Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed in a Current Report
on Form 8-K filed by the Company with the Securities and Exchange Commission (the “
SEC
”) on August 23,
2017 (the “
Initial Form 8-K”
), NeuroOne Medical Technologies Corporation (the “
Company
”)
entered into a Subscription Agreement (the “
Subscription Agreement
”) with certain accredited investors
(the “
Subscribers
”), pursuant to which the Company, in a private placement (the “
Private
Placement
”), agreed to issue and sell to the Subscribers promissory notes (each, a “
Note
”
and collectively, the “
Notes
”) in an aggregate principal amount of $253,000, maturing on February 18,
2018 and warrants to purchase shares of the Company’s common stock, par value $0.001 per share (the “
Common Stock
”),
with an initial exercise price of $1.80 per share (each, a “
Warrant
” and collectively, the “
Warrants
”).
As previously disclosed in a Current Report
on Form 8-K filed with the SEC on December 6, 2017 (together with the Initial Form 8-K, the “
Prior 8-Ks
”),
on November 30, 2017, the Company and each Subscriber signed a written consent to amend the Notes, and the Company executed and
delivered to each Subscriber the First Amendment to Promissory Note. Capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Prior 8-Ks.
On March 12, 2018, the Company and each Subscriber
signed a written consent (the “
Consent
”) to (i) amend and restate each Note in its entirety on the terms
and conditions set forth in Exhibit A attached thereto (each, an “
Amended and Restated Note
”) and (ii)
amend the first recital, Section 1.1 and any other provisions of the Subscription Agreement to replace the form of warrant agreement
annexed to the Subscription Agreement as Exhibit C in its entirety with the terms and conditions set forth in Exhibit B attached
to the Consent (the “
Replacement Warrant
”) and to provide for the issuance of an additional warrant based
on the form of warrant agreement attached as Exhibit C to the Consent (the “
Additional Warrant
”).
On March 12, 2018, the Company issued and delivered
the Amended and Restated Notes, the Replacement Warrants and the Additional Warrants to the Subscribers. The following is a description
of the Amended and Restated Notes, the Replacement Warrants and the Additional Warrants, which description is qualified in its
entirety by reference to the forms of the Amended and Restated Notes, the Replacement Warrants and the Additional Warrants attached
as Exhibits 4.1, 4.2 and 4.3 hereto, respectively, and incorporated herein by reference. These forms are incorporated herein by
reference only to provide investors with information regarding the terms of such documents and not to provide investors with any
other factual information regarding the Company or its business and should not be relied upon as a disclosure of factual information
relating to the Company.
Amended and Restated Notes
The Amended and Restated Notes are convertible
promissory notes that bear interest at a fixed rate of 8% per annum and require the Company to repay the principal and accrued
and unpaid interest thereon on the maturity date of July 31, 2018 (the “
Maturity Date
”). Pursuant to
the terms of each Amended and Restated Note, each Subscriber received a Replacement Warrant upon the issuance of such Amended and
Restated Note. If the Company raises more than $3,000,000 in an equity or equity-linked financing before the Maturity Date (the
“
Qualified Financing
”), the outstanding principal and accrued interest (the “
Outstanding
Balance
”) on the Notes shall automatically convert into the securities issued by us in the Qualified Financing (the
“
New Round Stock
”) based on the greater number of such securities resulting from either (i) the Outstanding
Balance divided by $1.80 or (ii) the Outstanding Balance multiplied by 1.25, divided by the price paid per security in the Qualified
Financing. If a change of control transaction occurs prior to the earlier of a Qualified Financing or the Maturity Date, the Amended
and Restated Notes would, at the election of the holders of a majority of the outstanding principal of the Notes, either become
payable on demand as of the closing date of such transaction or become convertible into shares of Common Stock immediately prior
to such transaction at a price per share equal to the lesser of (i) the per share value of the Common Stock as determined by our
Board of Directors as if in connection with the granting of stock based compensation or in a private sale to a third party in an
arms’ length transaction or (ii) at the per share consideration to be paid in such transaction (the date of any such conversion
of the Amended and Restated Notes pursuant to this paragraph, is referred to herein as the “
Conversion Date
”).
The Amended and Restated Notes are unsecured.
Replacement Warrants
Each Replacement Warrant grants the holder
the option to purchase up to the number of shares of capital stock of the Company equal to the New Round Stock issued or issuable
upon the conversion of the Amended and Restated Note held by such holder at a per share exercise price equal to either (i) the
actual per share price of New Round Stock if the Amended and Restated Note converted in connection with a Qualified Financing or
(ii) the price at which the Amended and Restated Note converted in connection with a change of control transaction. The Replacement
Warrants are exercisable commencing on the Conversion Date and expire on November 21, 2021. The exercise price and number of the
shares issuable upon exercising the Replacement Warrants are subject to adjustment in the event of any stock dividends and splits,
reverse stock split, recapitalization, reorganization or similar transaction, as described therein.
Additional Warrants
Each Additional Warrant grants the holder the
option to purchase up to the number of shares of capital stock of the Company equal to the product obtained by multiplying (i)
the outstanding principal amount of the Amended and Restated Note held by such holder and (ii) 0.75; at a per share exercise price
of $1.80. The Additional Warrants are exercisable commencing on the Conversion Date and expire on November 21, 2021. The exercise
price and number of the shares issuable upon exercising the Additional Warrants are subject to adjustment in the event of any stock
dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein.