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Aclarion, Inc. (ACON)·Q2 2023 Earnings Summary

Executive Summary

  • Q2 2023 revenue was $17,072, up 60% year over year, driven by a UNC Chapel Hill purchase order; gross margin was negative given small scale and royalty/partner costs .
  • Net loss per share was $0.18 vs $0.47 in Q2 2022 as post-IPO costs normalized and interest benefited from prior conversions; operating loss was $1.41M vs $2.21M in Q2 2022 .
  • Liquidity remained strained: cash and restricted cash ended Q2 at $614,518 with bridge financing of $1.25M in May; management disclosed substantial doubt about going concern and ongoing Nasdaq compliance risks (stockholders’ equity and $1.00 bid price) .
  • No formal guidance, earnings call transcript, or estimates were provided; the Q2 8‑K focused on the delayed 10‑Q filing and related Nasdaq notice, with the company filing on Aug 25 and indicating regained Rule 5250(c)(1) compliance .

What Went Well and What Went Wrong

What Went Well

  • Year-over-year revenue growth (+60%) tied to a UNC Chapel Hill purchase order: “The increase in revenues resulted from a Purchase Order from the University of North Carolina at Chapel Hill.”
  • Operating expense normalization: G&A fell 45% YoY in Q2 as post‑IPO bonuses and stock comp from 2022 rolled off .
  • Interest expense dramatically lower YoY (-$1.29M in Q2) due to the prior beneficial conversion of promissory note interest at IPO, reducing current-period interest burden .

What Went Wrong

  • Scale remains very small with negative gross margin and significant operating losses (Q2 operating loss $1.41M; gross profit $(2,229)) .
  • Liquidity risk: quarter-end cash $604,518 with management explicitly stating “substantial doubt” about going concern and reliance on short-term bridge financing to operate into Q3 2023 .
  • Listing compliance risks: notices for late filing, stockholders’ equity deficiency, and minimum bid price, with potential delisting if remediation fails .

Financial Results

Quarterly comparison (oldest → newest)

MetricQ3 2022Q1 2023Q2 2023
Revenue ($USD)$18,222 $25,470 $17,072
Cost of Revenue ($USD)$17,028 $17,453 $19,301
Gross Profit ($USD)$1,194 $8,017 $(2,229)
Operating Loss ($USD)$(1,633,260) $(1,181,264) $(1,406,200)
Net Loss ($USD)$(1,633,033) $(1,183,460) $(1,464,557)
EPS (Basic & Diluted, $)$(0.21) $(0.15) $(0.18)
Gross Margin %6.6% (1,194/18,222) 31.5% (8,017/25,470) -13.1% (-2,229/17,072)

Q2 year-over-year

MetricQ2 2022Q2 2023
Revenue ($USD)$10,676 $17,072
Cost of Revenue ($USD)$14,249 $19,301
Operating Loss ($USD)$(2,212,748) $(1,406,200)
Net Loss ($USD)$(3,554,862) $(1,464,557)
EPS (Basic & Diluted, $)$(0.47) $(0.18)

Operating expenses detail (Q/Q and Y/Y)

MetricQ2 2022Q1 2023Q2 2023
Sales & Marketing ($USD)$124,759 $177,284 $207,790
Research & Development ($USD)$353,226 $204,399 $250,006
General & Administrative ($USD)$1,731,190 $807,599 $946,175
Total Operating Expenses ($USD)$2,209,175 $1,189,281 $1,403,971

Liquidity and cash metrics

MetricQ3 2022Q1 2023Q2 2023
Cash ($USD)$2,656,108 $447,975 $604,518
Restricted Cash ($USD)$10,000 $10,000 $10,000
Cash + Restricted Cash ($USD)$2,666,108 $457,975 $614,518
Cash used in Operations ($USD)N/A$(1,013,113) $(1,960,653) (six months)

Note: Q2 2023 cash flow figures reflect six months ended June 30, 2023 .

Segment breakdown

  • Not applicable; the company reports a single revenue stream (Nociscan reports) .

KPIs

  • No unit-based KPIs disclosed (e.g., report counts or site deployments). Revenue recognition tied to delivery of Nociscan reports; costs include UCSF royalties and partner commissions (NuVasive 6%) .

Guidance Changes

  • The company did not issue quantitative guidance for revenue, margins, OpEx, or other items in Q2 2023 filings or press releases. The Q2 8‑K and press release focused on the delayed 10‑Q filing and Nasdaq compliance status .
MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q2 2023None disclosed None disclosed Maintained (no guidance)
Margins/OpExFY/Q2 2023None disclosed None disclosed Maintained (no guidance)
Other (tax, OI&E, dividends)FY/Q2 2023None disclosed None disclosed Maintained (no guidance)

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 2023. Themes are drawn from MD&A across quarters.

