NEUROONE MEDICAL TECHNOLOGIES Corp 10-Q/A for FY2026 Q2
NEUROONE MEDICAL TECHNOLOGIES Corp (NMTC)
About this 10-Q/A
NEUROONE MEDICAL TECHNOLOGIES Corp filed this 10-Q/A on June 12, 2026, covering the quarter ended March 31, 2026 (FY2026 Q2).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.86M
- up 34.3% from $1.39M a year earlier
- Net loss
- $2.38M
- compared with a net loss of $2.27M a year earlier
- Diluted EPS
- -$0.28
- compared with -$0.44 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form
(Amendment No. 1)
(Mark One)
For the Quarterly Period Ended
OR
For the transition period from ________ to ________
Commission File Number:
(Exact name of Registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including
Area Code:
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | ☒ | |
| Accelerated filer | ☐ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of outstanding shares of the registrant’s
common stock as of June 10, 2026 was
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-Q/A (this “Amended Report”) amends the Quarterly Report on Form 10-Q of NeuroOne Medical Technologies Corporation (the “Company,” “we,” “our,” or “us”) for the quarterly period ended March 31, 2026, originally filed with the Securities and Exchange Commission (“SEC”) on May 12, 2026 (the “Original Filing”). This Amended Report is being filed to restate the Company’s unaudited condensed financial statements and related disclosures for the three and six months ended March 31, 2026, as described in Note 2, “Restatement of Previously Issued Unaudited Condensed Financial Statements,” to the unaudited condensed financial statements included herein. Information that was not affected by the restatement is unchanged from the Original Filing.
Restatement Background.
Subsequent to filing the Original Filing, the Company identified errors in product revenue and cost of product revenue recognition related to modified purchase orders accounted for under ASC 606. The errors resulted from the duplication of product revenue and cost of product revenue recognized during the three months ended March 31, 2026.
As a result, revenue and gross profit was overstated by an aggregate amount of $529 thousand and $296 thousand, respectively, for the three and six months ended March 31, 2026. In addition, the accounts receivable was overstated by $529 thousand and inventory was understated by $233 thousand as a result of the errors.
Management evaluated the errors in accordance with ASC 250, Accounting Changes and Error Corrections, and Staff Accounting Bulletin No. 99 and No. 108, and concluded that the errors were material to the previously issued interim financial statements as of and for the three and six months ended March 31, 2026. The errors did not result from intentional misconduct and were attributable to a process control deficiency in customer purchase order tracking.
The Company is implementing enhanced reconciliation and review controls designed to prevent similar errors in future reporting periods.
Items Amended.
The following items of the Original Filing have been amended and restated:
Part I, Item 1: Financial Statements (Unaudited) — including the condensed balance sheet as of March 31, 2026, the condensed statements of operations for the three and six months ended March 31, 2026, the condensed statements of stockholders’ equity for the three and six months ended March 31, 2026, the condensed statement of cash flows for the six months ended March 31, 2026, and the related notes to the unaudited condensed consolidated financial statements.
Part I, Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Part I, Item 4: Controls and Procedures
Part II, Item 1A: Risk Factors
Part II, Item 6: Exhibits
In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this Form 10-Q/A (Exhibits 31.1, 31.2 and 32).
Except as described above, no other items of the Original Filing have been amended. This Amended Report does not reflect events occurring after the date of the Original Filing or modify or update those disclosures in any way, other than as required to reflect the effects of the restatement. Accordingly, this Amended Report should be read in conjunction with the Company’s filings with the SEC subsequent to the date of the Original Filing.
NEUROONE MEDICAL TECHNOLOGIES CORPORATION
FORM 10-Q
INDEX
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NeuroOne Medical Technologies Corporation
Condensed Balance Sheets
| As of | ||||||||
| March 31, | ||||||||
2026 (As Restated) | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory, net | ||||||||
| Deferred offering costs | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Intangible assets, net | ||||||||
| Right-of-use asset | ||||||||
| Property and equipment, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other liabilities | ||||||||
| Total current liabilities | ||||||||
| Warrant liability | ||||||||
| Operating lease liability, long term | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 5) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to condensed financial statements
1
NeuroOne Medical Technologies Corporation
Condensed Statements of Operations
(unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
2026 (As Restated) | 2025 | 2026 (As Restated) | 2025 | |||||||||||||
| Product revenue | $ | $ | $ | $ | ||||||||||||
| Cost of product revenue | ||||||||||||||||
| Product gross profit | ||||||||||||||||
| License revenue | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Fair value change in warrant liability | ( | ) | ||||||||||||||
| Financing costs | ( | ) | ||||||||||||||
| Other income | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share (Note 1): | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Number of shares used in per share calculations (Note 1): | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See accompanying notes to condensed financial statements
2
NeuroOne Medical Technologies Corporation
Condensed Statements of Changes in Stockholders’ Equity
(unaudited)
| Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ( | ) | ||||||||||||||||||
| Share repurchases for the payment of employee taxes | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||
| Net income | - | |||||||||||||||||||
| Balance at December 31, 2024 | ( | ) | ||||||||||||||||||
| Issuance of common stock attributed to equity financings | ||||||||||||||||||||
| Issuance costs related to equity financings | - | ( | ) | ( | ) | |||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ( | ) | ||||||||||||||||||
| Share repurchases for the payment of employee taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock | Additional Paid-In | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||
| Shares | Amount | Capital | (As Restated) | (As Restated) | ||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ( | ) | ||||||||||||||||||
| Share repurchases for the payment of employee taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at December 31, 2025 | ( | ) | ||||||||||||||||||
| Issuance of common stock attributed to equity financings | - | |||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ( | ) | ||||||||||||||||||
| Share repurchases for the payment of employee taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net loss (as restated) | - | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2026 (as restated) | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to condensed financial statements
3
NeuroOne Medical Technologies Corporation
Condensed Statements of Cash Flows
(unaudited)
| For the Six Months Ended March 31, | ||||||||
| 2026 (As Restated) | 2025 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Amortization and depreciation | ||||||||
| Stock-based compensation | ||||||||
| Amortization of deferred offering costs | ||||||||
| Non-cash lease expense | ||||||||
| Fair value change in warrant liability | ( | ) | ( | ) | ||||
| Debt termination costs reclassed to financing activities | ||||||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses, operating leases and other liabilities | ( | ) | ( | ) | ||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of common stock attributed to equity financings | ||||||||
| Issuance costs related to equity financings | ( | ) | ||||||
| Financing costs in connection with debt facility | ( | ) | ||||||
| Deferred issuance costs in connection with at-the-market offering program | ( | ) | ||||||
| Exercise of warrants | ||||||||
| Share repurchases for the payment of employee taxes | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental non-cash financing and investing transactions: | ||||||||
| Change in unpaid issuance costs | $ | $ | ||||||
| Modification of right-of-use asset and associated lease liability | $ | $ | ||||||
| Purchased property and equipment in accounts payable | $ | $ | ||||||
| Cashless exercise of warrants | $ | $ | ||||||
| Reclass of warrant liability to equity upon exercise | $ | $ | ||||||
See accompanying notes to condensed financial statements
4
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
NOTE 1 - Description of Business and Basis of Presentation
NeuroOne Medical Technologies Corporation (the “Company” or “NeuroOne”), a Delaware corporation, is a medical technology company focused on the development and commercialization of thin film electrode for continuous electroencephalogram (“cEEG”) and stereoelectrocencephalography (“sEEG”) recording, monitoring, ablation and stimulation solutions to diagnose and treat patients with epilepsy, trigeminal neuralgia, Parkinson’s disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other pain-related neurological disorders. 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.
