Nexalin Technology(US:NXL)2025-11-14 15:33Device Classification and Regulatory Approvals - The Gen-1 device is classified as a Class II device for anxiety and insomnia and Class III for depression, requiring a new 510(k) application for marketing approval[92][93]. - The Gen-2 device has received regulatory approval in China for treating insomnia and depression, allowing for marketing and sales in that region[112]. - The Gen-2 device has been granted regulatory approval by the Brazilian Health Regulatory Agency as of June 13, 2024[115]. - The FDA accepted a Q-Submission for the Gen-2 SYNC system targeting Alzheimer's disease and dementia, with a regulatory meeting scheduled[101]. - The Gen-2 SYNC and Gen-3 HALO devices are in the Q-submission process for FDA review, aiming for commercialization upon clearance[95][96]. Device Development and Clinical Trials - Clinical trials for the Gen-2 SYNC and Gen-3 HALO devices are planned in the U.S., Brazil, and China throughout 2025 and 2026[98]. - The new Gen-2 SYNC and Gen-3 HALO devices utilize a 15 milliamp waveform, representing a more than 400% increase in power compared to the Gen-1 device[104]. - A virtual clinic is being developed to allow physicians to diagnose and prescribe the Gen-3 HALO headset in a private tele-psychiatry setting[109]. - The company has formed a Military & Government Advisory Board to enhance relationships with U.S. federal government organizations for device deployment[113]. Financial Performance - Revenues for the three months ended September 30, 2025, were approximately $18,149,000, a decrease of 50% compared to $36,031,000 in 2024[116]. - Gross profit for the three months ended September 30, 2025, was approximately $14,201,000, down 39% from $23,337,000 in 2024, with gross profit margins of 78% and 65% respectively[118]. - Total operating expenses for the three months ended September 30, 2025, were approximately $2,359,832, a decrease of 7% from $2,531,854 in 2024[119]. - Net loss for the three months ended September 30, 2025, was $2,276,311, a reduction of 7% compared to a net loss of $2,448,257 in 2024[116]. - Revenues for the nine months ended September 30, 2025, were approximately $129,752,000, an 8% decrease from $141,542,000 in 2024[125]. - Total operating expenses for the nine months ended September 30, 2025, were approximately $6,067,122, an increase of 22% from $4,991,695 in 2024[128]. - Net cash used in operating activities for the nine months ended September 30, 2025, was approximately $3,809,636, an increase of $1,000,000 compared to $2,809,914 in 2024[135]. - Net cash used in investing activities for the nine months ended September 30, 2025, was approximately $821,171, a decrease from $2,205,079 in 2024[136]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was approximately $4,646,397, compared to $4,516,184 in 2024[137]. - Research and development expenses for the nine months ended September 30, 2025, increased by approximately $404,940, primarily due to costs associated with the Halo development project and APP development[131]. Company Outlook and Risks - As of September 30, 2025, the company had an accumulated deficit of approximately $90.49 million[139]. - For the nine months ended September 30, 2025, the company reported a loss from operations of approximately $5.85 million and negative cash flows from operations of approximately $3.81 million[139]. - The company had cash and cash equivalents of approximately $590,000 and short-term investments of approximately $3.76 million as of September 30, 2025[139]. - The company anticipates continued operating losses as it executes its development plans through 2025 and beyond[139]. - The company's ability to continue as a going concern is dependent on generating revenue from joint ventures and obtaining U.S. approval for device sales[140]. - Management concluded that the company will not have sufficient cash and short-term investments to meet anticipated cash requirements for the next twelve months[140]. - The company faces numerous risks in product development, including successful enrollment in clinical trials and compliance with regulatory requirements[138]. - The company has produced Gen-2, which is currently selling in China, but the development of future products remains highly uncertain[138]. - In September 2025, the company's warrants expired, and a Form 25 was filed with the SEC to indicate their delisting[144]. - The company is focused on protecting its intellectual property and maintaining a safety profile for its products post-approval[145].