[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q%20Filing%20Information) This section details ACLARION, INC.'s Quarterly Report on Form 10-Q filing for the period ended June 30, 2025, including registrant specifics and filing status [Registrant Details and Filing Status](index=1&type=section&id=Registrant%20Details%20and%20Filing%20Status) ACLARION, INC. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025. The company is incorporated in Delaware and is classified as a Non-accelerated Filer, Smaller reporting company, and Emerging growth company - Registrant: ACLARION, INC.[2](index=2&type=chunk) - Filing Period: Quarterly period ended June 30, 2025[2](index=2&type=chunk) Registrant Filing Status | Status | Indication | | :------------------------ | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated Filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of August 14, 2025, there were **582,371 shares** of common stock outstanding[4](index=4&type=chunk) [Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions about forward-looking statements, highlighting inherent risks and potential material differences in actual results [Nature and Risks of Forward-Looking Statements](index=3&type=section&id=Nature%20and%20Risks%20of%20Forward-Looking%20Statements) This section serves as a cautionary note regarding forward-looking statements within the report, indicating that such statements involve substantial risks and uncertainties and actual results may differ materially from expectations. It advises against undue reliance and refers readers to the Risk Factors section of the Company's Annual Report on Form 10-K - All statements, other than statements of historical facts, regarding strategy, future financial condition, operations, projected costs, prospects, plans, objectives, and expected market growth are forward-looking statements[6](index=6&type=chunk) - Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different, as described in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024[7](index=7&type=chunk) - The Company undertakes no obligation to publicly update any forward-looking statements, except as required by law[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents ACLARION, INC.'s unaudited condensed financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Aclarion, Inc.'s unaudited condensed financial statements, including the Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity, and Statements of Cash Flows, along with comprehensive notes detailing the company's accounting policies, financial instruments, equity activities, and other relevant financial disclosures for the periods ended June 30, 2025, and December 31, 2024 [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | Cash and cash equivalents | $12,825,657 | $453,661 | | Total current assets | $13,440,755 | $824,279 | | Total assets | $14,754,520 | $2,123,483 | | Total current liabilities | $564,422 | $1,153,426 | | Total liabilities | $564,422 | $1,153,426 | | Total stockholders' equity | $14,190,098 | $970,057 | - Cash and cash equivalents increased significantly from **$453,661** at December 31, 2024, to **$12,825,657** at June 30, 2025[14](index=14&type=chunk) - Total assets grew from **$2,123,483** to **$14,754,520**, while total liabilities decreased from **$1,153,426** to **$564,422**[14](index=14&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) This section outlines the company's financial performance, presenting revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 Condensed Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------- | :---------- | :---------- | | Revenue | $19,319 | $10,971 | | Cost of revenue | $14,179 | $23,294 | | Gross profit (loss) | $5,140 | $(12,323) | | Total operating expenses | $1,741,648 | $1,123,238 | | Net Loss | $(1,600,757)| $(1,238,077)| | Net loss per share (basic & diluted) | $(2.75) | $(1,362.83) | Condensed Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------- | :---------- | :---------- | | Revenue | $38,309 | $21,085 | | Cost of revenue | $37,658 | $42,770 | | Gross profit (loss) | $651 | $(21,685) | | Total operating expenses | $3,229,084 | $2,389,184 | | Net Loss | $(3,638,193)| $(3,637,180)| | Net loss per share (basic & diluted) | $(9.09) | $(4,816.86) | - Revenue increased by **76%** for the three months ended June 30, 2025, and by **82%** for the six months ended June 30, 2025, compared to the prior year periods[16](index=16&type=chunk) - Gross profit turned positive for the three-month period in 2025 (**$5,140**) from a loss in 2024 (**$(12,323)**), and significantly improved for the six-month period[16](index=16&type=chunk) [Condensed Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the company's equity changes, including common stock, additional paid-in capital, and accumulated deficit, for the six months ended June 30, 2025 Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Item | December 31, 2024 | June 30, 2025 | | :------------------------------------ | :------------------ | :-------------- | | Common Stock (Value) | $ * | $6 | | Additional Paid-In Capital | $52,232,368 | $69,090,597 | | Accumulated Deficit | $(51,262,311) | $(54,900,505) | | Total Stockholders' Equity | $970,057 | $14,190,098 | - Total stockholders' equity increased substantially from **$970,057** at December 31, 2024, to **$14,190,098** at June 30, 2025, primarily due to significant capital raises[21](index=21&type=chunk) - Additional paid-in capital increased by over **$16.8 million**, reflecting proceeds from registered direct offerings and a public offering of common stock and warrants[21](index=21&type=chunk) [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Statements of Cash Flows Highlights (Six Months Ended June 30) | Activity | 2025 | 2024 | | :------------------------------ | :------------ | :------------ | | Net cash used in operating activities | $(4,376,394) | $(3,293,096) | | Net cash used in investing activities | $(122,290) | $(157,523) | | Net cash provided by financing activities | $16,885,680 | $3,602,237 | | Net increase in cash and cash equivalents | $12,386,996 | $151,618 | | Cash, cash equivalents and restricted

Core Viewpoint - Aclarion, Inc. has reported a significant year-over-year growth in scan volume of 132% from Q2 2024 to Q2 2025, marking two consecutive quarters of growth for the first time, driven by new physician adoption and insurance coverage in the UK [1][6]. Group 1: Scan Volume Growth - The company has achieved a scan volume growth of 132% year-over-year from Q2 2024 to Q2 2025, indicating strong commercial traction [6]. - Aclarion expects continued quarter-over-quarter growth in scan volume through the remainder of 2025 and beyond, supported by new physician adoption and activation of commercial sites in the U.S. [2][6]. - Over 5.2 million people in the UK now have access to Nociscan through their insurance providers, which is expected to drive further volume increases [4][6]. Group 2: Key Catalysts - The first key catalyst for Aclarion is the growth of scan volume in the UK, where insurance approval for Nociscan has been secured, facilitating broader physician adoption [4][5]. - The second key catalyst is the CLARITY trial, which aims to demonstrate that using Nociscan in surgical planning can lead to better outcomes for patients with chronic low back pain, potentially securing widespread insurance coverage in the U.S. [5][6]. - The CLARITY trial is designed to validate Nociscan's ability to improve surgical outcomes, with internal interim results expected in Q2 2026 [6][8]. Group 3: Clinical Evidence and Publications - Aclarion's Nociscan has been shown to be more effective and less costly than provocative discography, saving $1,712 per patient and improving surgical success rates by 10% [9]. - The company is focused on building clinical evidence to support payment coverage for Nociscan, with a cost-effectiveness analysis published in a peer-reviewed journal [9]. - Aclarion continues to invest in real-world evidence development with customers in both the UK and U.S. [9]. Group 4: Customer and Market Strategy - The company remains selective in adding new customers outside the UK, focusing on strategic U.S. customers that prioritize real-world evidence development [9]. - Aclarion participated in six important industry conferences in the first half of 2025 to establish relevance and credibility among surgeons and spine societies [9]. Group 5: Intellectual Property and Funding - Aclarion holds 24 U.S. patents and is auditing its intellectual property portfolio to explore potential partnerships for optimizing shareholder value [9]. - The company raised nearly $15 million in net cash and eliminated all debt, ensuring it is adequately funded through Q3 2026 to execute its strategic objectives [9].

