What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-14 compared with 2021-02-16 · 1187 added, 1249 removed, 536 unchanged (82% of the section changed)

Financial Statements

NeuroOne Medical Technologies Corporation

Condensed Balance Sheets

As of December 31, 2020

As of September 30, 2020

Medical Technologies Corporation

Balance Sheets

September 30,

Current assets:

Accounts receivable

Prepaid and other assets

7 unchanged sentences

Accrued expenses

Advance related to future financing

Convertible promissory notes (Note 8)

7 unchanged sentences

Preferred stock, $0.001 par value;

10,000,000 shares authorized as of December 31, 2020 and September 30, 2020;

no shares issued or outstanding as of December 31, 2020 and September 30, 2020.

10,000,000 shares authorized as of March 31, 2021 and September 30, 2020;

no shares issued or outstanding as of March 31, 2021 and September 30, 2020.

Common stock, $0.001 par value;

100,000,000 shares authorized as of December 31, 2020 and September 30, 2020;

23,090,051 and 22,180,674 shares issued and outstanding as of December 31, 2020 and September 30, 2020, respectively.

100,000,000 shares authorized as of March 31, 2021 and September 30, 2020;

11,910,317 and 7,393,637 shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively.

Additional paid–in capital

4 unchanged sentences

Total liabilities and stockholders’

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Condensed Statements of Operations

For the three months ended

accompanying notes to condensed financial statements

Medical Technologies Corporation

Statements of Operations

Three Months Ended

Six Months Ended

Product Revenue

3 unchanged sentences

Operating expenses:

Selling, general and administrative

General and administrative

Research and development

7 unchanged sentences

$ (1,345,642 )

$ (4,353,396 )

$ (5,982,708 )

Net loss per share:

2 unchanged sentences

Basic and diluted

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Condensed Statements of Changes in Stockholders’

accompanying notes to condensed financial statements

Medical Technologies Corporation

Statements of Changes in Stockholders’

Equity (Deficit)

11 unchanged sentences

(21,875,937 )

Conversion of convertible notes into common stock

Exercise of stock options

Stock-based compensation

Issuance of common stock for consulting services

Issuance of common stock upon vesting of restricted stock units

Balance at March 31, 2020

$ (23,221,579 )

$ (5,185,183 )

Balance at September 30, 2020

6 unchanged sentences

(32,838,511 )

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Condensed Statements of Cash Flows

For the three months ended

Issuance of common stock in connection with

private placement

Issuance of warrants stock in connection with

private placement

Issuance costs in connection with private placement

Stock-based compensation

Exercise of warrants

Exercise of stock options

Issuance of common stock upon vesting of restricted stock units

Balance at March 31, 2021

$ (35,232,427 )

accompanying notes to condensed financial statements

Medical Technologies Corporation

Statements of Cash Flows

six months ended

Operating activities

9 unchanged sentences

Change in assets and liabilities:

Accounts receivable

Prepaid and other assets

9 unchanged sentences

Proceeds from issuance of common stock in connection with private placements

Proceeds from advance related to future financing

Proceeds from issuance of warrants in connection with private placement

Exercise of warrants

Exercise of stock options

Issuance costs related to private placements

5 unchanged sentences

Conversion of convertible notes into equity

Unpaid issuance costs attributed to convertible notes and private placement

Unpaid issuance costs and non-cash adjustments attributed to convertible notes and private placement

Broker warrants issued in connection with convertible notes

1 unchanged sentence

Operating lease right of use asset obtained in exchange for operating lease

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

accompanying notes to condensed financial statements

Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 1 –

Description of Business

and Basis of Presentation

NeuroOne Medical Technologies Corporation

(the “Company”

or “NeuroOne”), a Delaware Corporation, is an early-stage medical technology company developing

comprehensive neuromodulation cEEG and sEEG monitoring, ablation, and brain stimulation solutions to diagnose and treat patients

with epilepsy, Parkinson’s disease, essential tremors, and other brain related disorders.

To date, the Company has had limited commercial

The Company is currently raising capital to fund the development of its proprietary technology.

The Company received 510(k)

clearance from the FDA to market the initial cEEG product and expects to submit an application for 510(k) clearance for a second

product by end of the first half of calendar year 2021.

The Company is based in Eden Prairie, Minnesota.

On March 11, 2020, the World Health Organization

declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout

the United States and around the world.

As a result of the COVID-19 pandemic, the Company has experienced delays and disruptions

in its pre-clinical and clinical trials, as well as interruptions in its manufacturing, supply chain, and research and development

Additionally, the development of the Company’s technology was delayed in fiscal year 2020 due to interruption

in global manufacturing and shipping due to the COVID-19 pandemic.

For example, one of our key manufacturing partners and one of

the Company’s suppliers have had staffing issues due to COVID-19, leading to delays in the Company’s development builds

and delays in shipping product.

Additionally, the Company’s own staff has been impacted by infections and mandatory quarantines.

The Company’s plans for further testing or clinical trials may be further impacted by the continuing effects of COVID-19.

Description of Business and Basis of Presentation

Medical Technologies Corporation (the “Company”

or “NeuroOne”), a Delaware Corporation, is an early-stage

medical technology company developing comprehensive neuromodulation cEEG and sEEG monitoring, ablation, and brain stimulation

solutions to diagnose and treat patients with epilepsy, Parkinson’s disease, essential tremors, and other brain related

date, the Company has had limited commercial sales.

The Company is currently raising capital to fund the development of its proprietary

The Company received 510(k) clearance from the FDA to market the initial cEEG product and submitted an application

for 510(k) clearance for a second product in May 2021.

Company is based in Eden Prairie, Minnesota.

March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global

pandemic, which continues to spread throughout the United States and around the world.

As a result of the COVID-19 pandemic, the

Company has experienced delays and disruptions in its pre-clinical and clinical trials, as well as interruptions in its manufacturing,

supply chain, and research and development operations.

Additionally, the development of the Company’s technology was delayed

in fiscal year 2020 and early 2021 due to interruption in global manufacturing and shipping due to the COVID-19 pandemic.

example, one of our key manufacturing partners and one of the Company’s suppliers have had staffing issues due to COVID-19,

leading to delays in the Company’s development builds and delays in shipping product.

Additionally, the Company’s

own staff has been impacted by infections and mandatory quarantines.

The Company’s plans for further testing or clinical

trials may be further impacted by the continuing effects of COVID-19.

The global outbreak of COVID-19 continues to rapidly evolve.

In April 2020, given the impact of COVID-19 on the Company, the Company

applied for and received loan funding of $83,333 under the Paycheck Protection Program (“PPP”).

The Company may be

required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, and it cannot provide

any assurance that it will be eligible for loan forgiveness, or that any amount of the PPP loan will ultimately be forgiven.

The extent to which the COVID-19 pandemic

may impact the Company’s business and pre-clinical and clinical trials will depend on future developments, which are highly

uncertain and cannot be predicted with confidence, such as the effect of the pandemic on its suppliers and distributors and the

global supply chain, the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social

distancing in the U.S.

and other countries, business closures or business disruptions and the effectiveness of actions taken in

In April 2020, given the impact of COVID-19 on the Company and in connection with the enactment of the CARES Act, the Company applied for and received loan funding of $83,333 under

the Paycheck Protection Program (“PPP”).

The Company may be required to repay any portion of the outstanding principal

that is not forgiven, along with accrued interest, and it cannot provide any assurance that it will be eligible for loan forgiveness,

or that any amount of the PPP loan will ultimately be forgiven.

extent to which the COVID-19 pandemic may impact the Company’s business and pre-clinical and clinical trials will depend

on future developments, which are highly uncertain and cannot be predicted with confidence, such as the effect of the pandemic

on its suppliers and distributors and the global supply chain, the ultimate geographic spread of the disease, the duration of

the outbreak, travel restrictions and social distancing in the U.S.

and other countries, business closures or business disruptions

and the effectiveness of actions taken in the U.S.

and other countries to contain and treat the disease.

The COVID-19 pandemic may also impact the Company’s business

because of employee illness, school closures, and other community response measures.

The COVID-19 pandemic may also impact the

Company’s ability to secure additional financing, or its ability to up-list from our current OTC Market (“OTCQB”).

Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic

continues, it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity

in fiscal year 2021 and beyond.

Basis of presentation

The accompanying unaudited condensed financial

statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the

“SEC”).

Certain information and footnote disclosures normally included in financial statements prepared in accordance

generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations.

The condensed financial statements may not include all disclosures required by U.S.

however, the Company believes that the

disclosures are adequate to make the information presented not misleading.

These unaudited condensed financial statements should

be read in conjunction with the audited financial statements and the notes thereto for the year ended September 30, 2020 included

in the Annual Report on Form 10-K.

The condensed balance sheet at September 30, 2020 was derived from the audited financial statements

of the Company.

NeuroOne Medical Technologies Corporation

The COVID-19 pandemic

may also impact the Company’s business because of employee illness, school closures, and other community response measures.

COVID-19 pandemic may also impact the Company’s ability to secure additional financing, or its ability to up-list from our

current OTC Market (“OTCQB”).

Although the Company cannot estimate the length or gravity of the impact of the COVID-19

outbreak at this time, if the pandemic continues, it may have a material adverse effect on the Company’s results of future

operations, financial position, and liquidity for the remainder of fiscal year 2021 and beyond.

of presentation

accompanying unaudited condensed financial statements have been prepared by the Company, pursuant to the rules and regulations

of the Securities and Exchange Commission (the “SEC”).

Certain information and footnote disclosures normally included

in financial statements prepared in accordance with U.S.

generally accepted accounting principles (GAAP) have been condensed or

omitted pursuant to such rules and regulations.

The condensed financial statements may not include all disclosures required by

however, the Company believes that the disclosures are adequate to make the information presented not misleading.

unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto

for the year ended September 30, 2020 included in the Annual Report on Form 10-K.

The condensed balance sheet at September 30,

2020 was derived from the audited financial statements of the Company.

Medical Technologies Corporation

Notes to Condensed Financial Statements

In December 2019, the Company merged its

wholly owned subsidiary, NeuroOne Inc., into NeuroOne Medical Technologies Corporation.

The merger of the Company’s wholly

owned subsidiary did not have a financial impact to the periods presented.

Upon close of the merger, the Company did not have any

remaining entities that required consolidation for financial statement reporting purposes.

In the opinion of management, all adjustments,

consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations,

and cash flows for the interim periods, have been made.

The results of operations for the interim periods are not necessarily indicative

of the operating results for the full fiscal year or any future periods.

December 2019, the Company merged its wholly owned subsidiary, NeuroOne Inc., into NeuroOne Medical Technologies Corporation.

The merger of the Company’s wholly owned subsidiary did not have a financial impact to the periods presented.

of the merger, the Company did not have any remaining entities that required consolidation for financial statement reporting purposes.

the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly

the financial position, results of operations, and cash flows for the interim periods, have been made.

The results of operations

for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Reclassifications

Certain amounts presented in the prior

year period have been reclassified to conform to current period financial statement presentation.

The change in accounts payable

and accrued expenses reported in the statements of cash flows during the comparable prior year period was reclassified into two

separate line item categories.

Immaterial Revision to Prior Period

Financial Statements

Subsequent to the quarter ended December 31, 2019, it was determined that non-cash entries related

to the operating lease liability and related right-of-use asset were inappropriately presented on a gross basis within the condensed

statement of cash flows.

The Company assessed the materiality of this error considering both qualitative and quantitative factors

and determined it to be immaterial.

A revision to the previously issued condensed statement of cash flows has been made.

had no impact to the condensed balance sheet, condensed statement of operations, condensed statement of changes in stockholders’

equity (deficit), or cash flows from investing and financing activities in the condensed statement of cash flows.

The effect of the revisions on the impacted

line items within operating cash flows of the Company’s condensed statement of cash flows for the quarter ended December

31, 2019 is as follows:

● an addition of non-cash lease expense

● a decrease in the change in prepaid and

other assets of $325,248, bringing the previously reported balance of ($332,075) to a revised balance of ($6,827);

● a decrease in the change in accrued expenses,

deferred revenue, operating lease and other liabilities of $335,118, bringing the previously reported balance of $323,639 to a

revised balance, net of the $6,669 reclassification of accounts payable described above, to ($18,148).

There was no impact to net operating cash

NOTE 2 –

Liquidity and Capital

The accompanying condensed financial statements

have been prepared on the basis that the Company will continue as a going concern.

The Company has incurred losses since inception,

negative cash flows from operations, and has an accumulated deficit of $32,838,511 as of December 31, 2020.

The Company has not

established a source of revenues to cover its full operating costs, and as such, has been dependent on funding operations through

the issuance of debt and sale of equity securities.

Management believes that the Company, as a result of the cash flows received

from the 2021 Private Placement (See Note 13 –

Subsequent Events), has adequate liquidity to fund its operations without

raising additional funds for at least twelve months from the date of issuance of these financial statements.

Management believes

additional capital will be required for the Company to reach a point of break-even cash flows.

The Company’s future operating

activities under the distribution and development agreement with Zimmer, Inc.

coupled with its plans to raise capital or issue

debt financing may provide additional liquidity in the future, however these actions are not solely within the control of the Company

and we are unable to predict the ultimate outcome of these actions to generate the liquidity ultimately required.

NOTE 3 - Summary of Significant Accounting

Management’s Use of Estimates

The preparation of financial statements

in conformity with accounting principles generally accepted in the United States of America requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities, primarily in connection with the convertible promissory

notes, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

revenues and expenses during the reporting period.

Actual results could differ from those estimates.

NeuroOne Medical Technologies Corporation

amounts presented in the prior year period have been reclassified to conform to current period financial statement presentation.

The change in accounts payable and accrued expenses reported in the statements of cash flows during the comparable prior year

period was reclassified into two separate line item categories and the non-cash portion of the lease liability line item was reclassified

to the change in accrued expenses, deferred revenue, operating lease and other liabilities line item.

March 11, 2021, the Company’s Board of Directors (the “Board”) approved a one-for-three reverse stock split

of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”).

issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted

to reflect this Reverse Stock Split for all periods presented.

In addition, a proportionate adjustment was made to the per share

exercise price and the number of shares issuable upon the exercise of all outstanding stock options, restricted stock units and

warrants to purchase shares of common stock.

A proportionate adjustment was also made to the number of shares reserved for issuance

pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split.

Any fraction of a share

of common stock that was created as a result of the Reverse Stock Split was rounded up to the next whole share.

The authorized

shares and par value of the common stock and preferred stock were not adjusted as a result of the Reverse Stock Split.

Liquidity and Capital Resources

accompanying condensed financial statements have been prepared on the basis that the Company will continue as a going concern.

The Company has incurred losses since inception, negative cash flows from operations, and has an accumulated deficit of $35.2

million as of March 31, 2021.

The Company has not established a source of revenues to cover its full operating costs, and as such,

has been dependent on funding operations through the issuance of debt and sale of equity securities.

Management believes that

the Company, as a result of the cash flows received from the 2021 Private Placement, has adequate liquidity to fund its operations

without raising additional funds for at least twelve months from the date of issuance of these financial statements.

believes additional capital will be required for the Company to reach a point of break-even cash flows.

The Company’s future

operating activities under the distribution and development agreement with Zimmer, Inc.

coupled with its plans to raise capital

or issue debt financing may provide additional liquidity in the future, however these actions are not solely within the control

of the Company and we are unable to predict the ultimate outcome of these actions to generate the liquidity ultimately required.

Summary of Significant Accounting Policies

Management’s

Use of Estimates

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, primarily in

connection with the convertible promissory notes while outstanding, and disclosure of contingent assets and liabilities at the

date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results

could differ from those estimates.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Revenue Recognition

The Company entered into a development

and distribution agreement which has current and future revenue recognition implications.

See Note 7 –

Zimmer Development

Product Revenue

Revenues from product sales are recognized

when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the

consideration the Company expects to be entitled to in exchange for those goods or services.

At the inception of each contract,

performance obligations are identified and the total transaction price is allocated to the performance obligations.

commenced commercial sales of cEEG strip/grid and electrode cable assembly products in the first quarter of fiscal year 2021.

Cost of Product Revenue

Cost of product revenue consists of the

manufacturing and materials costs incurred by the Company’s third-party contract manufacturer in connection with Strip/Grid

Products and outside supplier materials costs in connection with the Electrode Cable Assembly Products.

In addition, cost of product

revenue includes royalty fees incurred in connection with the Company’s license agreements.

Collaborations Revenue

In determining the appropriate amount of

revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps:

(i) identification

of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance

obligations including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including

the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations based on estimated

selling prices;

and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

A performance obligation is a promise in

a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606.

Performance obligations

may include license rights, development services, and services associated with regulatory submission and approval processes.

management judgment is required to determine the level of effort required under an arrangement and the period over which the Company

expects to complete its performance obligations under the arrangement.

Company entered into a development and distribution agreement which has current and future revenue recognition implications.

Note 7 –

Zimmer Development Agreement.

from product sales are recognized when control of the promised goods or services is transferred to the Company’s customers,

in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

the inception of each contract, performance obligations are identified and the total transaction price is allocated to the performance

The Company commenced commercial sales of cEEG strip/grid and electrode cable assembly products in the first quarter

of fiscal year 2021.

of Product Revenue

Cost of product revenue consists of the manufacturing and materials

costs incurred by the Company’s third-party contract manufacturer in connection with NeuroOne’s strip and grid cortical electrodes

(the “Strip/Grid Products”) and outside supplier materials costs in connection with the Electrode Cable Assembly Products.

In addition, cost of product revenue includes royalty fees incurred in connection with the Company’s license agreements.

Collaborations

determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company

performs the following steps:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether

the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction

price to the performance obligations based on estimated selling prices;

and (v) recognition of revenue when (or as) the Company

satisfies each performance obligation.

A performance obligation is a promise in a contract to transfer a distinct

good or service to the customer and is the unit of account in Account Standards Codification (“ASC”) Topic 606.

obligations may include license rights, development services, and services associated with regulatory submission and approval processes.

Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the

Company expects to complete its performance obligations under the arrangement.

If the Company cannot reasonably estimate when its performance

obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably

make such estimates.

Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up

As part of the accounting for these arrangements,

the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation

identified in the contract.

The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted

revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory

The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone

selling prices of the promised goods or service underlying each performance obligation.

Licenses of intellectual property :

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations

identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when

the license is transferred to the customer, and the customer can use and benefit from the license.

For licenses that are bundled

with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether

the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring

progress for purposes of recognizing revenue from non-refundable, up-front fees.

The Company evaluates the measure of progress

each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

NeuroOne Medical Technologies Corporation

obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make

such estimates.

Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method.

part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone

selling price of each performance obligation identified in the contract.

The Company uses key assumptions to determine the stand-alone

selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount

rates and probabilities of technical and regulatory success.

The Company allocates the total transaction price to each performance

obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance

of intellectual property :

If the license to the Company’s intellectual property is determined to be distinct from the

other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees

allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license.

For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance

obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over

time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.

Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related

revenue recognition.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Milestone payments :

At the inception

of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being

achieved and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable

that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission) is

included in the transaction price.

Milestone payments that are not within the control of the Company, such as approvals from regulators,

are not considered probable of being achieved until those approvals are received.

When the Company’s assessment of probability

of achievement changes and variable consideration becomes probable, any additional estimated consideration is allocated to each

performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each

performance obligation and recorded in license, collaboration, and other revenues based upon when the customer obtains control

of each element.

For arrangements that

include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant

item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when

the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Fair Value of Financial Instruments

The Company’s accounting for fair

value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring

or nonrecurring basis adheres to the Financial Accounting Standards Board (“FASB”) fair value hierarchy that prioritizes

the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices

in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving

significant unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones

are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely

amount method.

If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such

as a regulatory submission) is included in the transaction price.

Milestone payments that are not within the control of the Company,

such as approvals from regulators, are not considered probable of being achieved until those approvals are received.

Company’s assessment of probability of achievement changes and variable consideration becomes probable, any additional estimated

consideration is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised

goods or service underlying each performance obligation and recorded in license, collaboration, and other revenues based upon

when the customer obtains control of each element.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license

is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the

related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied

(or partially satisfied).

Value of Financial Instruments

Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value

in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (“FASB”)

fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest

priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest

priority to measurements involving significant unobservable inputs (Level 3 measurements).

The three levels of the fair value

hierarchy are as follows:

Level 1 Inputs:

Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date.

Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement

Level 2 Inputs:

Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly,

for substantially the full term of the asset or liability.

Level 3 Inputs:

Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

As of December 31, 2020 and September 30,

2020, the fair values of cash, accounts receivable, inventory, prepaid expenses, other assets, accounts payable and accrued expenses

approximated their carrying values because of the short-term nature of these assets or liabilities.

The fair value of the convertible

notes while outstanding during the three months ended December 31, 2020 and 2019 were based on both the fair value of our common

stock, discount associated with the embedded redemption features, and cash flow models discounted at current implied market rates

evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments and are

based on Level 3 inputs.

There were no transfers between fair value

hierarchy levels during the three months ended December 31, 2020 and 2019.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements,

The fair value of financial instruments

measured on a recurring basis is as follows:

December 31, 2020

Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available,

thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement

of March 31, 2021 and September 30, 2020, the fair values of cash, prepaid expenses, other assets, accounts payable and accrued

expenses approximated their carrying values because of the short-term nature of these assets or liabilities.

The fair value of

the convertible notes while outstanding were based on both the fair value of our common stock, discount associated with the embedded

redemption features, and cash flow models discounted at current implied market rates evidenced in recent arms-length transactions

representing expected returns by market participants for similar instruments and are based on Level 3 inputs.

were no transfers between fair value hierarchy levels during the three and six months ended March 31, 2021 and 2020.

fair value of financial instruments measured on a recurring basis is as follows:

As of March 31, 2021

Convertible Notes

Total liabilities at fair value

September 30, 2020

As of September 30, 2020

Convertible Notes

Total liabilities at fair value

The following table provides a roll-forward

of the convertible notes at fair value on a recurring basis using unobservable level 3 inputs for the three months ended December

31 as follows:

Medical Technologies Corporation

Notes to Condensed Financial Statements

following table provides a roll-forward of the convertible notes at fair value on a recurring basis using unobservable level 3

inputs for the six months ended March 31 as follows:

Convertible notes

4 unchanged sentences

Balance as of end of period –

December 31, 2020

March 31, 2021

Convertible notes

2 unchanged sentences

Fair value attributed to convertible promissory notes upon issuance

Fair value attributed to note extinguishment

Balance as of end of period –December 31, 2019

Intellectual Property

The Company has entered into two licensing

agreements with major research institutions, which allows for access to certain patented technology and know-how.

Payments under

those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements,

Property and Equipment

Property and equipment is recorded at cost

and reduced by accumulated depreciation.

Depreciation expense is recognized over the estimated useful lives of the assets using

the straight-line method.

The estimated useful life for equipment and furniture ranges from three to seven years and three years

for software.

Tangible assets acquired for research and development activities and that have alternative use are capitalized over

the useful life of the acquired asset.

Estimated useful lives are periodically reviewed, and, when appropriate, changes are made

prospectively.

Software purchased for internal use consists primarily of amounts paid for perpetual licenses to third-party software

providers and installation costs.

When certain events or changes in operating conditions occur, asset lives may be adjusted and

an impairment assessment may be performed on the recoverability of the carrying amounts.

Maintenance and repairs are charged directly

to expense as incurred.

Allowances for Doubtful Accounts

The Company records a provision for doubtful

accounts, when appropriate, based on historical experience and a detailed assessment of the collectability of its accounts receivable.

In estimating the allowance for doubtful accounts, the Company considers, among other factors, the aging of the accounts receivable,

its historical write-offs, the credit worthiness of each customer, and general economic conditions.

Account balances are charged

off against the allowance when the Company believes that it is probable that the receivable will not be recovered.

Actual write-offs

may be in excess of the Company’s estimated allowance.

Inventories are stated at the lower of

cost (using the first-in, first-out “FIFO”

Conversion of convertible promissory notes to common stock

Change in fair value including accrued interest

Balance as of end of period –March 31, 2020

Company has entered into two licensing agreements with major research institutions, which allows for access to certain patented

technology and know-how.

Payments under those agreements are capitalized and amortized to general and administrative expense over

the expected useful life of the acquired technology.

and Equipment

and equipment is recorded at cost and reduced by accumulated depreciation.

Depreciation expense is recognized over the estimated

useful lives of the assets using the straight-line method.

The estimated useful life for equipment and furniture ranges from three

to seven years and three years for software.

Tangible assets acquired for research and development activities and that have alternative

use are capitalized over the useful life of the acquired asset.

Estimated useful lives are periodically reviewed, and, when appropriate,

changes are made prospectively.

Software purchased for internal use consists primarily of amounts paid for perpetual licenses

to third-party software providers and installation costs.

When certain events or changes in operating conditions occur, asset

lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.

and repairs are charged directly to expense as incurred.

for Doubtful Accounts

Company records a provision for doubtful accounts, when appropriate, based on historical experience and a detailed assessment

of the collectability of its accounts receivable.

In estimating the allowance for doubtful accounts, the Company considers, among

other factors, the aging of the accounts receivable, its historical write-offs, the credit worthiness of each customer, and general

economic conditions.

Account balances are charged off against the allowance when the Company believes that it is probable that

the receivable will not be recovered.

Actual write-offs may be in excess of the Company’s estimated allowance.

Inventories are stated at the lower of cost (using

the first-in, first-out “FIFO”

method) or net realizable value.

The Company calculates inventory valuation

adjustments for excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives,

and estimated future demand of the products and spare parts.

The Company’s inventory is currently comprised of cEEG strip/grid

and electrode cable assembly finished good product.

The strip/ grid products are produced by a third-party contract manufacturer

and the electrode cable assembly products are obtained from outside suppliers.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets,

which consist of licensed intellectual property and property and equipment for impairment whenever events or changes in circumstances

indicate that the carrying value of these assets may not be recoverable.

The Company assesses the recoverability of long-lived

assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash

If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying

value and the fair value of the impaired asset.

Research and Development Costs

Research and development costs are charged

to expense as incurred.

Research and development expenses may include costs incurred in performing research and development activities,

including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services,

license fees, and other external costs.

Non-refundable advance payments for goods and services that will be used in future research

and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment

is made, in accordance with Accounting Standards Codification (ASC) 730, Research and Development .

Selling, General and Administrative

Selling, general and administrative expenses

consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated

with research and development activities.

Other significant costs include legal fees relating to corporate matters, intellectual

property costs, professional fees for consultants assisting with regulatory, clinical, product development, financial matters,

and beginning in the first quarter of fiscal year 2021, sales and marketing in connection with the commercial sale of cEEG strip/grid

and electrode cable assembly products.

NeuroOne Medical Technologies Corporation

The Company calculates inventory valuation adjustments for

excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives, and estimated future

demand of the products and spare parts.

The Company’s inventory is currently comprised of cEEG strip/grid and electrode cable assembly

finished good product.

The Strip/Grid Products are produced by a third-party contract manufacturer and the Electrode Cable Assembly Products

are obtained from outside suppliers.

Medical Technologies Corporation

Notes to Condensed Financial Statements

For the Company, income taxes are accounted

for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable

to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base

and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected

to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset

will not be realized.

Net Loss Per Share

For the Company, basic loss per share of

common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings or loss per share of common

stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to

include additional shares from the assumed exercise of any common stock equivalents, if dilutive.

The Company’s convertible

promissory notes, warrants, stock options and restricted stock units while outstanding are considered common stock equivalents

of Long-Lived Assets

Company evaluates its long-lived assets, which consist of licensed intellectual property and property and equipment for impairment

whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered

through undiscounted expected future cash flows.

If the asset is considered to be impaired, the amount of any impairment is measured

as the difference between the carrying value and the fair value of the impaired asset.

and Development Costs

Research and development costs are charged to expense

Research and development expenses may include costs incurred in performing research and development activities, including

clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees,

and other external costs.

Non-refundable advance payments for goods and services that will be used in future research and development

activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance

with ASC 730, Research and Development .

General and Administrative

general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel

in functions not directly associated with research and development activities.

Other significant costs include legal fees relating

to corporate matters, intellectual property costs, professional fees for consultants assisting with regulatory, clinical, product

development, financial matters, and beginning in the first quarter of fiscal year 2021, sales and marketing in connection with

the commercial sale of cEEG strip/grid and electrode cable assembly products.

the Company, income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets

and liabilities and their respective tax base and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are

expected to be recovered or settled.

Deferred tax assets are reduced by a valuation allowance if it is more likely than not that

some portion or all of the deferred tax asset will not be realized.

Loss Per Share

the Company, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of

common stock outstanding during the period.

earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares

outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive.

The Company’s

convertible promissory notes, warrants, stock options and restricted stock units while outstanding are considered common stock equivalents

for this purpose.

Diluted earnings is computed utilizing the treasury method for the warrants, stock options and restricted stock

Diluted earnings with respect to the convertible promissory utilize the if-converted method.

No incremental common stock

equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss

reported for the three months ended December 31, 2020 and 2019.

The following potential common shares were

not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three months

ended December 31, 2020 and 2019:

Diluted earnings is computed utilizing the treasury method for the warrants, stock options and restricted stock units.

Diluted earnings with respect to the convertible promissory notes utilize the if-converted method.

No incremental common stock equivalents

were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for the

three and six months ended March 31, 2021 and 2020.

following potential common shares were not considered in the computation of diluted net loss per share as their effect would have

been anti-dilutive for the three and six months ended March 31, 2021 and 2020:

Stock options

1 unchanged sentence

Convertible notes

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13,

Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

(ASU 2018-13) .

The new guidance modifies the disclosure requirements in Topic 820 as follows:

the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

the policy for timing of transfers between levels;

Medical Technologies Corporation

Notes to Condensed Financial Statements

Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards

Update (“ASU”) 2016-13, “

Financial Instruments –

Credit Losses”

The ASU sets forth a “current

expected credit loss”

(“CECL”) model which requires the Company to measure all expected credit losses for financial

instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.

replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized

cost and applies to some off-balance sheet credit exposures.

This ASU is effective for fiscal years beginning after December 15, 2019,

including interim periods within those fiscal years, with early adoption permitted.

Recently, the FASB issued the final ASU to delay adoption

for smaller reporting companies to calendar year 2023.

The Company is currently assessing the impact of the adoption of this ASU on its

financial statements.

August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure

Requirements for Fair Value Measurement (ASU 2018-13) .

The new guidance modifies the disclosure requirements in Topic

820 as follows:

of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

the policy for timing of transfers between

and the valuation processes for Level 3 fair value measurements.

Modifications:

for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly;

and the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.

the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period;

and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements,

This guidance is effective for all entities

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The amendments on changes in

unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value

measurements, and the narrative description of measurement uncertainty should all be applied prospectively for only the most recent

interim or annual period presented in the initial year of adoption.

All other amendments should be applied retrospectively to all

periods presented upon their effective date.

investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation

of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated

the timing to the entity or announced the timing publicly;

and the amendments clarify that the measurement uncertainty disclosure

is to communicate information about the uncertainty in measurement as of the reporting date.

in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements

held at the end of the reporting period;

and the range and weighted average of significant unobservable inputs used to develop

Level 3 fair value measurements.

guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December

The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable

inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should all be

applied prospectively for only the most recent interim or annual period presented in the initial year of adoption.

All other amendments

should be applied retrospectively to all periods presented upon their effective date.

Early adoption is permitted.

An entity is permitted to early adopt any removed or

modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date.

The Company adopted the new guidance on October 1, 2020 and it did not have a material impact on its financial statements.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740) which amends the existing guidance relating to the accounting for income taxes.

This ASU is intended

to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes

and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing

permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional

disclosures until their effective date.

The Company adopted the new guidance on October 1, 2020 and it did not have a material

impact on its financial statements.

December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740) which amends the existing guidance relating to the accounting

for income taxes.

This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general

principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for

income taxes by clarifying and amending existing guidance.

The ASU is effective for fiscal years beginning after December 15,

The Company does not expect that the adoption

of this new guidance will have a material impact on the Company’s financial statements and plans to adopt this guidance on

a prospective basis for the provisions applicable to the Company.

In August 2020, FASB issued ASU 2020-06,

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s

Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which, among

other things, provides guidance on how to account for contracts on an entity’s own equity.

eliminates the beneficial conversion and cash conversion accounting models for convertible instruments.

It also amends the accounting

for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement

In addition, this ASU modifies how particular convertible instruments and certain contracts that may be settled in

cash or shares impact the diluted EPS computation.

The amendments in this ASU are effective for smaller reporting companies as

defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

The Company is currently evaluating

the impact of ASU 2020-06 on its financial statements.

NOTE 4 - Commitments and Contingencies

WARF License Agreement

The Company has entered into an exclusive

start-up company license agreement with the Wisconsin Alumni Research Foundation (“WARF”) for WARF’s neural probe

array and thin film micro electrode technology (the “WARF Agreement”).

The Company entered into an Amended and Restated

Exclusive Start-up Company License Agreement (the “WARF License”) with WARF on January 21, 2020, which amended and

restated in full the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014,

as amended on February 22, 2017, March 30, 2019 and September 18, 2019.

The WARF License grants to the Company

an exclusive license to make, use and sell, in the United States only, products that employ certain licensed patents for a neural

probe array or thin-film micro electrode array and method.

The Company has agreed to pay WARF a royalty equal to a single-digit

percentage of its product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000

for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect.

The minimum annual royalty

payment for calendar year 2020 in the amount of $50,000 was accrued by the Company as of December 31, 2020 and was reflected as

a component of cost of product revenue for the three month period ended December 31, 2020.

If the Company or any of its sublicensees

contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the contested

patent is found to be valid and would be infringed by the Company if not for the WARF License, the royalty rate will be tripled

for the remaining term of the WARF License.

NeuroOne Medical Technologies Corporation

The Company does not expect that the adoption of this new guidance will have a material impact on the Company’s financial

statements and plans to adopt this guidance on a prospective basis for the provisions applicable to the Company.

In August 2020, FASB issued ASU 2020-06, Debt—Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which, among other things, provides guidance

on how to account for contracts on an entity’s own equity.

This ASU eliminates the beneficial conversion and cash conversion accounting

models for convertible instruments.

It also amends the accounting for certain contracts in an entity’s own equity that are currently

accounted for as derivatives because of specific settlement provisions.

In addition, this ASU modifies how particular convertible instruments

and certain contracts that may be settled in cash or shares impact the diluted earnings per share computation.

The amendments in this

ASU are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including

interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15,

The Company is currently evaluating the impact of ASU 2020-06 on its financial statements.

Medical Technologies Corporation

Notes to Condensed Financial Statements

WARF may terminate the WARF License if

the Company defaults on the payments of amounts due to WARF or fails to timely submit development reports, or breaches any other

covenant in the WARF License and fails to remedy such default in ninety (90) days or in the event of certain bankruptcy events

involving the Company.

Commitments and Contingencies

License Agreement

Company has entered into an exclusive start-up company license agreement with the Wisconsin Alumni Research Foundation (“WARF”)

for WARF’s neural probe array and thin film micro electrode technology (the “WARF Agreement”).

The Company entered

into an Amended and Restated Exclusive Start-up Company License Agreement (the “WARF License”) with WARF on January

21, 2020, which amended and restated in full the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the

Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September 18, 2019.

WARF License grants to the Company an exclusive license to make, use and sell, in the United States only, products that employ certain

licensed patents for a neural probe array or thin-film micro electrode array and method.

The Company has agreed to pay WARF a royalty

equal to a single-digit percentage of its product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000

for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect.

The minimum annual

royalty payment for calendar year 2020 in the amount of $50,000 was paid by the Company as of March 31, 2021 and was reflected as a component

of cost of product revenue for the six month period ended March 31, 2021.

In addition, $25,000 of the minimum annual royalty payment

for calendar year 2021 was accrued for as of March 31, 2021 and was reflected as a component of cost of product revenue for the three

month and six month periods ended March 31, 2021.

If the Company or any of its sublicensees contest the validity of any licensed patent,

the royalty rate will be doubled during the pendency of such contest and, if the contested patent is found to be valid and would be infringed

by the Company if not for the WARF License, the royalty rate will be tripled for the remaining term of the WARF License.

may terminate the WARF License if the Company defaults on the payments of amounts due to WARF or fails to timely submit development

reports, or breaches any other covenant in the WARF License and fails to remedy such default in ninety (90) days or in the event

of certain bankruptcy events involving the Company.

WARF may also terminate the WARF License on ninety (90) days’

notice if the Company fails to have

commercial sales of one or more FDA-approved products under the WARF License by June 30, 2021.

The WARF License otherwise expires

by its terms (i) on the date that no valid claims on the patents licensed thereunder remain or (ii) upon the cessation for more

than four (4) calendar quarters of the payment, once begun, of earned royalties under certain sections of the WARF License.

Company expects the latest expiration of a licensed patent to occur in 2030.

The first commercial sale occurred in December 2020,

prior to the June 30, 2021 deadline.

Mayo Agreement

The Company has an exclusive license and

development agreement with the Mayo Foundation for Medical Education and Research (“Mayo”) related to certain intellectual

property and development services for thin film micro electrode technology (“Mayo Agreement”).

If the Company is successful

in obtaining regulatory approval, the Company is to pay royalties to Mayo based on a percentage of net sales of products of the

licensed technology through the term of the Mayo Agreement, set to expire May 25, 2037.

As of December 31, 2020, $2,144 in royalty

payments were due to Mayo given the commencement of commercial sales during the first quarter of 2021 and were reflected as a component

of cost of product revenue during the period.

PMT Litigation

From time to time, the Company is subject

to litigation and claims arising in the ordinary course of business.

In May 2017, NeuroOne received a letter from PMT Corporation

(“PMT”), the former employer of Mark Christianson and Wade Fredrickson.

PMT claimed that these officers had breached

their restrictive covenant obligations with PMT by virtue of their work for NeuroOne and such officer’s prior work during

employment with the prior employer, that these officers had breached their confidentiality and non-disclosure obligations to PMT

and federal and state law by misappropriating confidential and trade secret information, and that the Company is responsible for

tortious interference with contracts.

The letter, which purported to attach a noncompete agreement signed by Mr.

Fredrickson, demanded

if the Company fails to have commercial sales of one or more FDA-approved products under the WARF License by June 30, 2021.

WARF License otherwise expires by its terms (i) on the date that no valid claims on the patents licensed thereunder remain or

(ii) upon the cessation for more than four (4) calendar quarters of the payment, once begun, of earned royalties under certain

sections of the WARF License.

The Company expects the latest expiration of a licensed patent to occur in 2030.

The first commercial

sale occurred in December 2020, prior to the June 30, 2021 deadline.

The Company has an exclusive license and development

agreement with the Mayo Foundation for Medical Education and Research (“Mayo”) related to certain intellectual property and

development services for thin film micro electrode technology (“Mayo Agreement”).

If the Company is successful in obtaining

regulatory approval, the Company is to pay royalties to Mayo based on a percentage of net sales of products of the licensed technology

through the term of the Mayo Agreement, set to expire May 25, 2037.

As of March 31, 2021, $2,691 in royalty fees were incurred given the

commencement of commercial sales during the first six months of 2021 and were reflected as a component of cost of product revenue during

time to time, the Company is subject to litigation and claims arising in the ordinary course of business.

In May 2017, NeuroOne

received a letter from PMT Corporation (“PMT”), the former employer of Mark Christianson and Wade Fredrickson.

claimed that these officers had breached their restrictive covenant obligations with PMT by virtue of their work for NeuroOne

and such officer’s prior work during employment with the prior employer, that these officers had breached their confidentiality

and non-disclosure obligations to PMT and federal and state law by misappropriating confidential and trade secret information,

and that the Company is responsible for tortious interference with contracts.

The letter, which purported to attach a noncompete

agreement signed by Mr.

Fredrickson, demanded that Mr.

Fredrickson (who resigned from the Company in June 2017), Mr.

Christianson and NeuroOne cease and desist all competitive

activities, that Mr.

and NeuroOne cease and desist all competitive activities, that Mr.

Fredrickson step down from his position and that Mr.

Christianson and NeuroOne provide the former employer

access to NeuroOne’s systems to demonstrate that it is not using trade secrets or proprietary information nor competing with

the former employer.

On March 29, 2018, the Company was served

with a complaint filed by PMT adding the Company, NeuroOne and Mr.

Christianson to its existing lawsuit against Mr.

in the Fourth Judicial District Court of the State of Minnesota.

The complaint purported to attach Mr.

Fredrickson’s noncompete

agreement as Exhibit A.

and NeuroOne provide the former employer access to NeuroOne’s systems to demonstrate that it is not using trade secrets

or proprietary information nor competing with the former employer.

Medical Technologies Corporation

Notes to Condensed Financial Statements

March 29, 2018, the Company was served with a complaint filed by PMT adding the Company, NeuroOne and Mr.

Christianson to its

existing lawsuit against Mr.

Fredrickson in the Fourth Judicial District Court of the State of Minnesota.

The complaint purported

to attach Mr.

Fredrickson’s noncompete agreement as Exhibit A.

In the lawsuit, PMT claims that Mr.

Fredrickson and Mr.

Christianson breached their non-competition, non-solicitation

and non-disclosure obligations, breached their fiduciary duty obligations, were unjustly enriched, engaged in unfair competition,

engaged in a civil conspiracy, tortiously interfered with PMT’s contracts and prospective economic advantage, and breached

a covenant of good faith and fair dealing.

Fredrickson, PMT also alleges that he intentionally or negligently spoliated

evidence, made negligent or fraudulent misrepresentations, misappropriated trade secrets in violation of Minnesota law, and committed

the tort of conversion and statutory civil theft.

Against the Company and NeuroOne, PMT alleges that the Company and NeuroOne were

unjustly enriched and engaged in unfair competition.

PMT asked the Court to impose a constructive trust over the shares held by

breached their non-competition, non-solicitation and non-disclosure obligations, breached their fiduciary duty obligations, were

unjustly enriched, engaged in unfair competition, engaged in a civil conspiracy, tortiously interfered with PMT’s contracts

and prospective economic advantage, and breached a covenant of good faith and fair dealing.

Fredrickson, PMT also

alleges that he intentionally or negligently spoliated evidence, made negligent or fraudulent misrepresentations, misappropriated

trade secrets in violation of Minnesota law, and committed the tort of conversion and statutory civil theft.

Against the Company

and NeuroOne, PMT alleges that the Company and NeuroOne were unjustly enriched and engaged in unfair competition.

PMT asked the

Court to impose a constructive trust over the shares held by Mr.

Fredrickson and Mr.

Christianson and to award compensatory damages, equitable relief, punitive damages, attorneys’

costs and interest.

On April 18, 2018, Mr.

Christianson, the

Company and NeuroOne, Inc.

filed a motion for dismissal, which was heard by the Court on October 11, 2018.

The motion for dismissal

Christianson and to award compensatory damages,

equitable relief, punitive damages, attorneys’

fees, costs and interest.

April 18, 2018, Mr.

Christianson, the Company and NeuroOne, Inc.

filed a motion for dismissal, which was heard by the Court on

October 11, 2018.

The motion for dismissal stated that:

the contract claims against Mr.

Christianson fail because his agreement was not supported by consideration;

the Minnesota

Uniform Trade Secrets Act preempts plaintiff’s claims for unfair competition, civil conspiracy and unjust enrichment;

fails to state a claim regarding alleged breach of the duties of loyalty and good faith/fair dealing;

plaintiff cannot legally

obtain a constructive trust;

plaintiff has insufficiently pled its tortious interference claims;

and Plaintiff has not stated a

claim for unfair competition.

On January 7, 2019, the judge granted the motion for dismissal with respect to PMT’s claim

for breach of the duty of good faith and fair dealing, and denied the motion for dismissal with respect to the other claims presented.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements,

In April 2019, PMT served the Company,

NeuroOne, Inc and Christianson with a proposed Second Amended Complaint, which included new claims against the Company and NeuroOne,

Inc for tortious interference with contract and tortious interference with prospective business advantage and punitive damages

against the Company, NeuroOne Inc.

Christianson fail because his agreement

was not supported by consideration;

the Minnesota Uniform Trade Secrets Act preempts plaintiff’s claims for unfair competition,

civil conspiracy and unjust enrichment;

plaintiff fails to state a claim regarding alleged breach of the duties of loyalty and

good faith/fair dealing;

plaintiff cannot legally obtain a constructive trust;

plaintiff has insufficiently pled its tortious

interference claims;

and Plaintiff has not stated a claim for unfair competition.

On January 7, 2019, the judge granted the motion

for dismissal with respect to PMT’s claim for breach of the duty of good faith and fair dealing, and denied the motion for

dismissal with respect to the other claims presented.

April 2019, PMT served the Company, NeuroOne, Inc and Christianson with a proposed Second Amended Complaint, which included new

claims against the Company and NeuroOne, Inc for tortious interference with contract and tortious interference with prospective

business advantage and punitive damages against the Company, NeuroOne Inc.

and Christianson.

On June 28, 2019, the Company presented evidence indicating that PMT had participated

in a fraud on the Court and sought an Order that PMT had waived the attorney client privilege.

On July 16, 2019, the defendants served

PMT with a joint notice of motion for sanctions seeking a variety of sanctions for litigation misconduct including, but not limited

to, dismissal of the case and an award of attorneys’

The Company, NeuroOne Inc and Mr.

Christianson further intend

to move for summary judgment on all remaining claims asserted against them as well as for leave to assert counterclaims against

PMT for abuse of process.

On August 30, 2019, the Hennepin

County District Court heard dispositive motions in this case.

The district court judge indicated some claims would likely be tried

to a jury and encouraged the parties to settle.

On September 12, 2019, the district court

heard NeuroOne’s motion for sanctions.

The district court held the sanctions hearing on December 17, 2019 and December 18,

2019 and indicated that a ruling would be made in approximately 90 days.

On April 29, 2020, the district court granted

the Company’s motion for sanctions.

Additionally, the district court granted the Company’s motion for summary judgment

in part with respect to the counts for Christianson’s breach of non-confidentiality agreement, and denied the Company’s

motion for summary judgment on all other counts.

On August 24, 2020, defendants moved the

Court to amend their counterclaims for abuse of process against PMT to add a claim for punitive damages.

On October 12, 2020 the

Court awarded NeuroOne $185,000 in Rule 11 sanctions and Fredrickson $145,000 in Rule 11 sanctions with respect to its misconduct

relating to the Fredrickson noncompete.

PMT and its former litigation counsel, Barnes &Thornburg, were jointly and severally

liable for these awards, which were paid on December 11, 2020 and have been recognized in other income in the condensed statement

of operations.

The Court granted NeuroOne’s motion to amend to permit its assertion of the right to assert a punitive damages

claim against PMT associated with the additional legal costs incurred by the Company in fighting the allegations relating to the

Fredrickson noncompete.

Trial has been set for December 2021, but

this may be delayed or impacted by the COVID-19 pandemic.

The Company intends to continue to defend itself vigorously and to continue

to aggressively prosecute its affirmative counterclaim against PMT.

The outcome of any claim against the Company by PMT was not

estimable as of the filing of this Form 10-Q.

Facility Lease

On October 7, 2019, the Company entered

into a non-cancellable lease agreement (the “Lease”) with Biynah Cleveland, LLC, BIP Cleveland, LLC, and Edenvale Investors

(together, the “Landlord”) pursuant to which the Company has agreed to lease office space located at 7599 Anagram Drive,

Eden Prairie, Minnesota (the “Premises”).

The Company took possession of the Premises on November 1, 2019, with the

term of the Lease ending 65 months after such date, unless terminated earlier (the “Term”).

The initial base rent for

the Premises is $6,410 per month for the first 17 months, increasing to $7,076 per month by the end of the Term.

In addition, as

long as the Company is not in default under the Lease, the Company shall be entitled to an abatement of its base rent for the first

In addition, the Company will pay its pro rata share of the Landlord’s annual operating expenses associated with

the premises, calculated as set forth in the Lease of which the Company is entitled to an abatement of these operating expense

for the first 3 months.

NeuroOne Medical Technologies Corporation

On June 28, 2019, the Company presented

evidence indicating that PMT had participated in a fraud on the Court and sought an Order that PMT had waived the attorney client

July 16, 2019, the defendants served PMT with a joint notice of motion for sanctions seeking a variety of sanctions for litigation

misconduct including, but not limited to, dismissal of the case and an award of attorneys’

The Company, NeuroOne Inc

Christianson further intend to move for summary judgment on all remaining claims asserted against them as well as for

leave to assert counterclaims against PMT for abuse of process.

August 30, 2019, the Hennepin County District Court heard dispositive motions in this case.

The district court judge indicated

some claims would likely be tried to a jury and encouraged the parties to settle.

September 12, 2019, the district court heard NeuroOne’s motion for sanctions.

The district court held the sanctions hearing

on December 17, 2019 and December 18, 2019 and indicated that a ruling would be made in approximately 90 days.

April 29, 2020, the district court granted the Company’s motion for sanctions.

Additionally, the district court granted

the Company’s motion for summary judgment in part with respect to the counts for Christianson’s breach of non-confidentiality

agreement, and denied the Company’s motion for summary judgment on all other counts.

August 24, 2020, defendants moved the Court to amend their counterclaims for abuse of process against PMT to add a claim for punitive

On October 12, 2020 the Court awarded NeuroOne $185,000 in Rule 11 sanctions and Fredrickson $145,000 in Rule 11 sanctions

with respect to its misconduct relating to the Fredrickson noncompete.

PMT and its former litigation counsel, Barnes &Thornburg,

were jointly and severally liable for these awards, which were paid on December 11, 2020 and have been recognized in other income

in the condensed statement of operations.

The Court granted NeuroOne’s motion to amend to permit its assertion of the right

to assert a punitive damages claim against PMT associated with the additional legal costs incurred by the Company in fighting

the allegations relating to the Fredrickson noncompete.

Trial has been set for December 2021, but this

may be delayed or impacted by the COVID-19 pandemic.

The Company intends to continue to defend itself vigorously and to continue to aggressively

prosecute its affirmative counterclaim against PMT.

The outcome of any claim against the Company by PMT was not estimable as of the issuance

of these financial statements.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Prior to the October 2019 Lease, the Company

entered into a non-cancellable facility lease for its operations and headquarters for an eleven-month term beginning on December

The monthly rent under that lease was $4,763.

During the three months ended December

31, 2020 and 2019, rent expense associated with the facility leases amounted to $29,461 and $22,004, respectively.

Supplemental cash flow information related

to the operating lease was as follows:

For the three months ended

October 7, 2019, the Company entered into a non-cancellable lease agreement (the “Lease”) with Biynah Cleveland, LLC,

BIP Cleveland, LLC, and Edenvale Investors (together, the “Landlord”) pursuant to which the Company has agreed to

lease office space located at 7599 Anagram Drive, Eden Prairie, Minnesota (the “Premises”).

The Company took possession

of the Premises on November 1, 2019, with the term of the Lease ending 65 months after such date, unless terminated earlier (the

“Term”).

The initial base rent for the Premises is $6,410 per month for the first 17 months, increasing to $7,076

per month by the end of the Term.

In addition, as long as the Company is not in default under the Lease, the Company shall be

entitled to an abatement of its base rent for the first 5 months.

In addition, the Company will pay its pro rata share of the

Landlord’s annual operating expenses associated with the premises, calculated as set forth in the Lease of which the Company

is entitled to an abatement of these operating expense for the first 3 months.

the three and six months ended March 31, 2021, rent expense associated with the facility leases amounted to $31,800 and $61,261,

respectively.

During the three and six months ended March 31, 2020, rent expense associated with the facility leases amounted

to $25,862 and $47,866, respectively.

cash flow information related to the operating lease was as follows:

six months ended

Cash paid for amounts included in the measurement of lease liability:

2 unchanged sentences

Operating leases

Supplemental balance sheet information

related to the operating lease was as follows:

balance sheet information related to the operating lease was as follows:

September 30,

3 unchanged sentences

Weighted average discount rate

Maturity of the lease liability was as

2021 (period from January 1, 2021 to September 30, 2021)

of the lease liability was as follows:

2021 (period from April 1, 2021 to September 30, 2021)

Total lease payments

2 unchanged sentences

Long-term portion

NeuroOne Medical Technologies Corporation

Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 5 –

Intangibles and Property

and Equipment

Intangible assets rollforward is as follows:

December 30, 2020, the Company entered into a non-cancellable lease agreement for short term office space in San Jose, California

(the “San Jose Lease”) for a three month initial term.

