NOTE 4 — ACQUISITION OF PONM, INC.

On May 14, 2026, the Company completed the acquisition of 100% of the outstanding equity interests of PONM pursuant to a Stock Purchase Agreement with GreenLight Ventures, LLC (“GLV” and the agreement, the “Stock Purchase Agreement”). Immediately prior to the acquisition, PONM entered into a License Agreement with GLV (the “License Agreement”) pursuant to which PONM obtained an exclusive license to certain software and related intellectual property within specified fields of use. Concurrently with the acquisition, the Company entered into a Collaboration Agreement with GLV (“the “Collaboration Agreement”) under which GLV will provide ongoing software development, maintenance and related support services.

Management believes the licensed software and related intellectual property acquired through the transaction represent the foundational technology supporting the continued development of the Company’s Nexalin NeuroCare™ platform.

Prior to the acquisition, PONM had limited operations and substantially all of the value acquired by the Company related to the exclusive software license and related intellectual property obtained pursuant to the License Agreement with GLV.

The Company determined that the acquisition did not meet the definition of a business under ASC 805, Business Combinations, and therefore accounted for the transaction as an asset acquisition. Substantially all of the value acquired relates to the licensed software and related intellectual property, which has been recorded as a finite-lived intangible asset and is being amortized over its estimated useful life.

The aggregate purchase consideration is approximately $1.3 million and is payable through the issuance of shares of the Company’s common stock (“Consideration Shares”) in accordance with the issuance schedule contained in the Stock Purchase Agreement. The Consideration Shares are issuable in four tranches: 45% at closing; 20%, on the date that is 90 days after the closing date; 20%, on the date that is 180 days after the closing date; and 15%, on the date that is 270 days after the closing date. Closing of the first tranche under the Purchase Agreement occurred, and the Company issued the initial tranche of the Consideration Shares, or 959,016 shares of common stock, on May 14, 2026 (initial fair value of approximately $725,000). The unissued Consideration Shares are subject to specified protective provisions prior to issuance of the final tranche, including down-round protection for certain issuances below the applicable per share price, equitable adjustment for stock splits, reverse stock splits, recapitalizations, reclassifications and similar capital adjustments, and delisting protection, in each case, subject to a floor of $0.61 per share and a ceiling of $1.15 per share. The Purchase Agreement also provides for an acceleration of the issuance of all remaining unissued Consideration Shares upon a change of control of the Company.

As a result, the number of shares ultimately issued may vary, while the aggregate purchase consideration remains subject to the terms of the Stock Purchase Agreement. At closing, the Company issued the initial tranche of common shares. The remaining consideration will be settled through future share issuances upon satisfaction of the applicable contractual issuance provisions. The Company recorded the remaining obligation as a liability, which is subsequently remeasured until each tranche of consideration is settled through the issuance of common stock.

During the three months ended June 30, 2026, the Company adjusted the carrying amount of the acquired licensed technology for changes in the estimated amount of the remaining purchase consideration payable pursuant to the Stock Purchase Agreement (approximately $12,000). Such adjustments are capitalized as part of the cost of the acquired intangible asset and are not recognized in current-period earnings. The carrying amount of the related liability is adjusted concurrently until the remaining consideration is settled.

Amortization expense related to the acquired intangible asset was approximately $13,000 for the three months ended June 30, 2026 and $13,000 for the six months ended June 30, 2026.

The licensed technology and related intellectual property acquired in connection with the acquisition of PONM, Inc. is being amortized on a straight-line basis over its estimated useful life of 7 years. Future amortization is approximately $51,000 for the remaining of 2026, $102,000 for the years 2027 through 2032 and $37,000 for 2033.

As a portion of the purchase consideration is payable through future issuances of the Company’s common stock, the Company recognized a deferred share liability representing the estimated value of the remaining purchase consideration to be settled in shares. The deferred share liability is presented as a separate line item on the accompanying unaudited condensed consolidated balance sheet (approximately $387,000 at June 30, 2026). In accordance with the Company’s accounting policy, the deferred share liability is remeasured until each tranche of consideration is settled through the issuance of common stock, with corresponding adjustments recorded to the carrying amount of the related intangible asset. The Company accounts for the deferred share liability in accordance with its accounting policies for asset acquisitions and deferred share liabilities described in Note 3 “Summary of Significant Accounting Policies”.

Collaboration Agreement

On May 14, 2026, the Company entered into a Collaboration Agreement with GLV to support the development, compliance and commercialization of the Company’s cranial electrotherapy stimulation technologies and related products using certain licensed software associated with GLV’s development of the Nexalin NeuroCare™ platform. Prior to the Company’s entry into the Purchase Agreement and the Collaboration Agreement, GLV and PONM entered into the License Agreement, under which PONM obtained an exclusive license to use certain GLV software within the PONM Field of Use.

Under the Collaboration Agreement, GLV will provide development services under schedules of work and, upon request, infrastructure support services. Unless otherwise specified in a schedule of work, the Company will pay GLV $10,000 per month for such development services, with approved excess development services and approved infrastructure support services billed at rates set forth in the Collaboration Agreement.

The Collaboration Agreement has an initial term of 24 months.