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STOCKHOLDERS’ EQUITY
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 12. STOCKHOLDERS’ EQUITY

 

The Company filed an Amended and Restated Certificate of Incorporation on April 21, 2022, as part of the IPO. The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is two hundred twenty million (220,000,000) shares. Two hundred million (200,000,000) shares are authorized to be Common Stock, having a par value per share of $0.00001. Twenty million (20,000,000) shares are authorized to be Preferred Stock, having a par value per share of $0.00001.

 

2024 Public Offering

 

On February 27, 2024, the Company completed a public offering of 5,175,000 units (“Units”; equivalent to 572 units following the 2025 Stock Splits) at a price of $0.58 per Unit (adjusted to $5,246.10 following the 2025 Stock Splits), for gross proceeds of approximately $3.0 million, before deducting offering expenses. Each Unit was comprised of (i) one share of common stock or, in lieu of common stock, one pre-funded warrant to purchase one share of common stock, and (ii) two common warrants, each common warrant to purchase a share of common stock. The pre-funded warrants were immediately exercisable at a price of $0.00001 (adjusted to $0.09 following the 2025 Stock Splits) per share of common stock and only expire when such pre-funded warrants are fully exercised. The common warrants were immediately exercisable at a price of $0.58 (adjusted to $5,246.10 following the 2025 Stock Splits) per share of common stock and will expire five years from the date of issuance.

 

Subscription Agreements

 

On August 12, 2024, Aclarion, Inc. (the “Company”), entered into a subscription agreement with an institutional investor, pursuant to which the Company agreed to issue and sell to the investor 400,000 shares (the “Shares”; equivalent to 44 shares following the 2025 Stock Splits) of common stock of the Company at a price of $0.29 per share (equivalent to $2,623.05 following the 2025 Stock Splits) for gross proceeds to the Company of $116,000. The Shares were not placed through the efforts of a placement agent and no fees or commissions were paid on the transaction.

 

The Shares issued in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A (the “Offering Statement”), initially filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), on June 11, 2024 and qualified on June 24, 2024.

 

On August 15, 2024, Aclarion, Inc. (the “Company”), entered into a subscription agreement with an institutional investor, pursuant to which the Company agreed to issue and sell to the investor 425,000 shares (the “Shares”; equivalent to 47 shares following the 2025 Stock Splits) of common stock of the Company at a price of $0.29 per share (equivalent to $2,623.05 following the 2025 Stock Splits) for gross proceeds to the Company of $116,000. The Shares were not placed through the efforts of a placement agent and no fees or commissions were paid on the transaction.

 

The Shares issued in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A (the “Offering Statement”), initially filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), on June 11, 2024 and qualified on June 24, 2024.

 

On August 27, 2024, the Company entered into a subscription agreement (the “Subscription Agreement”) with certain accredited investors to which the Company agreed to issue and sell to the investors 1,000,000 shares of common stock (the “Shares”; equivalent to 111 shares following the 2025 Stock Splits) of the Company, par value $0.00001 per share, at a price of $0.29 per share (equivalent to $2,623.05 following the 2025 Stock Splits) for gross proceeds of $290,000. The Shares were offered at-the-market under NASDAQ rules and pursuant to the Company’s Form 1-A initially filed on June 11, 2024 and qualified on June 24, 2024.

 

In connection with the Subscription Agreement, on August 27, 2024, the Company also entered into a warrant purchase agreement (the “Warrant Purchase Agreement”) with the accredited investors pursuant to which the Company issued warrants (the “Warrants”) to purchase up to 400,000 Common Stock (44 shares following the 2025 Stock Splits) exercisable on or after February 27, 2025 with a five year term and an initial exercise price of $0.29 per share (adjusted to $2,623.05 following the 2025 Stock Splits). The exercise price of the Warrants may be adjusted if and whenever prior to the expiration Date, the Company grants, issues, or sells (or enters into any agreement to grant, issue or sell), or in accordance with Section 2 of the Warrant Agreement is deemed to have granted, issued or sold, any shares of Common Stock for a consideration per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale, then immediately after such Dilutive Issuance, the Exercise Price then In effect shall be reduced to an amount equal to the New Issuance Price.

 

On September 30, 2024, as a result of the securities purchase agreement for the Company’s Series C Preferred Stock noted below, the exercise price for the Warrants was adjusted to $0.1759 per share (adjusted to $1,591.02 following the 2025 Stock Splits).

 

White Lion Equity Line Agreement

 

The Company has had an equity line common stock purchase agreement (the “Equity Line Purchase Agreement”) with White Lion Capital, LLC (“White Lion”) since 2023. Pursuant to the Equity Line Purchase Agreement, during the year ended December 31, 2024, the Company issued to White Lion 1,502,343 common shares (166 shares post-2025 Stock Splits) for total proceeds of $1,754,032. Since the initiation of the Equity Line Purchase Agreement and through December 31, 2024, the Company has issued 1,800,000 shares (199 shares post-2025 Stock Splits) to White Lion for total proceeds of $3,216,981.

 

Pursuant to the Equity Line Agreement, the Company has the right, but not the obligation to require White Lion to purchase, from time to time, up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock, subject to certain limitations and conditions set forth in the Equity Line Purchase Agreement

 

Ascendiant Capital Markets, LLC Sales Agreement

 

On September 24, 2024, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC, (“Ascendiant”) as sales agent, to sell shares of its common stock, par value $0.00001 per share, having an aggregate offering price of up to $10 million from time to time, through an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. The aggregate market value of shares of the Company’s common stock eligible for sale under the Sales Agreement will be subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent required under such restriction. The Company is not obligated to make any sales of shares of common stock under the Sales Agreement. The Company and Ascendiant each have the right, in its sole discretion, to terminate the Sales Agreement pursuant to the terms and subject to the conditions set forth in the Sales Agreement.

 

On September 24, 2024, in conjunction with the Sales Agreement, the Company filed a prospectus supplement relating to the offer and sale of up to $1,075,000 of shares of common stock.

 

The Company is required to pay Ascendiant a commission of up to 3.0% of the gross proceeds from the sales of its common stock sold through Ascendiant under the Sales Agreement. The Company will also reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement.

 

During the year ended December 31, 2024, the Company sold 1,606,211 shares (178 shares post-2025 Stock Splits) of its common stock under the Sales Agreement for net proceeds of $288,294.

 

On January 3, 2025, the Company gave notice to terminate the Sales Agreement, effective immediately. See Note 17 – Subsequent Events.

 

Issuances of Preferred Stock

 

Series A Preferred Stock

 

In February 2023 the Company sold one share of the Company’s newly designated Series A preferred stock to Jeffrey Thramann, the Company’s Executive Chairman, for a purchase price of $1,000. The share of Series A preferred stock had proportional voting rights that were limited to the proposal to approve a reverse stock split of the Company’s common stock. Following March 24, 2023, special meeting, the Company redeemed the one outstanding share of Series A preferred stock on March 28, 2023, in accordance with its terms. The redemption price was $1,000. No Series A preferred stock remains outstanding at December 31, 2024 and 2023.

 

Series B Preferred Stock

 

On August 14, 2024, the Company entered into an exchange agreement (the “Exchange Agreement”) with accredited investors to exchange $930,052 of principal and accrued interest on the September 2023 Notes for 930 shares of newly issued Series B convertible preferred stock (the “Series B Preferred Stock”) at a purchase price of $1,000 per share. The Series B Preferred Stock is convertible into common stock at an initial conversion price of $0.234 per share ($2,116.53 post-2025 Stock Splits).

 

Holders of the Series B Preferred Stock are entitled to dividends in the amount of 10% per annum, payable quarterly.

 

The Company also has the option to cumulate or “capitalize” the dividends, in which case the accrued dividend amount shall be added to the stated value of each share of Series B Preferred Stock.

 

The Company has the option to pay dividends on the Series B Preferred Stock in additional shares of common stock, provided that no equity conditions failure (as defined in the Certificate of Designations) then exists. If the Company elects to pay in the form of common stock, the number of dividend shares to be issued shall be calculated by using a “Dividend Conversion Price” equal to the lower of (i) the then applicable Series B Conversion Price as in effect on the applicable dividend date, or (ii) 90% of the lowest volume weighted average price of the common stock during the five (5) consecutive trading day period ending and including the trading day immediately preceding the applicable dividend date.

 

The stated value of each share of Series B Preferred Stock (including all the unpaid dividends and other amounts payable on the Series B Preferred Stock) will be convertible into common stock at an initial fixed Conversion Price of $0.234 per share ($2,116.53 post-2025 Stock Splits) of common stock. The Series B Preferred Stock may be converted into shares of common stock at any time at the option of the holder. The Series B Preferred Stock may also be converted into shares of common stock at the option of the Company if the closing price of the common stock equals at least 300% of the Conversion Price for 20 consecutive trading days, provided that no equity conditions failure (as defined in the Certificate of Designations) then exists.

 

The Conversion Price of the Series B Preferred Stock is subject to certain anti-dilution adjustments, including in the event of any stock splits or combinations, certain dividends and distributions, reclassification, exchange or substitution of the Company’s common stock or in the event that the Company grants, issues or sells (or enters into any agreement to grant, issue or sell), or is deemed to have granted, issued or sold, any shares of common stock for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (the foregoing a “Dilutive Issuance”). Immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price.

