What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-12 · 257 added, 210 removed, 664 unchanged (41% of the section changed)

7 unchanged sentences

Accounts receivable

Prepaids and other assets

Total current assets

13 unchanged sentences

Preferred stock, $ 0.001 par value;

10,000,000 shares authorized as of March 31, 2023 and September 30, 2022;

no shares issued or outstanding as of March 31, 2023 and September 30, 2022.

10,000,000 shares authorized as of June 30, 2023 and September 30, 2022;

no shares issued or outstanding as of June 30, 2023 and September 30, 2022.

Common stock, $ 0.001 par value;

100,000,000 shares authorized as of March 31, 2023 and September 30, 2022;

16,887,738 and 16,216,540 shares issued and outstanding as of March 31, 2023 and September 30, 2022, respectively.

100,000,000 shares authorized as of June 30, 2023 and September 30, 2022;

17,862,162 and 16,216,540 shares issued and outstanding as of June 30, 2023 and September 30, 2022, respectively.

Additional paid–in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Product revenue

11 unchanged sentences

( 8,630,569 )

Other (expense) income, net

Other income, net

Loss before income taxes

13 unchanged sentences

See accompanying notes to condensed financial

NeuroOne Medical

Technologies Corporation

NeuroOne Medical Technologies Corporation

Condensed Statements of Changes in Stockholders’

18 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 )

Balance at September 30, 2022

15 unchanged sentences

( 56,082,409 )

Issuance of common stock in connection with at-the-market offering program

Issuance costs in connection with the at-the-market offering program

Stock-based compensation

Share repurchases for the payment of employee taxes

Issuance of common stock upon vesting of restricted stock units

( 3,468,773 )

Balance at June 30, 2023

$ ( 59,551,182 )

See accompanying notes to condensed financial

1 unchanged sentence

Condensed Statements of Cash Flows

Six Months Ended

For the Nine Months Ended

Operating activities

8 unchanged sentences

Accounts receivable

Prepaids and other assets

Accounts payable

8 unchanged sentences

Maturities of short-term investments

Purchase of fixed assets

Purchase of property and equipment

Net cash provided by (used in) investing activities

12 unchanged sentences

Modification of right-of-use asset and associated lease liability

Purchased fixed assets in accounts payable

Unpaid deferred issuance costs (offset in prepaids and other assets)

Purchased property and equipment in accounts payable

See accompanying notes to condensed financial

5 unchanged sentences

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

neuromodulation electroencephalogram (cEEG) and stereoelectrocencephalography (sEEG) recording, monitoring, ablation, and brain stimulation

solutions to diagnose and treat patients with epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed

back surgeries and other related neurological disorders.

The Company received 510(k) clearance from the

Food and Drug Administration (“FDA”) for its Evo cortical technology in November 2019 and in October 2022, the Company

received 510(k) from the FDA clearance for its 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.

neuromodulation electroencephalogram (“cEEG”) and stereoelectrocencephalography (“sEEG”) recording, monitoring,

ablation, drug delivery and brain stimulation solutions to diagnose and treat patients with epilepsy, Parkinson’s disease, dystonia,

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

The Company received 510(k) clearance from the United

States (“U.S.”) Food and Drug Administration (“FDA”) for its Evo cortical electrode technology in November 2019

and in October 2022, the Company received 510(k) from the FDA clearance for its 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.

To date, the Company has had limited commercial sales.

23 unchanged sentences

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

The condensed financial statements

may not include all disclosures required by U.S.

however, the Company believes that the disclosures are adequate to make the information

presented not misleading.

These unaudited condensed financial statements should be read in conjunction with the audited financial statements

and the notes thereto for the year ended September 30, 2022 included in the Annual Report on Form 10-K.

The condensed balance sheet at

September 30, 2022 was derived from the audited financial statements of the Company.

The condensed financial

statements may not include all disclosures required by U.S.

however, the Company believes that the disclosures are adequate to make

the information presented not misleading.

These unaudited condensed financial statements should be read in conjunction with the audited

financial statements and the notes thereto for the year ended September 30, 2022 included in the Annual Report on Form 10-K.

The condensed

balance sheet at September 30, 2022 was derived from the audited financial statements of the Company.

In the opinion of management, all adjustments,

9 unchanged sentences

The Company has incurred

losses since inception, negative cash flows from operations, and an accumulated deficit of $ 56.1 million as of March 31, 2023.

losses since inception, negative cash flows from operations, and an accumulated deficit of $ 59.6 million as of June 30, 2023.

the Company’s revenues have not been sufficient to cover its full operating costs, and as such, has been dependent on funding operations

through the issuance of debt and sale of equity securities.

The Company does not have adequate liquidity to fund its operations beginning

in the fourth quarter of calendar year 2023 without raising additional funds and such actions are not solely within the control of the

With the July 2023 Public Offering (see Note 13 - Subsequent Events), the

Company has adequate liquidity to fund its operations through March 31, 2024.

The raising of additional funds is not solely within the

control of the Company.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements

do not include any adjustments that might result from the outcome of this condition.

If the Company is unable to raise additional funds,

or the Company’s anticipated operating results are not achieved, management believes planned expenditures may need to be reduced

in order to extend the time period that existing resources can fund the Company’s operations.

The Company intends to fund ongoing

activities by utilizing its current cash, cash equivalents and short-term investments on hand, from product and collaborations revenue

and by raising additional capital through equity or debt financings.

If management is unable to obtain the necessary capital, it may have

a material adverse effect on the operations of the Company and the development of its technology, or the Company may have to cease operations

The financial

statements do not include any adjustments that might result from the outcome of this condition.

If the Company is unable to raise additional

funds, or the Company’s anticipated operating results are not achieved, management believes planned expenditures may need to be

reduced in order to extend the time period that existing resources can fund the Company’s operations.

The Company intends to fund

ongoing activities by utilizing its current cash and cash equivalents on hand, from product and collaborations revenue and by raising

additional capital through equity or debt financings.

If management is unable to obtain the necessary capital, it may have a material

adverse effect on the operations of the Company and the development of its technology, or the Company may have to cease operations altogether.

NOTE 3 – Summary of Significant Accounting

1 unchanged sentence

The preparation of financial statements in conformity

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

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

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

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting period.

Actual results could differ from those estimates.

12 unchanged sentences

Short-Term Investments

The Company invests its excess cash in United

States (“U.S.”) Treasury securities and highly rated corporate securities.

The Company intends and has the ability to hold

these investments to maturity.

Securities with original maturity dates of more than three months are reported as held-to-maturity investments

and are recorded at amortized cost, which approximates fair value due to the negligible risk of changes in value due to interest rates.

All investments held as of March 31, 2023 and September 30, 2022 had contractual maturities of less than one year.

The amortized cost

and estimated fair values of the Company’s investments as of March 31, 2023 and September 30, 2022 are as follows:

March 31, 2023

The Company has invested its excess cash in U.S.

Treasury securities and highly rated corporate securities in prior periods.

The Company has held these investments to maturity.

with original maturity dates of more than three months were reported as held-to-maturity investments and were recorded at amortized cost,

which approximated fair value due to the negligible risk of changes in value due to interest rates.

All investments held as September

30, 2022 had contractual maturities of less than one year.

The were no short-term investments outstanding as of June 30, 2023.

The amortized

cost and estimated fair values of the Company’s investments as of September 30, 2022 were as follows:

September 30, 2022

treasury and corporate notes

1 unchanged sentence

Notes to Condensed Financial Statements

September 30, 2022

treasury and corporate notes

Revenue Recognition

11 unchanged sentences

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

A performance obligation is a

promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Account Standards Codification

(“ASC”) Topic 606.

Performance obligations may include license rights, development services, and

services associated with regulatory submission and approval processes.

Significant management judgment is required to determine the level

of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the

If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential,

then revenue recognition is deferred until the Company can reasonably make such estimates.

Revenue is then recognized over the remaining

estimated period of performance using the cumulative catch-up method.

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

10 unchanged sentences

Collaborations

A performance

obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Account Standards

Codification (“ASC”) Topic 606.

Performance obligations may include license rights, development services,

and services associated with regulatory submission and approval processes.

Significant management judgment is required to determine the

level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under

the arrangement.

If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential,

then revenue recognition is deferred until the Company can reasonably make such estimates.

Revenue is then recognized over the remaining

estimated period of performance using the cumulative catch-up method.

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

5 unchanged sentences

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Licenses of intellectual property :

8 unchanged sentences

the measure of performance and related revenue recognition.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

20 unchanged sentences

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

Level 1 Inputs:

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

Level 2 Inputs:

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

Level 3 Inputs:

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

As of March 31, 2023 and September 30, 2022, the

fair values of cash, cash equivalents, short-term investments, accounts receivable, inventory, prepaids, accounts payable and accrued

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

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

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

for substantially the full term of the asset or liability.

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

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

As of June 30, 2023 and September 30, 2022, the

fair values of cash, cash equivalents, short-term investments, accounts receivable, inventory, prepaids and other assets, accounts payable

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

There were no transfers between fair value hierarchy

levels during the three or six months ended March 31, 2023 and 2022.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

levels during the three or nine months ended June 30, 2023 and 2022.

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

2 unchanged sentences

life of the acquired technology.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

and Equipment

35 unchanged sentences

The Company’s inventory is currently comprised of Strip/Grid

sEEG and electrode cable assembly work-in-process and finished good product.

The Strip/Grid Products and sEEG Products are produced by

a third-party contract manufacturer and the Electrode Cable Assembly Products are obtained from outside suppliers.

Products, sEEG and electrode cable assembly work-in-process and finished good product.

The Strip/Grid Products and sEEG Products are produced

by a third-party contract manufacturer and the Electrode Cable Assembly Products are obtained from outside suppliers.

and Development Costs

6 unchanged sentences

than when payment is made, in accordance with ASC 730, Research and Development .

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

General and Administrative

4 unchanged sentences

financial matters, and sales and marketing in connection with the commercial sales of the Company’s products.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Stock-Based Compensation

25 unchanged sentences

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, 2023 and 2022.

three and nine months ended June 30, 2023 and 2022.

The following potential common shares were not

considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three and six months

ended March 31, 2023 and 2022:

considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three and nine months

ended June 30, 2023 and 2022:

Stock options

14 unchanged sentences

ASU will have a material impact on its financial statements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

12 unchanged sentences

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

Company adopted ASU 2020-06 effective October 1, 2022 and the ASU did not have a material impact to our financial statements.

Company adopted ASU 2020-06 effective October 1, 2022 and the ASU did not have a material impact to its financial statements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 4 - Commitments and Contingencies

20 unchanged sentences

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

During the three months ended March

During the three months ended June

30, 2023 and 2022, $ 37,500 in royalty fees were incurred related to the WARF License during each of these periods.

During the six months

ended March 31, 2023 and 2022, $ 75,000 and $ 62,500 in royalty fees were incurred related to the WARF License, respectively.

During the nine months

ended June 30, 2023 and 2022, $ 112,500 and $ 100,000 in royalty fees were incurred related to the WARF License, respectively.

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

5 unchanged sentences

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

During the three months ended March 31, 2023 and 2022,

zero and $ 1,097 in royalty fees were incurred related to the Mayo Agreement, respectively.

During the six months ended March 31,

2023 and 2022, $ 690 and $ 1,836 in royalty fees were incurred related to the Mayo Agreement, respectively.

The royalty fees were

reflected as a component of cost of product revenue.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

During the three months ended June 30, 2023 and 2022, $ 5,727

and $ 962 in royalty fees were incurred related to the Mayo Agreement, respectively.

During the nine months ended June 30, 2023 and

2022, $ 6,417 and $ 2,798 in royalty fees were incurred related to the Mayo Agreement, respectively.

The royalty fees were reflected

as a component of cost of product revenue.

Facility Leases

12 unchanged sentences

of these operating expense for the first 3 months.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Los Gatos Lease

10 unchanged sentences

The rent under the extended Los Gatos Lease ranges from $ 4,453 to $ 4,632 per month beginning on January 1, 2023.

During the three and six months ended March 31,

During the three and nine months ended June 30,

2023, rent expense associated with the facility leases amounted to $ 43,053 and $ 128,580 , respectively.

During 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 nine months

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

Supplemental 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:

9 unchanged sentences

Weighted average discount rate

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Maturity of the lease liabilities was as follows:

2 unchanged sentences

Less imputed interest

Short-term portion

Short-term portion in accrued expenses and other liabilities

Long-term portion

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

In the ordinary course of business, from time

8 unchanged sentences

NOTE 5 – Supplemental Balance Sheet Information

Prepaid and other assets consisted of the following:

September 30,

Prepaid expenses

Deferred offering costs

As of June 30, 2023, the Company incurred deferred

issuance costs in the amount of $ 67,159 related to a pending financing.

See Note 13 – Subsequent Events.

Inventory consisted of the following:

September 30,

Work-in-process

Finished goods

Intangible assets rollforward is as follows:

1 unchanged sentence

12 - 13 years

Net Intangibles, March 31, 2023

Net Intangibles, June 30, 2023

Amortization expense was $ 5,578 and $ 16,736 for

the three and six months ended March 31, 2023, respectively, and $ 5,579 and $ 11,158 for the three and six months ended March 31, 2022,

the three and nine months ended June 30, 2023, respectively, and $ 5,578 and $ 16,736 for the three and nine months ended June 30, 2022,

respectively.

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

Property and Equipment, Net

1 unchanged sentence

are presented in the following table:

March 31, 2023

September 30,

3 unchanged sentences

Property and equipment, net

Depreciation expense was $ 38,331 and $ 68,641 for

the three months and six months ended March 31, 2023, respectively, and $ 22,952 and $ 42,534 for the three and six months ended March 31,

2022, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Depreciation expense was $ 51,380 and $ 120,021

for the three months and nine months ended June 30, 2023, respectively, and $ 25,928 and $ 68,462 for the three months and nine months ended

June 30, 2022, respectively.

Software assets were fully depreciated as of September 30, 2022 and were written-off during the third quarter

NOTE 6 - Accrued Expenses and Other Liabilities

Accrued expenses consisted of the following at

March 31, 2023 and September 30, 2022:

Accrued expenses and other liabilities consisted

of the following:

September 30,

23 unchanged sentences

Fee”) to the Company in fiscal year 2020.

2, 2022, the Company entered into a Third Amendment to the Zimmer Development Agreement with Zimmer.

Pursuant to the terms and conditions

of the Third Amendment, Zimmer made a $ 3.5 million payment to the Company.

In consideration of the mutual covenants and agreements

contained in the Zimmer Development Agreement, the 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 Development Agreement even though the satisfaction was after the deadlines originally identified.

NeuroOne Medical Technologies Corporation

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

2, 2022, the Company entered into a Third Amendment to the Zimmer Development Agreement (the “Third Amendment”) with Zimmer.

Pursuant to the terms and conditions of the Third Amendment, Zimmer made a $ 3.5 million payment to the Company.

In consideration

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

Zimmer Development Agreement were replaced with the following below:

million for the sEEG Exclusivity Maintenance Fee;

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 connection with the Third Amendment, the Company issued Zimmer a warrant to purchase common stock (the “2022 Zimmer Warrant”).

44 unchanged sentences

Accordingly, the Company recognized

revenue in the amount of zero and $ 1,455,188 during the three and six months ended March 31, 2023, respectively, related to the completion

revenue in the amount of zero and $ 1,455,188 during the three and nine months ended June 30, 2023, respectively, related to the completion

of the sEEG exclusivity maintenance milestone.

During the three and six months ended March 31, 2022, the Company recognized revenue in

During the three and nine months ended June 30, 2022, the Company recognized revenue in

the amount of zero and $ 6,374 related to sEEG Product development, respectively.

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

A reconciliation of the closing balance of deferred

revenue related to the Zimmer Development Agreement and Third Amendment is as follows during the six months ended as of March 31, 2023

revenue related to the Zimmer Development Agreement and Third Amendment is as follows during the nine months ended as of June 30, 2023

Deferred Revenue

Balance as of beginning of period – September 30

Balance as of beginning of period

Revenue recognized

( 1,455,188 )

Balance as of end of period – March 31

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

Balance as of end of period

Product Revenue

1 unchanged sentence

sEEG Products and Electrode Cable Assembly Products.

Product revenue recognized during the three and six months ended March 31, 2023 was

Product revenue recognized during the three and nine months ended June 30, 2023 was

$ 629,906 and $ 1,210,661 , respectively.

Product revenue recognized during the three and six months ended March 31, 2022 was $ 36,584 and $ 70,332 ,

Product revenue recognized during the three and nine months ended June 30, 2022 was $ 32,049 and

$ 102,381 , respectively.

3 unchanged sentences

Total advertising expense amounted to $ 49,492 and $ 156,131 for the

three and six months ended March 31, 2023, respectively.

three and nine months ended June 30, 2023, respectively.

Total advertising expense amounted to $ 43,479 and $ 218,011 for the three and

six months ended March 31, 2022, respectively.

nine months ended June 30, 2022, respectively.

NOTE 8 – Stock-Based Compensation

During the three and six months ended March 31,

During the three and nine months ended June 30,

2023 and 2022, stock-based compensation expense related to stock-based awards was included in selling, general and administrative and

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Selling, general and administrative

2 unchanged sentences

Stock Options

During the three months ended March 31, 2023 and

During the three months ended June 30, 2023 and

2022, under the 2017 Equity Incentive Plan (the “2017 Plan”), the Company granted 339,000 and 88,890 stock options, respectively,

to its board of directors, officers and employees.

During the six months ended March 31, 2023 and 2022, the Company granted 130,512 and

During the nine months ended June 30, 2023 and 2022, the Company granted 469,512 and

150,690 , respectively, to its board of directors, officers, employees and consultants.

Vesting generally occurs over an immediate to 48

month period based on a time of service condition although vesting acceleration is provided under one grant in the event that a certain

milestone is met.

The grant date fair value of the grants issued during the three months ended March 31, 2023 and 2022 was $ 0.88 and $ 1.00

per share, respectively.

The grant date fair value of the grants issued during the six months ended March 31, 2023 and 2022 was $ 0.75

and $ 1.03 per share, respectively.

The total expense for the three months ended March

Vesting generally occurs over an immediate to four-year

period based on a time of service condition although vesting acceleration is provided under one grant in the event that a certain milestone

The grant date fair value of the grants issued during the three months ended June 30, 2023 and 2022 was $ 0.92 and $ 0.57 per share,

respectively.

The grant date fair value of the grants issued during the nine months ended June 30, 2023 and 2022 was $ 0.88 and $ 0.76 per

share, respectively.

The total expense for the three months ended June

30, 2023 and 2022 related to stock options was $ 158,528 and $ 137,109 , respectively.

The total expense for the six months ended March 31,

The total expense for the nine months ended June 30,

2023 and 2022 related to stock options was $ 482,276 and $ 444,891 , respectively.

The total number of stock options outstanding as of March

The total number of stock options outstanding as of June

30, 2023 and September 30, 2022 was 1,708,906 and 1,239,915 , respectively.

2 unchanged sentences

The weighted-average assumptions used in the Black-Scholes

option-pricing model are as follows for the stock options granted during the three and six months ended March 31, 2023 and 2022:

option-pricing model are as follows for the stock options granted during the three and nine months ended June 30, 2023 and 2022:

Three Months Ended

Six Months Ended

Nine Months Ended

Expected stock price volatility

2 unchanged sentences

Risk free interest rate

During the three months ended March 31, 2023 and

2022, 84,778 and 182,217 stock options vested, respectively, and zero and 9,167 stock options were forfeited during these periods, respectively.

During the six months ended March 31, 2023 and 2022, 212,224 and 201,060 stock options vested, respectively, and zero and 22,501 stock

During the three months ended June 30, 2023 and

2022, 69,947 and 64,841 stock options vested, respectively, and 521 and 5,167 stock options were forfeited during these periods, respectively.

During the nine months ended June 30, 2023 and 2022, 282,172 and 265,901 stock options vested, respectively, and 521 and 27,668 stock

options were forfeited during these periods, respectively.

During the three and six months ended March 31, 2023 and 2022, no options were

During the three and nine months ended June 30, 2023 and 2022, no options were

Restricted Stock Units

During the three and six months ended March 31,

2023, the Company granted an aggregate of 61,728 restricted stock units (“RSUs”) to its board of directors under the 2017

The weighted average grant date fair value of the RSUs granted during the three and six months ended March 31, 2023 was $ 1.62 per

The RSUs vest over a one year period in equal monthly installments on the last day of each month, subject to the recipient’s

continued service on such dates.

During 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 RSUs 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.

During the three months ended March 31, 2023 and

During the three and nine months ended June 30,

2023, the Company granted an aggregate of 249,000 and 310,728 restricted stock units (“RSUs”) to its board of directors under

the 2017 Plan, respectively.

The weighted average grant date fair value of the RSUs granted during the three and nine months ended June

30, 2023 was $ 1.59 and $ 1.60 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 months ended June 30,

2022, the Company granted an aggregate of 87,720 and 443,670 RSUs to certain directors, officers and employees under the 2017 Plan.

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 months ended June 30, 2023 and

2022, 52,299 and 9,606 RSUs vested, respectively, and no RSUs were forfeited during these periods.

During the six months ended March

During the nine months ended June 30,

2023 and 2022, 294,109 and 18,694 RSUs vested, respectively, and no RSUs were forfeited during these periods.

The total expense for

the three months ended March 31, 2023 and 2022 related to these RSUs was $ 95,625 and $ 87,295 , respectively.

The total expense for the

six months ended March 31, 2023 and 2022 related to these RSUs was $ 214,062 and $ 128,006 , respectively.

three months ended June 30, 2023 and 2022 related to these RSUs was $ 137,874 and $ 118,439 , respectively.

The total expense for the nine

months ended June 30, 2023 and 2022 related to these RSUs was $ 351,935 and $ 246,445 , respectively.

Inducement Plan

11 unchanged sentences

shares outstanding as of December 31st of the preceding calendar year.

Notwithstanding the foregoing, the Board may act prior to January

1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the

share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding sentence.

“Fully Diluted Shares” as of a date means an amount equal to the number of shares of common stock (i) outstanding and (ii)

issuable upon exercise, conversion or settlement of outstanding awards under the 2017 Plan and any other outstanding options, warrants

or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable for shares of common

stock, in each case as of the close of business of the Company on December 31 of the preceding calendar year.

Effective January 1, 2023,

129,479 shares were added to the 2017 Plan as a result of the evergreen provision.

Notwithstanding the foregoing, the Company’s Board of Directors

may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year

or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant

to the preceding sentence.

“Fully Diluted Shares” as of a date means an amount equal to the number of shares of common stock

(i) outstanding and (ii) issuable upon exercise, conversion or settlement of outstanding awards under the 2017 Plan and any other outstanding

options, warrants or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable

for shares of common stock, in each case as of the close of business of the Company on December 31 of the preceding calendar year.

January 1, 2023, 129,479 shares were added to the 2017 Plan as a result of the evergreen provision.

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

As of March 31, 2023, 1,708,219 shares were available

As of June 30, 2023, 1,129,125 shares were available

in the aggregate for future issuance under the 2017 Plan and Inducement Plan.

1 unchanged sentence

Equity Incentive Plan.

Unrecognized stock-based compensation was $ 1,334,727 as of March 31, 2023.

Unrecognized stock-based compensation was $ 1,745,365 as of June 30, 2023.

The unrecognized share-based expense

6 unchanged sentences

NOTE 10 – Income Taxes

The effective tax rate for the three and six months

ended March 31, 2023 and 2022 was zero percent.

As a result of the analysis of all available evidence as of March 31, 2023 and September

The effective tax rate for the three and nine

months ended June 30, 2023 and 2022 was zero percent.

As a result of the analysis of all available evidence as of June 30, 2023 and September

30, 2022, the Company recorded a full valuation allowance on its net deferred tax assets.

Consequently, the Company reported no income

tax benefit during the three and six months ended March 31, 2023 and 2022.

tax benefit during the three and nine months ended June 30, 2023 and 2022.

If the Company’s assumptions change and the

6 unchanged sentences

On December 21, 2022, the Company 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 the Company 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.

of March 31, 2023, 516,484 shares of common stock were issued for gross proceeds of $ 928,257 under the ATM, and issuance costs in the

amount of $ 183,359 have been incurred in connection with the ATM.

a Capital on Demand TM Sales Agreement (“Sales Agreement”) with JonesTrading Institutional Services LLC (“JonesTrading”)

to create an at-the-market offering program (“ATM”) under which the Company 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

As of June 30, 2023, 1,439,677 shares of common stock were issued for gross proceeds of $ 2,552,656 under the ATM, and issuance

costs in the amount of $ 234,725 have been incurred in connection with the ATM.

See Note 13 – Subsequent Events.

1 unchanged sentence

On October 13, 2021, the Company, entered

into an Underwriting Agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC, as underwriter (the “Underwriter”),

into an Underwriting Agreement (the “CH Underwriting Agreement”) with Craig-Hallum Capital Group LLC, as underwriter (“Craig-Hallum”),

relating to the issuance and sale of 3,750,000 shares of the Company’s common stock at a price to the public of $ 3.20 per share.

In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days, to

In addition, under the terms of the CH Underwriting Agreement, the Company granted Craig-Hallum 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.

of 422,057 shares of common stock subject to Craig-Hallum’s overallotment option closed on November 15, 2021.

The gross proceeds to the Company from this offering

5 unchanged sentences

There were no warrant exercises during the three

and six months ended March 31, 2023 and 270,478 warrants expired during the six months ended March 31, 2023.

and nine months ended June 30, 2023 and 425,370 and 695,848 warrants expired during the three and nine months ended June 30, 2023, respectively.

The following table summarizes information about

warrants outstanding at March 31, 2023:

warrants outstanding at June 30, 2023:

Exercise Price

5 unchanged sentences

The Company has a 401(k) defined contribution

plan (the “401K Plan”) for all employees age 21 and over.

plan (the “401K Plan”) for all employees aged 21 and over.

Employees can defer up to 100 % of their compensation through payroll

3 unchanged sentences

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, 2023.

contributions under the 401K Plan in the future, but it has not done so through June 30, 2023.

Employee 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 the second anniversary of an employee’s

Discretionary employer matches to employee deferrals vest over a nine year period beginning on the second anniversary of an employee’s

date of hire.

2 unchanged sentences

The amount of matching contributions to the 401K Plan to satisfy certain non-discrimination tests was zero and $ 30,697 during

the three and six months ending March 31, 2023 and 2022, respectively.

the three and nine months ending June 30, 2023 and 2022, respectively.

NOTE 13 – Subsequent Events

In April and May 2023, the Company issued 639,900

shares of common stock for gross proceeds of $ 1.2 million under the ATM prior to the deduction of issuance costs in the amount of $ 0.04

As of June 30, 2023, 1,439,677 shares of common

stock were issued for gross proceeds of $ 2,552,656 under the ATM, and issuance costs in the amount of $ 234,725 have been incurred in connection

with the ATM.

On July 24, 2023, we decreased the amount of common stock that can be sold pursuant to the Sales Agreement, such that we

are offering up to an aggregate of $ 2,560,000 of our common stock for sale under the Sales Agreement, including the shares of common stock

previously sold.

July 2023 Public Offering

On July 24, 2023, the Company entered into an Underwriting Agreement

(the “Benchmark Underwriting Agreement”) with The Benchmark Company, LLC, as underwriter (“Benchmark”), relating

to the issuance and sale of 5,250,000 shares of the Company’s common stock, par value $ 0.001 per share, at a price to the public

of $ 1.00 per share.

In addition, under the terms of the Benchmark Underwriting Agreement, the Company granted Benchmark an option, exercisable

for 30 days, to purchase up to an additional 787,500 shares of common stock on the same terms (“the Overallotment Option”).

The offering closed on July 27, 2023, and the Company completed the sale and issuance of an aggregate of 6,037,500 shares of its common

stock, including the exercise in full of the Overallotment Option.

The net proceeds to the Company from this offering were approximately

$ 5,214,875 after deducting underwriting discounts and other offering expenses payable by the Company.

The Company intends to use the net

proceeds from this offering to:

(i) support the commercial launch of the EVO sEEG electrode with Zimmer Biomet, (ii) support the FDA submission

for the OneRF ablation system and (iii) complete the design of a novel drug delivery electrode, among other general corporate purposes.

NeuroOne Medical Technologies

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