What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-02-12 compared with 2024-08-14 · 389 added, 440 removed, 195 unchanged (81% of the section changed)

18 unchanged sentences

Forward-looking statements include statements about:

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

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

our ability to achieve or sustain profitability;

our ability to raise additional capital and to fund our operations and ability to continue as a going concern;

the availability of additional capital on acceptable terms or at all as or when needed;

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

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

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

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

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

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

our future development priorities;

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

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

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

ability to successfully commercialize our technology in the United States;

ability to achieve or sustain profitability;

ability to raise additional capital and to fund our operations;

availability of additional capital on acceptable terms or at all as or when needed;

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

ability to develop additional applications of our cortical strip, grid and depth electrode technology with the benefits we hope to offer

as compared to existing technology, or at all;

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

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

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

and depth electrode and RF ablation technology;

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

future development priorities;

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

expectations about the willingness of healthcare providers to recommend our cortical strip, grid and depth electrode and RF ablation

technology to people with epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries

and other related neurological disorders;

NeuroOne Medical Technologies Corporation

our future commercialization, marketing and manufacturing capabilities and strategy;

our ability to comply with applicable regulatory requirements;

our ability to maintain our intellectual property position;

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

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

our ability to satisfy the continued listing requirements of Nasdaq;

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

future commercialization, marketing and manufacturing capabilities and strategy;

ability to comply with applicable regulatory requirements;

ability to maintain our intellectual property position;

expectations regarding international opportunities for commercializing our cortical strip, grid and depth electrode technology under

including technology under development;

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

estimates regarding our future expenses and needs for additional financing.

Forward-looking statements are based on management’s

17 unchanged sentences

date of this Report.

We are 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.

We are also developing the capability to use our sEEG electrode technology to deliver drugs

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

Additionally, we are investigating the potential

applications of our technology associated with artificial intelligence.

NeuroOne has received 510(k) clearance for three

of its devices from the FDA, including:

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

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

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

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

Our other products are

still under development.

Under the Zimmer Development Agreement, we commenced

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

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

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

We have also initiated a limited commercial

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

We are 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.

We are also developing the capability to use our sEEG electrode technology to deliver drugs or gene therapy while being able to record

brain activity before, during, and after delivery.

Additionally, we are investigating the potential applications of our technology associated

with artificial intelligence.

We have 510(k) clearance for three of our devices

from the FDA, including:

(i) our Evo cortical electrode technology for recording, monitoring, and stimulating brain tissue for up to 30

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

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

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

Our other products are still

under development.

We distribute our cEEG strip/grid electrodes,

cable assembly products and our OneRF Ablation System with Zimmer Biomet.

We have incurred mostly losses since inception.

As of December 31, 2024, we had an accumulated deficit of $73.2 million, primarily as a result of expenses incurred in connection with

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

adjustments and loss on extinguishments related to our debt, offset in part by license and product revenues.

NeuroOne Medical Technologies Corporation

We have incurred losses

since inception.

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

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

value adjustments and loss on extinguishments related to our debt, offset in part by collaborations and product revenues.

Prior to FDA clearance

of certain of our products, our main sources of cash, cash equivalents and short-term investments were proceeds from the issuances of

notes, common stock, warrants and unsecured loans.

Prior to FDA clearance of certain of our products,

our main sources of cash, cash equivalents and short-term investments were proceeds from the issuances of notes, common stock, warrants

and unsecured loans.

See “Liquidity and Capital Resources—Capital Resources” below.

we have begun to generate revenue from the sale of products based on our cEEG and sEEG technology and through milestone and other

payments from our current collaboration with Zimmer, we expect to continue to incur significant expenses and increasing operating

and net losses for the foreseeable future until and unless we generate a higher level of revenue from commercial sales, and we will

need to obtain substantial additional funding in connection with our continuing operations through public or private equity or debt financings,

through collaborations or partnerships with other companies or other sources.

We may be unable to raise

additional funds when needed on favorable terms or at all.

Our failure to raise such capital as and when needed would have a negative

impact on our financial condition and our ability to develop and commercialize our cortical strip, grid electrode and depth electrode

technology and future products and our ability to pursue our business strategy.

See “Liquidity and Capital Resources—Liquidity

Outlook” below.

While we have begun to

generate revenue from the sale of products based on our cEEG and sEEG technology, and OneRF System, and through milestone and other payments

from our current collaboration and distribution arrangement with Zimmer, we expect to continue to incur significant expenses and

increasing operating and net losses for the foreseeable future until and unless we generate a higher level of revenue from commercial

sales, and we will need to obtain substantial additional funding in connection with our continuing operations through public

or private equity or debt financings, through collaborations or partnerships with other companies or other sources.

We may be unable to raise additional funds when

needed on favorable terms or at all.

Our failure to raise such capital as and when needed would have a negative impact on our financial

condition and our ability to develop and commercialize our cortical strip, grid electrode and depth electrode technology and future products

and our ability to pursue our business strategy.

See “Liquidity and Capital Resources—Liquidity Outlook” below.

Recent Developments

Corporate Updates

OneRF Ablation Limited Commercial Launch

In March 2024, we announced a limited commercial

launch of our OneRF ablation system.

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

to pursue a potential strategic partnership for the OneRF Products.

Nasdaq Notice

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

stock has been below $1.00.

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

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

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

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

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

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

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

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

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

and the matter would be resolved.

The Notice also disclosed that in the event we

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

To qualify for additional time, we

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

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

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

If we meet these requirements, Nasdaq will

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

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

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

We intend to continue actively monitor the closing

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

compliance with the Minimum Bid Price Requirement.

If we do not regain compliance within

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

will be subject to delisting.

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

There can be no assurance

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

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

Zimmer Amended and Restated Distribution Agreement

On October 25, 2024, we entered into the Zimmer

Amended and Restated Distribution Agreement (the “Amendment”) with Zimmer, Inc.

(“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.

We previously entered into an Exclusive Development

and Distribution Agreement dated July 20, 2020 with Zimmer, 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, we 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, we 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 us $3.0 million

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

its OneRF™ product.

In addition, we are eligible to receive a future milestone payment of $1.0 million upon reaching a one-time

sales volume threshold.

NeuroOne Medical Technologies Corporation

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

began on the Effective Date 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 only by the Parties in accordance with certain terms under the Amendment.

In addition, the license rights granted

to Zimmer under this Amendment shall be exclusive (i) from the Original Effective Date until September 30, 2032 for the SEEG Products

and Strip/Grid Products (the “SEEG and Strip/Grid Product Term”);

and (ii) from the Effective Date until October 31, 2034

for the OneRF™ Product System (the “RF Term”).

Nasdaq Notice

As previously reported, on July 11, 2024, we received

a letter (the “Bid Price Deficiency Notice”) from the Listing Qualifications Department (the “Staff”) of the Nasdaq

Stock Market (“Nasdaq”) notifying the Company that, because the closing bid price for its common stock had been below $1.00

per share for 30 consecutive trading days, it was not compliant with Nasdaq Marketplace Rule 5550(a)(2) (the “Minimum Bid Price

Requirement”).

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we had a period of 180 calendar days from July 11, 2024,

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

On January 8, 2025, we received a letter from

the Staff indicating the Company’s continued non-compliance with the Minimum Bid Price Requirement.

The letter further informed

us that our common stock would be delisted from the Nasdaq Capital Market unless the Company appeals the Staff’s delisting determination

by requesting a hearing before the Nasdaq Hearings Panel (the “Panel”).

On January 15, 2025, the Company requested a hearing

before the Panel to appeal the determination by the Staff, and to present its plan to regain and sustain compliance with the Minimum Bid

Price Requirement.

The request was granted and a hearing was scheduled for February 20, 2025.

O n February 3, 2025,

the Company received a letter from the Staff of Nasdaq that the Company’s bid price deficiency had been cured and that the Company

was in compliance with all applicable listing standards.

