S-1: Aclarion Files for Resale of Up to 2.5 Million Shares by White Lion Capital Amid Nasdaq Compliance Concerns

Aclarion, Inc. is registering for resale up to 2.5 million shares of its common stock by White Lion Capital, while also addressing ongoing compliance issues with Nasdaq's minimum bid price and stockholders' equity requirements.

Summary

• Aclarion, Inc., a healthcare technology company, has filed a registration statement for the resale of up to 2,500,000 shares of its common stock by White Lion Capital LLC.
• The shares may be issued and sold to White Lion pursuant to a purchase agreement effective as of October 9, 2023.
• Aclarion 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 the Purchase Agreement.
• The company is currently not in compliance with Nasdaq's minimum bid price requirement of $1.00 per share and the requirement to have at least $2,500,000 in stockholders' equity.
• Aclarion received notification from Nasdaq that it has until January 31, 2024, to demonstrate compliance with both requirements.
• The company believes its recently implemented 1-for-16 reverse stock split will help regain compliance with the bid price requirement.
• Aclarion's independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern.
• The company believes its existing cash will be sufficient to fund its current operating plans into the second quarter of 2024, and into the fourth quarter of 2024 assuming the receipt of the maximum amount of net proceeds from this offering.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are some positive developments like the ATEC partnership, the overwhelming concern is the company's financial instability, Nasdaq compliance issues, and reliance on a single product and vendor. The auditor's going concern warning is a significant negative signal.

Positives

• A strategic partnership agreement was executed with ATEC Spine, Inc. to co-market Nociscan in targeted markets.
• The company believes its recently implemented 1-for-16 reverse stock split is likely to result in compliance with the Nasdaq Bid Price Requirement in the near future.
• The company has been selected as a participant in a $150 million, NIH funded study (the Study), which is focused on evaluating the most promising data inputs for predicting the optimal treatment path for back pain patients.

Negatives

• Aclarion is not currently compliant with Nasdaq's minimum bid price and stockholders' equity requirements and has until January 31, 2024, to regain compliance.
• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company has a history of net losses, and expects to continue to incur losses for the foreseeable future.

Risks

• Failure to regain compliance with Nasdaq listing rules could lead to delisting, limiting stock liquidity and hindering capital raising.
• The company's ability to continue as a going concern is dependent on obtaining additional funding.
• 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 its ability to address the total potential patient population.
• 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.

Future Outlook

The company expects expenses to increase as it invests in sales, marketing, and engineering resources and brings its products to market, and believes that its existing cash will be sufficient to fund its current operating plans into the second quarter of 2024, and into the fourth quarter of 2024 assuming the receipt of the maximum amount of net proceeds from this offering.

Industry Context

The document highlights Aclarion's focus on addressing the $134.5 billion U.S. low back and neck pain market, emphasizing the need for objective, cost-effective, and noninvasive diagnostics to reliably identify the source of a patient's pain.

Comparison to Industry Standards

• The document positions Aclarion's NOCISCAN-LS as a potential improvement over existing diagnostic methods like MRI and Provocation Discogram (PD) tests.
• MRI is considered the current standard for lumbar imaging, but the document argues that it cannot reliably identify specific discs that are causing pain.
• PD Tests have been shown to be highly accurate when performed properly, but the document notes that they are invasive, subjective and unpleasant for the patient.
• The document claims that SPECT CT requires an MRI, a CT-Scan, and an injection of a radioactive dye followed by a period of time for circulation of the dye, and that the inflammation markers have not been shown to specifically correlate with pain.

Related Party Transactions

• The document mentions financial relationships with certain physicians and health care providers, research investigators, and authors for clinical or scientific publications that may be deemed a conflict of interest.
• The document mentions that the principal author of the Gornet Study is a spine surgeon who has a financial interest in the Company, and that other authors of these studies also have a financial relationship with Aclarion.

Stakeholder Impact

• Shareholders face potential dilution from the issuance of common stock to White Lion.
• Shareholders face the risk of delisting from Nasdaq, which could negatively affect the liquidity of the common stock.
• Employees face uncertainty due to the company's financial instability and potential need to delay, reduce, or eliminate technology development and commercialization efforts.

Next Steps

• The company intends to monitor the closing bid price of its common stock and is considering its options to regain compliance with the Bid Price Requirement.
• The company intends to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq.
• The company plans to collaborate with other MRI scanner vendors, as well as SIEMENS, to establish compatibility with their respective scanners and MRS capabilities for use with our products.

Key Dates

Keywords

Aclarion, White Lion Capital, Nasdaq, compliance, reverse stock split, Nociscan, stockholders equity, minimum bid price, going concern, ATEC Spine, strategic partnership, delisting, S-1 Filing, common stock, warrants