What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-12-17 compared with 2023-12-15 · 641 added, 475 removed, 574 unchanged (66% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

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Notes to Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the board of directors of NeuroOne Medical Technologies Corporation:

NeuroOne Medical Technologies Corporation

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the stockholders and the board of directors

of NeuroOne Medical Technologies Corporation:

Opinion on the Financial Statements

audited the accompanying balance sheets of NeuroOne Medical Technologies Corporation (the "Company") as of September 30, 2023 and 2022,

the related statements of operations, changes in stockholders’ equity, and cash flows, for each of the two years in the period ended

We have audited the accompanying balance

sheets of NeuroOne Medical Technologies Corporation (the “Company”) as of September 30, 2024 and 2023, the related

statements of operations, changes in stockholders’ equity, and cash flows, for each of the two years in the period ended

September 30, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and the results of

the Company’s operations and cash flows for each of the two years in the period ended September 30, 2023, in conformity with accounting

principles generally accepted in the United States of America.

In our opinion, the

financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and

2023, and the results of the Company’s operations and cash flows for each of the two years in the period ended September 30,

2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming

the Company will continue as a going concern.

As discussed in Note 2 of the financial statements, the Company had recurring losses from

operations and an accumulated deficit, expects to incur losses for the foreseeable future and requires additional working capital.

are the reasons that raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans

in regard to these matters are also described in Note 2.

The financial statements do not contain any adjustments that might result from

the outcome of this uncertainty.

The accompanying financial statements have been

prepared assuming the Company will continue as a going concern.

As discussed in Note 2 of the financial statements, the Company had recurring

losses from operations and an accumulated deficit, expects to incur losses for the foreseeable future and requires additional working

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

plans in regard to these matters are also described in Note 2.

The financial statements do not contain any adjustments that might result

from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility

is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with

the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform

the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose

of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used

and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that

our audits provide a reasonable basis for our opinion.

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

NeuroOne Medical Technologies Corporation

Critical Audit Matter

Critical audit matters are matters arising from the current

period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex

We determined that there are no critical audit matters.

The critical audit matter communicated below

is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to

the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions

on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of warrants

Critical Audit Matter Description

As described in Note 9 to the financial statements, the Company

completed a private placement offering during the year which included the issuance of warrants.

Management determined the proper classification

of the warrants by reviewing the terms and conditions of the issued warrants and applying the applicable accounting guidance, including

Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging.

Management concluded

the warrants met the criteria for the classification as a liability.

The Company determined the fair value of warrants at the date of

issuance and year-end using a Monte Carlo simulation model.

We identified the assessment of the measurement of fair value

of the common stock warrants as a critical audit matter.

Specifically, there was a high degree of subjective auditor judgment, including

the involvement of professionals with specialized skills and knowledge, due to the complex valuation methodology that incorporates several

How We Addressed the Matter in

The primary procedures we performed

to address this critical audit matter included:

◾ With the assistance of firm personnel having specialized

skills and knowledge, we tested the model and methodology used to calculate the fair value of the common stock warrants including an

independent re-calculation.

◾ Performed audit procedures surrounding management’s

assumptions utilized in the valuation model.

/s/ Baker Tilly US, LLP

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Cash and cash equivalents

Short-term investments

Accounts receivable

Deferred offering costs

Prepaid expenses

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Accrued expenses and other liabilities

Deferred revenue

Total current liabilities

Warrant liability

Operating lease liability, long term

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Preferred stock, $ 0.001 par value;

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

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

10,000,000 shares authorized;

no shares issued or outstanding.

Common stock, $ 0.001 par value;

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

100,000,000 shares authorized;

30,816,499 and 23,928,945 shares issued and outstanding as of September 30, 2024 and 2023, respectively.

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Cost of product revenue

Product gross profit (loss)

Product gross profit

Collaborations revenue

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( 11,955,250 )

Fair value change in warrant liability

Financing costs

Other income, net

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Issuance of common stock in connection with public offering

Issuance cost in connection with public offering

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

Issuance costs in connection with common stock issuances

( 1,071,663 )

Issuance of warrants in connection with Zimmer development agreement

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

Share repurchases for the payment of employee taxes

( 11,859,491 )

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( 62,686,303 )

Issuance of common stock in connection with public offering

Issuance of common stock in connection with 2024 Private Placement

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

Issuance cost in connection with common stock issuances

( 1,071,663 )

Issuance costs in connection with common stock issuances

Stock-based compensation

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Share repurchases for the payment of employee taxes

Issuance of warrants in connection with debt facility

( 12,318,110 )

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Operating activities

$ ( 11,859,491 )

$ ( 9,999,613 )

Adjustments to reconcile net loss to net cash used in operating

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

Amortization and depreciation

Amortization of deferred issuance costs

Stock-based compensation

Fair value change in warrant liability

Private placement warrant issuance costs reclassed to financing activities

Loss on disposal of fixed assets

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Non-cash lease expense

Issuance of warrants in connection with Zimmer contract

Change in assets and liabilities:

Accounts receivable

( 1,022,148 )

Prepaid expenses and other assets

Prepaid expenses

Accounts payable

Accrued expenses, deferred revenue,

operating lease and other liabilities

( 1,225,313 )

Accrued expenses, deferred revenue, operating lease and other liabilities

Net cash used in operating activities

( 12,886,874 )

( 7,519,534 )

Investing activities

Purchases of short-term investments

( 1,473,419 )

( 3,469,539 )

Maturities of short-term investments

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Purchases of property and equipment

Net cash provided by (used in) investing

( 3,244,765 )

Net cash (used in) provided by investing activities

Financing activities

Proceeds from issuance of common stock in connection with public

offerings and at-the-market offering program

Issuance costs in connection with common stock issuances

( 1,071,663 )

( 1,327,300 )

Share repurchases for the payment of

employee taxes

Proceeds from issuance of common stock in connection with private placement

Proceeds from issuance of warrants in connection with private placement

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

Issuance costs attributed to common stock and warrants issued in private placement

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

Deferred issuance costs in connection with at-the-market offering program

Deferred issuance costs in connection with debt facility

Share repurchases for the payment of employee taxes

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

( 2,837,836 )

Cash and cash equivalents at beginning

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental non-cash financing and investing

transactions:

Supplemental non-cash financing and investing transactions:

Unpaid purchases of property and equipment

Modification of right-of-use asset and

associated lease liability

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

Non-cash warrants issued in connection with debt facility

Unpaid issuance costs in connection with private placement

Unpaid deferred issuance costs

See accompanying notes to financial statements

NeuroOne Medical Technologies

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

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NeuroOne 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

“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.

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) 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.

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.

The Company is based in Eden Prairie, Minnesota.

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uncertain, particularly due to the conflicts between Russia and Ukraine and in the Middle East, 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.

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.

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 conflicts

in Ukraine and the Middle East, 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.

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.

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.

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 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.

NOTE 2 - Going Concern

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To date, 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, the Company has adequate liquidity to fund its operations through March

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 securities.

The Company has adequate liquidity, including the net proceeds from the 2024 Private Placement (See

Note 9 – Stockholders’ Equity) and the 2024 Debt Facility (See Note 10 - Debt Financing), to fund its operations through April

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.

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

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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.

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.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

NOTE 3 - Summary of Significant Accounting Policies

NOTE 3 - Summary of Significant Accounting

Basis of Presentation

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prepared in accordance with accounting standards generally accepted in the United States of America (“U.S.

Reclassifications

Certain amounts presented in the prior year period

have been reclassified to conform to current period financial statement presentation.

The financing proceeds and issuance costs attributed

to the at-the-market offering program and private placement reflected in the statements of cash flows during the comparable prior year

period were reclassified into two separate line item categories.

Management’s Use of Estimates

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and corporations in which the Company invests its surplus funds.

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

equivalent investments.

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

Short-Term Investments

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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.

There were no short-term investments outstanding as of September 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

There were no short-term investments

outstanding as of September 30, 2024 and 2023.

NeuroOne Medical Technologies Corporation

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agreement which has current and future revenue recognition implications.

See “Note 7 – Zimmer Development Agreement.”

In addition, the Company has product revenue in connection with

its OneRF product offerings (“OneRF Products”) which is not covered by a distribution agreement.

See “Note 7 –

Zimmer Amended and Restated Distribution Agreement and Other Product Revenue.

In determining the appropriate amount of revenue

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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”)

to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification (“ASC”)

Topic 606 (“ASC 606”).

Performance obligations may include license rights, development services, and services associated

with regulatory submission and approval processes.

Significant management judgment is required to determine the level of effort required

under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement.

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.

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.

Product Revenue

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the Company expects to be entitled to in exchange for those goods or services.

At the inception of each customer contract, performance

obligations are identified and the total transaction price is allocated to the performance obligations.

When the Company has consigned inventory at a customer,

revenue is recognized at the point in time when the customer issues a purchase order to the Company and when control of the promised goods

or services is transferred to the Company’s customers.

At the inception of each customer contract, performance obligations are identified

and the total transaction price is allocated to the performance obligations.

Cost of Product Revenue

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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.

grid cortical electrodes (the “Strip/Grid Products”), depth electrodes (“sEEG Products), OneRF Products and outside

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

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

Collaborations Revenue

As 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

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.

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.

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 :

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

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.

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the measure of performance and related revenue recognition.

NeuroOne Medical Technologies Corporation

NeuroOne Medical Technologies

Notes to Financial Statements

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

Warrant Liability

The Company issued warrants in connection with

its 2024 Private Placement (See Note 9– Stockholders’ Equity).

The Company accounts for these warrants as a liability at fair

value when warrant pricing protection provisions are not available to other common stockholders.

Additionally, issuance costs associated

with the warrant liability are expensed as incurred and reflected as a financing cost in the accompanying statements of operations.

Company adjusts the liability for changes in fair value until the earlier of the exercise or expiration of the warrants for any period

when pricing protections remain in place.

Any future change in fair value of the warrant liability, when outstanding, is recognized in

the statements of operations under the fair value change in warrant liability line item.

Fair Value of Financial Instruments

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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 date.

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.

● Level 1 Inputs:

Unadjusted quoted prices in active markets

for identical assets or liabilities accessible to the Company at the measurement date.

● Level 2 Inputs:

Other than quoted prices included in Level

1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset

or liability.

● Level 3 Inputs:

Unobservable inputs for the asset or liability

used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is

little, if any, market activity for the asset or liability at the measurement date.

As of September 30, 2024 and 2023, 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 years ended September 30, 2023 and 2022.

of cash, cash equivalents, accounts receivable, inventory, prepaids and deferred offering costs, accounts payable and accrued expenses

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

The fair value

of the warrant liability was based on Level 3 inputs as well the Company’s underlying stock price and associated volatility, expected

term of the warrants and market interest rates.

There were no transfers between fair value hierarchy levels during the years ended

September 30, 2024 and 2023.

NeuroOne Medical Technologies

Notes to Financial Statements

The fair value of financial instruments measured

on a recurring basis is as follows:

As of September 30, 2024

Warrant liability

Total liabilities at fair value

There was not a warrant liability as of September

The following table provides a roll-forward of

the warrant liability measured at fair value on a recurring basis using unobservable level 3 inputs for the year ended September

Warrant liability

Balance as of beginning of year

Value assigned to warrants in connection with 2024 Private Placement

Change in fair value of warrant liability

Balance as of end of year

Intellectual Property

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Depreciation expense is recognized over the estimated useful lives of the assets using the straight-line

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

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.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

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

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.

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.

and repairs are charged directly to expense as incurred.

Impairment of Long-Lived Assets

The 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.

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

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.

Allowances for Doubtful Accounts

The 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 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.

Actual write-offs may

be in excess of the Company’s estimated allowance.

The 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.

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.

Accounts Receivable and Allowances for Credit

The Company records a provision for credit losses,

when appropriate, based on historical experience, current conditions and reasonable supportable forecasts.

In estimating the allowance

for credit losses, the Company considers, among other factors, the estimate of credit losses over the remaining expected life of the asset,

primarily using historical experience and current 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 allowance.

The Company has not incurred any bad debt expense

to date and no allowance for credit losses has been recorded during the periods presented.

NeuroOne Medical Technologies

Notes to Financial Statements

Inventory is stated at the lower of cost (using

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demand of the products and spare parts.

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

No inventory valuation allowance was required

during the periods presented.

The Company’s inventory is currently comprised of Strip/Grid Products, sEEG Products, OneRF

Products and Electrode Cable Assembly Products component, work-in-process and finished good product.

The Strip/Grid Products, sEEG Products

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

No inventory valuation allowance was required during the periods presented.

Research and Development Costs

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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 .

Advertising Expense

Advertising expense is charged to selling, general

and administrative expenses during the period that it is incurred.

Total advertising expense amounted to $ 108,993 and $ 173,430 for the

years ended September 30, 2024 and 2023, respectively.

Selling, General and Administrative

Selling, general and administrative expenses

consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with

research and development activities.

Other significant costs include legal and litigation costs relating to corporate matters, intellectual

property costs, professional fees for consultants assisting with regulatory, clinical, product development, financial matters and sales

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

Selling, general and administrative expenses consist

primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with research

and development activities.

Other significant costs include legal and litigation costs relating to corporate matters, intellectual property

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

the commercial sales of the Company’s products.

Stock-Based Compensation

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provisions of ASC 718.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

Income taxes are accounted for under the asset

7 unchanged sentences

if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

NeuroOne Medical Technologies

Notes to Financial Statements

Net Loss Per Share

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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 years ended September 30, 2023 and 2022.

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

years ended September 30, 2024 and 2023.

The following potential common shares were not

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Restricted stock units

Unissued vested restricted stock units

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards

Update (“ASU”) 2023-07 - Segment Reporting (Topic 280):

Improvements 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 fiscal years beginning after December 15, 2024, with early adoption

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.

In 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, 2024, including interim periods within

those fiscal years and should be applied on a prospective basis, with retrospective application permitted.

The Company is currently evaluating

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

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.

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.

Update 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.

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.

The Company adopted the guidance on October 1, 2023.

Company does not expect that the adoption of this ASU will have a material impact on its financial statements.

In August 2020, the 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 815-40):

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.

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.

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

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

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

NOTE 4 - Commitments and Contingencies

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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 Agreement”).

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

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

The Company entered into an Amended and Restated Exclusive Start-up

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the WARF License.

NeuroOne Medical Technologies

Notes to Financial Statements

WARF may terminate the WARF License on 30 days’

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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.

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 years ended September

30, 2023 and 2022, $ 150,000 and $ 137,500 in royalty fees were incurred related to the WARF License, respectively, and were reflected

as a component of cost of product revenue.

During each of the years ended September

30, 2024 and 2023, $ 150,000 in royalty fees were incurred related to the WARF License and were reflected as a component of cost of product

Mayo Agreement

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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”).

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.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

On May 20, 2024, the Company amended its non-cancellable

headquarters lease (the “Lease”) with certain landlords (together, the “Landlord”) pursuant to which the Company

leases 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 June 30, 2028, as amended, unless terminated earlier (the “Lease

The base rent for the Premises ranges from $ 6,410 per month to $ 7,107 per month by the end of the Lease Term as amended.

In addition, as long as the Company is not in default under the Lease, the Company will be entitled to an abatement of its base rent for

the first two months of the amended Lease Term beginning in April 2025 and for the last month of the amended Lease Term (June 2028).

addition, the Company pays its pro rata share of the Landlord’s annual operating expenses associated with the Premises.

Los Gatos Lease

6 unchanged sentences

The initial monthly rent under the Los Gatos Lease

was approximately $ 4,241 .

was $ 4,241 .

On November 4, 2022, the Los Gatos Lease was extended for an additional two years to December 31, 2024.

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

The rent under the

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

During the years ended September 30, 2024 and

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For the Years Ended

September 30,

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 cash flows from operating leases

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

Operating leases

Supplemental balance sheet information related to the operating lease

was as follows:

NeuroOne Medical Technologies

Notes to Financial Statements

Supplemental balance sheet information related

to the operating lease was as follows:

September 30,

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September 30,

2023 (period from October 1, 2023 to December 31, 2023)

Total lease payments

Less imputed interest

Short-term portion

Short term portion in accrued expenses and other liabilities

Long term portion

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

NOTE 5 - Supplemental Balance Sheet

NOTE 5 - Supplemental Balance Sheet Information

Inventory consisted of the following:

3 unchanged sentences

Finished goods

The Company had finished goods on consignment

in the amount of $ 102,318 as of September 30, 2024.

There was no consigned inventory as of September 30, 2023.

Intangible assets roll forward is as follows:

3 unchanged sentences

Net intangibles, September 30, 2024

The Company anticipates amortization expense

of approximately $ 22,000 per year for fiscal year 2024 through 2027 based upon the two current license agreements.

NeuroOne Medical Technologies

Notes to Financial Statements

The Company anticipates amortization expense of

approximately $ 22,000 per year for fiscal year 2025 through 2027 based upon the two current license agreements.

Property and Equipment

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Equipment with a net book value of $ 39,643 was disposed by the Company

resulting in net proceeds of $ 7,500 .

resulting in net proceeds of $ 7,500 during the year ended September 30, 2023.

NOTE 6 - Accrued Expenses and Other Liabilities

4 unchanged sentences

Operating lease liability, short term

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

NOTE 7 - Zimmer Development Agreement

On July 20, 2020, the Company entered into an

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

pursuant to which the Company granted Zimmer exclusive global rights to distribute the Strip/Grid Products and electrode cable assembly

products (the “Electrode Cable Assembly Products”).

Additionally, the Company granted Zimmer the exclusive right and license

to distribute certain depth electrodes developed by the Company (“SEEG Products”, and together with the Strip/Grid Products

and Electrode Cable Assembly Products, the “Products”).

The parties have agreed to collaborate with respect to development

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

and the Company.

Under the terms of the Development Agreement,

NOTE 7 - Zimmer Distribution Agreement and

Other Product Revenue

On July 20, 2020, the Company entered into

an exclusive development and distribution agreement (the “Zimmer Distribution Agreement”) with Zimmer, Inc.

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

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 Distribution Agreement through a joint development committee

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

Under the terms of the Zimmer Distribution Agreement,

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

expenses related to the commercialization of the Products.

In addition to the Development Agreement, Zimmer and the Company have entered

into a Manufacturing and Supply Agreement and a supplier quality agreement with respect to the manufacturing and supply of the Products.

Except as otherwise provided in the Development

In addition to the Zimmer Distribution 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

Except as otherwise provided in the Zimmer Distribution

Agreement, the Company is responsible for performing all development activities, including non-clinical and clinical studies directed

1 unchanged sentence

Zimmer has agreed to use commercially reasonable efforts to promote, market and sell

each Product following the “Product Availability Date” (as defined in the Development Agreement) for such Product.

Pursuant to the Development Agreement, Zimmer

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

each Product following the “Product Availability Date” (as defined in the Zimmer Distribution Agreement) for such Product.

NeuroOne Medical Technologies

Notes to Financial Statements

Pursuant to the Zimmer Distribution Agreement,

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

in fiscal year 2020.

On August 2, 2022, the Company entered into a

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

Pursuant to the terms

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

In consideration of the mutual covenants and

agreements contained in the Development Agreement, the fee and milestone payment provisions in the Development Agreement were replaced

with the following below:

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

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 Distribution Agreement, the fee and milestone payment provisions in the Zimmer Distribution

Agreement were replaced with the following below:

● $ 1.5 million for the sEEG Exclusivity Maintenance Fee;

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

In addition, in connection with the Amendment,

● $ 2.0 million for satisfaction of each of the milestone events

related to the design of sEEG Products set forth in the Zimmer Distribution Agreement even though the satisfaction was after the deadlines

originally identified.

In addition, in connection with the Zimmer Amendment,

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

2 unchanged sentences

The 2022 Zimmer Warrant has an exercise

price of $ 3.00 per share, will be exercisable commencing six months from the issuance date, and will expire on August 2, 2027 .

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

price of $ 3.00 per share, is exercisable commencing six months from the issuance date, and will expire on August 2, 2027.

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

Input assumptions used were as follows:

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fixed and determinable, no cash settlement was required and no other provisions precluded equity treatment.

The 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 Development Agreement (x) with written notice for the

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

In addition, Zimmer may terminate the Development Agreement for any reason with 90 days’ written notice, and the Company may terminate

the Development Agreement if Zimmer acquires or directly or indirectly owns a controlling interest in certain competitors of the Company.

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

the Effective Date of the Amendment until the end of the Term.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

The Development Agreement and Amendment

The Zimmer Distribution 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 its terms.

Either party may terminate the Zimmer Distribution 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 Distribution Agreement for any reason with 90 days’ written notice, and the Company may terminate the Zimmer

Distribution 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

Distribution Agreement shall be exclusive from the effective date of the Zimmer Amendment until the end of the term of the Zimmer Amendment.

The Zimmer Distribution 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 Development Agreement and Amendment:

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

(2) completion SEEG Product development;

obligations under the Zimmer Distribution Agreement and Zimmer 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

(4) the provision

of sEEG exclusivity maintenance;

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

All performance obligations under the Development

Agreement and 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.

All performance obligations under

the Zimmer Distribution Agreement and Zimmer Amendment, outside of the sEEG exclusivity maintenance obligation, were met by September

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.

The aggregate transaction price associated with

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

payment under the Amendment, less the fair value 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.

The Company recognized revenue

in the amount of $ 1,455,188 and $ 1,948,872 during the years ended September 30, 2023 and 2022, respectively, in connection

with the Development Agreement and Amendment.

the Zimmer Distribution 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 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.

Company recognized collaborations revenue in the amount of $ 1,455,188 during the year ended September 30, 2023 in connection with

the Zimmer Distribution Agreement and Zimmer Amendment.

Given the achievement of the milestones under the Zimmer Distribution Agreement

and Zimmer Amendment by December 31, 2022, no collaborations revenue was recognized during the year ended September 30, 2024.

NeuroOne Medical Technologies

Notes to Financial Statements

A reconciliation of the closing balance of deferred

revenue related to the Development Agreement and Amendment is as follows as of September 30, 2023 and 2022:

revenue related to the Zimmer Distribution Agreement and the Zimmer Amendment is as follows as of September 30, 2024 and 2023:

Deferred Revenue

Balance as of September 30, 2022

Zimmer agreement amendment related to sEEG exclusivity maintenance

Revenue recognized

2 unchanged sentences

Revenue recognized

( 1,455,188 )

Balance as of September 30, 2024

Product Revenue

Product revenue is related to its Strip/Grid

Products, sEEG Products and Electrode Cable Assembly Products.

Product revenue recognized during the years ended September 30, 2023

and 2022 was $ 1,952,441 and $ 171,169 , 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 $ 173,430 and $ 270,612 for the

years ended September 30, 2023 and 2022, respectively.

Product revenue related to the Company’s

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

Product revenue recognized during the years

ended September 30, 2024 and 2023 was $ 3,453,003 and $ 1,952,441 , respectively, inclusive of OneRF Product revenue that amounted to $ 340,185

during the year ended September 30, 2024.

There was no OneRF Product revenue recognized during the prior year period presented.

Products were not covered by the Zimmer Distribution Agreement during the year ended September 30, 2024.

NOTE 8 - Stock-Based Compensation

During the years ended September 30, 2024 and

2022, stock-based expense related to the stock options, restricted stock units and stock awards was included in selling, general and

administrative and research and development costs as follows in the accompanying statements of operations:

2023, stock-based expense related to the stock options and restricted stock units was included in selling, general and administrative

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

Selling, general and administrative

1 unchanged sentence

Total stock-based compensation expense

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

The Company’s 2017 Equity Incentive Plan

2 unchanged sentences

Inducement Plan

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.

In addition to the Company’s 2017 Equity

Incentive Plan (the “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.

Inducement Plan was approved by the Company’s Board of Directors without stockholder approval in accordance with such rule.

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.

Evergreen provision

12 unchanged sentences

2024 and 2023, 1,051,556 and 129,479 shares were added to the 2017 Plan, respectively, as a result of the evergreen provision.

Stock Options

Medical Technologies Corporation

to Financial Statements

During the years ended September 30, 2024 and

2022, 459,512 and 152,690 stock options were granted to employees, directors and consultants, respectively, with a weighted average grant

date fair value of $ 0.88 and $ 0.76 per share, respectively.

The options granted have vesting periods ranging from being immediate to

2023, 1,225,669 and 459,512 stock options were granted to employees, directors and consultants, respectively, with a weighted average

grant date fair value of $ 1.08 and $ 0.88 per share, respectively.

The options granted have vesting periods ranging from being immediate

to four years .

All options expire ten years from the date of grant.

The total expense for the years ended September 30, 2023 and 2022 related

to the stock options was $ 632,315 and $ 582,329 , respectively.

The following table summarizes the Company’s stock option plan activity

for the years ended September 30, 2023 and 2022 as follows:

The total expense for the years ended September 30, 2024 and 2023

related to the stock options was $ 808,057 and $ 632,315 , respectively.

The following table summarizes the Company’s stock option

plan activity for the years ended September 30, 2024 and 2023 as follows:

Options Weighted

Price Weighted-

Term (years) Aggregate

Outstanding at September 30, 2022 1,239,915 $ 5.40 8.0 $ 89,295

Granted 469,512 $ 1.55 — —

Forfeited/Cancelled ( 1,000 ) $ 3.78 — —

Outstanding at September 30, 2023 1,708,427 $ 4.34 7.7 $ 20,064

Granted 1,225,669 $ 1.26 — —

Forfeited/Cancelled ( 120,000 ) $ 1.33 — —

4 unchanged sentences

As of September 30, 2024 and 2023, 2,780,581 and 1,682,912 outstanding options, respectively, had no intrinsic value.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

The weighted-average assumptions used in the

Black-Scholes option-pricing model are as follows for the stock options granted during the years ended September 30:

The weighted-average assumptions used in the Black-Scholes

option-pricing model are as follows for the stock options granted during the years ended September 30:

Expected stock price volatility 111.9 % 57.4 %

4 unchanged sentences

2023, 289,072 and 337,753 stock options vested, respectively.

During the years ended September 30, 2024 and 2023, 120,000 and 1,000 stock

options were forfeited, respectively.

No options were exercised during the years ended September 30, 2024 and 2023.

NeuroOne Medical Technologies

Notes to Financial Statements

Restricted Stock Units

5 unchanged sentences

During the years ended September 30, 2024 and

2022, 310,728 and 443,670 RSUs were granted to members of the Company’s board of directors and employees that vest over a period

ranging from a one year to three year period, with a grant date fair value of $ 1.60 and $ 1.91 per unit, respectively.

During the years

ended September 30, 2023 and 2022, 331,788 and 40,624 RSUs vested, respectively.

The total expense for the years ended September 30,

2023 and 2022 related to the RSU’s was $ 473,142 and $ 364,883 , respectively.

2023, 1,006,725 and 310,728 RSUs were granted to members of the Company’s board of directors and employees with a grant date fair

value of $ 1.03 and $ 1.60 per unit, respectively.

The RSUs granted in fiscal year 2024 vest over a four -year period in equal annual installments

on the anniversary date of the grant, subject to the recipient’s continued service on such dates.

The RSUs granted in fiscal 2023

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

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

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

During the years ended

September 30, 2024 and 2023, 270,333 and 331,788 RSUs vested, respectively.

The total expense for the years ended September 30, 2024 and

2023 related to the RSU’s was $ 536,419 and $ 473,142 , respectively.

No RSUs were forfeited during the years ended September 30, 2024

30, 2023 and 2022.

As of September 30, 2024, 297,461 shares were

available for future issuance on a combined basis under the 2017 Plan and the Inducement Plan.

Unrecognized stock-based compensation

was $ 1,474,119 as of September 30, 2023.

The unrecognized share-based expense is expected to be recognized over a weighted average

period of 1.8 years.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

Unrecognized stock-based compensation was

$ 2,373,628 as of September 30, 2024.

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

of 2.3 years.

NOTE 9 - Stockholders’ Equity

August 2024 Private Placement

On August 1, 2024, the

Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors

(the “Purchasers”), pursuant to which the Company, in a private placement (the “2024 Private Placement”), agreed

to issue and sell an aggregate of (i) 2,944,446 shares of the Company’s common stock, par value $ 0.001 per share and (ii) warrants

to purchase an aggregate of 2,208,333 shares of common stock (the “PIPE Warrants”) at a purchase price of $ 0.90 per unit,

consisting of one share and a PIPE Warrant to purchase 0.75 shares of common stock, resulting in total gross proceeds of approximately

$ 2.65 million before deducting expenses.

Issuance costs attributed to the 2024 Private Placement amounted to approximately $ 0.2 million.

The 2024 Private Placement closed on August 2, 2024.

The PIPE Warrants are

exercisable beginning on the date of issuance, have an exercise price of $ 1.19 per share, subject to adjustment, and will expire on the

third anniversary of the date of issuance.

One of the Purchasers in the 2024 Private Placement included Paul Buckman, a director on the

Company’s Board of Directors.

The PIPE Warrants were

accounted for and classified as liabilities on the accompanying balance sheets given certain price reset provisions not used for a fair

valuation under a fixed for fixed settlement scenario as required for equity balance sheet classification.

A Monte Carlo simulation

model was used to estimate the aggregate fair value of the PIPE Warrants.

Input assumptions used were as follows on August 2, 2024 and

September 30, 2024:

risk-free interest rate 3.63 % and 3.53 %, respectively;

expected volatility of 116.1 % and 115.7 %;

respectively;

life of 3 years and 2.84 years, respectively;

and expected dividend yield zero percent for both dates.

The underlying stock price used

was the market price as quoted on Nasdaq as of August 2, 2024 and September 30, 2024.

The aggregate fair value of the PIPE Warrants of

$ 1,813,223 upon issuance was recorded as a long term liability on the accompanying balance sheets.

The Company recorded the fair

value change of the PIPE Warrants in the amount of $ 327,092 to the fair value change in warrant liability line item on the accompanying

statements of operations for the year ended September 30, 2024.

NeuroOne Medical Technologies

Notes to Financial Statements

At-The-Market Offering

On 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.

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

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.

On 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 was 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.

On August 16,

2024, we increased the amount of common stock that can be sold pursuant to the Sales Agreement by $ 3.0 million.

During the years ended September 30, 2024 and

2023, 3,748,913 and 1,439,677 shares of common stock were issued, respectively, under the ATM for an aggregate offering price of $ 5,033,906

and $ 2,552,656 , respectively.

Issuance costs incurred under the ATM during the years ended

September 30, 2024 and 2023 were $ 277,903 and $ 234,725 , respectively.

The total aggregate offering price and common

stock issued since inception of the ATM though September 30, 2024 was $ 7,586,562 and 5,188,590 shares, respectively.

Cumulative issuance

costs incurred under the ATM through September 30, 2024 was $ 512,628 of which $ 41,305 was included as a deferred cost on the balance sheet

as of September 30, 2024.

July 2023 Public Offering

9 unchanged sentences

2023 Public Offering were approximately $ 5.2 million after deducting underwriting discounts and other offering expenses payable by the

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.

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 September 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 were 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.

2021 Public Offering

On October 13, 2021, the Company, entered

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

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

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

purchase up to an additional 562,500 shares of common stock on the same terms.

The base offering closed on October 15, 2021, and the

sale of 422,057 shares of common stock subject to the Underwriter’s overallotment option closed on November 15, 2021.

The gross proceeds 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.

The Company used 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

Notes to Financial Statements

Warrant Activity and Summary

1 unchanged sentence

during the years ended September 30, 2024 and 2023:

Warrants Exercise

Warrant Weighted

Average Exercise

Price Weighted

Outstanding and exercisable at September 30, 2022 7,103,344 $ 3.00 - 9.00 $ 5.98 2.68

$ 5.25 - 9.00

Reverse split adjustment correction

Expired ( 900,918 ) $ 5.61 - 9.00 $ 6.38 —

Outstanding and exercisable at September 30, 2023 6,202,426 $ 3.00 - 9.00 $ 5.92 2.00

$ 3.00 - 9.00

$ 5.61 - 9.00

Issued 2,308,338 $ 0.66 - 1.19 $ 1.17 3.09

Expired ( 1,464,889 ) $ 6.00 - 9.00 $ 8.59 —

Outstanding at September 30, 2024 7,045,875 $ 0.66 - 5.61 $ 3.81 1.98

$ 3.00 - 9.00

Outstanding and exercisable at September 30, 2024 7,045,875 $ 0.66 - 5.61 $ 3.81 1.98

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

The following table summarizes information about

warrants outstanding at September 30, 2024:

Exercise Price

Number Outstanding

Weighted Average

Exercise Price Number Outstanding Weighted Average

Remaining Contractual

Number Exercisable at

life (Years) Number Exercisable at

September 30,

$ 0.66 100,000 4.84 100,000

$ 1.19 2,208,338 2.84 2,208,338

$ 3.00 350,000 2.84 350,000

$ 5.25 4,166,682 1.29 4,166,682

$ 5.61 220,855 3.75 220,855

Total 7,045,875 7,045,875

NOTE 10 - Debt Financing

Debt Facility Financing

On August 2, 2024, the Company entered into a loan

and security agreement (the “Debt Facility Agreement”) with Growth Opportunity Funding, LLC, as the lender (the “Lender”),

which provides for a delayed draw term loan facility in an aggregate principal amount not to exceed $ 3.0 million (the “Debt Facility”).

The Company was permitted to borrow loans under the Debt Facility from time to time (collectively, the “Loans”), for general

corporate purposes and subject to certain specified conditions, until the earliest of:

(i) November 30, 2024, (ii) the occurrence of any

Monetization Event (as defined below) or Change of Control (as defined in the Debt Facility Agreement), or (iii) at the Lender’s

option, upon the occurrence and during the continuance of an event of default under the Debt Facility Agreement.

On November 7, 2024,

the Company terminated the Debt Facility Agreement (See Note 14 – Subsequent Events).

The Loans would have

matured on February 2, 2026, if issued.

Interest on any outstanding principal amount would have been at a rate of 10 % per annum, payable

monthly in arrears and at the maturity date.

As of September 30, 2024, no amounts were drawn under the Debt Facility Agreement by the

At closing of the Debt

Facility, the Company issued to the Lender a warrant exercisable for five years for 100,000 shares of common stock at an exercise price

of $ 0.66 per share, subject to adjustment (the “Closing Date Debt Facility Warrant”).

The Closing Date Debt Facility Warrant

was accounted for and classified as equity on the accompanying balance sheets.

At the time of any borrowing

of Loans, the Company would have issued to the Lender additional warrants exercisable for five years for 50,000 shares of common stock

(for each $ 500,000 of Loans borrowed) at the same per share exercise price as the Closing Date Debt Facility Warrant ( the “Additional

Debt Facility Warrants”, and together with the Closing Date Debt Facility Warrant, the “Debt Facility Warrants”).

NeuroOne Medical Technologies

Notes to Financial Statements

The Company was permitted

to voluntarily prepay the outstanding Loans at any time, without premium or penalty, upon five business days’ prior written notice

to the Lender.

The Company was required to prepay outstanding Loans upon the occurrence of (i) any Change of Control or (ii) certain other

events as more fully described in the Debt Facility Agreement, but in any event including any capital raise or other transaction pursuant

to which the Company received cumulative cash proceeds in excess of $ 5.0 million in the aggregate (each such event in this prong (ii),

a “ Monetization Event ”).

The obligations of the Company under the Debt Facility were secured by a first-priority security

interest in substantially all assets of the Company, subject to certain exceptions set forth in the Debt Facility Agreement.

The Debt Facility Agreement

included other customary representations and warranties, conditions, affirmative and negative covenants, and events of default.

Issuance costs incurred

through September 30, 2024 in connection with the Debt Facility amounted to $ 202,656 which included legal fees of $ 74,532 , warrant fair

of the warrant issuance in the amount of $ 53,124 and a transaction fee to the lender in the amount of $ 75,000 and were initially recorded

as a deferred cost on the accompanying balance sheets.

The deferred costs were being amortized over the term of the Debt Facility.

the year ended September 30, 2024, $ 101,329 of the deferred costs were amortized and were included in the financing costs line item in

the accompanying statements of operations.

NOTE 11 - Concentrations

One customer accounts for all of the Company’s

product and collaborations revenue.

For the year ended September 30, 2024, one customer

accounted for 90 % of the Company’s product revenue and three customers accounted for the remaining 10 % of product revenue.

year ended September 30, 2023, one customer accounted for all of the Company’s product and collaborations revenue.

Supplier concentration

31 unchanged sentences

Net deferred tax assets

NeuroOne Medical Technologies Corporation

NeuroOne Medical Technologies

Notes to Financial Statements

19 unchanged sentences

losses incurred after December 31, 2017 will not expire.

As of September 30, 2023 and 2022, the Company had state net operating loss

carryforwards of approximately $ 40,522,000 and $ 35,249,000 , respectively.

As of September 30, 2024 and 2023, the Company had state net operating loss carryforwards

of approximately $ 48,030,000 and $ 40,522,000 , respectively.

The Company had state research credit carryforwards of approximately $ 747,000

and $ 598,000 as of September 30, 2024 and 2023, respectively.

The state net operating loss carryforwards will begin to expire

in 2031, if not utilized, and the state research credit carryforwards will begin to expire in 2032 if not utilized.

The state net operating loss carryforwards will begin to expire in 2031,

if not utilized, and the state research credit carryforwards will begin to expire in 2032 if not utilized.

Utilization of the net operating loss carryforwards

and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the

Internal Revenue Code of 1986, as amended, and similar state provisions.

Generally, in addition to certain entity reorganizations, the

limitation applies when one or more “5-percent shareholders” increase their ownership, in the aggregate, by more than 50

percentage points over a 36-month testing period or beginning the day after the most recent ownership change, if shorter.

limitation may result in the expiration of net operating losses and credits before utilization.

and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal

Revenue Code of 1986, as amended, and similar state provisions.

Generally, in addition to certain entity reorganizations, the limitation

applies when one or more “ 5 -percent shareholders” increase their ownership, in the aggregate, by more than 50 percentage points

over a 36-month testing period or beginning the day after the most recent ownership change, if shorter.

The annual limitation may result

in the expiration of net operating losses and credits before utilization.

In accordance with ASC 740, Income Taxes (“ASC

17 unchanged sentences

statements of operations.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

The Company has tax filing obligations in the

1 unchanged sentence

federal, Minnesota and California.

The income tax returns since inception as a corporation in 2016 are

subject to examination by the federal and state taxing authorities.

The income tax returns since 2021 are subject to examination by the federal

and state taxing authorities.

NeuroOne Medical Technologies

Notes to Financial Statements

NOTE 13 - Defined Contribution Plan

13 unchanged sentences

date of hire.

The amount of contributions made by the Company under the 401K Plan during the years ended September 30, 2023 and 2022

was nil and $ 30,697 , respectively.

The Company did not make any contributions to the 401K Plan during the years ended September 30, 2024 and 2023.

NOTE 14 - Subsequent Events

First Amendment to 2021 Inducement Plan

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.

At-The-Market Offering

On December 1, 2023, 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 $ 4.8 million of common stock for sale under the Sales Agreement, including

the shares of common stock previously sold.

On October 25, 2024, we entered into the Zimmer

Amended and Restated Distribution Agreement with Zimmer pursuant to which we granted Zimmer the exclusive right and license to distribute

our OneRF Ablation System for an upfront payment of $ 3.0 million, with eligibility for an additional $ 1.0 million payment from Zimmer

upon achievement of certain specified net sales milestones.

On November 7, 2024, the Company terminated the

Debt Facility Agreement and no amounts were drawn under the Debt Facility Agreement, The Company and paid the standby fee of $ 125,000

to the Lender.

Medical Technologies Corporation

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

Not applicable.

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-K

Item 8. Financial Statements and Supplementary Data