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STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 6 — STOCKHOLDERS’ EQUITY

 

Issuance of Common Stock

 

During the six months ended June 30, 2024, the Company issued 150,000 shares of common stock to affiliates of Wider in satisfaction of obligations pursuant to their collaborative agreement. A charge to research and development was recorded in 2023 at the time the Company recognized its obligation to issue these shares.

 

During the six months ended June 30, 2023, the Company issued no shares of common stock.

 

Options

 

Nexalin’s 2023 Equity Incentive Plan (the “2023 Plan”) was approved by our stockholders on November 10, 2023. The Plan provides that maximum number of shares of Common Stock available for the grant of awards under the Plan shall be 1,500,000, subject to adjustment for stock dividends, stock splits or similar events. The 2023 Plan is administered by the Compensation Committee of the Board of Directors, which may in turn delegate administrative authority to one or more of our executive officers. Under the terms of the 2023 Plan, the Compensation Committee may grant equity awards, including nonqualified stock options and restricted stock to employees, officers, directors, consultants, agents, advisors and independent contractors.

 

On July 1, 2023, the Company entered into amended employment agreements with the three executives. In addition to the cash compensation included in their employment contracts, the three executives were granted one-time bonus stock options (that were immediately vested) and performance-based stock options that would be triggered based on certain performance criteria being achieved. The amount expensed during the three months ended June 30, 2024 and 2023 in the unaudited condensed consolidated statements of operations and comprehensive loss was $44,060 and $0 respectively. The amount expensed during the six months ended June 30, 2024 and 2023 in the unaudited condensed consolidated statements of operations and comprehensive loss was $88,120 and $0 respectively.

 

The following table presents a summary of stock option award activity during the six months ended June 30, 2024:

 

Schedule of stock option award activity                        
    Number of
options		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Life
In Years		  
Outstanding December 31, 2023     2,281,879     $ 0.89       9.00  
Issued     -     -       -  
Exercised     -       -       -  
Expired or cancelled     -       -       -  
Outstanding June 30, 2024     2,281,879     $ 0.89       9.00  

 

The following table provides additional information about stock options that are outstanding and exercisable at June 30, 2024:

 

                           
Exercise Price     Outstanding
Number of
Options		     Weighted Average
Remaining Life
In Years		     Exercisable
Number
of Options		  
$ 0.89       2,281,879     $ 9.00       587,248  
          2,281,879     $ 9.00       587,248  

 

The fair value of these stock option awards is estimated as of the grant date using a Black-Scholes option pricing model and the following assumptions: A risk-free interest rate based on the U.S. Treasury yield curve at the date of grant; an expected or contractual term; and expected volatility based on an evaluation of comparable public companies’ measures of volatility. The Company does not anticipate declaring dividends on common shares now or in the near future and has therefore assumed no dividend rate. The following table discloses the assumptions, utilized for stock options as follows:

 

Schedule of assumptions                
    June 30,
2024		     December 31,
2023		  
Volatility     99.0 %     99.0 %
Expected dividends   $ -     $ -  
Risk-free interest rate     4.61 %     4.61 %
Expected term (years)     9.00       9.5  

 

Warrants

 

The issuance of warrants to purchase shares of the Company’s common stock are summarized as follows:

 

Schedule of warrants                
    Number of
warrants		     Weighted Average
Exercise Price		  
Outstanding December 31, 2023     2,662,250     $ 4.15  
Issued     -       -  
Exercised     -       -  
Expired or cancelled     -       -  
Outstanding June 30, 2024     2,662,250     $ 4.15  

 

The following table summarizes information about warrants to purchase shares of the Company’s common stock outstanding and exercisable at June 30, 2024:

 

  Summary information about warrants to purchase                                  
Exercise Price     Outstanding
Number of
Warrants		     Weighted Average
Remaining Life
In Years		     Weighted Average
Exercise Price		     Exercisable
Number of
Warrants		  
$ 4.15       2,315,000       1.25     $ 4.15       2,135,000  
$ 4.15       347,250       1.25       4.15       347,250  
          2,662,250       1.25     $ 4.15       2,662,250  

 

The compensation expense attributed to the issuance of the warrants, if required to be recognized on the nature of the transaction, was recognized as they vested/earned. These warrants are exercisable up to three years from the date of grant. All are currently exercisable.