☒QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ ¨TRANSITION REPORT ~~UNDER~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

The number of shares of common stock, par value $0.001 per share, outstanding as of November 9, ~~2020~~12, 2021 was ~~22,908,705~~23,308,049.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact, included in this Quarterly Report on Form 10-Q regarding development of our strategy, future operations, future financial position, projected costs, prospects, plans and objectives of management are forward-looking statements. Forward-looking statements may include, but are not limited to, statements about:

The words "believe," "anticipate," "design," "estimate," "plan," "predict," "seek," "expect," "intend," "may," "could," "should," "potential," "likely," "projects," "continue," "will," and "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. We cannot guarantee that we actually will achieve the plans, intentions or expectations expressed in our forward-looking statements and you should not place undue reliance on these statements. There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements. These factors and the other cautionary statements made in this Quarterly Report on Form 10-Q should be read as being applicable to all related forward-looking statements whenever they appear herein. Except as required by law, we do not assume any obligation to update any forward-looking statement. We disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


	As of September 30, 2020 (Unaudited)			As of March 31, 2020			As of September 30, 2021 (Unaudited)			As of March 31, 2021
		($)			($)		($)			($)
ASSETS
Current assets:
Cash		16,948,939			106,107			26,768,196			31,865,371
Prepaid expenses and other receivables		358,404			452,463			1,364,458			1,269,513
Inventory (raw materials)		411,620			286,309
Accounts receivable - related party								503,554			0
Inventory								1,115,226			850,622
Total current assets		17,718,963			844,879			29,751,434			33,985,506

Other assets:
Property and equipment, net of accumulated depreciation		152,893			162,064			351,538			202,145
Intangible assets, net of accumulated amortization		237,150			213,080			1,491,068			1,055,256
Total other assets		390,043			375,144			1,842,606			1,257,401
Total assets		18,109,006			1,220,023			31,594,040			35,242,907

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		155,609			293,608			151,392			253,694
Liability due to related parties		153,533			830,093			0			148,795
Other liabilities and accrued expenses		47,609			168,966			602,669			180,552
Notes payable, net of unamortized discount		2,431,913			—
Notes payable, current portion								15,829,764			5,733,370
Deferred revenue		96,930			93,022			624,588			103,470
Total current liabilities		2,885,594			1,385,689			17,208,413			6,419,881

Non-current portion of notes payable, net of unamortized discount		2,785,515			—
Non-current portion of notes payable								8,794,846			19,188,724
Non-current portion of deferred revenue		1,195,470			1,147,278			1,224,797			1,276,130
Total non-current liabilities		3,980,985			1,147,278			10,019,643			20,464,854
Total liabilities		6,866,579			2,532,967			27,228,056			26,884,735

Commitments and contingencies:

Stockholders’ equity (deficit):
Series A convertible preferred stock, $0.001 par value, 200,000 shares authorized; 0 shares issued and outstanding at September 30, 2020 and March 31, 2020		—			—
Common stock, $0.001 par value,
42,000,000 shares authorized and 22,893,705 and 20,850,848
shares issued and outstanding at September 30, 2020 and March 31, 2020, respectively		22,894			20,851
Stockholders’ equity:
Common stock, $0.001 par value, 42,000,000 shares authorized and 23,308,049 and 22,941,157 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively								23,308			22,941
Additional paid-in capital		31,838,383			16,589,272			35,007,626			32,044,335
Accumulated deficit		(20,267,348	)		(17,586,075	)		(30,682,660	)		(23,844,671	)
Accumulated other comprehensive loss		(351,502	)		(336,992	)
Total stockholders’ equity / (deficit)		11,242,427			(1,312,944	)
Accumulated other comprehensive income								17,710			135,567
Total stockholders’ equity								4,365,984			8,358,172
Total liabilities and stockholders’ equity		18,109,006			1,220,023			31,594,040			35,242,907

	Common Stock		Additional Paid-in	Accumulated		Accumulated Other Comprehensive		Total Stockholders’		Common Stock
	Shares	Amount ($)	Capital ($)	Deficit ($)		Loss ($)		Equity ($)		Shares	Amount ($)	Additional Paid-in Capital ($)	Accumulated Deficit ($)		Accumulated Other Comprehensive Loss ($)		Total Stockholders’ Equity ($)
Balance at June 30, 2020	21,282,133	21,282	20,957,486	(18,686,131	)	(332,169	)	1,960,468
Issuance of common shares, net of offering costs of $834,280	1,601,572	1,602	10,817,707	—		—		10,819,309
Balance at March 31, 2021										22,941,157	22,941	32,044,335	(23,844,671	)	135,567		8,358,172
Exercise of warrants										366,892	367	2,963,291	—		—		2,963,658
Foreign currency translation adjustment										—	—	—	—		(117,857	)	(117,857	)
Net loss										—	—	—	(6,837,989	)	—		(6,837,989	)
Balance at September 30, 2021										23,308,049	23,308	35,007,626	(30,682,660	)	17,710		4,365,984

Balance at March 31, 2020										20,850,848	20,851	16,589,272	(17,586,075	)	(336,992	)	(1,312,944	)
Issuance of common shares, net of offering costs of $957,193										1,994,924	1,995	14,791,484	—		—		14,793,479
Restricted shares issued as stock-based compensation to consultants and investor relations	10,000	10	63,190	—		—		63,200		10,000	10	63,190	—		—		63,200
Exercise of warrants										37,933	38	394,437	—		—		394,475
Foreign currency translation adjustment	—	—	—	—		(19,333	)	(19,333	)	—	—	—	—		(14,510	)	(14,510	)
Net loss	—	—	—	(1,581,217	)	—		(1,581,217	)	—	—	—	(2,681,273	)	—		(2,681,273	)
Balance at September 30, 2020	22,893,705	22,894	31,838,383	(20,267,348	)	(351,502	)	11,242,427		22,893,705	22,894	31,838,383	(20,267,348	)	(351,502	)	11,242,427

Balance at June 30, 2019	20,801,680	20,802	16,320,359	(14,677,144	)	(355,639	)	1,308,378
Restricted shares issued as stock-based compensation to consultants and investor relations	1,250	1	12,375	—		—		12,376
Foreign currency translation adjustment	—	—	—	—		(7,401	)	(7,401	)
Net loss	—	—	—	(1,117,040	)	—		(1,117,040	)
Balance at September 30, 2019	20,802,930	20,803	16,332,734	(15,794,184	)	(363,040	)	196,313

Nemaura Medical Inc. (“Nemaura” or the “Company”), through its operating subsidiaries, performs medical device research and manufacturing of a continuous glucose monitoring system (“CGM”), named ~~sugarBEAT™..~~sugarBEAT®. The ~~sugarBEAT™.~~ sugarBEAT® device is a non-invasive, wireless device for use by persons with Type I and Type II diabetes and may also be used to screen pre-diabetic patients. The ~~sugarBEAT™.~~sugarBEAT® device extracts analytes, such as glucose, to the surface of the skin in a non-invasive manner where it is measured using unique sensors and interpreted using a unique algorithm.

Nemaura is a Nevada holding company organized in 2013. Nemaura ~~owns 100% of Region Green Limited, a British Virgin Islands corporation (“RGL”) formed on December 12, 2013. RGL~~ owns 100% of the stock in Dermal Diagnostic (Holdings) Limited, an England and Wales corporation (“DDHL”) formed on December 11, 2013, which in turn owns 100% of Dermal Diagnostics Limited, an England and Wales corporation formed on January 20, 2009 (“DDL”), and 100% of Trial Clinic Limited, an England and Wales corporation formed on January 12, 2011 (“TCL”).

