What changed in this filing

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Item 1. Business

2023-06-26 compared with 2022-06-28 · 988 added, 1113 removed, 48 unchanged (98% 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 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 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.

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 2023 refers to the fiscal year ended March 31, 2023).

Unless the context requires otherwise, references

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

and its consolidated

Modular Medical is a development-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, the Company seeks 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” to expand the category into the mass market.

Our product 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.

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

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 :

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.

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 may be daunting to less technically inclined, less motivated users.

We believe that a majority of existing pumps are bulky and difficult to manage, requiring a means of carrying the pump around and up to 48 inches of tubing to the injection site to connect the catheter to a pump.

The tubing and the cartridge, which holds the insulin, must be replaced every few days.

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

In comparison, our product only requires a cartridge change every few days.

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

These costs vary by pump and insurance coverage, but multi-thousand-dollar upfront payments, often with substantial co-payments in addition to possible additional co-payments on consumables, can easily place current pumps out of reach for patients.

This leads to limited or absent reimbursement/coverage and potentially high financial hurdles for patients to gain access.

Outdated style :

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.” 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.

Diabetes 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.

Pump 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 marketing authorization for, and bringing insulin pumps to market.

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.

provides a state-of-the-art insulin pump capable of both basal (steady flow) and bolus (mealtime dosing) insulin disbursement.

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.” While our initial target market is people with Type 1 diabetes, we believe there is a substantial opportunity

to penetrate the type 2 marketplace, whether through our initial MODD1 pump or further simplification of our pump to address the type

2 marketplace.

The MODD1 is a high-precision 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 internal technology

that enable precision with low-cost manufacture and high reproducibility.

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

One button interface, easy to learn and use;

90-day reusable, 3-day disposable;

Disposable portion removable at any time from an adhesive-backed retainer, which remains in place;

No external controller required, no charging, no battery replacement;

Slim profile, lighter weight.

A proprietary survey of American healthcare payors

representing 50 million covered lives (approximately 1/3 of U.S.

covered lives) performed for us by industry leading survey firm ISA in

2019 has demonstrated that payors are willing to grant equivalent or preferential coverage for a product with this feature set at launch

in exchange for discounts of approximately 20%.

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

Diabetes is typically classified as either type

T1D is an auto-immune condition characterized by the body’s nearly complete inability to produce insulin.

It is frequently diagnosed during childhood or adolescence, although it can sometimes have onset in adulthood.

Individuals with T1D require daily insulin therapy to survive.

T2D 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 T2D 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 requiring 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 T2D intensively treated with insulin currently in the United States.

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

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

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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.

disease, nervous system disorders, 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.

All people with

T1D, which is our primary market, require daily insulin.

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

with T2D in the United States, or approximately 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 T1D and people with T2D 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 (a type of syringe) , referred to as Multiple Daily Injection, or MDI therapy, or the use of an insulin

pump to deliver mealtime insulin boluses 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 clinical

benefits, a study conducted by Tandem Diabetes Care, Inc.

in 2021 demonstrated that insulin pump use can decrease glucose variability,

reduce the number of hypoglycemia events, and reduce the fear of hypoglycemia.

Notwithstanding these advantages, we believe 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 the warranty expires, as noted in a Seagrove Partners 2021 study), but also has severely limited the adoption

rate of insulin pumps by a large segment of the MDI diabetes population, whom we refer to in this Report as “Almost Pumpers.”

We define Almost Pumpers as insulin-requiring people with diabetes who are aware of pumps and their

potential benefits but because of past experiences, pump shortcomings, cost, complexity, and time and learning required to adopt and

utilize currently available insulin pumps, continue to receive their daily insulin through MDI therapy.

We undertook one-on-one

interviews with over 200 of these individuals to understand their past experiences on or considering pumps, existing pump

shortcomings, the cost and insurance challenges, complexity to learn and time and complexity to operate that drives them to

remain on MDI.

With this detailed understanding, we brought a series of prototype models to them to react to, so we could refine the

design and include features that would motivate them to be able to use this technology to better care for their diabetes.

the MODD1 pump has been well received by these individuals and our clinical advisors.

