Good day, ladies and gentlemen, and welcome to NeuroOne Medical Technologies Corporation's second quarter fiscal 2026 financial results conference call. Today's call will be conducted by the company's Chief Executive Officer, Dave Rosa, and Ron McClurg, the company's Chief Financial Officer. Before I turn the call over to Mr. Rosa, I'd like to remind you that this conference call will include forward-looking statements within the meaning of U.S. Federal Securities laws with respect to future operations, financial results, including events, trends, and performance, which are based on management's beliefs and assumptions as of today's call. Forward-looking statements may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. See NeuroOne's financial results, press release, and SEC filings for information regarding specific risks and uncertainties that could cause actual results to differ.
Except as required by law, NeuroOne undertakes no obligation to update such forward-looking statements. With that, I will turn the call over to Mr. Dave Rosa, Chief Executive Officer of NeuroOne. Please go ahead, sir.
Thank you, operator, and thank you to everyone for joining us today. I'd like to welcome you to our second quarter fiscal 2026 financial results conference call. Product revenue for the OneRF brain ablation system in the second quarter of fiscal 2026 grew 72% year over year to $2.4 million, compared to $1.4 million in the second quarter of fiscal 2025. We continue to be energized by reports of the positive impact this therapy is having on people's lives. Most recently, the U.S. Department of Veterans Affairs published an article regarding Dr. Garrett Banks' experience with the technology. The article discussed the challenges that Navy veteran Derrick Harpole had to endure after being diagnosed with epilepsy. For more than two decades, he was unable to work, drive, or hunt alone.
Dr. Banks and his team at the Houston VA performed their first OneRF brain ablation procedure on Derrick. He woke up the morning after the procedure, bright-eyed and bushy-tailed, in his words. With his seizures dramatically reduced, he now has hope that he can regain the life he once had. Through our partnership with Zimmer Biomet, our goal is to expand this therapy into new centers in order to change other people's lives as well. The company also had several important corporate developments I'd like to highlight. First, we appointed David Wambeke as Chief Business Officer to lead our drug delivery program, oversee investor relations, and support business development. As a meaningful sign of his confidence, David purchased 1 million shares of NeuroOne common stock on a pre-split basis.
We were also pleased to announce that we regained compliance with Nasdaq's minimum bid price requirement following a 1-for-6 reverse split of our common stock. Finally, we are always excited to welcome new investors, and we're pleased to learn a new high-net worth investor acquired approximately 7.4% of our outstanding common stock in the open market. Now, let's move on to discuss the exciting progress we have made with our existing product portfolio. Regarding our OneRF brain ablation system, as I mentioned in the opening, we experienced 72% year-over-year revenue growth. We believe there is upside for growth domestically and internationally. Domestically, we are developing a webinar that will highlight clinical experience with the device that we can expand exposure to neurologists and neurosurgeons that may not be aware of the exciting results that are being reported.
With respect to international commercialization progress, we completed the stage 2 audit of our Minnesota facility for ISO 13485 certification and remain bullish on certification in the latter part of 2026, which is a key step in the process of enabling international distribution of our products. We also had an important clinical milestone this quarter with the publication of a peer-reviewed case series that validates what physicians using our platform have been telling us, that real-time temperature monitoring during sEEG guided RF ablation is an important technology feature when performing brain ablations on patients with drug-resistant epilepsy. The OneRF brain ablation system was also highlighted at Zimmer Biomet's booth at the American Association of Neurological Surgeons meeting in San Antonio, Texas, alongside presentations on the technology.
Moving on to our OneRF Trigeminal Nerve Ablation System, we have continued to gain clinical experience and have experienced clinical success following our FDA 510(k) clearance and limited market release. To date, we have successfully completed 16 cases using the ablation system for the treatment of facial pain known as trigeminal neuralgia, with all patients reportedly pain-free after the procedure. We continue to be optimistic regarding the advantages and clinical performance of the device for treating facial pain. As a reminder, unlike traditional ablation systems, our product is intended to be placed once due to the multiple contacts present on the device. Whereas traditional systems typically require multiple probe placements that can cause additional patient discomfort and extend treatment times.
We were also pleased to be highlighted in The Business Research Company's April 24th, 2026 report, which noted that emerging growth patterns are driving expansion in the trigeminal neuralgia market, valued at approximately $780 million, towards stereotactic surgery using technology similar to our OneRF Trigeminal Nerve Ablation system. Regarding our drug delivery program, we remain on track for commercial availability of the system in the second half of fiscal 2026 for use in investigational clinical studies or animal studies. Also, we are currently evaluating distributors for commercialization of the product. In addition, we announced a collaboration with the Department of Neurology's Division of Epilepsy at the University of Minnesota Medical School to advance a study evaluating next generation epilepsy therapies using our drug delivery platform. Moving on to our two lower back pain management programs.
I will first provide an update on our basivertebral nerve ablation system. This quarter, we completed the user design requirements for the system and initiated preclinical testing to support continued development of the program. Our strategy remains to leverage our existing OneRF generator, temperature accessory, and ablation electrode while outsourcing access tools either through outside vendors or potential distribution partners. We continue to remain excited about the prospects of the system given the potential clinical advantages it offers. Let's move on to our spinal cord stimulation percutaneous paddle lead program. As a reminder, this system is designed to offer broader customizable stimulation, lower energy consumption, and can be inserted through a 14-gauge needle, eliminating the need for an incision in the patient's back. During the quarter, we concluded our chronic animal study and identified opportunities to enhance performance.
In addition, the system was also displayed at the North American Neuromodulation Society, or otherwise known as NANS, we received a great deal of interest from physicians that stopped by our booth. Finally, we also announced a CFO transition plan. Ron McClurg, who has served as our CFO with great distinction for over 5 years, will retire as CFO effective June 30, 2026, and remain a senior advisor to the company through year-end. Effective July 1, 2026, Chris Volker, our current Chief Operating Officer, will assume the role of Chief Financial Officer. We are confident that this transition will be seamless and support continued execution against our strategic priorities. I also want to personally thank Ron for all his efforts, his commitment, and his willingness to remain through this transition. I am confident that Chris Volker is a great fit for this role.
I would now love to turn the call over to Ron to provide a review of our second quarter fiscal 2026 financial results.
Thanks, Dave. Product revenue was $2.4 million in the second quarter of fiscal 2026, a 72% increase compared to product revenue of $1.4 million in the second quarter of fiscal 2025. The increase was driven by higher sales of OneRF products. For the 6 months ended March 31, 2026, product revenue was $5.3 million, an increase of 13% compared to $4.7 million in the same period of the prior fiscal year. The company had no license revenue in the second quarter or first 6 months of fiscal 2026, compared to license revenue of $3 million in the first 6 months of fiscal 2025, which was derived from the expanded exclusive distribution agreement with Zimmer Biomet.
Product gross profit was $1.3 million or 53.8% of product revenue in the second quarter of fiscal 2026, compared to product gross profit of $0.8 million or 55.6% of product revenue in the same quarter of the prior fiscal year. For the 6 months ended March 31, 2026, product gross profit was $2.9 million or 54.0% of product revenue, compared to $2.7 million or 57.9% of product revenue in the same period of the prior fiscal year. Total operating expenses were $3.4 million in the second quarter of fiscal 2026, compared to $3.5 million in the same quarter of the prior year.
Research and development or R&D expense in the second quarter of fiscal 2026 was $1.5 million, compared to $1.5 million in the same quarter of the prior year. Selling, general, and administrative or SG&A expense in the second quarter of fiscal 2026 was $1.9 million, compared to $1.9 million in the same quarter of the prior year. For the first six months of fiscal 2026, total operating expenses were $6.7 million, compared to $6.7 million in the same period of fiscal 2025. R&D expense in the first six months of fiscal 2026 was $2.9 million, compared to $2.7 million in the same period of fiscal 2025.
SG&A expense in the first 6 months of fiscal 2026 decreased 4% to $3.8 million, compared to $4.0 million in the prior year period. Net loss in the second quarter of fiscal 2026 was $2.1 million, or $0.25 per basic and diluted share, compared to a net loss of $2.3 million, or $0.44 per basic and diluted share in the same quarter of the prior year. The net loss in the second quarter of fiscal 2025 was favorably impacted by a $0.4 million gain from the fair value change in the warrant liability.
For the six months ended March 31st, 2026, net loss was $3.5 million, or $0.42 per basic share and $0.44 per diluted share, compared to a net loss of $0.5 million or $0.09 per basic and diluted share in the same period of the prior year. The lower net loss in the first six months of fiscal 2025 reflected a $3 million of license revenue recognized in the first quarter of fiscal 2025. As of March 31, 2026, the company had cash and cash equivalents of $2.8 million, compared to $6.6 million as of September 30th, 2025. The company also had $2.4 million in accounts receivable as of March 31st, 2026, which should be converted to cash in the third quarter of fiscal 2026 based on normal collection patterns.
The company had working capital of $5.7 million as of March 31, 2026, compared to working capital of $7.9 million as of September 30, 2025. NeuroOne had no debt outstanding as of March 31, 2026. Before I turn the call back to Dave for his closing remarks, I would like to thank Dave and the board of directors for giving me the opportunity to be part of such a talented team. It has been a privilege to serve as NeuroOne's Chief Financial Officer for over 5 years and to see the life-changing results our products are providing for patients. I look forward to watching the continued growth and success of NeuroOne.
Thank you, Ron. In summary, this was a very productive quarter for the company. We delivered 72% year-over-year product revenue growth, gained meaningful clinical experience with our OneRF Trigeminal Nerve Ablation System, completed the stage 2 ISO 13485 audit, paving the way for international distribution, regained Nasdaq compliance, and added two highly experienced executives in David Wambeke as Chief Business Officer, and effective July 1, Chris Volker as our next Chief Financial Officer. Looking ahead, the catalysts are clear. Continued commercial expansion of the OneRF brain ablation and OneRF Trigeminal Neuralgia ablation systems. Commercial availability of our drug delivery system later this year. Continued progress in our back pain technologies and future international commercial expansion. I am proud of what our team has built and believe we remain well-positioned for the future.
Finally, I look forward to sharing more of our story with investors at the Planet MicroCap conference in Las Vegas in June. With that, operator, at this time, we can open up the call for questions.
Thank you. Ladies and gentlemen, at this time, we'll be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you wish to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is coming from Jeff Cohen with Ladenburg Thalmann. Your line is live.
Hi, this is Destiny on for Jeff. Thank you for taking our questions. Could we start with the drug delivery timing and strategy? I know you mentioned that it would be available for partnering and clinical evaluation in the second half of 2026. I'm curious what's left on your end to do. This is the first time I've heard you mention working with a distributor. Can you just walk us through that and that strategy a bit?
Sure. Thanks for joining the call, Destiny. Really what's left is for us to finish our sterilization testing and validation, excuse me, and packaging. Once that's done, it usually takes about three months, we'll be in a position to start shipping the product. Again, it's for any animal use, as well as any approved human IDE studies. We obviously don't have a direct sales force today, the best way we think of really being able to commercialize the technology, at least initially for animal use, is to identify the distributors that sell into those areas. That's the plan there.
Yes, I, you know, I think you probably also heard that, we just partnered with the University of Minnesota regarding some of the therapies that they would like to test. They're not the only healthcare system that's approached us. We expect to have more of those as well in the future.
Got it. Thank you for that. Turning to facial pain for a second, I'm wondering how that commercialization strategy has changed or evolved as you're, you know, getting more of these procedures done. I wanted to follow up on one of my questions from, I think it was December, about scheduling. Are you seeing the same trends? I know you'd only had a couple when I asked the question originally, but are you seeing consistent trends with these physicians performing multiple ablations in different patients a day, or has that kind of changed?
I'll answer the second question first.
Okay.
No, that's remained, excuse me, I expect that it'll continue to be that way. It's a lot easier to really schedule these cases than it is the brain ablation cases because there's always the waiting period on the brain ablation cases.
to identify the focal area. Here, when the patient comes in, they know they're getting an ablation.
The neurosurgeons at the sites that we're at are stacking these cases in a day, and that makes it really easy to plan for that. You know, the commercialization strategy really hasn't changed. I still expect that we'll be partnering with another company. Until any agreement is final, we'll continue to do what we're doing, which is really opening up centers ourselves.
Got it. Okay. Thank you. Then, lastly, I just wanted to ask on guidance. I know you gave a top line of, I think it's ten and a half for product revenue for 2026. I'm wondering if that outlook kind of remains the same. I know it did not include anything for drug delivery or facial pain. I'm wondering if you can give us any updates there.
It still remains the same, the guidance. You're correct, it doesn't include anything from those areas. You know, I think by the time we get to commercialize drug delivery, it'll be late in our fiscal year. I'm not expecting any major contributions from that area. In terms of facial pain, it also really depends on how quickly we're able to finalize an agreement.
Okay. Perfect. Thank you so much for taking the questions. I appreciate it.
Thanks, Destiny.
Thank you. Our next question is coming from Jeremy Pearlman with Maxim Group. Your line is live.
