What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-02-17 compared with 2025-08-14 · 477 added, 518 removed, 39 unchanged (96% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Report contains forward-looking statements that involve substantial risks and uncertainties.

In some cases, you can identify forward-looking

statements by the words “may,” “might,” “will,” “could,” “would,” “should,”

“expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,”

“estimate,” “predict,” “project,” “potential,” “target,” “seek,”

“contemplate,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology

intended to identify statements about the future.

These statements involve known and unknown risks, uncertainties and other factors that

may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed

or implied by these forward-looking statements.

Although we believe that we have a reasonable basis for each forward-looking statement

contained in this Report, we caution you that these statements are based on a combination of facts and factors currently known by us

and our expectations of the future, about which we cannot be certain.

Management’s Discussion and Analysis of Financial

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, 2025.

Forward-Looking Statements

This Report contains forward-looking statements

that involve substantial risks and uncertainties.

In some cases, you can identify forward-looking statements by the words “may,”

“might,” “will,” “could,” “would,” “should,” “expect,” “intend,”

“plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,”

“project,” “potential,” “target,” “seek,” “contemplate,” “continue”

and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future.

These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity,

performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

Although we believe that we have a reasonable basis for each forward-looking statement contained in this Report, we caution you that these

statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot

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;

future commercialization, marketing and manufacturing capabilities and strategy;

ability to comply with applicable regulatory requirements;

ability to maintain our intellectual property position;

NeuroOne Medical Technologies Corporation

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

including technology under development;

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

estimates regarding our future expenses and needs for additional financing.

Forward-looking

statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry

in which we operate, and management’s beliefs and assumptions are not guarantees of future performance or development and involve

known and unknown risks, uncertainties and other factors that are in some cases beyond our control.

You should refer to the “Risk

Factors” section of our Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ

materially from those expressed or implied by our forward-looking statements.

As a result of these factors, we cannot assure you that

the forward-looking statements in this Report will prove to be accurate.

Furthermore, if our forward-looking statements prove to be inaccurate,

the inaccuracy may be material.

In light of the significant uncertainties in these forward-looking statements, you should not regard

these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified

time frame, or at all.

forward-looking statements speak only as of the date of this Report.

Except as required by law, we assume no obligation to update or

revise these forward-looking statements for any reason, even if new information becomes available in the future.

You should, however,

review the factors and risks and other information we describe in the reports we will file from time to time with the Securities and

Exchange Commission (the “SEC”) after the date of this Report.

are a medical technology company focused on the development and commercialization of thin film electrode technology for continuous electroencephalogram

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

and ablation solutions for patients suffering from epilepsy, Parkinson’s disease, dystonia, essential tremors, chronic pain due

to failed back surgeries and other related neurological disorders.

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

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

Additionally, we are investigating

the potential applications of our technology associated with artificial intelligence.

have received 510(k) clearance for three of our devices from the FDA, including:

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;

NeuroOne Medical Technologies

our future commercialization, marketing and manufacturing capabilities and strategy;

our ability to comply with applicable regulatory requirements;

our ability to maintain our intellectual property position;

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

current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s

beliefs and assumptions are not guarantees of future performance or development and involve known and unknown risks, uncertainties and

other factors that are in some cases beyond our control.

You should refer to the “Risk Factors” section of our Annual Report

on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied

by our forward-looking statements.

As a result of these factors, we cannot assure you that the forward-looking statements in this Report

will prove to be accurate.

Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material.

of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty

by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.

These forward-looking statements speak only as

of the date of this Report.

Except as required by law, we assume no obligation to update or revise these forward-looking statements for

any reason, even if new information becomes available in the future.

You should, however, review the factors and risks and other information

we describe in the reports we will file from time to time with the Securities and Exchange Commission (the “SEC”) after the

date of this Report.

We are a medical technology company focused on

(i) diagnostic, ablation and deep brain stimulation technology for brain related conditions such as epilepsy and Parkinson’s disease;

(ii) ablation and stimulation for pain management throughout the body;

and (iii) drug delivery including diagnostic and stimulation capabilities.

We are developing and commercializing thin film

electrode technology for continuous electroencephalogram (“cEEG”) and stereoelectrocencephalography (“sEEG”),

spinal cord stimulation, brain stimulation, drug delivery and ablation solutions for patients suffering from epilepsy, trigeminal neuralgia,

Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other pain-related neurological

The Company 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.

We have received 510(k) clearance for four of

our devices from the Food and Drug Administration (“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.

have incurred mostly losses since inception.

As of June 30, 2025, we had an accumulated deficit of $77.0 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.

to FDA clearance of certain of our products, our main sources of cash, cash equivalents and short-term investments were proceeds from

the issuances of notes, common stock, warrants and unsecured loans.

See “ Liquidity and Capital Resources—Capital Resources ”

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 sales.

NeuroOne Medical Technologies Corporation

Submission for Trigeminal Facial Pain

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

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

as 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.

Amended and Restated Distribution Agreement

October 25, 2024, we entered into the Zimmer Amended and Restated Distribution Agreement (the “Amendment”) with Zimmer, Inc.

(“Zimmer”) pursuant to which we granted Zimmer the exclusive right and license to distribute our OneRF Ablation System for

an upfront payment of $3.0 million, with eligibility for an additional $1.0 million payment from Zimmer upon achievement of certain specified

net sales milestones.

previously entered into an Exclusive Development and Distribution Agreement dated July 20, 2020 with Zimmer, related to the sEEG and

Strip/Grid Product Systems, which was subsequently amended pursuant to the terms and conditions of a letter agreement dated January 6,

2021, a Second Amendment to Exclusive Development and Distribution Agreement dated June 28, 2022, and a Third Amendment to Exclusive

Development and Distribution Agreement dated August 2, 2022 (collectively, the “EDDA”).The EDDAs executed prior to the Amendment

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

Additionally,

we granted Zimmer the exclusive right and license to distribute certain sEEG Products developed by the Company and together with the

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

In addition, under the prior EDDAs, we agreed

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

of Zimmer and the Company.

the Amendment, Zimmer paid us $3.0 million for an exclusive RF Distribution License (the “RF Distribution License” and “License”)

for commercialization of its OneRF™ product.

In addition, we are eligible to receive a future milestone payment of $1.0 million

upon reaching a one-time sales volume threshold.

revised term under the Amendment (the “Term”) began on the Effective Date and will remain in effect until October 31, 2034.

Upon the expiration of the Term, it may be renewed upon the mutual written of the Parties.

The Amended and Restated Exclusive Development

and Distribution Agreement may be terminated before the expiration of the Term only by the Parties in accordance with certain terms under

the Amendment.

In addition, the license rights granted to Zimmer under this Amendment shall be exclusive (i) from the Original Effective

Date until September 30, 2032 for the sEEG Products and Strip/Grid Products (the “sEEG and Strip/Grid Product Term”);

(ii) from the Effective Date until October 31, 2034 for the OneRF™ Product System (the “RF Term”).

Economic Conditions

worldwide economic conditions remain uncertain, particularly due to the conflicts between Russia and Ukraine and in the Middle East,

disruptions in the banking system and financial markets, and increased inflation.

The general economic and capital market conditions

both in the U.S.

and worldwide, have been volatile in the past and at times have adversely affected our access to capital and increased

the cost of capital.

The capital and credit markets may not be available to support future capital raising activity on favorable terms

If economic conditions continue 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

operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors.

in economic conditions, supply chain constraints, logistics challenges, labor shortages, increased inflation, the conflicts in Ukraine

and the Middle East, disruptions in the banking system and financial markets, and steps taken by governments and central banks, have

led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased

interest rates.

product revenue was derived from the sale of our Strip/Grid Products, the sEEG Products and the Electrode Cable Assembly Products based

on Evo cortical electrode technology and the OneRF Products, which are products based on our OneRF Ablation System.

We anticipate that

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

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.

gross profit represents our product revenue less our cost of product revenue.

Our cost of product revenue consists of the manufacturing

and materials costs incurred by our third-party contract manufacturers in connection with our Strip/Grid Products, sEEG Products, OneRF

Products and outside supplier materials costs of producing the Electrode Cable Assembly Products.

In addition, the cost of product revenue

includes royalty fees incurred in connection with our license agreements as well as valuation adjustments for excess or obsolete inventory.

Company determined that the RF Distribution License granted under the Zimmer Amended and Restated Distribution Agreement represented

functional intellectual property given Zimmer’s access to the underlying intellectual property associated with the OneRF Product.

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

which occurred in October 2024.

Revenue recognized under the Amendment during the nine months ending June 30, 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.

General and Administrative

general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in

functions not directly associated with research and development activities.

Other significant costs include legal and litigation costs

relating to corporate matters, intellectual property costs, professional fees for consultants assisting with financial and administrative

matters, and sales and marketing in connection with the commercial sale of cEEG strip/grid, sEEG depth electrode, OneRF ablation system

and electrode cable assembly products.

We anticipate that our selling, general and administrative expenses will increase in the future

to support our continued research and development activities, further commercialization of our cortical strip and grid technology, ablation

system and our depth electrode technology, and the increased costs of operating as a public company.

These increases will include increased

costs related to the hiring of additional personnel and fees for legal and professional services, as well as other public company-related

NeuroOne Medical Technologies Corporation

and Development

and development expenses consist of expenses incurred in performing research and development activities in developing our technology.

Research and development expenses include compensation and benefits for research and development employees including stock-based compensation,

overhead expenses, 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.

Value Change in Warrant Liability

net change in the fair value line item is attributed to the warrant liability while outstanding.

costs consists of the amortization of the deferred issuance costs and other lending and issuance costs in connection with the debt facility

and at-the market offering facility (both described below).

income primarily consists of interest income related to our cash and cash equivalents,

of Operations

of the Three Months Ended June 30, 2025 and 2024

following table sets forth the results of operations for the three months ended June 30, 2025 and 2024, respectively.

Three Months Ended

monitoring, and stimulating brain tissue for up to 30 days (“Evo Cortical”), (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 (“Evo sEEG”), (iii) our OneRF ablation system for creation of radiofrequency

lesions in nervous tissue for functional neurosurgical procedures (“OneRF Ablation System”), (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”).

We have 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.

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

The Company’s other products and indications are still

under development.

NeuroOne Medical Technologies

We have largely incurred losses since inception.

As of December 31, 2025, we had accumulated deficit of $80.0 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.

Prior to FDA clearance of certain of our products,

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

and unsecured loans.

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

While we have begun

to generate revenue from the sale of our Evo Cortical, Evo sEEG, OneRF Ablation System, and OneRF TN Ablation 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 sales.

We may be unable to raise

additional funds when needed on favorable terms or at all.

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

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

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

See “Liquidity and Capital Resources—Liquidity

Outlook” below.

Recent Developments

Corporate Updates

Trigeminal Limited Market Release

We initiated a limited market release of the OneRF

TN Ablation System in December 2025.

Nasdaq Minimum Bid Price Notification

On May 6, 2025, we received a letter from the

Listing Qualifications Department of Nasdaq Stock Market (“Nasdaq”) notifying that because the closing bid price of our common

stock was below $1.00 per share for the prior 30 consecutive business days, we are not in compliance with the minimum bid price requirement

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

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until November 3, 2025, to regain compliance

with the Minimum Bid Price Requirement.

On November 4, 2025, we received a letter from

Nasdaq notifying us that we have been granted a 180-day extension, until May 4, 2026, to regain compliance with the Minimum Bid Price

We will continue to monitor the closing bid price of our common stock and seek to regain compliance with the Minimum Bid

Price Requirement within the extension period.

If we do not regain compliance with the Minimum Bid Price Requirement within the extension

period, Nasdaq will provide written notification to us that our common stock will be subject to delisting, at which time we may appeal

Nasdaq’s delisting determination to a Nasdaq Hearing Panel.

There can be no assurance that, if we do need to appeal a Nasdaq delisting

determination to the Nasdaq Hearings Panel, that such appeal would be successful.

Global Economic Conditions

Generally, worldwide economic conditions remain

uncertain, particularly due to the conflicts between Russia and Ukraine and in the Middle East, disruptions in the banking system and

financial markets, and increased inflation.

The general economic and capital market conditions both in the U.S.

and worldwide, have been

volatile in the past and at times have adversely affected our access to capital and increased the cost of capital.

The capital and credit

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

If economic conditions continue

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

We have experienced

minor price increases from our suppliers related to tariffs on imported goods, and may experience additional price increases.

NeuroOne Medical Technologies

Our operating results could be materially impacted

by changes in the overall macroeconomic environment and other economic factors.

Changes in economic conditions, supply chain constraints,

logistics challenges, labor shortages, increased inflation, the conflicts in Ukraine and the Middle East, disruptions in the banking system

and financial markets, and steps taken by governments and central banks, have led to higher inflation, which has led to an increase in

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

Financial Overview

Product Revenue

Cost of product revenue

Our product revenue was derived from the sale

of our Evo Cortical, Evo sEEG, and OneRF Ablation System, which have each received FDA 510(k) clearance.

Product Gross Profit

Operating expenses:

Product gross profit represents our product revenue

less our cost of product revenue.

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

contract manufacturers in connection with our Evo Cortical, Evo sEEG, and OneRF Ablation Systems, and outside supplier costs of producing

our electrode cable assembly products.

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

license agreements as well as valuation adjustments for excess or obsolete inventory.

License Revenue

The Company determined that the RF Distribution

License granted under the Zimmer Amended and Restated Distribution Agreement represented functional intellectual property given Zimmer’s

access to the underlying intellectual property associated with the OneRF Ablation System.

As such, the revenue related to the license

was recognized at the point in time in which the license/know-how was delivered to Zimmer which occurred in October 2024.

recognized under the Amendment during the three months ended year ended 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 Zimmer Amended and Restated Distribution Agreement, see “—Liquidity and Capital Resources—Liquidity

Outlook” below and see “Note 7 — Zimmer Distribution Agreement and Other Product Revenue” to our condensed financial

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

Selling, General and Administrative

Selling, general and administrative expenses consist

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

and development activities.

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

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

the commercial sale of our Evo Cortical, Evo sEEG, and OneRF Ablation Systems.

We anticipate that our selling, general and administrative

expenses will increase in the future to support our continued research and development activities, further commercialization of our technology,

and the increased costs of operating as a public company.

Research and Development

Total operating expenses

Loss from operations

Research and development expenses consist of expenses

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

Research and development expenses include compensation

and benefits for research and development employees including stock-based compensation, overhead expenses, 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.

NeuroOne Medical Technologies

Fair Value Change in Warrant Liability

The net change in the fair value line item is

attributed to the warrant liability while outstanding.

Financing Costs

Loss before income taxes

Provision for income taxes

$ (1,500,868 )

$ (2,767,525 )

NeuroOne Medical Technologies Corporation

Revenue and Product Gross Profit

revenue was $1.7 million during the three months ended June 30, 2025 with a gross profit and gross profit percentage of $0.9 million

and 53.9%, respectively.

Product revenue was $0.8 million during the three months ended June 30, 2024 with a gross margin and gross profit

percentage of $0.3 million and 34.1%, respectively.

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 largely

of OneRF Products during the three months ended June 30, 2025 while revenue consisted of Strip/Grid Products, sEEG Products, Electrode

Cable Assembly Products, and OneRF Product sales during the comparable prior year period.

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 in connection with our license agreements during each of the

three months ended June 30, 2025 and 2024.

General and Administrative Expenses

general and administrative expenses were $1.6 million and $1.9 million during the three months ended June 30, 2025 and 2024, respectively.

The $0.3 million expense decrease in the current quarter over the comparable prior year quarter was largely attributed to lower legal

costs of $0.1 million and lower investor relations and other public company costs 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 June 30, 2025 and 2024, respectively.

and Development Expenses

and development expenses were $1.2 million for each of the three months ended June 30, 2025 and 2024.

There was a negligible decease

in the current period over the prior year period which 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 $70,000 and $68,000 of stock-based compensation during

the three months ended June 30, 2025 and 2024, respectively.

Value Change in Warrant Liability

net change in fair value of the warrant liability during the three months ended June 30, 2025 was $0.3 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 June 30,

2024 that were measured on a fair value basis.

costs during the three months ended June 30, 2025 consisted of the costs associated with the at-the market offering facility (described

further below) in the amount of $9,000.

We did not incur any financing costs during the three months ended June 30, 2024.

income during the three months ended June 30, 2025 and 2024 related to interest income on our cash and cash equivalents in the amount

of $75,000 and $26,000, respectively.

NeuroOne Medical Technologies Corporation

of the Nine Months Ended June 30, 2025 and 2024

following table sets forth the results of operations for the nine months ended June 30, 2025 and 2024, respectively.

Nine Months Ended

Financing costs consists of the amortization of

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

Other income primarily consists of interest income

related to our cash and cash equivalents,

Results of Operations

Comparison of the Three Months Ended December 31, 2025 and 2024

The following table sets forth the results of

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

For the three months ended

Product revenue

6 unchanged sentences

Total operating expenses

Loss from operations

(Loss) income from operations

Fair value change in warrant liability

Financing costs

Loss before income taxes

Financing cost

(Loss) income before income taxes

Provision for income taxes

Net (loss) income

$ (1,437,890 )

$ (3,223,212 )

Revenue and Product Gross Profit

revenue was $6.4 million during the nine months ended June 30, 2025 with a gross profit and gross profit percentage of $3.6 million and

Product Revenue and Product Gross Profit

Product revenue was $2.9 million during the three

months ended December 31, 2025 with a gross profit and gross profit percentage of $1.6 million and 54.2%, respectively.

Product revenue

was $3.3 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 $3.2 million during the nine months ended June 30, 2024 with a gross profit and gross profit

percentage of $0.9 million and 29.5%, respectively.

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 largely of

OneRF Products during the nine months ended June 30, 2025 while revenue consisted of Strip/Grid Products, sEEG Products, Electrode Cable

Assembly Products, and OneRF Product sales during the comparable prior year period.

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 $113,000 and $117,000 in connection with our license agreements during the nine

months ended June 30, 2025 and 2024, respectively.

revenue was $3.0 million for the nine months ended June 30, 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 nine months ended June 30, 2024.

NeuroOne Medical Technologies Corporation

General and Administrative Expenses

general and administrative expenses were $5.6 million for the nine months ended June 30, 2025, compared to $6.1 million for the nine

months ended June 30, 2024.

The $0.5 million decrease in the current nine months ended June 30, 2025 compared to the comparable prior

year period was primarily due to lower legal costs of $0.3 million, lower investor relations and other public company costs of $0.5 million,

offset by higher professional fees of $0.3 million on a net basis.

Selling, general and administrative expenses included $0.7 million

and $0.8 million of stock-based compensation during the nine months ended June 30, 2025 and 2024, respectively.

and Development Expenses

and development expenses were $3.9 million for the nine months ended June 30, 2025, compared to $4.0 million for the nine months ended

June 30, 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 nine months ended June 30, 2025 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 Products.

Research and development expenses included $0.2 million of stock-based

compensation during each of the nine months ended June 30, 2025 and 2024.

Value Change in Warrant Liability

net change in fair value of the warrant liability during the nine months ended June 30, 2025 was $1.1 million.

The change was due primarily

to fluctuations in our common stock fair value.

There were no warrants outstanding during the nine months ended June 30, 2024 that were

measured on a fair value basis.

costs during the nine months ended June 30, 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.

In addition, $9,000 in legal fees were incurred in connection with the at-the

market offering facility (described further below).

We did not incur any financing costs during the nine months ended June 30, 2024.

income during the nine months ended June 30, 2025 and 2024 consisted of $104,000 and $103,000 related to interest income attributed to

our cash and cash equivalents, respectively.

and Capital Resources

of June 30, 2025, our principal source of liquidity consisted of cash and cash equivalents in the aggregate of approximately $8.0 million.

sources of cash and cash equivalents to date have been limited to license, collaboration and product revenues, along with proceeds from

the issuances of notes with warrants, common stock with and without warrants and unsecured loans with the terms of our more recent financings

described below.

NeuroOne Medical Technologies Corporation

The decrease in gross profit percentage during the current period was largely due to higher direct customer sales during

the prior year period at list pricing vs.

discount pricing, and to a lesser extent, higher material and supply costs coupled with a lower

sales volume available to absorb fixed royalty and overhead period costs.

Product revenue consisted largely of OneRF Products.

of product revenue consisted of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection

largely with our OneRF Products.

In addition, 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, 2025 and 2024, respectively.

NeuroOne Medical Technologies

License Revenue

License revenue was $3.0 million for the three

months ended December 31, 2024.

License revenue during the prior year 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 Distribution Agreement during

the three months ended December 31, 2025.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were

$1.9 million for the three months ended December 31, 2025, compared to $2.0 million for the three months ended December 31, 2024.

approximate $0.1 million decrease was primarily due to an overall decrease in legal, investor relations, and other professional service

fees in the aggregate amount of $0.3 million, offset in part by higher sales and marketing costs of $0.1 million and by higher payroll

costs of $0.1 million.

Selling, general and administrative expenses included stock-based compensation of $279,000 and $270,000 during

the three months ended December 31, 2025 and 2024, respectively.

Research and Development Expenses

Research and development expenses were $1.4 million

for the three months ended December 31, 2025, compared to $1.2 million during the three months ended December 31, 2024.

The $0.2 million

increase period over period was attributed largely to the timing of activities, which primarily included costs related to consulting services,

materials and supplies associated with the development of new applications for drug delivery technology.

Research and development expenses

included stock-based compensation of $80,000 and $70,000 during the three months ended December 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 December 31, 2025 and 2024 was a benefit of $0.2 million and $0.4 million, respectively.

The change was

due primarily to fluctuations in our common stock fair value.

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,

Other income during the three months ended December

31, 2025 consisted of largely of interest income in the amount of $42,000 attributed to our cash and cash equivalents.

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.

NeuroOne Medical Technologies

Liquidity and Capital Resources

As of December 31, 2025, our principal source

of liquidity consisted of cash and cash equivalents in the aggregate of approximately $3.6 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.

Capital Resources

Our sources of cash and cash equivalents to date

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

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

2025 Financing

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

as 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.

received approximately $8.2 million in net proceeds.

2024 Private Placement

4, 2025, we entered into an underwriting agreement with Ladenburg, relating to the issuance and sale of 16,000,000 shares of our common

stock, at a price to the public of $0.50.

In addition, under the terms of the underwriting agreement, we 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 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

On August 1, 2024, we entered into a Securities

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

(i) 2,944,446 shares of our Company’s common stock (the “Shares”), par value $0.001 per share and (ii) warrants to purchase

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

one share and a PIPE Warrant to purchase 0.75 shares of common stock, resulting in total gross proceeds of approximately $2.65 million

before deducting estimated expenses.

The 2024 Private Placement closed on August 2, 2024.

Issuance costs attributed to the 2024 Private

Placement amounted to $0.2 million.

(i) 2,944,446 shares of our Company’s common stock (the “Shares”), 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, consisting of one share and a PIPE Warrant

to purchase 0.75 shares of common stock, resulting in total gross proceeds of approximately $2.65 million before deducting expenses.

2024 Private Placement closed on August 2, 2024.

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

The PIPE Warrants are exercisable beginning on

4 unchanged sentences

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

connection with the 2024 Private Placement, we agreed to file a registration statement with the SEC covering the resale of the Shares

and the shares of common stock issuable upon exercise of the PIPE Warrants which became effective on September 13, 2024.

At-The-Market

December 21, 2022, we entered into a Capital on Demand TM Sales Agreement (“Sales Agreement”) with JonesTrading

Institutional Services LLC (“JonesTrading”) to create an at-the-market offering program (“ATM”) under which we

may offer and sell shares having an aggregate offering price of up to $14.5 million.

JonesTrading is entitled to a commission at a fixed

commission rate of up to 3% of the gross proceeds.

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

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

including the shares of our common stock previously sold.

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

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

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

On January 5, 2024, we further increased

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

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

Through June 30, 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 June 30, 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.

Facility Financing

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

(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.

NeuroOne Medical Technologies Corporation

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

In connection with the 2024 Private Placement,

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

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

NeuroOne Medical Technologies

At-The-Market Offering

On December 21, 2022, we entered into a Capital

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

to create an at-the-market offering program (“ATM Program”) under which we may offer and sell shares having an aggregate offering

price of up to $14.5 million.

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

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

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

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

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

of our common stock previously sold.

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

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

including the shares of common stock previously sold.

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.

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

Through December 31, 2025, we have issued 5,544,489 shares of common stock under the ATM Program for gross proceeds in the amount of $8.0

We incurred issuance costs in connection with the ATM Program in the amount of $0.6 million through December 31, 2025.

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 or a 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.

Total costs incurred under the debt facility

financing was $0.4 million.

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

2 unchanged sentences

estimate such costs.

January 21, 2020, we entered into an Amended and Restated License Agreement (the “WARF License”) with WARF, which amended

and restated in full our prior license agreement with WARF, dated October 1, 2014.

Under the WARF License, we have agreed to pay WARF

a royalty equal to a single-digit percentage of our product sales pursuant to the WARF License, with a minimum annual royalty payment

of $50,000 for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect.

we or any of our sublicensees contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such

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

will be tripled for the remaining term of the WARF License.

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

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

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

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

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

Our other cash requirements greater than twelve months from various contractual obligations and commitments include operating

leases and contracted services.

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

statements included in “Part 1, Item 1 – Financial Statements” in this Report for further detail of our lease obligations

and the timing of expected future payments.

Contracted services include agreements with third-party service providers for clinical research,

product development, manufacturing, supplies, payroll services, equipment maintenance services, and audits for periods up to fiscal year

expect to satisfy our short-term and long-term obligations through cash on hand and revenue from commercial sales to cover expenses.

a discussion of potential fee payments under the Amended and Restated Zimmer Development Agreement, see “Note 7 — Zimmer

Distribution Agreement and Other Product Revenue” included in our condensed financial statements included in “Part 1, Item

1 – Financial Statements” in this Report.

Even though we have received regulatory clearance to expand the use of our Evo

sEEG electrode technology for up to 30 days, commercial sales of the sEEG electrodes and OneRF Products are expected to take some time

to be a significant source of liquidity.

Zimmer has exclusive global rights to distribute our strip and grid cortical electrodes, depth

electrodes and electrode cable assembly products.

Zimmer’s failure to timely develop or commercialize these products would have

a material adverse effect on our business and operating results.

On October 2024, we entered into an Amended and Restated Distribution

Agreement with Zimmer to provide Zimmer with the exclusive right and license to distribute also our OneRF Ablation System for an upfront

payment of $3.0 million, with eligibility for an additional $1.0 million payment from Zimmer upon achievement of certain specified net

sales milestones.

NeuroOne Medical Technologies Corporation

June 30, 2025, we had cash and cash equivalents in the aggregate of approximately $8.0 million.

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 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 statements.

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.

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 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.

development and commercialization of our cortical strip, grid electrode, depth electrode, ablation system technology and future products

and technology is subject to numerous uncertainties, and we could use our cash and cash equivalent resources sooner than we expect.

Additionally,

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

Our ability to successfully transition to profitability will be dependent upon achieving further regulatory approvals and achieving a

level of product sales adequate to support our cost structure.

We cannot assure you that we will ever be profitable or generate positive

cash flow from operating activities.

following is a summary of cash flows for each of the periods set forth below.

Nine Months Ended

Net cash used in operating activities

$ (1,311,600 )

Under the Amended and

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

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

“Note 4 – Commitments and Contingencies” to our condensed financial statements included

in “Part 1, Item 1 – Financial Statements” of this Report for more information about the WARF License and the Mayo Development

Our other cash requirements

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

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

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

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

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

Contracted services include agreements

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

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

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

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

NeuroOne Medical Technologies

Liquidity Outlook

For a discussion of potential fee payments under

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

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

of this Report .

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

to 30 days, commercial sales of the sEEG electrodes and OneRF Ablation System are expected to take some time to be a significant source

of liquidity.

Zimmer has exclusive global rights to distribute our strip and grid cortical electrodes, depth electrodes and electrode

cable assembly products.

Zimmer’s failure to timely develop or commercialize these products would have a material adverse effect

on our business and operating results.

In October 2024, we entered into an Amended and Restated Distribution Agreement with Zimmer

(“Zimmer Distribution Agreement”) to provide Zimmer with the exclusive right and license to distribute our OneRF Ablation

System in the brain for an upfront payment of $3.0 million, with eligibility for an additional $1.0 million payment from Zimmer upon achievement

of certain specified net sales milestones.

At December 31, 2025, we had cash and cash equivalents

in the aggregate of approximately $3.6 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, 2025 and 2024, 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 financing, 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

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 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

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

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

Additionally, the process of developing medical devices

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

Our ability to successfully transition to

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

our cost structure.

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

Our other cash requirements

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

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

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.

NeuroOne Medical Technologies

The following is a summary of cash flows for each

of the periods set forth below.

For the Three Months Ended

Net cash (used in) provided by operating activities

$ (3,115,835 )

Net cash used in investing activities

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net cash provided by (used in) financing activities

Net decrease in cash

$ (3,008,766 )

cash used in operating activities

cash used in operating activities was $1.3 million for the nine months ended June 30, 2025, which consisted of a net loss of $2.0 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 $0.3 million in the aggregate.

Our net loss was further adjusted

to account for the reclassification of debt and equity facility 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 accounts receivable and inventory, partially offset by a net decrease in our aggregate accrued expense

and accounts payable as well as by a slight increase in our prepaid expenses associated with the timing of payments.

cash used in operating activities was $8.3 million for the nine months ended June 30, 2024, which consisted of a net loss of $9.0 million

partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets, operating

lease expense, totaling approximately $1.3 million in the aggregate.

The net change in our net operating assets and liabilities associated

with fluctuations in our operating activities resulted in a cash use of approximately $0.6 million.

The net cash use stemming from the

change in operating assets and liabilities was primarily attributable to both an increase in our accounts receivable and inventory purchases.

NeuroOne Medical Technologies Corporation

cash used in investing activities

cash used in investing activities was $0.1 million for the nine months ended June 30, 2025 and consisted of outlays for purchases of

property and equipment.

cash used in investing activities was $0.1 million for the nine months ended June 30, 2024 and consisted of outlays for purchases of

property and equipment.

cash provided by financing activities

cash provided by financing activities was $8.0 million for the nine months ended June 30, 2025, which consisted of net proceeds from

the April 2025 Financing of $8.2 million and from the ATM in the amount of $0.3 million, offset by debt facility issuance costs of $0.3

million, issuance costs paid in connection with a prior year private placement of approximately $0.1 million and repurchases of common

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

cash provided by financing activities was $4.7 million for the nine months ended June 30, 2024, which consisted of net proceeds from

the ATM of $4.8 million, offset partially by repurchases of common stock for the payment of employee taxes in the amount of $0.1 million.

Accounting Estimates

financial statements are prepared in accordance with U.S.

Net cash (used in) provided by operating activities

Net cash used in operating activities was $3.1

million for the three months ended December 31, 2025, which consisted of a net loss of $1.4 million inclusive of non-cash stock-based

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

of $0.2 million.

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 $1.9 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 and accounts payable, offset in part by decrease in inventory on hand attributed to the timing of payments and purchases.

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 debt facility termination costs totaling approximately $0.4 million in the aggregate.

The net change in our net

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

$2.0 million.

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

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

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

Net cash used in investing activities

Net cash used in investing activities for the

three months ended December 31, 2025 was $41,000 and consisted of outlays for purchases of property and equipment.

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 provided by (used in) financing activities

Net cash provided by financing activities was

$148,000 for the three months ended December 31, 2025.

The activity during the period consisted of the exercise of warrants in the amount

of $174,000, offset in part by the payment of deferred issuance costs of $23,000 and by common stock repurchases of $4,000 for the payment

of withholding taxes.

Net cash used in financing activities was $0.5

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

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

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

NeuroOne Medical Technologies

Critical Accounting Estimates

Our financial statements are prepared in accordance

generally accepted accounting principles.

These accounting principles require

us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements

as well as the reported amounts of revenue and expense during the periods presented.

We believe that the estimates and judgments upon

which we rely are reasonably based upon information available to us at the time that we make these estimates and judgments.

To the extent

that there are material differences between these estimates and actual results, our financial results will be affected.

The accounting

policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding

and evaluating our reported financial results are described in “Note 3 — Summary of Significant Accounting Policies”

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

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

discussion about the determination of license revenue and product revenue, see “Note 7 — Zimmer Distribution Agreement and

Other Product Revenue” included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report.

To date, we have not had, nor expect to have in the future, significant variable consideration adjustments related to

product revenue, such as chargebacks, sales allowances and sales returns.

discussions about the application of grant date fair value associated with our stock-based compensation, see “Note 8 — Stock-Based

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

in this Report.

Value of Warrant liability

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.

NeuroOne Medical Technologies Corporation

Tax Assets and Liabilities

tax assets and liabilities include income tax valuation allowances.

For additional information, see “Note 10 — Income

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

this Report and “Note 12 – Income Taxes” in “Part II, Item 8 - Financial Statements” of our Annual Report

on Form 10-K for the year ended September 30, 2024.

Contingencies

are subject to numerous contingencies arising in the ordinary course of business, including legal contingencies.

For additional information,

see “Note 4 — Commitments and Contingencies” included in our condensed financial statements included in “Part

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

Accounting Pronouncements

to “Note 3— Summary of Significant Accounting Policies” to our condensed financial statements included in “Part

1, Item 1 – Financial Statements” in this Report for a discussion of recently issued accounting pronouncements.

These accounting principles require us to make estimates and judgments that can affect

the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and

expense during the periods presented.

We believe that the estimates and judgments upon which we rely are reasonably based upon information

available to us at the time that we make these estimates and judgments.

To the extent that there are material differences between these

estimates and actual results, our financial results will be affected.

The accounting policies that reflect our more significant estimates

and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are

described in Note 3 — “Summary of Significant Accounting Policies” to our condensed financial statements in “Part

1, Item 1 – Financial Statements” of 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” of this Report as they require

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

For discussion about the determination of license

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

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

To date, we have not had, nor

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

and sales returns.

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

Recent Accounting Pronouncements

Refer to “Note 3— Summary of Significant

Accounting Policies” to our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

of this Report for a discussion of recently issued accounting pronouncements.

Quantitative and Qualitative Disclosures About Market Risk

applicable for smaller reporting companies.

Not applicable for smaller reporting companies.

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