What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-14 compared with 2026-02-17 · 238 added, 550 removed, 173 unchanged (82% of the section changed)

9 unchanged sentences

Right of use asset, net 257 363

Other assets 61 61

TOTAL ASSETS $ 12,253 $ 14,832

LIABILITIES AND STOCKHOLDERS’ EQUITY

4 unchanged sentences

TOTAL CURRENT LIABILITIES 1,489 1,873

Warrant liabilities

Long-term lease liabilities

TOTAL LIABILITIES 1,489 1,873

3 unchanged sentences

Common Stock, $ 0.001 par value, 250,000 shares authorized;

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

5,571 and 4,661 shares issued and outstanding as of June 30, 2026 and March 31, 2026, respectively 6 5

Additional paid-in capital 130,111 125,949

3 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 12,253 $ 14,832

The accompanying notes are an integral part of

these condensed consolidated financial statements.

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

Modular Medical, Inc.

2 unchanged sentences

Three Months Ended

Nine Months Ended

Operating expenses

3 unchanged sentences

Loss from operations ( 6,538 ) ( 6,804 )

Change in fair value of warrant liabilities

Loss before income taxes

Provision for income taxes

Other income 52 102

Net loss $ ( 6,486 ) $ ( 6,702 )

Net loss per share

2 unchanged sentences

Basic and diluted 5,452 1,810

The accompanying notes are an integral part of

these condensed consolidated financial statements.

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

Modular Medical, Inc.

Condensed Consolidated Statements of Stockholders’

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

4 unchanged sentences

At-the-market sales of stock, net 157 — 29 128 700 — 828

Exercise of warrants

Issuance of common stock in registered direct offering, net 750 1 — — 2,963 — 2,964

Reversal of offering expense overpayment — — — — 45 — 45

Issuances under equity incentive plan 1 — — — 1 — 1

Stock-based compensation — — — — 446 — 446

Net loss — — — — — ( 6,486 ) ( 6,486 )

Balance as of June 30, 2026 5,571 $ 6 $ 29 128 130,111 $ ( 119,481 ) $ 10,764

At-the-market sales of stock, net

Issuance of common stock and warrants from warrant inducement offering

Issuances under equity incentive plan

Stock-based compensation

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

2 unchanged sentences

Shares issued for services — — — — 11 — 11

Exercise of warrants

Issuances under equity incentive plan

Stock-based compensation

Balance as of June 30, 2024

Shares issued for services

Exercise of warrants

At-the-market sales of stock, net 33 — — — 728 — 728

Issuances under equity incentive plan

Stock-based compensation

Balance as of September 30, 2024

Issuance of common stock in equity offering, net

Exercise of warrants 18 — — — 5 — 5

At-the-market sales of stock, net

Issuances under equity incentive plan 1 — — — 4 — 4

Stock-based compensation — — — — 720 — 720

Balance as of December 31, 2024

The accompanying notes are an integral part of

these condensed consolidated financial statements.

Net loss — — — — — ( 6,702 ) ( 6,702 )

Balance as of June 30, 2025 1,842 $ 2 — — $ 103,296 $ ( 91,455 ) $ 11,843

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

Modular Medical, Inc.

1 unchanged sentence

(In thousands)

Nine Months Ended

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss $ ( 6,486 ) $ ( 6,702 )

Adjustments to reconcile net loss to net cash used in operating activities:

1 unchanged sentence

Depreciation and amortization 501 410

Change in fair value of warrant liabilities

Shares issued for services 2 2

Other ( 1 ) —

Changes in assets and liabilities:

8 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from exercise of common stock warrants — 5

Fees paid for warrant inducement offering, net ( 26 ) —

Proceeds from at-the-market sales of common stock, net 700 728

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

Proceeds from registered direct offering, net 2,964 —

Net cash provided by financing activities 3,638 733

2 unchanged sentences

Cash and cash equivalents at end of period $ 3,920 $ 7,522

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

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

NOTE 1 – THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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.