TopicPrevious Mentions (Q3 2022 and Q1 2023)Current Period (Q2 2023)Trend
Liquidity/FinancingIPO proceeds funded into Q2 2023; need for additional funding; cash $2.7M Q3’22 Bridge financing ($1.25M first tranche), cash + restricted cash $614,518; substantial doubt about going concern Deteriorating liquidity; short-term bridge reliance
Nasdaq ComplianceQ1’23: plan submitted for equity requirement; regained $1.00 bid price in June Late 10‑Q notice and remediation; ongoing $1.00 bid price compliance period Ongoing compliance risk
Revenue DriversQ3’22: site trainings; UNC PO noted Q1/Q2’23: UNC PO drove revenue increases Early customer traction; scale still minimal
Cost StructureQ3’22 G&A inflated by IPO-related costs Q2’23 G&A down 45% YoY; S&M up with KOL RSU vesting and events Normalizing post-IPO; targeted commercial investments
Royalty/PartnersUCSF minimum royalties and 4% earned royalty; NuVasive commission 6% Continued royalty and commission costs; contributes to negative gross margin at small scale Structural burden until scale achieved
R&D ExecutionQ3’22: engineering, UCSF milestone payment Q2’23: lower R&D YoY as 2022 milestone rolled off Discipline amid funding constraints

Management Commentary

  • “Total revenues for the quarter ended June 30, 2023 were $17,072… The increase in revenues resulted from a Purchase Order from the University of North Carolina at Chapel Hill.”
  • “General and administrative expenses were $946,175… a decrease of $785,014 or 45%, from $1,731,190… [due to] post‑IPO expenses related to bonus payouts and stock compensation expenses, which were not incurred for the quarter ended June 30, 2023.”
  • “As a result of the Company’s recurring losses… there is uncertainty… which raises substantial doubt as to the Company’s ability to continue as a going concern.”
  • “On August 23, 2023, the Company received a notice from Nasdaq… [for] delinquent filing… The Company filed the Form 10‑Q on August 25, 2023… [and] believes… it has regained compliance with Rule 5250(c)(1).”
  • “Separately, on August 4, 2023, we received a notice… not in compliance with the $1.00 Minimum Bid Price requirement… 180 calendar days… to regain compliance.”

Q&A Highlights

  • No Q2 2023 earnings call transcript available; no analyst Q&A recorded in source documents [ListDocuments earnings-call-transcript returned none].

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2023 EPS and revenue was unavailable via tool at the time of analysis; therefore, no estimate comparison is provided. Values would normally be retrieved from S&P Global; in this case, estimates were unavailable due to request limits.

Key Takeaways for Investors

  • Revenue remains de minimis despite YoY growth; scale limits gross margin and exacerbates percentage losses—focus on customer adoption milestones (e.g., additional institutional POs) to validate trajectory .
  • Expense normalization is evident; however, operating losses persist—monitor S&M productivity and R&D cadence relative to cash runway and financing options .
  • Liquidity is the primary risk: Q2 cash ~$615K and reliance on unsecured notes; expect near-term capital raising and potential equity dilution or further warrant issuances .
  • Nasdaq compliance is a potential stock overhang (equity level and bid price); corporate actions (including potential reverse split) may be considered if price compliance fails—trading risk into compliance windows is elevated .
  • Structural costs (UCSF royalties, partner commissions) weigh on gross margins at low volumes; scale benefits are necessary to move margins positive .
  • No guidance or call limits near-term visibility; traders should watch filings for financing updates, compliance notices, and commercial progress announcements .
  • Medium-term thesis depends on validated clinical utility of Nociscan and payer/reimbursement evolution; current revenue model hinges on per-report sales without reimbursement, constraining adoption until clinical and economic value are demonstrated .

Supporting Press Releases and Filings

  • 8‑K (Aug 25, 2023): Notice of late filing; press release announcing delayed 10‑Q and subsequent filing; Nasdaq notice and stated regained compliance with filing requirement .
  • 10‑Q (Q2 2023, filed Aug 25, 2023): Full financials, liquidity/go‑concern, Nasdaq notices, and bridge financing detail .
  • 10‑Q (Q1 2023, filed Jul 3, 2023): Prior quarter financials and subsequent events including unsecured notes and bid-price compliance regained in June .
  • 10‑Q (Q3 2022, filed Nov 14, 2022): Historical context on revenue drivers, IPO-related costs, and liquidity post-IPO .