Aclarion, Inc.

Aclarion, Inc. is a healthcare technology company that leverages Magnetic Resonance Spectroscopy (MRS) and proprietary biomarkers to optimize clinical treatments, primarily addressing the $134.5 billion ⁴ U.S. low back and neck pain market, which a 2020 JAMA article identified as the most costly healthcare condition in the United States ⁴. The company's core technology, NOCISCAN®, utilizes MRS capabilities of commercially available scanners to non-invasively analyze the chemical makeup of intervertebral discs, identifying chemical biomarkers associated with degenerative pain and structural integrity of lumbar discs ⁵. Aclarion aims to improve outcomes of surgical interventions for chronic discogenic low back pain (DLBP) and intends to expand its technology beyond surgical decision-making to manage a broader spectrum of low back pain patients, including those undergoing conservative or regenerative therapies, and eventually to neck pain populations ⁶. The company is also exploring the use of Artificial Intelligence (AI) to assist in quality control processes for spectroscopy data and to associate MRS data with clinical outcomes, with aspirational plans to expand into diagnosing brain, breast, and prostate tumors ⁷.

Aclarion's competitive positioning is primarily against existing diagnostic standards such as X-ray, standard lumbar MRI, and needle-based Provocation Discogram (PD Test) ⁸. The company asserts its NOCISCAN product suite is superior to standard lumbar MRI because MRI only indicates structural defects and degeneration, which are not well correlated to identifying painful discs, whereas NOCISCAN has shown high correlation to pain as indicated by positive PD Test results in clinical trials ⁹. Furthermore, Aclarion claims superiority over PD Tests due to NOCISCAN being entirely non-invasive, pain-free, non-significant risk, objective, and more cost-effective, while PD Tests are invasive, painful, subjective, and carry risks of harm including infection and accelerated disc degeneration ¹⁰. The company's intellectual property portfolio includes 28 U.S. Patents, 24 Foreign Patents, 7 pending U.S. patent applications, and 12 pending Foreign patent applications, including those exclusively licensed from the Regents of the University of California, San Francisco (UCSF) ¹¹.

The core business model revolves around the NOCISCAN software application, which post-processes MRS exam data to detect chemical biomarkers correlated to pain and structural degradation of discs ¹². The company generates revenue from the delivery of Nociscan reports to medical professionals ¹³. Revenue is recognized when control of the promised services (the Nociscan report) is transferred to the customer upon delivery ¹⁴. The majority of Aclarion's revenue is generated in the United Kingdom, where three insurance providers reimburse for the NOCISCAN scan, and in the United States through direct patient payments ¹⁵. The company does not provide ongoing services, post-delivery support, or licensing arrangements after the report has been delivered ¹⁶.

Aclarion's product and service line is centered on the NOCISCAN platform, which comprises two software products: NOCICALC® and NOCIGRAM® ¹⁷. NOCICALC® receives raw MRS exam data and post-processes it into final spectra, performing degenerative pain biomarker calculations for each disc examined ¹⁸. NOCICALC is registered as a Class I Medical Device with the FDA ¹⁹. NOCIGRAM® further processes the NOCICALC results into individual NOCISCORES, on a 0-10 scale, which represent relative levels of degenerative pain biomarkers ²⁰. High/low NOCISCORE ranges are correlated to painful ("NOCI+") versus non-painful ("NOCI-") results, and the NOCIGRAM report is provided to the physician to aid in diagnosis and treatment planning ²¹. NOCIGRAM is commercially available in the United States as "Clinical Decision Support Software" under the 21st Century Cures Act, and as such is not considered a medical device nor regulated by the FDA ²². The platform also involves a proprietary MRS exam protocol and a data transfer portal ²³.

For the fiscal year ended December 31, 2025, Aclarion reported total revenues of $75,730 ²⁴, an increase of $30,006 ²⁵ or 65.6% ²⁶ from $45,724 ²⁷ in 2024. Cost of revenue decreased by $15,756 ²⁸ or 18.6% ²⁹ to $68,902 ³⁰ in 2025 from $84,658 ³¹ in 2024. This resulted in a gross profit of $6,828 ³² in 2025, a significant improvement from a gross loss of $(38,934) ³³ in 2024. Operating expenses totaled $7,059,219 ³⁴ in 2025, up from $5,474,113 ³⁵ in 2024. The net loss for 2025 was $(7,233,629) ³⁶, an increase of $240,702 ³⁷ or 3.4% ³⁸ from the net loss of $(6,992,927) ³⁹ in 2024. Diluted EPS was $(13.61) ⁴⁰ in 2025, compared to $(7,478.90) ⁴¹ in 2024. The company had cash and cash equivalents and restricted cash of $12,040,789 ⁴² as of December 31, 2025. Total liabilities were $837,287 ⁴³ and total stockholders' equity was $12,835,117 ⁴⁴ as of December 31, 2025.

Year-over-year, revenue increased by 65.6% ²⁶, primarily driven by growing NOCISCAN® report volume in the UK market due to recent local coverage decisions ⁴⁵. Gross profit shifted from a loss of $(38,934) ³³ in 2024 to a profit of $6,828 ³² in 2025, largely due to reduced allocation of hosting fees to cost of revenue and a change in revenue mix that reduced partner fees ⁴⁶. Sales and marketing expenses increased by $924,044 ⁴⁷ or 94.6% ⁴⁸ to $1,900,598 ⁴⁹ in 2025, mainly due to higher post-clearance clinical services for the CLARITY Trial, expanded use of external marketing consultants, and increased salaries and benefits for new personnel ⁵⁰. Research and development expenses rose by $145,023 ⁵¹ or 16.3% ⁵² to $1,033,789 ⁵³, driven by higher patent maintenance fees, bonus expense, and expanded regulatory compliance and documentation activities ⁵⁴. General and administrative expenses increased by $516,039 ⁵⁵ or 14.3% ⁵⁶ to $4,124,832 ⁵⁷, primarily due to higher incentive bonus program accruals, increased D&O insurance expenses, and higher litigation and financial accounting advisory expenses, partially offset by a decrease in stock-based compensation ⁵⁸. Net cash used in operating activities increased by $1,892,595 ⁵⁹ to $(7,164,204) ⁶⁰ in 2025, mainly due to a higher net loss after adjustments for non-cash items ⁶¹.

Significant operational developments during the period include the initiation of the CLARITY Trial in June 2025, with the first patient enrolled ⁶². The company also engaged with its first customer using PHILIPS MRS capabilities with its NOCISCAN platform in the first quarter of 2025, marking an expansion beyond SIEMENS compatibility ⁶³. Aclarion executed a strategic partnership agreement with ATEC Spine, Inc. in January 2024, to identify Key Opinion Leader (KOL) surgeons to evaluate Nociscan technology in conjunction with EOS imaging, with plans for co-marketing and exclusive distribution rights for ATEC ⁶⁴. In March 2025, the company paid $687,500 ⁶⁵ to settle a dispute under a "fee tail" provision of a previously executed investment banking agreement ⁶⁶.

Aclarion believes its current cash and cash equivalents and restricted cash of $12,040,789 ⁴² as of December 31, 2025, will fund its operating expenses and capital expenditure requirements into the first quarter of 2028 ⁶⁷. This estimate is based on assumptions that may prove incorrect, potentially leading to an earlier exhaustion of capital resources ⁶⁸. To finance operations beyond this period, the company will require additional capital, which cannot be assured ⁶⁹.

The primary near-term growth strategy for Aclarion is to secure payer contracts that provide coverage for its Category III CPT codes ⁷⁰. Over time, the company intends to pursue conversion of these codes to Category I CPT codes, believing that favorable payer coverage decisions will enhance its ability to market its technology more effectively to spine surgeons and imaging centers and support broader adoption ⁷¹. The company is currently generating the majority of its revenue in the United Kingdom, where three insurance providers reimburse for the NOCISCAN scan, and in the United States through direct patient payments ⁷². With increased revenue and proceeds from fiscal 2025 and 2026 fundraising activities, Aclarion is transitioning to broader commercial operations in the United States and the United Kingdom ⁷³. Key Opinion Leader (KOL) surgeons are assisting in generating additional clinical data to support NOCISCAN for discussions with payers ⁷⁴.

A major growth area involves expanding the application of its technology beyond surgical decisioning to help manage large segments of low back pain patients from initial MRI through episode resolution ⁷⁵. This expansion is expected to support treatment decisions for chronic low back pain patients undergoing conservative therapies like physical therapy or biologic and cell therapies aimed at regenerating lumbar discs ⁷⁶. The company also plans to expand its technology beyond the lumbar spine to address neck pain populations, though this will require overcoming technical challenges associated with securing adequate MRS data from the significantly smaller cervical disc ⁷⁷. Aclarion's ultimate objective for NOCISCAN is to address the entire $134.5 billion ⁴ low back and neck pain market ⁷⁸. To achieve this, current algorithms will need to expand to include advanced machine learning techniques incorporating multiple data inputs beyond disc chemical composition, all correlated to clinical outcomes for various treatments ⁷⁹.

Another growth vector is the continued research and development into Artificial Intelligence (AI) and machine learning platforms to analyze raw and post-processed spectroscopy data ⁸⁰. The goal is to more efficiently and effectively associate MRS data with clinical outcomes, not only for back pain treatment paths (conservative, regenerative, cell therapies, surgical intervention) but also to potentially expand into diagnosing brain, breast, and prostate tumors ⁸¹. Clinical research includes building clinical registries to provide data inputs for training AI models, aiming to improve efficiency and effectiveness for surgical decisioning and extend technology use for optimizing neck and low back pain treatment through other interventions ⁸². The CLARITY Trial is expected to add patients undergoing conservative and regenerative treatment plans to clinical registries, correlating NOCISCAN results to outcomes to utilize AI for associating spectroscopy signals with optimal treatment pathways ⁸³.

Operationally, Aclarion expects sales and marketing expenses to continue increasing due to ongoing enrollment in the CLARITY Trial and planned hiring of additional sales and marketing personnel in the United States and the United Kingdom ⁸⁴. Research and development expenses are also expected to continue to increase with the ongoing development of the Nociscan 3.0 product ⁸⁵. The company plans to prioritize commercialization in specific markets based on KOL surgeons and physician engagement, including the NYC Metropolitan Area, San Francisco and Southern CA, Chicago, IL, Phoenix, AZ, Miami, FL, Denver & Colorado Springs, CO, Indianapolis, IN, and London, United Kingdom ⁸⁶. Once a positive local payment decision is secured in a geographic area, Aclarion intends to deploy business development professionals to expand physician support and secure favorable coverage decisions from additional payers ⁸⁷.

Planned capital allocation includes continued investment in clinical studies, sales, marketing, and engineering resources to bring products to market ⁸⁸. The company expects to use net proceeds from its October 2025 registered direct public offering, which raised approximately $2.5 million ⁸⁹ before deducting placement agent fees of 7% ⁹⁰ and other offering expenses, to fund market development and clinical evidence, product development and quality, and general and administration support, and other general corporate purposes ⁹¹. Aclarion does not anticipate paying any cash dividends in the foreseeable future, intending to retain future earnings to finance business expansion ⁹².

Aclarion faces several material risks. Operationally, the company is highly dependent on its senior management and key personnel, and the inability to attract and retain qualified individuals could harm the business ⁹³. Its MR data post-processing products currently depend on compatible use with a limited number of MR scanners from SIEMENS and Philips, and changes to these scanners or their operating configurations could render them incompatible, frustrating the company's ability to support customers ⁹⁴. The company's commercial success depends on attaining significant market acceptance of its technology among physicians, surgeons, patients, clinicians, and imaging facilities, and increasing patient diagnoses, which is not assured ⁹⁵. If adequate reimbursement for its temporary Category III CMS Code designation cannot be obtained, or if conversion to permanent Category I codes at an adequate reimbursement level is unsuccessful, sales would diminish, and marketing efforts would be affected ⁹⁶. The use of Aclarion's technology requires appropriate training, and inadequate training could lead to negative patient outcomes, harming the business ⁹⁷. The company expects to increase its organizational size, and difficulties in managing this growth could harm future revenue and operating results ⁹⁸. Aclarion may not achieve or maintain satisfactory pricing and margins for its NOCISCAN products due to price competition or reduced third-party payer reimbursement, which could harm its business ⁹⁹. Inaccurate forecasting of customer demand could negatively affect operating results ¹⁰⁰.

Regulatory risks are significant. Aclarion's operations and technology are subject to pervasive and continuing FDA regulatory requirements, and a failure to comply could harm the business ¹⁰¹. While NOCICALC is a Class I 510(k)-exempt medical device and NOCIGRAM is considered Clinical Decision Support Software exempt from FDA regulation, there is no assurance the FDA will agree with these classifications in the future, potentially requiring clearance or approval and halting sales ¹⁰². The company's medical device products may be subject to recalls, which could divert resources and harm its reputation ¹⁰³. Outside the U.S., particularly in the EU, NOCISCAN is a "legacy device" under MDR and will require re-certification as a Class II(a) device by December 31, 2028, subject to stricter pre-market review and clinical data requirements ¹⁰⁴. Failure to obtain this approval could lead to loss of its CE mark and inability to sell products in the EU, UK, or other related countries ¹⁰⁵. The company is also subject to various federal and state anti-fraud and abuse laws, including the Anti-Kickback Statute and False Claims Act, and non-compliance could lead to substantial penalties ¹⁰⁶. Financial relationships with physicians and healthcare providers could be deemed conflicts of interest and violate regulations ¹⁰⁷. Regulatory compliance is expensive, complex, and uncertain, and failure to comply could lead to enforcement actions ¹⁰⁸. Clinical studies, including the CLARITY Trial, may be delayed, suspended, or terminated, increasing expenses and delaying reimbursement coverage or label expansion ¹⁰⁹. Healthcare reform initiatives and legislative proposals could limit product pricing or reimbursement ¹¹⁰.

Data privacy and security risks are also material. The collection, use, storage, disclosure, transfer, and processing of sensitive and personal information, including patient health data, is subject to evolving federal, state, and foreign laws like CCPA and GDPR ¹¹¹. Non-compliance could lead to significant costs, liabilities, investigations, fines (up to 4% of global annual turnover or €20 million ¹¹² under GDPR), and negative press ¹¹³. Significant disruptions in information technology systems, whether through breaches or failures, could lead to unauthorized use or disclosure of patient personal information, fraudulent activity, or system shutdowns, materially impacting the business ¹¹⁴. Some potential EU customers have refused to become customers due to concerns about transferring private patient information to the U.S. under GDPR, which may necessitate expanding operations to host foreign instances of cloud-based software ¹¹⁵.

Intellectual property risks include the inability to obtain, maintain, protect, enforce, and defend patents or other intellectual property protection for its technology, or if the scope of patents is not sufficiently broad, competitors could commercialize similar products ¹¹⁶. Patents could be found invalid or unenforceable if challenged, and the medical device industry is characterized by patent litigation, which could be costly and divert management's time ¹¹⁷. Compliance with patent agency requirements is crucial, and non-compliance could reduce or eliminate patent protection ¹¹⁸. Failure to comply with obligations under license agreements, such as the one with UCSF, could lead to loss of critical license rights ¹¹⁹. Changes in U.S. or foreign patent laws could diminish the value of patents ¹²⁰. The company may be subject to claims challenging ownership or inventorship of its intellectual property ¹²¹.

Management's message to shareholders emphasizes Aclarion's position as a healthcare technology company leveraging MRS, proprietary signal processing, biomarkers, and augmented intelligence algorithms to optimize clinical treatments, initially focusing on the chronic low back pain market with NOCISCAN ¹²². They highlight the company's objective to improve surgical outcomes for discogenic low back pain and expand the technology's application to broader low back and neck pain management, including conservative and regenerative therapies, with an aspirational goal to extend into tumor diagnosis ¹²³. Management explicitly states that current cash and cash equivalents and restricted cash of $12,040,789 ⁴² are expected to fund operating expenses and capital expenditure requirements into the first quarter of 2028 ⁶⁷. The key strategic priorities for the period ahead include securing payer contracts for Category III CPT codes and pursuing their conversion to Category I CPT codes to enable broader market adoption and more efficient physician and imaging center engagement ⁷⁰. Furthermore, management is focused on expanding the network of imaging centers and physicians using NOCISCAN in prioritized markets, such as the NYC Metropolitan Area, San Francisco and Southern CA, Chicago, IL, Phoenix, AZ, Miami, FL, Denver & Colorado Springs, CO, Indianapolis, IN, and London, United Kingdom ⁸⁶, and continuing to invest in clinical studies, including the CLARITY Trial, to build evidence for improved patient outcomes and support reimbursement efforts ¹²⁴.