What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-02-13 compared with 2024-11-14 · 101 added, 87 removed, 109 unchanged (63% of the section changed)

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These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events

and are subject to risks, uncertainties and other factors including, without limitation, the direct and indirect effects of coronavirus

disease 2019, or COVID-19, as well as inflationary risks, including the risk that the cost of certain of the Company’s components

is increasing, and related issues that may arise therefrom.

Many of those factors are outside of our control and could cause actual results

to differ materially from those expressed or implied by those forward-looking statements.

In light of these risks, uncertainties and assumptions,

the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than

we have described.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date

of this Report.

All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable

to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred

to in this Report.

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

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

and are subject to risks, uncertainties and other factors including, without limitation, inflationary risks, including the risk of increasing

costs for certain of the Company’s components, and related issues that may arise therefrom.

Many of those factors are outside of

our control and could cause actual results to differ materially from those expressed or implied by those forward-looking statements.

light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur

to a different extent or at a different time than we have described.

You are cautioned not to place undue reliance on these forward-looking

statements, which speak only as of the date of this Report.

All subsequent written and oral forward-looking statements concerning other

matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by

the cautionary statements contained or referred to in this Report.

We undertake no obligation to update or revise any forward-looking

statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying

such statements, or otherwise.

Our fiscal year ends on March 31 of each calendar

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The product seeks to serve both the type 1 and the rapidly growing, especially in terms of device adoption, type 2 diabetes

In January 2024, we submitted a 510(k) premarket notification to the United States Food and Drug Administration (“FDA”)

In January 2024, we submitted a 510(k) premarket notification to the United States Food and Drug Administration (the “FDA”)

for our MODD1 insulin pump, and, in September 2024, we received FDA clearance to market and sell our MODD1 pump in the United States.

We are actively working to commercialize our MODD1 product and commence initial shipments in the first half of fiscal 2026, obtain regulatory

clearance to market and sell our MODD1 product in foreign jurisdictions, improve the manufacturability and usability of our MODD1 product

and develop new pump products.

Historically, we have financed our operations

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in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended March 31, 2024.

September 30, 2024, there have been no material changes to our significant accounting policies and estimates.

December 31, 2024, there have been no material changes to our significant accounting policies and estimates.

Results of Operations

Research and Development

September 30,

(dollar amounts in thousands)

Research and development – Three months ended

Research and development – Six months ended

Research and development – Nine months ended

Our research and development, or R&D, expenses

include personnel, consulting, testing, materials and supplies, depreciation and amortization and other operational costs associated with

the pre-FDA clearance production of our insulin pump product.

the pre-commercialization development and production of our insulin pump products.

We expense R&D costs as they are incurred.

R&D expenses increased for the three months

ended September 30, 2024 compared with the same period of 2023, primarily due to increased stock-based compensation expense of $0.5 million,

employee-related costs of approximately $0.2 million and increased depreciation expense of approximately $0.2 million.

These increases

were partially offset by decreases of approximately $0.2 million in consulting expenses and $0.2 million in material costs.

R&D expenses increased for the six months

ended September 30, 2024 compared with the same period of 2023, primarily due to increased stock-based compensation costs of approximately

$0.5 million, increased employee-related costs of approximately $0.4 million, an increase in depreciation expense of approximately $0.3

million and an increase in travel-related and other costs of approximately $0.1 million.

These increases were partially offset by an approximately

$0.3 million decrease in material and supplies costs.

Our full-time R&D employee headcount increased to 42 at September 30, 2024 from

39 at September 30, 2023.

R&D expenses included stock-based compensation expenses of approximately $0.8 million and $0.4 million for

the three-months ended September 30, 2024 and 2023, respectively, and $1.2 million and $0.7 million for the six-month periods ended September

30, 2024 and 2023, respectively.

We expect research and development expenses to increase in the second half of fiscal 2025, as we commence

initial activities in support of commercialization of our MODD1 product.

R&D expenses remained relatively flat for

the three months ended December 31, 2024 compared with the same period of 2023, as employee-related costs increased approximately $0.5

million, depreciation expense increased by approximately $0.2 million, materials and supplies costs increased by approximately $0.2 million,

and other R&D-related expenses increased $0.1 million.

These increases were substantially offset by decreases of $0.6 million in consulting

expenses, which were significant in fiscal 2024 in support of our submission to the FDA in January 2024, and $0.4 million in stock-based

compensation expense.

R&D expenses increased for the nine months

ended December 31, 2024 compared with the same period of 2023, primarily due to increased employee-related costs of approximately $0.9

million, an increase in depreciation expense of approximately $0.5 million, an increase in travel-related and other costs of approximately

$0.2 million and an increase in stock-based compensation costs of approximately $0.1 million.

These increases were partially offset by

decreases of approximately $0.6 million in consulting expenses and $0.1 million in material and supplies costs.

Our full-time R&D employee headcount increased

to 44 at December 31, 2024 from 36 at December 31, 2023.

R&D expenses included stock-based compensation expenses of approximately

$0.3 million and $0.7 million for the three-months ended December 31, 2024 and 2023, respectively, and $1.5 million and $1.4 million for

the nine-month periods ended December 31, 2024 and 2023, respectively.

We expect research and development expenses to increase for the

remainder of fiscal 2025 due to testing activities in support of commercialization of our MODD1 product and to advance development of

new pump products.

General and Administrative

September 30,

(dollar amounts in thousands)

General and administrative – Three months ended

General and administrative – Six months ended

General and administrative – Nine months ended

General and administrative, or G&A, expenses

consist primarily of personnel and related overhead costs for facilities, finance, human resources, legal, marketing and general management.

increased for the three months ended September 30, 2024 compared with the same period of 2023, primarily as a result of increases

in professional service, recruiting, legal and consulting expenses of approximately $0.3 million.

G&A expenses increased for the six months

ended September 30, 2024 compared with the same period of 2023, primarily as a result of an increase in legal and professional services

expenses of approximately $0.3 million and stock-based compensation expense of approximately $0.1 million, partially offset by decreases

in travel-related and other costs of $0.1 million.

G&A expenses included stock-based compensation expenses of approximately $0.2 million

for each of the three-month periods ended September 30, 2024 and 2023, and $0.4 million and $0.3 million for the six months ended September

30, 2024 and 2023, respectively.

We expect G&A expenses to increase in the second half of fiscal 2025, as we commence initial activities

in support of commercialization of our MODD1 product.

consist primarily of personnel and related overhead costs for facilities, finance, human resources, legal, investor relations, marketing

and general management.

G&A expenses decreased for the three months

ended December 31, 2024 compared with the same period of 2023, primarily as a result of decreased stock-based compensation expense of

approximately $0.2 million, decreased legal and other professional service expenses of approximately $0.1 million, decreased marketing

expenses of approximately $0.1 million and a decrease in other G&A expenses of approximately $0.1 million.

The decreases were partially

offset by an increase in consulting expenses of approximately $0.1 million.

G&A expenses decreased for the nine months

ended December 31, 2024 compared with the same period of 2023, primarily as a result of a decrease in stock-based compensation expense

of approximately $0.1 million, a decrease in marketing expenses of approximately $0.1 million, and a decrease in travel-related and other

costs of approximately $0.2 million.

The decreases were partially offset by an increase in legal and other professional service expenses

of approximately $0.3 million.

G&A expenses included stock-based compensation

expenses of approximately $0.1 million and $0.3 million for the three-month periods ended December 31, 2024 and 2023, respectively and

$0.5 million and $0.6 million for the nine months ended December 31, 2024 and 2023, respectively.

We expect G&A expenses to increase

for the remainder of fiscal 2025, as we expect to incur additional expenses in support of commercialization of our MODD1 product.

Liquidity and Capital Resources;

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to costs incurred in connection with our operations.

For the six months ended September 30, 2024 and year ended March 31, 2024, we incurred

For the nine months ended December 31, 2024 and year ended March 31, 2024, we incurred

net losses of approximately $13.9 million and $17.5 million, respectively.

At September 30, 2024, we had a cash balance of $3.9 million

At December 31, 2024, we had a cash balance of $7.0 million

and an accumulated deficit of approximately $80 million.

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losses for the foreseeable future and incur cash outflows from operations, as we continue to invest in the development and commercialization

of our products.

of our pump products.

We expect that our expenses will continue to increase, and, as a result, we will eventually need to generate significant

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to support our future operations.

During the three months ended March 31, 2024, we completed an offering of shares of common stock for

net proceeds of approximately $10.3 million, which includes the proceeds from the underwriter’s exercise of the overallotment.

November 2023, we entered into a Sales Agreement (the “ATM Agreement”) with Leerink Partners LLC (“Leerink”) under

which we may offer and sell, from time to time at our sole discretion, shares of our common stock (subject to availability on our shelf

registration statement) through an “at the market offering” program under which Leerink will act as sales agent or principal.

During the three months ended September 30, 2024, we sold 824,514 shares of common stock for net proceeds of approximately $1.9 million

under the ATM Agreement.

Subject to market conditions, we expect to resume sales under the ATM during the remainder of fiscal 2025, however,

the potential net proceeds from such future sales are unknown.

In addition, during the three months ended September 30, 2024, we received

a total of approximately $0.8 million of proceeds from the exercise of common stock purchase warrants issued in a public offering we completed

Our future capital requirements and the adequacy of our available funds will depend on many factors, including, without limitation,

our ability to successfully commercialize our MODD1 product, competing technological and market developments, and the need to enter into

In November 2023, we entered into a Sales Agreement

(the “ATM Agreement”) with Leerink Partners LLC (“Leerink”) under which we may offer and sell, from time to time

at our sole discretion, shares of our common stock (subject to availability on our shelf registration statement) through an “at

the market offering” program under which Leerink acts as sales agent or principal.

During the three months ended December 31, 2024,

we sold 95,685 shares of common stock for net proceeds of approximately $0.2 million under the ATM Agreement.

Subject to market conditions,

we may resume sales under the ATM during the remainder of fiscal 2025, however, the potential net proceeds from such future sales,

if any, are unknown.

In November 2024, in a firm commitment underwritten offering, we sold 5,450,573 shares of our common stock at a public

offering price of $1.50 per share for net proceeds to us of approximately $7.3 million, after deducting underwriting discounts, commissions

and offering expenses.

In addition, during the three months ended December 31, 2024, we received a total of approximately $0.2 million

of proceeds from the exercise of common stock purchase warrants issued in a public offering we completed in May 2023.

Our future capital

requirements and the adequacy of our available funds will depend on many factors, including, without limitation, our ability to successfully

commercialize our MODD1 product and future pump products, competing technological and market developments, and the need to enter into

collaborations with other companies or acquire other companies or technologies to enhance or complement our product offerings.

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and R&D initiatives, reduce headcount and take additional measures to reduce costs in order to conserve our cash.

For the six months ended September 30, 2024,

we used approximately $7.3 million of cash in operating activities, which primarily resulted from our net loss of approximately $9.1

million and net changes in operating assets and liabilities of approximately $0.3 million, as adjusted for stock-based

compensation expenses of approximately $1.6 million, depreciation and amortization expenses of approximately $0.5 million and

other immaterial adjustments.

For the six months ended six September 30, 2023, we used approximately $6.5 million in operating activities,

which primarily resulted from our net loss of approximately $7.9 million and net changes in operating assets and liabilities of approximately

$0.2 million, as adjusted for stock-based compensation expenses of approximately $1.0 million,

net changes in operating assets and liabilities of approximately $0.2 million and depreciation and amortization expenses of approximately

$0.2 million.

six months ended September 30, 2024 and 2023, cash used in investing activities of approximately $1.0 million and $0.7 million ,

For the nine months ended December 31, 2024, we

used approximately $11.4 million of cash in operating activities, which primarily resulted from our net loss of approximately $13.9 million

and net changes in operating assets and liabilities of approximately $0.3 million, as adjusted for stock-based

compensation expenses of approximately $2.0 million, depreciation and amortization expenses of approximately $0.7 million and other

immaterial adjustments.

For the nine months ended December 31, 2023, we used approximately $10.5 million in operating activities, which

primarily resulted from our net loss of approximately $13.2 million and net changes in operating assets and liabilities of approximately

$0.4 million, as adjusted for stock-based compensation expenses of approximately $2.0 million and

depreciation and amortization expenses of approximately $0.3 million and other immaterial adjustments.

nine months ended December 31, 2024 and 2023, cash used in investing activities of approximately $1.5 million and $1.2 million ,

respectively, was for the purchase of property and equipment.

Cash provided by financing activities of approximately

$3.0 million for the six months ended September 30, 2024 was attributable to proceeds from the at-the-market sales of stock and exercise

of common stock purchase warrants.

Cash provided by financing activities of $9.7 million for the six months ended September 30, 2023 was

attributable to net proceeds from the issuance of common stock and common stock purchase warrants in a public offering, net of underwriting

fees and issuance costs.

$10.7 million for the nine months ended December 31, 2024 was attributable to $7.3 million of proceeds from the issuance of common stock

in a public offering, net of underwriting fees and issuance costs, which closed in November 2024, $2.1 million of proceeds from sales

of our common stock under an at-the-market offering and $1.3 million of proceeds from exercises of common stock purchase warrants.

provided by financing activities for the nine months ended December 31, 2023 was attributable to $9.7 million of net proceeds from the

issuance of common stock and warrants in a public offering, which closed in May 2023, and approximately $0.2 million of proceeds from

the exercise of common stock purchase warrants.

Purchase Obligations

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obligations include purchase orders for machinery and equipment.

At September 30, 2024, we had outstanding purchase orders for machinery

At December 31, 2024, we had outstanding purchase orders for machinery

and equipment and related expenditures of approximately $1.1 million.

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

As of September

As of December

31, 2024, we had a remaining obligation under the device integration agreement of approximately $0.4 million over three years for

technology license fees.

technology license and maintenance fees.

Recently Issued Accounting Pronouncements

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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 2. Management’s Discussion and Analysis