What changed in this filing

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Item 1. Financial Statements

2026-02-17 compared with 2025-11-14 · 533 added, 385 removed, 190 unchanged (83% of the section changed)

Financial Statements

Medical, Inc.

Consolidated Balance Sheets

thousands, except par value)

September 30,

Modular Medical, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except par value)

CURRENT ASSETS

10 unchanged sentences

TOTAL CURRENT LIABILITIES

Warrant liabilities

Long-term lease liabilities

4 unchanged sentences

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

61,171 and 53,706 shares issued and outstanding as of September 30, 2025 and March 31, 2025, respectively

77,703 and 53,706 shares issued and outstanding as of December 31, 2025 and March 31, 2025, respectively

Additional paid-in capital

3 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes are an integral part of these condensed consolidated financial statements.

Medical, Inc.

The accompanying notes are an integral part of

these condensed consolidated financial statements.

Modular Medical, Inc.

Condensed Consolidated Statements of Operations

thousands, except per share data)

(In thousands, except per share data)

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Operating expenses

3 unchanged sentences

Loss from operations

Change in fair value of warrant liabilities

Loss before income taxes

4 unchanged sentences

Basic and diluted

accompanying notes are an integral part of these condensed consolidated financial statements.

Medical, Inc.

Consolidated Statements of Stockholders’ Equity

The accompanying notes are an integral part of

these condensed consolidated financial statements.

Modular Medical, Inc.

Condensed Consolidated Statements of Stockholders’

(In thousands)

Issuable Shares

8 unchanged sentences

At-the-market sales of stock, net

Issuance of common stock and warrants from warrant

inducement offering

Issuance of common stock and warrants from warrant inducement offering

Issuances under equity incentive plan

1 unchanged sentence

Balance as of September 30, 2025

At-the-market sales of stock, net

Issuance of common stock and warrants from warrant inducement offering, net

Proceeds from public offering of common stock and common stock warrants, net

Issuances under equity incentive plan

Stock-based compensation

Balance as of December 31, 2025

$ ( 106,605 )

Issuable Shares

12 unchanged sentences

Balance as of September 30, 2024

accompanying notes are an integral part of these condensed consolidated financial statements.

Medical, Inc.

Consolidated Statements of Cash Flows

Six Months Ended

September 30,

Issuance of common stock in equity offering, net

Exercise of warrants

At-the-market sales of stock, net

Issuances under equity incentive plan

Stock-based compensation

Balance as of December 31, 2024

The accompanying notes are an integral part of

these condensed consolidated financial statements.

Modular Medical, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

2 unchanged sentences

Depreciation and amortization

Change in fair value of warrant liabilities

Shares issued for services

11 unchanged sentences

Proceeds from exercise of common stock purchase warrants

Proceeds from public offering of common stock, net

Proceeds from public offering of common stock and warrants, net

Proceeds from warrant inducement offering, net

3 unchanged sentences

Cash and cash equivalents at end of period

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MEDICAL, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Medical, Inc.

(the “Company”) was incorporated in Nevada in October 1998 under the name Bear Lake Recreation, Inc.

had no material business operations until approximately 2017, when it acquired all of the issued and outstanding shares of Quasuras,

Inc., a Delaware corporation (“Quasuras”) and changed its name from Bear Lake Recreation, Inc.

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

MODULAR MEDICAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING

Modular Medical, Inc.

(the “Company”)

was incorporated in Nevada in October 1998 under the name Bear Lake Recreation, Inc.

The Company had no material business operations until

approximately 2017, when it acquired all of the issued and outstanding shares of Quasuras, Inc., a Delaware corporation (“Quasuras”)

and changed its name from Bear Lake Recreation, Inc.

to Modular Medical, Inc.

Company is a pre-revenue, medical device company focused on the design, development and commercialization of innovative insulin delivery

systems using modernized technology to increase pump adoption in the diabetes marketplace.

Through the creation of innovative two-part

patch pumps, the Company seeks to fundamentally alter the trade-offs between cost and complexity and access to the higher standards of

care requiring considerable motivation that presently available insulin pumps provide.

By simplifying and streamlining the user experience

from introduction, prescription, reimbursement, training and day-to-day use, the Company seeks to expand the wearable insulin delivery

device market beyond the highly motivated “super users” and expand the category into the mass market.

The product seeks to

serve both the type 1 and the rapidly growing, especially in terms of device adoption, type 2 diabetes markets.

In January 2024, the

Company submitted a 510(k) premarket notification to the United States Food and Drug Administration (“FDA”) for its initial

product, the MODD1, and, in September 2024, the Company received FDA clearance to market and sell its MODD1 pump in the United States.

The Company is seeking FDA approval for an updated version of the MODD1 product, called

the Pivot, which is a tubeless version of the product that integrates the set into a true tubeless patch.

The Company intends to go to

market with its Pivot product, when the required regulatory approval from the FDA is received.

and Going Concern

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 operating expenses will continue to increase, and, as

a result, it will eventually need to generate significant revenue to achieve profitability.

When 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, 2025, 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.

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 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 its

product offering.

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.

As disclosed in

Note 4, in September 2025, the Company effected a warrant inducement offering for net proceeds of approximately $ 3.9 million, and, during

the six months ended September 30, 2025, the Company received net proceeds of approximately $ 0.7 million from sales of shares of common

stock under its at-the-market sales program.

of Presentation

Company’s fiscal year ends on March 31 of each calendar year.

Each reference to a fiscal year in these notes to the condensed consolidated

financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2026 refers to the

fiscal year ending March 31, 2026).

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned

subsidiary, Quasuras.

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

accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting

principles in the United States (“GAAP”) and with the rules and regulations of the United States Security and Exchange Commission

(“SEC”) regarding interim financial reporting.

The condensed consolidated balance sheet as of March 31, 2025 has been derived

from the audited consolidated financial statements at that date.

Certain information and disclosures normally included in financial statements

prepared in accordance with GAAP have been condensed or omitted in accordance with these rules and regulations of the SEC.

The information

in this report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in

its most recent annual report on Form 10-K filed with the SEC.

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

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

cash flows for the interim periods presented.

The operating results for the six months ended September 30, 2025 are not necessarily indicative

of the results that may be expected for the year ending March 31, 2026 or for any other future period.

preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period.

Estimates may include those pertaining to accruals, stock-based compensation and income taxes.

Actual results could differ from those

and Development

Company expenses research and development expenditures as incurred.

and Uncertainties

Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with

financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.

The Company may be unable to access the capital markets, and additional capital may only be available to the Company on terms that could

be significantly detrimental to its existing stockholders and to its business.

and Cash Equivalents

and cash equivalents include cash held in demand deposit and money market accounts, certificates of deposit and all highly liquid debt

instruments with original maturities of three months or less.

and Equipment

and equipment are recorded at historical cost.

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

of the assets, generally three to five years .

The Company is a pre-revenue, medical device company

focused on the design, development and commercialization of innovative insulin delivery systems using modernized technology to increase

pump adoption in the diabetes marketplace.

Through the creation of innovative two-part patch pumps, the Company seeks to fundamentally

alter the trade-offs between cost and complexity and access to the higher standards of care requiring considerable motivation that presently

available insulin pumps provide.

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

and day-to-day use, the Company seeks to expand the wearable insulin delivery device market beyond the highly motivated “super users”

and expand the category into the mass market.

The product seeks to serve both the type 1 and the rapidly growing, especially in terms

of device adoption, type 2 diabetes markets.

In January 2024, the Company submitted a 510(k) premarket notification to the United States

Food and Drug Administration (“FDA”) for its initial product, the MODD1, and, in September 2024, the Company received FDA

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

The Company is seeking FDA approval for an updated version of the MODD1

product, called the Pivot, which is a tubeless version of the product that integrates the set into a true tubeless patch.

intends to go to market with its Pivot product, when the required regulatory approval from the FDA is received.

Liquidity and Going Concern

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 operating expenses will continue to increase, and, as a result, it will eventually need to generate significant

revenue to achieve profitability.

When 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.

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, 2025, 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 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 its product offering.

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.

As disclosed in Note 4, in December 2025, the Company completed a public offering of common stock and warrants for

net proceeds of approximately $ 4.8 million and during the nine months ended December 31, 2025, the Company received approximately $ 4.0

million of net proceeds from a warrant inducement offering and $ 1.9 million from sales of shares of common stock under its at-the-market

sales program.

Basis of Presentation

The Company’s fiscal year ends on March

31 of each calendar year.

Each reference to a fiscal year in these notes to the condensed consolidated financial statements refers to

the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2026 refers to the fiscal year ending March 31, 2026).

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Quasuras.

All significant

intercompany transactions and balances have been eliminated in consolidation.

The accompanying condensed consolidated financial

statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”)

and with the rules and regulations of the United States Security and Exchange Commission (“SEC”) regarding interim financial

The condensed consolidated balance sheet as of March 31, 2025 has been derived from the audited consolidated financial statements

at that date.

Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been

condensed or omitted in accordance with these rules and regulations of the SEC.

The information in this report should be read in conjunction

with the Company’s consolidated financial statements and notes thereto included in its most recent annual report on Form 10-K filed

with the SEC.

In the opinion of management, the accompanying

unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary

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

operating results for the nine months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the

year ending March 31, 2026 or for any other future period.

Use of Estimates

The preparation of the accompanying condensed

consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial

statements and the reported amount of revenues and expenses during the reporting period.

Estimates may include those pertaining to accruals,

stock-based compensation and income taxes.

Actual results could differ from those estimates.

Research and Development

The Company expenses research and development expenditures as incurred.

Risks and Uncertainties

The Company is subject to risks from, among other

things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing

customer requirements, limited operating history and the volatility of public markets.

The Company may be unable to access the capital

markets, and additional capital may only be available to the Company on terms that could be significantly detrimental to its existing

stockholders and to its business.

Cash and Cash Equivalents

Cash and cash equivalents include cash held in

demand deposit and money market accounts, certificates of deposit and all highly liquid debt instruments with original maturities of three

months or less.

Property and Equipment

Property and equipment are recorded at historical

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three to five years .

Depreciation is recorded in operating expenses in the consolidated statements of operations.

Leasehold improvements and assets acquired through finance leases are amortized over the shorter of their estimated useful life or the

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

Construction-in-process

includes machinery and equipment and is stated at cost and not depreciated.

Depreciation on construction-in-process commences when the

assets are ready for their intended use and placed into service.

Value of Financial Instruments

Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques

used to measure fair value into three broad levels:

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

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.

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

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

Company’s right-of-use assets consist of leased assets recognized in accordance with Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC”) No.

842, Leases , which requires lessees to recognize a lease liability and

a corresponding lease asset for virtually all lease contracts.

Right-of-use assets represent the Company’s right to use an underlying

asset for the lease term and the lease liability represents the Company’s obligation to make lease payments arising from the lease,

both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement

Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheets and are expensed

on a straight-line basis over the lease term in the consolidated statement of operations and comprehensive loss.

The Company determines

the lease term by agreement with the lessor.

In cases where the lease does not provide an implicit interest rate, the Company uses the

Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of

future payments.

Company periodically issues stock options, restricted stock units and stock awards to employees and non-employees.

The Company accounts

for such awards based on FASB ASC Topic 718, whereby the value of the award is measured on the date of grant and recognized as compensation

expense on a straight-line basis over the requisite service period, usually the vesting period.

With respect to performance-based awards,

the Company assesses the probability of achieving the requisite performance criteria before recognizing compensation expense.

value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing (“Black Scholes”) model,

which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the options, and future dividends.

Compensation expense is recorded based upon the value derived from the Black-Scholes model.

The assumptions used in the Black-Scholes

model could materially affect compensation expense recorded in future periods.

Leasehold improvements and assets acquired

through finance leases are amortized over the shorter of their estimated useful life or the lease term, and amortization is recorded in

operating expenses in the consolidated statements of operations.

Construction-in-process includes machinery and equipment and is stated

at cost and not depreciated.

Depreciation on construction-in-process commences when the assets are ready for their intended use and placed

into service.

Fair Value of Financial Instruments

The Company measures the fair value of

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

three broad levels:

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

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

Level 3 unobservable inputs that are supported by little or no market

activity and reflect the use of significant management judgment are used to measure fair value.

These values are generally determined

using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The determination

of fair value for Level 3 investments and other financial instruments involves the most management judgment and subjectivity.

Due to their short-term nature, the carrying values of cash equivalents,

accounts payable and accrued expenses, approximate fair value.

The Company measures the fair value of its warrant liabilities using Level

The Company’s right-of-use assets consist

of leased assets recognized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

842, Leases , which requires lessees to recognize a lease liability and a corresponding lease asset for

virtually all lease contracts.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and

the lease liability represents the Company’s obligation to make lease payments arising from the lease, both of which are recognized

based on the present value of the future minimum lease payments over the lease term at the commencement date.

Leases with a lease term

of 12 months or less at inception are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the

lease term in the consolidated statement of operations and comprehensive loss.

The Company determines the lease term by agreement with

In cases where the lease does not provide an implicit interest rate, the Company uses the Company’s incremental borrowing

rate based on the information available at commencement date in determining the present value of future payments.

Stock-Based Compensation

The Company periodically issues stock options,

restricted stock units and stock awards to employees and non-employees.

The Company accounts for such awards based on FASB ASC Topic 718,

whereby the value of the award is measured on the date of grant and recognized as compensation expense on a straight-line basis over the

requisite service period, usually the vesting period.

With respect to performance-based awards, the Company assesses the probability of

achieving the requisite performance criteria before recognizing compensation expense.

The fair value of the Company’s stock options

is estimated using the Black-Scholes-Merton Option Pricing (“Black Scholes”) model, which uses certain assumptions related

to risk-free interest rates, expected volatility, expected life of the options, and future dividends.

Compensation expense is recorded

based upon the value derived from the Black-Scholes model.

The assumptions used in the Black-Scholes model could materially affect compensation

expense recorded in future periods.

Per-Share Amounts

Basic net loss per share is computed by dividing

loss for the period by the weighted-average number of shares of common stock outstanding (“WASO”) during the period.

the Company includes the number of shares of common stock issuable, including under pre-funded warrants, as outstanding for purposes

of the WASO calculation.

the Company includes the number of shares of common stock issuable, including under pre-funded warrants, as outstanding for purposes of

the WASO calculation.

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

Potentially dilutive common shares consist of incremental shares of common stock issuable upon the exercise of stock options and exercise

the six months ended September 30, 2025 and 2024, 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,

For the nine months ended December 31,

2025 and 2024, 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).

Nine Months Ended

Options to purchase common stock

2 unchanged sentences

Reclassifications

prior year amounts have been reclassified for consistency with the current period presentation.

These reclassifications had no effect

on the reported results of operations or cash flows.

Comprehensive

loss represents the changes in equity of an enterprise, other than those resulting from stockholder transactions.

Accordingly, comprehensive

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

For the three and six months ended September 30, 2025 and

2024, the Company’s comprehensive loss was the same as its net loss.

Issued Accounting Pronouncements

November 2024, the FASB issued ASU No.

2024-03, 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

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.

Certain prior year amounts have been reclassified

for consistency with the current period presentation.

These reclassifications had no effect on the reported results of operations or cash

Comprehensive Loss

Comprehensive loss represents the changes in equity

of an enterprise, other than those resulting from stockholder transactions.

Accordingly, comprehensive loss may include certain changes

in equity that are excluded from net loss.

For the three and nine months ended December 31, 2025 and 2024, the Company’s comprehensive

loss was the same as its net loss.

Recently Issued Accounting Pronouncements

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.

In December 2025, the

FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements (the “Update”), an amendment to improve

the guidance in Topic 270, Interim Report ing, by improving the navigability of the required interim disclosures and clarifying

when that guidance is applicable.

The amendments add to Topic 270 a principle that requires entities to disclose events since the end

of the last annual reporting period that have a material impact on the entity.

The amendments in this Update clarify interim disclosure

requirements and the applicability of Topic 270 apply to all entities that provide interim financial statements and notes in accordance

In addition, the amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP

with the objective to provide clarity about the current requirements.

The Update is effective for the Company for interim reporting periods

within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Update can be applied either prospectively

or retrospectively to any or all prior periods presented in the financial statements.

The Company is evaluating the impact that the Update

will have on the presentation of its consolidated financial statements.

NOTE 2 – CONSOLIDATED BALANCE SHEET DETAIL

September 30,

(in thousands)

1 unchanged sentence

Prepaid expenses

Other receivables

September 30,

(in thousands)

6 unchanged sentences

accumulated depreciation and amortization

September 30,

(in thousands)

1 unchanged sentence

Accrued wages and employee benefits

Road, San Diego, CA

48 -month lease term commenced February 1, 2023, and the lease provides for an initial base monthly rent of $ 36,000 with annual rent increases

of approximately 4 %.

In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain

other operating costs.

A discount rate of 8 %, which approximated the Company’s incremental borrowing rate, was used to measure

the lease asset and liability.

The Company obtained a right-of-use asset of approximately $ 1,560,000 in exchange for its obligations

under the operating lease.

minimum payments under the facility operating lease, as of September 30, 2025, are listed in the table below (in thousands).

NOTE 3 – LEASES

Thornmint Road, San Diego, CA

The 48 -month lease term commenced February 1,

2023, and the lease provides for an initial base monthly rent of $ 36,000 with annual rent increases of approximately 4 %.

In addition to

the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs.

A discount rate

of 8 %, which approximated the Company’s incremental borrowing rate, was used to measure the lease asset and liability.

obtained a right-of-use asset of approximately $ 1,560,000 in exchange for its obligations under the operating lease.

Future minimum payments under the facility operating

lease, as of December 31, 2025, are listed in the table below (in thousands).

Annual Fiscal Years

2 unchanged sentences

Present value of lease liability

paid for amounts included in the measurement of lease liabilities was approximately $ 234,000 and $ 225,000 for the six months ended September

30, 2025 and 2024, respectively.

Rent expense was approximately $ 225,000 for each of the six-month periods ended September 30, 2025 and

2024, respectively, and $ 113,000 for each of the three-month periods ended September 30, 2025 and 2024.

4 – STOCKHOLDERS’ EQUITY

In November 2023, the Company entered into a Sales 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.

During the three and six months ended September 30, 2025, under the ATM Agreement, the Company sold 9,200 and 1,009,200 shares of common

stock for net proceeds of $ 6,286 and $ 733,786 , respectively.

Inducement Offering

Cash paid for amounts included in the

measurement of lease liabilities was approximately $ 350,000 and $ 337,000 for the nine months ended December 31, 2025 and 2024, respectively.

Rent expense was approximately $ 337,000 for each of the nine-month periods ended December 31, 2025 and 2024 and $ 112,000

for each of the three-month periods ended December 31, 2025 and 2024.

NOTE 4 – STOCKHOLDERS’ EQUITY

In November 2023, the Company entered into a Sales

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

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 nine months ended December 31, 2025, under the ATM Agreement, the Company sold 1,870,903

and 2,880,103 shares of common stock for net proceeds of $ 1,148,107 and $ 1,881,893 , respectively.

Public Offering

On December 10, 2025, the Company entered into an Underwriting Agreement

(the “Underwriting Agreement”) with Newbridge Securities Corporation (“Newbridge”), relating to a firm commitment

underwritten offering (the “Offering”) of (i) 12,173,000 shares of the Company’s common stock, referred to as the “Firm

Shares,” and (ii) accompanying warrants exercisable to purchase up to 6,086,500 shares of the Company’s common stock (the

“Warrants”), referred to as the “Firm Warrants.” The Offering closed on December 11, 2025 (the “Closing

Date”), and the net proceeds to the Company from the Offering were approximately $ 4.1 million, after deducting underwriting discounts

and commissions and offering expenses.

Pursuant to the Agreement, the Company paid Newbridge a cash fee equal to 7 % of the gross proceeds

received from the Offering and reimbursed Newbridge for its expenses in an amount of $ 85 ,000.

In the Offering, each two shares of common

stock were offered and sold together with one accompanying warrant at a combined price of $ 0.77 , yielding an effective price of $ 0.38

per share and $ 0.01 per warrant.

The Warrants have an exercise price of $ 0.45 per share, were exercisable immediately upon issuance, and

will expire five years following the date of issuance.

Pursuant to the Underwriting Agreement, the Company granted to Newbridge a 30 -day

option (the “Over-allotment Option”) to purchase from the Company (i) up to an additional 1,825,950 shares of common stock,

representing 15 % of the Firm Shares sold in the Offering (the “Option Shares”), and/or (ii) additional Warrants to purchase

up to 912,975 shares of common stock, representing 15% of the Firm Warrants (the “Over-allotment Warrants”) sold in the Offering,

solely for the purpose of covering over-allotments of such securities.

Newbridge exercised the Over-allotment Option in full, and, on

December 22, 2025 (the “Over-Allotment Closing Date”), the Company issued the full amount of Option Shares and Over-allotment

Warrants for net proceeds of approximately $ 0.7 million.

As discussed in Note 5, the Firm Warrants and the Over-allotment Warrants had

a total fair value at the dates of issuance of $ 1,781,699 and are accounted for as liabilities.

The Company also agreed to issue to Newbridge

on the Closing Date and each Over-allotment Option closing date, warrant (the “Underwriter Warrants”) for the purchase of

a number of shares of common stock equal to an aggregate of 7 % of the Firm Shares sold on the Closing Date (equal to 852,110 shares) and

7 % of the Option Shares sold on each Over-allotment Option Closing Date (equal to 127,816 shares).

The Underwriter Warrants have substantially

the same terms as the Firm Warrants, except that the Underwriter Warrants have an exercise price of $ 0.462 per share, are not exercisable

for 180 days from the Closing Date and will include piggyback registration rights that are triggered if there is not an effective registration

statement covering all of the shares of common stock issuable upon exercise of the Underwriter Warrants.

As discussed in Note 5, the Underwriter

Warrants had a total fair value at the dates of issuance of $ 248,294 and are accounted for as liabilities.

Warrant Inducement Offering

In September 2025, the Company entered into inducement

8 unchanged sentences

of the date of issuance.

As of September 30, 2025, the Company had

issued 5,860,483 shares of common stock and 2,930,242 September 2025 Warrants, and the processing of the exercise of 175,500 2023 Warrants and 468,748 2025 Warrants was pending.

As a result, as of September 30, 2025, 644,248 shares

of common stock (the “Issuable Shares”) and 322,124 September 2025 Warrants were pending issuance.

The fair value of the unissued Issuable Shares has been presented separately as issuable shares on the condensed consolidated balance

sheets and statements of stockholders’ equity as of September 30, 2025.

The Company accounted

for the issuance of the:

i) shares of its common stock and ii) the September 2025 Warrants as a single equity transaction for gross

proceeds of approximately $ 4.4 million, which proceeds had been received in full as of September 30, 2025.

relation to the above warrant inducement offering, the Company engaged Newbridge Securities Corporation as the servicing agent and paid

a fee of $ 400,000 and expense reimbursement of $ 50,000 .

Equity-Classified

following table sets forth changes in the number of common stock purchase warrants outstanding during fiscal 2026 (share amounts in thousands):

As of December 31, 2025, the Company had issued

6,495,481 shares of common stock and 3,247,741 September 2025 Warrants.

As of December 31, 2025, 9,250 shares of common stock (the “Issuable

Shares”) and 4,625 September 2025 Warrants were pending issuance.

The fair value of the unissued Issuable Shares has been presented

separately as issuable shares on the condensed consolidated balance sheets and statements of stockholders’ equity as of December

The Company accounted for the issuance of the:

i) shares of its common stock and ii) the September 2025 Warrants as a single

equity transaction for gross proceeds of approximately $ 4.4 million, which proceeds had been received in full as of September 30, 2025.

In relation to the above warrant inducement offering, the Company engaged Newbridge as the servicing agent and paid it a fee of $ 400 ,000

and expense reimbursement of $ 50 ,000.

Equity-Classified Warrants

The following table sets forth changes in the

number of common stock purchase warrants outstanding during fiscal 2026 (share amounts in thousands):

Number of Exercise

7 unchanged sentences

Balance as of September 30, 2025 15,100

of September 30, 2025, the Company had the following warrants outstanding (share amounts in thousands):

Warrants issued 317 0.84 September 2030

Warrants exercised ( 166 ) 0.68 May 2028

Warrants exercised ( 469 ) 0.68 March 2029

Balance as of December 31, 2025 14,782

As of December 31, 2025, the Company had the following warrants outstanding

(share amounts in thousands):

Number of Exercise

9 unchanged sentences

Common stock 1,438 6.60 November 2027

Issuances to Service Providers

During the six months ended September 30, 2025

and 2024, the Company issued 10,000 and 30,000 shares of common stock, respectively, with fair values of approximately $ 11,000 and $ 51,000 , respectively,

to service providers.

5 – STOCK-BASED COMPENSATION

and Restated 2017 Equity Incentive Plan

October 2017, the Company’s board of directors (the “Board”) approved the 2017 Equity Incentive Plan (the “Plan”)

with 1,000,000 shares of common stock reserved for issuance.

In January 2020 and August 2021, the Board approved increases in the number

of shares reserved for issuance under the Plan by 333,334 and 1,333,334 shares, respectively.

In January 2023, February 2024 and February

2025, the Company’s stockholders approved increases in the number of shares reserved for issuance under the Plan by an additional

2,000,000 , 3,000,000 and 3,000,000 shares, respectively.

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

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

stock units (“RSUs”).

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

Compensation Expense

options granted by the Company generally vest over 36 months and have a 10 -year term.

As of September 30, 2025, the unamortized compensation

cost related to stock options was approximately $ 1,526,736 and is expected to be recognized as expense over a weighted-average period

of approximately 1.12 years.

April 2025, under its Two-Part FDA Submission and Product Milestone Bonus Program, the Company granted stock options for 1,941,000 shares,

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

As of June 30, 2025, the Company had commenced expense recognition for all 1,941,000 of these option shares based on its assessment of

the probability of achievement of the applicable performance requirements, including (i) submission of the 510(k) to the FDA for the

Pivot pump product on or before October 31, 2025 and (ii) validation of the manufacturing line validated for the Pivot pump product with

capacity to serve 6,000 patents by March 15, 2026.

weighted-average grant date fair value of options granted was $ 0.74 and $ 1.41 per share for the six months ended September 30, 2025

and 2024, respectively, and $ 0.56 and $ 1.51 for the three months ended September 30, 2025 and 2024, respectively.

The following assumptions

were used in the fair-value method calculations:

Share Issuances to Service Providers

During the nine months ended December 31, 2025

and 2024, the Company issued 10,000 and 30,000 shares of common stock, respectively, with fair values of approximately $ 11 ,000 and $ 51 ,000,

respectively, to service providers.

Note 5 – WARRANTS CLASSIFIED AS LIABILITIES

As of the Closing Date and Over-Allotment Closing Date, the Company

did not have adequate authorized shares of common stock to settle all of the Firm Warrants, the Over-allotment Warrants and the Underwriter

Warrants (collectively, the “Offering Warrants”).

Therefore, pursuant to ASC No.

480, the Company has classified the Offering

Warrants as liabilities in its condensed consolidated balance sheets.

The classification of the Offering Warrants, including whether the

Offering Warrants should be recorded as liabilities or as equity, is evaluated at the end of each reporting period with changes in the

fair value reported in other income (expense) in the condensed consolidated statements of operations.

The fair values of the Firm Warrants and Underwriter Warrants issued

on the Closing Date were determined using the Black Scholes model with the following assumptions:

(i) expected term based on the remaining

contractual terms, (ii) risk-free interest rate of 3.7 %, which was based on a comparable US Treasury 5-year bond, (iii) expected volatility

of 102.8 % and (iv) an expected dividend of zero .

The fair values of the Underwriter Warrants and Over-Allotment Warrants

issued on the Over-Allotment Closing Date, were determined using the Black Scholes model with the following assumptions:

term based on the remaining contractual terms, (ii) risk-free interest rate of 3.7 %, which was based on a comparable US Treasury 5-year

bond, (iii) expected volatility of 102.6 % and (iv) an expected dividend of zero .

The fair values of the Offering Warrants at December 31, 2025, were

determined using the Black Scholes model with the following assumptions:

(i) expected term based on the remaining contractual terms, (ii)

risk-free interest rate of 3.7 %, which was based on a comparable US Treasury 5-year bond, (iii) expected volatility of 102.8 % and (iv)

an expected dividend of zero .

As of December 31, 2025, the Company had the following liability-classified

warrants outstanding (amounts in thousands):

Number of Warrants

on Common Shares

Balance as of March 31, 2025

Recognition of warrant liability

Loss on change in fair value of warrants

Balance as of December 31, 2025

NOTE 6 – STOCK-BASED COMPENSATION

Amended and Restated 2017 Equity Incentive Plan

In October 2017, the Company’s board of

directors (the “Board”) approved the 2017 Equity Incentive Plan (the “Plan”) with 1,000,000 shares of common stock

reserved for issuance.

In January 2020 and August 2021, the Board approved increases in the number of shares reserved for issuance under

the Plan by 333,334 and 1,333,334 shares, respectively.

In January 2023, February 2024 and February 2025, the Company’s stockholders

approved increases in the number of shares reserved for issuance under the Plan by an additional 2,000,000 , 3,000,000 and 3,000,000 shares,

respectively.

Under the Plan, eligible employees, directors and consultants may be granted a broad range of awards, including stock options,

stock appreciation rights, restricted stock, performance-based awards and restricted stock units (“RSUs”).

The Plan is administered

by the Board or, in the alternative, a committee designated by the Board.

Stock-Based Compensation Expense

Stock options granted by the Company generally

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

As of December 31, 2025, the unamortized compensation cost related to stock options was approximately

$ 1,111,826 and is expected to be recognized as expense over a weighted-average period of approximately 1.10 years.

In April 2025, under its Two-Part FDA Submission

and Product Milestone Bonus Program (the “Program”, the Company granted stock options for 1,941,000 shares, which are subject

to vesting based upon achievement of two performance milestones by the Company and continued service by the optionee.

The two performance

milestones set forth under the Program were (i) submission of the 510(k) to the FDA for the Pivot pump product on or before October 31,

2025 (“Milestone 1”) and (ii) validation of the manufacturing line validated for the Pivot pump product with capacity to serve

6,000 patients by March 15, 2026 (“Milestone 2”).

The Company has commenced expense recognition for all option shares issued

under the Program based on its assessment of the probability of achievement of the applicable performance requirements.

During the quarter

ended December 31, 2025, the 945,500 outstanding Milestone 1 options vested.

The weighted-average grant date fair value of

options granted was $ 0.71 and $ 1.42 per share for the nine months ended December 31, 2025 and 2024, respectively, and $ 0.39 and $ 1.56

for the three months ended December 31, 2025 and 2024, respectively.

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

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Risk-free interest rates

9 unchanged sentences

Expected dividend %

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

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

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

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

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

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

in the foreseeable future.

The Company accounts for forfeitures as they occur.

following table summarizes the activity in the shares available for grant under the Plan during the six months ended September 30, 2025:

The fair values of options at the grant date were

estimated utilizing the Black-Scholes valuation model, which includes simplified methods to establish the fair term of options, as well

as average volatility.

The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates, as published by the U.S.

of the Treasury as of the grant date for terms equal to the expected terms of the options.

A dividend yield of zero was applied because

the Company has never paid dividends and has no intention to pay dividends in the foreseeable future.

The Company accounts for forfeitures

as they occur.

The following table summarizes the activity in

the shares available for grant under the Plan during the nine months ended December 31, 2025:

Options Outstanding

7 unchanged sentences

Balance at September 30, 2025

were no stock options exercised during the six months ended September 30, 2025.

A stock option was exercised on a cashless basis for

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

During the six months ended September 30, 2025 and 2024,

the Company awarded 12,750 and 7,750 shares, respectively, and for the three months ended September 30, 2025 and 2024, the Company awarded

6,375 and 3,875 shares, respectively, to its non-employee directors under the Company’s outside director compensation plan.

the six months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense for these share awards of approximately

$ 9,000 and $ 15,000 , respectively, and for the three months ended September 30, 2025 and 2024, the Company recorded stock-based compensation

expense for these share awards of approximately $ 4,000 and $ 9,000 , respectively.

summary of restricted stock unit (RSU) activity under the Plan is presented below.

Options granted

Options cancelled and returned to the Plan

Balance at December 31, 2025

There were no stock options exercised during the

nine months ended December 31, 2025.

A stock option was exercised on a cashless basis for 7,530 shares of common stock during the nine

months ended December 31, 2024.

During the nine months ended December 31, 2025 and 2024, the Company awarded 19,125 and 11,625 shares,

respectively, and for the three months ended December 31, 2025 and 2024, the Company awarded 6,375 and 3,875 shares, respectively, to

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

For the nine months ended December 31, 2025 and

2024, the Company recorded stock-based compensation expense for these share awards of approximately $ 11,000 and $ 20,000 , respectively,

and, for the three months ended December 31, 2025 and 2024, the Company recorded stock-based compensation expense for these share awards

of approximately $ 2,000 and $ 5,000 , respectively.

A summary of restricted stock unit RSU activity

under the Plan is presented below.

Non-vested shares at March 31, 2025

1 unchanged sentence

Non-vested shares at September 30, 2025

total intrinsic value of RSUs outstanding as of September 30, 2025 was approximately $ 44,000 .

The unamortized compensation cost at September

30, 2025 was approximately $ 58,000 related to RSUs and is expected to be recognized as expense over a period of approximately 0.75 years.

following table summarizes the range of outstanding and exercisable options as of September 30, 2025:

Non-vested shares at December 31, 2025

The total intrinsic value of RSUs outstanding

as of December 31, 2025 was approximately $ 15,000 .

The unamortized compensation cost at December 31, 2025 was approximately $ 39,000 related

to RSUs and is expected to be recognized as expense over a period of approximately 0.50 years.

The following table summarizes the range of outstanding and exercisable

options as of December 31, 2025:

Options Outstanding Options Exercisable

7 unchanged sentences

$0.36 - $17.70 7,340,122 7.69 2.38 5,269,261 2.91 182

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

market over the exercise price of the option.

6 – INCOME TAXES

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

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

taxable income.

A valuation allowance is established for any deferred tax assets for which it is more likely than not that all or a portion

of the deferred tax assets will not be realized.

Based on the available information and other factors, management believes it is more

likely than not that its federal and state net deferred tax assets will not be fully realized, and the Company has recorded a full valuation

Company files U.S.

federal and state income tax returns in jurisdictions with varying statutes of limitations.

All tax returns for fiscal

2018 to fiscal 2025 may be subject to examination by the U.S.

The intrinsic value per share is calculated as

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

NOTE 7 – INCOME TAXES

The Company determines deferred tax assets and

liabilities based upon the differences between the financial statement and tax bases of the Company’s assets and liabilities using

tax rates in effect for the year in which the Company expects the differences to affect taxable income.

A valuation allowance is established

for any deferred tax assets for which it is more likely than not that all or a portion of the deferred tax assets will not be realized.

Based on the available information and other factors, management believes it is more likely than not that its federal and state net deferred

tax assets will not be fully realized, and the Company has recorded a full valuation allowance.

The Company files U.S.

federal and state income

tax returns in jurisdictions with varying statutes of limitations.

All tax returns for fiscal 2018 to fiscal 2025 may be subject to examination

federal and state tax authorities.

As of September 30, 2025, the Company

has not recorded any liability for unrecognized tax benefits related to uncertain tax positions.

7 – COMMITMENTS AND CONTINGENCIES

Claims and Assessments

the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary

course of business.

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and

estimable settlements.

As of December 31, 2025, the Company has not recorded any liability for unrecognized tax

benefits related to uncertain tax positions.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Litigations, Claims and Assessments

In the normal course of business, the Company

may be involved in legal proceedings, claims and assessments arising in the ordinary course of business.

The Company records legal costs

associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

Indemnification

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

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

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

or claims relating to past performance.

In the ordinary course of business, the Company

enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach

of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined

within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance.

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

The Company has also

entered into indemnification agreements with its officers and directors.

No amounts were reflected in the Company’s consolidated

financial statements for the three and six months ended September 30, 2025 and 2024 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.

Company’s primary purchase obligations include purchase orders for machinery and equipment.

At September 30, 2025, the Company

had outstanding purchase orders for machinery and equipment and related expenditures of approximately $ 1,719,000 .

8 – BUSINESS SEGMENT AND CONCENTRATIONS

Company determines its reporting units in accordance with ASC No.

280, Segment Reporting (“ASC 280”), as amended by

The Company has also entered into indemnification agreements

with its officers and directors.

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

nine months ended December 31, 2025 and 2024 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.

Purchase Obligations

The Company’s primary purchase obligations

include purchase orders for machinery and equipment.

At December 31, 2025, the Company had outstanding purchase orders for machinery and

equipment and related expenditures of approximately $ 1,993,000 .

NOTE 9 – BUSINESS SEGMENT AND CONCENTRATIONS

Segment Information

The Company determines its reporting units in

accordance with ASC No.

280, Segment Reporting (“ASC 280”), as amended by ASU No.

2023-07, Segment Reporting (Topic

Improvements to Reportable Segment Disclosures , which the Company adopted effective

March 31, 2025.

Management evaluates a reporting unit by first identifying its operating segments under ASC 280.

The Company then evaluates

each operating segment to determine if it includes one or more components that constitute a business.

If there are components within

an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated

into one or more reporting units.

If applicable, when determining if it is appropriate to aggregate different operating segments, the

Company determines if the segments are economically similar and, if so, the operating segments are aggregated.

Company’s chief executive officer is the chief operating decision maker (the “CODM”), and the CODM evaluates financial

performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis, including

consolidated net income (loss).

Because the CODM evaluates financial performance on a consolidated basis, the Company operates and manages

its business as one reportable and operating segment as a medical device company focused on the design, development and eventual commercialization

of innovative insulin pumps using modernized technology.

The measure of segment assets is reported on the balance sheet as total consolidated

The Company’s reporting segment meets the definition of an operating segment and does not include the aggregation of multiple

operating segments.

segment expenses include research and development expenditures, salaries and benefits, and stock-based compensation.

Operating expenses

include all remaining costs necessary to operate the Company’s business, which primarily include facilities, external professional

services and other administrative expenses.

The following table presents the significant segment expenses and other segment items regularly

reviewed by the CODM:

September 30,

Improvements to Reportable Segment Disclosures , which the Company adopted effective March 31, 2025.

Management evaluates a reporting

unit by first identifying its operating segments under ASC 280.

The Company then evaluates each operating segment to determine if it includes

one or more components that constitute a business.

If there are components within an operating segment that meet the definition of a business,

the Company evaluates those components to determine if they must be aggregated into one or more reporting units.

If applicable, when determining

if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if

so, the operating segments are aggregated.

The Company’s chief executive officer is

the chief operating decision maker (the “CODM”), and the CODM evaluates financial performance and makes operating decisions

about allocating resources based on financial data presented on a consolidated basis, including consolidated net income (loss).

the CODM evaluates financial performance on a consolidated basis, the Company operates and manages its business as one reportable and

operating segment as a medical device company focused on the design, development and eventual commercialization of innovative insulin

pumps using modernized technology.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The Company’s

reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments.

Significant segment expenses include research

and development expenditures, salaries and benefits, and stock-based compensation.

Operating expenses include all remaining costs necessary

to operate the Company’s business, which primarily include facilities, external professional services and other administrative expenses.

The following table presents the significant segment expenses and other segment items regularly reviewed by the CODM:

(in thousands)

2 unchanged sentences

Other operating expenses

Other expense

Concentrations

instruments that potentially subject the Company to concentration of credit risk consist primarily of cash held in demand deposit accounts.

The Company maintains its cash at high credit quality financial institutions within the United States, which are insured by the Federal

Deposit Insurance Corporation up to limits of approximately $ 250,000 .

No reserve has been made in the financial

statements for any possible loss due to financial institution failure.

following table lists significant vendors that represented more than 10% of the Company’s total accounts payable balance at each

respective balance sheet date:

September 30,

less than 10%

9 – RELATED PARTY TRANSACTIONS

family member of one of the Company’s executive officers is an employee of the Company.

During the three months ended September

30, 2025 and 2024, the Company paid the family member approximately $ 33,760 and $ 43,365 , respectively, which includes the aggregate grant

date fair values, as determined pursuant to FASB ASC Topic 718, of any stock options granted during each period.

During the six months

ended September 30, 2025 and 2024, the Company paid the family member approximately $ 86,460 and $ 100,625 , respectively, which includes

the aggregate grant date fair values, as determined pursuant to FASB ASC Topic 718, of any stock options granted during each period.

Financial instruments that potentially

subject the Company to concentration of credit risk consist primarily of cash held in demand deposit accounts.

The Company maintains its

cash at high credit quality financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation

up to limits of approximately $ 250,000 .

No reserve has been made in the financial statements for any possible loss due to financial institution

The following table lists significant vendors

that represented more than 10% of the Company’s total accounts payable balance at each respective balance sheet date:

* Represents less than 10%

NOTE 10 – RELATED PARTY TRANSACTIONS

A family member of one of the Company’s

executive officers is an employee of the Company.

During the three months ended December 31, 2025 and 2024, the Company paid the family

member approximately $ 33,760 and $ 38,191 , respectively.

During the nine months ended December 31, 2025 and 2024, the Company paid the

family member approximately $ 120,220 and $ 138,510 , respectively, which includes the aggregate grant date fair values, as determined pursuant

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

A second family member of one of the Company’s

executive officers consulted with and became an employee of the Company during 2025.

During the three months ended September 30, 2025,

the Company paid the family member approximately $ 16,000 , which includes the aggregate grant date fair values, as determined pursuant

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

During the six months ended September 30, 2025, the Company paid

the family member approximately $ 34,600 , which includes the aggregate grant date fair values, as determined pursuant to FASB ASC Topic

718, of any stock options granted during each period.

During the three months ended December 31, 2025,

the Company paid the family member approximately $ 16 ,000.

During the nine months ended December 31, 2025, the Company paid the family

member approximately $ 50,600 , which includes the aggregate grant date fair values, as determined pursuant to FASB ASC Topic 718, of stock

options granted.

Two members of the Board participated in the Offering

and purchased 60,000 and 22,000 shares, respectively, and accompanying warrants for net proceeds to the Company of $ 46,200 and $ 16,940 , respectively.

NOTE 11 – SUBSEQUENT EVENTS

Subsequent to September 30, 2025, under the ATM

Agreement, the Company sold 1,793,064 shares of common stock for net proceeds of approximately $ 1.1 million.

On January 23, 2026, the Company’s shareholders

approved increases to:

i) the number of shares reserved for issuance under the Plan by 3,000,000 shares and ii) the authorized shares

of common stock from 100,000,000 to 250,000,000 .

On January 23, 2026, the Company filed a certificate of amendment to its Amended

and Restated Articles of Incorporation with the secretary of state of the state of Nevada to increase its number of authorized shares

of common stock to 250,000,000 .

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