Based on the foregoing, the previously scheduled

Nasdaq hearing has been cancelled and the matter is now closed.

Debt Facility Agreement

In August 2024, we entered into a loan and security

agreement (the “Debt Facility Agreement”) with Growth Opportunity Funding, LLC, as the Lender, which provided for a delayed

draw term loan facility in an aggregate principal amount not to exceed $3.0 million.

On November 7, 2024, we mutually agreed with the

Lender to terminate the loan facility under which no amounts were drawn under the facility.

Global Economic Conditions

9 unchanged sentences

to decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected.

NeuroOne Medical Technologies Corporation

Our operating results could be materially impacted

1 unchanged sentence

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.

logistics challenges, labor shortages, increased inflation, 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.

Financial Overview

1 unchanged sentence

Our product revenue was derived from the sale

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

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

We anticipate that

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

of our Strip/Grid Products, the sEEG Products and the Electrode Cable Assembly Products based on Evo cortical electrode technology and

the OneRF Products, which are products based on our OneRF Ablation System.

We anticipate that we will generate additional revenue from

the sale of products based on Evo cortical electrode technology and our OneRF Ablation System.

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

8 unchanged sentences

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

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

producing the Electrode Cable Assembly Products.

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

our license agreements.

Collaborations Revenue

On July 20, 2020, we entered into an exclusive

development and distribution agreement (the “Zimmer Development Agreement”) with Zimmer, pursuant to which we granted Zimmer

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

Additionally, we granted Zimmer the

exclusive right and license to distribute certain sEEG Products developed by the Company.

The OneRF ablation system is not covered by

the Zimmer Development Agreement.

The parties 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.

NeuroOne Medical Technologies Corporation

Under the terms of the Zimmer Development Agreement, we are 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 Products.

Except as otherwise provided in the Zimmer Development

Agreement, we are 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.

In addition, on August 2, 2022, we entered into a Third Amendment to the Zimmer Development Agreement (the “Zimmer

Amendment”) with Zimmer.

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

us in August 2022.

In consideration of the mutual covenants and agreements contained in the Zimmer Development Agreement, certain 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,

we issued to 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 our common stock.

The 2022 Zimmer Warrant has an exercise price of $3.00 per

share, is exercisable commencing six months from the issuance date, and will expire on August 2, 2027.

The 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 “Zimmer

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

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 Zimmer Development Agreement shall be exclusive from

the effective date of the Zimmer Amendment until the end of the Zimmer Term.

All payments attributed to the Initial Exclusivity

Fee, the sEEG exclusivity maintenance fee and sEEG design milestone payment are non-refundable.

The Zimmer Development Agreement and Zimmer Amendment

were accounted for under the provisions of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with

Customers (“ASC 606”) .

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

under the Zimmer Development Agreement and Zimmer Amendment:

(1) our obligation to grant Zimmer access to our intellectual property;

completion of sEEG Product development;

(3) completion of Strip/Grid Product development;

(4) the provision of sEEG exclusivity maintenance;

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

All performance obligations under the Zimmer Development Agreement and Zimmer

Amendment were met as of December 31, 2022.

In October 2022, we received 510(k) clearance

from the FDA for our Evo sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and stimulation equipment

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

Accordingly, we recognized

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

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

There was no collaboration revenue during the nine months

ended June 30, 2024.

NeuroOne Medical Technologies Corporation

The achievement of the level of sales required

to earn royalty payments from Zimmer is uncertain.

For further discussion about the determination

of collaborations revenue, product revenue and cost of product revenue, and for a discussion of milestones and royalty payments under

the Zimmer Development Agreement, see “—Liquidity and Capital Resources—Liquidity Outlook” below and see

“Note 7 — Zimmer Development Agreement” included in our condensed financial statements included in “Part 1, Item

1 – Financial Statements” in this Report.

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

of producing the Electrode Cable Assembly Products.

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

with our license agreements.

