0001019056-19-000143.txt : 20190214 0001019056-19-000143.hdr.sgml : 20190214 20190214171222 ACCESSION NUMBER: 0001019056-19-000143 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 41 CONFORMED PERIOD OF REPORT: 20181231 FILED AS OF DATE: 20190214 DATE AS OF CHANGE: 20190214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Modular Medical, Inc. CENTRAL INDEX KEY: 0001074871 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 870620495 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-49671 FILM NUMBER: 19608172 BUSINESS ADDRESS: STREET 1: 800 WEST VALLEY PARKWAY STREET 2: SUITE 203 CITY: ESCONDIDO STATE: CA ZIP: 92025 BUSINESS PHONE: 949-370-9062 MAIL ADDRESS: STREET 1: 800 WEST VALLEY PARKWAY STREET 2: SUITE 203 CITY: ESCONDIDO STATE: CA ZIP: 92025 FORMER COMPANY: FORMER CONFORMED NAME: BEAR LAKE RECREATION INC DATE OF NAME CHANGE: 19981208 10-Q 1 modular_3q18.htm FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended	December 31, 2018

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ____________________________ to __________________________

	Commission file number	000-49671

MODULAR MEDICAL, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada		87-0620495
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

800 West Valley Parkway, Suite 203, Escondido, California 92025
(Address of Principal Executive Offices) (Zip Code)

(949) 370-9062

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company x
	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of February 14, 2019, there were 17,799,705 shares of our common stock (“Common Stock”), par value $.001 per share, outstanding.

Unless expressly indicated or the context requires otherwise, the terms “Modular Medical, Inc.”, “Modular Medical”, “Company”, “we”, “us”, and “our” in this document refer to Modular Medical, Inc. (f/k/a Bear Lake Recreation, Inc.), a Nevada corporation, and may include Modular Medical, Inc.’s wholly-owned subsidiary, Quasuras, Inc., a Delaware corporation.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the Financial Statements and Notes to Financial Statements contained herein may contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended.

Item 1. Financial Statements

Modular Medical, Inc. and its Subsidiary
(f/k/a- Bear Lake Recreation, Inc.)
Condensed Consolidated Balance Sheets


ASSETS	December 31, 2018 (UNAUDITED)			March 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$	7,137,876		$	4,296,676
Other current assets		21,822			16,804
TOTAL CURRENT ASSETS		7,159,698			4,313,480
Intangible assets, net		189			213
Property and equipment, net		59,703			13,259
Security deposit		7,500			7,500
TOTAL NON-CURRENT ASSETS		67,392			20,972
TOTAL ASSETS	$	7,227,090		$	4,334,452
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	62,932		$	14,955
Payable to related party		—			516
TOTAL CURRENT LIABILITIES		62,932			15,471
Commitments and Contingencies		—			—
TOTAL LIABILITIES		62,932			15,471
STOCKHOLDERS’ EQUITY
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding		—			—
Common Stock, $0.001 par value, 50,000,000 shares authorized, 17,799,705 shares issued and outstanding as of December 31, 2018 and 15,983,273 as of March 31, 2018		17,800			15,983
Additional paid-in capital		9,387,566			5,011,661
Accumulated deficit		(2,241,208	)		(708,663	)
TOTAL STOCKHOLDERS’ EQUITY		7,164,158			4,318,981
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,227,090		$	4,334,452

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Modular Medical, Inc. and its Subsidiary
(f/k/a- Bear Lake Recreation, Inc.)
Condensed Consolidated Statements of Operations
(UNAUDITED)


	Three Months Ended						Nine Months Ended
	December 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017
Net Revenues	$	—		$	—		$	—		$	—
Cost of revenues		—			—			—
Gross Profit (Loss)		—			—			—

Operating Expenses:
Professional expenses		115,111			44,588			238,704			157,517
Research and development		504,787			171,045			1,008,127			258,799
General and administration expenses		130,662			45,227			307,917			64,655
Total Operating Expenses		750,560			260,860			1,554,748			480,971
Loss From Operations		(750,560	)		(260,860	)		(1,554,748	)		(480,971	)

Other Income (Expenses):
Interest income		11,355			2,888			22,203			3,908
Amortization of debt discount		—			—			—			—
Total Other Income (Expense)		11,355			2,888			22,203			3,908
Loss Before Income Taxes		(739,205	)		(257,972	)		(1,532,545	)		(477,063	)
Provision for income taxes		—			800			—			800
Net Loss	$	(739,205)		$	(258,772	)	$	(1,532,545	)	$	(477,863	)

Net Loss Per Share
Basic and Diluted:	$	(0.044	)	$	(0.016	)	$	(0.094	)	$	(0.038	)
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic		16,848,236			15,983,273			16,272,642			12,500,588
Diluted		16,848,236			15,983,273			16,272,642			12,500,588

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Modular Medical, Inc. and its Subsidiary
(f/k/a- Bear Lake Recreation, Inc.)
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)


	Nine Months Ended
	December 31, 2018			December 31, 2017
Net loss	$	(1,532,545	)	$	(477,863	)
Adjustments to reconcile net loss to net cash used in operating activities :

Depreciation and amortization		8,639			758
Adjustment to reorganization expenses		—			34,472
Stock-Based Compensation		374,006			—

Increase/Decrease in current assets:
Other assets		(5,018	)		—
Security deposits		—			(10,103	)

Decrease in current liabilities:
Accounts payable and accrued expenses		47,977			(92,101	)
Net cash used in operating activities		(1,106,941	)		(544,837	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(55,058	)		(13,032	)
Purchase of intangible assets		—			(230	)
Net cash used in investing activities		(55,058	)		(13,262	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from private placement		3,983,915			4,697,400
Repayment to related party		(516	)		(21,256	)
Proceeds from issuance of stock		19,800			—
Net cash provided by financing activities		4,003,199			4,676,144

Net increase in cash and cash equivalents		2,841,200			4,118,045

Cash and cash equivalents, at the beginning of the period		4,296,676			392,007

Cash and cash equivalents, at the end of the period	$	7,137,876		$	4,510,052

SUPPLEMENTAL DISCLOSURES :
Cash paid during the year for:
Income tax	$	—		$	800
Interest	$	—		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

MODULAR MEDICAL, INC.

F/K/A BEAR LAKE RECREATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2018

(UNAUDITED)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Modular Medical, Inc. (the “Company”) was organized under the laws of the State of Nevada on October 22, 1998, to engage in any lawful purpose. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.

Through the year ended June 30, 2001, the Company was seeking to rent out snowmobiles and all-terrain vehicles (“ATV”). In June of 2000, the Company also purchased the rights to manufacture, use, market, and sell the Net Caddy, a backpack style bag used to transport fishing gear. The Company abandoned both the snowmobile and ATV plans, as well as the Net Caddy plans.

Quasuras, Inc. (“Quauras”) was incorporated in Delaware on April 20, 2015.

Quasuras has developed a hardware technology allowing people with 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 too high. By addressing the time and effort required to effectively treat their condition, Quasuras believes it can address the less technically savvy, less motivated part of the market.

Reorganization

On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was accounted for as a reverse merger. As such, the Company recognized the assets and liabilities of Quasuras, acquired in the Reorganization, at their historical carrying amounts.

Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras.

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. The following summarizes the more significant of such policies:

Basis of Presentation

The accompanying condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the instructions to Form 10-Q.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited condensed interim consolidated financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Annual Report on the Form 10-K for the fiscal year ended March 31, 2018. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the fiscal year ended March 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2019.

Principles of Consolidation

The consolidated financial statements include the accounts of Modular Medical, Inc. and its wholly-owned subsidiary, Quasuras, Inc., collectively referred to as the Company. All material intercompany accounts, transactions and profits were eliminated in consolidation.

Use of Estimates

The preparation of the accompanying financial statements in conformity with GAAP requires management 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reportable Segment

The Company has one reportable segment. The Company’s activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.

Cost of Sales

Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties and product sampling.

Research and Development

The Company expenses the cost of research and development, as incurred. Research and development costs charged to operations were approximately $504,787 and $171,045 for the three months ended December 31, 2018 and 2017, respectively. For the nine months ended December 31, 2018 and 2017, the costs were approximately $1,008,127 and $258,799 respectively.

General and Administration

General and administration expenses consist primarily of payroll and benefit related costs, rent, office expenses, and meetings and travel.

Income Taxes

The Company utilizes FASB Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than fifty percent (50%) likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income.

At December 31, 2018 and 2017, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended March 31, 2018 and prior years or in computing its tax provision for 2017. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended March 31, 2018 to the present, generally for three years after they are filed.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions.

Risks and Uncertainties

The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At December 31, 2018 and March 31, 2018, the Company had $7,137,876 and $4,296,676, respectively, in cash. Deposits at the bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $6,707,805 and $3,933,002, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents.

Property, Plant & Equipment

Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three to ten years; computer equipment, two to three years; buildings and improvements, five to fifteen years; leasehold improvements, two to ten years; and furniture and equipment, one to five years.

As of December 31, 2018, and March 31, 2018, property, plant and equipment amounted to:

	December 31, 2018			March 31, 2018
Computer and equipment	$	70,161		$	15,103
Less: accumulated depreciation		(10,458	)		(1,844	)
	$	59,703		$	13,259

Depreciation expenses for the three months ended December 31, 2018 and 2017 were $5,426 and $458, respectively. For the nine months ended December 31, 2018 and 2017, depreciation was approximately $8,614 and $758, respectively.

Fair Value of Financial Instrument

For certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

As of December 31, 2018, and June 30, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.

Earnings Per Share (EPS)

Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).

The following table sets for the computation of basic and diluted earnings per share for three & nine months ended December 31, 2018 and 2017:

	Three Months Ended						Nine Months Ended
	December 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017
Net Loss	$	(739,205	)	$	(258,772	)	$	(1,532,545	)	$	(477,863	)
Net Loss Per Share
Basic and Diluted:	$	(0.044	)	$	(0.016	)	$	(0.094	)	$	(0.038	)

Weighted average number of shares used in computing basic and diluted net loss per share:
Basic		16,848,236			15,983,273			16,272,642			12,500,588
Diluted		16,848,236			15,983,273			16,272,642			12,500,588

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Recently Issued Accounting Pronouncements

In August of 2017, the FASB issued guidance that eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow hedge to be recorded in OCI, the change in fair value of derivative to be recorded in the same income statement line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020. Early adoption is permitted, and the modified retrospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow.

NOTE 2 - REORGANIZATION AND PRIVATE PLACEMENT

On April 26, 2017, Modular Medical issued 2,900,000 shares (the “Control Block”), of newly issued, restricted common stock, par value, $0.001, per share, for a purchase price of $375,000, resulting in a change in control of Modular Medical.

On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among, Modular Medical, three Quasuras shareholders and Quasuras (the “Acquisition Agreement”), Modular Medical acquired all 4,400,000 shares of Quasuras’ common stock which represented one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of our common stock, resulting in Quasuras becoming our wholly-owned subsidiary (the “Acquisition”).

Simultaneously with the closing of the Acquisition and as a condition thereto, we sold in a private placement (the “Private Placement”) an aggregate of 7,233,031 for cash and 568,182 from reissuance of previously canceled shares of our common stock pursuant to one or more exemptions from the registration requirements of the Securities Act, at a purchase price of $0.66 per share resulting in net proceeds to us of approximately $4,731,872. Simultaneously with the Acquisition and Private Placement, the Company cancelled all 2,900,000 Control Block shares it had issued in the Control Block Acquisition (the “Share Cancellation”). In connection with the Private Placement, we paid $41,928 as compensation in connection with sales of our shares therein.

Following the Acquisition, the Private Placement and the Share Cancellation, we had issued and outstanding 15,983,273 shares of our common stock.

The cash received in the Private Placement was recorded as the cash received in reorganization in the accompanying financial statements.

Simultaneously with and as a condition to the closing of the Acquisition and the Private Placement, pursuant to an Intellectual Property Transfer Agreement, dated as of July 24, 2017, by and among Modular Medical, Quasuras and Mr. Paul DiPerna (the “IP Transfer Agreement”), Mr. Paul DiPerna transferred to us all intellectual property rights owned directly and/or indirectly by him related to our proposed business. Separately, we agreed to pay Mr. Paul DiPerna as part of his compensation for services to be performed for us pursuant to a Royalty Agreement (the “Royalty Agreement”) certain fees based upon future sales, if any, of our proposed product subject to a maximum $10,000,000 cap on the aggregate amount of fees that Mr. DiPerna could earn from such arrangement.

NOTE 3 – ACCRUED EXPENSES

As of December 31, 2018 and March 31, 2018, accrued expenses amounted to $62,932 and $14,955, respectively. Accrued expenses comprised of rent and research and development as of December 31, 2018 and March 31, 2018.

NOTE 4 – PAYABLE TO RELATED PARTY

Payable to related party comprises of the amounts paid by the major shareholder on behalf of the Company. The payable is unsecured, non-interest bearing and due on demand. As of December 31, 2018 and March 31, 2018, respectively, the payable to related party amounted to $0 and $516, respectively.

NOTE 5 – STOCKHOLDERS’ EQUITY

Common stock

On July 24, 2017, pursuant to the Acquisition Agreement, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. The historical equity for Quasuras was restated pursuant to the reorganization.

The Company has 50,000,000 shares of Common Stock authorized. The par value of the shares is $0.001. During the three months ended December 31, 2018, 1,786,432 shares of Common Stock were issued for a private placement at $4,019,478, including legal fees of $35,563. During the three months ended December 31, 2018, 30,000 shares of Common Stock were issued for cash of $19,800. As of December 31, 2018, 17,799,705 shares of Common Stock of the Company were issued and outstanding.

Preferred Stock

The Company has 5,000,000 shares of preferred stock authorized. The par value of the shares is $0.001. As of December 31, 2018, none of the shares of preferred stock of the Company were issued.

Stock Options

On October 19, 2017, the Board of Directors approved an Employee Stock Option Program (“Stock Option Program”) that reserves 3,000,000 shares of common stock of the Company to be issued. Under the Company’s Stock Option Program, eligible employees, directors and consultants are granted options to purchase shares of common stock of the Company. The Stock Option Program is administered by the Company’s Board of Directors or, in the alternative, if necessary, a committee designated by the Board of Directors, and has the sole power over the exercise of the Stock Option Program. The Board of Directors determines whether the Stock Option Program will allow for the issuance of shares of common stock or an option to purchase shares of common stock, such option designated as either an incentive stock option or a non-qualified stock option.

The exercise or purchase price shall be calculated as follows:

(i)

In the case of an incentive stock option, (A) granted to employees, directors and consultants who, at the time of the grant of such incentive stock option own stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company, the per share exercise price shall be not less than one hundred ten percent (110%) of the fair market value per share on the date of grant; or (B) granted to employees, directors and consultants other than to employees, directors and consultants described in the preceding clause, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant;

(ii)

In the case of a non-qualified stock option, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant unless otherwise determined by the Board of Directors; and

(iii)

In the case of other grants, such price as is determined by the Board of Directors.

The Board of Directors are responsible for determining the consideration to be paid for the shares of common stock to be issued upon exercise or purchase. The Stock Option Program generally doesn’t allow for the transfer of the options, and the Board of Directors may amend, suspend or terminate the Stock Option Program at any time.

NOTE 6 — STOCK-BASED COMPENSATION

During the three months ended December 31, 2018, we granted options for a total of 28,661 shares with a weighted average grant date fair value of $0.87 per option. During the nine months ended December 31, 2018, we granted options for a total of 1,264,687 shares with a weighted average grant date fair value of $0.55 per option.

The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the three months ended December 31, 2018: (i) dividend yield on our common stock of 0 percent, (ii) expected stock price volatility of 88 percent, (iii) a risk-free interest rate of 3.2 percent for options granted from July to October, and 2.52 percent for options granted in November and December, and (iv) and expected option term of 8 years for 1,200,000 shares of option granted, and 5 years for 64,687 shares of option granted.

General and administrative expense for the three and nine months ended December 31, 2018 included stock-based compensation expense of $12,500 and $20,833. Research and development expenses also include stock-based compensation expenses of $178,670 and $353,173 for the three and nine months ended December 31, 2018.

As of December 31, 2018, the unrecognized stock-based compensation expenses related to non-vested stock options was approximately $330,000, which will be amortized over an estimated weighted average period of approximately 6 months.

NOTE 7 - INCOME TAXES

Based on the available information and other factors, management believes it is more likely than not that the net deferred tax assets at, December 31, 2018 and March 31, 2018 will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at December 31, 2018 and March 31, 2018. At December 31, 2018 and March 31, 2018, the Company had federal net operating loss carry-forwards of approximately $565,500 and $182,500, respectively, expiring beginning in 2037.

Deferred tax assets consist of the following components:

	December 31, 2018			March 31, 2018
Net loss carryforward	$	565,500		$	182,500
Valuation allowance		(565,500	)		(182,500	)
Total deferred tax assets	$	—		$	—

NOTE 8 – ROYALTY AGREEMENT

On July 12, 2017, the Company entered into a royalty agreement with the founder and major shareholder. Pursuant to the agreement, the founder and major shareholder is assigning and transferring all of his rights in the intellectual property in return for royalty payments. The Company shall pay royalty to the founder on any sales of the royalty product sold or otherwise commercialized by the Company, equal to (a) US$0.75 on each sale of a royalty product, or (b) five percent (5%) of the gross sale price of the royalty product, whichever is less. The royalty payments shall cease, and this agreement shall terminate, at such time as the total sum of royalty payments actually paid to the founder, pursuant to this agreement, reaches $10,000,000. The Company shall have the option to terminate this agreement at any time upon payment, to the founder, of the difference between total royalty payments actually made to him to date and the sum of $10,000,000. All payments of the royalties, if due, for the preceding quarter, shall be made by the Company within thirty days after the calendar quarter.

NOTE 9 – LEASE AGREEMENT

On August 21, 2017, the Company entered into a sublease agreement to rent office space. The term of the lease commences on September 1, 2017 and expires on December 14, 2019. The monthly rent for the lease is $3,000. The Company paid a deposit of $7,500 upon execution of the lease which has been recorded as a security deposit in the accompanying financial statements. The amounts of minimum lease payments and periods during which they become due are as follows:

Year	March 31,
2019	$	9,000
2020		25,500
Total minimum lease payment	$	34,500

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company was organized under the laws of the State of Nevada on October 22, 1998 under the name Bear Lake Recreation Inc., with an initial authorized capital consisting of 50,000,000 shares of $0.001 par value common voting stock. In 2017, the Company changed its name to Modular Medical, Inc. by filing a Certificate of Amendment to the Company’s Articles of Incorporation with the Nevada Secretary of State.

Our initial operations consisted of renting snowmobiles and ATVs. We had also planned on organizing snowmobile rental packages, which would have included lodging at Ideal Beach Resort at Bear Lake, Utah. On or about October 1999, we abandoned the snowmobile, ATV and lodging plans. Our lack of success was attributed to entering the marketplace comprising this endeavor during a year that was the beginning of a drought cycle, resulting in below average snowfall and competitive growth from one to three self-promoting developmental properties. Our operations ceased due to depleted capital resources resulting from offering vacation packages lacking in demand.

On June 27, 2000, we entered into a licensing agreement with AlCORP, an Oregon limited liability company, to purchase the right to manufacture, use, market and sell the NetCaddy, a backpack style bag used to transport fishing gear. By the end of the first quarter of 2002, we had also abandoned the Net Caddy operations. We realized only minimal sales through our e-commerce site and 800-number infomercial advertisements. Additionally, due to the exhaustion of our capital resources, we could no longer maintain the infrastructure required for sales promotion while faced with limited consumer demand.

We had no material business operations from 2002 through the Acquisition, and we were a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”). As a shell company, we did not have material operations and had assets consisting solely of cash and cash equivalents.

On July 24, 2017, pursuant to the Acquisition Agreement, by and among the Company, three Quasuras shareholders and Quasuras, the Company acquired all 4,400,000 shares of Quasuras’ common stock owned by the three Quasuras shareholders (which represented one hundred percent (100%) of the issued and outstanding shares of Quasuras) resulting in Quasuras becoming our wholly-owned subsidiary and Mr. Paul DiPerna owning approximately forty-seven percent (47%) of our issued and outstanding common stock, after giving effect to the Private Placement and the Share Cancellation. Simultaneously with the closing of the Acquisition and pursuant to the Acquisition Agreement, (i) Mr. James Besser resigned as president and a director and Mr. Morgan Frank resigned as chief executive officer, chief financial officer, secretary, and treasurer but remained a director of the Company, and (ii) Mr. Paul DiPerna was appointed our chairman, chief executive officer, chief financial officer, secretary and treasurer.

The Acquisition was accounted for as a recapitalization effected by a share exchange, wherein Quasuras is considered the acquirer for accounting and financial reporting purposes.

The Company is focused on providing next generation products and services to address the disease and condition diabetes.

This discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. 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. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.

Off-Balance Sheet Arrangements

As of December 31, 2018, we had not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Recent Accounting Pronouncements

See Note 1 in the Notes to the Financial Statements for recent accounting pronouncements.

There were various other accounting standards and interpretations recently issued, none of which are expected to have a material impact on our financial position, operations or cash flows.

Results of Operations

For the Three & Nine Months Ended December 31,

	Three Months Ended						Nine Months Ended
	December 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017
Sales, net	$	—		$	—		$	—		$	—
Cost of sales		—			—			—			—
Cost of sales		—			—			—			—
Gross profit margin		0	%		0	%		0	%		0	%
Operating expenses
Professional expenses		115,111			44,588			238,704			157,517
Research and development		504,787			171,045			1,008,127			258,799
General and administrative		130,662			45,227			307,917			64,655
Total operating expenses		750,560			260,860			1,554,748			480,971
Operating loss		(750,560	)		(260,860	)		(1,554,748	)		(480,971	)
Interest income		11,355			2,888			22,203			3,908
Income tax		—			800			—			800
Net loss	$	(739,205	)	$	(258,772	)	$	(1,532,545	)	$	(477,863	)

Overview:

We reported a net loss of $739,205 and $258,772 for the three months ended December 31, 2018 and 2017, respectively, and losses for the nine months ended December 31, 2018 and 2017 of $1,532,545 and $477,863, respectively. The increase in our net loss from December 31, 2018 to December 31, 2017, is due to an increase in research and developments, consulting fees, professional fees and general and administrative expenses.

Revenues:

Revenue for the three and nine months ended December 31, 2018 and 2017 was $0.

Operating Expenses:

Professional expenses for the three months ended December 31, 2018 increased to $115,111 as compared to $44,588 for 2017. For the nine months ended December 31, 2018 and 2017, professional fees increased to $238,704 in 2018 versus $157,517 in 2017. The increase is attributable to an increase in consulting fees paid to outside consultants and professional services required for our required filings.

Research and development for the three months ended December 31, 2018 increased to $504,787 as compared to $171,045 for 2017. For the nine months ended December 31, 2018 and 2017, research and development increased to $1,008,127 in 2018 versus $258,799 in 2017. The increase in research and development expenditures is attributable to efforts and expenses incurred to design and develop an innovative insulin pump to better serve the diabetic insulin delivery market along with stock-based compensation. We expect to continue to incur costs related to research and development.

General and administrative expenses for the three months ended December 31, 2018 increased to $130,662 as compared to $45,227 for 2017. For the nine months ended December 31, 2018 and 2017, general and administrative increased to $307,917 in 2018 versus $64,655 in 2017. The increase in our general and administrative expense is attributable to (i) an increase in employee related cost of approximately $127,000 (ii) an increase in stock-based compensation of approximately $20,833, (iii) an increase in rent & utilities of approximately $20,400, (iv) an increase in insurance expense of approximately $35,000, (v) an increase in marketing of $10,700, and (vi) an increase in equipment supplies of approximately $54,500.

Interest Income:

Interest income for the three months ended December 31, 2018 and 2017 was $11,355 and $2,888, respectively. For the nine months ended December 31, 2018 and 2017, interest income was $22,203 and $3,908, respectively.

Liquidity and Capital Resources

The following summarizes our cash flows for the nine months ended December 31,

	Nine Months Ended
	December 31, 2018			December 31, 2017
Cash used in operating activities	$	(1,106,941	)	$	(544,837	)
Cash used in investing activities		(55,058	)		(13,262	)
Cash acquired in financing activities		4,003,199			4,676,144
Net change in cash	$	2,841,200		$	4,118,045

As a result of our growth stage, the Company has not experienced sales to sustain cash flow to meet our current obligations and operations expenditures. As a result, the Company raised capital though the share exchange to meet our operating expenditures.

As of December 31, 2018, we had total current assets of $7,159,698 of which $7,137,876 were cash and cash equivalents, and current liabilities of $62,932. As of March 31, 2018, we had total current assets of $4,313,480 and current liabilities of $15,471. As of December 31, 2018 and March 31, 2018, we had working capital of approximately of $7,096,766 and $4,298,009, respectively.

Net Cash Used In Operating Activities:

We used $1,106,941 of cash to fund operating activities during nine month ended December 31, 2018, compared to $544,837 in 2017. Increased cash usage in 2018 was driven by greater operating losses deriving from development. We reported net losses of $1,532,545 and $477,863 for the nine months ended December 31, 2018 and 2017, respectively.

Net Cash Provided By Investing Activities:

We used $55,058 and $13,262 of cash to purchase equipment and intangible assets during the nine month ended December 31, 2018 and 2017, respectively.

Net Cash Acquired In Financing Activities:

We acquired $4,003,199 of cash from financing activities for nine month ended December 31, 2018, compared to $4,676,144 in 2017.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required.

Item 4. Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and our receipts

and expenditures of are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting and Management has concluded that the Company’s internal controls over financial reporting are not effective as of December 31, 2018. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses relate to inadequate internal controls over financial reporting, and the lack of segregation of duties in our financial reporting process. We do not have a separately designated audit committee or independent director. To remedy these material weaknesses, we intend to engage an internal accountant to assist with financial reporting as soon as our finances will allow.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

No report is required.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Stock-Based Compensation

During the three months ended December 31, 2018, pursuant to the terms of our Employment Agreement, we granted Mr. DiPerna options exercisable to purchase 28,661 shares at an exercise price of $0.66 and $2.25 per share.

In addition, the Company issued 30,000 shares of restricted Common Stock to a consultant for $19,800.

The options and shares of restricted Common Stock were granted without registration under the Securities Act of 1933, as amended, in reliance upon exemptions provided under Section 4(a)(2) of the Securities Act.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Employment Agreement

On August 1, 2018, the Company entered into an Employment Agreement (the “Employment Agreement”) with Paul M. DiPerna, whereby in consideration for Mr. DiPerna’s employment with the Company, the Company agreed to pay Mr. DiPerna a base compensation of $200,000 annually, plus $100,000 per year payable in options for shares of the Company’s Common Stock. Mr. DiPerna is eligible to receive a $300,000 annual bonus payable at the discertion of the Board in options or cash. Mr. DiPerna and the Company are eligible to terminate Mr. DiPerna’s employment at any time, for any reason or no reason. In addition, Mr. DiPerna may resign or terminate this employment at any time by giving the Company 30 days’ prior written notice.

The foregoing description of the Employment Agreement is qualified by reference to the full terms of the Employment Agreement attached hereto as Exhibit 10 and incorporated herein by reference.

Election of New Director

On January 16, 2019, the Board elected Liam Burns as a director of the Company for a term lasting until the next annual meeting of the shareholders. Mr. Burns has been granted an option to purchase 90,000 shares of the Company’s Common Stock at an exercise price of $2.25 per share in accordance with the Company's Stock Option Program.

Item 6. Exhibits

Exhibit No.		Description of Document
10		Employment Agreement, dated as of August 1, 2018, by and between the Company and Paul M. DiPerna.

31.1		Certification of Paul M. DiPerna pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Paul M. DiPerna of Periodic Financial Report under Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MODULAR MEDICAL, INC.


Date:	February 14, 2019	By:	/s/ Paul M. DiPerna
			Paul M. DiPerna
			Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
			(principal executive, financial and accounting officer)

EX-10 2 ex_10.htm EXHIBIT 10

Exhibit 10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and effective as of August 1, 2018, between Modular Medical, Inc., a Nevada corporation (the “Company”), and Paul M. DiPerna (“Executive”) (each a “Party” and collectively the “Parties”).

WHEREAS, Executive has been a retained consultant of Company since on or about July 24, 2017; and

WHEREAS, the Parties hereto deem it to be in their best interests to formalize their relationship and to enter into an employment agreement whereby the Company will employ Executive pursuant to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the receipt and sufficiency of which the Parties hereby acknowledge, the Parties agree as follows:

1. Employment. Upon the terms and subject to the conditions contained in this Agreement, the Company hereby employs Executive as the Chief Executive Officer and President of the Company, with responsibility for overseeing and directing all operations of the Company, subject to the authority and directives of the Company’s Board of Directors (the “Board”). Executive shall diligently and conscientiously devote his substantial time and attention to the discharge of his duties as Chief Executive Officer and President.

1.1 Other Business Activities. Executive has disclosed to Company and Company acknowledges that Executive is currently involved in the other business activities described on Schedule 1.1 hereto (the “Disclosed Activities”). Company has determined that the Disclosed Activities do not currently conflict with the Company’s business plans or strategies, and Executive shall be permitted to continue to engage in the Disclosed Activities for the term of this Agreement; provided, however, that Company’s Board and Executive agree to periodically mutually review the Disclosed Activities and assess the impact, if any, of such activities on Executive’s duties pursuant to this Agreement. Nothing in this Agreement shall prohibit Executive from serving as a director of or investor in other business enterprises or non-profit entities so long as such activities do not materially conflict with Executive’s duties hereunder.

2. Term. Subject to the severance provisions of Section 5 below, Executive’s employment with the Company shall initially be for a term of two years ending July 31, 2020 (“Termination Date”) and shall thereafter automatically renew for one-year terms unless either party terminates the Agreement with 90 days prior written notice of termination before the end of the then current term.

3. Compensation.

(a) Base Compensation. Executive shall be paid base compensation of $300,000 annually, as follows: Executive shall receive a cash salary of $200,000 per year ($16,666.67 per month) (the “Cash Salary”), plus $100,000 per year payable in options for shares of the Company’s common stock valued at a $.66 per share price or a price determined by the Company’s Board in its sole discretion (the “Equity Salary”, and together with the Cash Salary, “Base Compensation”). Options shall not be struck at a exercise price lower than $.66. The Base Salary shall be payable less applicable deductions and withholding in normal installments and in accordance with the payroll practices of Company. Shares constituting the Equity Salary shall be issued to Executive in equal monthly installments on the first day of each month. Company shall make applicable tax withholdings for the Equity Salary from payments of Executive’s Cash Salary. Executive’s Base Compensation shall not be reduced without agreement of Executive.

(b) Equity or Cash Bonus. In addition to his Base Compensation, Executive shall receive an annual bonus equivalent to $300,000, payable at the discretion of the Company’s Board in its sole discretion either in stock options, shares of the Company’s common stock valued at $0.66 per share or a price determined by the Company’s Board (the “Equity Bonus”), or in cash. In the event the bonus is paid as an Equity Bonus, Company shall pay or reimburse Executive for all federal, state and or local tax obligations of Executive resulting from the issuance of the Equity Bonus.

(c) Benefits. During the period of employment, the Company shall provide Executive with such employee benefits as are provided by the Company generally to its executive employees. In additon, Company shall provide Executive at Company’s expense, or shall reimburse Executive, for appropriate telecommunications and internet service and devices as needed for Executive to perform his duties pursuant to this Agreement.

(d) Reimbursement of Expenses. The Company shall reimburse Executive for all reasonable and necessary expenses incurred by him in connection with his employment and in accordance with the Company policy, which requires reasonable evidence of expenditure.

4. Indemnification Agreement. Contemporaneously herewith, Executive and Company have entered into an Indemnity Agreement whereby Company agrees to indemnify Executive on the terms as set forth therein. In addition, Company shall use commercially reasonable efforts to obtain a policy of officers and directors liability insurance covering all officers and directors of the Company with coverage as determined by the Board of Directors.

5. Termination of Employment. Executive and the Company acknowledge and agree that either party may terminate Executive’s employment at any time, for any reason or no reason. Any termination shall be subject to the following provisions:

(a) Certain Definitions. As used herein, the following terms shall have the following definitions:

(i) Good Reason. For purposes of this Agreement, “Good Reason” means: (A) a material reduction or adverse change in Executive’s title, position, duties or compensation without Executive’s prior express written consent; and (B) any other material breach by the Company of its obligations hereunder, which breach remains uncured for thirty (30) days following written notice to the Company of such breach, which notice specifies in reasonable detail the nature of such breach.

(ii) Disability. For purposes of this Agreement “Disability” shall mean Executive’s complete inability to perform his duties as determined by the Executive’s physician, which inability continues for more than one hundred eighty (180) consecutive days; provided, however, that in the event any disability income policy maintained by the Company contains a definition of “permanent disability” which requires a greater period of continuous inability to perform services, such definition shall control.

(iii) Cause. For the purposes of this Agreement, Cause shall mean: (i) Executive’s conviction of a felony or similar crime causing material harm to the standing and reputation of the Company; or (ii) Executive’s dishonesty or fraud that causes material harm to the Company; (iii) Executive’s gross negligence or ongoing neglect in the performance of his duties as Chief Executive Officer; or (iv) Executive’s fiscal or fiduciary malfeasance.

(b) Voluntary Termination. Executive may resign or otherwise terminate his employment at any time by giving the Company 30 days’ prior written notice of such resignation, including an intended last day of employment. Any such resignation by Executive other than a resignation for Good Reason shall be a Voluntary Termination. A Voluntary Termination shall be effective, at the Company’s sole election, on either the date that Executive provides notice of the termination or the Company provides notice of termination or on the date that Executive or the Company provides as the intended last day of employment (the period from the notice to the last day referred to as the “Notice Period”), or at any time during the Notice Period. The Company shall pay Executive his Base Compensation through the period ending on the effective date of termination.

(c) Severance. Executive shall be entitled to “Severance”, which shall mean that Executive shall have the right to receive the following:

(i) Termination by the Company Without Cause or by Executive With Good Reason other than in conjunction with a Change of Control. If the Company terminates Executive’s employment without Cause or Executive resigns with Good Reason, then Company shall Pay Executive a lump sum cash payment equal to the sum of Executive’s annual Base Compensation.

(ii) Termination With Cause. In the event of termination for Cause, the Company shall not be obligated to make and shall not make any severance payment. Executive will be provided only Base Compensation earned through the last date of employment.

(iii) Termination Due to Death/Disability other than in conjunction with a Change of Control. In the event of termination due to death or Disability, Executive or his legal representative shall be entitled to any Base Compensation earned through the last date of employment. In addition, Executive will remain eligible for all applicable benefits relative to death or disability pursuant to the plans, if any, in place at the time.

6. Change of Control.

(a) Definition. For purposes of this Agreement, “Change of Control” means the removal of Executive as Chief Executive Officer or Board Chair as the result of the occurrence of any of the following events: (A) the sale, lease, conveyance or other disposition of all or substantially all of the Company’s assets as an entirety or substantially as an entirety to any person, entity or group of persons acting in concert; (B) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than any then currently existing shareholder as of the Change of Control date, becoming the “beneficial owner” (as defined in Rule 13d-3 under said act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities but in no event shall the completion of an offering (i) of the Company’s Common Stock pursuant to a registration statement filed with the Securities and Exchange Commission in the Company’s initial public offering or (ii) a private offering of shares of the capital stock of the Company constitute a Change of Control; or (C) a merger or consolidation of the Company with any other corporation or entity not affiliated with any currently existing shareholder, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation. ; and (D) the engagement of a new Chief Executive Officer of the Company.

(b) Payment to Executives. In the event of a Change of Control, within 60 days of the date the Change of Control occurs, Executive shall be paid by the Company or its successor in interest a lump sum cash payment equal to the sum of Executive’s annual six month’s Base Compensation Cash Salary.

7. Non-Hire; Non-Solicitation. During the term of employment and for a one-year period commencing on the Termination Date, Executive covenants and agrees as follows:

(i) Non-hire/non-solicitation of employees. Executive shall not hire any officer, director, executive or employee of the Company who is employed or otherwise engaged by the Company or has been employed or otherwise engaged by the Company during the previous 6 months, nor shall Executive solicit or attempt to solicit any such person to leave his or her employment or engagement with the Company.

(ii) Customer non-interference/non-solicitation. Executive shall not, directly or indirectly, interfere with any contract, relationship, potential contract or potential relationship between the Company and any customer, client, business or potential customer, client or business.

(iii) Non- solicitation of suppliers. Executive also agrees and covenants that he shall not divert or attempt to divert from the Company, any Company supplier or vendor.

8. Other Agreements. Executive represents and warrants that the execution and delivery of this Agreement and the performance of all the terms of this Agreement do not and will not breach any agreement to keep in confidence proprietary information acquired by Executive in confidence or trust. Executive has not entered into and shall not enter into any agreement, either written or oral, in conflict with this Agreement. Executive represents that he has not brought and will not bring with him to the Company or use at the Company any materials or documents of an employer or a former employer that are not generally available to the public, unless express written authorization from such employer for their possession and use has been obtained. Executive further understands that he is not to breach any obligation of confidentiality that he has to any employer or former employer and agrees to fulfill all such obligations during the period of his affiliation with the Company.

9. Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if (a) delivered personally or sent by telecopier, (b) sent by nationally-recognized overnight courier or (c) sent by certified mail, postage prepaid, return receipt requested, addressed as follows:

if to the Company, to:

Modular Medical, Inc.

_____________________

Attention: ____________

and if to Executive, to Executive’s address on the books or records of the Company, or to such other address as the Party to whom notice is to be given may have furnished to each other Party in writing in accordance herewith. Any such communication shall be deemed to have been given (i) when delivered if personally delivered or sent by telecopier, (ii) on the Business Day (as hereinafter defined) after dispatch if sent by nationally-recognized, overnight courier and (iii) on the fifth Business Day after dispatch if sent by mail. As used herein, “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in California are not required to be open.

10. Entire Agreement; Amendments. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous negotiations, correspondence, understandings and agreements between the parties with respect thereto. This Agreement may be amended only by an agreement in writing signed by both parties hereto.

11. Assignment Successors: Benefits of Agreement. This Agreement is personal in its nature and neither Party hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that the Company shall have the right to assign its rights hereunder to any subsidiary or affiliate of the Company or a successor to all or substantially all of the Company’s business as part of a merger with, or acquisition of the Company by, another business entity. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors and permitted assigns of the parties hereto.

12. Waiver of Breach. A waiver of any breach of any provision of this Agreement shall not constitute or operate as a waiver of any other breach of such provision or of any other provision, and any failure to enforce any provision hereof shall not operate as a waiver of such provision or of any other provision.

13. Counterparts: Headings. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Headings said herein are for convenience of reference only and are not to affect the interpretation of this Agreement.

14. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California.

15. Severability. In the event that any provision of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

16. Remedies. Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of the provisions of this Agreement would cause the Company irreparable harm. In the event of a breach or threatened breach by Executive of the provisions of this Agreement, the Company shall be entitled to an injunction restraining him from such breach.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.


EXECUTIVE	COMPANY

	MODULAR MEDICAL, INC., a
	Nevada corporation
PAUL M. DIPERNA

	By:
		Paul M. DiPerna
		Chief Executive Officer

	Approved by the Board of Directors:

	Morgan Frank, Director

Schedule 1.1

Disclosed Activities

National Cardiac, Inc.: Executive is the Chief Executive Officer and a member of the Board of Directors, and holds a minority ownership stake in the company. The company is developing a low cost external heart monitor.

Fuel Source Partners, LLC: Executive is the sole owner and manager of this limited liability company, which acts primarily as an investment vehicle for Executive. Executive expends approximately one hour per week on Fuel Source Partners business.

Patient Focused Innovation Partners, LLC (“PFIP”): PFIP is a limited liability company of which Executive is one of three owner members; Executive is also a co-Manager. The company has developed technology for weight-loss treatments and has several pending patent applications. The company currently has no operations other than managing its patent applications. Executive expends less than one hour per month on PFIP business.

EX-31.1 3 ex31_1.htm EXHIBIT 31.1

Exhibit 31.1

CERTIFICATION
PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul M. DiPerna, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Modular Medical, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”);

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves our management or other employees who have a significant role in the registrant's internal controls over financial reporting.


/s/ Paul M. DiPerna		Date: February 14, 2019
Paul M. DiPerna
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
(principal executive, financial and accounting officer)

EX-32.1 4 ex32_1.htm EXHIBIT 32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Modular Medical, Inc. (the “Company”) on Form 10-Q for the three months ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul M. DiPerna, in my capacity as Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director, hereby certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities and Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and the results of operations of the Company for the period covered by the Report.

/s/ Paul M. DiPerna		Date: February 14, 2019
Paul M. DiPerna
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
(principal executive, financial and accounting officer)

A signed original of this written statement required by Section 906, or other documents authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Modular Medical, Inc. and will be retained by Modular Medical, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Modular Medical, Inc. (the “Company”) was organized under the laws of the State of Nevada on October 22, 1998, to engage in any lawful purpose.  The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.   Through the year ended June 30, 2001, the Company was seeking to rent out snowmobiles and all-terrain vehicles (“ATV”).  In June of 2000, the Company also purchased the rights to manufacture, use, market, and sell the Net Caddy, a backpack style bag used to transport fishing gear. The Company abandoned both the snowmobile and ATV plans, as well as the Net Caddy plans.   Quasuras, Inc. (“Quauras”) was incorporated in Delaware on April 20, 2015.   Quasuras has developed a hardware technology allowing people with 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 too high. By addressing the time and effort required to effectively treat their condition, Quasuras believes it can address the less technically savvy, less motivated part of the market.   Reorganization   On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was accounted for as a reverse merger. As such, the Company recognized the assets and liabilities of Quasuras, acquired in the Reorganization, at their historical carrying amounts.   Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras.   The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America.  The following summarizes the more significant of such policies:   Basis of Presentation   The accompanying condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the instructions to Form 10-Q.   Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited condensed interim consolidated financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Annual Report on the Form 10-K for the fiscal year ended March 31, 2018. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the fiscal year ended March 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2019.   Principles of Consolidation   The consolidated financial statements include the accounts of Modular Medical, Inc. and its wholly-owned subsidiary, Quasuras, Inc., collectively referred to as the Company. All material intercompany accounts, transactions and profits were eliminated in consolidation.   Use of Estimates   The preparation of the accompanying financial statements in conformity with GAAP requires management 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.   Reportable Segment   The Company has one reportable segment. The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business.   Revenue Recognition   Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.   Cost of Sales    Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties and product sampling.   Research and Development   The Company expenses the cost of research and development, as incurred. Research and development costs charged to operations were approximately $504,787 and $171,045 for the three months ended December 31, 2018 and 2017, respectively. For the nine months ended December 31, 2018 and 2017, the costs were approximately $1,008,127 and $258,799 respectively.   General and Administration   General and administration expenses consist primarily of payroll and benefit related costs, rent, office expenses, and meetings and travel.   Income Taxes   The Company utilizes FASB Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.   The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than fifty percent (50%) likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income.   At December 31, 2018 and 2017, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended March 31, 2018 and prior years or in computing its tax provision for 2017. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended March 31, 2018 to the present, generally for three years after they are filed.   Concentration of Credit Risk   Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions.     Risks and Uncertainties   The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.   Contingencies   Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.   If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.   Cash and Cash Equivalents   Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At December 31, 2018 and March 31, 2018, the Company had $7,137,876 and $4,296,676, respectively, in cash.  Deposits at the bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $6,707,805 and $3,933,002, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure.  The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents.   Property, Plant & Equipment   Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three to ten years; computer equipment, two to three years; buildings and improvements, five to fifteen years; leasehold improvements, two to ten years; and furniture and equipment, one to five years.   As of December 31, 2018, and March 31, 2018, property, plant and equipment amounted to:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">March 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 56%; text-align: left; padding-left: 5.4pt">Computer and equipment</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">70,161</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">15,103</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(10,458</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,844</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">59,703</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">13,259</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   Depreciation expenses for the three months ended December 31, 2018 and 2017 were $5,426 and $458, respectively. For the nine months ended December 31, 2018 and 2017, depreciation was approximately $8,614 and $758, respectively.   Fair Value of Financial Instrument   For certain of the Company's financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:   Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.   Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.   Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.   The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.   As of December 31, 2018, and June 30, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.   Earnings Per Share (EPS)   Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).   The following table sets for the computation of basic and diluted earnings per share for three & nine months ended December 31, 2018 and 2017:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Three Months Ended</td><td> </td> <td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%; text-align: left; padding-bottom: 2.5pt">Net Loss</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(739,205</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(258,772</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(1,532,545</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(477,863</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td>Net Loss Per Share</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.044</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.016</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.094</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.038</td><td style="text-align: left; padding-bottom: 2.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Weighted average number of shares used in computing basic and diluted net loss per share:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,848,236</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">15,983,273</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,272,642</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">12,500,588</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,848,236</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">15,983,273</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,272,642</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">12,500,588</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table>   Recently Issued Accounting Pronouncements   In August of 2017, the FASB issued guidance that eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow hedge to be recorded in OCI, the change in fair value of derivative to be recorded in the same income statement line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020. Early adoption is permitted, and the modified retrospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.   Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.    Reclassification   Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow.

On April 26, 2017, Modular Medical issued 2,900,000 shares (the “Control Block”), of newly issued, restricted common stock, par value, $0.001, per share, for a purchase price of $375,000, resulting in a change in control of Modular Medical. On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among, Modular Medical, three Quasuras shareholders and Quasuras (the “Acquisition Agreement”), Modular Medical acquired all 4,400,000 shares of Quasuras’ common stock which represented one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of our common stock, resulting in Quasuras becoming our wholly-owned subsidiary (the “Acquisition”). Simultaneously with the closing of the Acquisition and as a condition thereto, we sold in a private placement (the “Private Placement”) an aggregate of 7,233,031 for cash and 568,182 from reissuance of previously canceled shares of our common stock pursuant to one or more exemptions from the registration requirements of the Securities Act, at a purchase price of $0.66 per share resulting in net proceeds to us of approximately $4,731,872. Simultaneously with the Acquisition and Private Placement, the Company cancelled all 2,900,000 Control Block shares it had issued in the Control Block Acquisition (the “Share Cancellation”). In connection with the Private Placement, we paid $41,928 as compensation in connection with sales of our shares therein. Following the Acquisition, the Private Placement and the Share Cancellation, we had issued and outstanding 15,983,273 shares of our common stock. The cash received in the Private Placement was recorded as the cash received in reorganization in the accompanying financial statements. Simultaneously with and as a condition to the closing of the Acquisition and the Private Placement, pursuant to an Intellectual Property Transfer Agreement, dated as of July 24, 2017, by and among Modular Medical, Quasuras and Mr. Paul DiPerna (the “IP Transfer Agreement”), Mr. Paul DiPerna transferred to us all intellectual property rights owned directly and/or indirectly by him related to our proposed business. Separately, we agreed to pay Mr. Paul DiPerna as part of his compensation for services to be performed for us pursuant to a Royalty Agreement (the “Royalty Agreement”) certain fees based upon future sales, if any, of our proposed product subject to a maximum $10,000,000 cap on the aggregate amount of fees that Mr. DiPerna could earn from such arrangement.

As of December 31, 2018 and March 31, 2018, accrued expenses amounted to $62,932 and $14,955, respectively. Accrued expenses comprised of rent and research and development as of December 31, 2018 and March 31, 2018.

Payable to related party comprises of the amounts paid by the major shareholder on behalf of the Company. The payable is unsecured, non-interest bearing and due on demand. As of December 31, 2018 and March 31, 2018, respectively, the payable to related party amounted to $0 and $516, respectively.

Common stock   On July 24, 2017, pursuant to the Acquisition Agreement, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. The historical equity for Quasuras was restated pursuant to the reorganization.   The Company has 50,000,000 shares of Common Stock authorized. The par value of the shares is $0.001. During the three months ended December 31, 2018, 1,786,432 shares of Common Stock were issued for a private placement at $4,019,478, including legal fees of $35,563. During the three months ended December 31, 2018, 30,000 shares of Common Stock were issued for cash of $19,800. As of December 31, 2018, 17,799,705 shares of Common Stock of the Company were issued and outstanding.   Preferred Stock   The Company has 5,000,000 shares of preferred stock authorized. The par value of the shares is $0.001. As of December 31, 2018, none of the shares of preferred stock of the Company were issued.   Stock Options   On October 19, 2017, the Board of Directors approved an Employee Stock Option Program (“Stock Option Program”) that reserves 3,000,000 shares of common stock of the Company to be issued. Under the Company’s Stock Option Program, eligible employees, directors and consultants are granted options to purchase shares of common stock of the Company. The Stock Option Program is administered by the Company’s Board of Directors or, in the alternative, if necessary, a committee designated by the Board of Directors, and has the sole power over the exercise of the Stock Option Program. The Board of Directors determines whether the Stock Option Program will allow for the issuance of shares of common stock or an option to purchase shares of common stock, such option designated as either an incentive stock option or a non-qualified stock option.   The exercise or purchase price shall be calculated as follows:   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 48px; font: 12pt Arial, Helvetica, Sans-Serif; text-align: justify">(i)</td> <td style="font: 12pt Arial, Helvetica, Sans-Serif; text-align: justify">In the case of an incentive stock option, (A) granted to employees, directors and consultants who, at the time of the grant of such incentive stock option own stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company, the per share exercise price shall be not less than one hundred ten percent (110%) of the fair market value per share on the date of grant; or (B) granted to employees, directors and consultants other than to employees, directors and consultants described in the preceding clause, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 48px; font: 12pt Arial, Helvetica, Sans-Serif; text-align: justify">(ii)</td> <td style="font: 12pt Arial, Helvetica, Sans-Serif; text-align: justify">In the case of a non-qualified stock option, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant unless otherwise determined by the Board of Directors; and</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 48px; font: 12pt Arial, Helvetica, Sans-Serif; text-align: justify">(iii)</td> <td style="font: 12pt Arial, Helvetica, Sans-Serif; text-align: justify">In the case of other grants, such price as is determined by the Board of Directors.</td></tr> </table>   The Board of Directors are responsible for determining the consideration to be paid for the shares of common stock to be issued upon exercise or purchase. The Stock Option Program generally doesn’t allow for the transfer of the options, and the Board of Directors may amend, suspend or terminate the Stock Option Program at any time.

During the three months ended December 31, 2018, we granted options for a total of 28,661 shares with a weighted average grant date fair value of $0.87 per option. During the nine months ended December 31, 2018, we granted options for a total of 1,264,687 shares with a weighted average grant date fair value of $0.55 per option.   The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the three months ended December 31, 2018: (i) dividend yield on our common stock of 0 percent, (ii) expected stock price volatility of 88 percent, (iii) a risk-free interest rate of 3.2 percent for options granted from July to October, and 2.52 percent for options granted in November and December, and (iv) and expected option term of 8 years for 1,200,000 shares of option granted, and 5 years for 64,687 shares of option granted.   General and administrative expense for the three and nine months ended December 31, 2018 included stock-based compensation expense of $12,500 and $20,833. Research and development expenses also include stock-based compensation expenses of $178,670 and $353,173 for the three and nine months ended December 31, 2018.   As of December 31, 2018, the unrecognized stock-based compensation expenses related to non-vested stock options was approximately $330,000, which will be amortized over an estimated weighted average period of approximately 6 months.

Based on the available information and other factors, management believes it is more likely than not that the net deferred tax assets at, December 31, 2018 and March 31, 2018 will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at December 31, 2018 and March 31, 2018. At December 31, 2018 and March 31, 2018, the Company had federal net operating loss carry-forwards of approximately $565,500 and $182,500, respectively, expiring beginning in 2037.   Deferred tax assets consist of the following components:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2018</td><td> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">March 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 56%; text-align: left">Net loss carryforward</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">565,500</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">182,500</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1pt">Valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">(565,500</td><td style="text-align: left; padding-bottom: 1pt">)</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">(182,500</td><td style="text-align: left; padding-bottom: 1pt">)</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 2.5pt">Total deferred tax assets</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">—  </td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">—  </td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table>

On July 12, 2017, the Company entered into a royalty agreement with the founder and major shareholder. Pursuant to the agreement, the founder and major shareholder is assigning and transferring all of his rights in the intellectual property in return for royalty payments. The Company shall pay royalty to the founder on any sales of the royalty product sold or otherwise commercialized by the Company, equal to (a) US$0.75 on each sale of a royalty product, or (b) five percent (5%) of the gross sale price of the royalty product, whichever is less. The royalty payments shall cease, and this agreement shall terminate, at such time as the total sum of royalty payments actually paid to the founder, pursuant to this agreement, reaches $10,000,000. The Company shall have the option to terminate this agreement at any time upon payment, to the founder, of the difference between total royalty payments actually made to him to date and the sum of $10,000,000. All payments of the royalties, if due, for the preceding quarter, shall be made by the Company within thirty days after the calendar quarter.

On August 21, 2017, the Company entered into a sublease agreement to rent office space. The term of the lease commences on September 1, 2017 and expires on December 14, 2019. The monthly rent for the lease is $3,000. The Company paid a deposit of $7,500 upon execution of the lease which has been recorded as a security deposit in the accompanying financial statements. The amounts of minimum lease payments and periods during which they become due are as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td colspan="3" style="text-align: center">Year</td><td> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">March 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%; text-align: left"> </td><td style="width: 43%; text-align: left">2019</td><td style="width: 1%; text-align: left"> </td><td style="width: 10%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 43%; text-align: right">9,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: left; padding-bottom: 1pt">2020</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">25,500</td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="text-align: left; padding-bottom: 2.5pt">Total minimum lease payment</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">34,500</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table>

On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was accounted for as a reverse merger. As such, the Company recognized the assets and liabilities of Quasuras, acquired in the Reorganization, at their historical carrying amounts.   Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras.   The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America.  The following summarizes the more significant of such policies:

The accompanying condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the instructions to Form 10-Q.   Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to U.S. GAAP rules and regulations for presentation of interim financial information. Therefore, the unaudited condensed interim consolidated financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Annual Report on the Form 10-K for the fiscal year ended March 31, 2018. Current and future financial statements may not be directly comparable to the Company’s historical financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the fiscal year ended March 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2019.

The consolidated financial statements include the accounts of Modular Medical, Inc. and its wholly-owned subsidiary, Quasuras, Inc., collectively referred to as the Company. All material intercompany accounts, transactions and profits were eliminated in consolidation.

The preparation of the accompanying financial statements in conformity with GAAP requires management 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company has one reportable segment. The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business.

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.

Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping, importation duties and charges, third party royalties and product sampling.

The Company expenses the cost of research and development, as incurred. Research and development costs charged to operations were approximately $504,787 and $171,045 for the three months ended December 31, 2018 and 2017, respectively. For the nine months ended December 31, 2018 and 2017, the costs were approximately $1,008,127 and $258,799 respectively.

General and administration expenses consist primarily of payroll and benefit related costs, rent, office expenses, and meetings and travel.

The Company utilizes FASB Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.   The Company follows FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (codified in FASB ASC Topic 740). When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than fifty percent (50%) likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income.   At December 31, 2018 and 2017, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended March 31, 2018 and prior years or in computing its tax provision for 2017. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended March 31, 2018 to the present, generally for three years after they are filed.

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions.

The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.   If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At December 31, 2018 and March 31, 2018, the Company had $7,137,876 and $4,296,676, respectively, in cash.  Deposits at the bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $6,707,805 and $3,933,002, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure.  The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents.

Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three to ten years; computer equipment, two to three years; buildings and improvements, five to fifteen years; leasehold improvements, two to ten years; and furniture and equipment, one to five years.   As of December 31, 2018, and March 31, 2018, property, plant and equipment amounted to:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">March 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 56%; text-align: left; padding-left: 5.4pt">Computer and equipment</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">70,161</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">15,103</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(10,458</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,844</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">59,703</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">13,259</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   Depreciation expenses for the three months ended December 31, 2018 and 2017 were $5,426 and $458, respectively. For the nine months ended December 31, 2018 and 2017, depreciation was approximately $8,614 and $758, respectively.

For certain of the Company's financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:   Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.   Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.   Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.   The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.   As of December 31, 2018, and June 30, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.

In August of 2017, the FASB issued guidance that eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow hedge to be recorded in OCI, the change in fair value of derivative to be recorded in the same income statement line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020. Early adoption is permitted, and the modified retrospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.   Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow.

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">March 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 56%; text-align: left; padding-left: 5.4pt">Computer and equipment</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">70,161</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">15,103</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(10,458</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,844</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt; padding-left: 5.4pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">59,703</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">13,259</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td colspan="3" style="text-align: center">Year</td><td> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">March 31,</td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%; text-align: left"> </td><td style="width: 43%; text-align: left">2019</td><td style="width: 1%; text-align: left"> </td><td style="width: 10%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 43%; text-align: right">9,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: left; padding-bottom: 1pt">2020</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">25,500</td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="text-align: left; padding-bottom: 2.5pt">Total minimum lease payment</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">34,500</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table>

8614

758

5426

458

9000

25500

34500

Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).   The following table sets for the computation of basic and diluted earnings per share for three & nine months ended December 31, 2018 and 2017:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Three Months Ended</td><td> </td> <td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%; text-align: left; padding-bottom: 2.5pt">Net Loss</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(739,205</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(258,772</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(1,532,545</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(477,863</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td>Net Loss Per Share</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.044</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.016</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.094</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.038</td><td style="text-align: left; padding-bottom: 2.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Weighted average number of shares used in computing basic and diluted net loss per share:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,848,236</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">15,983,273</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,272,642</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">12,500,588</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,848,236</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">15,983,273</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,272,642</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">12,500,588</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Three Months Ended</td><td> </td> <td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Nine Months Ended</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td><td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">December 31, 2018</td></tr> <tr style="vertical-align: bottom"> <td style="width: 40%; text-align: left; padding-bottom: 2.5pt">Net Loss</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(739,205</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(258,772</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(1,532,545</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td><td style="width: 3%; padding-bottom: 2.5pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</td><td style="width: 10%; text-align: right; border-bottom: Black 2.5pt double">(477,863</td><td style="width: 1%; text-align: left; padding-bottom: 2.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td>Net Loss Per Share</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.044</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.016</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.094</td><td style="text-align: left; padding-bottom: 2.5pt">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">(0.038</td><td style="text-align: left; padding-bottom: 2.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Weighted average number of shares used in computing basic and diluted net loss per share:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,848,236</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">15,983,273</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,272,642</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">12,500,588</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,848,236</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">15,983,273</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">16,272,642</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double"> </td><td style="text-align: right; border-bottom: Black 2.5pt double">12,500,588</td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table>

17799705

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Dec. 31, 2018	Feb. 14, 2019
Document And Entity Information
Entity Registrant Name	Modular Medical, Inc.
Entity Central Index Key	0001074871
Document Type	10-Q
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding		17,799,705
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019

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Condensed Consolidated Balance Sheets - USD ($)	Dec. 31, 2018	Mar. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 7,137,876	$ 4,296,676
Other current assets	21,822	16,804
TOTAL CURRENT ASSETS	7,159,698	4,313,480
Intangible assets, net	189	213
Property and equipment, net	59,703	13,259
Security deposit	7,500	7,500
TOTAL NON-CURRENT ASSETS	67,392	20,972
TOTAL ASSETS	7,227,090	4,334,452
CURRENT LIABILITIES
Accounts payable and accrued expenses	62,932	14,955
Payable to related party	0	516
TOTAL CURRENT LIABILITIES	62,932	15,471
Commitments and Contingencies
TOTAL LIABILITIES	62,932	15,471
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding	0	0
Common Stock, $0.001 par value, 50,000,000 shares authorized, 17,799,705 shares issued and outstanding as of December 31, 2018 and 15,983,273 as of March 31, 2018	17,800	15,983
Additional Paid-in Capital	9,387,566	5,011,661
Accumulated Deficit	(2,241,208)	(708,663)
TOTAL STOCKHOLDERS' EQUITY	7,164,158	4,318,981
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 7,227,090	$ 4,334,452

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Mar. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,799,705	15,983,273
Common stock, shares outstanding	17,799,705	15,983,273

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Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Net Revenues	$ 0	$ 0	$ 0	$ 0
Cost of revenues	0	0	0	0
Gross Profit (Loss)	0	0	0	0
Operating Expenses:
Professional expenses	115,111	44,588	238,704	157,517
Research and development	504,787	171,045	1,008,127	258,799
General and administration expenses	130,662	45,227	307,917	64,655
Total Operating Expenses	750,560	260,860	1,554,748	480,971
Loss From Operations	(750,560)	(260,860)	(1,554,748)	(480,971)
Other Income (Expenses):
Interest income	11,355	2,888	22,203	3,908
Amortization of debt discount	0	0	0	0
Total Other Income (Expense)	11,355	2,888	22,203	3,908
Loss Before Income Taxes	(739,205)	(257,972)	(1,532,545)	(477,063)
Provision for Income Taxes	0	800	0	800
Net Loss	$ (739,205)	$ (258,772)	$ (1,532,545)	$ (477,863)
Net Loss Per Share:
Basic and Diluted	$ (.044)	$ (.016)	$ (0.094)	$ (.038)
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic	16,848,236	15,983,273	16,272,642	12,500,588
Diluted	16,848,236	15,983,273	16,272,642	12,500,588

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Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,532,545)	$ (477,863)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,639	758
Adjustment to reorganization expenses	0	34,472
Stock-based compensation	374,006	0
Increase/Decrease in current assets:
Other assets	(5,018)	0
Security deposits	0	(10,103)
Decrease in current liabilities:
Accounts payable and accrued expenses	47,977	(92,101)
Net cash used in operating activities	(1,106,941)	(544,837)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(55,058)	(13,032)
Purchase of intangible assets	0	(230)
Net cash provided by investing activities	(55,058)	(13,262)
Cash Flows from Financing Activities
Proceeds from private placement	3,983,915	4,697,400
Repayment to related party, net	(516)	(21,256)
Proceeds from issuance of stock	19,800	0
Net cash provided by financing activities	4,003,199	4,676,144
Net increase in cash and cash equivalents	2,841,200	4,118,045
Cash and cash equivalents, at the beginning of the period	4,296,676	392,007
Cash and cash equivalents, at the end of the period	7,137,876	4,510,052
SUPPLEMENTAL DISCLOSURES:
Cash paid during the year for: Income tax	0	800
Cash paid during the year for: Interest	$ 0	$ 0

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Quasuras, Inc. (“Quauras”) was incorporated in Delaware on April 20, 2015.

Quasuras has developed a hardware technology allowing people with 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 too high. By addressing the time and effort required to effectively treat their condition, Quasuras believes it can address the less technically savvy, less motivated part of the market.

Reorganization

Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras.

Basis of Presentation

Principles of Consolidation

Use of Estimates

Reportable Segment

The Company has one reportable segment. The Company's activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business.

Revenue Recognition

Cost of Sales

Research and Development

General and Administration

General and administration expenses consist primarily of payroll and benefit related costs, rent, office expenses, and meetings and travel.

Income Taxes

Concentration of Credit Risk

Risks and Uncertainties

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

Cash and Cash Equivalents

Property, Plant & Equipment

As of December 31, 2018, and March 31, 2018, property, plant and equipment amounted to:

	December 31, 2018			March 31, 2018
Computer and equipment	$	70,161		$	15,103
Less: accumulated depreciation		(10,458	)		(1,844	)
	$	59,703		$	13,259

Fair Value of Financial Instrument

For certain of the Company's financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.

As of December 31, 2018, and June 30, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.

Earnings Per Share (EPS)

The following table sets for the computation of basic and diluted earnings per share for three & nine months ended December 31, 2018 and 2017:

	Three Months Ended						Nine Months Ended
	December 31, 2018			December 31, 2018			December 31, 2018			December 31, 2018
Net Loss	$	(739,205	)	$	(258,772	)	$	(1,532,545	)	$	(477,863	)
Net Loss Per Share
Basic and Diluted	$	(0.044	)	$	(0.016	)	$	(0.094	)	$	(0.038	)

Weighted average number of shares used in computing basic and diluted net loss per share:
Basic		16,848,236			15,983,273			16,272,642			12,500,588
Diluted		16,848,236			15,983,273			16,272,642			12,500,588

Recently Issued Accounting Pronouncements

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow.

XML 17 R7.htm IDEA: XBRL DOCUMENT

REORGANIZATION AND PRIVATE PLACEMENT

9 Months Ended

Dec. 31, 2018

Reorganization And Private Placement

REORGANIZATION AND PRIVATE PLACEMENT

Following the Acquisition, the Private Placement and the Share Cancellation, we had issued and outstanding 15,983,273 shares of our common stock.

The cash received in the Private Placement was recorded as the cash received in reorganization in the accompanying financial statements.

XML 18 R8.htm IDEA: XBRL DOCUMENT

ACCRUED EXPENSES

9 Months Ended

Dec. 31, 2018

Accrued Liabilities [Abstract]

ACCRUED EXPENSES

XML 19 R9.htm IDEA: XBRL DOCUMENT

PAYABLE TO RELATED PARTY

9 Months Ended

Dec. 31, 2018

PAYABLE TO RELATED PARTY

XML 20 R10.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY

9 Months Ended

Dec. 31, 2018

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

Common stock

Preferred Stock

The Company has 5,000,000 shares of preferred stock authorized. The par value of the shares is $0.001. As of December 31, 2018, none of the shares of preferred stock of the Company were issued.

Stock Options

The exercise or purchase price shall be calculated as follows:

(i)

(ii)

(iii)

In the case of other grants, such price as is determined by the Board of Directors.

XML 21 R11.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION

9 Months Ended

Dec. 31, 2018

Share-based Compensation [Abstract]

STOCK-BASED COMPENSATION

XML 22 R12.htm IDEA: XBRL DOCUMENT

INCOME TAXES

9 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

Deferred tax assets consist of the following components:

	December 31, 2018			March 31, 2018
Net loss carryforward	$	565,500		$	182,500
Valuation allowance		(565,500	)		(182,500	)
Total deferred tax assets	$	—		$	—

XML 23 R13.htm IDEA: XBRL DOCUMENT

ROYALTY AGREEMENT	9 Months Ended
ROYALTY AGREEMENT	Dec. 31, 2018
Royalty Agreement
ROYALTY AGREEMENT	On July 12, 2017, the Company entered into a royalty agreement with the founder and major shareholder. Pursuant to the agreement, the founder and major shareholder is assigning and transferring all of his rights in the intellectual property in return for royalty payments. The Company shall pay royalty to the founder on any sales of the royalty product sold or otherwise commercialized by the Company, equal to (a) US$0.75 on each sale of a royalty product, or (b) five percent (5%) of the gross sale price of the royalty product, whichever is less. The royalty payments shall cease, and this agreement shall terminate, at such time as the total sum of royalty payments actually paid to the founder, pursuant to this agreement, reaches $10,000,000. The Company shall have the option to terminate this agreement at any time upon payment, to the founder, of the difference between total royalty payments actually made to him to date and the sum of $10,000,000. All payments of the royalties, if due, for the preceding quarter, shall be made by the Company within thirty days after the calendar quarter.

XML 24 R14.htm IDEA: XBRL DOCUMENT

LEASE AGREEMENT

9 Months Ended

Dec. 31, 2018

Leases [Abstract]

LEASE AGREEMENT

Year		March 31,
	2019	$	9,000
	2020		25,500
	Total minimum lease payment	$	34,500

XML 25 R15.htm IDEA: XBRL DOCUMENT

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Reorganization

Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras.

Basis of Presentation

Principles of Consolidation

Research and Development

General and Administration

General and administration expenses consist primarily of payroll and benefit related costs, rent, office expenses, and meetings and travel.

Income Taxes

Concentration of Credit Risk

Risks and Uncertainties

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

Cash and Cash Equivalents

Property, Plant & Equipment

As of December 31, 2018, and March 31, 2018, property, plant and equipment amounted to:

	December 31, 2018			March 31, 2018
Computer and equipment	$	70,161		$	15,103
Less: accumulated depreciation		(10,458	)		(1,844	)
	$	59,703		$	13,259

Fair Value of Financial Instrument

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.

As of December 31, 2018, and June 30, 2018, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value.

Earnings Per Share (EPS)

The following table sets for the computation of basic and diluted earnings per share for three & nine months ended December 31, 2018 and 2017:

	Three Months Ended						Nine Months Ended
	December 31, 2018			December 31, 2018			December 31, 2018			December 31, 2018
Net Loss	$	(739,205	)	$	(258,772	)	$	(1,532,545	)	$	(477,863	)
Net Loss Per Share
Basic and Diluted	$	(0.044	)	$	(0.016	)	$	(0.094	)	$	(0.038	)

Weighted average number of shares used in computing basic and diluted net loss per share:
Basic		16,848,236			15,983,273			16,272,642			12,500,588
Diluted		16,848,236			15,983,273			16,272,642			12,500,588

Recently Issued Accounting Pronouncements

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flow.

XML 26 R16.htm IDEA: XBRL DOCUMENT

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of property, plant and equipment

	December 31, 2018			March 31, 2018
Computer and equipment	$	70,161		$	15,103
Less: accumulated depreciation		(10,458	)		(1,844	)
	$	59,703		$	13,259

Schedule of earnings per share

	Three Months Ended						Nine Months Ended
	December 31, 2018			December 31, 2018			December 31, 2018			December 31, 2018
Net Loss	$	(739,205	)	$	(258,772	)	$	(1,532,545	)	$	(477,863	)
Net Loss Per Share
Basic and Diluted	$	(0.044	)	$	(0.016	)	$	(0.094	)	$	(0.038	)

Weighted average number of shares used in computing basic and diluted net loss per share:
Basic		16,848,236			15,983,273			16,272,642			12,500,588
Diluted		16,848,236			15,983,273			16,272,642			12,500,588

XML 27 R17.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Tables)

9 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Summary of deferred tax assets

	December 31, 2018			March 31, 2018
Net loss carryforward	$	565,500		$	182,500
Valuation allowance		(565,500	)		(182,500	)
Total deferred tax assets	$	—		$	—

XML 28 R18.htm IDEA: XBRL DOCUMENT

LEASE AGREEMENT (Tables)

9 Months Ended

Dec. 31, 2018

Leases [Abstract]

Schedule of future minimum lease payments

Year		March 31,
	2019	$	9,000
	2020		25,500
	Total minimum lease payment	$	34,500

XML 29 R19.htm IDEA: XBRL DOCUMENT

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Property and equipment, net	$ 59,703	$ 13,259
Computers and equipment
Property and equipment, gross	70,161	15,103
Accumulated depreciation	(10,458)	(1,844)
Property and equipment, net	$ 59,703	$ 13,259

XML 30 R20.htm IDEA: XBRL DOCUMENT

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net Loss	$ (739,205)	$ (258,772)	$ (1,532,545)	$ (477,863)
Net Loss Per Share:
Basic and Diluted	$ (.044)	$ (.016)	$ (0.094)	$ (.038)
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic	16,848,236	15,983,273	16,272,642	12,500,588
Diluted	16,848,236	15,983,273	16,272,642	12,500,588

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

XML 31 R21.htm IDEA: XBRL DOCUMENT

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Research and development	$ 504,787	$ 171,045	$ 1,008,127	$ 258,799
Cash and cash equivalents	7,137,876	4,510,052	7,137,876	4,510,052	$ 4,296,676	$ 392,007
Uninsured cash and cash equivalents	6,707,805		6,707,805		$ 3,933,002
Depreciation expenses	$ 5,426	$ 458	$ 8,614	$ 758
Computer software developed or acquired for internal use \| Minimum
Estimated useful life			3 years
Computer software developed or acquired for internal use \| Maximum
Estimated useful life			10 years
Computers and equipment \| Minimum
Estimated useful life			2 years
Computers and equipment \| Maximum
Estimated useful life			3 years
Buildings and improvements \| Minimum
Estimated useful life			5 years
Buildings and improvements \| Maximum
Estimated useful life			15 years
Leasehold improvements \| Minimum
Estimated useful life			2 years
Leasehold improvements \| Maximum
Estimated useful life			10 years
Furniture and equipment \| Minimum
Estimated useful life			1 year
Furniture and equipment \| Maximum
Estimated useful life			5 years

XML 32 R22.htm IDEA: XBRL DOCUMENT

ACCRUED EXPENSES (Details Narrative) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Accrued Liabilities [Abstract]
Accrued expenses	$ 62,932	$ 14,955

XML 33 R23.htm IDEA: XBRL DOCUMENT

PAYABLE TO RELATED PARTY (Details Narrative) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Related Party Transactions [Abstract]
Payable to related party	$ 0	$ 516

XML 34 R24.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares	Dec. 31, 2018	Mar. 31, 2018
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,799,705	15,983,273
Common stock, shares outstanding	17,799,705	15,983,273

XML 35 R25.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Net loss carryforward	$ 565,500	$ 182,500
Valuation allowance	(565,500)	(182,500)
Total deferred tax assets	$ 0	$ 0

XML 36 R26.htm IDEA: XBRL DOCUMENT

LEASE AGREEMENT (Details)	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 9,000
2020	25,500
Total minimum lease payment	$ 34,500