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HOUSTON, March 27, 2023 (GLOBE NEWSWIRE) — Nexalin Technology, Inc. (the “Company” or “Nexalin”) (Nasdaq: NXL; NXLIW) today provided a business update for the year ended December 31, 2022.
Mark White, CEO of Nexalin Technology stated, “Nexalin has made significant progress towards commencing clinical trials of our Gen-2 and Gen-3 neurostimulation devices in the United States. Nexalin’s enhanced neurostimulation devices combine innovation, frequencies and algorithms to provide an unprecedented solution for treating mental health disorders without the need for medication. Although our Gen-1 device was previously cleared by the U.S. Food and Drug Administration (FDA) to treat patients with anxiety, depression, and insomnia, we believe that the new devices will allow deeper penetration into the brain and provide enhanced patient response without adverse side effects. Given changes in FDA medical device requirements, the Company decided to not continue with the Gen-1 device, given the success of the new devices, based on both studies and approvals in China. Moreover, we are highly encouraged by the preliminary data provided by the University of California San Diego that supports the safety of utilizing our next generation devices. As a result, we look forward to presenting our new Gen-2 and Gen-3 devices to the FDA in the coming months for the treatment of anxiety and insomnia. We are also on track to submit our PMA with the FDA for the treatment of Major Depressive Disorder (MDD) in Q3 2023. In addition, we seek to expand our neurostimulation devices into new indications, such as substance use disorder (addiction), Alzheimer’s, traumatic brain injury (TBI), PTSD and chronic pain. Overall, we remain committed to our mission of bringing our new, effective and drug-free therapy to patients with mental health issues in the United States and around the world.”
“Shortly after receiving the approval of our Generation 2 (Gen-2) medical device by China’s National Medical Products Administration (NMPA) for insomnia and depression, our distributor, Wider Come Limited, commenced sales of our Gen-2 devices in China. Although we are pleased with our revenue growth in 2022, our sales in China were greatly affected by the pandemic. Despite this, our distributor continues to focus on selling the instrument and disposables to key opinion leaders at leading hospitals in China given the successful clinical studies and validation by China’s NMPA in the areas of insomnia and depression. We are highly encouraged by the interest and feedback in our neurostimulation technology. Most recently, our neurostimulation technology was featured in a white paper by the Second Xiangya Hospital of Central South University, China, which further validates that our Gen-2 device has the ability to significantly improve mental healthcare outcomes among patients affected with generalized anxiety disorder. As a result, we look forward to advancing the commercial rollout, as well as conducting additional clinical research studies in China across a number of different indications. The clinical trials in China have been funded in their entirety by our Chinese distributor.”
“In 2022, we succeeded in our goal of placing Nexalin in a stronger financial position through the Initial Public Offering and concurrent listing on the Nasdaq. As of December 31, 2022, we had cash, cash equivalents and short-term investments of $7.0 million, which we believe provides us sufficient liquidity to execute our business plan. As a result, we believe we are funded to support FDA approval in the United States.”
Financial results
Nexalin has filed its Report on Form 10-K for the year ended December 31, 2022 with the Securities and Exchange Commission. A full copy of the filing can be obtained on the SEC’s website at www.SEC.gov and on the Company’s website. We refer you to the full filing for additional information regarding Nexalin and its financial results and condition. We provide a brief summary of our financial results for the year ended December 31, 2022 below.
Revenue for the year ended December 31, 2022 was $1.3 million, compared to $0.1 million for the year ended December 31, 2021, an increase of $1.2 million. The increase in revenue for 2022 compared to 2021 was primarily due to increased device sales in 2022.
Gross profit was $1.0 million for the year ended December 31, 2022, compared to $0.1 million for the year ended December 31, 2021.
Total operating expenses for the years ended December 31, 2022 and 2021 were $2.8 million and $6.1 million, respectively. The decrease was primarily due to a decrease in stock-based compensation and professional fees. Loss from operations the years ended December 31, 2022 and 2021 were $1.8 million and $6.0 million, respectively. Net loss for the years ended December 31, 2022 and 2021 were $1.7 million or ($0.30) per basic and diluted share, and $6.1 million or ($1.43) per basic and diluted share, respectively.
As of December 31, 2022, the Company had cash, cash equivalents and short-term investments of $7.0 million.
About Nexalin Technology, Inc.
Nexalin designs and develops innovative neurostimulation products to uniquely and effectively help combat the ongoing global mental health epidemic. All Nexalin’s products are non-invasive and undetectable to the human body and provide relief to those afflicted with mental health issues without adverse side effects. Nexalin utilizes bioelectronic medical technology to treat mental health issues without the need for drugs or psychotherapy. Nexalin believes its neurostimulation medical devices can penetrate structures deep in the mid-brain that are associated with mental health disorders. Nexalin believes the deeper penetrating waveform in its next generation devices will generate enhanced patient response without any adverse side effects. The Nexalin tACS device was recently approved in China by the National Medical Products Administration (NMPA) for the treatment of insomnia and depression. In September 2018, Nexalin entered into a series of agreements with Wider Come Limited (“Wider”), a company formed under the laws of the People’s Republic of China. Pursuant to this agreement, Nexalin and Wider have agreed to explore the formation of a joint venture entity to be domiciled in Hong Kong. This new entity will conduct clinical research and implement a business distribution plan for the Nexalin device in the Asia Pacific region. Additional information about the Company is available at: https://nexalin.com/.
FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute “forward-looking statements,” These statements relate to future events or Nexalin’s future financial performance. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or that are not statements of historical fact (including without limitation statements to the effect that Nexalin or its management “believes”, “expects”, “anticipates”, “plans”, “intends” and similar expressions) should be considered forward looking statements that involve risks and uncertainties which could cause actual events or Nexalin’s actual results to differ materially from those indicated by the forward-looking statements. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s Report on Form 10-K for the year ended December 31, 2022 and other filings as filed with the Securities and Exchange Commission. Copies of such filings are available on the SEC’s website, www.sec.gov. Such forward-looking statements are made as of the date hereof and may become outdated over time. Such forward-looking statements are made as of the date hereof and may become outdated over time. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Contact:
Crescendo Communications, LLC
Tel: (212) 671-1020
Email: NXL@crescendo-ir.com
NEXALIN TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 162,743 | $ | 661,778 | ||||
| Short-term investments | 6,831,192 | – | ||||||
| Accounts receivable | 4,875 | 16,303 | ||||||
| Inventory | 154,370 | 31,410 | ||||||
| Prepaid expenses and other current assets | 272,282 | 43,168 | ||||||
| Total Current Assets | 7,425,462 | 752,659 | ||||||
| ROU Asset | 6,171 | – | ||||||
| Equipment, net of accumulated depreciation of $2,181 and $29,862, respectively | 503 | 1,039 | ||||||
| Total Assets | $ | 7,432,136 | $ | 753,698 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable (Includes related party of $260,000 and $399,320, respectively) | $ | 658,367 | $ | 843,794 | ||||
| Accrued expenses | 539,822 | 611,795 | ||||||
| Lease liability, current portion | 50,797 | 40,845 | ||||||
| Loan payable – shareholder | – | 37,200 | ||||||
| Loan payable – officer | 200,000 | 200,000 | ||||||
| Note payable | 500,000 | 500,000 | ||||||
| Deferred revenue | – | 130,000 | ||||||
| Total Current Liabilities | 1,948,986 | 2,363,634 | ||||||
| Long-term Liabilities: | ||||||||
| Lease liability, net of current portion | 4,463 | 49,089 | ||||||
| PPP Loan payable | – | 22,916 | ||||||
| Total Liabilities | 1,953,449 | 2,435,639 | ||||||
| Commitments and Contingencies (Note 8) | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized; 7,286,562 and 4,879,923 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 7,287 | 4,880 | ||||||
| Accumulated other comprehensive income | 36,313 | – | ||||||
| Additional paid in capital | 77,824,427 | 69,004,703 | ||||||
| Accumulated deficit | (72,389,340 | ) | (70,691,524 | ) | ||||
| Total Stockholders’ Equity (Deficit) | 5,478,687 | (1,681,941 | ) | |||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | 7,432,136 | $ | 753,698 | ||||
NEXALIN TECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| Year Ended December 31, |
||||||||
| 2022 | 2021 | |||||||
| Revenues, net (Includes related party of $1,183,367 and $26,132 for the year ended December 31, 2022 and December 31, 2021, respectively) | $ | 1,321,357 | $ | 144,065 | ||||
| Cost of revenues | 363,212 | 21,442 | ||||||
| Gross profit | 958,145 | 122,623 | ||||||
| Operating expenses | ||||||||
| Professional fees | 605,329 | 697,063 | ||||||
| Salaries and benefits | 694,108 | 228,738 | ||||||
| Selling, general and administrative | 1,491,739 | 5,215,423 | ||||||
| Total operating expenses | 2,791,176 | 6,141,224 | ||||||
| Loss from operations | (1,833,031 | ) | (6,018,601 | ) | ||||
| Other income (expense), net: | ||||||||
| Interest expense, net | (59,382 | ) | (82,319 | ) | ||||
| Other income | 171,681 | – | ||||||
| Forgiveness of PPP Loan | 22,916 | 22,916 | ||||||
| Total other income (expense), net | 135,215 | (59,403 | ) | |||||
| Net loss | (1,697,816 | ) | (6,078,004 | ) | ||||
| Other comprehensive income: | ||||||||
| Unrealized gain from short-term investments | 36,313 | – | ||||||
| Comprehensive loss | $ | (1,661,503 | ) | $ | (6,078,004 | ) | ||
| Net loss per share attributable to common stockholders – Basic and Diluted | $ | (0.30 | ) | $ | (1.43 | ) | ||
| Weighted Average Shares Outstanding – Basic and Diluted | 5,572,402 | 4,256,360 | ||||||
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