License Revenue

The Company determined that the RF Distribution

License granted under the Zimmer Amended and Restated Distribution Agreement 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 license 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 ending December 31, 2024 was $3.0 million.

For further discussion about the determination of

license revenue, product revenue and cost of product revenue, and for a discussion of milestones and royalty payments under the Amended

and Restated Zimmer Distribution Agreement, see “—Liquidity and Capital Resources—Liquidity Outlook” below and

see “Note 7 — Zimmer Distribution Agreement and Other Product Revenue” included in our condensed financial statements

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

Selling, General and Administrative

11 unchanged sentences

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

NeuroOne Medical Technologies Corporation

Research and Development

Research and development expenses consist of expenses

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

system technology.

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

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

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

Research and development costs are expensed

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

Lastly, de minimis income from the sale

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

We expect our research and development expenses

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

preclinical testing and clinical trials.

Other Income, net

Other income, net primarily consists of interest

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

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

NeuroOne Medical Technologies Corporation

incurred in performing research and development activities in developing our technology.

Research and development expenses include compensation

and benefits for research and development employees including stock-based compensation, overhead expenses, cost of laboratory supplies,

clinical trial and related clinical manufacturing expenses, costs related to regulatory operations, fees paid to consultants and other

outside expenses.

Research and development costs are expensed as incurred and costs incurred by third parties are expensed as the contracted

work is performed.

Fair Value Change in Warrant Liability

The net change in the fair value line item is

attributed to the warrant liability while outstanding.

Financing Costs

Financing costs consists of the amortization of

the deferred issuance costs and other lending costs in connection with the debt facility (as described further below).

Other income primarily consists of interest income

related to our cash and cash equivalents,

Results of Operations

Comparison of the Three Months Ended June 30,

2024 and 2023

Comparison of the Three Months Ended December 31, 2024 and 2023

The following table sets forth the results of

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

Three Months Ended

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

For the three months ended

Product revenue

1 unchanged sentence

Product gross profit

License revenue

Operating expenses:

2 unchanged sentences

Total operating expenses

Loss from operations

Other income, net

Loss before income taxes

Income (loss) from operations

Fair value change in warrant liability

Financing cost

Income (loss) before income taxes

Provision for income taxes

$ (2,767,525 )

Net income (loss)

$ (3,344,900 )

NeuroOne Medical Technologies Corporation

Product Revenue and Product Gross Profit

Product revenue was $3.3 million during the three

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

During the three months

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

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

to an increase in material supply costs.

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

and Electrode Cable Assembly Products.

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

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

with the Electrode Cable Assembly Products.

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

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

Selling, General and Administrative Expenses

Selling, general and administrative expenses were

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

The negligible increase in costs during the current three-month

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

which decreased by approximately $0.1 million.

Research and Development Expenses

Research and development expenses were $1.2 million

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

The $0.7 million decrease

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

and OneRF Products given the commercialization of these products.

Activity associated with new technology development partially offset

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

Development activities primarily included salary-related

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

NeuroOne Medical Technologies Corporation

Other Income, net

Other income during the three months ended June

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

Comparison of the Nine Months Ended June 30,

2024 and 2023

The following table sets forth the results of

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

Nine Months Ended

months ended December 31, 2024 with a gross profit and gross profit percentage of $1.9 million and 58.9%, respectively.

Product revenue

Cost of product revenue

Product gross profit

Collaborations revenue

Operating expenses:

Selling, general and administrative

Research and development

Total operating expenses

Loss from operations

Other income, net

Loss before income taxes

Provision for income taxes

$ (8,967,515 )

$ (8,724,370 )

Product Revenue and Product Gross Profit

Product revenue was $3.2 million during the nine

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

Product revenue was

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

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

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

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

OneRF Products and Electrode Cable Assembly Products sales.

Cost of product revenue consisted of the manufacturing and materials costs

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

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

In addition, cost of product revenue included royalty

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

and 2023, respectively.

Collaborations Revenue

Collaborations revenue was $1.5 million for the

nine months ended June 30, 2023.

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

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

There was no collaborations revenue during the nine months

ended June 30, 2024.

NeuroOne Medical Technologies Corporation

was $1.0 million during the three months ended December 31, 2023 with a gross profit and gross profit percentage of $0.3 million and 27.2%,

respectively.

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

fixed royalty and overhead period costs and due to lower overall material supply costs in the current period.

Product revenue consisted

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

The cost of product revenue consisted

of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our Strip/Grid Products,

sEEG Products and OneRF Products, and outside supplier materials costs in connection with the Electrode Cable Assembly Products.

cost of product revenue included royalty fees incurred of approximately $38,000 in connection with our license agreements during each

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

License Revenue

License revenue was $3.0 million for the three

months ended December 31, 2024.

License revenue during the current period related to the distribution license granted to Zimmer for the

OneRF Product in October 2024.

No license revenue was generated from the Amended and Restated Zimmer Development Agreement during the

three months ended December 31, 2023.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were

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

The $0.7 million

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

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

$2.0 million for the three months ended December 31, 2024, compared to $2.2 million for the three months ended December 31, 2023.

$130,000 decrease was primarily due to an overall decrease in legal, investor relations, and other professional service fees.

general and administrative expenses included stock-based compensation of $270,000 and $243,000 during the three months ended December

31, 2024 and 2023, respectively.

Research and Development Expenses

Research and development expenses were $1.2 million

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

The $1.2 million decrease period

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

Products given the commercialization of these products.

Activity associated with new technology development partially offset the overall

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

Development activities primarily included salary-related expenses

and costs related to consulting services, materials and supplies.

Other Income, net

Other income, net during the nine months ended

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

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

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

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

for the three months ended December 31, 2024, compared to $1.5 million during the three months ended December 31, 2023.

The $0.3 million

decrease period over period was attributed largely to the timing of development of activities, which primarily included salary-related

expenses and costs related to consulting services, materials and supplies associated with the development of OneRF Products, depth electrode

products and to a lesser extent strip/grid products.

Research and development expenses included stock-based compensation of $70,000 and

$65,000 during the three months ended December 31, 2024 and 2023, respectively.

Fair Value Change in Warrant Liability

The net change in fair value of the warrant liability

during the three months ended December 31, 2024 was $0.4 million benefit.

The change was due primarily to fluctuations in our common stock

There were no warrants outstanding during the three months ended December 31, 2023 that were measured on a fair value basis.

Financing Costs

Financing costs during the three months ended

December 31, 2024 consisted of the amortization of the deferred issuance costs associated with the debt facility (described further below)

in the amount of $0.2 million and additional legal and loan facility termination costs of $0.1 million upon the termination of the Debt

Facility in November 2024.

We did not incur any financing costs during the three months ended December 31, 2023.

Other income during the three months ended December

31, 2024 consisted of interest income in the amount of $9,000 attributed to our cash and cash equivalents.

Other income during the three months ended December

31, 2023 consisted of interest income in the amount of $46,000 attributed to our cash and cash equivalents.

NeuroOne Medical Technologies Corporation

Liquidity and Capital Resources

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

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

While we began to generate revenue in fiscal year

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

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

of revenue from commercial sales to cover expenses.

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

development and commercialization operations.

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

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

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

See “Funding Requirements” below

for more information.

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

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

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

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

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

As of December 31, 2024, our principal source

of liquidity consisted of cash and cash equivalents in the aggregate of approximately $1.1 million.

While we began to generate revenue

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

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

level of revenue from commercial sales to cover expenses.

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

product development and commercialization operations.

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

obligations under our intellectual property licenses with the Wisconsin Alumni Research Foundation and the Mayo Foundation for Medical

Education and Research as well as other administrative services.

See “Funding Requirements” below for more information.

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

pre-clinical and clinical trials, seek regulatory approvals, manufacture products, market and distribute our OneRF Products, hire additional

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

On August 2, 2024, we closed the

2024 Private Placement, a private placement of shares of common stock and warrants for total gross proceeds of approximately $2.65 million,

and entered into the Debt Facility, a delayed draw term debt facility in an aggregate principal amount not to exceed $3.0 million which

was ultimately not used.

Capital Resources

Our sources of cash, cash equivalents and short-term

investments to date have been limited to collaboration and product revenues, along with proceeds from the issuances of notes with warrants,

common stock with and without warrants and unsecured loans with the terms of our more recent financings described below.

Our sources of cash and cash equivalents to date

have been limited to license, collaboration and product revenues, along with proceeds from the issuances of notes with warrants, common

stock with and without warrants and unsecured loans with the terms of our more recent financings described below.

August 2024 Private Placement

On August 1, 2024, we entered into a Securities

Purchase Agreement with certain Purchasers, pursuant to which we, in a private placement, agreed to issue and sell an aggregate of

(i) 2,944,446 shares of our Company’s common stock (the “Shares”), 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 estimated expenses.

The 2024 Private Placement closed on August 2, 2024.

Issuance costs attributed to the 2024 Private

Placement amounted to $0.2 million.

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 .

In connection with the 2024 Private Placement,

we agreed to file a registration statement with the SEC covering the resale of the Shares and the shares of common stock issuable upon

exercise of the PIPE Warrants which became effective on September 13, 2024.

At-The-Market Offering

3 unchanged sentences

price of up to $14.5 million.

JonesTrading is entitled to a commission at a fixed commission

rate of up to 3% of the gross proceeds.

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

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

the shares of common stock previously sold.

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

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

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

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

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

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

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

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

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

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

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

of our common stock previously sold.

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

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

including the shares of common stock previously sold.

Through December 31, 2024, we have issued 5,188,590 shares of common stock under

the ATM for gross proceeds in the amount of $7.6 million.

We incurred issuance costs in connection with the ATM in the amount of $0.6

million through December 31, 2024, of which $83,000 was reflected as a deferred cost on our balance sheet.

On August 16, 2024, we increased

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

NeuroOne Medical Technologies Corporation

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

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

We incurred issuance costs in connection with the

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

Debt Facility Financing

On August 2, 2024, we entered into the Debt Facility

Agreement with Growth Opportunity Funding, LLC, as the Lender, which provided for a delayed draw term loan facility in an aggregate principal

amount not to exceed $3.0 million.

We were permitted to borrow loans under the Debt Facility Agreement from time to time, 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 in the Debt Facility Agreement or a change of 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.

On November 7, 2024, the Company terminated the Debt

Facility Agreement, and no amounts were drawn under the Debt Facility Agreement.

Total costs incurred under the debt facility financing

was $0.4 million.

July 2023 Public Offering

13 unchanged sentences

our intellectual property licenses with WARF and Mayo.

See “Item 1—Business—Clinical

Development and Regulatory Pathway—Clinical Experience, Future Development and Clinical Trial Plans” in our Annual Report

on Form 10-K for the year ended September 30, 2023 for a discussion of design, development, pre-clinical and clinical activities that

we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to

estimate such costs.

On January 21, 2020,

we entered into an Amended and Restated License Agreement (the “WARF License”) with WARF, which amended and restated in full

our prior license agreement with WARF, dated October 1, 2014.

Under the WARF License, we have agreed to pay WARF a royalty equal to a

single-digit percentage of our product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020,

$100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect.

If we or any of our sublicensees

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

patent is found to be valid and would be infringed by us if not for the WARF License, the royalty rate will be tripled for the remaining

term of the WARF License.

the Amended and Restated License and Development Agreement with Mayo (the “Mayo Development Agreement”), we have agreed to

pay Mayo a royalty equal to a single-digit percentage of our product sales pursuant to the Mayo Development Agreement.

4 – Commitments and Contingencies” included in our condensed financial statements included in “Part 1, Item 1 –

Financial Statements” in this Report for more information about the WARF License and the Mayo Development Agreement.

