What changed in this filing

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Item 1. Business

2022-06-28 compared with 2021-06-29 · 1149 added, 510 removed, 12 unchanged (99% of the section changed)

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 ended March 31, 2021).

Unless the context

requires otherwise, references to “we,”

“us,”

“our,”

and the “Company”

Modular Medical, Inc.

and its consolidated subsidiary.

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 2022 refers to the fiscal year ended March 31, 2022).

Unless the context requires otherwise,

references to “we,” “us,” “our,” and the “Company” refer to Modular Medical, Inc.

its consolidated subsidiary.

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-requiring

people with diabetes.

typically classified as either type 1 or type 2:

· Type 1 diabetes is characterized

by the body’s nearly complete inability to produce insulin.

It is frequently diagnosed during childhood or adolescence.

Individuals with type 1 diabetes require daily insulin therapy to survive.

· Type 2 diabetes represents

over 90% of all individuals diagnosed with diabetes and is characterized by the body’s inability to either properly utilize

insulin or produce enough insulin.

Initially, many people with type 2 diabetes attempt to manage their diabetes with improvements

in diet and exercise and/or the use of oral medications and/or injection of glucagon-like peptide-1, or GLP-1, drugs.

as their diabetes advances, patients progress to require insulin therapies, such as once-daily long-acting insulin, and, ultimately,

intensified mealtime rapid-acting insulin therapy.

the primary source of energy for cells, must be maintained at certain levels in the blood in order to permit optimal cell function

In people with diabetes, blood glucose levels fluctuate between very high, a condition known as hyperglycemia, and

very low, a condition called hypoglycemia.

Hyperglycemia can lead to serious long-term complications, including blindness, kidney

disease, nervous system disease, occlusive vascular diseases, lower-limb amputation, stroke and cardiovascular disease, and death.

Hypoglycemia can lead to confusion or loss of consciousness, often requiring a visit to the emergency room or, in certain cases,

result in seizures, coma, and death.

The International

Diabetes Federation, or IDF, estimates that, in 2019, approximately 460 million people had diabetes worldwide, and, that by 2045,

this number will increase to 700 million people.

According to the Seagrove 2021 Diabetes Blue Book, approximately 27 million people

in the United States have diagnosed diabetes, of which type 1 diabetes accounts for approximately 7%, or approximately 1.8 million

All people with type 1 diabetes, which is our primary market, require daily insulin.

According to the Seagrove 2021 Diabetes

Blue Book, approximately 18% of people with type 2 diabetes in the United States, or 4.7 million people, require insulin (basal

alone represent 3.1 million and basal plus mealtime represent 1.6 million) to manage their diabetes.

In this Report, we refer

to people with type 1 diabetes and people with type 2 diabetes who require mealtime insulin as “insulin-requiring people

with diabetes.”

Currently, there

are two primary therapies available for insulin-requiring people with diabetes:

multiple daily insulin injections directly into

the body through syringes or insulin pens, referred to as Multiple Daily Injection, or MDI therapy, or the use of an insulin pump

to deliver a continuous subcutaneous insulin infusion, or CSII therapy, into the body.

Generally, CSII therapy is considered to

provide a number of advantages over MDI therapy, primarily an improvement in glycemic control, as measured by certain diabetes

management tests.

Use of CSII has proven to improve clinical outcomes while, importantly, reducing emergency room visits associated

with low glucose.

Notwithstanding

these advantages, the difficulty in use resulting from the complexity and cumbersome design of available insulin pumps, as well

as high and often prohibitive costs for both the patient and insurance provider, has resulted not only in dissatisfaction among

many existing pump users, but also has severely limited the adoption rate of insulin pumps by a segment of the diabetes population,

who we refer to in this Report as “almost pumpers.”

define almost pumpers as persons with insulin-requiring diabetes who are aware of pumps and the potential benefits but, because

of the shortcomings, cost, and complexity-of-use problems prevalent in available insulin pumps, continue to receive their daily

insulin through MDI therapy.

target market for our insulin pump is the almost pumper population located in the United States.

upon our knowledge of the diabetes industry and information available and/or obtained by us, we believe that an estimated 31%

of Americans with type 1 diabetes use insulin pump therapy and an estimated 30% of Americans with type 1 diabetes are whom we

classify as almost pumpers.

The remainder of the population treat their diabetes via MDI therapy.

and development team is led by Paul DiPerna, our chairman, chief executive officer, and our largest shareholder.

over 30 years of high-level experience in developing, designing, and obtaining U.S.

Food and Drug Administration, or FDA, approval

for and managing the commercialization of medical devices, including consumer and hospital-based insulin pumps, while working

for such industry leading medical device companies as Baxter Healthcare, Inc., or Baxter, a supplier of drug therapies and associated

pumping technologies, and Tandem Diabetes Care, Inc., or Tandem, a leading supplier of pumping technology to the existing insulin

pumping marketplace, Mr.

DiPerna was the founder of Tandem and designer of its initial product.

Insulin Pump Prototype

designed and developed working prototypes of our low-cost insulin pump that are now undergoing the testing required to submit

for FDA approval.

During this period, we have, and continue to devote, substantial time and resources to better understand the

needs and preferences of almost pumpers to enable us to modify and refine our insulin pump to the needs and preferences of this

target market.

To help us better understand their needs and preferences, we obtained information about our target market and their

care givers through one on one interviews, human factors testing, on-line and in person surveys, and focus groups at industry

related tradeshows and conferences.

Pre-Commercialization

While we have

substantially completed the general engineering and mechanical aspects of our insulin pump prototype, prior to commercializing,

we still must successfully complete a number of material steps including:

· Continue to modify, refine

and finalize our prototype so that it meets:

o the general needs and preferences

of our almost-pumper target market based upon our knowledge of the diabetes industry and information available and/or obtained

by us from almost pumpers and their caregivers;

o the general guidelines of

third-party payors, private and public insurance companies, preferred provider organizations and other managed care providers

with particular focus on the guidelines established by the Center for Medicare and Medicaid Services, or CMS which administrates

the United States Medicare program, or Medicare.

To assist us in making such modifications and refinements, we have retained independent

consultants to focus on ensuring that our product satisfies the existing coverage and reimbursement criteria of such third-party

· Continue to work closely

with our regulatory consultants to complete, finalize and file our submission to the FDA for 510(k) clearance and all other documentation

necessary to obtain approval of our insulin pump.

This will include:

o engaging the FDA in a pre-submission

conference to ensure that we understand and meet the FDA’s requirements, expectations and standards with regard to approval

of our product.

At this meeting, our team, including our FDA regulatory consultant, received FDA comments and guidance regarding

our proposed submission during the pre-market notification period for 510(k) clearance (including any suggested modifications

to the device description, indications for use or summary of supporting data contained in the notification);

o preparing and ensuring that

our pre-market notification, which will be part of our FDA submission, demonstrates that our insulin pump, which is substantially

equivalent to an insulin pump previously cleared by the FDA and legally marketed to the public;

o preparing our submission

to the FDA, to include all of the appropriate results of tests (relating to, among other things, user effectiveness, sterility,

pump efficiency and shipping compatibility) demonstrating safety and efficacy of our insulin pump in satisfaction of the mandates

of the Federal Food, Drug and Cosmetics Act, or the FDCA, including requirements with regard to registration and listing, labeling,

medical device reporting and good manufacturing practices.

We currently expect to make this submission in the fourth calendar

quarter of 2021.

· Refine our manufacturing

process during the submission process to identify and select a manufacturer of our insulin pump through a competitive bidding

process, as we prepare for our product introduction;

· Take such actions, if any,

as may be required by the FDA as a condition to granting approval and providing 510(k) clearance for our insulin pump;

· Hire and retain appropriate

sales and marketing personnel to develop, implement and launch a promotional campaign for our insulin pump substantially focused

on our target market.

medical device attempting to enter and successfully compete with existing products in an established and competitive marketplace,

we will face significant hurdles to accomplish the above steps to commercialization including:

· Obtaining FDA 510(k) clearance

to market and sell our insulin pump to the public;

· Obtaining any other FDA-required

approvals with regard to our product, as required by the FDCA;

· Educating endocrinologists,

physician’s assistants, nurse practitioners and nurse educators, who typically prescribe pump usage, and certified diabetes

educators and dieticians, who provide education and guidance to diabetes patients, as to what we believe to be the superior qualities

of our product;

· Demonstrating to select general

practitioners, who have historically been skeptical of the heightened support inherent in insulin pumps, our product’s ease

of use and convenience;

· Ensuring that our final product

does, in fact, meet the needs of almost-pumpers;

· Overcoming the historic obstacles

and reluctance of almost-pumpers to using insulin pumps to treat their diabetes;

· Ensuring that third party

payors agree to cover all or a substantial portion of the purchase price and recurring costs of the use of our insulin pump.

that there are a number of shortcomings and issues with currently available insulin pumps that prevent a substantial number of

people who require insulin on a daily basis from choosing an insulin pump to treat their diabetes.

We believe, that by tailoring

our insulin pump to address such factors, we can expand the scope and adoption rate of insulin pump usage.

We believe that to

achieve broader market acceptance, an insulin pump must be easier to learn to use, be less time consuming to operate, more intuitive

to both patients and physicians, and meet the standards for coverage by insurance providers so that co-payments required

from patients are affordable and the hurdles to insurance coverage are significantly reduced.

the more prominent issues are:

stage medical device company focused on the design, development, and commercialization of an innovative insulin pump using modernized

technology to increase pump adoption in the diabetes marketplace.

Through the creation of a novel two-part patch pump, our MODD1 product

candidate, or MODD1, we seek to fundamentally alter the trade-offs between cost and complexity and access to the higher standards of

care that presently available insulin pumps provide.

By simplifying and streamlining the user experience from introduction, prescription,

reimbursement, training and day-to-day use, we seek to expand the wearable insulin delivery device market beyond the highly motivated

“super users” and expand the category into the mass market.

The product candidate seeks to serve both the Type 1 and the

rapidly growing especially in terms of device adoption, type 2 diabetes markets.

Differentiation

We believe that there

are a number of shortcomings and issues with currently available insulin pumps that prevent a substantial number of people who require

insulin on a daily basis from choosing an insulin pump to treat their diabetes.

We believe, that by tailoring our insulin pump to address

such factors, we can expand the scope and adoption rate of insulin pump usage.

We believe that to achieve broader market acceptance,

an insulin pump must be easier to learn to use, be less time consuming to operate, more intuitive to both patients and physicians, and

meet the standards for coverage by insurance providers so that co-payments required from patients are affordable and the hurdles to insurance

coverage are significantly reduced.

Among the more

prominent issues are:

· Complexity :

Many existing

pumps are highly complex and require significant technical expertise to use effectively.

We believe such pumps were designed for

“super users,”

who have high levels of motivation and technical competence.

The complexity of pumps proves

daunting to less technically inclined users.

Many existing pumps are highly complex and require significant technical expertise to use

We believe such pumps were designed for “super users,” who have

high levels of motivation and technical competence.

The complexity of pumps proves daunting

to less technically inclined users.

· Cumbersome :

that a majority of existing pumps are bulky and difficult to manage, in many cases requiring additional equipment to introduce

a catheter to the patient’s body and up to 48 inches of tubing, which must be replaced frequently, to connect the catheter

This requires users to carry spare parts and other equipment adding to the encumbrance of using the pump.

Costs associated

with insulin pump therapy are high and can be prohibitive, especially for those on fixed or limited incomes.