Our research, along with marketplace data provided

by Seagrove Partners in 2023, estimates that 33% of Americans with T1D have an insulin pump and 28% of Americans with T1D (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.

They do not want to closely manage

their glucose levels and incur the associated time and effort involved;

however, they understand they need to do more to achieve a reasonable

level of glucose.

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 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:

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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;

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;

Service and Support:

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.

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 T1D and T2D 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.

We intend to create an insulin

pump that appeals to all Almost Pumpers.

The International Diabetes Federation estimated

that, in 2019, approximately 460 million people were living with diabetes worldwide, and 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, T1D accounts for approximately 1.8 million people with the remainder being T2D.

All people with

T1D require daily insulin.

However, of the approximately 32.2 million people with T2D, about 1.6 million of them require multiple daily

injections of insulin 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.

According to the National Diabetes HCP Survey

conducted by Seagrove Partners, LLC in 2021, approximately 25% of the 1.6 million highly insulin intensive T2D have considered going “on

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 T1D and very few of the 1.6 million T2D 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 T1D’s and virtually

all of the T2D’s 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 (T1D and T2D) 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

We believe that they represent approximately 32% of the T1D 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 we believe have hampered adoption and intimidated many users.

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.” Our product only requires nine steps for setup and refill every 72 hours.

The current reluctance to adopt the insulin pump

has had serious consequences on the healthcare system.

In the United States, people living with T1D have struggled to attain glycemic

A 2019 analysis of the large T1D Exchange clinical registry found that only 21% of U.S.

adults with T1D 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.

Another transition in the care of diabetes is

the measuring of glucose from finger-stick tests to continuous glucose monitoring, or “CGM”, sensors, which are wearable devices.

These sensors are placed under the skin and give a reading every five minutes of the user’s glucose level.

While Dexcom has been

a market leader in this field, the introduction and rapid adoption of the Freestyle Libre by Abbott Labs has made CGM easier and more

affordable, expanded the product category, and doubled the market size.

The Freestyle Libre product is a more affordable, easier to use

and smaller version of the popular Dexcom, Inc.

(Dexcom) CGM product.

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

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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

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.

We believe the present pump marketplace is approximately

a $1.9 billion market, comprising 33% of T1D pumpers and a small group of T2D pumpers.

Seagrove Partners estimates in its 2021 report

that 28% of T1D patients and 25% of T2D 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.

Diabetes Care is at an Inflection Point

We believe that 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.

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 25-44 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 (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.

At the same time, reimbursement for patch pumps

has been increasingly moving to a pharmacy benefits manager (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.”

We believe these CGM users 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 (T2D, T1D that are currently not using technologies).

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

purchased a $5.5 million 30-second commercial advertisement during the 2021 Super Bowl.

All these recent changes support the high proportion

of T1D and T2D intensively treated with insulin that are considered as Almost Pumpers, a number that may grow in the coming 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 mind.

Using proprietary 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 production models of our low-cost insulin

pump have passed many of the tests required to submit to the FDA for 510(k) clearance to market them in the United States, and we are

in the process of completing and demonstrating that we can pass the formal tests.

A good part of our focus has shifted to implementing

the operational capability to manufacture production models of our pump product in low volume and ensure that this manufacturing flow

can be successfully outsourced to a tier-one contract manufacturer with the ability to scale to higher volumes at lower cost.

to devote substantial time and resources to better understand the needs and preferences of Almost Pumpers and the specific patient/provider/payor

requirements to motivate change from MDI.

By making the bolus delivery at meals simple we believe we will drive improved outcomes.

MODD1 has several

distinguishing features:

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 (NFC) chips to optionally allow the patient to communicate with their smart

phone, tablet, or other mobile computing platform.

Our mobile device application will be included in our 510(k) submission and will be

a part of our introductory product.

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 an infusion set (not shown) that

contains a soft 6 mm 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;

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.

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 Advantages

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 whereby a minimal

number of workers will be required in our production facility.

This advantage is compounded by the high availability and already optimized

cost reduction in its components.

This has 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.

Our MODD1 pump is smaller in overall volume than Insulet’s popular Omnipod product

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 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.

rate can be delivered almost continuously while other pumps are delivering micro-boluses every 5 minutes for the Omnipod, Tandem and Medtronic

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.

