Material Agreement, Financial Obligation (Form 8-K)

On August 21, 2026, Nexalin Technology, Inc. (the "Company") entered into a Note Purchase Agreement (the "Note Purchase Agreement") with an institutional investor (the "Investor"), pursuant to which the Investor purchased from the Company an unsecured promissory note in the amount of $1,170,000 (the "Note"), which included an original issue discount of $150,000 (the "OID") and reimbursement of the Investor's transaction expenses of $20,000, for gross proceeds to the Company of $1,000,000 (the "Purchase Price").

The Note matures six months after the Investor delivers the Purchase Price to the Company and does not bear interest unless and until an event of default occurs. The Company may prepay all or any portion of the outstanding balance of the Note at any time without penalty or premium. Each time the Company receives any proceeds in connection with any fundraising or financing transaction, it must make a mandatory prepayment equal to the lesser of 20% of the amount raised or the outstanding balance of the Note. On up to two occasions, with the Investor's consent, the Company may extend the maturity date by three months, in which case the outstanding balance will automatically increase by 7.5% on the first day of each extension period.

The Note Purchase Agreement and the Note contain customary agreements, affirmative and restrictive covenants, representations and warranties, and customary trigger events and events of default. Trigger events include, but are not limited to, failure to pay amounts when due, commencement of bankruptcy or insolvency proceedings, entering into a fundamental transaction (including certain mergers, acquisitions, and changes of control, as defined in the Note) without repaying the Note in full at or as a condition to closing, and failure to observe covenants in the Note Purchase Agreement (each, a "Trigger Event"). Upon the occurrence of a Trigger Event, the Investor may increase the outstanding balance by 10% for Major Trigger Events (as defined in the Note) and 5% for Minor Trigger Events (as defined in the Note), subject to an aggregate cap of 25%. If a Trigger Event is not cured within five trading days following notice from the Investor, it becomes an event of default, and the Investor may accelerate the Note. Upon an event of default, interest accrues at 18% per annum (or the maximum rate permitted by law, if lower) from the date of the event of default.

The Note Purchase Agreement provides for indemnification of the Investor and its affiliates in the event that they incur any loss or damage related to, among other things, a breach by the Company of any of its representations, warranties, or covenants under the Note Purchase Agreement, including advancement of expenses as they are incurred.

The description of the Note Purchase Agreement and the Note does not purport to be complete and is qualified in its entirety by the full text of the Note Purchase Agreement and the Note, copies of which are filed herewith as Exhibits 10.1 and 10.2, respectively, and which are incorporated herein by reference.

The representations, warranties and covenants contained in the Note Purchase Agreement and the Note were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to exceptions and limitations agreed upon by the contracting parties. Accordingly, the Note Purchase Agreement and the Note are incorporated herein by reference only to provide investors with information regarding the terms of such agreements, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company's periodic reports and other filings with the U.S. Securities and Exchange Commission.

The information contained in Item 1.01 above is incorporated by reference in this Item 2.03.