What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-13 compared with 2025-02-12 · 294 added, 271 removed, 313 unchanged (64% of the section changed)

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Condition and Results of Operations

The following discussion of our financial condition

and results of operations should be read in conjunction with the financial statements and notes included in Part I “Financial Information”,

Item I “Financial Statements” of this Quarterly Report on Form 10-Q (the “Report”) and the audited financial statements

and related footnotes included in our Annual Report on Form 10-K for the year ended September 30, 2024.

Forward-Looking Statements

This Report contains forward-looking statements

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Forward-looking statements include statements about:

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;

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

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 electrode, RF ablation system, and technology under development;

our 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;

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, grid electrode and depth electrode and RF ablation technology;

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

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;

NeuroOne Medical Technologies Corporation

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.

our expectations regarding international opportunities for commercializing our cortical strip, grid and depth electrode 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 estimates regarding our future expenses and needs for additional financing.

Forward-looking statements are based on management’s

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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 received 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 each of these three devices 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

As of March 31, 2025, we had an accumulated deficit of $75.5 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

Prior to FDA clearance of certain of our products,

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See “ Liquidity and Capital Resources—Capital Resources ” 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.

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

NeuroOne Medical Technologies Corporation

Recent Developments

Corporate Updates

510(k) Submission for Trigeminal Facial Pain

On April 22, 2025, we filed a 510(k) submission

to the FDA for our OneRF® Trigeminal Nerve Ablation System to treat facial pain.

2025 Financing

4, 2025, we entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co.

underwriter (the “Underwriter”), relating to the issuance and sale of 16,000,000 shares of the Company’s common stock,

at a price to the public of $0.50 per share (the “April 2025 Financing”).

In addition, under the terms of the Underwriting

Agreement, we granted the Underwriter an option, exercisable for 45 days, to purchase up to an additional 2,400,000 shares of common stock

on the same terms as the offering, which was exercised in full.

Net proceeds to the Company were approximately $8.2 million.

Zimmer Amended and Restated Distribution Agreement

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sales volume threshold.

NeuroOne Medical Technologies Corporation

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

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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

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

We do not currently

anticipate any meaningful impact from current or proposed tariffs on imported goods.

NeuroOne Medical Technologies Corporation

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

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

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

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

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

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

for functional neurosurgical procedure.

We have received FDA 510(k) clearance for our

cortical electrode for temporary (less than 30 days) recording, monitoring, and stimulation on the surface of the brain, 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 our OneRF Ablation System for creation of radiofrequency

lesions in nervous tissue for functional neurosurgical procedure.

Product Gross Profit

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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.

the Amendment during the six months ending March 31, 2025 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

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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.

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

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

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

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Results of Operations

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

Comparison of the Three Months Ended March

31, 2025 and 2024

The following table sets forth the results of

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

For the three months ended

operations for the three months ended March 31, 2025 and 2024, respectively.

Three Months Ended

Product revenue

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Product gross profit

License revenue

Operating expenses:

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Total operating expenses

Income (loss) from operations

Loss from operations

Fair value change in warrant liability

Financing cost

Income (loss) before income taxes

Loss before income taxes

Provision for income taxes

Net income (loss)

$ (2,270,607 )

$ (2,855,090 )

NeuroOne Medical Technologies Corporation

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Product revenue was $1.4 million during the three

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

Product revenue

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.

months ended March 31, 2025 with a gross profit and gross profit percentage of $0.8 million and 55.6%, respectively.

Product revenue was

$1.4 million during the three months ended March 31, 2024 with a gross profit and gross profit percentage of $0.4 million and 28.3%, respectively.

The increase in gross profit percentage during the current period was largely due to the higher margin OneRF Products being sold in the

current period under the Amendment with Zimmer.

Product revenue consisted of Strip/Grid Products, sEEG Products, Electrode Cable Assembly

Products, and for the current three-month period, OneRF Product 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.

In addition, cost of product revenue included

royalty fees incurred of approximately $38,000 and $42,000 in connection with our license agreements during the three months ended March

31, 2025 and 2024, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were

$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.

$1.9 million and $2.0 million during the three months ended March 31, 2025 and 2024, respectively.

The $0.1 million expense decrease in

the current quarter over the comparable prior year quarter was largely attributed to lower administrative payroll and stock-based compensation

of $0.1 million, lower legal costs of $0.1 million and lower public company costs of $0.1 million, partially offset by higher professional

services and marketing expenses of $0.2 million.

Selling, general and administrative expenses included $0.2 million and $0.3 million of

stock-based compensation during the three months ended March 31, 2025 and 2024, respectively.

Research and Development Expenses

Research and development expenses were $1.5 million

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.

for the three months ended March 31, 2025, compared to $1.3 million for the three months ended March 31, 2024.

The $0.2 million increase

in the current period over the prior year period was attributed largely to the timing of product development activities in the current

quarter when compared to the comparable prior year quarter.

Research and development expenses primarily included salary-related expenses

and costs related to consulting services, materials and supplies associated with the development of sEEG Products and to a much lesser

extent Strip/Grid Products.

Research and development expenses included $55,000 and $76,000 of stock-based compensation during the three

months ended March 31, 2025 and 2024, respectively.

Fair Value Change

in Warrant Liability

The net change in fair

value of the warrant liability during the three months ended March 31, 2025 was $0.4 million benefit.

The change was due primarily to

fluctuations in our common stock fair value.

There were no warrants outstanding during the three months ended March 31, 2024 that were

measured on a fair value basis.

Other income during the three months ended March

31, 2025 and 2024 related to interest income on our cash, cash equivalents and short-term investments in the amount of $19,000 and $31,000,

respectively.

NeuroOne Medical Technologies Corporation

Comparison of the Six Months Ended March 31,

2025 and 2024

The following table sets forth the results of

operations for the six months ended March 31, 2025 and 2024, respectively.

Six Months Ended

Product revenue

Cost of product revenue

Product gross profit

License revenue

Operating expenses:

Selling, general and administrative

Research and development

Total operating expenses

Loss from operations

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.

Loss before income taxes

Provision for income taxes

$ (6,199,990 )

Product Revenue and Product Gross Profit

Product revenue was $4.7 million during the six

months ended March 31, 2025 with a gross profit and gross profit percentage of $2.7 million and 57.9%, respectively.

Product revenue was

$2.4 million during the six months ended March 31, 2024 with a gross profit and gross profit percentage of $0.7 million and 27.9%, respectively.

The increase in gross profit percentage during the current period was largely due to higher margin OneRF Products being sold in the current

period under the Amendment with Zimmer.

Product revenue consisted of Strip/Grid Products, sEEG Products, Electrode Cable Assembly Products,

and for the current six-month period, OneRF Product 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.

In addition, cost of product revenue included royalty

fees incurred of approximately $75,000 and $79,000 in connection with our license agreements during the six months ended March 31, 2025

and 2024, respectively.

License Revenue

License revenue was $3.0 million for the six months

ended March 31, 2025.

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 six months ended

March 31, 2024.

NeuroOne Medical Technologies Corporation

Selling, General and Administrative Expenses

Selling, general and administrative expenses were

$4.0 million for the six months ended March 31, 2025, compared to $4.2 million for the six months ended March 31, 2024.

The $0.2 million

decrease in the current six-month period compared to the comparable prior year period was primarily due to lower administrative payroll

of $0.1 million, lower legal costs of $0.2 million, lower public company costs of $0.3 million, offset by higher professional fees of

$0.3 million and facility costs and other general operating expenses of $0.1 million on a net basis.

Selling, general and administrative

expenses included $0.5 million of stock-based compensation during each of the six months ended March 31, 2025 and 2024.

Research and Development Expenses

Research and development expenses were $2.7 million

for the six months ended March 31, 2025, compared to $2.8 million for the six months ended March 31, 2024.

The $0.1 million decrease period

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

period when compared to the comparable prior year period.

Research and development primarily included salary-related expenses and costs

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

Research and development expenses included $0.1 million of stock-based compensation during each of the six months ended March

31, 2025 and 2024.

Fair Value Change

in Warrant Liability

The net change in fair

value of the warrant liability during the six months ended March 31, 2025 was $0.8 million.

The change was due primarily to fluctuations

in our common stock fair value.

There were no warrants outstanding during the six months ended March 31, 2024 that were measured on a

fair value basis.

Financing Costs

Financing costs during

the six months ended March 31, 2025 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 six months ended March 31, 2024.

Other income during the six months ended March

31, 2025 and 2024 consisted of $28,000 and $77,000 related to interest income attributed to our cash and cash equivalents, respectively.

Liquidity and Capital Resources

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.

As of March 31, 2025, our principal source of

liquidity consisted of cash and cash equivalents in the aggregate of approximately $1.3 million.

Subsequently, on April 7, 2025, we received

net proceeds of approximately $8.2 million from the April 2025 Financing.

NeuroOne Medical Technologies Corporation

Capital Resources

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

2025 Financing

4, 2025, we entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co.

underwriter (the “Underwriter”), relating to the issuance and sale of 16,000,000 shares of our common stock, at a price to

the public of $0.50 (the “April 2025 Financing”).

In addition, under the terms of the Underwriting Agreement, we granted the

Underwriter an option, exercisable for 45 days, to purchase up to an additional 2,400,000 shares of common stock on the same terms as

the offering, which was exercised in full.

Issuance costs in connection with the April 2025 Financing amounted to approximately $1.0 million

which included a 7.0% commission to the Underwriter and legal and other expenses in the amount of $0.3 million.

The Company received approximately

$8.2 million in net proceeds.

August 2024 Private Placement

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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 March 31, 2025, we have issued 5,544,489 shares of common stock under the

ATM for gross proceeds in the amount of $8.0 million.

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

through March 31, 2025.

On August 16, 2024, we increased the amount of common stock that can be sold pursuant to the Sales Agreement by

$3.0 million.

On April 3, 2025, we decreased the amount of common stock that can be sold pursuant to the Sales Agreement to zero.

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

On July 24, 2023, we entered into an underwriting

agreement with The Benchmark Company, LLC, as underwriter (“Benchmark”), relating to the issuance and sale of 5,250,000 shares

of our common stock, par value $0.001 per share, at a price to the public of $1.00 per share (the “July 2023 Public Offering”).

In addition, under the terms of the July 2023 Public Offering, we granted Benchmark an option, exercisable for 30 days, to purchase up

to an additional 787,500 shares of common stock on the same terms (“the Overallotment Option”).

The July 2023 Public Offering

closed on July 27, 2023, and we completed the sale and issuance of an aggregate of 6,037,500 shares of our common stock, including the

exercise in full of the Overallotment Option.

The net proceeds to us from the July 2023 Public

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

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.

November 7, 2024, the Company terminated the Debt Facility Agreement, and no amounts were drawn under the Debt Facility

Total costs incurred under the debt facility financing was $0.4 million.

NeuroOne Medical Technologies Corporation

Funding Requirements

As noted above, certain of our cash requirements

relate to the funding of our ongoing product development and commercialization operations and our milestone and royalty obligations under

our intellectual property licenses with WARF and Mayo.

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

Certain of our cash requirements relate to the

funding of our ongoing product development and commercialization operations and our milestone and royalty obligations under our intellectual

property licenses with WARF and Mayo.

See “Part 1, 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

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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

Under the Amended and Restated License and Development

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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.

obligations through cash on hand and revenue from commercial sales to cover expenses.

Liquidity Outlook

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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.

Management has noted the existence of substantial doubt about our ability to continue

as a going concern.

Additionally, our independent registered public accounting firm included an explanatory paragraph in the report on

our financial statements as of and for the years ended September 30, 2024 and 2023, respectively, noting the existence of substantial

doubt about our ability to continue as a going concern.

Our existing cash and cash equivalents may not be sufficient to fund our operating

expenses through at least twelve months from the date of this filing.

To continue to fund operations, we will need to secure additional

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

We may not be able to raise additional capital on terms acceptable to us, or at all.

Any failure to raise capital when needed could compromise

our ability to execute on our business plan.

If we are unable to raise additional funds, or if our anticipated operating results are not

achieved, we believe planned expenditures may need to be reduced in order to extend the time period that existing resources can fund our

If we are unable to obtain the necessary capital, it may have a material adverse effect on our operations and the development

of our technology, or we may have to cease operations altogether.

At March 31, 2025, we had cash and cash

equivalents in the aggregate of approximately $1.3 million.

Subsequently, on April 7, 2025, we received net proceeds of

approximately $8.2 million from the April 2025 Financing.

Our independent registered public accounting firm included an explanatory

paragraph in the report on our financial statements as of and for the years ended September 30, 2024 and 2023, respectively, noting

the existence of substantial doubt about our ability to continue as a going concern.

We believe our current available cash and cash

equivalents inclusive of the April 2025 Financing, coupled with the anticipated increase in product revenues from minimum purchases

and improved gross margins under the Zimmer Amendment and forecasted operating expense reductions, will be sufficient to fund our

planned expenditures and meet our obligations for at least twelve months from the date of issuance of these financial

NeuroOne Medical Technologies Corporation

In the future, however, in the absence of an adequate

level of commercial sales to cover expenses, we may need to secure additional funding through public or private equity or debt financings,

through collaborations or partnerships with other companies or other sources.

We may not be able to raise additional capital on terms

acceptable to us, or at all.

Any failure to raise capital when needed could compromise our ability to execute on our business plan.

we are unable to raise additional funds, or if our anticipated operating results are not achieved, we believe planned expenditures may

need to be reduced in order to extend the time period that existing resources can fund our operations.

If we are unable to obtain the

necessary capital in the future from operating results or future financing, it may have a material adverse effect on our operations and

the development of our technology, or we may have to cease operations altogether.

The development and commercialization of our cortical

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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.

For the Three Months Ended

Six Months Ended

Net cash provided by (used in) operating activities

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Net cash (used in) provided by financing activities

Net decrease in cash

Net decrease in cash and cash equivalents

$ (2,887,838 )

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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.

$152,000 for the six months ended March 31, 2025, which consisted of a net loss of $0.5 million partially offset by non-cash stock-based

compensation, depreciation, amortization related to intangible assets, a fair value change in warrant liability and operating lease expense,

totaling approximately $0.2 million in the aggregate.

Our net loss was further adjusted to account for the reclassification of debt termination

costs to financing activities in the amount of $0.1 million.

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

fluctuations in our operating activities resulted in a cash source of approximately $0.3 million.

The net cash source stemming from the

change in operating assets and liabilities was primarily attributable to both a decrease in inventory and prepaid expenses, partially

offset by a net decrease in our aggregate accrued expenses, other liabilities and accounts payable as well as by an increase in our accounts

receivable attributed to the timing of payments.

Net cash used in operating activities was

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 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.

$6.0 million for the six months ended March 31, 2024, which consisted of a net loss of $6.2 million partially offset principally by

non-cash stock-based compensation, depreciation, amortization related to intangible assets, operating lease expense, totaling

approximately $0.8 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 prepaid expense as

well as attributed to a net decrease in our accrued expenses and other liabilities.

Partially offsetting the net cash used for the

period was the reduction in inventory purchases and increase in our account payable attributed to the timing of payments.

NeuroOne Medical Technologies Corporation

Net used in investing activities

Net cash used in investing activities was $28,000

for the six months ended March 31, 2025 and consisted of outlays for purchases of property and equipment.

Net cash used in investing activities was $68,000

for the six months ended March 31, 2024 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 $0.3

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.

million for the six months ended March 31, 2025, which consisted of issuance costs and repurchases of common stock for the payment of

employee taxes in the amount of $0.7 million in the aggregate, offset partially by proceeds from the ATM of $0.4 million.

Net cash provided by financing activities was

$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

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

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

Critical Accounting Estimates

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

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

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

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

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

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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

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 12 –

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

Income Tax Assets and Liabilities

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis