Nexalin issues $1,170,000.00 promissory note to Streeterville Capital

Nexalin Technology, Inc., a Delaware corporation, issued a promissory note with an effective date of August 21, 2026 to Streeterville Capital, LLC, a Utah limited liability company, according to an exhibit to a Form 8-K filed the same day. The original principal balance is $1,170,000.00, but the purchase price is $1,000,000.00. The gap is a $150,000.00 original issue discount plus a $20,000.00 transaction expense amount that Nexalin agreed to pay toward the lender's legal fees and other costs.

The note was issued under a note purchase agreement dated August 21, 2026. The exhibit names no placement agent, underwriter or financial advisor, and Streeterville is the only lender it names.

Repayment and extension terms

The note is unsecured and matures six months after the purchase price date. Nexalin may extend the maturity on up to two occasions by three months each, with Streeterville's written consent. Each extension increases the outstanding balance by seven-and-a-half percent (7.5%).

No interest accrues before an event of default. After a default and written notice from Streeterville, interest accrues at the lesser of eighteen percent (18%) per annum or the maximum lawful rate. Nexalin may prepay without penalty.

The mandatory prepayment is the most restrictive term. Each time Nexalin receives money from any financing, including warrant exercises, at-the-market sales, an equity line or debt, it must prepay the lesser of twenty percent (20%) of the amount raised and the outstanding balance within three (3) Trading Days. New capital therefore goes to this note before it reaches operations. The exhibit does not say how Nexalin plans to use the $1,000,000.00.

Default triggers and remedies

Trigger events include a failure to pay; a receiver appointed over the company that is not contested for twenty (20) days or dismissed within sixty (60) days; insolvency; bankruptcy filings, voluntary or involuntary; a fundamental transaction that does not repay the note in full; a breach of the covenants in Section 4 of the purchase agreement; a materially false statement; and a money judgment above $250,000.00 that stays unvacated for twenty (20) calendar days. A trigger becomes an event of default only if Nexalin fails to cure within five (5) Trading Days after Streeterville's demand.

For receivership, insolvency and bankruptcy triggers, an event of default occurs automatically, and the balance becomes payable in cash at the Mandatory Default Amount without notice. Otherwise Streeterville must give notice first. Nexalin waives presentment, demand and notice, and Streeterville may enforce its rights without any grace period.

Nexalin's payment obligation is not subject to offset, deduction or counterclaim, and it waives any such defense against the lender. Utah law governs, and disputes go to the arbitration provisions in the purchase agreement.

After any trigger event, Streeterville may also increase the outstanding balance by the Trigger Effect: 10% of the balance for each major trigger event, meaning the failure-to-pay, receivership, insolvency, bankruptcy, fundamental transaction and covenant triggers, and 5% for each minor one, meaning a false statement or an unpaid judgment. It can be applied up to three times for each kind, and the total cannot exceed 25%. The note treats fees, balance adjustments and default interest as liquidated damages, not penalties. John Fife, president of Streeterville, and Nexalin's President and CEO Mark White signed it.

Financial position

These figures come from the 10-K filed March 25, 2026. Revenue was $301,647 in 2025, against $168,721 in 2024. Research and development expense was $1.1 million in 2025 and $1.2 million in 2024. The net loss was $8.2 million in 2025, against $7.6 million in 2024, and the company used $5.0 million in operations in 2025, against $3.9 million in 2024.

Year-end cash and cash equivalents were $654,783 for 2025, according to a 10-Q filed August 12, 2026, and $574,485 for 2024. Short-term investments were $3.1 million at the end of 2025. Cash and cash equivalents were $1.0 million at June 30, 2026.

The $1,000,000.00 purchase price is about the same as the $1.0 million of cash on hand at June 30, 2026, and covers only part of the $5.0 million used in operations in 2025. The mandatory prepayment would send part of any new money back to Streeterville.

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