Thank you. Good morning. Thank you for taking the questions. Firstly, I wanted to speak a little bit about the international opportunity. You know, you hope to get certification by the end of 2026. Is that commercial rollout gonna be with Zimmer? Is that or is that potentially there with Zimmer, or is it gonna be through other distributors? Also maybe are there countries that you've targeted to be the first ones for that launch? Maybe any update on that would be great.
Yeah. Thanks for joining the call as well. Yes, the initial plan will be to enter international markets with Zimmer. In our agreement with Zimmer, they actually have certain geographies as part of the agreement, but there are some additional geographies that they don't have distribution rights to. There is a chance that we will partner with other distributors for geographies that Zimmer has not signed up for. And, you know, in terms of where we're gonna focus on first, that's really in process right now with the Zimmer folks. The good news is that they're more than willing to help us help support any registrations or regulatory clearances that we need.
We are waiting to come up with a final list of at least the initial territories that we're looking to target. We would like to go to those geographies that accept FDA clearance, so that there aren't any additional requirements for the company. I expect next quarter to have more information on that.
Okay. Great. Then maybe, again, these are some KPIs. I don't know if you have all this information because I know it's sold a lot of it through Zimmer. Can you quantify how many procedures this quarter were performed by repeat physicians versus, let's say, first-time users? You know, we can get some sense of how it's trending, both within the current install base and then potentially new users. Thanks.
Yeah. We don't have that information from Zimmer.
You don't. Okay. Understood. I mean, and then jumping to the trigeminal, is there, 'cause remind me if I'm not sure, this information might have slipped my head. Is there a CPT code that covers that procedure or is it being, you know, billed under an existing CPT code maybe? How should we look at the reimbursement landscape for the trigeminal ablation device?
Yeah. It is being billed under an existing code. I don't, in terms of what the code number is, I don't know that off the top of my head.
Got it. Understood. Okay. I think that does it for us. Thank you for taking the questions, and have a nice day.
You too, Jeremy. Thanks.
Thank you. Our next question is coming from Justin Walsh with JonesTrading. Your line is live.
Good morning. This is Leo Tels on for Justin Walsh at Jones. Thank you for taking our questions. We're curious on how are you driving new physician adoption for your OneRF system for facial pain?
I'm sorry, could you repeat the question? I just couldn't hear very clearly.
How are you driving new physician adoption for your OneRF system for facial pain?
Sure. We're targeting centers that already have our generator at their facility. If you remember, the surgeons that are performing the facial pain procedures are the same ones that are performing the brain ablation procedures. I think, you know, if you look at the results to date, you know, what we've said publicly is that 16 cases that we've currently done all are pain-free.
I think, you know, being able to really broadcast that data as we go to new sites that, you know, the system, in addition to seeing that so far patients are pain-free, it also is a much more comfortable procedure for the patient because our device only has to be placed a single time, as opposed to other existing technologies where the probe has to be placed multiple times until the neurosurgeon has found the area of the nerve that's triggering pain. Because we have multiple contacts on the electrode, we can place it once and then test each of those contacts. You know, in other words, the patient doesn't have to get that probe placed multiple times.
That typically leads to shorter procedures and certainly a higher level of comfort. I you know, the surgeons so far that we've gone to understand that and can appreciate it. I don't think it's going to be that difficult to continue to show the advantages of our system.
Okay, good. Thank you. Would you please expand on your timeline for your Spinal Cord Stimulation Percutaneous Paddle Program?
I'm sorry, again, I'm having a little trouble hearing. Could you repeat that?
Yes, of course. Would you expand on your timeline for your Spinal Cord Stimulation Percutaneous Paddle program?
Oh.
What's your timeline for that program?
Yeah. We, we haven't put out a timeline yet. Now with some of the adjustments that we wanna make, we'll have to figure out what that timeline's gonna look like. At this point, we're still trying to investigate, you know, the steps for what we want to do to make some enhancements on the system. That, that'll be something that we'll likely provide, I would assume in the next 1 to 2 quarters.
Good. Thank you. Thank you so much for taking our questions again.
Thank you.
Thank you. That appears to be the last question at this time, so I would like to turn the call back over to Mr. Dave Rosa for any closing remarks.
Thank you, operator. I would like to thank everyone again for attending the call and look forward to connecting with the investor community throughout the quarter. If we were unable to answer any of your questions today, please reach out to our IR firm, MZ Group, who would be more than happy to assist.
Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may disconnect your lines at this time. We hope you have a great day.