Modular Medical(MODD) - 2025 Q3 - Quarterly Report

Report Overview This Quarterly Report on Form 10-Q for December 31, 2024, details Modular Medical, Inc.'s financial status as a non-accelerated filer - Filing Type: Quarterly Report on Form 10-Q for the period ended December 31, 2024[1] - Registrant: MODULAR MEDICAL, INC.[1] - Filer Status: Non-accelerated Filer and Smaller reporting company[4] - Outstanding Shares: 40,665,220 common stock shares as of February 10, 2025[5] PART I — FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Modular Medical, Inc.'s unaudited condensed consolidated financial statements and notes for the periods ended December 31, 2024 Condensed Consolidated Balance Sheets Total assets decreased to $12.1 million from $13.8 million, primarily due to lower cash, impacting equity | Metric | Dec 31, 2024 (in thousands) | Mar 31, 2024 (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $6,986 | $9,232 | | Total Current Assets | $7,331 | $9,697 | | Property and equipment, net | $3,958 | $2,975 | | Total Assets | $12,149 | $13,807 | | Total Current Liabilities | $1,383 | $1,455 | | Total Liabilities | $1,887 | $2,272 | | Total Stockholders' Equity | $10,262 | $11,535 | | Accumulated Deficit | $(79,826) | $(65,929) | Condensed Consolidated Statements of Operations Net loss for the three months ended December 31, 2024, was $4.8 million, an improvement from $5.3 million prior year | Metric (in thousands) | Three Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2023 | Nine Months Ended Dec 31, 2024 | Nine Months Ended Dec 31, 2023 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $3,853 | $3,838 | $10,760 | $9,765 | | General and administrative | $1,001 | $1,431 | $3,310 | $3,445 | | Total operating expenses | $4,854 | $5,269 | $14,070 | $13,210 | | Loss from operations | $(4,854) | $(5,269) | $(14,070) | $(13,210) | | Net loss | $(4,804) | $(5,269) | $(13,897) | $(13,189) | | Net loss per share (Basic and diluted) | $(0.13) | $(0.23) | $(0.39) | $(0.64) | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity decreased to $10.3 million due to a $13.9 million net loss, partially offset by equity offerings | Metric (in thousands) | March 31, 2024 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $11,535 | $10,262 | | Accumulated Deficit | $(65,929) | $(79,826) | | Common Stock Shares Outstanding | 32,464 | 40,665 | - Issuance of common stock in equity offering, net: $7,344 thousand (nine months ended Dec 31, 2024)[15] - At-the-market sales of stock, net: $2,114 thousand (nine months ended Dec 31, 2024)[17] - Proceeds from exercise of common stock purchase warrants: $1,251 thousand (nine months ended Dec 31, 2024)[17] Condensed Consolidated Statements of Cash Flows Operating activities used $11.4 million, investing $1.5 million, financing generated $10.7 million, leading to a $2.2 million cash decrease | Cash Flow Activity (in thousands) | Nine Months Ended Dec 31, 2024 | Nine Months Ended Dec 31, 2023 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(11,410) | $(10,449) | | Net cash used in investing activities | $(1,545) | $(1,217) | | Net cash provided by financing activities | $10,709 | $9,914 | | Net decrease in cash and cash equivalents | $(2,246) | $(1,752) | | Cash and cash equivalents at end of period | $6,986 | $2,047 | Notes to Condensed Consolidated Financial Statements This section details accounting policies, financial components, equity, stock compensation, taxes, commitments, and related party transactions NOTE 1 – THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Modular Medical, Inc. received FDA clearance for its MODD1 insulin pump in September 2024 but faces going concern doubts due to operating losses - Company Overview: Pre-revenue medical device company focused on the design, development, and commercialization of innovative insulin pumps, specifically the MODD1 two-part patch pump[21] - Regulatory Milestone: Received FDA clearance to market and sell its MODD1 pump in the United States in September 2024[21] - Liquidity and Going Concern: Incurred operating losses and negative cash flows since inception, raising substantial doubt about the company's ability to continue as a going concern[22] - Reportable Segment: Operates in one business segment[28] NOTE 2 – CONSOLIDATED BALANCE SHEET DETAIL This note provides a detailed breakdown of property and equipment, net, and accrued expenses as of December 31, 2024, and March 31, 2024 | Property and Equipment, net (in thousands) | Dec 31, 2024 | Mar 31, 2024 | | :--------------------------------------- | :----------- | :----------- | | Machinery and equipment | $4,912 | $3,209 | | Computer equipment and software | $66 | $66 | | Construction-in-process | $300 | $283 | | Leasehold improvements | $33 | $33 | | Office equipment | $46 | $63 | | Less: accumulated depreciation and amortization | $(1,399) | $(679) | | Total | $3,958 | $2,975 | | Accrued Expenses (in thousands) | Dec 31, 2024 | Mar 31, 2024 | | :--------------------------------------- | :----------- | :----------- | | Accrued wages and employee benefits | $300 | $243 | | Other | $151 | $37 | | Total | $451 | $280 | NOTE 3 – LEASES The company holds an operating lease for its San Diego facility, with $914 thousand in lease liabilities as of December 31, 2024 - Lease term: 48-month operating lease for San Diego facility, commenced February 1, 2023[48] - Initial base monthly rent: $36,000 with annual increases of approximately 4%[48] | Lease Payments (in thousands) | Amount | | :---------------------------- | :----- | | Total future lease payments | $990 | | Less: Imputed interest | $(76) | | Present value of lease liability | $914 | - Cash paid for lease liabilities: Approximately $337,000 for the nine months ended December 31, 2024 (compared to $365,000 for the same period in 2023)[50] [NOTE 4