Nexalin Technology, Inc. reported significant financial developments in its 10-Q filing for the period ending September 30, 2024. The company experienced a notable increase in total revenue, which rose to $141,542 for the nine months ended September 30, 2024, compared to $90,212 for the same period in 2023, marking a 57% increase. For the third quarter alone, revenues increased by 49% to $36,031 from $24,113 in the prior year. This growth was primarily attributed to sales of supplies and parts, as well as device sales to a new overseas customer.

Despite the revenue growth, Nexalin reported a net loss of $(4,773,907) for the nine months ended September 30, 2024, compared to $(3,868,040) for the same period in 2023, reflecting a 24% increase in losses. The loss from operations also increased to $(4,879,250) from $(4,071,823) year-over-year. The company's gross profit for the nine-month period improved to $112,445, up from $69,755, indicating a gross margin increase from 77.32% to 79.44%.

Total operating expenses for the nine months rose to $4,991,695, up from $4,141,578, driven by increased shareholder-related expenses, executive search fees, travel costs, and stock compensation. The company reported a decrease in research and development costs, which fell by approximately $1,389,000.

On the balance sheet, total current assets increased to $4,907,589 as of September 30, 2024, from $3,429,892 at the end of 2023, while total assets rose to $5,257,182. Total current liabilities decreased to $299,389, contributing to an increase in total stockholders’ equity to $4,957,793.

Nexalin's cash and cash equivalents saw a significant decline, dropping to $81,421 from $580,230, while short-term investments surged to $4,512,197. The company raised approximately $4,720,000 through a public offering of 3 million shares at $1.75 per share on July 1, 2024, which bolstered its financial position.

Strategically, Nexalin is focused on the development of its Generation 2 and Generation 3 devices, which utilize advanced waveform technology for treating mental health conditions. The company is in the pre-submission phase for FDA review of these devices and plans to initiate pilot and pivotal trials in Q4 2024. Additionally, a joint venture established in May 2023 aims to facilitate the clinical development and marketing of its devices in China.

Despite these advancements, Nexalin anticipates continued operating losses and negative cash flows, raising concerns about its ability to sustain operations without additional capital. The company is actively working to address compliance issues with Nasdaq regarding minimum bid price and stockholder equity requirements.