S-1/A: Aclarion Seeks $7 Million in Best Efforts Offering to Bolster Product Platforms and Sales

Aclarion, Inc. aims to raise $7 million through a best efforts offering of units consisting of common stock or pre-funded warrants and common warrants to fund product development and commercialization.

Summary

• Aclarion, Inc., a healthcare technology company, is offering up to 3,888,888 units in a best efforts offering, aiming to raise approximately $7.0 million.
• Each unit comprises one share of common stock or a pre-funded warrant and one common warrant.
• The assumed offering price is $1.80 per unit, based on the closing price of Aclarion's common stock on February 14, 2024.
• The company intends to use the net proceeds to build out product platforms, expand sales and marketing efforts, and for general corporate purposes.
• Aclarion is an emerging growth company and a smaller reporting company, which allows it to take advantage of reduced public company reporting requirements.
• The company's independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern.
• Aclarion's common stock is listed on the Nasdaq Capital Market under the symbol ACON.
• The company has an agreement with Alphatec Holdings, Inc. for strategic partnership.
• The company has an equity line agreement with White Lion Capital, LLC for up to $10 million.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While it highlights the potential of Aclarion's technology and its strategic partnerships, it also acknowledges the company's financial challenges and the risks associated with its business.

Positives

• Aclarion has a strategic partnership agreement with Alphatec Holdings, Inc.
• The company has an equity line agreement with White Lion Capital, LLC for up to $10 million.
• The company's technology addresses a large market for low back and neck pain.
• The company has published clinical data supporting the efficacy of its technology.

Negatives

• The company's independent registered public accounting firm 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.
• The company is not currently in compliance with the minimum stockholders equity rule of the Nasdaq Capital Market.
• 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.

Risks

• The company may not be able to raise additional capital when needed or on acceptable terms.
• The company's commercial success depends on attaining significant market acceptance of its technology.
• The company may be unable to compete successfully with other available alternatives for diagnosing low back pain.
• The company's collection, use, storage, disclosure, transfer and other processing of sensitive and personal information could give rise to significant costs, liabilities and other risks.
• 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.
• The COVID-19 pandemic or other epidemic disease may have a material adverse effect on our business, financial condition and operating results.

Future Outlook

The company 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

The document highlights the high cost of low back and neck pain treatment and the need for objective, cost-effective diagnostics to reliably identify the source of a patient's pain.

Comparison to Industry Standards

• The document compares Aclarion's technology to existing diagnostic methods like MRI and Provocation Discogram (PD) tests.
• MRI is considered the current standard for lumbar imaging, but the document argues it cannot reliably identify specific discs causing pain.
• PD Tests have been shown to be highly accurate when performed properly, but the document notes they are invasive, subjective, and potentially harmful.
• The document positions Aclarion's NOCISCAN-LS as a non-invasive, objective alternative with the potential to improve surgical outcomes.

Related Party Transactions

• The document mentions transactions with NuVasive, Inc., including a marketing agreement and a Right of First Offer (ROFO) Agreement.
• It also mentions that David Neal, one of the directors, is the founder and a current member of SC Capital 1, LLC, which has invested in the company.
• The document mentions that Jeffrey Thramann, the Executive Chairman, has a Series A Preferred Stock.

Stakeholder Impact

• Shareholders may experience dilution as a result of the offering.
• The company's ability to continue as a going concern is uncertain, which could impact stakeholders.
• The success of the company's technology could improve patient outcomes and reduce healthcare costs.
• The company's strategic partnerships could benefit stakeholders through increased market reach and product development.

Next Steps

• Build out the product platforms.
• Expand sales and marketing efforts.
• Pursue value-based care contracts.
• Secure payer contracts to cover Category III CPT codes.
• Expand the network of imaging centers and surgeons using NOCISCAN-LS.
• Support surgeons, radiologists, Physical Medicine and Rehabilitation physicians, physical therapists, regenerative therapy physicians and medical device companies to initiate studies and report results.
• Build and expand clinical registries to provide real world evidence of better outcomes when using Nociscan to help determine which discs to treat.

Key Dates

Keywords

Aclarion, common stock, warrants, offering, NOCISCAN, spine, pain, MRS, Alphatec, White Lion, equity line, reimbursement, clinical, biomarkers