Core Points - Aclarion, Inc. has adjourned its Annual Meeting of Stockholders originally scheduled for July 7, 2025, to July 21, 2025, to solicit additional votes on proposals [1][2] - The record date for stockholders entitled to vote remains May 9, 2025, and stockholders are encouraged to vote as soon as possible [2] - Proxies submitted for the Annual Meeting will be voted at the adjourned meeting unless revoked, and stockholders can change their votes before the meeting [3] Company Overview - Aclarion is a healthcare technology company utilizing Magnetic Resonance Spectroscopy (MRS) and a proprietary biomarker to enhance clinical treatments for low back and neck pain [5] - The company addresses a significant market, valued at $134.5 billion in the U.S. for low back and neck pain [5] - Aclarion is incorporating Artificial Intelligence (AI) to improve quality control in spectroscopy data and is researching AI applications to better associate MRS data with clinical outcomes [5]

Core Insights - Aclarion, Inc. has initiated the first patient enrollment in the CLARITY trial, which aims to evaluate the clinical and economic value of its Nociscan platform in spine surgery for chronic low back pain [1][6] Company Overview - Aclarion is a healthcare technology company that utilizes Magnetic Resonance Spectroscopy (MRS), proprietary signal processing techniques, biomarkers, and augmented intelligence algorithms to enhance clinical treatments [5] - The company is focusing on the chronic low back pain market with Nociscan, the first evidence-supported SaaS platform designed to help physicians differentiate between painful and nonpainful discs in the lumbar spine [5] Trial Details - The CLARITY trial is a prospective, randomized multi-center study that will enroll 300 patients scheduled for surgical treatment of 1- or 2-level discogenic low back pain across multiple high-volume sites in the US [2] - The trial will randomize patients in a 1:1 ratio between surgeons who are blinded and unblinded to the Nociscan results, with the primary endpoint being the change in back pain measured on a 100mm VAS scale at 12 months compared to baseline [2][6] - The first patient was enrolled at the Texas Back Institute, which has a strong history in advancing spine care through clinical trial research [2][6] Market Context - Chronic low back pain is a significant global healthcare issue, affecting approximately 266 million people worldwide with degenerative spine disease and low back pain [3] - Aclarion's Nociscan solution aims to objectively quantify chemical biomarkers associated with disc pain, potentially leading to improved surgical outcomes [3][6]

Core Insights - Aclarion, Inc. is participating in the State of Spine Surgery Think Tank to showcase its NOCISCAN platform, which utilizes biomarkers and AI to identify chronic low back pain [1][2] - Dr. Kris Radcliff will present the NOCISCAN platform, emphasizing its innovative approach to objectively identify discogenic pain [2] - The conference highlights the increasing interest in NOCISCAN's clinical and commercial value, as noted by Aclarion's Chief Strategy Officer [3] Company Overview - Aclarion is a healthcare technology company focused on chronic low back pain, leveraging Magnetic Resonance Spectroscopy (MRS) and AI algorithms [6] - NOCISCAN is the first evidence-supported SaaS platform designed to noninvasively distinguish between painful and nonpainful lumbar discs [4][6] - The platform quantifies chemical biomarkers associated with disc pain, providing critical insights when used alongside other diagnostic tools [4][6] Market Context - Chronic low back pain affects approximately 266 million people globally, representing a significant healthcare challenge [4] - The integration of NOCISCAN into clinical practice aims to develop personalized and effective surgical strategies for patients [2][3]

Core Viewpoint - Aclarion, Inc. announced the addition of UHealth — University of Miami Health System as a trial site for the CLARITY study, which aims to demonstrate the clinical and economic value of its Nociscan technology in spine surgery [1][2]. Company Overview - Aclarion is a healthcare technology company focused on chronic low back pain, utilizing biomarkers and proprietary AI algorithms to assist physicians in identifying pain sources [1][6]. - Nociscan is the first evidence-supported SaaS platform designed to noninvasively differentiate between painful and nonpainful discs in the lumbar spine [4][6]. CLARITY Trial Details - The CLARITY trial is a prospective, randomized multi-center study involving 300 patients scheduled for surgical treatment of 1- or 2-level discogenic low back pain [3]. - The trial will randomize patients in a 1:1 ratio between surgeons blinded to Nociscan results and those unblinded, with the primary endpoint being the change in back pain measured on a 100mm VAS at 12 months [3]. - UHealth joins other prestigious institutions like Johns Hopkins Medicine and Northwestern Medicine as a trial site [2][3]. Clinical Significance - Chronic low back pain affects approximately 266 million people globally, highlighting the need for effective diagnostic and treatment solutions [4]. - Nociscan aims to improve surgical outcomes by providing critical insights into the location of low back pain through the analysis of chemical biomarkers [4][8]. Research and Development - The CLARITY trial represents a unique opportunity to advance the spine industry and showcase the research capabilities of the University of Miami [2][7]. - Aclarion's technology leverages Magnetic Resonance Spectroscopy (MRS) to optimize clinical treatments for chronic low back pain [6][7].

Core Insights - Aclarion, Inc. announced the addition of Keck Medical Center of USC as a site for the CLARITY trial, aimed at demonstrating the clinical and economic value of Nociscan in spine surgery [1][2] - The CLARITY trial will evaluate 300 patients undergoing surgical treatment for discogenic low back pain, with a primary endpoint of measuring changes in back pain at 12 months [3][4] Company Overview - Aclarion is a healthcare technology company utilizing biomarkers and AI algorithms to assist physicians in identifying chronic low back pain [1][6] - Nociscan is the first evidence-supported SaaS platform designed to noninvasively differentiate between painful and nonpainful discs in the lumbar spine [4][6] Trial Details - The CLARITY trial is a prospective, randomized multi-center study involving multiple high-volume sites across the US, including notable institutions like Johns Hopkins Medicine and Northwestern Medicine [2][3] - The trial will randomize patients in a 1:1 ratio between surgeons who are blinded and unblinded to Nociscan results [3] Market Context - Chronic low back pain affects approximately 266 million people globally, highlighting a significant healthcare challenge [4] - Aclarion's Nociscan aims to improve surgical outcomes by providing insights into the sources of low back pain through advanced diagnostic techniques [4][7]

Nociscan Solution & Market Opportunity - Nociscan leverages MR Spectroscopy and Augmented Intelligence for patients with pain of spinal origin [9] - Nociscan labels each disc as painful or pain free based upon a biochemical signal and correlation with provocative discography, leading to lower cost, better outcomes, and higher value care [14] - The U S low back & neck pain market represents an ultimate market of $135 billion [17] - The U S lumbar spine market (fusion & non-fusion surgery plus presurgical care) represents an expansion market of $40 billion [16] - The U S lumbar fusion & disc replacement market represents an actionable market of $10 billion [17] Foundational Science & Technology - Elevated Lactate is associated with Nociceptor Activation, Excessive Cellular Demand, Cell Death and Reduced PG Synthesis [23] - Spectroscopy analyzes the chemical composition of tissue, transforming raw spectral data into clear biomarkers [26] - Nociscan uses six ratios for each disc, with pain markers in the numerator and structural integrity markers in the denominator, leveraging AI for major advancements [30, 33] Clinical and Economic Evidence - MRS (NOCI+/–) compared to PD (P/NP) with an accuracy of 87%, sensitivity of 100%, and specificity of 80% [47] - The positive predictive value (PPV) in herniated discs, and negative predictive value (NPV) in non-herniated discs, were 100% [47] - MRS with the Nociscan diagnostic algorithm demonstrates cost-effectiveness dominance over PD for identifying CLBP surgical candidates, with annualized US savings estimated between $283 million and $441 million [51, 53] Intellectual Property & Availability - Aclarion has 23 issued U S Patents and 13 Pending Patent Applications [39, 38] - Over 1,100 Commercial Nociscans have been performed [97]

Financial Performance - Total revenue for Q1 2025 was $18,991, an increase of $8,877, or 88%, from $10,114 in Q1 2024, driven by additional patient-pay scans at Radnet facilities [132]. - Total cost of revenue for Q1 2025 was $23,479, an increase of 21% from $19,476 in Q1 2024, attributed to volume-related costs including partner fees [133]. - The company recorded a net loss of $2,037,436 in Q1 2025, an improvement of $361,665 compared to a net loss of $2,399,102 in Q1 2024 [130]. Expenses - Sales and marketing expenses rose to $302,584 in Q1 2025, an increase of $121,528, or 67%, primarily due to the initiation of the CLARITY trial [134]. - Research and development expenses decreased to $198,190 in Q1 2025, down $40,852, or 17%, due to reduced regulatory and quality system work [135]. - General and administrative expenses increased to $986,663 in Q1 2025, up $140,816, or 17%, due to additional financial operations and investor relations support [136]. Cash Flow and Financing - Cash and cash equivalents as of March 31, 2025, totaled $14,760,272, including $10,000 of restricted cash [150]. - The company raised $20.1 million in gross proceeds during Q1 2025 through public offerings and direct offerings [151]. - Cash used in operating activities was $2,510,782 in Q1 2025, compared to $2,238,557 in Q1 2024 [154]. - The company incurred $672,500 in penalties and settlements related to a dispute under an investment banking agreement [141]. - The company sold an aggregate of 100,000 common shares and 143,900,000 pre-funded warrants, generating net proceeds of $13.4 million from the public offering [160]. - The public offering price for each unit was $0.10, with the underwriter exercising an option to purchase an additional 21,000,000 shares and warrants [160]. - As of March 31, 2025, all pre-funded warrants have been exercised, resulting in the issuance of approximately 14.7 million common shares from Series B warrant exercises [162]. - The company redeemed all Series B Preferred Stock for a cash payment of $1,213,590 on January 22, 2025 [163]. - During Q1 2025, holders of Series C warrants exercised 5,685,049 warrants, generating payments of $336,411 [166]. - The company completed a public offering of 5,175,000 units at a price of $0.58 per unit, resulting in gross proceeds of approximately $3.0 million during Q1 2024 [167]. - The remaining outstanding balance of principal and interest on unsecured non-convertible notes was $898,380 after a payment of $300,974 in Q1 2024 [168]. - The company issued 644,142 shares of common stock in exchange for $1,519,779 principal and accrued interest on notes during Q1 2024 [169]. Business Outlook - Developing medical technology products is a costly and uncertain process, indicating a need for substantial additional funds to achieve business objectives [170]. - The company is classified as a smaller reporting company, with a market value of stock held by non-affiliates less than $700 million and annual revenue below $100 million [177].

Core Viewpoint - Aclarion, Inc. has announced the Texas Back Institute as a new site for its pivotal CLARITY trial, which aims to demonstrate the clinical and economic value of its Nociscan technology in spine surgery [1][4]. Company Overview - Aclarion is a healthcare technology company focused on chronic low back pain, utilizing biomarkers and proprietary AI algorithms to assist physicians in identifying pain sources [1][6]. - The company's Nociscan platform is the first evidence-supported SaaS solution designed to noninvasively differentiate between painful and nonpainful lumbar discs [4][7]. CLARITY Trial Details - The CLARITY trial is a prospective, randomized multi-center study involving 300 patients scheduled for surgical treatment of 1- or 2-level discogenic low back pain [3]. - The trial will randomize patients in a 1:1 ratio between surgeons blinded to Nociscan results and those unblinded, guiding surgical treatment decisions [3]. - The primary endpoint is the change in back pain measured on a 100mm Visual Analog Scale (VAS) at 12 months compared to baseline [3]. Texas Back Institute's Role - Texas Back Institute is recognized for its excellence in research and has participated in various studies related to spine treatments [2][4]. - The institute's involvement in the CLARITY trial is expected to enhance the study's credibility and align with its patient population [2][4]. Market Context - Chronic low back pain affects approximately 266 million people globally, highlighting the significant healthcare challenge it presents [4]. - Aclarion's Nociscan aims to improve surgical outcomes by providing critical insights into the sources of low back pain through advanced diagnostic techniques [4][7].