What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-02-12 · 295 added, 511 removed, 256 unchanged (76% of the section changed)

1 unchanged sentence

Modular Medical,

(f/k/a- Bear Lake Recreation, Inc.)

Condensed Consolidated Balance Sheets

June 30, 2021

CURRENT ASSETS

Cash and cash equivalents

Prepaid expenses

Other current assets

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TOTAL NON-CURRENT ASSETS

LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES

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Short-term lease liability

PPP note payable, current

PPP note payable

Convertible notes payable

TOTAL CURRENT LIABILITIES

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Bonus payable

PPP note payable

TOTAL LONG-TERM LIABILITIES

TOTAL LIABILITIES

Commitments and Contingencies (Note 8)

STOCKHOLDERS’

EQUITY (DEFICIT)

STOCKHOLDERS’ DEFICIT

Preferred Stock, $ 0.001 par value, 5,000,000 shares authorized, none issued and outstanding

Common Stock, $0.001 par value, 50,000,000 shares authorized, 18,832,648 shares issued and outstanding as of December 31, 2020 and 17,870,261 as of March 31, 2020

Common Stock, $ 0.001 par value, 50,000,000 shares authorized;

18,971,656 and 18,906,148 shares issued and outstanding as of June 30, 2021 and March 31, 2021, respectively

Additional paid-in capital

2 unchanged sentences

( 20,782,101 )

TOTAL STOCKHOLDERS’

(DEFICIT) EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’

(DEFICIT) EQUITY

( 15,947,010 )

TOTAL STOCKHOLDERS’ DEFICIT

( 1,581,488 )

( 1,275,149 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

The accompanying

1 unchanged sentence

Modular Medical,

(f/k/a- Bear Lake Recreation, Inc.)

Condensed Consolidated Statements of Operations

Three Months Ended

Nine Months Ended

Operating expenses

3 unchanged sentences

Loss from operations

Interest income

Loss before income taxes

Provision for income taxes

( 3,373,587 )

( 1,874,212 )

Interest expense

Loss on debt extinguishment

( 1,321,450 )

$ ( 4,835,091 )

$ ( 1,874,157 )

Net loss per share

Basic and diluted

Weighted Average Number of Shares Outstanding

Shares used in computing net loss per share

Basic and diluted

2 unchanged sentences

Modular Medical,

(f/k/a- Bear Lake Recreation, Inc.)

Condensed Consolidated Statements of Stockholders’

Equity (Deficit)

Stockholders’

Equity (Deficit)

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

Stockholders’

Balance as of March 31, 2021

$ ( 15,947,010 )

Private placement of common stock

$ ( 1,275,149 )

Shares issued for services

Warrants issued with convertible notes

Stock-based compensation

( 4,835,091 )

Balance as of June 30, 2021

$ ( 20,782,101 )

Stock-based compensation

Balance as of September 30, 2020

$ ( 1,581,488 )

Stockholders’

Balance as of March 31, 2020

$ ( 8,569,034 )

Private placement of common stock

Stock-based compensation

Balance as of December 31, 2020

( 1,874,157 )

Stockholders’

Balance as of March 31, 2019

( 1,874,157 )

Shares issued for services

Stock-based compensation

Balance as of June 30, 2020

$ ( 10,443,191 )

Stock-based compensation

Balance as of September 30, 2019

$ (5,517,925 )

Stock-based compensation

Balance as of December 31, 2019

The accompanying

1 unchanged sentence

Modular Medical,

(f/k/a- Bear Lake Recreation, Inc.)

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

Three Months Ended

$ ( 4,835,091 )

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Gain on PPP note forgiveness

Loss on debt extinguishment

Stock-based compensation expense

Depreciation and amortization

Amortization of lease right-to-use asset

Shares for services

Amortization of lease right-of-use asset

Change in lease liability

Amortization of debt discount

Changes in assets and liabilities:

Other assets and prepaid expenses

Security deposit

Accounts payable and accrued expenses

Net cash used in operating activities

( 2,204,621 )

( 1,507,548 )

CASH FLOWS FROM INVESTING ACTIVITIES

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from private placement, net of issuance costs

Proceeds from issuance of PPP note payable

Proceeds from private placement

Proceeds from issuance of convertible notes, net of placement fees

Issuance of PPP note

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure:

Noncash investing and financing activities:

Fair value of detachable warrants issued with convertible notes

The accompanying

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MODULAR MEDICAL,

F/K/A BEAR LAKE RECREATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –

THE COMPANY AND

NOTE 1 – THE COMPANY AND

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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business operations from 2002 until approximately 2017 when it acquired all of the issued and outstanding shares of Quasuras,

(Quasuras), a Delaware corporation.

Inc., a Delaware corporation (Quasuras).

As the major shareholder of Quasuras retained control of both the Company and Quasuras,

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As such, the Company recognized the assets and liabilities of Quasuras

acquired in the reverse merger at their historical carrying amounts.

Prior to the acquisition of Quasuras and since at least 2002,

the Company was a shell company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the Exchange

acquired in the merger, at their historical carrying amounts.

Prior to the acquisition of Quasuras and since at least 2002, the

Company was a shell company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the Exchange Act).

In June 2017, the Company changed its name from Bear Lake Recreation, Inc.

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The Company has developed a hardware technology allowing people with insulin-dependent

diabetes to receive their daily insulin in two ways, through a continuous “basal”

delivery allowing a small amount

of insulin to be in the blood at all times and a “bolus”

delivery to address meal time glucose input and to address

diabetes to receive their daily insulin in two ways, through a continuous “basal” delivery allowing a small amount

of insulin to be in the blood at all times and a “bolus” delivery to address meal time glucose input and to address

when the blood glucose level becomes excessively high.

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the Company believes it can address the less technically savvy, less motivated part of the market.

