NEUROONE MEDICAL TECHNOLOGIES CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K) – Marketscreener.com

Recent Developments and Upcoming Milestones
Accelerated Zimmer Milestone Payment
In August 2022, we entered into an amendment to the Exclusive Development and Distribution Agreement with Zimmer that provided us with a $3.5 million accelerated payment relating to certain milestone events. As part of the consideration, Zimmer received a Warrant to purchase 350,000 shares of our Common Stock, with an exercise price of $3.00 per share.
? $1.5 million for the sEEG exclusivity maintenance fee; and
? $2.0 million for satisfaction of each of the milestone events related to the
design of SEEG Products set forth in the Development Agreement, even though the
All payments attributed to the Initial Exclusivity Fee, the sEEG exclusivity maintenance fee and sEEG design milestone payment are non-refundable.
The achievement of the level of sales required to earn royalty payments from Zimmer is uncertain.
Selling, General and Administrative
Net valuation change of instruments measured at fair value
The net valuation change of instruments measured at fair value included the change in fair value of the 2019 Paulson Notes while they were outstanding.
Comparison of the Fiscal Years Ended September 30, 2022 and 2021
The following table sets forth our results of operations for the fiscal years ended September 30, 2022 and 2021.
Product Revenue and Product Gross Loss
Selling, general and administrative expenses
Research and development expenses
Net valuation change of instruments measured at fair value
Other income during the year ended September 30, 2022 related to interest income on our cash, cash equivalents and short-term investments in the amount of $31,000. Other income during the year ended September 30, 2021 consisted principally of proceeds received in connection with the PMT Corporation litigation in the amount of $0.2 million and from the forgiveness of the paycheck protection program loan in the amount of $0.1 million.
Liquidity and Capital Resources
October 2021 Underwritten Public Offering
2020 Paulson Convertible Notes
2019 Paulson Convertible Notes
Paycheck Protection Program Loan
In connection with the CARES Act, the Company received loan funding of approximately $83,000 under the Paycheck Protection Program (“PPP”), which was forgiven by the U.S. Small Business Administration on June 9, 2021.
Net cash used in operating activities $ (7,519,534 ) $ (8,602,826 ) Net cash used in investing activities (3,244,765 ) (67,079 ) Net cash provided by financing activities 12,023,282 11,534,854 Net increase in cash
Net cash used in operating activities
Net cash used in investing activities
Net cash used by investing activities for the year ended September 30, 2021 was $0.1 million and consisted of outlays for research and development equipment.
Net cash provided by financing activities
Net cash provided by financing activities was $12.0 million for the year ended September 30, 2022, which consisted of net proceeds from the October 2021 Underwritten Public Offering.
Critical Accounting Policies and Significant Judgments and Estimates
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:
Income Tax Assets and Liabilities
Income tax assets and liabilities include income tax valuation allowances. For additional information, see “Note 11 – Income Taxes” included in “Item 8 – Financial Statements and Supplementary Data” in this Report.
Recent Accounting Pronouncements
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