What changed in this filing

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Item 1. Financial Statements

2022-08-11 compared with 2022-05-12 · 290 added, 235 removed, 755 unchanged (41% of the section changed)

2 unchanged sentences

Balance Sheets

As of March 31,

As of September 30,

September 30,

Current assets:

16 unchanged sentences

Preferred stock, $ 0.001 par value;

10,000,000 shares authorized as of March 31, 2022 and September 30, 2021;

no shares issued or outstanding as of March 31, 2022 and September 30, 2021.

10,000,000 shares authorized as of June 30, 2022 and September 30, 2021;

no shares issued or outstanding as of June 30, 2022 and September 30, 2021.

Common stock, $ 0.001 par value;

100,000,000 shares authorized as of March 31, 2022 and September 30, 2021;

16,191,169 and 12,010,019 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively.

100,000,000 shares authorized as of June 30, 2022 and September 30, 2021;

16,194,616 and 12,010,019 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively.

Additional paid–in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Product revenue

54 unchanged sentences

( 35,232,427 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

Exercise of stock options

Exercise of stock warrants

( 2,951,609 )

Balance at June 30, 2021

$ ( 38,184,036 )

Balance at September 30, 2021

16 unchanged sentences

( 46,692,741 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

( 2,759,727 )

Balance at June 30, 2022

$ ( 49,452,468 )

accompanying notes to condensed financial statements

1 unchanged sentence

Statements of Cash Flows

six months ended

Nine Months Ended

Operating activities

7 unchanged sentences

Non-cash lease expense

Payroll protection program loan forgiveness

Change in assets and liabilities:

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Exercise of stock options

Deferred offering costs

Issuance costs related to public offering and private placements

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Reclass of deferred offering costs to additional paid-in capital in connection with public offering

Purchased fixed assets in accounts payable and accrued expenses

accompanying notes to condensed financial statements

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essential tremors, chronic pain due to failed back surgeries and other related neurological disorders.

The Company received 510(k) clearance from the U.S.

Food and Drug Administration (“FDA”) for its Evo cortical technology in November 2019, and in September 2021 received 510(k)

clearance from the FDA for its Evo sEEG electrode technology for temporary (less than 24 hours) use with recording, monitoring, and stimulation

equipment for the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain.

To date, the Company

has had limited commercial sales.

Company received 510(k) clearance from the U.S.

Food and Drug Administration (“FDA”) for its Evo cortical technology in November

2019, and in September 2021 received 510(k) clearance from the FDA for its Evo sEEG electrode technology for temporary (less than 24

hours) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical signals

at the subsurface level of the brain.

To date, the Company has had limited commercial sales.

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.

As a result of the COVID-19 pandemic, the Company has experienced, and will likely continue to experience, delays and disruptions in

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

The development of the Company’s technology was delayed in the first quarter due to interruptions in global manufacturing

and shipping as a result of the COVID-19 pandemic.

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

Testing and clinical trials, manufacturing, component supply, shipping and research and development operations may

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

extent to which the COVID-19 pandemic and macroeconomic conditions may further impact the Company’s business will depend on future

developments, which are highly uncertain and cannot be predicted with confidence, such as global supply chain disruptions, the duration

of the pandemic and the impact of variants, 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 Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, the continuing impact of the pandemic

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

of fiscal year 2022 and beyond.

Economic Conditions

COVID-19 pandemic that began around December 2019 introduced significant volatility to the global economy, disrupted supply chains and

had a widespread adverse effect on the financial markets.

The development of the Company’s technology was delayed in the first

quarter due to interruptions in global manufacturing and shipping as a result of the COVID-19 pandemic.

Additionally, the Company’s

own staff has been impacted by infections and mandatory quarantines.

Testing and clinical trials, manufacturing, component supply,

shipping and research and development operations may be further impacted by the continuing effects of COVID-19.

lingering impacts of COVID-19 throughout 2021 and into 2022 have impeded global supply chains and resulted in inflationary cost increases.

These broad-based inflationary impacts have increased the manufacturing costs of our products and product candidates.

We expect these

inflationary impacts to continue for the foreseeable future,

addition to the direct and indirect impacts of COVID-19, the United States and global markets are experiencing volatility and disruption

following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine.

In February 2022,

Russia launched a full-scale military invasion of Ukraine.

As a result of the conflict, the United States, United Kingdom, European Union

and other countries have levied economic sanctions and bans on Russia and Russia has responded with its own retaliatory measures.

These measures

have contributed to significant volatility and negative pressure in financial markets, and could have a lasting impact on regional and

global economies, and may have a material adverse effect on the Company’s results of future operations, financial position, and

liquidity for the duration of fiscal year 2022 and beyond.

of presentation

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statements of the Company.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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”) effective end-of-day March 31,

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 and/or vesting 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

On 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, par value $ 0.001 (“common stock”) effective end-of-day March 31, 2021 (the “Reverse Stock Split”).

All 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.

a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise and/or vesting

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 common stock par value and additional paid-in-capital line items contained in the financial statements were

adjusted to account for the Reverse Stock Split for all periods presented.

Lastly, the authorized shares and par value per share of the

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

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has incurred losses since inception, negative cash flows from operations, and had an accumulated deficit of $ 49.5 million as of

March 31, 2022.

June 30, 2022.

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

23 unchanged sentences

7 – Zimmer Development Agreement”.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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beginning in late fiscal year 2021.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

of Product Revenue

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

of March 31, 2022 and September 30, 2021, the fair values of cash, accounts receivable, inventory, prepaid expenses, other assets, accounts

of June 30, 2022 and September 30, 2021, 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.

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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 six months ended March 31, 2022 and 2021.

were no transfers between fair value hierarchy levels during the three and nine months ended June 30, 2022 and 2021.

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, 2021.

There were no convertible notes outstanding during the six months ended March 31, 2022.

for the nine months ended June 30, 2021.

There were no convertible notes outstanding during the nine months ended June 30, 2022.

Convertible notes

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( 1,005,232 )

Balance as of end of period – March 31, 2021

Company has entered into two licensing agreements with major research institutions, which allow 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.

Balance as of end of period – June 30, 2021

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

and know-how.

Payments under those agreements are capitalized and amortized to general and administrative expenses over the expected

useful life of the acquired technology.

and Equipment

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received, rather than when payment is made, in accordance with Accounting Standards Codification (ASC) 730, Research and Development .

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

General and Administrative

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matters and sales and marketing in connection with the commercial sale of cEEG strip/grid, sEEG depth electrode and electrode cable assembly

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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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, 2022 and 2021.

reported for the three and nine months ended June 30, 2022 and 2021.

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, 2022 and 2021:

anti-dilutive for the three and nine months ended June 30, 2022 and 2021:

Stock options

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of the adoption of this ASU on its financial statements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

December 2019, the FASB issued ASU No.

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guidance on October 1, 2021 and the adoption of this new guidance did not have a material impact on the Company’s financial statements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

August 2020, FASB issued ASU 2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts

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

In November 2021, the FASB issued ASU 2021-10, Government

Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance, to increase the transparency of government

assistance including the disclosure of the types of assistance, an entity’s accounting for the assistance, and the effect of the

assistance on an entity’s financial statements.

The amendments in this ASU are effective for all entities within their scope for

financial statements issued for annual periods beginning after December 15, 2021.

The Company does not expect that this guidance will

have a material impact to our financial statements.

November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government

Assistance, to increase the transparency of government assistance including the disclosure of the types of assistance, an entity’s

accounting for the assistance, and the effect of the assistance on an entity’s financial statements.

The amendments in this ASU

are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021.

The Company does not expect that this guidance will have a material impact to our financial statements.

4 - Commitments and Contingencies

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patent to occur in 2030.

During the three months ended March 31, 2022 and 2021, $ 37,500 and $ 25,000 in royalty fees were incurred related

During the three months ended June 30, 2022 and 2021, $ 37,500 and $ 25,000 in royalty fees were incurred related

to the WARF License, respectively.

During the six months ended March 31, 2022 and 2021, $ 62,500 and $ 75,000 in royalty fees were incurred

related to the WARF License, respectively.

During each of the nine month periods ended June 30, 2022 and 2021, $ 100,000 in royalty fees were

incurred related to the WARF License.

The royalty fees were reflected as a component of cost of product revenue.

