Annual Report for Fiscal Year Ending September 30, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of financial condition and results of operations of NeuroOne together with our financial statements and the related notes included elsewhere in this Report.

Overview

We are a medical technology company focused on (i) diagnostic, ablation and deep brain stimulation technology for brain related conditions such as epilepsy and Parkinson's disease; (ii) ablation and stimulation for pain management throughout the body; and (iii) drug delivery including diagnostic and stimulation capabilities.

We are developing and commercializing thin film electrode technology for continuous electroencephalogram ("cEEG") and stereoelectrocencephalography ("sEEG"), spinal cord stimulation, brain stimulation, drug delivery and ablation solutions for patients suffering from epilepsy, trigeminal neuralgia, Parkinson's disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other pain-related neurological disorders. The Company is also developing the capability to use its sEEG electrode technology to deliver drugs or gene therapy while being able to record activity before, during, and after delivery.

We have received 510(k) clearance for four of our devices from the Food and Drug Administration ("FDA"), including: (i) our Evo cortical electrode technology for recording, monitoring, and stimulating brain tissue for up to 30 days ("Evo Cortical"), (ii) our Evo sEEG electrode technology for temporary (less than 30 days) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain ("Evo sEEG"), (iii) our OneRF ablation system for creation of radiofrequency lesions in nervous tissue for functional neurosurgical procedures ("OneRF Ablation System"), (iv) our OneRF TN ablation system for use in procedures to create radiofrequency (RF) lesions for the treatment of pain, or for lesioning nerve tissue for functional neurosurgical procedures ("OneRF TN Ablation System"). We have a distribution agreement with Zimmer, Inc. ("Zimmer") providing Zimmer with a license to commercialize and distribute the Evo Cortical, Evo sEEG, and OneRF Ablation System in the brain. We initiated a limited market release of the OneRF TN Ablation System in December 2025. The Company's other products and indications are still under development.

We have largely incurred losses since inception. As of September 30, 2025, we had an accumulated deficit of $78.6 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.

NeuroOne Medical Technologies Corporation

FORM 10-K

Recent Developments

Corporate Updates

510(k) Clearance for Trigeminal Facial Pain

On August 15, 2025 we received FDA 510(k) clearance to market its OneRF® Trigeminal Nerve Ablation System for use in procedures to create radiofrequency lesions for the treatment of pain, or for lesioning nerve tissue for functional neurosurgical procedures.

April 2025 Financing

On April 4, 2025, we entered into an underwriting agreement with Ladenburg Thalmann & Co. Inc. as underwriter ( "Ladenburg"), relating to the issuance and sale of 16,000,000 shares of the Company's common stock, at a price to the public of $0.50 per share (the "April 2025 Financing"). In addition, under the terms of the underwriting agreement, we granted Ladenburg an option, exercisable for 45 days, to purchase up to an additional 2,400,000 shares of common stock on the same terms as the offering, which was exercised in full. Net proceeds to the Company were approximately $8.2 million.

Zimmer Amended and Restated Distribution Agreement

On October 25, 2024, we entered into the Zimmer Amended and Restated Distribution Agreement (the "Amendment") with Zimmer, Inc. ("Zimmer") pursuant to which we granted Zimmer the exclusive right and license to distribute our OneRF Ablation System for an upfront payment of $3.0 million, with eligibility for an additional $1.0 million payment from Zimmer upon achievement of certain specified net sales milestones.

We previously entered into an Exclusive Development and Distribution Agreement dated July 20, 2020 with Zimmer, related to the Evo Cortical and Evo sEEG products, which was subsequently amended pursuant to the terms and conditions of a letter agreement dated January 6, 2021, a Second Amendment to Exclusive Development and Distribution Agreement dated June 28, 2022, and a Third Amendment to Exclusive Development and Distribution Agreement dated August 2, 2022 (collectively, the "EDDA").The EDDAs executed prior to the Amendment granted Zimmer exclusive global rights to distribute the Evo Cortical and Evo sEEG products. In addition, under the prior EDDAs, we agreed to collaborate with respect to development activities through a joint development committee composed of an equal number of representatives of Zimmer and the Company.

Under the Amendment, Zimmer paid us $3.0 million for an exclusive RF Distribution License (the "RF Distribution License" and "License") for commercialization of the OneRF Ablation System in the brain. In addition, we are eligible to receive a future milestone payment of $1.0 million upon reaching a one-time sales volume threshold. We do not anticipate receiving this milestone payment.

The revised term under the Amendment (the "Term") began on the effective date and will remain in effect until October 31, 2034. Upon the expiration of the Term, it may be renewed upon the mutual written of the Parties. The Zimmer Amended and Restated Exclusive Development and Distribution Agreement may be terminated before the expiration of the Term only by the Parties in accordance with certain terms under the Amendment. In addition, the license rights granted to Zimmer under this Amendment shall be exclusive (i) from the original effective date until September 30, 2032 for the Evo Cortical and Evo sEEG products; and (ii) from the effective date until October 31, 2034 for the OneRF Ablation System.

Global Economic Conditions

Generally, worldwide economic conditions remain uncertain, particularly due to the conflicts between Russia and Ukraine and in the Middle East, disruptions in the banking system and financial markets, and increased inflation. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected our access to capital and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms or at all. If economic conditions continue to decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected. We have experienced minor price increases from our suppliers related to tariffs on imported goods, and may experience additional price increases.

NeuroOne Medical Technologies Corporation

FORM 10-K

Our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors. Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, increased inflation, the conflicts in Ukraine and the Middle East, disruptions in the banking system and financial markets, and steps taken by governments and central banks, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.

Financial Overview

Product Revenue

Our product revenue was derived from the sale of our Evo Cortical, Evo sEEG, and OneRF Ablation System, which have each received FDA 510(k) clearance.

Product Gross Profit

Product gross profit represents our product revenue less our cost of product revenue. Our cost of product revenue consists of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our Evo Cortical, Evo sEEG, and OneRF Ablation Systems, and outside supplier costs of producing our electrode cable assembly products. In addition, the cost of product revenue includes royalty fees incurred in connection with our license agreements as well as valuation adjustments for excess or obsolete inventory.

License Revenue

The Company determined that the RF Distribution License granted under the Zimmer Amended and Restated Distribution Agreement represented functional intellectual property given Zimmer's access to the underlying intellectual property associated with the OneRF Ablation System. As such, the revenue related to the license was recognized at the point in time in which the license/know-how was delivered to Zimmer which occurred in October 2024. Revenue recognized under the Amendment during the year ended September 30, 2025 was $3.0 million. For further discussion about the determination of license revenue, product revenue and cost of product revenue, and for a discussion of milestones and royalty payments under the Zimmer Amended and Restated Distribution Agreement, see "-Liquidity and Capital Resources-Liquidity Outlook" below and see "Note 7 - Zimmer Distribution Agreement and Other Product Revenue" included in our financial statements included in Item 8 - Financial Statements and Supplementary Data" in this Report.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in functions not directly associated with research and development activities. Other significant costs include legal and litigation costs relating to corporate matters, intellectual property costs, professional fees for consultants assisting with financial and administrative matters, and sales and marketing in connection with the commercial sale of our Evo Cortical, Evo sEEG, and OneRF Ablation Systems. We anticipate that our selling, general and administrative expenses will increase in the future to support our continued research and development activities, further commercialization of our technology, and the increased costs of operating as a public company.

Research and Development

Research and development expenses consist of expenses incurred in performing research and development activities in developing our technology. Research and development expenses include compensation and benefits for research and development employees including stock-based compensation, overhead expenses, laboratory supplies, clinical trial and related clinical manufacturing expenses, costs related to regulatory operations, fees paid to consultants and other outside expenses. Research and development costs are expensed as incurred and costs incurred by third parties are expensed as the contracted work is performed.

NeuroOne Medical Technologies Corporation

FORM 10-K

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

Other Income

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

Results of Operations

Comparison of the Fiscal Years Ended September 30, 2025 and 2024

The following table sets forth our results of operations for the fiscal years ended September 30, 2025 and 2024.

		For the years ended September 30,
		2025				2024				Period to Period Change
Product revenue		$	9,097,692			$	3,453,003			$	5,644,689
Cost of product revenue			3,956,286				2,373,336				1,582,950
Product gross profit			5,141,406				1,079,667				4,061,739
Collaborations revenue			3,000,000				-				3,000,000
Operating expenses:
Selling, general and administrative			7,384,517				7,901,695				(517,178	)
Research and development			4,983,362				5,065,181				(81,819	)
Total operating expenses			12,367,879				12,966,876				(598,997	)
Loss from operations			(4,226,473	)			(11,887,209	)			7,660,736
Fair value change in warrant liability			784,670				(327,092	)			1,111,762
Financing costs			(334,063	)			(228,988	)			(105,075	)
Other income, net			170,492				125,179				45,313
Loss before income taxes			(3,605,374	)			(12,318,110	)			8,712,736
Provision for income taxes			-				-				-
Net loss		$	(3,605,374	)		$	(12,318,110	)		$	8,712,736

Product Revenue and Product Gross Profit

Product revenue was $9.1 million during the year ended September 30, 2025 with a gross profit and gross profit percentage of $5.1 million and 56.5%, respectively. Product revenue was $3.5 million during the year ended September 30, 2024 with a gross profit and gross profit percentage of $1.1 million and 31.3%, respectively. The increase in gross profit percentage during the current period was largely due to the higher margin OneRF Ablation System being sold in the current period under the Amendment with Zimmer. Product revenue consisted primarily of sales of the OneRF Ablation System to Zimmer during the year ended September 30, 2025 while revenue consisted of Evo Cortical, Evo sEEG, and OneRF Ablation System sales during the prior year period. The cost of product revenue consisted of the manufacturing and materials costs incurred by our third-party contract manufacturers in connection with our Evo Cortical, Evo sEEG, and OneRF Ablation System. In addition, cost of product revenue included royalty fees incurred of approximately $150,000 and $157,000 in connection with our license agreements during the years ended September 30, 2025 and 2024, respectively.

NeuroOne Medical Technologies Corporation

FORM 10-K

Collaborations Revenue

License revenue was $3.0 million for the year ended September 30, 2025 which related to the distribution license granted to Zimmer for the OneRF Ablation System in October 2024. No license revenue was generated from the Zimmer Amended and Restated Development Agreement during the year ended September 30, 2024.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $7.4 million and $7.9 million for the years ended September 30, 2025 and 2024, respectively. The $0.5 million decrease period over period was primarily due to a decrease in both legal fees in the amount of $0.4 million and investor relations related expense of $0.6 million, offset in part by increases in payroll related costs of approximately $0.1 million, non-legal professional fees of $0.2 million, marketing and sales costs of $0.1 million and other operating cost increases of $0.1 million on a net basis.

Research and Development Expenses

Research and development expenses were approximately $5.0 million for the year ended September 30, 2025, compared to $5.1 million for the year ended September 30, 2024. The $0.1 million decrease period over period was attributed to the net reduction in development activities associated with our Evo Cortical, Evo sEEG, and OneRF Ablation System, given the commercialization of these products. Activity associated with new technology development largely offset the overall net decrease in research and development costs during the current period. Development activities primarily included salary-related expenses and costs related to consulting services, testing, materials and supplies.

Fair Value Change in Warrant Liability

The net change in fair value of the warrant liability during the year ended September 30, 2025 resulted in a $0.8 million benefit compared to an expense of $0.3 million during the year ended September 30, 2024. The change was due primarily to fluctuations in our common stock fair value.

Financing Costs

Financing costs during the year ended September 30, 2025 of $0.3 million consisted of the amortization of the deferred issuance costs associated with the debt facility (described further below) in the amount of $0.2 million and additional legal and loan facility termination costs of $0.1 million upon the termination of the debt facility in November 2024. In addition, $9,000 in legal fees were incurred in connection with the at-the market offering program (described further below).

Financing costs during the year ended September 30, 2024 of $0.2 million consisted of the amortization of the deferred issuance costs associated with the debt facility (described further below) in the amount of $0.1 million and issuance costs attributed to the warrants issued in connection with the 2024 Private Placement (described further below) in the amount of $0.1 million.

Other Income, net

Other income, net during the year ended September 30, 2025 and 2024 consisted principally of interest income attributed to our cash and cash equivalents.

Liquidity and Capital Resources

Overview

As of September 30, 2025, our principal source of liquidity consisted of cash and cash equivalents in the aggregate of approximately $6.6 million.

NeuroOne Medical Technologies Corporation

FORM 10-K

Capital Resources

Our sources of cash and cash equivalents to date have been limited to license, collaboration and product revenues, along with proceeds from the issuances of notes with warrants, common stock with and without warrants and unsecured loans with the terms of our more recent financings described below.

April 2025 Financing

On April 4, 2025, we entered into an underwriting agreement with Ladenburg, relating to the issuance and sale of 16,000,000 shares of our common stock, at a price to the public of $0.50. In addition, under the terms of the underwriting agreement, we granted Ladenburg an option, exercisable for 45 days, to purchase up to an additional 2,400,000 shares of common stock on the same terms as the offering, which was exercised in full. Issuance costs in connection with the April 2025 Financing amounted to approximately $1.0 million which included a 7.0% commission to the Underwriter and legal and other expenses in the amount of $0.3 million. The Company received approximately $8.2 million in net proceeds.

August 2024 Private Placement

On August 1, 2024, we entered into a Securities Purchase Agreement with certain purchasers, pursuant to which we, in a private placement, agreed to issue and sell an aggregate of (i) 2,944,446 shares of our Company's common stock (the "Shares"), par value $0.001 per share and (ii) warrants to purchase an aggregate of 2,208,338 shares of common stock (the "PIPE Warrants") at a purchase price of $0.90 per unit, consisting of one share and a PIPE Warrant to purchase 0.75 shares of common stock, resulting in total gross proceeds of approximately $2.65 million before deducting expenses. The 2024 Private Placement closed on August 2, 2024. Issuance costs attributed to the 2024 Private Placement amounted to $0.2 million.

The PIPE Warrants are exercisable beginning on the date of issuance and had an initial exercise price of $1.19 per share, subject to adjustment. In April 2025, the exercise price was reset to $0.465 upon the close of the April 2025 Financing for all of the PIPE Warrants, except for the PIPE Warrants to purchase 20,834 shares of common stock issued to a director on our Board of Directors for which the exercise price was reset to $0.876 per share. The PIPE Warrants will expire on the third anniversary of the date of issuance.

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

At-The-Market Offering

On December 21, 2022, we entered into a Capital on Demand^TM Sales Agreement ("Sales Agreement") with JonesTrading Institutional Services LLC ("JonesTrading") to create an at-the-market offering program ("ATM Program") under which we may offer and sell shares having an aggregate offering price of up to $14.5 million. JonesTrading is entitled to a commission at a fixed commission rate of up to 3% of the gross proceeds. On July 24, 2023, we decreased the amount of common stock that can be sold pursuant to the Sales Agreement, such that we were offering up to an aggregate of $2.6 million of our common stock for sale under the Sales Agreement, including the shares of our common stock previously sold. Subsequently, on December 1, 2023, however, we increased the amount of common stock that can be sold pursuant to the Sales Agreement, such that we were offering up to an aggregate of $4.8 million of our common stock for sale under the Sales Agreement, including the shares of our common stock previously sold. On January 5, 2024, we further increased the amount of common stock that can be sold pursuant to the Sales Agreement, such that we are offering up to an aggregate of $9.3 million of our common stock for sale under the Sales Agreement, including the shares of common stock previously sold. On August 16, 2024, we increased the amount of common stock that can be sold pursuant to the Sales Agreement by $3.0 million. On April 3, 2025, we decreased the amount of common stock that can be sold pursuant to the Sales Agreement to zero. On August 15, 2025, we increased the amount of common stock that can be sold pursuant to the Sales Agreement to $6,750,000. Through September 30, 2025, we have issued 5,544,489 shares of common stock under the ATM Program for gross proceeds in the amount of $8.0 million. We incurred issuance costs in connection with the ATM Program in the amount of $0.6 million through September 30, 2025.

NeuroOne Medical Technologies Corporation

FORM 10-K

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 as defined in the Debt Facility Agreement or a change of control, or (iii) at the Lender's option, upon the occurrence and during the continuance of an event of default under the Debt Facility Agreement. On November 7, 2024, the Company terminated the Debt Facility Agreement, and no amounts were drawn under the Debt Facility Agreement. Total costs incurred under the debt facility financing was $0.4 million.

Funding Requirements

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" of this Report 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.

