Nexalin Technology, Inc.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
NXL$1.47+5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001829126-25-005851
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001829126-25-009159
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 82 current paragraphs.
50 unchanged; 22 reworded; 10 added; 21 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
In October 2025, the FDA formally accepted our Q-Submission (“Q-Sub”) related to the Company’s Gen-2 Console (“SYNC”) system for the treatment of Alzheimer’s disease and dementia, with a regulatory meeting scheduled for later this year. This acceptance of the Company’s request for interaction with the FDA with respect to its Gen-2 SYNC system represents a significant step toward Nexalin’s goal of achieving FDA authorization to begin U.S. clinical studies targeting Alzheimer’s and dementia — two of the most urgent unmet needs in healthcare. The Q-Submission process enables structured dialogue with and feedback from the FDA to discuss proposed clinical trial design, study endpoints, and regulatory pathway for evaluating the Gen-2 SYNC system as a potential non-invasive therapy for these debilitating neurodegenerative conditions, as well as for mild to moderate cognitive impairment (MCI) associated with Alzheimer’s disease.
Current report
Military & Government
Current report
Total operating expenses for the three months ended September 30, 2025 and 2024 were approximately$2,360,000 and $2,532,000, respectively, resulting in a decrease ofapproximately$172,000. The overall decrease was a result of a decrease in selling, general and administrative expenses ofapproximately $377,000 offset by an increase in professional fees ofapproximately$3,000, increase insalaries and benefits ofapproximately$154,000 and an increase in research and development costs ofapproximately$48,000.
Current report
The selling, general and administrative cost decrease ofapproximately$377,000 wasdue to approximately $450,000 ofdecreased stock-based compensation recognized during this three-month period ended compared to the same period in the prior year. This was offset by increases in consulting expenses by approximately $36,000 during this period for additional international distribution services and other advisory services, approximately $30,000 increased supplies expensed during this current period and a net increase of approximately $7,000 for various other expense categories.
Current report
Professional fees increasedby approximately$3,000 which was consistent comparing each period.
Current report
Comparison of the nine months ended September 30, 2025 and 2024
Current report
The research and development cost increases ofapproximately$405,000 was due to the increased cost of approximately $201,000 associated with the Halo development project, increase of approximately $64,000 for clinical trials (UCSD and Brazil), increase of approximately $113,000 for development cost related to the APP, andapproximately $57,000 on general R&D activities, including software and board developments, offset by approximately $30,000 of decreased costs related to the SYNC desktop.
Current report
The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that impact amounts reported therein. The unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and, as such, include amounts based on informed estimates and judgments of management. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above.
Current report
Nasdaq
Current report
In Septemberof 2025, the warrants expired, and a Form 25 was filed with the Securities and Exchange Commission to indicate that the warrants had expired and were delisted. The common stock of the Company will continue to trade on the Nasdaq Capital Market under the symbol NXL.
Removed paragraphs (21)
Previous report
Recent Developments
Previous report
Total operating expenses for the three months ended June 30, 2025 and 2024 were $1,668,608 and $1,316,614, respectively, resulting in an increase of $351,994. The overall increase was a result of an increase in salaries and benefits of $62,921, selling, general and administrative expenses of $295,079 and research and development costs of $56,364, offset by a decrease in professional fees of $62,370.
Previous report
Professional fees decreased by $62,370 because of a significant decrease in national ad spending during this three-month period ended compared to the prior year.
Previous report
Comparison of the six months ended June 30, 2025 and 2024
Previous report
The research and development cost increases of $356,985 was due to the increased cost of Clinical Trials of approximately $190,000 due to UCSD for the initial costs of trial study, of approximately $114,000 and additional development expenses of approximately $80,000 related to the App. In addition, the Halo development project had increased costs of approximately $166,000 during the period.
