Nemaura Medical Inc.
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(Exact name of small business issuer as specified in its charter)
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NEVADA
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46-5027260
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Tax. I.D. No.)
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Advanced Technology Innovation Centre,
Loughborough University Science and Enterprise Parks,
5 Oakwood Drive,
Loughborough, Leicestershire
LE11 3QF
United Kingdom
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(Address of Principal Executive Offices)
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+ 00 44 1509 222912
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(Registrant’s Telephone Number, Including Area Code)
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Large accelerated filer ☐
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Accelerated filer ☑
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Non-accelerated filer ☐
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Smaller reporting company ☐
Emerging growth company ☑ |
Page
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PART I: FINANCIAL INFORMATION
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3
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ITEM 1
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INTERIM FINANCIAL STATEMENTS
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3
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Condensed Consolidated Balance Sheets as of December 31, 2018 (unaudited) and March 31, 2018
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3
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Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended December 31, 2018 and 2017 (unaudited)
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4
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Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2018 and 2017 (unaudited)
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5
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Notes to Condensed Consolidated Financial Statements (unaudited)
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6
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ITEM 2
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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16
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ITEM 3
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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20
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ITEM 4
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CONTROLS AND PROCEDURES
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20
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PART II: OTHER INFORMATION
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23
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ITEM 1
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LEGAL PROCEEDINGS
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23
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ITEM 1A
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RISK FACTORS
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23
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ITEM 2
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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23
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ITEM 3
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DEFAULTS UPON SENIOR SECURITIES
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23
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ITEM 4
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MINE SAFETY DISCLOSURES
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23
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ITEM 5
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OTHER INFORMATION
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23
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ITEM 6
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EXHIBITS
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23
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SIGNATURES
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24
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NEMAURA MEDICAL INC.
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Condensed Consolidated Balance Sheets
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As of December 31,
2018
($)
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As of March 31,
2018
($)
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Current Assets:
|
||||||||
Cash
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5,040,661
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822,335
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||||||
Fixed rate cash account
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-
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4,911,551
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||||||
Prepaid expenses and other receivables
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440,827
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187,139
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||||||
Accrued interest receivable
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-
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77,508
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||||||
Total current assets
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5,481,488
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5,998,533
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||||||
Other Assets:
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||||||||
Property and equipment, net
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43,190
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5,770
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||||||
Intangible assets, net of accumulated amortization
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223,768
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251,099
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||||||
266,958
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256,869
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|||||||
Total assets
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5,748,446
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6,255,402
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||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current Liabilities:
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||||||||
Accounts payable
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205,521
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49,912
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Liability due to related party
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918,794
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613,818
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||||||
Other liabilities and accrued expenses
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188,009
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77,414
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||||||
Deferred revenue
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98,559
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70,165
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||||||
Total current liabilities
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1,410,883
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811,309
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||||||
Deferred revenue
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1,181,132
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1,333,128
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||||||
Total liabilities
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2,592,015
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2,144,437
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||||||
Commitments and contingencies:
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||||||||
Stockholders’ Equity:
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||||||||
Series A convertible preferred stock, $0.001 par value, 200,000 shares authorized; zero and 137,324 outstanding at December 31, 2018 and March 31, 2018, respectively.
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-
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137
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||||||
Common stock, $0.001 par value,
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||||||||
420,000,000 shares authorized; 207,274,559 and 67,676,000
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||||||||
shares issued and outstanding at December 31, 2018 and March 31, 2018, respectively.
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207,275
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67,676
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||||||
Additional paid-in capital
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15,102,898
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13,056,859
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Accumulated deficit
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(11,801,399
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)
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(8,973,082
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)
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Accumulated other comprehensive loss
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(352,343
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)
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(40,625
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)
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Total stockholders’ equity
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3,156,431
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4,110,965
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Total liabilities and stockholders’ equity
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5,748,446
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6,255,402
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NEMAURA MEDICAL INC.
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Condensed Consolidated Statements of Comprehensive Loss
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(Unaudited)
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Three Months Ended December 31,
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Nine Months Ended December 31,
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|||||||||||||||
2018
($)
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2017
($)
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2018
($)
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2017
($)
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|||||||||||||
Revenue:
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-
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-
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-
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-
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||||||||||||
Total revenue
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-
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-
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-
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-
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||||||||||||
Operating Expenses:
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||||||||||||||||
Research and development
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443,380
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355,300
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1,495,201
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713,585
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||||||||||||
General and administrative
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489,545
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121,053
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1,357,044
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627,605
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Total operating expenses
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932,925
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476,353
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2,852,245
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1,341,190
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||||||||||||
Loss from operations
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(932,925
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)
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(476,353
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)
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(2,852,245
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)
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(1,341,190
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)
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||||||||
Interest income
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7,036
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9,988
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23,927
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74,006
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||||||||||||
Net loss
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(925,889
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)
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(466,365
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)
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(2,828,318
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)
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(1,267,184
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)
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||||||||
Other comprehensive income (loss):
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||||||||||||||||
Foreign currency translation adjustment
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(38,626
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)
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36,641
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(311,718
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)
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398,705
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||||||||||
Comprehensive loss
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(964,515
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)
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(429,724
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)
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(3,140,036
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)
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(868,479
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)
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||||||||
Loss per share
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||||||||||||||||
Basic and diluted
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*
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*
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(0.02
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)
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*
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|||||||||||
Weighted average number of shares outstanding
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205,407,088
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121,411,478
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172,179,520
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177,035,840
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NEMAURA MEDICAL INC.
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Condensed Consolidated Statements of Cash Flows
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(Unaudited)
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Nine Months Ended
December 31, |
||||||||
2018
($)
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2017
($)
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|||||||
Cash Flows From Operating Activities:
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||||||||
Net Loss
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(2,828,318
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)
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(1,267,184
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
Depreciation and amortization
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21,924
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22,467
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Stock-based compensation
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183,667
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-
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||||||
Changes in assets and liabilities:
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||||||||
Prepaid expenses and other receivables
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(236,976
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)
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(63,405
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)
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Accounts payable
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155,286
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(15,355
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)
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Liability due to related party
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359,842
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77,654
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Other liabilities and accrued expenses
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(44,318
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)
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43,223
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Accrued interest receivable
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70,527
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(58,504
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)
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Net cash used in operating activities
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(2,318,366
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)
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(1,261,104
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)
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Cash Flows from Investing Activities:
|
||||||||
Capitalized patent costs
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(13,844
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)
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(29,732
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)
|
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Purchase of property and equipment
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(43,216
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)
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-
|
|||||
Fixed rate savings account
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4,469,150
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1,955,489
|
||||||
Net cash provided by investing activities
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4,412,090
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1,925,757
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||||||
Cash Flows from Financing
|
||||||||
Cash costs incurred in relation to ATM financing
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(121,880
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)
|
-
|
|||||
Cash costs incurred in relation to public offering
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(217,922
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)
|
-
|
|||||
Gross proceeds from issuance of common stock in relation to ATM financing
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455,105
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-
|
||||||
Gross proceeds from public offering
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2,019,743
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-
|
||||||
Gross proceeds from warrant exercise/unit option purchase
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600
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-
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||||||
Net cash provided by financing activities
|
2,135,646
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-
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||||||
Net increase in cash
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4,229,370
|
664,653
|
||||||
Effect of exchange rate changes on cash
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(11,044
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)
|
88,604
|
|||||
Cash at beginning of period
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822,335
|
911,359
|
||||||
Cash at end of period
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5,040,661
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1,664,616
|
||||||
Supplemental disclosure of non-cash financing activities:
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||||||||
Conversion of Series A preferred stock to common stock
|
137,324
|
-
|
||||||
Accrual of costs incurred in connection with the issuance of equity
|
149,644
|
-
|
Nine Months Ended December 31,
2018
(unaudited)
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Nine Months Ended December 31,
2017
(unaudited)
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Three Months Ended December 31,
2018
(unaudited)
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Three Months Ended December 31,
2017
(unaudited)
|
Twelve Months Ended March 31,
2018
|
||||||||||||||||
Period end GBP : US$ exchange rate
|
1.277
|
1.351
|
1.277
|
1.351
|
1.403
|
|||||||||||||||
Average period/yearly GBP : US$ exchange rate
|
1.308
|
1.300
|
1.277
|
1.343
|
1.331
|
Three Months Ended
December 31, 2018
(unaudited)
($)
|
Three Months Ended
December 31, 2017
(unaudited)
($)
|
Nine Months Ended
December 31, 2018
(unaudited)
($)
|
Nine Months Ended
December 31, 2017
(unaudited)
($)
|
Year Ended
March 31, 2018
($)
|
||||||||||||||||
Balance due from (to) Pharma and NDM at beginning of period
|
(642,513
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)
|
(507,376
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)
|
(613,818
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)
|
(687,609
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)
|
(687,609
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)
|
||||||||||
Amounts invoiced by Pharma to DDL, NM and TCL (1)
|
(389,329
|
)
|
(314,706
|
)
|
(1,539,114
|
)
|
(554,464
|
)
|
(842,739
|
)
|
||||||||||
Amounts repaid by DDL to Pharma
|
92,025
|
-
|
1,130,755
|
440,266
|
1,096,767
|
|||||||||||||||
Amounts paid by DDL on behalf of Pharma
|
-
|
-
|
-
|
19,889
|
19,889
|
|||||||||||||||
Amounts received from Pharma
|
-
|
-
|
-
|
-
|
(145,214
|
)
|
||||||||||||||
Foreign exchange differences
|
21,023
|
(4,228
|
)
|
103,383
|
(44,392
|
)
|
(54,912
|
)
|
||||||||||||
Balance due to Pharma and NDM at end of the period
|
(918,794
|
)
|
(826,310
|
)
|
(918,794
|
)
|
(826,310
|
)
|
(613,818
|
)
|
(1) |
These amounts are included primarily in research and development expenses charged to the Company by Pharma.
|
– |
Establish commercial manufacturing operations for commercial supply of the sugarBEAT device and patches.
|
– |
Obtain CE approval of the body worn miniaturised device with Bluetooth connectivity.
|
– |
Continue clinical and human factor studies to support a US FDA submission.
|
- |
Deferred offering costs and cutoff for accrued expenses were not properly accounted for.
|
- |
Stock based compensation was not properly accounted for.
|
- |
Preparation of condensed consolidated financial statements.
|
- |
Since the September quarter end the Company has enhanced the quarterly reporting process by taking the following actions:
|
o |
External advice from a specialized third-party provider has been sought to provide technical guidance on accounting for December 2018 Public offering and related costs.
|
o |
Additional training for accounting personnel on the proper accounting and reporting for stock-based compensation and complex equity transactions.
|
o |
The month end process has been enhanced and additional controls such as full balance sheet reconciliations have been implemented.
|
o |
In addition, the increased size of the finance team has enabled and increased level of segregation of duties and enhanced opportunity for review.
|
Exhibit No.
|
Document Description
|
101
|
Interactive Data Files (1)
|
|
NEMAURA MEDICAL INC.
|
|
|
Dated: February 11, 2019
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/s/ Dewan F.H. Chowdhury
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Dewan F.H. Chowdhury
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Chief Executive Officer (Principal Executive Officer)
|
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Dated: February 11, 2019
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/s/ Dewan F.H. Chowdhury
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Dewan F.H. Chowdhury
|
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Interim Chief Financial Officer (Principal Financial and Accounting Officer)
|
Exhibit No.
|
Document Description
|
31.1
|
Certification of the Principal Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of the Principal Financial and Accounting Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1
|
Certification of the Principal Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification of the Principal Financial and Accounting Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
By:
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/s/ Dewan F.H. Chowdhury
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|
Dewan F. H, Chowdhury
|
||
Chief Executive Officer and President
|
||
Dated: February 11, 2019
|
(Principal Executive Officer)
|
By:
|
Dewan F.H. Chowdhury
|
|
Dewan F.H. Chowdhury
|
||
Interim Chief Financial Officer
|
||
Dated: February 11, 2019
|
(Principal Financial and Accounting Officer)
|
Dated: February 11, 2019
|
||
By:
|
/s/ Dewan F.H. Chowdhury
|
|
Dewan F.H. Chowdhury
|
||
Chief Executive Officer and President
|
||
(Principal Executive Officer)
|
Dated: February 11, 2019
|
||
By:
|
/s/ Dewan F.H. Chowdhury
|
|
Dewan F.H. Chowdhury
|
||
Interim Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
.-NYL8Z9..M NOTE 1 – ORGANIZATION AND PRINCIPAL
ACTIVITIES Nemaura Medical Inc. (“Nemaura”
or the “Company”), through its operating subsidiaries, performs medical device research and manufacturing of a continuous
glucose monitoring system (“CGM”), named sugarBEAT. The sugarBEAT device is a non-invasive, wireless device for use
by persons with Type I and Type II diabetes and may also be used to screen pre-diabetic patients. The sugarBEAT device extracts
analytes, such as glucose, to the surface of the skin in a non-invasive manner where it is measured using unique sensors and interpreted
using a unique algorithm. Nemaura is a Nevada holding company organized
in 2013. Nemaura owns one hundred percent (100%) of Region Green Limited, a British Virgin Islands corporation (“RGL”)
formed on December 12, 2013. RGL owns one hundred percent (100%) of the stock in Dermal Diagnostic (Holdings) Limited, an
England and Wales corporation (“DDHL”) formed on December 11, 2013, which in turn owns one hundred percent (100%) of
Dermal Diagnostics Limited, an England and Wales corporation formed on January 20, 2009 (“DDL”), and one hundred percent
(100%) of Trial Clinic Limited, an England and Wales corporation formed on January 12, 2011 (“TCL”). DDL is a diagnostic medical device company
headquartered in Loughborough, Leicestershire, England, and is engaged in the discovery, development and commercialization of diagnostic
medical devices. The Company’s initial focus has been on the development of the sugarBEAT device, which consists of a disposable
patch containing a sensor, and a non-disposable miniature electronic watch with a re-chargeable power source, which is designed
to enable trending or tracking of blood glucose levels. All the Company’s operations and assets are located in England. The following diagram illustrates Nemaura’s
corporate structure as of December 31, 2018: Nemaura
Medical Inc. Nevada
Corporation Region
Green Limited British
Virgin Islands Corporation Dermal
Diagnostics (Holdings) Limited England
and Wales Corporation Dermal
Diagnostics Limited England
and Wales Corporation Trial
Clinic Limited England
and Wales Corporation The Company has a five-year operating history,
during which period there has been recurring losses from operations and an accumulated deficit of approximately $11,801,000 as
of December 31, 2018. These operations have resulted in the successful completion of clinical programs to support a European CE
mark application, as well as a US FDA submission. The Company expects to continue to incur losses from operations until revenues
are generated through licensing fees or product sales. However, given the completion of the requisite clinical programs these losses
are expected to be reduced over time. Furthermore, management is currently engaged in discussions with several prospective licensees
for the product, in multiple global territories. Management has evaluated the expected expenses to be incurred along with its available
cash and has determined that there is no substantial doubt as to the Company’s ability to continue as a going concern
for at least one year subsequent to the date of issuance of these condensed consolidated financial statements. The Company
has approximately $5,041,000 of readily available cash on hand at December 31, 2018. Management's strategic plans include the
following: • obtaining regulatory approval for
the sugarBEAT device; • pursuing additional capital raising
opportunities, in addition to the Equity Distribution Agreement entered into on October 19, 2018 by the Company and Maxim pursuant
to which the Company may offer and sell, from time to time, through Maxim, up to $20,000,000 in shares of the Company’s common
stock. • exploring licensing opportunities;
and • developing the sugarBEAT device
for commercialization. NOTE 2 – BASIS OF PRESENTATION (a) Basis of presentation: The accompanying unaudited condensed consolidated
financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the
“SEC”), and consequently do not include all disclosures normally required by accounting principles generally accepted
in the United States of America. In the opinion of management, the accompanying unaudited interim condensed consolidated financial
statements contain all adjustments necessary, all of which are of a normal and recurring nature, to present fairly our financial
position, results of operations and cash flows. Certain information and note disclosures normally included in financial statements
have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2018. The accompanying consolidated financial
statements include the accounts of the Company and the Company’s subsidiaries, DDL, TCL, DDHL and RGL. The consolidated financial
statements are prepared in accordance with accounting principles generally accepted in the United States of America, and all significant
intercompany balances and transactions have been eliminated in consolidation. The functional currency for the majority
of the Company’s operations is the Great Britain Pound Sterling (“GBP”), and the reporting currency is the US
Dollar. NOTE 3 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (a) Cash and cash equivalents The Company considers all highly liquid
investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents
consist primarily of cash deposits maintained in the United Kingdom. From time to time, the Company's cash account balances exceed
amounts covered by the Financial Services Compensation Scheme. The Company has never suffered a loss due to such excess balances. (b) Fixed rate cash accounts From time to time the Company may invest
funds in fixed rate cash savings accounts. Customarily, these accounts, at the time of the initial investment, provide a
higher interest rate than other bank accounts, and require the Company to maintain the funds in the accounts for a certain
period of time. As of December 31, 2018, the Company does not hold any cash reserves in any such savings accounts. (c) Fair value of financial
instruments The Company's financial instruments primarily
consist of cash, fixed rate cash accounts, accounts payable and other current liabilities. The estimated fair values of non-related
party financial instruments were not materially different from their carrying values as presented, due to their short maturities.
The fair value of amounts payable to related parties are not practicable to estimate due to the related party nature of the underlying
transactions. (d) Property and equipment Property and equipment is stated at cost
and depreciated using the straight-line method over the estimated useful lives of the assets, generally four years for fixtures
and fittings. Plant and machinery is stated at cost and
depreciated using the straight-line method over the estimated useful lives of the assets, generally four years for plant and machinery. (e) Intangible assets Intangible assets consist of licenses and
patents associated with the sugarBEAT device and are amortized on a straight-line basis, generally over their legal lives of up
to 20 years and are reviewed for impairment. The Company evaluates its intangible assets (all have finite lives) and other long-lived
assets for impairment whenever events or circumstances indicate that they may not be recoverable, or at least annually. Recoverability
of finite and other long-lived assets is measured by comparing the carrying amount of an asset group to the future undiscounted
net cash flows expected to be generated by that asset group. The Company groups assets for purposes of such review at the lowest
level for which identifiable cash flows of the asset group are largely independent of the cash flows of the other groups of assets
and liabilities. The amount of impairment to be recognized for finite and other long-lived assets is calculated as the difference
between the carrying value and the fair value of the asset group, generally measured by discounting estimated future cash flows.
There were no impairment indicators present during the nine months ended December 31, 2018 or 2017. (f) Revenue Recognition Revenue is recognized when the four basic
criteria of revenue recognition are met: (1) a contractual agreement exists; (2) transfer of rights has been completed; (3) the
fee is fixed or determinable; and (4) collectability is reasonably assured. The Company may enter into product development
and other agreements with collaborative partners. The terms of the agreements may include nonrefundable signing and licensing fees,
milestone payments and royalties on any product sales derived from collaborations. The Company recognizes up front license
payments as revenue upon delivery of the license only if the license has stand-alone value to the customer. However, where further
performance criteria must be met, revenue is deferred and recognized on a straight-line basis over the period the Company is expected
to complete its performance obligations. Royalty revenue will be recognized upon
the sale of the related products provided the Company has no remaining performance obligations under the applicable agreement. (g) Research and development expenses The Company charges research and development
expenses to operations as incurred. Research and development expenses primarily consist of salaries and related expenses for personnel
and outside contractor and consulting services. Other research and development expenses include the costs of materials and supplies
used in research and development, prototype manufacturing, clinical studies, related information technology and an allocation of
facilities costs. (h) Income taxes Income taxes are accounted for under the
asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,
and operating loss carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on
deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets if it is considered more likely
than not that some portion, or all, of the deferred income tax assets will not be realized. The Company recognizes the effect of income
tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured
at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in
the period in which the change in judgment occurs. The Company has elected to classify interest and penalties related to unrecognized
tax benefits as part of income tax expense in the consolidated statements of comprehensive loss. The Company does not have any
accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense related to unrecognized
tax benefits recognized for the three and nine months ended December 31, 2018 and 2017. In December 2017, the US Tax Cuts and Jobs
Act was signed into law. Generally, this Act reduces corporate rates from a top rate of 35% to a top rate of 21%, effective
January 1, 2018. As the Company’s US operations are minimal, and all deferred tax assets are fully allowed for, there
is no significant impact to the Company as of and for the three and nine month periods ended December 31, 2018. (i) Earnings per share Basic earnings per share is computed by
dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period.
There were no potentially dilutive securities as of December 31, 2018 and 2017. For the three and nine months ended December 31,
2018 and 2017, warrants to purchase 10 million shares of common stock were anti-dilutive and were excluded from the calculation
of diluted loss per share. For the three and nine months ended December 31, 2018, warrants to purchase 1,942,061 shares of
common stock and a unit purchase option to purchase 97,103 shares of common stock as well as 97,103 warrants were considered anti-dilutive
and were also excluded from the calculation of diluted loss per share. (j) Use of estimates The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenues and expenses during the periods presented. Actual
results may differ from those estimates. (k) Foreign currency translation The functional currency of the Company
is the Great Britain Pound Sterling ("GBP"). The reporting currency is the United States dollar (US$). Stockholders'
equity is translated into United States dollars from GBP at historical exchange rates. Assets and liabilities are translated
at the exchange rates as of the balance sheet date. Income and expenses are translated at the average exchange rates prevailing
during the reporting period. The translation rates are as follows: Nine Months Ended December 31, 2018 (unaudited) Nine Months Ended December 31, 2017 (unaudited) Three Months Ended December 31, 2018 (unaudited) Three Months Ended December 31, 2017 (unaudited) Twelve Months Ended March 31, 2018 Adjustments resulting from translating the financial statements
into the United States dollar are recorded as a separate component of accumulated other comprehensive loss in stockholders' equity. (l) Stock-based compensation For stock options granted as consideration
for services rendered by non-employees, the company recognizes compensation expense in accordance with the requirements of FASB
ASC Topic 505-50 (“ASC 505-50”), “Equity Based Payments to Non- Employees.” Non-employee restricted common
stock and stock option grants that do not vest immediately upon grant, and whose terms are known, are recorded as an expense over
the vesting period of the underlying instrument granted. At the end of each financial reporting period prior to vesting, the value
of the instruments granted, will be re-measured using the fair value of the Company’s common stock and the stock-based compensation
recognized during the period will be adjusted accordingly. For restricted common stock and stock option
awards that have performance-based conditions, the Company recognizes the stock-based compensation expense at the fair value of
the award based on the date that the performance conditions have been met. The Company calculates the fair value
of the stock options using the Black Scholes option pricing model. The fair value of restricted common stock awards
is based on the closing price of the Company’s common stock on the applicable measurement date. The assumptions used in calculating the
fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application
of management’s judgment. To date, the Company has not granted any
stock-based compensation awards to employees. (m) Direct costs incurred for equity financing The Company includes all direct costs incurred
in connection with successful equity financings as a component of additional paid-in capital. Direct costs incurred for equity
financings that are unsuccessful are expensed. (n) Recent accounting pronouncements The Company continually assesses any new
accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the
Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial
statements and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements
properly reflect the change. In May 2014, the Financial Accounting Standards
Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2014-09, Revenue from Contracts with Customers.
ASU 2014-09 has been modified multiple times since its initial release. This ASU outlines a single comprehensive model for entities
to use in accounting for revenue arising from contracts with customers and will replace most existing revenue recognition guidance
in U.S. GAAP when it becomes effective. ASU 2014-09, as amended, becomes effective for annual reporting periods beginning after
December 15, 2017. Early adoption is permitted. As an Emerging Growth Company, the Company is allowed to adopt new, or updated,
accounting standards using the same time frame that applies to private companies. The Company will adopt this standard on
April 1, 2019. Management is currently evaluating the impact of adoption of this ASU on the Company’s consolidated
financial statements. In March 2016, the FASB issued ASU No.
2016-02, Leases. The main difference between the provisions of ASU No. 2016-02 and previous U.S. GAAP is the recognition of right-of-use
assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU No. 2016-02
retains a distinction between finance leases and operating leases, and the recognition, measurement, and presentation of expenses
and cash flows arising from a lease by a lessee have not significantly changed from previous U.S. GAAP. For leases with a term
of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize
right-of-use assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous
U.S. GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period
presented using a modified retrospective approach. This ASU is effective for public business entities in fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted as of the beginning of any interim
or annual reporting period. As an Emerging Growth Company, the Company is allowed to adopt new, or updated, accounting standards
using the same time frame that applies to private companies. The Company will adopt this standard on April 1, 2020.
Management is currently evaluating the impact of adoption of this ASU on the Company’s consolidated financial statements. NOTE 4 – LICENSING AGREEMENTS In March 2014, the Company entered into
an Exclusive Marketing Rights Agreement with an unrelated third party, that granted to the third party the exclusive right to market
and promote the sugarBEAT device and related patches under its own brand in the United Kingdom and the Republic of Ireland, the
Channel Islands and the Isle of Man. The Company received a non-refundable, up-front cash payment of GBP 1,000,000 (approximately
$1.277 million and $1.403 million as of December 31, 2018 and March 31, 2018, respectively), which is wholly non-refundable, upon
signing the agreement. As the Company has continuing performance
obligations under the agreement, the up-front fees received from this agreement have been deferred and will be recorded as income
over the term of the commercial licensing agreement beginning from the date of clinical evaluation approval. As the Company expects
commercialization of the sugarBEAT device to occur in the first quarter ending June 30, 2019, approximately $99,000 and $70,000
of the deferred revenue has been classified as a current liability as of December 31, 2018 and March 31, 2018, respectively. In April 2014, a Letter of Intent was signed
with the third party which specified a 10-year term and in November 2015, a License, Supply and Distribution Agreement with an
initial 5-year term was executed. Pursuant to this agreement, the Company grants the exclusive right to market and promote its
product in the United Kingdom and purchase the product at specified prices. In May 2018, the Company signed a commercial
agreement with Dallas Burston Ethitronix Limited (DBEE) for all other European territories as part of an equal joint collaboration
agreement. The joint collaboration agreement intends to seek sub-license rights opportunities to one or more leading
companies in the diabetes monitoring space, in order to leverage their network, infrastructure and resources. The Company and DBEE
agreed that they shall share proceeds equally from sales of the Company’s sugarBEAT products. In consideration of the sub-license
rights granted, DBEE shall pay to the Company the sum of approximately $1 if demanded and, except as described elsewhere in the
Agreement, no commission, royalties or other payments shall be due to the Company from DBEE. The initial term of the Agreement
is for five years, which may be terminated at the end of such five-year initial term by either party upon at least 12 months’
prior written notice. If such notice of termination is not provided by either party during the initial term, the Agreement
shall automatically continue until terminated by either party upon 12 months’ prior written notice. In the event the
Agreement is terminated as provided above, the non-terminating party shall receive an exit payment equal to 50% of the open market
value of the joint collaboration business as defined in the collaboration agreement and as agreed to by the parties at the time
of termination. The parties may also terminate the Agreement if the other party commits a material breach of the terms of
the Agreement which is not remedied within 30 days of written notification of such breach, or the other party dissolves or goes
bankrupt. Commercialization is expected to occur in early 2019. As of December 31, 2018 no payments have been made or received
or are due or receivable under the terms of the collaboration agreement. In November 2018, the Company signed a
commercial agreement with Al-Danah Medical Company for the exclusive license and distribution of the sugarBEAT device in Qatar.
This agreement gives Al-Danah Medical Company the exclusive rights to sell and market the Company’s products in Qatar. The
Company will sell devices to Al-Danah Medical Company at a specified price and with minimum order quantities which will be set
post product launch. The Company’s responsibility is limited to the supply of the device and related consumables. Al-Danah
Medical Company is responsible for ensuring compliance with all local regulation related to registering and selling the device
within Qatar. Product launch in Qatar is expected to take place after the initial commercialization of the sugarBEAT device which
is expected to occur in early 2019. NOTE 5 – RELATED PARTY TRANSACTIONS Nemaura Pharma Limited (Pharma) and NDM
Technologies Limited (NDM) are entities controlled by the Company’s chief executive officer and majority shareholder, Dewan
F.H. Chowdhury. In accordance with the United States Securities
and Exchange Commission (SEC) Staff Accounting Bulletin 55, these financial statements are intended to reflect all costs associated
with the operations of DDL and TCL. Pharma has a service agreement with DDL, to undertake development, manufacture and regulatory
approvals under Pharma’s ISO13485 Accreditation. In lieu of these services, DDL invoices Pharma on a periodic basis for said
services. Services are provided at cost plus a service surcharge amounting to less than 10% of the total costs incurred. Following is a summary of activity between
the Company and Pharma and NDM for the nine months ended December 31, 2018 and 2017. These amounts are unsecured, interest free,
and payable on demand. Three Months Ended December 31, 2018 (unaudited) ($) Three Months Ended December 31, 2017 (unaudited) ($) Nine Months Ended December 31, 2018 (unaudited) ($) Nine Months Ended December 31, 2017 (unaudited) ($) Year Ended March 31, 2018 ($) The Company routinely reviews its statement
of cash flows presentation of related party transactions for financing or operating classification based on the underlying nature
of the item and intended repayment. NOTE 6 – OTHER ITEMS (a) Risks and uncertainties The Company is in the development stage
of one primary product that it expects to introduce to the UK market after completion of clinical trials and CE mark approval
(European Union approval of the product). The Company has entered into sales and marketing agreements for the product. It has
also placed orders for the first commercial batch of transmitter devices with the electronics manufacturer Datalink Limited. It
has not entered into exclusive manufacturing agreements with any of its contract manufacturers. Uncertainties still exist with
regards to regulatory acceptance of the Company’s primary product development efforts and if acceptance is attained, the
cost structure to produce the final product. (b) Preferred shares On October 5, 2017, the Company entered
into common stock exchange agreements with each of its three largest shareholders, to exchange, in the aggregate, 137,324,000 shares
of the Company’s common stock for 137,324 shares of Series A Convertible Preferred Stock (the “Series A Preferred”).
Each share of Series A Preferred is convertible into 1,000 shares of the Company’s common stock, automatically upon the occurrence
of all of certain triggering events, as set forth in the Certificate of Designation for the Series A Preferred, namely (a) the
sugarBEAT® device to be commercialized has CE regulatory approval; (b) retail sales having commenced; and (c) retail sales
exceeding USD$5 million, inclusive of advanced sales or voluntarily by the holder after February 7, 2018, if these triggering events
have not occurred. Each holder of issued and outstanding Series A Preferred is entitled to a number of votes equal to the
number of shares of common stock into which the Series A Preferred is convertible. Holders of Series A Preferred are entitled to
vote on any and all matters presented to stockholders of the Company, except as provided by law. The Series A Preferred has
no preference to the common stock as to dividends or distributions of assets upon liquidation or winding up of the Company (which
has been agreed to by the holders of the Series A Preferred). The Company determined that the fair value of the shares of
Series A Preferred issued for the shares of common stock was equivalent to the fair value of the shares of common stock exchanged. On November 6, 2017, the transactions contemplated
by the exchange agreements were consummated and 137,324,000 shares of common stock were cancelled. As a result, the Company
had 67,676,000 shares of common stock issued and outstanding as of March 31, 2018. On June 5, 2018, the three holders of the
Company’s Series A Preferred each delivered notices of conversion to voluntarily convert their Series A Preferred, in the
aggregate amount of 137,324 of Series A Preferred shares, into 137,324,000 shares of common stock. The holders had the right
to voluntarily convert each share of Series A Preferred into 1,000 shares of common stock of the Company. (c) Investor relations agreements The Company currently has contracts with
several investor relations specialists to help support the ongoing financing activities of the business. On June 27, 2018, the Company entered into
a Master Services Agreement with investor relations company 1, pursuant to which for an initial three month term, the third party
shall provide services related to advising and assisting the Company in developing and implementing appropriate plans and materials
for presenting the Company and its business plans, strategy and personnel to the financial community, introducing the Company to
the financial community through the use of social media, digital media and other online awareness campaigns. The aggregate
fees in the amount of $160,000 are payable to the third party during the initial three-month term. On July 23, 2018 the Board
of Directors approved the issuance of a warrant to the third party exercisable for 75,000 shares of common stock at an exercise
price of $0.01 per share. As of September 30th, 2018, the Company recognized $114,500 of stock-based compensation expense
related to the 50,000 warrants that had vested as of that date based on a fair value of $2.29 per warrant. On October 9, 2018,
50,000 shares of common stock were issued to the third party, as a result of the third party’s exercise of 50,000 warrants
on September 24, 2018. At December 31, 2018, all liabilities for share based compensation were considered fully settled. It was
agreed by both parties that there is no further obligation to issue the remaining 25,000 warrants. On August 31, 2018, the Company entered
into an agreement to receive investor relations services from investor relations company 2. The term of the agreement was
1 year, although cancellable after 3 months if certain performance-based conditions are not met, including if the share trade volumes
fail to meet an average of 100,000 shares per day minimum. Compensation is partly in cash and partly in restricted stock,
40,000 shares of restricted stock due on the 3-month anniversary and the final 40,000 due on the one-year anniversary, provided
performance conditions are met as per the agreement. On November 30, 2018, 20,000 shares of common stock were issued to investor
relations company 2 in compensation for services performed over the previous 3 months. A fair value of $1.90 was established based
on the closing price of the common stock on November 30, 2018 and $38,000 expensed. This fulfilled all liabilities in relation
to this agreement and as of November 30, 2018 the agreement was terminated. On December 1, 2018 a new agreement was
entered to receive investor relations services from investor relations company 2. The term of the agreement is 1 year, although
cancellable at the end of each three-month period if certain performance obligations are not met, including if the share trade
volumes fail to meet an average of 100,000 shares per day minimum. Compensation is partly in cash and partly in restricted stock.
A cash payment of $22,500 will be made at the beginning of each quarter and 12,500 shares of restricted common stock will be issued
at the end of each quarter dependent on the performance obligations being met. On December 11, 2018 the Company entered
into an agreement to receive investor relations services from investor relations company 3. The term of this agreement is 3 months.
Compensation is partly in cash and partly in restricted common stock. At the beginning of each month a cash payment of $10,000
will be made and 15,000 shares of restricted stock will be issued. A fair value of $1.55 was established based on the closing
price of the common stock on December 11, 2018, and $23,250 expensed. (d) Management Consultancy Agreement On December 3, 2018, the Company entered
into an agreement to receive management consultancy advice from management consultancy company 1. The term of this agreement is
12 months but is cancellable prior to this date on written notice to the other party. Compensation is partly in cash and partly
in restricted stock. A cash payment of $25,000 together with the issuance of 12,500 shares of restricted common stock was made
at the inception of the agreement and will be made at the beginning of each subsequent quarter. A fair value of $1.90 was established
based on the closing price of common stock on December 3, 2018. $15,833 of the total $23,750 expense was treated as a pre-payment
as of December 31, 2018. (e) Equity Distribution Agreement On October 19, 2018, the Company entered
into an Equity Distribution Agreement (the “Distribution Agreement”) with Maxim Group LLC, as sales agent (“Maxim”),
pursuant to which the Company may offer and sell, from time to time, through Maxim (the “Offering”), up to $20,000,000
in shares of its common stock (the “Shares”). Any shares offered and sold in the Offering will be issued pursuant to
the Company's Registration Statement on Form S-3 (File No. 333-210293) declared effective by the Securities and Exchange Commission
(the “SEC”) on March 31, 2016, the prospectus and the prospectus supplement, dated October 19, 2018, relating to the
Offering that forms a part of the Form S-3. Subject to the terms and conditions of the Distribution Agreement, Maxim will
use its commercially reasonable efforts to sell the Shares from time to time, based on the Company's instructions. Under the Distribution
Agreement, Maxim may sell the Shares by any method permitted by law deemed to be an “at-the-market” offering as defined
in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation,
sales made directly on the Nasdaq Capital Market. The Company has no obligation to sell any
of the Shares. The Company and Maxim may, upon notice to the other party, suspend the Offering for any reason and at any
time. The Offering will terminate upon the earlier of (a) October 19, 2019, (b) the sale of all common stock provided for
in the prospectus supplement, (c) the earlier termination of the Distribution Agreement by either the Company upon ten (10) days’
prior written notice, or by Maxim, and (d) termination by mutual agreement of the Company and Maxim. The Company intends
to use the net proceeds from any “at-the-market” (ATM) offering for general corporate purposes, which include, but
are not limited to, clinical trials to support a US FDA submission, product launch in Europe and the development of new applications
for the technology platform, specifically Lactic acid monitoring in the first instance. Under the terms of the Distribution
Agreement, Maxim will be entitled to a commission at a fixed rate of 3% of the gross sales price of Shares sold under the Distribution
Agreement. The Company also reimbursed Maxim for certain expenses incurred in connection with the Distribution Agreement, and agreed
to provide indemnification and contribution to Maxim with respect to certain liabilities under the Securities Act and the Securities
Exchange Act of 1934, as amended. Between October 31, 2018, and December
31, 2018, the Company issued 234,998 shares of its common stock through the Distribution Agreement and received proceeds after
commission of $441,452. An additional $147,449 of costs were incurred in relation to this transaction of which $39,222 are accrued
for as of December 31, 2018. (f) December 2018 Public Offering On December 18, 2018, the Company entered
into a placement agency agreement with Dawson James Securities, Inc. with respect to the issuance and sale of an aggregate of up
to 2,400,000 units, each unit consisting of one share of common stock, par value $0.001 per share, together with one warrant to
purchase one share of common stock at an exercise price equal to $1.04 per share, in a public offering. The warrants offered in
the public offering will terminate on the fifth anniversary of the date of issuance. The public offering price for each unit was
$1.04. The shares of common stock, the warrants
and the shares issuable upon exercise of the warrants are being offered and sold to the public pursuant to the Company's registration
statement on Form S-3 and an accompanying prospectus (File No. 333-210293), which was declared effective by the Securities and
Exchange Commission on March 31, 2016, and a prospectus supplement filed with the Securities and Exchange Commission on December
19, 2018. Pursuant to the placement agency agreement,
the Company agreed to pay Dawson James Securities, Inc. a cash fee equal to 8% of the aggregate gross proceeds raised in this
offering. The Company also agreed to pay fees and expenses of the placement agent, not to exceed $75,000, and to issue to Dawson
James Securities, Inc, on the closing date, a unit purchase option for the purchase of up to 97,103 units, equal to 5% of the
aggregate number of units sold in the public offering, with an exercise price of $1.30, or 125% of the price per unit. The closing of the offering occurred on
December 20, 2018 and at such closing the Company sold 1,942,061 shares of common stock and 1,942,061 warrants for gross proceeds
of $2,019,743. The net proceeds to the Company from the sale of the shares of common stock and the warrants was $1,691,398, after
deducting $328,345 of placement agent commissions and other offering expenses payable by the Company. As of December 31, 2018,
$110,423 of offering costs have not yet been paid and were accrued. Effective December 18, 2018, the Company
issued a unit purchase option to the placement agent to purchase 97,103 shares and 97,103 warrants. The Company has classified
this option as equity. The unit purchase option has a term of three years and an exercise price of $1.30. (g) Subsequent Events On January 7, 2019 the Company entered
into a six-month contract with management consultancy company 2 for the provision of specialist consultancy services. Compensation
is wholly through the issue of 250,000 restricted shares of common stock which will be issued on commencement of the contract and
150,000 additional restricted shares which will be issued on the fourth month after commencement of the contract. If the contract
has been terminated prior to the fourth month, the additional restricted shares will not be payable. On February 4, 2019, the Company signed
an addendum to the contract with management consultancy company 1. This extended the range of services from this company. Compensation
for the initial 120-day period will be in the form of a cash payment of $20,000 and the issuance of 20,000 restricted shares. Compensation
for subsequent 90-day periods will be comprised of a cash payment of $15,000 and the issuance of 15,000 restricted shares. The
contract is on a rolling 90-day period and can be cancelled at the end of each three-month period and at the end of the initial
120-day period. (a) Cash and cash equivalents The Company considers all highly liquid
investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents
consist primarily of cash deposits maintained in the United Kingdom. From time to time, the Company's cash account balances exceed
amounts covered by the Financial Services Compensation Scheme. The Company has never suffered a loss due to such excess balances. (b) Fixed rate cash accounts From time to time the Company may invest
funds in fixed rate cash savings accounts. Customarily, these accounts, at the time of the initial investment, provide a
higher interest rate than other bank accounts, and require the Company to maintain the funds in the accounts for a certain
period of time. As of December 31, 2018, the Company does not hold any cash reserves in any such savings accounts. (c) Fair value of financial
instruments The Company's financial instruments primarily
consist of cash, fixed rate cash accounts, accounts payable and other current liabilities. The estimated fair values of non-related
party financial instruments were not materially different from their carrying values as presented, due to their short maturities.
The fair value of amounts payable to related parties are not practicable to estimate due to the related party nature of the underlying
transactions. (d) Property and equipment Property and equipment is stated at cost
and depreciated using the straight-line method over the estimated useful lives of the assets, generally four years for fixtures
and fittings. Plant and machinery is stated at cost and
depreciated using the straight-line method over the estimated useful lives of the assets, generally four years for plant and machinery. (e) Intangible assets Intangible assets consist of licenses and
patents associated with the sugarBEAT device and are amortized on a straight-line basis, generally over their legal lives of up
to 20 years and are reviewed for impairment. The Company evaluates its intangible assets (all have finite lives) and other long-lived
assets for impairment whenever events or circumstances indicate that they may not be recoverable, or at least annually. Recoverability
of finite and other long-lived assets is measured by comparing the carrying amount of an asset group to the future undiscounted
net cash flows expected to be generated by that asset group. The Company groups assets for purposes of such review at the lowest
level for which identifiable cash flows of the asset group are largely independent of the cash flows of the other groups of assets
and liabilities. The amount of impairment to be recognized for finite and other long-lived assets is calculated as the difference
between the carrying value and the fair value of the asset group, generally measured by discounting estimated future cash flows.
There were no impairment indicators present during the nine months ended December 31, 2018 or 2017. (f) Revenue Recognition Revenue is recognized when the four basic
criteria of revenue recognition are met: (1) a contractual agreement exists; (2) transfer of rights has been completed; (3) the
fee is fixed or determinable; and (4) collectability is reasonably assured. The Company may enter into product development
and other agreements with collaborative partners. The terms of the agreements may include nonrefundable signing and licensing fees,
milestone payments and royalties on any product sales derived from collaborations. The Company recognizes up front license
payments as revenue upon delivery of the license only if the license has stand-alone value to the customer. However, where further
performance criteria must be met, revenue is deferred and recognized on a straight-line basis over the period the Company is expected
to complete its performance obligations. Royalty revenue will be recognized upon
the sale of the related products provided the Company has no remaining performance obligations under the applicable agreement. (g) Research and development expenses The Company charges research and development
expenses to operations as incurred. Research and development expenses primarily consist of salaries and related expenses for personnel
and outside contractor and consulting services. Other research and development expenses include the costs of materials and supplies
used in research and development, prototype manufacturing, clinical studies, related information technology and an allocation of
facilities costs. (h) Income taxes Income taxes are accounted for under the
asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,
and operating loss carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on
deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets if it is considered more likely
than not that some portion, or all, of the deferred income tax assets will not be realized. The Company recognizes the effect of income
tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured
at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in
the period in which the change in judgment occurs. The Company has elected to classify interest and penalties related to unrecognized
tax benefits as part of income tax expense in the consolidated statements of comprehensive loss. The Company does not have any
accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense related to unrecognized
tax benefits recognized for the three and nine months ended December 31, 2018 and 2017. In December 2017, the US Tax Cuts and Jobs
Act was signed into law. Generally, this Act reduces corporate rates from a top rate of 35% to a top rate of 21%, effective
January 1, 2018. As the Company’s US operations are minimal, and all deferred tax assets are fully allowed for, there
is no significant impact to the Company as of and for the three and nine month periods ended December 31, 2018. (i) Earnings per share Basic earnings per share is computed by
dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period.
There were no potentially dilutive securities as of December 31, 2018 and 2017. For the three and nine months ended December 31,
2018 and 2017, warrants to purchase 10 million shares of common stock were anti-dilutive and were excluded from the calculation
of diluted loss per share. For the three and nine months ended December 31, 2018, warrants to purchase 1,942,061 shares of
common stock and a unit purchase option to purchase 97,103 shares of common stock as well as 97,103 warrants were considered anti-dilutive
and were also excluded from the calculation of diluted loss per share. (j) Use of estimates The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenues and expenses during the periods presented. Actual
results may differ from those estimates. (k) Foreign currency translation The functional currency of the Company
is the Great Britain Pound Sterling ("GBP"). The reporting currency is the United States dollar (US$). Stockholders'
equity is translated into United States dollars from GBP at historical exchange rates. Assets and liabilities are translated
at the exchange rates as of the balance sheet date. Income and expenses are translated at the average exchange rates prevailing
during the reporting period. The translation rates are as follows: Nine Months Ended December 31, 2018 (unaudited) Nine Months Ended December 31, 2017 (unaudited) Three Months Ended December 31, 2018 (unaudited) Three Months Ended December 31, 2017 (unaudited) Twelve Months Ended March 31, 2018 Adjustments resulting from translating the financial statements
into the United States dollar are recorded as a separate component of accumulated other comprehensive loss in stockholders' equity. (l) Stock-based compensation For stock options granted as consideration
for services rendered by non-employees, the company recognizes compensation expense in accordance with the requirements of FASB
ASC Topic 505-50 (“ASC 505-50”), “Equity Based Payments to Non- Employees.” Non-employee restricted common
stock and stock option grants that do not vest immediately upon grant, and whose terms are known, are recorded as an expense over
the vesting period of the underlying instrument granted. At the end of each financial reporting period prior to vesting, the value
of the instruments granted, will be re-measured using the fair value of the Company’s common stock and the stock-based compensation
recognized during the period will be adjusted accordingly. For restricted common stock and stock option
awards that have performance-based conditions, the Company recognizes the stock-based compensation expense at the fair value of
the award based on the date that the performance conditions have been met. The Company calculates the fair value
of the stock options using the Black Scholes option pricing model. The fair value of restricted common stock awards
is based on the closing price of the Company’s common stock on the applicable measurement date. The assumptions used in calculating the
fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application
of management’s judgment. To date, the Company has not granted any
stock-based compensation awards to employees. (m) Direct costs incurred for equity financing The Company includes all direct costs incurred
in connection with successful equity financings as a component of additional paid-in capital. Direct costs incurred for equity
financings that are unsuccessful are expensed. (n) Recent accounting pronouncements The Company continually assesses any new
accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the
Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial
statements and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements
properly reflect the change. In May 2014, the Financial Accounting Standards
Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2014-09, Revenue from Contracts with Customers.
ASU 2014-09 has been modified multiple times since its initial release. This ASU outlines a single comprehensive model for entities
to use in accounting for revenue arising from contracts with customers and will replace most existing revenue recognition guidance
in U.S. GAAP when it becomes effective. ASU 2014-09, as amended, becomes effective for annual reporting periods beginning after
December 15, 2017. Early adoption is permitted. As an Emerging Growth Company, the Company is allowed to adopt new, or updated,
accounting standards using the same time frame that applies to private companies. The Company will adopt this standard on
April 1, 2019. Management is currently evaluating the impact of adoption of this ASU on the Company’s consolidated
financial statements. In March 2016, the FASB issued ASU No.
2016-02, Leases. The main difference between the provisions of ASU No. 2016-02 and previous U.S. GAAP is the recognition of right-of-use
assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU No. 2016-02
retains a distinction between finance leases and operating leases, and the recognition, measurement, and presentation of expenses
and cash flows arising from a lease by a lessee have not significantly changed from previous U.S. GAAP. For leases with a term
of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize
right-of-use assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous
U.S. GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period
presented using a modified retrospective approach. This ASU is effective for public business entities in fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted as of the beginning of any interim
or annual reporting period. As an Emerging Growth Company, the Company is allowed to adopt new, or updated, accounting standards
using the same time frame that applies to private companies. The Company will adopt this standard on April 1, 2020.
Management is currently evaluating the impact of adoption of this ASU on the Company’s consolidated financial statements. The translation rates are as follows: Nine Months Ended December 31, 2018 (unaudited) Nine Months Ended December 31, 2017 (unaudited) Three Months Ended December 31, 2018 (unaudited) Three Months Ended December 31, 2017 (unaudited) Twelve Months Ended March 31, 2018 Following is a summary of activity between
the Company and Pharma and NDM for the nine months ended December 31, 2018 and 2017. These amounts are unsecured, interest free,
and payable on demand. Three Months Ended December 31, 2018 (unaudited) ($) Three Months Ended December 31, 2017 (unaudited) ($) Nine Months Ended December 31, 2018 (unaudited) ($) Nine Months Ended December 31, 2017 (unaudited) ($) Year Ended March 31, 2018 ($) $B9R;$U1*=IZN8I-0JKF,VM6N7 8LM
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M(!D!(4@9ZCD<]JEYX8O/B^W]KW.D3VD.BF%OM;QM&DXN#E3NX#@9XZXS4]J^
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M"X8_*PSG!X!!XOQ#JVLZ=X8\7Z0-;OGGT.>S:WO@ZI*\4NW$;E1DE>27!!8]
M<#()<+GKU%<1>_;-'^('A:VCU2^N%U%;Q;O[1+E90D:LGR !$(/=%4GOG)SV
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M %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110
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M*Y_QW_R3SQ-_V"KK_P!%-0!Y#\#/^1)O?^PB_P#Z+CKTZO,?@9_R)-[_ -A%
M_P#T7'7IU6MBUL%%%%,85S^J>%5U37;35VUC48+BRW_95A$&R'>H5\!HR3D#
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M7=_>>+M+OFD6&1],AE*7:1J%CF9XHV1F87)L9 7)L9 1_9)X[>-HQ+)ND! 4"- 2-S9
MR0<9.3@<'A#P^HT?P_>W-SJGF65HJQV-T2B02E-CG:5#D_? W$@!CM &*[&B
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MFZ%&()"HJB/.5!R4). "2 !6+=>'HO#7PSU;1;![Z\C^R3QV\;1B63=(" H$
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9 Months Ended
Document and Entity Information:
Entity Registrant Name
Nemaura Medical Inc.
Document Type
10-Q
Document Period End Date
Dec. 31, 2018
Amendment Flag
false
Entity Central Index Key
0001602078
Current Fiscal Year End Date
--03-31
Entity Common Stock, Shares Outstanding
207,539,559
Entity's Reporting Status Current
Yes
Entity Filer Category
Accelerated Filer
Entity Emerging Growth Company
true
Entity Small Business
false
Entity Ex Transition Period
false
Document Fiscal Year Focus
2019
Document Fiscal Period Focus
Q3
Statement of Financial Position [Abstract]
Preferred stock, Par Value
$ 0.001
$ 0.001
Preferred stock, authorized
200,000
200,000
Preferred stock, issued
0
137,324
Preferred stock, outstanding
0
137,324
Common Stock, Par Value
$ 0.001
$ 0.001
Common Stock, Shares Authorized
420,000,000
420,000,000
Common Stock, Shares Issued
207,274,559
67,676,000
Common Stock, Shares Outstanding
207,274,559
67,676,000
3 Months Ended
9 Months Ended
Revenue:
Total revenues
$ 0
$ 0
$ 0
$ 0
Operating expenses
Research and development
443,380
355,300
1,495,201
713,585
General and administrative
489,545
121,053
1,357,044
627,605
Total operating expenses
932,925
476,353
2,852,245
1,341,190
Loss from operations
(932,925)
(476,353)
(2,852,245)
(1,341,190)
Interest income
7,036
9,988
23,927
74,006
Net loss
(925,889)
(466,365)
(2,828,318)
(1,267,184)
Other comprehensive income (loss):
Foreign currency translation adjustment
(38,626)
36,641
(311,718)
398,705
Comprehensive loss
$ (964,515)
$ (429,724)
$ (3,140,036)
$ (868,479)
Loss per share
Basic and diluted
$ (0.02)
Weighted Average Number of Shares Outstanding
205,407,088
121,411,478
172,179,520
177,035,840
9 Months Ended
Disclosure Text Block [Abstract]
ORGANIZATION, PRINCIPAL ACTIVITIES
9 Months Ended
Disclosure Text Block [Abstract]
Basis of Presentation
9 Months Ended
Disclosure Text Block [Abstract]
Summary of Significant Accounting Policies
Period end GBP : US$ exchange rate
1.277
1.351
1.277
1.351
1.403
Average period/yearly GBP : US$ exchange rate
1.308
1.300
1.277
1.343
1.331
9 Months Ended
Disclosure Text Block [Abstract]
Licensing Agreement
9 Months Ended
Disclosure Text Block [Abstract]
Related Party Transactions
Balance due from (to) Pharma and NDM at beginning of period
(642,513
)
(507,376
)
(613,818
)
(687,609
)
(687,609
)
Amounts invoiced by Pharma to DDL, NM and TCL (1)
(389,329
)
(314,706
)
(1,539,114
)
(554,464
)
(842,739
)
Amounts repaid by DDL to Pharma
92,025
-
1,130,755
440,266
1,096,767
Amounts paid by DDL on behalf of Pharma
-
-
-
19,889
19,889
Amounts received from Pharma
-
-
-
-
(145,214
)
Foreign exchange differences
21,023
(4,228
)
103,383
(44,392
)
(54,912
)
Balance due to Pharma and NDM at end of the period
(918,794
)
(826,310
)
(918,794
)
(826,310
)
(613,818
)
(1)
These amounts are included primarily in research and development expenses charged to the Company by Pharma.
9 Months Ended
Other Income and Expenses [Abstract]
OTHER ITEMS
9 Months Ended
Policy Text Block [Abstract]
Cash and cash equivalents
Fixed rate cash accounts
Fair Value of Financial Instruments
Property and equipment
Intangible Assets
Revenue Recognition
Research and development expenses
Income Taxes
Earnings Per Share
Use of Estimates
Foreign Currency Translation
Period end GBP : US$ exchange rate
1.277
1.351
1.277
1.351
1.403
Average period/yearly GBP : US$ exchange rate
1.308
1.300
1.277
1.343
1.331
Stock-based compensation
Direct costs incurred for equity financing
Recent Accounting Pronouncements
9 Months Ended
Summary Of Significant Accounting Policies Tables
Translation Rates
Period end GBP : US$ exchange rate
1.277
1.351
1.277
1.351
1.403
Average period/yearly GBP : US$ exchange rate
1.308
1.300
1.277
1.343
1.331
9 Months Ended
Related Party Transactions Tables Abstract
Schedule of Related Party Transactions
Balance due from (to) Pharma and NDM at beginning of period
(642,513
)
(507,376
)
(613,818
)
(687,609
)
(687,609
)
Amounts invoiced by Pharma to DDL, NM and TCL (1)
(389,329
)
(314,706
)
(1,539,114
)
(554,464
)
(842,739
)
Amounts repaid by DDL to Pharma
92,025
-
1,130,755
440,266
1,096,767
Amounts paid by DDL on behalf of Pharma
-
-
-
19,889
19,889
Amounts received from Pharma
-
-
-
-
(145,214
)
Foreign exchange differences
21,023
(4,228
)
103,383
(44,392
)
(54,912
)
Balance due to Pharma and NDM at end of the period
(918,794
)
(826,310
)
(918,794
)
(826,310
)
(613,818
)
(1)
These amounts are included primarily in research and development expenses charged to the Company by Pharma.
Organization Principal Activities
Accumulated deficit
$ (11,801,399)
$ (8,973,082)
Cash available on hand
$ 5,040,661
$ 822,335
$ 1,664,616
$ 911,359
3 Months Ended
9 Months Ended
12 Months Ended
Period End GBP/USD Exchange Rate [Membe]
Exchange rate
1.277
1.351
1.277
1.351
1.403
Period Average GBP/USD Exchange Rate [Membe]
Exchange rate
1.277
1.343
1.308
1.300
1.331
3 Months Ended
9 Months Ended
Fixed rate cash account
$ 0
$ 0
$ 4,911,551
Unrecognized tax benefits
$ 0
$ 0
$ 0
$ 0
Tax rate
21.00%
Fixtures and Fittings [Member]
Estimated useful lives
4 years
Plant and Machinery [Member]
Estimated useful lives
4 years
Warrant [Member]
Anti-dilutive common stock
10,000,000
10,000,000
10,000,000
10,000,000
Warrant One [Member]
Anti-dilutive common stock
1,942,061
1,942,061
Warrant Two [Member]
Anti-dilutive common stock
97,103
97,103
Option [Member]
Anti-dilutive common stock
97,103
97,103
Licensing Agreement Details Narrative
Non-refundable, upfront cash payment
$ 1,277,000
$ 1,403,000
Deferred revenue
$ 99,000
$ 70,000
3 Months Ended
9 Months Ended
12 Months Ended
Note 7 - Related Party Transactions Details
Balance due (to) Pharma and NDM at beginning of period
$ (642,513)
$ (507,376)
$ (613,818)
$ (687,609)
$ (687,609)
Amount invoiced by Pharma to DDL, NM and TCL
(389,329)
(314,706)
(1,539,114)
[1]
(554,464)
[1]
(842,739)
[1]
Amounts repaid by DDL to Pharma
92,025
0
1,130,755
440,266
1,096,767
Amounts paid by DDL on behalf of Pharma
0
0
0
19,889
19,889
Amounts received from Pharma
0
0
0
0
(145,214)
Foreign exchange differences
21,023
(4,228)
103,383
(44,392)
(54,912)
Balance due to Pharma and NDM at end of the period
$ (918,794)
$ (826,310)
$ (918,794)
$ (826,310)
$ (613,818)
[1]
These amounts are included primarily in research and development expenses charged to the Company by Pharma.
1 Months Ended
2 Months Ended
9 Months Ended
Common Stock, Shares Issued
207,274,559
207,274,559
67,676,000
Common Stock, Shares Outstanding
207,274,559
207,274,559
67,676,000
Stock based compensation
$ 183,667
$ 0
Warrants vested
50,000
December 2018 Public Offering Description
On December 18, 2018, the Company entered into a placement agency agreement with Dawson James Securities, Inc. with respect to the issuance and sale of an aggregate of up to 2,400,000 units, each unit consisting of one share of common stock, par value $0.001 per share, together with one warrant to purchase one share of common stock at an exercise price equal to $1.04 per share, in a public offering. The warrants offered in the public offering will terminate on the fifth anniversary of the date of issuance. The public offering price for each unit was $1.04. The shares of common stock, the warrants and the shares issuable upon exercise of the warrants are being offered and sold to the public pursuant to the Company's registration statement on Form S-3 and an accompanying prospectus (File No. 333-210293), which was declared effective by the Securities and Exchange Commission on March 31, 2016, and a prospectus supplement filed with the Securities and Exchange Commission on December 19, 2018. Pursuant to the placement agency agreement, the Company agreed to pay Dawson James Securities, Inc. a cash fee equal to 8% of the aggregate gross proceeds raised in this offering. The Company also agreed to pay fees and expenses of the placement agent, not to exceed $75,000, and to issue to Dawson James Securities, Inc, on the closing date, a unit purchase option for the purchase of up to 97,103 units, equal to 5% of the aggregate number of units sold in the public offering, with an exercise price of $1.30, or 125% of the price per unit. The closing of the offering occurred on December 20, 2018 and at such closing the Company sold 1,942,061 shares of common stock and 1,942,061 warrants for gross proceeds of $2,019,743. The net proceeds to the Company from the sale of the shares of common stock and the warrants was $1,691,398, after deducting $328,345 of placement agent commissions and other offering expenses payable by the Company. As of December 31, 2018, $110,423 of offering costs have not yet been paid and were accrued. Effective December 18, 2018, the Company issued a unit purchase option to the placement agent to purchase 97,103 shares and 97,103 warrants. The Company has classified this option as equity. The unit purchase option has a term of three years and an exercise price of $1.30.
Management Consultancy company 1 [Member]
Subsequent Events Description
On February 4, 2019, the Company signed an addendum to the contract with management consultancy company 1. This extended the range of services from this company. Compensation for the initial 120-day period will be in the form of a cash payment of $20,000 and the issuance of 20,000 restricted shares. Compensation for subsequent 90-day periods will comprise of a cash payment of $15,000 and the issuance of 15,000 restricted shares. The contract is on a rolling 90-day period and can be cancelled at the end of each three-month period and at the end of the 120-day period.
Management Consultancy company 2 [Member] | Subsequent Event [Member]
Subsequent Events Description
On January 7, 2019 the Company entered into a six-month contract with management consultancy company 2 for the provision of specialist consultancy services. Compensation is wholly through the issue of 250,000 restricted shares of common stock which will be issued on commencement of the contract and 150,000 additional restricted shares which will be issued on the fourth month after commencement of the contract. If the contract has been terminated prior to the fourth month, the additional restricted shares will not be payable.
Stock exchange agreements [Member]
Common Stock Cancelled
137,324,000
Stock exchange agreements [Member] | Three Holders [Member]
Number of common stock exchanged
137,324
Number of Preferred Stock issued
137,324,000
Conversion ratio
$ 1,000
Stock exchange agreements [Member] | Shareholders [Member]
Number of common stock exchanged
137,324,000
Number of Preferred Stock issued
137,324
Conversion ratio
$ 1,000
Investor relations agreements [Member] | Invictus [Member]
Related party expenses
$ 160,000
Exercise Price
$ 0.01
Investor relations agreements [Member] | Third Party [Member]
Common Stock, Shares Issued
50,000
Exercise of warrants
50,000
50,000
75,000
25,000
Stock based compensation
$ 114,500
Fair value of warrants per share
$ 2.29
Investor relations agreements [Member] | Investor relations company 2 [Member]
Investor relations agreements Description
On December 11, 2018 the Company entered into an agreement to receive investor relations services from investor relations company 3. The term of this agreement is 3 months. Compensation is partly in cash and partly in restricted common stock. At the beginning of each month a cash payment of $10,000 will be made and 15,000 shares of restricted stock will be issued. A fair value of $1.55 was established based on the closing price of the common stock on December 11, 2018, and $23,250 expensed.
On August 31, 2018, the Company entered into an agreement to receive investor relations services from investor relations company 2. The term of the agreement was 1 year, although cancellable after 3 months if certain performance-based conditions are not met, including if the share trade volumes fail to meet an average of 100,000 shares per day minimum. Compensation is partly in cash and partly in restricted stock, 40,000 shares of restricted stock due on the 3-month anniversary and the final 40,000 due on the one-year anniversary, provided performance conditions are met as per the agreement. On November 30, 2018, 20,000 shares of common stock were issued to investor relations company 2 in compensation for services performed over the previous 3 months. A fair value of $1.90 was established based on the closing price of the common stock on November 30, 2018 and $38,000 expensed. This fulfilled all liabilities in relation to this agreement and as of November 30, 2018 the agreement was terminated.
Equity Distribution Agreement [Member]
Equity Distribution Agreement Description
Between October 31, 2018, and December 31, 2018, the Company issued 234,998 shares of its common stock through the Distribution Agreement and received proceeds after commission of $441,452. An additional $147,449 of costs were incurred in relation to this transaction of which $39,222 are accrued for as of December 31, 2018.
Equity Distribution Agreement [Member] | Maxim [Member]
Maximum number of common stock offerings
20,000,000
Management Consultancy Agreement [Member] | Management Consultancy company 1 [Member]
Management Consultancy Agreement Description
On December 3, 2018, the Company entered into an agreement to receive management consultancy advice from management consultancy company 1. The term of this agreement is 12 months but is cancellable prior to this date on written notice to the other party. Compensation is partly in cash and partly in restricted stock. A cash payment of $25,000 together with the issuance of 12,500 shares of restricted common stock was made at the inception of the agreement and will be made at the beginning of each subsequent quarter. A fair value of $1.90 was established based on the closing price of common stock on December 3, 2018. $15,833 of the total $23,750 expense was treated as a pre-payment as of December 31, 2018.