NeuroOne Medical Technologies (NMTC) - 2024 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, and cash flows, with notes detailing financial position and subsequent events Condensed Balance Sheets Condensed Balance Sheet Summary (unaudited) | Metric | June 30, 2024 ($) | September 30, 2023 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,619,977 | $5,322,493 | | Total current assets | $4,085,437 | $7,312,925 | | Total assets | $4,912,597 | $8,097,314 | | Liabilities & Equity | | | | Total current liabilities | $1,690,960 | $1,792,626 | | Total liabilities | $1,900,870 | $1,847,910 | | Total stockholders' equity | $3,011,727 | $6,249,404 | Condensed Statements of Operations Three Months Ended June 30, (unaudited) | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Product revenue | $825,776 | $629,906 | | Product gross profit | $281,872 | $243,666 | | Total operating expenses | $3,075,773 | $3,753,901 | | Loss from operations | ($2,793,901) | ($3,510,235) | | Net loss | ($2,767,525) | ($3,468,773) | | Net loss per share | ($0.10) | ($0.20) | Nine Months Ended June 30, (unaudited) | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Product revenue | $3,180,719 | $1,210,661 | | Product gross profit | $938,605 | $262,862 | | Collaborations revenue | $0 | $1,455,188 | | Total operating expenses | $10,009,079 | $10,508,556 | | Loss from operations | ($9,070,474) | ($8,790,506) | | Net loss | ($8,967,515) | ($8,724,370) | | Net loss per share | ($0.35) | ($0.52) | Condensed Statements of Cash Flows Cash Flow Summary for Nine Months Ended June 30, (unaudited) | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,344,957) | ($9,984,048) | | Net cash (used in) provided by investing activities | ($83,292) | $2,700,084 | | Net cash provided by financing activities | $4,725,733 | $2,207,093 | | Net decrease in cash and cash equivalents | ($3,702,516) | ($5,076,871) | | Cash and cash equivalents at end of period | $1,619,977 | $3,083,458 | Notes to Condensed Financial Statements - The company is a medical technology firm specializing in thin film electrode technology for neurological disorders, with FDA 510(k) clearance for three devices including the Evo cortical and sEEG electrodes, and the OneRF ablation system[11][12] - Substantial doubt exists regarding the company's ability to continue as a going concern, evidenced by a $71.7 million accumulated deficit as of June 30, 2024, though recent financing is expected to provide liquidity through July 2025[17] - No collaborations revenue was recognized in the nine months ended June 30, 2024, following the completion of all Zimmer Development Agreement obligations by December 31, 2022, compared to $1,455,188 in 2023[70][71] - Subsequent to quarter-end, the company secured approximately $2.65 million in gross proceeds from a private placement and a new $3.0 million delayed draw term loan facility on August 2, 2024[96][97] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, liquidity, and capital resources, highlighting operational results, funding needs, and recent strategic developments - The company initiated a limited commercial launch of its OneRF ablation system in March 2024 and is exploring strategic partnerships for the product[113] - On July 11, 2024, Nasdaq issued a non-compliance notice due to the stock's closing bid price falling below $1.00 for 30 consecutive trading days, with a compliance deadline of January 7, 2025[114] Results of Operations Comparison - Three Months Ended June 30, | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Product Revenue | $0.8 million | $0.6 million | | Product Gross Profit % | 34.1% | 38.7% | | R&D Expenses | $1.2 million | $1.9 million | | Net Loss | ($2.8 million) | ($3.5 million) | Results of Operations Comparison - Nine Months Ended June 30, | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Product Revenue | $3.2 million | $1.2 million | | Collaborations Revenue | $0 | $1.5 million | | R&D Expenses | $4.0 million | $5.2 million | | Net Loss | ($9.0 million) | ($8.7 million) | - As of June 30, 2024, cash and cash equivalents totaled $1.6 million, supplemented by subsequent August 2024 financing of ~$2.65 million from a private placement and a $3.0 million loan facility, expected to fund operations through July 2025[147] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a smaller reporting company - The company is a smaller reporting company and is not required to provide the information under this item[171] Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[171] - No material changes in internal control over financial reporting occurred during the quarter[172] PART II – OTHER INFORMATION Legal Proceedings The company is not currently a party to any legal proceedings likely to have a material adverse effect - The company is not currently involved in any legal proceedings that management believes would have a material adverse effect on the business[174] Risk Factors This section highlights the significant risk of potential Nasdaq delisting due to failure to meet the minimum bid price requirement - A primary risk is the potential delisting of the company's common stock from Nasdaq due to failure to maintain the $1.00 minimum bid price per share[176] - The company received a Nasdaq non-compliance notice on July 11, 2024, with a 180-day compliance period ending January 7, 2025[177] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities occurred during the period[181] Other Information No directors or Section 16 officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading plans during the three months ended June 30, 2024[181] Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications - A list of exhibits filed with the report is provided, including certifications required by the Sarbanes-Oxley Act[181]