DEF: Nexalin Technology Schedules 2025 Annual Meeting, Seeks Shareholder Approval for Director Elections, Equity Plan Expansion, and Auditor Ratification

Nexalin Technology, Inc. has announced its virtual-only Annual Meeting of Stockholders for July 15, 2025, where shareholders will vote on the election of five directors, an amendment to increase shares reserved under its 2023 Equity Incentive Plan, and the ratification of CBIZ CPAs P.C. as independent auditors.

Summary

• Nexalin Technology, Inc. will hold its Annual Meeting of Stockholders virtually on July 15, 2025, at 10:00 a.m. Eastern Standard Time.
• The record date for stockholders entitled to vote at the meeting was June 4, 2025, with 17,177,929 shares of common stock outstanding.
• Key proposals include the election of five directors, approval of an amendment to the 2023 Equity Incentive Plan to increase reserved shares from 6,000,000 to 9,000,000, and ratification of CBIZ CPAs P.C. as the independent auditors for the fiscal year ending December 31, 2025.
• The Board of Directors recommends a vote FOR all director nominees and FOR both the Equity Incentive Plan amendment and the auditor ratification.
• Executive compensation for Mark White (CEO/CFO) totaled $1,028,470 in 2024, up from $679,815 in 2023, including a $220,000 bonus for 2024 to be paid in 2025.
• David Owens, M.D. (CMO) received total compensation of $873,140 in 2024, significantly up from $154,478 in 2023.
• Carolyn Shelton, who joined as Senior Vice-President of Quality, Regulatory and Clinical Affairs in September 2024, received $288,534 in 2024, including a $20,000 bonus to be paid in 2025.
• The company disclosed related party transactions, including a consulting agreement with U.S. Asian Consulting Group, LLC (whose members are shareholders, including the company's Controller), with fees increasing from $10,000 to $16,667 per month effective July 1, 2024, and additional stock compensation.
• Office lease costs through an entity controlled by the CEO were $54,000 for both 2023 and 2024.
• Audit fees paid to Marcum LLP were $195,970 in 2024, an increase from $120,750 in 2023.
• Certain officers and directors had delinquent Section 16(a) reports for stock and option acquisitions, which were subsequently filed in January and February 2025.

Sentiment

Score: 6

Explanation: The document is largely neutral, as it's a routine proxy statement focused on corporate governance and administrative matters. The detailed disclosure of executive compensation and related party transactions is standard. The minor negative of delinquent Section 16(a) reports is offset by the proactive disclosure and subsequent filings, and the clear governance structure (separate Chairman/CEO, risk oversight) is a positive.

Positives

• The company maintains a segregated Board Chairman and Chief Executive Officer structure, which the Board believes ensures better overall governance and provides meaningful checks and balances.
• The Board actively oversees risk management, aiming to timely identify material risks, communicate information to senior executives and committees, implement appropriate strategies, and integrate risk management into decision-making.
• Key Board committees (Audit, Compensation, Nominating and Corporate Governance) are in place, with independent directors comprising the Audit Committee.
• The Board has determined that Alan Kazden qualifies as an Audit Committee financial expert, enhancing financial oversight.
• A Code of Ethics is adopted and publicly available, applying to directors, principal executive officer, principal financial officer, and other similar functions.
• The company has established a clear process for stockholder communication with the Board, individual directors, or committees.

Negatives

• Several officers and directors, including Dr. Owens, Mr. Kazden, and Ms. Shelton, failed to timely report acquisitions of common stock and stock options under Section 16(a) of the Exchange Act, requiring subsequent Form 5 filings.
• The company experienced a change in independent auditors, with Marcum LLP resigning and CBIZ CPAs P.C. being engaged on the same day, April 16, 2025, following CBIZ's acquisition of Marcum's attest business.

Risks

• The Board recognizes and oversees risks including liquidity/capital accessibility risk, medical product acceptance risk, operational risk, and China operation risk.
• Potential dilution for existing shareholders due to the proposed increase in shares reserved for issuance under the 2023 Equity Incentive Plan from 6,000,000 to 9,000,000 shares.

Future Outlook

The document primarily outlines the agenda for the upcoming Annual Meeting, focusing on corporate governance matters. It indicates the company's intention to continue attracting and retaining qualified management through its executive compensation program, which includes annual bonuses and stock option grants. The proposed amendment to the 2023 Equity Incentive Plan suggests a future need for additional equity awards to incentivize and reward personnel, including those in lieu of cash compensation, and to provide for potential additional awards.

Management Comments

• "We believe that holding a virtual meeting will enable more of our stockholders to attend and participate in the Annual Meeting since our stockholders can participate from any location around the world with Internet access. Virtual meetings provide expanded access, improved communication and cost savings for us and our stockholders."
• "The Board believes that the segregation of the roles of Board Chairman and the Chief Executive Officer ensures better overall governance of the Company and provides meaningful checks and balances regarding its overall performance."
• "The Board believes an effective risk management system will (1) timely identify the material risks that we face; (2) communicate necessary information with respect to material risks to senior executives and, as appropriate, to the Board or relevant Board committees; (3) implement appropriate and responsive risk management strategies consistent with the Companys risk profile; and (4) integrate risk management into the Companys decision-making."
• "The primary objective of the executive compensation program is to attract and retain qualified, energetic managers who are enthusiastic about the mission and culture of Nexalin Technology. A further objective of the compensation program is to provide incentives and reward each manager for their contribution."
• "It is the Compensation Committees intention to set totals for the CEO for cash compensation sufficiently high enough to attract and retain a strong motivated leadership team, but not so high that it creates a negative perception with the other stakeholders."

Industry Context

This DEF 14A filing is a standard corporate governance document for a publicly traded company, detailing the agenda for its annual shareholder meeting, executive compensation, and board structure. It does not provide specific operational or financial performance data that would allow for a detailed analysis of broader industry trends or the company's competitive position within the medical device or health technology sector. The focus is on internal corporate structure and compliance.

Comparison to Industry Standards

• N/A This document is a proxy statement focused on corporate governance, executive compensation, and shareholder proposals, rather than operational or financial performance. Therefore, it does not contain specific comparable company, project, or results data to assess against global industry benchmarks.

Management Changes

Corporate Governance

Related Party Transactions

• The company has a consulting agreement with U.S. Asian Consulting Group, LLC, whose members are shareholders in the company, including Marilyn Elson, Nexalin Technology's Controller. The monthly fee for services increased from $10,000 to $16,667 effective July 1, 2024, and includes a one-time stock grant and a semi-annual share award of $100,000.
• The company sub-leases approximately 4,000 square feet of office space from IIcom Strategic Inc., an entity controlled and owned by the company's Chief Executive Officer, Mark White. Lease costs were $54,000 for both the twelve months ended December 31, 2024, and 2023. Under a new one-year sublease, the company pays the third-party landlord directly, with no additional payments to the CEO's controlled entity.

Stakeholder Impact

• Shareholders: Will vote on the election of directors, the expansion of the equity incentive plan (which could lead to dilution), and the ratification of the independent auditors. The virtual meeting format aims to increase participation.
• Employees/Executives: The proposed amendment to the 2023 Equity Incentive Plan directly impacts their compensation structure, allowing for more stock and option awards, which aims to attract, retain, and incentivize them.
• Auditors: CBIZ CPAs P.C. will be ratified as the independent auditors, impacting their engagement with the company.
• Consultants: Those receiving equity awards under the 2023 Equity Incentive Plan will be impacted by the plan's expansion.
• Creditors: No direct impact mentioned, but the company's financial health and governance practices, as outlined, indirectly affect creditor confidence.

Next Steps

• Stockholders are encouraged to vote via internet, telephone, or mail as soon as possible to ensure their shares are represented at the Annual Meeting.
• The Annual Meeting of Stockholders will be held virtually on July 15, 2025, at 10:00 a.m. EST.
• Shareholders will vote on the election of five directors, the amendment to the 2023 Equity Incentive Plan, and the ratification of CBIZ CPAs P.C. as independent auditors.
• A representative of CBIZ CPAs P.C. will be available at the Annual Meeting to make a statement and respond to questions.
• Stockholders interested in presenting a proposal or nominating a director for the 2026 Annual Meeting must submit written notice to the Corporate Secretary by January 1, 2026, for inclusion in proxy materials.

Key Dates

Keywords

Proxy Statement, Annual Meeting, Corporate Governance, Director Election, Equity Incentive Plan, Auditor Ratification, Executive Compensation, SEC Filing, Shareholder Vote, Risk Management, Related Party Transactions, Nexalin Technology