Aclarion cuts losses but delayed report shows continued financial stress

BROOMFIELD — Aclarion Inc. (Nasdaq: ACON), a Broomfield-based medical-device startup, cut its year-over-year net loss in more than half during the second quarter of 2023 but questions remain as to whether the company has the cash to continue operations over the next few periods. 

The company posted sales of $17,000 in the second quarter of 2023, up from about $10,000 in the same period last year.

Aclarion’s net loss was just under $1.5 million, an improvement on a loss of nearly $3.6 million in the second quarter of 2022. 

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The company is a health care technology firm that uses biomarkers and proprietary augmented intelligence algorithms to help physicians identify the location of chronic low back pain.

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

Formerly known as Nocimed Inc., Aclarion completed an initial public offering in April 2022 and subsequently relocated its corporate headquarters from San Mateo, California, to Broomfield.

Since then, “we have financed our operations primarily through private placements of preferred shares and debt financing, PPP loans that were forgiven, and our IPO,” Aclarion’s management team said last week in its quarterly report, which was filed late.

Aclarion failed to file its earnings report before Nasdaq’s deadline to allow for the “completion of the review process by the company’s new independent accountant, CohnReznick LLP,” the company said. 

Now that the report has been filed, “we have regained compliance,” Aclarion’s managers said. 

This is hardly the first time Aclarion has run afoul of Nasdaq. 

Since December 2022, Aclarion has received two other notices of noncompliance with Nasdaq listing rules. The company failed to meet the $1 minimum-bid requirement for its stock price but informed Nasdaq on June 15 that it had regained compliance, with its stock trading at $1 or higher from June 1 through June 14. 

In March, Aclarion received notice from Nasdaq that it was not in compliance with a requirement that it maintain $2.5 million in stockholders’ equity, according to the quarterly filing with the SEC. The company reported $1.79 million in stockholders equity at the end of 2022 and $1.12 million at the end of the first quarter. Aclarion has until Aug. 30 to regain compliance with the listing rule.

The company’s stock has shaved off more than a quarter of its value over the past month and must more than double its price, which hovered around 43 cents on Monday, to meet Nasdaq’s $1 minimum price threshold. 

“As a result of the company’s recurring losses from operations and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the company’s ability to continue as a going concern,” Aclarion’s quarterly report said.