Modular Medical (MODD) 10-Q 13 Feb 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2019	Feb. 12, 2020
Document And Entity Information
Entity Registrant Name	Modular Medical, Inc.
Entity Central Index Key	0001074871
Document Type	10-Q
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,870,261
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Mar. 31, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 3,718,492	$ 6,553,768
Other current assets	50,011	15,590
Security deposit	4,106	7,500
TOTAL CURRENT ASSETS	3,772,609	6,576,858
Intangible assets, net	0	180
Property and equipment, net	110,402	75,948
TOTAL ASSETS	3,883,011	6,652,986
CURRENT LIABILITIES
Accounts payable	254,289	138,314
Accrued expenses	20,418	40,615
TOTAL LIABILITIES	274,707	178,929
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding	0	0
Common Stock, $0.001 par value, 50,000,000 shares authorized, 17,870,261 and 17,840,261 shares issued and outstanding as of December 31, 2019 and March 31, 2019, respectively	17,870	17,840
Additional paid-in capital	10,241,876	9,684,578
Common stock issuable	0	19,800
Accumulated deficit	(6,651,442)	(3,248,161)
TOTAL STOCKHOLDERS' EQUITY	3,608,304	6,474,057
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 3,883,011	$ 6,652,986

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2019	Mar. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,870,261	17,840,261
Common stock, shares outstanding	17,870,261	17,840,261

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Operating Expenses:
Research and development	$ 608,019	$ 504,787	$ 1,945,043	$ 1,008,127
General and administration expenses	527,829	245,773	1,486,386	546,621
Total Operating Expenses	1,135,848	750,560	3,431,429	1,554,748
Loss From Operations	(1,135,848)	(750,560)	(3,431,429)	(1,554,748)
Other Income (Expenses):
Interest income	2,331	11,355	28,148	22,203
Net Loss	$ (1,133,517)	$ (739,205)	$ (3,403,281)	$ (1,532,545)
Net Loss Per Share:
Basic and Diluted	$ (0.06)	$ (0.04)	$ (0.19)	$ (0.09)
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic and Diluted	17,870,261	16,848,236	17,862,625	16,272,642

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock	Additional Paid-In Capital	Common Stock Issuable	Accumulated Deficit	Total
Beginning balance, shares at Mar. 31, 2018	15,983,273
Beginning balance, amount at Mar. 31, 2018	$ 15,983	$ 5,011,661	$ 0	$ (708,663)	$ 4,318,981
Net loss				(249,566)	(249,566)
Ending balance, shares at Jun. 30, 2018	15,983,273
Ending balance, amount at Jun. 30, 2018	$ 15,983	5,011,661	0	(958,229)	4,069,415
Beginning balance, shares at Mar. 31, 2018	15,983,273
Beginning balance, amount at Mar. 31, 2018	$ 15,983	5,011,661	0	(708,663)	4,318,981
Stock-based compensation					374,006
Net loss					(1,532,545)
Ending balance, shares at Dec. 31, 2018	17,799,705
Ending balance, amount at Dec. 31, 2018	$ 17,800	9,387,566	0	(2,241,208)	7,164,158
Beginning balance, shares at Jun. 30, 2018	15,983,273
Beginning balance, amount at Jun. 30, 2018	$ 15,983	5,011,661	0	(958,229)	4,069,415
Stock-based compensation		166,170			166,170
Net loss				(543,774)	(543,774)
Ending balance, shares at Sep. 30, 2018	15,983,273
Ending balance, amount at Sep. 30, 2018	$ 15,983	5,177,831	0	(1,502,003)	3,691,811
Stock-based compensation		191,170			191,170
Net loss				(739,205)	(739,205)
Ending balance, shares at Dec. 31, 2018	17,799,705
Ending balance, amount at Dec. 31, 2018	$ 17,800	9,387,566	0	(2,241,208)	7,164,158
Beginning balance, shares at Mar. 31, 2019	17,840,261
Beginning balance, amount at Mar. 31, 2019	$ 17,840	9,684,578	19,800	(3,248,161)	6,474,057
Shares issued for services, shares	30,000
Shares issued for services, amount	$ 30	19,770	(19,800)		0
Stock-based compensation		194,428			194,428
Net loss				(1,122,198)	(1,122,198)
Ending balance, shares at Jun. 30, 2019	17,870,261
Ending balance, amount at Jun. 30, 2019	$ 17,870	9,898,776	0	(4,370,359)	5,546,287
Beginning balance, shares at Mar. 31, 2019	17,840,261
Beginning balance, amount at Mar. 31, 2019	$ 17,840	9,684,578	19,800	(3,248,161)	6,474,057
Stock-based compensation					537,528
Net loss					(3,403,281)
Ending balance, shares at Dec. 31, 2019	17,870,261
Ending balance, amount at Dec. 31, 2019	$ 17,870	10,241,876	0	(6,651,442)	3,608,304
Beginning balance, shares at Jun. 30, 2019	17,870,261
Beginning balance, amount at Jun. 30, 2019	$ 17,870	9,898,776	0	(4,370,359)	5,546,287
Stock-based compensation		156,355			156,355
Net loss				(1,147,566)	(1,147,566)
Ending balance, shares at Sep. 30, 2019	17,870,261
Ending balance, amount at Sep. 30, 2019	$ 17,870	10,055,131	0	(5,517,925)	4,555,076
Stock-based compensation		186,745			186,745
Net loss				(1,133,517)	(1,133,517)
Ending balance, shares at Dec. 31, 2019	17,870,261
Ending balance, amount at Dec. 31, 2019	$ 17,870	$ 10,241,876	$ 0	$ (6,651,442)	$ 3,608,304

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (3,403,281)	$ (1,532,545)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	537,528	374,006
Depreciation and amortization	23,840	8,639
Increase/Decrease in current assets:
Other assets and prepaid expenses	(34,257)	(5,018)
Security deposit	3,394	0
Decrease in current liabilities:
Accounts payable and accrued expenses	95,778	47,977
Net cash used in operating activities	(2,776,998)	(1,106,941)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(58,278)	(55,058)
Net cash used in investing activities	(58,278)	(55,058)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from private placement of stock	0	3,983,915
Payment to related party	0	(516)
Proceeds from issuance of stock	0	19,800
Net cash provided by financing activities	0	4,003,199
Net decrease in cash and cash equivalents	(2,835,276)	2,841,200
Cash and cash equivalents, at the beginning of the period	6,553,768	4,296,676
Cash and cash equivalents, at the end of the period	$ 3,718,492	$ 7,137,876

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Modular Medical, Inc. (the Company) was formed as a corporation under the laws of the State of Nevada in October 1998 under the name Bear Lake Recreation, Inc. The Company had no material business operations from 2002 until approximately 2017 when it acquired all of the issued and outstanding shares of Quasuras, Inc., a Delaware corporation (Quasuras). As the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was accounted for as a reverse merger. As such, the Company recognized the assets and liabilities of Quasuras, acquired in the merger, at their historical carrying amounts. Prior to the acquisition of Quasuras and, since at least 2002, the Company was a shell company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the Exchange Act). In June 2017, the Company changed its name from Bear Lake Recreation, Inc. to Modular Medical, Inc. The Company is a development-stage medical device company focused on the design, development and eventual commercialization of an innovative insulin pump to address shortcomings and problems represented by the relatively limited adoption of currently available pumps for insulin dependent people with diabetes. The Company has developed a hardware technology allowing people with insulin-dependent diabetes to receive their daily insulin in two ways, through a continuous “basal” delivery allowing a small amount of insulin to be in the blood at all times and a “bolus” delivery to address meal time glucose input and to address when the blood glucose level becomes excessively high. By addressing the time and effort required to effectively treat their condition, the Company believes it can address the less technically savvy, less motivated part of the market. The accompanying condensed consolidated financial statements of the Company have been prepared without audit. The condensed consolidated balance sheet as of March 31, 2019 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 accounting principles generally accepted in the United States (GAAP) have been condensed or omitted in accordance with these rules and regulations of the Securities and Exchange Commission (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 and nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the year ending March 31, 2020 or for any other future period. Basis of Presentation The 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 Company’s fiscal year ends on March 31 of each calendar year. Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. generally accepted accounting principles (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 consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reportable Segment The Company has one reportable segment and uses one measurement of profitability for its business. Research and Development The Company expenses research and development expenditures as incurred. General and Administrative General and administrative expenses consist primarily of payroll and benefit costs, rent, legal and accounting fees, and office and other administrative expenses. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash. The Company maintains its cash balances 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. The uninsured portion of the cash balances held at the Company’s primary bank aggregated approximately $3,463,816 at December 31, 2019. No reserve has been made in the financial statements for any possible loss due to financial institution failure. Risks and Uncertainties The Company is subject to risks from, among other things, competition associated with the industry in general, risks associated with its ability to continue to obtain financing and to satisfy liquidity requirements, as well as risks related to rapidly changing customer requirements, its limited operating history and the volatility of public markets. Contingencies Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, with the assistance of legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. Cash and Cash Equivalents Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and highly liquid debt instruments with original maturities of three months or less. Property & Equipment Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of property and equipment are generally as follows: computer equipment & software, three to ten years; office equipment, two to three years; buildings and improvements, five to fifteen years; and machinery and equipment, one to five years. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments · 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 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 and equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values. 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 during the period. Diluted loss per share gives effect to all potentially dilutive common shares outstanding during the period. For the three and nine months ended December 31, 2019, 2,526,443 outstanding options to purchase common stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. For the three and nine months ended December 31, 2018, 1,344,687 outstanding options to purchase common stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share for the periods indicated: Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 Net loss $ (1,133,517 ) $ (739,205 ) $ (3,403,281 ) $ (1,532,545 ) Net loss per share Basic and diluted $ (0.06 ) $ (0.04 ) $ (0.19 ) $ (0.09 ) Weighted average shares outstanding Basic and diluted 17,870,261 16,848,236 17,862,625 16,272,642 Recently Adopted Accounting Pronouncement In 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) Codification Improvements to Topic 842 Leases (Topic 842): Targeted Improvements Leases (Topic 842): Codification Improvements, Reclassification 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.