1 unchanged sentence

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

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 candidate

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

This new technology has also made the MODD1 lighter

than existing offerings.

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

26 grams) empty and 23 grams (vs.

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 patch pumps.

Our approach to the care of diabetes can be further

enhanced by leveraging the MODD1 single-pumping chamber technology and reusable pump approach to apply to dual (or more) chamber pumping

We believe that such multi-chamber pumps will be integral to the realization of high time-in-range artificial pancreas solutions

that require no human intervention because of the application of, for instance, drugs to raise glucose levels coupled with drugs to lower

They will be the next step forward from the cumbersome and awkward solutions today that require the user to announce meals, count

and input carbohydrates, and adjust delivery for exercise and sleep to prevent overdosing of insulin.

Instead, if a user overdosed insulin,

the user would simply pump in a drug to release sugar stores to raise it up.

We believe that a pre-filled peel and stick patch pump with

the ability to function in a fully autonomous closed loop system with a CGM device, which is measuring and transmitting glucose-level

information, 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.

applications would include weight loss, fertility, and simplifying the delivery of complex 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 may be 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.

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 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

We believe people generally will not use technology

that intimidates them.

In addition, we believe that physicians are hesitant to prescribe such technology due to the level of training

and support required with the present pump product offerings.

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 appealing to super users and leaving the other people with

diabetes further behind.

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 needs.

To achieve our above stated immediate and current

goals, we intend to pursue the following business strategies:

Use 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 the invention, market vision and technical development of insulin pumps,

we have generated proprietary technology that has been incorporated into our proposed insulin pump.

We believe this technology allowing

for a two-part, yet small enough to wear, pump product, along with simplified mechanics for pumping, 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 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 the world.

Keep 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 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.

Employ 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 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.

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 CGM users.

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.

We believe that MODD1 is approximately 50% less expensive to manufacture than Omnipod.

This low cost allows us to spend more on patients and sampling.

We believe that this will save money for payers because we expect to offer the pump with no upfront cost to patients.

Expected benefits of MODD1 include:

20% discount vs Insulet (PODD) will drive preferred status;

Designed to use Pharmacy Benefit Manager (PBM) codes as a disposable;

No new code needed to be reimbursed at launch because MODD1 will be able to use existing CMS codes;

Saves provider an estimated $1,062/patient/year vs Omnipod, as we will offer providers discounts from the existing reimbursement code.

● The 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, which we believe are

all major hurdles to pump adoption.

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, as approximately

60 million people in Europe live with diabetes.

$161 billion is spent annually on diabetes healthcare costs in Europe based on data from

a Seagrove Partners 2023 study.

At present, cost containment is restricting pump uptake across Europe.

Current pump usage hovers between

10% and 20% in many markets.

Single payor healthcare systems across Europe traditionally attempt to contain costs in the short term and

seek low price technologies with moderate medical benefits.

We anticipate 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

We intend to employ a partnership strategy across Europe following in-house managed regulatory and pricing activities in the

major markets (e.g., UK) and more cost receptive markets (e.g., Nordics).

We are targeting European and United Kingdom approval towards

MODD1 tackles the most significant barriers to

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

We believe that

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

Our commercialization plan

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

Maximize 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.

Leverage 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.

Facilitate 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 .

Provide a free sample pump, insurance verification, co-pay coupons and telehealth support, as may be allowed under federal and state law, to patients thereby reducing outlay of time and money;

Partner with connected care companies to provide superb support of

patients from trial through the first year.

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

We believe 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.

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

We 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.

Initiate a clinical study program (with key diabetes centers ) We intend 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 2024.

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.

Work 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

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

Payors want an effective product whereby the users realize the clinical benefit.

We intend to launch with a discount program for payors of 20% to drive uptake.

Designed to use existing PBM codes as a disposable

No new reimbursement code:

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.

Tie-in with telehealth.

In recent years, telehealth has gone mainstream,

and patients 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

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.

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

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:

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;

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.

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 payors.

Manufacturing

Manufacturing requires

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

Our pump product comprises the pump, a disposable

cartridge that holds the insulin reservoir, a baseplate that affixes the pump product to the user’s body and the infusion set, which

includes a cannula to infuse the insulin into the body.

We intend to manufacture the pump, the cartridge and the baseplate and purchase

the infusion set from third parties.

Prior to shipment, our pump product will be packaged with an infusion set.

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.

We have installed automation machines in our facility that will be capable of assembling the cartridges at a rate sufficient to supply 10,000 patients (100,000 per month).

Product packaging will initially be performed manually by our

personnel, while the cartridge automation is being refined.

We expect to purchase and implement packaging automation equipment as

the second phase of automation of the cartridge.

The infusion sets will be purchased from a third-party supplier to cost-effectively introduce our product and focus on our core expertise.

We have commenced working with a tier-one medical

product contract manufacturer to develop the tooling equipment required to produce the components used in our product and to prepare for

the transfer to its facility.

As discussed above, we are in the process of implementing the cartridge assembly tooling equipment in our

Prior to product launch, we expect to transfer the cartridge automation equipment to this contract manufacturer in early 2024

to verify and validate into our manufacturing process.

The contract manufacturer would perform all manufacturing responsibilities to ensure

compliance with FDA regulations.

To date, we have entered into a development agreement with this contract manufacturer for these development

activities, but we have not yet entered into a contract manufacturing agreement.

FDA Clearance

The FDA requires us to meet all applicable regulations

for insulin pumps, a subcategory of infusion pumps, which are generally considered Class II devices by the FDA.

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 prior to submission.

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.

One of the more important tests addresses insulin stability, and

we must demonstrate that our MODD1 pump does not damage the insulin molecules during infusion.

We have performed preliminary tests on

insulin stability to increase the likelihood that we will pass these tests.

In an earlier version of our pump product candidate, we experienced

issues demonstrating insulin stability.

To address those issues, we began working with a medical product contract manufacturer to develop

a full commercial version of our product utilizing alternative component parts.

In addition, we must demonstrate:

i) biocompatibility,

meaning that we don’t use materials that compromise long-term patient safety, ii) occlusion detection, meaning that our device will

inform the patient of a lack of insulin delivery and iii) cybersecurity controls to ensure that our product has adequate security protection

to ensure it cannot be hacked by a third party.

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.

engaged the FDA in three 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

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);

We are currently

preparing our premarket notification, which will be part of our FDA submission.

The purpose of the premarket notification is to

demonstrate that our insulin pump is substantially equivalent to an insulin pump that has:

i) previously been cleared and approved for

use by the FDA and ii) legally marketed to the public and generally safe and effective for its intended use.

We are also preparing other

parts of 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 Steps

To commercialize our product, we 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.

Continue to refine and finalize the production version of our product to ensure it meets:

o FDA requirements for 510(k) clearance;

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 administers the United States Medicare program,

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 payors.

Refine our manufacturing process during the submission process to qualify and test our product for transfer to a manufacturer;

We recently moved to a larger facility and have purchased production-level tools and assembly equipment to manufacture our disposable cartridge and reusable pump.

It is our intention to transfer these tools to a tier 1 medical product manufacturer prior to product launch;

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.

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:

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

Obtaining any other FDA-required authorizations with regard to our product candidate, 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 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;

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.

Looking Forward

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.

With our future MODD1+ product, we intend to seek to add phone-based control and Alternative Controller Enabled (“ACE”) and Automated Insulin Deliver (“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 an application on his/her cell phone as the controller.

AID control functionality is added via an “ACE” designation on the pump.

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

CGM integration allows the controller to potentially adjust basal insulin rate for meals and exercise with an approved algorithm.

With our future MODD2 product, 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.

We envision moving to a drug prefill model such that cartridges can be filled with insulin or other drugs and shipped cold chain to patients, further simplifying the use process.

As of March 31, 2023,

we had 38 employees all of whom are located in the United States and 37 of whom are full-time employees, consisting of 34 in research

and development and manufacturing operations and 4 in general and administrative functions.

Today, in the United States, only three companies

are commercializing insulin pumps to T1D patients and insulin treated T2D patients:

Medtronic - commercializes the durable Minimed 770G and also offers older durable pumps (670G, 630G etc.).

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

Tandem - 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.

Insulet - 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 any longer.

extent, the pumps described below are also used in small numbers.

Medtronic pump and infusion set

Tandem pump and infusion set

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 MDI.

The t:slim X2 and Minimed

770G each have a ~$5,000 list price that is covered through Durable Medical Equipment (DME) reimbursement and daily consumables, which

comprise cartridge, tubing and set for each three-day period, as well.

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 your body for 72 hours and uses a separate controller to manage the insulin delivery process.

coverage for Omnipod 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, according to a Mende 2022 study.

Around 33% of people living with T1D are currently using insulin

of these, the vast majority are using one of these three offerings, a statistic that has not changed significantly over the last

All of these pump products require extensive training

to initiate, two to four hours per day to use and manage on an ongoing basis.

We believe 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 using the Mannkind V-Go patch pump, a fixed basal rate and a button to deliver small

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 commercially 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 Mobi, coupled with an algorithm with potential launch expected

The Mobi is expected to have a small 2mL reservoir and would be controlled by a separate unit, similar to the current Omnipod

Insulet has also launched the Omnipod 5, a similar patch pump to their offering today, that includes an AID algorithm.

Approximately 79% of the people who rely upon

MDI choose to not administer a shot outside of their house, which creates a poorly controlled group.

MODD1 is designed to focus upon

a segment of these people and mobilize them via a simple, easy to use, affordable product.

Intellectual Property

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, and methods.

As of March 31, 2023, we held three U.S.

and no foreign patents, and we also held 22 pending applications in the United States and abroad.

The patents and patent applications

cover various aspects of our technology, including our proprietary fluid movement technology and associated features of our insulin delivery

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.

Government Regulation

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.

and regulations governing our business and interpretations of those laws and regulations and are subject to frequent change.

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.

As the applicable laws and regulations change, we

are likely to make conforming modifications in our business processes from time to time.

We 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.

FDA Regulation

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 FDA.

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.

Device 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 (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.

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

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.

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.

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.

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.

The de 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.

We expect our MODD1 insulin pump product candidate to be a Class II

device, and we do not expect to be required to apply for down-classification under the de novo classification process.

Clinical trials are almost always required to

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

All clinical investigations

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

(“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.

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.

submitting and updating establishment registration and device listings with the FDA;

compliance 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’ facilities;

labeling 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 device.

In addition, under the FDA medical device reporting

(“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.

The decision 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.

The MDR 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.

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 FDCA, or if any other material deficiency is found.

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

The failure to comply with applicable regulatory

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

warning letters, fines, injunctions or civil penalties;

recalls, detentions or seizures of products;

operating restrictions;

delays in the introduction of products into the market;

total or partial suspension of production;

delay 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;

in 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.

Federal 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 (the “FTC”) as well as comparable

state consumer protection laws.

Under the Federal Trade Commission Act (the “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.

Healthcare Law and Regulation

United States

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.

federal and state laws, rules and regulations

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

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:

the 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;

the 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;

the 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;

HIPAA, 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;

the 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;

the 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;

analogous 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.

or perceived failure to comply with such obligations could result in liability or reputational harm and could harm our business.

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 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.

European Union

In the European Economic Area, (which is comprised

of the 27 member states of the European Union plus Norway, Iceland and Liechtenstein), or 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).

Compliance 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

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 year.

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,

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

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;

improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;

sets 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.

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).

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”).

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

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.

The Control Block Acquisition.

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 a number of shares 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,

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 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.

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,

The Acquisition.

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, 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.

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, 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, secretary and treasurer.

DiPerna served as our chief executive officer until August 2021.

Available Information

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 SEC.

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.

Code of Business Conduct and charters are also available in print to any stockholder upon request without charge.

Requests for such documents

should be directed to Modular Medical, Inc., 10740 Thornmint Road, San Diego CA 92127, Attn.

Our Internet website and the information

contained on it or connected to it are not part of, or incorporated by, reference into this Report.

Our filings with the SEC are also

available on the SEC’s website at http://www.sec.gov.

Corporate Information

We are a Nevada corporation, and Quasuras, Inc.,

a Delaware corporation, is our only subsidiary.

Our corporate headquarters and operating facilities are located at 10740 Thornmint Road,

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