DDL is a diagnostic medical device company headquartered in Loughborough, Leicestershire, England, and is engaged in the discovery, development, and commercialization of diagnostic medical devices. The Company’s initial focus has been on the development of the ~~sugarBEAT™.device,~~sugarBEAT® device, which consists of a disposable patch containing a sensor, and a non-disposable miniature wireless transmitter with a re-chargeable power source, which is designed to enable trending or tracking of blood glucose levels. ~~All of~~While the Company’s key operations and assets are located in ~~England.~~England, the Company has recently commenced commercial operations in the United States.

During the fiscal year ended March 31, 2021, the Board of Directors assessed the adequacy of the group’s organizational structure and concluded that the intermediate holding company that sat below Nemaura Medical Inc., Region Green Limited (a British Virgin Islands corporation), was no longer required as the entity had been effectively dormant since inception and no longer represented a requirement to be maintained. It was therefore determined that Region Green Limited should be unwound, with the intention that the assets held by Region Green Limited be transferred up to Nemaura Medical Inc. following which Region Green Limited would be dissolved.

The transfer of assets took place on March 5, 2021 and Region Green Limited was formally dissolved as of April 23, 2021.

The following diagram illustrates Nemaura’s corporate structure as of September 30, ~~2020:~~2021:

The Company was incorporated in 2013 and has reported recurring losses from operations to date and an accumulated deficit of ~~$20,267,348~~$30,682,660 as of September 30, ~~2020.~~2021. These operations have resulted in the successful completion of clinical programs to support a CE mark (European Union approval of the product) approval, ~~as well as~~and a ~~De Novo 510(k) medical device application~~Pre-Market Application (“PMA”) to the U.S. Food and Drug Administration (“FDA”) for sugarBEAT® is currently under review.

The Company expects to continue to incur losses from operations until revenues are generated through licensing fees or product sales. However, given the completion of the requisite clinical programs, these losses are expected to ~~be reduced~~decrease over time. Management has entered into licensing, supply, or collaboration agreements with unrelated third parties relating to the United Kingdom (“UK”), Europe, Qatar, and all countries in the Gulf Cooperation Council.

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the ~~expected~~ongoing loss making position of the Company is considered to demonstrate an adverse condition that raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans to alleviate the substantial doubt raised as a consequence thereof includes their ability to adjust the timing and quantum of future operational expenses, ~~to be incurred along with its available cash~~revise the loan repayment terms currently in place, and ~~has determined~~/ or pursue additional capital raising opportunities.

Based on this, it is management’s assessment that the Company has alleviated the risk above and has the ability to continue as a going concern for at least one year subsequent to the date of issuance of these unaudited condensed consolidated financial statements. The Company has an $8 million unsecured senior credit facility made available from certain major stockholders on August 1, 2019. The credit facility is non-dilutive carrying 8% interest with quarterly interest payments only and the principal being due on maturity in 5 years. No draw down has been made to date.

~~On April 15, 2020,~~Following the ~~Company entered into a note purchase agreement resulting~~receipt of the CE mark approval in ~~cash proceeds of $4,675,000; as set out~~the EU, and in ~~Note 6~~. The Company has $16,948,939 cash at September 30, 2020. The Company believes the cash position as of September 30, 2020, plus the credit facility made available from certain major stockholders, is adequate for our current level of operations through at least November 2021, and for the achievement of certainsupport of our ~~product development milestones. Our~~plans for similar certification with the FDA in the U.S., our plan is to utilize the cash ~~plus loan draw down if required,~~on hand to continue establishing commercial manufacturing operations for the commercial supply of the ~~sugarBEAT™.device~~sugarBEAT® device and sensor patches ~~now that CE mark approval has been received.~~in our target markets.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. However, such information reflects all adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for a fair statement of the financial condition and results of operations for the interim periods. The results for the three months and six months ended September 30, ~~2020~~2021 are not indicative of annual results. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, ~~2020,~~2021, as filed with the SEC.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and the Company’s subsidiaries. References to “we”, “us”, “our”, or the “Company” refer to Nemaura Medical Inc. and its consolidated subsidiaries. The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP, and all significant intercompany balances and transactions have been eliminated in consolidation.

The functional currency for the majority of the Company’s operations is the Great Britain Pound Sterling (“GBP”), and the reporting currency is the U.S. Dollar (“USD”).

Derivative financial instruments are used as part of the overall strategy to manage exposure to foreign currency primarily associated with fluctuations in foreign currency exchange rates. Derivative financial instruments are included in the consolidated balance sheets and are measured at fair value on a recurring basis.

The Company ~~adopted Accounting Standards Update ("ASU") No. 2016-02, Leases, as of April 1, 2020 and~~is exposed to the impact of ~~adoption~~foreign currency exchange fluctuations as a significant proportion of our expenses are incurred within our UK subsidiary which is denominated GBP, with the remaining portion denominated in USD and a small amount in Euros (“EUR”). In addition to this ~~ASU~~we hold the majority of our cash in USD, with amounts also held in GBP and, to a much smaller amount, in EURs. The Company’s objective is to reduce the volatility associated with these foreign exchange rate changes to allow management to focus our attention on our core business strategy and objectives. Accordingly, the Company entered into a target accrual redemption forward contract (“TARF”) agreement to sell USD and buy GBP across 25 defined monthly fixings in order to fix the costs associated with the foreign currency exchange fluctuations associated with our GBP denominated expenses. These fixings allow for $250,000 to be converted into GBP at a rate of $1.369 subject to the spot rate on the fixing date being above the fixed rate. Should the spot rate fall below $1.369 on the scheduled fixing date, the Company is obligated to convert $500,000 to GBP at the fixed rate. The exchange rate range experienced by the Company over the last two years for USD: GBP has seen a high of approximately $1.163 in March 2020 and a low of approximately $1.423 in June 2021. Cumulative profit on the sale of USD is capped at an aggregate of approximately $55,000 over the shorter of the life of the contract fixings or the utilization of the cap.

At September 30, 2021, the Company held a forward contract to sell up to $11 million, which when remeasured at fair value generated a non-cash item loss of $270,400 which has been accounted for within General and administrative expenses and on balance sheet within Other liabilities and accrued expenses. No such similar derivative financial instruments were in place at the fiscal periods ending March 31, 2021 or September 30, 2020.

The Company’s ~~consolidated~~foreign currency forward contracts are measured at fair value on a recurring basis and are classified as Level 2 under our fair value of financial ~~statements is not significant.~~ instruments policy, as set out in the Annual Report on Form 10-K for the year ended March 31, 2021, as filed with the SEC.

There have been no other material changes to our significant accounting policies from those detailed in the Company’s Annual Report on Form 10-K for the year ended March 31, ~~2020,~~2021, as filed with the ~~SEC.~~SEC on June 29, 2021.

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements properly reflect the change.

This Quarterly Report on Form 10-Q does not discuss recent pronouncements that are not anticipated to have a current and/or future impact on the Company, or are unrelated to the Company’s financial condition, results of operations, cash flows or disclosures.

United Kingdom and the Republic of Ireland, the Channel Islands, and the Isle of Man

In March 2014, the Company entered into an Exclusive Marketing Rights Agreement (the “Marketing Rights Agreement”) with an unrelated third party (the “Licensee”), that granted to the Licensee the exclusive right to market and promote the ~~sugarBEAT™.device~~sugarBEAT® device and related patches under its own brand in the United Kingdom and the Republic of Ireland, the Channel Islands, and the Isle of Man. The Company received a non-refundable, up-front cash payment of GBP 1,000,000 ~~(approximately $1.292~~(approximately $1.35 million and ~~$1.240~~ $1.38 million as of September 30, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively), which is wholly non-refundable, upon signing the ~~agreement.~~

The Company is in ongoing dialogue with the Licensee about the timing of its plans with respect to its product launch. The current expectation is for this to occur in the third quarter ending December 31, 2020.Marketing Rights Agreement. The upfront ~~fees~~payment received from ~~this agreement have~~the Marketing Rights Agreement has been deferred and will be recorded as income over the term of the ~~commercial licensing agreement.~~Marketing Rights Agreement. Consequently, approximately ~~$97,000 and $93,000~~ $124,000 of the $624,000 deferred revenue ~~has been~~balance classified as a current liability as of September 30, ~~2020 and~~2021 relates to this upfront payment ($103,000 as at March 31, ~~2020, respectively.~~2021).