After March 31, 2021, the San Jose Lease is cancellable upon

a 30-day notice to the landlord.

The Company took possession of the office space on January 1, 2021.

The base rent under the San

Jose Lease is $504 per month.

Intangibles and Property and Equipment

assets rollforward is as follows:

Net Intangibles, September 30, 2020

Net Intangibles, December 31, 2020

Amortization expense was $5,579 for the

three months ended December 31, 2020 and 2019.

Property and Equipment

Property and equipment held for use by

category are presented in the following table:

Net Intangibles, March 31, 2021

expense was $5,579 and $11,158 for the three and six months ended March 31, 2021 and 2020, respectively.

and Equipment

and equipment held for use by category are presented in the following table:

September 30,

3 unchanged sentences

Property and equipment, net

Depreciation expense was $13,157 and $4,319

for the three months ended December 31, 2020 and 2019, respectively.

NOTE 6 - Accrued Expenses and Other

Accrued expenses consisted of the following

at December 31, 2020 and September 30, 2020:

expense was $13,715 and $26,872 for the three months and six months ended March 31, 2021, respectively, $5,488 and $9,807 during

the three and six months ended March 31, 2020, respectively.

Accrued Expenses and Other Liabilities

expenses consisted of the following at March 31, 2021 and September 30, 2020:

September 30,

3 unchanged sentences

Accrued issuance costs

The “other”

category is primarily

comprised of board fees.

Paycheck Protection Program

“other”

category is primarily comprised of board fees.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Protection Program

The CARES Act, signed into law in March 2020,

established the Paycheck Protection Program (“PPP”).

The PPP authorizes over $600 billion in forgivable loans

to small businesses.

Loan amounts are forgiven to the extent proceeds are used to cover documented payroll, mortgage interest,

rent, and utility costs over a 24-week measurement period following loan funding.

There can be no assurance that this PPP loan

will be forgiven.

The PPP authorizes over $600 billion in forgivable loans to small businesses.

Loan amounts may be forgiven to the extent proceeds are used to cover documented payroll, mortgage interest, rent, and utility costs over

a 24-week measurement period following loan funding.

As discussed in Note 1, there can be no assurance that this PPP loan will be forgiven.

Loans have a maturity of 2 years and an interest rate of 1%.

Prepayments may be made without penalty.

2020, the Company received loan funding of $83,333 under the PPP and was recorded as a long-term liability.

Interest in connection

with the PPP was nominal during the three months ended December 31, 2020.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements,

NOTE 7 –

In April 2020, the Company received

loan funding of $83,333 under the PPP and was recorded as a long-term liability.

Interest in connection with the PPP was nominal during

the three and six months ended March 31, 2021.

Zimmer Development Agreement

On July 20, 2020, the Company entered into

an exclusive development and distribution agreement (the “Development Agreement”) with Zimmer, Inc.

(“Zimmer”),

pursuant to which the Company granted Zimmer exclusive global rights to distribute NeuroOne’s strip and grid cortical electrodes

(the “Strip/Grid Products”) and electrode cable assembly products (the “Electrode Cable Assembly Products”).

Additionally, the Company granted Zimmer the exclusive right and license to distribute certain depth electrodes developed by the

Company (“SEEG Products”, and together with the Strip/Grid Products and Electrode Cable Assembly Products, the “Products”).

The parties have agreed to collaborate with respect to development activities under the Development Agreement through a joint development

committee composed of an equal number of representatives of Zimmer and the Company.

Under the terms of the Development Agreement,

the Company will be responsible for all costs and expenses related to developing the Products, and Zimmer will be responsible for

all costs and expenses related to the commercialization of the Products.

In addition to the Development Agreement, Zimmer and the

Company have entered into a Manufacturing and Supply Agreement (the “MS Agreement”) and a supplier quality agreement

(the “Quality Agreement”) with respect to the manufacturing and supply of the Products.

Except as otherwise provided in the Development

Agreement, the Company will be responsible for performing all development activities, including non-clinical and clinical studies

directed at obtaining regulatory approval of each Product.

Zimmer has agreed to use commercially reasonable efforts to promote,

market and sell each Product following the “Product Availability Date”

(as defined in the Development Agreement) for

such Product.

Pursuant to the Development Agreement, Zimmer made an upfront

initial exclusivity fee payment of $2.0 million (the “Initial Exclusivity Fee”) to the Company.

In addition, the Company

is to receive the following fee payments (the “Interim Fee Bonus”) upon reaching certain milestones:

Except where Zimmer

timely delivers a Design Modification Notice pursuant to Section 1.2, if one or more of the events set forth below occurs on or

before the deadline indicated for such event and the Product Availability Date (as defined in the Development Agreement) for the

SEEG Products occurs on or before June 30, 2021, then the Company shall receive the additional amount indicated for such event

as part of the SEEG Exclusivity Maintenance Fee:

Design freeze for the SEEG Products by November 30, 2020 - $500,000

Acceptance of all Deliverables for SEEG Products under the Development Plan (as defined in the Development Agreement) by April 30, 2021 - $500,000

Notwithstanding Scenario

1 above, if Zimmer timely delivers a Design Modification Notice to the Company pursuant to Section 1.2, and one or more of the

events set forth below occurs on or before the deadline indicated for such event and the Product Availability Date for the SEEG

Products occurs on or before June 30, 2021 as determined by Zimmer, then the Company shall receive the additional amount indicated

for such event as part of the SEEG Exclusivity Maintenance Fee:

Acceptance of all Deliverables for SEEG Products under the Development Plan other than the Modified Connector by April 30, 2021 - $500,000

Acceptance of all Deliverables for SEEG Products under the Development Plan, including the Modified Connector by September 30, 2021 - $500,000

For purposes of the Development Agreement,

each of the foregoing events shall have occurred only if the Company has demonstrated the achievement of the event to Zimmer’s

reasonable satisfaction.

Notwithstanding the foregoing, the events in Sections 6.1(c)(ii), (iii) and (iv) of the Development Agreement

shall not be deemed to be met if FDA Approval for the SEEG Products is not received prior to the applicable deadline.

NeuroOne Medical Technologies Corporation

On July 20, 2020, the Company entered into an exclusive

development and distribution agreement (the “Development Agreement”) with Zimmer, Inc.

(“Zimmer”), pursuant to

which the Company granted Zimmer exclusive global rights to distribute the Strip/Grid Products and electrode cable assembly products (the

“Electrode Cable Assembly Products”).

Additionally, the Company granted Zimmer the exclusive right and license to distribute

certain depth electrodes developed by the Company (“SEEG Products”, and together with the Strip/Grid Products and Electrode

Cable Assembly Products, the “Products”).

The parties have agreed to collaborate with respect to development activities under

the Development Agreement through a joint development committee composed of an equal number of representatives of Zimmer and the Company.

the terms of the Development Agreement, the Company will be responsible for all costs and expenses related to developing the Products,

and Zimmer will be responsible for all costs and expenses related to the commercialization of the Products.

In addition to the

Development Agreement, Zimmer and the Company have entered into a Manufacturing and Supply Agreement (the “MS Agreement”)

and a supplier quality agreement (the “Quality Agreement”) with respect to the manufacturing and supply of the Products.

as otherwise provided in the Development Agreement, the Company will be responsible for performing all development activities,

including non-clinical and clinical studies directed at obtaining regulatory approval of each Product.

Zimmer has agreed to use

commercially reasonable efforts to promote, market and sell each Product following the “Product Availability Date”

(as defined in the Development Agreement) for such Product.

to the Development Agreement, Zimmer made an upfront initial exclusivity fee payment of $2.0 million (the “Initial Exclusivity

Fee”) to the Company.

In addition, the Company is to receive the following fee payments (the “Interim Fee Bonus”)

upon reaching certain milestones:

Except where Zimmer timely delivers a Design Modification Notice pursuant to Section 1.2, if one or more of the events

set forth below occurs on or before the deadline indicated for such event and the Product Availability Date (as defined in the

Development Agreement) for the SEEG Products occurs on or before June 30, 2021, then the Company shall receive the additional

amount indicated for such event as part of the SEEG Exclusivity Maintenance Fee:

Design freeze for

the SEEG Products by November 30, 2020 - $500,000

Acceptance of all

Deliverables for SEEG Products under the Development Plan (as defined in the Development Agreement) by April 30, 2021 - $500,000

Notwithstanding Scenario 1 above, if Zimmer timely delivers a Design Modification Notice to the Company pursuant to Section

1.2, and one or more of the events set forth below occurs on or before the deadline indicated for such event and the Product Availability

Date for the SEEG Products occurs on or before June 30, 2021 as determined by Zimmer, then the Company shall receive the additional

amount indicated for such event as part of the SEEG Exclusivity Maintenance Fee:

Acceptance of all

Deliverables for SEEG Products under the Development Plan other than the Modified Connector by April 30, 2021 - $500,000

Acceptance of all

Deliverables for SEEG Products under the Development Plan, including the Modified Connector by September 30, 2021 - $500,000

Medical Technologies Corporation

Notes to Condensed Financial Statements

In addition to the Initial Exclusivity

Fee and Interim Fee Bonus, in order to maintain the exclusivity of the SEEG Distribution License, Zimmer must pay the SEEG Exclusivity

Maintenance Fee to the Company, on or prior to the SEEG Exclusivity Confirmation Date, in immediately available funds as follows:

if the Product Availability Date for the SEEG Products occurs on or before June 30, 2021, then $3,000,000, plus the amount of any Interim Fee Bonuses earned pursuant to Section 6.1(c), including any such Interim Fee Bonus earned after June 30, 2021 pursuant to Section 6.1(c)(iv) following the delivery of a Design Modification Notice;

if the Product Availability Date for the SEEG Products occurs after June 30, 2021, but on or before September 30, 2021, then $3,000,000, plus if Zimmer timely issues a Design A-9 Modification Notice, any Interim Fee Bonus earned pursuant to Section 6.1(c)(iv);

if the Product Availability Date for the SEEG Products occurs after September 30, 2021, but on or before December 31, 2021, then $2,500,000;

if the Product Availability Date for the SEEG Products occurs after December 31, 2021, then $1,500,000.

Notwithstanding any other provision of

the Development Agreement, if the Product Availability Date for the SEEG Products has not occurred on or before June 30, 2022,

Zimmer shall have the right to terminate the SEEG Distribution License by delivering written notice to the Company to that effect

and, upon delivery of such notice, Zimmer shall be relieved of all of its obligations hereunder with respect to SEEG Products,

purposes of the Development Agreement, each of the foregoing events shall have occurred only if the Company has demonstrated the

achievement of the event to Zimmer’s reasonable satisfaction.

Notwithstanding the foregoing, the events in Sections 6.1(c)(ii),

(iii) and (iv) of the Development Agreement shall not be deemed to be met if FDA Approval for the SEEG Products is not received

prior to the applicable deadline.

addition to the Initial Exclusivity Fee and Interim Fee Bonus, in order to maintain the exclusivity of the SEEG Distribution License,

Zimmer must pay the SEEG Exclusivity Maintenance Fee to the Company, on or prior to the SEEG Exclusivity Confirmation Date, in

immediately available funds as follows:

if the Product Availability

Date for the SEEG Products occurs on or before June 30, 2021, then $3,000,000, plus the amount of any Interim Fee Bonuses

earned pursuant to Section 6.1(c), including any such Interim Fee Bonus earned after June 30, 2021 pursuant to Section 6.1(c)(iv)

following the delivery of a Design Modification Notice;

if the Product Availability

Date for the SEEG Products occurs after June 30, 2021, but on or before September 30, 2021, then $3,000,000, plus if Zimmer

timely issues a Design A-9 Modification Notice, any Interim Fee Bonus earned pursuant to Section 6.1(c)(iv);

if the Product Availability

Date for the SEEG Products occurs after September 30, 2021, but on or before December 31, 2021, then $2,500,000;

if the Product Availability

Date for the SEEG Products occurs after December 31, 2021, then $1,500,000.

Notwithstanding

any other provision of the Development Agreement, if the Product Availability Date for the SEEG Products has not occurred on or before

June 30, 2022, Zimmer shall have the right to terminate the SEEG Distribution License by delivering written notice to the Company to

that effect and, upon delivery of such notice, Zimmer shall be relieved of all of its obligations hereunder with respect to SEEG Products,

including any obligation to pay the SEEG Exclusivity Maintenance Fee or to purchase, market, distribute or sell any SEEG Products.

The Initial Exclusivity Fee and the SEEG Exclusivity Maintenance Fee (including any Interim Fee Bonus(es) Fess), once paid, are

non-refundable.

The Development Agreement will expire on

the tenth anniversary of the date of the first commercial sale of the last of the Products to achieve a first commercial sale,

unless terminated earlier pursuant to its terms.

Either party may terminate the Development Agreement (x) with written notice for

the other party’s material breach following a cure period or (y) if the other party becomes subject to certain insolvency

In addition, Zimmer may terminate the Development Agreement for any reason with 90 days’

written notice, and

the Company may terminate the Development Agreement if Zimmer acquires or directly or indirectly owns a controlling interest in

certain competitors of the Company.

At inception of the Zimmer Development

Agreement through December 31, 2020, the Company had identified three performance obligations under the Zimmer Development Agreement

and consisted of the following:

Initial Exclusivity Fee and the SEEG Exclusivity Maintenance Fee (including any Interim Fee Bonus(es)), once paid, are non-refundable.

Development Agreement will expire on the tenth anniversary of the date of the first commercial sale of the last of the Products

to achieve a first commercial sale, unless terminated earlier pursuant to its terms.

Either party may terminate the Development

Agreement (x) with written notice for the other party’s material breach following a cure period or (y) if the other party

becomes subject to certain insolvency proceedings.

In addition, Zimmer may terminate the Development Agreement for any reason

with 90 days’

written notice, and the Company may terminate the Development Agreement if Zimmer acquires or directly or

indirectly owns a controlling interest in certain competitors of the Company.

At inception of the Zimmer Development Agreement through

March 31, 2021, the Company had identified three performance obligations under the Zimmer Development Agreement and consisted of the following:

(1) the Company obligation to grant Zimmer access to its intellectual property;

(2) complete SEEG

Product development;

and (3) complete Strip/Grid Product development.

Accordingly, the Company recognized revenue in the amount

of $22,274 related to the development of the Products completed during the period in connection with the Initial Exclusivity Fee

The Zimmer Development Agreement was accounted for under the provisions of ASC 606, Revenue from Contracts with Customers.

A reconciliation of the closing balance

of deferred revenue related to the Zimmer Development Agreement is as follows as of December 31, 2020:

(2) complete SEEG Product development;

and (3) complete

Strip/Grid Product development.

Accordingly, the Company recognized revenue in the amount of $20,113 and $42,387 for the three month and

six month periods ended March 31, 2021 related to the development of the Products completed during the period in connection with

the Initial Exclusivity Fee payment.

The Zimmer Development Agreement was accounted for under the provisions of ASC 606, Revenue from

Contracts with Customers.

reconciliation of the closing balance of deferred revenue related to the Zimmer Development Agreement is as follows as of March

Deferred Revenue

3 unchanged sentences

Balance as of end of period –

December 31, 2020

NeuroOne Medical Technologies Corporation

March 31, 2021

remaining performance obligations reflected in deferred revenue as of March 31, 2021 are expected to be completed in the latter

half of fiscal year 2021.

Medical Technologies Corporation

Notes to Condensed Financial Statements

The remaining performance obligations reflected

in deferred revenue as of December 31, 2020 are expected to be completed in the latter half of fiscal year 2021.

Product Revenue

In December 2020, the Company commenced

commercial sales of its Strip/Grid Products and Electrode Cable Assembly Products in connection with the Development Agreement.

Product revenue recognized during the three month period ended December 31, 2020 was $71,474.

Advertising Expense

Advertising expense is charged to selling, general and administrative

expenses during the period that it is incurred.

Total advertising expense amounted to $29,007 for the three month period ended

December 31, 2020.

In December 2020, the Company commenced commercial

sales of its Strip/Grid Products and Electrode Cable Assembly Products in connection with the Development Agreement.

Product revenue recognized

during the three and six month periods ended March 31, 2021 was $18,240 and $89,714, respectively.

Advertising expense is charged to selling, general

and administrative expenses during the period that it is incurred.

Total advertising expense amounted to $113,140 and $142,147 for the

three and six month periods ended March 31, 2021, respectively.

Advertising expense during the prior year period was negligible.

NOTE 8 - Convertible Promissory Notes

and Warrant Agreements

Convertible Promissory Notes and Warrant Agreements

September 30,

3 unchanged sentences

Paulson Convertible Note Offering

On November 1, 2019, the Company entered

into a subscription agreement with certain accredited investors, pursuant to which the Company, in a private placement (the “2019

Paulson Private Placement”), agreed to issue and sell to the investors 13% convertible promissory notes (each, a “2019

Paulson Note”

and collectively, the “2019 Paulson Notes”) and warrants (each, a “2019 Paulson Warrant”

and collectively, the “2019 Paulson Warrants”) to purchase shares of the Company’s common stock.

The initial closing of the 2019 Paulson

Private Placement was consummated on November 1, 2019, and, on that date and through December 3, 2019, the Company issued the 2019

Paulson Notes in an aggregate principal amount of $3,234,800 to the subscribers for gross proceeds equaling the principal amount.