ACCRUED EXPENSES

ACCRUED EXPENSES	9 Months Ended
	Dec. 31, 2019
Payables and Accruals [Abstract]
ACCRUED EXPENSES	As of December 31, 2019 and March 31, 2019, accrued expenses were primarily comprised of accrued legal, professional and consulting services fees.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
	Dec. 31, 2019
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	2017 Equity Incentive Plan In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the EIP) with 3,000,000 shares of common stock reserved for issuance. Under the EIP, 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. The EIP is administered by the Board or, in the alternative, a committee designated by the Board. The exercise or purchase price of a stock option shall be calculated as follows: (i) In the case of an incentive stock option, (A) granted to employees, who, at the time of the grant of such incentive stock option own stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company, the per share exercise price shall be not less than one hundred ten percent (110%) of the fair market value per share on the date of grant; or (B) granted to employees, other than to employees, described in the preceding clause, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant; (ii) In the case of a non-qualified stock option, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant unless otherwise determined by the Board; and (iii) In the case of other grants, such price as determined by the Board. The Board is responsible for determining the consideration to be paid for the shares of common stock to be issued upon exercise or purchase. The EIP generally does not allow for the transfer of awards, and the Board may amend, suspend or terminate the EIP at any time. Stock-Based Compensation Expense The expense relating to stock options is recognized on a straight-line basis over the requisite service period, usually the vesting period, based on the grant date fair value. The unamortized compensation cost, as of December 31, 2019, was $1,627,097 related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 2.83 years. During the nine months ended December 31, 2019, the Company granted options to purchase 996,535 shares of its common stock to employees, directors and consultants. The options had 10-year terms, and 116,535 options vested immediately on the grant dates. The fair value of the options was determined to be $1,634,595, of which $220,578 was recorded as stock-based compensation expense and included in the condensed consolidated statement of operations for the nine months ended December 31, 2019. The following assumptions were used in the fair value method calculations: Nine Months Ended December 31, 2019 Risk-free interest rates 1.34% - 2.41 % Volatility 87% - 102 % Expected life (years) 5.0 - 6.0 Dividend yield — % 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 of three comparable organizations. The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates, as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of 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. In accordance with ASU No. 2016-09, the Company accounts for forfeitures as they occur. A summary of stock option activity under the EIP is presented below: Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance at April 1, 2019 1,470,092 1,529,908 $ 0.86 Options granted (22,686 ) 22,686 2.25 Balance at June 30, 2019 1,447,406 1,552,594 $ 0.88 Options granted (77,800 ) 77,800 2.25 Balance at September 30, 2019 1,369,606 1,630,394 $ 0.95 Options granted (896,049) 896,049 2.25 Balance at December 31, 2019 473,557 2,526,443 $ 1.41 There were no stock options exercised during the nine months ended December 31, 2019 and 2018. The following table summarizes the range of outstanding and exercisable options as of December 31, 2019: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Aggregate Intrinsic value $0.66 - $2.25 2,526,443 9.12 $ 1.41 1,462,222 $ 0. 80 $ — The Company is required to present the tax benefits resulting from tax deductions in excess of the compensation cost recognized from the exercise of stock options as financing cash flows in the consolidated statements of cash flows. For the nine months ended December 31, 2019 and 2018, there were no such tax benefits associated with the exercise of stock options.

INCOME TAXES

INCOME TAXES	9 Months Ended
	Dec. 31, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	The Company determines deferred tax assets and liabilities based upon the differences between the financial statement and tax bases of the Company’s assets and liabilities using tax rates in effect for the year in which the Company expects the differences to affect taxable income. A valuation allowance is established for any deferred tax assets for which it is more likely than not that all or a portion of the deferred tax assets will not be realized. Based on the available information and other factors, management believes it is more likely than not that its federal and state net deferred tax assets will not be fully realized, and the Company has recorded a full valuation allowance. The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. All tax returns from 2016 to 2019 may be subject to examination by the U.S. federal and state tax authorities. As of December 31, 2019, the Company has not recorded any liability for unrecognized tax benefits related to uncertain tax positions.

ROYALTY AGREEMENT

ROYALTY AGREEMENT	9 Months Ended
	Dec. 31, 2019
Shareholder
ROYALTY AGREEMENT	In July 2017, the Company entered into a royalty agreement with its founder, chief executive officer and major shareholder (the Founder). Pursuant to the agreement, the Founder assigned and transferred all of his rights in the intellectual property of Quasuras in return for future royalty payments. 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) five percent (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 thirty days after the end of each calendar quarter.

RELATED PARTY TRANSACTION

RELATED PARTY TRANSACTION	9 Months Ended
	Dec. 31, 2019
Related Party Transactions [Abstract]
Related Party Transaction	During the nine months ended December 31, 2019, the Company entered into consulting agreements with a member of its Board. Under the consulting agreements, the Company paid the director consulting fees of $25,000 and $75,000 in cash during the three and nine months ended December 31, 2019, respectively, and the director was granted stock options with a fair value of $22,500 and $60,000 during the three and nine months ended December 31, 2019, respectively. The options were for a total of 36,788 shares of common stock, were fully vested on the grant dates and have terms of 10 years.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent events	In January 2020, the Board approved an amendment to the Plan to increase the number of shares reserved for issuance by 1,000,000 shares. In January 2020, the Company executed a three-year lease for a new, larger corporate facility in San Diego, California. The lease will commence on April 1, 2020 and provides for an initial monthly rent of approximately $12,400 with annual rent increases of approximately 3%. In addition, the Company paid a $100,000 security deposit.

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The 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 Company’s fiscal year ends on March 31 of each calendar year.
Use of Estimates	The preparation of the accompanying financial statements in conformity with U.S. generally accepted accounting principles (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 consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Reportable Segment	The Company has one reportable segment and uses one measurement of profitability for its business.
Research and Development	The Company expenses research and development expenditures as incurred.
General and Administration	General and administrative expenses consist primarily of payroll and benefit costs, rent, legal and accounting fees, and office and other administrative expenses.
Concentration of Credit Risk	Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash. The Company maintains its cash balances 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. The uninsured portion of the cash balances held at the Company’s primary bank aggregated approximately $3,463,816 at December 31, 2019. No reserve has been made in the financial statements for any possible loss due to financial institution failure.
Risks and Uncertainties	The Company is subject to risks from, among other things, competition associated with the industry in general, risks associated with its ability to continue to obtain financing and to satisfy liquidity requirements, as well as risks related to rapidly changing customer requirements, its limited operating history and the volatility of public markets.
Contingencies	Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, with the assistance of legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
Cash and Cash Equivalents	Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and highly liquid debt instruments with original maturities of three months or less.
Property, Plant & Equipment	Property and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of property and equipment are generally as follows: computer equipment & software, three to ten years; office equipment, two to three years; buildings and improvements, five to fifteen years; and machinery and equipment, one to five years.
Fair Value of Financial Instrument	For certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments · 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 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 and equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair values.
Earnings Per Share ("EPS")	Basic net loss per share is computed by dividing loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share gives effect to all potentially dilutive common shares outstanding during the period. For the three and nine months ended December 31, 2019, 2,526,443 outstanding options to purchase common stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. For the three and nine months ended December 31, 2018, 1,344,687 outstanding options to purchase common stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share for the periods indicated: Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 Net loss $ (1,133,517 ) $ (739,205 ) $ (3,403,281 ) $ (1,532,545 ) Net loss per share Basic and diluted $ (0.06 ) $ (0.04 ) $ (0.19 ) $ (0.09 ) Weighted average shares outstanding Basic and diluted 17,870,261 16,848,236 17,862,625 16,272,642
Recently Issued Accounting Pronouncements	In 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) Codification Improvements to Topic 842 Leases (Topic 842): Targeted Improvements Leases (Topic 842): Codification Improvements,
Reclassification	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.

ORGANIZATION AND SUMMARY OF S_3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of earnings per share	Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 Net loss $ (1,133,517 ) $ (739,205 ) $ (3,403,281 ) $ (1,532,545 ) Net loss per share Basic and diluted $ (0.06 ) $ (0.04 ) $ (0.19 ) $ (0.09 ) Weighted average shares outstanding Basic and diluted 17,870,261 16,848,236 17,862,625 16,272,642

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	9 Months Ended
	Dec. 31, 2019
STOCKHOLDERS' EQUITY
Assumptions used in fair value method	Nine Months Ended December 31, 2019 Risk-free interest rates 1.34% - 2.41 % Volatility 87% - 102 % Expected life (years) 5.0 - 6.0 Dividend yield — %
Stock option activity	Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance at April 1, 2019 1,470,092 1,529,908 $ 0.86 Options granted (22,686 ) 22,686 2.25 Balance at June 30, 2019 1,447,406 1,552,594 $ 0.88 Options granted (77,800 ) 77,800 2.25 Balance at September 30, 2019 1,369,606 1,630,394 $ 0.95 Options granted (896,049) 896,049 2.25 Balance at December 31, 2019 473,557 2,526,443 $ 1.41
Range of outstanding and exercisable options	Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Aggregate Intrinsic value $0.66 - $2.25 2,526,443 9.12 $ 1.41 1,462,222 $ 0. 80 $ —

ORGANIZATION AND SUMMARY OF S_4

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended						9 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net Loss	$ (1,133,517)	$ (1,147,566)	$ (1,122,198)	$ (739,205)	$ (543,774)	$ (249,566)	$ (3,403,281)	$ (1,532,545)
Net Loss Per Share:
Basic and Diluted	$ (0.06)			$ (0.04)			$ (0.19)	$ (0.09)
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic and Diluted	17,870,261			16,848,236			17,862,625	16,272,642

ORGANIZATION AND SUMMARY OF S_5

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Uninsured cash and cash equivalents	$ 3,463,816		$ 3,463,816
Anti-dilutive outstanding options excluded	2,526,443	1,344,687	2,526,443	1,344,687
Cash rent payments			$ 39,700
Rent expense			$ 25,500
Computer software developed or acquired for internal use | Minimum
Estimated useful life			3 years
Computer software developed or acquired for internal use | Maximum
Estimated useful life			10 years
Computers and equipment | Minimum
Estimated useful life			3 years
Computers and equipment | Maximum
Estimated useful life			10 years
Office Equipment | Minimum
Estimated useful life			2 years
Office Equipment | Maximum
Estimated useful life			3 years
Buildings and improvements | Minimum
Estimated useful life			5 years
Buildings and improvements | Maximum
Estimated useful life			15 years
Machinery and equipment | Minimum
Estimated useful life			1 year
Machinery and equipment | Maximum
Estimated useful life			5 years

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details)	9 Months Ended
	Dec. 31, 2019
Dividend yield	0.00%
Minimum
Risk-free interest rates	1.34%
Volatility	87.00%
Expected life (years)	5 years
Maximum
Risk-free interest rates	2.41%
Volatility	102.00%
Expected life (years)	6 years

STOCK-BASED COMPENSATION (Det_2

STOCK-BASED COMPENSATION (Details 1) - $ / shares	3 Months Ended			9 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2019
Granted				996,535
Equity Incentive Plan
Shares available for grant, beginning	1,369,606	1,447,406	1,470,092	1,470,092
Granted	(896,049)	(77,800)	(22,686)
Shares available for grant, ending	473,557	1,369,606	1,447,406	473,557
Number of options outstanding, beginning	1,630,394	1,552,594	1,529,908	1,529,908
Number of options granted	896,049	77,800	22,686
Number of options outstanding, ending	2,526,443	1,630,394	1,552,594	2,526,443
Weighted average exercise price outstanding, beginning	$ 0.95	$ 0.88	$ 0.86	$ 0.86
Weighted average exercise price granted	2.25	2.25	2.25
Weighted average exercise price outstanding, ending	$ 1.41	$ 0.95	$ 0.88	$ 1.41

STOCK-BASED COMPENSATION (Det_3

STOCK-BASED COMPENSATION (Details 2) - Option 1	9 Months Ended
	Dec. 31, 2019USD ($)$ / sharesshares
Exercise price range	.66-2.25
Number of options outstanding, ending | shares	2,526,443
Weighted average remaining contractual life (in years)	9 years 1 month 13 days
Weighted average exercise price outstanding | $ / shares	$ 1.41
Number of options exercisable | shares	1,462,222
Weighted average exercise price exercisable | $ / shares	$ .80
Aggregate intrinsic value exercisable | $	$ 0

STOCK-BASED COMPENSATION (Det_4

STOCK-BASED COMPENSATION (Details Narrative)	9 Months Ended
	Dec. 31, 2019USD ($)shares
STOCKHOLDERS' EQUITY
Unamortized compensation cost related to stock options | $	$ 1,627,097
Weighted-average period	2 years 9 months 29 days
Options granted | shares	996,535
Options vested | shares	116,535
Stock based compensation expense | $	$ 220,578

Related Party Transaction (Deta

Related Party Transaction (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2019
Related Party Transactions [Abstract]
Director consulting fee	$ 25,000	$ 75,000
Stock option	22,500	60,000
Term		10 years