Previous report
In August of 2023, the FASB issued ASU 2023-05,Business Combinations—Joint Venture (“JV”) Formations: Recognition and Initial Measurement. The guidance requires newly formed JVs to apply a new basis of accounting to all of its contributed net assets, which results in the JV initially measuring its contributed net assets under ASC 805-20, Business Combinations. The new guidance would be applied prospectively and is effective for all newly formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of ASU 2023-05 did not have a material impact on the Company’s unaudited condensed consolidated financial statements.
Previous report
In December of 2023, the FASB issued ASU 2023-09*, Income Taxes (Topic 740): Improvements to Income Tax Disclosures,* establishes incremental disaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid. This standard was effective for fiscal years beginning after December 15, 2024, and required prospective application with the option to apply it retrospectively. Early adoption was permitted. The Company adopted this standard effective January 1, 2025 and has applied it prospectively. Adoption of this new standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements.
Previous report
Future Adoption of New Accounting Pronouncement
Previous report
In November 2024, the FASB issued ASU 2024-03*, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*. This ASU requires additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. The standard is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect of adopting this guidance on its unaudited condensed consolidated financial statements.
Previous report
All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.
Previous report
Emerging Growth Company Status
Previous report
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile. We may take advantage of these exemptions until the last day of our fiscal year following the fifth anniversary of the completion of this offering. However, if any of the following events occur prior to the end of such five-year period, (i) our annual gross revenue exceeds $1.235 billion, (ii) we issue more than $1.0 billion of non-convertible debt in any three-year period or (iii) we become a “large accelerated filer,” (as defined in Rule 12b-2 under the Exchange Act), we will cease to be an emerging growth company prior to the end of such five-year period. We will be deemed to be a “large accelerated filer” at such time that we (a) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our most recently completed second fiscal quarter, (b) have been required to file annual and quarterly reports under the Exchange Act, for a period of at least twelve months and (c) have filed at least one annual report pursuant to the Exchange Act. Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
Previous report
Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are emerging growth companies. As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance or the application of existing guidance to changes in our business could significantly affect our financial position and results of operations.
Previous report
Continued Nasdaq Listing
Previous report
On May 10, 2023, the Company received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was no longer in compliance with the minimum bid price requirement for continued listing on Nasdaq, as the closing bid price for the Company’s common stock was below $1.00 per share as set forth in the Nasdaq listing rules. The Company was afforded 180 calendar days, or until November 6, 2023, to regain compliance with the Nasdaq listing rules. The Company was unable to regain compliance with the bid price requirement by November 6, 2023.
Previous report
On November 7, 2023, the Company submitted a letter to NASDAQ requesting a second 180-day period in order to regain compliance with NASDAQ Rule 5550(a)(2). The Company stated in that letter that it believed it will be able to cure the deficiency and increase its stock price to above $1.00 per share pursuant to its plan to do so.
Previous report
On November 7, 2023, the Company received written notice from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company was not eligible for an additional 180 calendar day compliance period because the Company no longer complied with Nasdaq’s $5 million minimum stockholder equity initial listing requirement.
Previous report
On January 18, 2024, the Nasdaq Hearing Panel granted the Company a temporary exception to regain compliance with the Minimum Bid Price Rule until March 27, 2024.
Previous report
On March 6, 2024, the Nasdaq Hearing Panel granted the Company a temporary exception to regain compliance with the Minimum Bid Price Rule until April 25, 2024.
Previous report
On March 7, 2024, The Company’s stockholders approved a proposed amendment to Nexalin’s Certificate of Incorporation (the “Amendment”), pursuant to which Nexalin’s Board of Directors is authorized, in its discretion, to proceed with a reverse stock split. The exact ratio of the reverse stock split would be within the 1-for-4 to 1-for-14 range, and, if enacted, will be determined by our Board and publicly announced by the Company prior to the effective time of the reverse stock split. The sole purpose for the proposed reverse stock split was to increase the per share market price of the Company’s Common Stock to meet the Nasdaq Minimum Bid Price Rule for continued listing on The Nasdaq Capital Market. The filing of the Amendment and the reverse stock split was only to be implemented if Nexalin’s Board determined they were necessary to regain and maintain compliance with the Nasdaq Minimum Bid Price Rule. The Company regained compliance with Nasdaq’s Minimum Bid Price Rule without the necessity of a reverse stock split and the Board did not exercise the authority given to it to file the proposed Amendment.
