Nexalin Technology (NXL) 10-Q10 Aug 232023 Q2 Quarterly reportFinancial data

Company Profile

Cover

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 08, 2023
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-41507
Entity Registrant Name	NEXALIN TECHNOLOGY, INC.
Entity Central Index Key	0001527352
Entity Tax Identification Number	27-5566468
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1776 Yorktown
Entity Address, Address Line Two	Suite 550
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056
City Area Code	(832)
Local Phone Number	260-0222
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,436,562
Common stock, par value $0.001 per share
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	NXL
Security Exchange Name	NASDAQ
Warrants, exercisable for one share of Common Stock
Title of 12(b) Security	Warrants, exercisable for one share of Common Stock
Trading Symbol	NXLIW
Security Exchange Name	NASDAQ

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 231,722	$ 162,743
Short-term investments	4,464,922	6,831,192
Accounts receivable (Includes related party of $10,207 and $0, respectively)	14,322	4,875
Inventory	160,007	154,370
Prepaid expenses and other current assets	240,911	272,282
Total Current Assets	5,111,884	7,425,462
ROU Asset	3,397	6,171
Equipment, net of accumulated depreciation of $2,449 and $2,181, respectively	234	503
Patent, net of amortization	60,106
Total Assets	5,175,621	7,432,136
Current Liabilities:
Accounts payable (Includes related party of $0 and $260,000, respectively)	48,501	658,367
Accrued expenses	603,633	539,822
Lease liability, current portion	30,487	50,797
Loan payable - officer		200,000
Note payable	500,000	500,000
Total Current Liabilities	1,182,621	1,948,986
Long-term Liabilities:
Lease liability, net of current portion		4,463
Total Liabilities	1,182,621	1,953,449
Stockholders’ Equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; 7,286,562 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	7,287	7,287
Accumulated other comprehensive income	33,089	36,313
Additional paid in capital	77,912,815	77,824,427
Accumulated deficit	(73,960,191)	(72,389,340)
Total Stockholders’ Equity	3,993,000	5,478,687
Total Liabilities and Stockholders’ Equity	$ 5,175,621	$ 7,432,136

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable related party	$ 10,207	$ 0
Accumulated depreciation	2,449	2,181
Accounts payable related party	$ 0	$ 260,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	7,286,562	7,286,562
Common stock, shares outstanding	7,286,562	7,286,562

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN (LOSS) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues, net (Includes related party of $10,207 and $362,868 for the three months ended and $10,207 and $663,367 for the six months ended respectively)	$ 35,540	$ 414,288	$ 66,100	$ 737,610
Cost of revenues	9,374	123,032	16,484	169,047
Gross profit	26,166	291,256	49,616	568,563
Operating expenses:
Professional fees	120,147	183,109	278,747	478,565
Salaries and benefits	303,334	167,260	602,657	305,854
Selling, general and administrative	479,545	385,990	824,498	604,364
Total operating expenses	903,026	736,359	1,705,902	1,388,783
Loss from operations	(876,860)	(445,103)	(1,656,286)	(820,220)
Other income (expense), net:
Interest income (expense), net	(5,518)	(17,302)	(14,355)	(35,434)
Gain on sale of short-term investments	58,878		97,650
Other income	1,063		2,140
Other income - PPP loan forgiveness				22,916
Total other income (expense), net	54,423	(17,302)	85,435	(12,518)
Net loss	(822,437)	(462,405)	(1,570,851)	(832,738)
Other comprehensive income (loss):
Unrealized loss from short-term investments	(7,980)		(3,224)
Comprehensive loss	$ (830,417)	$ (462,405)	$ (1,574,075)	$ (832,738)
Net loss per share attributable to common stockholders - Basic	$ (0.11)	$ (0.09)	$ (0.22)	$ (0.17)
Net loss per share attributable to common stockholders - Diluted	$ (0.11)	$ (0.09)	$ (0.22)	$ (0.17)
Weighted Average Shares Outstanding - Basic	7,286,562	4,896,717	7,286,562	4,896,717
Weighted Average Shares Outstanding - Diluted	7,286,562	4,896,717	7,286,562	4,896,717

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN (LOSS) (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenue from related parties	$ 10,207	$ 362,868	$ 10,207	$ 663,367

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)	Common Stock [Member]	AOCI Attributable to Parent [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 4,880		$ 69,004,703	$ (70,691,524)	$ (1,681,941)
Beginning balance, shares at Dec. 31, 2021	4,879,923
Stock issued for cash	$ 1		5,099		5,100
Stock issued for cash, shares	850
Stock compensation	$ 24		97,476		97,500
Stock compensation, shares	24,390
Net loss				(393,249)	(393,249)
Ending balance, value at Mar. 31, 2022	$ 4,905		69,107,278	(71,084,773)	(1,972,590)
Ending balance, shares at Mar. 31, 2022	4,905,163
Stock compensation			171,600		171,600
Net loss				(439,489)	(439,489)
Ending balance, value at Jun. 30, 2022	$ 4,905		69,278,878	(71,524,262)	(2,240,479)
Ending balance, shares at Jun. 30, 2022	4,905,163
Beginning balance, value at Dec. 31, 2022	$ 7,287	36,313	77,824,427	(72,389,340)	5,478,687
Beginning balance, shares at Dec. 31, 2022	7,286,562
Other comprehensive loss		4,756			4,756
Net loss				(748,414)	(748,414)
Ending balance, value at Mar. 31, 2023	$ 7,287	41,069	77,824,427	(73,137,754)	4,735,029
Ending balance, shares at Mar. 31, 2023	7,286,562
Other comprehensive loss		(7,980)			(7,980)
Stock compensation			88,388		88,388
Net loss				(822,437)	(822,437)
Ending balance, value at Jun. 30, 2023	$ 7,287	$ 33,089	$ 77,912,815	$ (73,960,191)	$ 3,993,000
Ending balance, shares at Jun. 30, 2023	7,286,562

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net Loss	$ (1,570,851)	$ (832,738)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad Debt		11,175
Stock compensation	88,388	269,100
Depreciation	268	268
Amortization	1,352	0
Forgiveness of PPP Loan		(22,916)
Non-cash lease expense	2,774	2,536
Gain on sale of short-term investments	(97,650)
Changes in operating assets and liabilities:
Accounts receivable	(9,447)	(18,560)
Prepaid assets	31,371	(64,052)
Inventory	(5,637)	(93,016)
Accounts payable - related party	(260,000)	58,099
Accounts payable	(349,866)	229,061
Accrued expenses	63,811	(12,050)
Deferred revenue		130,000
Lease liability	(24,773)	(22,450)
Net cash used in operating activities	(2,130,260)	(365,543)
Cash flows from investing activities:
Sale of short-term investments	21,155,143
Purchase of short-term investments	(18,694,446)
Purchase of patents	(61,458)
Net cash provided by investing activities	2,399,239
Cash flows from financing activities:
Sale of common stock for cash, net of financing fees		5,100
Payments on loan payable - shareholder		(10,000)
Payments on notes payable - officer	(200,000)
Net cash used in financing activities	(200,000)	(4,900)
Net increase (decrease) in cash and cash equivalents	68,979	(370,443)
Cash and cash equivalents - beginning of period	162,743	661,778
Cash and cash equivalents - end of period	231,722	291,335
Non-cash investing and financing activities:
Unrealized loss on short-term investments	(3,224)
ROU asset and lease liability recorded		$ 11,359

