What changed in Modular Medical, Inc.'s 2022 10-K compared to 2021?

Across the narrative sections we track, Modular Medical, Inc. (MODD) added 430 paragraphs, removed 293, and edited 175 between the 2021 and 2022 10-K filings. The biggest movers are Item 1. Business (+247/−104), Item 1A. Risk Factors (+123/−127), Item 7. Management's Discussion & Analysis (+45/−47).

Did Modular Medical, Inc. add new Risk Factors in the 2022 10-K?

Yes — Item 1A Risk Factors shows 123 new/edited paragraphs and 127 removed paragraphs versus the 2021 10-K.

What changed in Modular Medical, Inc.'s MD&A (Item 7) in 2022?

Item 7 Management's Discussion & Analysis shows 45 new/edited paragraphs and 47 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Modular Medical, Inc.'s Legal Proceedings (Item 3) change in 2022?

Item 3 shows 1 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this MODD 10-K diff come from?

The source filings are Modular Medical, Inc.'s official 2021 and 2022 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

Modular Medical, Inc.MODDEarnings & Financial Report

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What changed in Modular Medical, Inc.'s 10-K — 2021 vs 2022

Top changes in Modular Medical, Inc.'s 2022 10-K

430 paragraphs added · 293 removed · 175 edited across 5 sections

Item 1. Business+247 / −104 · 54 edited
Item 1A. Risk Factors+123 / −127 · 79 edited
Item 7. Management's Discussion & Analysis+45 / −47 · 35 edited
Item 5. Market for Registrant's Common Equity+14 / −14 · 6 edited
Item 3. Legal Proceedings+1 / −1 · 1 edited

Item 1. Business

Business — how the company describes what it does

54 edited+193 added−50 removed11 unchanged

2021 filing

2022 filing

We currently expect that various other expenses, such as product scale up, and sales and marketing costs, will not be incurred until such time as development work is completed and regulatory approvals obtained. 8 Employ experienced engineers selected, supervised, and led by Mr. DiPerna, a highly experienced and respected engineer and executive in the insulin pump industry.

We currently expect that various other expenses, such as product scale up, and sales and marketing costs, will not be incurred until such time as development work is completed and regulatory approvals obtained. · Employ experienced engineers selected, supervised, and led by Mr. DiPerna, a highly experienced and respected engineer and executive in the insulin pump industry.

DiPerna lead and focus the team on technological and mechanical aspects of our proposed insulin pump, we believe our team will be well guided, focused, cost efficient, and able to efficiently design and develop our product that we believe can eventually be a competitive and popular choice for people with insulin requiring diabetes.

DiPerna lead and focus the team on technological and mechanical aspects of our proposed insulin pump, we believe our team will be well guided, focused, cost efficient, and able to efficiently design and develop our product candidate that we believe can eventually be a competitive and popular choice for people with insulin requiring diabetes.

We believe that there are a number of shortcomings and issues with currently available insulin pumps that prevent a substantial number of people who require insulin on a daily basis from choosing an insulin pump to treat their diabetes.

Differentiation We believe that there are a number of shortcomings and issues with currently available insulin pumps that prevent a substantial number of people who require insulin on a daily basis from choosing an insulin pump to treat their diabetes.

Initially, many people with type 2 diabetes attempt to manage their diabetes with improvements in diet and exercise and/or the use of oral medications and/or injection of glucagon-like peptide-1, or GLP-1, drugs. However, as their diabetes advances, patients progress to require insulin therapies, such as once-daily long-acting insulin, and, ultimately, intensified mealtime rapid-acting insulin therapy.

Initially, many people with type 2 diabetes attempt to manage their condition with improvements in diet and exercise and/or the use of oral medications and/or injection of glucagon-like peptide-1 (GLP-1) drugs. However, as their diabetes advances, patients often progress to require insulin therapies such as once-daily long-acting insulin and ultimately to intensified mealtime rapid-acting insulin therapy.

Corporate History and Background We were formed as a corporation under the laws of the State of Nevada in October 1998 under the name Bear Lake Recreation Inc. We had no material business operations from 2002 until July 2017, when we acquired Quasuras, Inc., a Delaware corporation (Quasuras), in the Acquisition (as defined below).

Corporate History and Background We were formed as a corporation under the laws of the State of Nevada in October 1998 under the name Bear Lake Recreation Inc. We had no material business operations from 2002 until July 2017, when we acquired Quasuras, Inc., a Delaware corporation, in the Control Block Acquisition (as defined below).

Our long-term goal is to become a leading provider of insulin pump therapy by focusing on both consumer and clinical needs. To achieve our above stated immediate and current goals, we intend to pursue the following business strategies: Use of innovative proprietary technology. Based upon Mr.

ITEM 1. BUSINESS Our fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in this Report, refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2021 refers to the fiscal year ended March 31, 2021).

This requires users to carry spare parts and other equipment adding to the encumbrance of using the pump. · Cost : Costs associated with insulin pump therapy are high and can be prohibitive, especially for those on fixed or limited incomes.

This requires users to carry spare parts and other equipment adding to the difficulty of using the pump. · Costs: Costs associated with insulin pump therapy are high and can be prohibitive, especially for those on fixed or limited incomes.

The complexity of pumps proves daunting to less technically inclined users. · Cumbersome : We believe that a majority of existing pumps are bulky and difficult to manage, in many cases requiring additional equipment to introduce a catheter to the patient’s body and up to 48 inches of tubing, which must be replaced frequently, to connect the catheter to a pump.

We believe this approach is fundamentally different from that applied to the existing pump market today where most pumps are continuously adding complex features and are “user friendly” to only the most technically astute. Our current goal is to successfully design, develop and obtain all required regulatory approvals for our proposed insulin pump, and, thereafter, commercialize the finished product.

Pre-Commercialization Steps While we have substantially completed the general engineering and mechanical aspects of our insulin pump prototype, prior to commercializing, we still must successfully complete a number of material steps including: · Continue to modify, refine and finalize our prototype so that it meets: o the general needs and preferences of our almost-pumper target market based upon our knowledge of the diabetes industry and information available and/or obtained by us from almost pumpers and their caregivers; and o the general guidelines of third-party payors, private and public insurance companies, preferred provider organizations and other managed care providers with particular focus on the guidelines established by the Center for Medicare and Medicaid Services, or CMS which administrates the United States Medicare program, or Medicare.

Commercialization Steps While we have substantially completed the general engineering and mechanical aspects of our insulin pump prototype, prior to commercializing, we still must successfully complete a number of material steps including: · Continue to modify, refine and finalize our prototype so that it meets: · the general needs and preferences of our almost-pumper target market based upon our knowledge of the diabetes industry and information available and/or obtained by us from Almost Pumpers and their caregivers; and · the general guidelines of third-party payors, private and public insurance companies, preferred provider organizations and other managed care providers with particular focus on the guidelines established by CMS, which administers Medicare.

Among the more prominent issues are: · Complexity : Many existing pumps are highly complex and require significant technical expertise to use effectively. We believe such pumps were designed for “super users,” who have high levels of motivation and technical competence.

On April 26, 2017, pursuant to a Common Stock Purchase Agreement, dated as of April 5, 2017, by and among Manchester Explorer, LP, a Delaware limited partnership (Manchester Explorer), the Company and certain persons named therein, Manchester Explorer purchased from us 2,900,000 shares of our common stock representing in excess of a majority of our then issued and outstanding common stock, for a purchase price of $375,000 (the Control Block Acquisition), resulting in a change in control of the Company.

On April 26, 2017, pursuant to a Common Stock Purchase Agreement, dated as of April 5, 2017, by and among Manchester Explorer, LP, a Delaware limited partnership, we and certain persons named therein, Manchester Explorer, LP purchased from us 966,667 shares of our Common Stock representing in excess of a majority of our then issued and outstanding Common Stock, for a purchase price of $375,000 (the “Control Block Acquisition”), resulting in a change in control of the Company.

To attempt to ensure our proposed insulin pump is “state of the art,” functional, and efficient, as well as to conserve funds, substantially all of our employees will initially be hand-picked engineers under the leadership of Mr. DiPerna.

These features, together with the safety and reliability of our proposed pump, are designed to create the next generation of insulin pumps that will feature important and well-differentiated attributes compared to those currently available and make it available to consumers across mostly all socioeconomic groups in the United States and around the world.

Our Solution Our proposed pump is being designed and developed to address the above shortcomings and to appeal to: (i) the substantial group of “almost-pumpers” who are currently interested in using an insulin pump, but have not done so because of the complexity, cost or cumbersome nature of existing products, and (ii) people who are using one of the currently available insulin pumps but are dissatisfied with such products.

Our Solution Our proposed pump is being designed and developed to address the aforementioned shortcomings of the existing pump market and to appeal to: (i) the substantial group of “Almost-Pumpers” who are currently interested in using an insulin pump, but have not done so because of the complexity, cost or cumbersome nature of existing products, and (ii) people who are using one of the currently available insulin pumps but are dissatisfied with such products.

We believe people generally will not use technology that intimidates them and physicians are hesitant to prescribe such technology. We believe mass market products, such as is intended for our proposed pump, must be “user friendly” and affordable.

Frank is the portfolio manager and a consultant to Manchester Management Company, LLC, a Delaware limited liability company MMC). MMC is the general partner of Manchester Explorer and Jeb Partners, L.P. (Jeb Partners, and together with Manchester Explorer, collectively, the Purchasing Funds). 10 The Acquisition.

Frank is the portfolio manager and a consultant to Manchester Management Company, LLC, a Delaware limited liability company also referred to herein as MMC. MMC is the general partner of Manchester Explorer, LP and Jeb Partners, L.P. (Jeb Partners, and together with Manchester Explorer, LP, collectively, the Purchasing Funds). The Acquisition.

Individuals with type 1 diabetes require daily insulin therapy to survive. · Type 2 diabetes represents over 90% of all individuals diagnosed with diabetes and is characterized by the body’s inability to either properly utilize insulin or produce enough insulin.

On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company, Paul M. DiPerna, the sole officer, director and a controlling stockholder of Quasuras, Messrs. Besser and Frank (Messrs.

On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among us, Paul M. DiPerna, the sole officer, director and a controlling stockholder of Quasuras, Messrs. Besser and Frank (Messrs. Besser, Frank and DiPerna, collectively, the “3 Quasuras Shareholders”), and Quasuras, Inc.

In this Report, we refer to people with type 1 diabetes and people with type 2 diabetes who require mealtime insulin as “insulin-requiring people with diabetes.” Currently, there are two primary therapies available for insulin-requiring people with diabetes: multiple daily insulin injections directly into the body through syringes or insulin pens, referred to as Multiple Daily Injection, or MDI therapy, or the use of an insulin pump to deliver a continuous subcutaneous insulin infusion, or CSII therapy, into the body.

In this Report, we refer to people with type 1 diabetes and people with type 2 diabetes who require mealtime insulin as “insulin-requiring people with diabetes.” 5 Currently, there are two primary therapies available for insulin-requiring people with diabetes: multiple daily insulin injections directly into the body through syringes or insulin pens, referred to as Multiple Daily Injection, or MDI therapy, or the use of an insulin pump to deliver mealtime insulin boluses (single dose) to help with glucose absorption after carbohydrate consumption and a continuous subcutaneous insulin infusion, or CSII therapy, into the body.

Prior to the Acquisition, and, since at least 2002, we were a shell company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the Exchange Act). The Control Block Acquisition.

Prior to the Control Block Acquisition, we were a shell company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”). The Control Block Acquisition.

Traditional pumps generally utilize a syringe and plunger mechanism to deliver insulin. We believe this design limits the ability to reduce the size of the pump, and also potentially exposes the user to the unintended delivery of the full volume of insulin within the pump, which can cause hypoglycemia or death.

We believe this design limits the ability to reduce the size of the pump, and also potentially exposes the user to the unintended delivery of the full volume of insulin within the pump, which can cause hypoglycemia or death.

We believe this technology will greatly assist us in creating a simpler, user-friendly pump. We believe the proposed design, engineering and technology being incorporated into our proposed pump will make it substantially simpler and more affordable than those currently available.

Generally, this technology is involved in the delivery of insulin to the user at the appropriate and necessary times. We believe this technology will greatly assist us in creating a simpler, user-friendly pump. We believe the proposed design, engineering and technology being incorporated into our proposed pump will make it substantially simpler and more affordable than those currently available.

We believe this will be possible because of the extensive knowledge and experience of Mr. DiPerna, not only in the diabetes industry and more specifically in the insulin pump device market, but also his experience in designing and developing insulin pumps and other medical devices and his ability to manage a small, focused development team.

DiPerna, not only in the diabetes industry and more specifically in the insulin pump device market, but also his experience in designing and developing insulin pumps and other medical devices and his ability to manage a small, focused development team.

Notwithstanding these advantages, the difficulty in use resulting from the complexity and cumbersome design of available insulin pumps, as well as high and often prohibitive costs for both the patient and insurance provider, has resulted not only in dissatisfaction among many existing pump users, but also has severely limited the adoption rate of insulin pumps by a segment of the diabetes population, who we refer to in this Report as “almost pumpers.” We generally define almost pumpers as persons with insulin-requiring diabetes who are aware of pumps and the potential benefits but, because of the shortcomings, cost, and complexity-of-use problems prevalent in available insulin pumps, continue to receive their daily insulin through MDI therapy.

Notwithstanding these advantages, the difficulty in use resulting from the complexity and cumbersome design of available insulin pumps as well as high and often prohibitive costs for both the patient and insurance provider has resulted not only in dissatisfaction among many existing pump users (fewer than half purchase a new pump after warranty expires per Seagrove Partners (estimate), but also has severely limited the adoption rate of insulin pumps by a large segment of the MDI diabetes population, who we refer to in this Report as “Almost Pumpers.” We define Almost Pumpers as insulin-requiring people with diabetes who are aware of pumps and their potential benefits but, because of past experience, pump shortcomings, cost, complexity and time and learning required to adopt and utilize available insulin pumps, continue to receive their daily insulin through MDI therapy.

As with any medical device attempting to enter and successfully compete with existing products in an established and competitive marketplace, we will face significant hurdles to accomplish the above steps to commercialization including: · Obtaining FDA 510(k) clearance to market and sell our insulin pump to the public; · Obtaining any other FDA-required approvals with regard to our product, as required by the FDCA; · Educating endocrinologists, physician’s assistants, nurse practitioners and nurse educators, who typically prescribe pump usage, and certified diabetes educators and dieticians, who provide education and guidance to diabetes patients, as to what we believe to be the superior qualities of our product; · Demonstrating to select general practitioners, who have historically been skeptical of the heightened support inherent in insulin pumps, our product’s ease of use and convenience; · Ensuring that our final product does, in fact, meet the needs of almost-pumpers; · Overcoming the historic obstacles and reluctance of almost-pumpers to using insulin pumps to treat their diabetes; and · Ensuring that third party payors agree to cover all or a substantial portion of the purchase price and recurring costs of the use of our insulin pump.

As with any medical device attempting to enter and successfully compete with existing products in an established and competitive marketplace, we will face significant hurdles to accomplish the above steps to commercialization including: · Obtaining FDA 510(k) clearance to market and sell our insulin pump to the public; · Obtaining any other FDA-required authorizations with regard to our product candidate, as required by the FDCA; · Educating endocrinologists, physician’s assistants, nurse practitioners and nurse educators, who typically prescribe pump usage, and certified diabetes educators and dieticians, who provide education and guidance to diabetes patients, as to what we believe to be the superior qualities of our product candidate; · Demonstrating to select general practitioners, who have historically been skeptical of the heightened support inherent in insulin pumps, our product candidate’s ease of use and convenience; · Ensuring that our final product does, in fact, meet the needs of Almost-Pumpers; · Overcoming the historic obstacles and reluctance of Almost-Pumpers to using insulin pumps to treat their diabetes; and · Ensuring that third party payors agree to cover all or a substantial portion of the purchase price and recurring costs of the use of our insulin pump. 14 Looking Forward Going forward, we expect to continue to evolve the MODD1 pumps and their capabilities and functionality, both in response to patient needs and as part of our current platform roadmap. · In our next generation product, or MODD2, we will seek to add phone-based control and alternate controller enabled, or ACE, and automated insulin delivery, or AID, capability to allow integration with popular continuous glucose monitors.

Keep costs low during our design and development process. To attempt to ensure that we have sufficient funds to design, develop, and obtain all required regulatory approvals for our proposed insulin pump without having to sacrifice quality and efficiency, we intend to maintain a tight budget and limit expenditures where possible.

To attempt to ensure that we have sufficient funds to design, develop, and obtain all required regulatory approvals for our proposed insulin pump without having to sacrifice quality and efficiency, we intend to maintain a tight budget and limit expenditures where possible. We believe this will be possible because of the extensive knowledge and experience of Mr.

As of May 31, 2021, we had six pending U.S. utility patent applications, two pending foreign patent applications and two pending international PCT patent applications on various aspects of our technology, including our proprietary fluid movement technology.

As of March 31, 2022, we had one issued U.S. utility patent, five published U.S. utility patents, two pending foreign patent applications, and two pending international PCT patent applications covering various aspects of our technology, including our proprietary fluid movement technology.

We currently expect to make this submission in the fourth calendar quarter of 2021. · Refine our manufacturing process during the submission process to identify and select a manufacturer of our insulin pump through a competitive bidding process, as we prepare for our product introduction; 5 · Take such actions, if any, as may be required by the FDA as a condition to granting approval and providing 510(k) clearance for our insulin pump; and · Hire and retain appropriate sales and marketing personnel to develop, implement and launch a promotional campaign for our insulin pump substantially focused on our target market.

To assist us in making such modifications and refinements, we have retained independent consultants to focus on ensuring that our product candidate satisfies the existing coverage and reimbursement criteria of such third-party payors. · Refine our manufacturing process during the submission process to identify and select a manufacturer of our insulin pump through a competitive bidding process, as we prepare for our product introduction; · Take such actions, if any, as may be required by the FDA as a condition to granting approval and providing 510(k) clearance for our insulin pump; and · Hire and retain appropriate sales and marketing personnel to develop, implement and launch a promotional campaign for our insulin pump substantially focused on our target market.

It provides a state-of-the-art insulin pump capable of both basal (steady flow) and bolus (mealtime dosing) insulin disbursement. It also has been designed considering a natural migration path to multi-chamber/multi-liquid pumps, potentially offering an exciting array of new therapies to patients with diabetes and other conditions.

It also has been designed considering a natural migration path to multi-chamber/multi-liquid pumps, potentially offering an exciting array of new therapies to patients with diabetes and other conditions.

Smaller Reporting Company We are subject to the reporting requirements of Section 13 of the Exchange Act and to the disclosure requirements of Regulation S-K of the SEC, as a “smaller reporting company.” Such designation relieves us of some of the disclosure requirements of Regulation S-K. Available Information Our website address is www.modular-medical.com.

These costs vary by pump, but multi-thousand-dollar upfront payments, often with substantial co-payments in addition to possible daily co-payments on consumables, can easily place current pumps out of reach for patients. This makes insurance providers hesitant to pay for them, leading to limited or absent reimbursement/coverage and high hurdles for patients to gain access.

Intellectual Property Our success depends in part on our ability to obtain patents and trademarks, maintain trade secret and know-how protection, enforce our proprietary rights against infringers, and operate without infringing on the proprietary rights of third parties.

Our MODD1 product is designed to focus upon a segment of these people and mobilize them via a simple, easy to use, affordable product. 21 Intellectual Property Our success depends in part on our ability to obtain patents and trademarks, maintain trade secret and know-how protection, enforce our proprietary rights against infringers, and operate without infringing on the proprietary rights of third parties.

We file reports with the SEC and make available, free of charge, on or through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and information statements and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as section 16 reports on Form 3, 4, or 5, are available free of charge on our website at www.modular-medical.com. as soon as it is reasonably practicable after they are filed or furnished with the SEC.

DiPerna was appointed our chairman of the board of directors, chief executive officer, chief financial officer, secretary and treasurer.

Besser resigned as our president and a director and Mr. Frank resigned as our chief executive officer, chief financial officer, secretary, and treasurer, but remained a director, and Mr. DiPerna was appointed our chairman of the board of directors, chief executive officer, chief financial officer, president, secretary and treasurer. Mr.

Diabetes is typically classified as either type 1 or type 2: · Type 1 diabetes is characterized by the body’s nearly complete inability to produce insulin. It is frequently diagnosed during childhood or adolescence.

These costs are built into all of our models. Diabetes Classifications and Therapies Diabetes is typically classified as either type 1 or type 2: · Type 1 diabetes is an auto-immune condition characterized by the body’s nearly complete inability to produce insulin. It is frequently diagnosed during childhood or adolescence.

Our goal is to become the leader in expanding access to insulin pump technology to a wider portion of diabetes sufferers and provide not just care for the super users, but “diabetes care for the rest of us.” We believe there is a substantial opportunity to penetrate the type 2 MDI marketplace, whether through this new insulin pump or further simplification of pumps for the type 2 marketplace.

DiPerna’s substantial experience in engineering design and innovative technology in the medical device industry and, in particular, with insulin pumps, we have generated proprietary technology that has been incorporated into our proposed insulin pump. Generally, this technology is involved in the delivery of insulin to the user at the appropriate and necessary times.

Based upon the substantial experience of Paul DiPerna, our president, chief financial officer, treasurer and chairman of our board of directors, in engineering design and innovative technology in the medical device industry and, in particular, with insulin pumps, we have generated proprietary technology that has been incorporated into our proposed insulin pump.

Consumer electronics devices have evolved in both form and function. Diabetes pumps have not experienced similar progress. We believe that consumers will be more receptive of products designed with the user experience in mind and that many have low tolerance for complex, difficult procedures for use and maintenance of products. Bulky size.

We believe that consumers will be more receptive of products designed with the user experience in mind and that many have low tolerance for complex, difficult procedures for use and maintenance of products. · Pump mechanism limitations : Traditional pumps generally utilize a syringe and plunger mechanism to deliver insulin.

At this meeting, our team, including our FDA regulatory consultant, received FDA comments and guidance regarding our proposed submission during the pre-market notification period for 510(k) clearance (including any suggested modifications to the device description, indications for use or summary of supporting data contained in the notification); o preparing and ensuring that our pre-market notification, which will be part of our FDA submission, demonstrates that our insulin pump, which is substantially equivalent to an insulin pump previously cleared by the FDA and legally marketed to the public; and o preparing our submission to the FDA, to include all of the appropriate results of tests (relating to, among other things, user effectiveness, sterility, pump efficiency and shipping compatibility) demonstrating safety and efficacy of our insulin pump in satisfaction of the mandates of the Federal Food, Drug and Cosmetics Act, or the FDCA, including requirements with regard to registration and listing, labeling, medical device reporting and good manufacturing practices.

At these meetings, our team, including our FDA regulatory consultant, received FDA comments and guidance regarding our proposed submission during the pre-market notification period for 510(k) clearance (including any suggested modifications to the device description, indications for use or summary of supporting data contained in the notification); · We are currently preparing and ensuring that our premarket notification, which will be part of our FDA submission in order to demonstrate that our insulin pump is substantially equivalent to an insulin pump previously cleared by the FDA and legally marketed to the public and generally safe and effective for its intended use.

The International Diabetes Federation, or IDF, estimates that, in 2019, approximately 460 million people had diabetes worldwide, and, that by 2045, this number will increase to 700 million people.

Therefore, we cannot segment the market by socioeconomics, education or level of care. We intend to create an insulin pump that appeals to all Almost Pumpers. Market The International Diabetes Federation, or IDF, estimates that, in 2019, approximately 460 million people were living with diabetes worldwide and, that by 2045, this number will increase to approximately 700 million people.

Employees As of March 31, 2021, we had 20 employees all of whom are located in the United States, consisting of 16 in research and development and manufacturing operations and 4 in marketing and general and administrative functions.

Employees As of March 31, 2022, we had 25 employees all of whom are located in the United States, consisting of 23 in research and development and manufacturing operations and 2 in general and administrative functions. Properties Our corporate facility is leased and located at 16772 West Bernardo Drive, San Diego, CA 92127.

To assist us in making such modifications and refinements, we have retained independent consultants to focus on ensuring that our product satisfies the existing coverage and reimbursement criteria of such third-party payors. · Continue to work closely with our regulatory consultants to complete, finalize and file our submission to the FDA for 510(k) clearance and all other documentation necessary to obtain approval of our insulin pump.

Our team has substantial knowledge of the diabetes space and experience in developing, winning approval for, and bringing insulin pumps to market. Based on this experience, we believe that our innovative insulin pump, using a new and proprietary method of pumping insulin, can address most or all of these shortcomings.

Based on this experience, we believe that our innovative insulin pump, using a new and proprietary method of pumping insulin, can address most or all of these shortcomings. It provides a state-of-the-art insulin pump capable of both basal (steady flow) and bolus (mealtime dosing) insulin disbursement.

Besser, Frank and DiPerna, collectively, the 3 Quasuras Shareholders), and Quasuras (the Share Exchange Agreement), we acquired all of the issued and outstanding shares of Quasuras owned by the 3 Quasuras Shareholders, resulting in Quasuras becoming our wholly-owned subsidiary (the Acquisition).

(the “Share Exchange Agreement”), we acquired all of the issued and outstanding shares of Quasuras, Inc. owned by the 3 Quasuras Shareholders, resulting in Quasuras, Inc. becoming our wholly-owned subsidiary (the “Acquisition”). Simultaneously with the closing of the Acquisition, Manchester Explorer, LP cancelled the 2,900,000 shares of our Common Stock purchased in the Control Block Acquisition, Mr.

Glucose, the primary source of energy for cells, must be maintained at certain levels in the blood in order to permit optimal cell function and health. In people with diabetes, blood glucose levels fluctuate between very high, a condition known as hyperglycemia, and very low, a condition called hypoglycemia.

This represents an important portion of the diabetes market with an estimated 1.6 million type 2 individuals with diabetes intensively treated with insulin currently in the United States Glucose, the primary source of energy for cells, must be maintained at certain levels in the blood in order to permit optimal cell function and health.

Generally, CSII therapy is considered to provide a number of advantages over MDI therapy, primarily an improvement in glycemic control, as measured by certain diabetes management tests. Use of CSII has proven to improve clinical outcomes while, importantly, reducing emergency room visits associated with low glucose.

Generally, CSII therapy is considered to provide a number of advantages over MDI therapy, primarily an improvement in glycemic control, as measured by certain diabetes management tests such as hemoglobin A1c (HbA1c) measure and more recently Time in Range (TIR) where a continuous glucose measuring device is used to calculate this test.

Hyperglycemia can lead to serious long-term complications, including blindness, kidney disease, nervous system disease, occlusive vascular diseases, lower-limb amputation, stroke and cardiovascular disease, and death. Hypoglycemia can lead to confusion or loss of consciousness, often requiring a visit to the emergency room or, in certain cases, result in seizures, coma, and death.

In people with diabetes, blood glucose levels are not well controlled and frequently become very high, a condition known as hyperglycemia, and very low, a condition called hypoglycemia. Hyperglycemia can lead to serious long-term complications, including blindness, kidney disease, nervous system disease, occlusive vascular diseases, lower-limb amputation, stroke, cardiovascular disease, and death.

We believe that the fear of adverse health events due to technical malfunctions related to traditional pump mechanism limitations deters the adoption of insulin pump therapy. Costs. Existing pumps are expensive, with the more popular models having purchase prices exceeding $4,000 for individuals without health insurance and often require significant patient copays.

We believe that the fear of adverse health events due to technical malfunctions related to traditional pump mechanism limitations deters the adoption of insulin pump therapy. 4 Our team has substantial knowledge of the diabetes industry and experience in developing, obtaining regulatory authorization for, and bringing insulin pumps to market.

Failure to comply with applicable regulations could jeopardize our ability to commercialize and sell our proposed pump and result in enforcement actions such as fines, civil penalties, injunctions, warning letters, recalls of products, delays in the introduction of products into the market, refusal of the FDA or other regulators to grant future clearances or approvals, and the suspension or withdrawal of existing approvals by the FDA or other regulators.

The failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: · warning letters, fines, injunctions or civil penalties; · recalls, detentions or seizures of products; · operating restrictions; · delays in the introduction of products into the market; · total or partial suspension of production; · delay or refusal of the FDA or other regulators to grant 510(k) clearance, PMA approvals, or other marketing authorization to new products; · withdrawals of marketing authorizations; or · in the most serious cases, criminal prosecution.

Overview We are a development stage, medical device company focused on the design, development, and eventual commercialization of an innovative insulin pump to address shortcomings and problems represented by the relatively limited adoption of currently available pumps for insulin-requiring people with diabetes.

Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” refer to Modular Medical, Inc. and its consolidated subsidiary. Overview We are a development stage medical device company focused on the design, development, and commercialization of an innovative insulin pump using modernized technology to increase pump adoption in the diabetes marketplace.

This will include: o engaging the FDA in a pre-submission conference to ensure that we understand and meet the FDA’s requirements, expectations and standards with regard to approval of our product.

To achieve this, we will continue to work closely with our regulatory consultants to complete, finalize and file our submission to the FDA for 510(k) clearance and all other documentation necessary to obtain marketing authorization of our insulin pump. 13 · We have engaged the FDA in two pre-submission conferences to ensure that we understand and meet the FDA’s requirements, expectations and standards with regard to clearance of our product candidate.

According to the Seagrove 2021 Diabetes Blue Book, approximately 27 million people in the United States have diagnosed diabetes, of which type 1 diabetes accounts for approximately 7%, or approximately 1.8 million people. All people with type 1 diabetes, which is our primary market, require daily insulin.

Hypoglycemia can lead to confusion or loss of consciousness, often requiring a visit to the emergency room or, in certain cases, result in seizures, coma, and/or death. All people with type 1 diabetes, which is our primary market, require daily insulin.

Removed

Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” refer to Modular Medical, Inc. and its consolidated subsidiary.

Added

Through the creation of a novel two-part patch pump, our MODD1 product candidate, or MODD1, we seek to fundamentally alter the trade-offs between cost and complexity and access to the higher standards of care that presently available insulin pumps provide.

Removed

Our initial target market for our insulin pump is the almost pumper population located in the United States. 4 Based upon our knowledge of the diabetes industry and information available and/or obtained by us, we believe that an estimated 31% of Americans with type 1 diabetes use insulin pump therapy and an estimated 30% of Americans with type 1 diabetes are whom we classify as almost pumpers.

Added

By simplifying and streamlining the user experience from introduction, prescription, reimbursement, training and day-to-day use, we seek to expand the wearable insulin delivery device market beyond the highly motivated “super users” and expand the category into the mass market.

Removed

The remainder of the population treat their diabetes via MDI therapy. Our design and development team is led by Paul DiPerna, our chairman, chief executive officer, and our largest shareholder. Mr. DiPerna has over 30 years of high-level experience in developing, designing, and obtaining U.S.

Added

The product candidate seeks to serve both the Type 1 and the rapidly growing especially in terms of device adoption, type 2 diabetes markets.

Removed

Food and Drug Administration, or FDA, approval for and managing the commercialization of medical devices, including consumer and hospital-based insulin pumps, while working for such industry leading medical device companies as Baxter Healthcare, Inc., or Baxter, a supplier of drug therapies and associated pumping technologies, and Tandem Diabetes Care, Inc., or Tandem, a leading supplier of pumping technology to the existing insulin pumping marketplace, Mr.

Added

This makes insurance providers hesitant to pay for them, leading to limited or absent reimbursement/coverage and high hurdles for patients to gain access. · Outdated style : Consumer electronics devices have evolved in both form and function. Diabetes pumps have not experienced similar progress.

Removed

DiPerna was the founder of Tandem and designer of its initial product. Our Insulin Pump Prototype We have designed and developed working prototypes of our low-cost insulin pump that are now undergoing the testing required to submit for FDA approval.

Added

The MODD1 is a high-precision, first-line pump that we believe represents the best choice for new pump patients because it is easy to afford, easy to learn, easy to use, and has a revolutionary design and technology that enable precision with low-cost manufacture and high reproducibility.

Removed

During this period, we have, and continue to devote, substantial time and resources to better understand the needs and preferences of almost pumpers to enable us to modify and refine our insulin pump to the needs and preferences of this target market.

Added

Key features include: · Two parts - one reusable, one disposable - snap together to form the working system; · One button interface, easy to learn and use; · 90-day reusable, 3-day disposable; · Removable at any time from an adhesive bracket; · No external controller required, no charging, no battery replacement; and · Slim profile, lighter weight.

Removed

To help us better understand their needs and preferences, we obtained information about our target market and their care givers through one on one interviews, human factors testing, on-line and in person surveys, and focus groups at industry related tradeshows and conferences.

Added

A proprietary survey of American healthcare payors representing 50 million covered lives (approximately one-third of U.S. covered lives) performed for us by industry leading survey firm ISA has demonstrated that payors are willing to grant equivalent or preferential coverage for a product with this feature set at launch in exchange for rebates of approximately 20%.

Removed

DiPerna, our founder, chairman and chief executive officer, chief financial officer, secretary and treasurer, began his career in approximately 1980 as a mechanical design engineer in the automated test equipment industry before moving in approximately 1989 to a start-up company in the blood separation sciences industry. This company was acquired in approximately 1991 by Baxter.

Added

Among other medical benefits, it has been demonstrated that insulin pump use can decrease glucose variability, reduce the number of hypoglycemia, decrease the daily doses of insulin and reduce the fear of hypoglycemia.

Removed

Following such acquisition, he became employed by Baxter and held various positions for approximately 12 years. While at Baxter, Mr. DiPerna led significant projects and initiatives, including leading a team of approximately 50 engineers in developing equipment in the blood separation sciences industry.

Added

Our initial focus for our insulin pump is the almost pumper segment population located in the United States.

