# Aclarion, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Aclarion, Inc.](/companies/acon.md) (CIK 1635077)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 13:48 ET
- Period: 2025-06-30
- Accession: 0001683168-25-006126
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1635077/000168316825006126/aclarion_i10q-063025.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1635077/000168316825006126/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $19.3k | us-gaap:Revenues |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $38.3k | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $14.2k | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $37.7k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $5.1k | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $651 | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $270.4k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $468.6k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$1.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$3.2m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$1.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$3.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$2.75 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$9.09 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$2.75 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$9.09 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 582,371 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 400,868 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$4.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $481 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $12.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $13.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $14.8m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $564.4k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $564.4k | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $14.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 28,749 characters.

*The following discussion and analysis should be read in conjunction with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report and our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on April 9, 2025. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. You should carefully read the “Risk Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2024, which was as filed with the SEC on April 9, 2025, to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”*

### Overview

### Corporate Information

The Company currently operates as a Delaware corporation, under the name Aclarion, Inc.

### Results of operations

### For the Three Months Ended June 30, 2025, and 2024:

The following table summarizes our results of operations for the three months ended June 30, 2025, and 2024.

| Revenue | Three Months Ended June 30, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Revenue | $19,319 | $10,971 | $8,348 |
| Cost of revenue | 14,179 | 23,294 | (9,115) |
| Gross profit (loss) | 5,140 | (12,323) | 17,463 |
| **Operating expenses:** |  |  |  |
| Sales and marketing | 343,765 | 225,037 | 118,728 |
| Research and development | 270,434 | 202,102 | 68,332 |
| General and administrative | 1,127,449 | 696,099 | 431,350 |
| Total operating expenses | 1,741,648 | 1,123,238 | 618,410 |
| **(Loss) from operations** | (1,736,508) | (1,135,561) | (600,947) |
| Other income(expense): |  |  |  |
| Interest expense | – | (127,848) | 127,848 |
| Changes in fair value of warrant and derivative liabilities | 45 | 25,357 | (25,312) |
| Other, net | 135,706 | (25) | 135,731 |
| Total other income(expense) | 135,751 | (102,516) | 238,267 |
| (Loss) before income taxes | (1,600,757) | (1,238,077) | (362,680) |
| Income tax provision | – | – |  |
| **Net income (loss)** | $(1,600,757) | $(1,238,077) | $(362,680) |
| Net (loss) allocable to common stockholders | $(1,600,757) | $(1,238,077) | $(362,680) |
| Net (loss) per share allocable to common stockholders | $(2.75) | $(1,362.83) | $1,360.08 |
| Weighted average shares of common stock outstanding, basic and diluted | 582,371 | 908 | 581,463 |

27

*Total Revenues*. Total revenues for the quarter ended June 30, 2025 were $19,319, which was an increase of $8,348, or 76%, from $10,971 for the quarter ended June 30, 2024. This increase in revenues was driven primarily by the growing volume of NOCISCAN ® reports sold into the UK market following recent local coverage decisions.

*Cost of Revenue*. Direct cost of revenue is comprised of hosting and software costs, field support, UCSF royalty cost, partner fees (Radnet), and credit card fees. Total cost of revenue was $14,179 for the quarter ended June 30, 2025, compared to $23,294 for the quarter ended June 30, 2024, a decrease of 39%. This decrease was primarily due to a reduced allocation of hosting fees to cost of revenue and a change in revenue mix that reduced partner fees.

*Sales and Marketing*. Marketing expenses include post-market clinical and reimbursement consulting, salaries, website support, press releases, conferences, travel, and shared-based compensation for Key Opinion Leaders. Sales and marketing expenses were $343,765 for the quarter ended June 30, 2025, compared to $225,037 for the quarter ended June 30, 2024, an increase of $118,728, or 53%. Post-market clinical expenses increased as the Company initiated the Clarity trial, with the first patient enrolled in June 2025. Travel expenses were also higher to support the local coverage decisions in the UK market. These increased costs were partially offset by decreased product marketing consulting and the expiration of restricted stock vesting.

*Research and Development*. Research and development expenses were $270,434 for the quarter ended June 30, 2025, compared to $202,102 for the quarter ended June 30, 2024, an increase of $68,332, or 34%. This increase was due primarily to a bonus accrual in Q2 2025, compared to the quarter ended June 30, 2024 without a bonus accrual. Additionally, the Company utilized more quality and regulatory consulting services for the quarter ended June 30, 2025.

*General and Administrative*. General and administrative expenses were $1,127,449 for the quarter ended June 30, 2025, an increase of $431,350 or 62%, from $696,099 for the quarter ended June 30, 2024. For the quarter ended June 30, 2025, the Company accrued about $199,000 for the 2025 bonus program, compared to no bonus accrual in the quarter ended June 30, 2024. Also in 2025, the Company incurred higher insurance costs related to enhanced D&O coverage. Consulting services were also higher given increased attention on marketing the Company’s stock, financial control enhancements, and human resources.

*Other Income (Expense).*

The Company earned about $135,000 of interest income during the quarter ended June 30, 2025, on money market deposits following the fundraising activity in the first quarter ended March 31, 2025. Interest expense was $127,848 for the quarter ended June 30, 2024, due to the increase in debt taken on by the company in 2024.

### For the Six Months Ended June 30, 2025, and 2024:

The following table summarizes our results of operations for the six months ended June 30, 2025, and 2024.

| Revenue | Six Months Ended June 30, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Revenue | $38,309 | $21,085 | $17,224 |
| Cost of revenue | 37,658 | 42,770 | (5,112) |
| Gross profit (loss) | 651 | (21,685) | 22,336 |
| **Operating expenses:** |  |  |  |
| Sales and marketing | 646,350 | 406,094 | 240,256 |
| Research and development | 468,622 | 441,143 | 27,479 |
| General and administrative | 2,114,112 | 1,541,947 | 572,165 |
| Total operating expenses | 3,229,084 | 2,389,184 | 839,900 |
| **(Loss) from operations** | (3,228,433) | (2,410,869) | (817,564) |
| Other income(expense): |  |  |  |
| Interest expense | – | (463,672) | 463,672 |
| Loss on exchange of debt | – | (1,066,732) | 1,066,732 |
| Gain(loss) on extinguishment of debt | 73,272 | (111,928) | 185,200 |
| Changes in fair value of warrant and derivative liabilities | 11,766 | 323,041 | (311,275) |
| Penalties and settlements | (672,500) | – | (672,500) |
| Other, net | 177,702 | 92,980 | 84,722 |
| Total other (expense) | (409,760) | (1,226,311) | 816,551 |
| (Loss) before income taxes | (3,638,193) | (3,637,180) | (1,013) |
| Income tax provision | – | – | – |
| **Net income (loss)** | $(3,638,193) | $(3,637,180) | $(1,013) |
| Dividends accrued for preferred stockholders | $(6,683) | $– | $(6,683) |
| Net (loss) allocable to common stockholders | $(3,644,876) | $(3,637,180) | $(7,696) |
| Net (loss) per share allocable to common stockholders | $(9.09) | $(4,816.86) | $4,807.77 |
| Weighted average shares of common stock outstanding, basic and diluted | 400,868 | 755 | 400,113 |

*Total revenues*. Total revenues for the six months ended June 30, 2025, were $38,309, which was an increase of $17,224, or 82%, from $21,085 for the six months ended June 30, 2024. This increase in revenue was driven primarily by the growing volume of NOCISCAN ® reports sold into the UK market following recent local coverage decisions, with a slight increase also in patient-pay volume.

*Cost of Revenue*. Direct cost of revenue is comprised of hosting and software costs, field support, UCSF royalty cost, partner fees (Radnet), and credit card fees. Total cost of revenue was $37,658 for the six months ended June 30, 2025, compared to $42,770 for the six months ended June 30, 2024, a decrease of 12%. This decrease was primarily due to a reduced allocation of hosting fees to cost of revenue in the second quarter of 2025.

*Sales and Marketing*. Marketing expenses include post-market clinical and reimbursement consulting, salaries, website support, press releases, conferences, travel, and shared-based compensation for Key Opinion Leaders. Sales and marketing expenses were $646,350 for the six months ended June 30, 2025, compared to $406,094 for the six months ended June 30, 2024, an increase of $240,256, or 59%. Increased post-market clinical expense related to the Clarity trial (approximately $180,000 increase), co-marketing expense, and a 2025 bonus accrual, was offset in part by a reduction in restricted stock vesting expense related to the Company’s engagement of Key Opinion Leaders and reduced product market consulting.

*Research and Development*. Research and development expenses were $468,622 for the six months ended June 30, 2025, compared to $441,143 for the six months ended June 30, 2024, an increase of $27,479, or 6%. The increase expense was due to the bonus accrual that was recorded in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 without a bonus accrual, and an increase in required regulatory and quality system work in the first half of 2025.