NATURE OF THE ORGANIZATION AND

NATURE OF THE ORGANIZATION AND BUSINESS	6 Months Ended
NATURE OF THE ORGANIZATION AND BUSINESS	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF THE ORGANIZATION AND BUSINESS	NOTE 1 — NATURE OF THE ORGANIZATION AND BUSINESS Corporate History Nexalin Technology, Inc. (“NV Nexalin”) was formed on October 19, 2010 as a Nevada corporation. The Company’s principal offices are located at 1776 Yorktown, Suite 550, Houston, Texas 77056. On September 6, 2019, Neuro-Health International, Inc. (“Neuro-Health”), a Nevada corporation and wholly owned subsidiary of NV Nexalin, was formed. Neuro-Health had no activity from December 6, 2019 (Inception) through June 30, 2023. On November 22, 2021, NV Nexalin entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Nexalin Technology, Inc., a Delaware corporation (“Nexalin”, or the “Company”). Pursuant to the Merger Agreement, NV Nexalin merged with and into Nexalin with all shareholders of NV Nexalin receiving one common share of Nexalin in exchange for twenty shares of NV Nexalin held at the time of the Merger Agreement. NV Nexalin treated the transaction as a corporate reorganization with the historical consolidated financial statements of NV Nexalin becoming the historical consolidated financial statements of Nexalin. Nexalin had nominal assets and liabilities and did not conduct any operations prior to the reorganization other than its incorporation. NV Nexalin has retroactively applied the 20-for-1 exchange, effective on November 22, 2021, to share and per share amounts on the unaudited condensed consolidated financial statements for the six months ended June 30, 2023 and 2022. NV Nexalin’s authorized shares of common stock were not affected as a result of the Merger Agreement. As a result of the Merger Agreement, NV Nexalin was dissolved, and Neuro-Health became a subsidiary of Nexalin. The Company completed its initial public offering on September 16, 2022. The initial public offering consisted of 2,315,000 2,315,000 2,315,000 2,315,000 4.15 9,607,250 347,250 3,473 Our shares and warrants began trading on the Nasdaq Capital Market tier of the Nasdaq Stock Market (“Nasdaq”) on September 16, 2022, under the symbols “NXL” and “NXLIW”, respectively. Throughout this report, the terms “Nexalin,” “our,” “we,” “us,” and the “Company” refer to Nexalin Technology, Inc. Business Overview We design and develop innovative neurostimulation products to uniquely and effectively help combat the ongoing global mental health epidemic. We developed an easy-to-administer medical device — referred to as Generation 1 or Gen-1 — that utilizes bioelectronic medical technology to treat anxiety and insomnia, without the need for drugs or psychotherapy. Our original Gen-1 devices are cranial electrotherapy stimulation (CES) devices that emit waveform at 4 milliamps during treatment and are presently classified by the U.S. Food and Drug Administration (“FDA”) as a Class II device. While we continue providing services to medical professionals to support patients’ use of the Gen-1 devices which were in operation prior to December 2019, we are not making new sales or new marketing efforts of Gen-1 devices. We continue to derive revenue from devices which we sold or leased prior to the FDA’s December 2019 reclassification announcements. This revenue consists of monthly licensing fees and payments for the sale of electrodes. We have suspended marketing efforts for new sales of devices related to the Gen-1 device for treatment of anxiety and insomnia in the United States until the Nexalin regulatory team makes a final decision on amending our existing 510(k) application at 4 milliamps. A new pre-sub document in preparation of a new 510(k) for our Gen-3 Halo headset at 15 milliamps was filed with the FDA in January of 2023. Formal comments to our pre-sub document filing were received in March of 2023. A formal meeting to address FDA comments took place on May 9, 2023. Minutes of the meeting with the FDA were filed with the FDA on May 16, 2023. No additional comments have been received from the FDA at this time. We have designed and developed a new advanced wave form technology to be emitted at 15 milliamps through new and improved medical devices referred to as Generation 2 or Gen-2 and Generation 3 or Gen-3. Gen-2 is a clinical use device with a modern enclosure to emit the new 15 milliamp advanced waveform. Gen-3 is a new patient headset that is intended to be prescribed by licensed medical professionals in a virtual clinic setting similar to existing Tele-health platforms. Preliminary data provided by the University of California San Diego supports the safety of utilizing our 15 milliamp waveform technology, however the determination of safety and efficacy of medical devices in the United States is subject to clearance by the FDA. Additionally, we are currently designing clinical trial strategies for the use of Gen-3 for the treatment of substance use disorders including opiate, cocaine, and alcohol abuse. Recently the Gen-2 device was tested in pilot trials in China for the treatment of Alzheimer’s disease, and dementia. Continued pilot testing for Alzheimer’s and dementia, cognition and memory, and neurotransmitter changes is planned in China in 2023. On May 31, 2023, the Company formalized an agreement related to the formation of a joint venture established to engage in the clinical development, marketing, sale and distribution of Nexalin’s second generation transcranial Alternating Current Stimulation (“tACS”) devices (“Gen-2 devices”) in China and the greater Asia Pacific region. In connection with the formation of the joint venture, to be conducted through a company formed under the laws of Hong Kong (the “JV”), the Company entered into a Joint Venture Agreement (“JV Agreement”) with Wider Come Limited (“Wider”). Under the JV Agreement, the Company was issued a 48% minority interest in the JV. The investment in the JV is accounted for using the equity method of accounting. There has been no activity in the joint venture through June 30, 2023. The Incorporation Form (Company Limited by Shares) filed with the Companies Registry in Hong Kong currently reflects a 50%-50% ownership interest in the JV. We have requested that Wider take the necessary action to amend such form to properly reflect the 52%-48% ownership formalized in the JV agreement. Emerging Growth Company We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company, nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. Risks and Uncertainties Management continues to evaluate the impact of the economy and the capital markets and has concluded that, while it is reasonably possible that events could have negative effects on the Company’s financial position and results of its operations, the specific impacts are not readily determinable as of the date of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of uncertainties. The current challenging economic climate may lead to adverse changes in cash flows, working capital levels and/or debt balances, which may also have a direct impact on the Company’s operating results and financial position in the future. The ultimate duration and magnitude of the impact and the efficacy of government interventions on the economy has and may continue to indirectly impact the Company because of its current dependence upon its joint venture relationship with Wider Come Limited. Wider Come Limited, as part of its obligations under the JV Agreement, acts as a distributor for the Company’s devices in China and Asia. Because of significant restrictions imposed by the Chinese government during the COVID-19 pandemic through calendar year 2022 and into 2023, Wider’s ability to market and sell the Company’s devices has been negatively impacted, resulting in decreased revenue to the Company. Patients and salespeople have been restricted in their movements resulting in a significant slowdown in the medical and other sectors. Significant efforts and funds expended by our Chinese distributor has led to regulatory approval in China in both depression and insomnia thus far which has allowed for sales of our devices in China in 2022, and into 2023. The extent of future impact is dependent on future developments, including future activities by the Chinese government and other possible events which are highly uncertain and not in the Company’s control, including new information which may emerge concerning the spread and severity of COVID-19, or any of its variants, and actions taken to address its impact, among others. The repercussions of this health crisis could have a material adverse effect on the Company’s business, financial condition, liquidity and operating results. On May 10, 2023, we received a notice from The NASDAQ Stock Market LLC (or “NASDAQ”) notifying us that we are not in compliance with the requirement of NASDAQ Listing Rule 5450(a)(1) for continued listing on the NASDAQ Global Market as a result of the closing bid price of our common stock being below $1.00 per share for 30 consecutive business days. In accordance with NASDAQ Listing Rule 5810(c)(3)(A), we have 180 calendar days, or until November 6, 2023, to regain compliance with NASDAQ Listing Rule 5450(a)(1). To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of 10 consecutive business days. If we do not regain compliance during such period, we may be eligible for an additional compliance period of 180 calendar days, provided that we meet NASDAQ’s continued listing requirement for market value of publicly held shares and all other initial listing standards for the NASDAQ Capital Market, other than the minimum bid price requirement, and provide written notice to NASDAQ of our intention to cure the deficiency during the second compliance period. If we do not regain compliance during the initial compliance period and are not eligible for an additional compliance period, NASDAQ will provide notice that our common stock will be subject to delisting from the NASDAQ Stock Market. In that event, we may appeal such determination to a hearings panel. There can be no assurance that we will satisfy these conditions and that our common stock will remain listed on the NASDAQ Stock Market. Any delisting of our common stock from The NASDAQ Stock Market could adversely affect our ability to attract new investors, decrease the liquidity of our outstanding shares of common stock, reduce our flexibility to raise additional capital, reduce the price at which our common stock trades, and increase the transaction costs inherent in trading such shares with overall negative effects for our stockholders. In addition, delisting of our common stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, and might deter certain institutions and persons from investing in our securities at all. Furthermore, the delisting of our common stock from The NASDAQ Stock Market could adversely affect our business, financial condition and results of operations.

LIQUIDITY

LIQUIDITY	6 Months Ended
LIQUIDITY	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY	NOTE 2 — LIQUIDITY The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At June 30, 2023, we had a significant accumulated deficit of approximately $74.0 73,960,191 876,860 1,656,286 2,130,260 3.9 We expect to continue to incur operating losses as we execute our development plans, as well as undertaking other potential strategic and business development initiatives through 2023 and through the twelve months from the date of this report. In addition, we have had and expect to have negative cash flows from operations, at least into the near future. We have previously funded these losses primarily through the sale of equity and issuance of convertible notes. We have no convertible notes outstanding at this time. The accompanying unaudited consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern will be dependent upon our ability to execute on our business plan, including the ability to generate revenue from the joint venture and obtain U.S. approval for the sale of our devices in the United States, and, if necessary, our ability to raise additional capital. Although no assurances can be given as to our ability to deliver on our revenue plans or that unforeseen expenses may arise, management has evaluated the significance of the conditions as of June 30, 2023 and has concluded that due to the receipt of the net proceeds from the completion of the Initial Public Offering, we have sufficient cash and short-term investments on hand to satisfy its anticipated cash requirements for the next twelve months from the issuance of these financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS	NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS Basis of Presentation The accompanying unaudited condensed consolidated financial information has been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) for interim financial information. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position and the operating results and cash flows. Operating results for the three and six months ended June 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (the “SEC”). These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022. Principles of Consolidation The consolidated financial statements include the accounts of Nexalin and its wholly owned subsidiary Neuro-Health. Intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee’s net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be another than-temporary loss in value. The Company’s equity method investment is its interest in the newly formed joint venture. There has been no activity in the joint venture through June 30, 2023. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions, revenue and expenses and disclosure of contingent liabilities at the date of the financial statements. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, which may cause the Company’s future results to be affected. Revenue The Company recognizes revenue when its performance obligations with its customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of ASC Topic 606 and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. The Company has existing licensing and treatment fee agreements with its customers for the use of the Nexalin device in their practices. These agreements generally have terms of one year with automatic renewal if certain requirements are met and amounts due per these agreements are billed monthly. The Company also sells products related to the provision of services. The Company sells its devices in China to its acting distributor and sells products relating to the use of the devices. The Company has a Royalty Agreement whereby the manufacturer of the Company’s electrodes will pay a royalty to the Company for a three-year period beginning January 1, 2022. The amount of the Royalty is equal to 20% of the amount that the manufacturer invoices to the acting distributor for the sale of the electrodes. Revenue Streams The Company derives revenues from its license agreements by charging a monthly licensing fee for the duration of the agreement. The Company derives revenues from equipment by selling additional individual electrodes to customers for use with the Nexalin device. The Company receives revenue from the sale in China of its devices to its acting distributor and from the sale of products relating to the use of those devices. The Company derives revenue as a royalty fee from the China-based manufacturer for electrodes ordered in connection with the Company’s China sales. Performance Obligations Management identified that subsequent licensing revenue has one performance obligation. That performance obligation is satisfied as long as the licensing contract remains valid and is not terminated. The licensing revenue is invoiced monthly and is recognized at a point in time in which the invoice is sent to the customer. Management identified that the Company’s equipment and device revenue has one performance obligation. That performance obligation is satisfied when the equipment and devices are shipped. The Company recognizes revenue at a point in time in which the electrodes and devices are shipped to the customer. The Company does not offer a warranty on the electrodes and devices. Management identified that treatment fee revenue has one performance obligation. The performance obligation is satisfied upon the completion of individual treatments on patients by customers. Management identified that royalty revenue has one performance obligation. The performance obligation is satisfied at the time the Electrode manufacturer invoices the acting distributor for the sale to the acting distributor. Practical Expedients As part of ASC 606, the Company has adopted several practical expedients including: ● Significant Financing Component — the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised goods or services to the customer and when the customer pays for that service will be one year or less. ● Unsatisfied Performance Obligations — all performance obligations related to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC Topic 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. ● Shipping and Handling Activities — the Company elected to account for shipping and handling activities as a fulfilment cost rather than as a separate performance obligation. ● Right to Invoice — the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date the Company may recognize revenue in the amount to which the entity has a right to invoice. Disaggregated Revenues Major Revenue Streams Revenue consists of the following by service offering: Schedule of disaggregation of revenue Three Months Ended June 30, June 30, Device Sales $ 9,600 $ 380,000 Licensing Fee 20,033 19,305 Equipment 5,100 6,095 Other 807 8,888 Total $ 35,540 $ 414,288 Six Months Ended June 30, June 30, 2022 Device Sales $ 9,600 $ 644,500 Licensing Fee 43,903 39,448 Equipment 11,500 14,095 Other 1,097 39,567 Total $ 66,100 $ 737,610 Major Geographic Locations Three Months Ended June 30, June 30, U.S. Sales $ 25,333 $ 41,718 China Sales 10,207 372,570 Total $ 35,540 $ 414,288 Six Months Ended June 30, June 30, U.S. Sales $ 55,892 $ 64,541 China Sales 10,208 673,069 Total $ 66,100 $ 737,610 Contract Modifications There were no contract modifications during the six months ended June 30, 2023 and 2022. Contract modifications are not routine in the performance of the Company’s contracts. Deferred Revenue The Company receives payment for equipment and devices in advance of shipping. The Company recognizes the revenue as being earned upon shipment. No Cash and Cash Equivalents Cash held at financial institutions may at times exceed insured amounts. The Company believes it mitigates such risk by investing in or through, as well as maintaining cash balances, with major financial institutions. Short-Term Investments The appropriate classification of marketable securities is determined at the time of purchase and evaluated as of each reporting balance sheet date. Investments in marketable debt and equity securities classified as available-for-sale are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Unrealized holding gains and losses for equity securities are recognized in earnings. Unrealized holding gains and losses for available for sale debt securities are recognized in other comprehensive income. Realized gains and losses and interest and dividends earned are included in other income (expense), net. For individual debt securities classified as available-for-sale securities, the company determines whether a decline in fair value below the amortized cost basis has resulted from a credit loss or other factors. If the decline below amortized cost is a result of credit loss or the company will more likely than not be required to sell the security before recovery of its amortized cost basis, the company will recognize an impairment relating to the decline through an allowance for credit losses. There were no impairments recognized for the three and six months ended June 30, 2023. Accounts Receivable Accounts receivables are reported at their outstanding unpaid principal balances, net of allowances for credit loss. The Company periodically assesses its accounts and other receivables for collectability on a specific identification basis. The Company provides for an allowance for credit loss based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. The Company writes off accounts receivable against the allowance for credit loss when a balance is determined to be uncollectible. During the six months ended June 30, 2023 and 2022, the Company wrote off accounts receivable of $ 0 11,175 no Inventory Inventory consists of finished goods and components stated at the lower of cost or net realizable value with cost determined on a first-in first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of demand, or otherwise non-saleable items. Equipment Equipment is recorded at cost. Depreciation is computed using straight-line method over the estimated useful lives of the related assets, generally five years. Maintenance and repairs are charged to expense as incurred. The Company capitalizes costs attributable to the betterment of property and equipment when such betterment enhances the functionality of the asset or extends the useful life of the asset. Should an asset be disposed of before the end of its useful life, the cost and accumulated depreciation at that date is removed from the consolidated balance sheets, with the resulting gain or loss, if any, reflected in operations in that period. Patents Patents are amortized over their useful lives and are reviewed for impairment when warranted by economic conditions. Amortization expense was $ 1,352 0 691 0 The following table summarizes the gross carrying amount, amortization and the net carrying value at June 30, 2023 and December 31, 2022. Schedule of patents Gross Carrying Accumulated Net Carrying Value June 30, 2023 Patents $ 61,458 $ 1,352 $ 60,106 Total June 30, 2023 $ 61,458 $ 1,352 $ 60,106 December 31, 2022 Patents $ - $ - $ - Total December 31, 2022 $ - $ - $ - Income Taxes The Company accounts for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. The Company records valuation allowances against deferred tax assets when it is more likely than not that all or a portion of a deferred tax asset will not be realized. At June 30, 2023 and December 31, 2022, the Company had a full valuation allowance applied against its net tax assets. Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures ● Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. ● Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. ● Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. Fair Value of Financial Instruments The carrying value of cash, short-term investments, accounts receivable, inventory, prepaids, accounts payable and accrued expenses, and other current liabilities approximate their fair values based on the short-term maturity of these instruments. The carrying amount of the loans payable approximates the estimated fair value for this financial instrument as management believes that such debt and interest payable on the note approximates the Company’s incremental borrowing rate. The following table summarizes the amortized cost, unrealized gains and the fair value at June 30, 2023 and December 31, 2022. Schedule of amortized cost, unrealized gains Amortized Unrealized Fair Value June 30, 2023 Short-term investments $ 4,431,833 $ 33,089 $ 4,464,922 Total June 30, 2023 $ 4,431,833 $ 33,089 $ 4,464,922 December 31, 2022 Short-term investments $ 6,794,879 $ 36,313 $ 6,831,192 Total December 31, 2022 $ 6,794,879 $ 36,313 $ 6,831,192 The unrealized loss of $ 3,224 The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value as of June 30, 2023 and December 31, 2022. Schedule of fair value, assets measured on recurring basis Carrying Level 1 Level 2 Level 3 June 30, 2023 U.S. Treasury Notes $ 4,464,922 $ 4,464,922 $ - $ - December 31, 2022 U.S. Treasury Notes $ 6,831,192 $ 6,831,192 $ - $ - Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The dilutive effect, if any, of warrants is calculated using the treasury stock method. These shares were included in the basic and diluted net loss per common share on the unaudited condensed consolidated statements of operations and comprehensive loss. The following table summarizes the securities that would be excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to the Company’s net loss position even though the exercise price could be less than the most recent fair value of the common shares: Schedule of antidilutive shares Three Months Ended June 30, 2023 2022 Warrants 2,662,250 21,600 Total 2,662,250 21,600 Six Months Ended 2023 2022 Warrants 2,662,250 21,600 Total 2,662,250 21,600 Stock-Based Compensation The Company applies the provisions of ASC 718, Compensation — Stock Compensation For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. Pursuant to ASU 2018-07 Compensation — Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing employee stock options noted above. Warrant Accounting The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all its financial instruments, including issued private and public warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is assessed as part of this evaluation. During the reporting periods the Public Warrants were outstanding, they were precluded from liability classification, being equity-classified. Research and Development All research and development costs are charged to operations as incurred. For the six months ended June 30, 2023 and 2022, the Company recorded $ 211,834 41,105 146,000 29,540 Leases A lease is defined as an agreement that conveys the right to control the use of identified property, plant or equipment (right of use asset or “ROU asset”) for a period of time in exchange for consideration. The Company accounts for its leases in accordance with ASC 842, Leases, which requires that an ROU asset identified in a lease to be recorded as a noncurrent asset with a related liability. The Company does not record ROU assets for those agreements of a twelve-month duration or less. The Company recognized a ROU asset and corresponding lease liability on its balance sheets related to its office lease agreement. See Note 9, Leases, for further discussion, including the impact on the Company’s unaudited condensed consolidated financial statements and related disclosures. ROU assets include any initial direct costs and prepaid lease payments and exclude any lease incentives. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Recent Accounting Pronouncements In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments are in effect for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption on January 1, 2023 modified the way the Company analyzes financial instruments, but it did not have a material impact on our consolidated financial statements. All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