The Company received an initial order in April 2021 from the Licensee, against which the Company expects to commence delivery in November 2021. Under the terms of the contact, the Company was able to issue a “deposit” invoice to cover costs for purchases directly incurred in order to service orders made by the Licensee, as such an invoice was raised with a net value of approximately $0.5 million. As at September 30, 2021, this invoice has been treated as deferred revenue within current liabilities with the debit balance being captured within other receivables, the cash payment for which was received on October 1, 2021 and so no recognition has been made for this during fiscal quarter ended September 30, 2021.

Nemaura Pharma Limited (“Pharma”), NDM Technologies Limited (“NDM”) and Black and White Health Care Limited (“B&W”) are entities controlled by the Company’s Chief Executive Officer, President, director and majority stockholder, Dewan F.H. Chowdhury. While transactions occurred during the period between the Company and Pharma, no transactions were recorded with NDM or B&W.

These unaudited condensed consolidated financial statements are intended to reflect all costs associated with the operations of DDL and TCL. Pharma has a service agreement with DDL to undertake development, manufacture, and regulatory approvals under Pharma’s ISO13485 accreditation. In lieu of these services, Pharma invoices DDL on a periodic basis for said services. Services are provided at cost plus a service surcharge amounting to less than 10% of the total costs incurred.

The table below provides a summary of activity between the Company and Pharma ~~and NDM~~ for the six months ended September 30, ~~2020~~2021 and ~~2019,~~2020, and the year ended March 31, ~~2020. These amounts are unsecured, interest free, and payable on demand.~~2021.

Schedule of Related Party Transactions
	Six Months Ended September 30, 2020 (unaudited) ($)		Six Months Ended September 30, 2019 (unaudited) ($)		Year Ended March 31, 2020 ($)		Six Months Ended September 30, 2021 (unaudited) ($)			Six Months Ended September 30, 2020 (unaudited) ($)			Year Ended March 31, 2021 ($)
Liability due to related parties at beginning of period	830,093		964,679		964,679
Amounts invoiced by Pharma to DDL, NM and TCL (1)	698,300		966,425		1,800,517
Amounts due to related party at beginning of period								148,795			830,093			830,093
Amounts invoiced by Pharma to DDL (1)								1,115,748			698,300			2,441,108
Amounts invoiced by DDL to Pharma	(7,060	)	(814	)	(10,963	)		(2,495	)		(7,060	)		(17,213	)
Amounts paid by DDL to Pharma	(1,388,874	)	(867,013	)	(1,897,222	)		(1,770,942	)		(1,388,874	)		(3,209,084	)
Foreign exchange differences	21,074		(56,743	)	(26,918	)		5,340			21,074			103,891
Liability due to related parties at end of period	153,533		1,006,534		830,093
Amounts due (from) / to related party at end of period								(503,554	)		153,533			148,795

On April 15, 2020, the Company ~~has an $8 million unsecured senior credit facility made available~~entered into a note purchase agreement (the “Note Purchase Agreement 1”) by and among the Company, DDL, TCL and a third-party investor (the “Investor”).

Pursuant to the terms of Note Purchase Agreement 1, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from ~~certain majority stockholders as~~the Company a secured promissory note (the “2020 Secured Note”) in the original principal amount of ~~August 1, 2019. No draw down has been made~~$6,015,000. In consideration thereof, on April 15, 2020 (the closing date), (i) the Investor (a) paid $1,000,000 in cash, (b) issued to the Company (1) Investor Note #1 in the principal amount of $2,000,000 (“Investor Note #1”), and (2) Investor Note #2 in the principal amount of $2,000,000 (“Investor Note #2” and together with Investor Note #1, the “2020 Investor Notes”), and (ii) the Company delivered the 2020 Secured Note on behalf of the Company, to the Investor, against ~~this facility to date.~~delivery of the 2020 Purchase Price. For these purposes, the “2020 Purchase Price” means the Investor’s initial cash purchase price, together with the sum of the initial principal amounts of the Investor Notes.

The 2020 Secured Note is secured by the Collateral (as hereinafter defined). The 2020 Secured Note carries an original issue discount (“OID”) of $1,000,000 (16.7%). In addition, the Company ~~routinely reviews its condensed consolidated statements~~agreed to pay $15,000 to the Investor to cover the Investor’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of ~~cash flows presentation~~the 2020 Secured Note (the “Transaction Expense Amount”). In addition to this, a payment of ~~related party transactions~~$325,000 was made to Ascendiant Capital Markets, LLC for ~~financing or operating classification based~~structuring the agreement between both parties. The 2020 Purchase Price for the 2020 Secured Note is $4,675,000, computed as follows: $6,015,000 original principal balance, less: OID, Transaction Expense Amount, and commission paid.

The borrowing period is 24 months, and the Company shall pay the outstanding balance and all fees on maturity. A monitoring fee equal to 0.833% of the outstanding balance will automatically be added to the outstanding balance on the ~~underlying nature~~first day of each month. The debt less the discount and transaction expenses will be accreted over the term of the ~~item and intended repayment.~~2020 Secured Note using the effective interest method.

On April 15, 2020, the Company entered into the Security Agreement by the Company, DDL and TCL, in favor of the Investor (the “2020 Security Agreement”). Pursuant to the terms of the 2020 Security Agreement, the Company granted the Investor a first-priority security interest in all rights, title, interest, claims and demands of the Company in and to all of the Company’s patents and all other proprietary rights, and all rights corresponding to the Company’s patents throughout the world, now owned and existing, and all replacements, proceeds, products, and accessions thereof (the “Collateral”).

On February 8, 2021, the Company entered into an additional note purchase agreement (“Note Purchase Agreement 2”) with the Investor. Pursuant to the terms of Note Purchase Agreement 2, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company, a secured promissory note (the “Secured Note 2”) in the original principal amount of $24,015,000. The Secured Note 2 carries an OID of $4,000,000 (16.7%), and the Company agreed to pay $15,000 to the Investor to cover the Investor’s transaction expenses. In addition to this, a commission of $1,200,000 was also payable to Ascendiant Capital Partners, LLC.

In consideration thereof, on February 9, 2021 (the “closing date”), (i) the Investor paid $20,000,000 in cash to the Company, and (ii) the Company delivered Secured Note 2 on behalf of the Company, to the Investor, against the delivery of the 2021 Purchase Price. For these purposes, the “2021 Purchase Price” means the Investor’s initial cash purchase price. After adjusting for transaction expenses of $1,200,000, cash proceeds received were $18,800,000.

The borrowing terms for Note Purchase Agreement 2 are consistent with those of Note Purchase Agreement 1, with the borrowing period being 24 months from the date of the agreement, the Company being required to pay the outstanding balance and all fees on maturity, and a monitoring fee equal to 0.833% of the outstanding balance being automatically added to the outstanding balance on the first day of each month. The debt less discount and transaction expenses will be accreted over the term of the Secured Note 2 using the effective interest rate method.

On February 8, 2021, the 2020 Security Agreement was extended to include Note Purchase Agreement 2, which is also secured against all of the Company’s assets owned as of the closing date and extends to any assets acquired at any time that the Company’s obligations under Secured Note 2 are outstanding.

~~The Company was notified by The NASDAQ Stock Market (“NASDAQ”) on July 15, 2019 that~~During the ~~Company no longer met the requirements~~six month period ended September 30, 2021, 366,892 warrants were exercised, generating gross proceeds of ~~NASDAQ Rule 5550(a)(2) requiring listed securities to maintain a minimum closing bid price of $1.00 per share. Thereafter, the Company effected:~~

~~The reverse stock split and decrease in authorized common stock~~$2,963,658. At September 30, 2021, there were effective on December 5, 2019. On December 19, 2019, the Company received confirmation from NASDAQ that the Company had regained compliance with NASDAQ’s minimum bid price rule and the matter is now resolved. Amounts are retroactively restated for all periods presented.1,573,098 warrants outstanding. No other shares were issued during this period.

On October 19, 2018, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Maxim Group LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time, through Maxim (the “Offering”), up to $20,000,000 in shares of its common stock. During the six month period ended September 30, 2020, a total of 408,718 shares of common stock were issued under the ATM Equity Distribution Agreement ~~generating~~that was in place at the time with Maxim Group LLC (this agreement was subsequently terminated in August 2020), which generated gross proceeds of ~~$4,250,676~~$4,250,676 with associated costs of ~~$127,520.~~$127,520.

On August 8, 2020, pursuant to the terms of the Distribution Agreement, as amended, between the Company and Maxim, the Company provided notice of termination of the Distribution Agreement, as amended, to Maxim. Accordingly, the Distribution Agreement, as amended, terminated on August 18, 2020.

On July ~~28,~~30, 2020, the Company ~~entered into~~also closed an offering that saw a ~~placement agency agreement with~~further 1,586,206 shares of common stock issued through Kingswood Capital Markets ~~a division of Benchmark Investments, Inc. (“Kingswood” or the~~(the “Placement Agent”), along with ~~respect to the issuance and sale of an aggregate of 1,586,206 shares of the Company’s common stock, and~~ warrants to purchase up to 793,103 shares of common ~~stock. Each share of common~~ stock, ~~and accompanying one-half of a warrant were sold for a combined purchase price of $7.25,~~ for a total deal size of approximately ~~$11.5~~$10.7 million, ~~not including~~net of the Placement Agent’s commission and related expenses, excluding any future proceeds from the exercise of the warrants and before deducting the Placement Agent fees and offering expenses. Each whole warrant is immediately exercisable at a price of $8.00 per share, subject to adjustment in certain circumstances, and will expire five years from the date of issuance. The shares of common stock were offered together with the warrants, but the securities were issued separately and are separately transferable.

The closing of the offering took place on July 30, 2020 and the net proceeds from the sale of the common stock and warrants were approximately $10.7 million after deducting the Placement Agent commission and other expenses incurred by the Company as a result of the offering.warrants.

During the six month period ended September 30, 2020, 37,933 warrants were exercised, generating ~~$394,475~~$394,475 in additional funds; no warrants were exercised in the three month period ended September 30, 2020. During the six month period ended September 30, 2019, 2,500 warrants were exercised generating funds of $26,000, all of which were exercised during the three month period ended September 30, 2019.

funds. At September 30, 2020, there were ~~940,740~~1,940,740 warrants outstanding.

Effective December 18, 2018, the Company issued a unit purchase option to the Placement Agent to purchase 9,710 shares and 9,710 warrants. The Company has classified this option as equity. The unit purchase option has a term of three years and an exercise price of $13.00.

The following table sets forth the computation of basic and diluted loss per share for the periods indicated.

The Company excludes warrants outstanding, which are anti-dilutive given the Company is in a loss position, from the basic and diluted loss per share calculation.

Basic loss per share is computed by dividing loss available to common stockholders by the ~~weighted average~~weighted-average number of common shares outstanding during the period. For the three and six month periods ended September 30, ~~2020 and 2019,~~2021, warrants to purchase ~~one million~~1,573,098 shares of common stock and a unit purchase option to purchase 9,710 shares of common stock, as well as warrants to purchase 9,710 shares of common stock, were considered anti-dilutive and were excluded from the calculation of diluted loss per share. For the three and six month periods ended September 30, 2020, warrants to purchase ~~147,637 and 940,740~~1,940,740 shares of common stock ~~respectively,~~ and a unit purchase option to purchase 9,710 shares of common stock, as well as warrants to purchase 9,710 shares of common stock, were considered anti-dilutive and were also excluded from the calculation of diluted loss per share. ~~For the three and six month periods ended September 30, 2019, the equivalent number of warrants excluded from this calculation was 185,570 and the unit purchase option was 9,710.~~

~~On April 15, 2020, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with Chicago Venture Partners, L.P. (the “Investor”).~~

Pursuant to the terms of the Note Purchase Agreement, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company, a secured promissory note (the “Secured Note”) in the original principal amount of $6,015,000. In consideration thereof, on April 15, 2020 (the closing date), (i) the Investor (a) paid $1,000,000 in cash, (b) issued to the Company (1) Investor Note #1 in the principal amount of $2,000,000 (“Investor Note #1”), and (2) Investor Note #2 in the principal amount of $2,000,000 (“Investor Note #2” and together with Investor Note #1, the “Investor Notes”), and (ii) the Company delivered the Secured Note on behalf of the Company, to the Investor, against delivery of the Purchase Price. For these purposes, the “Purchase Price” means the Investor’s initial cash purchase price, together with the sum of the initial principal amounts of the Investor Notes.

The Secured Note is secured by all patents and related rights and items as defined in the related security agreement within the Secured Note. The Secured Note carries an original issue discount (“OID”) of $1,000,000. In addition, the Company agreed to pay $15,000 to the Investor to cover the Investor’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Secured Note (the “Transaction Expense Amount”), all of which amount is included in the initial principal balance of the Secured Note. The Purchase Price for the Secured Note is $5,000,000, computed as follows: $6,015,000 original principal balance, less the OID, less the commission expense of $325,000, resulting in cash proceeds of $4,675,000. The debt less the discount will be accreted over the 24-month term of the Secured Note using the effective interest method. The effective interest rate is 34.3%. A monitoring fee equal to 0.833% of the outstanding balance will automatically be added to the outstanding balance on the first day of each month. Accretion for the three and six month periods ended September 30, 2020 was $188,579 and $542,428, respectively.

The outbreak of COVID-19 ~~originating in Wuhan, China,~~ in December 2019 has since rapidly increased its exposure globally. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. We continue to monitor the ~~global outbreak~~impact of COVID-19 on our own operations and are working with our ~~customers,~~ employees, suppliers and other stakeholders to mitigate the risks posed by its spread, COVID-19 is not expected to have any long-term detrimental effect on the Company’s success. While key suppliers have not been accessible throughout the whole period of the outbreak, we have been able to be flexible in our priorities and respond favorably to the challenges faced during the outbreak. We have also seen a surge in the uptake of technologies for remote monitoring of patients and patient self-monitoring, which ~~therefore~~ potentially enhances the prospects for the ~~likes of the~~ Company, ~~and~~ its CGM product and its planned digital healthcare offering.

During the six month period ended September 30, 2021 and 2020, ~~$59,000 in~~the Company did not issue any restricted common stock to management consultants; the stock-based compensation ~~was shown as~~ expense ~~in relation to a management consulting company as a result of a release of prepaid expenses. This stock-based compensation was issued in~~during the three month period ended September 30, ~~2020.~~2020 of $59,000 related to the release of prepayments and accrued expenses.

~~Total stock-based compensation recognized during~~(c) Investor relations agreements

The Company has entered into contracts with several investor relations specialists to help support the ~~three and~~ongoing financing activities of the business.

During the six month periods ended September 30, ~~2019 was $115,410~~2021, and ~~$277,644,~~2020, fees paid for services associated with investor relations across various different providers were $323,000 and $388,000, respectively.

As a consequence of the services provided to the Company by Pharma, the Company issued a guarantee in favour of a key third party Pharma supplier, who is only used to support Pharma’s arrangements with the Company, to secure certain materials that are currently subject to shortages brought on as a result of COVID-19. This provides for the Company to make payment against any outstanding invoices unto a value of $250,000 should Pharma be unable. This guarantee arrangement is scheduled to extend out to June 2022.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the Condensed Consolidated Financial Statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements. See "Cautionary Statement Concerning Forward-Looking Statements" below, and "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, as filed with the Securities and Exchange Commission, as the same may be updated from time to time, for a discussion of the uncertainties, risks and assumptions associated with these statements.

We are a medical technology company developing ~~sugarBEAT™.~~sugarBEAT®, a non-invasive, affordable, and flexible continuous glucose monitoring system for adjunctive use by persons with diabetes. ~~sugarBEAT™.consists~~sugarBEAT® consists of a disposable adhesive skin-patch connected to a rechargeable wireless transmitter that displays glucose readings at regular five minute intervals via a mobile app. ~~sugarBEAT™.~~sugarBEAT® works by extracting glucose from the skin into a chamber in the patch that is in direct contact with an electrode-based sensor. The transmitter sends the raw data to a mobile app where it is processed by an algorithm and displayed as a glucose reading, with the ability to track and trend the data over days, weeks, and months. While ~~sugarBEAT™.requires~~sugarBEAT® requires once per day calibration by the patient using a blood sample obtained by a finger stick, we believe ~~sugarBEAT™.will~~sugarBEAT® will be adopted by non-insulin dependent persons with diabetes alongside insulin-injecting persons with diabetes, who all perform multiple daily finger sticks to manage their disease.

CE approval was granted by the European Notified Body BSI in May 2019, allowing the product to be made available for commercial ~~sale. The~~sale, this approval is subject to an annual review of the underlying ISO 13485 accredited Quality Management System, the accreditation was successfully renewed during November 2020. In conjunction with the UK Licensee, the Company commenced a phase 1 launch whereby devices were made available to limited cohorts of users to gauge their feedback so that any fine-tuning could be completed prior to a mass market launch. ~~A mass-market launch is due to commence~~The UK Licensee has also confirmed that they will undertake two Key Opinion Leader (“KOL”) studies in the UK infor their white-labelled service offering that is supported by sugarBEAT®. The KOL studies are expected to conclude by the ~~coming months via its~~end of the current fiscal year with a view to providing further support for their broader ongoing marketing plans.

The UK ~~licensee DB Ethitronix, whereby sugarBEAT™.will be available via~~Licensee placed an initial order for sugarBEAT® at the end of April 2021 and provided a ~~number of subscription models that are yet~~forecast for their post-launch volume expectations which the Company has used to ~~be determined.~~ establish both a short and medium term view to inform our commercial operational requirements. In line with this view the Company has taken the following actions during the fiscal quarter ended September 30, 2021:

In July 2020, Nemaura filed a PMA application with the FDA to use ~~sugarBEAT™.~~sugarBEAT® as an adjunct to finger prick testing for blood glucose trending. We, along with other applicants, were then informed by the FDA that the approval process was currently subject to delays as a result of the FDA’s Center for Devices and Radiological Health (“CDRH”) being actively engaged in responding to the current pandemic caused by COVID-19 which resulted in staff being reallocated to other approval requests associated with COVID-19. During April 2021 the FDA confirmed that they would recommence their review of the PMA application and this is now ongoing and in-progress.

In addition ~~it has been pursuing the possibility of launching sugarBEAT™.under the FDA Wellness guidance which would preclude it from an FDA assessment and allow the product~~ to ~~be launched in the U.S. for Wellness use, to provide prompts and educate users on factors affecting their blood sugar profiles. Further to discussions with the FDA~~this, Nemaura established that ~~sugarBEAT™.can~~proBEAT^TM, which is based on the sugarBEAT® platform, can be classified under the Wellness guidance when it is used according to the FDA Wellness guidance ~~notes.~~notes, to provide prompts and educate users on factors affecting their blood sugar profiles. Nemaura ~~plans to launch this~~launched proBEAT™ in the U.S. ~~under the brand proBEAT™.~~in December 2020, as part of a diabetes prevention and reversal program branded BEATdiabetes.life. During the quarter ended ~~September 30,~~December 31, 2020, Nemaura licensed a clinically validated weight loss program for the management of diabetes from Healthimation, LLC, which was originally developed at the Joslin Diabetes Center, an affiliate of Harvard Medical School. This program, together with ~~proBEAT™.~~proBEAT^TM, forms the BEATdiabetes.life program that is ~~planned~~currently being developed for ~~launch~~commercialization in the ~~U.S.~~United States. KOL studies are being conducted to provide further marketing support of the program in ~~December 2020, aimed at~~preparation for a broader US-wide roll-out. While still in the ~~management or reversal of Type 2 diabetes.~~relatively early stages, we are pleased with initial results and feedback received from these user-groups.

We believe there are additional applications for ~~sugarBEAT™.and~~sugarBEAT® and the underlying BEAT technology platform, which may include:

~~The~~During this period of product development, the Company has experienced recurring losses and negative cash flows from operations. AtAs of September 30, ~~2020,~~2021, the Company had cash balances of ~~$16,948,939,~~$26,768,196, working capital of ~~$14,833,369,~~$12,543,021, total stockholders' equity of ~~$11,242,427~~$4,365,984 and an accumulated deficit of ~~$20,267,348. To date, the Company has in large part relied on equity financing to fund its operations. Additional funding has come from related party contributions.~~$30,682,660. The Company expects to continue to incur losses from operations for the near-term and these losses could be significant as product development, regulatory activities, clinical trials, and other commercial and product development related expenses are incurred.

Management's strategic assessment ~~includes~~continues to include the following potential options:

On September 24, 2021, the Company entered into a Licence, Supply and Distribution Agreement, dated as of September 17, 2021, with MySugarWatch Duopack Limited (“MSW”). Pursuant to the terms of the agreement, the Company appointed MSW as its exclusive global licensee and distributor with regard to the Company’s sugarBEAT® non-invasive continuous glucose monitor devices and sensors (the “Products”), to be provided solely as duo-packs with prescription only medicines that are widely prescribed for Type 2 diabetes (each, a “Combination Pack”).

Pursuant to the terms of the agreement, the Company agreed to supply the Products in accordance with the terms of the agreement, and MSW agreed to purchase Products for its own account for resale.

The agreement has an initial term of 10 years, subject to earlier termination pursuant to the terms of the agreement. Either party may terminate the agreement at the end of the initial term upon 12 months’ notice. If such notice is not provided, the agreement will automatically continue after the initial 10-year term until terminated by either party giving at least 12 months' prior written notice.

The outbreak of COVID-19 ~~originating in Wuhan, China,~~ in December 2019 has since rapidly increased its exposure globally. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. We continue to monitor the ~~global outbreak~~impact of COVID-19 on our own operations and are working with our ~~customers,~~ employees, suppliers, and other stakeholders to mitigate the risks posed by its spread, COVID-19 is not expected to have any long-term detrimental effect on the Company’s ~~success. While~~success as while key suppliers have not always been accessible throughout the whole period of the outbreak, we have been able to be flexible in our priorities and respond ~~favorably~~favourably to the challenges faced during this period. We also recognise that one of the ~~outbreak. We have also seen~~consequences of this pandemic has been a surge in the uptake of technologies for remote monitoring of patients and patient self-monitoring, which ~~therefore~~ potentially enhances the prospects for the ~~likes of the~~ Company, ~~and~~ its CGM product and its planned digital healthcare offering.

Comparative Results for the Six Months Ended September 30, ~~2020~~2021 and ~~2019~~2020

There was no revenue recognized in the six ~~months~~month period ended September 30, ~~2020~~2021 and ~~2019. In 2014,~~2020.

The Company received its first order from our UK Licensee to support product sales in the UK, as part of a broader diabetes management service. Delivery of goods against this initial order is planned to commence in November 2021 and therefore, we ~~received an~~expect that revenue recognition will commence in the fiscal quarter ending December 31, 2021.

The upfront non-refundable cash payment of GBP 1 million (approximately ~~$1.292~~$1.35 million and ~~$1.240~~$1.38 million as of September 30, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively) that was received in connection with anthe Exclusive Marketing Rights Agreement that was previously signed with ~~an unrelated third party that provides~~ the ~~third party the exclusive right~~UK Licensee continues to ~~market and promote the sugarBEAT™.device and related patch under its own brand in the United Kingdom and the Republic of Ireland. We have~~be deferred ~~this licensing revenue~~ until sales ~~are due to commence, and~~commence; we expect to record ~~the~~this revenue as income over an approximately 10-year term from the date sales commence. Although the revenue is treated as deferred at September 30, ~~2020,~~2021, the cash payment became immediately available and ~~has been~~was used to fund our operations ~~including research and development costs associated with successfully obtaining the CE mark approval.~~to enable us to reach our current position.

Research and development (“R&D”) expenses were ~~$771,592~~$575,370 and ~~$1,018,699~~$771,592 for the six months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. This amount consisted primarily of expenditures on wages and sub-contractor activities incurred for improvements made to the ~~sugarBEAT™.~~sugarBEAT® device. The decrease of ~~$247,107~~$196,222 is ~~due to~~largely driven by a ~~decrease~~reduction in ~~these~~sub-contractor costs as the ~~sugarBEAT™.product is nearing~~sugarBEAT® product moves to commercial launch. Moving forward, we anticipate that the cost reductions seen in this area will continue as we see a re-balancing across general and administrative expenses driven by the commercial operations of the business becoming more relevant, although we expect to continue to incur R&D expenses as new pipeline products are moved through their respective development phases.

General and administrative expenses were ~~$1,367,253~~$2,760,102 and ~~$1,353,532~~$1,367,253 for the six months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. These consisted of fees for legal, professional, consultancy, audit services, investor relations, insurance, advertising and wages. The increase in expenses was driven predominantly by increased wages as additional headcount has been added to support the operational scale up process across both our UK and US teams. Increases have also been seen in insurance and advertising costs which are considered to be directly related to the commercialization steps taken during the period. In addition to this, a non-cash item charge of $270,400 was booked as a result of the Mark-To-Market impact from the revaluation of the foreign currency forward contracts in place as at the fiscal period end.

We ~~expect~~anticipate that general and administrative expenses will continue to ~~remain at similar levels going~~increase moving forward, as ~~we anticipate~~the business transitions to a more operational focused base that ~~most of these costs~~ will ~~need~~encompass an increase in functions expenses associated with sales, marketing, customer service, as well as enhancements to ~~be incurred for the day to day running of the Company.~~other existing functions.

For the six months ended September 30, ~~2020~~2021 and ~~2019,~~2020, other comprehensive loss was $117,857 and $14,510, respectively. Currently all transactions recorded through other comprehensive loss arise from fluctuations in the USD:GBP exchange rate and ~~$23,152, respectively, arising from foreign currency translation adjustments.~~the impact that this has on consolidation of the Company’s non-USD denominated assets and liabilities.

Comparative Results for the Three Months Ended September 30, ~~2020~~2021 and ~~2019~~2020

As noted above, the business is currently pre-revenue. As such, no revenue was recognized in the three ~~months~~month period ended September 30, ~~2020~~2021 and ~~2019.~~2020.

~~Research and development~~R&D expenses were ~~$456,280~~$286,886 and ~~$462,517~~$456,280 for the three month periods ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. This continues to be largely composed of expenditure on wages and sub-contractor activities incurred in finalizing the product design for the ~~sugarBEAT™.device~~sugarBEAT^TM device in order to enable scaling of the production ~~ability.~~ability combined with costs associated with new pipeline products as they move through their respective development phases.

General and administrative expenses were ~~$771,533~~$1,427,917 and ~~$654,523~~$771,533 for the three month periods ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Given the nature of the Company’s activities has remained unchanged, the cost drivers in this area have also remained consistent and are largely representative of fees for legal, professional, consultancy, audit services, investor relations, insurance and wages. The increase in expenses was driven predominantly by increased wages as additional headcount has been added to support the operational scale up process across both our UK and US teams. Increases have also been seen in insurance and advertising costs which are considered to be directly related to the commercialization steps taken during the period. In addition to this a non-cash item charge of $207,332 was booked for the Mark-To-Market revaluation of the foreign currency forward contracts in place at the fiscal period end.

For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, other comprehensive loss was ~~$19,333~~$107,151 and ~~$7,401,~~$19,333, respectively, arising from foreign currency translation adjustments.

We have experienced net losses and negative cash flows from operations since our inception. We have sustained cumulative losses of ~~$20,267,348~~$30,682,660 through September 30, ~~2020.~~2021. We have historically financed our operations through the issuances of equity and contributions of services from related entities. While no shares were issued during the six month period ended September 30, 2021, warrants to purchase 366,892 shares of common stock were exercised during, all of which were exercised during the fiscal quarter ended June 30, 2021, which provided $2,963,658 of additional funding.

AtAs of September 30, ~~2020,~~2021, the Company had net working capital of ~~$14,833,369~~$12,543,021, which included cash balances of ~~$16,948,939.~~$26,768,196. The Company reported a net loss for the three and six month periods ended September 30, ~~2020~~2021 of ~~$1,581,217~~$3,494,264 and ~~$2,681,273,~~$6,837,989, respectively. This loss is after taking account of interest and debt accretion charges arising from the note purchase agreements for the three and six month periods ended September 30, 2021 of $1,779,462 and $3,502,517, respectively.

We have completed clinical studies required for FDA submission and in July 2020, we submitted an application to the FDA for approval of the device. Therefore we expect that research and development costs for glucose monitoring will be reduced. The Company had an $8 million unsecured senior credit facility made available from certain major stockholders on August 1, 2019. No draw down has been made to date.

~~On April 15, 2020, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with Chicago Venture Partners, L.P. (the “Investor”).~~

Pursuant to the terms of the Note Purchase Agreement, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company a secured promissory note (the “Secured Note”) in the original principal amount of $6,015,000. In consideration thereof, on April 15, 2020 (the closing date), (i) the Investor (a) paid $1,000,000 in cash, (b) issued to the Company (1) Investor Note #1 in the principal amount of $2,000,000 (“Investor Note #1”), and (2) Investor Note #2 in the principal amount of $2,000,000 (“Investor Note #2” and together with Investor Note #1, the “Investor Notes”), and (ii) the Company delivered the Secured Note on behalf of the Company, to the Investor, against delivery of the Purchase Price. For these purposes, the “Purchase Price” means the Investor’s initial cash purchase price, together with the sum of the initial principal amounts of the Investor Notes.

The borrowing period is 24 months, and the Company shall pay the outstanding balance and all fees on maturity. A monitoring fee equal to 0.833% of the outstanding balance will automatically be added to the outstanding balance on the first day of each month. The debt less the discount will be accreted over the term of the Secured Note using the effective interest method.

We believe the cash position as of September 30, ~~2020 plus the credit facility made available from certain major stockholders,~~2021, in conjunction with our ability to flex operational expenses, debt repayments and / or generate additional capital investment as required, is adequate for our current planned level of operations through at least November ~~2021, and for the achievement of certain of our product development milestones.~~2022. We believe that ~~our cash on hand will be sufficient to continue establishing~~this encompasses the continued establishment of commercial manufacturing operations for the ~~commercial~~ supply of the ~~sugarBEAT™.device~~sugarBEAT® device and patches ~~now~~in relation to our existing licensing agreements, combined with the on-going steps that ~~CE mark approval has been received.~~the Company is taking to identify and attract market growth opportunities elsewhere.

Net cash used in operating activities for the six months ended September 30, 2021 was $3,476,079, reflecting a net loss of $6,837,989, adjusted for the add back of the accretion of debt discount expense of $3,502,517, the Mark-To-Market charge booked in relation to the revaluation of the foreign currency forward contracts of $270,400 and the depreciation and amortization charge of $81,691. Cash was also impacted by increases in inventory of $264,604 and prepayments of $94,945 as well as reductions in accounts payable ($102,302) combined with an increase in the Accounts receivable - related party balance ($652,349), all of which is directly driven by the necessary investments in working capital to support our transition to commercialization and the associated preparatory production activities in advance of commencing product delivery to our UK licensee. Offsetting these working capital investments are the increases in other liabilities and accruals of $151,717, combined with an increase in deferred revenue of $469,785, driven by the deposit invoice issued to the UK Licensee in advance of delivery, the actual cash for which was received on October 1, 2021.

Net cash used in operating activities for the six months ended September 30, 2020 was $3,006,267, with the key drivers being: net loss of $2,681,273 which includes a non-cash amount of $542,428 in relation to the accretion of debt discount, non-cash stock-based compensation of $59,000, a decrease in prepaid expenses of $94,059, an increase in inventory of $125,311, a decrease in accruals of $121,357, a decrease in liability due to related parties of $676,560 and a decrease in accounts payable of $137,999.

Net cash used in ~~operating~~investing activities was $686,255 for the six months ended September 30, ~~2019~~2021, which reflected patent filing costs of $47,426, the purchase of property and equipment of $220,035 driven by the procurement of cleanroom facilities and injection moulding tooling to support the operational production steps taken in advance of product delivery to the UK licensee. In addition to this, $418,794 was ~~$1,862,717, with~~invested in software development costs relating to the ~~key drivers being: net loss~~digital health program in the US and recent Beta launch of $2,368,305, non-cash stock-based compensation of $277,664, a decrease in prepaid expenses of $263,022, an increase of inventory of $170,371, an decrease in accruals of $52,608, an increase in liability due to related parties of $100,533, and an increase in accounts payable of $59,010.our consumer health program.

Net cash used in investing activities was $41,632 for the six months ended September 30, 2020, which reflected patent filing costs of $27,600 and the purchase of property and equipment of $14,032.

Net cash used in ~~investing~~financing activities ~~was $162,026~~ for the six months ended September 30, ~~2019, which reflected patent filing costs~~2021 was $836,342, comprising $2,963,658 of ~~$28,310 and~~proceeds from warrants exercised offset by $3,800,000 for the ~~purchase~~scheduled repayments of ~~property and equipment of $133,716.~~notes payable.

Net cash provided by financing activities for the six months ended September 30, 2020 was $19,780,399. Shares issued during the period delivered proceeds of $15,750,672 via a combination of the ATM facility and the placement facilitated by Kingswood, with costs directly associated with these activities totalling $957,193. $394,475 was also raised in relation to the exercise of 37,933 warrants and proceeds were also received from the issuance of notes totalling $5,000,000 less commission expense of $325,000.

Net cash provided by financing activities for the six months ended September 30, 2019 was $168,917. The ATM facility delivered proceeds of $152,492. In addition, $26,000 was raised in relation to the exercise of 25,000 warrants. The Company also incurred direct costs of $9,575 related to the ATM financing.

We have no off-balance sheet arrangements, including unrecorded derivative instruments that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

When we prepare our unaudited condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgements that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. We believe our critical accounting policies affect our more significant judgments and estimates used in the preparation of the unaudited condensed consolidated financial statements. During the three month and six ~~months~~month periods ended September 30, ~~2020,~~2021, we have made no material changes or additions with regard to such policies and estimates.

Our foreign currency exposure gives rise to market risk associated with exchange rate movements against the U.S. dollar, our reporting currency. Currently, most of our expenses and cash are denominated in Great Britain Pounds Sterling (“GBP”), with the remaining portion denominated in U.S. dollars. Fluctuations in exchange rates, primarily the U.S. dollar against the GBP, will affect our financial position. At September 30, 2020, the Company held approximately $2.925 million in GBP-denominated bank accounts. Based on this balance, a 1% depreciation of the GBP against the U.S. dollar would cause an approximate $29,250 reduction in cash account balances.

~~We have not utilized any hedging instruments in order to mitigate the foreign currency risk.~~

~~Historically, with UK inflation rates having been low in recent years, inflation has not had a significant effect on our business in the UK, the location of the substantial part of our activities.~~

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on ~~their~~this evaluation, ~~as of September 30, 2020, the Company’s Chief Executive Officer~~our principal executive officer and ~~Chief Financial Officer have~~principal financial officer concluded that, as of September 30, ~~2020, the Company’s~~2021, our disclosure controls and procedures ~~(as defined~~were effective in ~~Rules 13a-15 under~~alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the ~~Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were not effective due to a material weakness in the Company’s internal control over financial reporting.~~SEC.

InThere have been no changes in the Company's internal controls over financial reporting identified in connection with the evaluation required by Rules 13a-15 under the Exchange Act during the fiscal quarter ended September 30, 2020, as required by Rule 15d-15 promulgated under the Exchange Act, the Chief Executive Officer and Chief Financial Officer identified certain changes, as identified in this paragraph, in the Company’s internal control over financial reporting2021 that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting. On September 15, 2020, the Company’s Board of Directors appointed Justin Mclarney to serve as the Company’s Chief Financial Officer. Mr. Mclarney has significant experience building and maintaining accounting and business functions compliant with the Sarbanes-Oxley Act of 2002, as amended. Prior to Mr. Mclarney’s appointment, Mr. Chowdhury, the Company’s Chief Executive Officer, President and member of the Company’s Board of Directors, also served as interim Chief Financial Officer. Following Mr. Mclarney’s appointment, Mr. Chowdhury continues to serve as the Company’s Chief Executive Officer, President and director. In addition, the Company hired Mazars, LLP, to provide third party internal audit support to facilitate the creation and maintenance of an internal control environment to remediate the material weakness identified.

As a result of the onboarding of a permanent Chief Financial Officer, in combination with the on-going work that the Company has been undertaking with the guidance of Mazars, LLP, we believe that our internal control over financial reporting has improved significantly during the quarter ended September 30, 2020. However, the changes and improvement made were not sufficiently embedded during the quarter ended September 30, 2020, to enable the Company to conclude that the material weakness noted above had been fully remediated.

~~None.~~There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended March 31, 2021, filed with the SEC on June 29, 2021.

The exhibits listed on the Exhibit Index below are filed as part of this report.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~NEVADA~~nevada	46-5027260
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

57 West 57th Street Manhattan, NY10019
(Address of Principal Executive Offices) (Zip Code)

~~646-416-8000~~646-416-8000
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NMRD	The Nasdaq Stock Market LLC

		Page
PART I: FINANCIAL INFORMATION
ITEM 1	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and March 31, 2021	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended September 30, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended September 30, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2021 and 2020 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7-13
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14-18
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19
ITEM 4	CONTROLS AND PROCEDURES	19
PART II: OTHER INFORMATION		20
ITEM 1	LEGAL PROCEEDINGS	20
ITEM 1A	RISK FACTORS	20
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	20
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	20
ITEM 4	MINE SAFETY DISCLOSURES	20
ITEM 5	OTHER INFORMATION	20
ITEM 6	EXHIBITS	20
SIGNATURES		21

			~~Page~~
~~PART I: FINANCIAL INFORMATION~~
~~ITEM 1~~		~~FINANCIAL STATEMENTS~~
		~~Condensed Consolidated Balance Sheets as of~~ ~~September 30, 2020~~ ~~(unaudited) and~~ ~~March 31, 2020~~	4
		~~Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended September 30, 2020 and 2019 (unaudited)~~	5
		Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended September 30, 2020 and 2019 (unaudited) and the Six Months ended September 30, 2020 and 2019 (unaudited)	~~6-7~~
		~~Condensed Consolidated Statements of Cash Flows for the~~ ~~Six~~ M~~onths Ended~~ ~~September 30, 2020 and 2019 (unaudited)~~	8
		~~Notes to Condensed Consolidated Financial Statements (unaudited)~~	~~9-15~~
~~ITEM 2~~	��	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~	~~16-20~~
~~ITEM 3~~		~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~	21
~~ITEM 4~~		~~CONTROLS AND PROCEDURES~~	21
~~PART II: OTHER INFORMATION~~			22
~~ITEM 1~~		~~LEGAL PROCEEDINGS~~	22
~~ITEM 1A~~		~~RISK FACTORS~~	22
~~ITEM 2~~		~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~	22
~~ITEM 3~~		~~DEFAULTS UPON SENIOR SECURITIES~~	22
~~ITEM 4~~		~~MINE SAFETY DISCLOSURES~~	22
~~ITEM 5~~		~~OTHER INFORMATION~~	22
~~ITEM 6~~		~~EXHIBITS~~	22
~~SIGNATURES~~			23


	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020

Revenue:		—			—			—			—
Total revenue		0			0			0			0

Operating expenses:
Research and development		286,886			456,280			575,370			771,592
General and administrative		1,427,916			771,533			2,760,102			1,367,253
Total operating expenses		1,714,802			1,227,813			3,335,472			2,138,845

Loss from operations		(1,714,802	)		(1,227,813	)		(3,335,472	)		(2,138,845	)

Interest expense		(1,779,462	)		(353,404	)		(3,502,517	)		(542,428	)
Net loss		(3,494,264	)		(1,581,217	)		(6,837,989	)		(2,681,273	)

Other comprehensive loss:
Foreign currency translation adjustment		(107,151	)		(19,333	)		(117,857	)		(14,510	)
Comprehensive loss		(3,601,415	)		(1,600,550	)		(6,955,846	)		(2,695,783	)

Net loss per share, basic and diluted		(0.15	)		(0.07	)		(0.29	)		(0.12	)
Weighted average number of shares outstanding		23,308,049			22,390,114			23,209,514			21,638,907


	Six Months Ended September 30,
	2021 ($)			2020 ($)

Cash Flows From Operating Activities:
Net loss		(6,837,989	)		(2,681,273	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		81,691			40,746
Accretion of debt discount		3,502,517			542,428
Mark-To-Market FX revaluation		270,400			0
Stock-based compensation		0			59,000
Changes in assets and liabilities:
Prepaid expenses and other receivables		(94,945	)		94,059
Inventory		(264,604	)		(125,311	)
Accounts payable		(102,302	)		(137,999	)
Liability due to related parties		(652,349	)		(676,560	)
Other liabilities and accrued expenses		151,717			(121,357	)
Deferred revenue		469,785			0
Net cash used in operating activities		(3,476,079	)		(3,006,267	)

Cash Flows from Investing Activities:
Capitalized patent costs		(47,426	)		(27,600	)
Capitalized software development costs		(418,794	)		0
Purchase of property and equipment		(220,035	)		(14,032	)
Net cash used in investing activities		(686,255	)		(41,632	)

Cash Flows from Financing Activities:
Costs incurred in relation to equity financing		0			(957,193	)
Commission paid on note payable		0			(325,000	)
Proceeds from issuance of notes		0			5,000,000
Proceeds from issuance of common stock in relation to equity financing		0			15,750,672
Proceeds from warrant exercise		2,963,658			394,475
Repayments of note payable		(3,800,000	)		(82,555	)
Net cash (used in) provided by financing activities		(836,342	)		19,780,399

Net (decrease) increase in cash		(4,998,676	)		16,732,500
Effect of exchange rate changes on cash		(98,499	)		110,332
Cash at beginning of period		31,865,371			106,107
Cash at end of period		26,768,196			16,948,939

Supplemental disclosure of non-cash financing activities:
Release of prepayment for equity compensation		50,000			0

	Six Months Ended September 30,
	2020 ($)			2019 ($)

Cash Flows From Operating Activities:
Net loss		(2,681,273	)		(2,368,305	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		40,746			28,338
Accretion of debt discount		542,428			—
Stock-based compensation		59,000			277,664
Changes in assets and liabilities:
Prepaid expenses and other receivables		94,059			263,022
Inventory		(125,311	)		(170,371	)
Accounts payable		(137,999	)		59,010
Liability due to related parties		(676,560	)		100,533
Other liabilities and accrued expenses		(121,357	)		(52,608	)
Net cash used in operating activities		(3,006,267	)		(1,862,717	)

Cash Flows from Investing Activities:
Capitalized patent costs		(27,600	)		(28,310	)
Purchase of property and equipment		(14,032	)		(133,716	)
Net cash used in investing activities		(41,632	)		(162,026	)

Cash Flows from Financing Activities:
Costs incurred in relation to equity financing		(957,193	)		(9,575	)
Commission paid on note payable		(325,000	)		—
Proceeds from issuance of notes		5,000,000			—
Proceeds from issuance of common stock in relation to equity financing		15,750,672			152,492
Proceeds from warrant exercise		394,475			26,000
Repayments of note payable		(82,555	)		—
Net cash provided by financing activities		19,780,399			168,917

Net increase (decrease) in cash		16,732,500			(1,855,826	)
Effect of exchange rate changes on cash		110,332			(113,723	)
Cash at beginning of period		106,107			3,740,664
Cash at end of period		16,948,939			1,771,115

Supplemental disclosure of non-cash financing activities:
Prepayment of equity compensation		—			85,715

Schedule of earnings (loss) per share
	Three months ended September 30,						Six months ended September 30,
	2021			2020			2021			2020
	($, except share amounts)						($, except share amounts)
Net loss attributable to common stockholders		(3,494,264	)		(1,581,217	)		(6,837,989	)		(2,681,273	)
Weighted average basic and diluted shares outstanding		23,308,049			22,390,114			23,209,514			21,638,907
Basic and diluted loss per share:		(0.15	)		(0.07	)		(0.29	)		(0.12	)

Exhibit No.	Document Description
~~31.1~~10.1	License, Supply and Distribution Agreement, entered into on September 24, 2021 and dated as of September 17, 2021, by and between Nemaura Medical Inc. and MySugarWatch Duopack Limited (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 30, 2021).
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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		NEMAURA MEDICAL INC.

Date: November ~~13, 2020~~12, 2021	By:	/s/ Dewan F.H. Chowdhury
		Dewan F.H. Chowdhury Chief Executive Officer and President (Principal Executive Officer)



Date: November ~~13, 2020~~12, 2021	By:	/s/ Justin J. Mclarney
		Justin J. Mclarney Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Schedule of long term debt

Notes Payable
($)

Within 12 months

Within 24 months