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STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 6 — STOCKHOLDERS’ EQUITY

 

Recent Issuances of Common Stock

 

On April 23, 2025, the Company filed a “shelf” registration statement on Form S-3 (the “Registration Statement”) which was declared effective by the SEC on April 29, 2025. On May 6, 2025, pursuant to the Registration Statement and a prospectus supplement and prospectus which are a part thereof, the Company consummated a public offering of 3,850,000 shares of the Company’s common stock, $0.001 par value per share, resulting in aggregate gross proceeds of approximately $5,005,000, before deducting underwriting discounts and commissions and other offering expenses. 

 

On June 5, 2025, Maxim Group LLC (the “Representative”) partially exercised its overallotment option, and pursuant to such exercise on June 6, 2025, the Company closed the offering of 240,000 shares of its common stock to the Representative, at a price of $1.30 per share, for aggregate gross proceeds of $312,000, less applicable underwriter discounts.

 

In the first quarter of 2025 the Company issued 24,406 shares of restricted stock to a consultant as compensation.

 

In addition to the 25,000 shares of restricted stock issued to the new CFO, as noted in footnote 5, during the third quarter of 2025 the Company issued an additional 746,677 shares of restricted stock (494,583 of which would be considered related parties) to various employees, directors and consultants as stock compensation.

 

See Note 9 with respect to amendment to Equity Distribution Agreement.

 

Options

 

Nexalin’s 2023 Equity Incentive Plan (the “2023 Plan”) was approved by our stockholders on November 10, 2023. The Plan provides that the 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. The 2023 Plan has been amended, most recently as of July 15, 2025, to increase the number of shares under the Plan to 9,000,000.

 

In July of 2025, the Company entered into a five-year Transition and Consulting Agreement with Marilyn Elson, the Company’s controller, commencing on her voluntary retirement date of September 30, 2025. Consideration of the above agreement will be the issuance of a stock option exercisable into 300,000 shares of unregistered shares of the Company’s common stock on the grant date and are subject to the terms of the Company’s 2023 Equity Incentive Plan, as amended. Fifty (50%) of the option vests immediately, 10% on October 1, 2025, and the remaining 40% on equal increments on each subsequent October 1.

 

On July 17, 2025, the Company entered into an employment agreement with its Chief Financial Officer and issued a stock option exercisable into 130,435 shares of unregistered shares of the Company’s common stock on the grant date and are subject to the terms of the Company’s 2023 Equity Incentive Plan, as amended. Fifty (50%) of the option vests on February 1, 2026 and the remaining 50% on August 1, 2026.

 

In addition, during the third quarter of 2025 the Company also issued stock options exercisable into 445,104 shares of common stock to various employees, consultants and board members.

 

The amount expensed during the three and nine months ended September 30, 2025 and 2024 in the unaudited condensed consolidated statements of operations and comprehensive loss related to stock options issued under the 2023 Plan was $1,082,790 and $2,291,734 and $1,539,169 and $2,008,801, respectively.

 

The following table presents a summary of stock option award activity during the nine months ended September 30, 2025:

 

                       
    Number of
Options		     Weighted Average
Exercise Price		     Weighted Average
Remaining Life
In Years		  
Outstanding December 31, 2024     3,071,635     $ 1.02       7.26  
Issued     875,539       1.39       4.55  
Exercised     -       -       -  
Expired or cancelled     (33,557 )     0.89       -  
Outstanding September 30, 2025     3,913,617     $ 1.10       6.11  

 

The following table provides additional information about stock options that are outstanding and exercisable at September 30, 2025:

 

                           
Exercise Price     Outstanding
Number of
Options		     Weighted Average
Remaining
Life
In Years		     Exercisable
Number of
Options		  
$ 0.89       2,181,208     $ 7.76       1,118,568  
  0.94       581,250       3.20       581,250  
  0.66       90,620       3.99       -  
  2.95       185,000       4.24       125,000  
  3.25       130,000       2.80       130,000  
  1.15       430,435       4.81       180,000  
  0.96       315,104       4.92       315,104  
          3,913,617     $ 6.11       2,449,922  

 

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 award during the nine-months ended September 30, 2025

 

    
   September 30,
2025		 
Volatility   192.2-194.8%
Expected dividends  $- 
Risk-free interest rate   3.68 - 3.89%
Expected term (years)   3-5 

 

Warrants

 

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

 

               
    Number of
warrants		     Weighted Average
Exercise Price		  
Outstanding December 31, 2024     2,662,250     $ 4.15  
Issued     -       -  
Exercised     -       -  
Expired or cancelled     2,662,250       4.15  
Outstanding September 30, 2025     -     $ -