These costs vary

by pump, but multi-thousand-dollar upfront payments, often with substantial co-payments in addition to possible daily co-payments

We believe that a majority of existing pumps are bulky and difficult to manage, in many cases

requiring additional equipment to introduce a catheter to the patient’s body and up

to 48 inches of tubing, which must be replaced frequently, to connect the catheter to a pump.

This requires users to carry spare parts and other equipment adding to the difficulty of

using the pump.

Costs associated with insulin pump therapy are high and can be prohibitive, especially

for those on fixed or limited incomes.

These costs vary by pump, but multi-thousand-dollar

upfront payments, often with substantial co-payments in addition to possible daily co-payments

on consumables, can easily place current pumps out of reach for patients.

This makes insurance providers hesitant to pay for them,

leading to limited or absent reimbursement/coverage and high hurdles for patients to gain access.

has substantial knowledge of the diabetes space and experience in developing, winning approval for, and bringing insulin pumps

Based on this experience, we believe that our innovative insulin pump, using a new and proprietary method of pumping

insulin, can address most or all of these shortcomings.

It provides a state-of-the-art insulin pump capable of both basal (steady

flow) and bolus (mealtime dosing) insulin disbursement.

This makes insurance

providers hesitant to pay for them, leading to limited or absent reimbursement/coverage and

high hurdles for patients to gain access.

Consumer electronics devices have evolved in both form and function.

pumps have not experienced similar progress.

We believe that consumers will be more receptive

of products designed with the user experience in mind and that many have low tolerance for

complex, difficult procedures for use and maintenance of products.

mechanism limitations :

Traditional pumps generally utilize a syringe and plunger mechanism

to deliver insulin.

We believe this design limits the ability to reduce the size of the pump,

and also potentially exposes the user to the unintended delivery of the full volume of insulin

within the pump, which can cause hypoglycemia or death.

We believe that the fear of adverse

health events due to technical malfunctions related to traditional pump mechanism limitations

deters the adoption of insulin pump therapy.

Our team has substantial

knowledge of the diabetes industry and experience in developing, obtaining regulatory authorization for, and bringing insulin pumps to

Based on this experience, we believe that our innovative insulin pump, using a new and proprietary method of pumping insulin,

can address most or all of these shortcomings.

It provides a state-of-the-art insulin pump capable of both basal (steady flow) and bolus

(mealtime dosing) insulin disbursement.

It also has been designed considering a natural migration path to multi-chamber/multi-liquid

pumps, potentially offering an exciting array of new therapies to patients with diabetes and other conditions.

Our goal is to

become the leader in expanding access to insulin pump technology to a wider portion of diabetes sufferers and provide not just

care for the super users, but “diabetes care for the rest of us.”

our founder, chairman and chief executive officer, chief financial officer, secretary and treasurer, 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

company in the blood separation sciences industry.

This company was acquired in approximately 1991 by Baxter.

Following such acquisition,

he became employed by Baxter and held various positions for approximately 12 years.

While at Baxter, Mr.

DiPerna led significant

projects and initiatives, including leading a team of approximately 50 engineers in developing equipment in the blood separation

sciences industry.

In approximately 1996, he was promoted to General Manager of Baxter’s business development group to identify

expansion opportunities in the medical device industry for Baxter.

While holding such position, Mr.

DiPerna led a team of approximately

20 personnel responsible for researching custom orthopedics, digital dentistry, and rapid prototyping.

In such role, one of his

assignments was identifying opportunities in the diabetes industry.

As a result, Mr.

DiPerna developed an expertise and knowledge

and became well known in the diabetes industry and led attempts by Baxter to acquire three then-leading insulin pump manufacturers.

DiPerna, using his knowledge and experience acquired at Baxter in the diabetes industry and in the “pump”

product business in particular, left Baxter and founded what subsequently became Tandem.

While at Tandem, Mr.

DiPerna held various

positions, including member of the board of directors, chief executive officer, and chief technology officer.

Tandem is a medical

device company that designs, develops and commercializes products for people with insulin-dependent diabetes.

Tandem was founded

DiPerna to design, develop and commercialize a “state of the art”

user-friendly insulin pump.

He was the person

primarily responsible for the design concept and development of Tandem’s insulin pump, which, after commercial introduction,

it is estimated by Mr.

DiPerna such insulin pump had a quick ramp up to 5,000 purchasers.

DiPerna resigned from his

executive officer position and board seat at Tandem and continued to advise the company through 2013.

He co-invented a medical

device used for blood-borne infection control called the “Curos Cap.”

Curos Cap was owned by a private company which

was acquired by 3M Corporation in 2015 for $150,000,000.

Thereafter, Mr.

DiPerna founded Fuel Source Partners, LLC to incubate

early stage medical-device products and accumulate technical talent.

One of such proposed products was spun-out to Quasuras, Inc.,

or Quasuras, in March 2015, which we acquired in July 2017.

DiPerna holds a number of issued and pending patents and is a

member of the American Diabetes Association.

DiPerna received a Master’s in Engineering Management from Northeastern

University and a BS in Mechanical Engineering from the University of Lowell.

From January 2017 until July 2019, Mr.

DiPerna served

at National Cardiac Incorporated as its Chief Executive Officer and as a board member to leverage their technology in the cardiac

monitoring space.

Generally, there

are two primary therapies used by people with insulin-requiring diabetes:

insulin injections and insulin pumps.

Each is designed

to supplement or replace the insulin-producing function of the pancreas.

MDI therapy involves the use of syringes or insulin pens

to inject insulin into the body, as required.

Insulin pumps are used to provide a steady flow of insulin (often referred to as

continuous subcutaneous insulin infusion or basal rate insulin) and bursts of mealtime insulin (boluses).

Insulin pump therapy

has been shown to provide people with insulin-requiring diabetes with numerous advantages compared to MDI therapy.

flow of insulin and the easier application of mealtime boluses has been shown by numerous clinical studies to result in lower

HbA1c (a measure of the amount of glucose in the bloodstream) when compared to MDI therapy.

This results in lower rates of hospitalization

and a reduction in overall adverse events for people with diabetes.

that the greater efficacy of pumps compared to MDI makes insulin pumps a more optimal choice for persons in managing diabetes,

but that the shortcomings and challenges around existing pumps have held back adoption rates.

Centers for Disease Control and Prevention, or CDC, 2020 National Diabetes Statistics Report in the United States, in

2018, 88 million people, or 1 out of 3 adults, had pre-diabetes, approximately 27 million people had been diagnosed with diabetes

and an additional 7 million people had diabetes that was undiagnosed.

The CDC also indicated that diabetes was the seventh leading

cause of death in the United States in 2017, which according to the CDC, may be underreported.

Diabetes was the leading cause

of kidney failure, lower-limb amputations, and adult-onset blindness and represented more than $327 billion in medical costs in

Our goal is to become

the leader in expanding access to insulin pump technology to a wider portion of diabetes sufferers and provide not just care for the

super users, but “diabetes care for the rest of us.” We believe there is a substantial opportunity to penetrate the type

2 MDI marketplace, whether through this new insulin pump or further simplification of pumps for the type 2 marketplace.

The MODD1 is a high-precision,

first-line pump that we believe represents the best choice for new pump patients because it is easy to afford, easy to learn, easy to

use, and has a revolutionary design and technology that enable precision with low-cost manufacture and high reproducibility.

Key features include:

parts - one reusable, one disposable - snap together to form the working system;

button interface, easy to learn and use;

reusable, 3-day disposable;

at any time from an adhesive bracket;

external controller required, no charging, no battery replacement;

profile, lighter weight.

A proprietary survey

of American healthcare payors representing 50 million covered lives (approximately one-third of U.S.

covered lives) performed for us

by industry leading survey firm ISA has demonstrated that payors are willing to grant equivalent or preferential coverage for a product

with this feature set at launch in exchange for rebates of approximately 20%.

These costs are built into all of our models.

Classifications and Therapies

Diabetes is typically

classified as either type 1 or type 2:

1 diabetes is an auto-immune condition characterized by the body’s nearly complete inability to produce insulin.

It is frequently

diagnosed during childhood or adolescence.

Individuals with type 1 diabetes require daily insulin therapy to survive.

2 diabetes represents over 90% of all individuals diagnosed with diabetes and is characterized by the body’s inability to either

properly utilize insulin or produce sufficient insulin.

Initially, many people with type 2 diabetes attempt to manage their condition

with improvements in diet and exercise and/or the use of oral medications and/or injection of glucagon-like peptide-1 (GLP-1) drugs.

However, as their diabetes advances, patients often progress to require insulin therapies such as once-daily long-acting insulin

and ultimately to intensified mealtime rapid-acting insulin therapy.

This represents an important portion of the diabetes

market with an estimated 1.6 million type 2 individuals with diabetes intensively treated with insulin currently in the United States

the primary source of energy for cells, must be maintained at certain levels in the blood in order to permit optimal cell function and

In people with diabetes, blood glucose levels are not well controlled and frequently become very high, a condition known as hyperglycemia,

and very low, a condition called hypoglycemia.

Hyperglycemia can lead to serious long-term complications, including blindness, kidney

disease, nervous system disease, occlusive vascular diseases, lower-limb amputation, stroke, cardiovascular disease, and death.

can lead to confusion or loss of consciousness, often requiring a visit to the emergency room or, in certain cases, result in seizures,

coma, and/or death.

All people with type

1 diabetes, which is our primary market, require daily insulin.

According to the Seagrove 2021 Diabetes Blue Book, approximately 18%

of people with type 2 diabetes in the United States, or 4.7 million people, require insulin (basal alone represent 3.1 million and basal

plus mealtime represent 1.6 million) to manage their diabetes.

In this Report, we refer to people with type 1 diabetes and people with

type 2 diabetes who require mealtime insulin as “insulin-requiring people with diabetes.”

Currently, there are two primary therapies

available for insulin-requiring people with diabetes:

multiple daily insulin injections directly into the body through syringes or insulin

pens, referred to as Multiple Daily Injection, or MDI therapy, or the use of an insulin pump to deliver mealtime insulin boluses (single

dose) to help with glucose absorption after carbohydrate consumption and a continuous subcutaneous insulin infusion, or CSII therapy,

into the body.

Generally, CSII therapy is considered to provide a number of advantages over MDI therapy, primarily an improvement in

glycemic control, as measured by certain diabetes management tests such as hemoglobin A1c (HbA1c) measure and more recently Time in Range

(TIR) where a continuous glucose measuring device is used to calculate this test.

Among other medical benefits, it has been demonstrated

that insulin pump use can decrease glucose variability, reduce the number of hypoglycemia, decrease the daily doses of insulin and reduce

the fear of hypoglycemia.

Notwithstanding

these advantages, the difficulty in use resulting from the complexity and cumbersome design of available insulin pumps as well as high

and often prohibitive costs for both the patient and insurance provider has resulted not only in dissatisfaction among many existing

pump users (fewer than half purchase a new pump after warranty expires per Seagrove Partners (estimate), but also has severely limited

the adoption rate of insulin pumps by a large segment of the MDI diabetes population, who we refer to in this Report as “Almost

We define Almost Pumpers

as insulin-requiring people with diabetes who are aware of pumps and their potential benefits but, because of past experience, pump shortcomings,

cost, complexity and time and learning required to adopt and utilize available insulin pumps, continue to receive their daily insulin

through MDI therapy.

Our initial focus for

our insulin pump is the almost pumper segment population located in the United States.

Our research, along

with marketplace data, estimates that 32% of Americans with type 1 diabetes use insulin pump therapy and 28% of Americans with type 1

diabetes (44% of those who currently utilize MDI) can be classified as having an interest in pump adoption and meeting the American Diabetes

Association guidelines of glucose control if their objections to the currently available suite of products can be overcome.

want to closely manage their glucose levels and incur the associated time and effort involved.

They are the Almost Pumpers.

We have developed

what we believe to be the most technologically advanced delivery system overcome the objections and provided motivation for this market.

We believe that there are four addressable hurdles to adoption:

the device needs to be easy to learn and to operate;

· Affordability:

we will focus on overcoming copay and insurance hurdles rather than leaving the “insurance

journey” to the clinician and patient;

· Accessibility

and Education:

we will seek to engage patients to sample this new technology by supplying

clinicians with free samples and simple training to allow people to see first-hand the typical

barriers to adoption that have been overcome;

where we will answer their questions and concerns during this diabetes experience.

We believe this conversion

process, engaging people to try and thereby receive the benefits of our technology will substantially increase adoption of insulin pumps

among both those with type 1 diabetes and type 2 diabetes who remain reliant upon multiple daily injections.

Diabetes is a disease that

appears throughout the world.

Therefore, we cannot segment the market by socioeconomics, education or level of care.

We intend to create

an insulin pump that appeals to all Almost Pumpers.

The International Diabetes

Federation, or IDF, estimates that, in 2019, approximately 460 million people were living with diabetes worldwide and, that by 2045,

this number will increase to approximately 700 million people.

An estimated 34 million

people in the United States live with diabetes.

Within this group, type 1 diabetes accounts for approximately 1.8 million people (7%

of total) with the remainder being type 2 diabetes.

However, of the people with type 2 diabetes about 1.6 million of them require intensive

insulin treatments to manage their diabetes.

This represents a large and growing market with the effects of diabetes accounting for roughly

25% of all healthcare dollars spent annually in the United States.

the National Diabetes Health Care Provider Survey conducted by Seagrove Partners, approximately 25% of the 1.6 million highly insulin intensive type 2

diabetes have considered going “on pump.”

Insulin pumps have

been shown to provide a higher level of care for insulin dependent people with diabetes and result in better glycemic control, fewer

comorbidities, fewer trips to the emergency room, and higher overall quality of life.

They also result in lower overall costs to the

healthcare system, reducing typical expense per patient year from $27,195 to $16,992.

Despite these

benefits, only 1 in 3 (33%) of the 1.8 million Americans with type 1 diabetes and very few of the 1.6 million type 2 diabetes intensively

treated with insulin currently use an insulin pump, for a total of approximately 670,000 current users, with only a slow increase of

insulin pump use.

The remaining 68% of type 1 diabetes’ and virtually all of the type 2 diabetes’ rely on multiple daily

injections (MDI) for glucose control.

Decades of advances in technology advances have left these non-pumpers at a significant disadvantage

from a control perspective versus their “pumping” counterparts.

We have identified

a large segment of the market that we refer to as “Almost Pumpers.” Almost Pumpers are those insulin-requiring people with

diabetes (type 1 diabetes and type 2 diabetes) who feel that they would adopt the pump if it were less expensive, less time consuming,

less technically intimidating, and if there was no separate controller.

They represent approximately 32% of the type 1 diabetes market

correlating to a $1.9 billion growth opportunity.

Insulin pumps on the

market today require a substantial amount of time to manage the therapy, have high out of pocket costs that place these technologies

out of reach for a large part of the population, and are feature-heavy with complex systems that have hampered adoption and intimidated

The most commonly used insulin pumps today require extensive training and hours of daily management.

The average pump user

must go through 42 steps of setup and refill process every 72 hours to “stay on track.”

current reluctance to adopt the insulin pump has had serious consequences on the healthcare system.

In the United States, people

living with type 1 diabetes have struggled to attain glycemic targets.

A 2019 analysis of the large type 1 diabetes Exchange clinical

registry found that only 21% of U.S.

adults with type 1 diabetes achieved the ADA A1c goal (<7.0%).

Further, according to a

study published in JAMA Internal Medicine, researchers found no significant improvements in diabetes care between 2005 and 2016,

with persistent gaps in care related to socioeconomic status.

The recent introduction

and rapid adoption of Abbott Labs’ Freestyle Libre, or the Libre, has made continuous glucose monitoring, or CGM, easier and more

affordable, expanding the product category, and doubling its size.

Now for the first time, there is an easy, less painful (i.e., no more

finger sticks) way for patients to have the data they need to understand more about their glucose levels and their insulin requirements.

Access to such data has motivated patients to ask their diabetes clinician how they can achieve better glycemic control and made them

more comfortable with using technology and wearables to treat their diabetes.

Pumps offer a clear pathway to better control and better

overall care.

We believe that the insulin pump market is ready for a similar transition as that experienced in the CGM space.

We believe our MODD1 pump

represents a new and better offering to assist and induce a wide variety of patients to make the transition and bridge the void to superior

control by becoming a “pumper.”

We believe the present

pump marketplace is approximately a $1.9 billion market, comprising approximately 33% of type 1 diabetes pumpers and a small group of

type 2 diabetes pumpers.

Seagrove Partners estimates that 28% of type 1 diabetes patients and 25% of type 2 diabetes patients would adopt

technology that was easier to use, access and pay for.

We believe the total addressable market approximates $3 billion, assuming revenue

of $4,128 per patient, per year.

We expect to spend approximately 15% of our total revenue on discounts and free samples to encourage

adoption of our pump product.

We are dedicated to

helping all people with diabetes gain access to high quality care.

We aim to help people with diabetes, especially Almost Pumpers and

the historically underserved communities, gain access to insulin pump technology by making it affordable and easy to use.

Care is at an Inflection Point

We believe that

due to a number of factors, including the large consumption of processed foods and the growing obesity problem in the United States,

the number of persons requiring daily administration of insulin will continue to grow at rapid rates.

of persons with diabetes requiring daily insulin administration is our target market, and we believe our proposed product has

the potential to substantially improve the day to day quality of life of such persons.

The Opportunity

We believe the

insulin pump market is large and growing, but, generally, has been poorly served by existing products that have limited the adoption

of insulin pumps.

We believe an insulin pump having the correct mix of efficiency, reliability, features that are easy to understand

and use, and offered at an affordable price point will drive a substantial percentage of “almost-pumpers”

to use insulin

pumps and persons currently using available, but less than optimal pumps, to switch to such a more desirable product.

that such an insulin pump can improve glucose control, and, therefore, the user’s quality of life while substantially mitigating

adverse diabetes-related health risks and many, if not all, of the challenges and shortcomings discussed herein.

We believe there

is a substantial opportunity to penetrate the type 2 MDI marketplace, whether through this new insulin pump or further simplification

of pumps for the type 2 marketplace.

As set forth in general terms herein,

we believe existing pumps have numerous shortcomings and challenges including:

Consumer electronics devices have evolved in both form and function.

Diabetes pumps have not experienced similar

We believe that consumers will be more receptive of products designed with the user experience in mind and that many

have low tolerance for complex, difficult procedures for use and maintenance of products.

We believe that consumers view traditional pumps, especially those with tubing, to be large, bulky, and inconvenient

to carry or wear, especially when compared to modern consumer electronic devices.

The size of the pump further contributes to

users being embarrassed by the pump.

We believe a simple patch style of pump will drive adoption.

Pump mechanism

Traditional pumps generally utilize a syringe and plunger mechanism to deliver insulin.

We believe this

design limits the ability to reduce the size of the pump, and also potentially exposes the user to the unintended delivery of

the full volume of insulin within the pump, which can cause hypoglycemia or death.

We believe that the fear of adverse health

events due to technical malfunctions related to traditional pump mechanism limitations deters the adoption of insulin pump therapy.

pumps are expensive, with the more popular models having purchase prices exceeding $4,000 for individuals without health insurance

and often require significant patient copays.

Others have daily use costs that exceed the reimbursement rates of many health insurance

plans, forcing some users to spend thousands of dollars a year in copays.

We believe this makes insurers hesitant to pay for pumps

for any but their best and most compliant patients and places pumps out of reach for many patients who cannot afford such out

of pocket expenses.

pump is being designed and developed to address the above shortcomings and to appeal to:

(i) the substantial group of “almost-pumpers”

who are currently interested in using an insulin pump, but have not done so because of the complexity, cost or cumbersome nature

of existing products, and (ii) people who are using one of the currently available insulin pumps but are dissatisfied with such

We believe that, owing to our new proprietary technology, our proposed insulin pump will be the simplest and least expensive

product on the market and the easiest for providers to prescribe.

pump prototype of our proposed pump has been built to test what we believe to be our novel approach to insulin pumps.

a pump that we believe will establish industry standards in terms of technology, simplicity to understand, ease of use and price,

we believe our proposed pump will offer the vast majority of benefits afforded by more expensive and complex pumps but remain

accessible to a substantially greater percentage of diabetes sufferers requiring daily insulin therapy.

We believe people

generally will not use technology that intimidates them and physicians are hesitant to prescribe such technology.

We believe mass

market products, such as is intended for our proposed pump, must be “user friendly”

and affordable.

the insulin pump market stands at a crossroads as a confluence of events makes the timing for a new product introduction ideal.

2020 was a very

difficult year in diabetes.

Between COVID-19 and a loss of glycemic control during quarantines and isolation, deaths from diabetes rose

by 17% in 2020 versus the prior year.

This was sharpest among the young who saw deaths rise 29% in the 25 to 44 year-old demographic.

This has created a pain point and a desire to find new and better solutions and has raised awareness among patients, caregivers, payors,

and policy makers.

COVID-19 also

encouraged (and required) trial and adoption of telehealth models and a great many people have found them to their liking with a high

proportion of patients and of health care providers, or HCPs, that want to continue to use these technologies.

We expect much of this

shift and newfound comfort with distance care models to persist and believes that this can provide a patient acquisition and engagement

model for insulin pumps and diabetes care, especially for pumps optimized for free trial and easy learning.

time, reimbursement for patch pumps has been increasingly moving to a pharmacy benefits manager, or PBM, model, which simplifies reimbursement

which will further aid in a “frictionless launch.” This represents a fundamental shift in the insulin pump market, making

onboarding rapid and simplifying a previously complex and time-consuming “insurance journey.”

The CGM space

(wearable devices that monitor blood glucose levels) has been experiencing explosive growth largely driven by the Libre.

was a more affordable, easier to use version of the popular Dexcom CGM product.

Not only is it now a larger (by revenues) product than

Dexcom, but it accomplished this without seeming to slow Dexcom’s growth but rather by growing a new category with a new type of

are increasingly interested in adopting technology and wearables to manage their diabetes.

We believe they are a natural market for a

new type of pump if it can meet their needs and address their objections and that the conjunction of the above trends represents a unique

opportunity in the insulin pump market’s history.

Diabetes technology

companies understand that we are at a turning point with new markets.

This can be seen with increased discussion around this topic during

recent national diabetes conferences, as well as but also an increase in marketing promotion.

For example, Dexcom aired a $5.5 million

30-second commercial during the 2021 Super Bowl.

All these recent changes

support the high proportion of type 1 diabetes and type 2 diabetes intensively treated with insulin that are considered as Almost Pumpers,

number that may grow in the next years and that may be more reachable with adequate marketing strategies.

Instead of building

complex, bespoke, and difficult to manufacture and maintain pumping and control systems, we began with the technology and the user in

Using proprietary and patented methods of insulin measurement, we were able to eschew complex mechanisms and instead built a product

candidate using only parts from high volume consumer electronics manufacturing lines, breaking the cost vs functionality curve that has

existed in the insulin pump space and representing the first truly modern insulin pump design.

This is a new kind of product for a new

kind of patient.

The pre-production

models of our low-cost insulin pump are now undergoing the testing required to submit to the FDA for clearance to market them in the

United States.

We continue to devote, substantial time and resources to better understand the needs and preferences of Almost Pumpers

and the specific patent/provider/payor requirements to motivate change from MDI.

MODD1 has several distinguishing

1 - The pump has a

simple button to press to deliver insulin as the patient requires it.

The electronic pump uses a simple motor and rotating cam to motivate

the insulin into the patient along with a low power Bluetooth and near field communication chips to allow the patient to communicate

with their smart phone, tablet, or other mobile computing platform, as appropriate.

2 - The pump snaps

together with a three-day disposable cartridge that is patient filled with insulin for delivery.

It includes the power source and a simple

coin cell that allows it to run through the 80-hour life of the cartridge.

3 - There is a set

(not shown) that contains a soft 6 millimeter cannula and an introducer for insertion into the skin and removal of the needle used to

transfer insulin to the body.

4 - MODD1 comes with

a variety of methods for the patient to wear the pump.

Options include:

a base plate with adhesive (shown) for attaching to the body

that has features for holding the pump to the patient;

overwraps to hold the product candidate to the patient;

and a velcro strap with

a base plate suitable for wrapping around the arm or leg of the patient.

The system will deliver

a small continuous rate called a basal that will provide approximately 50% of the total daily dose required and the user will use the

on-pump button to administer boluses, typically before and after meals.

The objective is to

make the product candidate simple to acquire and take home, simple to learn and most importantly, simple to use to expand the pump market,

drive adoption and ultimately better clinical outcomes.

Technological

The adoption of new

ultra-high volume technologies will result in far easier manufacturing scale up as parts sourcing and assembly processes are far easier.

The MODD1 was designed from the beginning for mass manufacturing processes and “lights out” or near lights out production

assembly lines.

This advantage is compounded by the high availability and already optimized cost reduction in its components.

resulted in a cost of goods, estimated on the competitors’ announced margins and sales, 50% lower than our closest patch pump competitor.

The adoption of modern,

miniaturized technologies has led to numerous other advantages as well.

The MODD1 pump is smaller in overall volume than Insulet’s

popular Omnipod product, or the Omnipod, and has a lower profile to the skin.

Despite this, it holds a full 3mL (300 units) of insulin

in line with full sized pumps such as Tandem and Medtronic, 50% more than the 2mL reservoir in the Omnipod.

We believe that this volume

advantage over other patch pumps will be significant as 24% of type 1 and over 50% of the rapidly growing type 2 market require more

than 2mL of insulin every three days (the expected wear time of patch pumps).

In addition, our new

and patented pumping modality will provide what we believe is the most even (and thus closest to the function of a healthy pancreas)

delivery of basal insulin in the industry.

Basal rate can be delivered almost continuously while other pumps are delivering micro-boluses

every 5 minutes for the Omnipod and Tandem and Medtronic pumps.

We plan to demonstrate the impact of our system on glycemic control in

a future clinical study.

The technology allows

the patient to simply add insulin and operate.

The battery is included in each cartridge and the device is operated without a controller.

Nothing needs charging.

MODD1 has been made push button simple to appeal to a wider audience of users.

This new technology

has also made the MODD1 lighter than existing offerings.

Compared to the Omnipod, MODD1 weighs 20 grams (vs.

26 grams) empty and 23 grams

28 grams) fully filled (despite carrying 50% more insulin), a reduction of 23% and 18%, respectively.

Also, unlike existing patch

pumps, the MODD1 can be removed from the needle and taken off and replaced later if the user desires.

This avoids loss of insulin in

a pump due to accidental dislodging of the soft canula, an issue that users have expressed considerable dissatisfaction with on other

This technology is

also uniquely suited to dual (or more) chamber pumps.

We believe that such pumps will be integral to the realization of high time in

range artificial pancreas solutions that require no human intervention, the next step forward from the cumbersome and awkward solutions

today that require the user to announce meals, count and input carbs, and adjust delivery for exercise and sleep.

The advantages of cost

and miniaturization are multiplied in a multi-chamber setup and we expect to be able to reach price points, ease of use, and form factor

unlike anything seen in the industry thus far.

We believe that a prefilled, multi-hormone peel and stick patch pump able to function

in a fully autonomous closed loop system with CGM’s represents the next generation of diabetes care.

We believe that we have demonstrated

our technology and are securing intellectual property protection on our approach.

We believe this technology,

especially in dual chamber, will open up numerous applications outside of diabetes where medication compliance of complex therapy regimes

is difficult addressing such spaces as weight loss, fertility, and simplifying complex delivery of multi-drug cocktails, especially those

with diverse and challenging dosing schedules.

Our proposed pump is

being designed and developed to address the aforementioned shortcomings of the existing pump market and to appeal to:

(i) the substantial

group of “Almost-Pumpers” who are currently interested in using an insulin pump, but have not done so because of the complexity,

cost or cumbersome nature of existing products, and (ii) people who are using one of the currently available insulin pumps but are dissatisfied

with such products.

We believe that, owing to our new proprietary technology, our proposed insulin pump will be the simplest and least

expensive product on the market and the easiest for providers to prescribe.

Our current pump prototype

of our proposed pump has been built to test what we believe to be our novel approach to insulin pumps.

By providing a pump that we believe

will establish industry standards in terms of technology, simplicity to understand, ease of use and price, we believe our proposed pump

will offer the vast majority of benefits afforded by more expensive and complex pumps but remain accessible to a substantially greater

percentage of diabetes sufferers requiring daily insulin therapy.

We believe people generally

will not use technology that intimidates them and physicians are hesitant to prescribe such technology.

We believe mass market products,

such as is intended for our proposed pump, must be “user friendly” and affordable.

We believe this approach is fundamentally

different from that applied to the existing pump market today where most pumps are continuously adding complex features and are “user

friendly” to only the most technically astute.

Our current goal is

to successfully design, develop and obtain all required regulatory approvals for our proposed insulin pump, and, thereafter, commercialize

the finished product.

Our long-term goal is to become a leading provider of insulin pump therapy by focusing on both consumer and clinical

To achieve our above

stated immediate and current goals, we intend to pursue the following business strategies:

of innovative proprietary technology.

Based upon the substantial

experience of Paul DiPerna, our president, chief financial officer, treasurer and chairman of our board of directors, in engineering

design and innovative technology in the medical device industry and, in particular, with insulin pumps, we have generated proprietary

technology that has been incorporated into our proposed insulin pump.

Generally, this technology is involved in the delivery of insulin

to the user at the appropriate and necessary times.

We believe this technology will greatly assist us in creating a simpler, user-friendly

We believe the proposed design, engineering and technology being incorporated into our proposed pump will make it substantially

simpler and more affordable than those currently available.

These features, together with the safety and reliability of our proposed

pump, are designed to create the next generation of insulin pumps that will feature important and well-differentiated attributes compared

to those currently available and make it available to consumers across mostly all socioeconomic groups in the United States and around

costs low during our design and development process.

To attempt to ensure

that we have sufficient funds to design, develop, and obtain all required regulatory approvals for our proposed insulin pump without

having to sacrifice quality and efficiency, we intend to maintain a tight budget and limit expenditures where possible.

We believe this

approach is fundamentally different from that applied to the existing pump market today where most pumps are continuously adding

complex features and are “user friendly”

to only the most technically astute.

goal is to successfully design, develop and obtain all required regulatory approvals for our proposed insulin pump, and, thereafter,

commercialize the finished product.

Our long-term goal is to become a leading provider of insulin pump therapy by focusing on

both consumer and clinical needs.

To achieve our above stated immediate

and current goals, we intend to pursue the following business strategies:

innovative proprietary technology.

Based upon Mr.

DiPerna’s substantial experience in engineering design and innovative technology in the medical device industry and, in

particular, with insulin pumps, we have generated proprietary technology that has been incorporated into our proposed insulin

Generally, this technology is involved in the delivery of insulin to the user at the appropriate and necessary times.

believe this technology will greatly assist us in creating a simpler, user-friendly pump.

We believe the proposed design, engineering

and technology being incorporated into our proposed pump will make it substantially simpler and more affordable than those currently

These features, together with the safety and reliability of our proposed pump, are designed to create the next generation

of insulin pumps that will feature important and well-differentiated attributes compared to those currently available and make

it available to consumers across mostly all socioeconomic groups in the United States and around the world.

low during our design and development process.

To attempt to

ensure that we have sufficient funds to design, develop, and obtain all required regulatory approvals for our proposed insulin

pump without having to sacrifice quality and efficiency, we intend to maintain a tight budget and limit expenditures where possible.

We believe this will be possible because of the extensive knowledge and experience of Mr.

DiPerna, not only in the diabetes industry

and more specifically in the insulin pump device market, but also his experience in designing and developing insulin pumps and

other medical devices and his ability to manage a small, focused development team.

We currently expect that various other expenses,

such as product scale up, and sales and marketing costs, will not be incurred until such time as development work is completed

and regulatory approvals obtained.

will be possible because of the extensive knowledge and experience of Mr.

DiPerna, not only in the diabetes industry and more specifically

in the insulin pump device market, but also his experience in designing and developing insulin pumps and other medical devices and his

ability to manage a small, focused development team.

We currently expect that various other expenses, such as product scale up, and sales

and marketing costs, will not be incurred until such time as development work is completed and regulatory approvals obtained.

experienced engineers selected, supervised, and led by Mr.

DiPerna, a highly experienced and respected engineer and executive

in the insulin pump industry.

To attempt to

ensure our proposed insulin pump is “state of the art,”

functional, and efficient, as well as to conserve funds, substantially

all of our employees will initially be hand-picked engineers under the leadership of Mr.

We believe that there is a strong

pool of engineers with significant applicable experience and knowledge who we will be able to initially employ on a contract and/or

outsource basis to help us design and develop our proposed insulin pump.

We believe by hiring such persons on an out-source basis,

we will save substantial resources and by having Mr.

DiPerna lead and focus the team on technological and mechanical aspects of

our proposed insulin pump, we believe our team will be well guided, focused, cost efficient, and able to efficiently design and

develop our product that we believe can eventually be a competitive and popular choice for people with insulin requiring diabetes.

device industry is regulated extensively by governmental authorities, principally the FDA and corresponding state regulatory agencies.

The regulations are very complex and are subject to rapid change and varying interpretations.

Regulatory restrictions or changes

could limit our ability to bring our proposed product to the commercialization stage as a result of higher than anticipated costs

to obtain regulatory approval.

The FDA and other U.S.

governmental agencies regulate numerous elements of our proposed product

at various stages, including:

product design and development;

pre-clinical and clinical

testing and trials;

product safety;

establishment registration

and product listing;

labeling and storage;

marketing, manufacturing,

sales and distribution;

pre-market clearance

servicing and post-market

surveillance;

advertising and promotion;

recalls and field safety

corrective actions.

Even if we obtain

all regulatory approvals, before we can market or sell our proposed product, we must obtain either clearance under Section 510(k)

of the FDCA or approval of a pre-market approval application, a PMA, from the FDA, unless an exemption from pre-market review

In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially equivalent”

to a device legally on the market, known as a “predicate”

device, with respect to intended use, technology and safety

and effectiveness, in order to clear the proposed device for marketing.

Clinical data is sometimes required to support a determination

of substantial equivalence.

The PMA pathway requires an applicant to demonstrate the safety and effectiveness of the device based

on extensive data.

The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining,

life-supporting or implantable devices, such as our proposed insulin pump.

Products that are approved through a PMA application

generally need FDA approval before they can be modified.

Similarly, some modifications made to products cleared through a 510(k)

may require a new 510(k).

The process of obtaining regulatory clearances or approvals to market a medical device, such as our

proposed insulin pump, can be costly and time-consuming, and we may not be able to obtain such clearances or approvals on a timely

basis or at all for our proposed product.

If the FDA requires

us to go through a more rigorous examination for our proposed product than we currently expect, we will require substantial additional

funding sooner than anticipated and/or our product could be severely delayed, or our efforts ceased.

We anticipate that our proposed

product will require the 510(k) clearance process.

delay, limit or deny clearance or approval of our proposed pump device for many reasons, including:

inability to demonstrate that our product is safe and effective for its intended users;

data from our clinical trials may be insufficient to support clearance or approval; and

of the manufacturing process or facilities we use to meet applicable requirements.

the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other

actions which may prevent or delay approval or clearance of our proposed product.

Any delay in,

or failure to receive or maintain, clearance or approval for our proposed product under development could prevent us from generating

revenue therefrom or achieving profitability.

Additionally, the FDA and other regulatory authorities have broad enforcement powers.

Regulatory enforcement or inquiries, or other increased scrutiny on us, could dissuade some customers from using our proposed

product and adversely affect our reputation and the perceived safety and efficacy of our proposed product.

Failure to comply

with applicable regulations could jeopardize our ability to commercialize and sell our proposed pump and result in enforcement

actions such as fines, civil penalties, injunctions, warning letters, recalls of products, delays in the introduction of products

into the market, refusal of the FDA or other regulators to grant future clearances or approvals, and the suspension or withdrawal

of existing approvals by the FDA or other regulators.

Any of these sanctions could result in higher than anticipated costs and

have a material adverse effect on our reputation, business and financial condition.

DiPerna, a highly experienced

and respected engineer and executive in the insulin pump industry.

To attempt to ensure

our proposed insulin pump is “state of the art,” functional, and efficient, as well as to conserve funds, substantially all

of our employees will initially be hand-picked engineers under the leadership of Mr.

We believe that there is a strong pool

of engineers with significant applicable experience and knowledge who we will be able to initially employ on a contract and/or outsource

basis to help us design and develop our proposed insulin pump.

We believe by hiring such persons on an out-source basis, we will save

substantial resources and by having Mr.

DiPerna lead and focus the team on technological and mechanical aspects of our proposed insulin

pump, we believe our team will be well guided, focused, cost efficient, and able to efficiently design and develop our product candidate

that we believe can eventually be a competitive and popular choice for people with insulin requiring diabetes.

Commercialization

Overcoming the Insurance Hurdles

Our goal is to establish

MODD1 as the best option for new pump patients as we expand the market into the Almost Pumpers (Type 1 and Type 2) and the newly motivated

We seek to grow the market by providing first-line insulin pump therapy that is well suited to meet the needs of both diabetes

patients requiring insulin and their clinicians.

is approximately 50% less expensive to manufacture than the Omnipod.

This low cost allows

us to spend more on patients and sampling.

This will save money for payers.

the pump with no upfront cost to patients.

Benefits of MODD1 include:

discount vs Insulet will drive preferred status;

to use PBM codes as a disposable;

new code needed to be reimbursed at launch;

provider an estimated $1,062/patient/year vs the Omnipod.

MODD1 will be sampled and given to patients by the doctor or diabetes nurse educator at the

time of the patient visit.

When a patient is motivated to make change, our starter kit will

make it easy for the clinician to initiate the new therapy that same day.

We seek to eliminate

the currently challenging “insurance journey” and product acquisition timeline

and significantly reduce training time for the busy clinician, all major hurdles to pump

We intend to add telehealth support to help the patient throughout adoption and

use and to facilitate greater collaboration between patients and their physicians.

Europe represents

another large potential market for MODD1.

Approximately 60 million people in Europe live with diabetes, and approximately $161

billion is spent annually in diabetes healthcare costs in Europe.

At present, cost containment is restricting pump uptake across

Current pump usage hovers between 10% and 20% in many markets.

Single payor healthcare systems across the Europe traditionally

attempt to contain costs in the short term and seek low price technologies with moderate medical benefits.

MODD1 will offer a

rebalance of this risk/reward strategy in that payors will incur only minor incremental short-term costs with the benefit of longer

-term cost savings associated with reliable pump use.

We intend to employ a partnership strategy across Europe following in-house

managed regulatory and pricing activities in the major markets (e.g., the United Kingdom) and more cost receptive markets (e.g.,

the Nordic countries).

We are targeting European and United Kingdom approval towards early 2023.

Our initial target market for

our insulin pump is the Almost Pumper population located in the United States followed quickly by an effort to obtain Conformitè

Europëenne , or CE, mark approval for distribution throughout Europe.

MODD1 tackles the most

significant barriers to pump use-access and affordability-and makes it easier for clinicians, caregivers and individuals to manage diabetes

Our commercialization plan will drive adoption and is designed to expand the market and is intended to do the following:

adoption with a comprehensive frictionless launch program.

We will seek to decrease the

level of reimbursement effort and cost to encourage HCPs to offer our pumps and encourage

patient trials.

Our product candidate reduces the technical hurdles to widen appeal, new

starts and increase adherence.

We will encourage MDI patients who want or need more control

to make the switch to the pump earlier in their treatment-ideally right at diagnosis.

technology to support sales and new patient acquisition .

We intend to set up tech enabled

sales teams backed with a full omnichannel program to drive awareness and trial with HCPs

and patients.

We will focus on educating providers that our product candidate is simple to

teach and easy to support making it an ideal front line offering.

patient trials.

To facilitate patient trials, we intend to:

a free pump and a 30-day supply of cartridges, insurance verification, co-pay coupons and

telehealth support to patients thereby reducing outlay of time and money

with connected care companies to provide superb support of patients from trial through the

that MODD1 will be the only insulin pump that patients can take home immediately from the doctor’s office.

MODD1 300-unit chamber to increase adoption with Type 2 patients .

MODD1 has a major advantage

over existing patch pumps in that the chamber carries enough insulin to meet the high doses

many type 2 patients need.

We intend to promote this advantage and capture a significant

share of the existing type 2 pump users as well as new starts.

with key organizations and policy makers to pave the way for greater access to pumps.

will promote MODD1 technology among the underserved, who are typically low users

of health technology.

We will identify individuals, patient organizations, professional societies,

and policy and DEI organizations that are critically important to the adoption of new technologies

in the diabetes space and build relationships with these influential stakeholders.

a clinical study program (with key diabetes centers ) to provide additional clinical support

for MODD1 in special patient types and clinical setting.

After obtaining 510(k) clearance,

we intend to conduct a soft launch and clinical research program in major markets to pave

the way for the full launch in late 2022.

We will work with our advisors and key diabetes

associations to educate the community about the MODD1.

In addition, we will conduct clinical

studies to develop competitive claims and market expansion.

with major health plans to establish MODD1 as the first line pump for Type 2 patients .

We believe MODD1 will be payor preferred for both type 1 and type 2 patients.

It was designed

to attain preferential reimbursement and avoid the coverage pitfalls many other pumps have

want a simple product that is less expensive.

We will launch with a discount program for

payers of 20% less than Omnipod to drive uptake.

to use existing PBM codes as a disposable

Reimbursed at launch

with the massive movement to telehealth.

2020 saw personal telehealth

go from beta test to mainstream.

Customers and providers have become comfortable with it.

There are only 4,000 patient-facing endocrinologists

in the United States.

The treatment of diabetes will be significantly enhanced with telehealth to drive more volume and clinical enhancements

through their practices.

Telemedicine is a force multiplier for a small group of doctors to better serve a large market.

MODD1 was designed

to be affordable enough for free sampling and trial, and simple enough for self-guided user training.

We believe that by combining telehealth

support with MODD1, we will decrease the burden of diabetes care and improve the lives of people with diabetes.

Pre-Launch/Trial

We intend to initiate

a “soft launch” following FDA clearance of the MODD1 device.

Our plan is to select a group of clinicians who are well trained,

experienced and have the support infrastructure to take on initial patients and monitor them carefully to provide clinical feedback on

our performance to further refine our product candidate and support infrastructure prior to full commercial launch.

Many of these clinicians

will have been those who assisted in the development of the MODD1 offering.

We intend to continue

to modify, refine and finalize our system to best meet:

general needs and preferences of our almost pumper target market based upon our knowledge

of the diabetes industry and information available and/or obtained by us from Almost Pumpers

and their caregivers;

general guidelines of third-party payors, private and public insurance companies, preferred

provider organizations and other managed care providers with particular focus on the guidelines

established by the Center for Medicare and Medicaid Services, or CMS, which administrates

the United States Medicare program, or Medicare.

To assist us in making such modifications

and refinements, we have retained independent consultants to focus on ensuring that our product

candidate satisfies the existing coverage and reimbursement criteria of such third-party

Manufacturing

Manufacturing requires

the production of pumps, cartridges, and baseplates as well as assembly with sets.

In connection therewith:

plan to build an automation machine for implementation in Southern California, close to the

design engineers, that will be capable of assembling the cassettes at a rate sufficient to

supply 50,000 patients in a single shift (500,000 per month).

This equipment will require

nine months to design and build and three months to verify and validate into our manufacturing

packaging equipment and boxing will start as manual operations while the automation is refined.

This equipment will be purchased and implemented as the second phase of automation of the

sets will be purchased through third party suppliers with expertise in the product to time

and cost-effectively introduce the product and focus on our core expertise.

standard cost of the cartridge is estimated to be $7.68 at the point we are manufacturing

for 3,000 users or more.

The pump is estimated to cost $34.00 at similar volumes.

internal estimates project potential gross margins as high as 78% and a 20% operating margin,

approximately 30 months after launch.

The pumps will be built

and tested in our San Diego facility while we build volume and expertise.

When the production methodology has matured and the volumes

have risen, we will consider a transition to outside and offshore manufacturing, as appropriate.

The FDA requires us

to meet all applicable regulations for insulin pumps, a subcategory of infusion pumps, which are generally considered Class 2 devices.

The design of the MODD1 pump has been completed, units have been built and testing is underway to verify that the design meets all FDA

requirements.

There are 17 specific tests required to submit for 510(k) clearance.

We break these required tests into four testing categories:

wetted surface, electrical safety, usability and internal.

Appropriate design control and standard operating procedures have been implemented

to allow us, when testing is completed, to submit for clearance under the premarket notification (or 510(k)) process.

To achieve this,

we will continue to work closely with our regulatory consultants to complete, finalize and file our submission to the FDA for 510(k)

clearance and all other documentation necessary to obtain marketing authorization of our insulin pump.

have engaged the FDA in two pre-submission conferences to ensure that we understand and meet

the FDA’s requirements, expectations and standards with regard to clearance of our

product candidate.

At these meetings, our team, including our FDA regulatory consultant,

received FDA comments and guidance regarding our proposed submission during the pre-market

notification period for 510(k) clearance (including any suggested modifications to the device

description, indications for use or summary of supporting data contained in the notification);

are currently preparing and ensuring that our premarket notification, which will be part

of our FDA submission in order to demonstrate that our insulin pump is substantially equivalent

to an insulin pump previously cleared by the FDA and legally marketed to the public and generally

safe and effective for its intended use.

We are also preparing our submission to the FDA,

which will include the relevant results of our performance and human factor tests (relating

to, among other things, user effectiveness, sterility, pump efficiency and shipping compatibility)

demonstrating the accuracy and usability of our insulin pump, which we believe will satisfy

the mandates of the FDCA and any applicable performance standards.

Commercialization

While we have substantially

completed the general engineering and mechanical aspects of our insulin pump prototype, prior to commercializing, we still must successfully

complete a number of material steps including:

to modify, refine and finalize our prototype so that it meets:

general needs and preferences of our almost-pumper target market based upon our knowledge

of the diabetes industry and information available and/or obtained by us from Almost Pumpers

and their caregivers;

general guidelines of third-party payors, private and public insurance companies, preferred

provider organizations and other managed care providers with particular focus on the guidelines

established by CMS, which administers Medicare.

To assist us in making such modifications

and refinements, we have retained independent consultants to focus on ensuring that our product

candidate satisfies the existing coverage and reimbursement criteria of such third-party

our manufacturing process during the submission process to identify and select a manufacturer

of our insulin pump through a competitive bidding process, as we prepare for our product

introduction;

such actions, if any, as may be required by the FDA as a condition to granting approval and

providing 510(k) clearance for our insulin pump;

and retain appropriate sales and marketing personnel to develop, implement and launch a promotional

campaign for our insulin pump substantially focused on our target market.

As with any medical

device attempting to enter and successfully compete with existing products in an established and competitive marketplace, we will face

significant hurdles to accomplish the above steps to commercialization including:

FDA 510(k) clearance to market and sell our insulin pump to the public;

any other FDA-required authorizations with regard to our product candidate, as required by

endocrinologists, physician’s assistants, nurse practitioners and nurse educators,

who typically prescribe pump usage, and certified diabetes educators and dieticians, who

provide education and guidance to diabetes patients, as to what we believe to be the superior

qualities of our product candidate;

· Demonstrating

to select general practitioners, who have historically been skeptical of the heightened support

inherent in insulin pumps, our product candidate’s ease of use and convenience;

that our final product does, in fact, meet the needs of Almost-Pumpers;

the historic obstacles and reluctance of Almost-Pumpers to using insulin pumps to treat their

that third party payors agree to cover all or a substantial portion of the purchase price

and recurring costs of the use of our insulin pump.

Going forward, we expect

to continue to evolve the MODD1 pumps and their capabilities and functionality, both in response to patient needs and as part of our

current platform roadmap.

our next generation product, or MODD2, we will seek to add phone-based control and alternate

controller enabled, or ACE, and automated insulin delivery, or AID, capability to allow integration

with popular continuous glucose monitors.

This will expand our available market to include

many existing pumpers.

The new model has the same modular design and low-cost components

as MODD1 and provides a much desired breakthrough for patients - two-factor command authentication

that allows the wearer to use his/her own cell phone as the controller.

· Additionally,

adds AID control functionality via an ACE designation

approved algorithm controller can drive insulin delivery in “auto” mode

integration allows the controller to potentially adjust basal insulin rate for meals and

exercise with an approved algorithm.

MODD2, we will seek to move to a full featured multi chamber pump optimized for high time

in range fully autonomous close loop insulin delivery utilizing the form factor and cost

advantages of its pumping designs to create an affordable, easy to use drug delivery system

to realize the aspiration of true “artificial pancreas” systems.

moving to a drug prefill model such that cartridges can be filled with therapeutics and shipped

cold chain to patients, further simplifying the use process.

Our operations are

subject to comprehensive federal, state, and local laws and regulations in the jurisdictions in which we or our research and development

partners do business.

The laws and regulations governing our business and interpretations of those laws and regulations and are subject

to frequent change.

Our ability to operate profitably will depend in part upon our ability, and that of our research and development

partners and affiliates, to operate in compliance with applicable laws and regulations.

The laws and regulations relating to medical

products and healthcare services that apply to our business and that of our partners and affiliates continue to evolve, and we must,

therefore, devote significant resources to monitoring developments in legislation, enforcement, and regulation in such areas.

applicable laws and regulations change, we are likely to make conforming modifications in our business processes from time to time.

cannot provide assurance that a review of our business by courts or regulatory authorities will not result in determinations that could

adversely affect our operations or that the regulatory environment will not change in a way that restricts our operations.

In the United States,

medical devices are strictly regulated by the FDA.

Under the FDCA, a medical device is defined as “an instrument, apparatus, implement,

machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component, part or accessory which

is, among other things:

intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention

of disease, in man or other animals;

or intended to affect the structure or any function of the body of man or other animals, and which

does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not

dependent upon being metabolized for the achievement of any of its primary intended purposes.” This definition provides a clear

distinction between a medical device and other FDA regulated products such as drugs.

If the primary intended use of a medical product

is achieved through chemical action or by being metabolized by the body, the product is usually a drug or biologic.

If not, it is generally

a medical device.

We are currently developing

an insulin pump delivery system, which is regulated by the FDA as a medical device under the FDCA, as implemented and enforced by the

The FDA regulates the development, testing, manufacturing, labeling, packaging, storage, installation, servicing, advertising, promotion,

marketing, distribution, import, export, and market surveillance of our medical devices.

Premarket Regulatory Requirements

Before being introduced

into the U.S.

market, each medical device must obtain marketing clearance or approval from the FDA through the premarket notification

(or 510(k)) process, the de novo classification process, or the

premarket approval, or PMA, process, unless they are determined to be Class I devices or to otherwise qualify for an exemption from one

of these available forms of premarket review and authorization by the FDA.

Under the FDCA, medical devices are classified into one of

three classes - Class I, Class II or Class III - depending on the degree of risk associated with each medical device and the extent of

control needed to provide reasonable assurance of safety and effectiveness.

Classification of a device is important because the class

to which a device is assigned determines, among other things, the necessity and type of FDA review required prior to marketing the device.

Class I devices are those for which reasonable assurance of safety and effectiveness can be maintained through adherence to general controls

which include compliance with the applicable portions of the FDA’s Quality System Regulation, or the QSR, as well as regulations

requiring facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading

labeling, advertising, and promotional materials.

The Class I designation also applies to devices for which there is insufficient information

to determine that general controls are sufficient to provide reasonable assurance of the safety and effectiveness of the device or to

establish special controls to provide such assurance, but that are not life-supporting or life-sustaining or for a use which is of substantial

importance in preventing impairment of human health, and that do not present a potential, unreasonable risk of illness or injury.

Class II devices are

those for which general controls alone are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient

information to establish “special controls.” These special controls can include performance standards, post-market surveillance

requirements, patient registries and FDA guidance documents describing device-specific special controls.

While most Class I devices are

exempt from the premarket notification requirement, most Class II devices require a premarket notification prior to commercialization

in the United States;

however, the FDA has the authority to exempt Class II devices from the premarket notification requirement under

certain circumstances.

As a result, manufacturers of most Class II devices must submit premarket notifications to the FDA under Section

510(k) of the FDCA (21 U.S.C.

§ 360(k)) in order to obtain the necessary clearance to market or commercially distribute such devices.

To obtain 510(k) clearance, manufacturers must submit to the FDA adequate information demonstrating that the proposed device is “substantially

equivalent” to a “predicate device” that is already on the market.

A predicate device is a legally marketed device

that is not subject to PMA, meaning, (i) a device that was legally marketed prior to May 28, 1976 (“pre-amendments device”)

and for which a PMA is not required, (ii) a device that has been reclassified from Class III to Class II or I or (iii) a device that

was found substantially equivalent through the 510(k) process.

If the FDA agrees that the device is substantially equivalent to the predicate

device identified by the applicant in a premarket notification submission, the agency will grant 510(k) clearance for the new device,

permitting the applicant to commercialize the device.

Premarket notifications are subject to user fees, unless a specific exemption applies.

If there is no adequate

predicate to which a manufacturer can compare its proposed device, the proposed device is automatically classified as a Class III device.

In such cases, a device manufacturer must then fulfill the more rigorous PMA requirements or can request a risk-based classification

determination for its device in accordance with the de novo classification process.

Devices that are intended

to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable risk of harm or

are of substantial importance in preventing impairment of health, and devices that are not substantially equivalent to a predicate device

and for which safety and effectiveness cannot be assured solely by the general controls and special controls are placed in Class III.

Such devices generally require FDA approval through the PMA process, unless the device is a pre-amendments device not yet subject to

a regulation requiring premarket approval.

The PMA process is more demanding than the 510(k) process.

For a PMA, the manufacturer must

demonstrate through extensive data, including data from preclinical studies and one or more clinical trials, that the device is safe

and effective for its proposed indication.

The PMA must also contain a full description of the device and its components, a full description

of the methods, facilities and controls used for manufacturing, and proposed labeling.

Following receipt of a PMA submission, the FDA

determines whether the application is sufficiently complete to permit a substantive review.

If the FDA accepts the application for review,

it has 180 days under the FDCA to complete its review and determine whether the proposed device can be approved for commercialization,

although in practice, PMA reviews often take significantly longer, and it can take up to several years for the FDA to issue a final decision.

Before approving a PMA, the FDA generally also performs an on-site inspection of manufacturing facilities for the product to ensure compliance

with the QSR.

novo classification process allows a manufacturer whose novel device is automatically classified into Class III to request

down-classification of its device to Class I or Class II, on the basis that the device presents low or moderate risk, as an alternative

to following the typical Class III device pathway requiring the submission and approval of a PMA application.

Under the Food and Drug

Administration Safety and Innovation Act of 2012, the FDA is required to classify a device within 120 days following receipt of the de

novo classification request from an applicant;

however, the most recent FDA premarket review goals state that in fiscal year

2021, FDA will attempt to issue a decision within 150 days of receipt on 65% of all de

novo classification requests received during the year and on 70% of de

novo requests received during fiscal year 2022.

If the manufacturer seeks reclassification into Class II, the classification

request must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and effectiveness

of the medical device.

The FDA may reject the classification request if it identifies a legally marketed predicate device that would

be appropriate for a 510(k) notification or determines that the device is not low to moderate risk or that general controls would be

inadequate to control the risks and special controls cannot be developed.

Clinical trials are

almost always required to support PMAs and are sometimes required to support 510(k) and de novo classification submissions.

investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational

device exemption, or IDE, regulations that govern investigational device labeling, prohibit promotion of investigational devices, and

specify recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

If the device presents a

“significant risk,” as defined by the FDA, the agency requires the study sponsor to submit an IDE application to the FDA,

which must become effective prior to commencing human clinical trials.

The IDE will automatically become effective 30 days after receipt

by the FDA, unless the FDA denies the application or notifies the sponsor that the investigation is on hold and may not begin until the

sponsor provides supplemental information about the investigation that satisfies the agency’s concerns.

If the FDA determines that

there are deficiencies or other concerns with an IDE that require modification of the study, the FDA may permit a clinical trial to proceed

under a conditional approval.

The FDA may also notify the sponsor that the study is approved as proposed or approved with specific requested

modification.

Furthermore, the agency may withdraw approval of an IDE under certain circumstances.

In addition, the study must be approved

by, and conducted under the oversight of, an institutional review board, or IRB, for each clinical site.

If the device presents a non-significant

risk to the patient according to criteria established by the FDA as part of the IDE regulations, a sponsor may begin the clinical trial

after obtaining approval for the trial by one or more IRBs without separate authorization from the FDA, but must still comply with abbreviated

IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping

requirements.

Post-Marketing

Restrictions and Enforcement

After a device is placed

on the market, numerous regulatory requirements apply.

These include, but are not limited to:

and updating establishment registration and device listings with the FDA;

with the QSR, which requires manufacturers to follow stringent design, testing, control,

documentation, record maintenance, including maintenance of complaint and related investigation

files, and other quality assurance controls during the manufacturing process;

· unannounced

routine or for-cause device facility inspections by the FDA, which may include our suppliers’

regulations, which prohibit the promotion of products for uncleared or unapproved (or “off-label”)

uses and impose other restrictions relating to promotional activities;

· corrections

and removal reporting regulations, which require that manufacturers report to the FDA field

corrections or removals if undertaken to reduce a risk to health posed by a device or to

remedy a violation of the FDCA that may present a risk to health;

· post-market

surveillance regulations, which apply to certain Class II or III devices when necessary to

protect the public health or to provide additional safety and effectiveness data for the

In addition, under

the FDA medical device reporting, or MDR, regulations, medical device manufacturers are required to report to the FDA information that

a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or

contribute to death or serious injury if the malfunction of the device or a similar device of such manufacturer were to recur.

to file an MDR involves a judgment by the manufacturer.

If the FDA disagrees with the manufacturer’s determination, the FDA can

take enforcement action.

requirements also extend to health care facilities that use medical devices in providing care to patients, or “device user

facilities,” which include hospitals, ambulatory surgical facilities, nursing homes, outpatient diagnostic facilities, or

outpatient treatment facilities, but not physician offices.

A device user facility must report any device-related death to both the

FDA and the device manufacturer, or any device-related serious injury to the manufacturer (or, if the manufacturer is unknown, to

the FDA) within 10 days of the event.

Device user facilities are not required to report device malfunctions that would likely cause

or contribute to death or serious injury if the malfunction were to recur but may voluntarily report such malfunctions through

MedWatch, the FDA’s Safety Information and Adverse Event Reporting Program.

The FDA also has the

authority to require the recall of commercialized medical device products in the event of material deficiencies or defects in design

or manufacture.

The authority to require a recall must be based on an FDA finding that there is a reasonable probability that the device

would cause serious adverse health consequences or death.

Manufacturers may, under their own initiative, recall a product if any distributed

devices fail to meet established specifications, are otherwise misbranded or adulterated under the Federal Food, Drug, and Cosmetic Act, or the FDCA, or if any other material deficiency

The FDA requires that certain classifications of recalls be reported to the FDA within ten working days after the recall is

The failure to comply

with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

letters, fines, injunctions or civil penalties;

detentions or seizures of products;

restrictions;

in the introduction of products into the market;

or partial suspension of production;

or refusal of the FDA or other regulators to grant 510(k) clearance, PMA approvals, or other

marketing authorization to new products;

· withdrawals

of marketing authorizations;

the most serious cases, criminal prosecution.

To ensure compliance

with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced

inspections by the FDA, and these inspections may include the manufacturing facilities of subcontractors.

Trade Commission Regulatory Oversight

Our advertising for

our products and services is subject to federal truth-in-advertising laws enforced by the Federal Trade Commission, or the FTC, as well

as comparable state consumer protection laws.

Under the Federal Trade Commission Act, or FTC Act, the FTC is empowered, among other things,

to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce;

(b) seek monetary redress

and other relief for conduct injurious to consumers;

and (c) gather and compile information and conduct investigations relating to the

organization, business, practices, and management of entities engaged in commerce.

The FTC has very broad enforcement authority, and

failure to abide by the substantive requirements of the FTC Act and other consumer protection laws can result in administrative or judicial

penalties, including civil penalties, injunctions affecting the manner in which we would be able to market services or products in the

future, or criminal prosecution.

Law and Regulation

If our MODD1 product

candidate or our other future product candidates are approved in the United States, we will have to comply with various U.S.

and state laws, rules and regulations pertaining to healthcare fraud and abuse, including anti-kickback laws and physician self-referral

laws, rules and regulations.

Violations of the fraud and abuse laws are punishable by criminal and civil sanctions, including, in some

instances, exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid.

These laws include

the following:

federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully

soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash

or in kind, to induce or reward either the referral of an individual for, or the purchase,

order or recommendation of, any good or service, for which payment may be made, in whole

or in part, under a federal healthcare program such as Medicare and Medicaid;

federal False Claims Act imposes civil penalties, and provides for civil whistleblower or

qui tam actions, against individuals or entities for knowingly presenting, or causing to

be presented, to the federal government, claims for payment that are false or fraudulent

or making a false statement to avoid, decrease or conceal an obligation to pay money to the

federal government;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal

and civil liability for executing a scheme to defraud any healthcare benefit program or making

false statements relating to healthcare matters;

as amended by the Health Information Technology for Economic and Clinical Health Act and

its implementing regulations, also imposes obligations, including mandatory contractual terms,

with respect to safeguarding the privacy, security and transmission of individually identifiable

health information;

federal false statements statute prohibits knowingly and willfully falsifying, concealing

or covering up a material fact or making any materially false statement in connection with

the delivery of or payment for healthcare benefits, items or services;

federal transparency requirements under the Physician Payments Sunshine Act require manufacturers

of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid

to report, on an annual basis, to the Department of Health and Human Services information

related to payments and other transfers of value to physicians, teaching hospitals, and certain

advanced non-physician health care practitioners and physician ownership and investment interests;

state and foreign laws and regulations, such as state anti-kickback and false claims laws,

may apply to sales or marketing arrangements and claims involving healthcare items or services

reimbursed by nongovernmental third-party payors, including private insurers.

Some state laws require

pharmaceutical or medical device companies to comply with the relevant industry’s voluntary compliance guidelines and the relevant

compliance guidance promulgated by the federal government in addition to requiring drug and device manufacturers to report information

related to payments to physicians and other health care providers or marketing expenditures.

State and foreign laws

also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant

ways and often are not preempted by HIPAA, thus complicating compliance efforts.

We also may be subject to, or may in the future become

subject to, U.S.

federal and state, and foreign laws and regulations imposing obligations on how we collect, use, disclose, store and

process personal information.

Our actual or perceived failure to comply with such obligations could result in liability or reputational

harm and could harm our business.

Ensuring compliance with such laws could also impair our efforts to maintain and expand our customer

base and thereby decrease our future revenues.

The European Union, or EU,

approves the use of medical devices in a very different way.

They have similar regulations and requirements to adhere to, however a Notified

Body, in the form of a private company, will represent their interests and is required to have sufficient expertise to review all applications

and the company’s internal processes to ensure the safety of the product for which approval is being requested.

We are in the process

of identifying a Notified Body to represent us, and we will follow our FDA submission process with regard to preparing the materials

and processes required to meet the regulations and gain clearance.

Economic Area

In the European Economic

Area (which is comprised of the 27 member states of the European Union plus Norway, Iceland and Liechtenstein), or the EEA, manufacturers

of medical devices need to comply with the Essential Requirements laid out in Annex I to the EU Medical Devices Directive (Council Directive

93/42/EEC) or with the General Safety and Performance Requirements (GSPR) of the new EU Medical Devices Regulation (EU 2017/745).

with these requirements is a prerequisite to be able to affix the CE mark to medical devices, without which they cannot be marketed or

sold in the EEA.

To demonstrate compliance with the Essential Requirements and the GSPR and obtain the right to affix the CE Mark, manufacturers

of medical devices must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification.

Except for low-risk medical devices (Class I with no measuring function and which are not sterile), where the manufacturer can issue

an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the Essential Requirements and the

GSPR, a conformity assessment procedure requires the intervention of a Notified Body, which is an organization designated by a competent

authority of an EEA country to conduct conformity assessments.

Depending on the relevant conformity assessment procedure, the Notified

Body would audit and examine the Technical File and the quality system for the manufacture, design and final inspection of the devices.

The Notified Body issues a CE Certificate of Conformity following successful completion of a conformity assessment procedure conducted

in relation to the medical device and its manufacturer and their conformity with the Essential Requirements and GSPR.

This Certificate

entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity.

As a general rule, demonstration of conformity of medical devices and their manufacturers with the Essential Requirements and GSPR must

be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal

conditions of use.

Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions

of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits

of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence.

All manufacturers placing

medical devices into the market in the EEA must comply with the EU Medical Device Vigilance System.

Under this system, incidents must

be reported to the relevant authorities of the member states of the EEA, and manufacturers are required to take Field Safety Corrective

Actions, or FSCAs, to reduce a risk of death or serious deterioration in the state of health associated with the use of a medical device

that is already placed on the market.

An incident is defined as any malfunction or deterioration in the characteristics and/or performance

of a device, as well as any inadequacy in the labeling or the instructions for use which, directly or indirectly, might lead to or might

have led to the death of a patient or user or of other persons or to a serious deterioration in their state of health.

An FSCA may include

the recall, modification, exchange, destruction or retrofitting of the device.

FSCAs must be communicated by the manufacturer or its

legal representative to its customers and/or to the end users of the device through Field Safety Notices.

Where appropriate, our products

commercialized in Europe are CE marked and classified as either Class I or Class II.

In 2017, the European

Parliament passed the Medical Devices Regulation, which repeals and replaces the EU Medical Devices Directive.

Unlike directives, which

must be implemented into the national laws of the EEA member states, the regulations would be directly applicable (i.e., without the

need for adoption of EEA member State laws implementing them) in all EEA member states and are intended to eliminate current differences

in the regulation of medical devices among EEA member States.

The Medical Devices Regulation, among other things, is intended to establish

a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and in vitro diagnostic devices

and ensure a high level of safety and health while supporting innovation.

The Medical Device

Regulation was meant to become applicable three years after publication (in May 2020).

However, in April 2020, to allow EEA national

authorities, notified bodies, manufacturers and other actors to focus fully on urgent priorities related to the COVID-19 pandemic, the

European Council and Parliament adopted Regulation 2020/561, postponing the date of application of the Medical Device Regulation by one

The Medical Device Regulation became applicable on May 26, 2021.

Devices lawfully placed on the market pursuant to the EU Medical

Devices Directive prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025.

The Medical Devices Regulation, among other things:

· strengthens

the rules on placing devices on the market and reinforces surveillance once they are available;

· establishes

explicit provisions on manufacturers’ responsibilities for the follow-up of the quality,

performance and safety of devices placed on the market;

the traceability of medical devices throughout the supply chain to the end-user or patient

through a unique identification number;

up a central database to provide patients, healthcare professionals and the public with comprehensive

information on products available in the EU;

· strengthens

rules for the assessment of certain high-risk devices, such as implants, which may have to

undergo an additional check by experts before they are placed on the market.

Today, in the United

States, only three companies are commercializing insulin pumps to type 1 diabetes patients and insulin treated type 2 diabetes patients:

- commercializes the durable Minimed 770G also offering older durable pumps still in use

(e.g., the 670G, 630G etc.).

In 2020, they held approximately 51% of the US insulin pump

- commercializes the durable t:slim X2 pump (with or without algorithms - Basal-IQ and Control-IQ).

In 2020, they held approximately 28% of the US insulin pump market.

- commercializes the disposable Omnipod patch pump with about 19% of the US market in 2020.

Older insulin pumps

are also still being used by a minority of patients previously provided by Roche or Animas, though these pumps are not commercialized

To a lesser extent, the pumps described below are also used in small numbers.

These three insulin

pump offerings are vying for the attention of the most motivated and well insured in hope of converting them away from their reliance

on multi-day insulin injections.

The t:slim X2 and Minimed 770G each have a ~$5,000 list price that is covered through Durable Medical

Equipment (DME) reimbursement;

daily consumables and insulin are also required to complete these offerings.

These products have controllers

integrated into the pump, making them cumbersome and bulky, along with long (>20 inch) tubing between the pump and the cannular site.

The Omnipod is the third offering, a patch pump that attaches to the body for 72 hours and uses a separate controller to manage the insulin

delivery process.

Insurance coverage can be provided via DME but also via Pharmacy Benefit (PB).

The Omnipod patch pump is more expensive

per day and less accurate than other insulin pumps.

Around 32% of people living with T1D are currently using insulin pumps;

the vast majority are using one of these three offerings, a statistic that has not changed significantly over the last 5+ years.

All of these pump products

require extensive training to initiate and two to four hours per day to use and manage on an ongoing basis.

This level of sophistication

and effort along with the cost and awkwardness of these products contribute to the limited uptake.

Although there are

purely mechanical pumps available to patients with a small percentage of T2D patients are using the Zealand V-Go patch pump, a fixed

basal rate and a button to deliver small boluses.

This pump is simple to use though gives little performance decision to the user (no

possibility to change the basal rate, no possibility to stop bolus doses, small reservoir, pump that needs to be changed every day, etc.).

The last available patch pump is provided by Cequr, called Simplicity, a bolus-only delivery option without basal delivery that is yet

to be available.

In the future, Medtronic

intends to launch a new version of their insulin pump, the Minimed 780G, already available in some European countries with an advanced

algorithm, but no obvious change in hardware.

Tandem is currently developing a patch pump called t:sport, coupled with an algorithm with

potential launch expected in summer 2022.

The t:sport should have a small 2mL reservoir and would be controlled by a separate unit as

is the current Omnipod.

Insulet should launch in the coming quarters the Omnipod 5, a similar patch pump to their offering today, that

includes an algorithm.

Approximately 71% of

the people who rely upon MDI choose to not administer a shot outside of their house, which creates a poorly controlled group.

product is designed to focus upon a segment of these people and mobilize them via a simple, easy to use, affordable product.

Our success depends

in part on our ability to obtain patents and trademarks, maintain trade secret and know-how protection, enforce our proprietary rights

against infringers, and operate without infringing on the proprietary rights of third parties.

Because of the length of time and expense

associated with developing new products and bringing them through the regulatory approval process, the health care industry places considerable

emphasis on obtaining patent protection and maintaining trade secret protection for new technologies, products, processes, know-how,

As of March 31, 2022,

2021, we had 20 employees all of whom are located in the United States, consisting of 16 in research and development and manufacturing

operations and 4 in marketing and general and administrative functions.

Medtronic, Inc.,

Tandem Diabetes Care, Inc.

and Insulet Corporation are all much larger companies with substantially greater resources than us

that make similar products for the more sophisticated, technically capable person with diabetes.

We do not intend to directly

compete for those individuals with diabetes, instead we intend to offer a simple to use more cost-effective solution to attract

the more mainstream patients.

Intellectual Property

depends in part on our ability to obtain patents and trademarks, maintain trade secret and know-how protection, enforce our proprietary

rights against infringers, and operate without infringing on the proprietary rights of third parties.

Because of the length of

time and expense associated with developing new products and bringing them through the regulatory approval process, the health

care industry places considerable emphasis on obtaining patent protection and maintaining trade secret protection for new technologies,

products, processes, know-how, and methods.

31, 2021, we had six pending U.S.

utility patent applications, two pending foreign patent applications and

two pending international PCT patent applications on various aspects of our technology, including our proprietary fluid

movement technology.

There can be no assurance that the pending patent applications will result in the issuance of patents,

that patents issued to or licensed by us will not be challenged or circumvented by competitors, or that these patents will be

found to be valid or sufficiently broad to protect our technology or provide us with a competitive advantage.

Corporate History and Background

We were formed

as a corporation under the laws of the State of Nevada in October 1998 under the name Bear Lake Recreation Inc.

We had no material

business operations from 2002 until July 2017, when we acquired Quasuras, Inc., a Delaware corporation (Quasuras), in the Acquisition

(as defined below).

Prior to the Acquisition, and, since at least 2002, we were a shell company, as defined in Rule 12b-2 promulgated

under the Securities Exchange Act of 1934 (the Exchange Act).

Block Acquisition.

On April 26, 2017, pursuant to a Common Stock Purchase Agreement, dated as of April 5,

2017, by and among Manchester Explorer, LP, a Delaware limited partnership (Manchester Explorer), the Company and certain persons

named therein, Manchester Explorer purchased from us 2,900,000 shares of our common stock representing in excess of a majority

of our then issued and outstanding common stock, for a purchase price of $375,000 (the Control Block Acquisition), resulting in

a change in control of the Company.

we had one issued U.S.

utility patent, five published U.S.

utility patents, two pending foreign patent applications, and two pending

international PCT patent applications covering various aspects of our technology, including our proprietary fluid movement technology.

There can be no assurance that the pending patent applications will result in the issuance of patents, that patents issued to or licensed

by us will not be challenged or circumvented by competitors, or that these patents will be found to be valid or sufficiently broad to

protect our technology or provide us with a competitive advantage.

Our annual reports

on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant

to section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as section 16 reports on Form 3, 4, or 5, are available free

of charge on our website at www.modular-medical.com.

as soon as it is reasonably practicable after they are filed or furnished with the

Our Code of Business Conduct and Ethics and the charters for the Audit Committee, Compensation Committee and Nominating and Governance

Committee are also available on our website.

The Code of Business Conduct and charters are also available in print to any shareholder

upon request without charge.

Requests for such documents should be directed to Corporate Secretary, at Modular Medical, Inc., 16772 W.

Bernardo Drive, San Diego CA 92127.

Our Internet website and the information contained on it or connected to it are not part of, or incorporated

by, reference into this prospectus.

Our filings with the SEC are also available on the SEC’s website at http://www.sec.gov.

History and Background

We were formed as a

corporation under the laws of the State of Nevada in October 1998 under the name Bear Lake Recreation Inc.

We had no material business

operations from 2002 until July 2017, when we acquired Quasuras, Inc., a Delaware corporation, in the Control Block Acquisition (as defined

Prior to the Control Block Acquisition, we were a shell company, as defined in Rule 12b-2 promulgated under the Securities Exchange

Act of 1934 (the “Exchange Act”).

Control Block Acquisition.

On April 26, 2017, pursuant to a Common Stock Purchase

Agreement, dated as of April 5, 2017, by and among Manchester Explorer, LP, a Delaware limited partnership, we and certain persons named

therein, Manchester Explorer, LP purchased from us 966,667 shares of our Common Stock representing in excess of a majority of our then

issued and outstanding Common Stock, for a purchase price of $375,000 (the “Control Block Acquisition”), resulting in a change

in control of the Company.

In connection with the Control Block Acquisition, James E.

Besser was appointed president

and a director and Morgan C.

Frank was appointed the chief executive officer, chief financial officer, secretary, treasurer and

a director of ours and immediately following such appointments, our then officers and directors resigned.

Besser is the managing

member of and Mr.

Frank is the portfolio manager and a consultant to Manchester Management Company, LLC, a Delaware limited liability

company MMC).

MMC is the general partner of Manchester Explorer and Jeb Partners, L.P.

(Jeb Partners, and together with Manchester

Explorer, collectively, the Purchasing Funds).

The Acquisition.

July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company, Paul M.

DiPerna, the sole

officer, director and a controlling stockholder of Quasuras, Messrs.

Besser was appointed president and a director and

Frank was appointed the chief executive officer, chief financial officer, secretary, treasurer and a director of ours and immediately

following such appointments, our then officers and directors resigned.

Besser is the managing member of and Mr.

Frank is the portfolio

manager and a consultant to Manchester Management Company, LLC, a Delaware limited liability company also referred to herein as MMC.

MMC is the general partner of Manchester Explorer, LP and Jeb Partners, L.P.

(Jeb Partners, and together with Manchester Explorer, LP,

collectively, the Purchasing Funds).

On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement,

by and among us, Paul M.

DiPerna, the sole officer, director and a controlling stockholder of Quasuras, Messrs.

Besser and Frank (Messrs.

Besser, Frank and DiPerna, collectively,

the 3 Quasuras Shareholders), and Quasuras (the Share Exchange Agreement), we acquired all of the issued and outstanding shares

of Quasuras owned by the 3 Quasuras Shareholders, resulting in Quasuras becoming our wholly-owned subsidiary (the Acquisition).

Simultaneously with the closing of the Acquisition, Manchester Explorer cancelled the 2,900,000 shares of our common stock purchased

in the Control Block Acquisition, Mr.

Besser resigned as our president and a director and Mr.

Frank resigned as our chief executive

officer, chief financial officer, secretary, and treasurer, but remained a director, and Mr.

DiPerna was appointed our chairman

of the board of directors, chief executive officer, chief financial officer, secretary and treasurer.

In anticipation

of the closing of the Acquisition, on June 27, 2017, we changed our name from “Bear Lake Recreation, Inc.”

to “Modular

Medical, Inc.”

and changed our trading symbol from “BLKE”

to “MODD.”

2017, we filed a Current Report on Form 8-K, as amended (the Super 8-K), with the Securities and Exchange Commission (the SEC)

disclosing the Acquisition and related transactions, and, upon such filing, we ceased being a shell company.

Smaller Reporting Company

We are subject

to the reporting requirements of Section 13 of the Exchange Act and to the disclosure requirements of Regulation S-K of the SEC,

as a “smaller reporting company.”

Such designation relieves us of some of the disclosure requirements of Regulation

Available Information

Our website address is www.modular-medical.com.

The information in our website is not incorporated by reference into this report.

We file reports

with the SEC and make available, free of charge, on or through our website, our annual reports on Form 10-K, quarterly reports

on Form 10-Q, current reports on Form 8-K, proxy and information statements and amendments to these reports filed or furnished

pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material

with, or furnish it to, the SEC.

All SEC filings are also available at the SEC’s website at www.sec.gov.

Besser, Frank and DiPerna, collectively, the “3 Quasuras Shareholders”), and Quasuras, Inc.

(the “Share Exchange Agreement”),

we acquired all of the issued and outstanding shares of Quasuras, Inc.

owned by the 3 Quasuras Shareholders, resulting in Quasuras, Inc.

becoming our wholly-owned subsidiary (the “Acquisition”).

Simultaneously with the closing of the Acquisition, Manchester

Explorer, LP cancelled the 2,900,000 shares of our Common Stock purchased in the Control Block Acquisition, Mr.

Besser resigned as our

president and a director and Mr.

Frank resigned as our chief executive officer, chief financial officer, secretary, and treasurer, but

remained a director, and Mr.

DiPerna was appointed our chairman of the board of directors, chief executive officer, chief financial officer,

president, secretary and treasurer.

DiPerna served as our chief executive officer until August 2021 and as our secretary until October

Quasuras, Inc., a Delaware

corporation, is our only subsidiary.

As of March 31,

2022, we had 25 employees all of whom are located in the United States, consisting of 23 in research and development

and manufacturing operations and 2 in general and administrative functions.

Our corporate facility

is leased and located at 16772 West Bernardo Drive, San Diego, CA 92127.

The 39-month lease term commenced April 1, 2020, and provides

for an initial monthly rent of approximately $12,400 with annual rent increases of approximately 3%.

In addition to the minimum lease

payments, we are responsible for property taxes, insurance and certain other operating costs.

We believe that our existing facility is

adequate to meet our current needs.

We are a Nevada corporation.

Our corporate headquarters and operating facilities are located at 16772 West Bernardo Drive, San Diego, CA 92127 Our telephone number

is (858) 800-3500.

We maintain a website at www.modular-medical.com.

Medtronic, Inc., Tandem

Diabetes Care, Inc.

and Insulet Corporation are all much larger companies with substantially greater resources than us that make similar

products for the more sophisticated, technically capable person with diabetes.

We do not intend to directly compete for those individuals

with diabetes, instead we intend to offer a simple to use more cost-effective solution to attract the more mainstream patients.

Reporting Company

We are subject to the

reporting requirements of Section 13 of the Exchange Act and to the disclosure requirements of Regulation S-K of the SEC, as a “smaller

reporting company.” Such designation relieves us of some of the disclosure requirements of Regulation S-K.

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 1. Business