ACLARION, INC. 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-41358

ACLARION, INC.

(Exact name of registrant as specified in its charter)

Delaware		47-3324725
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

8181 Arista Place, Suite 100

Broomfield, Colorado 80021

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (833) 275-2266

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.00001 per share	ACON	The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Common stock	ACONW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 15, 2025, there were 582,371 shares of the registrant's common stock, $0.00001 par value per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology.

Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those indicated (both favorably and unfavorably). These risks and uncertainties include, but are not limited to, those described in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the Form 10-K) dated April 9, 2025, as filed with the Securities and Exchange Commission on April 9, 2025, under Rule 424(b)(4). Caution should be taken not to place undue reliance on any such forward-looking statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward- looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	4
	Condensed Balance Sheets	4
	Condensed Statements of Operations	5
	Condensed Statements of Changes in Stockholders' Equity/(Deficit)	6
	Condensed Statements of Cash Flows	8
	Notes to Condensed Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
	Signatures	38

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Aclarion, Inc.

Condensed Balance Sheets


	March 31, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	14,750,272		$	453,661
Restricted cash		10,000			10,000
Accounts receivable, net		19,172			18,326
Prepaids and other current assets		377,909			342,292
Total current assets		15,157,353			824,279

Non-current assets:
Property and equipment, net		5,093			5,499
Intangible assets, net		1,317,231			1,293,705
Total non-current assets		1,322,324			1,299,204

Total assets	$	16,479,677		$	2,123,483

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	516,268		$	531,603
Accrued and other liabilities		182,616			529,182
Warrant liability		148			11,869
Liability to issue equity		–			80,772
Total current liabilities		699,032			1,153,426

Total liabilities		699,032			1,153,426

Commitments and contingencies (see Note 10)					–

Stockholders' equity
Series B preferred stock - $0.00001 par value, 3,000 authorized and 0 and 930 shares issued and outstanding (see Note 11)		–			*
Series C preferred stock - $0.00001 par value, 1,000 authorized and 0 and 874 shares issued and outstanding (see Note 11)		–			*
Common stock - $0.00001 par value, 200,000,000 authorized and 582,338 and 1,370 shares issued and outstanding (see Note 11)		6			*
Additional paid-in capital		69,080,386			52,232,368
Accumulated deficit		(53,299,747	)		(51,262,311	)
Total stockholders’ equity (deficit)		15,780,645			970,057

Total liabilities and stockholders’ equity	$	16,479,677		$	2,123,483

*	Rounds to less than one share or $1

See accompanying notes to condensed financial statements.

Aclarion, Inc.

Condensed Statements of Operations

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Revenue
Revenue	$	18,991		$	10,114
Cost of revenue		23,479			19,476
Gross profit (loss)		(4,488	)		(9,362	)

Operating expenses:
Sales and marketing		302,584			181,056
Research and development		198,190			239,042
General and administrative		986,663			845,847
Total operating expenses		1,487,437			1,265,945

Income (loss) from operations		(1,491,925	)		(1,275,307	)

Other income (expense):
Interest expense		–			(335,824	)
Loss on exchange of debt		–			(1,066,732	)
Gain(Loss) on extinguishment of debt		73,272			(111,928	)
Changes in fair value of warrant and derivative liabilities		11,721			297,684
Penalties and settlements		(672,500	)		–
Other, net		41,996			93,005
Total other income (expense)		(545,511	)		(1,123,795	)

Loss before income taxes		(2,037,436	)		(2,399,102	)
Income tax provision		–			–
Net Loss	$	(2,037,436	)	$	(2,399,102	)

Dividends accrued for preferred stockholders		(6,683	)		–
Net loss allocable to common stockholders	$	(2,044,119	)	$	(2,399,102	)
Net loss per share allocable to common stockholders	$	(9.32	)	$	(3,985.22	)
Weighted average shares of common stock outstanding, basic and diluted		219,366			602

See accompanying notes to condensed financial statements.

Aclarion, Inc.

Condensed Statements of Changes in Stockholders' Equity (Deficit)

(Unaudited)

Series A

Series B

Series C

Preferred Stock

Value

For the Three Months Ended March 31, 2024

Balance, December 31, 2023

–

Share-based compensation

–

Issuance of common stock and warrants related to public offering, net issuance costs

–

Issuance of common shares - equity line

–

Public offering and equity line issuance costs

–

Issuance of common shares - debt for equity exchange

–

Issuance of commitment shares - note financing

–

Issuance of common shares related to restricted stock units

–

Cashless exercise of pre-funded warrants

–

Round up convention related to reverse stock split

–

Net loss

–

Balance, March 31, 2024

–

For the Three Months Ended March 31, 2025

Balance, December 31, 2024

–

930

874

Share-based compensation

–

Registered Direct offering of commons stock

–

Public offering of common stock and warrants

–

Common stock issuance cost

–

Redemption of B series preferred stock

–

(930

)

–

Conversion of C-series preferred stock to common stock

–

(874

)

Exercise of C-series warrants

–

Warrant amendment

–

Alternative cashless exercise of B warrants

–

Round-up conversion related to reverse stock splits

–

Net loss

–

Balance, March 31, 2025

–

* Rounds to less than one share or $1

(continued)

Aclarion, Inc.

Condensed Statements of Changes in Stockholders' Equity (Deficit)

(Unaudited)

(continued)


	Common Stock				Paid-In			Accumulated
	Shares		Value		Capital			Deficit			Total
For the Three Months Ended March 31, 2024
Balance, December 31, 2023		91	$	*	$	43,553,532		$	(44,281,526	)	$	(727,995	)
Share-based compensation		–		–		85,827			–			85,827
Issuance of common stock and warrants related to public offering		572		*		3,001,496			–			3,001,496
Issuance of common shares - equity line		50		*		1,449,532			–			1,449,532
Public offering and equity line issuance costs		–		–		(709,211	)		–			(709,211	)
Issuance of common shares - debt for equity exchange		71		*		1,771,606			–			1,771,606
Issuance of commitment shares - note financing		1		*		33,297			–			33,297
Issuance of common shares related to restricted stock units		*		*		*			–			–
Cashless exercise of pre-funded warrants		*		*		–			–			–
Round up convention related to reverse stock split		4		*		–			–			–
Net loss		–		–		–			(2,399,102	)		(2,399,102	)
Balance, March 31, 2024		791	$	*	$	49,186,078		$	(46,680,628	)	$	2,505,450


For the Three Months Ended March 31, 2025
Balance, December 31, 2024		1,370	$	*	$	52,232,368		$	(51,262,311	)	$	970,057
Share-based compensation		–		–		55,897			–			55,897
Registered Direct offerings of common stock		19,144		*		5,167,927			–			5,167,927
Public offering of common stock and warrants		16,048		*		14,554,544			–			14,554,544
Common stock issuance costs		–		–		(2,101,282	)		–			(2,101,282	)
Redemption of Series B preferred stock		–		–		(1,213,590	)		–			(1,213,590	)
Conversion of C-series preferred stock to common stock		687		*		–			–			–
Exercise of C-series warrants		629		*		336,441			–			336,441
Warrant amendment		–		–		48,087			–			48,087
Alternative cashless exercise of B warrants		544,299		5		(5	)		–			–
Round-up conversion related to reverse stock splits		161		*		–			–			–
Net loss		–		–		–

SEC Form 10-Q filed by Aclarion Inc.