What changed in this filing

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Item 1. Financial Statements

2024-02-13 compared with 2023-08-14 · 630 added, 780 removed, 141 unchanged (91% of the section changed)

Financial Statements

NeuroOne Medical Technologies Corporation

Condensed Balance Sheets

Medical Technologies Corporation

Balance Sheets

September 30,

1 unchanged sentence

Cash and cash equivalents

Short-term investments

Accounts receivable

Prepaids and other assets

Prepaid expenses and other assets

Total current assets

Intangible assets, net

Right-of-use asset

Right-of-use assets

Property and equipment, net

3 unchanged sentences

Accrued expenses and other liabilities

Deferred revenue

Total current liabilities

4 unchanged sentences

Preferred stock, $ 0.001 par value;

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.

10,000,000 shares authorized;

no shares issued or outstanding.

Common stock, $ 0.001 par value;

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.

100,000,000 shares authorized;

24,831,090 and 23,928,945 shares issued and outstanding as of December 31, 2023 and September 30, 2023, respectively.

Additional paid–in capital

4 unchanged sentences

Total liabilities and stockholders’ equity

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Condensed Statements of Operations

Three Months Ended

Nine Months Ended

Product revenue

Cost of product revenue

Product gross profit (loss)

Collaborations revenue

accompanying notes to condensed financial statements

Medical Technologies Corporation

Statements of Operations

For the three months ended

of product revenue

gross profit (loss)

Collaborations

general and administrative

and development

operating expenses

Selling, general and administrative

Research and development

Total operating expenses

Loss from operations

( 3,510,235 )

( 2,761,434 )

( 8,790,506 )

( 8,630,569 )

Other income, net

Loss before income taxes

( 3,468,773 )

( 2,759,727 )

from operations

( 3,390,475 )

( 1,784,352 )

Provision for income taxes

before income taxes

( 3,344,900 )

( 1,732,769 )

for income taxes

$ ( 3,344,900 )

4 unchanged sentences

Basic and diluted

See accompanying notes to condensed financial

NeuroOne Medical Technologies Corporation

Condensed Statements of Changes in Stockholders’

accompanying notes to condensed financial statements

Medical Technologies Corporation

Statements of Changes in Stockholders’ Equity

Stockholders’

Balance at September 30, 2021

$ ( 40,827,199 )

Issuance of common stock in connection with public offering

Issuance cost in connection with public offering

( 1,352,280 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

( 2,807,475 )

Balance at December 31, 2021

( 43,634,674 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

( 3,058,067 )

Balance at March 31, 2022

at September 30, 2022

$ ( 50,826,812 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

of common stock upon vesting of restricted stock units

( 1,732,769 )

Balance at June 30, 2022

at December 31, 2022

$ ( 52,559,581 )

1 unchanged sentence

$ ( 62,686,303 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

( 1,732,769 )

Balance at December 31, 2022

( 52,559,581 )

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

( 3,522,828 )

Balance at March 31, 2023

( 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

of common stock attributed to equity financings

costs related to equity financings

of common stock upon vesting of restricted stock units

repurchases for the payment of employee taxes

( 3,344,900 )

Balance at June 30, 2023

at December 31, 2023

$ ( 66,031,203 )

See accompanying notes to condensed financial

NeuroOne Medical Technologies Corporation

Condensed Statements of Cash Flows

For the Nine Months Ended

Operating activities

accompanying notes to condensed financial statements

Medical Technologies Corporation

Statements of Cash Flows

For the three months ended

$ ( 3,344,900 )

$ ( 1,732,769 )

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization and depreciation

Stock-based compensation

Amortization of discounts and premiums on short-term investments

Non-cash lease expense

Change in assets and liabilities:

Accounts receivable

Prepaids and other assets

Accounts payable

Accrued expenses, deferred revenue, operating leases and other liabilities

to reconcile net loss to net cash used in operating activities:

and depreciation

of discounts and premiums on short-term investments

lease expense

in assets and liabilities:

and other assets

( 1,455,188 )

Net cash used in operating activities

expenses, operating leases and other liabilities

cash used in operating activities

( 3,809,391 )

( 3,492,253 )

Investing activities

Purchases of short-term investments

of short-term investments

( 1,473,419 )

Maturities of short-term investments

Purchase of property and equipment

Net cash provided by (used in) investing activities

Financing activities

Proceeds from issuance of common stock in connection with at-the-market offering program and public offering

Issuance costs related to at-the-market offering program and public offering

of short-term investments

of property and equipment

cash (used in) provided by investing activities

from issuance of common stock attributed to equity financings

costs related to equity financings

repurchases for the payment of employee taxes

cash provided by (used in) financing activities

decrease in cash

( 2,641,508 )

Share repurchases for the payment of employee taxes

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

( 3,492,897 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental non-cash financing and investing transactions:

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

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

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

Purchased property and equipment in accounts payable

See accompanying notes to condensed financial

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 1 – Description of Business and

Basis of Presentation

NeuroOne Medical Technologies Corporation (the

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

neuromodulation 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.

The Company is based in Eden Prairie, Minnesota.

Global Economic Conditions

Generally, worldwide economic conditions remain

uncertain, particularly due to the conflict between Russia and Ukraine, disruptions in the banking system and financial markets, lingering

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 the Company’s 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.

conditions continue to decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely

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

Additionally, the Company’s 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, disruptions in the banking system and financial markets, 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.

