What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-02-13 compared with 2022-08-11 · 485 added, 556 removed, 41 unchanged (96% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion of our financial condition and results of operations should be read in conjunction with the financial statements

and notes included in Part I “Financial Information”, Item I “Financial Statements” of this Quarterly Report

on Form 10-Q (the “Report”) and the audited financial statements and related footnotes included in our Annual Report on Form

10-K for the year ended September 30, 2021.

Forward-Looking

Report contains forward-looking statements that involve substantial risks and uncertainties.

In some cases, you can identify forward-looking

statements by the words “may,” “might,” “will,” “could,” “would,” “should,”

“expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,”

“estimate,” “predict,” “project,” “potential,” “target,” “seek,”

“contemplate,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology

intended to identify statements about the future.

These statements involve known and unknown risks, uncertainties and other factors that

may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed

or implied by these forward-looking statements.

Although we believe that we have a reasonable basis for each forward-looking statement

contained in this Report, we caution you that these statements are based on a combination of facts and factors currently known by us

and our expectations of the future, about which we cannot be certain.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

The following discussion of our financial

condition and results of operations should be read in conjunction with the financial statements and notes included in Part I “Financial

Information”, Item I “Financial Statements” of this Quarterly Report on Form 10-Q (the “Report”) and the

audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended September 30, 2022.

Forward-Looking Statements

This Report contains forward-looking statements

that involve substantial risks and uncertainties.

In some cases, you can identify forward-looking statements by the words “may,”

“might,” “will,” “could,” “would,” “should,” “expect,” “intend,”

“plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,”

“project,” “potential,” “target,” “seek,” “contemplate,” “continue”

and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the

These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of

activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

Although we believe that we have a reasonable basis for each forward-looking statement contained in this Report, we caution you that

these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which

we cannot be certain.

Forward-looking statements include statements about:

the timing of and our ability

to obtain and maintain regulatory clearance of our cortical strip, grid and depth electrode technology, including our ability to

obtain 510(k) clearance for use of its Evo sEEG electrode technology for less than 30 days;

our ability to successfully

commercialize our technology in the United States;

our ability to achieve

or sustain profitability;

our ability to raise additional

capital and to fund our operations;

the results of our development

and distribution relationship with Zimmer, Inc.

the availability of additional

capital on acceptable terms or at all as or when needed;

the clinical utility of

our cortical strip, grid and depth electrode including technology under development;

our ability to develop

additional applications of our cortical strip, grid and depth electrode technology with the benefits we hope to offer as compared

to existing technology, or at all;

the performance, productivity,

reliability and regulatory compliance of our third party manufacturers of our cortical strip, grid electrode and depth electrode

our ability to develop

future generations of our cortical strip, grid and depth electrode technology;

our future development

the impact of the COVID-19

pandemic and macroeconomic conditions, including supply chain disruptions, labor shortages and inflationary pressures, on our business;

our ability to obtain reimbursement

coverage for our cortical strip, grid and depth electrode technology;

our expectations about

the willingness of healthcare providers to recommend our cortical strip, grid and depth electrode technology to people with epilepsy,

Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological

NeuroOne Medical Technologies Corporation

our future commercialization,

marketing and manufacturing capabilities and strategy;

our ability to comply with

applicable regulatory requirements;

our ability to maintain

our intellectual property position;

the outcome of legal proceedings

with PMT Corporation (“PMT”);

our expectations regarding

international opportunities for commercializing our cortical strip, grid and depth electrode technology under including technology

under development;

our estimates regarding

the size of, and future growth in, the market for our technology, including technology under development;

our estimates regarding

our future expenses and needs for additional financing.

Forward-looking

statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry

in which we operate, and management’s beliefs and assumptions are not guarantees of future performance or development and involve

known and unknown risks, uncertainties and other factors that are in some cases beyond our control.

You should refer to the “Risk

Factors” section of our Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ

materially from those expressed or implied by our forward-looking statements.

As a result of these factors, we cannot assure you that

the forward-looking statements in this Report will prove to be accurate.

Furthermore, if our forward-looking statements prove to be inaccurate,

the inaccuracy may be material.

In light of the significant uncertainties in these forward-looking statements, you should not regard

these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified

time frame, or at all.

forward-looking statements speak only as of the date of this Report.

Except as required by law, we assume no obligation to update or

revise these forward-looking statements for any reason, even if new information becomes available in the future.

You should, however,

review the factors and risks and other information we describe in the reports we will file from time to time with the Securities and

Exchange Commission (the “SEC”) after the date of this Report.

are a medical technology company focused on the development and commercialization of thin film electrode technology for cEEG and sEEG

recording, spinal cord stimulation, brain stimulation and ablation solutions for patients suffering from epilepsy, Parkinson’s

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

Additionally,

we are investigating the potential applications of our technology associated with artificial intelligence.

are developing our cortical, sheet and depth electrode technology to provide solutions for diagnosis through cEEG recording and sEEG

recording and treatment through brain stimulation and ablation, all in one product.

A cEEG is a continuous recording of the electrical

activity of the brain that identifies the location of irregular brain activity, which information is required for proper treatment.

recording involves an invasive surgical procedure, referred to as a craniotomy.

sEEG involves a less invasive procedure whereby doctors

place electrodes in targeted brain areas by drilling small holes through the skull.

Both methods of seizure diagnosis are used to identify

areas of the brain where epileptic seizures originate in order to precisely locate the seizure source for therapeutic treatment if possible.

brain stimulation, or DBS, therapies involve activating or inhibiting the brain with electricity that can be given directly by electrodes

on the surface or implanted deeper in the brain via depth electrodes.

Introduced in 1987, this procedure involves implanting a power

source referred to as a neurostimulator, which sends electrical impulses through implanted depth electrodes, to specific targets in the

brain for the treatment of disorders such as Parkinson’s disease, essential tremors, dystonia, and chronic pain.

The effects of

DBS as a potential treatment for Alzheimer’s is also being evaluated by researchers.