Accounting Standards Board (FASB) Accounting Standards Update (ASU) No.

2014-15, Going Concern , requires management

to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s

ability to continue as a going concern within one year after the date that the financial statements are issued.

If management

identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management

must consider if there are plans that are probable to be implemented, and whether it is probable that the plans will mitigate

the conditions or events raising the substantial doubt about the entity’s ability to continue as a going concern.

the substantial doubt is not alleviated after consideration of management’s plans, the entity must include a statement in

the notes to the financial statements indicating that there is substantial doubt about the entity’s ability to continue

as a going concern within one year after the date that the financial statements are issued including:

1) the principal conditions

or events that raise substantial doubt about the entity’s ability to continue as a going concern, 2) management’s

evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations,

and 3) management’s plans to attempt to mitigate the conditions or events causing the substantial doubt about the entity’s

Accounting Standards Board (FASB) Accounting Standard Update (ASU) No.

2014-15 (ASU 2014-15), Going Concern , requires

management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about

the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going

concern, management must consider if there are plans that are probable to be implemented, and whether it is probable that the

plans will mitigate the conditions or events raising the substantial doubt about the entity’s ability to continue as a going

If the substantial doubt is not alleviated after consideration of management’s plans, the entity must include

a statement in the notes to the financial statements indicating that there is substantial doubt about the entity’s ability

to continue as a going concern within one year after the date that the financial statements are issued including:

1) the principal

conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, 2) management’s

evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations,

and 3) management’s plans to attempt to mitigate the conditions or events causing the substantial doubt about the entity’s

ability to continue as a going concern.

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product revenues to achieve profitability.

These circumstances raise substantial doubt about the Company’s ability to continue

as a going concern within one year after the date that these financial statements are issued.

Implementation of the Company’s

plans and its ability to continue as a going concern will depend upon the Company’s ability to raise additional capital,

Implementation of the Company’s

plans and its ability to continue as a going concern will depend upon the Company’s ability to raise additional capital,

through the sale of additional equity or debt securities, to support its future operations.

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capital will be offered on terms and conditions acceptable to the Company.

As discussed in note 9, in February 2021, the

Company issued convertible promissory notes to investors to fund its operations.

In addition, during 2020, the Company obtained

additional equity financing through a private placement of its common stock (see note 4), and the Company obtained a loan from

Silicon Valley Bank in April 2020 (see note 3).

The Company’s

operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital

expenditures.

The Company’s future capital requirements and the adequacy of its available funds will depend on many factors,

including the Company’s ability to successfully commercialize its product, competing technological and market developments,

The Company’s future capital requirements and the adequacy of its available funds will depend on many factors,

including the Company’s ability to successfully commercialize its product, competing technological and market developments,

and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement

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initiatives and take additional measures to reduce costs in order to conserve its cash.

These consolidated financial statements

do not include any adjustments that might result from this uncertainty.

These condensed consolidated financial

statements do not include any adjustments that might result from this uncertainty.

Basis of Presentation

The Company’s

fiscal year ends on March 31 of each calendar year.

2 unchanged sentences

to the fiscal year ending March 31, 2022).

The consolidated financial statements include the accounts of the Company

and its wholly-owned subsidiary, Quasuras.

All significant intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements include the accounts of the

Company and its wholly-owned subsidiary, Quasuras.

All significant intercompany transactions and balances have been eliminated

in consolidation.

The accompanying

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Exchange Commission (SEC).

The information in this report should be read in conjunction with the Company’s consolidated

financial statements and notes thereto included in its most recent annual report on Form 10-K filed with the SEC.

opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting

only of normal recurring adjustments) necessary to summarize fairly the Company’s financial position, results of operations

and cash flows for the interim periods presented.

The operating results for the three months and nine months ended December 31,

2020 are not necessarily indicative of the results that may be expected for the year ending March 31, 2021 or for any other future

The operating results for the three months ended June 30, 2021 are not necessarily

indicative of the results that may be expected for the year ending March 31, 2022 or for any other future period.

The preparation

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and global economy, disrupted global supply

chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place”

and created significant disruption of the financial markets.

The full extent of the COVID-19 impact on the Company’s operational

and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions

taken by U.S.

and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s

control, and cannot be predicted.

5 unchanged sentences

Depreciation is computed using the straight-line method over the estimated useful lives

of the assets, generally three to seven years.

Depreciation is recorded in operating expenses in the condensed consolidated statements

of operations.

of the assets, generally three to five years.

Depreciation is recorded in operating expenses in the consolidated statements of

Leasehold improvements and assets acquired through capital leases are amortized over the shorter of their estimated

useful life or the lease term, and amortization is recorded in operating expenses in the condensed consolidated statements of

useful life or the lease term, and amortization is recorded in operating expenses in the consolidated statements of operations.

Fair Value of Financial

1 unchanged sentence

used to measure fair value into three broad levels:

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

Level 2 inputs to the valuation methodology

include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or

liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to

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

their short-term nature, the carrying values of cash equivalents, accounts payable and accrued expenses approximate fair value.

· Level 1 inputs to the valuation

methodology are quoted prices for identical assets or liabilities in active markets.

· Level 2 inputs to the valuation

methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the

asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3 inputs to the valuation

methodology are unobservable and significant to the fair value measurement.

their short-term nature, the carrying values of cash equivalents, accounts payable, accrued expenses and notes payable approximate

Per-Share Amounts

Basic net loss per share is

computed by dividing loss for the period by the weighted-average number of shares of common stock outstanding during the period.

