NeuroOne Medical Technologies Corporation (NMTC) Earnings

Management highlights

- Executive and Organizational Updates * Welcomed new CFO Chris Volker and new Chief Business Officer Dave Wambecke to the leadership team, with Wambecke bringing specialized expertise in the gene and cell therapy space for the StereoCED program * Post-quarter, the company's lead investor increased their holdings from 7.4% to 12.5% * Completed a 1-for-6 reverse stock split, which went into effect on April 16, 2026 - Commercial Product Progress * Grew OneRF Brain Ablation System revenue 16% YoY and orders 43% YoY in the quarter; the Journal of Neurosurgery published a Mayo Clinic study confirming OneRF can be safely used in patients with existing neuromodulation implants, expanding the eligible patient pool for seizure treatment * Post-market clinical outcomes for the OneRF Trigeminal Nerve Ablation System have demonstrated strong patient pain relief; the U.S. disposable market for this indication is estimated at $40 million, and the company is currently interviewing independent distributors to support expanded commercialization leveraging existing personnel * Achieved ISO 13485 quality certification ahead of schedule, opening access to international markets for all commercial product lines - Pipeline Development * StereoCED robotic-assisted intracranial drug delivery platform: Preclinical progress is on track, with animal studies scheduled to begin this quarter at the University of Minnesota (epilepsy collaboration) and Mayo Clinic (diffuse midline glioma collaboration); the platform is on track to be ready for investigational human clinical studies by the end of September 2026, with the first device sale to a pharma company for nonhuman primate research expected by end-2026. The platform addresses critical industry workflow challenges, reducing 8-12 hour procedures by leveraging existing hospital neurosurgical infrastructure * BVNA Basivertebral Nerve Ablation System for back pain: Completed user design requirements and initiated preclinical testing; confirmed the regulatory path is a 510(k) FDA submission, with submission targeted for the second half of calendar 2027, leveraging the existing OneRF platform to reduce development costs - Financial Results * Total operating expenses were $3.6 million, up from $2.8 million YoY, with R&D expense of $1.4 million (up from $1.2 million YoY) and SG&A expense of $2.2 million (up from $1.6 million YoY, driven by increased headcount and sales/marketing investment) * Net loss was $2.0 million ($0.23 per basic share) compared to a $1.5 million net loss ($0.19 per basic share) YoY; the net loss included a $0.4 million favorable gain from fair value change in warrant liability * As of June 30, 2026, cash and cash equivalents totaled $2.0 million, working capital was $3.7 million, and there was no outstanding debt

Guidance

- Full fiscal year 2026 aggregate product orders are expected to be approximately $11.2 million, with recognized revenue projected between $9.2 million and $10.5 million, a downward revision from the prior guidance of at least $10.5 million. The wide revenue range is entirely dependent on manufacturing and shipment timing of outstanding orders. - A second manufacturing site is expected to come online in the first part of 2027 to expand production capacity and reduce lead times, with the goal of clearing all remaining order backlog by the end of the fourth calendar quarter of 2026. - Formal updates on international market entry strategy, including territory selection and partner agreements, are expected by the end of Q4 FY2026. - First preclinical data from StereoCED academic collaborations is expected in fall 2026, with the platform ready for investigational human clinical studies by end of September 2026. - The 510(k) submission for the BVNA back pain ablation system is targeted for the second half of calendar 2027.

Segment performance

For the third quarter of fiscal 2026, the company's only reported product segment is core neuro products including the OneRF Brain Ablation System, OneRF Trigeminal Neuralgia Ablation System, and Evo Cortical/sEEG diagnostic lines. Core neuro product revenue was $2.0 million, a 16% year-over-year increase from $1.7 million in Q3 FY2025. This segment generated total product orders of $2.7 million, representing 43% year-over-year order growth, with an order backlog of $1.7 million as of June 30, 2026. Product gross profit for the core segment was $1.2 million, equal to 59.9% of total product revenue, up from $0.9 million (53.9% of revenue) in the prior year quarter. The remaining business segments (StereoCED drug delivery, BVNA back pain ablation) are still in development and did not generate commercial revenue during the quarter.

Risks & headwinds

- Extended supplier lead times (up to 6 months) and build-to-order inventory strategy have created order backlog and limited the company's ability to respond quickly to changes in product mix, delaying commercial expansion of the Trigeminal Neuralgia ablation system and creating uncertainty around full year revenue recognition. - Current cash and working capital levels are relatively limited, which may constrain the company's ability to fund pipeline development and commercial expansion if additional capital is not raised in a timely manner. - International market entry requires additional regulatory submissions and clinical data in many geographies, which may delay revenue generation from international expansion. - Pharmaceutical companies will generally not change delivery technologies mid-stream in ongoing clinical trials, which may limit near-term adoption of StereoCED until after new gene and cell therapies receive FDA approval. - Commercial sales of the OneRF Brain Ablation System are managed by partner Zimmer Biomet, and NeuroOne does not have contractual access to detailed KPI data on new account growth or utilization in existing accounts, limiting internal visibility into commercial performance.

Analyst Q&A

• Q: Jeffrey Cohen (Ladenburg Thalmann) asked for details on the University of Minnesota StereoCED epilepsy collaboration, including epilepsy type, study size, and timeline. /

  A: The collaboration focuses on focal epilepsy. The first step is preclinical testing of the university's developed therapy, which is expected to start in the next quarter. After successful preclinical work demonstrating efficacy, the program will move to a Phase I human trial. No specific study size was shared.

• Q: Cohen also asked for details on the source of current backlog, the timeline for the second manufacturing site, and updates on international distribution for OneRF. /

  A: Backlog stems from 6-month supplier lead times and the company's build-to-order strategy that minimizes inventory costs, making it hard to adjust quickly to product mix changes. The second, larger manufacturing site will launch in early 2027, and the company targets clearing all backlog by end-Q4 2026. ISO certification is the gateway to international markets; Zimmer Biomet is assessing priority territories for its geographies, while NeuroOne evaluates independent distributors for Zimmer-non-exclusive regions, with a formal update expected next quarter. Timelines vary by region based on local regulatory requirements.

• Q: Jeremy Pearlman (Maxim Group) asked if the plan to use independent distributors for OneRF Trigeminal Neuralgia expansion means Zimmer Biomet is not interested in adding the product to its agreement. /

  A: This interpretation is incorrect; Zimmer is still interested in adding the product. The current prioritization of existing Brain Ablation product manufacturing for Zimmer (the company's larger current revenue opportunity) has delayed Trigeminal expansion while the company works through existing backlog. NeuroOne is moving forward with independent distributor preparation to avoid waiting, and will still partner with Zimmer if an agreement is finalized.

• Q: Pearlman also asked why full-year 2026 revenue guidance was adjusted to $9.2-$10.5 million from the prior target of at least $10.5 million. /

  A: The revised range is entirely driven by manufacturing delays. Total expected orders for the full year are $11.2 million, but it is unlikely all ordered units will be manufactured and shipped in time for revenue recognition this fiscal year based on current vendor timelines. The range builds in conservative risk for further delivery delays.