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 be certain. Forward-looking statements include statements about:

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

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

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our ability to achieve or sustain profitability;

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our ability to raise additional capital and to fund our operations;

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

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

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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;

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the results of our development and distribution relationship with Zimmer, Inc. ("Zimmer");

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

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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;

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

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our future development priorities;

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

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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 Corporation
Form 10-Q

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our future commercialization, marketing and manufacturing capabilities and strategy;

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our ability to comply with applicable regulatory requirements;

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our ability to maintain our intellectual property position;

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

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

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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. 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.

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.

Overview

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 disorders. The Company is also developing the capability to use its sEEG electrode technology to deliver drugs or gene therapy while being able to record 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 ("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. We initiated 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 Corporation
Form 10-Q

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 Requirement. 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 Corporation
Form 10-Q

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

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

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. Revenue 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

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 expenses. 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 Corporation
Form 10-Q

Fair Value Change in Warrant Liability

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

Financing Costs

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

Other Income

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 December 31, (unaudited)
		2025				2024				Period to Period Change
Product revenue		$	2,892,635			$	3,274,167			$	(381,532	)
Cost of product revenue			1,324,807				1,347,278				(22,471	)
Product gross profit			1,567,828				1,926,889				(359,061	)
License revenue			-				3,000,000				(3,000,000	)
Operating expenses:
Selling, general and administrative			1,885,455				2,043,454				(157,999	)
Research and development			1,389,680				1,172,228				217,452
Total operating expenses			3,275,135				3,215,682				59,453
(Loss) income from operations			(1,707,307	)			1,711,207				(3,418,514	)
Fair value change in warrant liability			222,740				389,445				(166,705	)
Financing cost			-				(324,738	)			324,738
Other income			46,677				9,408				37,269
(Loss) income before income taxes			(1,437,890	)			1,785,322				(3,223,212	)
Provision for income taxes			-				-				-
Net (loss) income		$	(1,437,890	)		$	1,785,322			$	(3,223,212	)

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. 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. The cost 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 Corporation
Form 10-Q

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. The 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, 2025.

Other Income

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 Corporation
Form 10-Q

Liquidity and Capital Resources

Overview

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. We anticipate that our expenses will increase substantially as we continue to develop and commercialize our electrode technology and pursue pre-clinical and clinical trials, seek regulatory approvals, manufacture products, market and distribute our OneRF Products, hire additional staff, add operational, financial and management systems and continue to operate as a public company.

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.

April 2025 Financing

On April 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"), 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. The 2024 Private Placement closed on August 2, 2024. Issuance costs attributed to the 2024 Private Placement amounted to $0.2 million.

The PIPE Warrants are exercisable beginning on the date of issuance 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 our Board of Directors for which the exercise price was reset to $0.876 per share. The PIPE Warrants will expire on the third anniversary of the date of issuance.

In connection with the 2024 Private Placement, we agreed to file a registration statement with the SEC covering the resale of the Shares and the shares of common stock issuable upon exercise of the PIPE Warrants which became effective on September 13, 2024.

NeuroOne Medical Technologies Corporation
Form 10-Q

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. 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. 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 million. 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 on Form 10-K for the year ended September 30, 2025 for a discussion of design, development, pre-clinical and clinical activities that we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.

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. See "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 Agreement.

Our other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities. Our other cash requirements greater than twelve months from various contractual obligations and commitments include operating leases and contracted services. Refer to "Note 4 - Commitments and Contingencies"to our condensed financial statements included in "Part 1, Item 1 - Financial Statements" of this Reportfor 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 Corporation
Form 10-Q

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 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.

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

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 Corporation
Form 10-Q

Cash Flows

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

		For the Three Months Ended
		December 31,
		2025				2024
Net cash (used in) provided by operating activities		$	(3,115,835	)		$	208,049
Net cash used in investing activities			(40,754	)			(24,416	)
Net cash provided by (used in) financing activities			147,823				(509,325	)
Net decrease in cash		$	(3,008,766	)		$	(325,692	)

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

NeuroOne Medical Technologies Corporation
Form 10-Q

Critical Accounting Estimates

Our financial statements are prepared in accordance with U.S. 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 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:

Revenues:

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.