NeuroOne (NMTC) Q1 2026 Earnings Call Transcript

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DATE

Tuesday, Feb. 17, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — David A. Rosa
• Chief Financial Officer — Ronald W. McClurg

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TAKEAWAYS

• Product Revenue -- $2,900,000, representing a 5.5% sequential increase from $2,700,000 in the previous quarter, but a decrease from $3,300,000 due to the absence of last year’s initial stocking order with Zimmer.
• License Revenue -- $0, in contrast to $3,000,000 in the prior-year quarter, which stemmed from the Zimmer distribution agreement.
• Gross Profit -- $1,600,000, or 54.2% of product revenue, up 2.6% sequentially from $1,500,000, but down from $1,900,000, or 58.9%, in the prior-year period.
• Total Operating Expenses -- $3,300,000, compared to $3,200,000 in the previous year’s first quarter.
• Research and Development Expense -- $1,400,000, rising from $1,200,000 year over year.
• Selling, General, and Administrative Expense -- $1,900,000, marking a 7.7% decrease from $2,000,000 a year ago.
• Net Loss -- $1,400,000, or a loss of $0.03 per share, compared to net income of $1,800,000, or $0.06 per share, in the prior-year quarter, primarily due to the absence of license revenue recognized last year.
• Cash and Cash Equivalents -- $3,600,000 as of Dec. 31, 2025, down from $6,600,000 as of Sept. 30, 2025.
• Working Capital -- $6,800,000 as of Dec. 31, 2025, compared to $7,900,000 as of Sept. 30, 2025.
• Debt -- No debt outstanding as of Dec. 30, 2025.
• Fiscal 2026 Revenue Outlook -- Management projects at least $10,500,000 in sales for fiscal 2026 (ending Sept. 30, 2026), representing a minimum 17% increase from fiscal 2025 (ending Sept. 30, 2025).
• Commercial Progress: 1RF Brain Ablation System -- The number of ablations performed in the quarter accounted for nearly half of all procedures since product launch, indicating accelerated adoption.
• Registry Initiative -- Enrollment for a new registry to capture patient outcomes is expected to begin by the end of the third fiscal quarter.
• Commercial Progress: 1RF Trigeminal Nerve Ablation -- Nine patients have been treated across three centers, with all reported pain free after treatment; limited commercial launch continues.
• Strategic Partnership Discussions -- Active diligence with a strategic partner is underway for potential licensing of the trigeminal nerve ablation technology.
• International Expansion Efforts -- The company is pursuing ISO 13485 certification as the first step toward international commercialization.
• Drug Delivery Program Acceleration -- Devices will be available for investigational animal and clinical studies in Q3, six months ahead of previous estimates.
• Business Development -- Diligence discussions are active for partnerships or licensing in drug delivery and lower back pain programs, including the 14-gauge needle and basivertebral nerve ablation system.
• Board Appointment -- Jason Mills, Executive Vice President of Strategy at Penumbra Incorporated, has joined the board, bringing business development expertise.
• Commercialization and Marketing -- Zimmer Biomet bears full responsibility for product commercialization and marketing in line with the 2020 distribution agreement.
• Operating Expense Outlook -- Management expects SG&A expenses to remain flat for the remainder of the year, while R&D costs may fluctuate with program phases.

SUMMARY

Management signaled continued commercial adoption of NeuroOne Medical Technologies (NASDAQ:NMTC)’s key platforms, with the 1RF brain ablation system showing increased clinical uptake and near-term readiness for broader registry data collection. A projected fiscal-year sales increase of at least 17% for fiscal 2026 (ending Sept. 30, 2026) sets growth expectations despite a return to net loss in the absence of prior-year license revenue. Cash burn was notable, with liquidity declining but working capital and the absence of debt supporting ongoing operations; the company is funded through fiscal 2026 (ending Sept. 30, 2026) contingent on milestone achievements. Partnership, licensing, and international expansion activities, alongside the addition of a strategic-focused board member, point to evolving corporate development priorities that could shape future commercialization and capital formation.

• Doctors from the Mayo Clinic provided feedback on the 1RF system at the December American Epilepsy Society meeting, supporting physician engagement with the technology.
• Field reports indicate the 1RF ablation procedure can be performed bedside and is viewed by clinicians as easy to use.
• The superiority of the trigeminal nerve ablation probe, which requires only single placement due to multiple contacts, differentiates it from conventional technologies relying on multiple insertions.
• The company does not have demographics on geographic adoption or center count for Zimmer’s domestic sales of 1RF, reflecting limited commercialization data transparency.
• Drug delivery, lower back pain, and basivertebral nerve ablation platforms are progressing, with institutional interest and planned animal or preclinical studies noted but no reported human commercial use yet.

INDUSTRY GLOSSARY

• 1RF system: NeuroOne’s proprietary platform enabling brain ablation and neural recording with a single electrode device.
• Trigeminal Nerve Ablation: A neuro-ablative procedure using a specialized electrode to alleviate facial pain by targeting the trigeminal nerve.
• ISO 13485: An international standard that specifies requirements for a quality management system in the design and manufacture of medical devices, required for many global regulatory pathways.
• Basivertebral nerve ablation: A minimally invasive procedure aiming to treat chronic low back pain by ablating nerves in the vertebral body.

Full Conference Call Transcript

David A. Rosa: I would like to welcome you to our first quarter fiscal 2026 financial results conference call. The company continued the positive momentum from fiscal year 2025 by making progress in a number of different areas of the business. Our first quarter sales were sequentially higher than the previous quarter and down slightly as expected from the initial stocking order that was placed in 2025 with the launch of the 1RF brain ablation system. We are also projecting fiscal year 2026 sales to be at least $10,500,000, which is a minimum 17% increase from fiscal year 2025. With respect to our existing product portfolio, we continue to make exciting progress across all of our programs.

First, regarding our 1RF brain ablation system, the number of ablations performed in fiscal Q1 2026 was nearly half of all ablations performed since the launch of the technology. This demonstrates continued penetration and adoption of the technology in the market. We also reported that Mark Burnell, a professional pianist from Chicago, was able to resume his career after receiving an ablation with our system. These types of success stories are not only exciting to hear, but also confirm our enthusiasm for future potential growth with this platform. As previously mentioned, we are also establishing a registry to capture these outcomes and hope to enroll the first patient by the end of the third fiscal quarter.

We also attended the American Epilepsy Society meeting in December where our system was exhibited at Zimmer Biomet’s booth. In addition, doctors from the Mayo Clinic in Jacksonville, Florida provided their experience with the system at the booth. We also believe there is an opportunity internationally for our technology and continue to work towards receiving ISO 13485 certification as a first step towards commercializing internationally. Moving on to our 1RF trigeminal nerve ablation system, we previously disclosed that in August 2025, we received FDA 510(k) clearance for this system to treat facial pain by ablating the trigeminal nerve.

In 2026, we initiated a limited commercial launch and reported that the first two patients were treated at University Hospitals Cleveland with both patients reporting pain relief from the procedure. To date, nine total patients have been treated at three centers and all are reported pain free, which is extremely encouraging. As a reminder, unlike traditional ablation systems, our probe was intended to be placed once due to the multiple contacts present on the device. Traditional systems typically require multiple probe placements, which can cause additional patient discomfort. Given the positive outcomes to date, we expect to complete this limited launch by 2026.

We are currently in diligence discussions with a strategic to potentially license this technology and look to conclude these discussions as quickly as possible. Regarding our drug delivery program, we were able to accelerate the program and expect that we will have devices available for commercial use in investigational clinical studies or animals in Q3 fiscal 2026. This is approximately six months sooner than originally expected. We are currently organizing an advisory board of leading oncology experts that treat challenging brain tumors such as glioblastomas, to provide guidance in utilizing the system to deliver therapies to the brain for this application.

We are also continuing discussions with various pharma and biotech companies regarding the potential use of the device for animal and/or investigational human studies for gene and cell therapies in development. As reported last quarter, we are evaluating opportunities with two organizations interested in forming a partnership to use our drug delivery technology to deliver their experimental therapies to the brain to treat a variety of different neurological conditions. Moving on to our two lower back pain management programs, I will first provide an update on our 14-gauge needle eliminating the need for an incision in the patient’s back. We plan to initiate a long-term animal study next month in preparation for our first human implant.

We are actively engaged in diligence discussions with strategic organizations regarding their interest in this platform. The second technology in development to treat lower back pain is our basivertebral nerve ablation system. This past quarter, we held multiple advisory board meetings with leading pain experts to confirm the product requirements as well as to validate the system’s potential benefits compared to existing technologies. We are confident in our strategy to leverage our existing 1RF and sEEG probe for this application. We are also in diligence discussions with strategics regarding this product technology and the potential partnership. Next up in development is to firms that can provide manufacturing or required access tools for the system.

Finally, we were excited to announce the appointment of Jason Mills to our board of directors. Jason is currently the Executive Vice President of Strategy for Penumbra Incorporated which was recently acquired by Boston Scientific for $14,500,000,000. Prior to that, Jason was Managing Director at Canaccord Genuity and has held similar roles in other investment banks over his career. We believe his expertise will translate smoothly into helping address the company’s business development opportunities currently in process. I will now turn the call over to Ronald W. McClurg, Chief Financial Officer, to provide a review of our first quarter fiscal 2026 financial results. Thanks, Dave.

Product revenue was $2,900,000 in 2026, compared to product revenue of $3,300,000 in 2025, which included Zimmer’s initial stocking. On a sequential basis, revenue increased 5.5% from $2,700,000 in 2025. The company had no license revenue in 2026, compared to license revenue of $3,000,000 in 2025.

Ronald W. McClurg: Which was derived from the expanded

David A. Rosa: exclusive distribution agreement with Zimmer. Product gross profit was $1,600,000, or 54.2% of revenue, in 2026 compared to product gross profit of $1,900,000, or 58.9% of revenue, in the same quarter of the prior fiscal year. On a sequential basis, product gross profit increased 2.6% from $1,500,000 in 2025. Total operating expenses were $3,300,000 in 2026 compared to $3,200,000 in the same quarter of the prior year. Research and development expense in 2026 was $1,400,000 compared to $1,200,000 in the same quarter of the prior year. Selling, general, and administrative expense in 2026 decreased 7.7% to $1,900,000 compared to $2,000,000 in the same quarter of the prior year.

Net loss in 2026 was $1,400,000, or a loss of $0.03 per share, compared to net income of $1,800,000, or $0.06 per share, in the same quarter of the prior year. Net income in 2025 included the license revenue of $3,000,000 related to the distribution license granted to Zimmer for the 1RF product in October 2024. As of 12/31/2025, the company had cash and cash equivalents of $3,600,000 compared to $6,600,000 as of 09/30/2025. Of note, NeuroOne Medical Technologies Corporation is funded through fiscal 2026, potentially longer if key milestones are hit. The company had working capital of $6,800,000 as of 12/31/2025,

Ronald W. McClurg: compared to working capital of

David A. Rosa: $7,900,000 as of 09/30/2025. NeuroOne Medical Technologies Corporation had no debt outstanding as of 12/30/2025. I will now turn the call back over to Dave for his closing remarks. Thank you, Ron. As I mentioned at the top of the call, we continued the positive momentum from fiscal year 2025 by making progress across all of our programs. In addition, we are projecting revenues of at least $10,500,000 in fiscal 2026 and look forward to providing updates on our progress in other areas of the business as well throughout the year.

In addition, we will be attending the Oppenheimer 36th Annual Healthcare MedTech and Services Conference and invite investors to meet with NeuroOne Medical Technologies Corporation in March and join our presentation at 1:20 p.m. Eastern Time on Tuesday, March 17. Lastly, before we move into the Q&A portion of today’s call, I and everyone at NeuroOne Medical Technologies Corporation would like to extend our sympathies for the unexpected loss of Dr. Sanjit Grewal, a brilliant neurosurgeon, valued collaborator, and friend to NeuroOne Medical Technologies Corporation. Our deepest condolences to his wife, Angela, his children, and the entire Mayo Clinic family. Operator, at this time, we can open up the call for questions.

Operator: Thank you, sir. At this time, we will be conducting our question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. And you may press 2 if you would like to remove your question from the queue. 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 Jeffrey Scott Cohen with Ladenburg Thalmann. Your line is live. Hey. Good morning, Dave and Ron. How are you? Good.

David A. Rosa: Great, Jeff. Good morning.

Operator: Couple questions from Aaron. So could you talk about trigeminal firstly? I know

Jeffrey Scott Cohen: congrats on getting up to nine cases. Could you give us a sense of number of physicians or number of centers that did the nine cases, and then maybe talk about interest from Zimmer and/or others trigeminal, please. Sure. I will take that.

David A. Rosa: So the nine cases that we have done were done at three centers. One of those centers, by the way, was Dr. Grewal’s, that I mentioned just recently passed away. But in all nine cases, the patients were reportedly pain free. That is really the objective of this therapy. So that was very encouraging to see. And really, one of the major advantages of the technology is that due to the multiple contacts on the electrode itself, you are able to place the device once instead of multiple times to really find the area of the nerve that is triggering the pain.

So it is a much more comfortable procedure, let us say, for patients, and may require less time because you are only placing the device once. And in terms of strategic interest, yes, there are discussions underway. Obviously, you would always like to conclude those discussions as soon as possible, and that is really the goal. But right now, we are in diligence with the company, but would be prepared, if we do not move forward in diligence, to commercialize this ourselves.

