NEUROONE MEDICAL TECHNOLOGIES Corp

Previous wording

We have incurred mostly losses since inception. As of March 31, 2025, we had an accumulated deficit of $75.5 million, primarily as a result of expenses incurred in connection with our research and development, selling, general and administrative expenses associated with our operations and interest expense, fair value adjustments and loss on extinguishments related to our debt, offset in part by license and product revenues.

Current wording

We 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.

Previous wording

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 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.

Current wording

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 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.

Previous wording

The Company determined that the RF Distribution License granted under the Zimmer Amended and Restated Distribution Agreement represented functional intellectual property given Zimmer’s access to the underlying intellectual property associated with the OneRF Product. As such, the revenue related to the license was recognized at the point in time in which the license/know-how was delivered to Zimmer which occurred in October 2024. Revenue recognized under the Amendment during the six months ending March 31, 2025 was $3.0 million. For further discussion about the determination of license revenue, product revenue and cost of product revenue, and for a discussion of milestones and royalty payments under the Amended and Restated Zimmer Distribution Agreement, see “—Liquidity and Capital Resources—Liquidity Outlook” below and see “Note 7 — Zimmer Distribution Agreement and Other Product Revenue” included in our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report.

Current wording

The Company determined that the RF Distribution License granted under the Zimmer Amended and Restated Distribution Agreement represented functional intellectual property given Zimmer’s access to the underlying intellectual property associated with the OneRF Product. As such, the revenue related to the license was recognized at the point in time in which the license/know-how was delivered to Zimmer which occurred in October 2024. Revenue recognized under the Amendment during the 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.

Previous wording

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

Current wording

Financing 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).

Previous wording

Product revenue was $1.4 million during the three months ended March 31, 2025 with a gross profit and gross profit percentage of $0.8 million and 55.6%, respectively. Product revenue was $1.4 million during the three months ended March 31, 2024 with a gross profit and gross profit percentage of $0.4 million and 28.3%, respectively. The increase in gross profit percentage during the current period was largely due to the higher margin OneRF Products being sold in the current period under the Amendment with Zimmer. Product revenue consisted of Strip/Grid Products, sEEG Products, Electrode Cable Assembly Products, and for the current three-month period, OneRF Product sales. The cost of product revenue consisted of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our Strip/Grid Products, sEEG Products and OneRF Products, and outside supplier materials costs in connection with the Electrode Cable Assembly. In addition, cost of product revenue included royalty fees incurred of approximately $38,000 and $42,000 in connection with our license agreements during the three months ended March 31, 2025 and 2024, respectively.

Current wording

Product 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.

Previous wording

Selling, general and administrative expenses were $1.9 million and $2.0 million during the three months ended March 31, 2025 and 2024, respectively. The $0.1 million expense decrease in the current quarter over the comparable prior year quarter was largely attributed to lower administrative payroll and stock-based compensation of $0.1 million, lower legal costs of $0.1 million and lower public company costs of $0.1 million, partially offset by higher professional services and marketing expenses of $0.2 million. Selling, general and administrative expenses included $0.2 million and $0.3 million of stock-based compensation during the three months ended March 31, 2025 and 2024, respectively.

Current wording

Selling, 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.

Previous wording

Research and development expenses were $1.5 million for the three months ended March 31, 2025, compared to $1.3 million for the three months ended March 31, 2024. The $0.2 million increase in the current period over the prior year period was attributed largely to the timing of product development activities in the current quarter when compared to the comparable prior year quarter. Research and development expenses primarily included salary-related expenses and costs related to consulting services, materials and supplies associated with the development of sEEG Products and to a much lesser extent Strip/Grid Products. Research and development expenses included $55,000 and $76,000 of stock-based compensation during the three months ended March 31, 2025 and 2024, respectively.

Current wording

Research 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.

Previous wording

The net change in fair value of the warrant liability during the three months ended March 31, 2025 was $0.4 million benefit. The change was due primarily to fluctuations in our common stock fair value. There were no warrants outstanding during the three months ended March 31, 2024 that were measured on a fair value basis.

Current wording

The 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.

Previous wording

Other income during the three months ended March 31, 2025 and 2024 related to interest income on our cash, cash equivalents and short-term investments in the amount of $19,000 and $31,000, respectively.

Current wording

Other 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.

Previous wording

The following table sets forth the results of operations for the six months ended March 31, 2025 and 2024, respectively.

Current wording

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

Previous wording

Product revenue was $4.7 million during the six months ended March 31, 2025 with a gross profit and gross profit percentage of $2.7 million and 57.9%, respectively. Product revenue was $2.4 million during the six months ended March 31, 2024 with a gross profit and gross profit percentage of $0.7 million and 27.9%, respectively. The increase in gross profit percentage during the current period was largely due to higher margin OneRF Products being sold in the current period under the Amendment with Zimmer. Product revenue consisted of Strip/Grid Products, sEEG Products, Electrode Cable Assembly Products, and for the current six-month period, OneRF Product sales. The cost of product revenue consisted of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our Strip/Grid Products, sEEG Products and OneRF Products, and outside supplier materials costs in connection with the Electrode Cable Assembly Products. In addition, cost of product revenue included royalty fees incurred of approximately $75,000 and $79,000 in connection with our license agreements during the six months ended March 31, 2025 and 2024, respectively.

Current wording

Product 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 56.8%, 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.

Previous wording

License revenue was $3.0 million for the six months ended March 31, 2025. License revenue during the current period related to the distribution license granted to Zimmer for the OneRF Product in October 2024. No license revenue was generated from the Amended and Restated Zimmer Development Agreement during the six months ended March 31, 2024.* *

Current wording

License 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.* *

Previous wording

Selling, general and administrative expenses were $4.0 million for the six months ended March 31, 2025, compared to $4.2 million for the six months ended March 31, 2024. The $0.2 million decrease in the current six-month period compared to the comparable prior year period was primarily due to lower administrative payroll of $0.1 million, lower legal costs of $0.2 million, lower public company costs of $0.3 million, offset by higher professional fees of $0.3 million and facility costs and other general operating expenses of $0.1 million on a net basis. Selling, general and administrative expenses included $0.5 million of stock-based compensation during each of the six months ended March 31, 2025 and 2024.

Current wording

Selling, 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.

Previous wording

Research and development expenses were $2.7 million for the six months ended March 31, 2025, compared to $2.8 million for the six months ended March 31, 2024. The $0.1 million decrease period over period was attributed to the timing and an overall reduction in OneRF Product development activities during the current six-month period when compared to the comparable prior year period. Research and development primarily included salary-related expenses and costs related to consulting services, materials and supplies associated with the development of sEEG Products and to a much lesser extent Strip/Grid Products. Research and development expenses included $0.1 million of stock-based compensation during each of the six months ended March 31, 2025 and 2024.

Current wording

Research 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.

Previous wording

The net change in fair value of the warrant liability during the six months ended March 31, 2025 was $0.8 million. The change was due primarily to fluctuations in our common stock fair value. There were no warrants outstanding during the six months ended March 31, 2024 that were measured on a fair value basis.

Current wording

The 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.

Previous wording

Financing costs during the six months ended March 31, 2025 consisted of the amortization of the deferred issuance costs associated with the debt facility (described further below) in the amount of $0.2 million and additional legal and loan facility termination costs of $0.1 million upon the termination of the Debt Facility in November 2024. We did not incur any financing costs during the six months ended March 31, 2024.

Current wording

Financing 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.

Previous wording

Other income during the six months ended March 31, 2025 and 2024 consisted of $28,000 and $77,000 related to interest income attributed to our cash and cash equivalents, respectively.

Current wording

Other 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.

Previous wording

As of March 31, 2025, our principal source of liquidity consisted of cash and cash equivalents in the aggregate of approximately $1.3 million. Subsequently, on April 7, 2025, we received net proceeds of approximately $8.2 million from the April 2025 Financing.

Current wording

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

Previous wording

On August 1, 2024, we entered into a Securities Purchase Agreement with certain Purchasers, pursuant to which we, in a private placement, agreed to issue and sell an aggregate of (i) 2,944,446 shares of our Company’s common stock (the “Shares”), par value $0.001 per share and (ii) warrants to purchase an aggregate of 2,208,333 shares of common stock (the “PIPE Warrants”) at a purchase price of $0.90 per unit, consisting of one share and a PIPE Warrant to purchase 0.75 shares of common stock, resulting in total gross proceeds of approximately $2.65 million before deducting estimated expenses. The 2024 Private Placement closed on August 2, 2024. Issuance costs attributed to the 2024 Private Placement amounted to $0.2 million.

Current wording

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.

Previous wording

The PIPE Warrants are exercisable beginning on the date of issuance, have an exercise price of $1.19 per share, subject to adjustment, and will expire on the third anniversary of the date of issuance**.**

Current wording

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.

Previous wording

At March 31, 2025, we had cash and cash equivalents in the aggregate of approximately $1.3 million. Subsequently, on April 7, 2025, we received net proceeds of approximately $8.2 million from the April 2025 Financing. Our independent registered public accounting firm included an explanatory paragraph in the report on our financial statements as of and for the years ended September 30, 2024 and 2023, respectively, noting the existence of substantial doubt about our ability to continue as a going concern. We believe our current available cash and cash equivalents inclusive of the April 2025 Financing, coupled with the anticipated increase in product revenues from minimum purchases and improved gross margins under the Zimmer Amendment and forecasted operating expense reductions, will be sufficient to fund our planned expenditures and meet our obligations for at least twelve months from the date of issuance of these financial statements.

Current wording

At 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.

Previous wording

Net cash provided by operating activities was $152,000 for the six months ended March 31, 2025, which consisted of a net loss of $0.5 million partially offset by non-cash stock-based compensation, depreciation, amortization related to intangible assets, a fair value change in warrant liability and operating lease expense, totaling approximately $0.2 million in the aggregate. Our net loss was further adjusted to account for the reclassification of debt termination costs to financing activities in the amount of $0.1 million. The net change in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a cash source of approximately $0.3 million. The net cash source stemming from the change in operating assets and liabilities was primarily attributable to both a decrease in inventory and prepaid expenses, partially offset by a net decrease in our aggregate accrued expenses, other liabilities and accounts payable as well as by an increase in our accounts receivable attributed to the timing of payments.

Current wording

Net 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.

Previous wording

Net cash used in operating activities was $6.0 million for the six months ended March 31, 2024, which consisted of a net loss of $6.2 million partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets, operating lease expense, totaling approximately $0.8 million in the aggregate. The net change in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a cash use of approximately $0.6 million. The net cash use stemming from the change in operating assets and liabilities was primarily attributable to both an increase in our accounts receivable and prepaid expense as well as attributed to a net decrease in our accrued expenses and other liabilities. Partially offsetting the net cash used for the period was the reduction in inventory purchases and increase in our account payable attributed to the timing of payments.

Current wording

Net cash used in operating activities was $8.3 million for the nine months ended June 30, 2024, which consisted of a net loss of $9.0 million partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets, operating lease expense, totaling approximately $1.3 million in the aggregate. The net change in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a cash use of approximately $0.6 million. The net cash use stemming from the change in operating assets and liabilities was primarily attributable to both an increase in our accounts receivable and inventory purchases.

Previous wording

Net cash used in investing activities was $28,000 for the six months ended March 31, 2025 and consisted of outlays for purchases of property and equipment.

Current wording

Net 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.

Previous wording

Net cash used in investing activities was $68,000 for the six months ended March 31, 2024 and consisted of outlays for purchases of property and equipment.

Current wording

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

Previous wording

Net cash provided by (used in) operating activities

Current wording

Net cash provided by financing activities

Previous wording

Net cash used in financing activities was $0.3 million for the six months ended March 31, 2025, which consisted of issuance costs and repurchases of common stock for the payment of employee taxes in the amount of $0.7 million in the aggregate, offset partially by proceeds from the ATM of $0.4 million.

Current wording

Net 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.

Previous wording

Net cash provided by financing activities was $3.2 million for the six months ended March 31, 2024, which consisted of net proceeds from the ATM of $3.2 million, offset partially by repurchases of common stock for the payment of employee taxes in the amount of $25,000.

Current wording

Net cash provided by financing activities was $4.7 million for the nine months ended June 30, 2024, which consisted of net proceeds from the ATM of $4.8 million, offset partially by repurchases of common stock for the payment of employee taxes in the amount of $0.1 million.