NeuroOne Medical Technologies (NMTC) - 2025 Q4 - Annual Report

Market Opportunities - The epilepsy market presents a significant opportunity, with approximately 3,000,000 patients in the U.S. and an estimated annual cost of $15.5 billion[30] - The chronic back pain market, particularly through spinal cord stimulation (SCS), is valued at approximately $2.5 to $3 billion globally[36] - The total market for Basivertebral Nerve Ablation (BVNA) procedures in the U.S. is estimated at around $100 million per year, with over 10,000 procedures performed annually[40] - The Parkinson's disease market includes around 1,000,000 patients in the U.S., with 60,000 new diagnoses each year, highlighting a significant treatment need[42] - The company is developing a drug delivery system that has already been ordered by a large biopharmaceutical company, representing a new market opportunity exceeding $50 million[41] Product Development and Regulatory Approvals - The company has received 510(k) clearance for four devices, including the Evo Cortical and OneRF Brain Ablation System, enhancing its product portfolio for brain-related conditions[23] - The OneRF TN Ablation System features a "first-of-its-kind" multi-contact RF probe, potentially reducing procedural time and improving patient safety[25] - The company is pursuing FDA clearance for a new drug delivery device intended for neurological therapies, which could expand its market reach significantly[27] - The company is pursuing a 510(k) clearance with the FDA for its drug delivery system and BVNA product[54] - Four products have received 510(k) clearance from the FDA: Evo Cortical, Evo sEEG, OneRF Ablation System, and OneRF TN Ablation System, while other products are still under development[173] Financial Performance and Funding - In fiscal 2025, the company generated approximately $9.1 million in product revenue from the Evo Cortical, Evo sEEG, and OneRF Brain Ablation System[50] - The company raised approximately $8.2 million from the sale of 16 million shares at $0.50 per share in April 2025[70] - As of September 30, 2025, the company had an accumulated deficit of $78.6 million, primarily due to expenses from operations and research and development programs[144] - The company has incurred significant operating losses since inception and does not expect to achieve profitability in the foreseeable future[145] - The company had cash and cash equivalents of approximately $6.6 million as of September 30, 2025, which is insufficient to fund ongoing operating expenses[156] Competition and Market Dynamics - The company faces competition in the epilepsy diagnosis market from Ad-Tech Medical Instrument Corporation, PMT Corporation, and Dixi Medical, among others[84] - The market for trigeminal neuralgia treatment includes competition from Boston Scientific and Avanos RF ablation systems[87] - The company faces significant competition from established players in the medical device industry, which may impact market acceptance[212] - Competitors may have advantages such as more experienced sales forces, greater name recognition, and established distribution networks[215] - The company may face challenges in developing and commercializing new products due to competition and market dynamics[214] Regulatory Compliance and Risks - The company is subject to extensive governmental regulation, and failure to comply could adversely affect its business[146] - The FDA classifies medical devices into three classes (I, II, III) based on risk, with Class III requiring the most regulatory control and typically a Premarket Approval (PMA) process[108] - Non-compliance with regulatory requirements can lead to significant consequences, including product recalls, fines, and potential criminal prosecution[128] - The PMA approval process can be lengthy and costly, with many devices never receiving approval despite applications being submitted[120] - Regulatory compliance and scrutiny will continue to be a significant responsibility for the company, even after obtaining product approvals[181] Research and Development - Research and development expenses for the years ended September 30, 2025, and 2024 were $5.0 million and $5.1 million, respectively, indicating a slight decrease[82] - The company is focused on developing comprehensive neuromodulation solutions for neurological disorders, including epilepsy and Parkinson's disease[148] - Clinical testing for new products is expensive and time-consuming, with potential delays impacting the ability to generate revenue[174] - The company may need to conduct additional clinical trials or testing, which could delay marketing approval for its technologies[177] - The company is exploring partnerships for drug delivery systems capable of therapy delivery and monitoring for up to 30 days[50] Intellectual Property and Partnerships - The patent estate includes multiple issued patents and pending applications, with expiration dates ranging from 2028 to 2045, highlighting the importance of intellectual property protection[94] - The partnership with Mayo is crucial for licensing know-how for the development and commercialization of technology, and its termination would harm the business[221] - The Mayo Development Agreement includes exclusive licensing of certain improvements and non-exclusive licensing of thin film electrode technology know-how[221] Operational Challenges - The company relies on reimbursement from private third-party healthcare payors and Medicare, which is critical for its success, but future coverage levels are uncertain[74] - The company relies on a limited number of third-party suppliers for components, which exposes it to risks related to pricing, availability, and quality[168] - The inability to obtain a supply of components and raw materials could materially adversely affect the company's business and financial condition[163] - The company faces fierce competition in recruiting and retaining qualified personnel, which could harm business if competitors are more successful[216] - The company has faced substantial doubt about its ability to continue as a going concern due to ongoing losses and negative cash flows from operations[156]