The Company has received 510(k) clearance from the United States (“U.S.”) Food and Drug Administration (“FDA”) for four of its devices: (i) its Evo cortical electrode technology for recording, monitoring, and stimulating brain tissue for up to 30 days (“Evo Cortical”), (ii) its Evo® sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain (“Evo sEEG”); (iii) its OneRF ablation system for creation of radiofrequency lesions in nervous tissue for functional neurosurgical procedures (the “OneRF Ablation System”) and (iv) our OneRF TN ablation system for use in procedures to create radiofrequency (RF) lesions for the treatment of pain, or for lesioning nerve tissue for functional neurosurgical procedures (“OneRF TN Ablation System”, together with the Evo Cortical, Evo sEEG, and OneRF Ablation System, the “Commercialized Products”). The Company has a distribution agreement with Zimmer, Inc. (“Zimmer”) providing Zimmer with a license to commercialize and distribute the Evo Cortical, Evo sEEG, and OneRF Ablation System in the brain. The Company initiated a limited market release of its OneRF TN Ablation System in December 2025 and completed the limited market release in March 2026. The Company’s other products and indications are still under development.
The Company is based in Eden Prairie, Minnesota.
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 the Company’s 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, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected. The Company has experienced minor price increases from our suppliers related to tariffs on imported goods and may experience additional price increases.
The Company’s operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors. Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, 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. The Company expects to submit a request for a tariff refund for minor tariffs paid by the Company to the U.S. government under the International Emergency Economic Powers Act, but the timing and amount of cash receipt pursuant to such future submission remains uncertain. We will continue to monitor guidance issued regarding the refund process.
Basis of presentation
The accompanying unaudited condensed financial statements have been prepared by the Company, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The condensed financial statements may not include all disclosures required by U.S. GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended September 30, 2025 included in the Company’s Annual Report on Form 10-K. The condensed balance sheet at September 30, 2025 was derived from the audited financial statements of the Company.
In the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods.
5
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Reverse Stock Split
On April 14, 2026, the
Company filed an amendment to its Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time, to
effectuate a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $
As a result of the Reverse
Stock Split, every
No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive fractional shares as a result of the Reverse Stock Split were automatically entitled to receive a cash payment equal to the market value of the fractional share. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s relative interest in the Company’s equity securities, except for any adjustments for fractional shares.
NOTE 2 - Restatement of Previously Issued Unaudited Condensed Financial Statements
The unaudited condensed financial statements as of March 31, 2026 and for the three and six months ended March 31, 2026 have been restated to reflect the correction of misstatements. The Company also restated all amounts impacted within the notes to the financial statements. A description of the adjustments and their impact on the previously issued unaudited condensed financial statements are included below. The error was identified after a customer questioned the validity of certain invoices related to product shipments made on March 31, 2026. Management’s subsequent review of the related purchase orders, order modifications, packing slips, and invoices determined that revenue and cost of product revenue had been recognized for certain invoices that should have been cancelled under the modified customer order arrangement.
Nature of the Errors
The errors resulted in an overstatement of
product revenue of $
In accordance with Accounting Standards Codification (ASC) 250, Accounting Changes and Error Corrections, the Company is restating the previously issued unaudited condensed balance sheet, statement of operations, stockholders’ equity, and cash flows to reflect the effects of the misstatements.
Impact of the Restatement
The following tables summarize the impact of the restatement on the Company’s previously issued unaudited condensed financial statements:
Condensed Balance Sheet as of March 31, 2026 (Excerpt)
| As Previously | ||||||||||||
| Reported | Adjustment | As Restated | ||||||||||
| Accounts receivable | $ | $ | ( | ) | $ | |||||||
| Inventory, net | $ | $ | $ | |||||||||
| Total current assets | $ | $ | ( | ) | $ | |||||||
| Total assets | $ | $ | ( | ) | $ | |||||||
| Accumulated deficit | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Total stockholders’ equity | $ | $ | ( | ) | $ | |||||||
| Total liabilities and stockholders’ equity | $ | $ | ( | ) | $ | |||||||
Condensed Statement of Operations - Three Months Ended March 31, 2026 (Excerpt)
| As Previously | ||||||||||||
| Reported | Adjustment | As Restated | ||||||||||
| Product revenue | $ | $ | ( | ) | $ | |||||||
| Cost of product revenue | $ | $ | ( | ) | $ | |||||||
| Product gross profit | $ | $ | ( | ) | $ | |||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss per share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
6
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Condensed Statement of Stockholders’ Equity - Three Months Ended March 31, 2026 (Excerpt)
| As Previously | ||||||||||||
| Reported | Adjustment | As Restated | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Accumulated deficit | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Total stockholders’ equity | $ | $ | ( | ) | $ | |||||||
Condensed Statement of Operations - Six Months Ended March 31, 2026 (Excerpt)
| As Previously | ||||||||||||
| Reported | Adjustment | As Restated | ||||||||||
| Product revenue | $ | $ | ( | ) | $ | |||||||
| Cost of product revenue | $ | $ | ( | ) | $ | |||||||
| Product gross profit | $ | $ | ( | ) | $ | |||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss per share, basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net loss per share, diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Condensed Statement of Cash Flows - Six Months Ended March 31, 2026 (Excerpt)
| As Previously | ||||||||||||
| Reported | Adjustment | As Restated | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Accounts receivable | $ | ( | ) | $ | $ | ( | ) | |||||
| Inventory | $ | $ | ( | ) | $ | |||||||
| Net cash used in operating activities | $ | ( | ) | $ | - | $ | ( | ) | ||||
NOTE 3 - Going Concern (As Restated)
The accompanying condensed financial statements
have been prepared on the basis that the Company will continue as a going concern. The Company has incurred losses since inception, negative
cash flows from operations, and an accumulated deficit of $
The Company intends to fund ongoing activities by utilizing its current cash and cash equivalents on hand, from product and collaborations revenue and by raising additional capital through equity or debt financing. If management is unable to obtain the necessary capital, it may have a material adverse effect on the operations of the Company and the development of its technology, or the Company may have to cease operations altogether.
7
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
NOTE 4 - Summary of Significant Accounting Policies (As Restated)
Management’s Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Segment Information
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original contractual maturity on date of purchase of less than or equal to three months to be classified and presented as cash equivalents on the balance sheets. Cash equivalents are stated at cost, which approximates fair value. The Company’s cash and cash equivalents may include demand deposit accounts with large financial institutions, institutional money market funds, U.S. Treasury securities, and corporate notes and bonds. The Company monitors the creditworthiness of the financial institutions, institutional money market funds, and corporations in which the Company invests its surplus funds. The Company has experienced no credit losses from its cash and cash equivalent investments.
Revenue Recognition
The Company entered into a development and distribution agreement which has current and future revenue recognition implications. See “Note 8 - Zimmer Distribution Agreement and Other Product Revenue.”
In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Performance obligations may include license rights, development services, and services associated with regulatory submission and approval processes. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method.
8
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Product Revenue
Revenues from product sales are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. At the inception of each customer contract, performance obligations are identified and the total transaction price is allocated to the performance obligations.
Cost of Product Revenue
Cost of product revenue consists of the manufacturing and materials costs incurred by the Company’s third-party contract manufacturers in connection with OneRF Brain Ablation System and the OneRF® Trigeminal Nerve Ablation System (the “OneRF Products”), strip and grid cortical electrodes (the “Strip/Grid Products”), depth electrodes (“sEEG Products”) and outside supplier materials costs in connection with the electrode cable assembly products (“Electrode Cable Assembly Products”) when sold. In addition, cost of product revenue includes royalty fees incurred in connection with the Company’s license agreements as well as valuation adjustments for excess or obsolete inventory.
License Revenue
As part of the accounting for collaboration arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the estimated relative stand-alone selling prices of the promised goods or service underlying each performance obligation.
Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
Milestone payments: At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal will not occur, the value of the associated milestone (such as a regulatory submission) is included in the transaction price. Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until those approvals are received. When the Company’s assessment of probability of achievement changes and variable consideration becomes probable, any additional estimated consideration is allocated to each performance obligation based on the estimated relative stand-alone selling prices of the promised goods or service underlying each performance obligation and recorded in license revenues based upon when the customer obtains control of each element.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Warrant Liability
The Company issued warrants in connection with its 2024 Private Placement. See “Note 13- Stockholders’ Equity”. The Company accounts for these warrants as a liability at fair value when warrant pricing protection provisions are not available to other common stockholders. Additionally, issuance costs associated with the warrant liability are expensed as incurred and reflected as a financing cost in the accompanying condensed statements of operations. The Company adjusts the liability for changes in fair value until the earlier of the exercise or expiration of the warrants for any period when pricing protections remain in place. Any future change in the fair value of the warrant liability is recognized in the condensed statements of operations under the fair value change in warrant liability line item.
9
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Fair Value of Financial Instruments
The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (“FASB”) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
| ● | Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. |
| ● | Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. |
| ● | Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. |
As of March 31, 2026 and September 30, 2025, the fair values of cash, cash equivalents, accounts receivable, inventory, prepaid expenses, deferred offering costs, accounts payable and accrued expenses and other liabilities approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the warrant liability was based on Level 3 inputs as well as the Company’s underlying stock price and associated volatility, expected term of the warrants and market interest rates. There were no transfers between fair value hierarchy levels during the three and six months ended March 31, 2026 and 2025.
The fair value of financial instruments measured on a recurring basis is as follows:
| As of March 31, 2026 | ||||||||||||||||
| Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | ||||||||||||
| As of September 30, 2025 | ||||||||||||||||
| Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | ||||||||||||
10
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
The following table provides a roll-forward of the warrant liability measured at fair value on a recurring basis using unobservable level 3 inputs for the six months ended March 31, 2026 and 2025, respectively.
| 2026 | 2025 | |||||||
| Warrant liability | ||||||||
| Balance as of beginning of Period | $ | $ | ||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Exercise | ( | ) | ||||||
| Balance as of end of period | $ | $ | ||||||
Intellectual Property
The Company has entered into two licensing agreements with major research institutions, which allow for access to certain patented technology and know-how. Payments under those agreements are capitalized and amortized to selling, general and administrative expense over the expected useful life of the acquired technology.
Property and Equipment
Property and equipment is recorded at cost and
reduced by accumulated depreciation. Depreciation expense is recognized over the estimated useful lives of the assets using the straight-line
method. The estimated useful life for equipment and furniture ranges from
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets, which consist of licensed intellectual property, property and equipment and right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of impairment is measured as the difference between the carrying value and the fair value of the impaired asset.
Accounts Receivable and Allowances for Credit Losses
The Company records a provision for credit losses, when appropriate, based on historical experience, current conditions and reasonably supportable forecasts. In estimating the allowance for credit losses, the Company considers, among other factors, the estimate of credit losses over the remaining expected life of the asset, primarily using historical experience and current economic conditions that could affect the collectability of the balances in the future. Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be recovered. Actual write-offs may be in excess of the Company’s estimated allowance. The Company has not incurred any bad debt expense to date and no allowance for credit losses has been recorded during the periods presented.
Inventory
Inventory is stated at the lower of cost (using the first-in, first-out “FIFO” method) or net realizable value. The Company calculates inventory valuation adjustments for excess and obsolete inventory, when appropriate, based on current inventory levels, movement, expected useful lives, and estimated future demand of the products and spare parts. The Company’s inventory is currently comprised of its commercialized product components, work-in-process and finished goods. The commercialized products are produced by a third-party contract manufacturer and electrode cable assembly components are obtained from outside suppliers.
11
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Research and Development Costs
Research and development costs are charged to expense as incurred. Research and development expenses comprise of costs incurred in performing research and development activities, including compensation and benefits for research and development employees (including stock-based compensation), overhead expenses, cost of laboratory supplies, clinical trial and related clinical manufacturing expenses, costs related to regulatory operations, fees paid to consultants and other outside expenses. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development.
Advertising Expense
Advertising expense is charged to selling, general
and administrative expenses during the period that it is incurred. Total advertising expense amounted to $
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 sales of the Company’s products.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation - Stock Compensation (“ASC 718”). Accordingly, compensation costs related to equity instruments granted are recognized at the grant-date fair value over the requisite service period. The Company records forfeitures when they occur. Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable provisions of ASC 718.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Net Loss Per Share (As Restated)
For the Company, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s warrants, stock options, and restricted stock units while outstanding are considered common stock equivalents for this purpose. Diluted earnings or loss per share of common stock is computed utilizing the treasury method for the warrants, stock options and restricted stock units.
12
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
The table below presents the computation of basic and diluted loss per share:
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2026 (As Restated) | 2025 | 2026 (As Restated) | 2025 | |||||||||||||
| Basic: | ||||||||||||||||
| Net loss available to common stockholders - basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding - basic | ||||||||||||||||
| Loss per share - basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted (1): | ||||||||||||||||
| Net loss available to common stockholders - diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||
| Loss per share - diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| (1) |
The following table presents the computation of weighted average common shares considered in the computation of diluted net loss per share during the three and six months ended March 31,
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Denominator (weighted average shares) | ||||||||||||||||
| Basic common shares outstanding | ||||||||||||||||
| Dilutive stock options | ||||||||||||||||
| Dilutive restricted stock units | ||||||||||||||||
| Dilutive warrants | ||||||||||||||||
| Diluted common shares outstanding | ||||||||||||||||
The following potential common shares were not considered in the computation of basic net loss per share as their effect would have been anti-dilutive for the three and six months ended March 31, 2026 and 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Warrants | ||||||||||||||||
| Stock options | ||||||||||||||||
| Restricted stock units | ||||||||||||||||
Recent Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years and should be applied on a prospective basis, with retrospective application permitted. The Company adopted this guidance on October 1, 2025 and the newly adopted guidance will result in additional income tax disclosures in its financial statements.
13
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU is intended to improve the disclosures related to expenses and provide investors more detailed information about certain types of expenses. This ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential impact that this new standard will have on its financial statements and related disclosures.
NOTE 5 - Commitments and Contingencies
WARF License Agreement
The Company has entered into an exclusive start-up company license agreement with the Wisconsin Alumni Research Foundation (“WARF”) for WARF’s neural probe array and thin film micro electrode technology. The Company entered into an Amended and Restated Exclusive Start-up Company License Agreement (the “WARF License”) with WARF on January 21, 2020, which amended and restated in full the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September 18, 2019.
The WARF License grants to the Company an exclusive
license to make, use and sell, in the United States only, products that employ certain licensed patents for a neural probe array
or thin-film micro electrode array and method. The Company 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 $
WARF may terminate the WARF License on
Mayo Agreement
The Company has an exclusive license and development agreement with the Mayo Foundation for Medical Education and Research (“Mayo”) related to certain intellectual property and development services for thin film micro electrode technology (“Mayo Agreement”). If the Company is successful in obtaining regulatory approval, the Company is to pay royalties to Mayo based on a percentage of net sales of products of the licensed technology through the term of the Mayo Agreement, set to expire May 25, 2037. During the three and six months ended March 31, 2026 and 2025, royalty fees were incurred related to the Mayo Agreement.
14
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Facility Leases
Headquarters Lease
On May 20, 2024, the Company amended its non-cancellable
headquarters lease (the “Lease”) with certain landlords (together, the “Landlord”) pursuant to which the Company
leases office space located at 7599 Anagram Drive, Eden Prairie, Minnesota (the “Premises”). The Company took possession of
the Premises on November 1, 2019, with the term of the Lease ending June 30, 2028, as amended, unless terminated earlier (the “Lease
Term”). The base rent for the Premises ranges from $
Los Gatos Lease
In 2021, the Company entered into and commenced
a non-cancellable facility lease (the “Los Gatos Lease”), pursuant to which the Company agreed to rent office space for its
research and development operations located at 718 University Avenue, Suite #111, Los Gatos, California. The facility space under the
Los Gatos Lease is approximately
During the three and six months ended March 31,
2026, rent expense associated with the facility leases amounted to $
Supplemental cash flow information related to the operating leases was as follows:
| For the six months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for amounts included in the measurement of lease liability: | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Right-of-use assets obtained in exchange for lease obligations: | ||||||||
| Modification of right-of-use asset and associated lease liability | $ | $ | ||||||
Supplemental balance sheet information related to the operating leases was as follows:
| As of March 31, 2026 | As of September 30, 2025 | |||||||
| Right-of-use assets | $ | $ | ||||||
| Lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
15
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Maturity of the lease liabilities was as follows:
| Calendar Year | As of March 31, 2026 | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Total | ||||
| Short-term portion (included in accrued expenses and other liabilities) | ( | ) | ||
| Long-term portion | $ | |||
Other Contingencies
In the ordinary course of business, from time to time, the Company may be subject to a broad range of claims and legal proceedings that relate to contractual allegations, patent infringement and other claims. The Company establishes accruals when applicable for matters and commitments which it believes losses are probable and can be reasonably estimated. To date, no loss contingency for such matters and potential commitments have been recorded. Although it is not possible to predict with certainty the outcome of these matters or potential commitments, the Company is of the opinion that the ultimate resolution of these matters and potential commitments will not have a material adverse effect on its results of operations or financial position.
NOTE 6 - Supplemental Balance Sheet Information (As Restated)
Inventory (As Restated)
Inventory consisted of the following as of:
| March 31, 2026 (As Restated) | September 30, 2025 | |||||||
| Component inventory | $ | $ | ||||||
| Work-in-process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
Excess and obsolete valuation
reserve adjustments reflected as a reduction of component inventory as of both March 31, 2026 and September 30, 2025 was $
Intangibles
Intangible assets rollforward is as follows:
| Useful Life | ||||||
| Net Intangibles, September 30, 2025 | $ | |||||
| Less: amortization | ( | ) | ||||
| Net Intangibles, March 31, 2026 | $ | |||||
Amortization expense was $
16
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
Property and Equipment
Property and equipment held for use by category are presented in the following table:
| As of March 31, 2026 | As of September 30, 2025 | |||||||
| Equipment and furniture | $ | $ | ||||||
| Total property and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expense was $
NOTE 7 - Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the following:
| As of March 31, 2026 | As of September 30, 2025 | |||||||
| Accrued payroll | $ | $ | ||||||
| Operating lease liability, short term | ||||||||
| Royalty payments | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
NOTE 8 - Zimmer Distribution Agreement and Other Product Revenue (As Restated)
On October 25, 2024, the Company entered into
the Zimmer Amended and Restated Distribution Agreement (the “Amendment” or “Zimmer Distribution Agreement”) with
Zimmer pursuant to which the Company granted Zimmer the exclusive right and license to distribute its OneRF Ablation System for an upfront
payment of $
The Company and Zimmer previously entered into an Exclusive Development and Distribution Agreement related to the sEEG and Strip/Grid Product Systems, which was subsequently amended a couple of times through August 2, 2022 (the “EDDA”). The EDDA executed prior to the Amendment granted Zimmer exclusive global rights to distribute the Strip/Grid Products and the Electrode Cable Assembly Products. Additionally, the Company granted Zimmer the exclusive right and license to distribute certain sEEG Products developed by the Company and together with the Strip/Grid Products and Electrode Cable Assembly Products, the “Products”. In addition, under the prior EDDAs, the Company and Zimmer agreed to collaborate with respect to development activities through a joint development committee composed of an equal number of representatives of Zimmer and the Company.
Under the Amendment, Zimmer paid the Company $
The revised term under the Amendment (the “Term”) began on the effective date of the Amendment and will remain in effect until October 31, 2034. Upon the expiration of the Term, it may be renewed upon the mutual written consent of the parties. The Amended and Restated Exclusive Development and Distribution Agreement may be terminated before the expiration of the Term in accordance with certain terms under the Amendment. In addition, the license rights granted to Zimmer under this Amendment shall be exclusive (i) until September 30, 2032 for the sEEG Products and Strip/Grid Products; and (ii) until October 31, 2034 for the OneRF Ablation System in the brain.
17
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
License Revenue
The Amendment was accounted for under the provisions of ASC 606 as a separate contract from the prior EDDAs. In accordance with the provisions under ASC 606, the Company identified the transfer of the RF Distribution License as the sole performance obligation of the RF Distribution License. The distribution rights granted to Zimmer, inclusive of the access to the underlying intellectual property for future production of the OneRF Product if required, was found to have significant standalone functionality as no additional substantive input was required by the Company on a go forward basis. Lastly, ancillary support related to the Amendment was concluded to be a perfunctory obligation and de minimis in terms of required resources.
The transaction price associated with the Amendment
was $
Sales Volume Milestone and Payment
The sales volume milestone associated with the Amendment was determined by sales or usage-based thresholds. The sales volume milestone was accounted for under the sales milestone recognition constraint and will be accounted for as constrained variable consideration. The Company has applied the sales volume constraint to the milestone payment and will not recognize revenue until the sales volume threshold occurs.
Product Revenue (As Restated)
Product revenue recognized during the three
and six months ended March 31, 2026 was $
Product revenue recognized during the three and
six months ended March 31, 2025 was $
Recognition of License Revenue
The Company determined that the RF Distribution
License represented functional intellectual property given Zimmer’s access to the underlying intellectual property associated with
the OneRF 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 ended March 31, 2025 was $
NOTE 9 - Stock-Based Compensation
During the three and six months ended March 31, 2026 and 2025, stock-based compensation expense related to stock-based awards was included in selling, general and administrative and research and development costs as follows in the accompanying condensed statements of operations.
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Selling, general and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
18
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
2025 Equity Incentive Plan
On January 10, 2025, the Board of Directors of the Company adopted the NeuroOne Medical Technologies Corporation 2025 Equity Incentive Plan (the “2025 Plan”). On February 14, 2025, at the 2025 annual meeting of stockholders, the stockholders of the Company approved the 2025 Plan.
The 2025 Plan is the successor to and continuation of the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) and to the Company’s 2016 Equity Incentive Plan (together, the “Prior Plans”). As of the Effective Date, (i) no additional awards may be granted under the Prior Plans; (ii) any Returning Shares will become available for issuance pursuant to Awards granted under the 2025 Plan; and (iii) all outstanding awards granted under the Prior Plans will remain subject to the terms of the Prior Plans (except to the extent such outstanding awards result in returning shares that become available for issuance pursuant to awards granted under the 2025 Plan).
Initially, the maximum number of shares of
the Company’s common stock that may be issued under the 2025 Plan may not exceed (1)
Inducement Plan
In October 2021, the Company adopted the NeuroOne
Medical Technologies Corporation 2021 Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved
Stock Options
During the three months ended March 31, 2026
and 2025, the Company granted
The total expense for the three months ended
March 31, 2026 and 2025 related to stock options was $
19
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three and six months ended March 31, 2026 and 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Expected stock price volatility | % | % | % | % | ||||||||||||
| Expected life of options (years) | ||||||||||||||||
| Expected dividend yield | % | % | % | % | ||||||||||||
| Risk free interest rate | % | % | % | % | ||||||||||||
During the three months ended March 31, 2026
and 2025,
Restricted Stock Units
During the six months ended March 31, 2026, the
Company granted an aggregate of
During the three and six months ended March 31,
2025, the Company granted an aggregate of
During the three months ended March 31, 2026
and 2025,
General
As of March 31, 2026,
NOTE 10 - Concentrations
Revenue
For the three months and six months ended March
31, 2026, one customer accounted for
For the three months and six months ended March
31, 2025, one customer accounted for
Supplier concentration
One contract manufacturer produces all of the Company’s Strip/Grid Products and sEEG Products and another supplier was responsible for the development of the Company’s OneRF Ablation System generator.
20
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
NOTE 11 - Income Taxes
The effective tax rate for the three and six
months ended March 31, 2026 and 2025 was
NOTE 12 - Debt Financing
On August 2, 2024, the Company entered into a loan
and security agreement (the “Debt Facility Agreement”) with Growth Opportunity Funding, LLC, as the lender (the “Lender”),
which provided for a delayed draw term loan facility in an aggregate principal amount not to exceed $
At closing of the Debt
Facility, the Company issued to the Lender a warrant exercisable for
NOTE 13 - Stockholders’ Equity
March 2026 Private Placement
On March 1, 2026, the
Company entered into a securities purchase agreement (the “March 2026 Private Placement”) with a newly appointed officer
of the Company, David Wambeke, to issue and sell
August 2024 Private Placement
On August 1, 2024, the
Company entered into a Securities Purchase Agreement with certain accredited investors (the “Purchasers”), pursuant
to which the Company, in a private placement (the “2024 Private Placement”), agreed to issue and sell an aggregate of (i)
The PIPE Warrants are
exercisable beginning on the date of issuance, have an initial exercise price of $
21
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
The PIPE Warrants were accounted for and classified
as liabilities on the accompanying condensed balance sheets given certain price reset provisions not used for a fair valuation under
a fixed for fixed settlement scenario as required for equity balance sheet classification. A Monte Carlo simulation model
was used to estimate the aggregate fair value of the PIPE Warrants. Input assumptions used were as follows on March 31, 2026 and September
30, 2025: risk-free interest rate
At-The-Market Offering
On December 21, 2022, the Company entered into
a Capital on DemandTM Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“JonesTrading”)
that created an at-the-market offering program (“ATM”) under which the Company may offer and sell common stock having an
aggregate offering price of up to $
In
2023, the Company changed the amount of common stock that can be sold pursuant to the Sales Agreement to $
During the three and six months ended March 31,
2025,
The total aggregate offering price and common
stock issued since inception of the ATM Program through March 31, 2026 was $
Warrant Activity and Summary
| Warrants | Exercise Price Per Warrant | Weighted Average Exercise Price | Weighted Average Term (years) | |||||||||||||
| Outstanding at September 30, 2025 | $ | $ | ||||||||||||||
| Issued | $ | $ | - | |||||||||||||
| Exercised (1) | ( | ) | $ | $ | - | |||||||||||
| Expired | ( | ) | $ | $ | - | |||||||||||
| Outstanding at March 31, 2026 | $ | $ | ||||||||||||||
| Outstanding and exercisable at March 31, 2026 | $ | $ | ||||||||||||||
| (1) |
22
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
The following table summarizes information about warrants outstanding as of March 31, 2026:
| Exercise Price | Number Outstanding | Weighted Average Remaining Contractual life (Years) | Number Exercisable as of March 31, 2026 | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| Total | ||||||||||||||
NOTE 14 - Defined Contribution Plan
The Company has a 401(k) defined contribution
plan (the “401K Plan”) for all employees age 21 and older. Employees can defer up to
Employee contributions and any employer matching
contributions made to satisfy certain non-discrimination tests required by the Internal Revenue Code are
NOTE 15 - Segment Reporting (As Restated)
Operating segments are defined as components
of an enterprise about which separate discrete information is available for evaluation by the CODM in deciding how to allocate resources
in assessing performance. The Company has one reportable segment, which is the business of development and commercialization
of products related to comprehensive neuromodulation cEEG and sEEG recording, monitoring, ablation, and stimulation solutions (“Neuromodulation
Products”). NeuroOne is a medical technology company focused on developing and commercializing Neuromodulation Products. The Company
recognizes the Neuromodulation Products as
The accounting policies of the Neuromodulation Products segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the Neuromodulation Products segment based on net loss income, which is reported on the statements of operations as net loss. The measure of segment assets is reported on the balance sheet as total assets. The Company does not have any intra-entity sales or transfers.
The CODM uses cash forecast models in deciding how to invest into the Neuromodulation Products segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation.
23
NeuroOne Medical Technologies Corporation
Notes to Condensed Financial Statements
(unaudited)
The statements of operations below are inclusive of the significant expense categories regularly reviewed by the CODM for the three and six months ended March 31, 2026 and 2025:
| Three months ended March 31, | Six months ended March 31, | |||||||||||||||
| 2026 (As Restated) | 2025 | 2026 (As Restated) | 2025 | |||||||||||||
| Product revenue | $ | $ | $ | $ | ||||||||||||
| Cost of product revenue | ||||||||||||||||
| Product gross profit | ||||||||||||||||
| License revenue | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Sales | ||||||||||||||||
| Marketing | ||||||||||||||||
| Development | ||||||||||||||||
| Quality assurance | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Fair value change in warrant liability | ( | ) | ||||||||||||||
| Financing costs | ( | ) | ||||||||||||||
| Other income | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
NOTE 16 - Subsequent Events
2025 Plan
On April 3, 2026, at the 2026 annual meeting
of stockholders, the stockholders of the Company approved the increase in share authorization under the 2025 Plan by
24
NeuroOne Medical Technologies Corporation
Form 10-Q
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (As Restated)
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:
| ● | 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 restatement of our financial statements; |
| ● | The material weaknesses in our internal controls over financial reporting and the potential insufficiency of our disclosure controls and procedures to detect errors or acts of fraud; |
| ● | 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. (“Zimmer”); |
| ● | 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; |
25
NeuroOne Medical Technologies Corporation
Form 10-Q
| ● | 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 back pain and other related neurological disorders; |
| ● | our future commercialization, marketing and manufacturing capabilities and strategy; |
| ● | our ability to comply with applicable regulatory requirements; |
| ● | our ability to maintain our intellectual property position; |
| ● | 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; and |
| ● | 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.
Restatement of Previously Issued Financial Statements
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been amended and restated to give effect to the restatement of our unaudited condensed financial statements, as more fully described in Note 2 “Restatement of Previously Issued Unaudited Condensed Financial Statements.”
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 back pain 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 and completed the limited market release in March 2026. The Company’s other products and indications are still under development.
26
NeuroOne Medical Technologies Corporation
Form 10-Q
We have largely incurred losses since inception. As of March 31, 2026, we had an accumulated deficit of $82.4 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
Reverse Stock Split
On April 14, 2026, we filed an amendment to our Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time, to effectuate a reverse stock split of our issued and outstanding shares of common stock, par value $0.001 per share, which became effective on April 15, 2026 at 5:00 p.m. Eastern Time (the “Reverse Stock Split”). Trading of the common stock on The Nasdaq Capital Market commenced on a split-adjusted basis at market open on April 16, 2026. All amounts in the condensed financial statements have been retroactively adjusted to reflect the Reverse Stock Split.
As a result of the Reverse Stock Split, every 6 shares of our common stock issued or outstanding was automatically reclassified into one validly issued, fully-paid and non-assessable new share of common stock, subject to the treatment of fractional shares as described below, without any action on the part of the holders. Proportional adjustments were made to the number of shares of common stock awarded and available for issuance under our equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of our outstanding stock options and other equity securities under our equity incentive plans. All outstanding warrants were also adjusted in accordance with their terms. The shares of common stock outstanding following the Reverse Stock Split remain fully paid and non-assessable. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value per share of the common stock.
No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive fractional shares as a result of the Reverse Stock Split were automatically entitled to receive a cash payment equal to the market value of the fractional share. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s relative interest in our equity securities, except for any adjustments for fractional shares.
27
NeuroOne Medical Technologies Corporation
Form 10-Q
2025 Equity Incentive Plan
On April 3, 2026, at the 2026 annual meeting of stockholders, our stockholders approved the increase in share authorization under the 2025 Equity Incentive Plan (the “2025 Plan”) by 250,000 shares. In addition, an evergreen provision was approved whereby the number of shares available under the 2025 Plan will be increased automatically on January 1 each year between January 1, 2027 and January 1, 2031. The aggregate number of shares of common stock that may be issued pursuant to awards (as defined in the 2025 Plan) by an amount equal to 5% of the fully diluted shares (as defined in the 2025 Plan) as of the last day of the preceding calendar year, provided, however that our Board of Directors may act prior to the effective date of any such annual increase to provide that the increase for such year will be a lesser number of shares of common stock.
March 2026 Private Placement
On March 1, 2026, we entered into a securities purchase agreement (the “March 2026 Private Placement”) with a newly appointed officer of the Company, David Wambeke, to issue and sell 166,666 shares of our common stock at a price per share equal to $4.02242. The March 2026 Private Placement closed on March 2, 2026 upon which we received gross proceeds in the amount of $670,400.
Trigeminal Limited Market Release
We initiated a limited market release of the OneRF TN Ablation System in December 2025 and completed the limited market release in March 2026. The Company is currently evaluating the distribution options for the OneRF TN Ablation System.
Nasdaq Minimum Bid Price Notification
On May 6, 2025, we received a letter from the Listing Qualifications Department of Nasdaq Stock Market (“Nasdaq”) notifying us 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.
On April 30, 2026, we received a letter from Nasdaq notifying us that we have regained compliance with the Minimum Bid Price Requirement as a result of the closing bid price of the Company’s common stock being at $1.00 per share or greater for the prior 10 consecutive business days. Accordingly, the letter indicated we are in compliance with the Minimum Bid Price Requirement and the matter is closed.
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. We expect to submit a request for a tariff refund for minor tariffs paid by the Company to the U.S. government under the International Emergency Economic Powers Act, but the timing and amount of cash receipt pursuant to such future submission remains uncertain. We will continue to monitor guidance issued regarding the refund process.
28
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 Systems when they occur, 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 in the brain. 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 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 8 - 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.
29
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 (As Restated)
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table sets forth the results of operations for the three months ended March 31, 2026 and 2025, respectively.
| For the Three Months Ended March 31, (unaudited) | ||||||||||||
| 2026 (As Restated) | 2025 | Period to Period Change (As Restated) | ||||||||||
| Product revenue | $ | 1,862,050 | $ | 1,386,550 | $ | 475,500 | ||||||
| Cost of product revenue | 871,786 | 615,489 | 256,297 | |||||||||
| Product gross profit | 990,264 | 771,061 | 219,203 | |||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 1,919,371 | 1,940,414 | (21,043 | ) | ||||||||
| Research and development | 1,468,090 | 1,510,663 | (42,573 | ) | ||||||||
| Total operating expenses | 3,387,461 | 3,451,077 | (63,616 | ) | ||||||||
| Loss from operations | (2,397,197 | ) | (2,680,016 | ) | 282,819 | |||||||
| Fair value change in warrant liability | (8,271 | ) | 390,351 | (398,622 | ) | |||||||
| Other income | 23,446 | 19,058 | 4,388 | |||||||||
| Loss before income taxes | (2,382,022 | ) | (2,270,607 | ) | (111,415 | ) | ||||||
| Provision for income taxes | - | - | - | |||||||||
| Net loss | $ | (2,382,022 | ) | $ | (2,270,607 | ) | $ | (111,415 | ) | |||
Product Revenue and Product Gross Profit
Product revenue was $1.9 million during the three months ended March 31, 2026 with a gross profit and gross profit percentage of $1.0 million and 53.2%, respectively. 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. The decrease in gross profit percentage during the current period was largely due to higher component costs in the current period coupled with a slightly lower average selling price attributed to a change in sales mix. Product revenue consisted of OneRF Products related sales during the periods presented. The cost of product revenue consisted of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our OneRF Products and outside supplier materials costs. 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 March 31, 2026 and 2025.
30
NeuroOne Medical Technologies Corporation
Form 10-Q
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $1.9 million during each of the three months ended March 31, 2026 and 2025. The slight decrease of $21,000 in the current quarter over the comparable prior year quarter was largely attributed to lower legal costs of $0.1 million and lower professional fees of $0.1 million, offset by higher administrative payroll and stock-based compensation of $0.1 million and by sales and marketing costs of $0.1 million. Selling, general and administrative expenses included $0.3 million and $0.2 million of stock-based compensation during the three months ended March 31, 2026 and 2025, respectively.
Research and Development Expenses
Research and development expenses were $1.5 million during each of the three months ended March 31, 2026 and 2025. The slight decrease of $43,000 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 additional applications of our thin-film electrode technology, including the delivery of drugs or gene therapy to the brain, and basivertebral nerve ablation (BVNA) and spinal cord stimulation for treatment of chronic lower back pain. Research and development expenses included $0.1 million of stock-based compensation during each of the three months ended March 31, 2026 and 2025.
Fair Value Change in Warrant Liability
The net change in fair value of the warrant liability during the three months ended March 31, 2026 was $8,000 compared to a $(0.4) million benefit during the three months ended March 31, 2025. The change was due primarily to fluctuations in our common stock fair value.
Other Income
Other income during the three months ended March 31, 2026 and 2025 related to interest income on our cash, cash equivalents and short-term investments in the amount of $23,000 and $19,000, respectively.
Comparison of the Six Months Ended March 31, 2026 and 2025
The following table sets forth the results of operations for the six months ended March 31, 2026 and 2025, respectively.
| For the Six Months Ended March 31, (unaudited) (As Restated) | ||||||||||||
| 2026 (As Restated) | 2025 | Period to Period Change (As Restated) | ||||||||||
| Product revenue | $ | 4,754,685 | $ | 4,660,717 | $ | 93,968 | ||||||
| Cost of product revenue | 2,196,593 | 1,962,767 | 233,826 | |||||||||
| Product gross profit | 2,558,092 | 2,697,950 | (139,858 | ) | ||||||||
| License revenue | - | 3,000,000 | (3,000,000 | ) | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 3,804,826 | 3,983,868 | (179,042 | ) | ||||||||
| Research and development | 2,857,770 | 2,682,891 | 174,879 | |||||||||
| Total operating expenses | 6,662,596 | 6,666,759 | (4,163 | ) | ||||||||
| Loss from operations | (4,104,504 | ) | (968,809 | ) | (3,135,695 | ) | ||||||
| Fair value change in warrant liability | 214,469 | 779,796 | (565,327 | ) | ||||||||
| Financing costs | - | (324,738 | ) | 324,738 | ||||||||
| Other income | 70,123 | 28,466 | 41,657 | |||||||||
| Loss before income taxes | (3,819,912 | ) | (485,285 | ) | (3,334,627 | ) | ||||||
| Provision for income taxes | - | - | - | |||||||||
| Net loss | $ | (3,819,912 | ) | $ | (485,285 | ) | $ | (3,334,627 | ) | |||
31
NeuroOne Medical Technologies Corporation
Form 10-Q
Product Revenue and Product Gross Profit
Product revenue was $4.8 million during the six months ended March 31, 2026 with a gross profit and gross profit percentage of $2.6 million and 53.8%, respectively. 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. The decrease in gross profit percentage during the current period was largely due to higher product costs coupled with a slightly lower average selling price associated with the sales mix. Product revenue consisted of OneRF Products during the period presented. The cost of product revenue consisted of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our OneRF Products and outside supplier materials costs. In addition, cost of product revenue included royalty fees incurred of approximately $75,000 in connection with our license agreements during each of the six months ended March 31, 2026 and 2025.
License Revenue
License revenue was $3.0 million for the six months ended March 31, 2025 related to the distribution license granted to Zimmer for the OneRF Product in the brain in October 2024. No license revenue was generated from the Amended and Restated Zimmer Development Agreement during the six months ended March 31, 2026.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $3.8 million for the six months ended March 31, 2026, compared to $4.0 million for the six months ended March 31, 2025. The $0.2 million decrease in the current six-month period compared to the comparable prior year period was primarily due to lower legal costs of $0.3 million and lower professional fees of $0.2 million, offset by higher administrative payroll of $0.2 million and marketing and sales costs of $0.1 million. Selling, general and administrative expenses included $0.5 million of stock-based compensation during each of the six months ended March 31, 2026 and 2025.
Research and Development Expenses
Research and development expenses were $2.9 million for the six months ended March 31, 2026, compared to $2.7 million for the six months ended March 31, 2025. The $0.2 million increase period over period was attributed to the timing of 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 additional applications of our thin-film electrode technology, including the delivery of drugs or gene therapy to the brain, and basivertebral nerve ablation (BVNA) and spinal cord stimulation for treatment of chronic lower back pain.. Research and development expenses included $0.2 million and $0.1 million of stock-based compensation during the six months ended March 31, 2026 and 2025, respectively.
32
NeuroOne Medical Technologies Corporation
Form 10-Q
Fair Value Change in Warrant Liability
The net change in fair value of the warrant liability during the six months ended March 31, 2026 was $(0.2) million benefit compared to a $(0.8) million benefit for the six months ended March 31, 2025. The change was due primarily to fluctuations in our common stock fair value.
Financing Costs
Financing costs during the six months ended March 31, 2025 consisted of the amortization of the deferred issuance costs associated with the debt facility (described further below) in the amount of $0.2 million and additional legal and loan facility termination costs of $0.1 million upon the termination of the Debt Facility in November 2024. We did not incur any financing costs during the six months ended March 31, 2026.
Other Income
Other income during the six months ended March 31, 2026 and 2025 consisted of $70,000 and $28,000 related to interest income attributed to our cash and cash equivalents, respectively.
Liquidity and Capital Resources (As Restated)
Overview
As of March 31, 2026, our principal source of liquidity consisted of cash and cash equivalents in the aggregate of approximately $2.8 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.
March 2026 Private Placement
On March 1, 2026, we entered into the March 2026 Private Placement with a newly appointed officer of the Company, David Wambeke, to issue and sell 166,666 shares of our common stock at a price per share equal to $4.02242. The March 2026 Private Placement closed on March 2, 2026 upon which we received gross proceeds in the amount of $670,400. Issuance costs in connection with the March 2026 Private Placement were nil.
33
NeuroOne Medical Technologies Corporation
Form 10-Q
April 2025 Financing
On April 4, 2025, we entered into an underwriting agreement with Ladenburg, relating to the issuance and sale of 2,666,666 shares of our common stock, at a price to the public of $3.00. In addition, under the terms of the underwriting agreement, we granted Ladenburg an option, exercisable for 45 days, to purchase up to an additional 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) 490,741 shares of our Company’s common stock (the “Shares”), and (ii) warrants to purchase an aggregate of 368,052 shares of common stock (the “PIPE Warrants”) at a purchase price of $5.40 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 $7.14 per share, subject to adjustment. In April 2025, the exercise price was reset to $2.79 upon the close of the April 2025 Financing for all of the PIPE Warrants, except for the PIPE Warrants to purchase 3,472 shares of common stock issued to a director on our Board of Directors for which the exercise price was reset to $5.26 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.
At-The-Market Offering
On December 21, 2022, we entered into a Capital on DemandTM 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 April 3, 2025, we decreased the amount of common stock that can be sold pursuant to the Sales Agreement to zero, and 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 March 31, 2026, we have issued 924,081 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 March 31, 2026.
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.
34
NeuroOne Medical Technologies Corporation
Form 10-Q
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 5 - 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 5 - 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.
Liquidity Outlook
For a discussion of potential fee payments under the Amended and Restated Zimmer Development Agreement, see “Note 8 - 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.
As of March 31, 2026, we had cash and cash equivalents in the aggregate of approximately $2.8 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.
35
NeuroOne Medical Technologies Corporation
Form 10-Q
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.
Cash Flows
The following is a summary of cash flows for each of the periods set forth below.
| For the Six Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used in) provided by operating activities | $ | (4,444,546 | ) | $ | 151,905 | |||
| Net cash used in investing activities | (79,270 | ) | (27,587 | ) | ||||
| Net cash provided by (used in) financing activities | 757,445 | (264,109 | ) | |||||
| Net decrease in cash and cash equivalents | $ | (3,766,371 | ) | $ | (139,791 | ) | ||
Net cash (used in) provided by operating activities
Net cash used in operating activities was $4.4 million for the six months ended March 31, 2026, which consisted of a net loss of $3.8 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 $0.7 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 $1.3 million. The change in operating assets and liabilities consisted of an increase in our accounts receivable and prepaid expenses as well as of a decrease in our accounts payable and accrued expenses attributed to the timing of payments, partially offset by decrease in our inventory.
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.
36
NeuroOne Medical Technologies Corporation
Form 10-Q
Net cash used in investing activities
Net cash used in investing activities was $79,000 for the six months ended March 31, 2026 and consisted of outlays for purchases of property and equipment.
Net cash used in investing activities was $28,000 for the six months ended March 31, 2025 and consisted of outlays for purchases of property and equipment.
Net cash provided by (used in) financing activities
Net cash provided by financing activities was $0.8 million for the six months ended March 31, 2026, which consisted of proceeds from a private placement in the amount of $0.7 million and from the exercise of warrants in the amount of $0.2 million. The proceeds were offset in part by issuance costs and by repurchases of common stock for the payment of employee taxes in the amount of $0.1 million in the aggregate.
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.