ACCRUED EXPENSES

ACCRUED EXPENSES	6 Months Ended
ACCRUED EXPENSES	Jun. 30, 2023
Payables and Accruals [Abstract]
ACCRUED EXPENSES	NOTE 4 — ACCRUED EXPENSES Accrued expenses consist of the following amounts: Schedule of accrued expenses June 30, December 31, Accrued interest $ 105,001 $ 111,501 Accrued – other 52,653 2,321 Accrued settlement liabilities 336,000 336,000 Accrued research and development expense 109,979 90,000 Total $ 603,633 $ 539,822

NON-CONSOLIDATED JOINT VENTURE

NON-CONSOLIDATED JOINT VENTURE AND RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
NON-CONSOLIDATED JOINT VENTURE AND RELATED PARTY TRANSACTIONS	NOTE 5 — NON-CONSOLIDATED JOINT VENTURE AND RELATED PARTY TRANSACTIONS Formalized Joint Venture On December 21, 2018, the Company entered into the first of a series of preliminary agreements providing for the establishment of a joint venture (“JV”) agreement (the “JV Agreement”) with Wider Come Limited, a China company (“Wider”) for the purpose of marketing, sale and distribution of the Company’s proprietary devices for the treatment of (i) anxiety, depression and insomnia (“ADI”) and (ii) Alzheimer’s and dementia (“AD”) in the applicable territories. Wider has an experienced medical technology team in China. The parties formalized the JV on May 31, 2023. The joint venture is to be conducted through a company formed under the laws of Hong Kong. The JV will design and implement a comprehensive business model and distribution plan for our devices in China, Hong Kong, Macau and Taiwan. The embodiment of the agreed-upon terms and conditions of the JV in the formalized JV Agreement follows Wider’s completion of certain funding, clinical study, and publication milestones, as well as the resolution of certain regulatory concerns in China. The Company granted the JV a license to commercialize and exploit certain of the Company’s products and technologies in specified designated territories., and the JV will design and implement a comprehensive business model and distribution plan for these products and devices in such designated territories. Under the JV Agreement, Wider is obligated to fund all operations for the initial 12-month period of the JV, after which Nexalin and Wider plan to jointly fund the JV’s operating expenses in accordance with their pro rata ownership. The JV entity is controlled by a Board of Directors in which Wider is to have sole representation but neither the Company nor Wider has exclusive decision-making ability over day-to-day or significant operational decisions. Wider and Nexalin will own 52% 48% Under the preceding terms of the collaborative arrangement between the Company and Wider, Wider served as an authorized distributor of the Company’s Gen-2 devices in Asia. As part of the consideration for Wider’s performance of its obligations to the Company prior to the recent formalization of the JV, the Company and certain designated Wider shareholders entered into stock issuance agreements for the issuance of 450,000 200,000 150,000 550,000 During the six months ended June 30, 2023 and 2022, the Company recorded $ 10,207 663,367 10,207 362,868 U.S. Asian Consulting Group, LLC On May 9, 2018, the Company entered into a five-year consulting agreement with U.S. Asian Consulting Group, LLC (“U.S. Asian”). On March 4, 2021, the contract was extended for an additional eight years. The two members of U.S. Asian are shareholders in the Company and include Leonard Osser and Marilyn Elson, who is the Chief Financial Officer of the Company. Pursuant to the consulting agreement, U.S. Asian will provide consulting services to the Company with regard to, among other things, corporate development and financing arrangements. Pursuant to the contract extension, Mr. Osser was given the title of Director of Chinese Operations. The Company is to pay U.S. Asian $ 10,000 249,750 30,000 0 260,000 On December 22, 2021, the Company entered into a one-year agreement with Leonard Osser to serve on the Company’s Board of Advisors. The agreement may be, but has not yet been, extended for an additional one-year term upon agreement of both parties. As consideration Mr. Osser was entitled to $ 80,000 Officers On January 11, 2022, the Company entered into an employment agreement with Marilyn Elson to serve as Chief Financial Officer of the Company for a three-year term with an option for the Company and Ms. Elson to extend the term for an additional two years. Ms. Elson is the spouse of Leonard Osser. On July 1, 2023, the Company entered into a new employment agreement with Mark White to serve as Chief Executive Officer, a new services agreement with David Owens, M.D. to serve as Chief Medical Officer and a new employment agreement with Michael Nketiah to serve as Senior Vice President, Quality, Regulatory and Clinical Affairs. Each of the foregoing agreements are governed by three-year terms and provide compensation in the form of performance-based stock option awards, subject to and contingent upon approval and adoption of the Board of Directors, as well as approval of the stockholders and, in all cases, based on the closing price of the Company's publicly-traded common stock on the applicable date of grant. Under the terms of his employment agreement, Mr. White is entitled to (i) a sign-on/retention bonus consisting of a one-time lump-sum payment of $50,000 and a grant of nonqualified stock options to purchase shares of the Company's common stock with an exercise price equal to $400,000, and (ii) stock option grants to purchase shares of the Company's common stock with an exercise price equal to $840,000. Under the terms of his service agreement, Mr. Owens is entitled to (i) a sign-on/retention bonus consisting of a grant of nonqualified stock options to purchase shares of the Company's common stock with an exercise price equal to $125,000 and (ii) stock option grants to purchase shares of the Company's common stock with an exercise price equal to $585,000. Under the terms of his employment agreement Mr. Nketiah is entitled to stock option grants to purchase shares of the Company's common stock with an exercise price equal to $90,000. In addition to the payments stock and option grants described above, each of Messrs. White, Owens and Nketiah are receiving cash compensation and are eligible for additional cash bonuses Loan Payable – Officer On November 1, 2021, the Company received $ 200,000 200,000 9% March 17, 2023 39,000 18,000 4,500 200,000 34,500 Leases Our principle executive office is located at 1776 Yorktown, Suite 550, Houston, Texas 77056. Under ASC 842 “ Leases 54,000 27,000

LOANS PAYABLE

LOANS PAYABLE	6 Months Ended
LOANS PAYABLE	Jun. 30, 2023
Debt Disclosure [Abstract]
LOANS PAYABLE	NOTE 6 — LOANS PAYABLE Legacy Ventures International, Inc. On September 11, 2017, the Company issued a promissory note (the “Promissory Note”) in favor of Legacy Ventures International, Inc. (“Legacy”) as part of a commercial transaction with Legacy that was never consummated. The Promissory Note was issued in the original principal amount of $ 500,000 4% December 31, 2017 10,000 10,000 5,000 5,000 500,000

STOCKHOLDERS_ EQUITY (Deficit)

STOCKHOLDERS’ EQUITY (Deficit)	6 Months Ended
STOCKHOLDERS’ EQUITY (Deficit)	Jun. 30, 2023
Equity [Abstract]
STOCKHOLDERS’ EQUITY (Deficit)	NOTE 7 — STOCKHOLDERS’ EQUITY (Deficit) Issuance of Common Stock During the six months ended June 30, 2022, the Company issued 850 5,100 6.00 During the six months ended June 30, 2022, the Company issued 24,390 150,000 37,500 231,600 During the six months ended June 30, 2023, the Company issued no shares of common stock. Warrants The issuance of warrants to purchase shares of the Company’s common stock are summarized as follows: Schedule of warrants Number of Weighted Average Exercise Price Outstanding December 31, 2022 2,662,250 $ 4.15 Issued - - Exercised - - Expired or cancelled - - Outstanding June 30, 2023 2,662,250 $ 4.15 The following table summarizes information about warrants to purchase shares of the Company’s common stock outstanding and exercisable at June 30 2023: Summary information about warrants to purchase Exercise Price Outstanding Weighted Average Weighted Average Exercisable $ 4.15 2,315,000 2.25 $ 4.15 2,135,000 $ 4.15 347,250 2.25 4.15 347,250 2,662,250 2.25 $ 4.15 2,662,250 The compensation expense attributed to the issuance of the warrants, if required to be recognized on the nature of the transaction, was recognized as they vested/earned. These warrants are exercisable up to three years from the date of grant. All are currently exercisable.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
COMMITMENTS AND CONTINGENCIES	Jun. 30, 2023
Commitments and Contingencies (Note 8)
COMMITMENTS AND CONTINGENCIES	NOTE 8 — COMMITMENTS AND CONTINGENCIES Legal Claims There are no material pending legal proceedings in which the Company or any of its subsidiaries is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of its voting securities, or security holder is a party adverse to us or has a material interest adverse to the Company other than the following: Sarah Veltz v. Nexalin Technology, Inc. et al. Plaintiff, Sarah Veltz, filed a lawsuit in this matter on January 20, 2021 in Orange County Superior Court (Case No. 30-2021-01180164-CU-WT-CJC) (the “Complaint”) naming the Company and others as defendants. In her Complaint, Plaintiff contends that she was employed by defendants, including Nexalin, and has not been paid all wages, including overtime wages and other benefits allegedly due her. Plaintiff also contends that, during her employment, she was subjected to sexual harassment by the Company’s then Chief Executive Officer. Plaintiff seeks both compensatory and punitive damages. On March 12, 2021, the Company filed its answer to the Complaint. Although the parties are seeking mediation, the court has set a trial in this matter for March 18, 2024. Management’s intent is to contest the allegations vigorously and, as of the date of this report, is unable to provide an evaluation of the potential outcome of the litigation within the probable or remote range or to provide an estimate of the amount of or a range of potential loss that might be incurred by the Company. Employment Development Department The Company is currently engaged in settlement discussions with the Employment Development Department (EDD) of the state of California. This matter involves issues related to our previous management’s classification of certain work provided to or on behalf of the Company’s business as contract labor instead of employee labor. The total amount involved is approximately $300,000. Management has petitioned for reassessment and believes the hired workers at issue were indeed actual contractors and not employees. We have no business in California other than one part time and one full time worker residing in California. An initial hearing before an EDD magistrate was held on April 15, 2022. A second hearing was held in June of 2022. We are now in negotiations with the EDD for a final settlement. The Company believes its potential exposure to be approximately $ 300,000 Demand Letter from The University of Arizona On December 8, 2022, the Company received a demand letter from the University of Arizona seeking payment of $111,094 purportedly due on an Investigator Initiated Cooperative Study Agreement, dated as of September 25, 2017 (the “2017 Study”). The Company believes that the 2017 Study was not completed and no payment was due. In fact, for a number of months prior to receipt of the demand letter, the Company had had discussions with the person at the University of Arizona who was to conduct the 2017 Study concerning updating the 2017 Study and completing an updated study and related work. After receipt of the demand letter, the Company has had discussions with the University of Arizona concerning resuming an updated study and receipt of credit for some or all the monies claimed to be due for the 2017 Study. The Company received follow-up correspondence from the University of Arizona on June 29, 2023, pursuant to which the University of Arizona may proceed with referring the matter to collections if, and in the event that, an agreement may not be reached within sixty days thereof. Discussions with the University of Arizona are ongoing, and no resolution has been reached but the Company hopes to achieve a consensual resolution.

LEASES

LEASES	6 Months Ended
LEASES	Jun. 30, 2023
Leases
LEASES	NOTE 9 — LEASES With the adoption of ASC 842, operating lease agreements are required to be recognized on the balance sheet as ROU assets and corresponding lease liabilities. On January 1, 2022, the Company exercised its right to lease an additional 400 square feet of office space and an increase of monthly rent of $500. In accordance with ASC 842 management accounted for this as a separate lease and, as a result, recorded an ROU asset and lease liability of $ 11,359 When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate at January 1, 2022. The weighted average incremental borrowing rate applied was 9% Operating leases are included in the consolidated balance sheets as follows: Schedule of Operating leases Classification June 30, December 31, Lease assets Operating lease cost ROU assets Assets $ 3,397 $ 6,171 Total lease assets $ 3,397 $ 6,171 Lease liabilities Operating lease liabilities, current Current liabilities $ 30,487 $ 50,797 Operating lease liabilities, non-current Liabilities - 4,463 Total lease liabilities $ 30,487 $ 55,260 The components of lease costs, which are included in income from operations in our unaudited condensed consolidated statements of operations, were as follows: Schedule of lease cost Three Months Ended 2023 2022 Leases costs Operating lease costs $ 13,500 $ 13,500 Total lease costs $ 13,500 $ 13,500 Six Months Ended 2023 2022 Leases costs Operating lease costs $ 27,000 $ 27,000 Total lease costs $ 27,000 $ 27,000 Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the six months ended June 30, 2023: Future minimum payments under non-cancelable leases for operating leases Fiscal Year Operating Remainder of 2023 $ 26,901 2024 4,496 Total future minimum lease payments 31,397 Amount representing interest 910 Present value of net future minimum lease payments $ 30,487 Additional information related to leases is presented as follows: Schedule of additional information related to leases June 30, December 31, Leases Weighted average remaining lease term 0.5 1.00 Weighted average discount rate 9.9 % 9.9 %

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK	6 Months Ended
CONCENTRATION OF CREDIT RISK	Jun. 30, 2023
Risks and Uncertainties [Abstract]
CONCENTRATION OF CREDIT RISK	NOTE 10 — CONCENTRATION OF CREDIT RISK Revenues Three customers accounted for 65% 54% Concentration of credit risk Three Months Ended Six Months Ended Customer A - related party 29 % 15 % Customer B 21 % 23 % Customer C 15 % 16 % One customer, a related party, accounted for 88% 90% Accounts Receivable Two customers accounted for 85% June 30, Customer A - related party 71 % Customer B 14 % Four customers accounted for 84% December 31, Customer A 29 % Customer B 20 % Customer C 20 % Customer D 15 %

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11 — SUBSEQUENT EVENTS Management evaluated subsequent events and transactions that occurred after the balance sheet date, up to the date that the unaudited financial statements were issued. Subsequent to period end and through August 8, 2023, the Company issued an additional 150,000 Management did not identify any additional subsequent events that would have required adjustment or disclosure in the unaudited consolidated condensed financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Policies)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial information has been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) for interim financial information. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position and the operating results and cash flows. Operating results for the three and six months ended June 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (the “SEC”). These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Nexalin and its wholly owned subsidiary Neuro-Health. Intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee’s net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be another than-temporary loss in value. The Company’s equity method investment is its interest in the newly formed joint venture. There has been no activity in the joint venture through June 30, 2023.
Use of Estimates	Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions, revenue and expenses and disclosure of contingent liabilities at the date of the financial statements. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, which may cause the Company’s future results to be affected.
Revenue	Revenue The Company recognizes revenue when its performance obligations with its customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of ASC Topic 606 and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. The Company has existing licensing and treatment fee agreements with its customers for the use of the Nexalin device in their practices. These agreements generally have terms of one year with automatic renewal if certain requirements are met and amounts due per these agreements are billed monthly. The Company also sells products related to the provision of services. The Company sells its devices in China to its acting distributor and sells products relating to the use of the devices. The Company has a Royalty Agreement whereby the manufacturer of the Company’s electrodes will pay a royalty to the Company for a three-year period beginning January 1, 2022. The amount of the Royalty is equal to 20% of the amount that the manufacturer invoices to the acting distributor for the sale of the electrodes. Revenue Streams The Company derives revenues from its license agreements by charging a monthly licensing fee for the duration of the agreement. The Company derives revenues from equipment by selling additional individual electrodes to customers for use with the Nexalin device. The Company receives revenue from the sale in China of its devices to its acting distributor and from the sale of products relating to the use of those devices. The Company derives revenue as a royalty fee from the China-based manufacturer for electrodes ordered in connection with the Company’s China sales. Performance Obligations Management identified that subsequent licensing revenue has one performance obligation. That performance obligation is satisfied as long as the licensing contract remains valid and is not terminated. The licensing revenue is invoiced monthly and is recognized at a point in time in which the invoice is sent to the customer. Management identified that the Company’s equipment and device revenue has one performance obligation. That performance obligation is satisfied when the equipment and devices are shipped. The Company recognizes revenue at a point in time in which the electrodes and devices are shipped to the customer. The Company does not offer a warranty on the electrodes and devices. Management identified that treatment fee revenue has one performance obligation. The performance obligation is satisfied upon the completion of individual treatments on patients by customers. Management identified that royalty revenue has one performance obligation. The performance obligation is satisfied at the time the Electrode manufacturer invoices the acting distributor for the sale to the acting distributor. Practical Expedients As part of ASC 606, the Company has adopted several practical expedients including: ● Significant Financing Component — the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised goods or services to the customer and when the customer pays for that service will be one year or less. ● Unsatisfied Performance Obligations — all performance obligations related to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC Topic 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. ● Shipping and Handling Activities — the Company elected to account for shipping and handling activities as a fulfilment cost rather than as a separate performance obligation. ● Right to Invoice — the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date the Company may recognize revenue in the amount to which the entity has a right to invoice. Disaggregated Revenues Major Revenue Streams Revenue consists of the following by service offering: Schedule of disaggregation of revenue Three Months Ended June 30, June 30, Device Sales $ 9,600 $ 380,000 Licensing Fee 20,033 19,305 Equipment 5,100 6,095 Other 807 8,888 Total $ 35,540 $ 414,288 Six Months Ended June 30, June 30, 2022 Device Sales $ 9,600 $ 644,500 Licensing Fee 43,903 39,448 Equipment 11,500 14,095 Other 1,097 39,567 Total $ 66,100 $ 737,610 Major Geographic Locations Three Months Ended June 30, June 30, U.S. Sales $ 25,333 $ 41,718 China Sales 10,207 372,570 Total $ 35,540 $ 414,288 Six Months Ended June 30, June 30, U.S. Sales $ 55,892 $ 64,541 China Sales 10,208 673,069 Total $ 66,100 $ 737,610 Contract Modifications There were no contract modifications during the six months ended June 30, 2023 and 2022. Contract modifications are not routine in the performance of the Company’s contracts. Deferred Revenue The Company receives payment for equipment and devices in advance of shipping. The Company recognizes the revenue as being earned upon shipment. No
Cash and Cash Equivalents	Cash and Cash Equivalents Cash held at financial institutions may at times exceed insured amounts. The Company believes it mitigates such risk by investing in or through, as well as maintaining cash balances, with major financial institutions.
Short-Term Investments	Short-Term Investments The appropriate classification of marketable securities is determined at the time of purchase and evaluated as of each reporting balance sheet date. Investments in marketable debt and equity securities classified as available-for-sale are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Unrealized holding gains and losses for equity securities are recognized in earnings. Unrealized holding gains and losses for available for sale debt securities are recognized in other comprehensive income. Realized gains and losses and interest and dividends earned are included in other income (expense), net. For individual debt securities classified as available-for-sale securities, the company determines whether a decline in fair value below the amortized cost basis has resulted from a credit loss or other factors. If the decline below amortized cost is a result of credit loss or the company will more likely than not be required to sell the security before recovery of its amortized cost basis, the company will recognize an impairment relating to the decline through an allowance for credit losses. There were no impairments recognized for the three and six months ended June 30, 2023.
Accounts Receivable	Accounts Receivable Accounts receivables are reported at their outstanding unpaid principal balances, net of allowances for credit loss. The Company periodically assesses its accounts and other receivables for collectability on a specific identification basis. The Company provides for an allowance for credit loss based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. The Company writes off accounts receivable against the allowance for credit loss when a balance is determined to be uncollectible. During the six months ended June 30, 2023 and 2022, the Company wrote off accounts receivable of $ 0 11,175 no
Inventory	Inventory Inventory consists of finished goods and components stated at the lower of cost or net realizable value with cost determined on a first-in first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of demand, or otherwise non-saleable items.
Equipment	Equipment Equipment is recorded at cost. Depreciation is computed using straight-line method over the estimated useful lives of the related assets, generally five years. Maintenance and repairs are charged to expense as incurred. The Company capitalizes costs attributable to the betterment of property and equipment when such betterment enhances the functionality of the asset or extends the useful life of the asset. Should an asset be disposed of before the end of its useful life, the cost and accumulated depreciation at that date is removed from the consolidated balance sheets, with the resulting gain or loss, if any, reflected in operations in that period.
Patents	Patents Patents are amortized over their useful lives and are reviewed for impairment when warranted by economic conditions. Amortization expense was $ 1,352 0 691 0 The following table summarizes the gross carrying amount, amortization and the net carrying value at June 30, 2023 and December 31, 2022. Schedule of patents Gross Carrying Accumulated Net Carrying Value June 30, 2023 Patents $ 61,458 $ 1,352 $ 60,106 Total June 30, 2023 $ 61,458 $ 1,352 $ 60,106 December 31, 2022 Patents $ - $ - $ - Total December 31, 2022 $ - $ - $ -
Income Taxes	Income Taxes The Company accounts for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. The Company records valuation allowances against deferred tax assets when it is more likely than not that all or a portion of a deferred tax asset will not be realized. At June 30, 2023 and December 31, 2022, the Company had a full valuation allowance applied against its net tax assets.
Fair Value Measurements	Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures ● Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. ● Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. ● Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying value of cash, short-term investments, accounts receivable, inventory, prepaids, accounts payable and accrued expenses, and other current liabilities approximate their fair values based on the short-term maturity of these instruments. The carrying amount of the loans payable approximates the estimated fair value for this financial instrument as management believes that such debt and interest payable on the note approximates the Company’s incremental borrowing rate. The following table summarizes the amortized cost, unrealized gains and the fair value at June 30, 2023 and December 31, 2022. Schedule of amortized cost, unrealized gains Amortized Unrealized Fair Value June 30, 2023 Short-term investments $ 4,431,833 $ 33,089 $ 4,464,922 Total June 30, 2023 $ 4,431,833 $ 33,089 $ 4,464,922 December 31, 2022 Short-term investments $ 6,794,879 $ 36,313 $ 6,831,192 Total December 31, 2022 $ 6,794,879 $ 36,313 $ 6,831,192 The unrealized loss of $ 3,224 The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value as of June 30, 2023 and December 31, 2022. Schedule of fair value, assets measured on recurring basis Carrying Level 1 Level 2 Level 3 June 30, 2023 U.S. Treasury Notes $ 4,464,922 $ 4,464,922 $ - $ - December 31, 2022 U.S. Treasury Notes $ 6,831,192 $ 6,831,192 $ - $ -
Net Loss per Common Share	Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The dilutive effect, if any, of warrants is calculated using the treasury stock method. These shares were included in the basic and diluted net loss per common share on the unaudited condensed consolidated statements of operations and comprehensive loss. The following table summarizes the securities that would be excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to the Company’s net loss position even though the exercise price could be less than the most recent fair value of the common shares: Schedule of antidilutive shares Three Months Ended June 30, 2023 2022 Warrants 2,662,250 21,600 Total 2,662,250 21,600 Six Months Ended 2023 2022 Warrants 2,662,250 21,600 Total 2,662,250 21,600
Stock-Based Compensation	Stock-Based Compensation The Company applies the provisions of ASC 718, Compensation — Stock Compensation For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. Pursuant to ASU 2018-07 Compensation — Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing employee stock options noted above.
Warrant Accounting	Warrant Accounting The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all its financial instruments, including issued private and public warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is assessed as part of this evaluation. During the reporting periods the Public Warrants were outstanding, they were precluded from liability classification, being equity-classified.
Research and Development	Research and Development All research and development costs are charged to operations as incurred. For the six months ended June 30, 2023 and 2022, the Company recorded $ 211,834 41,105 146,000 29,540
Leases	Leases A lease is defined as an agreement that conveys the right to control the use of identified property, plant or equipment (right of use asset or “ROU asset”) for a period of time in exchange for consideration. The Company accounts for its leases in accordance with ASC 842, Leases, which requires that an ROU asset identified in a lease to be recorded as a noncurrent asset with a related liability. The Company does not record ROU assets for those agreements of a twelve-month duration or less. The Company recognized a ROU asset and corresponding lease liability on its balance sheets related to its office lease agreement. See Note 9, Leases, for further discussion, including the impact on the Company’s unaudited condensed consolidated financial statements and related disclosures. ROU assets include any initial direct costs and prepaid lease payments and exclude any lease incentives. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments are in effect for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption on January 1, 2023 modified the way the Company analyzes financial instruments, but it did not have a material impact on our consolidated financial statements. All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Tables)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Schedule of disaggregation of revenue	Schedule of disaggregation of revenue Three Months Ended June 30, June 30, Device Sales $ 9,600 $ 380,000 Licensing Fee 20,033 19,305 Equipment 5,100 6,095 Other 807 8,888 Total $ 35,540 $ 414,288 Six Months Ended June 30, June 30, 2022 Device Sales $ 9,600 $ 644,500 Licensing Fee 43,903 39,448 Equipment 11,500 14,095 Other 1,097 39,567 Total $ 66,100 $ 737,610 Major Geographic Locations Three Months Ended June 30, June 30, U.S. Sales $ 25,333 $ 41,718 China Sales 10,207 372,570 Total $ 35,540 $ 414,288 Six Months Ended June 30, June 30, U.S. Sales $ 55,892 $ 64,541 China Sales 10,208 673,069 Total $ 66,100 $ 737,610
Schedule of patents	Schedule of patents Gross Carrying Accumulated Net Carrying Value June 30, 2023 Patents $ 61,458 $ 1,352 $ 60,106 Total June 30, 2023 $ 61,458 $ 1,352 $ 60,106 December 31, 2022 Patents $ - $ - $ - Total December 31, 2022 $ - $ - $ -
Schedule of amortized cost, unrealized gains	Schedule of amortized cost, unrealized gains Amortized Unrealized Fair Value June 30, 2023 Short-term investments $ 4,431,833 $ 33,089 $ 4,464,922 Total June 30, 2023 $ 4,431,833 $ 33,089 $ 4,464,922 December 31, 2022 Short-term investments $ 6,794,879 $ 36,313 $ 6,831,192 Total December 31, 2022 $ 6,794,879 $ 36,313 $ 6,831,192
Schedule of fair value, assets measured on recurring basis	Schedule of fair value, assets measured on recurring basis Carrying Level 1 Level 2 Level 3 June 30, 2023 U.S. Treasury Notes $ 4,464,922 $ 4,464,922 $ - $ - December 31, 2022 U.S. Treasury Notes $ 6,831,192 $ 6,831,192 $ - $ -
Schedule of antidilutive shares	Schedule of antidilutive shares Three Months Ended June 30, 2023 2022 Warrants 2,662,250 21,600 Total 2,662,250 21,600 Six Months Ended 2023 2022 Warrants 2,662,250 21,600 Total 2,662,250 21,600

ACCRUED EXPENSES (Tables)

ACCRUED EXPENSES (Tables)	6 Months Ended
ACCRUED EXPENSES (Tables)	Jun. 30, 2023
Payables and Accruals [Abstract]
Schedule of accrued expenses	Schedule of accrued expenses June 30, December 31, Accrued interest $ 105,001 $ 111,501 Accrued – other 52,653 2,321 Accrued settlement liabilities 336,000 336,000 Accrued research and development expense 109,979 90,000 Total $ 603,633 $ 539,822

STOCKHOLDERS_ EQUITY (Deficit)

STOCKHOLDERS’ EQUITY (Deficit) (Tables)	6 Months Ended
STOCKHOLDERS’ EQUITY (Deficit) (Tables)	Jun. 30, 2023
Equity [Abstract]
Schedule of warrants	Schedule of warrants Number of Weighted Average Exercise Price Outstanding December 31, 2022 2,662,250 $ 4.15 Issued - - Exercised - - Expired or cancelled - - Outstanding June 30, 2023 2,662,250 $ 4.15
Summary information about warrants to purchase	Summary information about warrants to purchase Exercise Price Outstanding Weighted Average Weighted Average Exercisable $ 4.15 2,315,000 2.25 $ 4.15 2,135,000 $ 4.15 347,250 2.25 4.15 347,250 2,662,250 2.25 $ 4.15 2,662,250

LEASES (Tables)

LEASES (Tables)	6 Months Ended
LEASES (Tables)	Jun. 30, 2023
Leases
Schedule of Operating leases	Schedule of Operating leases Classification June 30, December 31, Lease assets Operating lease cost ROU assets Assets $ 3,397 $ 6,171 Total lease assets $ 3,397 $ 6,171 Lease liabilities Operating lease liabilities, current Current liabilities $ 30,487 $ 50,797 Operating lease liabilities, non-current Liabilities - 4,463 Total lease liabilities $ 30,487 $ 55,260
Schedule of lease cost	Schedule of lease cost Three Months Ended 2023 2022 Leases costs Operating lease costs $ 13,500 $ 13,500 Total lease costs $ 13,500 $ 13,500 Six Months Ended 2023 2022 Leases costs Operating lease costs $ 27,000 $ 27,000 Total lease costs $ 27,000 $ 27,000
Future minimum payments under non-cancelable leases for operating leases	Future minimum payments under non-cancelable leases for operating leases Fiscal Year Operating Remainder of 2023 $ 26,901 2024 4,496 Total future minimum lease payments 31,397 Amount representing interest 910 Present value of net future minimum lease payments $ 30,487
Schedule of additional information related to leases	Schedule of additional information related to leases June 30, December 31, Leases Weighted average remaining lease term 0.5 1.00 Weighted average discount rate 9.9 % 9.9 %

CONCENTRATION OF CREDIT RISK (T

CONCENTRATION OF CREDIT RISK (Tables)	6 Months Ended
CONCENTRATION OF CREDIT RISK (Tables)	Jun. 30, 2023
Risks and Uncertainties [Abstract]
Concentration of credit risk	Concentration of credit risk Three Months Ended Six Months Ended Customer A - related party 29 % 15 % Customer B 21 % 23 % Customer C 15 % 16 % One customer, a related party, accounted for 88% 90% Accounts Receivable Two customers accounted for 85% June 30, Customer A - related party 71 % Customer B 14 % Four customers accounted for 84% December 31, Customer A 29 % Customer B 20 % Customer C 20 % Customer D 15 %

NATURE OF THE ORGANIZATION AN_2

NATURE OF THE ORGANIZATION AND BUSINESS (Details Narrative) - USD ($)		1 Months Ended
	Apr. 06, 2020	Sep. 20, 2022	Jun. 30, 2023	Dec. 31, 2022
Subsidiary, Sale of Stock [Line Items]
Shares issued during the period	450,000
Warrant to purchase		2,315,000	2,662,250	2,662,250
Exercise price		$ 4.15	$ 4.15	$ 4.15
Proceeds from issuance of equity		$ 9,607,250
Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Shares issued during the period		2,315,000
Warrant [Member]
Subsidiary, Sale of Stock [Line Items]
Shares issued during the period		2,315,000
IPO [Member]
Subsidiary, Sale of Stock [Line Items]
Shares issued during the period		2,315,000
Over-Allotment Option [Member]
Subsidiary, Sale of Stock [Line Items]
Shares issued during the period		347,250
Proceeds from issuance of warrants		$ 3,473

LIQUIDITY (Details Narrative)

LIQUIDITY (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
LIQUIDITY (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 73,960,191		$ 73,960,191		$ 72,389,340
Loss from operation	876,860	$ 445,103	1,656,286	$ 820,220
Cash flows from operations			2,130,260	$ 365,543
Working capital deficit	$ 3,900,000		$ 3,900,000

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Total	$ 35,540	$ 414,288	$ 66,100	$ 737,610
UNITED STATES
Product Information [Line Items]
Total	25,333	41,718	55,892	64,541
CHINA
Product Information [Line Items]
Total	10,207	372,570	10,208	673,069
Device Sales [Member]
Product Information [Line Items]
Total	9,600	380,000	9,600	644,500
Licensing Fee [Member]
Product Information [Line Items]
Total	20,033	19,305	43,903	39,448
Equipment [Member]
Product Information [Line Items]
Total	5,100	6,095	11,500	14,095
Other [Member]
Product Information [Line Items]
Total	$ 807	$ 8,888	$ 1,097	$ 39,567

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details 1) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Carrying Amount	$ 61,458
Accumulated Amortization	1,352
Net Carring Value	60,106
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying Amount	61,458
Accumulated Amortization	1,352
Net Carring Value	$ 60,106

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details 2) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Schedule of Investments [Line Items]
Amortized Cost	$ 4,431,833	$ 6,794,879
Unrealized Gain	33,089	36,313
Fair Value	4,464,922	6,831,192
Short-Term Investments [Member]
Schedule of Investments [Line Items]
Amortized Cost	4,431,833	6,794,879
Unrealized Gain	33,089	36,313
Fair Value	$ 4,464,922	$ 6,831,192

SUMMARY OF SIGNIFICANT ACCOUN_7

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details 3) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Platform Operator, Crypto-Asset [Line Items]
Financial assets	$ 4,464,922	$ 6,831,192
Fair Value, Inputs, Level 1 [Member]
Platform Operator, Crypto-Asset [Line Items]
Financial assets	4,464,922	6,831,192
Fair Value, Inputs, Level 2 [Member]
Platform Operator, Crypto-Asset [Line Items]
Financial assets
Fair Value, Inputs, Level 3 [Member]
Platform Operator, Crypto-Asset [Line Items]
Financial assets

SUMMARY OF SIGNIFICANT ACCOUN_8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details 4) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Total	2,662,250	21,600	2,662,250	21,600
Warrant [Member]
Total	2,662,250	21,600	2,662,250	21,600

SUMMARY OF SIGNIFICANT ACCOUN_9

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Accounting Policies [Abstract]
Deferred revenue	$ 0		$ 0		$ 0
Writeoff accounts receivable			0	$ 11,175
Allowance for doubtful accounts	0		0		$ 0
Amortization expense	691	$ 0	1,352	0
Reduction in total unrealized gain			3,224
Research and development costs	$ 146,000	$ 29,540	$ 211,834	$ 41,105

ACCRUED EXPENSES (Details)

ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued interest	$ 105,001	$ 111,501
Accrued – other	52,653	2,321
Accrued settlement liabilities	336,000	336,000
Accrued research and development expense	109,979	90,000
Total	$ 603,633	$ 539,822

NON-CONSOLIDATED JOINT VENTUR_2

NON-CONSOLIDATED JOINT VENTURE AND RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

Jul. 01, 2023

Nov. 02, 2021

Apr. 06, 2020

May 09, 2018

Dec. 22, 2021

Jun. 30, 2023

Jun. 30, 2022

Jun. 30, 2023

Jun. 30, 2022

Dec. 31, 2022

Dec. 31, 2020

May 17, 2023

Apr. 26, 2023

Mar. 17, 2023

Sep. 21, 2018

Related Party Transaction [Line Items]

Issuance of common stock

450,000

Related party contribution

$ 200,000

Shares issued

150,000

Stock-based compensation

$ 231,600

$ 550,000

Revenue from related parties

$ 10,207

$ 362,868

$ 10,207

663,367

New service agreement description

Under the terms of his employment agreement, Mr. White is entitled to (i) a sign-on/retention bonus consisting of a one-time lump-sum payment of $50,000 and a grant of nonqualified stock options to purchase shares of the Company's common stock with an exercise price equal to $400,000, and (ii) stock option grants to purchase shares of the Company's common stock with an exercise price equal to $840,000. Under the terms of his service agreement, Mr. Owens is entitled to (i) a sign-on/retention bonus consisting of a grant of nonqualified stock options to purchase shares of the Company's common stock with an exercise price equal to $125,000 and (ii) stock option grants to purchase shares of the Company's common stock with an exercise price equal to $585,000. Under the terms of his employment agreement Mr. Nketiah is entitled to stock option grants to purchase shares of the Company's common stock with an exercise price equal to $90,000. In addition to the payments stock and option grants described above, each of Messrs. White, Owens and Nketiah are receiving cash compensation and are eligible for additional cash bonuses

Interest payable

$ 39,000

Outstanding amount

$ 200,000

Outstanding interest

$ 34,500

Lease payments

$ 54,000

Lease costs

13,500

27,000

Loans Payable Officer [Member]

Related Party Transaction [Line Items]

Interest expense

18,000

4,500

Chief Executive Officer [Member]

Related Party Transaction [Line Items]

Loans from related party

$ 200,000

Principal amount

$ 200,000

Interest rate

Maturity date

Mar. 17, 2023

US Asian Consulting Group LLC [Member]

Related Party Transaction [Line Items]

Issuance of common stock

249,750

Monthly payment

$ 10,000

Balance owed for accrued,unpaid services and expenses

$ 260,000

US Asian Consulting Group LLC [Member] | Consulting Agreement [Member]

Related Party Transaction [Line Items]

Consulting expenses

30,000

Wider [Member]

Related Party Transaction [Line Items]

Revenue from related parties

$ 10,207

$ 362,868

$ 10,207

$ 663,367

Mr Osser [Member]

Related Party Transaction [Line Items]

Consideration paid

$ 80,000

Wider [Member]

Related Party Transaction [Line Items]

Ownership percentage

52%

Nexalin [Member]

Related Party Transaction [Line Items]

Ownership percentage

48%

LOANS PAYABLE (Details Narrativ

LOANS PAYABLE (Details Narrative) - Legacy Ventures International Inc [Member] - USD ($)		3 Months Ended		6 Months Ended
	Sep. 11, 2017	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Face Amount	$ 500,000
Interest rate	4%
Maturity date	Dec. 31, 2017
Interest expense		$ 5,000	$ 5,000	$ 10,000	$ 10,000
Outstanding amount		$ 500,000		$ 500,000		$ 500,000

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIT) (Details)	6 Months Ended
STOCKHOLDERS' EQUITY (DEFICIT) (Details)	Jun. 30, 2023 $ / shares shares
Equity [Abstract]
Number of warrants outstanding at beginning \| shares	2,662,250
Weighted average exercise price, warrants outstanding at beginning \| $ / shares	$ 4.15
Warrants issued \| shares
Weighted average exercise price, warrants issued \| $ / shares
Warrants exercised \| shares
Weighted average exercise price, warrants exercised \| $ / shares
Warrants expired or cancelled \| shares
Weighted average exercise price, warrants expired or cancelled \| $ / shares
Number of warrants outstanding at end \| shares	2,662,250
Weighted average exercise price, warrants outstanding at end \| $ / shares	$ 4.15

STOCKHOLDERS' EQUITY (DEFICIT_2

STOCKHOLDERS' EQUITY (DEFICIT) (Details 1) - $ / shares	6 Months Ended
STOCKHOLDERS' EQUITY (DEFICIT) (Details 1) - $ / shares	Jun. 30, 2023	Dec. 31, 2022	Sep. 20, 2022
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price	$ 4.15	$ 4.15	$ 4.15
Outstanding Number of Warrants	2,662,250	2,662,250	2,315,000
Weighted Average Remaining Life In Years	2 years 3 months
Weighted Average Exercise Price	$ 4.15
Exercisable Number of Warrants	2,662,250
Range 1 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price	$ 4.15
Outstanding Number of Warrants	2,315,000
Weighted Average Remaining Life In Years	2 years 3 months
Weighted Average Exercise Price	$ 4.15
Exercisable Number of Warrants	2,135,000
Range 2 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price	$ 4.15
Outstanding Number of Warrants	347,250
Weighted Average Remaining Life In Years	2 years 3 months
Weighted Average Exercise Price	$ 4.15
Exercisable Number of Warrants	347,250

STOCKHOLDERS_ EQUITY (Deficit_2

STOCKHOLDERS’ EQUITY (Deficit) (Details Narrative) - USD ($)		6 Months Ended		12 Months Ended
	Apr. 06, 2020	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of common stock issued	450,000
Proceeds from issuance of common stock			$ 5,100
Stock compensation expenses			$ 231,600	$ 550,000
An Investor [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of common stock issued			850
Proceeds from issuance of common stock			$ 5,100
Share price			$ 6
Various Consultants [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Stock issued for services rendered, shares			24,390
Stock issued during period, value, issued for services			$ 150,000
Stock compensation expenses			$ 37,500

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Commitments and Contingencies (Note 8)
Accrued amount	$ 300,000	$ 300,000

LEASES (Details)

LEASES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Leases
Operating lease cost ROU assets	$ 3,397	$ 6,171
Total lease assets	3,397	6,171
Operating lease liabilities, current	30,487	50,797
Operating lease liabilities, non-current		4,463
Total lease liabilities	$ 30,487	$ 55,260

LEASES (Details 1)

LEASES (Details 1) - USD ($)	3 Months Ended		6 Months Ended
LEASES (Details 1) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases
Operating lease costs	$ 13,500	$ 13,500	$ 27,000	$ 27,000
Total lease costs	$ 13,500	$ 13,500	$ 27,000	$ 27,000

LEASES (Details 2)

LEASES (Details 2) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Leases
Remainder of 2023	$ 26,901
2024	4,496
Total future minimum lease payments	31,397
Amount representing interest	910
Present value of net future minimum lease payments	$ 30,487	$ 55,260

LEASES (Details 3)

LEASES (Details 3)	Jun. 30, 2023	Dec. 31, 2022
Leases
Weighted average remaining lease term	6 months	1 year
Weighted average discount rate	9.90%	9.90%

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)	6 Months Ended
LEASES (Details Narrative) - USD ($)	Jun. 30, 2023	Jan. 02, 2022
Leases
Lease liability		$ 11,359
Weighted average incremental borrowing rate	9%

CONCENTRATION OF CREDIT RISK (D

CONCENTRATION OF CREDIT RISK (Details) - Customer Concentration Risk [Member]	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Customer A [Member] \| Revenue Benchmark [Member]
Concentration Risk [Line Items]
Revenue, percentage	29%	15%
Customer A [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue, percentage		71%	29%
Customer B [Member] \| Revenue Benchmark [Member]
Concentration Risk [Line Items]
Revenue, percentage	21%	23%
Customer B [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue, percentage		14%	20%
Customer C [Member] \| Revenue Benchmark [Member]
Concentration Risk [Line Items]
Revenue, percentage	15%	16%
Customer C [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue, percentage			20%
Customer D [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue, percentage			15%

CONCENTRATION OF CREDIT RISK _2

CONCENTRATION OF CREDIT RISK (Details Narrative) - Customer Concentration Risk [Member]	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Three Customer [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue, percentage	65%		54%
One Customer [Member] \| Revenue Benchmark [Member]
Concentration Risk [Line Items]
Revenue, percentage		88%		90%
Two Customer [Member] \| Revenue Benchmark [Member]
Concentration Risk [Line Items]
Revenue, percentage			85%
Four Customer [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Revenue, percentage					84%

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - shares	Jul. 13, 2023	Dec. 31, 2020
Subsequent Event [Line Items]
Shares issued		150,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Shares issued	150,000

STOCKHOLDERS' EQUITY (DEFICIT) (Details)	6 Months Ended
STOCKHOLDERS' EQUITY (DEFICIT) (Details)	Jun. 30, 2023 $ / shares shares
Equity [Abstract]
Number of warrants outstanding at beginning \| shares	2,662,250
Weighted average exercise price, warrants outstanding at beginning \| $ / shares	$ 4.15
Warrants issued \| shares
Weighted average exercise price, warrants issued \| $ / shares
Warrants exercised \| shares
Weighted average exercise price, warrants exercised \| $ / shares
Warrants expired or cancelled \| shares
Weighted average exercise price, warrants expired or cancelled \| $ / shares
Number of warrants outstanding at end \| shares	2,662,250
Weighted average exercise price, warrants outstanding at end \| $ / shares	$ 4.15