Our other cash requirements

within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities.

cash requirements greater than twelve months from various contractual obligations and commitments include operating leases and contracted

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

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

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

Contracted services include agreements

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

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

See “Item 1—Business—Clinical Development and Regulatory Pathway—Clinical

Experience, Future Development and Clinical Trial Plans” in our Annual Report on Form 10-K for the year ended September 30, 2024

for a discussion of design, development, pre-clinical and clinical activities that we may conduct in the future, including expected cash

expenditures required for some of those activities, to the extent we are able to estimate such costs.

On January 21, 2020, we entered into an Amended

and Restated License Agreement (the “WARF License”) with WARF, which amended and restated in full our prior license agreement

with WARF, dated October 1, 2014.

Under the WARF License, we have agreed to pay WARF a royalty equal to a single-digit percentage of our

product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000 for 2021 and $150,000

for 2022 and each calendar year thereafter that the WARF License is in effect.

If we or any of our sublicensees contest the validity of

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

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

NeuroOne Medical Technologies Corporation

We expect to satisfy

our short-term and long-term obligations through cash on hand and, until we generate an adequate level of revenue from commercial sales

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

Under the Amended and Restated License and Development

Agreement with Mayo (the “Mayo Development Agreement”), we have agreed to pay Mayo a royalty equal to a single-digit percentage

of our product sales pursuant to the Mayo Development Agreement.

See “Note 4 – Commitments and Contingencies” included

in our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report for more information

about the WARF License and the Mayo Development Agreement.

Our other cash requirements within the next twelve

months include accounts payable, accrued expenses, purchase commitments and other current liabilities.

Our other cash requirements greater

than twelve months from various contractual obligations and commitments include operating leases and contracted services.

Refer to “Note

4 – Commitments and Contingencies” included in our condensed financial statements included in “Part 1, Item 1 –

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

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

services, equipment maintenance services, and audits for periods up to fiscal year 2027.

We expect to satisfy our short-term and long-term

obligations through cash on hand and, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever,

from future equity and debt financings.

Liquidity Outlook

For a discussion of potential fee payments under

the Zimmer Development Agreement, see “Note 7 — Zimmer Development Agreement”

the Amended and Restated Zimmer Development Agreement, see “Note 7 — Zimmer Distribution Agreement and Other Product Revenue”

included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

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

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

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

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

Zimmer has exclusive

1 unchanged sentence

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

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

for the OneRF Products.

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

On October 2024, we entered into an Amended and Restated Distribution Agreement with Zimmer to provide Zimmer with the exclusive right

and license to distribute also 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.

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

in the aggregate of approximately $1.1 million.

16 unchanged sentences

The development and commercialization of our cortical

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

and cash equivalent resources sooner than we expect.

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

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

Our ability to successfully transition to profitability will be dependent

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

We cannot assure

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

strip, grid electrode, depth electrode, ablation system technology and future products and technology is subject to numerous uncertainties,

and we could use our cash and cash equivalent resources sooner than we expect.

Additionally, the process of developing medical devices

is costly, and the timing of progress in pre-clinical tests and clinical trials is uncertain.

Our ability to successfully transition to

profitability will be dependent upon achieving further regulatory approvals and achieving a level of product sales adequate to support

our cost structure.

We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

NeuroOne Medical Technologies Corporation

The following is a summary of cash flows for each

of the periods set forth below.

Nine Months Ended

Net cash used in operating activities

$ (8,344,957 )

$ (9,984,048 )

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Net decrease in cash and cash equivalents

For the Three Months Ended

Net cash provided by (used in) operating activities

$ (3,809,391 )

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net decrease in cash

$ (2,641,508 )

NeuroOne Medical Technologies Corporation

Net cash used in operating activities

Net cash used in operating activities was $8.3

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

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

million in the aggregate.

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

resulted in a cash use of approximately $0.6 million.

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

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

Net cash provided by (used in) operating activities

Net cash provided by operating activities was

$0.2 million for the three months ended December 31, 2024, which consisted of net income of $1.8 million inclusive of non-cash stock-based

compensation, depreciation, amortization related to intangible assets and deferred costs, non-cash lease expense, fair value change in

warrant liability and reclass of debt facility termination costs totaling approximately $0.4 million in the aggregate.

The net change

in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a net cash use of approximately

$2.0 million.

The net cash use stemming from the change in operating assets and liabilities was primarily attributable to an increase

in accounts receivable in connection with the Zimmer Distribution Agreement and to a decrease in accrued expenses and accounts payable,

offset in part by decreases in prepaid expenses and inventory on hand attributed to the timing of payments and purchases.

Net cash used in operating activities was $3.8

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

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

million in the aggregate.

million for the three months ended December 31, 2023, which consisted of a net loss of $3.3 million partially offset by non-cash stock-based

compensation, depreciation, amortization related to intangible assets and non-cash lease expense, totaling approximately $0.4 million

in the aggregate.

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

resulted in a cash use of approximately $2.3 million.

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

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

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

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

Partially offsetting the net cash operating use

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

and fluctuations in our operations.

Net cash (used in) provided by investing activities

Net cash used in investing activities was $0.1

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

Net cash provided by investing activities was

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

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

The balance of activity during

the period consisted of outlays for purchases of property and equipment in the amount $0.3 million.

Net cash provided by financing activities

Net cash provided by financing activities was

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

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

resulted in a net cash use of $0.9 million.

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

attributable to an increase in accounts receivable in connection with the Zimmer Distribution Agreement and to a decrease in accrued expenses,

offset in part by decreases in prepaid expenses and inventory on hand attributed to the timing of payments and purchases.

Net cash used in investing activities

Net cash used in investing activities for the

three months ended December 31, 2024 was $24,000 and consisted of outlays for purchases of property and equipment.

Net cash used in investing activities for the

three months ended December 31, 2023 was $37,000 and consisted of outlays for purchases of property and equipment.

Net cash (used in) provided by financing activities

Net cash used in financing activities was $0.5

million for the three months ended December 31, 2024, which consisted of the payment of issuance costs related to the August 2024 Private

Placement that were unpaid as of September 30, 2024, debt facility costs, and deferred issuance costs in connection with ATM.

there were common stock repurchases for the payment of withholding taxes.

Net cash provided by financing activities was

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

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

$1.2 million for the three months ended December 31, 2023, which consisted of net proceeds in connection with the ATM, offset in a small

part by common stock repurchases for the payment of withholding taxes.

NeuroOne Medical Technologies Corporation

Critical Accounting Estimates

12 unchanged sentences

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

NeuroOne Medical Technologies Corporation

Of these policies, the following are considered

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

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

For discussion about the determination of collaborations

revenue, product revenue and cost of product revenue, see “Note 7 — Zimmer Development Agreement” included in our condensed

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

To date, we have not had, nor

expect to have in the future, significant variable consideration adjustments related to product revenue, such as chargebacks, sales allowances

and sales returns.

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

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

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

For discussion about the determination of license

revenue and product revenue, see “Note 7 — Zimmer Distribution Agreement and Other Product Revenue” included in our

condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

To date, we have

not had, nor expect to have in the future, significant variable consideration adjustments related to product revenue, such as chargebacks,

sales allowances and sales returns.

Stock-based Compensation

2 unchanged sentences

condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

Fair Value of Warrant liability

We issued warrants in connection with our August

2024 Private Placement.

The warrants were classified as a liability on our balance sheet and were recorded at fair value as certain provisions

precluded equity accounting treatment for these instruments.

We will continue to adjust the liabilities for changes in fair value until

the earlier of the exercise, expiration, or until such time that cash settlement or indexation provisions are no longer in effect for

the warrants.

For discussions about the application of fair value associated with the warrants, see “Note 9 – Stockholders’

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

NeuroOne Medical Technologies Corporation

Income Tax Assets and Liabilities

17 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis