NMTC US Equity☆

ITEM 1A. RISK FACTORS 25

ITEM 1B. UNRESOLVED STAFF COMMENTS 58

ITEM 2. PROPERTIES 58

ITEM 3. LEGAL PROCEEDINGS 58

ITEM 4. MINE SAFETY DISCLOSURES 59

ITEM 6. [RESERVED] 60

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 75

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 76

ITEM 9A. CONTROLS AND PROCEDURES 108

ITEM 9B. OTHER INFORMATION 108

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 108

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 109

ITEM 11. EXECUTIVE COMPENSATION 114

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 123

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 124

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Unless the context requires otherwise, references

in this Annual Report on Form 10-K (this “Annual Report” or “Report”) to “we,” “us,” “the

Company” and “our” refer to NeuroOne Medical Technologies Corporation (the “Company”).

This Annual Report contains forward-looking statements

that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections entitled “Risk

Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,”

but are also contained elsewhere in this Annual Report. 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 Annual 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 achieve or sustain profitability;

● our ability to raise additional capital and to fund our operations;

● our future development priorities;

● the impact of the COVID-19 pandemic on our business;

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● our ability to comply with applicable regulatory requirements;

● our ability to maintain our intellectual property position;

● the outcome of legal proceedings with PMT Corporation (“PMT”);

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 this Annual Report

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 Annual 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 Annual 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 Annual Report.

iii

PART I

ITEM 1.BUSINESS

Overview

Corporate Overview of NeuroOne Medical Technologies

Corporation

We were originally incorporated as Original Source

Entertainment, Inc. under the laws of the State of Nevada on August 20, 2009. Prior to the closing of the Acquisition, as defined below,

we completed a series of steps contemplated by a Plan of Conversion pursuant to which we, among other things, changed our name to NeuroOne

Medical Technologies Corporation, increased our authorized number of shares of Common Stock from 45,000,000 to 100,000,000, increased

our authorized number of shares of preferred stock from 5,000,000 to 10,000,000 and reincorporated in Delaware. On July 20, 2017, we acquired

NeuroOne, Inc. (the “Acquisition”). Immediately following the closing of the Acquisition, the business of NeuroOne, Inc. became

our sole focus.

Corporate Overview and History of NeuroOne,

Inc.

NeuroOne, Inc. was incorporated under the laws

of the State of Delaware on October 7, 2016. Its predecessor entity, NeuroOne LLC (the “LLC”), was formed on December 13,

2013 and operated as a limited liability company until it was merged with and into NeuroOne, Inc. on October 27, 2016, with NeuroOne,

Inc. as the surviving entity (the “Merger”). As a result of the Merger, all of the properties, rights, privileges and powers

of the LLC vested in NeuroOne, Inc., and all debts, liabilities and duties of the LLC became the debts, liabilities and duties of NeuroOne,

Inc., except for the Exclusive Start-up Company License Agreement, dated as of October 1, 2014, as amended on February 22, 2017, March

30, 2019 and September 18, 2019 (the “Original WARF License”), with the Wisconsin Alumni Research Foundation (“WARF”),

which was not legally transferred until May 2017. The purposes of the Merger were to: change the jurisdiction of incorporation from Minnesota

to Delaware; change the ownership of the LLC’s underlying assets; and convert from a limited liability company to a corporation.

In December 2019, NeuroOne, Inc. was merged with and into the Company, with the Company remaining as the surviving entity.

We are a medical technology company focused on

the development and commercialization of thin film electrode technology for continuous electroencephalogram (cEEG) and stereoelectrocencephalography

(sEEG) recording, spinal cord stimulation, brain stimulation and ablation solutions for patients suffering from epilepsy, Parkinson’s

disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological disorders. Additionally,

we are investigating the potential applications of our technology associated with artificial intelligence. Members of our management team

have held senior leadership positions at a number of medical technology and biopharmaceutical companies, including Boston Scientific,

St. Jude Medical, Stryker Instruments, C.R. Bard, A-Med Systems, Sunshine Heart, Empi, Don-Joy and PMT.

We are developing our cortical, sheet and depth

electrode technology to provide solutions for diagnosis through cEEG recording and sEEG recording and treatment through brain stimulation

and ablation, all in one product. A cEEG is a continuous recording of the electrical activity of the brain that identifies the location

of irregular brain activity, which information is required for proper treatment. cEEG recording involves an invasive surgical procedure,

referred to as a craniotomy. sEEG involves a less invasive procedure whereby doctors place electrodes in targeted brain areas by drilling

small holes through the skull. Both methods of seizure diagnosis are used to identify areas of the brain where epileptic seizures originate

in order to precisely locate the seizure source for therapeutic treatment if possible.

Deep brain stimulation, or DBS, therapies involve

activating or inhibiting the brain with electricity that can be given directly by electrodes on the surface or implanted deeper in the

brain via depth electrodes. Introduced in 1987, this procedure involves implanting a power source referred to as a neurostimulator, which

sends electrical impulses through implanted depth electrodes, to specific targets in the brain for the treatment of disorders such as

Parkinson’s disease, essential tremors, dystonia, and chronic pain. The effects of DBS as a potential treatment for Alzheimer’s

is also being evaluated by researchers. Unlike ablative technologies, the effects of DBS are reversible.