Previous report
On April 23, 2024, the Company received notice from Nasdaq notifying the Company that it has regained compliance with Nasdaq’s minimum bid price requirement under Nasdaq Rule 5550(a)(2).
Reworded paragraphs (22)
Previous wording
Nexalin’s new advanced waveform technology will be emitted at 15 milliamps through our new and improved medical devices referred to as Gen-2 SYNC and Gen-3 HALO. The new Gen-2 SYNC is a clinical use device with a modern enclosure emitting the new 15 milliamp advanced waveform. The Gen-3 HALO is a new patient headset that is intended to be prescribed by licensed medical professionals in a virtual clinic setting similar to existing tele-health platforms. The Nexalin research team believes that the new 15 milliamp Gen-2 SYNC and Gen-3 HALO devices can penetrate deeper into the brain and stimulate deep brain structures that contribute to or cause mental illness, which we believe will generate enhanced patient response without any risk or unpleasant side effects. The Nexalin regulatory team is developing strategies for pilot trials and/or pivotal trials for various mental health disease states. In addition, a new PMA application in the United States is in strategic development for the treatment of depression utilizing both Gen-2 SYNC and Gen-3 HALO. We plan to execute additional pilot trials and/or pivotal trials for the new Gen-3 HALO device for anxiety and insomnia in the United States, Brazil and China throughout 2025.
Current wording
Nexalin’s new advanced waveform technology will be emitted at 15 milliamps through our new and improved medical devices referred to as Gen-2 SYNC and Gen-3 HALO. The new Gen-2 SYNC is a clinical use device with a modern enclosure emitting the new 15 milliamp advanced waveform. The Gen-3 HALO is a new patient headset that is intended to be prescribed by licensed medical professionals in a virtual clinic setting similar to existing tele-health platforms. The Nexalin research team believes that the new 15 milliamp Gen-2 SYNC and Gen-3 HALO devices can penetrate deeper into the brain and stimulate deep brain structures that contribute to or cause mental illness, which we believe will generate enhanced patient response without any risk or unpleasant side effects. The Nexalin regulatory team is developing strategies for pilot trials and/or pivotal trials for various mental health disease states. In addition, a new PMA application in the United States is in strategic development for the treatment of depression utilizing both Gen-2 SYNC and Gen-3 HALO. We plan to execute additional pilot trials and/or pivotal trials for the new Gen-3 HALO device for anxiety and insomnia in the United States, Brazil and China throughout 2025 and 2026.
Previous wording
For the three months ended June 30, 2025 and 2024, we generated $70,588 and $26,840 respectively, of revenue primarily from the sale of supplies and from licensing and treatment fee agreements with our customers for which we charge a monthly licensing fee for the duration of the agreement. We also generated revenue from treatment fee agreements by collecting fees based on the number of treatments per month to customers. In addition, we derived revenue from equipment by selling boards, electrodes and patient cables to customers for use with our device. The increase in revenue for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to a large shipment of boards to China during the second quarter of 2025.
Current wording
For the three months ended September 30, 2025 and 2024, we generated approximately$18,000 and $36,000 respectively, of revenue primarily from licensing and treatment fee agreements with our customers for which we charge a monthly licensing fee for the duration of the agreement. We also generated revenue from treatment fee agreements by collecting fees based on the number of treatments per month to customers. In addition, we derived revenue from equipment by selling boards, electrodes and patient cables to customers for use with our devices. Thedecreasein revenue for the three months ended September 30, 2025 compared to the same period in 2024 was primarilydue toless License fee revenue derived in 2025 compared to 2024, along with decreased Equipment sales in 2025 compared to 2024 due to timing of needs of customers ofelectrodes and other supplies.