 

Series C Preferred Stock Financing

 

On September 30, 2024, the Company entered into a securities purchase agreement with accredited investors for a convertible preferred stock and warrants financing. The Company received $1,000,000 of gross proceeds in connection with the closing of this financing. The Company issued 1,000 shares of Series C convertible preferred stock (the “Series C Preferred Stock”) at a purchase price of $1,000 per share of Series C Preferred Stock. The Series C Preferred Stock is convertible into common stock at an initial conversion price of $0.1759 per share ($1,591.02 post-2025 Stock Splits) of common stock. The Company also issued warrants exercisable for 5,685,049 shares of common stock (equivalent to 629 following the 2025 Stock Splits) with a 5.5 year term and an initial exercise price of $0.1759 (adjusted to$1,591.02 following the 2025 Stock Splits).

 

The Preferred Stock key terms are summarized as follows:

Preference Amounts  Issue Date   Total Face Value of Investment   Issue Purchase Price/Share 
                
Series B Preferred Stock   8/14/2024   $930,052   $1,000 

 

  · ranks senior to the common stock with respect to dividends and rights upon liquidation
  · Stated value of $1,000 per preferred share
  · 10% per annum dividend rate payable in cash or stock; Company has the option to cumulate or “capitalize” or dividends, in which case the accrued dividend amount shall be added to the stated value
  · has a liquidation preference equal to the greater of (a) 125% of the applicable liquidation value and (b) the amount per share such holder would receive if such holder converted the preferred shares into common stock immediately prior to the date of such payment
  · convertible into common stock at the option of the holder at an initial fixed conversion price of $0.234 per share of common stock ($2,116.53 post-2025 Stock Splits), subject to exchange cap and beneficial ownership limitations
  · conversion price is subject to certain price-based anti-dilution adjustments in the event that the Company issues or sells any shares of common stock for a consideration per share less than the conversion price then in effect
  · at any time, the Company has the right to redeem all, but not less than all, of the preferred shares then outstanding in cash at a price equal to at a 25% premium to the greater of (i) the applicable redemption amount and (ii) the equity value of the shares of our common stock underlying the preferred shares included in the applicable redemption amount
  · no voting rights except as otherwise required by law (or with respect to approval of certain actions)

 

Series C Preferred Stock   9/30/2024   $1,000,000   $1,000 

 

  · ranks senior to the common stock with respect to dividends and rights upon liquidation
  · Stated value of $1,000 per preferred share
  · 10% per annum dividend rate payable in cash or stock; Company has the option to cumulate or “capitalize” or dividends, in which case the accrued dividend amount shall be added to the stated value
  · has a liquidation preference equal to the sum of (i) the Black Scholes value of the warrants issued in connection with the Series C Preferred Stock and (ii) the greater of (a) 125% of the applicable liquidation value and (b) the amount per share such holder would receive if such holder converted the preferred shares into common stock immediately prior to the date of such payment
  · convertible into common stock at the option of the holder at an initial fixed conversion price of $0.1759 per share of common stock (adjusted to $1,591.02 following the 2025 Stock Splits), subject to exchange cap and beneficial ownership limitations
  · conversion price is subject to certain price-based anti-dilution adjustments in the event that the Company issues or sells any shares of common stock for a consideration per share less than the conversion price then in effect
  · at any time, the Company has the right to redeem all, but not less than all, of the preferred shares then outstanding in cash at a price equal to at a 25% premium to the greater of (i) the applicable redemption amount and (ii) the equity value of the shares of our common stock underlying the preferred shares included in the applicable redemption amount
  · no voting rights except as otherwise required by law (or with respect to approval of certain actions)
  · In connection with the Series C Preferred Stock, the Company also issued warrants exercisable for 5,685,049 shares of common stock(equivalent to 629 shares following the 2025 Stock Splits) with a 5.5 year term and an initial exercise price of $0.1759 per share (adjusted to $1,591.02 following the 2025 Stock Splits)

 

Warrants

 

The following table summarizes the Company’s outstanding warrants as of December 31, 2024. The warrants and related strike prices have been adjusted to reflect the 2025 Stock Splits:

         
Issue Date  Strike Price  Number Outstanding  Expiration
April 21, 2022 (1)  $629,532  17  April 21, 2027
April 21, 2022  $787,277  1  April 26, 2027
April 21, 2022  $629,532  3  April 21, 2027
May 16, 2023  $2,623  9  May 16, 2028
November 21, 2023  $2,623  5  November 21, 2028
November 21, 2023  $1.45  1  November 21, 2028
February 27, 2024  $5,246  1,144  February 27, 2029
August 27, 2024 (2)  $2,623  44  August 27, 2029
September 30, 2024 (2)  $1,591  629  April 1, 2030

 

(1)  These warrants were issued as part of the Company’s initial public offering completed April 2022, and trade on Nasdaq under the ticker symbol “ACONW.”
(2)  The per share exercise price of these warrants is subject to a “ratchet” adjustment if the Company issues securities at an effective per share price lower than the then effective warrant exercise price. The strike price of $1,591 is current through the Series C preferred stock issuance closed September 30, 2024.