Basic net loss

per share is computed by dividing loss for the period by the weighted-average number of shares of common stock outstanding during

Diluted net loss per share gives effect to all potentially dilutive common shares outstanding during the period.

months ended December 31, 2020 and 2019, outstanding options to purchase 3,512,588 and 2,526,443 shares of common stock, respectively,

the three months ended June 30, 2021 and 2020, outstanding options to purchase 3,751,437 and 3,407,587 shares of common stock

were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.

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comprehensive loss may include certain changes in equity that are excluded from net loss.

For the three and nine months ended

December 31, 2020 and 2019, the Company’s comprehensive loss was the same as its net loss.

NOTE 2 –

For the three months ended June 30,

2021 and 2020, the Company’s comprehensive loss was the same as its net loss.

Adopted Accounting Pronouncement

In August 2020, the FASB issued ASU

2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts

in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity (ASU

ASU 2020-06 simplifies the accounting for convertible instruments by removing major separation models required

under current GAAP.

Consequently, more convertible debt instruments will be reported as a single liability instrument with no

separate accounting for embedded conversion features.

ASU 2020-06 removes certain settlement conditions that are required for

equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it.

2020-06 also simplifies the diluted net income per share calculation in certain areas.

The new guidance is effective for annual

and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December

15, 2020, and interim periods within those fiscal years.

The Company early adopted ASU 2020-06 effective April 1, 2021, and the

impact of the adoption was not material to the Company’s consolidated financial statements.

NOTE 2 – LEASES

Effective April

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the alternative transition method, which allowed the Company to initially apply the new lease standard at the adoption date (the

“effective date method”).

In January 2020, the Company executed a lease for a new, larger corporate facility in San

8 unchanged sentences

A discount rate of 11%, which approximated

the Company’s incremental borrowing rate, was used to measure the lease asset and liability.

Lease expense is recognized

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Future minimum

payments under the facility operating lease, as of December 31, 2020, are listed in the table below.

payments under the facility operating lease, as of June 30, 2021, are listed in the table below.

Annual Fiscal Years

1 unchanged sentence

Present value of lease liabilities

paid for amounts included in the measurement of lease liabilities was $86,891 for the nine months ended December 31, 2020.

expense was $26,884 and $7,500 for the three months ended December 31, 2020 and 2019, respectively, and $80,654 and $25,500 for

the nine months ended December 31, 2020 and 2019, respectively.

NOTE 3 –

paid for amounts included in the measurement of lease liabilities was $ 48,085 .

Rent expense was $ 26,884 and $ 26,885 for the three

months ended June 30, 2021 and 2020, respectively.

2020, the Company received a $ 368,780 unsecured loan (the PPP Note) under the Paycheck Protection Program (the PPP), which was

established under the U.S.

government’s Coronavirus Aid, Relief, and Economic Security Act.

The PPP Note to the Company

was made through Silicon Valley Bank (the Lender), and the Company entered into a U.S.

Small Business Administration (SBA) Paycheck

Protection Program Note (the Agreement) with the Lender evidencing the PPP Note.

government’s Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).

to the Company was made through Silicon Valley Bank (the Lender), and the Company entered into a U.S.

Small Business Administration

Paycheck Protection Program Note (the Agreement) with the Lender evidencing the PPP Note.

The full amount

of the PPP Note is due in April 2022.

Interest accrues on the outstanding principal balance of the PPP Note at a fixed rate of

1.0% per annum.

Monthly payments will be due and payable beginning in September 2021 and continue each month thereafter until

maturity of the PPP Note.

The Company may prepay principal of the PPP Note at any time in any amount without penalty.

The Agreement

contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties

or provisions of the PPP Note.

The occurrence of an event of default may result in the repayment of all amounts outstanding, collection

of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company.

In October 2020,

the Company applied to the Lender for forgiveness of the PPP Note, and the Lender submitted the Company’s forgiveness application

to the SBA to be processed.

No assurance is provided that the Company will obtain forgiveness of the PPP Note in whole or in part.

NOTE 4 –

STOCKHOLDERS’

EQUITY (DEFICIT)

2020, the Company initiated a private placement of shares of its common stock (the 2020 Placement).

As of December 31, 2020, the

Company had sold 962,387 shares of common stock, at a purchase price of $2.87 per share, for gross proceeds of $2,762,054.

the terms of the common stock purchase agreements between the Company and the investors, the Company must use commercially reasonable

efforts to file a registration statement with the SEC within 90 days of the closing of the 2020 Placement to register for resale

the shares of common stock sold.

NOTE 5 –

of the PPP Note was due in April 2022 and interest accrued on the outstanding principal balance of the PPP Note at a fixed rate of 1.0%

per annum, which was deferred for 10 months after the covered period during which the Company used the proceeds.

The Company applied

to the Lender for forgiveness of the PPP Note in October 2020, and, in May 2021, the Company was notified by the Lender and the U.S.

Small Business Administration that the outstanding principal and accrued interest for the PPP Note was forgiven in full.

accounted for the forgiveness of the PPP Note in accordance with Accounting Standards Codification Topic 470:

Debt (ASC 470),

and the amount forgiven was recorded as a gain on extinguishment and recognized in the other income line of the condensed consolidated

statement of operations.

4 – CONVERTIBLE PROMISSORY NOTES

February through April 2021, the Company sold $2,310,000 of convertible promissory notes (the Original Notes), at par in a private placement

transaction effected pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended.

April 30, 2021, pursuant to a revocation and replacement agreement between each holder of an Original Note and the Company (the Revocation

Agreement), the $2,310,000 of Original Notes and accrued interest thereon as of April 30, 2021 were replaced with $2,360,550 aggregate

principal amount of Notes (as defined below).

The Company accounted for the replacement of the Original Notes in accordance with ASC

470 and recorded a loss on extinguishment of $ 1,321,450 and interest expense of $ 70,647 for unamortized debt issuance costs as of April 30, 2021.

In April and May

2021, pursuant to a Securities Purchase Agreement (the SPA), the Company sold to investors $ 4,250,000

aggregate principal amount of convertible promissory notes (the Notes) and warrants

to purchase shares of its common stock (the Warrants).

The Notes are unsecured obligations of the Company with each Note having a stated

maturity date of 12 months from its issue date (the Issue Date).

The Notes bear interest at a rate of 12% per annum, payable on maturity,

provided that, if the Company fails to pay any amounts when due under a Note, the interest rate increases to the greater of 16% or the

maximum amount permitted by law.

Each Note may be prepaid at the Company’s option during the first 270 calendar days following

its Issue Date (the 270 th day, the Trigger Date), subject to a 110% prepayment penalty on outstanding principal and accrued

interest then outstanding.

No Note may be prepaid in whole or in part after the Trigger Date.

Notes outstanding after the Trigger Date may be

converted into shares of the Company’s common stock at an initial conversion price of $2.87 per share;

provided that a Note holder

may not convert any portion of its Note that would cause it to beneficially own in excess of 4.99% of the Company’s outstanding

common stock.

The conversion price and number of shares of Company common stock issuable upon conversion of the Notes are subject to adjustment

from time to time for subdivisions and consolidations of shares and other standard dilutive and corporate events, as provided in the Notes.

Subject to certain Exempt Issuances (as defined in the Notes), if while a Note is outstanding, the Company sells, issues or grants any

shares of its common stock or other securities to acquire shares of common stock at a price per share less than the then conversion price,

such conversion price shall be reduced to such lesser price, and the number of conversion shares issuable upon conversion of the Notes

shall be increased, as provided in the Notes.

If the Company completes an offering of its common stock or other securities

in excess of $12,000,000 of gross proceeds (a Qualified Capital Raise), each Note holder will be required to convert its Adjusted Note

Amount into the securities of such Qualified Capital Raise.

Adjusted Note Amount equals the product of (i) the sum of all outstanding

principal plus accrued interest on a Note, multiplied by (ii) 1.25.

The Notes contain

a number of Company events of default (Events of Default) including, without limitation (i) failure to pay any principal or interest

thereon when due, (ii) failure to timely deliver shares upon conversions, (iii) failure to comply with SEC reporting requirements under

the Exchange Act, (iv) certain breaches of the SPA, the Notes, the Warrants, and the Registration Rights Agreement, (v) material restatements

of the Company’s consolidated financial statements filed with the SEC, (vi) a holder’s inability to rely on Rule 144 for

sales of shares underlying the Notes, (vii) the Company’s common stock is suspended or halted from trading and/or fails to be quoted

or listed (as applicable) on the OTCQB, OTCQX, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American

within 10 days thereafter, (viii) failure to file with the SEC a registration statement covering the resale of shares of common stock

underlying the Notes and Warrants within 60 calendar days following the Issue Date, (ix) failure to cause such registration statement

to become effective within 120 calendar days following the Issue Date, or (x) certain mergers consolidations, business combinations and

sales of all or substantially all of the Company’s assets in the event the Company is not the survivor of such transaction.

Upon an Event of

Default, a Note holder may declare all amounts under its Note(s) due and payable, in which event the Company will be required to pay

such Note holder the sum of (i) the product of (a) all then outstanding principal amount and accrued interest thereon, multiplied by

and (ii) all collection costs including legal fees and expenses in connection therewith.

At the option of a Note holder, in

the event the Company receives cash proceeds as a result of certain events, including, but not limited to, payments from customers, issuances

of debt or equity securities, exercise of warrants or asset sales, the Company will be required to use such proceeds to repay all or

any lesser outstanding amounts due under such holder’s Note.

The Notes include covenants, representations,

warranties, other payment obligations and agreements by the Company including, without limitation, most-favored nation rights, rights

of participation and first refusal and exchange rights.

In connection with the issuance of the Notes, the Company issued Warrants

to purchase in the aggregate 2,303,348 shares of its common stock at an initial exercise price of $8.00 per share.

The Warrants may be

exercised for a period of five years from the Trigger Date, provided that, if prior to the Trigger Date, the Company (i) completes a Qualified

Capital Raise, the outstanding Warrants shall be cancelled or (ii) prepays a holder’s Note(s) in whole or in part, such holder’s

pro-rata number of Warrants shall be cancelled.

The fair value of the Warrants was $3,700,632, of which $2,379,182 was recorded as a debt

discount, which is being amortized to interest expense over the term of the Warrants, and $1,321,450 was recorded as a loss on debt extinguishment.

The Company calculated the fair value of the

Warrants utilizing the Black-Scholes valuation model with the following assumptions:

volatility of 88.98 % , risk-free interest rate of

0.86 % , a term of 5.75 years and a dividend yield of zero .

In connection with

the April and May 2021 sales of the $4,250,000 aggregate principal amount of the Notes, the Company incurred debt issuance costs of $116,000,

which were recorded as a debt discount and are being amortized to interest expense over the term of the Notes using the effective interest

The interest expense attributable to the debt discount, comprising the debt issuance costs and Warrants, during the

three months ended June 30, 2021 was approximately $338,619.

The $6,610,550 aggregate principal amount of Notes are due and payable in full in the first quarter of fiscal 2023.

As of June 30, 2021, the Notes and accrued interest could

be converted into 2,354,653 shares of common stock at a conversion price of $2.87 per share.

5 – STOCKHOLDERS EQUITY (DEFICIT) & STOCK-BASED COMPENSATION

During the three months ended June

30, 2021, the Company issued 60,000 shares of common stock to a service provider.

2017 Equity Incentive Plan

2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the Plan) with 3,000,000 shares

of common stock reserved for issuance.

In January 2020, the Board approved an increase in the number of shares reserved for issuance

under the Plan by 1,000,000 shares.

Under the Plan, eligible employees, directors and consultants may be granted a broad range

of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock

The Plan is administered by the Board or, in the alternative, a committee designated by the Board.

In October 2017,

the Board approved the 2017 Equity Incentive Plan (the Plan) with 3,000,000 shares of common stock reserved for issuance.

2020, the Board approved an increase in the number of shares reserved for issuance by 1,000,000 shares.

Under the Plan, eligible

employees, directors and consultants may be granted a broad range of awards, including stock options, stock appreciation rights,

restricted stock, performance-based awards and restricted stock units.

The Plan is administered by the Board or, in the alternative,

a committee designated by the Board.

Stock-Based Compensation

1 unchanged sentence

based on the grant date fair value.

The unamortized compensation cost at December 31, 2020, was $2,354,079 related to stock options

As of June 30, 2021, the unamortized compensation cost was $ 2,288,683 related to stock options

and is expected to be recognized as expense over a weighted-average period of approximately 1.94 years .

the nine months ended December 31, 2020, the Company granted options to purchase 355,476 shares of its common stock to employees,

directors and consultants.

The options had 10-year terms, and 10,476 options vested immediately when granted.

The fair value of

the options was determined to be $825,838 of which $223,878 was recorded as stock-based compensation expense and included in the

condensed consolidated statement of operations for the nine months ended December 31, 2020.

the three months ended June 30, 2021, the Company granted 5,508 shares to members of its board of directors (the Board) in accordance

with its Board compensation plan for non-employee directors.

During the three months ended June 30, 2021, the Company granted

options to purchase 182,321 shares of its common stock to employees, directors and consultants.

The options had 10-year terms,

and 47,320 options granted on June 30, 2020, in accordance with its Board compensation plan for non-employee directors, vested immediately.

During the three months ended June 30, 2021, the fair value of the options granted was $ 698,093 , and $ 300,918 was recorded as

stock-based compensation expense in the condensed consolidated statement of operations.

The following assumptions were used

in the fair value method calculations:

Three Months Ended

Nine Months Ended

Risk-free interest rates

1.51% - 1.69 %

1.34% - 2.41 %

in the fair value calculations:

Schedule of Fair Value Assumptions

interest rates

Expected life (years)

Dividend yield

The fair values

of options at the grant date were estimated utilizing the Black-Scholes valuation model, which includes simplified methods to

establish the fair term of options as well as average volatility of three comparable organizations.

The risk-free interest rate

was derived from the Daily Treasury Yield Curve Rates, as published by the U.S.

Department of the Treasury as of the grant date

for terms equal to the expected terms of the options.

A dividend yield of zero was applied because the Company has never paid

dividends and has no intention to pay dividends in the foreseeable future.

establish the fair term of options, as well as average volatility.

The risk-free interest rate was derived from the Daily Treasury

Yield Curve Rates, as published by the U.S.

Department of the Treasury as of the grant date for terms equal to the expected terms

of the options.

A dividend yield of zero was applied because the Company has never paid dividends and has no intention to pay

dividends in the foreseeable future.

In accordance with ASU No.

2016-09, the Company accounts

for forfeitures as they occur.

of stock option activity under the Plan is presented below:

2016-09, the Company accounts for forfeitures as they occur.

of stock option activity under the EIP is presented below:

Schedule of Stock Option activity

Options Outstanding

3 unchanged sentences

Balance at June 30, 2021

Options granted

Balance at September 30, 2020

Options granted

Options cancelled and returned to the Plan

Balance at December 31, 2020

There were no

stock options exercised during the nine months ended December 31, 2020 and 2019.

stock options exercised during the three months ended June 30, 2021 and 2020.

The following

table summarizes the range of outstanding and exercisable options at December 31, 2020:

table summarizes the range of outstanding and exercisable options as of June 30, 2021:

Outstanding and Exercisable Option, Range

Options Outstanding

2 unchanged sentences

$ 0.66 - $ 5.90

The intrinsic

value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading

market over the exercise price of the option at December 31, 2020.

The Company’s common stock has minimal trading volume,

and the closing price is not necessarily representative of the fair value.

The intrinsic value per share is

calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise

price of the option.

is required to present the tax benefits resulting from tax deductions in excess of the compensation cost recognized from the exercise

of stock options as financing cash flows in the consolidated statements of cash flows.

For the nine months ended December 30,

For the three months ended June 30, 2021

and 2020, there were no such tax benefits associated with the exercise of stock options.

NOTE 6 –

NOTE 6 – INCOME TAXES

determines deferred tax assets and liabilities based upon the differences between the financial statement and tax bases of the

Company’s assets and liabilities using tax rates in effect for the year in which the Company expects the differences to

affect taxable income.

6 unchanged sentences

All tax returns

from 2016 to 2019 may be subject to examination by the U.S.

for fiscal 2016 to fiscal 2020 may be subject to examination by the U.S.

federal and state tax authorities.

As of December 31, 2020,

As of June 30,

2021, the Company has not recorded any liability for unrecognized tax benefits related to uncertain tax positions.

NOTE 7 –

PARTY TRANSACTION

During fiscal

2020, the Company entered into consulting agreements with a member of its board of directors.

The most recent consulting

agreement was terminated in March 2020.

At December 31, 2020, the Company had an outstanding payable to the director of $5,585,

which was included in accounts payable in the condensed consolidated balance sheet.

NOTE 8 –

COMMITMENTS AND CONTINGENCIES

NOTE 7 – RELATED

PARTY TRANSACTIONS

2021 Placement

2021, the Company’s chief executive officer and an existing investor, who is represented by a member of the Company’s board

of directors, purchased $100,000 and $1,000,000, aggregate principal amount of the Original Notes, respectively.

Effective April

30, 2021, the Related Party Holders entered into Revocation Agreements with the Company pursuant to which their collective $ 1,100,000

aggregate principal amount of Original Notes and accrued interest of $ 50,091

were replaced with Notes.

At June 30, 2021,

the investor and executive officer held Notes in an aggregate principal amount of $ 1,026,630

and $ 102,663 ,

respectively, with $ 20,589

of interest payable thereon.

In May 2021, a member

of the Board purchased $ 200,000

aggregate principal amount of Notes.

June 30, 2021, approximately $ 4,000

of interest was payable by the Company thereon.

COMMITMENTS & CONTINGENCIES

Claims and Assessments

2 unchanged sentences

Indemnification

ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties

from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims

and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising

from litigation or claims relating to past performance.

In the ordinary

course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any

losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising

from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims

relating to past performance.

Such indemnification clauses may not be subject to maximum loss clauses.

The Company has also entered into indemnification agreements with its officers and directors.

No amounts were reflected in the

Company’s consolidated financial statements for the nine months ended December 31, 2020 and 2019 related to these indemnifications.

The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited

history of prior claims and the unique facts and circumstances applicable to each particular agreement.

To date, the Company has

not made any payments related to these indemnification agreements, and no claims for payment have been made under such agreements.

NOTE 9 –

The Company has also entered into

indemnification agreements with its officers and directors.

No amounts were reflected in the Company’s consolidated financial statements

for the three months ended June 30, 2021 and 2020 related to these indemnifications.

The Company has not estimated the maximum potential

amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances

applicable to each particular agreement.

To date, the Company has not made any payments related to these indemnification agreements,

and no claims for payment have been made under such agreements.

9 – SUBSEQUENT EVENT

February 8, 2021, the Company sold $1,100,000 of convertible promissory notes (the Notes) in a private placement transaction effected

pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended.

The Notes bear interest

at an annual rate of 12%, and interest is accrued or payable monthly in cash.

The Notes mature on September 30, 2021 (the Maturity

Date) and may not be prepaid prior to the Maturity Date.

aggregate principal amount of the Notes plus accrued but unpaid interest thereon shall automatically convert upon the closing

of an offering of the Company’s equity securities to investors or a strategic corporate investor resulting in aggregate

gross proceeds to the Company of at least $5,000,000 (excluding conversion of the Notes or other convertible securities issued

for capital raising purposes) (a Qualified Financing).

In the event of a Qualified Financing, all such outstanding principal and

accrued interest shall convert into the same equity securities purchased by and on the same terms and conditions as the other

investors in such Qualified Financing at a conversion price equal to 80% (a 20% discount) of the lowest price paid per unit or

share by investors in the Qualified Financing.

In the event that additional bridge financing is obtained by the Company, the Notes

shall convert into the same securities and on the same terms and conditions as the other investors therein and all such purchases

will be treated as one, single round of financing going forward.

any time on or following the Maturity Date, the holders of the Notes may demand repayment of the Notes, and the Company shall

repay the outstanding aggregate principal amount plus accrued but unpaid interest thereon.

The holders of the Notes, however,

retain the right for 30 days after the Maturity Date to convert all or part of the aggregate principal amount plus accrued but

unpaid interest on the Notes into the Company’s common stock at the conversion price of $2.87 per share or at a 20% discount

to any financing consummated during the 30-day period following the Maturity Date.

If a Qualified

Financing has not occurred immediately prior to the consummation of a Change of Control (as defined below), the Note holders shall

have the option of either (i) converting all or any portion of the aggregate principal amount of the Notes plus accrued but unpaid

interest thereon into common stock of the Company at a conversion price equal to $2.87 per share or (ii) having the Company repay

the aggregate principal amount of the Notes and accrued but unpaid interest.

The term “Change of Control”

a consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate

reorganization, other than any such consolidation, merger or reorganization in which the shares of capital stock of the Company

immediately prior to such consolidation, merger or reorganization continue to represent a majority of the voting power of the

surviving entity immediately after such consolidation, merger or reorganization;

(ii) any transaction or series of related transactions

to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred;

(iii) the sale or

transfer of all or substantially all of the Company’s assets, or the exclusive license of all or substantially all of the

Company’s material intellectual property;

or (iv) the dissolution and winding up of the Company.

The Company’s

chairman and chief executive officer and an existing investor, which is represented by a member of the Company’s board of

directors, purchased the $1,100,000 aggregate principal amount of the Notes.

The private placement of the Notes was approved by

the Company’s disinterested directors.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with

the accompanying condensed consolidated financial statements and notes included in this Quarterly Report on Form 10-Q (this Report).

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E

of the Securities Exchange Act of 1934, which include, without limitation, statements about the market for our proposed product,

strategy, competition, expected financial performance, capital position and capital raising efforts, and other aspects of our

business identified in our most recent Annual Report on Form 10-K for the year ended March 31, 2020 (the 2020 10-K) filed

with the Securities and Exchange Commission on June 29, 2020 and in other reports that we file from time to time with the Securities

and Exchange Commission.

Any statements about, among other items, our business, financial results, financial condition and operations

contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements.

Without limiting

the foregoing, the words “believes,”

“anticipates,”

“expects,”

“intends,”

“plans,”

“projects,”

or similar expressions are intended to identify forward-looking statements.

Our actual results could differ

materially from those expressed or implied by these forward-looking statements as a result of various factors, including the risk

factors described under Item 1A of our 2020 10-K.

These forward-looking statements represent our intentions, plans, expectations,

assumptions and beliefs about future events and are subject to risks, uncertainties and other factors including, without limitation,

the direct and indirect effects of COVID-19, and related issues that may arise therefrom and/or be related thereto.