On January 21, 2020, we entered into an Amended and Restated License Agreement (the "WARF License") with WARF, which amended and restated in full our prior license agreement with WARF, dated October 1, 2014. Under the WARF License, we have agreed to pay WARF a royalty equal to a single-digit percentage of certain of our product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect. If we or any of our sublicensees contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the contested patent is found to be valid and would be infringed by us if not for the WARF License, the royalty rate will be tripled for the remaining term of the WARF License.

Under the Amended and Restated License and Development Agreement with Mayo (the "Mayo Development Agreement"), we have agreed to pay Mayo a royalty equal to a single-digit percentage of certain of our product sales pursuant to the Mayo Development Agreement. See "Note 4 - Commitments and Contingencies" included in our financial statements included in "Item 8 - Financial Statements and Supplementary Data" in this Report. for more information about the WARF License and the Mayo Development Agreement.

Our other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities. Our other cash requirements greater than twelve months from various contractual obligations and commitments include operating leases and contracted services. Refer to "Note 4 - Commitments and Contingencies" included in our financial statements included in "Item 8 - Financial Statements and Supplementary Data" in this Report for further detail of our lease obligations and the timing of expected future payments. Contracted services include agreements with third-party service providers for clinical research, product development, manufacturing, supplies, payroll services, equipment maintenance services, and audits for periods up to fiscal year 2028.

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

NeuroOne Medical Technologies Corporation

FORM 10-K

Liquidity Outlook

For a discussion of potential fee payments under the Amended and Restated Zimmer Development Agreement, see "Note 7 - Zimmer Distribution Agreement and Other Product Revenue" included in our financial statements included in "Item 8 - Financial Statements and Supplementary Data" in this Report. Even though we have received regulatory clearance to expand the use of our Evo sEEG electrode technology for up to 30 days, commercial sales of the sEEG electrodes and OneRF 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 to provide Zimmer with the exclusive right and license to distribute our OneRF Ablation System in the brain for an upfront payment of $3.0 million, with eligibility for an additional $1.0 million payment from Zimmer upon achievement of certain specified net sales milestones.

At September 30, 2025, we had cash and cash equivalents in the aggregate of approximately $6.6 million. Management has noted the existence of substantial doubt about our ability to continue as a going concern. Additionally, our independent registered public accounting firm included an explanatory paragraph in the report on our financial statements as of and for the years ended September 30, 2025 and 2024, respectively, noting the existence of substantial doubt about our ability to continue as a going concern. Our existing cash and cash equivalents may not be sufficient to fund our operating expenses through at least twelve months from the date of this filing. To continue to fund operations, we will need to secure additional funding through public or private equity or debt financing, through collaborations or partnerships with other companies, or other sources.

We may not be able to raise additional capital on terms acceptable to us, or at all. Any failure to raise capital when needed could compromise our ability to execute on our business plan. If we are unable to raise additional funds, or if our anticipated operating results are not achieved, we believe planned expenditures may need to be reduced in order to extend the time period that existing resources can fund our operations. If we are unable to obtain the necessary capital in the future from operating results or future financing, it may have a material adverse effect on our operations and the development of our technology, or we may have to cease operations altogether.

The development and commercialization of our cortical strip, grid electrode, depth electrode, ablation system technology and future products and technology is subject to numerous uncertainties, and we could use our cash and cash equivalent resources sooner than we expect. Additionally, the process of developing medical devices is costly, and the timing of progress in pre-clinical tests and clinical trials is uncertain. Our ability to successfully transition to profitability will be dependent upon achieving further regulatory approvals and achieving a level of product sales adequate to support our cost structure. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Our other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities. Our other cash requirements greater than twelve months from various contractual obligations and commitments include operating leases and contracted services.

We expect to satisfy our short term and long term obligations through cash on hand and, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever, from future equity and debt financings.

Cash Flows

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

		For the Years Ended
		September 30,
		2025				2024
Net cash used in operating activities		$	(2,837,272	)		$	(11,011,840	)
Net cash used in investing activities			(81,742	)			(120,197	)
Net cash provided by financing activities			8,029,354				7,269,586
Net increase (decrease) in cash and cash equivalents		$	5,110,340			$	(3,862,451	)

NeuroOne Medical Technologies Corporation

FORM 10-K

Net cash used in operating activities

Net cash used in operating activities was $2.8 million for the year ended September 30, 2025, which consisted of a net loss of $3.6 million partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets and deferred issuance costs, operating lease expense, fair value change in warrant liability totaling approximately $1.1 million in the aggregate. Our net loss was further adjusted to account for the reclassification of debt and equity facility termination costs to financing activities in the amount of $0.1 million. The net change in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a cash use of approximately $0.4 million. The net cash use stemming from the change in operating assets and liabilities was primarily attributable to an increase in our accounts receivable attributed largely to the timing of customer payments. Partially offsetting the net cash operating use during the period was a decrease in our inventory and prepaid expenses as well as a net increase in our accounts payable and accrued expenses resulting from timing of payments and fluctuations in our operations.

Net cash used in operating activities was $11.0 million for the year ended September 30, 2024, which consisted of a net loss of $12.3 million partially offset principally by non-cash stock-based compensation, depreciation, amortization related to intangible assets and deferred issuance costs, operating lease expense, fair value change in warrant liability and the proceeds from the issuance of warrants in connection with the 2024 Private Placement totaling approximately $2.2 million in the aggregate. Our net loss was further adjusted to account for the reclassification of debt and equity facility termination costs to financing activities in the amount of $0.1 million. The net change in our net operating assets and liabilities associated with fluctuations in our operating activities resulted in a cash use of approximately $1.0 million. The net cash use stemming from the change in operating assets and liabilities was primarily attributable to an increase in inventory purchases and to an increases in our accounts receivable attributed largely to the timing of customer payments. Partially offsetting the net cash operating use during the period was an increase in our accounts payable and accrued expenses coupled with a decrease in prepaid expenses resulting from timing of payments and fluctuations in our operations.

Net cash used in investing activities

Net cash used in investing activities was $0.1 million for each of the years ended September 30, 2025 and 2024 consisting of outlays for purchases of property and equipment.

Net cash provided by financing activities

Net cash provided by financing activities was $8.0 million for the year ended September 30, 2025, which consisted of net proceeds from the April 2025 Financing of approximately $8.2 million and from the ATM Program in the amount of approximately $0.3 million as well as from the exercise of warrants in the amount of $0.1 million. Offsetting the net proceeds were debt facility issuance costs of $0.3 million, issuance costs paid in connection with a prior year private placement of approximately $0.2 million and as a result of the repurchases of common stock for the payment of employee taxes in the amount of $0.1 million.

Net cash provided by financing activities was $7.3 million for the year ended September 30, 2024, which consisted of net proceeds from the ATM Program of $4.8 million and net proceeds from the 2024 Private Placement of $2.6 million, offset partially by repurchases of common stock for the payment of employee taxes in the amount of $81,000 and debt facility issuance costs of approximately $75,000.

NeuroOne Medical Technologies Corporation

FORM 10-K

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which we rely are reasonably based upon information available to us at the time that we make these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described in "Note 3 - Summary of Significant Accounting Policies" to our financial statements included in "Item 8 - Financial Statements and Supplementary Data" in this Report.

Of these policies, the following are considered critical to an understanding of our financial statements included in "Item 8 - Financial Statements and Supplementary Data" in this Report that require the application of the most subjective and the most complex judgments:

Revenues:

For discussion about the determination of collaborations revenue, product revenue and cost of product revenue, see "Note 7 - Zimmer Amended and Restated Distribution Agreement and Other Product Revenue" included in "Item 8 - Financial Statements and Supplementary Data" in this Report. To date, we have not had, nor expect to have in the future, significant variable consideration adjustments related to product revenue, such as chargebacks, sales allowances and sales returns.

Fair Value of Warrant liability

We issued warrants in connection with our August 2024 Private Placement. The warrants were classified as a liability on our balance sheet and were recorded at fair value as certain provisions precluded equity accounting treatment for these instruments. We will continue to adjust the liabilities for changes in fair value until the earlier of the exercise, expiration, or until such time that cash settlement or indexation provisions are no longer in effect for the warrants. For discussions about the application of fair value associated with the warrants, see "Note 9 - Stockholders' Equity" included in "Item 8 - Financial Statements and Supplementary Data" in this Report.

Recent Accounting Pronouncements

See "Note 3 - Summary of Significant Accounting Policies" included in "Item 8 - Financial Statements and Supplementary Data" in this Report regarding the impact of certain recent accounting pronouncements on our financial statements.