Previous wording
For the three months ended June 30, 2025 and 2024, cost of revenues was $22,838 and $7,247, respectively, yielding a gross profit of $47,750 and $19,593, respectively, or 68% and 73%, respectively. Such decrease in gross profit was a result of the mix of revenue types during each quarter as licensing fees comprised a larger portion of total revenue for the prior period and contributed a higher margin.
Current wording
For the three months ended September 30, 2025 and 2024, cost of revenues wasapproximately$4,000 and $13,000, respectively, yielding a gross profit ofapproximately$14,000 and $23,000, respectively, or 78% and 65%, respectively. Such increasein gross profit was a result of the mix of revenue types during each quarter as licensing fees comprised a larger portion of total revenue for thecurrent period and contributed a higher margin.
Previous wording
The salaries and benefits increase of $62,921 was primarily attributable to additional compensation related to one new employee and normal pay and benefit increases throughout the organization.
Current wording
The salaries and benefits increase ofapproximately$154,000 was primarily attributable to additional compensation related tothree new employees in 2025 and normal pay, taxes and benefit increases throughout the organization.
Previous wording
The research and development cost increase of $56,364 was due to the increased cost of Clinical Trials of approximately $112,000 due to UCSD for the initial costs of trial study, of approximately $50,000 and additional development expenses of approximately $62,000 related to the App. This was offset by a decrease of approximately $30,000 on our Desktop project and approximately $27,000 on the Halo development project due to timing.
Current wording
The research and development cost increase ofapproximately$48,000 was dueto the increased cost ofapproximately $35,000 on the Halo Development project, $53,000 on general R&D activities, including software and board developments andadditional development expenses of approximately $30,000 related to the App. This was offset byadecreases in Clinical Trials of approximately $50,000 dueto timing of trial expenses and a decrease of approximately $20,000 on our SYNC Desktop project
Previous wording
Other income, net for the three months ended June 30, 2025 and 2024 was $39,871 and $13,819, respectively, consisting of interest and dividend income and gain on the sale of short-term investments. An increase in the gain on sale of short-term investments drove the increase for the period.
Current wording
Other income, net for the three months ended September 30, 2025 and 2024 wasconsistent each period ofapproximately$69,000 and $60,000, respectively, primarily consisting of interest and dividend income and gain on the sale of short-term investments.
Previous wording
Our financial results for the six months ended June 30, 2025 and 2024 are summarized as follows:
Current wording
Our financial results for thenine months ended September 30, 2025 and 2024 are summarized as follows:
Previous wording
For the six months ended June 30, 2025 and 2024, we generated $111,603 and $105,511 respectively, of revenue primarily from the sale of devices, supplies and from licensing and treatment fee agreements with our customers for which we charge a monthly licensing fee for the duration of the agreement. We also generated revenue from treatment fee agreements by collecting fees based on the number of treatments per month to customers. In addition, we derived revenue from equipment by selling boards, electrodes and patient cables to customers for use with our device. The increase in revenue for the six months ended June 2025 compared to 2024 was primarily due to an increase in equipment sales of approximately $60,000, from a large sale of boards to China during the six months ended June 30, 2025, offset by a decrease in Device sales for the periods due to a large device sale to Oman during 2024.
Current wording
For the nine months ended September 30, 2025 and 2024, we generated approximately $130,000 and $142,00 respectively, of revenue primarily from the sale of devices and licensing and treatment fee agreements with our customers for which we charge a monthly licensing fee for the duration of the agreement. We also generated revenue from treatment fee agreements by collecting fees based on the number of treatments per month to customers. In addition, we derived revenue from equipment by selling boards, electrodes and patient cables to customers for use with our device. The decrease in revenue for the nine months ended September 2025 compared to 2024 was primarily due to an decrease in Device sales of approximately $56,000 from a large Device sale to Oman during 2024 and a decrease in Licensing fees of approximately $17,000. This was offset by an increase in Equipment sales of approximately $49,000 from a large sale of boards to China during the nine months ended September 30, 2025 and an increase of approximately $12,000 of other revenue from increased shipping charges.