Unlike ablative technologies, the effects

of DBS are reversible.

our ability to maintain regulatory clearance of our cortical strip

and grid electrode technology;

our ability to obtain and maintain regulatory clearance for our RF

ablation system;

our ability to successfully commercialize our technology in the United

our ability to achieve or sustain profitability;

our ability to raise additional capital and to fund our operations;

the availability of additional capital on acceptable terms or at all

as or when needed;

the clinical utility of our cortical strip, grid and depth electrode

including technology under development;

our ability to develop additional applications of our cortical strip,

grid and depth electrode technology with the benefits we hope to offer as compared to existing technology, or at all;

the results of our development and distribution relationship with Zimmer,

we have been the victim of a cyber-related crime, and our controls

may not be successful in avoiding future cyber-related crimes;

the performance, productivity, reliability and regulatory compliance

of our third party manufacturers of our cortical strip, grid electrode and depth electrode technology;

our ability to develop future generations of our cortical strip, grid

and depth electrode technology;

our future development priorities;

the impact of the COVID-19 pandemic on our business;

our ability to obtain reimbursement coverage for our cortical strip,

grid and depth electrode technology;

our expectations about the willingness of healthcare providers to recommend

our cortical strip, grid and depth electrode technology to people with epilepsy, Parkinson’s disease, dystonia, essential tremors,

chronic pain due to failed back surgeries and other related neurological disorders;

NeuroOne Medical Technologies Corporation

ablation is a procedure that uses radiofrequency under the electrode contacts which is directed to the site of the brain tissue that

is targeted for removal.

The process involves delivering energy to the contacts, thereby heating them and destroying the brain tissue.

The ablation does not remove the tissue.

Rather, it is left in place and typically scar tissue forms in the place where the ablation

This procedure is also known as brain lesioning as it causes irreversible lesions.

received 510(k) FDA clearance for our Evo cortical technology in November 2019, and in September 2021 we received FDA clearance to market

our 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.

November 2021, the Company submitted a request to the FDA seeking a 510(k) clearance for use of its Evo sEEG electrode technology for

less than 30 days.

On March 11, 2022, the Company received a letter via email from the FDA that the FDA had denied the Company’s

510(k) application based on a finding of non-substantial equivalence based on their analysis of the methodology used for exhaustive extraction

The FDA letter stated the Company has not demonstrated that the sEEG Electrode for less than 30-day use is substantially equivalent

to the predicate device (sEEG Electrode for less than 24 hours K211367).

The FDA also stated that the Company may re-submit a new 510(k)

if it has biocompatibility data it believes can show its device to be substantially equivalent.

Company filed an appeal of this decision to a higher level within the FDA, which placed the submission on hold until a decision was made.

In a letter to the Company dated May 13, 2022, the FDA stated that they were upholding their decision that the device is not substantially

equivalent for extended use based on their analysis of the methodology used for exhaustive extraction testing.

FDA also stated that the Company may submit a new 510(k) with new evidence, specifically as it relates to the subacute toxicity endpoint,

to support a finding of substantial equivalence.

The Company is in the process of collecting such data and intends to submit a Special

510(k) which according to FDA guidance is processed within 30 days of receipt, rather than the 90 days for a traditional 510(k).

Company expects to resubmit the application to the FDA in August 2022.

Company has stated previously that it expected to be commercial ready with the Evo sEEG electrode in the first calendar quarter of 2022

pending FDA clearance.

The Company now expects that additional time will be required and will continue to work with the FDA in pursuit

of 510(k) clearance.

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

The Company sold, on a limited application basis for design verification, sEEG depth electrode products for non-human use

beginning in late fiscal year 2021.

our future commercialization, marketing and manufacturing capabilities

and strategy;

our ability to comply with applicable regulatory requirements;

our ability to maintain our intellectual property position;

our expectations regarding international opportunities for commercializing

our cortical strip, grid and depth electrode technology under including technology under development;

our estimates regarding the size of, and future growth in, the market

for our technology, including technology under development;

our estimates regarding our future expenses and needs for additional

Forward-looking statements are based on management’s

current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s

beliefs and assumptions are not guarantees of future performance or development and involve known and unknown risks, uncertainties and

other factors that are in some cases beyond our control.

You should refer to the “Risk Factors” section of our Annual Report

on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied

by our forward-looking statements.

As a result of these factors, we cannot assure you that the forward-looking statements in this Report

will prove to be accurate.

Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material.

light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation

or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.

These forward-looking statements speak only as

of the date of this Report.

Except as required by law, we assume no obligation to update or revise these forward-looking statements for

any reason, even if new information becomes available in the future.

You should, however, review the factors and risks and other information

we describe in the reports we will file from time to time with the Securities and Exchange Commission (the “SEC”) after the

date of this Report.

We are a medical technology

company focused on the development and commercialization of thin film electrode technology for continuous electroencephalogram (cEEG)

and stereoelectrocencephalography (sEEG), spinal cord stimulation, brain stimulation and ablation solutions for patients suffering from

epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological

Additionally, we are investigating the potential applications of our technology associated with artificial intelligence.

In November 2019, our Evo cortical technology

received 510(k) clearance from the FDA for recording, monitoring, and stimulating brain tissue for up to 30 days, and in October 2022,

we received FDA clearance for our Evo sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and

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

We completed feasibility bench top testing with

a new design of our diagnostic and ablation depth electrode in the first calendar quarter of 2021 and signed a contract with RBC Medical

Innovations to develop hardware for the system in the third calendar quarter of 2021.

We are targeting the first calendar quarter of

2023 for design verification of such hardware.

We also completed an animal feasibility study at Emory University in September 2021.

we plan to complete additional animal studies through the first quarter of calendar 2023 and submit an application for FDA 510(k) clearance

in the second calendar quarter of 2023.

Our other products are still under development.

to FDA approval or clearance of certain of our products, our primary activities were limited to, and our limited resources were dedicated

to, performing business and financial planning, raising capital, recruiting personnel, negotiating with business partners and the licensors

of our intellectual property and conducting research and development activities.

have incurred losses since inception.

As of June 30, 2022, we had an accumulated deficit of $49.5 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

to FDA approval of certain of our products, our main source of cash was proceeds from the issuances of notes, common stock, warrants

and unsecured loans.

See “—Liquidity and Capital Resources—Capital Resources” below.

While we have

begun to generate revenue from the sale of products based on our cEEG and sEEG technology and through milestone payments from our current

collaboration with Zimmer, 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, and we will need to obtain substantial

additional funding in connection with our continuing operations through public or private equity or debt financings, through collaborations

or partnerships with other companies or other sources.

NeuroOne Medical Technologies Corporation

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—Liquidity Outlook” below

Developments and Upcoming Milestones

November 2021, we submitted a request to the FDA seeking a 510(k) clearance for use of our Evo sEEG electrode technology for less than

On March 11, 2022, the FDA denied the Company’s 510(k) application based on a finding of non-substantial equivalence based

on their analysis of the methodology used for exhaustive extraction testing.

filed an appeal of this decision to a higher level within the FDA, which placed the submission on hold until a decision was made.

May 13, 2022, the FDA stated that they were upholding their decision that the device is not substantially equivalent for extended use

based on their analysis of the methodology used for exhaustive extraction testing.

We intend to submit a Special 510(k) which according

to FDA guidance is processed within 30 days of receipt, rather than the 90 days for a traditional 510(k).

We expect to resubmit the application

to the FDA in August 2022.

had stated previously that we expected to be commercial ready with the Evo sEEG electrode in the first calendar quarter of 2022 pending

FDA clearance.

We now expect that additional time will be required and will continue to work with the FDA in pursuit of 510(k) clearance.

completed feasibility bench top testing with a new design of our diagnostic and ablation depth electrode in the first calendar quarter

of 2021, and signed a contract with RBC Medical Innovations to develop and manufacture hardware (a radio frequency generator) for the

system in the third calendar quarter of 2021.

We are targeting the third calendar quarter of 2022 for completion of a prototype of hardware,

with the submission of an application for FDA clearance in early calendar 2023.

We also completed an animal feasibility study at Emory

University in September 2021 and additional animal studies are planned.

During the fiscal quarter, we also announced that we have surpassed

five years of accelerated aging testing for our recording electrodes.

We continue to develop our Chronic Use electrodes and remain focused

on developing a system for the treatment of chronic back pain due to failed back surgeries that provides the capabilities of recording

and stimulation in a thin film electrode technology.

We recently established a physician advisory board comprised of leading anesthesiologists

and neurosurgeons that have extensive experience with implanting these systems.

In our fiscal fourth quarter, we will convene the group

to begin to develop the framework of a desired feature set customized to the advantages of our electrode technology.

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 our technology was delayed in the first quarter due to interruptions

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

Additionally, our 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 our results of future operations, financial position, and liquidity for the

duration of fiscal year 2022 and beyond.

NeuroOne Medical Technologies Corporation

product revenue was derived from the sale of strip/grid, depth electrode and electrode cable assembly products based on Evo cortical

and sEEG technology.

For the foreseeable future, we anticipate that we will generate additional revenue from the sale of products based

on Evo cortical and sEEG technology.

have received FDA 510(k) clearance for our cortical strip electrode, but we do not expect to generate any significant revenue from the

sale of our other products until we develop and obtain all required regulatory approvals or clearances for and commercialize depth electrode

technology for human use.

If we fail to complete the development of the depth electrode technology, or any other product candidate we

may pursue in the future, in a timely manner, or fail to obtain regulatory approval, we may never be able to generate revenue from product

sales sufficient to sustain operations.

Gross Profit (Loss)

gross profit (loss) represents our product revenue less our cost of product revenue.

Our cost of product revenue consists of the manufacturing

and materials costs incurred by our third-party contract manufacturer in connection with our strip/grid and depth electrode 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 our license agreements.

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 achievement and timing of

future milestones or level of sales required to earn royalty payments from Zimmer is uncertain.

For a discussion of milestones and royalty

payments under the Zimmer Development Agreement, see “—Liquidity and Capital Resources—Liquidity Outlook” below

and see “Note 7 — Zimmer Development Agreement” included in our condensed financial statements included in “Part

1, Item 1 – Financial Statements” in this Report.

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 financial and administrative matters, and sales

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

We anticipate that our selling, general and administrative expenses will significantly increase in the future to support our continued

research and development activities, further commercialization of our cortical strip technology, potential further commercialization

of our grid electrode and depth electrode technology, if approved, and the increased costs of operating as a public company.

These increases

will include increased costs related to the hiring of additional personnel and fees for legal and professional services, as well as other

public-company related costs.

and Development

and development expenses consist of expenses incurred in performing research and development activities in developing our cortical strip,

grid electrode and depth electrode technology.

Research and development expenses include compensation and benefits for research and development

employees including stock-based compensation, overhead expenses, cost of laboratory supplies, clinical trial and related clinical manufacturing

expenses, costs related to regulatory operations, fees paid to consultants and other outside expenses.

Research and development costs

are expensed as incurred and costs incurred by third parties are expensed as the contracted work is performed.

Lastly, de minimis income

from the sale of prototype products and related materials are offset against research and development expenses.

We commenced commercial

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

We sold, on a limited

application basis for design verification, sEEG depth electrode products for non-human use beginning in late fiscal year 2021, and we

commenced commercial sales of our sEEG depth electrode products in late calendar 2022.

Our other products are still under development.

NeuroOne Medical Technologies Corporation

expect our research and development expenses to significantly increase over the next several years as we develop our cortical strip,

grid electrode and depth electrode technology and conduct preclinical testing and clinical trials and will depend on the duration, costs

and timing to complete our preclinical programs and clinical trials.

expense consists of interest costs related to our convertible notes issued in 2019 (the “2019 Paulson Notes”) outstanding

during the first quarter of fiscal year 2021.

valuation change of instruments measured at fair value

net valuation change of instruments measured at fair value included the change in fair value of the 2019 Paulson Notes while they were

income primarily consists of interest income related to our cash deposits and proceeds outside of normal operating activity relating

to legal settlements and sales of non-commercial supplies.

of Operations

of the Three Months Ended June 30, 2022 and 2021

following table sets forth the results of operations for the three months ended June 30, 2022 and 2021, respectively.

For the Three Months Ended

June 30, (unaudited)

We have incurred losses since inception.

December 31, 2022, we had an accumulated deficit of $52.6 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.

Prior to FDA clearance

of certain of our products, our main sources of cash, cash equivalents and short-term investments were proceeds from the issuances of

notes, common stock, warrants and unsecured loans.

See “Liquidity and Capital Resources—Capital Resources” below.

we have begun to generate revenue from the sale of products based on our cEEG and sEEG technology and through milestone and other

payments from our current collaboration with Zimmer, 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, and we will

need to obtain substantial additional funding in connection with our continuing operations through public or private equity or debt financings,

through collaborations or partnerships with other companies or other sources.

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—Liquidity

Outlook” below.

Recent Developments and Upcoming Milestones

Global Economic Conditions

Generally, worldwide

economic conditions remain uncertain, particularly due to the effects of the COVID-19 pandemic and increased inflation.

The general economic

and capital market conditions both in the U.S.

and worldwide, have been volatile in the past and at times have adversely affected our

access to capital and increased the cost of capital.

The capital and credit markets may not be available to support future capital raising

activity on favorable terms or at all.

If economic conditions decline, our future cost of equity or debt capital and access to the capital

markets could be adversely affected.

The COVID-19 pandemic

that began in late 2019 introduced significant volatility to the global economy, disrupted supply chains and had a widespread adverse

effect on the financial markets.

Additionally, our operating results could be materially impacted by changes in the overall macroeconomic

environment and other economic factors.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages,

the conflict in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well

as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in

fiscal and monetary policy, including increased interest rates.

Financial Overview

Product Revenue

Cost of product revenue

Product gross profit (loss)

Our product revenue was derived from the sale

of our strip and grid cortical electrodes (“Strip/Grid Products”), depth electrodes (“sEEG products”) and electrode

cable assembly products (“Electrode Cable Assembly Products”) based on Evo cortical technology.

We anticipate that we will

generate additional revenue from the sale of products based on Evo cortical technology.

In November 2019, we received FDA 510(k) clearance

for our cortical strip electrode for temporary (less than 30 days) recording, monitoring, and stimulation on the surface of the brain.

In October 2022, we received FDA 510(k) clearance for our Evo sEEG electrode technology for temporary (less than 30 days) use with recording,

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

NeuroOne Medical Technologies Corporation

Product Gross Loss

Product gross loss represents our product revenue

less our cost of product revenue.

Our cost of product revenue consists 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 of producing the Electrode Cable

Assembly Products.

In addition, cost of product revenue includes royalty fees incurred in connection with our license agreements.

Collaborations Revenue

Operating expenses:

On July 20, 2020, we entered into an exclusive

development and distribution agreement (the “Zimmer Development Agreement”) with Zimmer, pursuant to which we granted Zimmer

exclusive global rights to distribute the Strip/Grid Products and electrode cable assembly products (the “Electrode Cable Assembly

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 Zimmer Development Agreement through a joint development

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

Under the terms of the Zimmer Development Agreement,

we are 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.

Except as otherwise provided in the Zimmer Development

Agreement, we are 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.

Pursuant to the Zimmer Development Agreement,

Zimmer made an upfront initial exclusivity fee payment of $2.0 million (the “Initial Exclusivity Fee”) to the Company

in fiscal year 2020.

In addition, on August 2, 2022, we entered into a Third Amendment to the Zimmer Development Agreement (the “Amendment”)

Pursuant to the terms and conditions of the Amendment, Zimmer made a $3.5 million payment to us in August 2022.

In consideration

of the mutual covenants and agreements contained in the Zimmer Development Agreement, certain fee and milestone payment provisions in

the Zimmer Development Agreement were replaced with the following below:

$1.5 million for the sEEG exclusivity maintenance fee;

$2.0 million for satisfaction of each of the milestone events related to the design of sEEG Products set forth in the Zimmer Development Agreement, even though the satisfaction was after the deadlines originally identified.

In addition, in connection with the Amendment,

we issued to Zimmer a warrant to purchase common stock (the “2022 Zimmer Warrant”).

The 2022 Zimmer Warrant is exercisable

for up to an aggregate of 350,000 shares of our Common Stock.

The 2022 Zimmer Warrant has 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.

The Zimmer Development Agreement will expire on

the tenth anniversary of the date of the first commercial sale of the last Products to achieve a first commercial sale (the “Zimmer

Term”), 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

In addition, Zimmer may terminate the Zimmer 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.

The license rights granted to Zimmer under the Zimmer Development Agreement shall be exclusive from

the effective date of the Amendment until the end of the Zimmer Term.

NeuroOne Medical Technologies Corporation

All payments attributed to the Initial Exclusivity

Fee, the sEEG exclusivity maintenance fee and sEEG design milestone payment are non-refundable.

The Zimmer Development Agreement and Amendment

were accounted for under the provisions of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with

Customers (“ASC 606”).

In accordance with the provisions under ASC 606, we identified five performance obligations under

the Zimmer Development Agreement and Amendment:

(1) our obligation to grant Zimmer access to our intellectual property;

(2) completion

of sEEG Product development;

(3) completion of Strip/Grid Product development;

(4) the provision of sEEG exclusivity maintenance;

(5) sEEG design modifications as requested by Zimmer.

All performance obligations under the Zimmer Development Agreement and Amendment

were met as of December 31, 2022.

In October 2022, we received 510(k) clearance

from the FDA for our Evo sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and stimulation equipment

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

Accordingly, we recognized

revenue in the amount of $1,455,188 during the three months ended December 31, 2022 related to the completion of the sEEG exclusivity

maintenance milestone.

During the three months ended December 31, 2021, we recognized revenue in the amount of $6,374 related to sEEG

Product development.

The achievement of the level of sales required

to earn royalty payments from Zimmer is uncertain.

For further discussion about the determination

of collaborations revenue, product revenue and cost of product revenue, and for a discussion of milestones and royalty payments under

the Zimmer Development Agreement, see “—Liquidity and Capital Resources—Liquidity Outlook” below and see “Note

7 — Zimmer Development Agreement” included in our condensed financial statements included in “Part 1, Item 1 –

Financial Statements” in this Report.

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 and litigation costs relating to corporate matters, intellectual

property costs, professional fees for consultants assisting with financial and administrative matters, and sales and marketing in connection

with the commercial sale of cEEG strip/grid, sEEG depth electrode and electrode cable assembly products.

We anticipate that our selling,

general and administrative expenses will significantly increase in the future to support our continued research and development activities,

further commercialization of our cortical strip technology, our grid electrode technology, and our depth electrode technology, and the

increased costs of operating as a public company.

These increases will include increased costs related to the hiring of additional personnel

and fees for legal and professional services, as well as other public company related costs.

Research and Development

Total operating expenses

Loss from operations

Loss before income taxes

Provision for income taxes

$ (2,759,727 )

$ (2,951,609 )

NeuroOne Medical Technologies Corporation

Revenue and Product Gross Profit (Loss)

Product revenue and product gross profit (loss)

was $32,000 and $(6,000), respectively, during the three months ended June 30, 2022.

Product revenue and product gross profit (loss) was

$40,000 and $(22,000), respectively, during the three months ended June 30, 2021.

The product revenue during the second quarter of 2022

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.

Collaborations

revenue was $17,000 for the three months ended June 30, 2021.

Revenue during the prior year 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.

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 three

months ended June 30, 2022.

general and administrative expenses

general and administrative expenses were $1.5 million for the three months ended June 30, 2022, compared to $2.1 million for the three

months ended June 30, 2021.

The $0.6 million decrease was primarily due to a decrease in stock-based compensation expense of $0.6 million

and sales and marketing expenses of $0.1 million, offset in part by an increase in legal and public company costs of $0.1 million.

and development expenses

and development expenses were $1.2 million for the three months ended June 30, 2022, compared to $0.9 million during for the three months

ended June 30, 2021.

The $0.3 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.

income during the three months ended June 30, 2022 related to interest income on our cash deposits in the amount of $2,000.

during the three months ended June 30, 2021 was attributed to the forgiveness of the U.S.

Small Business Administration Paycheck Protection

Program loan in the amount of $0.1 million.

Research and development expenses consist of

expenses incurred in performing research and development activities in developing our cortical strip, grid electrode and depth electrode

Research and development expenses include compensation and benefits for research and development employees including stock-based

compensation, overhead expenses, cost of laboratory supplies, clinical trial and related clinical manufacturing expenses, costs related

to regulatory operations, fees paid to consultants and other outside expenses.

Research and development costs are expensed as incurred

and costs incurred by third parties are expensed as the contracted work is performed.

Lastly, de minimis income from the sale of prototype

products and related materials are offset against research and development expenses.

We expect our research and development expenses

to significantly increase over the next several years as we develop our cortical strip, grid electrode and depth electrode technology

and conduct preclinical testing and clinical trials and will depend on the duration, costs and timing to complete our preclinical programs

and clinical trials.

Other income primarily consists of interest income

related to our cash, cash equivalents and short-term investments and to proceeds outside of normal operating activity relating to legal

settlements and sales of non-commercial supplies.

NeuroOne Medical Technologies Corporation

of the Nine Months Ended June 30, 2022 and 2021

following table sets forth the results of operations for the nine months ended June 30, 2022 and 2021, respectively.

For the Nine Months Ended

June 30, (unaudited)

Results of Operations

Comparison of the Three Months Ended December 31, 2022 and 2021

The following table sets forth the results of

operations for the three months ended December 31, 2022 and 2021, respectively.

For the three months ended

Product revenue

Cost of product revenue

Product gross profit (loss)

Product gross loss

Collaborations revenue

4 unchanged sentences

Loss from operations

Interest expense

Net valuation change of instruments measured at fair value

Loss before income taxes

2 unchanged sentences

$ (2,807,475 )

$ (1,320,264 )

Revenue and Product Gross Profit (Loss)

Product revenue and product gross profit (loss)

was $102,000 and $(56,000) during the nine months ended June 30, 2022, respectively.

Product revenue and product gross profit (loss) was

$130,000 and $(81,000) during the nine months ended June 30, 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 in connection with our license

Collaborations

revenue was $6,000 and $60,000 for the nine months ended June 30, 2022 and 2021, respectively.

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 these nine month periods.

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.

Product Revenue and Product Gross Loss

Product revenue was approximately $0.1 million

and $34,000 during the three months ended December 31, 2022 and 2021, respectively.

Product gross loss was approximately $(12,000) and

$(13,000) during the three months ended December 31, 2022 and 2021, respectively.

The product revenue consists of the sale of our strip/grid,

depth electrode 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 and depth electrode products, and outside supplier materials

costs in connection with the electrode cable assembly products.

In addition, cost of product revenue included royalty fees incurred of

approximately $38,000 and $26,000 in connection with our license agreements during the three months ended December 31, 2022 and 2021,

respectively.

Collaborations Revenue

Collaborations revenue was $1.5 million and $6,000

for the three months ended December 31, 2022 and 2021, respectively.

Revenue during each period was derived from the Zimmer Development

Agreement and represented the portion of the upfront initial development fee payment eligible for revenue recognition during such period.

The amount of revenue recognized in the first quarter of fiscal year 2023 related to the completion of the sEEG maintenance fee obligation

as a result of securing FDA approval.

For the comparable prior year period, the upfront fee was based on development completed in connection

with depth electrode products, and to a lesser extent, the strip/grid products.

NeuroOne Medical Technologies Corporation

general and administrative expenses

general and administrative expenses were $5.1 million for the nine months ended June 30, 2022, compared to $4.6 million for the nine

months ended June 30, 2021.

The $0.5 million increase was primarily due to higher investor relations costs of $0.4 million, litigation

support and other legal costs $0.5 million, sales and marketing expenses of $0.1 million and insurance and other operating expenses and

fees of $0.2 million, offset in part by stock-based compensation of $0.7 million.

and development expenses

and development expenses were $3.5 million for the nine months ended June 30, 2022, compared to $2.9 million for the nine months ended

June 30, 2021.

The $0.6 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.

expense for the nine months ended June 30, 2021 was $3,000 and consisted of issuance costs in connection the 2019 Paulson Notes.

not incur interest expense during the current nine month period ended June 30, 2022.

valuation change of instruments measured at fair value:

net valuation change of instruments measured at fair value for the nine months ended June 30, 2021 was a benefit of $2,000 related to

the 2019 Paulson Notes that were measured at fair value.

The change was due to accrued interest on these convertible notes and due to

fluctuations in our common stock fair value and the number of potential shares of common stock issuable upon conversion of these notes

while outstanding.

There was no net valuation change of instruments measured at fair value during the nine month period ended June 30,

2022 as there were no instruments measured at fair value during the current year period.

income during the nine months ended June 30, 2022 consisted of $5,000 related primarily to interest income attributed to our cash deposits.

income during the nine months ended June 30, 2021 consisted principally of proceeds received in connection with the PMT Corporation litigation

in the amount of $0.2 million and the forgiveness of the U.S.

Small Business Administration Paycheck Protection Program loan in the amount

Selling, general and administrative expenses

were $1.7 million for the three months ended December 31, 2022, compared to $1.7 million for the three months ended December 31, 2021.

The $0.1 million decrease was primarily due to a decrease in legal costs of $0.3 million and a decrease in professional services of $0.1

million, offset in part by increases in public company and other operating costs of $0.2 million and by increases in stock-based compensation

of $0.1 million.

and Capital Resources

of June 30, 2022, our principal source of liquidity consisted of cash deposits of $10.2 million.

While we began to generate revenue in

fiscal year 2021 from commercial sales and through milestone payments under our collaboration with Zimmer, we expect to continue to incur

significant expenses and increasing operating and net losses for the foreseeable future until and unless we generate an adequate level

of revenue from commercial sales to cover expenses.

Our most significant cash requirements relate to the funding of our ongoing product

development and commercialization operations and our royalty obligations under our intellectual property licenses with the Wisconsin

Alumni Research Foundation (“WARF”) and the Mayo Foundation for Medical Education and Research (“Mayo”).

additional material cash needs include commitments under operating leases and other administrative services.

See “—Funding

Requirements” below for more information.

We anticipate that our expenses will increase substantially as we develop and commercialize

our cortical strip, grid electrode and depth electrode technology and pursue pre-clinical and clinical trials, seek regulatory approvals,

manufacture products, establish our own sales, marketing and distribution infrastructure to commercialize our ablation electrode technology,

hire additional staff, add operational, financial and management systems and continue to operate as a public company.

NeuroOne Medical Technologies Corporation

sources of cash to date have been limited collaboration and product revenues and proceeds from the issuances of notes with warrants,

Research and development expenses

Research and development expenses were $1.6 million

for the three months ended December 31, 2022, compared to $1.1 million during for the three months ended December 31, 2021.

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 depth electrode products and to a

lesser extent strip/grid products.

Other income during the three months ended December

31, 2022 consisted of interest income in the amount of $52,000 attributed to our cash, cash equivalents and short term investments.

Other income during the three month period ended

December 31, 2021 consisted of $2,000 related primarily to interest income attributed to our cash deposits.

Liquidity and Capital Resources

As of December 31, 2022, our principal source

of liquidity consisted of cash, cash equivalents and short-term investments in the aggregate of approximately $7.6 million.

began to generate revenue in fiscal year 2021 from commercial sales and through milestone and other payments under our collaboration

with Zimmer, we expect to continue to incur significant expenses and increasing operating and net losses for the foreseeable future until

and unless we generate an adequate level of revenue from commercial sales to cover expenses.

Our most significant cash requirements relate

to the funding of our ongoing product development and commercialization operations and our royalty obligations under our intellectual

property licenses with the Wisconsin Alumni Research Foundation (“WARF”) and the Mayo Foundation for Medical Education and

Research (“Mayo”).

Our additional material cash needs include commitments under operating leases and other administrative

See “Funding Requirements” below for more information.

We anticipate that our expenses will increase substantially

as we develop and commercialize our cortical strip, grid electrode and depth electrode technology and pursue pre-clinical and clinical

trials, seek regulatory approvals, manufacture products, establish our own sales, marketing and distribution infrastructure to commercialize

our ablation electrode technology, hire additional staff, add operational, financial and management systems and continue to operate as

a public company.

Capital Resources

Our sources of cash, cash equivalents and short-term

investments to date have been limited to collaboration and product revenues, along with proceeds from the issuances of notes with warrants,

common stock with and without warrants and unsecured loans, with the terms of our most recent financings described below.

2021 Underwritten Public Offering

October 13, 2021, we entered into an underwriting agreement relating to the issuance and sale of 3,750,000 shares of our common stock

at a price to the public of $3.20 per share (the “October 2021 Underwritten Public Offering”).

In addition, under the terms

of the underwriting agreement, we granted the underwriter an option, exercisable for 30 days, to purchase up to an additional 562,500

shares of common stock on the same terms.

The base offering closed on October 15, 2021, and the sale of 422,057 shares of common stock

subject to the underwriter’s overallotment option closed on November 15, 2021.

The gross proceeds from this offering were approximately

$13.4 million prior to deducting underwriting discounts and other offering expenses payable by us.

Private Placement

January 12, 2021, we entered into a 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 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 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 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 2021 Private Placement closed

on January 14, 2021.

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 Company 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.

noted above, certain of our cash requirements relate to the funding of our ongoing product development and commercialization operations

and our milestone and royalty obligations under our intellectual property licenses with the Wisconsin Alumni Research Foundation (“WARF”)

and the Mayo Foundation for Medical Education and Research (“Mayo”).

See “Item 1—Business—Clinical

Development and Regulatory Pathway—Clinical Experience, Future Development and Clinical Trial Plans” in our Annual Report

on Form 10-K for the year ended September 30, 2021 for a discussion of design, development, pre-clinical and clinical activities that

we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to

estimate such costs.

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”).

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.

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.

At-The-Market Offering

On December 21, 2022, we entered into a Capital

on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (“JonesTrading”) to create an at-the-market

offering program (“ATM”) under which we may offer and sell shares having an aggregate offering price of up to $14.5 million.

JonesTrading is entitled to a commission at a fixed commission rate equal to up to 3% of the gross proceeds.

To date, no issuances of

securities have occurred under the ATM.

Deferred issuance costs in the amount of $0.1 million have been incurred in connection with the

October 2021 Underwritten Public Offering

On October 13, 2021, we entered into an underwriting

agreement relating to the issuance and sale of 3,750,000 shares of our common stock at a price to the public of $3.20 per share (the

“October 2021 Underwritten Public Offering”).

In addition, under the terms of the underwriting agreement, we granted the

underwriter an option, exercisable for 30 days, to purchase up to an additional 562,500 shares of common stock on the same terms.

base offering closed on October 15, 2021, and the sale of 422,057 shares of common stock subject to the underwriter’s overallotment

option closed on November 15, 2021.

The gross proceeds from this offering were approximately $13.4 million prior to deducting underwriting

discounts and other offering expenses payable by us.

NeuroOne Medical Technologies Corporation

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.

4 – Commitments and Contingencies” included in our condensed financial statements included in “Part 1, Item 1 –

Financial Statements” in this Report for more information about the WARF License and the Mayo Development Agreement.

other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current

Our other cash requirements greater than twelve months from various contractual obligations and commitments include operating

leases and contracted services.

Refer to “Note 4 – Commitments and Contingencies” included in our condensed financial

statements included in “Part 1, Item 1 – Financial Statements” in this Report for further detail of our lease obligations

and the timing of expected future payments.

Contracted services include agreements with third-party service providers for clinica l

research, product development, manufacturing, supplies, payroll services, equipment maintenance services, and audits for periods up to

expect to satisfy our short-term and long-term obligations through cash on hand and, until we generate an adequate level of revenue from

commercial sales to cover expenses, if ever, from future equity and debt financings.

a discussion of potential fee payments under the Zimmer Development Agreement, see “Note 7 — Zimmer Development Agreement”

included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

The Company does not intend to deliver saleable product to Zimmer unless and until it receives regulatory clearance to expand the use

of its Evo sEEG Electrode technology for up to 30 days, at which point the Company and Zimmer intend to commence negotiations regarding

payments of applicable milestone payments described therein, notwithstanding the deadlines for the Product Availability Date and the

Acceptance of all Deliverables for SEEG Products.

Funding Requirements

As noted above, certain

of our cash requirements relate to the funding of our ongoing product development and commercialization operations and our milestone

and royalty obligations under our intellectual property licenses with the Wisconsin Alumni Research Foundation (“WARF”) and

the Mayo Foundation for Medical Education and Research (“Mayo”).

See “Item 1—Business—Clinical Development

and Regulatory Pathway—Clinical Experience, Future Development and Clinical Trial Plans” in our Annual Report on Form 10-K

for the year ended September 30, 2022 for a discussion of design, development, pre-clinical and clinical activities that we may conduct

in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such

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.

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.

See “Note 4 – Commitments

and Contingencies” included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report for more information about the WARF License and the Mayo Development Agreement.

Our other cash requirements

within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities.

cash requirements greater than twelve months from various contractual obligations and commitments include operating leases and contracted

Refer to “Note 4 – Commitments and Contingencies” included in our condensed financial statements included

in “Part 1, Item 1 – Financial Statements” in this Report for further detail of our lease obligations and the timing

of expected future payments.

Contracted services include agreements with third-party service providers for clinical research, product

development, manufacturing, supplies, payroll services, equipment maintenance services, and audits for periods up to fiscal year 2024.

We expect to satisfy

our short-term and long-term obligations through cash on hand and, until we generate an adequate level of revenue from commercial sales

to cover expenses, if ever, from future equity and debt financings.

Liquidity Outlook

For a discussion of potential fee payments under

the Zimmer Development Agreement, see “Note 7 — Zimmer Development Agreement” included in our condensed financial statements

included in “Part 1, Item 1 – Financial Statements” in this Report.

Even though we have received regulatory clearance

to expand the use of our Evo sEEG Electrode technology for up to 30 days, commercial sales of the sEEG Electrodes are expected to take

some time to be a significant source of liquidity.

Zimmer has exclusive global rights to distribute our strip and grid cortical electrodes,

2 unchanged sentences

have a material adverse effect on our business and operating results.

Further, our inability to agree with Zimmer on dates of completion

for product development, regulatory clearance and commercialization milestones on which various fee payments to the Company are based

under the Zimmer Development Agreement could have a material adverse impact on our financial and operating results.

June 30, 2022, we had approximately $10.2 million in cash deposits.

Management has noted the existence of substantial doubt about our

ability to continue as a going concern.

Additionally, our independent registered public accounting firm and our former independent registered

public accounting firm included explanatory paragraphs in the reports on our financial statements as of and for the years ended September

30, 2021 and 2020, respectively, noting the existence of substantial doubt about our ability to continue as a going concern.

cash may not be sufficient to fund our operating expenses through at least twelve months from the date of this filing.

To continue to

fund operations, we will need to secure additional funding through public or private equity or debt financings, through collaborations

or partnerships with other companies or other sources.

We may not be able to raise additional capital on terms acceptable to us, or at

NeuroOne Medical Technologies Corporation

At December 31, 2022, we had cash, cash equivalents

and short-term investments in the aggregate of approximately $7.6 million.

Management has noted the existence of substantial doubt about

our ability to continue as a going concern.

Additionally, our independent registered public accounting firm included an explanatory paragraph

in the report on our financial statements as of and for the years ended September 30, 2022 and 2021, respectively, noting the existence

of substantial doubt about our ability to continue as a going concern.

Our existing cash, cash equivalents and short-term investments

may not be sufficient to fund our operating expenses through at least twelve months from the date of this filing.

To continue to fund

operations, we will need to secure additional funding through public or private equity or debt financings, through collaborations or

partnerships with other companies or other sources.

We may not be able to raise additional capital on terms acceptable to us, or at all.

Any failure to raise capital when needed could compromise our ability to execute on our business plan.

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.

development and commercialization of our cortical strip, grid electrode and depth electrode technology is subject to numerous uncertainties,

and we could use our cash resources sooner than we expect.

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.

The development and commercialization of our

cortical strip, grid electrode and depth electrode technology is subject to numerous uncertainties, and we could use our cash, cash equivalent

and short-term investment resources sooner than we expect.

Additionally, the process of developing medical devices is costly, and the

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We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

NeuroOne Medical Technologies Corporation

following is a summary of cash flows for each of the periods set forth below.

Nine Months Ended

The following is a summary of cash flows for

each of the periods set forth below.

For the Three Months Ended

Net cash used in operating activities

$ (8,537,351 )

$ (6,573,520 )

Net cash used in investing activities

Net cash provided by financing activities

Net increase in cash

cash used in operating activities

cash used in operating activities was $8.5 million for the nine months ended June 30, 2022, which consisted of a net loss of $8.6 million

partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets, operating

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Net (decrease) increase in cash

Net cash used in operating activities

Net cash used in operating activities was $3.5

million for the three months ended December 31, 2022, which consisted of a net loss of $1.7 million partially offset by non-cash stock-based

compensation, depreciation, amortization related to intangible assets, short-term investment discount and premium amortization, and non-cash

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 approximately $0.8 million.

The change in operating assets and

liabilities was primarily attributable to a net decrease in accounts payable and accrued expenses and to an increase in inventory and

prepaid expenses attributed to both the timing of payments and the timing of product sales.

cash used in operating activities was $6.6 million for the nine months ended June 30, 2021, which consisted of a net loss of $7.3 million

partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets, revaluation

of convertible notes, operating lease expense and the forgiveness of the U.S.

Small Business Administration Paycheck Protection Program

loan, totaling approximately $1.5 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 $0.7 million.

The change in operating assets and liabilities was primarily

attributable to a decrease in accounts payable and accrued expenses attributed to the timing of payments coupled to a lesser extent with

an increase in accounts receivable, inventory and prepaid and other assets.

Net cash used in investing activities

Net cash used in investing activities was $0.2

million and $32,000 during the nine months ended June 30, 2022 and 2021, respectively, and consisted of outlays for purchases of property

and equipment.

cash provided by financing activities

cash provided by financing activities was $12.0 million for the nine months ended June 30, 2022, which consisted of net proceeds from

the October 2021 Underwritten Public Offering.

cash provided by financing activities was $11.6 million for the nine months ended June 30, 2021, which consisted primarily of net proceeds

received from the 2021 Private Placement in the amount of $11.3 million.

There were also exercises of stock options and warrants during

the nine months ended June 30, 2021 resulting in additional cash proceeds of $0.3 million, offset in part by deferred offering costs

Accounting Estimates

financial statements are prepared in accordance with U.S.

generally accepted accounting principles.

These accounting principles require

us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements

as well as the reported amounts of revenue and expense during the periods presented.

We believe that the estimates and judgments upon

which we rely are reasonably based upon information available to us at the time that we make these estimates and judgments.

To the extent

that there are material differences between these estimates and actual results, our financial results will be affected.

The accounting

policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding

and evaluating our reported financial results are described in Note 3 — “Summary of Significant Accounting Policies”

to our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

with fluctuations in our operating activities resulted in a net cash use of $2.1 million.

The net cash use stemming from the change in

operating assets and liabilities was primarily attributable to a decrease in deferred revenue in connection with the completion of the

remaining milestone performance obligation under the Zimmer Development Agreement, and to a lesser extent, to an increase in inventory

purchases and to a net decrease in the aggregate of account payable, accrued expenses, accounts receivable and prepaid expenses attributed

to the timing of payments.

Net cash used in operating activities was $2.7

million for the three months ended December 31, 2021, which consisted of a net loss of $2.8 million partially offset by non-cash stock-based

compensation, depreciation, amortization related to intangible assets 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 $0.1 million.

The net cash use stemming from the change in operating assets and liabilities was primarily attributable

to an increase in inventory purchases, net decrease in account payable and accrued expenses attributed to the timing of payments, partially

offset by a decrease in accounts receivable in connection with the Zimmer Development Agreement.

NeuroOne Medical Technologies Corporation

these policies, the following are considered critical to an understanding of our condensed financial statements included in “Part

1, Item 1 – Financial Statements” in this Report as they require the application of the most subjective and the most complex

discussion about the determination of collaborations revenue, product revenue and cost of product revenue, see “Note 7 —

Zimmer Development Agreement” included in our condensed financial statements included in “Part 1, Item 1 – Financial

Statements” in this Report.

To date, we have not had, nor expect to have in the future, significant variable consideration adjustments

related to product revenue, such as chargebacks, sales allowances and sales returns.

discussions about the application of grant date fair value associated with our stock-based compensation, see “Note 9 — Stock-Based

Compensation” included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report.

Tax Assets and Liabilities

tax assets and liabilities include income tax valuation allowances.

For additional information, see “Note 11 — Income

Taxes” included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in

this Report and “Note 11 – Income Taxes” in Part II, Item 8 “Financial Statements” of our Annual Report

on Form 10-K for the year ended September 30, 2021.

Net cash provided by (used in) investing activities

Net cash provided by investing activities for

the three month ended December 31, 2022 was $15,000 and consisted of maturities of short-term investments in the amount of $1.5 million,

offset by purchases of short term investment, consisting of treasury and corporate notes, and by outlays for purchases of property and

Net cash used by investing activities consisted

of outlays for property and equipment during the three months ended December 31, 2021.

Net cash (used in) provided by financing activities

Net cash used in financing activities was $16,000

for the three months ended December 31, 2022, which consisted of deferred issuance costs in connection with the ATM.

Net cash provided by financing activities was

$12.0 million for the three months ended December 31, 2021, which consisted of net proceeds from the October 2021 Underwritten Public

Critical Accounting Estimates

Our financial statements are prepared in accordance

generally accepted accounting principles.

These accounting principles require us to make estimates and judgments that can affect

the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue

and expense during the periods presented.

We believe that the estimates and judgments upon which we rely are reasonably based upon information

available to us at the time that we make these estimates and judgments.

To the extent that there are material differences between these

estimates and actual results, our financial results will be affected.

The accounting policies that reflect our more significant estimates

and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results

are described in Note 3 — “Summary of Significant Accounting Policies” to our condensed financial statements included

in “Part 1, Item 1 – Financial Statements” in this Report.

Of these policies, the following are considered

critical to an understanding of our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report as they require the application of the most subjective and the most complex judgments:

For discussion about the determination of collaborations

revenue, product revenue and cost of product revenue, see “Note 7 — Zimmer Development Agreement” included in our condensed

financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

To date, we have not had,

nor expect to have in the future, significant variable consideration adjustments related to product revenue, such as chargebacks, sales

allowances and sales returns.

Stock-based Compensation

For discussions about the application of grant

date fair value associated with our stock-based compensation, see “Note 8 — Stock-Based Compensation” included in our

condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

Income Tax Assets and Liabilities

Income tax assets and liabilities include income

tax valuation allowances.

For additional information, see “Note 10 — Income Taxes” included in our condensed financial

statements included in “Part 1, Item 1 – Financial Statements” in this Report and “Note 11 – Income Taxes”

in Part II, Item 8 “Financial Statements” of our Annual Report on Form 10-K for the year ended September 30, 2022.

Contingencies

are subject to numerous contingencies arising in the ordinary course of business, including legal contingencies.

For additional information,

see “Note 4 — Commitments and Contingencies” included in our condensed financial statements included in “Part

1, Item 1 – Financial Statements” in this Report.

Accounting Pronouncements

to Note 3 — “Summary of Significant Accounting Policies” to our condensed financial statements included in “Part

1, Item 1 – Financial Statements” in this Report for a discussion of recently issued accounting pronouncements.

We are subject to numerous contingencies arising

in the ordinary course of business, including legal contingencies.

For additional information, see “Note 4 — Commitments

and Contingencies” included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report.

NeuroOne Medical Technologies Corporation

Recent Accounting Pronouncements

Refer to “Note 3— Summary of Significant

Accounting Policies” to our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report for a discussion of recently issued accounting pronouncements.

Quantitative and Qualitative Disclosures About Market Risk

applicable for smaller reporting companies.

Not applicable for smaller reporting companies.

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 2. Management’s Discussion and Analysis