Many of those

factors are outside of our control and could cause actual results to differ materially from those expressed or implied by those

forward-looking statements.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking

statements might not occur or might occur to a different extent or at a different time than we have described.

You are cautioned

not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report.

All subsequent

written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person

acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future

events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

Our fiscal year

ends on March 31 of each calendar year.

Each reference to a fiscal year in this Report, refers to the fiscal year ended March

31 of the calendar year indicated (for example, fiscal 2021 refers to the fiscal year ending March 31, 2021).

context requires otherwise, references to “we,”

“us,”

“our,”

and the “Company”

refer to Modular Medical, Inc.

and its consolidated subsidiary .

Company Overview

We are a development-stage

medical device company focused on the design, development and eventual commercialization of an innovative insulin pump to address

shortcomings and problems represented by the relatively limited adoption of currently available pumps for insulin dependent people

with diabetes.

We have developed a hardware technology allowing people with insulin-dependent diabetes to receive their daily

insulin in two ways, through a continuous “basal”

delivery allowing a small amount of insulin to be in the blood at

all times and a “bolus”

delivery to address meal time glucose input and to address when the blood glucose level becomes

excessively high.

By addressing the substantial time and effort required by them to effectively treat their condition, we believe

we can address the less technically savvy, less motivated part of the market, which we believe is underserved.

We have substantially

completed development of, but have not yet obtained U.S.

Food and Drug Administration, or FDA, clearance for, our insulin pump,

and we have therefore not generated any revenues from product sales.

Our net losses were approximately $5.6 million and $5.3 million

for the nine months ended December 31, 2020 and year ended March 31, 2020, respectively.

As of December 31, 2020, we had a negative

working capital of approximately $0.2 million and an accumulated deficit of approximately $14.2 million.

Historically,

we have financed our operations principally through private placements of our common stock.

Based on our current operating plan,

substantial doubt about our ability to continue as a going concern for a period of at least one year from the date that the financial

statements included in Item 1 of this Report are issued exists.

Our ability to continue as a going concern depends on our ability

to raise additional capital, through the sale of equity or debt securities, to support our future operations.

If we are unable

to secure additional capital, we will be required to curtail our research and development initiatives and take additional measures

to reduce costs.

We have provided additional disclosure in Note 1 of the notes to the condensed consolidated financial statements

and under Liquidity and Capital Resources below.

Impacts of COVID-19

The global outbreak

of COVID-19 was declared a pandemic by the World Health Organization and a national emergency by the U.S.

government in March

This has negatively affected the U.S.

and global economy, disrupted global supply chains, significantly restricted

travel and transportation, resulted in mandated closures and orders to “shelter-in-place”

and created significant

disruption of the financial markets.

The full extent of the COVID-19 impact on our operational and financial performance will

depend on future developments, including, without limitation, the duration and spread of the pandemic and related actions taken

and foreign government agencies to prevent disease spread, all of which are uncertain, out of our control, and cannot

be predicted.

In March 2020,

San Diego County in California, where we are based, and the state of California issued “shelter-in-place”

(the Orders).

We have been complying with the Orders and have minimized business activities at our San Diego facility.

implemented a teleworking policy for our employees and contractors to minimize on-site activity at our facility.

We have experienced

longer lead times for certain components used to manufacture initial quantities of our products for our product-approval submission

to the FDA, which is expected to occur in the first half of calendar year 2021.

In addition, our teleworking policy, which was

required to comply with the Orders, has required us to minimize the number of our employees and contractors that are working on

site at our facility at any one time.

We have implemented a COVID-19 policy and related protocols and procedures, which are based

on guidance from the U.S.

government’s Centers for Disease Control and Prevention and San Diego County, to address the health

and safety of our employees and their families.

We remain diligent

in continuing to identify and manage risks to our business given the changing uncertainties related to COVID-19.

While we believe

that our operations personnel are currently in a position to build an adequate supply of products for our FDA submission, we recognize

that unpredictable events could create difficulties in the months ahead.

We may not be able to address these difficulties in a

timely manner, which could delay our submission to the FDA and negatively impact our business, results of operations, financial

condition and cash flows.

In addition, we could experience delays in obtaining FDA approval for our product, if the FDA does not

review our submission in a timely manner, as the FDA may place higher priority on reviewing COVID-19 product-related submissions.

The continued

spread of COVID-19 has also led to disruption and volatility in the global capital markets.

We have been able to raise additional

capital in a private placement that commenced in March 2020 and received a $368,780 unsecured loan (the PPP Note) under the Paycheck

Protection Program (the PPP), which was established under the U.S.

government’s Coronavirus Aid, Relief, and Economic Security

Act (see discussion below under Liquidity and Capital Resources ).

However, we need to raise additional capital to

support our operations.

We may be unable to access the capital markets or additional capital may only be available to us on terms

that could be significantly detrimental to our existing stockholders and to our business.

For additional

information on risks that could impact our future results, please refer to “Risk Factors”

in Part II, Item 1A, of

Accounting Policies and Estimates

The discussion

and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements,

which have been prepared in accordance with U.S.

The preparation of these condensed consolidated financial statements requires

us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, and expenses.

On an ongoing

basis, we make these estimates based on our historical experience and on assumptions that we consider reasonable under the circumstances.

Actual results may differ from these estimates and reported results could differ under different assumptions or conditions.

significant accounting policies and estimates are disclosed in note 1 of the notes to consolidated financial statements in our

Annual Report on Form 10-K for the year ended March 31, 2020.

As of December 31, 2020, there have been no material changes to

our significant accounting policies and estimates.

of Operations

and Development

Research and development –

Three months ended

Research and development –

Nine months ended

and development expenses include personnel, consulting, tooling and other costs associated with the development of our insulin

pump product.

We expense research and development costs as they are incurred.

development, or R&D, expenses increased for the three months ended December 31, 2020 primarily due to increased engineering

and manufacturing personnel and consulting costs, as we have increased our development and manufacturing activities.

increased for the nine months ended December 31, 2020 primarily due to increased engineering and manufacturing personnel and consulting

Our R&D employee headcount increased to 15 at December 31, 2020 from eight at December 31, 2019.

R&D expenses included

non-cash, stock-based compensation expenses of $96,127 and $66,314 for the three months ended December 31, 2020 and 2019, respectively,

and $301,767 and $317,783 for the nine months ended December 31, 2020 and 2019, respectively.

We expect R&D expenses to decrease

for the remainder of fiscal 2021, as we intend to closely manage our expenses and reduce certain expenditures.

Administrative

General and administrative –

Three months ended

General and administrative –

Nine months ended

administrative expenses consist primarily of personnel and related overhead costs for facilities, marketing, finance, human resources

and general management.

General and administrative,

or G&A, expenses, increased for the three and nine months ended December 31, 2020 primarily as a result of increased personnel

costs, stock-based compensation expenses and facilities costs, partially offset by reduced consulting and professional services

Our G&A employee headcount increased to four at December 31, 2020 from two at December 31, 2019.

included stock-based compensation expenses of $198,926 and $120,431 for the three months ended December 31, 2020 and 2019, respectively,

and $638,607 and $219,745 for the nine months ended December 31, 2020 and 2019, respectively.

We expect G&A expenses to decrease

for the remainder of fiscal 2021, as we intend to closely manage our expenses and reduce certain expenditures.

Interest Income

Interest income –

Three months ended

Interest income –

Nine months ended

Interest income consists of

interest earned on our cash deposits.

The decrease in interest income for fiscal 2021 compared with the same periods for fiscal

2020 was primarily attributable to a reduction in interest rates in fiscal 2021 combined with lower average cash balances during

and Capital Resources

As a development-stage

enterprise, we do not currently have revenues to generate cash flows to cover operating expenses.

Since our inception, we have

incurred operating losses and negative cash flows in each year due to costs incurred in connection with R&D activities and

G&A expenses associated with our operations.

For the nine months ended December 31, 2020, we incurred a net loss of approximately

$5.6 million.

For the years ended March 31, 2020 and 2019, we incurred net losses of approximately $5.3 million and approximately

$2.5 million, respectively.

At December 31, 2020, we had a cash balance of approximately $0.6 million and an accumulated deficit

of approximately $14.2 million.

When considered with our current operating plan, these conditions raise substantial doubt about

our ability to continue as a going concern for a period of at least one year from the issuance date of the financial statements

included in Item 1 of this Report.

Our financial statements do not include adjustments to the amounts and classification of assets

and liabilities that may be necessary should we be unable to continue as a going concern.

Our ability to continue as a going concern

depends on our ability to raise additional capital through the sale of equity or debt securities to support our current and future

operations, and we are currently seeking such additional financing.

As discussed in the notes to our condensed consolidated financial

statements in Item 1 of this Report, during 2020, we obtained additional equity financing through a private placement of our common

In addition, we obtained a $368,780 loan (the PPP Note) from Silicon Valley Bank in April 2020 under the U.S.

Small Business

Administration Paycheck Protection Program (the PPP).

The full amount of the PPP Note is due in April 2022, and interest accrues

on the outstanding principal balance of the PPP Note at a fixed rate of 1.0% per annum.

Monthly payments will be due and payable

beginning in September 2021 and continue each month thereafter until maturity.

In October 2020, we applied to have the PPP Note

forgiven, as permitted under the terms of the PPP.

No assurance is provided that we will obtain forgiveness of the PPP Note in

whole or in part, but we believe we have used the proceeds in accordance with the PPP to qualify for forgiveness of the PPP Note.

As disclosed in the notes to the condensed consolidated financial statements in Item 1 of this Report, in February 2021, we issued

$1.1 million aggregate principal amount of convertible promissory notes.

Our operating

needs include the planned costs to operate our business, including amounts required to fund research and development activities,

including those related to our FDA submission and working capital and capital expenditures.

Our future capital requirements and

the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our product,

competing technological and market developments, and the need to enter into collaborations with other companies or acquire other

companies or technologies to enhance or complement our product offering.

If we are unable to secure additional capital, we will

be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve

months ended December 31, 2020, we used $4,570,713 in operating activities, which primarily resulted from our net loss of $5,605,431

and changes to operating assets and liabilities of $107,758, as adjusted for stock-based compensation expenses of $940,374, depreciation

and amortization expenses of $82,016, net changes in lease assets and liabilities of $120,085.

For the nine months ended December

31, 2019, we used $2,776,998 in operating activities, which primarily resulted from our net loss of $3,403,281, which was partially

offset by changes to operating assets and liabilities of $64,915, and adjusted for non-cash charges, which included stock-based

compensation expenses of $537,528 and depreciation and amortization expenses of $23,840.

For the nine months ended December

31, 2020, cash used in investing activities of $109,541 was due to the purchase of property and equipment.

We used $58,278 of

cash to purchase equipment during the nine months ended December 31, 2019.

Cash provided by financing activities

of $2,154,662 for the nine months ended December 31, 2020 was attributable to net proceeds of $1,785,882 from the sale of shares

of our common stock in a private placement that was initiated in March 2020 and $368,780 in proceeds from the PPP Note.

no cash flows related to financing activities during the nine months ended December 31, 2019.

Quantitative and Qualitative Disclosures about Market Risk

Not required.

August 11, 2021, the Board approved an increase in the number of shares reserved for issuance under the Plan by 4,000,000 shares, bringing

the total shares reserved for issuance to 8,000,000 shares.

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-Q

Item 1. Financial Statements