Previous wording
For the six months ended June 30, 2025 and 2024, cost of revenues was $36,396 and $16,403, respectively, yielding a gross profit of $75,207 and $89,108, respectively, or 67% and 84%, respectively. Such decrease in gross profit was a result of the mix of revenue types during the six months periods as licensing fees and devices comprised a larger portion of total revenue for the prior period, and drives a higher margin compared to equipment sales.
Current wording
For thenine months ended September 30, 2025 and 2024, cost of revenues wasapproximately $40,000 and $30,000, respectively, yielding a gross profit ofapproximately$90,000 and $112,000, respectively, or 68% and 79%, respectively. Such decrease in gross profit was a result of the mix of revenue types during thenine months periods as licensing fees and devices comprised a larger portion of total revenue for the prior period, and drives a higher margin compared to equipment sales.
Previous wording
Total operating expenses for the six months ended June 30, 2025 and 2024 were $3,707,290 and $2,459,841, respectively, consisting of increases in salaries and benefits expenses of $71,862, selling, general and administrative expenses of $740,895, research and development expenses of $356,985 and in professional fees expenses of $77,617.
Current wording
Total operating expenses for the nine months ended September 30, 2025 and 2024 were approximately$6,067,000 and $4,992,000, respectively, consisting of increases in; salaries and benefits expenses ofapproximately$226,000, selling, general and administrative expenses ofapproximately$364,000, research and development expenses ofapproximately$405,000 and in professional fees expenses ofapproximately$80,000.
Previous wording
The Salaries and benefits cost increases of $71,862 were primarily attributable to additional compensation related to one new employee and normal pay and benefit increases throughout the organization.
Current wording
Thes alaries and benefits cost increases ofapproximately$226,000 wasprimarily attributable to additional compensation related tothree newemployees and normal pay, taxes and benefit increase throughout the organization.
Previous wording
Selling, general and administrative cost increase of $295,079 were due to approximately $260,000 of increased stock-based compensation recognized during this three-month period ended compared to the same period in the prior year. Additionally, consulting expenses increased by approximately $50,000 during this period for additional international distribution services.
Current wording
Selling, general and administrative cost increases ofapproximately$364,000 wasdue to approximately $283,000 of increased stock-based compensation recognized during this nine-month period ended compared to the same period in the prior year. Additionally, consulting expenses increased approximately $116,000 for additional international distribution services and other advisory services, offset by decreases in insurance of approximately $48,000, in travel expenses of approximately $52,000. The remaining net increase of approximately $65,000 was due to various immaterial changes in various accounts during the period.
Previous wording
The increase in professional fees of $77,617 were primarily due to increases in accounting, legal and other consulting costs primarily attributable to increased services during the period from the capital raise and other registration statement activity.
Current wording
The increase in professional fees ofapproximately$80,000 was primarily due to increasesof approximately $75,000 in accounting, legal and other consulting costs primarily attributable to increased services during the period from the capital raise and other registration statement activity.
Previous wording
Other income, net for the six months ended June 30, 2025 and 2024 was $63,807 and $40,591, respectively, consisting of interest and dividend income and gain on the sale of short-term investments. An increase in gain on sale of short-term investments drove the increase for the six-month period.
Current wording
Other income, net for thenine months ended September 30, 2025 and 2024 were approximately $133,000 and $101,000, respectively, consisting of interest and dividend income and gain on the sale of short-term investments. Theincrease in gain on sale of short-term investments, interest income and reduction in accrued settlement for the EDD matter drove the increase for thenine-month period.
Previous wording
The following table summarizes our consolidated cash flows for the six months ended June 30, 2025 and 2024:
Current wording
The following table summarizes our consolidated cash flows for thenine months ended September 30, 2025 and 2024:
Previous wording
Net cash used in operating activities was $2,343,379 for the six months ended June 30, 2025, as compared to $2,009,704 for the respective period in 2024, an increase of approximately $334,000, which was primarily due to an increase in net loss of approximately $1.2 million, or approximately $512,000 adjusted for non-cash expenses. The remaining change was due to changes in operating assets and liabilities for the respective periods; a decrease in accounts payable of approximately $149,000 and accrued expenses of approximately $106,000, offset by decreases in prepaid assets of approximately $89,000 and accounts receivable of approximately $46,000.
Current wording
Net cash used in operating activities wasapproximately$3,810,000 for thenine months ended September 30, 2025, as compared toapproximately $2,810,000 for the respective period in 2024, an increase of approximately $1,000,000, which was primarily due to an increase in net loss of approximately$1,072,000, or approximately $785,000 adjustedfor non-cash expenses. The remaining change was due to changes in operating assets and liabilities for the respective periods; a decrease in accounts payable of approximately $95,000, a decrease in prepaid expenses and other current assets of approximately $179,000, increase ininventory of approximately $16,000, an increase in lease liability ofapproximately $4,000, aincrease inaccrued expenses of approximately $28,000 andincrease inaccounts receivable of approximately $11,000.
Previous wording
Net Cash Provided By (Used In) Investing Activities
Current wording
Net Cash Used In Investing Activities
Previous wording
Net cash provided by (used in) investing activities during the six months ended June 30, 2025, and 2024 was $(2,466,183) and $2,278,270, respectively, which was due to short-term investment sales of approximately $17.7 million offset by purchases of $20.1 million of short-term investments and the purchase of patents and trademarks of approximately $44,000. Net cash provided by investing activities during the six months ended June 30, 2024, of $2,278,270 was due to short-term investment sales of approximately $9.2 million offset by purchases of $6.8 million of short-term investments and the purchase of patents and trademarks of approximately $127,000.
Current wording
Net cash used in investing activities during thenine months ended September 30, 2025, and 2024 wasapproximately$821,000 and $2,205,000, respectively. For the nine months ended September 30, 2025 this wasdue to short-term investment sales of approximately $31,247,000 offset by purchases ofapproximately $32,005,000 of short-term investments and the purchase of patents and trademarks of approximately $63,000. Net cash provided by investing activities during the nine months ended September 30, 2024, ofapproximately$2,205,000 was due to short-term investment sales of approximately $22,349,000 offset by purchases ofapproximately $24,400,000 of short-term investments and the purchase of patents and trademarks of approximately $154,000.
Previous wording
Net cash provided by financing activities during the six months ended June 30, 2025 and 2024 was $4,646,397 and $0, respectively, which was due to the sale of common stock.
Current wording
Net cash provided by financing activities during thenine months ended September 30, 2025 and 2024 wasapproximately$4,646,000 and $4,516,000, respectively, which was due to the sale of common stock in each period.
Previous wording
As of June 30, 2025, the Company had a significant accumulated deficit of $88.2 million. For the six months ended June 30, 2025, the Company had a loss from operations of $3.6 million and negative cash flows from operations of $2.3 million. The Company’s operating activities consume the majority of its cash resources. The Company will continue to service existing customers in the United States and sell devices and equipment overseas. The Company anticipates that it will continue to incur operating losses as it executes its development plans through 2025 and beyond, as well as other potential strategic and business development initiatives. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company previously funded these losses primarily through the sale of equity. As of June 30, 2025, the Company had cash and cash equivalents on hand of approximately $431,000 and short-term investments of $5.4 million.
Current wording
As of September 30, 2025, the Company had a significant accumulated deficit ofapproximately $90,491,000. For the nine months ended September 30, 2025, the Company had a loss from operations of approximately $5,846,000 and negative cash flows from operations ofapproximately$3,810,000. The Company’s operating activities consume the majority of its cash resources. The Company will continue to service existing customers in the United States and sell devices and equipment overseas. The Company anticipates that it will continue to incur operating losses as it executes its development plans through 2025 and beyond, as well as other potential strategic and business development initiatives. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company previously funded these losses primarily through the sale of equity. As of September 30, 2025, the Company had cash and cash equivalents on hand of approximately $590,000 and short-term investments ofapproximately $3,763,000. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for at least twelve months after the date of this Report.
Previous wording
Our ability to continue as a going concern will be dependent upon our ability to execute on our business plan, including the ability to generate revenue from the joint venture and other overseas ventures and obtain U.S. approval for the sale of our devices in the United States, and, if necessary, our ability to raise additional capital. Although no assurances can be given as to our ability to deliver on our revenue plans or that unforeseen expenses may arise, management has evaluated the significance of the conditions as of June 30, 2025 and have concluded that we will not have sufficient cash and short-term investments to satisfy our anticipated cash requirements for the next twelve months from the issuance of these financial statements. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Current wording
Our ability to continue as a going concern will be dependent upon our ability to execute on our business plan, including the ability to generate revenue from the joint venture and other overseas ventures and obtain U.S. approval for the sale of our devices in the United States, and, if necessary, our ability to raise additional capital. Although no assurances can be given as to our ability to deliver on our revenue plans or that unforeseen expenses may arise, management has evaluated the significance of the conditions as of September 30, 2025 and have concluded that we will not have sufficient cash and short-term investments to satisfy our anticipated cash requirements for the next twelve months from the issuance of these financial statements. These plans were therefore determined not to be sufficient to overcome the presumption of substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the unaudited condensed consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Previous wording
The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 3, “Summary of Significant Accounting Policies and New Accounting Standards” of the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2024 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s unaudited condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2024 Form 10-K.
Current wording
See Note 3 – Summary of significant accounting policies and new accounting standards in the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a summary of recently adopted accounting pronouncements.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The Nexalin regulatory team plans to use data from these clinical trials will also be used to support an application for the CE-mark of our Gen-2 and new Gen-3 headset devices in the European Union.
Previous report — wording carried elsewhere
In part due to increasing incidence attributed to the devastating impacts of the COVID-19 pandemic, mental health and cognitive disorders are widespread across the globe and cause substantial health, social and economic losses, and hardships. Our focus is on the continued development of our innovative bioelectronic medical technologies and rapid regulatory approval. We intend to help reverse these losses, and hardships of these losses, by safely and effectively treating various mental health disorders associated with post Covid and long Covid mental disease states.
Previous report — wording carried elsewhere
This device and all other clinical devices will include single use electrodes for long term revenue streams. The USA Gen-2 SYNC device bears a fresh and modern appearance that meets the technology standards of the digital tech world of 2025. Early adopters of the Gen-1 device will be able to access additional firmware upgrades which are planned to enhance the previously purchased and leased devices to the new symmetric15-milliamp waveform. Our Gen-2 SYNC device will be equipped with Radio Frequency Identification (RFID) technology that exchanges electrode usage data with a reader in the main device. The purpose of RFID is to track and maintain control of the proprietary single use electrode. Our electrode chip will be programmed to exchange data with the device and allow activation for a single treatment with a new electrode only. This ensures a recurring revenue stream on the device and protects against any generic knockoffs designed to avoid treatment costs. This upgrade in technology also ensures the proprietary nature of the electrodes that support treatment outcomes.
Previous report — wording carried elsewhere
Selling, general and administrative cost increases of $740,985 were due to approximately $740,000 of increased stock-based compensation recognized during this six-month period ended compared to the same period in the prior year.