(the “Company”) is a commercial-stage medical device company focused on the design, development and commercialization of innovative insulin pumps using modernized technology to increase pump adoption in the diabetes marketplace.

Through the creation of an innovative two-part patch pump, its initial product, 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 (the “FDA”) for its initial product, the MODD1, and, in September 2024, the Company received FDA clearance to market and sell the MODD1 pump in the United States.

In August 2025, the Company announced the first human use of the MODD1 pump delivering insulin to a human patient.

In addition, in August 2025, the Company announced its next-generation patch pump, branded as Pivot.

The Company submitted a 510(k) premarket notification to the FDA for its Pivot product in November 2025, and the Company received regulatory approval in April 2026.

In June 2026, the Company announced commercial availability of its Pivot product and commenced initial shipments in the United States.

The Company is actively working to i) expand commercial activities for its Pivot product across metropolitan markets, ii) obtain regulatory clearance to market and sell its Pivot product in foreign jurisdictions, iii) improve the manufacturability and usability of its Pivot product and iv) develop new pump products.

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.

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.

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, 2026, 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 Notes 4 and 10, the Company completed a registered direct offering in April 2026, and, in June 2026, commenced sales under an at the market offering 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.

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 2027 refers to the fiscal year ending March 31, 2027).

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

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 Securities and Exchange Commission (the “SEC”) regarding interim financial reporting.

The condensed consolidated balance sheet as of March 31, 2026 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.

The operating results for the three months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending March 31, 2027 or for any other future period.

Reverse Stock Split

On March 30, 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 (the “Amendment”) to effect a one (1)-for-thirty (30) reverse stock split of the Company’s shares of common stock.

Such Amendment and ratio were previously approved by a majority of the Company’s stockholders and by the board of directors.

As a result of the reverse stock split, which was effective for trading purposes on March 31, 2026, every 30 shares of the Company’s pre-reverse split outstanding common stock and exchangeable shares were combined and reclassified into one share of common stock.

Proportionate voting rights and other rights of holders of common stock were not affected by the reverse stock split.

Any fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole share.

All stock options and restricted stock units outstanding and common stock reserved for issuance under the Company’s equity incentive plan and warrants outstanding immediately prior to the reverse stock split were adjusted by dividing the number of affected shares of common stock by 30 and, as applicable, multiplying the exercise price by 30, as a result of the reverse stock split.

All share and per-share amounts in these condensed consolidated financial statements have been restated to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.

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.

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.

2 unchanged sentences

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.

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.

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.

Pre-launch Inventory

The Company capitalizes inventories produced in preparation for product launches when commercialization of the related products is deemed probable, risks and uncertainties regarding ultimate regulatory approval and market acceptance have been significantly reduced and the Company has determined it is probable that these capitalized costs will provide some future economic benefit in excess of capitalized costs.

The determination to capitalize is based on the particular facts and circumstances including but not limited to factors such as uncertainties surrounding receipt and analysis of positive clinical trial results, results from meetings with the relevant regulatory authorities prior to the filing of regulatory applications, all relevant communication with regulatory authorities during the regulatory application process, the status of the regulatory approval process, the Company’s historical experience with manufacturing and commercializing similar products and the relevant product candidate, existence of specific issues identified relating to safety, efficacy, manufacturing, marketing or labeling, shelf lives and anticipated volume, timing and estimated selling prices of future sales.

Capitalized pre-launch inventory, if any, is measured in accordance with Accounting Standards Codification (“ASC”) No.

330, Inventory , at the lower of cost or net realizable value and is assessed each reporting period for impairment, including risks associated with delays in regulatory approval or changes in expected demand, with any write-downs recognized in earnings.

Property and Equipment

Property and equipment are recorded at historical

Property 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.

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.

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:

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.

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

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

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

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.

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 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.

The expected option term is computed using the “simplified” method as permitted under the provisions of ASC Topic 718.

The Company uses the simplified method to calculate expected term of share options and similar instruments, as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

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.

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.

In addition, the Company includes the number of shares of common stock issuable 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

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

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

For the three months ended June 30, 2026 and 2025, the following table sets forth securities outstanding which were excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive (in thousands).

Three Months Ended

Options to purchase common stock 426 240

1 unchanged sentence

Common stock purchase warrants 3,029 601

Total 3,455 844

Reclassifications

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

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 flows.

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.

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 months ended June 30, 2026 and 2025, 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.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements (the “Update”), an amendment to improve the guidance in Topic 270, Interim Reporting , 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 with GAAP.

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

2026 March 31,

(in thousands)

1 unchanged sentence

Prepaid expenses $ 686 $ 583

Other receivables 239 17

Total $ 925 $ 600

2026 March 31,

(in thousands)

5 unchanged sentences

Office equipment 45 45

10,819 10,094

accumulated depreciation and amortization ( 3,729 ) ( 3,228 )

Total $ 7,090 $ 6,866

2026 March 31,

(in thousands)

1 unchanged sentence

Accrued wages and employee benefits $ 594 $ 413

Total $ 607 $ 488

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

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.

The Company 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 June 30, 2026, are listed in the table below (in thousands).

Annual Fiscal Year

Total future lease payments $ 283

1 unchanged sentence

Present value of lease liability $ 278

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.

Cash paid for amounts included in the measurement of lease liabilities was approximately $ 122,000 and $ 117,000 for the three months ended June 30, 2026 and 2025, respectively.

Rent expense was approximately $ 112,000 for each of the three-month periods ended June 30, 2026 and 2025.

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

offer letter agreements (the “Inducement Letters”) with certain holders (the “Holders”) of warrants issued in

May 2023 (the “2023 Warrants”) and in March 2025 (the “March 2025 Warrants” and, collectively with the 2023 Warrants,

the “Existing Warrants”) to purchase up to an aggregate of 6,504,731 shares of the Company’s common stock.

to the Inducement Letters, the Holders agreed to exercise for cash i) 2023 Warrants to purchase 1,901,700 shares of common stock with

an original exercise price of $ 1.22 per share and ii) March 2025 Warrants to purchase 4,603,031 shares with an original exercise price

of $ 1.12 per share at a reduced exercise price of $ 0.68 per share in consideration for the Company’s agreement to issue in a private

placement new common stock purchase warrants to purchase an aggregate of 3,252,366 shares (the “September 2025 Warrants”).

The September 2025 Warrants have an exercise price of 0.84 per share, were exercisable upon issuance and expire on the five-year anniversary

of the date of issuance.

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

Shares Price ($) Expiration

Balance as of March 31, 2025 18,561

Warrants exercised ( 531 ) 0.01 —

Balance as of June 30, 2025 18,030

Warrants issued 2,930 0.84 September 2030

Warrants exercised ( 1,726 ) 0.68 May 2028

Warrants exercised ( 4,134 ) 0.68 March 2029

Balance as of September 30, 2025 15,100

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

Type Shares Price ($) Expiration

ATM Offering Programs

Leerink ATM Agreement

In November 2023, the Company entered into a Sales Agreement (the “Leerink ATM Agreement”) with Leerink Partners LLC (“Leerink”) under which the Company offered and sold, from time to time at its sole discretion, shares of its common stock, through an “at the market offering” program under which Leerink acted as sales agent or principal.

On April 17, 2026, the Leerink ATM Agreement was terminated.

Maxim ATM Agreement

On April 23, 2026, the Company entered into a Sales Agreement (the “2026 ATM Agreement”) with Maxim Group LLC (“Maxim”) under which the Company may offer and sell, from time to time at its sole discretion, up to $ 100,000,000 of shares of its common stock through an “at the market offering” program under which Maxim will act as sales agent or principal.

The 2026 ATM Agreement provides that Maxim 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 2026 ATM Agreement.

The Company has no obligation to sell any shares under the 2026 ATM Agreement and may, at any time, suspend solicitation and offers under the 2026 ATM Agreement.

April 2026 Registered Direct Offering

On April 19, 2026, the Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with Maxim, relating to a registered direct offering (the “April Offering”) of 750 ,000 shares of the Company’s common stock, referred to as the “Shares.” The April Offering closed on April 21, 2026, and the gross proceeds to the Company from the April Offering were approximately $ 3.375 million, before deducting the placement agent fee and other offering expenses.

Pursuant to the Placement Agency Agreement, the Company paid Maxim a cash fee equal to 7 % of the gross proceeds received from the April Offering and reimbursed Maxim $ 75,000 for its expenses incurred in connection with the April Offering.

As of June 30, 2026 and March 31, 2026, the Company had the following warrants outstanding (share amounts in thousands):

Type Number of

Shares Exercise

Price Expiration

Common stock 2,270 $ 5.29 March 2031

Common stock 108 25.20 September 2030

Common stock 33 13.86 December 2030

Common stock 233 13.50 December 2030

Common stock 13 56.25 November 2029

Common stock 64 33.60 March 2029

Common stock 29 42.00 March 2029

Common stock 200 0.03 —

Common stock 16 39.60 May 2027

Common stock 56 36.60 May 2028

Common stock 875 1.40 March 2029

Common stock 381 1.875 November 2029

Common stock 768 6.00 January 2027 - February 2027

Common stock 133 198.00 February 2027

Common stock 48 198.00 November 2027

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

Common stock 26 $ 180.00 January 2027 - February 2027

During the three months ended June 30, 2026, the Company issued 2 ,000 shares of common stock with a fair value of approximately $ 6,900 to a service provider.

NOTE 5 – 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.

Amended 2017 Equity Incentive Plan

In October 2017, the Company’s board of directors (the “Board”) approved the Amended and Restated 2017 Equity Incentive Plan, as amended (the “Plan”) with 33,334 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 11,112 and 44,444 shares, respectively.

In January 2023, February 2024, February 2025 and January 2026, the Company’s stockholders approved increases in the number of shares reserved for issuance under the Plan by an additional 66,667 , 100,000 , 100,000 and 100,000 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.

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

As of June 30, 2026, the unamortized compensation cost related to stock options was approximately $ 990,185 and is expected to be recognized as expense over a weighted-average period of approximately 0.44 years.

The weighted-average grant date fair value of options granted was $ 2.90 and $ 22.50 per share for the three months ended June 30, 2026 and 2025, respectively.

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

Three Months Ended

Nine Months Ended

Risk-free interest rates 4.19 % - 4.23 % 3.79 % - 4.14 %

3.7 % - 3.8 %

3.9 % - 4.4 %

3.7 % - 4.1 %

3.5 % - 4.4 %

102 % - 106 %

110 % - 113 %

102 % - 107 %

110 % - 123 %

Volatility 108 % - 109 % 105 % - 107 %

Expected life (years) 5.0 - 5.7 5.0 - 5.7

Expected dividend %

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 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.

The expected volatility is based on the historical volatility of the Company’s stock price.

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:

Department 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 three months ended June 30, 2026 (in thousands, except exercise price):

Options Outstanding

Shares Average

Available Number of Exercise

for Grant Shares Prices ($)

Balance at March 31, 2026 117 326 51.97

Share awards — — 4.88

Options granted ( 118 ) 118 3.53

( 2,291,172 )

Options cancelled and returned to the Plan 18 ( 18 ) 54.76

Balance at June 30, 2026 17 426 38.42

Options granted

Options cancelled and returned to the Plan

Balance at September 30, 2025

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

There were no stock options exercised during the three months ended June 30, 2026 and 2025.

During the three months ended June 30, 2026 and 2025, the Company awarded 218 and 214 shares, respectively, to its non-employee directors under the Company’s outside director compensation plan.

For the three months ended June 30, 2026 and 2025, the Company recorded stock-based compensation expense for these share awards of approximately $ 1,000 and $ 4,000 , respectively.

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

Shares Grant-Date

Fair Value ($)

Balance at March 31, 2026 695 0.91

Vested ( 695 ) 0.91

Non-vested shares at June 30, 2026 —

Non-vested shares at 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:

The following table summarizes the range of outstanding and exercisable options as of June 30, 2026 (in thousands, except contractual life and exercise price):

Options Outstanding Options Exercisable

Remaining Weighted Weighted

Contractual Average Average Aggregate

Number Life Exercise Number Exercise Intrinsic

Range of Exercise Price Outstanding (in Years) Price ($) Exercisable Price ($) Value ($)

Range of Exercise Price Number

Outstanding Weighted

(in Years) Weighted

Price ($) Number

Exercisable Weighted

Price ($) Aggregate

$3.46 - $64.80 381 8.92 17.62 140 36.19 $ —

2 unchanged sentences

$3.46 - $531.00 426 8.50 38.42 185 79.65 $ —

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.

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

NOTE 6 – 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 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 income tax returns in jurisdictions with varying statutes of limitations.

All tax returns for fiscal 2018 to fiscal 2026 may be subject to examination by the U.S.

federal and state tax authorities.

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

benefits related to uncertain tax positions.

As of June 30, 2026, the Company has no t recorded any liability for unrecognized tax benefits related to uncertain tax positions.

NOTE 7 – 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.

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

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.

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

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.

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 months ended June 30, 2026 and 2025 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 .

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

At June 30, 2026, the Company had outstanding purchase orders for machinery and equipment and related expenditures of approximately $ 0.8 million.

At June 30, 2026, the Company had outstanding purchase orders for supplies and inventory components of approximately $ 0.2 million.

NOTE 8 – BUSINESS SEGMENT AND CONCENTRATIONS

Segment Information

The Company determines its reporting units in

accordance with ASC No.

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 280):

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.

Improvements to Reportable Segment Disclosures .

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).

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 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 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:

1 unchanged sentence

Research and development $ 1,010 $ 1,490

Compensation 2,706 2,916

Stock-based compensation 447 724

Other operating expenses 2,375 1,674

Other expense

Other income, net ( 52 ) ( 102 )

Net loss $ 6,486 $ 6,702

Concentrations

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%

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 (“FDIC”) 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.

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:

2026 March 31,

Vendor A 17 % 14 %

Vendor B 12 % 15 %

NOTE 9 – 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 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.

A family member of one of the Company’s executive officers was an employee of the Company until March 2026, and, in April 2026, the family member converted to a consultant.

During the three months ended June 30, 2026 and 2025, the Company paid the family member compensation of approximately $ 1,100 and $ 52,700 , 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 is an employee of the Company.

During the three months ended June 30, 2026 and 2025, the Company paid the family member compensation of approximately $ 18,900 and $ 18,600 , 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.

Royalty Agreement

In July 2017, the Company entered into a royalty agreement with its founder, who currently serves as an executive officer of the Company (the “Founder”).

Pursuant to the agreement, the Founder assigned and transferred all of his rights in the intellectual property of Quasuras, Inc.

in return for future royalty payments on the Company’s product.

The Company is obligated to make royalty payments under the agreement to the Founder on any sales of the royalty product sold or otherwise commercialized by the Company equal to (a) $ 0.75 on each sale of a royalty product or (b) 5 % of the gross sale price of the royalty product, whichever is less.

The royalty payments will cease, and the agreement will terminate, at such time as the total sum of royalty payments actually paid to the Founder, pursuant to the agreement, reaches $ 10,000,000 .

The Company has the option to terminate the agreement at any time upon payment, to the Founder, of the difference between total royalty payments actually made to him to date and the sum of $ 10,000,000 .

All payments of the royalties, if due, for the preceding quarter, will be made by the Company to the Founder within 30 days after the end of each calendar quarter.

NOTE 10 – SUBSEQUENT EVENTS

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 .

Subsequent to June 30, 2026, the Company issued 2,530,250 shares of common stock for net proceeds of $ 5,113,542 under the 2026 ATM Agreement.

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