What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-14 · 248 added, 226 removed, 387 unchanged (55% of the section changed)

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Forward-looking statements include statements about:

our ability to maintain

regulatory clearance of our cortical strip and grid electrode technology, our sEEG electrode technology, and our RF ablation

our ability to maintain regulatory clearance of our cortical strip and grid electrode technology, our sEEG electrode technology, and our RF ablation system;

our ability to successfully commercialize our technology in the United States;

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the clinical utility of our cortical strip, grid and depth electrodes, RF ablation system, and technology under development;

our ability to develop

additional applications of our cortical strip, grid and depth electrode and RF ablation technology with the benefits we hope to

offer as compared to existing technology, or at all;

our ability to develop additional applications of our cortical strip, grid and depth electrode and RF ablation technology with the benefits we hope to offer as compared to existing technology, or at all;

the results of our development and distribution relationship with Zimmer, Inc.

we have been the victim of a cyber-related crime, and our controls may not be successful in avoiding future cyber-related crimes;

the performance,

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

electrode and RF ablation technology;

our ability to develop

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

the performance, productivity, reliability and regulatory compliance of our third-party manufacturers of our cortical strip, electrode and depth electrode and RF ablation technology;

our ability to develop future generations of our cortical strip, grid and depth electrode and RF ablation technology;

our future development priorities;

our ability to obtain reimbursement coverage for our cortical strip, grid and depth electrode technology;

NeuroOne Medical Technologies

our expectations about the

willingness of healthcare providers to recommend our cortical strip, grid and depth electrode and RF ablation technology to people

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

neurological disorders;

our expectations about the willingness of healthcare providers to recommend our cortical strip, grid and depth electrode and RF ablation technology to people with epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological disorders;

NeuroOne Medical Technologies Corporation

our future commercialization, marketing and manufacturing capabilities and strategy;

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our ability to maintain our intellectual property position;

our expectations regarding

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

including technology under development;

our expectations regarding international opportunities for commercializing our cortical strip, grid and depth electrode and RF ablation technology under including technology under development;

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

our ability to satisfy the continued listing requirements of Nasdaq;

our estimates regarding our future expenses and needs for additional financing.

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applications of our technology associated with artificial intelligence.

NeuroOne has received 510(k) clearance for

three of its devices from the FDA, including:

(i) our Evo cortical electrode technology for recording, monitoring, and stimulating

brain tissue for up to 30 days, (ii) our Evo sEEG electrode technology for temporary (less than 30 days) use with recording,

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

of the brain, and (iii) our OneRF ablation system for creation of radiofrequency lesions in nervous tissue for functional

neurosurgical procedures.

Our other products are still under development.

NeuroOne Medical Technologies

We commenced commercial sales of cEEG strip/grid and electrode cable

assembly products beginning in the first quarter of fiscal year 2021.

We sold, on a limited application basis for design verification,

sEEG depth electrode products for non-human use beginning in late fiscal year 2021, and we commenced commercial sales of our sEEG depth

electrode products in late calendar 2022.

We initiated a limited commercial launch of our OneRF ablation system in March 2024.

NeuroOne has received 510(k) clearance for three

of its devices from the FDA, including:

(i) our Evo cortical electrode technology for recording, monitoring, and stimulating brain tissue

for up to 30 days, (ii) our Evo sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and stimulation

equipment for the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain, and (iii) our OneRF

ablation system for creation of radiofrequency lesions in nervous tissue for functional neurosurgical procedures.

Our other products are

still under development.

Under the Zimmer Development Agreement, we commenced

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

on a limited application basis for design verification, sEEG depth electrode products for non-human use beginning in late fiscal year

2021, and we commenced commercial sales of our sEEG depth electrode products in late calendar 2022.

We have also initiated a limited commercial

launch of our OneRF ablation system in March 2024 without a distribution partner.

NeuroOne Medical Technologies Corporation

We have incurred losses

since inception.

As of March 31, 2024, we had an accumulated deficit of $68.9 million, primarily as a result of expenses incurred in connection

As of June 30, 2024, we had an accumulated deficit of $71.7 million, primarily as a result of expenses incurred in connection

with our research and development, selling, general and administrative expenses associated with our operations and interest expense, fair

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We do not have a distribution partner for the OneRF ablation system at this time, and are continuing

to pursue potential strategic partnerships for this product.

to pursue a potential strategic partnership for the OneRF Products.

Nasdaq Notice

Since May 28, 2024, the closing price of our common

stock has been below $1.00.

On July 11, 2024, we received a letter (the “Notice”) from the Listing Qualifications Department

(the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) informing us that because the closing bid price for our common

stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company was not in compliance with the minimum bid price requirement

for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Marketplace Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from July 11, 2024, or until January

7, 2025, to regain compliance with the Minimum Bid Price Requirement.

If at any time before January 7, 2025, the closing bid price of

the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive trading days (which number days may

be extended by Nasdaq), Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement,

and the matter would be resolved.

The Notice also disclosed that in the event we

do not regain compliance with the Rule by January 7, 2025, we may be eligible for additional time.

To qualify for additional time, we

would be required to meet the applicable market value of publicly held shares requirement for continued listing and all other applicable

standards for initial listing on The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide

written notice of its intention to cure the deficiency during the second compliance period.

If we meet these requirements, Nasdaq will

inform us that it has been granted an additional 180 calendar days.

However, if it appears to the Staff that we will not be able to cure

the deficiency, or if we are otherwise not eligible, Nasdaq will provide notice that our securities will be subject to delisting.

We intend to continue actively monitor the closing

bid price for our common stock between now and January 7, 2025, and will consider available options to resolve the deficiency and regain

compliance with the Minimum Bid Price Requirement.

If we do not regain compliance within

the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that our common stock

will be subject to delisting.

We would then be entitled to appeal that determination to a Nasdaq hearings panel.

There can be no assurance

that we will regain compliance with the Minimum Bid Price Requirement during the 180-day compliance period, secure a second period of

180 calendar days to regain compliance, or maintain compliance with the other Nasdaq listing requirements.

NeuroOne Medical Technologies Corporation

Global Economic Conditions

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in fiscal and monetary policy, including increased interest rates.

NeuroOne Medical Technologies

Financial Overview

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of our Strip/Grid Products, sEEG Products and electrode cable assembly products (“Electrode Cable Assembly Products”) based

on Evo cortical electrode technology.

We anticipate that we will generate additional revenue from the sale of products based on Evo cortical

electrode technology and our OneRF ablation system.

on Evo cortical electrode technology and products based on our OneRF ablation system (“OneRF Products”).

We anticipate that

we will generate additional revenue from the sale of products based on Evo cortical electrode technology and our OneRF ablation system.

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

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

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

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

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

in nervous tissue for functional neurosurgical procedure.

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

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

December 2023, we received FDA 510(k) clearance for our OneRF ablation system for creation of radiofrequency lesions in nervous tissue

for functional neurosurgical procedure.

Product Gross Profit

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Our cost of product revenue consists of the manufacturing and materials costs incurred by our third-party

contract manufacturer in connection with our Strip/Grid Products, sEEG Products and outside supplier materials costs of producing the

Electrode Cable Assembly Products.

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

contract manufacturer in connection with our Strip/Grid Products, sEEG Products, OneRF Products and outside supplier materials costs of

producing the Electrode Cable Assembly Products.

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

our license agreements.

Collaborations Revenue

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

NeuroOne Medical Technologies Corporation

Under the terms of the Zimmer Development Agreement, we are responsible

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$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.

NeuroOne Medical Technologies

In addition, in connection with the Zimmer Amendment,

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Accordingly, we recognized

revenue in the amount of $1.5 million during the six months ended March 31, 2023 related to the completion of the sEEG exclusivity maintenance

There was no collaboration revenue during the six months ended March 31, 2024.

revenue in the amount of $1.5 million during the nine months ended June

30, 2023 related to the completion of the sEEG exclusivity maintenance milestone.

There was no collaboration revenue during the nine months

ended June 30, 2024.

NeuroOne Medical Technologies Corporation

The achievement of the level of sales required

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

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

We anticipate that our selling, general

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

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

These increases will include increased costs related to the hiring of additional personnel and fees for legal and professional services,

as well as other public company related costs.

NeuroOne Medical Technologies

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

We anticipate

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

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

costs of operating as a public company.

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

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

Research and Development

Research and development expenses consist of expenses

incurred in performing research and development activities in developing our cortical strip and grid electrode and depth electrode technology.

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

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

operations, fees paid to consultants and other outside expenses.

Research and development costs are expensed as incurred and costs incurred

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

Lastly, de minimis income from the sale of prototype products and related

materials are offset against research and development expenses.

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

system technology.

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

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

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

Research and development costs are expensed

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

Lastly, de minimis income from the sale

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

We expect our research and development expenses

to increase over the next several years as we develop additional applications for our electrode technology and conduct preclinical testing

and clinical trials.

Other Income (Expense), net

Other income (expense), net primarily consists

of interest income related to our cash, cash equivalents, investment income or loss from short-term investments and other income or expense

outside of normal operating activity relating to legal settlements, sales of non-commercial supplies and other items as applicable.

to increase over the next several years as we develop additional applications for our electrode and ablation system technology and conduct

preclinical testing and clinical trials.

Other Income, net

Other income, net primarily consists of interest

income related to our cash, cash equivalents, investment income or loss from short-term investments and other income or expense outside

of normal operating activity relating to legal settlements, sales of non-commercial supplies and other items as applicable.

NeuroOne Medical Technologies Corporation

Results of Operations

Comparison of the Three Months Ended March

Comparison of the Three Months Ended June 30,

2024 and 2023

The following table sets forth the results of

operations for the three months ended March 31, 2024 and 2023, respectively.

operations for the three months ended June 30, 2024 and 2023, respectively.

Three Months Ended

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Loss from operations

Other income (expense), net

Other income, net

Loss before income taxes

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Product Revenue and Product Gross Profit

Product revenue and product gross profit was $1.4

million and $0.4 million, respectively, during the three months ended March 31, 2024.

Product revenue and product gross profit was $0.5

million and $32,000, respectively, during the three months ended March 31, 2023.

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

sEEG and electrode cable assembly products.

Cost of product revenue consisted of the manufacturing and materials costs incurred by our

third-party contract manufacturer in connection with our strip/grid and sEEG products, and outside supplier materials costs in connection

Product revenue was $0.8 million during the three

months ended June 30, 2024 with a gross margin and gross profit percentage of $0.3 million and 34.1%, respectively.

During the three months

ended June 30, 2023, product revenue was $0.6 million with a gross margin and gross profit percentage of $0.2 million and 38.7%, respectively.

The decrease in the gross profit percentage in the current period when compared to the corresponding prior year period was primarily due

to an increase in material supply costs.

Product revenue consisted of the sale of our Strip/Grid Products, sEEG Products, OneRF Products

and Electrode Cable Assembly Products.

Cost of product revenue consisted of the manufacturing and materials costs incurred by our third-party

contract manufacturer in connection with our Strip/Grid, sEEG Products and OneRF Products, and outside supplier materials costs in connection

with the Electrode Cable Assembly Products.

In addition, cost of product revenue included royalty fees incurred of approximately $38,000

and $38,000 in connection with our license agreements during the three months ended March 31, 2024 and 2023, respectively.

NeuroOne Medical Technologies

Selling, General and Administrative Expenses

and $43,000 in connection with our license agreements during the three months ended June 30, 2024 and 2023, respectively.

Selling, General and Administrative Expenses

were $2.0 and $1.8 million during the three months ended March 31, 2024 and 2023, respectively.

The $0.2 million expense increase in

the current quarter over the comparable prior year quarter was attributed to higher administrative payroll of $0.2 million and stock-based

compensation of $0.1 million, partially offset by lower professional services and marketing expenses of $0.1 million.

Selling, general

and administrative expenses included $0.3 million and $0.2 million of stock-based compensation during the three months ended March 31,

2024 and 2023, respectively.

Selling, general and administrative expenses were

$1.9 million during each of the three months ended June 30, 2024 and 2023.

The negligible increase in costs during the current three-month

period was attributed to higher administrative payroll costs of approximately $0.1 million offset largely by professional service costs

which decreased by approximately $0.1 million.

Research and Development Expenses

Research and development expenses were $1.2 million

for the three months ended March 31, 2024, compared to $1.7 million during for the three months ended March 31, 2023.

The $0.4 million

decrease in the current period over the prior year period was attributed largely to the timing and overall lower OneRF Product development

activities in the current quarter when compared to the comparable prior year quarter.

Research and development expenses primarily included

salary-related expenses and costs related to consulting services, materials and supplies associated with the development of sEEG Products

and to a much lesser extent Strip/Grid Products.

Research and development expenses included $76,000 and $38,000 of stock-based compensation

during the three months ended March 31, 2024 and 2023, respectively.

Other Income (expense), net

Other income during the three months ended March

31, 2024 and 2023 related to interest income on our cash, cash equivalents and short-term investments in the amount of $31,000 and $67,000,

respectively.

Other expense during the three months ended March

31, 2023 was attributed to an exploit loss of $94,000.

There were no other expenses during the three months ended March 31, 2024.

Comparison of the Six Months Ended March 31,

for the three months ended June 30, 2024, compared to $1.9 million during for the three months ended June 30, 2023.

The $0.7 million decrease

period over period was attributed to the net reduction in development activities associated with our sEEG Products, Strip/Grid Products

and OneRF Products given the commercialization of these products.

Activity associated with new technology development partially offset

the overall net decrease in research and development costs during the current period.

Development activities primarily included salary-related

expenses and costs related to consulting services, materials and supplies.

NeuroOne Medical Technologies Corporation

Other Income, net

Other income during the three months ended June

30, 2024 and 2023 related to interest income on our cash and cash equivalents in the amount of $26,000 and $41,000, respectively.

Comparison of the Nine Months Ended June 30,

2024 and 2023

The following table sets forth the results of

operations for the six months ended March 31, 2024 and 2023, respectively.

Six Months Ended

operations for the nine months ended June 30, 2024 and 2023, respectively.

Nine Months Ended

Product revenue

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$ (8,724,370 )

NeuroOne Medical Technologies

Product Revenue and Product Gross Profit

Product revenue and product gross profit was $2.4

million and $0.7 million during the six months ended March 31, 2024, respectively.

Product revenue and product gross profit was $0.6 million

and $19,000 during the six months ended March 31, 2023, respectively.

Product revenue was $3.2 million during the nine

months ended June 30, 2024 with a gross profit and gross profit percentage of $0.9 million and 29.5%, respectively.

Product revenue was

$1.2 million during the nine months ended June 30, 2023 with a gross margin and gross profit percentage of $0.3 million and 21.7%, respectively.

The increase in gross profit percentage during the current period was largely due to the higher sales volume that exceeded fixed royalty

period costs and due to slightly lower overall material supply costs.

Product revenue consisted of Strip/Grid Products, sEEG Products,

and Electrode Cable Assembly Products sales.

Cost of product revenue consisted of the manufacturing and materials costs incurred by our

third-party contract manufacturer in connection with our Strip/Grid Products, sEEG Products and outside supplier materials costs in connection

with the Electrode Cable Assembly Products.

In addition, cost of product revenue included royalty fees incurred of approximately $79,000

and $76,000 in connection with our license agreements during the six months ended March 31, 2024 and 2023, respectively.

OneRF Products and Electrode Cable Assembly Products sales.

Cost of product revenue consisted of the manufacturing and materials costs

incurred by our third-party contract manufacturer in connection with our Strip/Grid Products, sEEG Products and OneRF Products, and outside

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

In addition, cost of product revenue included royalty

fees incurred of approximately $117,000 and $119,000 in connection with our license agreements during the nine months ended June 30, 2024

and 2023, respectively.

Collaborations Revenue

Collaborations revenue was zero and $1.5 million

for the six months ended March 31, 2024 and 2023, respectively.

Revenue was derived from the Zimmer Development Agreement and represented

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

The amount of revenue

recognized in the current six months related to the completion of the sEEG maintenance fee obligation as a result of securing FDA approval.

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

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

Collaborations revenue was $1.5 million for the

nine months ended June 30, 2023.

Revenue during the period was derived from the Zimmer Development Agreement in connection with the completion

of the sEEG maintenance fee obligation as a result of securing FDA approval.

There was no collaborations revenue during the nine months

ended June 30, 2024.

NeuroOne Medical Technologies Corporation

Selling, General and Administrative Expenses

Selling, general and administrative expenses were

$4.2 million for the six months ended March 31, 2024, compared to $3.5 million for the six months ended March 31, 2023.

$6.1 million for the nine months ended June 30, 2024, compared to $5.3 million for the nine months ended June 30, 2023.

The $0.7 million

increase in the current six month period compared to the comparable prior year period was primarily due to higher administrative payroll

of $0.3 million, professional fees of $0.3 million, mainly in connection with legal services, and other general operating expenses of

$0.1 million on a net basis.

Selling, general and administrative expenses included $0.5 million of stock-based compensation during each

of the six months ended March 31, 2024 and 2023.

increase during the current period was primarily attributed to higher administrative payroll costs of $0.4 million, professional services

of $0.2 million and sales and marketing costs of $0.1 million.

Research and Development Expenses

Research and development expenses were $4.0 million

for the six months ended March 31, 2024, compared to $3.3 million for the six months ended March 31, 2023.

for the nine months ended June 30, 2024, compared to $5.2 million for the nine months ended June 30, 2023.

The $1.2 million decrease period

over period was attributed to the timing and an overall reduction in supporting OneRF development activities during the current six month

period when compared to the comparable prior year period.

Research and development primarily included salary-related expenses and costs

related to consulting services, materials and supplies associated with the development of sEEG Products and to a much lesser extent Strip/Grid

Research and development expenses included $142,000 and $83,000 of stock-based compensation during the six months ended March

31, 2024 and 2023, respectively,

over period was attributed to the net reduction in development activities associated with our sEEG Products, Strip/Grid Products and OneRF

Products given the commercialization of these products.

Activity associated with new technology development partially offset the overall

net decrease in research and development costs during the current period.

Development activities primarily included salary-related expenses

and costs related to consulting services, materials and supplies.

Other Income, net

Other income, net during the six months ended

March 31, 2024 consisted of $77,000 related to interest income attributed to our cash and cash equivalents.

Other income, net during the six months ended

March 31, 2023 consisted of $119,000 related primarily to interest income attributed to our cash, cash equivalents and short-term investments,

partially offset by an exploit loss of $94,000.

NeuroOne Medical Technologies

Other income, net during the nine months ended

June 30, 2024 of $0.1 million consisted of interest income attributed to our cash and cash equivalents.

Other income, net during the nine months ended June 30, 2023 of $66,000

consisted of $160,000 related primarily to interest income attributed to our cash, cash equivalents and short-term investments, while

outstanding, which was partially offset by an exploit loss of $94,000.

Liquidity and Capital Resources

As of March 31, 2024, our principal source of

liquidity consisted of cash and cash equivalents in the aggregate of approximately $2.4 million.

While we began to generate revenue in

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

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

level of revenue from commercial sales to cover expenses.

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

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

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

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

See “Funding Requirements”

below for more information.

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

technology and pursue pre-clinical and clinical trials, seek regulatory approvals, manufacture products, establish our own sales, marketing

and distribution infrastructure to commercialize our ablation electrode technology, hire additional staff, add operational, financial

and management systems and continue to operate as a public company.

As of June 30, 2024, our principal source of liquidity

consisted of cash and cash equivalents in the aggregate of approximately $1.6 million.

While we began to generate revenue in fiscal year

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

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

of revenue from commercial sales to cover expenses.

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

development and commercialization operations.

Our additional material cash needs include commitments under operating leases, royalty obligations

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

Medical Education and Research (“Mayo”) as well as other administrative services.

See “Funding Requirements” below

for more information.

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

technology and pursue pre-clinical and clinical trials, seek regulatory approvals, manufacture products, market and distribute our OneRF

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

2, 2024, we closed a private placement of shares of common stock and warrants for total gross proceeds of approximately $2.65 million,

and entered into a delayed draw term loan facility in an aggregate principal amount not to exceed $3.0 million.

Capital Resources

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price of up to $14.5 million.

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

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

up to an aggregate of $2.6 million of our common stock for sale under the Sales Agreement, including the shares of common stock previously

Subsequently on December 1, 2023, however, we increased the amount of common stock that can be sold pursuant to the Sales Agreement,

such that we were offering up to an aggregate of $4.8 million of our common stock for sale under the Sales Agreement, including the shares

of common stock previously sold.

On January 5, 2024, we further increased the amount of common stock that can be sold pursuant to

the Sales Agreement, such that we are offering up to an aggregate of $9.3 million of our common stock for sale under the Sales Agreement,

including the shares of common stock previously sold.

Through March 31, 2024, we have issued 3,769,273

JonesTrading is entitled to a commission at a fixed commission

rate of up to 3% of the gross proceeds.

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

Agreement, such that we were offering up to an aggregate of $2.6 million of our common stock for sale under the Sales Agreement, including

the shares of common stock previously sold.

Subsequently on December 1, 2023, however, we increased the amount of common stock that can

be sold pursuant to the Sales Agreement, such that we were offering up to an aggregate of $4.8 million of our common stock for sale under

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

On January 5, 2024, we further increased the amount of

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

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

NeuroOne Medical Technologies Corporation

Through June 30, 2024, we have issued 5,188,590

shares of common stock under the ATM for gross proceeds in the amount of $7.6 million.

We incurred issuance costs in connection with the

ATM in the amount of $0.4 million through March 31, 2024.

Between April 1 and May 10, 2024, we issued an additional 1,093,135 shares of

common stock for net proceeds in the amount of $1.3 million in connection with the Sales Agreement.

NeuroOne Medical Technologies

ATM in the amount of $0.5 million through June 30, 2024.

July 2023 Public Offering

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

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

obligations and the timing of expected future payments.

Contracted services include agreements with third-party service providers

for clinical research, product development, manufacturing, supplies, payroll services, equipment maintenance services, and audits for

periods up to fiscal year 2025.

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

in this Report for further detail of our lease obligations and the timing of expected future payments.

Contracted services include agreements

with third-party service providers for clinical research, product development, manufacturing, supplies, payroll services, equipment maintenance

services, and audits for periods up to fiscal year 2028.

NeuroOne Medical Technologies Corporation

We expect to satisfy

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

NeuroOne Medical Technologies

Liquidity Outlook

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Even though we have received regulatory clearance to expand the use of our Evo sEEG electrode technology for up to 30 days, commercial

sales of the sEEG electrodes are expected to take some time to be a significant source of liquidity.

Zimmer has exclusive global rights

to distribute our strip and grid cortical electrodes, depth electrodes and electrode cable assembly products.

Zimmer’s failure to

timely develop or commercialize these products would have a material adverse effect on our business and operating results.

At March 31, 2024, we had cash and cash equivalents

sales of the sEEG electrodes and OneRF Products are expected to take some time to be a significant source of liquidity.

Zimmer has exclusive

global rights to distribute our strip and grid cortical electrodes, depth electrodes and electrode cable assembly products.

failure to timely develop or commercialize these products would have a material adverse effect on our business and operating results.

We do not have a distribution partner for the OneRF ablation system at this time, and are continuing to pursue a potential strategic partnership

for the OneRF Products.

At June 30, 2024, we had cash and cash equivalents

in the aggregate of approximately $1.6 million.

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The development and commercialization of our cortical

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

resources sooner than we expect.

Additionally, the process of developing medical devices is costly, and the timing of progress in pre-clinical

tests and clinical trials is uncertain.

Our ability to successfully transition to profitability will be dependent upon achieving further

regulatory approvals and achieving a level of product sales adequate to support our cost structure.

We cannot assure you that we will

ever be profitable or generate positive cash flow from operating activities.

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

and cash equivalent resources sooner than we expect.

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

of progress in pre-clinical tests and clinical trials is uncertain.

Our ability to successfully transition to profitability will be dependent

upon achieving further regulatory approvals and achieving a level of product sales adequate to support our cost structure.

We cannot assure

you that we will ever be profitable or generate positive cash flow from operating activities.

The following is a summary of cash flows for each

of the periods set forth below.

Six Months Ended

Nine Months Ended

Net cash used in operating activities

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$ (5,076,871 )

NeuroOne Medical Technologies Corporation

Net cash used in operating activities

Net cash used in operating activities was $8.3

million for the six months ended March 31, 2024, which consisted of a net loss of $6.2 million partially offset principally by non-cash

million for the nine months ended June 30, 2024, which consisted of a net loss of $9.0 million partially offset principally by non-cash

stock-based compensation, depreciation, amortization related to intangible assets, operating lease expense, totaling approximately $1.3

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

primarily attributable to both an increase in our accounts receivable and prepaid expense as well as attributed to a net decrease in our

accrued expenses and other liabilities.

Partially offsetting the net cash used for the period was the reduction in inventory purchases

and increase in our account payable attributed to the timing of payments.

NeuroOne Medical Technologies

primarily attributable to both an increase in our accounts receivable and inventory purchases.

Net cash used in operating activities was $10.0

million for the six months ended March 31, 2023, which consisted of a net loss of $5.3 million partially offset principally by non-cash

stock-based compensation, depreciation, amortization related to intangible assets and to our short-term investments, operating lease expense,

totaling approximately $0.6 million in the aggregate.

The net change in our net operating assets and liabilities associated with fluctuations

in our operating activities resulted in a cash use of approximately $2.4 million.

The net cash use stemming from the change in operating

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

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

accounts receivable and prepaids, coupled with a decrease in the aggregate of account payable and accrued expenses, attributed to the

timing of payments.

million for the nine months ended June 30, 2023, which consisted of a net loss of $8.7 million partially offset principally by non-cash

stock-based compensation, depreciation, amortization related to intangible assets, operating lease expense, totaling approximately $1.0

million in the aggregate.

The net change in our net operating assets and liabilities associated with fluctuations in our operating activities

resulted in a cash use of approximately $2.3 million.

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

primarily attributable to a decrease in deferred revenue in connection with the completion of the remaining milestone performance obligation

under the Zimmer Development Agreement, and to a lesser extent, to an increase in inventory purchases, coupled with a decrease in the

aggregate of account payable and accrued expenses, attributed to the timing of payments.

Partially offsetting the net cash operating use

during the period was a decrease in our accounts receivable and prepaids in the aggregate of $0.1 million resulting from timing of payments

and fluctuations in our operations.

Net cash (used in) provided by investing activities

Net cash used in investing activities was $0.1

for the six months ended March 31, 2024 and consisted of outlays for purchases of property and equipment.

million for the nine months ended June 30, 2024 and consisted of outlays for purchases of property and equipment.

Net cash provided by investing activities was

$1.8 million for the six months ended March 31, 2023 and consisted of maturities of short-term investments in the amount of $3.5 million,

$2.7 million for the nine months ended June 30, 2023 and consisted of maturities of short-term investments in the amount of $4.5 million,

offset by purchases of short term investment of $1.5 million, consisting of treasury and corporate notes.

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Net cash provided by financing activities was

$3.2 million for the six months ended March 31, 2024, which consisted of net proceeds from the ATM of $3.2 million, offset partially by

repurchases of common stock for the payment of employee taxes in the amount of $25,000.

$4.7 million for the nine months ended June 30, 2024, which consisted of net proceeds from the ATM of $4.8 million, offset partially by

repurchases of common stock for the payment of employee taxes in the amount of $0.1 million.

Net cash provided by financing activities was

$0.6 million for the six months ended March 31, 2023, which consisted of net proceeds from the ATM of $0.7 million, offset partially by

$2.2 million for the nine months ended June 30, 2023, which consisted of net proceeds from the ATM of $2.3 million, offset partially by

repurchases of common stock for the payment of employee taxes in the amount of $0.1 million.

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

Of these policies, the following are considered critical to an understanding

of our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report as they require

the application of the most subjective and the most complex judgments:

NeuroOne Medical Technologies Corporation

Of these policies, the following are considered

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

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

For discussion about the determination of collaborations

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and sales returns.

NeuroOne Medical Technologies

Stock-based Compensation

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Recent Accounting Pronouncements

Refer to “Note 3— Summary of

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

Refer to “Note 3— Summary of Significant

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

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis