Aclarion, Inc. Common Stock LD Micro 20th Annual Main Event Conference

Take it away. Thank you, Kate.

For anyone in the audience or listening to this on webcast who has suffered an acute back pain episode, or who has a loved one that is suffering from chronic low back pain, I want you to know that help is on the way. Aclarion is a publicly traded entity on NASDAQ. Our symbol is ACON, and we are in absolute growth mode. We will be in your neighborhood soon. What we offer is a disruptive solution through our Nociscan platform, where we are measuring the chemical composition of the discs inside the back. Evidence has shown that when Nociscan is utilized, surgical outcomes improve from the average of 54% up to 97%. The size of this market is absolutely incredible. It is a $32 billion global market opportunity. I will dive more into the actual addressable market in subsequent slides.

We have commercial traction with private payer reimbursement occurring in three of the top five commercial payers in the U.K., and much of our investment and energy right now is focused on converting U.S. payers or bringing U.S. payers on board. We have tremendous expansion in our physician referral patterns, both in the United States and in the U.K. We have launched a national randomized control trial called the Clarity Trial, where 300 patients will be evaluated, again, on a surgical outcomes basis, which is really quite unique for a diagnostic platform to be evaluated on a surgical outcome basis. But we are confident that that early single-surgeon, single-site evidence that I mentioned earlier will be replicated. We have now, as of today, $14.2 million of cash on hand, which fully funds the Clarity Trial and moves us well into 2027.

When I was referencing your loved ones earlier that maybe suffer from chronic low back pain, they are not alone. 266 million people suffer from this debilitating ailment, and I can tell you that the costs associated with the treatment and diagnostic of back pain is the number one expenditure in all of healthcare. So we are helping to solve a massive problem. There are 330,000 fusion procedures. When you think about the treatment of back pain, massage and chiropractic are kind of early stages. But it goes to the other end of the spectrum as a highly invasive fusion procedure. These are very expensive procedures, $58,000 for a one-level procedure, $71,000 for a two, and the costs go up from there, and $38,000 for a total disc replacement. Unfortunately, in spite of the invasive and sophisticated nature of these procedures, the average success rate hovers around 54%.

$6 billion are spent in the U.S. alone on revision surgeries. What we're trying to do here is make sure that the physicians are armed with all of the information, the chemical, before the structural information, so we don't have to bring these people back in for surgery later. When you think about the indirect costs, 20%-30% reduction in work productivity, absenteeism from back pain is off the charts. Unfortunately, a really tragic outcome of this is that back pain is the leading cause of opioid addiction in the U.S. Again, I'm setting the stage here because we're really trying to solve a very perplexing problem that is very large. From a company perspective, the annual revenue opportunity is depicted below.

I'm not going to talk about the $22 million lumbar MRIs so much as I want you to focus on these beachhead segments when you think about our company and our financial performance and opportunity moving forward. When you take our revenue per scan, times the number of pain management injections and basivertebral nerve ablation procedures, things that address the back pain market, if a Nociscan were applied to those prior to doing those procedures, we would be looking at a $6.7 billion revenue opportunity for that pain management alone. Then you add the surgical decision support, and you add another $478 million. Roughly a $7 billion beachhead segment that we're going after in terms of revenue opportunity, so tremendous. Here's the problem. When you go to your doctor and you bring him your MRI, he or she is trying to make a decision about, "What am I going to do to treat this patient?" They look at that, and there's nothing obvious wrong with that particular spine.

You might see a little bulge down there at L5, S1, the bottom one, but it's just not indicative of the pain symptoms that you're describing to the physician. It really leads to a high degree of surgical variability. We know that variation in any process really is the evil to any process, and therefore poor outcomes follow, and it's really the definition of low-value care.

What Nociscan provides for a physician is a personalized measurement of the chemical nature of the discs inside that MRI picture that really, if you want to talk about our superpower, we help physicians see the invisible, the chemical nature of the disc. I'll explain to you how this actually works anatomically in just a minute, but when they know this information, it lowers costs, it improves outcomes, and ultimately drives higher value of care. What do we actually do? Well, in the MRI down the street from where you live, there is a sequence called spectroscopy, little known and kind of a niche little way of an MRI to pull data out of an area of interest.

What the brilliant scientists that founded our company discovered is that when there are high levels of acids inside the disc and the structural integrity of that disc has degraded a little bit, the nerves have grown into the disc tissue, and as nerves hit acid, it causes pain. The problem is, as I described on the slide before, you cannot see that. You cannot see the chemical nature of pain inside the disc, and yet it could be the exact source of pain that brings people back after surgery that was unaddressed in the original procedure. We measure alanine, lactic acid, propionate in the numerator of our algorithm and carbohydrate, collagen, and proteoglycan in the denominator of the algorithm that is up in the cloud. The squiggly lines on the right is spectral data. That is a spectral plot, spectroscopy.

There is no picture being generated by our scan, but nobody knows how to read that. That is highly complex information. We could talk about where does proteoglycan live on the spectral plot on this and try to figure that out. What we have done is we have taken this complex information, and we have translated it into a simple-to-interpret report and clinically actionable information for the physician. It is not being used in its spectral raw spectral format, but we can derive tremendous value from that data. What we have learned in the early trials is that there is a clear separation with these algorithms when the ratios come out between painful and non-painful discs. You can see here the different plots on this.

Painful up and to the right, not painful down to low, and it really comes down to that proteoglycan strong structural integrity has remained in place, whereas the high acids, if the proteoglycan is low, that is a painful disc. That is to highly simplify it. Having that clear delineation between painful and not painful enables us to deliver this. This is the segments of our physician report that goes back to your treating physician that clearly points out where those acids are high and the proteoglycan is low. We also include this, we call it the SI score, the structural integrity score. That is on the right-hand side. Because when a physician is making a decision about what to do with you, understanding the adjacent level strength will play into whether they are going to treat that level or not.

The physicians that are using this test now, the early adopters, they absolutely love it. This is insight that they did not have before. Pain is chemical before it is structural. We are moving upstream on all of this. We have a tremendous patent portfolio, 62 active patents in the use of spectroscopy to identify painful discs, in the use of AI to identify painful discs, and a lot of kind of in the weeds type patents around how do we separate those spectral plots to ensure that we have accurate data assessment. We have better patents on spectroscopy than the big gear players in our space, and we are really quite proud of that. I would like to talk to you about what physicians have to do where there is not Nociscan available if they want to really pinpoint the discs that are causing pain. This is a test. We'll call it the prevailing gold standard.

It's called provocative discography, and it's as painful as it sounds by design. The patient is awake on the table, and their discs are being injected and pressurized. They're asking when they inject the first disc, "How does that feel?" It's somewhat subjective, isn't it? Then they go to the next disc. "How does that feel?" Then they hit a disc that is actually full of acids, and the patient is screaming off the table. It's somewhat barbaric. Effective, but barbaric. What we're replacing is an invasive, expensive, subjective, and painful test with a non-invasive, not painful, much less expensive, and objective measurement of what's actually going on inside the disc. We feel pretty well-armed in terms of displacing discography.