Removed

In approximately 1996, he was promoted to General Manager of Baxter’s business development group to identify expansion opportunities in the medical device industry for Baxter. While holding such position, Mr. DiPerna led a team of approximately 20 personnel responsible for researching custom orthopedics, digital dentistry, and rapid prototyping.

Added

Our research, along with marketplace data, estimates that 32% of Americans with type 1 diabetes use insulin pump therapy and 28% of Americans with type 1 diabetes (44% of those who currently utilize MDI) can be classified as having an interest in pump adoption and meeting the American Diabetes Association guidelines of glucose control if their objections to the currently available suite of products can be overcome.

Removed

In such role, one of his assignments was identifying opportunities in the diabetes industry. As a result, Mr. DiPerna developed an expertise and knowledge and became well known in the diabetes industry and led attempts by Baxter to acquire three then-leading insulin pump manufacturers. In 2003, Mr.

Added

They do not want to closely manage their glucose levels and incur the associated time and effort involved. They are the Almost Pumpers. We have developed what we believe to be the most technologically advanced delivery system overcome the objections and provided motivation for this market.

Removed

DiPerna, using his knowledge and experience acquired at Baxter in the diabetes industry and in the “pump” product business in particular, left Baxter and founded what subsequently became Tandem. While at Tandem, Mr. DiPerna held various positions, including member of the board of directors, chief executive officer, and chief technology officer.

Added

We believe that there are four addressable hurdles to adoption: · Usability: the device needs to be easy to learn and to operate; · Affordability: we will focus on overcoming copay and insurance hurdles rather than leaving the “insurance journey” to the clinician and patient; · Accessibility and Education: we will seek to engage patients to sample this new technology by supplying clinicians with free samples and simple training to allow people to see first-hand the typical barriers to adoption that have been overcome; and · Service and Support: where we will answer their questions and concerns during this diabetes experience.

Removed

Tandem is a medical device company that designs, develops and commercializes products for people with insulin-dependent diabetes. Tandem was founded by Mr. DiPerna to design, develop and commercialize a “state of the art” user-friendly insulin pump.

Added

We believe this conversion process, engaging people to try and thereby receive the benefits of our technology will substantially increase adoption of insulin pumps among both those with type 1 diabetes and type 2 diabetes who remain reliant upon multiple daily injections. Diabetes is a disease that appears throughout the world.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+44 added−48 removed81 unchanged

2021 filing

2022 filing

Our cash requirements may differ significantly from our estimates from time to time, depending on a number of factors, including: · the costs and results of our clinical studies regarding our insulin pump product; · the time and costs involved in obtaining regulatory clearance and approvals; · whether we are able to obtain funding under future licensing agreements, strategic partnerships, or other collaborative relationships, if any; · the costs of compliance with laws, regulations, or judicial decisions applicable to us; and the costs of general and administrative infrastructure required to manage our business and protect corporate assets and shareholder interests.

Our cash requirements may differ significantly from our estimates from time to time, depending on a number of factors, including: · the costs and results of our clinical studies regarding our insulin pump product candidate; · the time and costs involved in obtaining regulatory clearance and approvals; · whether we are able to obtain funding under future licensing agreements, strategic partnerships, or other collaborative relationships, if any; · the costs of compliance with laws, regulations, or judicial decisions applicable to us; and · the costs of general and administrative infrastructure required to manage our business and protect corporate assets and shareholder interests.

To enable us to accomplish these and other related items and continue to operate our business, we will need to raise substantial additional capital and/or enter into strategic partnerships or joint ventures to enable us to: · fund clinical studies and seek regulatory approvals; · build or access manufacturing and commercialization capabilities; · develop, test, and, if approved, market our product; · acquire or license additional internal systems and other infrastructure; and · hire and support additional management, engineering and scientific personnel.

To enable us to accomplish these and other related items and continue to operate our business, we will need to raise substantial additional capital and/or enter into strategic partnerships or joint ventures to enable us to: · fund clinical studies and seek regulatory approvals; · build or access manufacturing and commercialization capabilities; · develop, test, and, if approved, market our product candidate; · acquire or license additional internal systems and other infrastructure; and · hire and support additional management, engineering and scientific personnel.

If we are sued for infringing on third-party intellectual property rights, it will be costly and time-consuming, and an unfavorable outcome would have a significant adverse effect on our business. Our ability to commercialize our product depends on our ability to use, manufacture and sell our product without infringing the patents or other proprietary rights of third parties.

If we are sued for infringing on third-party intellectual property rights, it will be costly and time-consuming, and an unfavorable outcome would have a significant adverse effect on our business. Our ability to commercialize our product candidate depends on our ability to use, manufacture and sell our product candidate without infringing the patents or other proprietary rights of third parties.

If our workforce is unable to work effectively, including because of illness, quarantines, absenteeism, government actions, facility closures, travel restrictions or other restrictions in connection with the COVID-19 pandemic, our operations will be negatively impacted. We may be unable to develop our product, and our costs may increase as a result of the COVID-19 outbreak.

If our workforce is unable to work effectively, including because of illness, quarantines, absenteeism, government actions, facility closures, travel restrictions or other restrictions in connection with the COVID-19 pandemic, our operations will be negatively impacted. We may be unable to develop our product candidate, and our costs may increase as a result of the COVID-19 outbreak.

As a result, we contract with and rely on third parties for important functions, including in connection with the development and finalization of our insulin pump, the preparation and filing of our FDA submission and eventual manufacturing and commercialization of our product. We have recently entered into several agreements with third parties for such services.

As a result, we contract with and rely on third parties for important functions, including in connection with the development and finalization of our insulin pump, the preparation and filing of our FDA submission and eventual manufacturing and commercialization of our product candidate. We have recently entered into several agreements with third parties for such services.

We cannot predict the occurrence of future disruptions or how long such negative conditions might continue. Because our current insulin pump prototype is still in the development stage, it does not have reimbursement and is not approved for insurance coverage.

We cannot predict the occurrence of future disruptions or how long such negative conditions might continue. 34 Because our current insulin pump prototype is still in the development stage, it does not have reimbursement and is not approved for insurance coverage.

In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay approval or clearance of our product or impact our ability to modify our product after clearance on a timely basis.

In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay approval or clearance of our product candidate or impact our ability to modify our product candidate after clearance on a timely basis.

We may seek to enter into a strategic alliance with a diabetes related service providing company for the further development and approval of our insulin pump product. At this time, we have not entered into any such strategic alliance.

We may seek to enter into a strategic alliance with a diabetes related service providing company for the further development and approval of our insulin pump product candidate. At this time, we have not entered into any such strategic alliance.

We are dependent on consultants for important aspects of our product development strategy. We do not have the required financial resources and personnel to carry out independently the development of our product, and do not have the capability or resources to manufacture, market or sell our current product.

We are dependent on consultants for important aspects of our product development strategy. We do not have the required financial resources and personnel to carry out independently the development of our product candidate, and do not have the capability or resources to manufacture, market or sell our current product candidate.

However, a facility closure, work slowdowns or temporary stoppage at one of our manufacturing suppliers could occur, which could have a longer-term impact and could delay our prototype production and ability to conduct business.

However, a facility closure, work slowdowns or temporary stoppage at one of our suppliers could occur, which could have a longer-term impact and could delay our prototype production and ability to conduct business.

We may not receive the necessary regulatory clearance or approvals for our insulin pump, and failure to timely obtain necessary clearances and/or approvals could harm our then operations, including our ability to commercialize our product.

We may not be able to successfully scale-up manufacturing of our product in sufficient quality and quantity, which would delay or prevent us from developing our product and commercializing our product.

We may not be able to successfully scale-up manufacturing of our product candidate in sufficient quality and quantity, which would delay or prevent us from developing our product candidate and commercializing our product candidate.

We may be unable to access the capital markets, and additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and to our business. 12 We will need substantial additional funding to complete subsequent phases of our insulin pump product and to operate our business and such funding may not be available or, if it is available, such financing is likely to substantially dilute our existing shareholders.

We may be unable to access the capital markets, and additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and to our business. 24 We will need substantial additional funding to complete subsequent phases of our insulin pump product and to operate our business and such funding may not be available or, if it is available, such financing is likely to substantially dilute our existing shareholders.

Even assuming we obtain FDA approval or clearance with regard to our insulin pump, the FDA has the authority to require the recall of our pump if we commence manufacturing of our insulin pump and we or any contract manufacturers we retain fail to comply with relevant regulations pertaining to manufacturing practices, labeling, advertising or promotional activities, or if new information is obtained concerning the safety or efficacy of the product.

A government-mandated recall could occur if the FDA finds that there is a reasonable probability that our product would cause serious, adverse health consequences or death. A voluntary recall by us could occur as a result of manufacturing defects, labeling deficiencies, packaging defects or other failures to comply with applicable regulations.

A government-mandated recall could occur if the FDA finds that there is a reasonable probability that our device would cause serious, adverse health consequences or death. A voluntary recall by us could occur as a result of manufacturing defects, labeling deficiencies, packaging defects or other failures to comply with applicable regulations.

Furthermore, Section 404 of the Sarbanes-Oxley Act and related regulations require our management to evaluate the effectiveness of our internal control over financial reporting as of the end of each fiscal year. Based on its evaluation, our management concluded that our internal controls over financial reporting were effective as of March 31, 2021.

A material step in the process of the commercialization of our product will involve selecting a manufacturer or manufacturers for our pump.

A material step in the process of the commercialization of our product candidate will involve selecting a manufacturer or manufacturers for our pump.

Our certificate of incorporation allows for our board of directors to create new series of preferred stock without further approval by our shareholders, which could adversely affect the rights of the holders of our common stock. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock.

Our articles of incorporation allows for our board of directors to create new series of preferred stock without further approval by our shareholders, which could adversely affect the rights of the holders of our Common Stock. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock.

Our board of directors is able to adopt recapitalizations through forward or reverse splits of our outstanding shares of common stock without shareholder approval. Pursuant to our amended and restated articles of incorporation, our board of directors has the power, without obtaining shareholder approval, to effectuate recapitalizations of the Company through forward or reverse splits of our outstanding common stock.

Our board of directors is able to adopt recapitalizations through forward or reverse splits of our outstanding shares of Common Stock without shareholder approval. Pursuant to our amended and restated articles of incorporation, our board of directors has the power, without obtaining shareholder approval, to effectuate recapitalizations of us through forward or reverse splits of our outstanding Common Stock.

If a third party claims that our actions infringe on its patents or other proprietary rights, we could face a number of issues that could seriously harm our competitive position, including, but not limited to: · infringement and other intellectual property claims that, even if meritless, can be costly and time-consuming, delay the regulatory approval process and divert management’s attention from our core business operations; · substantial damages for infringement, including consequential damages for lost of profits or market share, if a court determines that our products or technologies infringe on a third party’s patent or other proprietary rights; · a court prohibiting us from selling or licensing our products or technologies unless the holder licenses the patent or other proprietary rights to us, which it is not required to do; and · even if a license is available from a holder, we may have to pay substantial royalties or grant cross-licenses to our patents or other proprietary rights.

If a third-party claims that our actions infringe on its patents or other proprietary rights, we could face a number of issues that could seriously harm our competitive position, including, but not limited to: · infringement and other intellectual property claims that, even if meritless, can be costly and time-consuming, delay the regulatory approval process and divert management’s attention from our core business operations; · substantial damages for infringement, including consequential damages for lost of profits or market share, if a court determines that our products or technologies infringe on a third party’s patent or other proprietary rights; 31 · a court prohibiting us from selling or licensing our products or technologies unless the holder licenses the patent or other proprietary rights to us, which it is not required to do; and · even if a license is available from a holder, we may have to pay substantial royalties or grant cross-licenses to our patents or other proprietary rights.

Despite the time, effort and cost, a device may not be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory approvals could harm our business, including our ability to commercialize our product and our shareholders could lose their entire investment.

Despite the time, effort and cost, a device may not be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory authorizations could harm our business, including our ability to commercialize our product candidate and our shareholders could lose their entire investment.

If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by the FDA, which may include any of the following sanctions: · untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; · customer notification, or orders for repair, replacement or refunds · voluntary or mandatory recall or seizure of our current or future products; · administrative detention by the FDA of medical devices believed to be adulterated or misbranded; · imposing operating restrictions, suspension or shutdown of production; · refusing our requests for 510(k) clearance or pre-market approval of any new products, new intended uses or modifications to our insulin pump; · rescinding 510(k) clearance that has already been granted; and · criminal prosecution.

If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by the FDA, which may include any of the following sanctions: · untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; · customer notification, or orders for repair, replacement or refunds · voluntary or mandatory recall or seizure of our current or future products; · administrative detention by the FDA of medical devices believed to be adulterated or misbranded; · imposing operating restrictions, suspension or shutdown of production; · refusing our requests for 510(k) clearance, PMA, or de novo classification any new products, new intended uses or modifications to our insulin pump; · rescinding 510(k) clearance that has already been granted; and · criminal prosecution.

As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of data supporting the safety and performance of the products during normal conditions of use.

We and any future contract manufacturers of our insulin pump will be required to comply with the FDA’s quality system regulations, which impose a complex regulatory framework that covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of medical devices.

Investigations by those agencies could divert management’s focus and could have a material adverse effect on our reputation and financial condition. We are subject to the regulation and oversight of the SEC and state regulatory agencies, in addition to the FDA. As a result, we may face legal or administrative proceedings by these agencies.

Even if the validity of our patents is upheld, a court may refuse to stop the other party from using the technology at issue on the grounds that the other party’s activities are not covered by our patents.

Specifically, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings, are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.

Certain future modifications made to our product, which we currently expect to be cleared through 510(k), may require a new 510(k) clearance. The 510(k) clearance process can be expensive, lengthy and uncertain. The FDA’s 510(k) clearance process usually takes from three to 12 months, but can last longer.

We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).

We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Stock less attractive to investors. We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).

Contract medical device manufacturers often encounter difficulties involving production yields, quality control and quality assurance and shortages of qualified personnel. These manufacturers are subject to stringent regulatory requirements, including the FDA’s current good-manufacturing-practices regulations.

Any recall would divert management’s attention and financial resources and harm our reputation with customers. A recall involving our insulin pump would be particularly harmful to our business, financial condition and results of operations because it is currently our only product.

Further, the Bipartisan Budget Act of 2018 among other things, amended the Medicare statute, effective January 1, 2019, to reduce the coverage gap in most Medicare drug plans, commonly known as the “donut hole,” by raising the manufacturer discount under the Medicare Part D coverage gap discount program to 70%.

To prevent infringement or unauthorized use, we may need to file infringement and/or misappropriation suits, which are very expensive and time-consuming, could result in meritorious counterclaims against us and would distract management’s attention.

If we are able to obtain all regulatory approvals and have completed all other steps needed to be taken to commercialize our insulin pump, if we or any contract manufacturers we select fails to comply with the FDA’s quality system regulations, the manufacturing and distribution of our product could be interrupted, and our product sales and operating results could suffer.

Even if we are able to obtain all regulatory approvals and have completed all other steps needed to be taken to commercialize our insulin pump, if we or any contract manufacturers we select fails to comply with the FDA’s quality system regulations, the manufacturing and distribution of our product candidate could be interrupted, and our product sales and operating results could suffer.

As a result of such provision, our board of directors can implement recapitalizations of the Company by effectuating a forward or reverse stock split of our outstanding common stock, which would increase or decrease each of our shareholder’s number of shares owned, and our shareholders will have no right to approve or disapprove any such action even if such actions have a material adverse effect on them.

As a result of such provision, our board of directors can implement recapitalizations of us by effectuating a forward or reverse stock split of our outstanding Common Stock, which would increase or decrease each of our shareholder’s number of shares owned, and our shareholders will have no right to approve or disapprove any such action even if such actions have a material adverse effect on them.

We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of the first sale of shares covered by this prospectus, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which requires the market value of our common stock that is held by non-affiliates to exceed $700.0 million as of the prior September 30 th , and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. 21 Our common stock may be classified as “penny stock” and trading of our shares may be restricted by the SEC’s penny stock regulations.

Significant changes in the health care system in the U.S. or elsewhere, including changes resulting from adverse trends in third-party reimbursement programs, could have a material adverse effect on our projected future operating results and our ability to raise capital, commercialize products, and remain in business. We are subject to extensive regulation by the U.S.

Since our inception, we have incurred operating losses in each year due to costs incurred in connection with research and development activities and general and administrative expenses associated with our operations. For the years ended March 31, 2021 and 2020, we incurred net losses of approximately $7.4 million and $5.3 million, respectively.

Since our inception, we have incurred operating losses in each year due to costs incurred in connection with research and development activities and general and administrative expenses associated with our operations. For the years ended March 31, 2022 and 2021, we incurred net losses of approximately $18.6 million and $7.4 million, respectively.

Food and Drug Administration, which could restrict the sales and marketing of our insulin pump and could cause us to incur significant costs. Our insulin pump is subject to extensive regulation by the FDA. These regulations relate to manufacturing, labeling, sale, promotion, distribution and shipping.

We are subject to extensive regulation by the FDA, which could restrict the sales and marketing of our insulin pump and could cause us to incur significant costs. Our insulin pump is subject to extensive regulation by the FDA. These regulations relate to manufacturing, labeling, sale, promotion, distribution and shipping.

In the 510(k) clearance process, before a device may be marketed, the FDA must determine that such proposed device is “substantially equivalent” to a legally-marketed “predicate” device, which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved pre-market approval (PMA) and later down-classified, or a 510(k)-exempt device.

At March 31, 2021, we had an accumulated deficit of approximately $15.9 million. As a result, we will need to raise additional capital in the future, which may or may not be available to us at all or only on unfavorable terms.

At March 31, 2022, we had an accumulated deficit of approximately $34.6 million. As a result, we will need to raise additional capital in the future, which may or may not be available to us at all or only on unfavorable terms.

Further, 510(k) clearances can be revoked if safety or effectiveness problems develop. 17 The current regulatory requirements to which we are subject may change in the future in a way that adversely affects us.

Further, 510(k) clearances can be revoked if safety or effectiveness problems develop once the device is on the market. The current regulatory requirements to which we are subject may change in the future in a way that adversely affects us.

We believe this makes insurers hesitant to pay for any pumps, except their most technologically proficient and compliant patients and places pumps out of reach for many patients whom cannot afford such out of pocket expenses. We are engaged in the diabetes treatment sector of the healthcare marketplace, which is intensely competitive.

We believe this makes insurers hesitant to pay for any pumps and places pumps out of reach for many patients whom cannot afford such out of pocket expenses. 28 We are engaged in the diabetes treatment sector of the healthcare marketplace, which is intensely competitive.

To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device.

Our future funding requirements will depend on many factors, including, but not limited to: · the testing costs for our insulin pump product and other development activities conducted by us directly, and our ability to successfully conclude the studies and activities and achieve favorable results; · our ability to attract future strategic partners to pay for or share costs related to our product development efforts; · the costs and timing of seeking and obtaining regulatory clearance and approvals for our product; · the costs of filing, prosecuting, maintaining and enforcing any patents and other intellectual property rights that we may have and defending against potential claims of infringement; · decisions to hire additional scientific, engineering or administrative personnel or consultants; · our ability to manage administrative and other costs of our operations; and · the presence or absence of adverse developments in our research program. 13 If any of these factors cause our funding needs to be greater than expected, our operations, financial condition, ability to continue operations and stock price may be adversely affected.

Our future funding requirements will depend on many factors, including, but not limited to: · the testing costs for our insulin pump product and other development activities conducted by us directly, and our ability to successfully conclude the studies and activities and achieve favorable results; · our ability to attract future strategic partners to pay for or share costs related to our product development efforts; · the costs and timing of seeking and obtaining regulatory clearance and approvals for our product candidate; · the costs of filing, prosecuting, maintaining and enforcing any patents and other intellectual property rights that we may have and defending against potential claims of infringement; · decisions to hire additional scientific, engineering or administrative personnel or consultants; · our ability to manage administrative and other costs of our operations; and · the presence or absence of adverse developments in our research program.

In the event that our or any contract manufacturer’s facilities fails a quality system inspection, the manufacturing or distribution of our product could be interrupted and our operations disrupted.

In the event that our or any contract manufacturer’s facilities fails a quality system inspection, the manufacturing or distribution of our product candidate could be interrupted and our operations disrupted.

When we do enter into strategic or contractual relationships, we become dependent on the successful performance of our partners or counter-parties. If they fail to perform as expected, such failure could adversely affect our financial condition, lead to increases in our capital needs, or hinder or delay our development efforts. See “Our Business – Number of Total Employees” below.

This has negatively affected the world economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets.

Any disputes could be costly and time-consuming, and an unfavorable outcome could have a significant adverse effect on our business. See “Our Business –Use of Proprietary Technology,” below. Assuming our insulin pump receives FDA clearance or approval, our insulin pump will still be subject to recalls, which would harm our reputation, business operations and financial results.

Any disputes could be costly and time-consuming, and an unfavorable outcome could have a significant adverse effect on our business. Assuming our insulin pump receives FDA clearance or approval, our insulin pump will still be subject to recalls, which would harm our reputation, business operations and financial results.

See “Our Business – Patents,” below. 19 We may become involved in disputes with our present or future contract partners over intellectual property ownership or other matters, which would have a significant effect on our business.

See “Our Business – Patents,” below. 33 We may become involved in disputes with our present or future contract partners over intellectual property ownership or other matters, which would have a significant effect on our business.

We cannot predict all the possible harms or adverse effects that may result. We maintain a modest amount of product liability insurance to provide some protection from claims. Nonetheless, we may not have sufficient resources to pay for any liabilities resulting from a personal injury or other claim, even if it is partially covered by insurance.

We maintain a modest amount of product liability insurance to provide some protection from claims. Nonetheless, we may not have sufficient resources to pay for any liabilities resulting from a personal injury or other claim, even if it is partially covered by insurance.

If we are unable to attract and retain persons with sufficient engineering, scientific, technical and managerial experience, we may be forced to limit or delay our product development activities or may experience difficulties in successfully conducting our business, which would adversely affect our operations and financial condition.

Accordingly, unless government and other third- party payors provide coverage and reimbursement for our insulin pump, patients may not use it, which would cause investors to lose their entire investment. We are subject to the oversight of the SEC and other regulatory agencies.

Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. Accordingly, unless government and other third-party payors provide coverage and reimbursement for our insulin pump, patients may not use it, which would cause investors to lose their entire investment. We are subject to the oversight of the SEC and other regulatory agencies.

Our competitors also have significantly greater experience in: · developing medical device and other product candidates; · undertaking testing and clinical studies; · building relationships with key customers and opinion-leading physicians; · obtaining and maintaining FDA and other regulatory approvals; · formulating and manufacturing medical devices; · launching, marketing and selling medical devices; and · providing management oversight for all of the above-listed operational functions. 16 If we fail to achieve superiority over other existing or newly developed products, we may be unable to obtain regulatory approval.

Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never achieve, we expect to finance our cash needs primarily through public or private equity offerings, debt financings or through the establishment of possible strategic alliances. We cannot be certain that additional funding will be available on acceptable terms, or at all.

The amount of this dilution may be substantially increased if the trading price of our common stock is lower at the time of any financing. Regardless, the economic dilution to shareholders will be significant if our stock price does not increase significantly, or if the effective price of any sale is below the price paid by a particular shareholder.

Regardless, the economic dilution to shareholders will be significant if our stock price does not increase significantly, or if the effective price of any sale is below the price paid by a particular shareholder.

Patent and Trademark Office for patents on our proprietary fluid movement technology and the configuration of our insulin pump. There is no assurance that these patents will be issued, and no assurance that they will prevent other companies from competing with us. We will continue to attempt to patent our innovations as appropriate to help ensure a sustainable competitive advantage.

There is no assurance that these patents will be issued, and no assurance that they will prevent other companies from competing with us. We will continue to attempt to patent our innovations as appropriate to help ensure a sustainable competitive advantage.

The FDA can delay, limit or deny clearance or approval for our insulin pump medical device for many reasons, including: · our inability to demonstrate to the satisfaction of the FDA that our product is safe or effective for its intended use; · the disagreement of the FDA with the design or implementation of our clinical studies or the interpretation of data from our clinical studies; · serious and unexpected adverse device effects experienced by participants in our clinical studies; · the data from clinical studies may be insufficient to support clearance or approval, where required; · our inability to demonstrate that the benefits of our pump outweigh the risks; 15 · the manufacturing process or facilities we intend to use may not meet applicable requirements; and · the potential for approval policies or regulations of the FDA to change significantly in a manner rendering our data or regulatory filings insufficient for clearance or approval.

The FDA can delay, limit or deny clearance or approval for our insulin pump medical device for many reasons, including: · our inability to demonstrate to the satisfaction of the FDA that our product candidate is substantially equivalent to the proposed predicate device; · the disagreement of the FDA with the design or implementation of our performance testing protocols or the interpretation of data from our performance testing; · the data from performance testing may be insufficient to support a determination of substantial equivalence or that our device meets required special controls or applicable performance standards; · our inability to demonstrate that the benefits of our pump outweigh the risks; · the manufacturing process or facilities we intend to use may not meet applicable requirements; and · the potential for approval policies or regulations of the FDA to change significantly in a manner rendering our data or regulatory filings insufficient for clearance or approval.

In addition, quality issues may arise during scale-up activities. If we are unable to successfully scale up the manufacture of our product in sufficient quality and quantity, the development and testing of our product and regulatory approval or commercial launch may be delayed, which could significantly harm our business.

If we are unable to successfully scale up the manufacture of our product in sufficient quality and quantity, the development and testing of our product candidate and regulatory approval or commercial launch may be delayed, which could significantly harm our business. 29 We may be subject to potential product liability and other claims that could materially impact our business and financial condition.

Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain clearance for our pump, increase the costs of compliance or restrict our ability to maintain our current approval. For example, as part of the Food and Drug Administration Safety and Innovation Act, or FDASIA, enacted in 2012, the U.S.

We may be subject to potential product liability and other claims that could materially impact our business and financial condition. The development and sale of our insulin pump exposes us to the risk of significant damages from product liability and other claims, and the use of our product in clinical studies may result in adverse effects.

The development and sale of our insulin pump exposes us to the risk of significant damages from product liability and other claims, and the use of our product candidate in clinical studies may result in adverse effects. We cannot predict all the possible harms or adverse effects that may result.

The full effects of COVID-19 and other potential future public health crises, epidemics, pandemics or similar events are uncertain and could have a material and adverse effect on our business, financial condition, operating results and cash flows.

If we fail to generate revenue and eventually become profitable, or if we are unable to fund our continuing losses, our shareholders could lose all or a substantial part of their investment. 23 The full effects of COVID-19 and other potential future public health crises, epidemics, pandemics or similar events are uncertain and could have a material and adverse effect on our business, financial condition, operating results and cash flows.

If we are not able to secure additional equity funding when needed, we may have to delay, reduce the scope of, or eliminate one or more of our clinical studies, development programs or future commercialization initiatives. In addition, any additional equity funding that we do obtain will dilute the ownership held by our existing equity holders.

We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are not able to secure additional equity funding when needed, we may have to delay, reduce the scope of, or eliminate one or more of our clinical studies, development programs or future commercialization initiatives.

If the FDA requires us to go through a lengthier, more rigorous examination for our product than we had expected, product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business.

Furthermore, even if we are granted the required regulatory authorizations, such authorizations may be subject to significant limitations on the indicated uses for the device, which may limit the market for our product candidate. 27 If the FDA requires us to go through a lengthier, more rigorous examination for our product candidate than we had expected, product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business.

Consequently, shareholders’ only opportunity to achieve a return on their investment is if the price of our stock appreciates and they sell their shares at a profit. We cannot assure shareholders of a positive return on their investment when they sell their shares or that shareholders will not lose the entire amount of their investment.

Consequently, shareholders’ only opportunity to achieve a return on their investment is if the price of our stock appreciates and they sell their shares at a profit.

We were recently able to raise additional capital in a private placement that commenced in February 2021, however, we will need to raise additional capital to support our operations in the future.

We were recently able to raise additional capital through equity offerings in February 2022 and May 2022, however, we will need to raise additional capital to support our operations in the future.

In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing shareholders.

In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our Common Stock or that is convertible into our Common Stock, which could decrease the relative voting power of our Common Stock or result in dilution to our existing shareholders. 36 If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately or prevent fraud.

In addition, if we do not appropriately manage our relationships with our consultants, we may not be able to efficiently manage the development, testing, regulatory approval and eventual commercialization of our insulin pump, which also could have a material and adverse effect on our business, financial condition and stock price. 14 We will need to outsource and rely on third parties for various aspects relating to the development, manufacture, sales and marketing of our insulin pump as well as in connection with assisting us in the preparation and filing of our FDA submission, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.

We will need to outsource and rely on third parties for various aspects relating to the development, manufacture, sales and marketing of our insulin pump as well as in connection with assisting us in the preparation and filing of our FDA submission, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.

We continue to incur increased research and development expenditures, which are attributable to effort and expenses incurred in designing and developing our innovative insulin pump. We expect to continue to incur substantial costs related to research and development.

We consider research and development to be an important part of the process of designing, developing, obtaining regulatory required approvals and the eventual commercialization of our insulin pump. We continue to incur increased research and development expenditures, which are attributable to effort and expenses incurred in designing and developing our innovative insulin pump.

Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our operating results and financial prospects. Our shares of common stock are quoted on the OTCQB Venture Market, and the trading market for our common stock is limited.

Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our operating results and financial prospects. We do not expect any cash dividends to be paid on our shares of Common Stock for the foreseeable future.

If the beneficial ownership of our common stock continues to be highly concentrated, it may prevent our shareholders from influencing significant corporate decisions. As of March 31, 2021, our executive officers, directors and certain persons who may be deemed their affiliates beneficially owned substantially in excess of 50.1% of our issued and outstanding common stock.

As of March 31, 2022, our executive officers, directors and certain persons who may be deemed affiliates beneficially own in excess of 50.1% of our issued and outstanding Common Stock.

We are unable to predict the effect of any investigations on our business, financial condition or reputation.

We are unable to predict the effect of any investigations on our business, financial condition or reputation. In addition, publicity surrounding any investigation, even if ultimately resolved in our favor, could have a material adverse effect on our business.

Others have daily use costs that exceed the reimbursement rates of many health insurance plans, forcing some users to spend thousands of dollars a year in copays.

Existing insulin pumps are expensive, with the more popular models having purchase prices exceeding $4,000 for individuals without health insurance and often require significant patient copays. Others have daily use costs that exceed the reimbursement rates of many health insurance plans, forcing some users to spend thousands of dollars a year in copays.

Each of these processes can be expensive and lengthy, and entail significant user fees, unless exempt. Medical devices may be marketed only for the indications for which they are approved or cleared.

If we receive 510(k) clearance for our insulin pump, we may be required to obtain a new 510(k) clearance for significant post-market modifications to the pump. Each premarket submission and review process can be expensive and lengthy, and entail significant user fees, unless exempt. Medical devices may be marketed only for the indications for which they are approved or cleared.

If adequate funds are not obtained, we will be required to reduce or curtail operations. The amount of financing we require will depend on a number of factors, many of which are beyond our control.

No assurance can be given that we can or will ever operate profitably. 25 The amount of financing we require will depend on a number of factors, many of which are beyond our control.

We are a “smaller reporting company,” and are subject to lesser disclosure obligations in our SEC filings compared to other issuers.

We are a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our Common Stock may be less attractive to investors. We are a “smaller reporting company,” and are subject to lesser disclosure obligations in our SEC filings compared to other issuers.

If our competitors’ market medical devices that are less expensive, safer or more effective than our insulin pump, or that gain or maintain greater market acceptance, we may not be able to compete effectively. See “Our Business – Competition” below. We expect to rely on third-party manufacturers and will be dependent on their quality and effectiveness.

If we fail to achieve superiority over other existing or newly developed products, we may be unable to obtain regulatory approval. If our competitors’ market medical devices that are less expensive, safer or more effective than our insulin pump, or that gain or maintain greater market acceptance, we may not be able to compete effectively.

Before a new medical device, or a new use of or claim for an existing product, can be marketed in the United States, it must first receive either 510(k) clearance or PMA from the FDA, unless an exemption applies. We may be required to obtain a new 510(k) clearance for significant post-market modifications to our insulin pump.

Before a new medical device, or a new intended use of a legally marketed device, can be marketed in the United States, it must be cleared or approved by FDA through the applicable premarket review process (510(k), PMA, or de novo classification), unless an exemption applies.

The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations and could result in shareholders losing their entire investment. Our success depends substantially upon our ability to obtain and maintain intellectual property protection relating to our product and research technologies. We have applied to the U.S.

Our success depends substantially upon our ability to obtain and maintain intellectual property protection relating to our product and research technologies. We have applied to the U.S. Patent and Trademark Office for patents on our proprietary fluid movement technology and the configuration of our insulin pump.

Removed

If we fail to generate revenue and eventually become profitable, or if we are unable to fund our continuing losses, our shareholders could lose all or a substantial part of their investment. We might not be able to continue as a going concern which would likely cause our stockholders to lose most or all of their investment.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2022 filing

No director, executive officer or affiliate of ours or owner of record or beneficially of more than five percent of our common stock is a party adverse to us or has a material interest adverse to us in any proceeding. ITEM 4: MINE SAFETY DISCLOSURES Not applicable 23 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2021 filing

2022 filing

The 2020 Placement resulted in gross proceeds to us of $2,762,054. 24 2018 Placement Between November 2018 and March 2019, we sold to accredited investors in a private placement (the 2018 Placement) a total of 1,856,988 shares of our common stock at a purchase price of $2.25 per share, resulting in gross proceeds to us of $4,142,666.

The 2020 Placement resulted in gross proceeds to us of $2,762,054. 2018 Placement Between November 2018 and March 2019, we sold to accredited investors in a private placement a total of 618,996 shares of our Common Stock at a purchase price of $6.75 per share, resulting in gross proceeds to us of $4,142,666.

The above sales of our securities were made pursuant to exemptions from registration pursuant to Section 4(2) and/or Rule 506 of Regulation D of the Securities Act. We made such determinations based upon representations by the purchasers of such securities including, without limitation, that such purchasers were “accredited investors” as defined in the Securities Act.

Recent Sales of Unregistered Securities 2021 Placement Between February and May 2021, we issued to accredited investors in the 2021 Placement, $6,610,550 aggregate principal amount of our 12% unsecured convertible promissory notes, due 12 months from each respective issuance date, at par and warrants to purchase in the aggregate 2,285,736 shares of our common stock at an exercise price of $8.00 per share, exercisable for a 5-year period, as provided in such warrants.

Officer Purchases of Common Stock On October 28, 2021, we sold to two of our executive officers a total of 30,865 shares of our Common Stock at a purchase price of $8.10 per share, which resulted in gross proceeds to us of approximately $250,000. 2021 Placement Between February and May 2021, we issued to accredited investors in a private placement $6,610,550 aggregate principal amount of our 12% unsecured convertible promissory notes, due 12 months from each respective issuance date, at par and warrants to purchase in the aggregate 767,796 shares of our Common Stock at an exercise price of $24.00 per share, exercisable for a 5-year period, as provided in such warrants. 38 2020 Placement Between March and December 2020, we sold to accredited investors in a private placement a total of 320,796 shares of our Common Stock at a purchase price of $8.61 per share.

We currently expect to retain future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.

Dividend Policy We have never declared or paid any cash dividend on our capital stock. We do not anticipate paying any cash dividends in the foreseeable future and we intend to retain all of our earnings, if any, to finance our growth and operations and to fund the expansion of our business.

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently quoted on the OTCQB Venture Market under the trading symbol “MODD.” Trading in shares of our common stock is limited and sporadic.

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently listed on the Nasdaq Capital Market under the symbol “MODD.” Holders of Record On May 31, 2022, we had approximately 80 stockholders of record.

Other Transactions In 2021, we issued a total of 133,500 shares of common stock to three service providers in exchange for services rendered, and, in 2019, we sold 30,000 shares of our common stock to a service provider. 2020 Placement Between March and December 2020, we sold to accredited investors in a private placement (the 2020 Placement) a total of 962,387 shares of our common stock at a purchase price of $2.87 per share.

On January 5, 2022, we issued 16,666 shares of our Common Stock to service providers. In 2021, we issued a total of 52,834 shares of our Common Stock to five service providers in exchange for services rendered. In 2019, we issued 10,000 shares of our Common Stock for cash to a service provider.

Removed

There is no established trading market for shares of our common stock and no assurances can be given that any such trading market will develop or be maintained. Holders of Record As of March 31, 2021, we had approximately 100 holders of record of our common stock. This does not include beneficial owners holding common stock in street name.

Added

The actual number of stockholders is greater than this number of stockholders of record and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. This number of stockholders of record also does not include stockholders whose shares may be held in trust by other entities.

Removed

As such, the number of beneficial holders of our shares could be substantially larger than the number of shareholders of record. Dividend Policy We have never declared or paid any dividends on our capital stock.

Added

Payment of any dividends will be made in the discretion of our board of directors, after its taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion.

Removed

Securities Authorized for Issuance under Equity Compensation Plan In October 2017, our board of directors approved the Amended 2017 Equity Incentive Plan (the 2017 Plan) and reserved 3,000,000 shares of our common stock to be issued thereunder.

Added

Any dividends that may be declared or paid on our common stock, must also be paid in the same consideration or manner, as the case may be, on our shares of preferred stock, if any.

Removed

In January 2020, our board of directors approved an amendment to the 2017 Plan to increase the number of shares reserved for issuance by 1,000,000 shares.

Added

Recent Sales of Unregistered Securities Set forth below is information regarding shares of Common Stock, convertible notes and warrants issued, and options granted, by us within the past three years that were not registered under the Securities Act.

Removed

The following table shows shares of our common stock authorized for issuance under our 2017 Plan as of March 31, 2021: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding Securities reflected in Column (a)) (a) (b) I Equity compensation plans approved by security holders(1) 3,591,755 $ 1.75 408,245 (1) The 2017 Plan allows for grants in the form of incentive stock options, nonqualified stock options, stock units, stock awards, stock appreciation rights, and other stock-based awards.

Added

Also included is the consideration, if any, received by us for such shares, convertible notes, warrants and options, and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.

Removed

All of our officers, directors, employees, consultants and advisors are eligible to receive grants under the Plan. Options to purchase shares of common stock are granted at exercise prices not less than 100% of fair value on the dates of grant.

Added

Director Compensation On March 31, 2022, we issued 15,250 shares of our Common Stock to non-employee members of our board of directors for service as directors in accordance with our Outside Director Compensation Plan (the “Director Plan”).

Removed

We intend to use net proceeds from the 2021 Placement for business development, including, without limitation, working capital and general corporate purposes.

Added

On December 31, 2021, we issued 5,775 shares of our Common Stock to non-employee members of our board of directors for service as directors in accordance with the Director Plan. On September 30, 2021, we issued 3,636 shares of our Common Stock to non-employee members of our board of directors for service as directors in accordance with the Director Plan.

Removed

Repurchases of Equity Securities None ITEM 6: SELECTED FINANCIAL DATA Not required

Added

On June 30, 2021, we issued 1,836 shares of our Common Stock to non-employee members of our board of directors for service as directors in accordance with our Outside Director Compensation Plan the Director Plan. Service Providers On March 23, 2022 we issued 45,000 shares of our Common Stock to a service provider.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2021 filing

2022 filing

In fiscal 2021, we used $5,908,662 in operating activities, which primarily resulted from our net loss of $7,377,976 and changes to operating assets and liabilities of $61,147, as adjusted for non-cash charges and gains, which included stock-based compensation expenses of $1,227,578, $68,880 for issuances of shares of common stock in exchange for services, $109,731 related to the lease right-of-use asset and liability and depreciation and amortization expenses of $111,015.

In fiscal 2021, we used $5,908,662 in operating activities, which primarily resulted from our net loss of $7,377,976 and changes to operating assets and liabilities of $61,147, as adjusted for non-cash charges and gains, which included stock-based compensation expenses of $1,227,578, $68,880 for issuance of shares of common stock in exchange for services, $109,731 related to the lease right-of-use asset and liability and depreciation and amortization expenses of $111,015.

Based on the available information and other factors, management believes it is more likely than not that our federal and state net deferred tax assets will not be fully realized, and we have recorded a full valuation allowance. We account for uncertain tax positions in accordance with FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes .

Based on the available information and other factors, management believes it is more likely than not that our federal and state net deferred tax assets will not be fully realized, and we have recorded a full valuation allowance. We account for uncertain tax positions in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 740, Income Taxes .

Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the consolidated statements of income. Leases We account for our leases under Accounting Standards Update (ASU) No. 2016-02, Leases (ASC 842), and related ASUs, which provide supplementary guidance and clarifications.

Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in general and administrative expenses in the consolidated statements of operations. 42 Leases We account for our leases under Accounting Standards Update (ASU) No. 2016-02, Leases (ASC 842), and related ASUs, which provide supplementary guidance and clarifications.

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included in this Annual Report on Form 10-K.

Since our inception, we have incurred operating losses and negative cash flows in each year due to costs incurred in connection with R&D activities and G&A expenses associated with our operations. For the years ended March 31, 2021 and 2020, we incurred net losses of approximately $7.4 million and $5.3 million, respectively.

Since our inception, we have incurred operating losses and negative cash flows in each year due to costs incurred in connection with R&D activities and G&A expenses associated with our operations. For the years ended March 31, 2022 and 2021, we incurred net losses of approximately $18.6 million and $7.4 million, respectively.

Such changes in assets and liabilities primarily related to the timing of payments to vendors.

The changes in operating assets and liabilities primarily related to the timing of payments to vendors.

We may be unable to access the capital markets or additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and to our business. For additional information on risks that could impact our future results, please refer to “Risk Factors” in Part I, Item 1A of this Report.

We may be unable to access the capital markets, and additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and to our business. For additional information on risks that could impact our future results, please refer to “Risk Factors” in Part I, Item 1A of this Report.

This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets.

If we are unable to secure additional capital, we will be required to curtail our research and development initiatives and take additional measures to reduce costs.

Cash provided by financing activities for fiscal 2021 totaled $4,364,662 and was attributable to $1,785,882 of net proceeds from the sale of shares of our common stock in the 2020 Placement, $368,760 of proceeds from the PPP Note and $2,210,000 of gross proceeds from the issuance of our 2021 Notes in the quarter ended March 31, 2021.

Our financing activities for fiscal 2021 totaled $4,364,662 and were attributable to $1,785,882 of net proceeds from the sale of shares of common stock in a private placement, $368,760 of proceeds from the PPP Note and $2,210,00 of gross proceeds from the issuance of our convertible notes in the quarter ended March 31, 2021.

The full extent of the COVID-19 impact on our operational and financial performance will depend on future developments, including, without limitation, the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of our control, and cannot be predicted. 25 In March 2020, Santa Diego County in California, where we are based, and the state of California issued “shelter-in-place” orders (the Orders).

While we believe that our operations personnel are currently in a position to build an adequate supply of products for our FDA submission, we recognize that unpredictable events could create difficulties in the months ahead.

We remain diligent in continuing to identify and manage risks to our business given the changing uncertainties related to COVID-19. While we believe that our operations personnel are currently in a position to build an adequate supply of products for our FDA submission, we recognize that unpredictable events could create difficulties in the months ahead.

Off-Balance Sheet Arrangements We do not maintain any off-balance sheet arrangements or obligations that are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity or capital resources. Recent Accounting Pronouncements None 28 ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required.

Small Business Administration Paycheck Protection Program, which loan was forgiven in May 2021. Our operating needs include the planned costs to operate our business, including amounts required to fund research and development activities, including clinical studies, working capital and capital expenditures.

Our operating needs include the planned costs to operate our business, including amounts required to fund research and development activities, including clinical studies, working capital and capital expenditures.

Research and Development Years ended March 31, Year-over-Year Change 2021 2020 2021 to 2020 Research and development $ 4,083,303 $ 3,034,152 $ 1,049,151 34.6 % Our research and development expenses include personnel, overhead and other costs associated with the development of our insulin pump product. We expense research and development costs as they are incurred.

Research and Development Years ended March 31, Year-over-Year Change 2022 2021 2022 to 2021 Research and development $ 7,729,240 $ 4,083,303 $ 3,645,937 89.3 % Our research and development expenses include personnel, materials and supplies and other costs associated with the development of our insulin pump product candidate. We expense research and development costs as they are incurred.

Research and development, or R&D, expenses increased in fiscal 2021 compared with fiscal 2020 primarily due to increased engineering and operations personnel and consulting costs. Our R&D employee headcount increased to 17 at March 31, 2021, from 10 at March 31, 2020. R&D expenses included stock-based compensation expenses of $390,045 and $422,625 for fiscal 2021 and fiscal 2020, respectively.

Research and development, or R&D, expenses increased in fiscal 2022 compared with fiscal 2021 primarily due to increased consulting costs, engineering and operations personnel, stock compensation expense and materials and supplies expenditures. Our R&D employee headcount increased to 23 at March 31, 2022, from 17 at March 31, 2021.

In fiscal 2021, cash used in investing activities of $109,669 was for the purchase of property and equipment. We used $260,789 of cash to purchase property and equipment in fiscal 2020.

We used $109,669 of cash to purchase property and equipment in fiscal 2021.

General and administrative expenses, or G&A, increased in fiscal 2021 compared with fiscal 2020 primarily as a result of increased personnel and consulting costs, stock-based compensation expenses and professional services fees related to our financing activities. Our full-time G&A headcount increased to four at March 31, 2021 from two at March 31, 2020.

General and administrative expenses, or G&A, increased in fiscal 2022 compared with fiscal 2021 primarily as a result of increased personnel and consulting costs, stock-based compensation expenses and professional services fees, primarily related to our financing activities, including our public offering that was completed in February 2022.

Such changes in assets and liabilities primarily related to the timing of payments to vendors, offset by an increase in security deposits. Increased cash usage during fiscal 2021 was due to increased operating activities related to the development and eventual commercialization of our product.

Such changes in assets and liabilities primarily related to the timing of payments to vendors. Increased cash usage during fiscal 2022 was due to increased operating activities related to the development and eventual commercialization of our product. 41 In fiscal 2022, cash used in investing activities of $54,764 was for the purchase of property and equipment.

G&A expenses included stock-based compensation expenses of $837,533 and $378,619 for fiscal 2021 and fiscal 2020, respectively. We expect G&A expenses to continue to increase in fiscal 2022, as we commence the commercialization of our product and increase headcount.

G&A expenses included stock-based compensation expenses of $3,272,964 and $837,533 for fiscal 2022 and fiscal 2021, respectively. We expect G&A expenses to continue to increase in fiscal 2023, as we will increase headcount as we expand our organization to support our anticipated growth and prepare for the expected commencement of the commercialization of our product in late fiscal 2023.

Impacts of COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020.

We have provided additional disclosure in Note 1 to the consolidated financial statements in Item 1 of this Report and under Liquidity below. 39 Impacts of COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020.

Our ability to continue as a going concern depends on our ability to raise additional capital, through the sale of equity or debt securities to support our future operations, and we are currently seeking such additional financing.

Based on our current operating plan, we believe we have adequate cash for at least the next 12 months. Our long-term ability to continue as a going concern depends on our ability to raise additional capital, through the sale of equity or debt securities, to support our future operations.

These policies may involve estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

We have identified the accounting policies below as some of the more critical to our business and the understanding of our results of operations. These policies may involve estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

Although we believe our judgments and estimates are appropriate, actual future results may differ from our estimates, and if different assumptions or conditions were to prevail, the results could be materially different from our reported results. 27 Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Note 1 to the consolidated financial statements in Item 8 of this Report describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. We have identified the accounting policies below as some of the more critical to our business and the understanding of our results of operations.

Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Note 1 to the consolidated financial statements in Item 8 of this Report describes the significant accounting policies and methods used in the preparation of our consolidated financial statements.

At March 31, 2021, we had a cash balance of $1.5 million and an accumulated deficit of approximately $16 million.

At March 31, 2022, we had a cash balance of $9.1 million and an accumulated deficit of approximately $34.6 million. In May 2022, we completed a registered direct offering of securities for net proceeds of approximately $7.4 million.

We were recently able to raise additional capital in a private placement (see discussion below under Liquidity ), however, we need to raise additional capital to support our operations in the future.

We were recently able to raise additional capital through equity offerings in February 2022 and May 2022, however, we will need to raise additional capital to commercialize our pump product candidate and support our operations in the future.

General and Administrative Years ended March 31, Year-over-Year Change 2021 2020 2021 to 2020 General and administrative $ 3,253,412 $ 2,313,870 $ 939,542 40.6 % General and administrative expenses consist primarily of personnel and related overhead costs for marketing, finance, human resources and general management.

We expect R&D expenses to continue to increase in fiscal 2023, as we complete the development of our pump product candidate, engage third parties to test our product and develop a low-volume manufacturing process. 40 General and Administrative Years ended March 31, Year-over-Year Change 2022 2021 2022 to 2021 General and administrative $ 7,197,162 $ 3,253,412 $ 3,943,750 121.2 % General and administrative expenses consist primarily of personnel and related overhead costs for marketing, finance, human resources and general management.

We have been complying with the Orders and, until May 2021, had minimized business activities at our San Diego facility since March 2020. During that time, we implemented a teleworking policy for our employees and contractors to reduce on-site activity at our facility.

During that time, we implemented a teleworking policy for our employees and contractors to reduce on-site activity at our facility. In May 2021, our employees and certain contractors returned to work in our office. We have and continue to experience longer lead times for certain components used to manufacture initial quantities of our products for our submission to the FDA.

The decrease in interest income for fiscal 2021 compared with fiscal 2020 was primarily attributable to lower average cash balances during fiscal 2021. Interest expense represents interest on our 2021 Notes. Liquidity and Going Concern As a development-stage enterprise, we do not currently have revenues to generate cash flows to cover operating expenses.

See Notes 5 and 6 to the consolidated financial statements included in Item 8 of this Report for additional disclosure. Liquidity As a development-stage enterprise, we do not currently have revenues to generate cash flows to cover operating expenses.

Overview We are a development-stage medical device company focused on the design, development and eventual commercialization of an innovative insulin pump to address shortcomings and problems represented by the relatively limited adoption of currently available pumps for insulin dependent people with diabetes.

Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” refer to Modular Medical, Inc. and its consolidated subsidiary. Company Overview We are a development-stage medical device company focused on the design, development and commercialization of an innovative insulin pump using modernized technology to increase pump adoption in the diabetes marketplace.

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties, including those discussed under Part I, Item 1A, “Risk Factors.” These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements.

These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in Part I, Item 1A, These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements.

Our ability to continue as a going concern depends on our ability to raise additional capital, through the sale of equity or debt securities, to support our future operations. If we are unable to secure additional capital, we will be required to curtail our research and development initiatives and take additional measures to reduce costs.

If we are unable to secure additional capital timely, we will be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve our cash. We believe that our cash will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months.

In fiscal 2020, we used $4,094,839 in operating activities, which primarily resulted from our net loss of $ 5,320,873, partially offset by changes to operating assets and liabilities of $389,359, and adjusted for non-cash charges and gains, which included stock-based compensation expenses of $801,244, depreciation and amortization expenses of $35,431.

In fiscal 2022, we used $10,259,528 in operating activities, which primarily resulted from our net loss of $18,632,761 less changes to operating assets and liabilities of $420,600, as adjusted for non-cash charges and gains, which included stock-based compensation expenses of $4,031,902, amortization of debt issuance costs of $1,833,618, a loss on debt extinguishment of $1,321,450, accrued interest of $666,338, $395,950 for issuances of shares of common stock in exchange for services, and depreciation and amortization expenses of $117,490, partially offset by a gain on PPP note forgiveness of $368,780 and net changes in lease assets and liabilities of $45,610 and other immaterial adjustments.

Historically, we have financed our operations principally through private placements of our common stock, and, more recently, of convertible promissory notes. In May 2021, we completed the 2021 Placement and issued $6,610,550 aggregate principal amount of our convertible promissory notes (the 2021 Notes), at par, and warrants to purchase shares of our common stock.

The product seeks to serve both the type 1 and the rapidly growing, especially in terms of device adoption, type 2 diabetes markets. Historically, we have financed our operations principally through private placements and public offerings of our common stock and sales of convertible promissory notes.

Removed

We have developed a hardware technology allowing people with insulin-dependent diabetes to receive their daily insulin in two ways, through a continuous “basal” delivery allowing a small amount of insulin to be in the blood at all times and a “bolus” delivery to address meal time glucose input and to address when the blood glucose level becomes excessively high.

Added

Management’s Discussion and Analysis of Financial Condition and Results of Operations may contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors.

Removed

By addressing the time and effort required to effectively treat their condition, we believe we can address the less technically savvy, less motivated part of the market. We have completed development of, but have not yet obtained U.S. Food and Drug Administration, or FDA, clearance for, our insulin pump, and we have therefore not generated any revenues from product sales.

Added

Our fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in this Report, refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2022 refers to the fiscal year ending March 31, 2022).

Removed

Our net losses were approximately $7.4 million and $5.3 million for the years ended March 31, 2021 and 2020, respectively. As of March 31, 2021, we had negative working capital of approximately $1.6 million and an accumulated deficit of approximately $15.9 million.

Added

Through the creation of a novel two-part patch pump, our MODD1 product, we seek to fundamentally alter the trade-offs between cost and complexity and access to the higher standards of care that presently-available insulin pumps provide.

Removed

For further discussion of the 2021 Placement and the 2021 Notes, see Notes 3 and 12 to the consolidated financial statements in Item 8 of this Report and below under Liquidity .

Added

Removed

Based on our current operating plan, substantial doubt about our ability to continue as a going concern for a period of at least one year from the date that the financial statements included in Item 8 of this Report are issued exists.

Added

In March 2020, Santa Diego County in California, where we are based, and the state of California issued “shelter-in-place” orders (the Orders). We complied with the Orders and minimized business activities at our San Diego facility since March 2020 until May 2021.

Removed

We have and continue to experience longer lead times for certain components used to manufacture initial quantities of our products for our submission to the FDA, which is expected to occur in the quarter ending December 31, 2021. We remain diligent in continuing to identify and manage risks to our business given the changing uncertainties related to COVID-19.

Added

R&D expenses included stock-based compensation expenses of $758,938 and $390,045 for fiscal 2022 and fiscal 2021, respectively.

Removed

We expect R&D expenses to continue to increase in fiscal 2022, as we continue to advance the development of our pump product and develop a low-volume manufacturing process.

Added

Interest Expense Years ended March 31, Year-over-Year Change 2022 2021 2022 to 2021 Interest expense $ 2,752,229 $ 39,791 $ 2,712,438 6,816.7 % Interest expense consisted of interest expense incurred from our convertible promissory notes, including amortization of debt issuance costs, and our promissory (bridge) note. We retired our outstanding debt in February 2022.

Removed

Interest Income Years ended March 31, Year-over-Year Change 2021 2020 2021 to 2020 Interest income $ 130 $ 28,749 $ (28,619 ) (99.5 )% Interest expense $ 39,791 $ — $ 39,791 — 26 Interest income consisted of interest earned on our cash deposits.

Added

Cash provided by financing activities for fiscal 2022 totaled $17,922,199 and was attributable to $13,535,000 of net proceeds from a public offering of our common stock in February 2022, $4,137,199 of net proceeds from the issuance of convertible notes, $2,100,000 of net proceeds from issuance of a bridge promissory note, and $250,000 of proceeds from a private placement of common stock to officers, which were partially offset by the $2,100,00 repayment of the bridge promissory note.

Removed

When considered with our current operating plan, these conditions raise substantial doubt about our ability to continue as a going concern for a period of at least one year from the date that the financial statements included in Item 8 of this Report are issued.

Added

Removed

Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

Added

Contractual Obligations As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide the information requested by paragraph (a)(5) of this Item. Recent Accounting Pronouncements See Note 1 to the consolidated financial statements in Item 8 of this Report for a full description of recent accounting pronouncements.

Removed

In fiscal 2021, we completed the 2021 Placement of our 2021 Notes for gross proceeds of $6,560,000, we sold shares of our common stock for gross proceeds of $1,838,056 as part of the 2020 Placement and obtained a $368,000 loan from Silicon Valley Bank in April 2020 under the U.S.

Removed

Our financing activities for fiscal 2020 included $923,994 of proceeds from the 2020 Placement. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.