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RF ablation is a procedure that uses radiofrequency under the electrode

contacts which is directed to the site of the brain tissue that is targeted for removal. The process involves delivering energy to the

contacts, thereby heating them and destroying the brain tissue. The ablation does not remove the tissue. Rather, it is left in place and

typically scar tissue forms in the place where the ablation occurs. This procedure is also known as brain lesioning as it causes irreversible

lesions. In August 2021, the Company announced a strategic partnership with RBC Medical Innovations to develop a radio frequency

(RF) ablation generator. The following month, our RF ablation technology was tested by representatives from Emory University in Atlanta

Georgia in an animal study. The product remains in development.

Our cortical sheet electrode and depth electrode

technology has been tested over the years by both WARF, the owners of our licensed patents, and Mayo Clinic located in Rochester, Minnesota,

in both pre-clinical models as well as through an institutional review board (“IRB”) approval at Mayo Clinic for clinical

research. In December 2020, we announced the first human commercial use of our Evo cortical electrode in a procedure performed at the

Mayo Clinic. Regarding our ablation electrode, the Cleveland Clinic has performed testing in bench top models and pre-clinical (or animal

testing) modes. These pre-clinical tests have demonstrated that the technology is capable of recording, ablation and acute stimulation,

although our ablation electrode technology remains in product development (meaning that additional testing will be needed prior to it

being cleared for sale by the U.S. Food and Drug Administration (the “FDA”)) for recording (or diagnostic) and therapeutic

modalities.

We received 510(k) FDA clearance for our Evo cortical

technology in November 2019, and in September 2021 we received FDA clearance to market our Evo sEEG electrode technology for temporary

(less than 24 hours) use with recording, monitoring, and stimulation equipment for the recording, monitoring, and stimulation of electrical

signals at the subsurface level of the brain.

Our Market Opportunity

Epilepsy Market

We expect to initially target the diagnosis and

treatment of epilepsy. Epilepsy can be caused by a variety of conditions that affect a person’s brain, some of which are: stroke,

brain tumor, traumatic brain injury and central nervous system infections. According to the Centers for Disease Control and Prevention

(the “CDC”) and Citizens United for Research in Epilepsy (“CURE”), there are approximately 3,000,000 patients

annually suffering with epilepsy in the United States, with an additional 200,000 diagnosed every year. The CDC and CURE also estimate

that epilepsy costs the United States $15.5 billion per year. Approximately 720,000 of these patients are not receptive to pharmaceutical

treatment and therefore are appropriate for surgical treatment of this disorder. In addition to poor quality of life, epilepsy also is

associated with fairly high mortality rates. Sudden Unexpected Death in Epilepsy has an annual incidence of 1.16/1000 in epilepsy patients.

Despite the large market opportunity, it is estimated that there are only 16,000 craniotomies performed for epilepsy cases each year in

the United States with 18,000 performed in Europe.1

These numbers represent an underpenetrated market due to the invasiveness of a full craniotomy required just to perform the diagnostic

procedure. After the diagnostic procedure, a second therapeutic procedure is required and at times even a third surgery if the seizures

persist. We believe patients are unwilling to proceed due to the long diagnostic times (one to four weeks in the hospital with a craniotomy),

infection rates and 50% rate of success in the diagnosis and treatment of the disorder. As detailed above, after the diagnosis is completed,

if successful, the patient must undergo an additional procedure to have the affected area of brain tissue removed. The average cost for

the diagnostic technology per procedure is $10,000, with ablation devices costing $15,000 and brain stimulation devices costing $25,000

to $30,000. We believe our technology, once developed, will offer an all-in-one solution with diagnostic and therapeutic capabilities.

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Many leading neurologists believe that the limits

of today’s current technologies are the reason the exact affected area of the brain causing epileptic seizures is not well-determined.

We believe our technology, which has been developed to date by physicians at WARF and Mayo Clinic, will provide a number of advantages

over the current commercially available technologies, including the following:

We

expect our technology can ablate through the electrodes as well as perform brain stimulation, allowing for diagnosis and treatment

through the same product and in the same procedure.

Parkinson’s Disease

The Parkinson’s Disease Foundation estimates

that as many as 1,000,000 patients in the United States live with Parkinson’s disease with an additional 60,000 patients diagnosed

per year. Over 10,000,000 patients worldwide are living with Parkinson’s disease. There have not been any drugs introduced that

have been effective at treating Parkinson’s disease. The average onset is over 60 years old but some people have been diagnosed

as young as 40 years old. Parkinson’s is a disorder of the central nervous system caused by loss of brain cells throughout various

regions of the brain. It is attributed to the loss of dopamine production in the brain, a messenger in the brain that allows for movement

and coordination. There are no objective tests to diagnose Parkinson’s disease, and misdiagnosis rates are still very high. Doctors

look to find two or more signs to make a diagnosis, including balance problems, rigidity and tremors that occur during rest. In 2011,

the FDA approved the first imaging device called a DaTscan that can capture images of the dopamine system in the brain. By itself, these

scans cannot diagnose Parkinson’s but can help confirm a doctor’s diagnosis. Parkinson’s disease is typically not fatal;

however, complications caused by the symptoms of Parkinson’s, such as difficulty swallowing causing food to travel to the lungs

resulting in pulmonary issues or falls related to loss of balance, can be fatal.

