Nexalin Technology Inc

This management proposal asks stockholders to approve a new 2026 Equity Incentive Plan that would replace the company’s 2023 plan and authorize additional shares for incentive awards to employees, consultants and directors. Management presents the 2026 Plan as necessary to remain competitive in recruiting and retaining talent and to continue to align management and director compensation with long-term stockholder value through equity-based awards. The plan includes typical governance protections such as no repricing without stockholder approval, limited share recycling, clawback policy application, and annual limits on non-employee director compensation, and contemplates a broad menu of award types (ISOs, NSOs, SARs, RSUs, PSUs and cash awards). The board emphasizes that without additional authorized shares under the new plan the company may be forced to increase cash compensation, which would strain limited cash resources and could misalign incentives with stockholders. The proposal also specifies that outstanding awards under the 2023 Plan would remain in effect, but unused 2023 Plan shares would not carry forward into the 2026 Plan, and contains standard adjustment provisions for corporate events, change-in-control treatment, and Section 409A and tax compliance mechanics. The Compensation Committee considered historical burn rate, projected recruiting needs, dilution/overhang, independent consultant advice, and market practices in proposing the share request. Approval requires a majority of votes cast; the Board unanimously recommends a vote FOR, noting the plan supports retention and performance alignment while including safeguards to protect shareholder interests.

This management proposal requests shareholder approval to authorize the board to implement one or more reverse stock splits within a wide ratio range (1-for-2 to 1-for-100, aggregate not more than 1-for-250) at the Board’s discretion. Management frames the proposal primarily as a defensive and listing-maintenance tool: the flexibility allows the board to quickly cure or avoid Nasdaq’s minimum $1.00 bid-price requirement or otherwise respond to market conditions without reconvening shareholders. The board highlights potential marketability benefits (attracting broker/dealer attention and funds that avoid low-priced securities) and potential operational benefits (reducing administrative costs and facilitating financings), but also acknowledges risks including potential lack of proportional price increase, reduced liquidity and possible anti-takeover effects due to the increased proportion of unissued authorized shares. The mechanics preserve shareholders’ percentage ownership (other than fractional-share cash-outs), do not change authorized common shares, and include standard tax and accounting treatments and Delaware corporate-law procedures. The board retains discretion to abandon any proposed amendment if conditions change. Because the resolution authorizes a range of ratios rather than a single split factor, it gives the company tactical flexibility but can raise investor concern about potential dilution when coupled with other corporate actions; the Board recommends FOR to preserve strategic options to maintain listing and marketability.

This management proposal seeks shareholder approval to add 10 million shares of blank-check preferred stock to the company’s charter, giving the board authority to create series of preferred stock with rights, preferences and limitations determined solely by the board. Management frames this as a strategic flexibility measure to facilitate capital raising, mergers and acquisitions, stock dividends or other corporate transactions without requiring prior shareholder approval for each issuance (subject to law and exchange rules). While the board asserts no immediate plans to issue preferred stock, investors should view this as a tool that can be used to structure financing or defensive measures; the company acknowledges potential negative effects on common shareholders, including preferential liquidation or dividend rights, dilution, voting-power shifts, or use as an anti-takeover device. The charter amendment also contemplates that future amendments pertaining solely to preferred-series terms may not require common-stockholder votes if holders of the affected series have voting rights, and permits share-authority adjustments without separate class votes in certain circumstances. The Board recommends a vote FOR, emphasizing the operational and financing flexibility the authorization provides, but investors should weigh the potential for issuance that could subordinate common-stockholder interests.

This management proposal would amend the charter to extend Delaware Section 102(b)(7)-style exculpation to specified officers, aligning officer protections with those already afforded to directors. Management argues this change is narrowly tailored — it covers only defined officer roles and named executive officers and preserves key exceptions (breach of loyalty, bad faith or knowing violations of law, unlawful distributions, and transactions conferring improper personal benefits), and does not protect officers from derivative or corporate claims. The Board frames the amendment as a recruitment and retention tool in a litigious environment, asserting that reducing personal economic exposure for fiduciary duty of care claims will encourage qualified candidates to serve and allow officers to make timely business decisions. From a governance perspective, investors should weigh the potential benefit of attracting talent against concerns that expanded exculpation could reduce officers’ incentives to exercise care, although the retained exceptions and statutory limits mitigate that risk. The proposal requires a majority of outstanding shares to approve and the Board emphasizes the limited scope and compliance with Delaware law; it recommends a vote FOR to maintain parity with director protections and to support management stability.