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 4 - “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 8 - 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 13 - Stockholders’ Equity” to our condensed financial statements included in “Part 1, Item 1 - Financial Statements” of this Report.
Recent Accounting Pronouncements
Refer to “Note 4 - 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.
37
NeuroOne Medical Technologies Corporation
Form 10-Q
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable for smaller reporting companies.
Item 4. Controls and Procedures (As Restated)
Evaluation of Disclosure Controls and Procedures
At the time our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 was filed on May 12, 2026 (the “Original Filing”), our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal control over financial reporting. As described in Note 2, subsequent to the date of the Original Filing, errors were identified in the Company’s revenue recognition for certain product revenue shipments, resulting in the restatement of the Company’s previously issued unaudited condensed financial statements for the three and six months ended March 31, 2026.
In connection with the filing of this Form 10-Q/A, we have re-evaluated our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2026 due to the material weakness in our internal controls over financial reporting as discussed further below that were identified in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025 and the additional material weakness that existed as of March 31, 2026 as discussed in more detail below.
Material Weakness
The Company identified a material weakness related to insufficient segregation of duties within its accounting and financial reporting functions. Specifically, due to the Company’s limited accounting personnel and organizational structure, certain individuals had the ability to initiate, process, record, and review financial transactions, as well as prepare and post journal entries, without adequate independent review.
This material weakness resulted in an increased risk that errors or misstatements in the Company’s financial statements may not be prevented or detected on a timely basis.
In addition, the restatement of our condensed consolidated financial statements for the three and six months ended March 31, 2026 identified a further material weakness related to ineffective controls over revenue recognition, specifically with respect to: (i) the review of customer purchase order modifications and related shipping documentation, and (ii) the reconciliation of shipments.
Remediation Plans
Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:
| ● | Enhancing reconciliation procedures between shipping records, billing, and recorded revenue to confirm completeness and accuracy of revenue recognized; |
| ● | Enhancing policies and procedures to retain adequate documentary evidence for certain management review controls over certain business processes including precision of review and evidence of review procedures performed to demonstrate effective operation of such controls; |
| ● | Segregating key functions within our financial processes supporting our internal controls over financial reporting; and |
| ● | Continuing to enhance and formalize our accounting, business operations, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting and disclosures. |
As of the end of the reporting period, these material weaknesses had not been remediated. Accordingly, management concluded that our internal control over financial reporting was not effective.
Changes in Internal Control over Financial Reporting
There has not been any material change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
38
NeuroOne Medical Technologies Corporation
Form 10-Q
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
In addition to the other information set forth elsewhere in this Report, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended September 30, 2025. Such factors, if they were to occur, could cause our actual results to differ materially from those expressed in our forward-looking statements in this Report, and materially adversely affect our financial condition or future results. Although we are not aware of any other factors that we currently anticipate will cause our forward-looking statements to differ materially from our future actual results, or materially affect the Company’s financial condition or future results, additional risks and uncertainties not currently known to us or that we currently deem to be immaterial might materially adversely affect our actual business, financial condition and/or operating results.
Our management has identified certain internal control deficiencies, which management believes constitute material weaknesses. Our failure to establish and maintain an effective system of internal controls has caused, and could continue to cause material misstatements of our financial statements or cause us to fail to meet our reporting obligations or fail to prevent fraud in which case, our stockholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our common stock.
We review and update our internal controls, disclosure controls and procedures, and corporate governance policies as our Company continues to evolve. In addition, we are required to comply with the internal control evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”) and management is required to report annually on our internal control over financial reporting. Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of SOX until the date we are no longer a “smaller reporting company” as defined by applicable SEC rules.
Our management’s evaluation of the effectiveness of our internal controls over financial reporting as of September 30, 2025 concluded that our controls were not effective, due to a material weakness resulting from an ineffective overall control environment. The material weakness stems primarily from our small size and includes the inability to maintain appropriate segregation of duties. In addition, the restatement of our unaudited condensed financial statements for the three months ended March 31, 2026 identified a further material weakness related to ineffective controls over revenue recognition, specifically with respect to the review of customer purchase order modifications and related shipping documentation.
Such shortcomings could have an adverse effect on our business and financial results. Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of the controls and procedures or failure to comply with regulations concerning controls and procedures could have a material effect on our business, results of operations and financial condition. Any of these events could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements, which ultimately could negatively affect the market price of our shares, increase the volatility of our stock price and adversely affect our ability to raise additional funding. The effect of these events could also make it more difficult for us to attract and retain qualified persons to serve on our Board and as executive officers.
Subject to limitations on liquidity, the Company is planning to take steps to remediate these material weaknesses. However, we cannot assure you that any of the measures we implement to remedy any such deficiencies will effectively mitigate or remedy such deficiencies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On March 1, 2026, the Company entered into a securities purchase agreement with a newly appointed officer of the Company, David Wambeke, to issue and sell 166,666 shares of the Company’s common stock at a price per share equal to $4.022. The foregoing issuance of securities was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable to our Company.
Item 5. Other Information
Rule 10b5-1 Trading Plans - Directors and Section 16 Officers
During the three months
ended March 31, 2026, none of the Company’s directors or Section 16 officers
39
NeuroOne Medical Technologies Corporation
Form 10-Q
Item 6. Exhibits
| * | Filed herewith. |
| ** | Documents are furnished and not filed. |
40
NeuroOne Medical Technologies Corporation
Form 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: June 12, 2026
NeuroOne Medical Technologies Corporation
| By: | /s/ David Rosa | |
| David Rosa | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| By: | /s/ Ronald McClurg | |
| Ronald McClurg | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
41
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a) OR 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES OXLEY ACT OF 2002
I, David Rosa, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q/A of NeuroOne Medical Technologies Corporation for the period ended March 31, 2026; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 12, 2026 | /s/ David Rosa | |
| Name: | David Rosa | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a) OR 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES OXLEY ACT OF 2002
I, Ronald McClurg, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q/A of NeuroOne Medical Technologies Corporation for the period ended March 31, 2026; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 12, 2026 | /s/ Ronald McClurg | |
| Name: | Ronald McClurg | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer) | ||
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER,
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002*
Pursuant to the requirement set forth in Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, David Rosa, Chief Executive Officer of NeuroOne Medical Technologies Corporation (the “Company”) hereby certifies that, to the best of his knowledge:
| 1. | The Company’s Quarterly Report on Form 10-Q/A for the period ended March 31, 2026 (the “Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report. |
| /s/ David Rosa | |
|
David Rosa Chief Executive Officer (Principal Executive Officer)
| |
| Dated: June 12, 2026 |
| * | This certification accompanies the report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of NeuroOne Medical Technologies Corporation under the Securities Act of 1933, as amended, or the Exchange Act made before or after the date of the report, irrespective of any general incorporation language contained in such filing. |
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER,
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002*
Pursuant to the requirement set forth in Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, Ronald McClurg, Chief Financial Officer of NeuroOne Medical Technologies Corporation (the “Company”) hereby certifies that, to the best of his knowledge:
| 1. | The Company’s Quarterly Report on Form 10-Q/A for the period ended March 31, 2026 (the “Report”), to which this Certification is attached as Exhibit 32.2, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report. |
| /s/ Ronald McClurg | |
|
Ronald McClurg Chief Financial Officer (Principal Financial Officer) | |
| Dated: June 12, 2026 |
| * | This certification accompanies the report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of NeuroOne Medical Technologies Corporation under the Securities Act of 1933, as amended, or the Exchange Act made before or after the date of the report, irrespective of any general incorporation language contained in such filing. |