Today’s primary treatment for Parkinson’s

disease involves medications that have not proven to resolve symptoms but rather ease symptoms. Years ago, surgical procedures such as

thalamotomy and pallidotomy targeted certain parts of the brain and involved destroying the tissue. More recently, these procedures have

been replaced with DBS. A doctor evaluates the patient by reviewing the patient’s symptoms and medications taken and administering

detailed memory, thinking and imaging tests to determine if they are appropriate for DBS. According to the Michael J. Fox Parkinson’s

Disease Research Foundation website, patients that seem to do best with DBS are those that have had the disease for at least four years

and have benefited from taking medications prescribed to control the disease. In addition, DBS seems to help with reducing the issues

with motor functions such as tremors, stiffness and slowness but not for balance issues. Doctors are evaluating treatment to other parts

of the brain in an effort to address more symptoms to treat walking or balance issues. In addition, research is being conducted to provide

stimulation when the symptoms return as opposed to all of the time.

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Essential Tremors

Essential tremors are thought to be due to electrical

irregularities in the brain that send abnormal signals to the muscles. It is a progressive condition that worsens over time and is linked

to genetic disorders that typically appear in people who are over 40. Essential tremors usually occur alone and without any other neurological

symptoms or signs. The tremors usually occur when the hands are raised and primarily affect the hands. Muscles in the trunk, face and

neck may also experience symptoms. Sometimes misdiagnosed as Parkinson’s disease, essential tremors are an involuntary rhythmic

shaking of the hands that is not present at rest. It is apparent during activities such as drinking, writing and eating. Symptoms can

worsen due to stress, anxiety, smoking, caffeine, fatigue, etc. Genetics Home Reference estimates that as many as 10,000,000 people in

the United States are affected by the disease. Treatments for the disease include medical therapy, weighting the limbs and DBS. Patients

need to eliminate any medications they are taking that cause tremors as this can exacerbate the symptoms. For some patients, using wrist

weights may ease symptoms allowing the patient to function. Other patients may also use relaxation techniques as stress can increase symptoms.

Medical therapy is also used to treat patients’ symptoms. Primidone is typically the first drug prescribed as it has had success

in some situations for epilepsy. Botox is also used at times to control head tremors. When these fail, surgery is the next alternative.

A surgical procedure used years ago created lesions in the ventral intermediate thalamus and was highly successful with treating essential

tremors but is no longer commonly used due to increased risk of developing speech problems. The latest therapy is DBS, which, unlike other

therapies, is reversible and programmable, helping to adjust the settings to maximize patient benefit. Similar to Parkinson’s disease,

the ability to detect this irregular brain activity before it causes a tremor is highly desirable.

Dystonia

Dystonia is a neurological condition recognized

as a motion disorder that involves over activity of a variety of different muscles simultaneously that work against each other. It presents

itself in a variety of symptoms but typically involves repetitive, patterned and often twisting involuntary muscle contractions resembling

tremors. According to the Dystonia Medical Research Foundation, over 300,000 people are affected in the United States and Canada alone.

Dystonia is the third most common problem seen in movement disorder clinics. Because it has many different manifestations, it is often

misdiagnosed. In addition, similar to Parkinson’s disease, there are no specific tests that can positively diagnose dystonia. A

doctor typically will evaluate patient and family history, potentially do genetic testing, EEG testing, blood and urine tests. There are

also many treatment options for patients but depend on the type of dystonia. Botox and certain medications may be helpful or DBS may be

used.

Spinal Cord Stimulation

Failed back surgery syndrome (“FBSS”)

is a condition that produces chronic lower back/leg pain due to one or more failed back surgeries. Typically, it is related to patients

that suffer with pain after surgery of the lumbar spine for degenerative disc disease. Re-operations are usually not recommended for these

patients due to low success rates. These patients experience greater levels of pain, a lower quality of life, varying levels of disability

and higher rate of unemployment. Spinal cord stimulation works by placing an electrode(s) in a targeted area of the spine which is then

connected to an implantable pulse generator that sends electrical stimulation to the electrode to block the pain signals from reaching

the brain.

The back pain market includes the following indications:

FBSS, Ischemic Limb Pain, and Complex Regional Pain Syndrome. Over half of this market is comprised of patients with FBSS. Certain studies

have indicated a benefit for these patients suffering from chronic back and lower limb pain when they have been treated with electrical

stimulation. Prior to the patient receiving an implant, they undergo a trial period that allows them to determine if they are receiving

relief from the therapy while preventing a surgery to implant the pulse generator that provides the stimulation. If the trial period is

successful, then the device is implanted in a follow-up procedure.

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Artificial Intelligence

The brain consists of approximately 100 billion

nerve cells, which are small wires that pass electrical signals to control all of its functions. There have been a number of successful

clinical trials in which small metal wires, known as electrodes, are implanted in the brain to correct nerve damage using wireless communication

between implanted wires to simulate functional nerve cells. In addition to correcting damaged nerve cells, certain scientists have theorized

that if millions of wires could be implanted in the brain, these electrodes could present an opportunity to use artificial intelligence

to create infrared sight, increase hearing or perfect memory recall. However, there currently is no commercially available manufacturing

platform capable of making thousands of wires that can be placed within or on the brain and work reliably for the lifetime of a subject,

and are soft enough to match the tissue of the brain, that avoid damage to the brain.

Limitations of Currently Available Therapies

There are a limited number of currently available

products for diagnosis and treatment for people with neurological disorders such as epilepsy. Although the currently available systems

provide diagnosis and treatment for patients, they have certain inherent limitations and shortcomings that we believe limit their use

and validate the need for improved technology in the market. These limitations include:

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Our

Solution

As a result of the inherent limitations and inconvenience

of existing systems, we believe that there is a significant unmet need among people with neurological disorders for cortical strip, grid

and depth electrodes that provide diagnostic capabilities through cEEG and sEEG recording in addition to therapeutic modalities, such

as brain stimulation and ablation, offered as an all-in-one product. In comparison to currently available technologies, we are continuing

to develop applications of our strip, grid and depth electrodes with the goal of providing the following expected advantages:

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Our Strategy

Our goal is to be the global leader in cEEG and

sEEG recording, monitoring, deep brain stimulation and ablation, owning the procedure from diagnosis through treatment. The key elements

of our strategy include:

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Our

Technology

Epilepsy Mapping and Monitoring

Epileptic seizures occur when the neurons in the

brain miscommunicate. This miscommunication typically results in involuntary muscle seizure activities and/or periods of perceptual disconnect

where the individual appears frozen. Modern medical science has advanced the treatment of epileptic seizures by mapping the electrical

communication activity of neurons and understanding their special orientation in the brain. This mapping is accomplished by access to

the cranium (through a craniotomy) and placing conductive contacts on the brain directly. The craniotomy procedure is very invasive, traumatic

to the surrounding tissue, results in high patient down time, and increases the risk of infection.

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We seek to leverage scale-able technology and

produce ultra-thin, or paper-thin electrodes that allow for high-resolution and high-definition recordings, which would improve mapping

resolution and signal acquisition. If the Company is able to leverage scale-able technology, it would mean that our technology would be

able to incorporate smaller electrodes and thereby increase the number of electrodes on a given surface area. We expect that this would

increase the imaging resolution so that brain activity is displayed in greater definition. We also believe that the electrodes’

unique thinness and flexibility will provide a less invasive approach to electrode placement. The electrodes would be able to be placed

through a small quarter size hole instead of by an invasive full craniotomy procedure.

The images under “Cortical Electrode,”

from bottom to top, are images of our cortical electrode strip, our grid electrode, and the placement of the grid electrode on the brain,

respectively. The images under “High Density Interconnect” are both images of our product that connects our electrodes to

the head box, which is a piece of hardware that connects to electrodes to acquire, amplify, display, store and archive electrophysiological

signals, and is integrated as part of our manufactured electrode product. The images under “Head Box” and “Signal Monitoring

and Mapping” are images of the device which processes information received through the high density interconnect, and a sample output

of data acquisition, respectively, neither of which is one of the Company’s products.

Our technology consists of three primary types

of cortical electrodes: grid electrodes, strip electrodes and dual-sided electrodes. These electrodes have a patented design that utilizes

proprietary processing and materials technology, which we believe will allow the electrodes to have improved features over the current

industry standard recording electrodes.

What sets our technology apart from others is

the integration of state of the art design leveraging the latest in flexible printed circuit technology. We believe our patented designs

will provide the surgeon a higher tactile perspective on electrode placement allowing for ultra-precise neuron recording. We expect the

benefits of our electrode designs to include the ability to detect better defined margins between healthy tissue and resect-able tissue,

less immune-response from the brain and surrounding tissue, better signal acquisition due to superior conformability of the electrode

over the brain, improved flexibility that physicians have requested, which we expect will enable a minimally invasive approach and the

electrodes unique thinness that is unmatched by current products being used.

The Future of Neurology Mapping with NeuroOne

We seek to develop superior “scale-able”

technology for future product system iterations in higher density contact placement. This will open the doors to other brain related

disease recording procedures by providing high fidelity, more accurate diagnostic capabilities and also the ability to provide an all-in-one

therapy capable of diagnosis, ablation and/or stimulation. Beyond the brain, we believe our technology under development has applications

in other neurological signal recording disease states related to voluntary or involuntary motor neuron abnormalities, understanding sensory

neuro behavior (pain), limb prosthetics and degenerative muscle disease.

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Clinical Development and Regulatory Pathway

Clinical Experience, Future Development

and Clinical Trial Plans

Our Evo cortical electrode technology has received

510(k) clearance from the FDA for recording, monitoring, and stimulating brain tissue for up to 30 days. Our Evo sEEG electrode technology

has received FDA 510(k) clearance from the FDA for use (less than 24 hours) with recording, monitoring, and stimulation equipment for

the recording, monitoring, and stimulation of electrical signals at the subsurface level of the brain. Our other products have not received

any clearance for commercialization by any U.S. or foreign regulatory body. To date, the Company has performed a number of bench top (which

includes feasibility testing) and pre-clinical tests (which include animal testing of device placement, ergonomics, performance, ease

of use, and other tests required by FDA regulations). As described in “—Government Regulation” below, the Company will

be required to perform additional testing of its technology in connection with seeking additional regulatory clearances or approvals.

We intend to expand our product offerings to include

less invasive means and all-in-one solutions, thus providing both patients and physicians better options to treat epilepsy, Parkinson’s

disease, dystonia, essential tremors, chronic pain due to failed back surgeries and other related neurological disorders. While we expect

to make modifications to our initial system, we believe that most of our future product development initiatives will involve unique and

transformational next generation technology that should drive further appeal of our products with both physicians and patients.

We are utilizing a number of resources to develop

these technologies. We license three critical patents from WARF that are the foundation of the technology and we are developing and intend

to commercialize and benefit from the thin film technology know-how of Mayo Clinic doctors through our license and development agreement.

WARF, Mayo Clinic (cortical electrodes) and Cleveland Clinic (sEEG electrodes) have been responsible for all pre-clinical studies of our

technology under development to date. See “—WARF License” and “—Mayo Foundation for Medical Education and

Research License and Development Agreement” below. Further, as we announced in December 2020, Mayo Clinic doctors used our technology

in the first human commercial application of our Evo cortical electrode technology to perform recording, functional mapping and stimulation

of the brain on a human patient.

Below we have summarized, for each component of

our technology, the current stage of development or commercial production, the pre-clinical testing done to date by WARF, the Cleveland

Clinic or Mayo Clinic on such component, if any, our plans for further testing or clinical trials and our expectations regarding the requirements

for regulatory clearance or approval and timing of regulatory submissions.

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Mayo Clinic and University of Wisconsin-Madison

Studies

Our cortical technology for the diagnosis of epilepsy

has been tested by doctors at Mayo Clinic in multiple pre-clinical tests conducted from 2012 to 2017. In pre-clinical models, doctors

examined the biological impact on mammalian brains. Polyimide substrate electrodes (NeuroOne technology) were implanted on the pig’s

brain for one week alongside standard competitive electrodes. The tissue underneath the two types of electrodes was removed, fixed, stained,

and examined for immunological responses. The results of a histological (evaluation of brain tissue under a microscope) analysis showed

reduced immunological reaction to prolonged polyimide substrate implants (NeuroOne technology) compared to standard silicone substrate

clinical electrodes. Electrophysiological recordings showed data obtained from polyimide electrodes which showed the feasibility of high

fidelity multi-scale electrophysiology while also displaying easier deployment of polyimide electrodes (NeuroOne technology) through minimally

invasive burr holes.

Additionally, doctors implanted our polyimide

thin film electrodes on five human patients who were undergoing surgery to remove brain tissue for drug resistant epilepsy. Electrophysiological

recordings from the polyimide thin film technology displayed in each of these patients demonstrated micro-seizure activity due to the

high fidelity multi-scale electrophysiology. In December 2020, we announced the first human commercial use of our Evo cortical electrode

to perform recording, functional mapping and stimulation of the brain. In the procedure, performed at the Mayo Clinic, our electrodes

were used to record evidence of pre-seizure activity which may be critical in developing treatments to prevent the onset of seizures.

Conclusions reached by the physicians at Mayo

Clinic were that thin, flexible polyimide electrodes (NeuroOne technology) provided recordings similar to standard clinical electrodes

with reduced immunological response. In addition, Mayo Clinic physicians observed that the flexibility of polyimide electrodes may reduce

pain and swelling associated with implantation of the device, and the single wire exiting the skull may reduce infection risk. The ability

to record micro-seizure and single neuron brain activity may also provide additional useful clinical data. Combined, these properties

suggest that the replacement of current competitive silicone electrodes with polyimide substrate electrodes (NeuroOne technology) for

recording brain activity for epilepsy could provide enhanced clinical value with reduced cost, reduced infection risk, and improved patient

comfort.

In addition, our thin film cortical implant technology

has been tested by researchers at the University of Wisconsin-Madison in multiple pre-clinical animal studies conducted from 2006 to 2016,

which included mice, rats and primates. In these studies, our technology was able to record brain activity from different areas of the

brain, was implanted in a minimally invasive fashion, electrically provided brain stimulation and tissue ablation, and had increased flexibility

compared to existing commercially available technology, which allowed the grids to conform more easily to the brain surface (and may have

reduced pain and swelling, compared to less flexible devices).

Sales and Marketing

Zimmer Development Agreement

Based on the size and maturity of the U.S. market,

our initial commercial focus, on July 20, 2020, we entered into an exclusive development and distribution agreement (the “Development

Agreement”) with Zimmer, pursuant to which we granted Zimmer exclusive global rights to distribute NeuroOne’s strip and grid

cortical electrodes (the “Strip/Grid Products”) and electrode cable assembly products (the “Electrode Cable Assembly

Products”), including to approximately 188 Level 4 epilepsy centers. Additionally, we granted Zimmer the exclusive right and license

to distribute certain depth electrodes developed by the Company (“SEEG Products”, and together with the Strip/Grid Products

and Electrode Cable Assembly Products, the “Products”). The parties have agreed to collaborate with respect to development

activities under the Development Agreement through a joint development committee composed of an equal number of representatives of Zimmer

and the Company.

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Under the terms of the Development Agreement,

we are responsible for all costs and expenses related to developing the Products, and Zimmer is responsible for all costs and expenses

related to the commercialization of the Products. In addition to the Development Agreement, Zimmer and the Company have entered into a

manufacturing and supply agreement (the “MS Agreement”) and a supplier quality agreement (the “Quality Agreement”)

with respect to the manufacturing and supply of the Products.

Except as otherwise provided in the Development

Agreement, we are responsible for performing all development activities, including non-clinical and clinical studies directed at obtaining

regulatory approval of each Product. Zimmer has agreed to use commercially reasonable efforts to promote, market and sell each Product

following the “Product Availability Date” (as defined in the Development Agreement) for such Product.

Pursuant to the Development Agreement, Zimmer

made an upfront payment of $2.0 million to the Company.

The Development Agreement will expire on the tenth

anniversary of the date of the first commercial sale of the last of the Products to achieve a first commercial sale, unless terminated

earlier pursuant to its terms. Either party may terminate the Development Agreement (x) with written notice for the other party’s

material breach following a cure period or (y) if the other party becomes subject to certain insolvency proceedings. In addition, Zimmer

may terminate the Development Agreement for any reason with 90 days’ written notice, and we may terminate the Development Agreement

if Zimmer acquires or directly or indirectly owns a controlling interest in certain competitors of the Company.

We will investigate markets outside of the U.S.

with the assistance of Zimmer and formulate a plan to enter those markets with the support of Zimmer.

For more information regarding the Development

Agreement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Overview—Collaborations

Revenue” and “Note 7 – Zimmer Development Agreement” included in “Item 8 — Financial Statements and

Supplementary Data” in this Report.

Reimbursement

Coverage in the United States

Reimbursement from private third-party healthcare

payors and, to a lesser extent, Medicare will be an important element of our success. Although the Centers for Medicare and Medicaid Services

(“CMS”) and third-party payors have adopted coverage policies for our targeted indications, there is no guarantee this will

continue at the same levels or at all in the future. Current Procedural Terminology, or CPT, is a medical code set that is used to report

medical, surgical and diagnostic procedures and services to entities such as physicians, health insurance companies and accreditation

organizations.

Applicable diagnostic CPT codes for mapping (diagnosing)

the brain for diagnostic procedures are as follows:

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Regarding

ICD-10 codes, the International Classification of Diseases, Tenth Edition (ICD-10) is a clinical cataloging system that went into effect

for the U.S. healthcare industry on October 1, 2015, after a series of lengthy delays. Accounting for modern advances in clinical treatment

and medical devices, ICD-10 codes offer many more classification options compared to those found in its predecessor, ICD-9. Within the

healthcare industry, providers, coders, IT professionals, insurance carriers, government agencies and others use ICD codes to properly

note diseases on health records, to track epidemiological trends and to assist in medical reimbursement decisions.

ICD-10 codes for epilepsy are as follows:

● G40.3 Generalized idiopathic epilepsy and epileptic syndromes;

● G40.A Absence epileptic syndrome;

● G40.4 Other generalized epilepsy and epileptic syndromes;

● G40.50 Epileptic seizures related to external causes, not intractable;

● G40.80 Other epilepsy; and

● G40.82 Epileptic spasms.

We believe that many of the indications we are

pursuing with our technologies are currently reimbursed on a widespread basis by Medicare, Medicaid and private insurance companies.

Medicare, Medicaid, health maintenance organizations

and other third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement

of new medical devices, and, as a result, their coverage policies may be restrictive, or they may not cover or provide adequate payment

for our products. In order to obtain reimbursement arrangements, we may have to agree to a net sales price lower than the net sales price

we might charge in other sales channels. Our revenue may be limited by the continuing efforts of government and third-party payors to

contain or reduce the costs of healthcare through various increasingly sophisticated means, such as requiring prospective reimbursement

and second opinions, purchasing in groups, or redesigning benefits. Our future dependence on the commercial success of our technologies

makes us particularly susceptible to any cost containment or reduction efforts. Accordingly, if government and other third-party payors

do not provide adequate coverage and reimbursement for our products and the related insertion and removal procedures, our financial performance

will be negatively impacted.

Manufacturing, Supply and Quality Assurance

We currently outsource the supply and manufacture

of all components of our prototypes of our technology under development. We plan to continue with an outsourced manufacturing arrangement

for the foreseeable future. Our third-party manufacturers are recognized in their field for their competency to manufacture the respective

portions of our system and have quality systems established that meet FDA requirements. We believe the manufacturers we currently utilize

have sufficient capacity to meet our requirements; however, see “Risk Factors—Risks Related to Our Business—The COVID-19

pandemic has adversely impacted, and may continue to impact, our business”. We believe that as we increase our demand in the future,

our per-unit costs will decrease materially. We have also identified capable second source manufacturers and suppliers in the event of

disruption from any of our primary vendors.

Our suppliers meet the latest ISO 13485 certification,

which includes design control requirements. As a medical device developer, the facilities of our sterilization and other critical suppliers

are subject to periodic inspection by the FDA and corresponding state and foreign agencies. We believe that our quality systems and those

of our suppliers are robust and achieve high product quality. We plan to audit our suppliers periodically to ensure conformity with the

specifications, policies and procedures for our devices.

14

Research and Development

Our research and development team, which includes

our Director of Electrode Development, utilizes advice from leading experts in the neurotech field on our scientific advisory board and

is focused on the development of thin film cortical grid and strip electrodes and depth electrodes for recording, ablation and chronic

stimulation for brain related disorders as well as stimulation for spinal cord stimulation for back related pain. Our research and development

expenses were $3.9 million and $2.1 million for the years ended September 30, 2021 and 2020, respectively.

Competition

In the market for Epilepsy diagnosis, our cortical

strip, sheet and depth electrode technology will likely compete with Integra Life Science’s Integra Epilepsy Strip, Grid and depth

electrodes, which provide a similar function to our diagnostic technologies. These products are well established in the marketplace and

Integra has greater resources than us, which could allow them to innovate faster. Ad-Tech Medical Instrument Corporation’s Epilepsy/LTM

(subdural grid, strip and depth) electrodes, which have become the market leaders for diagnostic mapping in epilepsy, and PMT’s

Cortac Strips and grid electrodes and Depthalon depth electrodes are used for recording brain activity similar to other competitive technologies.

In addition, Dixie Medical has launched a product line of depth electrodes and CorTec has launched a cortical electrode product line called

AirRay. Today’s success rates for seizure free post-operative conditions remain at 50%, which has limited patients’ willingness

to undergo the currently highly invasive surgical procedure. We will also compete against other companies in early stages of development

of thin film technologies.

In the neuro-ablation market, we expect to compete

with Medtronic’s Visualase guided-laser ablation technology and Monteris Medical’s NeuroBlate technology, which use MRI guided

laser surgical ablation for use to ablate, necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy in medicine

and surgery in the discipline of neurosurgery with 1064 nm lasers. Their website claims it is used for ablation in the brain for soft

tissue and tumors. We believe there are other laser-based systems in development that will compete with these technologies.

In the neurostimulation market, we expect to compete

with NeuroPace’s RNS system approved for epilepsy, Medtronic’s Activa system approved for Parkinson’s disease, Boston

Scientific Vercise (indicated for Parkinson’s, dystonia and essential tremors), Abbott/St. Jude Medical’s Infinity DBS system

(approved for Parkinson’s disease and essential tremors), Liva Nova/Cyberonic’s VNS therapy intended for patients suffering

with epilepsy. We believe there are additional companies pursuing thin film electrode technology for use in the brain although none are

expected to be commercially available in 2022.

Although we will face potential competition from

many different sources, we believe that our technology, knowledge, experience and scientific resources will provide us with competitive

advantages. For a discussion of the key competitive factors that we believe will impact the success of our cortical strip and sheet electrodes

under development, if successfully developed and approved, see “—Our Solution” above.

Many of the companies against which we may compete

in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing,

conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the

pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of

our competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements

with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management

personnel and establishing clinical trial sites and subject registration for clinical trials, as well as in acquiring technologies complementary

to, or necessary for, our development.

15

WARF License

In January 2020, we entered into the Amended and

Restated Exclusive Start-Up Company License Agreement, dated as of January 21, 2020, as amended on June 15, 2020 (the “WARF License”)

with WARF, which amended and restated in full the Original WARF License. Pursuant to the WARF License, WARF has granted to us 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. We have 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 $50,000 for calendar year 2020, $100,000 for calendar year 2021 and $150,000

for calendar year 2022 and each calendar year thereafter that the WARF License is in effect. The minimum annual royalty payment for calendar

year 2020 in the amount of $50,000 was paid in January 2021. 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.

WARF may terminate this license on 30 days’

written notice, if we default on the payments of amounts due to WARF or fail to timely submit development reports, actively pursue our

development plan or breach any other covenant in the WARF License and fail to remedy such default in 90 days or in the event of certain

bankruptcy events involving us. WARF may also terminate the WARF License (i) on 90 days’ notice if we had failed to have commercial

sales of one or more FDA-approved products under the WARF License by June 30, 2021 or (ii) if, after royalties earned on sales begin to

be paid, such earned royalties cease for more than four calendar quarters. The first commercial sale occurred on December 7, 2020, prior

to the June 30, 2021 deadline. The WARF License otherwise expires by its terms on the date that no valid claims on the patents licensed

thereunder remain. We expect the latest expiration of a licensed patent to occur in 2030.

In addition, WARF reserves the right to grant

non-profit research institutions and government agencies non-exclusive licenses to practice and use the inventions of the licensed patents

for non-commercial research purposes, and we grant WARF a non-exclusive, sub licensable, royalty-free right and license for non-commercial

research purposes to use improvements to the licensed patents. In the event that we discontinue use or commercialization of the licensed

patents or improvements thereon, we must grant WARF an option to obtain a non-exclusive, sub-licensable, royalty-bearing license to use

the improvements for commercial purposes.

See “Risk Factors— Risks Related

to Our Business—We depend on intellectual property licensed from WARF for our technology, including our technology under development,

and the termination of this license would harm our business” for additional information regarding the WARF License.

Mayo Foundation for Medical Education and Research

License and Development Agreement

In May 2017, we entered into the Amended and Restated

License and Development Agreement, dated as of May 25, 2017 (the “Mayo Development Agreement”), with Mayo Foundation for Medical

Education and Research (“Mayo”) to license worldwide (i) certain know how for the development and commercialization of products,

methods and processes related to flexible circuit thin film technology for the recording of tissue and (ii) the products developed therefrom,

and to partner with Mayo to assist the Company in the investigation, research application, development and improvement of such technology.

Mayo has agreed to assist us by providing access to certain individuals at Mayo (the “Mayo Principal Investigators”), in developing

our cortical thin film flexible circuit technology, including prototype development, animal testing, protocol development for human and

animal use, abstract development and presentation and access to and license of any intellectual property that the Mayo Principal Investigators

develop relating to the procedure.

We have agreed to pay Mayo a royalty equal to

a single-digit percentage of our product sales pursuant to the Mayo Development Agreement. Mayo may purchase any developed products licensed

under the Mayo Development Agreement at the best price offered by us to the end user in the prior year. The Mayo Development Agreement

generally will expire in October 2034, unless the Mayo know-how and improvements under the Mayo Development Agreement remain in use, and

the Mayo Development Agreement may be terminated by Mayo for cause or under certain circumstances.

For additional information regarding the Mayo

Development Agreement, see “Risk Factors— Risks Related to Our Business—We depend on our partnership with Mayo to license

certain know how for the development and commercialization of our technology. Termination of this partnership would harm our business,

and even if this partnership continues, it may not be successful.”

16

Intellectual Property

Protection of our intellectual property is a strategic

priority for our business. We rely on a combination of patents, trademarks, copyrights, and trade secrets as well as nondisclosure and

assignment of invention agreements, material transfer agreements, confidentiality agreements and other measures to protect our intellectual

property and other proprietary rights.

Patents

As of September 30, 2021, our patent estate consists

of three issued United States patents licensed from WARF covering a neural probe array and thin-film micro electrode array and method,

a pending U.S. patent application filed by us and published in 2018 covering our applications and additional devices used during the diagnostic

and therapeutic ablation and stimulation procedures, pending U.S. and European patent applications filed by us and published in 2020 relating

to improved neural depth electrodes, a pending U.S. patent application filed by us and published in 2020 relating to agent-delivering

neural electrodes, three pending U.S. applications (and corresponding PCT applications) filed in 2020 and 2021 relating to minimally invasive

electrodes, spinal cord stimulation devices, and additional electrode improvements and one additional pending U.S. application relating

to devices with temperature sensors. The licensed issued patents expire between 2025 and 2030, subject to any patent extensions that may

be available for such patents. If a patent or patents are issued on our pending patent applications, the resulting patents are projected

to expire between 2038 and 2042.

Our patent applications may not result in issued

patents, and any patents that have been issued or may be issued in the future may not protect the commercially important aspects of our

technology. Furthermore, the validity and enforceability of our issued patents may be challenged by third parties and our patents could

be invalidated or modified by the issuing governmental authority. Third parties may independently develop technology that is not covered

by our patents that is similar to, or competes with, our technology. In addition, our intellectual property may be infringed or misappropriated

by third parties, particularly in foreign countries where the laws and governmental authorities may not protect our proprietary rights

as effectively as those in the United States.

The medical device industry in general, and the

recording, ablation and neurostimulation sector of this industry in particular, are characterized by the existence of a large number of

patents and frequent litigation based on assertions of patent infringement. We are aware of numerous patents issued to third parties that

may relate to the technology used in our business, including the design and manufacture of electrodes and pulse generators, as well as

methods for device placement. Each of these patents contains multiple claims, any one of which may be independently asserted against us.

The owners of these patents may assert that the manufacture, use, sale or offer for sale of our cortical strip and sheet electrodes infringe

one or more claims of their patents. Furthermore, there may be additional patents issued to third parties of which we are presently unaware

that may relate to aspects of our technology that such third parties could assert against us and materially and adversely affect our business.

In addition, because patent applications can take many years to issue, there may be patent applications that are currently pending and

unknown to us, which may later result in issued patents that third parties could assert against us and materially and adversely affect

our business.

Any adverse determination in litigations, post

grant trial proceedings, at the Patent Office relating to intellectual property to which we are or may become a party could subject us

to significant liabilities to third parties or require us to seek licenses from third parties, and result in the cancellation and/or invalidation

of our intellectual property. Furthermore, if a court finds that we have willfully infringed a third party’s intellectual property,

we could be required to pay treble damages and/or attorney fees for the prevailing party, in addition to other penalties. Although intellectual

property disputes in the medical device area are often settled through licensing or similar arrangements, costs associated with such arrangements

can be substantial and often require ongoing royalty payments. We may be unable to obtain necessary licenses on satisfactory terms, if

at all. If we do not obtain necessary licenses, we may not be able to redesign our products to avoid infringement; if we are able to redesign

our products to avoid infringement, we may not receive FDA approval in a timely manner. Adverse determinations in a judicial or administrative

proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling our products, which could have a significant

adverse impact on our business.

17

Trademarks

We have a registered U.S. trademark for the “EVO”

trademark. The document(s) updating the owner’s name were filed with the U.S. Trademark Office on November 30, 2021, with an effective

date of December 30, 2019.

Trade Secrets

We also rely on trade secrets, technical know-how

and continuing innovation to develop and maintain our competitive position. We seek to protect such intellectual property and proprietary

information by generally requiring our employees, consultants, contractors, scientific collaborators and other advisors to execute non-disclosure

and assignment of invention agreements upon the commencement of their employment or engagement as the case may be. Our agreements with

our employees prohibit them from providing us with any intellectual property or proprietary information of third parties. We also generally

require confidentiality agreements or material transfer agreements with third parties that receive or have access to our confidential

information, data or other materials. Notwithstanding the foregoing, there can be no assurance that our employees and third parties that

have access to our confidential proprietary information will abide by the terms of their agreements. Despite the measures that we take

to protect our intellectual property and confidential information, unauthorized third parties may copy aspects of our products or obtain

and use our proprietary information.

Government Regulation

Our cortical strip, grid and depth electrodes

are medical devices subject to extensive and ongoing regulation by the FDA and the U.S. CMS. Regulations cover virtually every critical

aspect of a medical device company’s business operations, including research activities, product development, quality, manufacturing,

supplier management and risk management, contracting, reimbursement, medical communications, and sales and marketing. In the United States,

the Federal Food, Drug and Cosmetic Act (“FDCA”), and the implementing regulations of the FDA (specifically, 21 Code of Regulations

(21 CFR Parts 801- labeling, 803 – medical device reporting, 807 – registration and listing, subpart E premarket notification

510k, 812 - investigational device exemption, 814 – premarket approval and 820 – quality system regulation) and applicable

FDA guidance) govern product design and development, pre-clinical and clinical testing, premarket clearance or approval, product manufacturing,

quality systems, import and export, product labeling, product storage, recalls and field safety corrective actions, advertising and promotion,

product sales and distribution, and post-market clinical surveillance. Our business is subject to federal, state and local quality regulations,

such as ISO 13485, ISO 14971, and FDA’s Quality System Regulation (“QSR”) contained in 21 CFR Part 820.

Regulatory Framework in the United States

Device classification

The FDA characterizes medical devices into one

of three classes, Class I, II, and III. Regulatory control increases from Class I to Class III.

The device classification regulation defines the regulatory requirements for a general device type. Most Class I devices are exempt from