What changed in this filing

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Item 9A. Controls and Procedures

2021-06-29 compared with 2020-06-29 · 530 added, 557 removed, 294 unchanged (79% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure

Controls and Procedures

controls and procedures are designed to ensure that information required to be disclosed in the reports filed with or furnished

to the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange

Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be

disclosed in the reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive

Officer, to allow timely decisions regarding required disclosure.

the supervision and with the participation of our management, including our Chief Executive Officer, who also serves as our Chief

Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and

procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act).

on this evaluation, our management concluded that as of March 31, 2020, our disclosure controls and procedures were effective.

Evaluation of Disclosure Controls

and Procedures

Disclosure controls

and procedures are designed to ensure that information required to be disclosed in the reports filed with or furnished to the

Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is

recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Disclosure controls

and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed

in the reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer,

to allow timely decisions regarding required disclosure.

Under the supervision

and with the participation of our management, including our Chief Executive Officer, who also serves as our Chief Financial Officer,

we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined

in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act).

Based on this evaluation,

our management concluded that as of March 31, 2021, our disclosure controls and procedures were effective.

Management’s

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our internal control over financial reporting was effective as of March 31, 2021.

in Internal Control over Financial Reporting

of management’s assessment of the effectiveness of our internal control over financial reporting as of March 31, 2019, our

management concluded that there were material weaknesses and that our internal controls over financial reporting were not effective.

A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting, such

that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be

prevented or detected on a timely basis.

The identified material weaknesses related to inadequate internal controls over financial

reporting and the lack of segregation of duties in our financial reporting process.

fiscal 2020, we began implementing a remediation plan to address the material weaknesses identified in our internal controls as

of March 31, 2019.

These remediation efforts are focused on:

monitoring and review controls over financial reporting and disclosures;

adequate segregation of duties;

personnel with accounting and financial reporting expertise.

As part of our

remediation efforts, we have:

a full-time accounting manager to manage our accounting and financial reporting functions;

an interim chief financial officer (CFO), who has significant experience as a public-company

CFO and is a certified public accountant, to have executive responsibility for our accounting,

financial reporting and compliance functions;

our board of directors with the appointment of two new qualified directors, each of whom

has been determined to be independent, as determined in accordance with Rule 10A-3

of the Exchange Act;

an audit committee and appointed one of the new directors as the audit committee chairperson

and financial expert, as defined by Item 407(d)(5) of Regulation S-K under

the Exchange Act;

a compensation committee and appointed the other new, independent director as the compensation

committee chairperson;

audit committee review of our filings with the SEC;

· implemented

new management review controls over the preparation of our consolidated financial statements

and preparation of the quarterly and annual reports that we file with the SEC;

· implemented

new management review controls over the financial close process, expenditures, payments

and payroll processing.

We believe that

the addition of these qualified finance professionals and independent directors combined with the internal control procedures

implemented during fiscal 2020 has enabled us to remediate the material weaknesses identified as of March 31, 2019 during fiscal

We intend to implement additional controls during fiscal 2021, including formally establishing committee charters, adding

additional directors to the committees and establishing additional formally documented policies and procedures.

Internal Control over Financial Reporting

There were no changes in our internal

controls over financial reporting during the fourth fiscal quarter of 2021 that have materially affected, or are reasonably likely

to materially affect, our internal control over financial reporting.

OTHER INFORMATION

Our employment

agreement with Paul DiPerna, our chief executive officer, chairman, chief financial officer, secretary and treasurer, dated August

1, 2018, as amended (the Employment Agreement), provides that Mr.

DiPerna will receive an annual bonus of $300,000, which is payable

at the discretion of our board of directors.

DiPerna has served in these executive capacities since our July 2017 merger with

Quasuras, Inc., and, to date, has not received any bonus from us.

On June 26, 2020, our board of directors authorized a $280,000

bonus for Mr.

DiPerna for fiscal 2020.

The bonus will be payable ratably over the 24-month period commencing March 31, 2020.

on June 26, 2020, our board of directors approved an amendment to the Employment Agreement to provide that Mr.

DiPerna’s

base salary would be paid entirely in cash commencing July 1, 2020.

The payment of the additional cash component of Mr.

DiPerna’s

annual base salary ($8,333.33 per month) shall initially be deferred (the Deferred Salary) and accrue for Mr.

DiPerna’s

benefit until the Company has received $5,000,000 of cumulative gross proceeds from its current financing activities.

Salary shall be paid to Mr.

DiPerna after achievement of the $5,000,000 of gross proceeds and the salary deferrals will cease.

of directors approved these actions after reviewing such Employment Agreement with Mr.

DIRECTORS, EXECUTIVE

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Officer, Chief Financial Officer, Secretary, Treasurer and Director (Chairman of the Board of Directors)

Liam Burns(1)

Carmen Volkart(1)(2)

Compensation Committee

Member of Audit Committee

The principal occupations and positions

for at least the past five years of our directors are described below.

There are no family relationships among any of our directors

or executive officers.

DiPerna has been our chairman, chief executive officer, chief financial officer, secretary and treasurer

since we acquired Quasuras, Inc.

Audit Committee

Member of Compensation Committee

The principal

occupations and positions for at least the past five years of our directors are described below.

There are no family relationships

among any of our directors or executive officers.

Paul DiPerna.

DiPerna has been our chairman, chief executive officer, chief financial officer, secretary and treasurer since we acquired Quasuras,

(Quasuras) in July 2017.

DiPerna began his career in approximately 1980 as a mechanical

design engineer in the automated test equipment industry before moving in approximately 1989 to a start-up in the blood

separation sciences industry.

This company was eventually acquired in approximately 1991 by Baxter Healthcare (Baxter).

Following such acquisition, Mr.

DiPerna became employed by Baxter and held various positions during his approximate 12 years

While at Baxter, Mr.

DiPerna worked on numerous projects and initiatives including leading a team of approximately

50 engineers in developing equipment in the blood separation sciences industry.

In approximately 1996, Mr.

promoted to General Manager of Baxter’s business development group to identify targets for Baxter’s expansion

opportunities in the medical device industry.

While holding such position, Mr.

DiPerna led a team researching custom

orthopedics, digital dentistry and rapid prototyping.

In such role, one of Mr.

DiPerna’s assignments was identifying

synergistic opportunities in the diabetes industry.

In 2015, he founded Quasuras, an early-stage medical device company developing an insulin pump product,

and, until its acquisition by us, he served as its chief executive officer and chairman.

Prior to that, Mr.

DiPerna founded Fuel

Source Partners, LLC to incubate early stage medical device products and accumulate technical talent.

Our current pump product

was one of such proposed products and was spun-out to Quasuras in 2015.

From 2012 to 2015, he served as a co-inventor at a private

company with property rights in a medical device used for blood borne infection control called the Curos Cap, which was acquired

by 3M Corporation.

DiPerna founded Tandem Diabetes Care, Inc.

(Tandem) and held various positions, including as director,

chief executive officer and chief technology officer and was primarily responsible for the design concept and development of Tandem’s

initial insulin pump.

Prior to that, he held executive and management positions at Baxter Healthcare Corporation (Baxter) where

he was tasked with identifying synergistic opportunities in the diabetes industry.

As a result, Mr.

DiPerna developed substantial expertise and knowledge in

the diabetes industry and led attempts by Baxter to acquire three insulin pump manufacturers.

Baxter and founded what subsequently became Tandem Diabetes Care, Inc.

While at Tandem, Mr.

DiPerna held various

positions, including as director, chief executive officer and chief technology officer and was primarily responsible for the

design concept and development of Tandem’s initial insulin pump, which subsequently was commercialized by

Tandem is a medical device company that designs, develops and commercializes products for people with

insulin-requiring diabetes.

DiPerna resigned from his executive officer position and board seat at Tandem but

continued to assist the company through 2013.

In early 2012, Mr.

DiPerna was the co-inventor with regard to a private company

with property rights in a medical device used for blood borne infection control called the “Curos Cap.”

was acquired by 3M Corporation in 2015.

Thereafter, Mr.

DiPerna founded a company, Fuel Source Partners, LLC (FSP), where he

is the manager of, to incubate early stage medical device products and accumulate technical talent.

One of such proposed

products was spun-out to Quasuras in March 2015, which we acquired in July 2017.

DiPerna holds a number of patents and

patents pending and is a member of the American Diabetes Association.

DiPerna received a Masters in Engineering

Management from Northeastern University and a B.S.

DiPerna developed substantial

expertise and knowledge in the diabetes industry and led attempts by Baxter to acquire three insulin pump manufacturers.

he held mechanical design engineering positions in the automated test equipment and blood separation sciences industries.

DiPerna holds a number of patents and patents pending and is a member of the American Diabetes Association.

DiPerna received

a Masters in Engineering Management from Northeastern University and a B.S.

in Mechanical Engineering from the University of Lowell.

In January 2017,

DiPerna joined National Cardiac Incorporated (Cardiac) as its chief executive officer and a board member to leverage

Cardiac’s technology in the cardiac monitoring space before resigning in 2019 as an executive and 2020 as a member of

its board of directors.

We believe that Mr.

DiPerna is qualified to serve as the chairman of our board of directors due to

his extensive knowledge and experience in the medical device industry generally, and, in particular, with regard to insulin

pumps and the diabetes industry as well as his management and leadership experience from holding director and senior

executive positions in other public and private companies and leading project development teams of medical device

DiPerna is qualified to serve as the chairman of our board of directors due to his extensive knowledge and

experience in the medical device industry generally, and, in particular, with regard to insulin pumps and the diabetes industry,

as well as his management and leadership experience from holding director and senior executive positions in other public and private

companies and leading project development teams of medical device companies.

Burns was appointed to our board of directors in January 2019.

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Febbo was appointed to our board of directors in January 2020.

He has served as chief executive officer

and a member of the board of directors of OptimizeRx Corporation since February 2016.

Febbo became a faculty member

of the Massachusetts Institute of Technology’s linQ program, which is a collaborative initiative focused on increasing the

potential of innovative research to benefit society and the economy.

Prior to 2016, he served as chairman and founder of Plexuus,

LLC, a payment processing business for medical professionals.

From 2007 to 2015, Mr.

Febbo served as chief operating officer of

Merriman Holdings, Inc., an investment banking firm, and assisted with capital raises in the technology, biotech, cleantech, consumer

and resources industries.

From 2013 to 2015, he served as chief executive officer and co-founder of Digital Capital Network, Inc.,

which operated a transaction platform for institutional and accredited investors.

Prior to 2007, Mr.

Febbo was chief executive

officer and co-founder of MedPanel, a provider of market intelligence and communications for the pharmaceutical, biomedical, and

medical device industries.

He holds a B.A.

in international studies and Spanish from Dickinson College.

We believe that Mr.

is qualified to serve on our board of directors because of his experience in building and managing health services and financial

In addition, he has expertise in corporate finance and strategy experience gained from his experience as an investment

He is currently the Chief Executive

Officer and a director of OptimizeRx Corporation, a digital health company focused on bringing life sciences support to patients

and providers, having joined the company in 2016.

Febbo founded Plexuus, LLC, a payment processing business for medical professionals

in September 2015 and remained its Chairman from September 2015 to December 2020.

From April 2007 to September 2015, he

served as Chief Operating Officer of Merriman Holdings, Inc., an investment banking firm, where he assisted with capital raises

in the technology, biotechnology, clean technology, consumer and resources industries.

Febbo was a co-founder of, and from

September 2013 to September 2015 served as Chief Executive Officer of, Digital Capital Network, Inc.

a transaction platform for

institutional and accredited investors.

He was a co-founder of, and from January 1999 to September 2015 was Chief Executive Officer

of, MedPanel, LLC, a provider of market intelligence and communications for the pharmaceutical, biomedical, and medical device

Since 2017, Mr.

Febbo has been a faculty member of the Massachusetts Institute of Technology’s linQ program,

which is a collaborative initiative focused on increasing the potential of innovative research to benefit society and the economy.

Since 2004, he has been a board member of the United Nations Association of Greater Boston, a resource for the citizens of Greater

Boston on the broad agenda of critical global issues addressed by the United Nations and its agencies.

On January 29,

2018, the Financial Industry Regulatory Authority (FINRA) accepted a Letter of Acceptance, Waiver and Consent (the Consent) submitted by

Without admitting or denying the findings, Mr.

Febbo consented to the sanctions and to the entry of findings that he

permitted Merriman Capital, Inc.

to conduct a securities business while below its net capital requirement.

From August 2012 to

October 2015, he was the Financial and Operations Principal (FinOp) for a registered broker-dealer, Merriman Capital, Inc.

During certain months, while Mr.

Febbo was FinOp, FINRA found that certain of Merriman’s net capital filings with

FINRA were inaccurate because of the method by which Merriman calculated net capital and that, when corrected, it was retroactively

determined that Merriman had operated below its minimum net capital requirements.

Febbo, as FinOp, signed certain of these

reports and was thus held responsible.

Based on the Consent, in settlement, Mr.

Febbo, who was then no longer registered with any

broker-dealer, accepted a fine of $5,000, a 10-business day suspension from acting as FinOp for any FINRA member and required to

requalify by examination for the Series 27 license before again acting in a FinOp capacity.

qualified to serve on our board of directors because of his wealth of experience in building and managing health services and

financial businesses.

Febbo brings more than 20 years of experience in building and managing health services and financial

Frank was appointed to our board of directors in April 2017.

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Volkart was appointed to our board of directors in December 2019.

She has served as chief financial officer of

Natureworks LLC, an advanced materials company offering a portfolio of renewably-sourced polymers, since October 2018.

2012 to July 2018, Ms.

Volkart served as chief financial officer and, for a portion of that time, as senior vice president of

commercialization for NxThera, Inc., a medical device company pioneering the application of convective radiofrequency thermotherapy

to treat endurological conditions.

She has served as chief financial officer of Natureworks

LLC, an advanced materials company offering a portfolio of renewably-sourced polymers, since October 2018.

From October 2012 to

July 2018, Ms.

Volkart served as chief financial officer and, for a portion of that time, as senior vice president of commercialization

for NxThera, Inc., a medical device company pioneering the application of convective radiofrequency thermotherapy to treat endurological

She served as global chief financial officer of Tornier N.V.

from 2010 to 2012, and was chief

operating and financial officer, corporate secretary, compliance officer and treasurer of Spine Wave, Inc.

from 2010 to 2012, and was chief operating and financial

officer, corporate secretary, compliance officer and treasurer of Spine Wave, Inc.

from 2006 to 2010.

Prior to 2006, Ms.

Volkart held various executive and financial positions at American Medical, Inc., Medtronic, Inc.

and Honeywell,

held various executive and financial positions at American Medical, Inc., Medtronic, Inc.

and Honeywell, Inc.

She holds a B.S.

in accounting from the University of North Dakota and an MBA with a concentration in strategic management

from the University of Minnesota.

Volkart is qualified to serve on our board of directors because of her substantial financial

and public-company experience, as she has served as chief financial officer at multiple medical device and other companies.

in accounting from the University of North Dakota and an MBA with a concentration in strategic management from the University

of Minnesota.

Volkart is qualified to serve on our board of directors because of her substantial financial and public-company

experience, as she has served as chief financial officer at multiple medical device and other companies.

The names of our executive officers

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From December 2014 until February 2020, he served as U.S.

Manager for Adocia, a clinical-stage, French biotechnology company.

General Manager

for Adocia, a clinical-stage, French biotechnology company.

Before joining Adocia, Mr.

Daly served in senior roles for

the commercialization of therapeutics in the diabetes and metabolism fields at companies such as Halozyme, Amylin Pharmaceuticals

Prior to his industry-specific experience in diabetes and metabolism, he held portfolio planning and commercialization

roles in the generic and biosimilar marketplace for Baxter International and Sicor, a division of Teva Pharmaceuticals.

holds a Bachelor of Science in business administration (finance and information systems) from Northeastern University.

Daly served in senior roles for the commercialization

of therapeutics in the diabetes and metabolism fields at companies such as Halozyme, Amylin Pharmaceuticals and Affymax.

to his industry-specific experience in diabetes and metabolism, he held portfolio planning and commercialization roles in the

generic and biosimilar marketplace for Baxter International and Sicor, a division of Teva Pharmaceuticals.

a Bachelor of Science in business administration (finance and information systems) from Northeastern University.

Involvement in Legal Proceedings

Except with regard to Mr.

to our knowledge, none of our executive officers or our directors has, during the last ten years:

regard to Messrs.

Burns and Febbo, to our knowledge, none of our executive officers or our directors has, during the last ten

any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or

1 unchanged sentence

within two years prior to that time;

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction

or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement

in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities,

or to be associated with persons engaged in any such activity;

found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to

have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently

reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an

alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial

institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement

or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or

any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory

organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of

the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority

over its members or persons associated with a member.

· been subject to any order,

judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state

authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business,

securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons

engaged in any such activity;

· been found by a court of

competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal

or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

· been the subject of, or a

party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended

or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any

federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance

companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money

penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting

mail or wire fraud or fraud in connection with any business entity;

· been the subject of, or a

party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined

in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act),

or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated

with a member.

To our knowledge,

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for Appointment of Directors and Officers

July 24, 2022, our board of directors shall consist of no more than five and no less than two directors of which (i) Manchester

has the right to appoint two directors, pursuant to which Manchester appointed Mr.

the Reorganization and Share Exchange Agreement dated as of July 24, 2017, by and among us, Quasuras, Mr.

DiPerna and the other

stockholders of Quasuras (the Share Agreement), until July 24, 2022, our board of directors shall consist of no more than five

and no less than two directors of which (i) Manchester has the right to appoint two directors, pursuant to which Manchester appointed

Frank and Ms.

Volkart and (ii) Mr.

in addition to being our chairman of the board, has the right to appoint 2 additional directors, pursuant to which he appointed

DiPerna, in addition to being our chairman of the board, has the right to appoint two additional

directors, pursuant to which he appointed Messrs.

Burns and Febbo.

See “Risk Factor - If the beneficial ownership of our common stock continues to be highly concentrated,

it may prevent you and other shareholders from influencing significant corporate decisions;

agreement to elect directors.

The DiPerna Employment and

Related Agreements

into an employment agreement dated August 1, 2018, with Mr.

In May 2021, the parties amended the Share Agreement and removed

Manchester’s and Mr.

DiPerna’s rights to appoint directors.

In addition, the parties agreed that Mr.

DiPerna shall

remain chairman of our board of directors until July 2022;

provided, that in the event Mr.

DiPerna resigns or is otherwise replaced

as our chief executive officer, Mr.

DiPerna shall remain as chairman of our board of directors for an additional period of three

Following such amendment, our board of directors increased the size of the board to six members and, on May 18, 2021, appointed

Ellen O’Connor Vos as director to our board.

The DiPerna Employment and Related

We entered into

an employment agreement dated August 1, 2018, with Mr.

DiPerna pursuant to which Mr.

DiPerna is employed by us as our Chief

Executive Officer and President for an initial 2-year term with automatic one-year renewals.

Pursuant to such agreement, we have

agreed to pay Mr.

i) an annual salary of $200,000 in cash, ii) $100,000 per year in fully-vested stock options granted

monthly at an exercise price determined by the board of directors in its sole discretion and iii) an annual bonus of $300,000,

payable at the discretion of the board of directors in its sole discretion, either in shares of stock or in cash.

chooses to pay the bonus in shares of stock, such shares will be valued at a price determined by the board of directors.

pursuant to our employment agreement with Mr.

DiPerna, in the event that we terminate Mr.

DiPerna’s employment without cause

or he resigns with good reason, we will pay Mr.

DiPerna a lump sum of $200,000.

In the event that we terminate Mr.

DiPerna’s

employment for cause, we are not obligated to make any severance payment and Mr.

DiPerna will receive only his base compensation

through the last day of his employment.

In the event of Mr.

DiPerna’s death or disability, he will receive his base compensation

through the last day of his employment and will remain eligible for all applicable benefits relative to death or disability pursuant

to any plans that we have in place at such time.

If a “change of control”

(as defined in the employment agreement)

occurred, under his employment agreement, Mr.

DiPerna will be paid a lump sum of $100,000 within sixty days of the time at which

such change of control takes place.

of control occurred on March 31, 2020, under his employment agreement, Mr.

DiPerna would be entitled to the following:

of a lump sum of $100,000 within 60 days of the time at which such change of control

· accelerated

vesting of 275,000 shares of common stock under an unvested stock option.

the shares subject to accelerated vesting is calculated as the intrinsic value per share

multiplied by the number of shares that would become fully vested upon a change of control.

The intrinsic value per share would be calculated as the excess of the closing price

of the common stock of $0.24 on the OTC Pink Open Market on March 31, 2020 over the exercise

price of the option.

If the value is less than zero, which it is as of March 31, 2020,

it is deemed to be zero for the purposes of this calculation.

DiPerna is employed by us as our chief executive

officer and president for an initial 2-year term with automatic one-year renewals.

Pursuant to such agreement, we agreed to pay

i) an annual salary of $200,000 in cash, ii) $100,000 per year in fully-vested stock options granted monthly at an

exercise price determined by our board of directors in its sole discretion and iii) an annual bonus of $300,000, payable at the

discretion of our board of directors, either in shares or in cash.

If the board chooses to pay the bonus in shares, such shares

will be valued at a price determined by our board of directors.

Pursuant to such employment agreement (i) if (a) we terminate

DiPerna’s employment without cause or he resigns with good reason, we will pay Mr.

DiPerna a lump sum of $200,000, and

(b) we terminate Mr.

DiPerna’s employment for cause, we are not obligated to make any severance payment and Mr.

will receive only his base compensation through the last day of his employment, (ii) upon Mr.

DiPerna’s death or disability,

he will receive his base compensation through the last day of his employment and will remain eligible for all applicable benefits

relative to death or disability pursuant to any plans that we have in place at such time, and (iii) upon a change of control (as

defined in the employment agreement), Mr.

DiPerna will be paid a lump sum of $100,000 within sixty days of the time at which such

change of control takes place.

2020, we amended our employment agreement with Mr.

DiPerna to provide that in the event of a change in control:

60 days of the date the change of control occurs, Mr.

DiPerna shall be paid by us or

our successor in interest a lump sum cash payment equal to 12 months of Mr.

DiPerna’s

then annual Base Compensation (as defined in the employment agreement);

· immediately

prior to such change of control, any unvested stock options or other unvested securities

of ours issued to Mr.

DiPerna shall automatically accelerate and immediately become fully

vested and exercisable.

· within 60 days of the date

the change in control occurs, Mr.

DiPerna shall be paid by us or our successor in interest a lump sum cash payment equal to 12

months of Mr.

DiPerna’s then annual Base Compensation (as defined in the employment agreement);

· immediately prior to such

change of control, any unvested stock options or other unvested securities of ours issued to Mr.

DiPerna shall automatically accelerate

and immediately become fully vested and exercisable.

In June 2020,

our board of directors approved an amendment to the employment agreement to provide that Mr.

DiPerna’s base salary would

be paid entirely in cash commencing July 1, 2020.

The payment of the additional cash component of Mr.

DiPerna’s annual base

salary ($8,333.33 per month) shall initially be deferred (the Deferred Salary) and accrue for Mr.

DiPerna’s benefit until

the Company has received $5,000,000 of cumulative gross proceeds of financing, at which time the Deferred Salary shall be paid

DiPerna and the salary deferrals will cease.

2021, our board of directors authorized a $50,000 bonus for Mr.

DiPerna for fiscal 2021.

of control occurred on March 31, 2021, under his employment agreement, Mr.

DiPerna would be entitled to the following:

· payment of a lump sum of

$300,000 within 60 days of the time at which such change of control takes place;

· accelerated vesting of 183,333

shares of common stock under an unvested stock option.

The value of the shares subject to accelerated vesting is calculated as

the intrinsic value per share multiplied by the number of shares that would become fully vested upon a change of control.

intrinsic value per share would be calculated as the excess of the closing price of the common stock of $5.25 on the OTCQB Venture

Market on March 31, 2021 over the exercise price of the option.

As of March 31, 202, the intrinsic value was approximately $550,000.

In connection

1 unchanged sentence

Quasuras and Mr.

DiPerna (the IP Transfer Agreement), pursuant to which Mr.

DiPerna transferred to us all intellectual property

rights owned directly and/or indirectly by him related to our business.

we agreed to pay Mr.

DiPerna, as part of his compensation for services to be performed for us, pursuant to a royalty agreement

(the Royalty Agreement), certain fees based upon future sales, if any, of our potential product subject to a maximum $10,000,000

cap on the aggregate amount of fees that Mr.

DiPerna, pursuant to which Mr.

DiPerna transferred to us all intellectual property rights owned directly and/or

indirectly by him related to our business.

Separately, we agreed to pay Mr.

DiPerna, as part of his compensation for services

to be performed for us, pursuant to a royalty agreement, certain fees based upon future sales, if any, of our potential product

subject to a maximum $10,000,000 cap on the aggregate amount of fees that Mr.

DiPerna could earn from such arrangement.

1 unchanged sentence

Our stockholders

may send correspondence to our board of directors c/o the corporate secretary at the address set forth on the cover page of this

Annual Report on Form 10-K.

Our corporate secretary will forward stockholder communications to our board of directors prior to

the board of director’s next scheduled meeting following the receipt of the communication.

may send correspondence to our board of directors to the attention of our corporate secretary at the address set forth on the

cover page of this Annual Report on Form 10-K.

Our corporate secretary will forward stockholder communications to our board of

directors prior to the board of director’s next scheduled meeting following the receipt of the communication.

Corporate Governance

1 unchanged sentence

and Role in Risk Oversight

the small size and early stage of the Company, we have not adopted a formal policy on whether the chairman and chief executive

officer positions should be separate or combined.

Our board of directors has oversight responsibility for our risk management

Our board of directors receives and reviews periodic reports from management, auditors, legal counsel, and others,

as considered appropriate, regarding our assessment of risks.

Our board of directors will focus on the most significant risks

facing us and our general risk management strategy, and also ensure that risks undertaken by us are consistent with our appetite

While our board of directors oversees our risk management processes, management is responsible for day-to-day risk management

We believe this division of responsibilities is the most effective approach for addressing the risks facing us and

that the leadership structure of our board of directors supports this approach.

of directors established an audit committee on December 31, 2019 for the purpose of overseeing the accounting and financial reporting

processes and audits of our consolidated financial statements.

During fiscal 2021, our board of directors intends to implement

a formal audit committee charter and appoint additional directors to this committee.

Volkart serves as the chairperson and

has been designated by the board of directors as the “audit committee financial expert,”

as defined by Item 407(d)(5)

of Regulation S-K under the Securities Act of 1933, as amended, and the Exchange Act.

That status does not impose duties,

liabilities or obligations that are greater than the duties, liabilities or obligations otherwise imposed on her as a member of

the audit committee and the board of directors, however.

Our board of directors has determined that she is an independent director,

as determined in accordance with Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the Exchange Act).

is responsible for review and pre-approval of services proposed to be provided by our independent registered public accounting

of directors established a compensation committee in January 2020 for the purpose of reviewing,

Due to the small

size and early stage of the Company, we have not adopted a formal policy on whether the chairman and chief executive officer positions

should be separate or combined.

Our board of directors has oversight responsibility for our risk management processes.

of directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate,

regarding our assessment of risks.

Our board of directors will focus on the most significant risks facing us and our general risk

management strategy, and also ensure that risks undertaken by us are consistent with our appetite for risk.

While our board of

directors oversees our risk management processes, management is responsible for day-to-day risk management processes.

this division of responsibilities is the most effective approach for addressing the risks facing us and that the leadership structure

of our board of directors supports this approach.

Our board of directors established

the audit committee for the purpose of overseeing the accounting and financial reporting processes and audits of our financial

The audit committee also is charged with reviewing any internal control violations under our whistleblower policy

are directed to the members of the audit committee.

The responsibilities of our audit committee are described in the Audit Committee

Charter adopted by our board of directors, a current copy of which can be found on the investors section of our website, www.modular-medical.com.

Volkart and Liam Burns are the current members of the Audit Committee.

Volkart serves as the chairperson and has been designated

by the board of directors as the “audit committee financial expert,”

as defined by Item 407(d)(5) of Regulation S-K

under the Securities Act of 1933, as amended, and the Exchange Act.

That status does not impose duties, liabilities or obligations

that are greater than the duties, liabilities or obligations otherwise imposed on her as a member of the audit committee and the

board of directors, however.

Our board of directors has determined that she is an independent director, as determined in accordance

with Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the Exchange Act).

Volkart is responsible for review

and pre-approval of services proposed to be provided by our independent registered public accounting firm.

directors established a compensation committee in January 2020 for the purpose of reviewing,

recommending and approving our compensation policies and benefits, including the compensation of all of our executive officers

and directors .

Our compensation committee also has the principal responsibility

for the administration of our equity incentive plan.

During fiscal 2021, our board of directors will approve a formal

compensation committee charter and appoint additional directors to this committee.

Febbo serves as the chairman, and our board

of directors has determined that he is an independent director, as determined in accordance with the Exchange Act.

William Febbo, Morgan Frank and Carmen

Volkart are the current members of the compensation committee, and Mr.

Febbo serves as the chairperson.

compensation committee is responsible for reviewing, recommending and approving our compensation policies and benefits, including

the compensation of all of our executive officers and directors, and it also has the principal responsibility for the administration

of our equity incentive plan.

The responsibilities of our compensation committee are more fully described in the Compensation

Committee Charter adopted by our board of directors, a current copy of which can be found on the investors section of our website, www.modular-medical.com.

Nominations Process

have a nominating committee, as we are a small company and Manchester and Mr.

DiPerna have the right to appoint directors to our

board of directors, as discussed above.

We do not have

a nominating committee, as we are a small company.

Prior to May 2021, Manchester and Mr.

DiPerna had the right to appoint directors

to our board of directors, as discussed above.

Instead of having such a committee, Messrs.

DiPerna and Frank identify and evaluate qualified

individuals to become nominees for director and board committee members.

DiPerna and Frank would identify and

evaluate qualified individuals to become nominees for director and board committee members.

When new candidates

1 unchanged sentence

context of the needs and the composition of the board of directors as a whole.

Our board of directors conduct any appropriate

and necessary inquiries into the backgrounds and qualifications of candidates.

When evaluating director nominees, our board of

directors generally seeks to identify individuals with diverse, yet complementary business backgrounds.

Although we have no formal

policy regarding diversity, our directors consider both the personal characteristics and experience of director nominees, including

each nominee’s independence, diversity, age, skills, expertise, time availability and industry background in the context

of the needs of the board of directors and the Company.

The board of directors believes that director nominees should exhibit

proven leadership capabilities and experience at a high level of responsibility within their chosen fields, and must have the

experience and ability to analyze the complex business issues facing us, and specifically, the issues inherent in the medical

device industry.

In addition to business expertise, the board of directors requires that director nominees have the highest personal

and professional ethics, integrity and values and, above all, are committed to representing the long-term interests of our stockholders

and other stakeholders.

Our board of directors conducts any

appropriate and necessary inquiries into the backgrounds and qualifications of candidates.

When evaluating director nominees,

our board of directors generally seeks to identify individuals with diverse, yet complementary business backgrounds.

we have no formal policy regarding diversity, our directors consider both the personal characteristics and experience of director

nominees, including each nominee’s independence, diversity, age, skills, expertise, time availability and industry background

in the context of the needs of the board of directors and the Company.

The board of directors believes that director nominees

should exhibit proven leadership capabilities and experience at a high level of responsibility within their chosen fields, and

must have the experience and ability to analyze the complex business issues facing us, and specifically, the issues inherent in

the medical device industry.

In addition to business expertise, the board of directors requires that director nominees have the

highest personal and professional ethics, integrity and values and, above all, are committed to representing the long-term interests

of our stockholders and other stakeholders.

Delinquent Section 16(a) Reports

8 unchanged sentences

with all applicable Section 16(a) filing requirements during fiscal 2021, except that:

DiPerna failed to timely file 13 Form 4s;

Burns failed to timely file 12 Form 4s and one Form 5;

Volkart failed to timely file a Form 3 and a Form 4;

Daly failed to timely file a Form 3 and Form 4.

DiPerna failed to timely

file three Form 4s;

Frank failed to timely

file a Form 4.

EXECUTIVE COMPENSATION

2 unchanged sentences

information for fiscal 2021 and 2020 for each of our named executive officers.

CEO, CFO, Secretary,

Name and Principal

Paul DiPerna, CEO, CFO, Secretary,

Treasurer and Director(2)

Stephen Daly Chief Commercial

amounts reflect the aggregate grant date fair value with respect to awards granted, as

determined pursuant to FASB ASC Topic 718.

The assumptions used to calculate the aggregate

grant date fair value of option awards are set forth in the notes to the consolidated

financial statements included in item 8 of this Report.

These amounts do not reflect

actual compensation earned or to be earned by our named executive officers.

DiPerna’s annual salary base was increased from $180,000 to $300,000 in August

2018, under the terms of an employment agreement between us and Mr.

DiPerna’s

$300,000 annual salary is paid $200,000 in cash and $100,000 in fully-vested stock options

granted monthly.

Our board of directors amended the salary payment composition subsequent

to March 31, 2020, as disclosed in item 9B of this Report.

as a bonus, which will be paid over the 24-month period commencing on March 31, 2020.

Daly became our Chief Commercial Officer in March 2020 at an annual base salary of $250,000.

Outstanding Equity Awards

at Fiscal Year-End

Stephen Daly, Chief Commercial Officer(5)

(1) Award amounts reflect the

aggregate grant date fair value with respect to awards granted, as determined pursuant to FASB ASC Topic 718.

The assumptions

used to calculate the aggregate grant date fair value of option awards are set forth in the notes to the consolidated financial

statements included in item 8 of this Report.

These amounts do not reflect actual compensation earned or to be earned by our named

executive officers.

DiPerna’s annual

salary base was increased from $180,000 to $300,000 in August 2018, under the terms of an employment agreement between us

From August 2018 until June 30, 2020, Mr.

DiPerna’s $300,000 annual salary was paid $200,000 in cash and

$100,000 in fully-vested stock options granted monthly.

In June 2020, our board of directors amended the salary payment composition

effective July 1, 2020, such that the $100,000 component of Mr.

DiPerna’s salary would be deferred until the Company had

achieved $5,000,000 in financing proceeds from a subsequent financing.

(3) Earned as a bonus of which

$22,000 was paid on April 30, 2021, and the remainder will be paid in four quarterly installments commencing on July 15, 2021.

(4) Earned as a bonus, and is

being paid in quarterly installments over the 24-month period that commenced on March 31, 2020.

Daly became our Chief

Commercial Officer in March 2020 at an annual base salary of $250,000.

In February 2021, Mr.

Daly converted to part time and his

annual base salary was reduced to $125,000.

Outstanding Equity Awards at Fiscal

The following

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Unexercisable

standard option term is ten years, but all of the options expire automatically unless

exercised within 90 days after the cessation of service as an employee, director

or consultant.

option was granted on March 2, 2020, and the shares subject to this option were fully

vested on the grant date.

option was granted on February 1,2020, and the shares subject to this option were fully

vested on the grant date.

option was granted on January 1, 2020, and the shares subject to this option were fully

vested on the grant date.

option was granted on December 1, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on November 1, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on October 1, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on September 15, 2019, and the shares subject to this option were

fully vested on the grant date.

option was granted on August 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on July 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on June 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on May 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on April 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on March 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on February 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on January 15, 2019, and the shares subject to this option were fully

vested on the grant date.

option was granted on December 15, 2018, and the shares subject to this option were fully

vested on the grant date.

option was granted on November 15, 2018, and the shares subject to this option were fully

vested on the grant date.

option was granted on October 15, 2018, and the shares subject to this option were fully

vested on the grant date.

option was granted on September 15, 2018, and the shares subject to this option were

fully vested on the grant date.

option was granted on August 15, 2018, and the shares subject to this option were fully

vested on the grant date.

option was granted on November 25, 2019, and the shares subject to this option vest monthly

over three years commencing January 1, 2020, subject to continued service as an employee,

director or consultant.

option was granted on March 3, 2020, and the shares subject to this option vest will

as to 1/3rd of the shares on March 2, 2021 and as to 1/36th of the shares subject to the option monthly thereafter, subject

to continued service as an employee, director or consultant .

option term is ten years, but all of the options expire automatically unless exercised within 90 days after the cessation

of service as an employee, director or consultant.

The option was granted

on June 1, 2020, and the shares subject to this option were fully vested on the grant date.

The option was granted

on May 1, 2020, and the shares subject to this option were fully vested on the grant date.

The option was granted

on April 1, 2020, and the shares subject to this option were fully vested on the grant date.

The option was granted

on March 2, 2020, and the shares subject to this option were fully vested on the grant date.

The option was granted

on February 1,2020, and the shares subject to this option were fully vested on the grant date.

The option was granted

on January 1, 2020, and the shares subject to this option were fully vested on the grant date.

The option was granted

on December 1, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on November 1, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on October 1, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on September 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on August 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on July 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on June 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on May 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on April 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on March 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on February 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on January 15, 2019, and the shares subject to this option were fully vested on the grant date.

The option was granted

on December 15, 2018, and the shares subject to this option were fully vested on the grant date.

The option was granted

on November 15, 2018, and the shares subject to this option were fully vested on the grant date.

The option was granted

on October 15, 2018, and the shares subject to this option were fully vested on the grant date.

The option was granted

on September 15, 2018, and the shares subject to this option were fully vested on the grant date.

The option was

granted on August 15, 2018, and the shares subject to this option were fully vested on the grant date.

option was granted on November 25, 2019, and the shares subject to this option vest monthly over three years commencing January

1, 2020, subject to continued service as an employee, director or consultant.

option was granted on March 3, 2020, and the shares subject to this option vest as

to 1/3rd of the shares the annual anniversary of the grant date and as to 1/36th of the shares subject to the option on each monthly

anniversary thereafter, subject to continued service as an employee, director or consultant .

Employment Agreements

We have entered into our standard

form of employment, confidential information and invention assignment agreement with each of our named executive officers.

have entered into agreements to indemnify our directors and certain executive officers, in addition to the indemnification provided

for in our certificate of incorporation and bylaws.

These agreements, among other things, provide for indemnification of our directors

and certain executive officers for many expenses, including attorneys’

fees, judgments, fines and settlement amounts incurred

by any such person in any action or proceeding, including any action by or in the right of the Company, arising out of such person’s

services as a director or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the person

provided services at our request.

We have entered

into our standard form of employment, confidential information and invention assignment agreement with each of our named executive

We also have entered into agreements to indemnify our directors and certain executive officers, in addition to the indemnification

provided for in our certificate of incorporation and bylaws.

These agreements, among other things, provide for indemnification

of our directors and certain executive officers for many expenses, including attorneys’

fees, judgments, fines and settlement

amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising

out of such person’s services as a director or executive officer of ours, any subsidiary of ours or any other company or

enterprise to which such person provided services at our request.

Director Compensation

The following table summarizes

the compensation we paid to our non-employee directors in fiscal 2020:

The following table summarizes the

compensation we paid to our non-employee directors in fiscal 2021:

Restricted Stock

Liam Burns(3)

William Febbo

Morgan Frank(3)

Carmen Volkart

amounts reflect the aggregate grant date fair value with respect to awards granted, as

determined pursuant to FASB ASC Topic 718.

The assumptions used to calculate the aggregate

grant date fair value of option awards are set forth in the notes to the consolidated

financial statements included in Item 8 of this Annual Report on Form 10-K.

These amounts

do not reflect actual compensation earned or to be earned by our directors.

of March 31, 2020, our non-employee directors each held outstanding options to purchase

the following number of shares of our common stock:

Liam Burns, 197,062;

(1) Award amounts reflect the

aggregate grant date fair value with respect to awards granted, as determined pursuant to FASB ASC Topic 718.

The assumptions

used to calculate the aggregate grant date fair value of option awards are set forth in the notes to the consolidated financial

statements included in Item 8 of this Annual Report on Form 10-K.

These amounts do not reflect actual compensation earned or to

be earned by our directors.

(2) As of March 31, 2021,

our non-employee directors each held outstanding options to purchase the following number of shares of our common stock:

Burns, 197,062;

William Febbo, 200,000;

Morgan Frank, 150,000;

Carmen Volkart, 150,000.

Burns was granted an option to purchase 60,000 shares of our common stock in January

Febbo joined our board of directors in January 2020 and was granted an option to purchase

200,000 shares of our common stock.

Volkart joined our board of directors in December 2019 and was granted options to purchase

a total of 150,000 shares of our common stock.

of directors has authorized an annual cash retainer fee of $10,000, payable in quarterly installments, for our non-employee directors,

with the exception of Mr.

Frank was granted an

option to purchase 150,000 shares of our common stock in May 2020.

During fiscal

2021, our board of directors had authorized an annual cash retainer fee of $10,000, payable in quarterly installments, for our

non-employee directors, with the exception of Mr.

Frank, as compensation for their service.

Effective April 1, 2021, our board

of directors approved our outside (non-employee) director compensation plan (the Director Plan).

Pursuant to the Director Plan,

outside directors will be paid the following annual retainers:

for service as a member of the board of directors;

for service as chair of the audit committee;

for service as chair of the compensation committee.

The retainers

will be paid in quarterly installments in either cash or in shares of common stock of the Company, as directed by each director

based on an annual election.

In addition, under the Director Plan, each director will also receive an annual service equity award

of $100,000 paid in quarterly installments in either options to purchase shares of the Company’s common stock or shares

of the Company’s common stock, as directed by each director based on an annual election.

upon appointment to our board of directors, we award our non-employee directors a stock option grant under our Amended 2017 Equity

4 unchanged sentences

following table sets forth certain information as of June 15, 2021 concerning the ownership of our common stock by:

shareholder known by us to be the beneficial owner of more than 5% of the outstanding

shares of our common stock (currently our only class of voting securities);

of our directors;

of our executive officers;

directors and executive officers as a group.

ownership is determined in accordance with Rule 13d-3 of the Exchange Act, and includes all shares over which the beneficial owner

exercises voting or investment power.

Shares that are issuable upon the exercise of options, warrants and other rights to acquire

common stock that are presently exercisable or exercisable within 60 days of June 15, 2020 are reflected in a separate column

in the table below.

These shares are taken into account in the calculation of the total number of shares beneficially owned by

a particular holder and the total number of shares outstanding for the purpose of calculating percentage ownership of the particular

We have relied on information supplied by our officers, directors and certain stockholders and on information contained

in filings with the SEC.

Except as otherwise indicated, and subject to community property laws where applicable, we believe, based

on information provided by these persons, that the persons named in the table have sole voting and investment power with respect

to all shares of common stock shown as beneficially owned by them.

The percentage of beneficial ownership is based on 18,454,459

shares of common stock outstanding as of June 15, 2020.