Jeffrey Scott Cohen: Okay. Got it. And could you give us a sense—I do not know how much clarity or transparency you have—could you give us a sense of number of physicians or number of centers for which Zimmer is present domestically?

David A. Rosa: Yes, we do not have that information. The information that I referred to earlier in the discussion was that they told us that the first fiscal quarter, in terms of number of patients, that there were almost half of all the patients they have treated since they launched this, actually completed in the first fiscal quarter. But we do not have clarity on the number of centers or the number of cases.

Jeffrey Scott Cohen: Okay. Got it. And then one more if I may. Maybe a question for Ron. Could you talk about OpEx generally speaking, would you expect that to be fairly flattish off of Q1 levels for the balance of the year?

David A. Rosa: We—thanks, Jeff—we would expect that the SG&A would be fairly flat the rest of the year, but we do expect that the R&D may fluctuate, depending on what phase of the projects that we are working on. As Dave mentioned before, we did accelerate our drug delivery project and made significant progress there. And so, we are not sure exactly—there will be some near-term expenses, and then that project will start to taper off a little bit.

Jeffrey Scott Cohen: Got it. Okay. So did you—the animal studies for drug delivery and also spinal cord will pick up in the back half the year, it looks like Q2 and Q3.

Operator: Yes. Yes.

David A. Rosa: Not significantly, but it will pick up a little bit.

Jeffrey Scott Cohen: Okay. Perfect. That does it for me. Thanks for taking the questions.

David A. Rosa: Thanks, Jeff.

Operator: Thank you. Our next question is coming from Jeremy Perlman with Maxim Group. Your line is live.

David A. Rosa: Thank you. Good morning. Question regarding any clinical feedback you may have received from neurologists or surgical teams that are using the installed products so far that you could share?

Operator: Thank you.

David A. Rosa: So, yes. In general, what we are finding is that the device has been successful in either reducing the number of seizures that patients are having, or completely eliminating them. Now, those metrics are really measured over time, so one of the reasons why we want to capture those, despite our enthusiasm for it, this is the main reason why we started the registry, as a way to really capture what the results are long term. But I think the results speak for themselves. The feedback that we have is the actual generator, the device that creates the ablation, it is very easy to use, and the system itself is very easy to use.

And these procedures do not require patients in the operating room. At least from what we know, all of them to date have been done at the patient’s bedside. That is the actual ablation itself. So I have never seen a surgical procedure done by a patient’s bedside, so it is kind of exciting to see the results that we are getting and really the feedback on ease of use. Okay. That is great to hear. And then maybe, again, you might not have the information, it might be more at Zimmer’s end. But is there a specific region in the U.S. where they are seeing the most traction and adoption of the technology?

And then maybe how do they replicate that across the rest of the

Operator: country?

David A. Rosa: Yes. That information, we do not have. Okay. And then just last question. Sales and marketing—your expectations for 2026—is that going to be, are you going to share that burden with Zimmer to promote the products? Or is that

Chris Volker: fully on Zimmer’s shoulder?

David A. Rosa: Yes. Part of our agreement that we signed way back in 2020, the responsibility for all marketing and sales costs lies with Zimmer. We are obviously responsible for providing all the training and field support as is reasonable. And it has worked very well, but it is actually their responsibility to cover all commercialization and marketing costs.

Chris Volker: Okay. Alright. Great. And then just last question. The revenue breakdown for the first quarter, was that just predominantly or all just restocking? Or was there any additional purchases that Zimmer made, maybe beyond what they had originally expected to use the device, and they were restocking even within the quarter. Most of the revenue—yeah, I will take that, Dave.

David A. Rosa: Most of the revenue is what you are calling restocking, which is replenishing and selling into the market.

Chris Volker: A year ago, if you remember, in 2025,

David A. Rosa: that was their initial stocking order. And pretty much everything since then has been the continuation and restocking.

Jeffrey Scott Cohen: Okay.

Chris Volker: Got it. Understood. Alright. Thank you for taking my questions. Have a nice day.

David A. Rosa: Thank you, Jeremy. Jeremy.

Operator: Thank you. That appears to be the last question at this time. I would like to turn the call back over to Mr. David A. Rosa for any closing remarks.

David A. Rosa: Thank you, operator. I would like to thank everyone again for attending the call, and we 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 investor relations firm, MZ Group, who would be more than happy to assist.

Operator: Thank you. Ladies and gentlemen, this concludes today’s conference. We thank you for your participation. You may now disconnect your lines at this time and have a great rest of the day.

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