Basis of presentation

The accompanying unaudited condensed financial

statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

at beginning of period

at end of period

non-cash financing and investing transactions:

deferred offering and issuance costs attributed to the at-the-market offering program and public offering

of right-of-use asset and associated lease liability

accompanying notes to condensed financial statements

Medical Technologies Corporation

to Condensed Financial Statements

– Description of Business and Basis of Presentation

Medical Technologies Corporation (the “Company” or “NeuroOne”), a Delaware corporation, is a medical technology

company focused on the development and commercialization of thin film electrode for continuous 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.

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) clearance from the FDA 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.

In December 2023, we received 510(k) clearance for our OneRF ablation system for creation of radiofrequency lesions

in nervous tissue for functional neurosurgical procedures.

Company is based in Eden Prairie, Minnesota.

Economic Conditions

worldwide economic conditions remain uncertain, particularly due to the conflicts between Russia and Ukraine and in the Middle East,

disruptions in the banking system and financial markets, 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 the Company’s 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 continue to decline, the Company’s future cost of equity or debt capital and

access to the capital markets could be adversely affected.

Company’s operating results could be materially impacted by changes in the overall macroeconomic environment and other economic

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflicts in Ukraine and

the Middle East, disruptions in the banking system and financial markets, and steps taken by governments and central banks, 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.

of presentation

The accompanying unaudited condensed financial statements have been

prepared by the Company, pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (the “SEC”).

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.

generally accepted

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

The condensed financial

statements may not include all disclosures required by 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.

accounting principles (U.S.

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, 2023 included in the Company’s Annual Report on Form 10-K.

The condensed

balance sheet at September 30, 2023 was derived from the audited financial statements of the Company.

In the opinion of management, all adjustments,

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

cash flows for the interim periods, have been made.

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

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 2 – Going Concern

The accompanying

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

The Company has incurred

losses since inception, negative cash flows from operations, and 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.

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.

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

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

The results of operations for the

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

Medical Technologies Corporation

to Condensed Financial Statements

2 - Going Concern

The accompanying financial statements have been prepared on the basis

that the Company will continue as a going concern.

The Company has incurred losses since inception, negative cash flows from operations,

and an accumulated deficit of $ 66.0 million as of December 31, 2023.

To date, the Company’s revenues have not been sufficient to

cover its full operating costs, and as such, it has been dependent on funding operations through the issuance of debt and sale of equity

The Company has adequate liquidity to fund its operations through mid-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 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

Management’s Use of Estimates

The preparation of financial statements in conformity

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.

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.

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

3 – Summary of Significant Accounting Policies

Use of Estimates

preparation of financial statements in conformity with U.S.

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.

Cash and Cash Equivalents

The Company considers all highly liquid investments

with an original contractual maturity on date of purchase of less than or equal to three months to be classified and presented as cash

equivalents on the Balance Sheets.

Cash equivalents are stated at cost, which approximates fair value.

The Company’s cash and cash

equivalents may include demand deposit accounts with large financial institutions, institutional money market funds, U.S.

Treasury securities,

and corporate notes and bonds.

The Company monitors the creditworthiness of the financial institutions, institutional money market funds,

and corporations in which the Company invests its surplus funds.

The Company has experienced no credit losses from its cash and cash equivalent

Short-Term Investments

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Revenue Recognition

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

segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the Company’s

chief operating decision maker in deciding how to allocate resources and assessing performance.

The Company’s chief operating decision

maker is its Chief Executive Officer.

The Company’s Chief Executive Officer views the Company’s operations and manages its

business in one operating segment, which is the business of development and commercialization of products related to comprehensive neuromodulation

cEEG and sEEG recording, monitoring, ablation, and brain stimulation solutions.

Accordingly, the Company has a single reporting segment.

and Cash Equivalents

Company considers all highly liquid investments with an original contractual maturity on date of purchase of less than or equal to three

months to be classified and presented as cash equivalents on the condensed balance sheets.

Cash equivalents are stated at cost, which

approximates fair value.

The Company’s cash and cash equivalents may include demand deposit accounts with large financial institutions,

institutional money market funds, U.S.

Treasury securities, and corporate notes and bonds.

The Company monitors the creditworthiness

of the financial institutions, institutional money market funds, and corporations in which the Company invests its surplus funds.

Company has experienced no credit losses from its cash and cash equivalent investments.

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

Treasury securities and highly rated corporate securities.

The Company has

held these investments to maturity.

Securities 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.

There were no short-term investments outstanding as of December 31, 2023 and September 30, 2023.

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

7 – Zimmer Development Agreement.”

In determining

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

Medical Technologies Corporation

to Condensed Financial Statements

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

the following steps:

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

(ii) determination of whether the promised goods or services

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

(iii) measurement of the transaction

price, including the constraint on variable consideration;

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

on estimated selling prices;

(ii) determination of whether the promised

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

(iii) measurement

of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance

obligations based on estimated selling prices;

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

A performance obligation is a

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

(“ASC”) Topic 606.

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

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

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 Accounting Standards Codification (“ASC”) Topic 606 (“ASC

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.

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

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

At the inception

1 unchanged sentence

of Product Revenue

product revenue consists of the manufacturing and materials costs incurred by the Company’s third-party contract manufacturer in

connection with the Company’s strip and grid cortical electrodes (the “Strip/Grid Products”), depth electrodes (“sEEG

Products) and outside supplier materials costs in connection with the electrode cable assembly products (“Electrode Cable

Assembly Products”) .

In addition, cost of product revenue includes royalty fees incurred in

connection with the Company’s license agreements.

of product revenue consists of the manufacturing and materials costs incurred by the Company’s third-party contract manufacturer

in connection with the Company’s strip and grid cortical electrodes (the “Strip/Grid Products”), depth electrodes (“sEEG

Products) and outside supplier materials costs in connection with the electrode cable assembly products (“Electrode Cable Assembly

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

Collaborations

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

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

selling price of each performance obligation identified in the contract.

The Company uses key assumptions to determine the stand-alone

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

probabilities of technical and regulatory success.

The Company allocates the total transaction price to each performance obligation based

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

Licenses of intellectual property :

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

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

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

For licenses that are bundled with other promises, the Company

utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation

is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing

revenue from non-refundable, up-front fees.

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

the measure of performance and related revenue recognition.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

and probabilities of technical and regulatory success.

The Company allocates the total transaction price to each performance obligation

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

of intellectual property :

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

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

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

For licenses that

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

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

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

The Company evaluates the measure of progress

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

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

4 unchanged sentences

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

When the Company’s assessment of probability of

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

When the Company’s assessment of probability

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

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

and recorded in collaborations revenues based upon when the customer obtains control of each element.

Medical Technologies Corporation

to Condensed Financial Statements

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

1 unchanged sentence

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

Fair Value of Financial Instruments

The Company’s accounting for fair value

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

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

techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical

assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level

3 measurements).

Value of Financial Instruments

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

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

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

The hierarchy gives the highest priority

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

involving significant unobservable inputs (Level 3 measurements).

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

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 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

and know-how.

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

life of the acquired technology.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Level 1 Inputs:

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

Level 2 Inputs:

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:

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.

of December 31, 2023 and September 30, 2023, the fair values of cash, cash equivalents, 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.

were no transfers between fair value hierarchy levels during the three months ended December 31, 2023 and 2022.

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

technology and know-how.

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

over the expected useful life of the acquired technology.

and Equipment

3 unchanged sentences

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

years and three years for software.

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

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

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

changes are made prospectively.

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

software providers and installation costs.

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

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

Maintenance and repairs are charged directly

to expense as incurred.

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

life of the acquired asset.

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

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

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

performed on the recoverability of the carrying amounts.

Maintenance and repairs are charged directly to expense as incurred.

Medical Technologies Corporation

to Condensed Financial Statements

of Long-Lived Assets

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

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

The Company assesses

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

expected future cash flows.

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

the carrying value and the fair value of the impaired asset.

for Doubtful Accounts

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

of its accounts receivable.

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

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

Account balances

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

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

are stated at the lower of cost (using the first-in, first-out “FIFO” method) or net realizable value.

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

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

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

through undiscounted expected future cash flows.

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

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

Receivable and Allowances for Doubtful Accounts

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

collectability of its accounts receivable.

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

the aging of the accounts receivable, its historical write-offs, the credit worthiness of each customer, and economic conditions that

could affect the collectability of the balances in the future.

Account balances are charged off against the allowance when the Company

believes that it is probable that the receivable will not be recovered.

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

The Company has not incurred any bad debt expense to date and no allowance for doubtful accounts has been recorded during

the periods presented.

is stated at the lower of cost (using the first-in, first-out “FIFO” method) or net realizable value.

The Company calculates

3 unchanged sentences

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.

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.

valuation allowance was required during the periods presented.

and Development Costs

and development costs are charged to expense as incurred.

Research and development expenses may include costs incurred in performing research

and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as

other contracted services, license fees, and other external costs.

Non-refundable advance payments for goods and services that will be

used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather

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

Research and development expenses comprise of costs incurred in performing

research and development activities , including 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.

Non-refundable advance payments for goods and services

that will be used in future research and development activities are expensed when the activity is performed or when the goods have been

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

General and Administrative

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

not directly associated with research and development activities.

Other significant costs include legal and litigation costs relating

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

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

The Company accounts for stock-based compensation

in accordance with the provisions of ASC 718, Compensation — Stock Compensation (“ASC 718”).

Accordingly, compensation

costs related to equity instruments granted are recognized at the grant-date fair value.

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 regulatory, clinical, product

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

Company accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation — Stock Compensation

Accordingly, compensation costs related to equity instruments granted are recognized at the grant-date fair

value over the requisite service period.

The Company records forfeitures when they occur.

Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable provisions of ASC 718.

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

Deferred tax assets and liabilities are recognized for the

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

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

Deferred tax assets and liabilities are measured using

enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

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

tax asset will not be realized.

Net Loss Per Share

For the Company, basic loss per share of common

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

Diluted earnings or loss per share of common stock

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

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

The Company’s warrants, stock options, and restricted

stock units while outstanding are considered common stock equivalents for this purpose.

Diluted earnings or loss per share of common stock

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

No incremental common stock equivalents

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

three and 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 nine months

ended June 30, 2023 and 2022:

Stock-based compensation arrangements to non-employees

are accounted for in accordance with the applicable provisions of ASC 718.

Medical Technologies Corporation

to Condensed Financial Statements

taxes are accounted for under the asset and liability method.

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

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

tax base and operating loss and tax credit carryforwards.

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

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

Deferred tax assets

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

Loss Per Share

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

during the period.