6 unchanged sentences

During the three months

ended March 31, 2022 and 2021, $ 1,097 and $ 547 in royalty fees were incurred related to the Mayo Agreement, respectively.

six months ended March 31, 2022 and 2021, $ 1,836 and $ 2,691 in royalty fees were incurred related to the Mayo Agreement, respectively.

The royalty fees were reflected as a component of cost of product revenue.

ended June 30, 2022 and 2021, $ 962 and $ 1,203 in royalty fees were incurred related to the Mayo Agreement, respectively.

During the nine

months ended June 30, 2022 and 2021, $ 2,798 and $ 3,894 in royalty fees were incurred related to the Mayo Agreement, respectively.

royalty fees were reflected as a component of cost of product revenue.

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

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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motion for summary judgment on all other counts.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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May 27, 2021 PMT, moved for summary judgment on defendants’ claims for abuse of process and punitive damages, and on August 5, 2021,

the district court granted PMT’s motion to dismiss the abuse of process and punitive damage claims.

On April 29, 2022, the district court issued an order ruling on several

motions brought by the parties to exclude evidence from the trial, granting many of the Company’s requests to exclude certain evidence,

and denying PMT’s exclusion requests.

has been postponed from December 2021 to August of 2022.

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.

the district court granted PMT’s motion to dismiss the Company’s abuse of process and punitive damage claims.

April 29, 2022, the district court issued an order ruling on several motions brought by the parties to exclude evidence from the trial,

granting many of the Company’s requests to exclude certain evidence, and denying PMT’s exclusion requests.

July 26, 2022, the Special Master appointed by the district court issued an order striking PMT’s attempt to supplement its trade

secret claim by adding thirteen new trade secret claims which it never disclosed during discovery.

The Special Master found that the

attempt by PMT’s fourth set of lawyers to add claims on the eve of trial was both untimely and unfairly prejudicial to the Company.

In addition, the Special Master found the alleged trade secrets were too vague and indefinite to constitute actionable trade secrets.

was postponed from December 2021 to August 22, 2022.

The Company intends to continue to defend itself vigorously.

The outcome of any

claim against the Company by PMT was not able to be estimated as of the issuance of these financial statements.

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

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operating expense for the first 3 months.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

July 1, 2021, the Company entered into a non-cancellable facility lease (the “Los Gatos Lease”), pursuant to which the Company

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The base rent under the San Jose Lease was $ 504 per month.

the three and six months ended March 31, 2022, rent expense associated with the facility leases amounted to $ 43,085 and $ 86,130 , respectively.

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

the three and nine months ended June 30, 2022, rent expense associated with the facility leases amounted to $ 42,185 and $ 128,315 , respectively.

During the three and nine months ended June 30, 2021, rent expense associated with the facility leases amounted to $ 31,485 and $ 92,746 ,

respectively.

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

six months ended

Nine Months Ended

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

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Operating leases

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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Long-term portion

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

5 – Supplemental Balance Sheet Information

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and other assets consisted of the following:

March 31, 2022

September 30, 2021

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12 - 13 years

Net Intangibles, March 31, 2022

expense was $ 5,579 and $ 11,158 for the three and six months ended March 31, 2022, respectively, and $ 5,579 and $ 11,158 for the three

and six months ended March 31, 2021, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Net Intangibles, June 30, 2022

expense was $ 5,578 and $ 16,736 for the three and nine months ended June 30, 2022, respectively, and $ 5,579 and $ 16,737 for the three

and nine months ended June 30, 2021, respectively.

and Equipment, Net

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

March 31, 2022

September 30,

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Property and equipment, net

expense was $ 22,952 and $ 42,534 for the three months and six months ended March 31, 2022, respectively, and $ 13,715 and $ 26,872 for the

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

expense was $ 25,928 and $ 68,462 for the three months and nine months ended June 30, 2022, respectively, and $ 14,776 and $ 41,648 for the

three and nine months ended June 30, 2021, respectively.

6 - Accrued Expenses and Other Liabilities

expenses consisted of the following at March 31, 2022 and September 30, 2021:

Accrued expenses and other liabilities consisted of the following at

June 30, 2022 and September 30, 2021:

September 30,

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Royalty Payments

7 – Zimmer Development Agreement

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 is responsible for all costs and expenses related to developing the Products, and

Zimmer is 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 is 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.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

7 – Zimmer Development Agreement

July 20, 2020, the Company entered into an exclusive development and distribution agreement (as amended from time to time, the “Zimmer

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 Zimmer Development Agreement through a joint

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

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

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

In addition to the Zimmer 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 Zimmer Development Agreement, the Company is 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 Zimmer Development

Agreement) for such Product.

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

Fee”) to the Company.

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:

on or before the deadline indicated for such event and the Product Availability Date (as defined in the Zimmer 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:

freeze for the SEEG Products by December 15, 2020 - $ 500,000

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

Zimmer timely delivers a Design Modification Notice to the Company under the Development Agreement, 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

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

Zimmer timely delivers a Design Modification Notice to the Company under the Zimmer Development Agreement, 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, then the Company shall receive the additional amount indicated for such event as part of the SEEG Exclusivity

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

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

purposes of the Zimmer 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 Zimmer 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

Notes to Condensed Financial Statements

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:

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;

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);

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

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

● 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 .

Product Availability Date for the SEEG Products has not yet occurred.

Notwithstanding any other provision of the Development Agreement,

Notwithstanding any other provision of the Zimmer 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

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(including any Interim Fee Bonus(es)), once paid, are non-refundable.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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.

inception of the Zimmer Development Agreement through March 31, 2022, 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

Zimmer 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 Zimmer 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 Zimmer Development Agreement if Zimmer acquires or directly or indirectly owns a controlling

interest in certain competitors of the Company.

inception of the Zimmer Development Agreement through June 30, 2022, 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 zero and $ 20,113 during the three month periods ended March 31, 2022 and 2021, respectively, and $ 6,374 and

$ 42,387 during the six month periods ending March 31, 2022 and 2021, respectively, 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 during the six months

ended as of March 31, 2022 and 2021:

Accordingly, the Company recognized revenue in

the amount of zero and $ 17,451 during the three month periods ended June 30, 2022 and 2021, respectively, and $ 6,374 and $ 59,838 during

the nine month periods ended June 30, 2022 and 2021, respectively, in connection with the Initial Exclusivity Fee payment.

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 during the nine months

ended as of June 30, 2022 and 2021:

Deferred Revenue

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Revenue recognized

Balance as of end of period – March 31

remaining performance obligations reflected in deferred revenue as of March 31, 2022 are expected to be completed in the second half

Balance as of end of period – June 30

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

remaining performance obligations reflected in deferred revenue as of June 30, 2022 are expected to be completed in the last quarter

of fiscal year 2022.

On August 2, 2022, the Company and Zimmer entered into the Third Amendment

to the Zimmer Development Agreement.

See “Note 14 – Subsequent Events”.

revenue related to its Strip/Grid Products, SEEG Products and Electrode Cable Assembly Products.

Product revenue recognized during the

three and six month periods ended March 31, 2022 was $ 36,584 and $ 70,332 , respectively.

Product revenue recognized during the three and

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

three and nine month periods ended June 30, 2022 was $ 32,049 and $ 102,381 , respectively.

Product revenue recognized during the three

and nine month periods ended June 30, 2021 was $ 40,096 and $ 129,810 , respectively.

expense is charged to selling, general and administrative expenses during the period that it is incurred.

Total advertising expense amounted

to $ 113,197 and $ 174,532 for the three and six month periods ended March 31, 2022, respectively.

to $ 43,479 and $ 218,011 for the three and nine month periods ended June 30, 2022, respectively.

Total advertising expense amounted to

$ 113,140 and $ 142,147 for the three and six month periods ended March 31, 2021, respectively.

$ 79,261 and $ 221,408 for the three and nine month periods ended June 30, 2021, respectively.

8 - Convertible Promissory Notes and Warrant Agreements

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common stock.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

initial closing of the 2019 Paulson Private Placement was consummated on November 1, 2019, and, on that date and through December 3,

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the resale of any common stock received on conversion of such 2019 Paulson Notes, and shares of common stock underlying the Warrants.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

Interest on principal amounted to $ 5,701 during the nine month

period ended June 30, 2021 and was recorded under the net valuation change of instruments measured at fair value in the condensed statements

of operations.

The 2019 Paulson Notes were not outstanding during the six month period ended March 31, 2022.

The 2019 Paulson Notes were not outstanding during the nine month period ended June 30, 2022.

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

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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 was recorded under the net valuation change of instruments measured at fair

of $( 1,974 ) during the nine months ended June 30, 2021 and was recorded under the net valuation change of instruments measured at fair

value in the condensed statements of operations.

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there was no value attributed to the 2019 Paulson Warrants in the condensed financial statements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

costs during the six month period ended March 31, 2021 in connection with the 2019 Paulson Private Placement were $ 3,053 and related

costs during the nine month period ended June 30, 2021 in connection with the 2019 Paulson Private Placement were $ 3,053 and related

to legal costs.

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9 – Stock-Based Compensation

the three and six month periods ended March 31, 2022 and 2021, stock-based compensation 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.

the three and nine month periods ended June 30, 2022 and 2021, stock-based compensation expense related to stock-based awards was included

in selling, general and administrative expenses and research and development costs as follows in the accompanying condensed statements

of operations.

Three Months Ended

Six Months Ended

General and administrative

Nine Months Ended

Selling, general and administrative

Research and development

Total stock-based compensation expense

the three month periods ended March 31, 2022 and 2021, under the 2017 Equity Incentive Plan (the “2017 Plan”), the Company

the three month periods ended June 30, 2022 and 2021, under the 2017 Equity Incentive Plan (the “2017 Plan”), the Company

granted 88,690 and 81,446 stock options, respectively, to its officers and employees.

During the six month periods ended March 31, 2022

During the nine month periods ended June 30, 2022

and 2021, the Company granted 150,690 and 703,117 , respectively, to its officers, employees and consultants.

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the event that a certain milestone is met.

The grant date fair value of the grants issued during the three month periods ended March

The grant date fair value of the grants issued during the three month periods ended June 30,

2022 and 2021 was $ 0.57 and $ 3.65 per share, respectively.

The grant date fair value of the grants issued during the six month periods

ended March 31, 2022 and 2021 was $ 1.03 and $ 2.92 per share, respectively.

total expense for the three months ended March 31, 2022 and 2021 related to stock options was $ 145,421 and $ 217,466 , respectively.

total expense for the six months ended March 31, 2022 and 2021 related to stock options was $ 307,782 and $ 317,612 , respectively.

total number of stock options outstanding as of March 31, 2022 and September 30, 2021 was 1,162,059 and 1,122,560 , respectively.

The grant date fair value of the grants issued during the nine month periods

ended June 30, 2022 and 2021 was $ 0.76 and $ 3.01 per share, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

total expense for the three months ended June 30, 2022 and 2021 related to stock options was $ 137,109 and $ 500,149 , respectively.

total expense for the nine months ended June 30, 2022 and 2021 related to stock options was $ 444,891 and $ 817,761 , respectively.

total number of stock options outstanding as of June 30, 2022 and September 30, 2021 was 1,245,582 and 1,122,560 , 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, 2022 and 2021:

and nine month period ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

Nine Months Ended

Expected stock price volatility

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Risk free interest rate

the three month periods ended March 31, 2022 and 2021, 182,217 and 34,752 stock options vested, respectively, and 9,167 and 10,146 stock

the three month periods ended June 30, 2022 and 2021, 64,841 and 162,266 stock options vested, respectively, and 5,167 and 21,437 stock

options were forfeited during these periods, respectively.

During the six month periods ended March 31, 2022 and 2021, 201,060 and 106,527

During the nine month periods ended June 30, 2022 and 2021, 265,901 and 268,793

stock options vested, respectively and 27,668 and 31,583 stock options were forfeited during these periods, respectively.

three and six months ended March 31, 2021, 758 stock options were exercised with an intrinsic value of $ 955 .

No options were exercised

during the three and six months ended March 31, 2022.

three and nine months ended June 30, 2021, 780 and 1,538 stock options were exercised, respectively, with an intrinsic value of $ 1,693

and $ 2,648 , respectively.

No options were exercised during the three and nine months ended June 30, 2022.

During the three and nine months ended June 30, 2022, the Company granted

an aggregate of 87,720 and 443,670 restricted stock units (“RSUs”) to certain directors, officers and employees under the

The weighted average grant date fair value of the RSUs granted during the three and nine months ended June 30, 2022 was $ 1.14

and $ 1.91 per unit, respectively.

The RSUs vest over a one to three year period with some of the RSUs vesting ratably on a monthly and

others vesting at 50 percent on the first anniversary of the grant date with the remaining RSUs vesting in equal monthly installments

on the last day of each month over 24 months, subject to the recipient’s continued service on such dates.

During the three

and nine month periods ended June 30, 2021, 13,776 RSUs were granted to directors at a weighted average grant date fair value of $ 7.26 .

the three months ended June 30, 2022 and 2021, 9,606 and 7,077 RSUs vested, respectively, and no RSUs were forfeited during these periods.

During the nine months ended June 30, 2022 and 2021, 18,694 and 23,453 RSUs vested, respectively, and no RSUs were forfeited during these

The total expense for the three months ended June 30, 2022 and 2021 related to these RSUs was $ 118,439 and $ 39,702 , respectively.

The total expense for the nine months ended June 30, 2022 and 2021 related to these RSUs was $ 246,445 and $ 123,278 , respectively.

Stock-Based Awards

April 2021, two consulting agreements were executed whereby a total of 62,659 shares

of common stock were subject to issuance of which 51,330 shares of common stock were issued as of June 30, 2021.

expense related to the stock awards granted under these consulting agreements amounted to $339,001 for the three and nine months

ended June 30, 2021 and were included in the total stock-based compensation expense.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

the three and six months ended March 31, 2022, the Company granted an aggregate of 355,950 restricted stock units (“RSUs”)

to certain officers and employees under the 2017 Plan.

The weighted average grant date fair value of the RSU granted during the three

and six months ended March 31, 2022 was $ 2.10 per unit.

The RSUs vest over a three year period with 50 percent vesting on the first anniversary

of the grant date and the remaining RSUs vesting in equal monthly installments on the last day of each month over 24 months, subject

to the recipient’s continued service on such dates.

No RSUs were granted during the three and six month periods ended March

the three months ended March 31, 2022 and 2021, 3,444 and 7,992 RSUs vested, respectively, and no RSUs were forfeited during these periods.

During the six months ended March 31, 2022 and 2021, 9,088 and 16,376 RSUs vested, respectively, and no RSUs were forfeited during these

The total expense for the three months ended March 31, 2022 and 2021 related to these RSUs was $ 87,295 and $ 40,493 , respectively.

The total expense for the six months ended March 31, 2022 and 2021 related to these RSUs was $ 128,006 and $ 83,576 , respectively.

Stock-Based Awards

August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company repurchase.

The stock award under the agreement vested over a six-month period.

As of March 31, 2021, 40,000 shares were vested under this agreement

of which 13,334 and 33,334 shares vested during the three and six month periods ended March 31, 2021, respectively.

August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to

Company repurchase.

The stock award under the agreement vests over a six-month period.

As of June 30, 2021, 40,000 shares were

vested under this agreement of which 33,334 shares vested during the nine months ended June 30, 2021.

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 compensation expense.

other stock-based awards were issued during the three and six month periods ended March 31, 2022 and no expense associated with stock

awards was recorded during the three and six months ended March 31, 2022.

related to the stock award granted under this consulting agreement amounted to $171,000 for the nine months ended June 30, 2021

and was included in the total stock-based compensation expense.

other stock-based awards were issued during the three and nine month periods ended June 30, 2022 and no expense associated with stock

awards was recorded during the three and nine months ended June 30, 2022.

October 4, 2021, the Company adopted the NeuroOne Medical Technologies Corporation 2021 Inducement Plan (the “Inducement Plan”),

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Effective January 1, 2022, 1,614,538 shares were added to the 2017 Plan as a result of the evergreen

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

of March 31, 2022, 1,880,777 shares were available in the aggregate for future issuance under the 2017 Plan and Inducement Plan.

of June 30, 2022, 1,709,534 shares were available in the aggregate for future issuance under the 2017 Plan and Inducement Plan.

were available for future issuance under the 2016 Equity Incentive Plan.

Unrecognized stock-based compensation was $ 2,035,046 as of March

Unrecognized stock-based compensation was $ 1,927,956 as of June

The unrecognized share-based expense is expected to be recognized over a weighted average period of 2.2 years.

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to these financial institutions.

As of March 31, 2022, the Company had no deposits in excess of federally insured amounts.

As of June 30, 2022, the Company had no deposits in excess of federally insured amounts.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

customer accounts for all of the Company’s product and collaborations revenue.

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11 – Income Taxes

effective tax rate for the three and six months ended March 31, 2022 and 2021 was zero percent.

effective tax rate for the three and nine months ended June 30, 2022 and 2021 was zero percent.

As a result of the analysis of all available

evidence as of March 31, 2022 and September 30, 2021, the Company recorded a full valuation allowance on its net deferred

Consequently, the Company reported no income tax benefit during the three and six months ended March

evidence as of June 30, 2022 and September 30, 2021, the Company recorded a full valuation allowance on its net deferred

Consequently, the Company reported no income tax benefit during the three and nine months ended June

30, 2022 and 2021.

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12 – Stockholders’ Equity

Public Offering

October 13, 2021, the Company, entered into an Underwriting Agreement (the “Underwriting Agreement”) with Craig-Hallum

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other offering expenses payable by the Company in the amount of approximately $ 1.4 million in the aggregate.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Private Placement

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of issuance and will expire on the fifth anniversary of such date.

The 2021 Private Placement closed on January 14, 2021.

This private placement closed on January 14, 2021.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Activity and Summary

following table summarizes warrant activity during the six month period ended March 31, 2022:

following table summarizes warrant activity during the nine month period ended June 30, 2022:

Weighted Average

Price Per Warrant

Outstanding and exercisable at September 30, 2021

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Forfeited/Expired

Outstanding and exercisable at March 31, 2022

Outstanding and exercisable at June 30, 2022

$ 5.25 -$ 9.00

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The Company may also make discretionary profit sharing contributions under the 401K Plan in the future, but it has not done so through

March 31, 2022.

June 30, 2022.

contributions and any employer matching contributions made to satisfy certain non-discrimination tests required by the Internal Revenue

Code are 100 % vested upon contribution.

Discretionary employer matches to employee deferrals vest over a six year period beginning on

Discretionary employer matches to employee deferrals vest over a nine year period beginning on

the second anniversary of an employee’s date of hire.

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The amount of matching contributions to the 401K Plan to satisfy certain

non-discrimination tests was $ 30,697 and $ 14,803 during the three and six month periods ending March 31, 2022 and 2021, respectively.

non-discrimination tests was $ 30,697 and $ 14,803 during the three and nine month periods ended June 30, 2022 and 2021, respectively.

14 – Subsequent Events

Third Amendment to Exclusive Development

and Distribution Agreement with Zimmer, Inc.

On August 2, 2022, the Company entered into a

Third Amendment to Exclusive Development and Distribution Agreement (the “Zimmer Amendment” ) with Zimmer.

to the terms and conditions of the Zimmer Amendment, Zimmer agreed to make a $ 3,500,000 payment to the Company within 10 business days

of the execution of the Zimmer Amendment.

On August 2, 2022, in connection with the Zimmer

Amendment, the Company issued Zimmer a Warrant to Purchase Common Stock (the “2022 Zimmer Warrant” ).

The 2022 Zimmer Warrant will be exercisable for

up to an aggregate of 350,000 shares of the Company’s common stock.

The 2022 Zimmer Warrant will have an exercise price of $ 3.00

per share, will be exercisable commencing six months from the issuance date, and will expire on August 2, 2027 .

Subject to limited exceptions,

Zimmer will not have the right to exercise any portion of the 2022 Zimmer Warrant if Zimmer, together with its affiliates, would beneficially

own in excess of 4.99 % of the number of shares of the Common Stock outstanding immediately after giving effect to such exercise provided,

however, that upon prior notice to the Company, the holder may increase or decrease the Beneficial Ownership Limitation, provided further

that in no event shall the Beneficial Ownership Limitation exceed 19.99 % and any increase in the beneficial ownership limitation will

not be effective until 61 days following notice to the Company.

NeuroOne 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