S-1/A: Aclarion Files Amendment to S-1 Registration for Common Stock Resale by White Lion Capital

Aclarion files an amendment to its S-1 registration statement to allow White Lion Capital to resell up to 2,500,000 shares of common stock, while addressing Nasdaq compliance and going concern uncertainties.

Summary

• Aclarion has filed an amendment to its S-1 registration statement related to the resale of up to 2,500,000 shares of its common stock by White Lion Capital LLC.
• The company will not receive any proceeds from the sale of shares by White Lion, but may receive up to $7.1 million from the sale of common stock to White Lion under a purchase agreement.
• Aclarion is addressing Nasdaq compliance issues, having regained compliance with the minimum bid price requirement but still needing to meet the stockholders' equity requirement by February 27, 2024.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern, and its existing cash is expected to fund operations into the second quarter of 2024.
• Aclarion is a healthcare technology company focused on improving the diagnosis and treatment of low back pain using Magnetic Resonance Spectroscopy (MRS) and artificial intelligence.
• The company's primary product, NOCISCAN-LS, aims to assist surgeons in determining the optimal surgical procedure for patients with lumbar spine pain.
• Aclarion has a strategic partnership with ATEC Spine, Inc. to evaluate and co-market Nociscan technology.
• The company is working to secure payer contracts for its Category III CPT codes to improve reimbursement for its technology.
• A reverse stock split of 1-for-16 was implemented to regain compliance with Nasdaq's bid price requirement.
• The company has entered into exchange agreements to exchange principal and accrued interest on certain notes for shares of common stock.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive developments such as the ATEC Spine partnership and regained Nasdaq bid price compliance, the going concern warning, continued losses, and need for additional funding create significant uncertainty.

Positives

• Aclarion has a strategic partnership with ATEC Spine, Inc. to evaluate and co-market Nociscan technology.
• The company is participating in a $150 million NIH-funded study to evaluate data inputs for predicting optimal back pain treatment.
• Aclarion regained compliance with Nasdaq's minimum bid price requirement through a 1-for-16 reverse stock split.
• The company has an intellectual property portfolio consisting of 22 U.S. Patents, 17 Foreign Patents, 6 pending U.S. patent applications, and 7 pending Foreign patent applications.

Negatives

• Auditors have expressed substantial doubt about Aclarion's ability to continue as a going concern.
• Existing cash is expected to fund operations only into the second quarter of 2024.
• Aclarion needs to demonstrate compliance with the Nasdaq stockholders' equity requirement by February 27, 2024.

Risks

• Failure to regain compliance with the Nasdaq stockholders' equity rule could lead to delisting.
• The company's history of net losses and expectation of continued losses raise concerns about its financial sustainability.
• The COVID-19 pandemic or other epidemic disease may have a material adverse effect on our business, financial condition and operating results, as well as on the operations and financial performance of our customers and suppliers.
• The company's commercial success depends on attaining significant market acceptance of its technology.
• The company's commercial software products currently depend on compatible use with a limited number of MR scanners that are provided by one MR scanner vendor, SIEMENS, which limits our ability to address the total potential patient population that our products could otherwise address in commercial sales.
• The company's current product is supported by a single clinical study at a single clinical center involving one spine surgeon who has a financial interest in the Company.
• The company may fail to continue to meet the listing standards of The Nasdaq Capital Market whether or not this offering occurs.

Future Outlook

Aclarion plans to expand the application of its technology beyond the lumbar spine to address neck pain populations and to expand clinical registries to capture patients undergoing surgical interventions for back pain that includes all surgical interventions, not just fusion and disc replacement procedures.

Industry Context

Aclarion operates in the healthcare technology sector, specifically targeting the low back and neck pain market, which is a significant area of healthcare spending. The company's technology aims to address the limitations of current diagnostic methods, such as MRI and discography, by providing a non-invasive and objective assessment of discogenic pain.

Comparison to Industry Standards

• Aclarion's technology competes with existing diagnostic methods for low back pain, including MRI, CT-Scan, SPECT CT, and discography.
• The company's clinical study results, showing a 97% clinical improvement rate when all discs identified as painful by NOCISCAN were included in surgical treatment, compare favorably to typical surgical success rates for low back pain, which range from 41% to 57%.
• Unlike SPECT CT, Aclarion's technology identifies biomarkers shown to be linked to pain and structural integrity of intervertebral discs.
• Unlike discography, Aclarion's technology is non-invasive and does not carry the risk of accelerating disc degeneration.

Stakeholder Impact

• Shareholders face potential dilution from the sale of common stock to White Lion Capital LLC.
• Employees may experience uncertainty due to the company's financial challenges and potential need for cost-cutting measures.
• Customers (surgeons and imaging centers) may be affected by the availability and reimbursement of Aclarion's technology.
• Suppliers and creditors face potential risks due to the company's going concern uncertainty.

Next Steps

• Demonstrate compliance with the Nasdaq stockholders' equity requirement by February 27, 2024.
• Continue to execute the strategic partnership with ATEC Spine, Inc.
• Secure payer contracts for Category III CPT codes.
• Continue to participate in the NIH-funded study to evaluate data inputs for predicting optimal back pain treatment.
• Pursue additional funding to support ongoing operations and growth strategy.

Key Dates

Keywords

Aclarion, White Lion Capital, S-1, Registration Statement, Common Stock, Resale, Nasdaq, Compliance, Going Concern, Nociscan, ATEC Spine, CPT Codes, Reverse Stock Split, Financial Results, MRS, Magnetic Resonance Spectroscopy, Low Back Pain, AI, Artificial Intelligence