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

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

The Company’s

warrants, stock options, and restricted stock units while outstanding are considered common stock equivalents for this purpose.

earnings or loss per share of common stock is computed utilizing the treasury method for the warrants, stock options and restricted stock

No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive

given the net loss reported for the three months ended December 31:

Stock options

Restricted stock units

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards

Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses” .

The ASU sets forth a “current

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

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

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

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

Unissued vested restricted stock units

Accounting Pronouncements

November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07 - Segment Reporting (Topic 280):

to Reportable Segment Disclosures , which enhances reportable segment disclosure requirements, primarily through disclosures of significant

segment expenses.

This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal

years, with early adoption permitted.

The guidance must be applied retrospectively to all prior periods presented.

The Company is currently

evaluating the impact of adoption of this guidance on its financial statements.

December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which enhances income

tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This guidance also includes certain other

amendments to improve the effectiveness of income tax disclosures.

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

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

Recently, the FASB issued the final ASU to delay adoption

for smaller reporting companies to fiscal years beginning after December 15, 2022.

The Company does not expect that the adoption of this

ASU will have a material impact on its financial statements.

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

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

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

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

This ASU eliminates the beneficial conversion and cash conversion

accounting models for convertible instruments.

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

are currently accounted for as derivatives because of specific settlement provisions.

In addition, this ASU modifies how particular convertible

instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation.

The amendments in this ASU

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

periods within those fiscal years.

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 its financial statements.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 4 - Commitments and Contingencies

2024, including interim periods within those fiscal years and should be applied on a prospective basis, with retrospective application

The Company is currently evaluating the impact of adoption of this guidance on its financial statements.

June 2016, the FASB issued Accounting Standards Update 2016-13, “ Financial Instruments – Credit Losses” .

ASU sets forth a “current expected credit loss” (“CECL”) model which requires the Company to measure all expected

credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable

supportable forecasts.

This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial

assets measured at amortized cost and applies to some off-balance sheet credit exposures.

This ASU is effective for fiscal years beginning

after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.

The FASB issued the final

ASU to delay adoption for smaller reporting companies to fiscal years beginning after December 15, 2022.

The Company adopted the guidance

on October 1, 2023.

The adoption of this ASU did not have a material impact on the Company’s financial statements.

Medical Technologies Corporation

to Condensed Financial Statements

4 – Commitments and Contingencies

License Agreement

The Company has entered into an exclusive start-up

company license agreement with the Wisconsin Alumni Research Foundation (“WARF”) for WARF’s neural probe array and thin

film micro electrode technology (the “WARF License”).

The WARF License grants to the Company an exclusive

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

or thin-film micro electrode array and method.

The Company 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 the Company or any of its sublicensees contest the validity

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

be valid and would be infringed by the Company if not for the WARF License, the royalty rate will be tripled for the remaining term of

the WARF License.

WARF may terminate the WARF License on 30 days’

written notice if we default on the payments of amounts due to WARF or fail to timely submit development reports, actively pursue our

development plan or breach any other covenant in the WARF License and fail to remedy such default in 90 days or in the event of certain

bankruptcy events involving us.

The WARF License otherwise expires by its terms on the date that no valid claims on the patents licensed

thereunder remain.

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

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 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.

The Company has an exclusive license and development

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

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

If the Company is successful in obtaining

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

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

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

Headquarters Lease

On October 7, 2019, the Company entered into a

non-cancellable lease agreement (the “Lease”) with certain landlords (together, the “Landlord”) pursuant to which

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

Company took possession of the Premises on November 1, 2019, with the term of the Lease ending 65 months after such date, unless terminated

earlier (the “Term”).

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

per month by the end of the Term.

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

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

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

annual operating expenses associated with the premises, calculated as set forth in the Lease of which the Company is entitled to an abatement

of these operating expense for the first 3 months.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Los Gatos Lease

On July 1, 2021, the Company entered into a non-cancellable

facility lease (the “Los Gatos Lease”), pursuant to which the Company agreed to rent office space for its research and development

operations located at 718 University Avenue, Suite #111, Los Gatos, California.

The facility space under the Los Gatos Lease is approximately

1,162 square feet.

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

for WARF’s neural probe array and thin film micro electrode technology.

The Company entered into an Amended and Restated Exclusive

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

the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February

22, 2017, March 30, 2019 and September 18, 2019.

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

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

The Company 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.

Company or any of its sublicensees contest the validity of any licensed patent, the royalty rate will be doubled during the pendency

of such contest and, if the contested patent is found to be valid and would be infringed by the Company if not for the WARF License,

the royalty rate will be tripled for the remaining term of the WARF License.

may terminate the WARF License on 30 days’ written notice if we default on the payments of amounts due to WARF or fail to timely

submit development reports, actively pursue our development plan or breach any other covenant in the WARF License and fail to remedy

such default in 90 days or in the event of certain bankruptcy events involving us.

WARF may also terminate the WARF License (i) on 90

days’ notice if we had failed to have commercial sales of one or more FDA-approved products under the WARF License by June 30,

2021 or (ii) if, after royalties earned on sales begin to be paid, such earned royalties cease for more than four calendar quarters.

The first commercial sale occurred on December 7, 2020, prior to the June 30, 2021 deadline.

The WARF License otherwise expires

by its terms on the date that no valid claims on the patents licensed thereunder remain.

The Company expects the latest expiration of

a licensed patent to occur in 2030.

During the three months ended December 31, 2023 and 2022, $ 37,500 in royalty fees were incurred related

to the WARF License during each of these periods and were reflected as a component of cost of product

Company has an exclusive license and development agreement with the Mayo Foundation for Medical Education and Research (“Mayo”)

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

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

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

the three months ended December 31, 2023 and 2022, $ 269 and $ 690 in royalty fees were incurred related to the Mayo Agreement, respectively,

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

October 7, 2019, the Company entered into a non-cancellable lease agreement (the “Lease”) with certain landlords (together,

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

Minnesota (the “Premises”).

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

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

The initial base rent for the Premises is $ 6,410

per month for the first 17 months, increasing to $ 7,076 per month by the end of the Lease Term.

In addition, as long as the Company is

not in default under the Lease, the Company shall be entitled to an abatement of its base rent for the first 5 months.

In addition, the

Company will pay its pro rata share of the Landlord’s annual operating expenses associated with the Premises, calculated as set

forth in the Lease of which the Company is entitled to an abatement of these operating expense for the first 3 months.

Medical Technologies Corporation

to Condensed Financial Statements

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

agreed to rent office space for its research and development operations located at 718 University Avenue, Suite #111, Los Gatos, California.

The facility space under the Los Gatos Lease is approximately 1,162 square feet.

The Company took possession of the office space on July

The initial monthly rent under the Los Gatos Lease

was approximately $ 4,241 .

On November 4, 2022, the Los Gatos Lease was extended for an additional two years to

December 31, 2024 .

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 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 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:

Nine Months Ended

The initial monthly rent under the Los Gatos Lease was approximately $ 4,241 .

On November 4, 2022, the Los Gatos Lease was extended

for an additional two years to December 31, 2024 .

The rent under the extended Los Gatos Lease ranges from $ 4,453 to $ 4,632 per month

beginning on January 1, 2023.

the three months ended December 31, 2023 and 2022, rent expense associated with the facility leases amounted to $ 43,053 and $ 42,474 ,

respectively.

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

For the three months ended

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

Operating cash flows from operating leases

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

Supplemental balance sheet information related

to the operating leases was as follows:

cash flows from operating leases

Right-of -use assets obtained in exchange for

lease obligations:

of right-of-use asset and associated lease liability

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

September 30,

Right-of-use assets

Lease liabilities

Weighted average remaining lease term (years)

Weighted average discount rate

Maturity of the lease liabilities was as follows:

Calendar Year

Weighted average remaining

lease term (years)

Weighted average discount

of the lease liabilities was as follows:

Total lease payments

Less imputed interest

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

to time, the Company may be subject to a broad range of claims and legal proceedings that relate to contractual allegations, patent infringement

and other claims.

The Company establishes accruals when applicable for matters and commitments which it believes losses are probable and

can be reasonably estimated.

To date, no loss contingency for such matters and potential commitments have been recorded.

Although it is

not possible to predict with certainty the outcome of these matters or potential commitments, the Company is of the opinion that the ultimate

resolution of these matters and potential commitments will not have a material adverse effect on its results of operations or financial

NOTE 5 – Supplemental Balance Sheet Information

Prepaid and other assets consisted of the following:

Short-term portion (included in other liabilities)

Medical Technologies Corporation

to Condensed Financial Statements

the ordinary course of business, from time to time, the Company may be subject to a broad range of claims and legal proceedings that

relate to contractual allegations, patent infringement and other claims.

The Company establishes accruals when applicable for matters

and commitments which it believes losses are probable and can be reasonably estimated.

To date, no loss contingency for such matters

and potential commitments have been recorded.

Although it is not possible to predict with certainty the outcome of these matters or potential

commitments, the Company is of the opinion that the ultimate resolution of these matters and potential commitments will not have a material

adverse effect on its results of operations or financial position.

5 – Supplemental Balance Sheet Information

and other assets

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:

consisted of the following:

September 30,

Component inventory

Work-in-process

Finished goods

Intangible assets rollforward is as follows:

assets rollforward is as follows:

Net Intangibles, September 30, 2023

12 - 13 years

Net Intangibles, June 30, 2023

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

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

Property and equipment held for use by category

are presented in the following table:

Net Intangibles, December 31, 2023

Amortization expense was $ 5,579 for each of the three months ended

December 31, 2023 and 2022.

Medical Technologies Corporation

to Condensed Financial Statements

and Equipment

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

September 30,

Equipment and furniture

and furniture

Total property and equipment

Less accumulated depreciation

Property and equipment, net

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 and other liabilities consisted

of the following:

Property and equipment,

expense was $ 53,078 and $ 30,310 for the three months ended December 31, 2023 and 2022, respectively.

6 - Accrued Expenses and Other Liabilities

expenses and other liabilities consisted of the following:

September 30,

2 unchanged sentences

Royalty payments

NOTE 7 – Zimmer Development Agreement

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

Development Agreement”) with Zimmer, Inc.

(“Zimmer”), pursuant to which the Company granted Zimmer exclusive global

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

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

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

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

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

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

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

7 – Zimmer Development Agreement

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

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

(“Zimmer”), pursuant to which

the Company granted Zimmer exclusive global rights to distribute the Strip/Grid Products and the Electrode Cable Assembly Products.

Additionally,

the Company granted Zimmer the exclusive right and license to distribute certain sEEG Products developed by the Company and together with

the Strip/Grid Products and Electrode Cable Assembly Products, the “Products”.

The parties have agreed to collaborate with

respect to development activities under the Zimmer Development Agreement through a joint development committee composed of an equal number

of representatives of Zimmer and the Company.

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

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

In addition to the Zimmer Development

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

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

otherwise provided in the Zimmer Development Agreement, the Company is responsible for performing all development activities, including

Agreement, Zimmer and the Company have entered into a Manufacturing and Supply Agreement and a Supplier Quality Agreement with respect

to the manufacturing and supply of the Products.

as otherwise provided in the Zimmer Development Agreement, the Company is responsible for performing all development activities, including

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

2 unchanged sentences

Agreement) for such Product.

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

Fee”) to the Company in fiscal year 2020.

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:

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.

Medical Technologies Corporation

to Condensed Financial Statements

August 2, 2022, the Company entered into a Third Amendment to Exclusive Development and Distribution Agreement (the “Zimmer

Amendment”) with Zimmer.

Pursuant to the terms and conditions of the Zimmer 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;

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”).

The 2022 Zimmer Warrant is exercisable for up to an aggregate of 350,000 shares of the Company’s common stock.

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 fair value of the 2022 Zimmer Warrant of $ 0.1 million was based on the Black-Scholes pricing model.

assumptions used were as follows:

● $ 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.

addition, in connection with the Zimmer Amendment, the Company issued 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 the Company’s

common stock.

The 2022 Zimmer Warrant has an exercise price of $ 3.00 per share, is exercisable commencing six months from the issuance

date, and will expire on August 2, 2027.

The fair value of the 2022 Zimmer Warrant of $ 0.1 million was based on the Black-Scholes pricing

Input assumptions used were as follows:

a risk-free interest rate of 2.9 %;

1 unchanged sentence

expected life of 5 years;

dividend yield of 0 %;

expected dividend yield of 0 %;

and the underlying fair market of the common stock.

The 2022 Zimmer Warrant was classified in stockholders’

equity as the number of shares were fixed and determinable, no cash settlement was required and no other provisions precluded equity treatment.

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, unless terminated earlier pursuant to

Either party may terminate the Zimmer Development Agreement (x) with written notice for the other party’s material breach

following a cure period or (y) if the other party becomes subject to certain insolvency proceedings.

In addition, Zimmer may terminate

the 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.

rights granted to Zimmer under the Strip/Grid Distribution License and sEEG Distribution License shall be exclusive from the effective

date of the Third Amendment until the end of the term.

The Zimmer Development Agreement and Third Amendment

were accounted for under the provisions of ASC 606.

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

obligations under the Zimmer Development Agreement and Third Amendment:

(1) the Company’s obligation to grant Zimmer access to its

intellectual property;

(2) completion of sEEG Product development;

(3) completion of Strip/Grid Product development;

(4) the provision

of sEEG exclusivity maintenance;

and (5) completion of sEEG design modifications as requested by Zimmer.

All performance obligations under

the Zimmer Development Agreement and Third Amendment were met as of December 31, 2022.

The aggregate transaction price associated with

the Zimmer Development Agreement and Third Amendment was $ 5.4 million comprising the Initial Exclusivity Fee of $ 2.0 million and the $ 3.5

million payment under the Third Amendment, less the fair value of the 2022 Zimmer Warrant of $ 0.1 million.

The transaction price was allocated

between performance obligations based on their relative standalone selling prices.

The Company used a market based valuation approach

and an expected cost plus margin approach with regard to estimating the standalone selling price for the performance obligations.

In October 2022, the Company received 510(k) clearance

from the FDA 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.

Accordingly, the Company recognized

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 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 nine months ended as of June 30, 2023

equity as the number of shares were fixed and determinable, no cash settlement was required and no other provisions precluded equity

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 “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 proceedings.

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 Strip/Grid

Distribution License and sEEG Distribution License as defined in the Zimmer Development Agreement shall be exclusive from the effective

date of the Zimmer Amendment until the end of the term of the Zimmer Amendment.

Zimmer Development Agreement and Zimmer Amendment were accounted for under the provisions of ASC 606.

In accordance with the provisions

under ASC 606, the Company identified five performance obligations under the Zimmer Development Agreement and Zimmer Amendment:

Company’s obligation to grant Zimmer access to its intellectual property;

(2) completion sEEG Product development;

(3) completion

of Strip/Grid Product development;

(4) the provision of sEEG exclusivity maintenance;

and (5) completion of sEEG design modifications

as requested by Zimmer.

All performance obligations under the Zimmer Development Agreement and Zimmer Amendment, outside of the sEEG

exclusivity maintenance obligation, were met by September 30, 2022.

The remaining performance obligation in deferred revenue as of September

30, 2022 attributed to sEEG exclusivity maintenance was completed in first quarter of fiscal year 2023.

aggregate transaction price associated with the Zimmer Development Agreement and Zimmer Amendment was $ 5.4 million comprising the Initial

Exclusivity Fee of $ 2.0 million and the $ 3.5 million payment under the Zimmer Amendment, less the fair value 2022 Zimmer Warrant of $ 0.1

The transaction price was allocated between performance obligations based on their relative standalone selling prices.

used a market based valuation approach and an expected cost plus margin approach with regard to estimating the standalone selling price

for the performance obligations.

The Company recognized collaborations revenue in the amount of $ 1,455,188 during the three months

ended December 31, 2022 in connection with the Zimmer Development Agreement and Zimmer Amendment.

Given the achievement of the milestones

under the Zimmer Development Agreement and Zimmer Amendment by December 31, 2022, no collaborations revenue was recognized during the

three months ended December 31, 2023.

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

during the three months ended as of December 31, 2023 and 2022:

Deferred Revenue

Balance as of beginning of period

Balance as of beginning of period – September

Revenue recognized

( 1,455,188 )

Balance as of end of period

Product Revenue

Product revenue related to its Strip/Grid Products,

sEEG Products and Electrode Cable Assembly Products.

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 nine months ended June 30, 2022 was $ 32,049 and

$ 102,381 , respectively.

Advertising Expense

Advertising expense is charged to selling, general

and administrative expenses during the period that it is incurred.

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

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

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

nine months ended June 30, 2022, respectively.

NOTE 8 – Stock-Based Compensation

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

research and development costs as follows in the accompanying condensed statements of operations.

Three Months Ended

Nine Months Ended

Balance as of end of period – December

Medical Technologies Corporation

to Condensed Financial Statements

revenue recognized during the three months ended December 31, 2023 and 2022 was $ 977,649 and $ 114,579 , respectively, related to the Company’s

Strip/Grid Products, sEEG Products and Electrode Cable Assembly Products.

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

Total advertising expense amounted

to $ 49,272 and $ 53,026 for the three months ended December 31, 2023 and 2022, respectively.

8 – Stock-Based Compensation

During the three-month periods ended December 31, 2023 and 2022, stock-based

compensation expense was included in selling, general and administrative and research and development costs as follows in the accompanying

condensed statements of operations.

Selling, general and administrative

Research and development

Total stock-based compensation expense

Stock Options

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 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 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 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 June

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

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

The weighted-average assumptions used in the Black-Scholes

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

Nine Months Ended

Total stock-based compensation

The Company’s 2017 Equity Incentive Plan (“2017 Plan”)

provides for the issuance of restricted shares and stock options to employees, directors, and consultants of the Company.

In addition to the Company’s 2017 Plan, the Company adopted the

NeuroOne Medical Technologies Corporation 2021 Inducement Plan (the “Inducement Plan”) on October 4, 2021, pursuant to which

the Company reserved 420,350 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously

employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within

the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

The Inducement Plan was approved by the Company’s Board of Directors

without stockholder approval in accordance with such rule.

On November 9, 2023, the Company’s Board of Directors adopted the First

Amendment to the Company’s Inducement Plan, increasing the aggregate number of shares of common stock that may be issued pursuant

to equity incentive awards under the Inducement Plan by 150,000 shares for a total of 570,350 shares of common stock that may be issued

pursuant to equity incentive awards under the Inducement Plan.

Under the 2017 Plan, the shares reserved automatically increase on

January 1st of each year, for a period of not more than ten years from the date the 2017 Plan is approved by the stockholders of the Company,

commencing on January 1, 2019 and ending on (and including) January 1, 2027, to an amount equal to 13 % of the fully-diluted shares outstanding

as of December 31st of the preceding calendar year.

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

“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.

On January 1,

2024, 1,051,556 shares were added to the 2017 Plan as a result of the evergreen provision.

See Note 12 – Subsequent Events.

Medical Technologies Corporation

to Condensed Financial Statements

the three months ended December 31, 2023 and 2022, under the 2017 Plan and the Inducement Plan, the Company granted 1,160,669 and 73,731

stock options, respectively, to its employees and consultants.

Vesting generally occurs over an immediate to 48 month period based on

a time of service condition.

The weighted-average grant date fair value of the grants issued during the three months ended December 31,

2023 and 2022 was $ 1.08 and $ 0.66 per share, respectively.

The total expense for the three months ended December 31, 2023 and 2022 related

to stock options was $ 187,431 and $ 181,744 , respectively.

The total number of stock options outstanding as of December 31, 2023 and September

30, 2023 was 2,814,096 and 1,708,427 , respectively.

weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three-month

periods ended December 31, 2023 and 2022:

Expected stock price volatility

2 unchanged sentences

Risk free interest rate

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

Restricted Stock Units

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 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 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

On October 4, 2021, the Company adopted the NeuroOne

Medical Technologies Corporation 2021 Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 420,350 shares

of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company,

as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the

Nasdaq Listing Rules.

The Inducement Plan was approved by the Company’s Board of Directors without stockholder approval in accordance

with such rule.

2017 Plan Evergreen Provision

Under the 2017 Plan, the shares reserved automatically

increase on January 1st of each year, for a period of not more than ten years from the date the 2017 Plan is approved by the stockholders

of the Company, commencing on January 1, 2019 and ending on (and including) January 1, 2027, to an amount equal to 13 % of the fully-diluted

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

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

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

No shares were available for future issuance under the 2016

Equity Incentive Plan.

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

The unrecognized share-based expense

is expected to be recognized over a weighted average period of 2.0 years.

NOTE 9 – Concentrations

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

Supplier concentration

One contract manufacturer produces all of the Company’s Strip/Grid

Products and sEEG Products.

NOTE 10 – Income Taxes

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 nine months ended June 30, 2023 and 2022.

If the Company’s assumptions change and the

Company believes that it will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation

allowance on deferred tax assets will be recognized as a reduction of future income tax expense.

If the assumptions do not

change, each period the Company could record an additional valuation allowance on any increases in the deferred tax assets.

NOTE 11 – Stockholders’ Equity

At-The-Market Offering

On December 21, 2022, the Company entered into

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.

During the three months ended December 31, 2023 and 2022, 56,616 and

127,446 stock options vested, and 55,000 and zero stock options were forfeited during these periods, respectively.

were no restricted stock units (“RSUs”) granted during the three months ended December 31, 2023 and 2022.

37,679 and 21,930

previously granted RSUs vested during these periods, respectively.

The total expense for the three months ended December 31, 2023 and

2022 related to these RSUs was $ 121,207 and $ 118,437 , respectively.

No RSUs were forfeited during the three months ended December 31,

2023 and 2022.

of December 31, 2023, 182,314 shares were available in the aggregate for future issuance under the 2017 Equity Incentive Plan and Inducement

Unrecognized stock-based compensation was $ 2,372,540 as of December 31, 2023.

The unrecognized share-based expense is expected

to be recognized over a weighted average period of 2.5 years.

9 – Concentrations

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

concentration

contract manufacturer produces all of the Company’s Strip/Grid Products and sEEG Products and another supplier was responsible

for the development of the Company’s OneRF Ablation system.

10 – Income Taxes

effective tax rate for the three months ended December 31, 2023 and 2022 was zero percent.

As a result of the analysis of all available

evidence as of December 31, 2023 and September 30, 2023, the Company recorded a full valuation allowance on its net deferred

Consequently, the Company reported no income tax benefit during the three months ended December 31, 2023

If the Company’s assumptions change and the Company believes that it will be able to realize these deferred tax assets,

the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of future

income tax expense.

If the assumptions do not change, each period the Company could record an additional valuation allowance

on any increases in the deferred tax assets.

Medical Technologies Corporation

to Condensed Financial Statements

11 – Stockholders’ Equity

At-The-Market

December 21, 2022, the Company entered into a Capital on Demand TM Sales Agreement (the “Sales Agreement”) with

JonesTrading Institutional Services LLC (“JonesTrading”) that created an at-the-market offering program (“ATM”)

under which the Company may offer and sell common stock having an aggregate offering price of up to $ 14.5 million.

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

On July 24, 2023, the Company decreased the

amount of common stock that can be sold pursuant to the Sales Agreement, such that the Company was offering up to an aggregate of $ 2.6

million of its common stock for sale under the Sales Agreement, including the shares of common stock previously sold.

Subsequently on

December 1, 2023, however, the Company increased the amount of common stock that can be sold pursuant to the Sales Agreement, such that

the Company was offering up to an aggregate of $ 4.8 million of its common stock for sale under the Sales Agreement, including the shares

of common stock previously sold.

January 5, 2024, the Company further increased the amount of common stock that can be sold pursuant to the Sales Agreement, such that

the Company is offering up to an aggregate of $ 9.3 million of its common stock for sale under the Sales Agreement, including the shares

of common stock previously sold.

See Note 12 – Subsequent Events.

Public Offering

On October 13, 2021, the Company, entered

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 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 Craig-Hallum’s overallotment option closed on November 15, 2021.

The gross proceeds to the Company from this offering

were approximately $ 13.4 million prior to deducting underwriting discounts and other offering expenses payable by the Company in

the amount of approximately $ 1.4 million in the aggregate.

NeuroOne Medical Technologies

Notes to Condensed Financial Statements

Warrant Activity and Summary

There were no warrant exercises during the three

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 June 30, 2023:

Exercise Price

Number Outstanding

Weighted Average

the three months ended December 31, 2023, 868,243 shares of common stock were issued under the ATM for an aggregate offering price of

$ 1,256,271 .

The total aggregate offering price and common stock issued since inception of the ATM though December 31, 2023 was $ 3,808,927

and 2,307,920 shares, respectively.

Issuance costs incurred under the ATM during the three months ended December 31, 2023 were $ 37,698 .

the three months ended December 31, 2022, deferred issuance costs in the amount of $ 103,787 were incurred in connection with the ATM,

but no shares of common stock were issued under the ATM during that period.

Activity and Summary

Average Exercise

Outstanding and exercisable at

September 30, 2023

( 1,059,133 )

Outstanding and exercisable

at December 31, 2023

$ 3.00 - 9.00

following table summarizes information about warrants outstanding at December 31, 2023:

Remaining Contractual

Number Exercisable at

NOTE 12 – Deferred Contribution Plan

The Company has a 401(k) defined contribution

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

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

withholdings into the 401K Plan subject to federal law limits.

The Company may match 100 % of deferrals up to 3 % of one’s contributions.

The Company’s matching contributions to employee deferrals are discretionary.

The Company may also make discretionary profit sharing

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 nine year period beginning on the second anniversary of an employee’s

date of hire.

Discretionary profit sharing contributions vest over a five year period beginning on the first anniversary of an employee’s

date of hire.

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

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

NOTE 13 – Subsequent Events

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

12 – Subsequent Events

Plan Evergreen Provision

January 1, 2024, 1,051,556 shares were added to the 2017 Plan as a result of the evergreen provision.

See Note 8 – Stock-Based

Compensation.

At-The-Market

On January 5, 2024, the Company increased the amount of common stock

that can be sold pursuant to the Sales Agreement with JonesTrading, such that we are offering up to an aggregate of $ 9.3 million of common

stock for sale under the Sales Agreement, including the shares of common stock previously sold.

As a of result of the higher issuance

threshold under the Sales Agreement, the Company sold an additional 1,080,314 shares of common stock for net proceeds in the amount of

$ 1.5 million during January 2024.

Medical Technologies Corporation

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements