What changed in this filing

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Item 1. Financial Statements

2025-02-12 compared with 2024-08-14 · 524 added, 600 removed, 375 unchanged (75% of the section changed)

6 unchanged sentences

Accounts receivable

Deferred offering costs

Prepaid expenses

1 unchanged sentence

Intangible assets, net

Right-of-use assets

Right-of-use asset

Property and equipment, net

4 unchanged sentences

Total current liabilities

Warrant liability

Operating lease liability, long term

7 unchanged sentences

100,000,000 shares authorized;

27,846,722 and 23,928,945 shares issued and outstanding as of June 30, 2024 and September 30, 2023, respectively.

30,841,830 and 30,816,499 shares issued and outstanding as of December 31, 2024 and September 30, 2024, respectively.

Additional paid–in capital

4 unchanged sentences

Total liabilities and stockholders’ equity

See accompanying notes to condensed financial

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Condensed Statements of Operations

Three Months Ended

Nine Months Ended

For the three months ended

Product revenue

1 unchanged sentence

Product gross profit

Collaborations revenue

License revenue

Operating expenses:

2 unchanged sentences

Total operating expenses

Loss from operations

( 2,793,901 )

( 3,510,235 )

( 9,070,474 )

( 8,790,506 )

Other income, net

Loss before income taxes

( 2,767,525 )

( 3,468,773 )

Income (loss) from operations

( 3,390,475 )

Fair value change in warrant liability

Financing cost

Income (loss) before income taxes

( 3,344,900 )

Provision for income taxes

$ ( 2,767,525 )

$ ( 3,468,773 )

$ ( 8,967,515 )

Net income (loss)

$ ( 3,344,900 )

Net loss per share:

Basic and diluted

Net income (loss) per share:

Number of shares used in per share calculations:

Basic and diluted

See accompanying notes to condensed financial

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

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$ ( 62,686,303 )

Issuance of common stock attributed to equity financings

Issuance costs related to equity financings

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

Share repurchases for the payment of employee taxes

( 3,344,900 )

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$ ( 66,031,203 )

Issuance of common stock attributed to the at-the-market offering

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

Stock-based compensation

Share repurchases for the payment of employee taxes

Issuance of common stock upon vesting of restricted stock units

( 3,522,828 )

Balance at March 31, 2023

Stockholders’

Balance at September 30, 2024

$ ( 75,004,413 )

Issuance of common stock attributed to the at-the-market offering

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

Stock-based compensation

Share repurchases for the payment of employee taxes

Issuance of common stock upon vesting of restricted stock units

( 3,468,773 )

Balance at June 30, 2023

Share repurchases for the payment of employee taxes

Balance at December 31, 2024

$ ( 73,219,091 )

at September 30, 2023

of common stock attributed to the at-the-market offering

costs in connection with the at-the market offering

of common stock upon vesting of restricted stock units

repurchases for the payment of employee taxes

at December 31, 2023

of common stock attributed to the at-the-market offering

costs related to the at-the market-offering

of common stock upon vesting of restricted stock units

repurchases for the payment of employee taxes

at March 31, 2024

of common stock attributed to the at-the-market offering

costs related to the at-the-market offering

of common stock upon vesting of restricted stock units

repurchases for the payment of employee taxes

at June 30, 2024

See accompanying notes to condensed financial

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Condensed Statements of Cash Flows

For the Nine Months Ended

For the three months ended

Operating activities

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

Net income (loss)

$ ( 3,344,900 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Amortization and depreciation

Amortization of deferred offering costs

Debt termination costs reclassed to financing activities

Stock-based compensation

Amortization of discounts and premiums on short-term investments

Fair value change in warrant liability

Non-cash lease expense

1 unchanged sentence

Accounts receivable

Prepaids and other assets

( 2,192,277 )

Prepaid expenses and other assets

Accounts payable

Accrued expenses, deferred revenue, operating leases and other liabilities

Net cash used in operating activities

Accrued expenses, operating leases and other liabilities

Net cash provided by (used in) operating activities

( 3,809,391 )

Investing activities

Purchases of short-term investments

Maturities of short-term investments

Payments for purchase of property and equipment

Net cash (used in) provided by investing activities

Purchase of property and equipment

Net cash used in investing activities

Financing activities

Proceeds from issuance of common stock attributed to the at-the-market offering

Issuance costs related to the at-the-market offering

Proceeds from issuance of common stock attributed to equity financings

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

Financing costs in connection with debt facility

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

Share repurchases for the payment of employee taxes

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Net cash (used in) provided by financing activities

Net decrease in cash

( 2,641,508 )

Cash at beginning of period

Cash at end of period

Supplemental non-cash financing and investing transactions:

Unpaid deferred offering costs attributed to the at-the-market offering program

Unpaid debt issuance costs

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

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

Purchased property and equipment in accounts payable

See accompanying notes to condensed financial

See accompanying notes to condensed financial statements

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 1 – Description of Business and

Basis of Presentation

NeuroOne Medical Technologies

Corporation (the “Company” or “NeuroOne”), a Delaware corporation, is a medical technology company focused on

the development and commercialization of thin film electrode technology for continuous electroencephalogram (“cEEG”) and

stereoelectrocencephalography (“sEEG”), spinal cord stimulation, brain stimulation, drug delivery and ablation solutions

for patients suffering from epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries

and other related neurological disorders.

The Company is also developing the capability to use its sEEG electrode technology to deliver

drugs or gene therapy while being able to record brain activity before, during, and after delivery.

Additionally, the Company is investigating

the potential applications of its technology associated with artificial intelligence.

NeuroOne has received 510(k) clearance for three

of its devices from the FDA, including:

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

for up to 30 days, (ii) 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, and (iii) its OneRF

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

The Company’s

other products are still under development.

The Company commenced commercial sales of cEEG

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

The Company sold, on a limited application

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

sales of its sEEG depth electrode products in late calendar 2022.

Lastly, the Company initiated a limited commercial launch of its OneRF

ablation system in March 2024.

NOTE 1 – Description of Business and Basis of Presentation

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 disorders.

The Company received 510(k) clearance for three

of its devices from the U.S.

Food and Drug Administration (“FDA”), including:

(i) its Evo cortical electrode technology for

recording, monitoring, and stimulating brain tissue for up to 30 days, (ii) 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, and (iii) its OneRF ablation system for creation of radiofrequency lesions in nervous tissue for

functional neurosurgical procedures.

The Company has a distribution agreement with Zimmer, Inc.

(“Zimmer”) providing Zimmer

with a license to commercialize and distribute these three products in the brain.

The Company’s other products and indications are

still under development.

The Company is based in Eden Prairie, Minnesota.

Global Economic Condition

Global Economic Conditions

Generally, worldwide economic conditions remain

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capital and credit markets may not be available to support future capital raising activity on favorable terms or at all.

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

adversely affected.

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

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GAAP) have been condensed or omitted pursuant to such rules and regulations.

The condensed financial statements may not include all disclosures required by U.S.

however, the Company believes that the disclosures

are adequate to make the information presented not misleading.

These unaudited condensed financial statements should be read in conjunction

with the audited financial statements and the notes thereto for the year ended September 30, 2023 included in the Company’s Annual

Report on Form 10-K.

The condensed

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

however, the Company believes that the disclosures are adequate

to make the information presented not misleading.

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

audited financial statements and the notes thereto for the year ended September 30, 2024 included in the Company’s Annual Report

on Form 10-K.

The condensed balance sheet at September 30, 2024 was derived from the audited financial statements of the Company.

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cash flows for the interim periods, have been made.

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

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

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

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

NeuroOne Medical Technologies Corporation

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NOTE 2 - Going Concern

The accompanying financial statements have been

prepared on the basis that the Company will continue as a going concern.

The Company has incurred losses since inception, negative cash

flows from operations, and an accumulated deficit of $ 71.7 million as of June 30, 2024.

To date, the Company’s revenues have not

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

and sale of equity securities.

The Company has adequate liquidity, including the net proceeds from the August 2024 private placement

and August 2024 term loan facility, to fund its operations through July 2025.

The raising of additional funds is not solely within the control

of the Company.

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

The financial

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

If the Company is unable to raise additional

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

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

The Company intends to fund ongoing activities

by utilizing its current cash and cash equivalents on hand, from product and collaborations revenue and by raising additional capital

through equity or debt financings.

As discussed further in Note 12, on August 2, 2024, the Company closed a private placement and received

net proceeds of approximately $ 2.5 million, and entered into a delayed draw term loan facility in an aggregate principal amount not to

exceed $ 3.0 million.

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 accompanying condensed financial statements

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

The Company has incurred losses since inception, negative

cash flows from operations since inception, and an accumulated deficit of $ 73.2 million as of December 31, 2024.

To date, the Company’s

revenues have not been sufficient to cover its full operating costs, and as such, it has been dependent on funding operations through

the issuance of debt and sale of equity securities.

The Company has adequate liquidity to fund its operations through April 2025.

raising of additional funds is not solely within the control of the Company.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of

this condition.

If the Company is unable to raise additional funds, or the Company’s anticipated operating results are not achieved,

management believes planned expenditures may need to be reduced to extend the time period that existing resources can fund the Company’s

The Company intends to fund ongoing activities by utilizing its current cash and cash equivalents on hand, from product and

license revenue and by raising additional capital through equity or debt financings.

If management is unable to obtain the necessary capital,

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

to cease operations altogether.

NOTE 3 – Summary of Significant Accounting

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

equivalents on the condensed balance sheets.

equivalents on the balance sheets.

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

The Company’s

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

Treasury securities, and corporate notes and bonds.

The Company monitors the creditworthiness of the financial institutions, institutional

money market funds, and corporations in which the Company invests its surplus funds.

The Company has experienced no credit losses from

its cash and cash equivalent investments.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Short-Term Investments

The Company has periodically invested its excess

Treasury securities and highly rated corporate securities.

The Company has held these investments to maturity.

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

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

There were no short-term investments

outstanding as of June 30, 2024 and September 30, 2023.

The Company’s cash and cash

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

Treasury securities,

and corporate notes and bonds.

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

and corporations in which the Company invests its surplus funds.

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

Revenue Recognition

1 unchanged sentence

agreement which has current and future revenue recognition implications.

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 Development Agreement and Other Product Revenue .

See “Note 7 – Zimmer Distribution Agreement

and Other Product Revenue.

In determining the appropriate amount of revenue

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

A performance obligation is a promise in a contract

1 unchanged sentence

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

Revenues from product sales are recognized

when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the

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

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.

the inception of each customer contract, performance obligations are identified and the total transaction price is allocated to the

performance obligations.

Revenues from product sales are recognized when

control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration

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

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

Cost of product revenue consists of the manufacturing

and materials costs incurred by the Company’s third-party contract manufacturer in connection with the Company’s strip and

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

Collaborations Revenue

and materials costs incurred by the Company’s third-party contract manufacturers in connection with the Company’s strip and

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

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.

License 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 success.

The Company allocates the

total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods

or service underlying each performance obligation.

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 and distribution

If the license to the Company’s intellectual property or distribution rights to an underlying product 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 or distribution rights when the license or distribution right is transferred to the customer, and the customer

can use and benefit from the license or distribution right.

For licenses or distribution rights that are bundled with other promises,

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

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

recognizing revenue from non-refundable, up-front fees.

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

adjusts the measure of performance and related revenue recognition.

Milestone payments:

At the inception of each arrangement

that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates

the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal

will not occur, the value of the associated milestone (such as a regulatory submission) is included in the transaction price.

payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved

until those approvals are received.

When the Company’s assessment of probability of achievement changes and variable consideration

becomes probable, any additional estimated consideration is allocated to each performance obligation based on the estimated relative standalone

selling prices of the promised goods or service underlying each performance obligation and recorded in license revenues based upon when

the customer obtains control of each element.

For arrangements that include sales-based

royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the

royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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

For licenses that are bundled with other promises, the Company

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

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

revenue from non-refundable, up-front fees.

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

the measure of performance and related revenue recognition.

Milestone payments :

At the inception of

each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved

and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant

revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission) is included in the transaction

Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable

of being achieved until those approvals are received.

When the Company’s assessment of probability of achievement changes and variable

consideration becomes probable, any additional estimated consideration is allocated to each performance obligation based on the estimated

relative standalone selling prices of the promised goods or service underlying each performance obligation and recorded in collaborations

revenues based upon when the customer obtains control of each element.

For arrangements that include

sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item

to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance

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 condensed statements of operations.

The 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 the fair value of the warrant liability is recognized in the condensed

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

Fair Value of Financial Instruments

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

Level 1 Inputs:

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

Level 2 Inputs:

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

the full term of the asset or liability.

Level 3 Inputs:

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

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

As of June 30, 2024 and September 30, 2023, the

fair values of cash, cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses and other

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

There were no transfers between fair value hierarchy

levels during the three and nine months ended June 30, 2024 and 2023.

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

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

for substantially the full term of the asset or liability.

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

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

As of December 31, 2024 and September 30, 2024,

the fair values 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 as 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 three months ended December 31, 2024 and 2023.

The fair value of financial instruments measured

on a recurring basis is as follows:

As of December 31, 2024

Warrant liability

Total liabilities at fair value

As of September 30, 2024

Warrant liability

Total liabilities at fair value

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 three months ended December

Warrant liability

Balance as of beginning of period

Change in fair value of warrant liability

Balance as of end of period

NeuroOne Medical Technologies Corporation

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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.

Accounts Receivable and Allowances for Credit Losses

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 the carrying value of such assets will be recovered through undiscounted expected future cash flows.

the asset is considered to be impaired, the amount of 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,

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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

Account balances are charged off against the allowance when the Company believes that it is probable that the receivable

will not be recovered.

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.

The Company has not incurred any bad debt expense

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

Inventory is stated at the lower of cost (using

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expense as incurred.

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 .

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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

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and administrative expenses during the period that it is incurred.

Total advertising expense amounted to $ 45,000 and $ 110,053 for the

three and nine months ended June 30, 2024, respectively.

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

nine months ended June 30, 2023, respectively.

Total advertising expense amounted to $ 38,543 and $ 49,272 for the three

months ended December 31, 2024 and 2023, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Selling, General and Administrative

Selling, general and administrative expenses

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

research and development activities.

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

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

with the commercial 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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records forfeitures when they occur.

Stock-based compensation arrangements to non-employees are accounted for in accordance with the

applicable provisions of ASC 718.

Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable

provisions of ASC 718.

Income taxes are accounted for under the asset

and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences

between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss

and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income

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

Deferred tax assets are reduced by a valuation

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

Net Loss Per Share

For the Company, basic loss per share of common

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

Diluted earnings or loss per share of common

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

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

The Company’s warrants, stock options,

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

Diluted earnings or loss per share

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

No incremental

common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the

net loss reported for the three and nine months ended June 30, 2024 and 2023.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between

the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit

carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years

in which those temporary differences are expected to be recovered or settled.

Deferred tax assets are reduced by a valuation allowance

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

Net income (loss) per share

Basic net income (loss) per share of common stock

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

Diluted net income or loss per share of common stock is computed similarly to basic net income 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 net income or loss per share is computed utilizing the treasury method for the warrants, stock options and restricted

Incremental common stock equivalents that were antidilutive were excluded in calculating diluted net income or loss per share.

For the three months ended December 31, 2023, no common stock equivalents were included in the diluted net loss per share because such

inclusion would be anti-dilutive given the net loss reported for the prior year period.

The following table presents the computation of

weighted average common shares considered in the computation of diluted net income (loss) per share during the three months ended December

Denominator (weighted average shares)

Basic common shares outstanding

Dilutive stock options

Dilutive warrants

Diluted common shares outstanding

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

The following potential common shares were not

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

ended June 30, 2024 and 2023:

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

ended December 31:

Stock options

Restricted stock units

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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.

effective for fiscal years beginning after December 15, 2023, including interim periods within fiscal years beginning after December

15, 2024, with early adoption permitted.

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.

The Company adopted this guidance on October 1,

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

In December 2023, the FASB issued ASU 2023-09

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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 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.

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

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

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 Company entered into an Amended and Restated Exclusive Start-up Company License Agreement (the

“WARF License”) with WARF on January 21, 2020, which amended and restated in full the prior license agreement between WARF

and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September

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

film micro electrode technology.

The Company entered into an Amended and Restated Exclusive Start-up Company License Agreement (the “WARF

License”) with WARF on January 21, 2020, which amended and restated in full the prior license agreement between WARF and NeuroOne,

LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September 18, 2019.

The WARF License grants to the Company an exclusive

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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 three months ended December

31, 2024 and 2023, $ 37,500 in royalty fees were incurred related to the WARF License during each of these periods and were reflected as

a component of cost of product revenue.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

During the three months ended June 30, 2024 and

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

During the nine months ended June

30, 2024 and 2023, $ 112,500 in royalty fees were incurred related to the WARF License during each of these periods.

The royalty fees

were reflected as a component of cost of product revenue.

Mayo Agreement

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

During the three months ended June 30, 2024 and 2023, zero and

$ 5,727 in royalty fees were incurred related to the Mayo Agreement, respectively.

During the nine months ended June 30, 2024 and

2023, $ 4,415 and $ 6,417 in royalty fees were incurred related to the Mayo Agreement, respectively.

The royalty fees were reflected

as a component of cost of product revenue.

During the three months ended December 31, 2024 and 2023, zero

and $ 269 in royalty fees were incurred related to the Mayo Agreement, respectively, and were reflected as a component of cost of product

Facility Leases

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The rent under the

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

During the three and nine months ended June 30,

2024, rent expense associated with the facility leases amounted to $ 43,455 and $ 129,560 , respectively.

During the three and nine months

ended June 30, 2023, rent expense associated with the facility leases amounted to $ 43,053 and $ 128,580 , respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Supplemental cash flow information related to

the operating leases was as follows:

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

On December 17, 2024, the Los Gatos Lease

was extended again for an additional two years to December 31, 2026.

The rent under the newly extended Los Gatos Lease ranges from $ 4,939

to $ 5,087 per month beginning on January 1, 2025.

During the three months ended December 31, 2024

and 2023, rent expense associated with the facility leases, including cancellable arrangements, amounted to $ 69,178 and $ 43,053 , respectively.

Supplemental cash flow information related to the operating leases

was as follows:

For the three months ended

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

Operating cash flows from operating leases

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

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

Operating leases

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Supplemental balance sheet information related

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Less imputed interest

Short-term portion in accrued expenses and other liabilities

Short-term portion (included in other liabilities)

Long-term portion

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and other claims.

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

and can be reasonably estimated.

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

can be reasonably estimated.

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

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

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

or financial position.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Although it is

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

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

NOTE 5 – Supplemental Balance Sheet Information

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12 - 13 years

Net Intangibles, June 30, 2024

Amortization expense was $ 5,578 during each of

the three months ended June 30, 2024 and 2023 and $ 16,736 during each of the nine months ended June 30, 2024 and 2023, respectively.

Property and Equipment, Net

Net Intangibles, December 31, 2024

Amortization expense was $ 5,579 for each of the

three months ended December 31, 2024 and 2023.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

Property and Equipment

Property and equipment held for use by category

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Property and equipment, net

Depreciation expense was $ 57,529 and $ 165,928

for the three months and nine months ended June 30, 2024, respectively, and $ 51,380 and $ 120,021 for the three months and nine months

ended June 30, 2023, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 6 – Accrued Expenses and Other

Accrued expenses consisted of the following at

June 30, 2024 and September 30, 2023:

Depreciation expense was $ 59,548 and $ 53,078 for

the three months ended December 31, 2024 and 2023, respectively.

NOTE 6 - Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted

of the following :

September 30,

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Royalty payments

NOTE 7 – Zimmer 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 Development 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 Development Agreement through a joint development committee

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

Under the terms of the Zimmer Development Agreement,

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

expenses related to the commercialization of the Products.

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

entered into a Manufacturing and Supply Agreement and a Supplier Quality Agreement with respect to the manufacturing and supply of the

Except as otherwise provided in the Zimmer Development

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

at obtaining regulatory approval of each Product.

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

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

Pursuant to the Zimmer Development Agreement,

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

in fiscal year 2020.

On August 2, 2022, the Company entered into a

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

Agreement were replaced with the following below:

● $ 1.5 million for the sEEG Exclusivity Maintenance Fee;

● $ 2.0 million for satisfaction of each of the milestone events related to the design of sEEG Products set forth in the Zimmer Development 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”).

The 2022 Zimmer Warrant is

exercisable for up to an aggregate of 350,000 shares of the Company’s common stock.

The 2022 Zimmer Warrant has an exercise

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

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

pricing model.

Input assumptions used were as follows:

a risk-free interest rate of 2.9 %;

expected volatility of 53.5 %;

expected life

expected dividend yield of 0 %;

and the underlying fair market of the common stock.

The 2022 Zimmer Warrant was classified

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

precluded equity treatment.

On October 25, 2024, the Company entered into the Zimmer Amended and

Restated Distribution Agreement (the “Amendment”) with Zimmer pursuant to which the Company granted Zimmer the exclusive right

and license to distribute its 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.

The Company and Zimmer previously entered into

an Exclusive Development and Distribution Agreement dated July 20, 2020, related to the SEEG and Strip/Grid Product Systems, which was

subsequently amended pursuant to the terms and conditions of a letter agreement dated January 6, 2021, a Second Amendment to Exclusive

Development and Distribution Agreement dated June 28, 2022, and a Third Amendment to Exclusive Development and Distribution Agreement

dated August 2, 2022 (collectively, the “EDDA”).The EDDAs executed prior to the Amendment granted Zimmer exclusive global

rights to distribute the Strip/Grid Products and the Electrode Cable Assembly Products.

Additionally, the Company granted Zimmer the exclusive

right and license to distribute certain sEEG Products developed by the Company and together with the Strip/Grid Products and Electrode

Cable Assembly Products, the “Products”.

In addition, under the prior EDDAs, the Company and Zimmer agreed to collaborate

with respect to development activities through a joint development committee composed of an equal number of representatives of Zimmer

and the Company.

Under the Amendment, Zimmer paid the Company $ 3.0

million for an exclusive RF Distribution License (the “RF Distribution License” and “License”) for commercialization

of its OneRF™ product.

In addition, the Company is eligible to receive a future milestone payment of $ 1.0 million upon reaching

a one-time sales volume threshold.

The revised term under the Amendment (the “Term”)

began on the effective date of the Amendment and will remain in effect until October 31, 2034.

Upon the expiration of the Term, it may

be renewed upon the mutual written of the parties.

The Amended and Restated Exclusive Development and Distribution Agreement may be terminated

before the expiration of the Term in accordance with certain terms under the Amendment.

In addition, the license rights granted to Zimmer

under this Amendment shall be exclusive (i) until September 30, 2032 for the SEEG Products and Strip/Grid Products;

and (ii) until October

31, 2034 for the OneRF™ Product System.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

The Zimmer Development Agreement will expire

on the tenth anniversary of the date of the first commercial sale of the last Products to achieve a first commercial sale (the “Term”),

unless terminated earlier pursuant to its terms.

Either party may terminate the Zimmer Development Agreement (x) with written notice

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

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

may terminate the Zimmer Development Agreement if Zimmer acquires or directly or indirectly owns a controlling interest in certain competitors

of the Company.

The license rights granted to Zimmer under the Strip/Grid Distribution License and sEEG Distribution License as defined

in the Zimmer Development Agreement shall be exclusive from the effective date of the Zimmer Amendment until the end of the term of the

Zimmer Amendment.

The Zimmer Development Agreement and Zimmer Amendment

were accounted for under the provisions of ASC 606.

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

obligations under the Zimmer Development Agreement and Zimmer Amendment:

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

its intellectual property;

(2) completion of sEEG Product development;

(3) completion of Strip/Grid Product development;

(4) the provision

of sEEG exclusivity maintenance;

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

All performance obligations

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

$ 3.5 million payment under the Zimmer Amendment, less the fair value 2022 Zimmer Warrant of $ 0.1 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 nine months ended June 30, 2023 in connection with

the Zimmer Development Agreement and Zimmer Amendment.

Given the achievement of the milestones under the Zimmer Development Agreement

and Zimmer Amendment by December 31, 2022, no collaborations revenue was recognized during the nine months ended June 30, 2024.

A reconciliation of the closing balance of deferred

revenue related to the Zimmer Development Agreement and Zimmer Amendment is as follows during the nine months ended as of June 30, 2024

Deferred Revenue

Balance as of beginning of period – September 30

Revenue recognized

( 1,455,188 )

Balance as of end of period – June 30

License Revenue

The Amendment was accounted for under the provisions of ASC 606 as

a separate contract from the prior EDDAs.

In accordance with the provisions under ASC 606, the Company identified the transfer of

the RF Distribution License as the sole performance obligation of the RF Distribution License.

The distribution rights granted to Zimmer,

inclusive of the access to the underlying intellectual property for future production of the OneRF Product if required, was found to have

significant standalone functionality as no additional substantive input was required by the Company on a go forward basis.

Lastly, ancillary

support related to the Amendment was concluded to be a perfunctory obligation and de minimis in terms of required resources.

The transaction price associated with the Amendment

was $ 3.0 million, which was comprised solely of the One RF Exclusivity Fee and was allocated totally to RF Distribution License performance

Sales Volume Milestone and Payment

The sales volume milestone associated with the

Amendment was determined by sales or usage-based thresholds.

The sales volume milestone was accounted for under the sales milestone recognition

constraint and will be accounted for as constrained variable consideration.

The Company has applied the sales volume constraint to

the milestone payment and will not recognize revenue until the sales volume threshold occurs.

Recognition of License Revenue

The Company determined that the RF Distribution

License represented functional intellectual property given Zimmer’s access to the underlying intellectual property associated with

the OneRF Product.

As such, the revenue related to the licenses was recognized at the point in time in which the license/know-how was

delivered to Zimmer which occurred in October 2024.

Revenue recognized under the Amendment during the three months ended December

31, 2024 was $ 3.0 million.

Product Revenue

2 unchanged sentences

Product revenue recognized during the three

and nine months ended June 30, 2024 was $ 825,776 and $ 3,180,719 , respectively, inclusive of OneRF Product revenue that amounted to $ 163,549

during the three and nine months ended June 30, 2024.

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

The OneRF Products are not covered by the Zimmer Development Agreement.

Product revenue recognized during the three and nine months ended

June 30, 2023 was $ 629,906 and $ 1,210,661 , respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

months ended December 31, 2024 and 2023 was $ 3,274,167 and $ 977,649 , respectively.

All product revenue was comprised of OneRF Product

revenue during the three months ended December 31, 2024.

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

OneRF Products were subject to the Amendment upon its execution in October 2024.

NOTE 8 – Stock-Based Compensation

During the three and nine months ended June 30,

2024 and 2023, stock-based compensation expense related to stock-based awards was included in selling, general and administrative and

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

Three Months Ended

Nine Months Ended

During the three months ended December 31, 2024

and 2023, stock-based compensation expense was included in selling, general and administrative and research and development costs as follows

in the accompanying condensed statements of operations.

Selling, general and administrative

1 unchanged sentence

Total stock-based compensation expense

The Company’s 2017 Equity Incentive Plan

(“2017 Plan”) provides for the issuance of restricted shares and stock options to employees, directors, and consultants of

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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.

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 a 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.

Evergreen Provision

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Notwithstanding the foregoing, the Company’s Board of Directors

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

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

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

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

to the preceding sentence.

4 unchanged sentences

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

See Note 13 – Subsequent Events

related to additional shares added to the 2017 Plan effective January 1, 2025.

Stock Options

During the three months ended June 30, 2024 and

2023, under the 2017 Plan, the Company granted zero and 339,000 stock options, respectively, to its officers, employees and consultants.

During the nine months ended June 30, 2024 and 2023, the Company granted 1,225,669 and 469,512 , respectively, to its board of directors,

officers, employees and consultants.

Vesting generally occurs over an immediate to 48 month period based on a time of service condition.

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

The grant date fair value

of the grants issued during the nine months ended June 30, 2024 and 2023 was $ 1.08 and $ 0.88 per share, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

The total expense for the three months ended June

30, 2024 and 2023 related to stock options was $ 202,338 and $ 158,528 , respectively.

The total expense for the nine months ended June 30,

2024 and 2023 related to stock options was $ 603,957 and $ 482,276 , respectively.

The total number of stock options outstanding as of June

30, 2024 and September 30, 2023 was 2,814,096 and 1,708,427 , respectively.

During the three months ended December 31, 2024

and 2023, under the 2017 Plan and the Inducement Plan, the Company granted zero and 1,160,669 stock options, respectively, to its employees

and consultants.

Vesting generally occurs over a 48 -month period based on a time-of-service condition.

The weighted-average grant date

fair value of the grants issued during the three months ended December 31, 2023 was $ 1.08 per share.

The total expense for the three months

ended December 31, 2024 and 2023 related to stock options was $ 202,954 and $ 187,431 , respectively.

The total number of stock options outstanding

as of December 31, 2024 and September 30, 2024 was 2,814,096 .

The weighted-average assumptions used in the Black-Scholes

option-pricing model are as follows for the stock options granted during the three and nine months ended June 30, 2024 and 2023:

Three Months Ended Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

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

Expected stock price volatility 112.0 %

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Risk free interest rate 4.7 %

During the three months ended June 30, 2024 and

2023, 127,583 and 69,947 stock options vested, respectively, and 65,000 and 521 stock options were forfeited during these periods, respectively.

During the nine months ended June 30, 2024 and 2023, 232,494 and 282,172 stock options vested, respectively, and 120,000 and 521 stock

options were forfeited during these periods, respectively.

During the three and nine months ended June 30, 2024 and 2023, no options were

Restricted Stock Units

During the three and nine months ended June 30,

2024, the Company granted an aggregate of zero and 1,006,725 restricted stock units (“RSUs”) to its officers, employees and

consultants under the 2017 Plan, respectively.

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

June 30, 2024 was $ 1.03 per unit.

The RSUs granted 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.

During the three and nine months ended June 30,

2023, the Company granted an aggregate of 249,000 and 310,728 RSUs to its board of directors, officers, employees and consultants under

the 2017 Plan, respectively.

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

30, 2023 was $ 1.59 and $ 1.60 per unit, respectively.

The RSUs vest over a one to three year period with some of the RSUs vesting ratably

on a monthly 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 three months ended June 30, 2024 and

2023, 162,309 and 52,299 RSUs vested, respectively, and no RSUs were forfeited during these periods.

During the nine months ended June

30, 2024 and 2023, 232,523 and 294,109 RSUs vested, respectively, and no RSUs were forfeited during these periods.

The total expense for

the three months ended June 30, 2024 and 2023 related to these RSUs was $ 136,271 and $ 137,874 , respectively.

The total expense for the

nine months ended June 30, 2024 and 2023 related to these RSUs was $ 400,148 and $ 351,935 , respectively.

As of June 30, 2024, 289,215 shares were available

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

No shares were available for future issuance under the 2016

Equity Incentive Plan.

Unrecognized stock-based compensation was $ 2,713,998 as of June 30, 2024.

The unrecognized share-based expense

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

During the three months ended December 31, 2024

and 2023, 394,450 and 56,616 stock options vested, and zero and 55,000 stock options were forfeited during these periods, respectively.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

NOTE 9 – Concentrations

Through March 31, 2024, one customer accounted for all of the Company’s

product and collaborations revenue.

During the three months ended June 30, 2024, the Company initiated a limited commercial launch of

our OneRF ablation system and sold to two additional customers, who accounted for approximately 20 % of the Company’s product revenue

for the period.

The OneRF Products are not covered by a distribution agreement.

Supplier concentration

One contract manufacturer produces all of the

Company’s Strip/Grid Products and sEEG Products and another supplier was responsible for the development of the Company’s

OneRF Ablation system.

NOTE 10 – Income Taxes

The effective tax rate for the three and nine

months ended June 30, 2024 and 2023 was zero percent.

As a result of the analysis of all available evidence as of June 30, 2024 and September

30, 2023, the Company recorded a full valuation allowance on its net deferred tax assets.

Consequently, the Company reported no income

tax benefit during the three and nine months ended June 30, 2024 and 2023.

If the Company’s assumptions change and the

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

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

If the assumptions do not

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

Restricted Stock Units

There were no restricted stock units (“RSUs”)

granted during the three months ended December 31, 2024 and 2023.

37,809 and 37,679 previously granted RSUs vested during these periods,

respectively.

The total expense for the three months ended December 31, 2024 and 2023 related to these RSUs was $ 136,270 and $ 121,207 ,

respectively.

No RSUs were forfeited during the three months ended December 31, 2024 and 2023.

As of December 31, 2024, 297,461 shares were available

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

Unrecognized stock-based compensation was

$ 2,034,404 as of December 31, 2024.

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

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 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 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

The PIPE Warrants were accounted for and classified

as liabilities on the accompanying condensed 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 December 31, 2024 and September

risk-free interest rate 4.17 % and 3.53 %, respectively;

expected volatility of 110.20 % and 115.7 %;

respectively;

expected life

of 2.59 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 December 31, 2024 and September 30, 2024.

The Company recorded the fair value change of the

PIPE Warrants in the amount of $ 389,445 the fair value change in warrant liability line item on the accompanying condensed statements

of operations for the three months ended December 31, 2024.

At-The-Market Offering

11 unchanged sentences

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 is offering up to an aggregate of $ 9.3

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.

During the three and nine months ended June 30,

2024, 1,419,317 and 3,748,913 shares of common stock were issued, respectively, under the ATM for an aggregate offering price of $ 1,683,439

and $ 5,033,906 , respectively.

Issuance costs incurred under the ATM during the three and nine months ended June 30, 2024 were $ 50,519

and $ 236,599 , respectively.

During the three and nine months ended June 30,

2023, 923,193 and 1,439,677 shares of common stock were issued, respectively, under the ATM for an aggregate offering price of $ 1,624,399

and $ 2,552,656 during these periods, respectively.

Issuance costs incurred during the three and nine months ended June 30, 2023 was $ 51,366

and 234,725 , respectively.

On August 16,

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

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

During the three months ended December 31, 2023,

868,243 shares of common stock were issued under the ATM for an aggregate offering price of $ 1,256,271 .

There were no shares issued out of the ATM during

the three months ending December 31, 2024.

Lastly, the Company incurred deferred offering costs related to the ATM during the three months

ended December 31, 2024 of $ 41,657 .

The total aggregate offering price and common

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

Cumulative issuance costs

incurred under the ATM through June 30, 2024 were $ 471,323 .

stock issued since the inception of the ATM though December 31, 2024 was $ 7,586,562 and 5,188,590 shares, respectively.

Cumulative issuance

costs incurred under the ATM through December 31, 2024 was $ 554,285 of which $ 82,962 was included as a deferred cost on the condensed

balance sheets as of December 31, 2024.

Warrant Activity and Summary

There were no warrant exercises and 1,338,860

warrants expired during the nine months ended June 30, 2024, respectively.

The following table summarizes information about warrants outstanding

at June 30, 2024:

Warrants Exercise

Price Per Warrant Weighted Average Exercise Price Weighted Average Term (Years)

Warrant Weighted

Average Exercise

Price Weighted

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

Expired ( 1,338,860 ) $ 7.50 - 9.00 $ 8.69 —

Outstanding and exercisable at June 30, 2024 4,863,566 $ 3.00 - 9.00 $ 5.16 1.73

Outstanding and exercisable at December 31, 2024 7,045,875 $ 0.66 - 5.61 $ 3.81 1.73

The following table summarizes information about

warrants outstanding at June 30, 2024:

warrants outstanding at December 31, 2024:

Exercise Price Number Outstanding Weighted Average

Remaining Contractual

life (Years) Number Exercisable

$ 3.00 350,000 3.09 350,000

life (Years) Number Exercisable at

$ 0.66 100,000 4.59 100,000

4 unchanged sentences

Total 7,045,875 7,045,875

NOTE 12 – Subsequent Events

Private Placement

On August 2, 2024, the Company closed on a private

placement of an aggregate of 2,944,446 shares of common stock and warrants to purchase an aggregate of 2,208,338 shares of common stock

at a purchase price of $ 0.90 per unit, consisting of one share and a warrant to purchase 0.75 shares of common stock, resulting in gross

proceeds of approximately $ 2.65 million, excluding the proceeds, if any, that the Company may receive in the future from the exercise

of the warrants.

The warrants have an initial exercise price of $ 1.19 per share and are exercisable for a period of three years from the

date of issuance.

A director of the Company participated in the private placement on the same terms and conditions as all other purchasers,

except that the exercise price of such director’s warrant cannot be adjusted below the “Minimum Price” as defined under

Nasdaq rules and regulations.

New Debt Facility Agreement

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

which provided 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 or change in control, or (iii) at the Lender’s option, upon the occurrence and during the continuance of an event of

default under the Debt Facility Agreement.

The Loan(s), upon issuance, will be secured by substantially all of the Company’s assets, subject to certain exceptions set forth in the Debt Facility Agreement,

and will be subject to covenants.

The Debt Facility matures on February 2, 2026 .

The outstanding principal

amount of any outstanding Loans will bear interest at a rate of 10 % per annum, payable monthly in arrears and at the maturity date.

of the closing date of the Debt Facility Agreement, no amounts were drawn by the Company thereunder.

On August 2, 2024, the Company paid a one-time standby facility fee of

$ 150,000 and issued 100,000 warrants to Lender to purchase shares of the Company’s common stock at exercise price of $ 0.66 per share.

The warrants are immediately exercisable and expire on August 2, 2029.

Lastly, a cash draw-fee of $ 50,000 is payable and a warrant draw-fee

consisting of the issuance of an additional 50,000 warrants to the Lender is required upon each future funding date under the Debt Facility.

The warrants issuable upon each future funding date will have an exercise price of $ 0.66 per share and will have a five year term.

Monetization Event (as defined in the Debt Facility Agreement) 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, and no amounts were drawn under the Debt Facility Agreement.

The Company paid a termination fee of $ 125,000 to the Lender and incurred additional legal fees of $ 7,091 related to the termination.

The Company also incurred non-termination Debt Facility costs of $ 192,647 during the three-months ended December 31, 2024.

NeuroOne Medical Technologies Corporation

Notes to Condensed Financial Statements

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 condensed balance sheets.

NOTE 11 – Concentrations

For the three months ended December 31, 2024,

one customer accounted for 91 % of the Company’s product revenue and three customers accounted for the remaining 9 % of product revenue.

For the three months ended December 31, 2023, one customer accounted for all of the Company’s product and license revenue.

Supplier concentration

One contract manufacturer produces all of the

Company’s Strip/Grid Products and sEEG Products and another supplier was responsible for the development of the Company’s

OneRF Ablation system.

NOTE 12 – Income Taxes

The effective tax rate for the three months ended

December 31, 2024 and 2023 was zero percent.

As a result of the analysis of all available evidence as of December 31, 2024 and September

30, 2024, the Company recorded a full valuation allowance on its net deferred tax assets.

Consequently, the Company reported no income

tax benefit during the three months ended December 31, 2024 and 2023.

If the Company’s assumptions change and the Company

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

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

If the assumptions do not change, each

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

NOTE 13 – Subsequent Events

2017 Plan Evergreen Provision

Effective January 1, 2025, 1,124,446 shares were

added to the 2017 Plan as a result of the evergreen provision.

See Note 8 – Stock-Based Compensation.

NeuroOne Medical Technologies Corporation

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

What changed 10-Q

Item 1. Financial Statements