November 1, 2019, the Company entered into a subscription agreement with certain accredited investors, pursuant to which the Company,

in a private placement (the “2019 Paulson Private Placement”), agreed to issue and sell to the investors 13% convertible

promissory notes (each, a “2019 Paulson Note”

and collectively, the “2019 Paulson Notes”) and warrants

(each, a “2019 Paulson Warrant”

and collectively, the “2019 Paulson Warrants”) to purchase shares of the

Company’s common stock.

initial closing of the 2019 Paulson Private Placement was consummated on November 1, 2019, and, on that date and through December

3, 2019, the Company issued the 2019 Paulson Notes in an aggregate principal amount of $3,234,800 to the subscribers for gross

proceeds equaling the principal amount.

The 2019 Paulson Private Placement terminated on December 3, 2019.

On April 24, 2020, the Company and holders

of a majority in aggregate principal amount of the 2019 Paulson Notes entered into an amendment to the 2019 Paulson Notes (the

“Second 2019 Paulson Notes Amendment”) to, among other things:

Extended the Maturity Date –

The Second 2019 Paulson Notes Amendment extended the maturity date of the 2019 Paulson Notes from May 1, 2020 to November 1, 2020 (in either case, unless a change of control transaction happens prior to such date);

Revised Optional Conversion Terms –

The Second 2019 Paulson Notes Amendment provided that the amount of shares to be received upon the a subscriber’s optional conversion of the 2019 Paulson Notes prior to a 2019 Qualified Financing (as defined in the 2019 Paulson Notes) would have equaled:

(1) the Outstanding Balance as defined below of such subscriber’s 2019 Paulson Note elected by the subscriber to be converted divided by (2) an amount equal to 0.6 multiplied by the volume weighted average price of the common stock for the ten (10) trading days immediately preceding the date of conversion;

NeuroOne Medical Technologies Corporation

April 24, 2020, the Company and holders of a majority in aggregate principal amount of the 2019 Paulson Notes entered into an

amendment to the 2019 Paulson Notes (the “Second 2019 Paulson Notes Amendment”) to, among other things:

Maturity Date –

The Second 2019 Paulson Notes Amendment extended the maturity date of the 2019 Paulson

Notes from May 1, 2020 to November 1, 2020 (in either case, unless a change of control transaction happens prior to such date);

Revised Optional

Conversion Terms –

The Second 2019 Paulson Notes Amendment provided that the amount of shares to be received

upon the a subscriber’s optional conversion of the 2019 Paulson Notes prior to a 2019 Qualified Financing (as defined

in the 2019 Paulson Notes) would have equaled:

(1) the Outstanding Balance as defined below of such subscriber’s 2019

Paulson Note elected by the subscriber to be converted divided by (2) an amount equal to 0.6 multiplied by the volume weighted

average price of the common stock for the ten (10) trading days immediately preceding the date of conversion;

Registration Date –

The Second 2019 Paulson Notes Amendment provided that promptly following the earlier of

(1) May 1, 2020, if the applicable subscriber converted all or a majority of the Outstanding Balance of such subscriber’s

2019 Paulson Note prior to such date;

(2) the final closing of a 2019 Qualified Financing;

and (3) the maturity date, the Company

will enter into a registration rights agreement with the applicable subscriber containing customary and usual terms pursuant

to which the Company shall agree to prepare and file with the SEC a registration statement on or prior to the 90th calendar

day following the registration date, covering the resale of any common stock received on conversion of such 2019 Paulson Notes,

and shares of common stock underlying the Warrants.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Revise the Registration Date –

The Second 2019 Paulson Notes Amendment provided that promptly following the earlier of (1) May 1, 2020, if the applicable subscriber converted all or a majority of the Outstanding Balance of such subscriber’s 2019 Paulson Note prior to such date;

(2) the final closing a 2019 Qualified Financing;

and (3) the maturity date, the Company will enter into a registration rights agreement with the applicable subscriber containing customary and usual terms pursuant to which the Company shall agree to prepare and file with the SEC a registration statement on or prior to the 90th calendar day following the registration date, covering the resale of any common stock received on conversion of such 2019 Paulson Notes, and shares of common stock underlying the Warrants.

The 2019 Paulson Notes had a fixed interest

rate of 13% per annum and required the Company to repay the principal and accrued and unpaid interest thereon on November 1, 2020

(the “Maturity Date”).

Interest on principal amounted to $5,701 and $53,875 during the three month period ended December

31, 2020 and 2019, respectively, and was recorded under the net valuation change of instruments measured at fair value in the condensed

statements of operations.

The subscriber, prior to the Second 2019 Paulson Notes Amendment, had the option to convert the outstanding

principal and accrued and unpaid interest of such subscriber’s 2019 Paulson Note (the “Outstanding Balance”)

into common stock in an amount equal to the Outstanding Balance divided by the ten day volume weighted average closing price of

the common stock prior to conversion.

In addition, both before and after the Second 2019 Paulson Note Amendment, if the Company

raised more than $3,000,000 in an equity financing (the “Qualified Financing”) before the Maturity Date, each subscriber

had the option to convert the Outstanding Balance into the securities issued by the Company in such Qualified Financing in an amount

equal to (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of securities

issued by the Company in the Qualified Financing or (B) the ten day volume weighted average closing price of the common stock prior

to the first closing of a Qualified Financing.

2019 Paulson Notes had a fixed interest rate of 13% per annum and required the Company to repay the principal and accrued and

unpaid interest thereon on November 1, 2020 (the “Maturity Date”).

Interest on principal amounted to $5,701 during

the six month period ended March 31, 2021, and $100,269 and $154,144 during the three and six month periods ended March 31, 2020,

respectively, and was recorded under the net valuation change of instruments measured at fair value in the condensed statements

of operations.

The subscriber, prior to the Second 2019 Paulson Notes Amendment, had the option to convert the outstanding principal

and accrued and unpaid interest of such subscriber’s 2019 Paulson Note (the “Outstanding Balance”) into common

stock in an amount equal to the Outstanding Balance divided by the ten day volume weighted average closing price of the common

stock prior to conversion.

In addition, both before and after the Second 2019 Paulson Note Amendment, if the Company raised more

than $3,000,000 in an equity financing (the “Qualified Financing”) before the Maturity Date, each subscriber had the

option to convert the Outstanding Balance into the securities issued by the Company in such Qualified Financing in an amount equal

to (i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of securities issued

by the Company in the Qualified Financing or (B) the ten day volume weighted average closing price of the common stock prior to

the first closing of a Qualified Financing.

If a change of control transaction had occurred prior to a Qualified Financing or

2 unchanged sentences

50% of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the Company’s

The Company elected to account for the

2019 Paulson Notes on a fair value basis under ASC 825 to comprehensively value and streamline

Company elected to account for the 2019 Paulson Notes on a fair value basis under ASC 825 to comprehensively value and streamline

the accounting for the embedded conversion options.

The fair value of the 2019 Paulson Notes was significantly higher than

the proceeds received as of each of the respective issuance dates given the significant redemption discount associated with the

Qualified Financing provision.

The excess of fair value over proceeds at issuance amounted to $1,831,940 and was recorded to interest

expense in the condensed statements of operations during the three months ended December 31, 2019.

Subsequent to issuance, the

fair value change of the Paulson Notes amounted to a benefit of $(1,974) and an expense of $125,574 during the three months ended

December 31, 2020 and 2019, respectively, and was recorded under the net valuation change of instruments measured at fair value

in the condensed statements of operations.

Each 2019 Paulson Warrant grants the holder

the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied by (ii) the principal amount of such subscriber’s

2019 Paulson Notes divided by 1.87, with an exercise price per share equal to $1.87.

As of the final closing on December 3, 2019,

the Company issued 2019 Paulson Warrants exercisable for 864,913 shares of common stock in connection with all closings of the

2019 Paulson Private Placement.

The 2019 Paulson Warrants are immediately exercisable and expire on November 1, 2022.

price is subject to adjustment in the event of any stock dividends or splits, reverse stock split, recapitalization, reorganization

or similar transaction, as described therein.

The 2019 Paulson warrants were deemed to be a free-standing instrument and were accounted

for as equity.

Given that the fair value of the 2019 Paulson Notes exceeded the proceeds received at issuance, there was no value

attributed to the 2019 Paulson Warrants in the condensed financial statements.

NeuroOne Medical Technologies Corporation

The fair value of the 2019 Paulson Notes was significantly higher than the

proceeds received as of each of the respective issuance dates given the significant redemption discount associated with the Qualified

Financing provision.

The excess of fair value over proceeds at issuance amounted to $1,831,940 and was recorded to interest expense

in the condensed statements of operations during the six months ended March 31, 2020.

Subsequent to issuance, the fair value change

of the Paulson Notes amounted to a benefit of $(1,974) during the six months ended March 31, 2021, and amounted to a benefit of

$(31,716) and an expense of $93,858 during the three and six month periods ended March 31, 2020, respectively, and was recorded

under the net valuation change of instruments measured at fair value in the condensed statements of operations.

2019 Paulson Warrant granted the holder the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied

by (ii) the principal amount of such subscriber’s 2019 Paulson Notes divided by 5.61, with an exercise price per share equal

As of the final closing on December 3, 2019, the Company issued 2019 Paulson Warrants exercisable for 288,305 shares

of common stock in connection with all closings of the 2019 Paulson Private Placement.

The 2019 Paulson Warrants are immediately

exercisable and expire on November 1, 2022.

The exercise price is subject to adjustment in the event of any stock dividends or

splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein.

The 2019 Paulson warrants

were deemed to be a free-standing instrument and were accounted for as equity.

Given that the fair value of the 2019 Paulson Notes

exceeded the proceeds received at issuance, there was no value attributed to the 2019 Paulson Warrants in the condensed financial

Issuance costs during the six month period ended

March 31, 2021 in connection with the 2019 Paulson Private Placement were $3,053 and related to legal costs.

Issuance costs incurred during

the six months ended March 31, 2020 were $865,567.

During the first quarter of 2020, Paulson Investment Company (“Paulson”)

received a cash commission equal to 12% of the gross proceeds from the sale of the 2019 Paulson Notes which amounted to $388,176, and

10-year warrants to purchase an amount of common stock equal to 86,492 shares of common stock at an exercise price equal to $5.61 per

share (the “Broker Warrants”) at a fair value $419,635.

Lastly, issuance costs during the first quarter of fiscal year 2020

included legal and third party fees in the amount of $57,756.

The issuance costs during both periods were recorded as a component of interest

in the accompanying statements of operations.

the first quarter of fiscal year 2021, the remaining holders of the 2019 Paulson Notes elected to convert the remaining outstanding

principal and accrued and unpaid interest in the amount of $615,159 into 292,754 shares of common stock.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Issuance costs during the three month period

ended December 31, 2020 in connection with the 2019 Paulson Private Placement were $3,053 and related to legal costs.

costs incurred during the three months ended December 31, 2019 were $865,567.

During the first quarter of 2020, Paulson Investment

Company (“Paulson”) received a cash commission equal to 12% of the gross proceeds from the sale of the 2019 Paulson

Notes which amounted to $388,176, and 10-year warrants to purchase an amount of Common Stock equal to 259,476 shares of common

stock at an exercise price equal to $1.87 per share (the “Broker Warrants”) at a fair value $419,635.

Lastly, issuance

costs during the first quarter of fiscal year 2020 included legal and third party fees in the amount of $57,756.

The issuance costs

during both periods were recorded as a component of interest in the accompanying statements of operations.

During the first quarter of fiscal year

2021, the remaining holders of the 2019 Paulson Notes elected to convert the remaining outstanding principal and accrued and unpaid

interest in the amount of $615,159 into 878,253 shares of common stock.

NOTE 9 –

Stock-Based Compensation

During the three month periods ended December

31, 2020 and 2019, stock-based expense related to stock-based awards amounted to $245,829 and $587,677, respectively, and was included

the three and six month periods ended March 31, 2021 and 2020, stock-based expense related to stock-based awards was included

in general and administrative and research and development costs as follows in the accompanying condensed statements of operations.

Three Months Ended

Six Months Ended

General and administrative

Research and development

Total stock-based compensation expense

Stock Options

During the three month period ended December

31, 2020 and 2019, under the 2017 Equity Incentive Plan (the “2017 Plan”), the Company granted 125,000 and 800,000

stock options, respectively, to its employees, consultants and scientific advisory board members.

Vesting generally occurs over

an immediate to 48 month period based on a time of service condition although vesting acceleration is provided under one grant

in the event that certain milestones are met.

The grant date fair value of the grants issued during the three month periods ended

December 31, 2020 and 2019 was $0.53 and $1.06 per share, respectively.

The total expense for the three months ended December 31,

2020 and 2019 related to stock options was $100,147 and $438,083, respectively.

The total number of stock options outstanding as

of December 31, 2020 and September 30, 2020 was 1,603,485 and 1,478,485, respectively.

The weighted-average assumptions used in

the Black-Scholes option-pricing model are as follows for the stock options granted during the three month period ended December

31, 2020 and 2019:

Total share-based compensation

During the three month periods ended March

31, 2021 and 2020, under the 2017 Equity Incentive Plan (the “2017 Plan”), the Company granted 580,002 and 6,667 stock

options, respectively, to its employees, consultants and scientific advisory board members.

During the six month periods ended March

31, 2021 and 2020, the Company granted 621,671 and 273,336, respectively, to its employees, consultants and scientific advisory

board members.

Vesting generally occurs over an immediate to 48 month period based on a time of service condition although vesting

acceleration is provided under one grant in the event that certain milestones are met.

The grant date fair value of the grants

issued during the three month periods ended March 31, 2021 and 2020 was $3.02 and $3.45 per share, respectively.

The grant date fair

value of the grants issued during the six month periods ended March 31, 2021 and 2020 was $2.92 and $3.18 per share,

respectively.

total expense for the three months ended March 31, 2021 and 2020 related to stock options was $217,466 and $88,806, respectively.

The total expense for the six months ended March 31, 2021 and 2020 related to stock options was $317,612 and $526,888, respectively.

The total number of stock options outstanding as of March 31, 2021 and September 30, 2020 was 1,103,609 and 492,842, respectively.

weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during

the three and six month period ended March 31, 2021 and 2020:

Three Months Ended

Six Months Ended

Expected stock price volatility

2 unchanged sentences

Risk free interest rate

During the three month periods ended December

31, 2020 and 2019, 215,326 and 375,830 stock options vested, and zero and 7,497 stock options were forfeited during these periods,

respectively.

Restricted Stock Units

There were no restricted stock units (“RSUs”)

granted during the three months ended December 31, 2020 and 2019, and 25,144 and 10,503 RSUs vested during these periods, respectively.

The total expense for the three months ended December 31, 2020 and 2019 related to these RSUs was $43,082 and $25,001, respectively.

The number of RSUs forfeited during the three month periods ended December 31, 2020 and 2019 was zero and 7,003, respectively.

NeuroOne Medical Technologies Corporation

the three month periods ended March 31, 2021 and 2020, 34,752 and 15,622 stock options vested, respectively and 10,146 and 86,771

stock options were forfeited during these periods, respectively.

During the six month periods ended March 31, 2021 and 2020, 106,527

and 140,898 stock options vested, respectively and 10,146 and 89,270 stock options were forfeited during these periods, respectively.

the three and six months ended March 31, 2020, 55,952 restricted stock units (“RSUs”) were granted.

No RSUs were granted

during the three and six month period ended March 31, 2021.

During the three months ended March 31, 2021 and 2020, 7,992 and 40,925

RSUs vested, respectively, and no RSUs were forfeited during these periods.

During the six months ended March 31, 2021 and 2020,

16,376 and 44,427 RSUs vested, respectively, and zero and 2,335 RSUs were forfeited during these periods.

The total expense for

the three months ended March 31, 2021 and 2020 related to these RSUs was $40,493 and $289,394, respectively.

The total expense

for the six months ended March 31, 2021 and 2020 related to these RSUs was $83,576 and $314,395, respectively.

Medical Technologies Corporation

Notes to Condensed Financial Statements

Other Stock-Based Awards

In August 2020, an additional consulting

agreement was executed whereby 120,000 shares of common stock were issued, subject to Company repurchase.

The stock award under

the agreement vests over a six-month period.

As of December 31, 2020, 80,000 shares were vested under this agreement of which 60,000

shares vested during the first quarter of fiscal year 2021.

Compensation expense related to the stock awards granted under this

consulting agreement amounted to $102,600 for the three month ended December 31, 2020 and was included in the total stock-based

In October 2019, two consulting agreements

were executed whereby up to 115,000 shares of common stock were issuable of which 90,000 shares of common stock were issued and

60,000 shares were vested as of December 31, 2019 under these agreements.

Vesting was based on a time-based vesting condition ranged

Stock-Based Awards

August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company

The stock award under the agreement vests over a six-month period.

As of March 31, 2020, 40,000 shares were vested

under this agreement of which 13,334 and 33,334 shares vested during the three and six months ended March 31, 2021, respectively.

Compensation expense related to the stock award granted under this consulting agreement amounted to $68,400 and $171,000 for the

three and six months ended March 31, 2021, respectively, and was included in the total stock-based expense.

October 2019, two consulting agreements were executed whereby up to 38,334 shares of common stock were issuable of which 30,000

shares of common stock were issued and vested as of March 31, 2020 under these agreements.

In addition, an additional consulting

agreement was executed in February 2020 whereby up to 30,000 shares of common stock were issuable of which 12,000 shares of common

stock were issued and vested as of March 31, 2020.

Vesting for these awards was based on a time-based vesting condition that ranged

over a three to nine month period commencing upon the execution of the consulting agreements.

Compensation expense related to the

stock awards granted under these consulting agreements amounted to $124,593 and was included in the total stock-based expense referenced

above for the three month period ended December 31, 2019.

The expense was based on the fair value of the underlying common stock

at the point of vesting which ranged from $2.00 to $2.65 per share.

As of December 31, 2020, 1,714,400 shares

were available for future issuance on a combined basis under the 2016 Equity Incentive Plan and 2017 Plan.

Unrecognized stock-based

compensation was $666,127 as of December 31, 2020.

The unrecognized share-based expense is expected to be recognized over a weighted

average period of 1.9 years.

NOTE 10 –

Concentrations

Financial instruments that potentially

subject the Company to a concentration of credit risk consist of cash.

The Company’s cash is held by one financial institution

in the United States.

Amounts on deposit may at times exceed federally insured limits.

The Company has not experienced any losses

on its deposits since inception, and management believes that minimal credit risk exists with respect to these financial institutions.

As of December 31, 2020, the Company had $6,889,912 of deposits in excess of federally insured amounts.

One customer accounts for all of the Company’s product

and collaborations revenue.

Supplier concentration

One contract manufacturer produces all of the Company’s

Strip/Grid Products.

NOTE 11 –

The effective tax rate for the three months

ended December 31, 2020 and 2019 was zero percent.

As a result of the analysis of all available evidence as of December 31,

2020 and September 30, 2020, the Company recorded a full valuation allowance on its net deferred tax assets.

Consequently,

the Company reported no income tax benefit during the three months ended December 31, 2020 and 2019.

Company’s assumptions change and the Company believes that it will be able to realize these deferred tax assets, the tax

benefits relating to any reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of future

income tax expense.

If the assumptions do not change, each period the Company could record an additional valuation allowance

on any increases in the deferred tax assets.

Medical Technologies Corporation

to Condensed Financial Statements, continued

Stockholders’

Private Placement

January 12, 2021, the Company entered into a common stock and warrant purchase agreement with certain accredited investors pursuant

to which the Company, in a private placement (the “2021 Private Placement”), agreed to issue and sell an aggregate

of 12,500,000 shares of the common stock and warrants to purchase an aggregate of 12,500,000 shares of common stock resulting

in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering expenses.

See Note 13 –

Subsequent Events.

Common Stock Offering

October 23, 2019, the Company entered into Securities Purchase Agreements with certain accredited investors, pursuant to which

the Company, in a private placement, has issued and sold 141,666 shares of the Company’s common stock to the accredited

investors at a price of $1.80 per share, for gross proceeds amounting to $255,000.

The Company filed a registration statement

with the SEC covering the resale of the shares of common stock sold in the private placement on August 11, 2020.

Activity and Summary

following table summarizes warrant activity during the three month period ended December 31, 2020:

Exercise Price

Outstanding and exercisable at September 30, 2020

$ 1.80 - 3.00

Outstanding and exercisable at December 31, 2020

$ 1.80 - 3.00

Subsequent Events

Compensation expense related to

the stock awards granted under these consulting agreements amounted to $153,581 and $278,175 during the three and six months ended

March 31, 2020, respectively, and was included in the total stock-based expense.

The expense was based on the fair value of the

underlying common stock at the point of vesting which ranged from $6.00 to $7.95 per share.

Plan Evergreen Provision

12 unchanged sentences

were added to the 2017 Plan as a result of the evergreen provision.

NeuroOne Medical Technologies Corporation

of March 31, 2021, 486,214 shares were available for future issuance on a combined basis under the 2016 Equity Incentive Plan

and 2017 Plan.

Unrecognized stock-based compensation was $2,049,822 as of March 31, 2021.

The unrecognized share-based expense

is expected to be recognized over a weighted average period of 0.7 years.

Concentrations

Financial instruments that potentially subject

the Company to a concentration of credit risk consist of cash.

The Company’s cash is held by one financial institution in the United

Amounts on deposit may at times exceed federally insured limits.

The Company has not experienced any losses on its deposits since

inception, and management believes that minimal credit risk exists with respect to these financial institutions.

As of March 31, 2021,

the Company had $11,024,185 of deposits in excess of federally insured amounts.

customer accounts for all of the Company’s product and collaborations revenue.

concentration

contract manufacturer produces all of the Company’s Strip/Grid Products.

Medical Technologies Corporation

Notes to Condensed Financial Statements

effective tax rate for the three and six months ended March 31, 2021 and 2020 was zero percent.

As a result of the analysis of

all available evidence as of March 31, 2021 and September 30, 2020, the Company recorded a full valuation allowance

on its net deferred tax assets.

Consequently, the Company reported no income tax benefit during the three and six

months ended March 31, 2021 and 2020.

If the Company’s assumptions change and the Company believes that it will be

able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax

assets will be recognized as a reduction of future income tax expense.

If the assumptions do not change, each period

the Company could record an additional valuation allowance on any increases in the deferred tax assets.

Stockholders’

Private Placement

January 12, 2021, the Company entered into a Common Stock and Warrant Purchase Agreement (the “2021 Purchase Agreement”)

with certain accredited investors (the “Purchasers”), pursuant to which the Company, in the 2021 Private Placement,

agreed to issue and sell an aggregate of 12,500,000 shares (the “Shares”) of the common stock of the Company, par

value $0.001 per share (the “Common Stock”), and warrants to purchase an aggregate of 12,500,000 shares of Common

Stock (the “2021 Warrants”) at an aggregate purchase price of $1.00 per share of Common Stock and corresponding warrant,

resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering expenses.

2021 Warrants have an initial exercise price of $1.75 per share.

The 2021 Warrants are exercisable beginning on the date of issuance

and will expire on the fifth anniversary of such date.

Prior to expiration, subject to the terms and conditions set forth in the

2021 Warrants, the holders of such 2021 Warrants may exercise the 2021 Warrants for Warrant Shares by providing notice to the

Company and paying the exercise price per share for each share so exercised or by utilizing the “cashless exercise”

feature contained in each 2021 Warrant.

The 2021 Private Placement closed on January 14, 2021.The Company received $5,000,000

of the 2021 Private Placement proceeds on December 31, 2020.

January 1, 2021, the Company granted 180,000 stock options to an executive officer at an exercise price of $1.57 per share under

the 2017 Plan.

The stock options vest over a four year period.

January 27, 2021, the Company granted 1,560,000 stock options to four employees, including three executive officers at an exercise

price of $1.99 per share under the 2017 Plan.

All of the stock options vest over a four year period, except that 250,000 stock

options granted to our Chief Executive Officer vest upon certain performance objectives.

Medical Technologies Corporation

On January 12, 2021, the Company entered into

a Common Stock and Warrant Purchase Agreement with certain accredited investors, pursuant to which the Company, in the 2021 Private Placement,

agreed to issue and sell an aggregate of 4,166,682 shares of the common stock of the Company and warrants to purchase an aggregate of

4,166,682 shares of common stock (the “2021 Warrants”) at an aggregate purchase price of $3.00 per share of common stock and

corresponding warrant, resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering

The 2021 Warrants have an initial exercise price of $5.25 per share.

The 2021 Warrants are immediately exercisable and will

expire on the fifth anniversary of issuance.

Prior to expiration, subject to the terms and conditions set forth in the 2021 Warrants,

the holders of such 2021 Warrants may exercise the 2021 Warrants for shares of common stock by providing notice to the Company and paying

the exercise price per share for each share so exercised or by utilizing the “cashless exercise”

feature contained in each

2021 Warrant.

The fair value of the 2021 Warrants was $7.3 million and was based on the Black-Scholes pricing model.

Input assumptions

used were as follows:

a risk-free interest rate of 0.5%;

expected volatility of 56.0%;

expected life of 5 years;

expected dividend yield

and the underlying traded stock price.

$3.7 million of the total proceeds was allocated to the 2021 Warrants based on the

relative fair value allocation method, which has been reflected in stockholders’

The 2021 Warrants were classified in stockholders’

equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment.

The private placement

closed on January 14, 2021.

Common Stock Offering

On October 23, 2019, the Company entered into

Securities Purchase Agreements with certain accredited investors, pursuant to which the Company, in a private placement, has issued and

sold 47,223 shares of the Company’s common stock to the accredited investors at a price of $5.40 per share, for gross proceeds amounting

The Company filed a registration statement with the SEC covering the resale of the shares of common stock sold in the private

placement on August 11, 2020.

Activity and Summary

following table summarizes warrant activity during the six month period ended March 31, 2021:

Outstanding and exercisable at September 30, 2020

$ 5.40 - 9.00

Outstanding and exercisable at March 31, 2021

NeuroOne Medical Technologies

Management’s Discussion and Analysis of Financial Condition and Results of Operations

32 unchanged sentences

in our Annual Report on Form 10-K for the year ended

September 30, 2020 and subsequent reports filed with or furnished to the Securities and Exchange Commission (the “SEC”).

Moreover, we operate in a very competitive and rapidly changing environment.

September 30, 2020 and our Quarterly Report on Form 10-Q for the quarter ended December 31, 2020, and subsequent reports filed

with or furnished to the Securities and Exchange Commission (the “SEC”).

Moreover, we operate in a very competitive

and rapidly changing environment.

New risks emerge from time to time.

It is not possible

for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any

factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements

Given these uncertainties, you should not place undue reliance on these forward-looking statements.

It is not possible for our management to predict all risks,

nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may

cause actual results to differ materially from those contained in any forward-looking statements we may make.

Given these uncertainties,

you should not place undue reliance on these forward-looking statements.

forward-looking statement made by us in this Report speaks only as of the date hereof or as of the date specified herein.

4 unchanged sentences

and conducting research and development activities.

Our Evo cortical technology (“cEEG”

) has received 510(k) clearance

Our Evo cortical technology (“cEEG”) has received 510(k) clearance

from the FDA for recording, monitoring, and stimulating brain tissue for up to 30 days for which we have begun to generate revenue

in the first quarter of fiscal 2021 from the sale of products based on our Evo cortical technology.

Our other products are still

under development.

have incurred losses since inception.

As of December 31, 2020, we had an accumulated deficit of $32.8 million, primarily as a

result of expenses incurred in connection with our research and development, selling, general and administrative expenses associated

with our operations and interest expense, fair value adjustments and loss on extinguishments related to our debt, offset in part

by collaborations and product revenues.

We expect to continue to incur significant expenses and increasing operating and net losses

for the foreseeable future until and unless we generate a higher level of revenue from commercial sales.

beginning in the first quarter of fiscal 2021 from the sale of products based on our Evo cortical technology.

Our other products

are still under development.

We have incurred losses since inception.

March 31, 2021, we had an accumulated deficit of $35.2 million, primarily as a result of expenses incurred in connection with our research

and development, selling, general and administrative expenses associated with our operations and interest expense, fair value adjustments

and loss on extinguishments related to our debt, offset in part by collaborations and product revenues.

We expect to continue to incur

significant expenses and increasing operating and net losses for the foreseeable future until and unless we generate a higher level of

revenue from commercial sales.

main source of cash to date, outside of collaborations and product revenues, has been proceeds from the issuances of notes, common

1 unchanged sentence

See “—Liquidity and Capital Resources—Historical Capital Resources”

Medical Technologies Corporation

At December 31, 2020, we had $7.1 million

in cash deposits.

Our existing cash and cash equivalents coupled with the remaining net proceeds of $6.3 million received from

the 2021 Private Placement in January 2021, discussed further below, should be sufficient to fund our operating expenses through

at least twelve months from the date of this filing.

We will, however, need to obtain substantial additional funding in connection

with our continuing operations through public or private equity or debt financings or other sources such as additional product

revenue and milestone payments from our current collaboration with Zimmer.

However, we may be unable to raise additional funds

when needed on favorable terms or at all.

Our failure to raise such capital as and when needed would have a negative impact on

our financial condition and our ability to develop and commercialize our cortical strip, grid electrode and depth electrode technology

and future products and our ability to pursue our business strategy.

See “—Liquidity and Capital Resources—Funding

Requirements and Outlook”

Development Agreement

December 2020, we completed our first commercial sale of our strip and grid cortical electrodes (the “Strip/Grid Products”)

and electrode cable assembly products (the “Electrode Cable Assembly Products”) under the exclusive development and

distribution agreement (the “Development Agreement”) that we entered into on July 20, 2020 with Zimmer, Inc.

(“Zimmer”).

Under the Development Agreement, we granted Zimmer exclusive global rights to distribute NeuroOne’s Strip/Grid Products

and Electrode Cable Assembly Products.

Additionally, we granted Zimmer the exclusive right and license to distribute certain depth

electrodes developed by the Company (“SEEG Products”, and together with the Strip/Grid Products and Electrode Cable

Assembly Products, the “Products”).

The parties have agreed to collaborate with respect to development activities

under the Development Agreement through a joint development committee composed of an equal number of representatives of Zimmer

and the Company.

March 31, 2021, we had $11.3 million in cash deposits.

Our existing cash and cash equivalents should be sufficient to fund our

operating expenses through at least twelve months from the date of this filing.

We will, however, need to obtain substantial additional

funding in connection with our continuing operations through public or private equity or debt financings or other sources such

as additional product revenue and milestone payments from our current collaboration with Zimmer.

However, we may be unable to

raise additional funds when needed on favorable terms or at all.

Our failure to raise such capital as and when needed would have

a negative impact on our financial condition and our ability to develop and commercialize our cortical strip, grid electrode and

depth electrode technology and future products and our ability to pursue our business strategy.

See “—Liquidity and

Capital Resources—Funding Requirements and Outlook”

NeuroOne Medical Technologies Corporation

after the close of business on March 31, 2021, the Company completed a 1-for-3 reverse stock split of its common stock.

and per share amounts in this Quarterly Report have been reflected on a post-split basis.

Private Placement

On January 12, 2021, we entered into a Common

Stock and Warrant Purchase Agreement (the “2021 Purchase Agreement”) with certain accredited investors (the “Purchasers”),

pursuant to which the Company, in a private placement (the “2021 Private Placement”), agreed to issue and sell an aggregate

of 4,166,682 shares (the “Shares”) of the common stock of the Company, and warrants to purchase an aggregate of 4,166,682

shares of common stock (the “2021 Warrants”) at an aggregate purchase price of $3.00 per share of common stock and corresponding

warrant, resulting in total gross proceeds of $12.5 million before deducting placement agent fees and offering expenses.

The 2021 Warrants

have an initial exercise price of $5.25 per share.

See “—

Liquidity and Capital Resources —

Historical Capital

Resources ”

section below for additional information with regard to the 2021 Private Placement.

March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread

19 unchanged sentences

time, if the pandemic continues, it may have a material adverse effect on the Company’s results of future operations, financial

position, and liquidity in fiscal year 2021.

Medical Technologies Corporation

product revenue during the first quarter of fiscal year 2021 was derived from the sale of strip/grid and electrode cable assembly

position, and liquidity in for the remainder of fiscal year 2021 and beyond.

product revenue during the six months ended March 31, 2021 was derived from the sale of strip/grid and electrode cable assembly

products based on Evo cortical technology.

7 unchanged sentences

from product sales sufficient to sustain operations.

NeuroOne Medical Technologies Corporation

Gross Profit (Loss)

6 unchanged sentences

Collaborations

Collaborations revenue was derived from

the upfront initial exclusivity fee payment under the Zimmer Development Agreement.

We anticipate that we may earn additional revenues

stemming from additional milestone and royalty payments from Zimmer, however, the hitting of milestones or level of sales required

to earn royalty payments is uncertain.

Collaborations

revenue was derived from the upfront initial exclusivity fee payment under the Zimmer Development Agreement.

We anticipate that

we may earn additional revenues stemming from additional milestone and royalty payments from Zimmer, however, the hitting of milestones

or level of sales required to earn royalty payments is uncertain.

General and Administrative

27 unchanged sentences

valuation change of instruments measured at fair value

Medical Technologies Corporation

net valuation change of instruments measured at fair value include the change in fair value of the 2019 Paulson Notes.

of proceeds outside of normal operating activity relating to legal settlements.

NeuroOne Medical Technologies Corporation

of Operations

of the Three Months Ended December 31, 2020 and 2019

following table sets forth the results of operations for the three-months ended December 31, 2020 and 2019, respectively.

For the three months ended

of the Three Months Ended March 31, 2021 and 2020

following table sets forth the results of operations for the three-months ended March 31, 2021 and 2020, respectively.

three months ended

Product revenue

7 unchanged sentences

Loss from operations

Interest expense

Net valuation change of instruments measured at fair

Net valuation change of instruments measured at fair value

Loss before income taxes

2 unchanged sentences

$ (1,345,642 )

$ (1,048,274 )

Revenue and Product Gross Profit (Loss)

Project revenue and product gross profit

(loss) was $0.1 million and ($38,000), respectively, during the three months ended December 31, 2020.

The product revenue during

the first quarter related to the sale of our Strip/Grid Products and Electrode Cable Assembly Products.

Cost of product revenue

consisted of the manufacturing and materials costs incurred by our third-party contract manufacturer in connection with our Strip/Grid

Products and outside supplier materials costs in connection with the Electrode Cable Assembly Products.

In addition, cost of product

revenue included royalty fees incurred, including the initial minimum royalty fee to WARF of $50,000 for calendar year 2020, in

Product revenue and product gross profit (loss)

was $18,000 and $(21,000), respectively, during the three months ended March 31, 2021.

The product revenue during the second quarter related

to the sale of our Strip/Grid Products and Electrode Cable Assembly Products.

Cost of product revenue consisted of the manufacturing and

materials costs incurred by our third-party contract manufacturer in connection with our Strip/Grid Products and outside supplier materials

costs in connection with the Electrode Cable Assembly Products.

In addition, cost of product revenue included royalty fees incurred in

connection with our license agreements.

There was no product revenue or product gross profit (loss) recognized during the comparable

prior year period.

Medical Technologies Corporation

There was no product revenue or product gross profit (loss) recognized during the comparable prior

Collaborations

Collaborations revenue was $22,000 for

the three months ended December 31, 2020.

Revenue during the period was derived from the Zimmer Development Agreement and represented

the portion of the upfront initial development fee payment eligible for revenue recognition during the first quarter of fiscal

The amount of revenue recognized related to the upfront fee was based on development completed in connection with SEEG

products, and to a lesser extent, the Strip/Grid Products.

There was no collaborations revenue recognized during the comparable

Collaborations revenue was $20,000 for the three

months ended March 31, 2021.

Revenue during the period was derived from the Zimmer Development Agreement and represented the portion of

the upfront initial development fee payment eligible for revenue recognition during the second quarter of fiscal year 2021.

of revenue recognized related to the upfront fee was based on development completed in connection with SEEG Products, and to a lesser

extent, the Strip/Grid Products.

There was no collaborations revenue recognized during the comparable prior year period.

general and administrative expenses

general and administrative expenses were $1.3 million for the three months ended March 31, 2021, compared to $1.0 million for

the three months ended March 31, 2020.

The $0.3 million increase was primarily due to a net increase in sales and marketing expenses

of $0.3 million.

Additionally, stock-based compensation decreased by $0.2 million in the current quarter when compared to the

prior year period, but was offset by an increase in other operating expenses of $0.2 million on a net basis when compared to the

second quarter of fiscal year 2020.

NeuroOne Medical Technologies Corporation

and development expenses

and development expenses were $1.1 million for the three months ended March 31, 2021, compared to $0.3 million during for the

three months ended March 31, 2020.

The $0.7 million increase period over period was attributed to supporting development activities,

which primarily included salary-related expenses and costs related to consulting services, materials and supplies associated with

the development of SEEG Products and to a lesser extent Strip/Grid Products.

valuation change of instruments measured at fair value:

net valuation change of instruments measured at fair value for the 2019 Paulson Notes for the three months ended March 31, 2021

and 2020 was a zero and a benefit of $32,000, respectively.

The change was due to accrued interest on the 2019 Paulson Notes and

due to fluctuations in our common stock fair value and the number of potential shares of common stock issuable upon conversion

of the 2019 Paulson Notes while outstanding.

Other income during the three months ended March

31, 2021 consisted of proceeds from the sale of certain supplies in the amount of $2,000.

We did not have other income during the comparable

prior year period.

of the Six Months Ended March 31, 2021 and 2020

following table sets forth the results of operations for the six months ended March 31, 2021 and 2020, respectively.

six months ended

Product revenue

Cost of product revenue

Product gross profit (loss)

Collaborations revenue

Operating expenses:

Selling, general and administrative

Research and development

Total operating expenses

Loss from operations

Interest expense

Net valuation change of instruments measured at fair value

Loss before income taxes

Provision for income taxes

$ (4,353,396 )

$ (5,982,708 )

NeuroOne Medical Technologies Corporation

Revenue and Product Gross Profit (Loss)

Product revenue and product gross profit (loss)

was $90,000 and $(59,000) during the six months ended March 31, 2021, respectively.

The product revenue consisted of Strip/Grid Products

and Electrode Cable Assembly Products sales.

Cost of product revenue consisted of the manufacturing and materials costs incurred by our

third-party contract manufacturer in connection with our Strip/Grid Products and outside supplier materials costs in connection with the

Electrode Cable Assembly Products.

In addition, cost of product revenue included royalty fees incurred, including the initial minimum

royalty fee to WARF of $50,000 for calendar year 2020, in connection with our license agreements.

There was no product revenue or product

gross profit (loss) recognized during the comparable prior year period.

Collaborations

revenue was $42,000 for the six months ended March 31, 2021.

Revenue during the period was derived from the Zimmer Development

Agreement and represented the portion of the upfront initial development fee payment eligible for revenue recognition during the

six months ended March 31, 2021.

The amount of revenue recognized related to the upfront fee was based on development completed

in connection with SEEG products, and to a lesser extent, the Strip/Grid Products.

There was no collaborations revenue recognized

during the comparable prior year period.

general and administrative expenses

general and administrative expenses were $1.2 million for the three months ended December 31, 2020, compared to $1.3 million for

the three months ended December 31, 2019.

The $0.1 million decrease was primarily due to a decrease in stock-based compensation

of $0.4 million, offset in part by an increase in sales and marketing expenses of $0.2 million and operating costs of $0.1 million

on a net basis.

Selling, general and administrative expenses were

$2.5 million for the six months ended March 31, 2021, compared to $2.3 million for the six months ended March 31, 2020.

The $0.2 million

increase was primarily due to an increase in sales and marketing expenses of $0.4 million and other operating expenses and fees of $0.3

million, offset in part by a decrease in stock-based compensation of $0.6 million.

and development expenses

and development expenses were $0.9 million for the three months ended December 31, 2020, compared to $0.5 million during for the

three months ended December 31, 2019.

and development expenses were $2.0 million for the six months ended March 31, 2021, compared to $0.8 million during for the six

months ended March 31, 2020.

The $1.2 million increase period over period was attributed to supporting development activities,

1 unchanged sentence

the development of SEEG Products and to a lesser extent Strip/Grid Products.

expense for the three months ended December 31, 2020 was $3,000 and consisted of issuance costs in connection with our 2019 Paulson

expense for the six months ended March 31, 2021 was $3,000 and consisted of issuance costs in connection with our 2019 Paulson

Notes described further below.

expense for the three months ended December 31, 2019 was $2.7 million and consisted of non-cash interest expense in connection

with our 2019 Paulson Notes described further below.

Interest expense was comprised of issuance costs of $0.9 million and day-one

interest at issuance of $1.8 million representing the amount by which fair value exceeded note proceeds.

expense for the six months ended March 31, 2020 was $2.7 million and consisted of non-cash interest expense in connection with

our 2019 Paulson Notes described further below.

Interest expense was comprised of issuance costs of $0.9 million and day-one interest

at issuance of $1.8 million representing the amount by which fair value exceeded note proceeds.

valuation change of instruments measured at fair value:

net valuation change of instruments measured at fair value for the 2019 Paulson Notes for the three months ended December 31,

net valuation change of instruments measured at fair value for the 2019 Paulson Notes for the six months ended March 31, 2021

and 2020 was a benefit of $2,000 and an expense of $0.1 million, respectively.

The change was due to accrued interest on

the 2019 Paulson Notes and due to fluctuations in our common stock fair value and the number of potential shares of common stock

issuable upon conversion of the 2019 Paulson Notes while outstanding.

income during the three months ended December 31, 2020 consisted of proceeds received in connection with the PMT Corporation litigation

in the amount of $0.2 million.

The change was due to accrued interest on the 2019

Paulson Notes and due to fluctuations in our common stock fair value and the number of potential shares of common stock issuable

upon conversion of the 2019 Paulson Notes while outstanding.

income during the six months ended March 31, 2021 consisted principally of proceeds received in connection with the PMT Corporation

litigation in the amount of $0.2 million.

We did not have other income during the comparable prior year period.

NeuroOne Medical Technologies Corporation

and Capital Resources

Capital Resources

of December 31, 2020, our principal source of liquidity consisted of cash deposits of $7.1 million (inclusive of $5.0 million

in gross proceeds received in connection with the 2021 Private Placement discussed further below).

of March 31, 2021, our principal source of liquidity consisted of cash deposits of $11.3 million.

We have just begun to generate

1 unchanged sentence

for the foreseeable future until and unless we generate an adequate level of revenue from commercial sales to cover expenses.

Medical Technologies Corporation

anticipate that our expenses will increase substantially as we develop and commercialize our cortical strip, grid electrode and

8 unchanged sentences

Private Placement

January 12, 2021, we entered into a Common Stock and Warrant Purchase Agreement (the “2021 Purchase Agreement”) with

certain accredited investors (the “Purchasers”), pursuant to which the Company, in a private placement (the “2021

Private Placement”), agreed to issue and sell an aggregate of 12,500,000 shares (the “Shares”) of the common

stock of the Company, par value $0.001 per share (the “Common Stock”), and warrants to purchase an aggregate of 12,500,000

shares of Common Stock (the “2021 Warrants”) at an aggregate purchase price of $1.00 per share of Common Stock and

corresponding warrant, resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated

offering expenses.

January 12, 2021, we entered into the “2021 Purchase Agreement with certain accredited investors, pursuant to which the

Company, in a private placement (the “2021 Private Placement”), agreed to issue and sell an aggregate of 4,166,682

shares (the “Shares”) of the common stock of the Company, and warrants to purchase an aggregate of 4,166,682 shares

of common stock (the “2021 Warrants”) at an aggregate purchase price of $3.00 per share of common stock and corresponding

warrant, resulting in total gross proceeds of $12.5 million before deducting placement agent fees and estimated offering expenses.

The 2021 Warrants have an initial exercise price of $5.25 per share.

The 2021 Warrants are exercisable beginning

The 2021 Warrants became immediately exercisable beginning

on the date of issuance and will expire on the fifth anniversary of such date.

Prior to expiration, subject to the terms and conditions

set forth in the 2021 Warrants, the holders of such 2021 Warrants may exercise the 2021 Warrants for Warrant Shares by providing

notice to the Company and paying the exercise price per share for each share so exercised or by utilizing the “cashless

set forth in the 2021 Warrants, the holders of such 2021 Warrants may exercise the 2021 Warrants for shares of common stock by

providing notice to the Company and paying the exercise price per share for each share so exercised or by utilizing the “cashless

exercise”

2 unchanged sentences

connection with the 2021 Private Placement, the Company agreed to file a registration statement with the SEC covering the resale

of the Shares, the 2021 Warrants and the shares of Common Stock issuable upon exercise of the 2021 Warrants (the “Warrant

Shares”).

The Company has agreed to file such registration statement within 30 days of the execution of the 2021 Purchase

Agreement on January 12, 2021 and filed such registration statement on February 10, 2021.

The following table sets forth the Company’s

total stockholders’

equity as reported as of December 31, 2020 and as adjusted on a pro forma basis to reflect the recently

completed private placement:

Total stockholders' equity as of December 31, 2020

Net proceeds from 2021 private placement

Pro forma total stockholders' equity as of December 31, 2020

This pro forma calculation assumes full

equity classification of the securities issued in the 2021 Private Placement.

The accounting treatment of the securities

issued in the 2021 Private Placement is subject to change once a full accounting treatment evaluation is completed.

of the Shares, the 2021 Warrants and the shares of common stock issuable upon exercise of the 2021 Warrants.

The Company has

agreed to file such registration statement within 30 days of the execution of the 2021 Purchase Agreement on January 12, 2021

and filed such registration statement on February 10, 2021.

Stock Offerings

19 unchanged sentences

Company’s common stock.

Medical Technologies Corporation

NeuroOne Medical Technologies Corporation

April 30, 2020 and June 30, 2020, the Company issued 2020 Paulson Notes in an aggregate principal amount of $5.1 million to the

3 unchanged sentences

(as defined in the 2020 Paulson Notes) with Zimmer, Inc.

The terms of the 2020 Paulson Notes are summarized below:

2020 Paulson Notes had interest at a fixed rate of 13% per annum and required the Company to repay the principal and accrued and

unpaid interest thereon on the earlier of (i) December 31, 2020 and (ii) a change of control transaction.

If the Company had raised

more than $5,000,000 in an equity financing before the maturity date (the “2020 Qualified Financing”), without any

action on the part of the Subscribers, all of the outstanding principal and accrued and unpaid interest of the Notes (the “Outstanding

Balance”) would have been converted into that number of shares of the securities issued by the Company in the closing on

the date a 2020 Qualified Financing occurred equal to:

(i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied

by (A) the actual per share price of the securities issued by the Company in the closing on the date a 2020 Qualified Financing

occurred and (B) the volume weighted average price (“VWAP”) of the common stock for ten (10) trading days immediately

preceding the 2020 Qualified Financing.

addition, as was the case in July 2020, if the Company announced a transaction between the Company and any other company (or an

affiliate of any such company) that was included in the S&P 500 Health Care Index as published from time to time by S&P

Dow Jones Indices LLC that included an investment or upfront payments resulting in gross proceeds to the Company of at least $2,000,000

upon the execution of such transaction or definitive agreement, and provided for terms of collaboration, manufacturing, distribution,

licensing or supply of the Company’s products (a “Strategic Transaction”) before the maturity date, without

any action on the part of the subscribers, the Outstanding Balance would convert into that number of shares of common stock equal

(i) the Outstanding Balance divided by (ii) the lower of 0.6 multiplied by (A) the VWAP of the common stock for the ten (10)

trading days immediately preceding the first announcement of the Strategic Transaction or (B) closing price of the common stock

on the day preceding the first announcement by the Company of a Strategic Transaction.

any time, at the sole election of the holder of such 2020 Paulson Note prior to a Qualified Financing, Strategic Transaction or

change of control transaction, all or a portion of the Outstanding Balance could be converted into that number of shares of common

stock equal to:

(i) the Outstanding Balance elected by the holder to be converted divided by (ii) an amount equal to 0.6 multiplied

by the volume weighted average price of the common stock for the ten (10) trading days immediately preceding the date of conversion.

a change of control transaction had occurred prior to the conversion of the 2020 Paulson Notes or the maturity date, the 2020

Paulson Notes would have become payable on demand as of the closing date of such transaction.

Change of control meant a merger

or consolidation with another entity in which the Company’s stockholders did not own more than 50% of the outstanding voting

power of the surviving entity or the disposition of all or substantially all of the Company’s assets.

2020 Paulson Warrant grants the holder the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied

by (ii) the principal amount of such subscriber’s 2020 Paulson Notes divided by 1.87, with an exercise price per share equal

As of the final closing on June 30, 2020, the Company issued 2020 Paulson Warrants exercisable for 1,369,690 shares

of Common Stock in connection with all closings of the private placement.

2020 Paulson Warrants are immediately exercisable and expire on April 30, 2023.

The exercise price is subject to adjustment in

the event of any stock dividends or splits, reverse stock split, recapitalization, reorganization, or similar transaction.

connection with the 2020 Paulson Private Placement, Paulson Investment Company (“Paulson”), received a cash commission

equal to 12% of the gross proceeds from the sale of the 2020 Paulson Notes, and at the final closing of the 2020 Paulson Private

Placement, Paulson received 7-year warrants to purchase an amount of Common Stock equal to 410,911 (“Broker Warrants”).

The Broker Warrants have an exercise price equal to $1.87.

Paulson Note Conversions

May 4, 2020 and July 22, 2020, certain Subscribers elected to convert $3,590,353 of the outstanding principal and interest of

such Subscribers’

2020 Paulson Notes into 4,012,334 shares of common stock.

On July 23, 2020, the remaining $1,613,961 of

the outstanding principal and interest of the 2020 Paulson Notes were automatically converted into 1,605,532 shares of Common

Stock following the announcement of a Strategic Transaction as discussed above.

Medical Technologies Corporation

Refer to “—Liquidity and Capital Resources—Historical

Capital Resources”

in our Annual Report on Form 10-K for the year ended September 30, 2020 for additional information related

to the 2020 Paulson Convertible Notes.

Paulson Convertible Notes

10 unchanged sentences

The private placement terminated on December 3, 2019.

Paulson Notes had a fixed interest rate of 13% per annum and required the Company to repay the principal and accrued and unpaid

interest thereon on May 1, 2020.

If the Company raised more than $3,000,000 in an equity financing before the Maturity Date (the

“Qualified Financing”), each subscriber would have had the option to convert the outstanding principal and accrued

and unpaid interest of such subscriber’s 2019 Paulson Note (the “Outstanding Balance”) into the securities issued

by the Company in such Qualified Financing in an amount equal to (i) the Outstanding Balance divided by (ii) the lower of 0.6

multiplied by (A) the actual per share price of securities issued by the Company in the Qualified Financing and (B) the ten day

volume weighted average closing price of the common stock prior to the first closing of a Qualified Financing.

If a change of

control transaction had occurred prior to the earlier of a Qualified Financing or the maturity date, the 2019 Paulson Notes would

have become payable on demand as of the closing date of such transaction.

Change of control meant a merger or consolidation with

another entity in which the Company’s stockholders did not own more than 50% of the outstanding voting power of the surviving

entity or the disposition of all or substantially all of the Company’s assets.

2019 Paulson Warrant grants the holder the option to purchase the number of shares of common stock equal to (i) 0.5 multiplied

by (ii) the principal amount of such subscriber’s 2019 Paulson Notes divided by 1.87, with an exercise price per share equal

As of the final closing on December 3, 2019, the Company issued 2019 Paulson Warrants exercisable for 864,913 shares

of Common Stock in connection with all closings of the private placement.

The 2019 Paulson Warrants are immediately exercisable

and expire on November 1, 2022.

The exercise price is subject to adjustment in the event of any stock dividends or splits, reverse

stock split, recapitalization, reorganization or similar transaction, as described therein.

connection with the private placement, Paulson received a cash commission equal to 12% of the gross proceeds from the sale of

the 2019 Paulson Notes, and 10-year warrants to purchase an amount of Common Stock equal to 259,476 shares of common stock at

an exercise price equal to $1.87 per share.

Amendment of 2019 Paulson Notes

April 24, 2020, the Company and holders of a majority in aggregate principal amount of the 2019 Paulson Notes entered into an

amendment to the 2019 Paulson Notes (the “Second Paulson Amendment”) to, among other things:

the Maturity Date –

The Second Paulson Amendment extended the maturity date of the 2019 Paulson Notes

from May 1, 2020 to November 1, 2020 (in either case, unless a change of control transaction happens prior to such date);

Optional Conversion Terms –

The Second Paulson Amendment provided that the amount of shares to be received

upon the a subscriber’s optional conversion of the 2019 Paulson Notes prior to a Qualified Financing (as defined in

the 2019 Paulson Notes) would have been equal to:

(1) the outstanding balance of such subscriber’s 2019 Paulson Note

elected by the subscriber to be converted divided by (2) an amount equal to 0.6 multiplied by the volume weighted average

price of the common stock for the ten (10) trading days immediately preceding the date of conversion;

the Registration Date –

The Second Paulson Amendment provided that promptly following the earlier of (1) May

1, 2020, if the applicable subscriber had converted all or a majority of the outstanding balance of such subscriber’s

2019 Paulson Note prior to such date;

(2) the final closing a Qualified Financing;

and (3) the maturity date, the Company

will enter into a registration rights agreement with the applicable subscriber containing customary and usual terms pursuant

to which the Company filed a registration statement in August 2020.

Medical Technologies Corporation

were no other significant changes to terms under the Second Paulson Amendment.

Paulson Note Conversion

April 24, 2020 and December 15, 2020, all of the holders elected to convert outstanding principal and accrued and unpaid interest

of 2019 Paulson Notes in the amount of $3,453,883 into 3,054,372 shares of common stock.

Between April 24, 2020 and December 15, 2020, all

of the holders elected to convert outstanding principal and accrued and unpaid interest of 2019 Paulson Notes in the amount of

$3,453,883 into shares of common stock.

Refer to “—Liquidity and Capital Resources—Historical Capital Resources”

in our Annual Report on Form 10-K for the year ended September 30, 2020 for additional information related to the 2019 Paulson

Convertible Notes.

Protection Program Loan

10 unchanged sentences

December 28, 2018 through July 1, 2019, the Company entered into Subscription Agreements (each, a “2019 Purchase Agreement”)

with certain accredited investors (the “New Purchasers”), pursuant to which the Company, in a new private placement

(the “2019 Unit Private Placement”), agreed to issue and sell Units (the “2019 Units”), each consisting

of (i) one share of common stock and (ii) a warrant to purchase one share of common stock at an initial exercise price of $3.00

per share (the “2019 Warrants”), to the New Purchasers.

The 2019 Warrants are exercisable beginning on the date of

issuance and will expire on December 28, 2023, five years from the date of the first closing of the 2019 Unit Private Placement.

initial closing of the 2019 Unit Private Placement was consummated on December 28, 2018.

The Company issued and sold an aggregate

of 2,338,179 of the 2019 Units at $2.50 per Unit to the New Purchasers, for total gross proceeds to the Company of $5,845,448

with certain accredited investors (the “New Purchasers”), pursuant to which the Company, in a new private placement (the

“2019 Unit Private Placement”), agreed to issue and sell Units (the “2019 Units”), each consisting of (i) one

share of common stock and (ii) a warrant to purchase one share of common stock for total gross proceeds to the Company of $5,845,448

before deducting offering expenses.

Refer to “—Liquidity and Capital Resources—Historical Capital Resources”

in our Annual Report on Form 10-K for the year ended September 30, 2020 for additional information related to the 2019 Unit Private Placement.

Private Placement

2 unchanged sentences

placement (the “2018 Private Placement”), agreed to issue and sell to the Purchasers units (each, a “2018 Unit”),

each consisting of (i) one share of common stock and (ii) a warrant to purchase one share of common stock at an initial exercise

price of $3.00 per share (the “2018 Warrants”).

The 2018 Warrants are exercisable beginning on the date of issuance

and will expire on July 9, 2023, five years from the date of the first closing.

The 2018 Warrants were accounted for as free-standing

equity instruments and classified as additional paid-in capital in the accompanying balance sheets based on their relative fair

value to the underlying common shares issued.

The initial closing of the 2018 Private Placement was consummated on July 9, 2018

and was terminated on December 12, 2018.

of the termination of the 2018 Private Placement on December 12, 2018, the Company had issued and sold an aggregate of 615,200

of the 2018 Units at a price of $2.50 per Unit to the Purchasers, for total gross proceeds to the Company of $1,538,000 before

deducting offering expenses.

Medical Technologies Corporation

each consisting of (i) one share of common stock and (ii) a warrant to purchase one share of common stock for total gross proceeds

to the Company of $1,538,000 before deducting offering expenses.

Refer to “—Liquidity and Capital Resources—Historical

Capital Resources”

in our Annual Report on Form 10-K for the year ended September 30, 2020 for additional information related

to the 2018 Private Placement.

NeuroOne Medical Technologies Corporation

3 Notes and Warrants (2017 Convertible Notes)

4 unchanged sentences

On February 28, 2019, the outstanding principal and

interest on the Series 3 Notes converted into 839,179 shares of common stock and 839,179 common stock purchase warrants with an

exercise term of approximately 4.8 years and an exercise price of $3.00 per share.

addition, each holder has the option to purchase additional shares of our capital stock equal to 839,179 shares of capital stock

of the Company at a per share exercise price equal to $2.50.

The warrants exercisable at $2.50 per share have a five-year term

which commenced on February 28, 2019.

The exercise price and number of the shares issuable upon exercising the Series 3 Warrants

are subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization,

business combination or similar transaction, as described therein.

interest on the Series 3 Notes converted into shares of common stock and common stock purchase warrants.

Refer to “—Liquidity

and Capital Resources—Historical Capital Resources”

in our Annual Report on Form 10-K for the year ended September

30, 2020 for additional information related to the Series 3 Notes and Warrants (2017 Convertible Notes).

2 Notes and Warrants

August 2017, the Company entered into a subscription agreement in an aggregate principal amount of $253,000 to certain accredited

investors (the “Series 2 Notes”).

On July 2, 2018, the Series 2 Notes were converted into 144,053 shares of Common

Stock and warrants exercisable for 477,856 shares of common stock at a per share exercise price equal to $1.80 per share.

warrants expire on November 21, 2021.

In August 2017, the Company entered into a subscription

agreement in an aggregate principal amount of $253,000 to certain accredited investors (the “Series 2 Notes”).

2018, the Series 2 Notes were converted into shares of common stock and warrants.

Refer to “—Liquidity and Capital Resources—Historical

Capital Resources”

in our Annual Report on Form 10-K for the year ended September 30, 2020 for additional information related to

the Series 2 Notes and warrants.

1 Notes and Warrants

November 2016 to June 2017, the Company issued convertible promissory notes in an aggregate principal amount of $1.6 million that

bear interest at a fixed rate of 8% per annum and warrants to purchase shares of the Company’s capital stock (the “Series

1 Notes”).

The Series 1 Notes were converted into 1,002,258 shares of Common Stock and warrants exercisable for 2,004,516

shares of Common Stock were issued on July 2, 2018 at a per share exercise price of $1.80 per share.

The warrants will expire

on November 21, 2021.

From November 2016 to June 2017, the Company issued

convertible promissory notes in an aggregate principal amount of $1.6 million and warrants to purchase shares of the Company’s capital

stock (the “Series 1 Notes”).

The Series 1 Notes were converted into shares of common stock and warrants.

Refer to “—Liquidity

and Capital Resources—Historical Capital Resources”

in our Annual Report on Form 10-K for the year ended September 30, 2020

for additional information related to the Series 1 Notes and warrants.

March 2018 to December 2018, the Company received gross proceeds from unsecured loans in the amount of $528,000.

1 unchanged sentence

loans were repaid in full as of June 30, 2019.

to “—Liquidity and Capital Resources—Historical Capital Resources”

in our Annual Report on Form 10-K for

the year ended September 30, 2019 for additional information related to financings prior to fiscal year 2020.

Requirements and Outlook

At December 31, 2020, we had $7.1 million

in cash deposits.

Our existing cash and cash equivalents coupled with the remaining net proceeds of $6.3 million received from

the 2021 Private Placement in January 2021 should be sufficient to fund our operating expenses through at least twelve months from

the date of this filing.

Prior to the close of the 2021 Private Placement, our independent registered public accounting firm included

an explanatory paragraph in its report on our financial statements as of and for the years ended September 30, 2020 and 2019, noting

the existence of substantial doubt about our ability to continue as a going concern.

This uncertainty arose from management’s

review of our results of operations and financial condition and its conclusion that, based on our operating plans, we did not have

adequate liquidity to fund our operating expenses.

While our future operating activities under the distribution and development

agreement with Zimmer, Inc.

coupled with our plans to raise capital or issue debt financing, may provide additional liquidity in

the future, these actions are not solely within our control.

If we are unable to raise additional funds, or if our anticipated

operating results are not achieved, we believe planned expenditures may need to be reduced in order to extend the time period that

existing resources can fund our operations.

If we are unable to obtain the necessary capital, it may have a material adverse effect

on our operations and the development of our technology, or we may have to cease operations altogether.

March 31, 2021, we had $11.3 million in cash deposits.

Our existing cash and cash should be sufficient to fund our operating expenses

through at least twelve months from the date of this filing.

Prior to the close of the 2021 Private Placement, our independent

registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the

years ended September 30, 2020 and 2019, noting the existence of substantial doubt about our ability to continue as a going concern.

This uncertainty arose from management’s review of our results of operations and financial condition and its conclusion

that, based on our operating plans, we did not have adequate liquidity to fund our operating expenses.

While our future operating

activities under the distribution and development agreement with Zimmer, Inc.

coupled with our plans to raise capital or issue

debt financing, may provide additional liquidity in the future, these actions are not solely within our control.

If we are unable

to raise additional funds, or if our anticipated operating results are not achieved, we believe planned expenditures may need

to be reduced in order to extend the time period that existing resources can fund our operations.

If we are unable to obtain the

necessary capital, it may have a material adverse effect on our operations and the development of our technology, or we may have

to cease operations altogether.

have agreements with the Wisconsin Alumni Research Foundation (“WARF”) and the Mayo Foundation for Medical Education

and Research (“Mayo”) that require us to make certain milestone and royalty payments.

Medical Technologies Corporation

January 22, 2020, we entered into an Amended and Restated License Agreement (the “WARF License”) with WARF, which

amended and restated in full our prior license agreement with WARF, dated October 1, 2014 (the “Original WARF License”).

Under the WARF License, we have agreed to pay WARF a royalty equal to a single-digit percentage of our product sales pursuant

to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000 for 2021 and $150,000 for 2022 and each

calendar year thereafter that the WARF License is in effect.

The minimum annual royalty payment for calendar year 2020 in the

amount of $50,000 was recorded in our accrued expense liability balance as of December 31, 2020.

If we or any of our sublicensees

contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the

contested patent is found to be valid and would be infringed by us if not for the WARF License, the royalty rate will be tripled

for the remaining term of the WARF License.

Under the Amended and Restated License

and Development Agreement with Mayo (the “Mayo Development Agreement”), we have agreed to pay Mayo a royalty equal

to a single-digit percentage of our product sales pursuant to the Mayo Development Agreement.

Nothing further was due until we

started selling our products.

As of December 31, 2020, $2,144 in royalty payments were due to Mayo given the commencement of commercial

sales during the first quarter of fiscal year 2021.

On January 22, 2020, we entered into an Amended

and Restated License Agreement (the “WARF License”) with WARF, which amended and restated in full our prior license agreement

with WARF, dated October 1, 2014 (the “Original WARF License”).

Under the WARF License, we have agreed to pay WARF a royalty

equal to a single-digit percentage of our product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000

for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect.

The minimum annual

royalty payment for calendar year 2020 in the amount of $50,000 was paid in January 2021.

If we or any of our sublicensees contest the

validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the contested patent is

found to be valid and would be infringed by us if not for the WARF License, the royalty rate will be tripled for the remaining term of

the WARF License.

NeuroOne Medical Technologies Corporation

Under the Amended and Restated License and Development

Agreement with Mayo (the “Mayo Development Agreement”), we have agreed to pay Mayo a royalty equal to a single-digit percentage

of our product sales pursuant to the Mayo Development Agreement.

Nothing further was due until we started selling our products.

March 31, 2020, $2,691 in royalty payments were earned by Mayo given the commencement of commercial sales in fiscal year 2021.

to the Company’s Annual Report on Form 10-K for the year ended September 30, 2020 with regard to:

7 unchanged sentences

of our technology.”

To continue to fund operations, we will

need to secure additional funding or take steps to reduce expenses.

We may obtain additional financing in the future through the

issuance of our Common Stock and securities convertible into our Common Stock, through other equity or debt financings or through

collaborations or partnerships with other companies.

We may not be able to raise additional capital on terms acceptable to us,

Further, any failure to raise capital when needed could compromise our ability to execute on our business plan.

continue to fund operations, we will need to secure additional funding or take steps to reduce expenses.

We may obtain additional

financing in the future through the issuance of our common stock and securities convertible into our common stock, through other

equity or debt financings or through collaborations or partnerships with other companies.

We may not be able to raise additional

capital on terms acceptable to us, or at all.

Further, any failure to raise capital when needed could compromise our ability to

execute on our business plan.

development and commercialization of our cortical strip, grid electrode and depth electrode technology is subject to numerous

8 unchanged sentences

following is a summary of cash flows for each of the periods set forth below.

For the Three Months

six Months Ended

Net cash used in operating activities

4 unchanged sentences

Net increase in cash

Medical Technologies Corporation

cash used in operating activities

Net cash used in operating activities was

$ 1.9 million for the three months ended December 31, 2020, which consisted of a net loss of $2.0 million partially offset by non-cash

stock-based compensation, depreciation, amortization related to intangible assets, revaluation of convertible notes and operating

lease expense, totaling approximately $0.3 million in the aggregate.

The net change in our net operating assets and liabilities

associated with fluctuations in our operating activities resulted in a cash use of $0.2 million.

The change in operating assets

and liabilities was primarily attributable to a net increase in accounts receivable in connection with the Zimmer Development Agreement

and a decrease in accounts payable attributed to the timing of payments.

Net cash used in operating activities was

$1.2 million for the three months ended December 31, 2019, which consisted of a net loss of $4.6 million partially offset primarily

by non-cash interest, stock-based compensation, depreciation, amortization related to intangible assets, non-cash lease expenses

and revaluation of convertible notes, totaling approximately $3.4 million in the aggregate.

cash used in operating activities was $4.3 million for the six months ended March 31, 2021, which consisted of a net loss of $4.4

million partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets,

revaluation of convertible notes and operating lease expense, totaling approximately $0.6 million in the aggregate.

The net change

in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a cash use of

$0.5 million.

The change in operating assets and liabilities was primarily attributable to a net decrease in accounts payable

and accrued expenses attributed to the timing of payments.

cash used in operating activities was $2.5 million for the six months ended March 31, 2020, which consisted of a net loss of $6.0

million partially offset primarily by non-cash interest, stock-based compensation, depreciation, amortization related to intangible

assets, revaluation of convertible notes, totaling approximately $3.9 million in the aggregate.

The net change in our net operating

assets and liabilities associated with fluctuations in our operating activities was negligible.

assets and liabilities associated with fluctuations in our operating activities resulted in a cash use of $0.4 million.

in operating assets and liabilities was primarily attributable to a decrease in accounts payable and accrued expenses and to an

increase in our prepaid expenses.

NeuroOne Medical Technologies Corporation

cash used by investing activities

cash used by investing activities consisted of outlays for furniture and equipment during the three months ended December 31,

There were no investing activities during the three months ended December 31, 2020.

cash used by investing activities was $2,000 and $40,000 during the six months ended March 31, 2021 and 2020, respectively, and

consisted of outlays for furniture and equipment.

cash provided by financing activities

cash provided by financing activities was $5.0 million for the three months ended December 31, 2020, which consisted primarily

of proceeds received in advance of the 2021 Private Placement.

cash provided by financing activities was $3.0 million for the three months ended December 31, 2019, which consisted primarily

of net proceeds received upon the issuance of the Paulson Notes and common stock offering totaling $3.0 million in the aggregate.

Net cash provided by financing activities was $11.5 million for the

six months ended March 31, 2021, which consisted primarily of net proceeds received from the 2021 Private Placement in the amount of $11.3

There were also exercises of stock options and warrants during the six months ended March 31, 2021 resulting in additional cash

proceeds of $0.2 million.

Net cash provided by financing activities was $3.0 million for the

six months ended March 31, 2020, which consisted primarily of net proceeds received upon the issuance of the 2019 Paulson Notes and common

stock offering totaling $3.0 million in the aggregate and proceeds from the exercise of stock options in the amount of $1,000.

Accounting Policies

15 unchanged sentences

in this Report.

the three months ended December 31, 2020, we commenced commercial sales of the Strip/Grid Products and Electrode Cable Assembly

the six months ended March 31, 2021, we commenced commercial sales of the Strip/Grid Products and Electrode Cable Assembly Products.

As a result, we added the following critical accounting policies below:

7 unchanged sentences

addition, cost of product revenue includes royalty fees incurred in connection with our license agreements.

Medical Technologies Corporation

for Doubtful Accounts

5 unchanged sentences

Actual write-offs may be in excess of our estimated allowance.

NeuroOne Medical Technologies Corporation

are stated at the lower of cost (using the first-in, first-out “FIFO”

13 unchanged sentences

“Summary of Significant Accounting Policies”

to our condensed financial statements included in “Part

1, Item 1 –

to our condensed financial statements included in

“Part 1, Item 1 –

Financial Statements”

in this Report for a discussion of recently issued accounting pronouncements.

in this Report for a discussion of recently issued accounting

pronouncements.

Balance Sheet Arrangements

1 unchanged sentence

applicable for smaller reporting companies.

Medical Technologies Corporation

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements