10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  December 31, 2014

or

¨ TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  

 to

Commission File Number:  333-194857

Nemaura Medical Inc.

(Exact name of small business issuer as specified in its charter)

	NEVADA	46-5027260
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Tax. I.D. No.)
Charnwood Building, Holywell Park, Ashby Road, Loughborough, Leicestershire LE11 2PU United Kingdom
(Address of Principal Executive Offices)
+ 00 44 1509 222912
(Registrant’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes þ  Noo  

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting companyþ

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

YesoNoþ

The number of shares of no par value common stock outstanding as of January 31, 2015 was 200,000,000.

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NEMAURA MEDICAL INC. 

TABLE OF CONTENTS

		Page
PART I: FINANCIAL INFORMATION		3
ITEM 1	INTERIM FINANCIAL STATEMENTS	3
	Condensed Consolidated Balance Sheets as of December 31, 2014 (unaudited) and March 31, 2014	3
	Condensed Consolidated Statements of Comprehensive Income/(Loss) for the Three and Nine Months Ended December 31, 2014 and 2013 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2014 and 2013 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	15
ITEM 4	CONTROLS AND PROCEDURES	15
PART II: OTHER INFORMATION		17
ITEM 1	LEGAL PROCEEDINGS	17
ITEM 1A	RISK FACTORS	17
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	17
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	17
ITEM 4	MINE SAFETY DISCLOSURES	17
ITEM 5	OTHER INFORMATION	17
ITEM 6	EXHIBITS	17
SIGNATURES		17

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PART I – FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

NEMAURA MEDICAL INC.

Condensed Consolidated Balance Sheets

	As of December 31, 2014 ($)	As of March 31, 2014 ($)
	(Unaudited)
ASSETS
Current Assets:
Cash	613,608	1,873,141
Prepayments and Other assets	39,724	20,390
Prepayment to Related Party for clinical trials	465,454	-
Total Current Assets	1,118,786	1,893,531
Intangible assets, net of accumulated amortization	115,863	70,781
Tangible fixed assets	6,154	-
Restricted cash	-	85,462
	122,017	156,243
Total assets	1,240,803	2,049,774
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	50,408	1,830
Other liabilities	4,362	6,844
Total current liabilities	54,770	8,674
Deferred revenue	1,566,600	1,667,200
Total liabilities	1,621,370	1,675,874
Commitments and contingencies:
Stockholders’ Equity:
Common stock, $0.001 par value,
420,000,000 shares authorized and 200,000,000	200,000	200,000
shares issued and outstanding
Additional paid in capital	2,924,672	2,924,672
Accumulated deficit	(3,525,791)	(2,741,890)
Accumulated other comprehensive income (loss)	20,552	(8,882)
Total stockholders’ (deficit) equity	(380,567)	373,900
Total liabilities and stockholders’ equity	1,240,803	2,049,774

See notes to the unaudited condensed consolidated financial statements

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NEMAURA MEDICAL INC.

Condensed Consolidated Statements Of Comprehensive Income/(Loss)

(Unaudited)

	Three Months Ended December 31,		Nine Months Ended December 31,
	2014 ($)	2013 ($)	2014 ($)	2013 ($)
Revenue:	-	-	-	-
Total revenue	-	-	-	-
Operating Expenses:
Research and development	141,976	172,446	555,795	253,043
General and administrative	16,790	167,750	228,106	171,064
Total operating expenses	158,766	340,196	783,901	424,107
Loss from operations	(158,766)	(340,196)	(783,901)	(424,107)
Net loss	(158,766)	(340,196)	(783,901)	(424,107)
Other comprehensive income:
Foreign currency translation adjustment	24,580	(13,460)	29,434	9,906
Comprehensive loss	(134,186)	(353,656)	(754,467)	(414,201)
Loss per share
Basic and diluted	*	*	*	*
Weighted average number of shares outstanding	200,000,000	180,000,000	200,000,000	180,000,000

* Per share amounts are less than $0.01

See notes to the unaudited condensed consolidated financial statements

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NEMAURA MEDICAL INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended December 31,
	2014 ($)	2013 ($)
Cash Flows From Operating Activities:
Net Loss	(783,901)	(424,107)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,536	2,230
Contributed services to a related party	-	218,863
Changes in assets and liabilities:
Prepayments and other assets	(21,721)	(2,122)
Accounts payable and other liabilities	49,035	-
Prepayment to related party for clinical trials	(494,491)	-
Net cash used in operating activities	(1,245,542)	(205,136)
Cash Flows From Investing Activities:
Decrease in restricted cash	85,462	-
Purchase of intellectual property	(57,222)	(10,956)
Purchase of tangible fixed assets	(7,181)	-
Net cash provided by (used in) in investing activities	21,059	(10,956)
Cash Flows From Financing Activities:
Net cash provided by financing activities	-	-
Net decrease in cash	(1,224,483)	(216,092)
Effect of exchange rate changes on cash	(35,050)	22,433
Cash at beginning of period	1,873,141	200,485
Cash at end of period	613,608	6,826

See notes to the unaudited condensed consolidated financial statements

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NEMAURA MEDICAL INC.

Notes to Condensed Consolidated Financial Statements

Three and Nine Months Ended December 31, 2014

 (Unaudited)

INTERIM FINANCIAL STATEMENTS

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”). The CGM system 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 CGM  extracts  analytes, such as glucose, to the surface of the skin in a non-invasive manner to the surface of the skin 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 formed on December 12, 2013.  Region Green Limited owns one hundred percent (100%) of the stock in Dermal Diagnostic (Holdings) Limited, an England and Wales corporation 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 CGM device, which consists of a disposable patch containing a sensor, and a non-disposable miniature electronic watch with a re-chargeable power source, which can enable early detection of subtle changes in blood glucose levels.

The following diagram illustrates our corporate and shareholder structure as of December 31, 2014:

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NEMAURA MEDICAL INC.

Notes to Condensed Consolidated Financial Statements

Three and Nine Months Ended December 31, 2014

(Unaudited)

NOTE 2 -- BASIS OF PRESENTATION

The accompanying financial statements of Nemaura have been prepared in accordance with the instructions to quarterly reports on Form 10-Q. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position at December 31, 2014 and for all periods presented have been made. Certain information and footnote data necessary for fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Registration Statement on Form S-1 filed with the Securities Exchange Commission on August 12, 2014. The results of operations for the period ended December 31, 2014 are not necessarily an indication of operating results for the full year.

In the quarter ending June 30, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU has allowed the Company to remove the inception to date information and all references to development stage.

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)

Economic and political risk

The Company’s operations are conducted in the United Kingdom. Accordingly, the political, economic, and legal environments in the United Kingdom may influence the Company’s business, financial condition, and results of operations.

(b)

Cash and Restricted Cash

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. The Company’s restricted cash includes cash held in escrow with use restricted to certain future listing costs.

(c)

Fair value of financial instruments

The Company’s financial instruments primarily consist of cash and accounts payable. As of the period-end dates, the estimated fair values of financial instruments were not materially different from their carrying values as presented, due to their short maturities.  

(d)

Intangible assets

Intangible assets consist of licenses and patents associated with the CGM and are amortized on a straight-line basis, generally over their legal life.

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NEMAURA MEDICAL INC.

Notes to Condensed Consolidated Financial Statements

Three and Nine months Ended December 31, 2014

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(e)

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 non-refundable 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 standalone 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 agreement.

(f)

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.

(g)

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 Income (Loss).

(h)

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, 2014 and 2013.

(i)

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 year. Actual results may differ from those estimates.

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NEMAURA MEDICAL INC.

Notes to Condensed Consolidated Financial Statements

Three and Nine months Ended December 31, 2014

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(j)

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 balance sheet date. Income and expenditures are translated at the average exchange rates prevailing during the reporting period.  

The translation rates are as follows:

	December 31, 2014 (unaudited)	December 31, 2013 (unaudited)	March 31, 2014
Period end GBP : US$ exchange rate	1.567	1.656	1.667
Average period/yearly GBP : US$ exchange rate	1.601	1.560	1.588

Adjustments resulting from translating the financial statements into the United States dollar are recorded as a separate component of accumulated other comprehensive income in Stockholders’ Equity (Deficit).

(k)

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, FASB issued ASU No. 2014-09 “Revenue from Contracts from Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and is to be applied retrospectively.  Early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements.

In February 2013, FASB issued ASU No. 2013-02, “Comprehensive Income: Reporting the Amounts Reclassified Out of Accumulated Other Comprehensive Income” which expanded the disclosure requirements with respect to changes in accumulated other comprehensive income (AOCI). Under this new guidance, companies are required to disclose the amount of income (or loss) reclassified out of AOCI to each respective line item on the statements of earnings where net income is presented. The guidance allows companies to elect whether to disclose the reclassification either in the notes to the financial statements or parenthetically on the face of the financial statements. The adoption did not have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-14, “Presentation of Financial Statements – Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern.” The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter. The Company is currently assessing the impact of the adoption of the ASU No. 2014-15 on its financial position, results of operations and financial statements disclosures.

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NEMAURA MEDICAL INC.

Notes to Condensed Consolidated Financial Statements

Three and Nine months Ended December 31, 2014

(Unaudited)

NOTE 4 – LICENSING AGREEMENT

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 CGM and related patches under its own brand in the United Kingdom and the Republic of Ireland. The Company received a non-refundable, upfront cash payment of GBP 1,000,000 (approximately $1.57 million and $1.67 million as of December 31, 2014 and March 31, 2014 respectively), which is wholly non-refundable, upon signing the agreement. A supply cost for goods agreement will be finalized upon product approval and prior to launch, as part of the full commercial licensing agreement also to be signed closer to product approval and launch. 

As the Company has continuing performance obligations under the agreement, the upfront fees received from this agreement have been deferred and will be recorded as income over the term of the commercial licensing agreement.

In April 2014, a Letter of Intent was signed with the third party, which specified a 10 year term. This relates to a Full Commercial Licensing agreement.

NOTE 5 – CASH

As of December 31, 2014 and March 31, 2014, the Company held $613,608 and $1,873,141 in cash, respectively.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets are summarized as follows:

	December 31, 2014 (unaudited) ($)	March 31, 2014 ($)
Patents and licenses	131,226	87,655
Less accumulated amortization	(15,363)	(16,874)
	115,863	70,781

Estimated amortization expense is approximately $7,000 for each of the next five years.

NOTE 7 – RELATED PARTY TRANSACTIONS

Nemaura Pharma Limited (Pharma) and NDM Technologies Limited (NDM) are entities controlled by the Company’s majority shareholder Dewan FH Chowdhury.

From inception, Pharma invoiced DDL and TCL for research and development services. In addition, certain operating expenses of DDL and TCL were incurred and paid by Pharma and NDM. In accordance with the United States Securities and Exchange Commission (SEC) Staff Accounting Bulletin 55, these financial statements reflect all costs associated with the operations of DDL and TCL. While certain costs incurred by Pharma and NDM are directly attributable to DDL and TCL, other costs were shared between the organizations. In situations where the costs were shared, expense has been allocated between Pharma and NDM and DDL and TCL using a fixed percentage allocation. Management believes the methodologies used are reasonable and that the costs allocated are not materially different from what they would have been had Pharma and NDM been unaffiliated entities. DDL and TCL advanced Pharma certain amounts to cover a portion of the costs. The remaining amounts were contributed to the Company in the form of contributed services.

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NEMAURA MEDICAL INC.

Notes to Condensed Consolidated Financial Statements

Three and Nine months Ended December 31, 2014

(Unaudited)

NOTE 7 – RELATED PARTY TRANSACTIONS (continued)

Following is a summary of activity between the Company and Pharma and NDM as of December 31, 2014 (unaudited) and March 31, 2014:

	Nine Months Ended December 31, 2014 (unaudited) ($)	Year Ended March 31, 2014 ($)
Balance due (to) Pharma and NDM at beginning of period	-	-
Amounts advanced to Pharma	578,409	325,092
Amounts received from Pharma	(1,567)	(149,280)
Amounts invoiced by Pharma to DDL and TCL	(110,106)	(557,670)
Expenses paid by Pharma on behalf of DDL and TCL	-	(28,574)
Assets contributed by Pharma on behalf of DDL and TCL	-	(7,327)
Capital contribution by Pharma (excess of expenses paid over amounts advanced)	-	420,401
Foreign exchange differences	(1,282)	(2,642)
Balance due from (to) Pharma and NDM at end of the period	465,454	-

Advances to Pharma as of December 31, 2014 consist of amounts advanced in connection with the Company’s planned clinical trials. These advances are expected to be expensed in the fourth quarter of fiscal 2015, as clinical trials commence.

In addition, the Company engaged a related party, One-E Consulting Limited, to provide certain consulting services, in the amount of $4,453 related to the Company’s public listing transaction.  Bashir Timol serves as Strategic Director of One-E Consulting Limited.  Mr. Timol is also a Director of the Company.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's plans and basis of presentation:

The  Company  has  experienced  recurring  losses  and  negative  cash  flows  from  operations. At December 31, 2014, the Company had cash of $613,608, working capital of $1,064,016, stockholders' deficit of $380,567 and an accumulated deficit of $3,525,791. To date, the Company has funded its operations through the issuances of equity, UK government grants and contributions of services from related entities.  The Company  expects  to  continue  to  incur  losses  from  operations  for  the  near-term  and  these  losses  could  be significant as product development,  clinical and regulatory  activities,  consulting  expenses  and other product  development  related expenses are incurred.

We believe that our current working capital position is sufficient to continue the ongoing clinical studies during this fiscal year. Our cash on hand is also sufficient to maintain our basic operations to December 2015.

During this reporting period we obtained conformance notifications from the Drug Controller General India (DCGI, the Indian regulatory authority for approval of drugs and medical devices), and Ethics approvals in multiple clinics in India, and the first stage of a 140 patient study was commenced in some of these clinics. This study is expected to run for 6-9 months depending on patient recruitment rates. We filed our algorithm patent in all major global territories, and filed an International patent (PCT) titled: Characterisation of Biological Substances. Furthermore during this period we submitted an application for the first CE approval to the notified body Intertek. We plan to commence scale-up manufacturing during the fourth fiscal quarter of 2015.

We continue to actively pursue various funding options, including equity offerings and debt financings, to obtain additional funds to continue the development of our products and bring them to commercial markets. We are closely monitoring our cash balances, cash needs and expense levels.

Management's strategic plans include the following:

It is our goal  to lead in the discovery, development and commercialization of innovative and targeted diagnostic medical devices that improve disease monitoring, management and overall patient care. We plan to take the following steps to implement our broad business strategy post-approval:

·

Develop our own specialty sales and marketing teams to market the CGM Watch in the European Union. We intend to develop specialty sales teams and/or enter into licensing agreements with established marketing companies for production and distribution of our product in the European Economic Area. We have a marketing rights agreement for the UK and Republic of Ireland with DB Pharma (Jersey) Ltd.

·

Expand the indications for which the CGM Watch may be used. We believe that the CGM Watch may offer other significant benefits other than those found in the non-acute setting for the monitoring of other diseases. This includes monitoring of lactic acid for performance athletics, and the monitoring of drugs. Initial proof of concept will be completed in laboratory settings followed by a clinical program.

·

Expand our product pipeline through our proprietary platform technologies, acquisitions and strategic licensing arrangements. We intend to leverage our proprietary platform technologies to grow our portfolio of product candidates for the diagnosis of diabetes and other diseases. In addition we intend to license our product and acquire products and technologies that are consistent with our research and development and business focus and strategies.

Results of Operations

Comparative Results for the Nine Months Ended December 31, 2014 and 2013

Revenue

In March 2014, we received an upfront non-refundable cash payment of GBP 1,000,000 (approximately $1.67 million) in connection with an Exclusive Marketing Rights Agreement with an unrelated third party that provides the third party the exclusive right to market and promote the CGM and related patch under its own brand in the United Kingdom and the Republic of Ireland.  We have deferred this licensing revenue until we complete our continuing performance obligations, which include securing successful CE marking of the CGM patch. We expect to record the revenue in income over an approximately 10 year term from the date CE marking approval is obtained.  Although the revenue is deferred at December 31, 2014, the cash payment became immediately available and will be used to fund our operations, including research and development costs associated with obtaining the CE marking approval.

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Research and Development Expenses

Research and development expenses were $555,795 and $253,043 for the nine month periods ended December 31, 2014 and 2013, respectively. The increase is due to the increased activity, mostly subcontracted, relating to preparation for our Ethics submission and our initial European Conformity Approval submission.  We expect research and development expenses to increase in future periods as we continue our clinical studies of our CGM Watch and pursue our strategic opportunities.

General and Administrative Expenses

General and administrative expenses were $228,106 and $171,064 for the periods ended December 31, 2014 and 2013, respectively.  General and administrative expenses increased approximately $57,000, primarily due to the ongoing costs associated with our audit and legal expenses related to the registration process with the Securities and Exchange Commission (“SEC”). We expect general and administrative expenses to increase going forward in the long term, as we move our technologies forward toward commercialization and incur additional costs and expenses related to ongoing compliance with SEC reporting.

Effects of exchange rate

For the periods ended December 31, 2014 and 2013 we had exchange rate fluctuations that affected our cash flows.  For the nine month periods ended December 31, 2014 and 2013, the effects of changes in foreign exchange rates on cash were ($35,050) and $22,433, respectively.

Comparative Results for the Three Months Ended December 31, 2014 and 2013

Revenue

There were no sales recognized in the quarters to December 2014 or 2013.

Research and Development Expenses

Research and development expenses were $141,976 and $172,446 for the three months ended December 31, 2014 and 2013, respectively. The decrease is due to the stage of development reached. More work was carried out in house in the quarter to December 2014 compared to the comparative period. We expect research and development expenses to increase in future periods as we continue our clinical studies of our CGM Watch and pursue our strategic opportunities.

General and Administrative Expenses

General and administrative expenses were $16,790 and $167,750 for the three months ended December 31, 2014 and 2013, respectively.  General and administrative expenses decreased approximately $156,000 as the quarter to December 2013 contained costs relating to the initial work being carried out towards our listing. Advisor and management fees were significant as a result. No significant one time fees feature in the quarter to December 2014. We expect general and administrative expenses to increase going forward in the long term, as we move our technologies forward toward commercialization and incur additional costs and expenses related to ongoing compliance with SEC reporting.

Liquidity and Capital Resources

We have experienced net losses and negative cash flows from operations since our inception.  We have sustained cumulative losses of $3,525,791 through December 31, 2014 as technical development has continued since March 31, 2014. We have historically financed our operations through the issuances of equity, UK government grants, and contributions of services from related entities.

We continue to actively pursue various funding options, including equity offerings and debt financings, to obtain additional funds to continue the development of our products and bring them to commercial markets. There can be no assurance that we will be able to consummate any fund raising transactions on terms acceptable to us or at all.

Our cash position was $613,608 as of December 31, 2014, and is adequate for our current level of operations through to the end of the calendar year 2015, and for the achievement of certain of our product development milestones.  

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Through December 2014, we have incurred expenditures of approximately $67,000, and  $45,000, related to our submission for ethics approval and our CE approval, respectively. We advanced approximately $578,000 to Nemaura Pharma in connection with our milestone related to clinical studies in Type I and Type II Diabetic Subjects. Applications for ethics approval have been submitted to the Dubai Health authority and the UK MHRA (Medicines and Health Products Regulatory Agency), and two Clinical Centres in India with appropriate notification to the DCGI (Drug Controller General of India). Furthermore, 70 CGM devices have been manufactured and tested in preparation for the clinical studies, and request for CE (European Conformity) approval review was submitted in the second fiscal quarter of 2015 to the Notified body Intertek in the UK, for the initial proposed CE approval using literature based clinical evaluation. While our current cash level is sufficient for the commencement of the clinical studies and the initial scale up of our manufacturing, the completion of those milestones by the stated product development target dates is contingent upon our ability to raise additional funds.  This may include a combination of debt, equity and licensing fees.  If we are not successful in raising the funds needed in the specified timelines, the target dates for the achievement of the milestones will be extended.

There are no assurances that we will be able to raise additional capital as may be needed and meet our projections for operating expenses.   If we are unable to raise additional capital, our liquidity will be materially adversely affected and we may be forced to cease or significantly delay our clinical trials.

We believe that the successful growth and operation of our business is dependent upon our ability to obtain adequate sources of debt or equity financing to pay for our operating expenses and to fund our long-term business strategy.

There can be no assurance that we will be successful in achieving our long-term plans as set forth above, or that such plans, if consummated, will enable us to obtain profitable operations or continue in the long-term.

Net cash used by our operating activities for the nine months ended December 31, 2014 was $1,245,542 which reflected our net loss of $783,901 together with an increase in accounts payable of $49,035 and an increase in prepayments to a related party of $494,491.  Net cash used in operating activities for the period ended December 31, 2013 was $205,136, which reflected our net loss of $424,107 together with contributed services from a related party of $218,863.

Net cash provided by investing activities was $21,059 for the nine months ended December 31, 2014, which reflected a decrease in restricted cash less expenditure on fixed assets and intellectual property.  For the nine months ended December 31, 2013, net cash used in investing activities was $10,956 which reflected the purchase of intellectual property.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with research and development, income taxes and intangible assets.

The Company’s financial position, results of operations and cash flows are impacted by the accounting policies the Company has adopted. In order to get a full understanding of the Company’s financial statements, one must have a clear understanding of the accounting policies employed. A summary of the Company’s critical accounting policies follows:

Research and Development Expenses:  The Company charges research 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.

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 year 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

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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 income (loss).

Intangible Assets:    Intangible assets primarily represent legal costs and filings associated with obtaining patents on the Company’s new discoveries. The Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life using the straight-line method. The Company tests intangible assets with finite lives upon significant changes in the Company’s business environment and any resulting impairment charges are recorded at that time.

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 and with collaborative partners. The terms of the agreements may include non-refundable 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 agreement.

Recently issued accounting pronouncements:  See Note 3 – Summary of Significant Accounting Policies to the accompanying financial statements for recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

As a smaller reporting company we are not required to provide information required by this Item

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Mr. Dewan F.H, Chowdhury, who is our  Chief Executive Officer and our Principal Financial and Accounting Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this evaluation, management concluded that our disclosure controls and

procedures were not effective at the reasonable assurance level due to a material weakness in our internal control over financial reporting, which is described below.

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Changes in Internal Control over Financial Reporting

In connection with the preparation of our financial statements for the fiscal year ended March 31, 2014, we concluded there was a material weakness in the design and operating effectiveness of our internal control over financial reporting.  We have begun to establish a number of remediation measures, which we believe will remediate the material weaknesses identified, if such measures are effectively implemented and maintained.  As of the end of the period covered by the report, we continue the process of implementing and maintaining the remediation measures, but we cannot assure when or if we will be able to successfully implement these remedial measures. 

A material weakness is adeficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The primary factors contributing to the material weakness, which relates to our financial statement close process, were:

·

Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. Specifically, there is limited review of financial reporting and policies and procedures have not yet been implemented to analyze, document, monitor and report on non-routine and complex transactions that require management estimation or judgment.

·

Related party transactions. Specifically, there are limited controls over the authorization, recording and disclosure of related party transactions.

 We have begun taking steps and plan to take additional measures to remediate the underlying causes of the material weakness, primarily through the development and implementation of formal policies, improved processes and documented procedures, as well as the hiring of additional finance personnel.

Notwithstanding the identified material weakness, management believes the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A.  RISK FACTORS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits listed on the Exhibit Index below are provided as part of this report.

Exhibit No.	Document Description
31.1	Certification of the Principal Executive Officer and Principal Financial 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
32.1	Certification of the Principal Executive Officer and Principal Financial 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
101	Interactive Data Files (1)

(1)  Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be filed by the Company for purposes of Section 18 or any other provision of the Exchange Act of 1934, as amended.

SIGNATURES

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

	NEMAURA MEDICAL INC.
Dated:  February 12, 2015	/s/ Dewan F H Chowdhury
	Dewan F H Chowdhury
	Chief Executive Officer (Principal Executive Officer) and  Chief Financial Officer (Principal Financial Officer )

17

EX-31

EXHIBIT 31.1

Certification of
Principal Executive Officer and Principal Accounting Officer

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dewan F H Chowdhury, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Nemaura Medical Inc., a Nevada corporation (the “Registrant”) and its subsidiaries;

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

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

4.    I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a)

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

b)

[omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];

c)

Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

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

5.     I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

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

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: February 12, 2015

/s/ Dewan F H Chowdhury

Dewan F H Chowdhury
Chief Executive Officer (Principal Executive Officer) and  Chief Financial Officer (Principal Financial Officer )

EX-32

EXHIBIT 32
Section 1350 Certifications

STATEMENT FURNISHED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

WRITTEN STATEMENT
PURSUANT TO
18 U.S.C. SECTION 1350

In connection with Quarterly Report of Nemaura Medical, Inc. and its subsidiaries (the “Company”) on Form 10-Q for the period ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Dewan F H Chowdhury, Principal Executive Officer and Principal Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 12, 2015	By:	DEWAN F. H. CHOWDHURY
	Name:	Dewan F H Chowdhury
	Title:	Chief Executive Officer (Principal Executive Officer) and  Chief Financial Officer (Principal Financial Officer )

XML

Note 6 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Tables)

9 Months Ended

Dec. 31, 2014

Tables/Schedules

Schedule of Finite-Lived Intangible Assets

	December 31, 2014 (unaudited) ($)	March 31, 2014 ($)
Patents and licenses	131,226	87,655
Less accumulated amortization	(15,363)	(16,874)
	115,863	70,781

XML

Note 4 - Licensing Agreement

9 Months Ended

Dec. 31, 2014

Notes

Note 4 - Licensing Agreement

NOTE 4 – LICENSING AGREEMENT

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 CGM and related patches under its own brand in the United Kingdom and the Republic of Ireland. The Company received a non-refundable, upfront cash payment of GBP 1,000,000 (approximately $1.57 million and $1.67 million as of December 31, 2014 and March 31, 2014 respectively), which is wholly non-refundable, upon signing the agreement. A supply cost for goods agreement will be finalized upon product approval and prior to launch, as part of the full commercial licensing agreement also to be signed closer to product approval and launch. 

As the Company has continuing performance obligations under the agreement, the upfront fees received from this agreement have been deferred and will be recorded as income over the term of the commercial licensing agreement.

In April 2014, a Letter of Intent was signed with the third party, which specified a 10 year term. This relates to a Full Commercial Licensing agreement.

XML

Note 3 - Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2014

Notes

Note 3 - Summary of Significant Accounting Policies

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)     Economic and political risk

The Company’s operations are conducted in the United Kingdom. Accordingly, the political, economic, and legal environments in the United Kingdom may influence the Company’s business, financial condition, and results of operations.

(b)     Cash and Restricted Cash

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. The Company’s restricted cash includes cash held in escrow with use restricted to certain future listing costs.

(c)     Fair value of financial instruments

The Company’s financial instruments primarily consist of cash and accounts payable. As of the period-end dates, the estimated fair values of financial instruments were not materially different from their carrying values as presented, due to their short maturities.  

(d)     Intangible assets

Intangible assets consist of licenses and patents associated with the CGM and are amortized on a straight-line basis, generally over their legal life.

(e)     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 non-refundable 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 standalone 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 agreement.

(f)      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.

(g)     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 ConsolidatedStatements of ComprehensiveIncome (Loss).

(h)     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, 2014 and 2013.

(i)       Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 year. Actual results may differ from those estimates.

(j)      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 balance sheet date. Income and expenditures are translated at the average exchange rates prevailing during the reporting period. 

The translation rates are as follows:

	December 31, 2014 (unaudited)	December 31, 2013 (unaudited)	March 31, 2014
Period end GBP : US$ exchange rate	1.567	1.656	1.667
Average period/yearly GBP : US$ exchange rate	1.601	1.560	1.588

Adjustments resulting from translating the financial statements into the United States dollar are recorded as a separate component of accumulated other comprehensive income in Stockholders’ Equity (Deficit).

(k)                 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, FASB issued ASU No. 2014-09 “Revenue from Contracts from Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and is to be applied retrospectively.  Early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements.

In February 2013, FASB issued ASU No. 2013-02, “Comprehensive Income: Reporting the Amounts Reclassified Out of Accumulated Other Comprehensive Income” which expanded the disclosure requirements with respect to changes in accumulated other comprehensive income (AOCI). Under this new guidance, companies are required to disclose the amount of income (or loss) reclassified out of AOCI to each respective line item on the statements of earnings where net income is presented. The guidance allows companies to elect whether to disclose the reclassification either in the notes to the financial statements or parenthetically on the face of the financial statements. The adoption did not have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-14, “Presentation of Financial Statements – Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern.” The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter. The Company is currently assessing the impact of the adoption of the ASU No. 2014-15 on its financial position, results of operations and financial statements disclosures.

XML

Statement of Financial Position (USD $)	Dec. 31, 2014	Mar. 31, 2014
Assets, Current
Cash and Cash Equivalents, at Carrying Value	$ 613,608	$ 1,873,141
Prepayments and Other Assets	39,724	20,390
Prepayment to Related Party for clinical trials	465,454
Assets, Current	1,118,786	1,893,531
Assets, Noncurrent
Finite-Lived Intangible Assets, Net	115,863	70,781
Restricted Cash, Noncurrent		85,462
Tangible Fixed Assets	6,154
Assets, Noncurrent	122,017	156,243
Assets	1,240,803	2,049,774
Liabilities, Current
Accounts Payable, Current	50,408	1,830
Other Liabilities, Current	4,362	6,844
Liabilities, Current	54,770	8,674
Liabilities, Noncurrent
Deferred Revenue and Credits, Noncurrent	1,566,600	1,667,200
Liabilities, Noncurrent	1,566,600	1,667,200
Liabilities	1,621,370	1,675,874
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest
Common Stock, Value, Issued	200,000	200,000
Additional Paid in Capital, Common Stock	2,924,672	2,924,672
Accumulated Other Comprehensive Income (Loss), Net of Tax	20,552	(8,882)
Retained Earnings (Accumulated Deficit)	(3,525,791)	(2,741,890)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(380,567)	373,900
Liabilities and Equity	$ 1,240,803	$ 2,049,774

XML

Note 1 - Organization and Principal Activities

9 Months Ended

Dec. 31, 2014

Notes

Note 1 - Organization and Principal Activities

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”). The CGM system 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 CGM  extracts  analytes, such as glucose, to the surface of the skin in a non-invasive manner to the surface of the skin 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 formed on December 12, 2013.  Region Green Limited owns one hundred percent (100%) of the stock in Dermal Diagnostic (Holdings) Limited, an England and Wales corporation 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 CGM device, which consists of a disposable patch containing a sensor, and a non-disposable miniature electronic watch with a re-chargeable power source, which can enable early detection of subtle changes in blood glucose levels.

The following diagram illustrates our corporate and shareholder structure as of December 31, 2014:

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Note 3 - Summary of Significant Accounting Policies: Foreign Currency Translation (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Foreign Currency Translation

(j)      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 balance sheet date. Income and expenditures are translated at the average exchange rates prevailing during the reporting period. 

The translation rates are as follows:

	December 31, 2014 (unaudited)	December 31, 2013 (unaudited)	March 31, 2014
Period end GBP : US$ exchange rate	1.567	1.656	1.667
Average period/yearly GBP : US$ exchange rate	1.601	1.560	1.588

Adjustments resulting from translating the financial statements into the United States dollar are recorded as a separate component of accumulated other comprehensive income in Stockholders’ Equity (Deficit).

XML

Note 3 - Summary of Significant Accounting Policies: Foreign Currency Translation: Foreign Currency Disclosure (Tables)

9 Months Ended

Dec. 31, 2014

Tables/Schedules

Foreign Currency Disclosure

	December 31, 2014 (unaudited)	December 31, 2013 (unaudited)	March 31, 2014
Period end GBP : US$ exchange rate	1.567	1.656	1.667
Average period/yearly GBP : US$ exchange rate	1.601	1.560	1.588

XML

Note 2 -- Basis of Presentation

9 Months Ended

Dec. 31, 2014

Notes

Note 2 -- Basis of Presentation

NOTE 2 -- BASIS OF PRESENTATION

The accompanying financial statements of Nemaura have been prepared in accordance with the instructions to quarterly reports on Form 10-Q. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position at December 31, 2014 and for all periods presented have been made. Certain information and footnote data necessary for fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Registration Statement on Form S-1 filed with the Securities Exchange Commission on August 12, 2014. The results of operations for the period ended December 31, 2014 are not necessarily an indication of operating results for the full year.

In the quarter ending June 30, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU has allowed the Company to remove the inception to date information and all references to development stage.

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.

XML

Statement of Financial Position - Parenthetical (USD $)	Dec. 31, 2014	Mar. 31, 2014
Balance Sheets
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	420,000,000	420,000,000
Common Stock, Shares Issued	200,000,000	200,000,000
Common Stock, Shares Outstanding	200,000,000	200,000,000

XML

Note 3 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Revenue Recognition

(e)     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 non-refundable 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 standalone 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 agreement.

XML

Document and Entity Information (USD $)	9 Months Ended
	Dec. 31, 2014	Jan. 31, 2015	Sep. 30, 2014
Document and Entity Information:
Entity Registrant Name	Nemaura Medical Inc.
Document Type	10-Q
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Entity Central Index Key	0001602078
Current Fiscal Year End Date	--03-31
Entity Common Stock, Shares Outstanding		200,000,000
Entity Public Float			$ 1,286,353
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Note 3 - Summary of Significant Accounting Policies: Research and Development Expenses (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Research and Development Expenses

(f)      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.

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Statement of Income (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Operating Expenses
Research and Development Expense	$ 141,976	$ 172,446	$ 555,795	$ 253,043
General and Administrative Expense	16,790	167,750	228,106	171,064
Operating Expenses	158,766	340,196	783,901	424,107
Operating Income (Loss)	(158,766)	(340,196)	(783,901)	(424,107)
Net Income (Loss)	(158,766)	(340,196)	(783,901)	(424,107)
Foreign Currency Transaction Adjustment	24,580	(13,460)	29,434	9,906
Comprehensive Income (Loss)	$ (134,186)	$ (353,656)	$ (754,467)	$ (414,201)
Earnings Per Share
Earnings Per Share, Basic	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted Average Number of Shares Outstanding, Basic	200,000,000	180,000,000	200,000,000	180,000,000

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Note 7 - Related Party Transactions

9 Months Ended

Dec. 31, 2014

Notes

Note 7 - Related Party Transactions

NOTE 7 – RELATED PARTY TRANSACTIONS

Nemaura Pharma Limited (Pharma) and NDM Technologies Limited (NDM) are entities controlled by the Company’s majority shareholder Dewan FH Chowdhury.

From inception, Pharma invoiced DDL and TCL for research and development services. In addition, certain operating expenses of DDL and TCL were incurred and paid by Pharma and NDM. In accordance with the United States Securities and Exchange Commission (SEC) Staff Accounting Bulletin 55, these financial statements reflect all costs associated with the operations of DDL and TCL. While certain costs incurred by Pharma and NDM are directly attributable to DDL and TCL, other costs were shared between the organizations. In situations where the costs were shared, expense has been allocated between Pharma and NDM and DDL and TCL using a fixed percentage allocation. Management believes the methodologies used are reasonable and that the costs allocated are not materially different from what they would have been had Pharma and NDM been unaffiliated entities. DDL and TCL advanced Pharma certain amounts to cover a portion of the costs. The remaining amounts were contributed to the Company in the form of contributed services.

Following is a summary of activity between the Company and Pharma and NDM as of December 31, 2014 (unaudited) and March 31, 2014:

	Nine Months Ended December 31, 2014 (unaudited) ($)	Year Ended March 31, 2014 ($)
Balance due (to) Pharma and NDM at beginning of period	-	-
Amounts advanced to Pharma	578,409	325,092
Amounts received from Pharma	(1,567)	(149,280)
Amounts invoiced by Pharma to DDL and TCL	(110,106)	(557,670)
Expenses paid by Pharma on behalf of DDL and TCL	-	(28,574)
Assets contributed by Pharma on behalf of DDL and TCL	-	(7,327)
Capital contribution by Pharma (excess of expenses paid over amounts advanced)	-	420,401
Foreign exchange differences	(1,282)	(2,642)
Balance due from (to) Pharma and NDM at end of the period	465,454	-

Advances to Pharma as of December 31, 2014 consist of amounts advanced in connection with the Company’s planned clinical trials. These advances are expected to be expensed in the fourth quarter of fiscal 2015, as clinical trials commence.

In addition, the Company engaged a related party, One-E Consulting Limited, to provide certain consulting services, in the amount of $4,453 related to the Company’s public listing transaction.  Bashir Timol serves as Strategic Director of One-E Consulting Limited.  Mr. Timol is also a Director of the Company.

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Note 6 - Intangible Assets

9 Months Ended

Dec. 31, 2014

Notes

Note 6 - Intangible Assets

NOTE 6 – INTANGIBLE ASSETS

Intangible assets are summarized as follows:

	December 31, 2014 (unaudited) ($)	March 31, 2014 ($)
Patents and licenses	131,226	87,655
Less accumulated amortization	(15,363)	(16,874)
	115,863	70,781

Estimated amortization expense is approximately $7,000 for each of the next five years.

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Note 3 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Recent Accounting Pronouncements

(k)                 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, FASB issued ASU No. 2014-09 “Revenue from Contracts from Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and is to be applied retrospectively.  Early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements.

In February 2013, FASB issued ASU No. 2013-02, “Comprehensive Income: Reporting the Amounts Reclassified Out of Accumulated Other Comprehensive Income” which expanded the disclosure requirements with respect to changes in accumulated other comprehensive income (AOCI). Under this new guidance, companies are required to disclose the amount of income (or loss) reclassified out of AOCI to each respective line item on the statements of earnings where net income is presented. The guidance allows companies to elect whether to disclose the reclassification either in the notes to the financial statements or parenthetically on the face of the financial statements. The adoption did not have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-14, “Presentation of Financial Statements – Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern.” The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter. The Company is currently assessing the impact of the adoption of the ASU No. 2014-15 on its financial position, results of operations and financial statements disclosures.

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Note 3 - Summary of Significant Accounting Policies: Income Taxes (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Income Taxes

(g)     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 ConsolidatedStatements of ComprehensiveIncome (Loss).

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Note 3 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Fair Value of Financial Instruments

(c)     Fair value of financial instruments

The Company’s financial instruments primarily consist of cash and accounts payable. As of the period-end dates, the estimated fair values of financial instruments were not materially different from their carrying values as presented, due to their short maturities.  

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Note 3 - Summary of Significant Accounting Policies: Economic and Political Risk (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Economic and Political Risk

(a)     Economic and political risk

The Company’s operations are conducted in the United Kingdom. Accordingly, the political, economic, and legal environments in the United Kingdom may influence the Company’s business, financial condition, and results of operations.

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Note 3 - Summary of Significant Accounting Policies: Cash and Restricted Cash (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Cash and Restricted Cash

(b)     Cash and Restricted Cash

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. The Company’s restricted cash includes cash held in escrow with use restricted to certain future listing costs.

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Note 3 - Summary of Significant Accounting Policies: Intangible Assets (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Intangible Assets

(d)     Intangible assets

Intangible assets consist of licenses and patents associated with the CGM and are amortized on a straight-line basis, generally over their legal life.

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Note 3 - Summary of Significant Accounting Policies: Use of Estimates (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Use of Estimates

(i)       Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 year. Actual results may differ from those estimates.

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Note 7 - Related Party Transactions: Schedule of Related Party Transactions (Tables)

9 Months Ended

Dec. 31, 2014

Tables/Schedules

Schedule of Related Party Transactions

	Nine Months Ended December 31, 2014 (unaudited) ($)	Year Ended March 31, 2014 ($)
Balance due (to) Pharma and NDM at beginning of period	-	-
Amounts advanced to Pharma	578,409	325,092
Amounts received from Pharma	(1,567)	(149,280)
Amounts invoiced by Pharma to DDL and TCL	(110,106)	(557,670)
Expenses paid by Pharma on behalf of DDL and TCL	-	(28,574)
Assets contributed by Pharma on behalf of DDL and TCL	-	(7,327)
Capital contribution by Pharma (excess of expenses paid over amounts advanced)	-	420,401
Foreign exchange differences	(1,282)	(2,642)
Balance due from (to) Pharma and NDM at end of the period	465,454	-

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Statement of Cash Flows (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Net Cash Provided by (Used in) Operating Activities
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (783,901)	$ (424,107)
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Depreciation and Amortization	5,536	2,230
Other Cost of Services		218,863
Increase (Decrease) in Assets and Liabilities
Increase (Decrease) in Prepaid Expense and Other Assets	(516,212)	(2,122)
Increase (Decrease) in Accounts Payable	49,035
Net Cash Provided by (Used in) Operating Activities	(1,245,542)	(205,136)
Net Cash Provided by (Used in) Investing Activities
Increase Decrease In Restricted Cash And Investments	85,462
Purchase of Intellectual Property	(57,222)	(10,956)
Payments to Acquire Tangible Fixed Assets	(7,181)
Net Cash Provided by (Used in) Investing Activities	21,059	(10,956)
Cash and Cash Equivalents, Period Increase (Decrease)	(1,224,484)	(216,092)
Effect of Exchange Rate Changes on Cash	(35,050)	22,433
Cash and Cash Equivalents, at Carrying Value	1,873,141	200,485
Cash and Cash Equivalents, at Carrying Value	$ 613,608	$ 6,826

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Note 5 - Cash

9 Months Ended

Dec. 31, 2014

Notes

Note 5 - Cash

NOTE 5 – CASH

As of December 31, 2014 and March 31, 2014, the Company held $613,608 and $1,873,141 in cash, respectively.

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Note 3 - Summary of Significant Accounting Policies: Earnings Per Share (Policies)

9 Months Ended

Dec. 31, 2014

Policies

Earnings Per Share

(h)     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, 2014 and 2013.