What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-13 · 164 added, 95 removed, 390 unchanged (40% of the section changed)

3 unchanged sentences

(In thousands, except par value)

September 30,

CURRENT ASSETS

16 unchanged sentences

Common Stock, $ 0.001 par value, 100,000 shares authorized;

32,561 and 32,464 shares issued and outstanding as of June 30, 2024 and March 31, 2024, respectively

34,370 and 32,464 shares issued and outstanding as of September 30, 2024 and March 31, 2024, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

September 30,

Six Months Ended

September 30,

Operating expenses

3 unchanged sentences

Loss from operations

Loss before income taxes

Provision for income taxes

Net loss per share

14 unchanged sentences

Balance as of June 30, 2024

Shares issued for services

Exercise of warrants

At-the-market sales of stock, net

Issuances under equity incentive plan

Stock-based compensation

Balance as of September 30, 2024

Stockholders’

4 unchanged sentences

Balance as of June 30, 2023

Shares issued for services

Issuances under equity incentive plan

Stock-based compensation

Balance as of September 30, 2023

The accompanying notes are an integral part of

3 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

13 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from at-the-market sales of stock, net

Proceeds from exercise of common stock purchase warrants

29 unchanged sentences

In January 2024, the Company submitted a 510(k)

premarket notification to the United States Food and Drug Administration (FDA) for the MODD1.

In March 2024, the Company received comments

from the FDA on its submission, and the Company responded to those comments in August 2024.

premarket notification to the United States Food and Drug Administration (FDA) for the MODD1, and, in September 2024, the Company received

FDA clearance to market and sell its MODD1 pump in the United States.

and Going Concern

Company expects to continue to incur operating losses for the foreseeable future and incur cash outflows from operations as it

continues to invest in the development and subsequent commercialization of its products.

The Company expects that its research and

development and general and administrative expenses will continue to increase, and, as a result, it will eventually need to generate

significant revenue to achieve profitability.

The Company’s expected operating losses and cash burn raise substantial doubt

about the Company’s ability to continue as a going concern within one year after the date that these financial statements are

In addition, the Company’s independent registered public accounting firm, in its report on the consolidated financial

statements as of and for the year ended March 31, 2024, expressed substantial doubt about the Company’s ability to continue as

a going concern.

These condensed consolidated financial statements do not include any adjustments that might result from this

Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the

Company’s ability to raise additional capital, through the sale of additional equity or debt securities, to support its future

There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be

sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company.

Company’s operating needs include the planned costs to operate its business, including amounts required to fund working

capital and capital expenditures.

The Company’s future capital requirements and the adequacy of its available funds will

depend on many factors, including the Company’s ability to successfully commercialize its product, competing technological and

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

The Company does not currently have revenues to

generate cash flows to cover operating expenses.

Since its inception, the Company has incurred operating losses and negative cash flows

in each year due to costs incurred in connection with its operations.

The Company expects to continue

to incur operating losses for the foreseeable future and incur cash outflows from operations as it continues to invest in the development

and commercialization of its products.

The Company expects that its research and development and general and administrative expenses will

continue to increase, and, as a result, it will eventually need to generate significant revenue to achieve profitability.

considered with its current operating plan, these conditions raise substantial doubt about the Company’s

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

In addition, the Company’s

independent registered public accounting firm, in its report on the consolidated financial statements as of and for the year ended March

31, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern.

These condensed consolidated financial

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

Implementation of the Company’s plans and its

ability to continue as a going concern will depend upon the Company’s ability to raise additional capital, through the sale of additional

equity or debt securities, to support its future operations.

There can be no assurance that such additional capital, whether in the form

of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on terms and conditions

acceptable to the Company.

The Company’s operating needs include the planned costs to operate its business, including amounts required

to fund working capital and capital expenditures.

The Company’s future capital requirements and the adequacy of its available funds

will depend on many factors, including the Company’s ability to successfully commercialize its MODD1 product, competing technological

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

enhance or complement its product offering.

If the Company is unable to secure additional capital, it may be required to curtail its

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

If the Company is unable to secure additional capital, it may be required to curtail its product

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

Basis of Presentation

17 unchanged sentences

to summarize fairly the Company’s financial position, results of operations and cash flows for the interim periods presented.

operating results for the three months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the

operating results for the six months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the

year ending March 31, 2025 or for any other future period.

45 unchanged sentences

instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad

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

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

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

38 unchanged sentences

common shares consist of incremental shares of common stock issuable upon the exercise of stock options and exercise of warrants.

For the three months ended June 30, 2024 and 2023,

the following table sets forth securities outstanding which were excluded from the computation of diluted net loss per share as their

inclusion would be anti-dilutive (in thousands).

Three Months Ended

The following table sets forth securities outstanding

which were excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive (in thousands).

Six Months Ended

September 30,

Options to purchase common stock

10 unchanged sentences

in equity that are excluded from net loss.

For the three months ended June 30, 2024 and 2023, the Company’s comprehensive loss was

the same as its net loss.

For the three and six months ended September 30, 2024 and 2023, the Company’s comprehensive

loss was the same as its net loss.

Recently Issued Accounting Pronouncements

17 unchanged sentences

of its consolidated financial statements.

In November 2024, the FASB issued ASU No.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation

of Income Statement Expenses .

The new standard requires disclosures about specific types of expenses included in the expense captions

presented on the face of the income statement as well as disclosures about selling expenses.

The standard is effective for the Company

for annual periods beginning April 1, 2027 and interim periods beginning April 1, 2028, with early adoption permitted.

The standard may

be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any

or all prior periods presented in the financial statements.

The Company is evaluating the impact that this ASU will have on the presentation

of its consolidated financial statements.

NOTE 2 – CONSOLIDATED BALANCE SHEET DETAIL

September 30,

(in thousands)

6 unchanged sentences

accumulated depreciation and amortization

September 30,

(in thousands)

11 unchanged sentences

Future minimum payments under the facility operating

lease, as of June 30, 2024, are listed in the table below (in thousands).

lease, as of September 30, 2024, are listed in the table below (in thousands).

Annual Fiscal Years

3 unchanged sentences

Cash paid for amounts included in the measurement

of lease liabilities was approximately $ 112,000 and $ 149,000 for the three months ended June 30, 2024 and 2023, respectively.

was approximately $ 112,000 for each of the three month periods ended June 30, 2024 and 2023, respectively.

of lease liabilities was approximately $ 225,000 and $ 257,000 for the six months ended September 30, 2024 and 2023, respectively.

expense was approximately $ 225,000 for each of the six month periods ended September 30, 2024 and 2023, respectively and $ 113,000 for

each of the three month periods ended September 30, 2024 and 2023.

NOTE 4 – STOCKHOLDERS’ EQUITY

1 unchanged sentence

Agreement (the ATM Agreement) with Leerink Partners LLC (Leerink) under which the Company may offer and sell, from time to time at its

sole discretion, shares of its common stock, for aggregate gross proceeds of up to $ 6,500,000 through an “at the market offering”

program under which Leerink will act as sales agent or principal.

The ATM Agreement provides that Leerink will be entitled to compensation

for its services equal to 3.0 % of the gross proceeds from sales of any shares of common stock under the ATM Agreement.

The Company has

no obligation to sell any shares under the ATM Agreement and may, at any time, suspend solicitation and offers under the ATM Agreement.

As of June 30, 2024, the Company

had the following common stock purchase warrants outstanding (share amounts in thousands):

sole discretion, shares of its common stock through an “at the market offering” program under which Leerink will act as sales

agent or principal.

The ATM Agreement provides that Leerink will be entitled to compensation for its services equal to 3.0 % of the gross

proceeds from sales of any shares of common stock under the ATM Agreement.

The Company has no obligation to sell any shares under the

ATM Agreement and may, at any time, suspend solicitation and offers under the ATM Agreement.

During the three and six months ended September

30, 2024, under the ATM Agreement, the Company sold 824,514 shares of common stock for proceeds of approximately $ 1,933,000 , which was

net of commissions and legal fees of approximately $ 82,000 .

Common Stock Purchase

As of September

30, 2024, the Company had the following common stock purchase warrants outstanding (share amounts in thousands):

Shares Exercise

3 unchanged sentences

Balance as of June 30, 2024 12,466

As of March 31, 2024, the Company had the following warrants outstanding (share amounts in thousands):

Warrants exercised ( 252 ) $ 0.01 —

Warrants exercised ( 649 ) $ 1.22 May 2028

Warrants exercised ( 39 ) $ 1.32 May 2027

Balance as of September 30, 2024 11,526

As of March 31, 2024, the Company had the following warrants outstanding

(share amounts in thousands):

Type Number of

7 unchanged sentences

Common stock 1,438 $ 6.60 November 2027

The 1,348,000

The outstanding

pre-funded warrants with an exercise price of $ 0.01 per share were included in the weighted average shares outstanding calculation for

each of the three-month periods ended June 30, 2024 and 2023.

At March 31, 2024, the Company had a receivable from its transfer agent

for approximately $ 142,000 for the proceeds from warrants exercised prior to March 31, 2024.

The receivable was recorded in the prepaid

and other line in the consolidated balance sheet at March 31, 2024 and was collected during the three months ended June 30, 2024.

During the three months ended June 30, 2024, the

Company issued 10,000 shares of common stock with a fair value of approximately $ 15,000 to a service provider.

each of the three and six month periods ended September 30, 2024 and 2023.

At March 31, 2024, the Company had a receivable from its transfer

agent for approximately $ 142,000 for the proceeds from warrants exercised prior to March 31, 2024.

The receivable was recorded in the

prepaid and other line in the consolidated balance sheet at March 31, 2024 and was collected during the three months ended June 30, 2024.

During the six months ended September 30, 2024

and 2023, the Company issued 30,000 and 1,429 shares of common stock with fair values of approximately $ 51,000 and $ 1,400 , respectively

to service providers.

NOTE 5 – STOCK-BASED COMPENSATION

13 unchanged sentences

vest over 36 months and have a 10 -year term.

As of June 30, 2024, the unamortized compensation cost related to stock options was approximately

$ 2,262,000 and is expected to be recognized as expense over a weighted-average period of approximately 1.6 years.

As of September 30, 2024, the unamortized compensation cost related to stock options was

approximately $ 1,763,000 and is expected to be recognized as expense over a weighted-average period of approximately 1.8 years.

In October 2023, under its Two-Part FDA Submission

and Clearance Milestone Bonus Program (the Bonus Program), the Company granted stock options for 909,533 shares, which are subject to

vesting based upon the achievement of certain performance milestones by the Company and continued service by the optionees.

2024, options to purchase 625,326 shares (net of forfeitures), which were granted under part one of the Bonus Program, vested upon the

Company’s submission to the FDA.

As of June 30, 2024, the Company had not commenced expense recognition of 242,307 (net of forfeitures)

of the options, which were granted under part two of the Bonus Program, based on its assessment of the probability of achievement of the

applicable performance requirements.

and Clearance Milestone Bonus Program (the Bonus Program), the Company granted stock options to purchase 909,533 shares of common stock,

which were subject to vesting based upon the achievement of certain performance milestones by the Company and continued service by the

In January 2024, options to purchase 625,326 shares (net of forfeitures), which were granted under part one of the Bonus Program,

vested upon the Company’s submission to the FDA.

In August 2024, options to purchase 242,307 shares (net of forfeitures), which

were granted under part two of the Bonus Program, were canceled, as the Company did not receive clearance from the FDA for its MODD1 product

by August 1, 2024.

In August 2024, the Company granted new options to purchase 339,298 shares (the Clearance Options), which were subject

to vesting based upon the Company’s receipt of clearance from the FDA for its MODD1 product by December 31, 2024 and continued service

by the optionees.

The Clearance options vested in full in September 2024 upon the Company’s receipt of clearance from the FDA for

its MODD1 product.

The weighted-average grant date fair value of

options granted was $ 1.33 and $ 1.00 per share for the three months ended June 30, 2024 and 2023, respectively.

The following assumptions

were used in the fair-value method calculations:

options granted was $ 1.41 and $ 1.00 per share for the six months ended September 30, 2024 and 2023, respectively, and $ 1.51 and $ 1.02

for the three months ended September 30, 2024 and 2023, respectively.

The following assumptions were used in the fair-value method calculations:

Three Months Ended

September 30,

Six Months Ended

September 30,

Risk-free interest rates

2 unchanged sentences

3.5 % - 4.4 %

3.5 % - 4.6 %

114 % - 117 %

114 % - 123 %

82.6 % - 152.2 %

Expected life (years)

9 unchanged sentences

The following table summarizes the activity in

the shares available for grant under the Plan during the three months ended June 30, 2024:

the shares available for grant under the Plan during the six months ended September 30, 2024:

Options Outstanding

4 unchanged sentences

Balance at June 30, 2024

Options granted

Options cancelled and returned to the Plan

Balance at September 30, 2024

A stock option was exercised on a cashless basis

for 7,530 shares of common stock during the three months ended June 30, 2024.

There were no stock options exercised during the three months

ended June 30, 2023.

During the three months ended June 30, 2024 and 2023, the Company awarded 3,875 and 6,375 shares, respectively, to

for 7,530 shares of common stock during the six months ended September 30, 2024.

There were no stock options exercised during the six

months ended September 30, 2023.

During the six months ended September 30, 2024 and 2023, the Company awarded 7,750 and 12,640 shares,

respectively, and for the three months ended September 30, 2024 and 2023, the Company awarded 3,875 and 6,265 shares, respectively, to

its non-employee directors under the Company’s outside director compensation plan.

For the three months ended June 30, 2024 and

For the six months ended September 30, 2024 and

2023, the Company recorded stock-based compensation expense for these share awards of approximately $ 15,000 and $ 13,000 , respectively,

and for the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense for these share awards

of approximately $ 9,000 and $ 7,000 , respectively.

A summary of restricted stock unit (RSU) activity

under the Plan is presented below.

Balance at March 31, 2024

Non-vested shares at March 31, 2024

Non-vested shares at June 30, 2024

Non-vested shares at September 30, 2024

The total intrinsic value of RSUs outstanding

as of June 30, 2024 was approximately $ 263,000 .

The unamortized compensation cost at June 30, 2024 was approximately $ 153,000 related

to RSUs and is expected to be recognized as expense over a period of approximately two years.

as of September 30, 2024 was approximately $ 328,000 .

The unamortized compensation cost at September 30, 2024 was approximately $ 94,000

related to RSUs and is expected to be recognized as expense over a period of approximately 1.75 years.

The following table summarizes the range of outstanding

and exercisable options as of June 30, 2024:

and exercisable options as of September 30, 2024:

Options Outstanding Options Exercisable

23 unchanged sentences

federal and state tax authorities.

As of June 30, 2024, the Company has not recorded any liability for unrecognized tax benefits

related to uncertain tax positions.

As of September 30, 2024, the Company has not recorded any liability for unrecognized tax

benefits related to uncertain tax positions.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

12 unchanged sentences

with its officers and directors.

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

ended June 30, 2024 and 2023 related to these indemnifications.

The Company has not estimated the maximum potential amount of indemnification

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

particular agreement.

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

six months ended September 30, 2024 and 2023 related to these indemnifications.

The Company has not estimated the maximum potential amount

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

applicable to each particular agreement.

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

2 unchanged sentences

include purchase orders for machinery and equipment.

At June 30, 2024, the Company had outstanding purchase orders for machinery and equipment

and related expenditures of approximately $ 768,000 .

At September 30, 2024, the Company had outstanding purchase orders for machinery

and equipment and related expenditures of approximately $ 990,000 .

In December 2023, the Company signed a device

integration agreement with a provider of connected-care and remote monitoring diabetes technology solutions.

As of June 30, 2024, the

Company had a remaining obligation under the device integration agreement of approximately $ 400,000 over three years for technology

As of September 30, 2024,

the Company had a remaining obligation under the device integration agreement of approximately $ 400,000 over three years for technology

license fees.

2 unchanged sentences

executive officers is an employee of the Company.

During the three months ended June 30, 2024 and 2023, the Company paid the family member

approximately $ 57,300 and $ 34,800 , respectively, which includes the aggregate grant date fair values, as determined pursuant to FASB ASC

Topic 718, of stock options granted during each period.

NOTE 9 – SUBSEQUENT EVENTS

On August 2, 2024, 242,307 outstanding options,

which were granted under part two of the Bonus Program, were cancelled, as the applicable performance requirements had not been achieved.

During the three months ended September 30, 2024 and 2023, the Company paid the family

member approximately $ 43,365 and $ 28,954 , respectively, which includes the aggregate grant date fair values, as determined pursuant to

FASB ASC Topic 718, of stock options granted during each period.

During the six months ended September 30, 2024 and 2023, the Company

paid the family member approximately $ 100,625 and $ 63,754 , respectively, which includes the aggregate grant date fair values, as determined

pursuant to FASB ASC Topic 718, of stock options granted during each period.

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

What changed 10-Q

Item 1. Financial Statements