Unless otherwise stated,

the business address of each of our directors and executive officers listed in the table is 16772 West Bernardo Drive, San Diego,

California 92127.

· each shareholder known by

us to be the beneficial owner of more than 5% of the outstanding shares of our common stock (currently our only class of voting

· each of our directors;

· each of our executive officers;

· all directors and executive

officers as a group.

Beneficial ownership

is determined in accordance with Rule 13d-3 of the Exchange Act, and includes all shares over which the beneficial owner exercises

voting or investment power.

Shares that are issuable upon the exercise of options, warrants and other rights to acquire common

stock that are presently exercisable or exercisable within 60 days of June 15, 2021 are reflected in a separate column in the

These shares are taken into account in the calculation of the total number of shares beneficially owned by a particular

holder and the total number of shares outstanding for the purpose of calculating percentage ownership of the particular holder.

We have relied on information supplied by our officers, directors and certain stockholders and on information contained in filings

with the SEC.

Except as otherwise indicated, and subject to community property laws where applicable, we believe, based on information

provided by these persons, that the persons named in the table have sole voting and investment power with respect to all shares

of common stock shown as beneficially owned by them.

The percentage of beneficial ownership is based on 18,966,148 shares of common

stock outstanding as of June 15, 2021.

Unless otherwise

stated, the business address of each of our directors and executive officers listed in the table is 16772 West Bernardo Drive,

San Diego, California 92127.

Name and principal position

14 unchanged sentences

Carmen Volkart

current directors and executive officers as a group (6 persons)

Ellen O’Connor Vos(5)

All current directors and executive officers as a group (7 persons)

* Represents less than 1%

shares subject to outstanding options to acquire common stock that are exercisable within

60 days of June 15, 2020.

(2) Represents

the number of shares subject to outstanding options to acquire common stock that are

exercisable within 60 days of June 15, 2020.

(i) 180,830 shares directly held by Mr.

Besser, which shares were received in the Acquisition

in exchange for Mr.

Besser’s shares of Quasuras;

(ii) 88,889 shares directly held

Besser who purchased such shares in the 2018 Placement;

(iii) 4,545,455 shares

held by Manchester Explorer L.P.

(Manchester) which purchased such shares in a 2017 private

placement (the 2017 Placement);

(iv) 471,111 shares held by Manchester who purchased

such shares in a 2018 private placement (the 2018 Placement);

(v) 757,576 shares held

(1) Excludes shares subject to

outstanding options to acquire common stock that are exercisable within 60 days of June 15, 2021.

(2) Represents the number of

shares subject to outstanding options to acquire common stock that are exercisable within 60 days of June 15, 2021.

(3) Includes (i) 269,719 shares

directly held by Mr.

Besser, of which:

(a) 180,830 shares were received in exchange for Mr.

Besser’s shares as a result

of our acquisition of Quasuras and (b) 88,889 shares purchased in the 2018 Placement;

(ii) 5,051,409 held by Manchester Explorer,

(Manchester) of which:

(a) 4,545,455 shares were purchased in a private placement in 2017 (the 2017 Placement), (b) 471,111

shares were purchased in the 2018 Placement, and (c) 34,483 were purchased in the 2020 Placement;

(iii) 1,056,948 shares held

by JEB Partners, L.P.

(JEB) purchased in the 2017 Placement;

(vi) 160,000 shares held

by JEB who purchased such shares in the 2018 Placement;

and (vii) 180,830 shares held

Frank, which shares were received in the Acquisition in exchange for Mr.

Frank’s

shares of Quasuras.

Besser as the managing member and Mr.

Frank as the portfolio

manager and consultant to Manchester Management, LLC (MMC), the general partner of Manchester

and JEB, have shared voting and dispositive power over shares held by Manchester and

The address for Messrs.

Besser and Frank is c/o Manchester Management, LLC 2 Calle

(JEB Partners) of which (a) 757,576 shares were purchased in the 2017 Placement, (b) 160,000 shares were

purchased in the 2018 Placement and (c) 139,372 shares were purchase in the 2020 Placement;

and (iv) 180,830 shares held by Mr.

Frank, which shares were received in our acquisition of Quasuras in exchange for Mr.

Frank’s shares of Quasuras.

as the managing member, and Mr.

Frank, as the portfolio manager and consultant of Manchester Management, LLC (MMC), the general

partner of Manchester and JEB Partners, have shared voting and dispositive power over shares held by Manchester and JEB Partners.

The address for Manchester and Mr.

Besser is c/o MMC, 2 Calle Candina, No.

1701, San Juan, Puerto Rico 00907.

Such person disclaims beneficial ownership

of all shares not held directly by such person, except to the extent of such person’s

pecuniary interest therein.

(i) 303,030 shares held directly by the Paul DiPerna Trust, which shares were purchased

by the Paul DiPerna Trust in the 2017 Placement and (ii) 7,220,400 shares acquired by

DiPerna in the Acquisition in exchange for his shares of Quasuras.

the Chairman of our board of directors, and also serves as our Chief Executive Officer,

Chief Financial Officer Treasurer and Secretary.

Such person disclaims beneficial ownership

of all shares not held directly by such person, except to the extent of such person’s

pecuniary interest therein.

(4) Includes (i) 6,000,000 shares

directly held by the Paul DiPerna Irrevocable Trust (the Irrevocable Trust), (ii) 1,000,000 shares directly held by Mr.

DiPerna’s

adult daughters, Kelsie DiPerna and Alaria DiPerna, which shares Mr.

DiPerna has sole voting power over;

(iii) 523,430 shares

directly held by the Paul DiPerna Trust (the Trust), of which 303,030 shares were purchased in the 2017 Placement, and (iv) 278,015

shares issuable upon exercise of stock options granted to Mr.

DiPerna under the 2017 Plan.

The 6,000,000 shares held by the Irrevocable

Trust, 1,000,000 shares held by Mr.

DiPerna’s adult daughters and 220,440 shares held by the Trust were issued in 2017 to

DiPerna in the Acquisition and transferred to such persons in December 2020 by Mr.

DiPerna is the chairman of

our board of directors, and also serves as our chief executive officer, chief financial officer, and secretary.

the trustee of the Irrevocable Trust and the Trust.

Vos was appointed to

our board of directors in May 2021.

CERTAIN RELATIONSHIPS

1 unchanged sentence

Transactions with Related Persons

As disclosed elsewhere in this Annual

Report on Form 10-K, Mr.

elsewhere in this Annual Report on Form 10-K, Mr.

DiPerna, is a party to related party transactions with us, see Item 10.

Directors, Executive

Officers and Corporate Governance .

During fiscal 2020, we entered into

consulting agreements with Liam Burns, a member of our board of directors.

Under the consulting agreements, during the year ended

March 31, 2020, we paid Mr.

Burns consulting fees of $140,625 in cash, and Mr.

granted stock options with a fair value of $76,875.

The options were for a total of 47,062 shares of common stock, were fully

vested on the grant dates and have terms of 10 years.

The most recent consulting agreement, which was entered into

Burns and us in September 2019, was terminated in March 2020.

As of March 31, 2020, we had an outstanding payable

Burns of $5,585.

In March 2021,

Burns, a member of our board of directors, $5,585 in settlement of a liability outstanding at March 31, 2020 for consulting

services rendered during fiscal 2020.

Burns provided no consulting services to us during fiscal 2021.

February 2021, Mr.

DiPerna and Manchester, which is represented by Mr.

Frank, purchased $100,000 and $1,000,000, respectively,

aggregate principal amount of our 2021 Notes.

As of March 31, 2021, interest payable by us on such 2021 Notes totaled $1,677 and

$16,766 for Mr.

DiPerna and Manchester, respectively.

Director Independence

2 unchanged sentences

FEES AND SERVICES

The following table shows the fees

billed to us by Farber Haas Hurley LLP, or Farber, our independent registered public accounting firm, for the audit of our consolidated

financial statements and other services provided.

The following

table shows the fees billed to us by Farber Hass Hurley LLP, or Farber, our independent registered public accounting firm, for

the audit of our consolidated financial statements and other services provided.

Audit fees(1)

1 unchanged sentence

(1) Audit fees consisted of fees

for professional services rendered for the audit of our annual consolidated financial statements, review of our quarterly

consolidated financial statements and services provided in connection with our issuance of SEC registration statements.

Audit-related

fees consisted of fees for assurance and related services that are reasonably related to the performance of the audit or review

of our consolidated financial statements fees and primarily related to the issuance of SEC registration statements.

not provide any non-audit or other services other than those reported under “Audit fees”

and “Audit-related

on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

2020, our board of directors formed an audit committee, and appointed Ms.

Volkart to serve as it chairperson.

We are in the process

of developing a charter for and adding additional directors to the audit committee.

While we have not yet implemented a formal

Volkart pre-approves the fees for any services to be provided to us by Farber.

for professional services rendered for the audit of our annual consolidated financial statements, review of our quarterly consolidated

financial statements and services provided in connection with our issuance of SEC registration statements.

(2) Audit-related fees consisted

of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated

financial statements fees and primarily related to the issuance of SEC registration statements.

(3) Farber did not provide any

non-audit or other services other than those reported under “Audit fees”

and “Audit-related fees.”

Consolidated financial statements .

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Reorganization and Share Exchange Agreement

dated as of July 24, 2017, by and among the Registrants, Quasuras, Inc., Paul DiPerna and the other stockholders of Quasuras, Inc.

dated as of July 24, 2017, by and among the Registrant, Quasuras, Inc., Paul DiPerna and the other stockholders of Quasuras, Inc.

1 to Reorganization and Share Exchange Agreement dated as of July 24, 2017, by and among the Registrant, Quasuras, Inc., Paul DiPerna and the other Stockholders of Quasuras, Inc.

dated May 3, 2021

Second Amended and Restated Articles of

Incorporation, as filed with the Secretary of State of Nevada on June 27, 2017

Certificate of Designation of Preferences,

Rights and Limitations of Series A Cumulative Redeemable Perpetual Preferred Stock

Amended Bylaws

2017 Equity Incentive Plan, as amended

Form of Common Stock Purchase Warrant

Form of Warrant Agent Agreement

Form of Subscription Agreement

Form of Subscription Escrow Agreement

Form of Dividend Payment Escrow Agreement

Description of Registrant’s Securities

Common Stock Purchase Agreement, dated

32 unchanged sentences

Stock Option Agreement under the Amended 2017 Equity Incentive Plan

Form of Common Stock Purchase Agreement

dated March 2020 by and between the Registrant and the Investors named therein

First Amendment to Employment Agreement

2 unchanged sentences

Protection Program Note dated April 23, 2020

Second Amendment to Employment Agreement between the Registrant and Paul DiPerna effective as of July 1, 2020

Form of Convertible Promissory Note dated February 8, 2021

Form of Convertible Promissory Note issued in the 2021 Placement

Form of Common Stock Purchase Warrant issued in the 2021 Placement

Form of Securities Purchase Agreement for the 2021 Placement

Service Agreement effective May 18, 2020 between the Registrant and Ellen O'Connor Vos

Sole Subsidiary of the Registrant (as disclosed

in the Notes to Consolidated Financial Statements as of March 31, 2021 in Item 8 of this Report)

of Independent Registered Public Accounting Firm - Farber Hass & Hurley LLP

Power of Attorney (see signature page of

Certification

DiPerna pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Paul

DiPerna pursuant to 18 U.S.C.

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

7 unchanged sentences

incorporated herein by reference.

filed with the Registrant’s Current Report on Form 8-K filed June 29, 2017, and

incorporated herein by reference.

filed with the Registrant’s Registration Statement on Form S-1, as amended,

originally filed April 9, 2020, declared effective May 11, 2020 (Commission file No.

and incorporated herein by reference.

filed with the Registrant’s Annual Report on Form 10-K/A for the year ended June

30, 2008, and incorporated herein by reference.

(2) As filed with the Registrant’s Current Report on Form 8-K filed May 12, 2021, and incorporated herein by reference.

(3) As filed with the Registrant’s Current Report on Form 8-K filed June 29, 2017, and incorporated herein by reference.

(4) As filed with the Registrant’s Annual Report on Form 10-K/A for the year ended June 30, 2008, and incorporated herein by reference.

filed with the Registrant’s Annual Report on Form 10-K filed June 29, 2018, and

incorporated herein by reference.

filed with the Registrant’s Current Report on Form 8-K filed April 5, 2017, and

incorporated herein by reference.

filed with the Registrant’s Current Report on Form 8-K filed November 20, 2018

and incorporated herein by reference.

filed with the Registrant’s Registration Statement on Form S-1, as amended,

originally filed June 27, 2019, declared effective October 22, 2019 (Commission file

(6) As filed with the Registrant’s Current Report on Form 8-K filed April 5, 2017, and incorporated herein by reference.

(7) As filed with the Registrant’s Current Report on Form 8-K filed November 20, 2018 and incorporated herein by reference.

(8) As filed with the Registrant’s Registration Statement on Form S-1, as amended, originally filed June 27, 2019, declared effective October 22, 2019 (Commission File No.

333-232377), and incorporated herein by reference.

filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended

December 31, 2019, and incorporated herein by reference.

filed with the Registrant’s Current Report on Form 8-K filed May 27, 2020, and

incorporated herein by reference.

filed with the Registrant’s Current Report on Form 8-K filed May 12, 2020, and

incorporated herein by reference.

(9) As filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2019, and incorporated herein by reference.

(10) As filed with the Registrant’s Current Report on Form 8-K filed May 27, 2020, and incorporated herein by reference.

(11) As filed with the Registrant’s Current Report on Form 8-K filed May 12, 2020, and incorporated herein by reference.

(12) As filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2020, and incorporated herein by reference.

(13) As filed with the Registrant’s Current Report on Form 8-K filed May 12, 2021, and incorporated herein by reference.

Management contract,

compensatory plan or arrangement.

* Filed herewith

Pursuant to the requirements of Section 13

7 unchanged sentences

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE

PRESENTS, that each person whose signature appears below constitutes and appoints Paul DiPerna as true and lawful attorney-in-fact

and agent, with full power of substitution and resubstitution, for her and him and in her or his name, place and stead, in any

and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits

thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact

and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection

therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said

attorney-in- fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Paul DiPerna as true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for her and him and in her or his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in- fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Executive Officer, Chief Financial Officer, Secretary,

2 unchanged sentences

of the Board)

June 29, 2020

William Febbo

3 unchanged sentences

Carmen Volkart

Ellen O’Connor Vos

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures