What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-12-17 compared with 2024-12-17 · 505 added, 505 removed, 710 unchanged (59% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY

INDEX TO FINANCIAL STATEMENTS

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Opinion on the Financial Statements

We have audited the accompanying balance

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

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

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

In our opinion, the

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

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

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

We have audited the accompanying balance sheets

of NeuroOne Medical Technologies Corporation (the “Company”) as of September 30, 2025 and 2024, the related statements of

operations, changes in stockholders’ equity, and cash flows, for each of the two years in the period ended September 30, 2025, and

the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of the Company’s

operations and cash flows for each of the two years in the period ended September 30, 2025, in conformity with accounting principles generally

accepted in the United States of America.

Going Concern

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of the Company’s management.

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

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

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

federal securities laws and the applicable rules

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

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

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

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

federal securities laws and the applicable

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

We conducted our audits in accordance with the

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

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

control over financial reporting.

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

internal control over financial reporting.

Accordingly, we express no such opinion.

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Critical Audit Matter

The critical audit matter communicated below

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

the audit committee and that:

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

especially challenging, subjective, or complex judgments.

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

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

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

The critical audit matter

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

be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,

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

Valuation of warrants

Critical Audit Matter Description

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

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

Management determined the proper classification

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

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

Management concluded

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

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

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

We identified the assessment of the measurement of fair value

of the common stock warrants as a critical audit matter.

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

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

As described in Note 9 to the financial

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

Management determined

the proper classification of the warrants by reviewing the terms and conditions of the issued warrants and applying the applicable accounting

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

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

The Company determined the fair value of warrants

at the date of issuance and year-end using a Monte Carlo simulation model.

We identified the assessment of the

measurement of fair value of the common stock warrants as a critical audit matter.

Specifically, there was a high degree of subjective

auditor judgment, including the involvement of professionals with specialized skills and knowledge, due to the complex valuation methodology

that incorporates several assumptions.

How We Addressed the Matter in

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to address this critical audit matter included:

◾ With the assistance of firm personnel having specialized

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

independent re-calculation.

◾ Performed audit procedures surrounding management’s

assumptions utilized in the valuation model.

With the assistance of firm personnel having specialized skills and knowledge, we tested the model and methodology used to calculate the fair value of the common stock warrants including an independent re-calculation.

Performed audit procedures surrounding management’s assumptions utilized in the valuation model.

/s/ Baker Tilly US, LLP

We have served as the Company’s auditor since

We have served as the Company’s auditor

Minneapolis, Minnesota

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Statements of Changes in Stockholders’

Additional Paid–In

Total Stockholders’

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$ ( 62,686,303 )

Issuance of common stock in connection with public offering

Issuance of common stock in connection with 2024 Private Placement

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

Issuance costs in connection with common stock issuances

( 1,071,663 )

Stock-based compensation

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Share repurchases for the payment of employee taxes

Issuance of warrants in connection with debt facility

( 12,318,110 )

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( 75,004,413 )

Issuance of common stock in connection with 2024 Private Placement

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

Issuance costs in connection with common stock issuances

Issuance of common stock attributed to non-private placement equity offering

Issuance costs related to equity offerings

( 1,056,646 )

Stock-based compensation

Issuance of common stock upon vesting of restricted stock units

Exercise of warrants

Share repurchases for the payment of employee taxes

Issuance of warrants in connection with debt facility

( 3,605,374 )

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Operating activities

$ ( 3,605,374 )

$ ( 12,318,110 )

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

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Fair value change in warrant liability

Private placement warrant issuance costs reclassed to financing activities

Loss on disposal of fixed assets

Amortization of discounts and premiums on short-term investments

Debt and equity facility costs reclassified to financing activities

Non-cash lease expense

Valuation adjustments for excess or obsolete inventory

Change in assets and liabilities:

Accounts receivable

( 1,088,169 )

Prepaid expenses

Accounts payable

Accrued expenses, deferred revenue, operating lease and other liabilities

Accrued expenses, operating lease and other liabilities

Net cash used in operating activities

( 2,837,272 )

( 11,011,840 )

Investing activities

Purchases of short-term investments

Maturities of short-term investments

Proceeds from the disposal of fixed assets

Purchases of property and equipment

Net cash (used in) provided by investing activities

Net cash used in investing activities

Financing activities

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Proceeds from issuance of warrants in connection with private placement

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

Proceeds from issuance of common stock attributed to non-private placement

equity offerings

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

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

Issuance costs related to non-private placement equity offerings

( 1,045,971 )

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

Deferred issuance costs in connection with debt facility

Exercise of warrants

Share repurchases for the payment of employee taxes

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

( 3,862,451 )

Cash and cash equivalents at beginning of year

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Supplemental non-cash financing and investing transactions:

Unpaid purchases of property and equipment

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

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NeuroOne Medical Technologies Corporation

Notes to Financial Statements

to Financial Statements

NOTE 1 - Organization and Nature of Operations

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commercialization of thin film electrode for continuous electroencephalogram (“cEEG”) and stereoelectrocencephalography (“sEEG”)

recording, monitoring, ablation, drug delivery and brain stimulation solutions to diagnose and treat patients with epilepsy, Parkinson’s

disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological disorders.

The Company received 510(k) clearance from the

United States (“U.S.”) Food and Drug Administration (“FDA”) for its Evo cortical electrode technology in November

2019 and in October 2022, the Company received 510(k) clearance from the FDA for its Evo® sEEG electrode technology for temporary

recording, monitoring, ablation and brain stimulation solutions to diagnose and treat patients with epilepsy, trigeminal neuralgia, Parkinson’s

disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other pain-related neurological disorders.

is also developing the capability to use its sEEG electrode technology to deliver drugs or gene therapy while being able to record activity

before, during, and after delivery.

The Company has received 510(k) clearance from the United States (“U.S.”)

Food and Drug Administration (“FDA”) for four of its devices:

(i) its Evo cortical electrode technology for recording, monitoring,

and stimulating brain tissue for up to 30 days (“Evo Cortical”), (ii) its Evo® sEEG electrode technology for temporary

(less than 30 days) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical

signals at the subsurface level of the brain.

In December 2023, we received 510(k) clearance for our OneRF Ablation System for creation

of radiofrequency lesions in nervous tissue for functional neurosurgical procedures.

signals at the subsurface level of the brain (“Evo sEEG”);

(iii) its OneRF ablation system for creation of radiofrequency

lesions in nervous tissue for functional neurosurgical procedures (the “OneRF Ablation System”) and (iv) our OneRF TN ablation

system for use in procedures to create radiofrequency (RF) lesions for the treatment of pain, or for lesioning nerve tissue for functional

neurosurgical procedures (“OneRF TN Ablation System”, together with the Evo Cortical, Evo sEEG, and OneRF Ablation System,

the “Commercialized Products”).

The Company has a distribution agreement with Zimmer, Inc.

(“Zimmer”) providing

Zimmer with a license to commercialize and distribute the Evo Cortical, Evo sEEG, and OneRF Ablation System in the brain.

initiated a limited market release of its OneRF TN Ablation System in December 2025.

The Company’s other products and indications

are still under development.

The Company is based in Eden Prairie, Minnesota.

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

The Company has experienced minor price increases from our suppliers related to tariffs on imported goods, and may experience additional

price increases.

The Company’s operating results could be

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costs and has caused changes in fiscal and monetary policy, including increased interest rates.

Basis of Presentation

The accompanying financial statements have been

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

NeuroOne Medical Technologies Corporation

to Financial Statements

NOTE 2 – Going Concern

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The Company has incurred losses since inception, negative cash

flows from operations, and an accumulated deficit of $ 75.0 million as of September 30, 2024.

To date, the Company’s revenues have

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

debt and sale of equity securities.

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

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

flows from operations since inception, and an accumulated deficit of $ 78.6 million as of September 30, 2025.

To date, the Company’s

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

the issuance of debt and sale of equity securities which previously resulted in substantial doubt regarding the Company’s ability to continue

as a going concern.

As of September 30, 2025, the Company had $ 6.6 million in cash and cash equivalents.

The Company believes its current

available cash and cash equivalents 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 the Company’s operations

through September 2026.

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

These factors raise substantial doubt about the

Company’s ability to continue as a going concern.

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

the outcome of this condition.

If the Company is unable to raise additional funds, or the Company’s anticipated operating results

are not achieved, management believes planned expenditures may need to be reduced in order to extend the time period that existing resources

can fund the Company’s operations.

These factors raise substantial

doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might

result from the outcome of this condition.

If the Company is unable to raise additional funds, or the Company’s anticipated operating

results are not achieved, management believes planned expenditures may need to be reduced in order to extend the time period that existing

resources can fund the Company’s operations.

The Company intends to fund ongoing activities

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

through equity or debt financings.

through equity or debt financing.

If management is unable to obtain the necessary capital, it may have a material adverse effect on the

operations of the Company and the development of its technology, or the Company may have to cease operations altogether.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

NOTE 3 – Summary of Significant Accounting

Basis of Presentation

The accompanying financial statements have been

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

Reclassifications

Certain amounts presented in the prior year period

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

The financing proceeds and issuance costs attributed

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

period were reclassified into two separate line item categories.

Management’s Use of Estimates

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for which separate financial information is available and are evaluated regularly by the Company’s chief operating decision maker

in deciding how to allocate resources and assessing performance.

The Company’s chief operating decision maker is its Chief Executive

(“CODM”) in deciding how to allocate resources and assessing performance.

The Company’s CODM is its Chief Executive

The Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment.

which is the business of development and commercialization of products related to comprehensive neuromodulation cEEG and sEEG recording,

monitoring, ablation, and brain stimulation solutions.

Accordingly, the Company has a single reporting segment.

See “Note 14 – Segment Reporting”.

Cash and Cash Equivalents

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

Short-Term Investments

The Company has periodically invested its excess

Treasury securities and highly rated corporate securities.

The Company has held these investments to maturity.

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

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

There were no short-term investments

outstanding as of September 30, 2024 and 2023.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

Revenue Recognition

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agreement which has current and future revenue recognition implications.

In addition, the Company has product revenue in connection with

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

See “Note 7 –

Zimmer Amended and Restated Distribution Agreement and Other Product Revenue.

See “Note 7 – Zimmer Distribution Agreement and Other

Product Revenue.”

In determining the appropriate amount of revenue

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

NeuroOne Medical Technologies Corporation

to Financial Statements

A performance obligation is a promise in a contract

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

When the Company has consigned inventory at a customer,

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

or services is transferred to the Company’s customers.

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

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

At the inception of each customer contract, performance

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

Cost of Product Revenue

Cost of product revenue consists of the manufacturing

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

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

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

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

Collaborations Revenue

and materials costs incurred by the Company’s third-party contract manufacturers in connection with OneRF Ablation System (the “OneRF

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

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

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

as valuation adjustments for excess or obsolete inventory.

License Revenue

As part of the accounting for collaboration arrangements,

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the measure of performance and related revenue recognition.

NeuroOne Medical Technologies

Notes to Financial Statements

Milestone payments :

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If it is probable that a significant

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

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

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

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

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

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

For arrangements that include

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

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

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

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

based upon when the customer obtains control of each element.

NeuroOne Medical Technologies Corporation

to Financial Statements

For arrangements that include sales-based royalties,

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

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

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

Warrant Liability

The Company issued warrants in connection with

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

The Company accounts for these warrants as a liability at fair

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

Additionally, issuance costs associated

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

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

its 2024 Private Placement.

See “Note 9– Stockholders’ Equity”.

The Company accounts for these warrants as a liability

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

Additionally, issuance costs

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

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

when pricing protections remain in place.

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

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

Any future change in the fair value of the warrant liability is recognized in the statements

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

Fair Value of Financial Instruments

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Level 1 Inputs:

Unadjusted quoted prices in active markets

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

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

Level 2 Inputs:

Other than quoted prices included in Level

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

or liability.

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

Level 3 Inputs:

Unobservable inputs for the asset or liability

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

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

As of September 30, 2024 and 2023, the fair values

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

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

The fair value

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

term of the warrants and market interest rates.

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

September 30, 2024 and 2023.

NeuroOne Medical Technologies

Notes to Financial Statements

Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

As of September 30, 2025 and 2024, the fair values of cash, cash equivalents,

accounts receivable, inventory, prepaid expenses, deferred offering costs, accounts payable and accrued expenses and other liabilities

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

The fair value of the warrant liability

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

and market interest rates.

There were no transfers between fair value hierarchy levels during the years ended September 30, 2025

The fair value of financial instruments measured

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Total liabilities at fair value

There was not a warrant liability as of September

As of September 30, 2024

Warrant liability

Total liabilities at fair value

NeuroOne Medical Technologies Corporation

to Financial Statements

The following table provides a roll-forward of

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

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

30, 2025 and 2024.

Warrant liability

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Balance as of end of year

There were no financial instruments measured on

a non-recurring basis during the periods presented.

Intellectual Property

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The Company assesses the recoverability of long-lived

assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows.

If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the

fair value of the impaired asset.

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

the asset is considered to be impaired, the amount of impairment is measured as the difference between the carrying value and the fair

value of the impaired asset.

Accounts Receivable and Allowances for Credit

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

NeuroOne Medical Technologies

Notes to Financial Statements

Inventory is stated at the lower of cost (using

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demand of the products and spare parts.

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

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

The Strip/Grid Products, sEEG Products

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

No inventory valuation allowance was required during the periods presented.

The Company’s inventory is currently comprised of our Commercialized Product components,

work-in-process and finished goods.

The Commercialized Products are produced by a third-party contract manufacturer and our electrode

cable assembly components are obtained from outside suppliers.

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

Research and Development Costs

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

NeuroOne Medical Technologies

Notes to Financial Statements

Net Loss Per Share

Basic loss per share of common stock is computed

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

For the Company, basic loss per share of common

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

Diluted earnings or loss per share of common stock

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years ended September 30, 2025 and 2024.

NeuroOne Medical Technologies Corporation

to Financial Statements

The following potential common shares were not

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The guidance must be applied retrospectively to all prior periods presented.

The Company is currently evaluating the impact

of adoption of this guidance on its financial statements.

The Company adopted this guidance on October 1,

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

In December 2023, the FASB issued ASU 2023-09

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The Company is currently evaluating

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

In June 2016, the FASB issued Accounting Standards

Update 2016-13, Financial Instruments – Credit Losses .

The ASU sets forth a “current expected credit loss” (“CECL”)

model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical

experience, current conditions, and reasonable supportable forecasts.

This replaces the existing incurred loss model and is applicable

to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures.

The Company adopted the guidance on October 1, 2023.

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

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

NOTE 4 – Commitments and Contingencies

WARF License Agreement

License Agreement

The Company has entered into an exclusive start-up

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

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

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

Company License Agreement (the “WARF License”) with WARF on January 21, 2020, which amended and restated in full the prior

license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017,

March 30, 2019 and September 18, 2019.

film micro electrode technology.

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

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

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

The WARF License grants to the Company an exclusive

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the WARF License.

NeuroOne Medical Technologies

Notes to Financial Statements

WARF may terminate the WARF License on 30 days’

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30, 2025 and 2024, $ 150,000 in royalty fees were incurred related to the WARF License and were reflected as a component of cost of product

Mayo Agreement

NeuroOne Medical Technologies Corporation

to Financial Statements

The Company has an exclusive license and development

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

During the years ended September 30, 2024 and 2023, $ 6,861 and

$ 7,486 in royalty fees were incurred, respectively, and were reflected as a component of cost of product revenue.

During the year ended September 30, 2024, $ 6,861 in royalty fees

were incurred and were reflected as a component of cost of product revenue.

There were no royalty fees in connection with the Mayo Agreement

during the year ended September 30, 2025.

Facility Leases

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leases office space located at 7599 Anagram Drive, Eden Prairie, Minnesota (the “Premises”).

The Company took possession of

the Premises on November 1, 2019, with the term of the Lease ending June 30, 2028, as amended, unless terminated earlier (the “Lease

The Company took possession

of the Premises on November 1, 2019, with the term of the Lease ending June 30, 2028, as amended, unless terminated earlier (the “Lease

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

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

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

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

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

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

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

Los Gatos Lease

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The rent under the

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

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

On December 17, 2024, the Los Gatos Lease

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

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

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

During the years ended September 30, 2025 and

8 unchanged sentences

Operating leases

NeuroOne Medical Technologies

Notes to Financial Statements

NeuroOne Medical Technologies Corporation

to Financial Statements

Supplemental balance sheet information related

5 unchanged sentences

Weighted average discount rate 7.2 % 7.4 %

Maturity of the lease liability was as follows:

Maturity of the lease liabilities was as follows:

Calendar Year

2 unchanged sentences

Less imputed interest

Short term portion in accrued expenses and other liabilities

Short-term portion (included in other liabilities)

Long-term portion

Other Contingencies

In the ordinary course of business, from time

to time, the Company may be subject to a broad range of claims and legal proceedings that relate to contractual allegations, patent infringement

and other claims.

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

can be reasonably estimated.

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

Although it is

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

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

NOTE 5 – Supplemental Balance Sheet Information

4 unchanged sentences

Finished goods

The Company had finished goods on consignment

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

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

The Company had finished

goods on consignment in the amount of zero and $ 102,318 as of September 30, 2025 and 2024, respectively.

Excess and obsolete valuation

reserve adjustments reflected as a reduction of work-in-process inventory as of September 30, 2025 and 2024 were $ 10,000 and zero , respectively.

NeuroOne Medical Technologies Corporation

to Financial Statements

Intangible assets roll forward is as follows:

3 unchanged sentences

Net intangibles, September 30, 2025

NeuroOne Medical Technologies

Notes to Financial Statements

The Company anticipates amortization expense of

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

approximately $ 22,000 per year for fiscal years 2026 through 2027 based upon the two current license agreements.

Property and Equipment

8 unchanged sentences

for the years ended September 30, 2025 and 2024, respectively.

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

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

NOTE 6 - Accrued Expenses and Other Liabilities

4 unchanged sentences

Operating lease liability, short term

NOTE 7 - Zimmer Distribution Agreement and

Other Product Revenue

On July 20, 2020, the Company entered into

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

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

Additionally, the Company granted Zimmer the exclusive right and license to distribute certain sEEG Products developed by the

Company and together with the Strip/Grid Products and Electrode Cable Assembly Products, the “Products”.

The parties have

agreed to collaborate with respect to development activities under the Zimmer Distribution Agreement through a joint development committee

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

Under the terms of the Zimmer Distribution Agreement,

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

expenses related to the commercialization of the Products.

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

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

Except as otherwise provided in the Zimmer Distribution

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

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 Distribution Agreement) for such Product.

NeuroOne Medical Technologies

Notes to Financial Statements

Pursuant to the Zimmer Distribution Agreement,

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

in fiscal year 2020.

On August 2, 2022, the Company entered into a

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

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

In consideration of the mutual

covenants and agreements contained in the Zimmer Distribution Agreement, the fee and milestone payment provisions in the Zimmer Distribution

Agreement were replaced with the following below:

● $ 1.5 million for the sEEG Exclusivity Maintenance Fee;

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

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

originally identified.

In addition, in connection with the Zimmer Amendment,

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

The 2022 Zimmer Warrant is

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

The 2022 Zimmer Warrant has an exercise

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

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

Input assumptions used were as follows:

a risk-free interest rate of 2.9 %;

expected volatility of 53.5 %;

expected life of 5 years;

expected dividend yield of 0 %;

and the underlying

fair market of the common stock.

The 2022 Zimmer Warrant was classified in stockholders’ equity as the number of shares were

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

The Zimmer Distribution Agreement will expire

on the tenth anniversary of the date of the first commercial sale of the last Products to achieve a first commercial sale, unless terminated

earlier pursuant to its terms.

Either party may terminate the Zimmer Distribution Agreement (x) with written notice for the other party’s

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

In addition, Zimmer

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

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

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

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

The Zimmer Distribution Agreement and Zimmer Amendment

were accounted for under the provisions of ASC 606.

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

obligations under the Zimmer Distribution Agreement and Zimmer Amendment:

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

its intellectual property;

(2) completion of sEEG Product development;

(3) completion of Strip/Grid Product development;

(4) the provision

of sEEG exclusivity maintenance;

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

All performance obligations under

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

The remaining performance obligation in deferred revenue as of September 30, 2022 attributed to sEEG exclusivity maintenance

was completed in first quarter of fiscal year 2023.

The aggregate transaction price associated with

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

$ 3.5 million payment under the Zimmer Amendment, less the fair value 2022 Zimmer Warrant of $ 0.1 million.

The transaction price was allocated

between performance obligations based on their relative standalone selling prices.

The Company used a market based valuation approach

and an expected cost plus margin approach with regard to estimating the standalone selling price for the performance obligations.

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

the Zimmer Distribution Agreement and Zimmer Amendment.

Given the achievement of the milestones under the Zimmer Distribution Agreement

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

NeuroOne Medical Technologies

Notes to Financial Statements

A reconciliation of the closing balance of deferred

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

Deferred Revenue

Balance as of September 30, 2022

Revenue recognized

( 1,455,188 )

Balance as of September 30, 2023

Revenue recognized

Balance as of September 30, 2024

NOTE 7 – Zimmer Distribution Agreement

and Other Product Revenue

On October 25, 2024, the Company entered into

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

Zimmer the exclusive right and license to distribute its OneRF Ablation System for an upfront payment of $ 3.0 million, with eligibility

for an additional $ 1.0 million payment from Zimmer upon achievement of certain specified net sales milestones.

The Company and Zimmer previously entered into

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

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

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

dated August 2, 2022 (collectively, the “EDDA”).

The EDDAs executed prior to the Amendment granted Zimmer exclusive global

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

Additionally, the Company granted Zimmer the exclusive

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

Cable Assembly Products, the “Products”.

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

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

and the Company.

NeuroOne Medical Technologies Corporation

to Financial Statements

Under the Amendment, Zimmer paid the Company $ 3.0

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

of its OneRF™ product.

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

a one-time sales volume threshold, but does not anticipate achieving this milestone.

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

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

Upon the expiration of the Term, it may

be renewed upon the mutual written consent of the parties.

The Amended and Restated Exclusive Development and Distribution Agreement may

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

In addition, the license rights

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

and (ii) until October 31, 2034 for the OneRF™ Product System.

License Revenue

The Amendment was accounted for under the provisions

of ASC 606 as a separate contract from the prior EDDAs.

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

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

The distribution rights granted

to Zimmer, inclusive of the access to the underlying intellectual property for future production of the OneRF Products if required, was

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

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

The transaction price associated with the Amendment

was $ 3.0 million, which was comprised solely of the OneRF Exclusivity Fee, as defined in the Amendment, and was allocated totally

to the RF Distribution License performance obligation.

Sales Volume Milestone and Payment

The sales volume milestone associated with the

Amendment was determined by sales or usage-based thresholds.

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

constraint and will be accounted for as constrained variable consideration.

The Company has applied the sales volume constraint to

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

Recognition of License Revenue

The Company determined that the RF Distribution

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

the OneRF Products.

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

delivered to Zimmer which occurred in October 2024.

Revenue recognized under the Amendment during the year ended September 30, 2025

was $ 3.0 million.

Product Revenue

Product revenue related to the Company’s

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

Product revenue recognized during the years

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

during the year ended September 30, 2024.

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

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

Product revenue recognized during the year ended

September 30, 2025 was $ 9.1 million and was comprised primarily of OneRF Ablation System revenue.

The OneRF Ablation System was subject

to the Amendment upon its execution in October 2024.

During the year ended September 30, 2024, product revenue related to

the Company’s Evo Cortical, Evo sEEG, and OneRF Ablation Systems and amounted to $ 3.5 million of which $ 0.3 million was comprised

of OneRF Products revenue.

The OneRF Ablation System was not covered by the Zimmer Distribution Agreement during the year ended September

NeuroOne Medical Technologies Corporation

to Financial Statements

NOTE 8 - Stock-Based Compensation

During the years ended September 30, 2025 and

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

2024, stock-based compensation expense related to the stock options and restricted stock units was included in selling, general and administrative

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

2 unchanged sentences

Total stock-based compensation expense

The Company’s 2017 Equity Incentive Plan

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

Effective October 1, 2021, no shares were available for issuance under the 2016 Equity Incentive Plan.

Inducement Plan

In addition to the Company’s 2017 Equity

Incentive Plan (the “2017 Plan”), the Company adopted the NeuroOne Medical Technologies Corporation 2021 Inducement Plan (the

“Inducement Plan”) on October 4, 2021, pursuant to which the Company reserved 420,350 shares of its common stock to be used

exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material

to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

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

9, 2023, the Company’s Board of Directors adopted the First Amendment to the Company’s Inducement Plan, increasing the aggregate

number of shares of common stock that may be issued pursuant to equity incentive awards under the Inducement Plan by 150,000 shares for

a total of 570,350 shares of common stock that may be issued.

Evergreen provision

Under the 2017 Plan, the shares reserved automatically

increase on January 1st of each year, for a period of not more than ten years from the date the 2017 Plan is approved by the stockholders

of the Company, commencing on January 1, 2019 and ending on (and including) January 1, 2027, to an amount equal to 13 % of the fully-diluted

shares outstanding as of December 31st of the preceding calendar year.

Notwithstanding the foregoing, the Board of Directors may act prior

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

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

“Fully Diluted Shares” as of a date means an amount equal to the number of shares of common stock (i) outstanding

and (ii) issuable upon exercise, conversion or settlement of outstanding awards under the 2017 Plan and any other outstanding options,

warrants or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable for shares

of common stock, in each case as of the close of business of the Company on December 31 of the preceding calendar year.

2025 Equity Incentive Plan

On January 10, 2025,

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

Medical Technologies Corporation

the Board of Directors of the Company adopted the NeuroOne Medical Technologies Corporation 2025 Equity Incentive Plan (the “2025

On February 14, 2025, at the 2025 annual meeting of stockholders, the stockholders of the Company approved the 2025 Plan.

The 2025 Plan is the

successor to and continuation of the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) and to the Company’s

2016 Equity Incentive Plan (together, the “Prior Plans”).

As of the Effective Date, (i) no additional awards may be granted

under the Prior Plans;

(ii) any Returning Shares will become available for issuance pursuant to Awards granted under the 2025 Plan;

(iii) all outstanding awards granted under the Prior Plans will remain subject to the terms of the Prior Plans (except to the extent such

outstanding awards result in returning shares that become available for issuance pursuant to awards granted under the 2025 Plan).

Initially, the maximum

number of shares of the Company’s common stock, that may be issued under the 2025 Plan may not exceed (1) 3,000,000 and (2) any

shares subject to outstanding stock awards under the 2017 Plan that are forfeited or otherwise returned to the share reserve.

Inducement Plan

In October 2021, the Company adopted the NeuroOne

Medical Technologies Corporation 2021 Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 420,350 shares

of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company,

as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the

Nasdaq Listing Rules.

The Inducement Plan was approved by the Company’s Board of Directors without stockholder approval in accordance

with such a rule.

On November 9, 2023, the Company’s Board of Directors adopted the First Amendment to the Company’s Inducement

Plan, increasing the aggregate number of shares of common stock that may be issued pursuant to equity incentive awards under the Inducement

Plan by 150,000 shares, and on May 20, 2025, the Board adopted the Second Amendment to the Company’s Inducement Plan,

increasing the aggregate number of shares of common stock that may be issued pursuant to equity incentive awards under the Inducement

Plan by an additional 575,000 shares.

2017 Plan and Evergreen Provision

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

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

However, upon the adoption of the 2025 Plan, there

will be no further issuance of grants under the 2017 Plan and any forfeitures of grants issued under the 2017 Plan will be added to the

amount available for future issuance under the 2025 Plan.

Grants issued under the 2017 Plan will continue to be governed under the terms

of the 2017 Plan.

NeuroOne Medical Technologies Corporation

to Financial Statements

Stock Options

During the years ended September 30, 2025 and

1 unchanged sentence

grant date fair value of $ 0.50 and $ 1.08 per share, respectively.

The options granted have vesting periods ranging from being immediate

to four years .

The options granted have vesting periods ranging from one year to four

All options expire ten years from the date of grant.

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

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

The following table summarizes the Company’s stock option

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

The total expense for the years ended September 30, 2025 and 2024 related

to the stock options was $ 779,428 and $ 808,057 , respectively.

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

for the years ended September 30, 2025 and 2024:

Options Weighted

34 unchanged sentences

value of $ 1.20 and $ 1.03 per unit, respectively.

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

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

The RSUs granted in fiscal 2023

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

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

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

During the years ended

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

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

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

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

The RSUs granted in fiscal year 2025 vest over a one-year period in equal annual installments

on a monthly basis, subject to the recipient’s continued service on such dates.

The RSUs granted to employees in fiscal year 2024

vest over a four-year period in equal annual installments on the anniversary date of the grant, subject to the recipient’s continued

service on such dates.

During the years ended September 30, 2025 and 2024, 397,900 and 270,333 RSUs vested, respectively.

The total expense

for the years ended September 30, 2025 and 2024 related to the RSU’s was $ 485,180 and $ 536,419 , respectively.

There were 2,500 and

zero RSU forfeitures during the years ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, 1,761,970 shares were

5 unchanged sentences

NOTE 9 – Stockholders’ Equity

2025 Financing

4, 2025, the Company entered into an underwriting agreement with Ladenburg Thalmann & Co.

as underwriter ( “Ladenburg”),

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, the Company granted Ladenburg 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

overallotment was exercised in full.

Issuance costs in connection with the April 2025 Financing amounted to $ 960,717 which included a

7 % commission to Ladenburg and legal and other expenses in the amount of $ 316,717 .

Net proceeds to the Company were $ 8,239,283 .

NeuroOne Medical Technologies Corporation

to Financial Statements

At-The-Market Offering

On December 21, 2022, the Company entered into

a Capital on Demand TM Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“JonesTrading”)

that created an at-the-market offering program (“ATM Program”) under which the Company could offer and sell common stock having

an aggregate offering price of up to $ 14.5 million.

JonesTrading is entitled to a commission at a fixed commission rate of up to

3 % of the gross proceeds.

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

Agreement, such that the Company was offering up to an aggregate of $ 2.6 million of its common stock for sale under the Sales Agreement,

including the shares of common stock previously sold.

Subsequently on December 1, 2023, however, the Company increased the amount of common

stock that could be sold pursuant to the Sales Agreement, such that the Company was offering up to an aggregate of $ 4.8 million of its

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

On January 5, 2024, the Company

further increased the amount of common stock that can be sold pursuant to the Sales Agreement, such that the Company was offering up to

an aggregate of $ 9.3 million of its common stock for sale under the Sales Agreement, including the shares of common stock previously sold.

On August 16, 2024, the Company increased the amount of common stock that can be sold pursuant to the Sales Agreement by $ 3.0 million.

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

15, 2025, the Company increased the amount of common stock that can be sold pursuant to the Sales Agreement to $ 6,750,000 .

During the years ended September 30, 2025 and

2024, 355,899 and 3,748,913 shares of common stock were issued, respectively, under the ATM Program for an aggregate offering price of

$ 414,037 and $ 5,033,906 , respectively.

Issuance costs incurred under the ATM Program during the years ended September 30, 2025 and 2024

were $ 95,929 and $ 277,903 , respectively.

Lastly, during the year ended September 30, 2025, the Company incurred legal costs of $ 9,325

that were expensed as financing costs.

The total aggregate offering price and common

stock issued since inception of the ATM Program through September 30, 2025 was $ 8,000,600 and 5,544,489 shares, respectively.

issuance costs incurred under the ATM Program through September 30, 2025 was $ 608,558 .

August 2024 Private Placement

On August 1, 2024, the

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

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

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

On August 1, 2024, the Company entered into a securities

purchase agreement with certain accredited investors, pursuant to which the Company, in a private placement (the “2024 Private

Placement”), agreed to issue and sell an aggregate of (i) 2,944,446 shares of the Company’s common stock and (ii) warrants

to purchase an aggregate of 2,208,338 shares of common stock (the “PIPE Warrants”) at a purchase price of $ 0.90 per unit,

3 unchanged sentences

The 2024 Private Placement closed on August 2, 2024.

The PIPE Warrants are

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

third anniversary of the date of issuance.

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

Company’s Board of Directors.

The PIPE Warrants are exercisable beginning on

the date of issuance and had an initial exercise price of $ 1.19 per share, subject to adjustment.

In April 2025, the exercise price was

reset to $ 0.465 upon the close of the April 2025 Financing for all of the PIPE Warrants, except for the PIPE Warrants to purchase 20,834

shares of common stock issued to a director on the Company’s Board of Directors for which the exercise price was reset to $ 0.876

The PIPE Warrants will expire on the third anniversary of the date of issuance.

The PIPE Warrants were

3 unchanged sentences

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

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

September 30, 2024:

Input assumptions used were as follows on September 30, 2025

risk-free interest rate 3.55 % and 3.53 %, respectively;

1 unchanged sentence

respectively;

life of 3 years and 2.84 years, respectively;

expected life

of 1.84 years and 2.84 years, respectively;

and expected dividend yield zero percent for both dates.

The underlying stock price used

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

The underlying stock price used was

the market price as quoted on Nasdaq as of September 30, 2025 and 2024, respectively.

The aggregate fair value of the PIPE Warrants of

1 unchanged sentence

The Company recorded the fair

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

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

NeuroOne Medical Technologies

Notes to Financial Statements

At-The-Market Offering

On December 21, 2022, the Company entered into

a Capital on Demand TM Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“JonesTrading”)

that created an at-the-market offering program (“ATM”) under which the Company may offer and sell common stock having an aggregate

offering price of up to $ 14.5 million.

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

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

the Company was offering up to an aggregate of $ 2.6 million of its common stock for sale under the Sales Agreement, including the shares

of common stock previously sold.

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

be sold pursuant to the Sales Agreement, such that the Company was offering up to an aggregate of $ 4.8 million of its common stock for

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

On January 5, 2024, the Company further increased

the amount of common stock that can be sold pursuant to the Sales Agreement, such that the Company was offering up to an aggregate of

$ 9.3 million of its common stock for sale under the Sales Agreement, including the shares of common stock previously sold.

On August 16,

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

During the years ended September 30, 2024 and

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

and $ 2,552,656 , respectively.

Issuance costs incurred under the ATM during the years ended

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

The total aggregate offering price and common

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

Cumulative issuance

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

as of September 30, 2024.

July 2023 Public Offering

On July 24, 2023, the Company 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 the Company’s 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, the Company 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 the Company completed the sale and issuance of an aggregate of 6,037,500 shares

of its common stock, including the exercise in full of the Overallotment Option.

The net proceeds to the Company from the July

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

The Company used the net proceeds from this offering to:

(i) support the commercial launch of the EVO sEEG electrode with Zimmer

Biomet, (ii) support the FDA submission for the OneRF ablation system and (iii) complete the design of a novel drug delivery electrode,

among other general corporate purposes.

NeuroOne Medical Technologies

Notes to Financial Statements

value change of the PIPE Warrants in the amount of a $ 784,670 benefit and an expense of $ 327,092 to the fair value change in warrant liability

line item on the accompanying statements of operations for the years ended September 30, 2025 and 2024, respectively.

NeuroOne Medical Technologies Corporation

to Financial Statements

Warrant Activity and Summary

2 unchanged sentences

Warrants Exercise

Warrant Weighted

Average Exercise

Price Weighted

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

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

Warrant Weighted Average Exercise

Price Weighted Average Term (years)

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

2 unchanged sentences

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

Exercised ( 150,000 ) $ 0.465 $ 0.465 —

Outstanding at September 30, 2025 6,895,875 $ 0.465 - 5.61 $ 3.65 0.96

Outstanding and exercisable at September 30, 2025 6,895,875 $ 0.465 - 5.61 $ 3.65 0.96

10 unchanged sentences

$ 5.25 4,166,682 0.29 4,166,682

$ 5.61 220,855 2.75 220,855

Total 6,895,875 6,895,875

As provided in the PIPE Warrants agreement, the

exercise price of the PIPE Warrants was adjusted downward from $ 1.19 per share as of September 30, 2024 ultimately to $ 0.465 per share

for most of the PIPE Warrants in April 2025 attributed to the April 2025 Financing.

The exercise price of the PIPE Warrants issued to

a director of the Company’s Board of Directors;

however, was reset to $ 0.876 per given a higher floor price provision for that individual.

NOTE 10 - Debt Financing

2 unchanged sentences

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

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

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

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

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

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

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

On November 7, 2024,

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

The Loans would have

matured on February 2, 2026, if issued.

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

monthly in arrears and at the maturity date.

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

At closing of the Debt

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

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

The Closing Date Debt Facility Warrant

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

At the time of any borrowing

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

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

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

NeuroOne Medical Technologies

Notes to Financial Statements

The Company was permitted

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

to the Lender.

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

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

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

a “ Monetization Event ”).

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

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

The Debt Facility Agreement

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

Issuance costs incurred

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

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

as a deferred cost on the accompanying balance sheets.

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

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

the accompanying statements of operations.

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

The Company was permitted to borrow loans under the Debt Facility from time to time, 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 or Change of Control

(as each defined in the Debt Facility Agreement), or (iii) at the Lender’s option, upon the occurrence and during the continuance

of an event of default under the Debt Facility Agreement.

On November 7, 2024, the Company terminated the Debt Facility Agreement, and

no amounts were drawn under the Debt Facility Agreement.

The Company paid a termination fee of $ 125,000 to the Lender and incurred additional

legal fees of $ 7,091 related to the termination.

The Company also incurred non-termination Debt Facility costs of $ 192,647 and $ 202,656

during the year ended September 30, 2025 and 2024, respectively.

NeuroOne Medical Technologies Corporation

to Financial Statements

At closing of the Debt Facility, the Company issued

to the Lender a warrant exercisable for five years for 100,000 shares of common stock at an exercise price of $ 0.66 per share, subject

to adjustment (the “Closing Date Debt Facility Warrant”).

The Closing Date Debt Facility Warrant was accounted for and classified

as equity on the accompanying balance sheets.

NOTE 11 - Concentrations

For the year ended September 30, 2025, one customer

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

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

accounted for 97 % of the Company’s product revenue and 4 customers accounted for the remaining 3 % of product revenue.

ended September 30, 2024, one customer accounted for 90 % of the Company’s product revenue and three customers accounted for the

remaining 10 % of product revenue.

Supplier concentration

One contract manufacturer produces all of the

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

OneRF Ablation system.

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

Company’s OneRF Ablation system.

NOTE 12 - Income Taxes

27 unchanged sentences

Net deferred tax assets

NeuroOne Medical Technologies

Notes to Financial Statements

NeuroOne Medical Technologies Corporation

to Financial Statements

As of September 30, 2025 and 2024, the Company

40 unchanged sentences

Unrecognized tax positions, beginning of year

Gross increase, current period tax positions

Gross increase, current year tax positions

Unrecognized tax positions, end of year

If recognized, none of the unrecognized tax positions

would impact the Company’s income tax benefit or effective tax rate as long as the Company’s net deferred tax assets remain subject to

a full valuation allowance.

The Company does not expect any significant increases or decreases to the Company’s unrecognized tax positions

within the next 12 months.

In accordance with this guidance, the Company

has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will

be classified as a component of interest expense and any related penalties will be classified in operating expenses in the accompanying

statements of operations.

would impact the Company’s income tax benefit or effective tax rate as long as the Company’s net deferred tax assets remain

subject to a full valuation allowance.

The Company does not expect any significant increases or decreases to the Company’s unrecognized

tax positions within the next 12 months.

In accordance with ASC Topic 740, Income Taxes

guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment

of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses

in the accompanying statements of operations.

The Company has tax filing obligations in the

3 unchanged sentences

and state taxing authorities.

NeuroOne Medical Technologies

NeuroOne Medical Technologies Corporation

Notes to Financial Statements

1 unchanged sentence

The Company has a 401(k) defined contribution

plan (the “401K Plan”) for all employees over age 21.

plan (the “401K Plan”) for all employees age 21 and older.

Employees can defer up to 100 % of their compensation through payroll

10 unchanged sentences

date of hire.

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

NOTE 14 - Subsequent Events

On October 25, 2024, we entered into the Zimmer

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

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

upon achievement of certain specified net sales milestones.

On November 7, 2024, the Company terminated the

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

to the Lender.

Medical Technologies Corporation

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

The Company made contributions in the amount of $ 31,105 and zero to the 401K Plan during the years ended September 30, 2025

and 2024, respectively.

NOTE 14 – Segment Reporting

Operating segments

are defined as components of an enterprise about which separate discrete information is available for evaluation by the CODM in deciding

how to allocate resources in assessing performance.

The Company has one reportable segment, which is the business of development

and commercialization of products related to comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and stimulation

solutions (“Neuromodulation Products”).

NeuroOne is a medical technology company focused

on developing and commercializing Neuromodulation Products .

The Company recognizes the Neuromodulation

Products as one reporting segment.

The accounting policies of the Neuromodulation

Products segment are the same as those described in the summary of significant accounting policies.

CODM assesses performance for the N euromodulation Products segment based on net loss, which is reported

on the statement of operations as net loss.

The measure of segment assets is reported on the balance sheet as total assets.

does not have any intra-entity sales or transfers.

The CODM uses cash forecast models in

deciding how to invest into the Neuromodulation Products segment.

Such cash forecast models are reviewed

to assess the entity-wide operating results and performance.

Net loss is used to monitor budget versus actual results.

Monitoring budgeted

versus actual results is used in assessing performance of the segment and in establishing management’s compensation.

The statements of operations below are inclusive of the significant

expense categories regularly reviewed by the CODM for the years ended September 30, 2025 and 2024:

September 30,

Product revenue

Cost of product revenue

Product gross profit

Collaborations revenue

Operating expenses:

General and administrative

Quality assurance

Total operating expenses

Loss from operations

( 4,226,473 )

( 11,887,209 )

Fair value change in warrant liability

Financing costs

Other income, net

Loss before income taxes

( 3,605,374 )

( 12,318,110 )

Provision for income taxes

$ ( 3,605,374 )

$ ( 12,318,110 )

NeuroOne Medical Technologies

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data