Core Insights - Nexalin Technology Inc. (NASDAQ:NXL) experienced a significant stock price increase of 69.47%, reaching $1.59, with a trading volume of 167.9 million shares compared to the average of 972.2 thousand shares [1][7]. Clinical Data and Findings - The company published positive clinical data indicating that its proprietary 15 milliamp (mA) Gen-2 Nexalin DIFS technology improves cognitive performance and enhances brain network connectivity in patients with mild Alzheimer's disease (AD) [2]. - Patients using Nexalin's Gen-2 SYNC 40-Hz DIFS device showed significant improvements in Mini-Mental State Examination (MMSE) scores and Montreal Cognitive Assessment (MoCA) scores compared to baseline, with statistical significance (P = .001 and .03, respectively) [3]. - Resting-state functional MRI (fMRI) demonstrated enhanced functional connectivity (FC) between the hippocampus and critical cortical regions, which are essential for memory and executive function, with significant increases observed across broader cognitive networks [4]. Correlation and Safety - Increased connectivity between the hippocampus and middle cingulate gyrus correlated with improvements on the Boston Naming Test (r = 0.65, FDR-adjusted P = .008), indicating a link between brain network modulation and functional outcomes [5]. - No adverse events were reported during the treatment period, highlighting the safety and tolerability of Nexalin's DIFS technology [5]. Regulatory Approvals and Strategy - Nexalin's Gen-2 SYNC 15 mA DIFS device is already approved in China for treating depression and insomnia, and it has approvals in Brazil and Oman for anxiety, depression, and insomnia [6]. - The new Alzheimer's data supports the company's strategy to expand treatment indications with various international regulatory agencies, including the FDA in the United States [6].

Core Insights - Nexalin Technology, Inc. has published positive clinical data demonstrating that its Gen-2 Nexalin DIFS™ technology significantly improves cognitive performance and brain connectivity in patients with mild Alzheimer's disease, marking a significant milestone for the company's technology platform [1][2] Clinical Study Findings - The study is the first to provide fMRI confirmation that a 40-Hz, 15 mA electrical waveform can enhance hippocampal-cortical connectivity in Alzheimer's patients, correlating with measurable cognitive improvements [2] - Patients using Nexalin's Gen-2 SYNC 40-Hz DIFS device showed statistically significant improvements in Mini-Mental State Examination (MMSE) and Montreal Cognitive Assessment (MoCA) scores compared to the sham group, with P-values of .001 and .03 respectively [5] - Enhanced functional connectivity was observed between the hippocampus and key cortical regions, critical for memory and executive function, as confirmed by resting-state fMRI [5] - Increased connectivity between the hippocampus and middle cingulate gyrus was significantly correlated with improvements on the Boston Naming Test, indicating a link between brain network modulation and cognitive outcomes [5] Safety and Regulatory Status - The Nexalin Gen-2 SYNC 15 mA DIFS device has been approved in China for treating depression and insomnia, and in Brazil and Oman for anxiety, depression, and insomnia [3][6] - No adverse events were reported during the treatment period, reinforcing the safety and tolerability of Nexalin's DIFS technology [5] Market Potential - The global Alzheimer's disease market is projected to exceed $20 billion annually, highlighting the potential for Nexalin's non-invasive neurostimulation technology as a safe and effective alternative to pharmacologic treatments [2]

Core Insights - Nexalin Technology, Inc. has received a U.S. Design Patent for its HALO™ Clarity neuromodulation device, providing 15 years of design protection, which enhances its intellectual property portfolio [1][5] Group 1: Product Overview - HALO™ Clarity is a non-invasive neuromodulation device aimed at treating mental health and neurological conditions, including Alzheimer's, without the need for pharmaceuticals or surgery [2][3] - The device is designed for at-home use under professional supervision, allowing remote monitoring and guidance from physicians, which can improve patient access and reduce healthcare costs [3][8] Group 2: Clinical Development - Nexalin is conducting multiple clinical studies for HALO™ Clarity targeting conditions such as anxiety, insomnia, PTSD, and mild traumatic brain injury, with positive feedback from the FDA on pivotal trial designs [4] - The DIFS™ platform has been involved in over two dozen trials globally, showing consistent safety and efficacy signals [4] Group 3: Advantages of HALO™ Clarity - The device offers enhanced convenience by allowing therapy at home, reducing the need for frequent office visits [8] - It enables remote clinician oversight, allowing real-time data review and protocol adjustments through telemedicine [8] - The system may improve treatment compliance and continuity while potentially lowering overall care costs by minimizing in-clinic resource requirements [8]

Core Insights - Nuix has secured a multiyear contract to provide forensic analysis software to the tax authority of Rhineland-Palatinate, Germany, highlighting its growing influence in regulatory technology [1][4]. Group 1: Contract Details - The contract with the Landesamt für Steuern Rheinland-Pfalz emphasizes Nuix's capability in delivering advanced forensic analysis tools tailored for tax authorities [1][5]. - The selection of Nuix followed a Europe-wide tender process, indicating a competitive evaluation of solutions available in the market [5]. Group 2: Technology and Capabilities - Nuix Neo software automates workflows and can ingest data from over 1,000 file types, utilizing responsible AI and advanced automation to analyze complex datasets [2]. - The software is designed to assist investigators in uncovering financial irregularities and enhancing tax compliance through efficient data analysis [3]. Group 3: Leadership and Vision - Jonathan Rubinsztein, CEO of Nuix, stated that the partnership reflects the trust regulators place in Nuix for complex investigations, reinforcing its position as a leading technology provider in the regulatory space [4]. - The collaboration aims to drive regulatory excellence and innovation, aligning with the shared vision of both Nuix and the Rhineland-Palatinate tax authority [5].

Core Insights - Nexalin Technology, Inc. is hosting a webinar on September 9, 2025, to discuss its innovative approach to mental healthcare using its proprietary Deep Intracranial Frequency Stimulation (DIFS™) technology [1][2] - The company is positioned in a $537 billion mental health market, with international regulatory approvals and U.S. expansion plans underway [2] - Nexalin's technology includes real-time AI-driven patient monitoring and aims to provide scalable, at-home treatment options through its Gen-3 HALO™ Clarity headset and Virtual Clinic model [2] Company Overview - Nexalin Technology, Inc. designs and develops non-invasive neurostimulation products aimed at addressing the global mental health epidemic [4] - The company's devices are believed to penetrate deep brain structures associated with mental health disorders, potentially enhancing patient response without adverse side effects [4] - The Nexalin Gen-2 15 milliamp neurostimulation device has received regulatory approval in China, Brazil, and Oman [4]

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=ITEM%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q2 2025 financials reveal a net loss and negative cash flow, offset by increased equity from a recent stock offering [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $431,320 | $574,485 | | Short-term investments | $5,361,465 | $2,905,438 | | Total Current Assets | $6,269,111 | $3,961,141 | | Total Assets | $6,563,982 | $4,222,732 | | **Liabilities & Equity** | | | | Total Current Liabilities | $600,584 | $546,694 | | Total Liabilities | $600,584 | $546,694 | | Total Stockholders' Equity | $5,963,398 | $3,676,038 | - Total assets increased significantly to **$6.56 million** from **$4.22 million**, primarily driven by a rise in short-term investments following a stock offering[11](index=11&type=chunk) - Total stockholders' equity grew to **$5.96 million** from **$3.68 million**, reflecting the net proceeds from the recent equity issuance, partially offset by the accumulated deficit[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | Revenues, net | $70,588 | $26,840 | $111,603 | $105,511 | | Gross profit | $47,750 | $19,593 | $75,207 | $89,108 | | Total operating expenses | $1,668,608 | $1,316,614 | $3,707,290 | $2,459,841 | | Loss from operations | $(1,620,858) | $(1,297,021) | $(3,632,083) | $(2,370,733) | | Net loss | $(1,580,987) | $(1,284,493) | $(3,569,324) | $(2,325,650) | | Net loss per share (Basic & Diluted) | $(0.10) | $(0.17) | $(0.25) | $(0.31) | - Revenues for Q2 2025 more than doubled year-over-year, reaching **$70.6 thousand**, while revenues for the six-month period showed modest growth[13](index=13&type=chunk) - Operating expenses increased significantly for both the three and six-month periods, leading to wider net losses compared to the prior year[13](index=13&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) - Stockholders' equity increased from **$3.68 million** on January 1, 2025, to **$5.96 million** on June 30, 2025[15](index=15&type=chunk) - The primary driver for the increase in equity was the issuance of 4,090,000 shares as part of an offering, which contributed approximately **$4.65 million** in additional paid-in capital[15](index=15&type=chunk) - The increase from the stock issuance was partially offset by a net loss of **$3.57 million** for the six-month period[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,343,379) | $(2,009,704) | | Net cash provided by (used in) investing activities | $(2,446,183) | $2,278,270 | | Net cash provided by financing activities | $4,646,397 | $0 | | **Net (decrease) increase in cash** | **$(143,165)** | **$268,566** | - Financing activities provided **$4.65 million** in cash during the first six months of 2025, entirely from the sale of common stock, compared to zero in the same period of 2024[18](index=18&type=chunk) - Cash used in operations increased to **$2.34 million**, reflecting the larger net loss during the period[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide critical context to the financial statements, covering business operations, liquidity, accounting policies, and key financial items [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights new device development, Q2 2025 revenue growth, increased losses from R&D, and expresses substantial doubt about the company's going concern - The company's strategy is focused on developing its new Gen-2 SYNC and Gen-3 HALO neurostimulation devices, which use a more powerful **15 milliamp** waveform, and navigating the FDA regulatory process for U.S. market entry[118](index=118&type=chunk)[119](index=119&type=chunk) - Sales of the older Gen-1 device **remain paused** in the U.S. following an FDA reclassification in 2019, though the company continues to derive some revenue from legacy units[117](index=117&type=chunk) - The company is developing a virtual clinic platform to allow physicians to prescribe and monitor the Gen-3 HALO headset for at-home patient use, aiming to address the stigma associated with traditional mental health treatments[131](index=131&type=chunk) - Recent international progress includes **regulatory approval** for the Gen-2 device in Brazil and operational use in Oman[138](index=138&type=chunk)[139](index=139&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Comparison of Three Months Ended June 30, 2025 and 2024 | Metric | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues, net | $70,588 | $26,840 | $43,748 | 163% | | Gross profit | $47,750 | $19,593 | $28,157 | 144% | | Total operating expenses | $1,668,608 | $1,316,614 | $351,994 | 27% | | Net loss | $(1,580,987) | $(1,284,493) | $(296,494) | 23% | - The **163%** increase in Q2 2025 revenue was primarily due to a large shipment of boards to China[141](index=141&type=chunk) - The **27%** increase in Q2 2025 operating expenses was driven by higher stock-based compensation (**~$260 thousand**), increased consulting expenses (**~$50 thousand**), and higher R&D costs for clinical trials[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - For the six months ended June 30, 2025, the net loss widened by **53%** to **$3.6 million**, largely due to a **$740.0 thousand** increase in stock-based compensation and a **$357.0 thousand** increase in R&D expenses[149](index=149&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had approximately **$431.0 thousand** in cash and cash equivalents and **$5.4 million** in short-term investments[162](index=162&type=chunk) - The company has a significant accumulated deficit of **$88.2 million** and negative operating cash flows of **$2.3 million** for the first six months of 2025[162](index=162&type=chunk) - Management has concluded that the company will not have sufficient cash to satisfy its anticipated cash requirements for the next twelve months, which raises **substantial doubt about its ability to continue as a going concern**[163](index=163&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Nexalin is not required to provide the information for this item - The company is **not required to provide this information** as it qualifies as a smaller reporting company[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses in internal control over financial reporting - Management identified **material weaknesses** in internal control over financial reporting[179](index=179&type=chunk) - The identified weaknesses include: (i) lack of sufficient resources for adequate segregation of duties in financial reporting, and (ii) insufficient IT controls related to user access to the financial reporting system[179](index=179&type=chunk) - Due to these weaknesses, management concluded that disclosure controls and procedures were **not effective** as of the end of the period[180](index=180&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=39&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings - There are **no material pending legal proceedings** involving the company[184](index=184&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=ITEM%201A.%20Risk%20Factors) The company reports a new risk factor related to U.S. trade policy changes and tariffs, which could adversely affect business with China - A new risk factor has been added regarding recent changes to U.S. trade policy, including tariffs, which could adversely affect the business[186](index=186&type=chunk) - Ongoing trade tensions between the U.S. and China could harm sales and operations by impacting the importation of products or subjecting the company's exports to retaliatory tariffs[188](index=188&type=chunk)[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds from registered securities for the period - **None reported for the period**[190](index=190&type=chunk) [Item 6. Exhibits](index=40&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including material contracts and corporate governance documents - The report lists numerous exhibits, including the Underwriting Agreement from the May 2025 offering, the Joint Venture Agreement with Wider Come Limited, and various employment and consulting agreements[195](index=195&type=chunk)

Core Insights - Nexalin Technology, Inc. has appointed Justin Van Fleet as Chief Financial Officer effective August 1, 2025, bringing over 20 years of experience in public accounting and assurance services [1][2] - Mr. Van Fleet has a strong track record in financial systems development, regulatory compliance, and strategic financial management, particularly in guiding companies through complex financial transactions [2][3] - The company is at a pivotal moment with its innovative neurostimulation technology aimed at treating serious mental health conditions, and Mr. Van Fleet's expertise will be crucial for scaling operations and advancing the technology [4] Company Overview - Nexalin Technology designs and develops non-invasive neurostimulation products to address the global mental health epidemic, utilizing bioelectronic medical technology [6] - The company's Generation 2 and Generation 3 devices are currently under FDA review and are designed to provide deep-brain stimulation without drugs or invasive procedures, targeting conditions such as anxiety and depression [4][6] - Nexalin's Gen-2 15 milliamp neurostimulation device has received approval in China, Brazil, and Oman, indicating its potential for international market expansion [6]

Core Insights - Nexalin Technology, Inc. is hosting a webinar on June 3, 2025, to discuss its innovative approach to mental healthcare using its proprietary Deep Intracranial Frequency Stimulation (DIFS™) technology [1][2] - The company is positioned in a $537 billion mental health market, with international regulatory approvals and U.S. expansion plans underway [2] - Nexalin's technology includes real-time AI-driven patient monitoring and aims to provide scalable, at-home treatment options [2] Company Overview - Nexalin designs and develops non-invasive neurostimulation products aimed at addressing the global mental health epidemic [4] - The company's devices are believed to penetrate deep brain structures associated with mental health disorders, enhancing patient response without adverse side effects [4] - The Nexalin Gen-2 15 milliamp neurostimulation device has received approval in China, Brazil, and Oman [4]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's financial statements, management's analysis, market risk, and internal controls assessment [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) Nexalin Technology reported a significant Q1 2025 revenue decrease and wider net loss, with reduced assets and going concern doubts despite a May 2025 public offering Condensed Consolidated Balance Sheet Summary | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,620,591 | $3,961,141 | | **Total Assets** | $2,900,111 | $4,222,732 | | **Total Current Liabilities** | $574,736 | $546,694 | | **Total Stockholders' Equity** | $2,325,375 | $3,676,038 | Condensed Consolidated Statement of Operations Summary | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenues, net** | $41,015 | $78,671 | | **Gross profit** | $27,457 | $69,515 | | **Loss from operations** | $(2,011,225) | $(1,073,712) | | **Net loss** | $(1,988,337) | $(1,041,157) | | **Net loss per share** | $(0.15) | $(0.14) | Condensed Consolidated Statement of Cash Flows Summary | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(1,426,214) | $(763,289) | | **Net cash provided by investing activities** | $1,473,758 | $729,314 | | **Cash and cash equivalents - end of period** | $622,029 | $546,255 | [Note 1: Nature of the Organization and Business](index=8&type=section&id=NOTE%201%20%E2%80%94%20NATURE%20OF%20THE%20ORGANIZATION%20AND%20BUSINESS) The company develops neurostimulation products, focusing on Gen-2/3 FDA pre-submission, managing a joint venture, and addressing Nasdaq compliance - The company designs and develops neurostimulation products for mental health, with its Gen-1 device facing U.S. marketing restrictions following a 2019 FDA reclassification[23](index=23&type=chunk)[24](index=24&type=chunk) - The company is now focused on developing its next-generation devices, Gen-2 (SYNC) and Gen-3 (HALO), which use a more powerful 15 milliamp waveform and are currently in the FDA's pre-submission process[26](index=26&type=chunk) - A joint venture was formed on May 31, 2023, with Wider Come Limited to develop, market, and sell the Gen-2 SYNC device in China and other Asian countries, with Nexalin owning **48%** of the JV and accounting for it using the equity method[40](index=40&type=chunk)[43](index=43&type=chunk) - The company has faced and regained compliance with Nasdaq's minimum bid price and minimum stockholder equity requirements, highlighting ongoing risks to its stock listing[48](index=48&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [Note 2: Liquidity](index=13&type=section&id=NOTE%202%20%E2%80%94%20LIQUIDITY) The company faces substantial going concern doubt due to accumulated deficit, operating losses, and negative cash flow, despite a recent public offering - The company's financial statements were prepared on a going concern basis, but significant factors raise substantial doubt about its ability to continue, including an accumulated deficit of approximately **$86.7 million**, a Q1 operating loss of **$2.0 million**, and negative operating cash flow of **$1.4 million** as of March 31, 2025[54](index=54&type=chunk) - Management believes that a public offering completed on May 6, 2025, provides sufficient cash for the next twelve months, though these plans were deemed insufficient to overcome the presumption of substantial doubt about the company's ability to continue as a going concern[56](index=56&type=chunk) [Note 7: Commitments and Contingencies](index=24&type=section&id=NOTE%207%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) The company settled the Sarah Veltz lawsuit and is in discussions with the California EDD regarding worker classification issues - The company entered into a confidential settlement agreement on May 12, 2025, to resolve the Sarah Veltz lawsuit, with the settlement amount not expected to have a material effect on the company's financials[119](index=119&type=chunk) - The company is in settlement discussions with the California Employment Development Department (EDD) regarding worker classification issues, with the potential liability reduced to approximately **$40,000**, which has been accrued[120](index=120&type=chunk) [Note 8: Concentration of Credit Risk](index=25&type=section&id=NOTE%208%20%E2%80%94%20CONCENTRATION%20OF%20CREDIT%20RISK) The company faces significant customer concentration risk, with a few customers accounting for a large portion of revenues and accounts receivable - The company has significant customer concentration risk, with two customers accounting for **50%** of revenues for the three months ended March 31, 2025[122](index=122&type=chunk) - As of March 31, 2025, three customers accounted for **90%** of accounts receivable[123](index=123&type=chunk) [Note 10: Subsequent Events](index=27&type=section&id=NOTE%2010%20%E2%80%94%20SUBSEQUENT%20EVENTS) A public offering completed on May 6, 2025, raised approximately $5.005 million in gross proceeds for the company - On May 6, 2025, the company completed a public offering of **3,850,000** shares of common stock, raising aggregate gross proceeds of approximately **$5,005,000**[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 revenue declined 48% with net loss widening 91% due to higher operating expenses, highlighting liquidity concerns despite a recent $5 million equity offering and Gen-2 device approvals [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2025 revenue declined due to lower device sales, while operating expenses increased significantly, leading to a wider net loss Comparison of Operations (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $41,015 | $78,671 | $(37,656) | (48%) | | **Gross Profit** | $27,457 | $69,515 | $(42,058) | (61%) | | **Total Operating Expenses** | $2,038,682 | $1,143,227 | $895,455 | 78% | | **Loss from Operations** | $(2,011,225) | $(1,073,712) | $(937,513) | 87% | | **Net Loss** | $(1,988,337) | $(1,041,157) | $(947,180) | 91% | - The decrease in revenue was primarily due to the sale of devices to a new overseas customer in Q1 2024, which was not repeated in Q1 2025[155](index=155&type=chunk) - The significant increase in operating expenses was driven by higher professional fees (approximately **$140,000**), R&D costs (approximately **$301,000**), and stock compensation (approximately **$475,000**)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company continues to incur operating losses and negative cash flows, funding operations through equity sales, with a recent offering expected to cover the next twelve months - As of March 31, 2025, the company had an accumulated deficit of **$86.7 million** and cash of approximately **$622,000**, continuing to incur operating losses and negative cash flows, funding these primarily through equity sales[163](index=163&type=chunk) - Management believes the capital raised from the May 2025 public offering will be sufficient to satisfy cash requirements for the next twelve months, but acknowledges this is not sufficient to overcome the substantial doubt about the company's ability to continue as a going concern[165](index=165&type=chunk) [Recent Developments](index=31&type=section&id=Recent%20Developments) The company received regulatory approvals for its Gen-2 device in the Sultanate of Oman and Brazil, expanding its international market access - The company received conditional approval for its Gen-2 device from the Ministry of Health in the Sultanate of Oman, with the first device shipped in January 2024[152](index=152&type=chunk) - On June 13, 2024, the Gen-2 device was granted regulatory approval by the Brazilian Health Regulatory Agency[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company, as a smaller reporting company, is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Nexalin is not required to provide the information for this item[180](index=180&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses in segregation of duties and IT controls, with remediation efforts underway - Management identified material weaknesses in internal control over financial reporting and concluded that disclosure controls and procedures were not effective as of March 31, 2025[181](index=181&type=chunk)[182](index=182&type=chunk) - The specific material weaknesses include: (i) lack of adequate segregation of duties related to financial reporting, and (ii) insufficient IT controls, particularly regarding user access to the financial reporting system[181](index=181&type=chunk) - The company intends to engage an outside firm and implement new controls to remediate the material weaknesses, but no material changes to internal controls were made during the quarter[182](index=182&type=chunk)[184](index=184&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=37&type=section&id=ITEM%201.%20Legal%20Proceedings) This section states there are no material pending legal proceedings - The report states there are no material pending legal proceedings under this item[185](index=185&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=ITEM%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes from the risk factors previously disclosed in the company's 2024 Form 10-K[186](index=186&type=chunk)[187](index=187&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds from registered securities during the period - None reported for the period[188](index=188&type=chunk) [Item 6. Exhibits](index=38&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including underwriting agreements, corporate governance documents, material contracts such as employment and joint venture agreements, and officer certifications - The report includes a list of exhibits filed, such as an Underwriting Agreement dated May 4, 2025, various employment and consulting agreements, and certifications from the Principal Executive Officer[193](index=193&type=chunk)

Core Insights - Nexalin Technology, Inc. has reconstituted its Scientific Advisory Board (SAB) to enhance its focus on Alzheimer's disease, reflecting a strategic prioritization within its clinical development pipeline [1][3] - The newly appointed members of the SAB include Dr. Mingxiong Huang, Dr. David Owens, and Dr. Abe Scheer, who bring extensive expertise in neurology and neuroimaging [2][3] - The company plans to initiate new Alzheimer's-focused clinical studies in Q3 2025, incorporating cognitive testing and imaging biomarkers to assess treatment efficacy [11][12] Company Developments - The restructuring of the SAB aims to provide scientific and clinical oversight for Nexalin's initiatives in neurodegenerative and neuropsychiatric disorders [2][3] - Nexalin's proprietary Deep Intracranial Frequency Stimulation (DIFS™) technology is designed to penetrate deep brain structures associated with cognitive decline and mental illness [3][12] - The company emphasizes the potential of DIFS™ to promote neuroplasticity and functional recovery, particularly in memory and executive function areas [3][12] Advisory Board Expertise - Dr. Mingxiong Huang specializes in magnetoencephalography (MEG) and neuroimaging, with over 25 years of experience in advanced imaging techniques for neurological disorders [4][5] - Dr. Abe Scheer has over four decades of experience in neurology and psychiatry, and has previously served on Nexalin's SAB [6][7] - Dr. David Owens, the Chief Medical Officer, is a board-certified neuroradiologist with expertise in advanced imaging techniques and clinical research on transcranial stimulation therapies [8][10] Future Directions - The SAB will guide the scientific direction and clinical strategy for Nexalin's Alzheimer's initiatives, ensuring adherence to regulatory standards and scientific rigor [11][12] - The company aims to leverage the combined expertise of the SAB members to advance its technology through clinical trials addressing Alzheimer's disease [3][11]