*General and Administrative*. General and administrative expenses were $2,114,112 for the six months ended June 30, 2025, an increase of $572,165 or 37%, from $1,541,947 for the six months ended June 30, 2024. The increase was related to a bonus accrual of about $154,000 for the 2025 bonus program, compared to no bonus accrual in the quarter ended June 30, 2024. For the six months ended June 30, 2025, the Company incurred higher insurance costs related to enhanced D&O coverage. Consulting services were also higher given increased attention to marketing the Company’s stock, financial control enhancements, and human resources. Finally, the Company recorded higher NASDAQ and SEC fees versus the prior year.

*Other Income (Expense).*

Interest expense was $0 for the six months ended June 30, 2025, while interest expense for the six months ended June 30, 2024 was $463,672. This decrease in interest expense was related to the retirement of all unsecured non-convertible notes in 2024.

The Company incurred losses during the six months ended June 30, 2024, on two transactions to reduce debt. The first transaction took place between January 22 and January 29, 2024, whereby the Company entered into a series of exchange agreements with investors to issue an aggregate of 644,142 (71 adjusted for 2025 Stock Splits) shares of common stock in exchange for $1,519,779 principal and accrued interest on the notes. This transaction accelerated the recognition of the related note discounts and resulted in a $1,066,732 charge. The second transaction was on March 6, 2024, whereby the Company paid $300,974 of principal and accrued interest on the notes. This transaction accelerated the recognition of the related note discounts and resulted in a $111,928 charge.

The Company recognized a gain of $73,272 in the six months ended June 30, 2025 related to retiring an obligation for commitment shares.

The Company’s warrant and derivative liabilities are recorded at fair value as of each reporting date. For the six months ended June 30, 2025, the Company recorded a favorable adjustment in fair value of $11,766. For the six months ended June 30, 2024, the Company recorded a favorable adjustment in fair value of $323,041. The derivative liability was retired in 2024 along with the retirement of all unsecured non-convertible notes.

In the six months ended June 30, 2025, the Company recorded $672,500 in Penalties and Settlements. In March 2025 the Company paid $687,500 to settle a dispute under the "fee tail" provision of an investment banking agreement that the Company had previously entered into. This was netted against a $15,000 favorable accounts payable settlement.

Other net income of $177,702 for the six months ended June 30, 2025, was primarily interest on money market deposits following the fundraising activity in the first quarter of 2025. Other net income of $92,980 for the six months ended June 30, 2024, included a favorable discount to accounts payable of $117,985, offset in part by a $25,000 penalty paid to investors related to a failure to timely register certain commitment shares.

### Critical accounting policies and use of estimates

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates.

While our significant accounting policies are described in more detail in the notes to our financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

### Revenue Recognition

The Company derives its revenues from one source, the delivery of Nociscan reports to medical professionals. Revenues are recognized when a contract with a customer exists, and the control of the promised services are transferred to our customers. The amount of revenue recognized reflects the consideration the Company expects to receive in exchange for those services. Substantially all of our revenues are generated from contracts with customers in the United States and United Kingdom.

### Equity-Based Compensation

Certain of our employees and consultants have received grants of common stock options and RSUs in our company. These awards are accounted for in accordance with guidance prescribed for accounting for equity-based compensation. Based on this guidance and the terms of the awards, the awards are equity classified.

Until our April 2022 initial public offering, we were a private company with no active public market for our common equity. Therefore, we had periodically determined the overall value of our company and the estimated per share fair value of our common equity at their various dates using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of CPA’s Practice Aid. Since a public trading market for our common stock has been established in connection with the completion of our initial public offering, it will no longer be necessary for us to estimate the fair value of our common stock in connection with our accounting for equity awards we may grant, as the fair value of our common stock will be its public market trading price.

For financial reporting purposes, we performed common stock valuations as a private company with the assistance of a third-party specialist. Subsequent to the initial public offering, the fair value of the Company’s common stock underlying its equity awards is based on the quoted market price of the Company’s common stock on the grant date.

### Liquidity and capital resources

### Sources of liquidity

To date, we have financed our operations primarily through private placements and public offerings of our equity and debt securities.

As of June 30, 2025, we had cash and cash equivalents of $12,850,657, including $25,000 of restricted cash.

During the six months ended June 30, 2025, the Company raised an aggregate of $20.1 million of gross proceeds through a combination of a public offering of units ($14.6 million) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5.2 million) of common stock, and the exercise of Series C Preferred warrants ($0.3 million).

We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2026. Management is actively managing our cash position and continually working to secure long-term funding.

### Cash flows

The following table summarizes our sources and uses of cash for each of the periods presented:

|  | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Cash used in operating activities | $(4,376,394) | $(3,293,096) |
| Cash used in investing activities | (122,290) | (157,523) |
| Cash provided by financing activities | 16,885,680 | 3,602,237 |
| Net increase (decrease) in cash | $12,386,996 | $151,618 |

### Operating activities

During the six months ended June 30, 2025, operating activities used $4,376,394 of cash. This use of cash consisted primarily of employee compensation and benefit expense, general liability insurance, CLARITY study expenses, and audit and legal fees. During the six months ended June 30, 2024, operating activities used $3,293,096 of cash. During the six months ended June 30, 2025, the Company reduced accounts payable, primarily legal expenses that had accumulated over time, and reduced accrued expenses including payroll, bonuses, board compensation, and audit fees. In addition, prepaid expenses increased primarily due to D&O insurance.

### Investing activities

During the six months ended June 30, 2025, and 2024, investing activities used $122,290 and $157,523 of cash, respectively. These investing activities consisted almost entirely of patent and license filings.

### Financing activities

#### Six months ended June 30, 2025

During the six months ended June 30, 2025, the Company raised an aggregate of $20.1 million of gross proceeds through a combination of a public offering of units ($14.6 million) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5.2 million) of common stock, and the exercise of Series C Preferred warrants ($0.3 million).

#### Registered Direct Public Offerings

On January 3, 2025, the Company sold in a registered direct offering an aggregate of 3,380,276 shares (374 shares post-2025 Stock Splits) of its common stock at a price of $0.142 per share ($1,284.39 post-2025 Stock Splits). The net proceeds to the Company of this offering were $0.45 million.

On January 30, 2025, the Company sold in a registered direct offering an aggregate of 506,803 shares (18,770 shares post-Second 2025 Stock Split) of its common stock at a price of $9.25 per share ($249.75 post-March 2025 stock split). The net proceeds to the Company of this offering were $4.4 million.

#### Units Offering of Common Shares and Warrants

On January 15, 2025, the Company sold, in an underwritten public offering, an aggregate of (i) 100,000 shares (11 shares post-2025 Stock Splits) of the Company’s common stock, (ii) 143,900,000 pre-funded warrants (the “Pre-Funded Warrants) (15,909 pre-funded warrants post-2025 Stock Splits) to purchase up to an aggregate of 143,900,000 common shares (15,909 shares post-2025 Stock Splits), (iii) 144,000,000 Series A Common Warrants (the “Series A Common Warrants”) (15,920 warrants post-2025 Stock Splits), and (iv) 144,000,000 Series B Common Warrants (the “Series B Common Warrants” and, together with the Series A Common Warrants, the “Common Warrants”) Each share or Pre-Funded Warrant, as applicable, was sold together with one Series A Common Warrant to purchase one share of Common Stock and one Series B Common Warrant to purchase one share of Common Stock.

The public offering price for each Unit (consisting of a common share (or Pre-Funded Warrant in lieu thereof) and accompanying Common Warrants was $0.10 ($904.50 post-2025 Stock Splits). In addition, the Company granted the underwriter an option to purchase up to an additional 21,000,000 shares (2,322 shares post-2025 Stock Splits) of our common stock (or Pre-Funded Warrants in lieu of shares of Common Stock), at the public offering price, less underwriting discounts and commissions, and up to an additional 21,000,000 (2,322 shares post-2025 Stock Splits) Series A Common Warrants and up to an additional 21,000,000 (2,322 post-2025 Stock Splits) Series B Common Warrants at a nominal price within 45 days from January 15, 2025, to cover over-allotment sales. The underwriter exercised its option to purchase 21,000,000 (2,322 post-2025 Stock Splits) Series A Common Warrants and 21,000,000 (2,322 post-2025 Stock Splits) Series B Common Warrants. The net proceeds to the Company of this offering were $13.4 million.

#### Warrants

The Pre-Funded Warrants had an exercise price of $0.00001 ($.09 post-2025 Stock Splits) per share, were immediately exercisable and expired when exercised in full. All Pre-Funded Warrants have been exercised as of March 31, 2025. Each Series A Common Warrant will have an exercise price per share of $0.20 ($1,809.00 post-2025 Stock Splits) and will be exercisable beginning on the first trading day following the date on which Stockholder Approval is received and deemed effective (the “Initial Exercise Date” or the “Stockholder Approval Date”). The Series A Common Warrants will expire on the five-year anniversary of the Initial Exercise Date. The Series B Common Warrants will have an exercise price per share of $0.20 ($1,809.00 post-2025 Stock Splits) and will be exercisable beginning on the Initial Exercise Date. The Series B Common Warrants will expire on the two and one-half anniversary of the Initial Exercise Date.

#### Approval of A and B Warrant Shares

On March 5, 2025, the Company convened a Special Meeting of Stockholders. Stockholders approved the full issuance of shares of common stock issuable by the Company upon exercise of the Series A Common Warrants and the Series B Common Warrants. Following March 5, 2025, holders of Series B warrants have exercised substantially all of our outstanding Series B warrants using the alternative cashless exercise ("ACE") feature included in those warrants. The Company has issued approximately 14.7 million common shares (544 thousand shares adjusted for the Second 2025 Stock Split) in such Series B warrant exercises. No Series A warrants have been exercised as of June 30, 2025.

#### Series B Preferred Stock

On January 22, 2025, the Company redeemed all Series B Preferred Stock and related accrued dividends with a cash payment of $1,213,590.

#### Series C Preferred Stock and Warrants

During the fourth quarter of 2024, certain holders converted 126 shares of C Preferred Stock and related accrued dividends into 739,050 shares of common stock (equivalent to 82 common shares following the 2025 Stock Splits). There were 874 C Preferred shares remaining at December 31, 2024.

During the six months ended June 30, 2025, certain holders converted the remaining 874 shares of C Preferred Stock and related accrued dividends into 6,211,618 shares of common stock (equivalent to 687 common shares following the 2025 Stock Splits).

During the six months ended June 30, 2025, holders of the Series C warrants exercised 5,685,049 warrants (629 post-2025 Stock Splits). 4,548,039 (503 post-2025 Stock Splits) warrants were exercised at $0.03 per share ($271.35 post-2025 Stock Splits), and 1,137,010 (126 post-2025 Stock Splits) warrants were exercised at $0.1759 per share ($1,591.02 post-2025 Stock Splits). The Company received payments of $336,411 as part of the warrant exercises.

#### Six months ended June 30, 2024

During the six months ended June 30, 2024, net cash provided by financing activities was $3,602,237, which included gross proceeds of $1,754,032 from our equity line and $3,001,495 from a February 27, 2024, public offering. Cash issuance costs related to all financing activities totaled $1,153,289. The Company used cash in the year 2024 to retire $300,973 of outstanding debt.

### Funding requirements

Developing medical technology products is a time-consuming, expensive and uncertain process that takes years to complete, and the Company may never generate meaningful revenues. Accordingly, we may need to obtain substantial additional funds to achieve our business objectives.

Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that the Company raises additional capital through the sale of equity securities, the ownership interest of existing stockholders may be diluted. Any debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute existing stockholders’ ownership interests.

If we raise additional funds through licensing agreements and strategic collaborations with third parties, we may have to relinquish valuable rights to our technology, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds, we may be required to delay, limit, reduce and/or terminate development of our product candidates or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

### Contractual obligations and commitments

The Company does not have any contractual obligations not otherwise on our balance sheet as of June 30, 2025.

### Off-balance sheet arrangements

The Company did not have, during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

### Recently issued accounting pronouncements

The Company reviewed all recently issued standards and has determined that, as disclosed in Note 4 to our condensed financial statements appearing in this quarterly report, there have been no recent accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements.

### Emerging growth company and smaller reporting company status

The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public entities. Accordingly, our financial statements may not be comparable to other public companies that do not elect the extended transition period.

We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

## Market risk

As filed, 153 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

## Controls and procedures

As filed, 3,452 characters.

### Evaluation of Disclosure Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the Exchange Act), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), to allow for timely decisions regarding required disclosure.

As required by Exchange Act Rule 13a-15, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to our limited resources our disclosure controls and procedures are not effective in providing material information required to be included in our periodic SEC filings on a timely basis and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure about our internal control over financial reporting discussed below.

During the six months ended June 30, 2025, the Company continued to work with an outside firm to establish best practices to improve our required disclosure about our internal control over financial reporting.

### Changes in Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2024, due to material weaknesses related to (1) a limited segregation of duties due to our lack of formal control documentation, limited resources, and the small number of employees, and (2) a lack of adequate accounting resources to properly account for complex accounting transactions. Management determined that these control deficiencies constitute material weaknesses, which could result in material misstatements of significant accounts and disclosures that could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. In addition, due to limited staffing, we are not always able to detect minor errors or omissions in reporting.

The Company did engage an outside firm in the third quarter of 2023 to provide accounting support and increased segregation of duties. During the six months ended June 30, 2025, the Company continued to work with the outside firm to establish best practices over time that enhance internal control over financial reporting.

Other than the applicable remediation efforts described above, there were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 651 characters.

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on April 9, 2025. There have been no material changes to our risk factors from those included in such Annual Report except as noted below. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001683168-25-006126. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.