Document and Entity Information
Document and Entity Information | 9 Months Ended |
Dec. 31, 2019 | |
Document And Entity Information | |
Entity Registrant Name | Modular Medical, Inc. |
Entity Central Index Key | 0001074871 |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | To update financials. |
Entity Incorporation, State or Country Code | NV |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Small Business | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 3,718,492 | $ 6,553,768 | $ 4,296,676 |
Other current assets | 50,011 | 15,590 | 16,804 |
Security deposit, current | 4,106 | 7,500 | 0 |
TOTAL CURRENT ASSETS | 3,772,609 | 6,576,858 | 4,313,480 |
Intangible assets, net | 0 | 180 | 213 |
Property and equipment, net | 110,402 | 75,948 | 13,259 |
Security deposit, non-current | 0 | 0 | 7,500 |
TOTAL NON-CURRENT ASSETS | 110,402 | 76,128 | 20,972 |
TOTAL ASSETS | 3,883,011 | 6,652,986 | 4,334,452 |
CURRENT LIABILITIES | |||
Accounts payable | 254,289 | 138,314 | 14,955 |
Accrued expenses | 20,418 | 40,615 | 516 |
TOTAL LIABILITIES | 274,707 | 178,929 | 15,471 |
STOCKHOLDERS' EQUITY | |||
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding | 0 | 0 | 0 |
Common Stock, $0.001 par value, 50,000,000 shares authorized, 17,870,261, 17,840,261 and 15,983,273 shares issued and outstanding as of December 31, 2019, March 31, 2019 and March 31, 2018 respectively | 17,870 | 17,840 | 15,983 |
Additional paid-in capital | 10,241,876 | 9,684,578 | 5,011,661 |
Common stock issuable | 0 | 19,800 | 0 |
Accumulated deficit | (6,651,442) | (3,248,161) | (708,663) |
TOTAL STOCKHOLDERS' EQUITY | 3,608,304 | 6,474,057 | 4,318,981 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,883,011 | $ 6,652,986 | $ 4,334,452 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Statement of Financial Position [Abstract] | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,870,261 | 17,840,261 | 15,983,273 | 15,983,273 |
Common stock, shares outstanding | 17,870,261 | 17,840,261 | 15,983,273 | 15,983,273 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Expenses: | ||||||
Professional expenses | $ 0 | $ 0 | $ 0 | $ 0 | $ 260,396 | $ 232,961 |
Research and development | 608,019 | 504,787 | 1,945,043 | 1,008,127 | 1,882,345 | 332,642 |
General and administration expenses | 527,829 | 245,773 | 1,486,386 | 546,621 | 420,090 | 98,700 |
Depreciation expense | 0 | 0 | 0 | 0 | 14,468 | 1,861 |
Total Operating Expenses | 1,135,848 | 750,560 | 3,431,429 | 1,554,748 | 2,577,299 | 666,164 |
Loss From Operations | (1,135,848) | (750,560) | (3,431,429) | (1,554,748) | (2,577,299) | (666,164) |
Other Income (Expenses): | ||||||
Interest income | 2,331 | 11,355 | 28,148 | 22,203 | 39,390 | 8,518 |
Loss Before Income Taxes | (1,133,517) | (739,205) | (3,403,281) | (1,532,545) | (2,537,909) | (657,646) |
Provision for Income Taxes | 0 | 0 | 0 | 0 | 1,589 | 1,600 |
Net Loss | $ (1,133,517) | $ (739,205) | $ (3,403,281) | $ (1,532,545) | $ (2,539,498) | $ (659,246) |
Net Loss Per Share: | ||||||
Basic and Diluted | $ (0.06) | $ (0.04) | $ (0.19) | $ (0.09) | $ (0.153) | $ (0.049) |
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 | 16,589,633 | 13,336,309 |
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, 2017 | 7,582,060 | ||||
Beginning balance, amount at Mar. 31, 2017 | $ 7,582 | $ 404,467 | $ 0 | $ (49,417) | $ 362,632 |
Reverse capitalization, shares | 1,168,182 | ||||
Reverse capitalization, amount | $ 1,168 | (117,445) | (116,277) | ||
Shares issued for cash, shares | 7,233,031 | ||||
Shares issued for cash, amount | $ 7,233 | 4,724,639 | 4,731,872 | ||
Stock-based compensation | 0 | ||||
Net loss | (659,246) | (659,246) | |||
Ending balance, shares at Mar. 31, 2018 | 15,983,273 | ||||
Ending 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 Mar. 31, 2018 | 15,983,273 | ||||
Beginning balance, amount at Mar. 31, 2018 | $ 15,983 | 5,011,661 | 0 | (708,663) | 4,318,981 |
Shares issued for cash, shares | 1,856,988 | ||||
Shares issued for cash, amount | $ 1,857 | 4,140,809 | 4,142,666 | ||
Shares issued for services, amount | 19,800 | 19,800 | |||
Stock-based compensation | 532,108 | 532,108 | |||
Net loss | (2,539,498) | (2,539,498) | |||
Ending balance, shares at Mar. 31, 2019 | 17,840,261 | ||||
Ending balance, amount at Mar. 31, 2019 | $ 17,840 | 9,684,578 | 19,800 | (3,248,161) | 6,474,057 |
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 | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | $ (3,403,281) | $ (1,532,545) | $ (2,539,498) | $ (659,246) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Stock-based compensation | 537,528 | 374,006 | 532,108 | 0 |
Depreciation and amortization | 23,840 | 8,639 | 14,468 | 1,861 |
Shares for services | 0 | 0 | 19,800 | 0 |
Increase/Decrease in current assets: | ||||
Other assets and prepaid expenses | (34,257) | (5,018) | 1,214 | (23,998) |
Security deposit | 3,394 | 0 | 0 | 0 |
Decrease in current liabilities: | ||||
Accounts payable and accrued expenses | 95,778 | 47,977 | 163,974 | (109,748) |
Net cash used in operating activities | (2,776,998) | (1,106,941) | (1,807,934) | (791,131) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property, plant and equipment | (58,278) | (55,058) | (77,124) | (15,119) |
Purchase of intangible assets | 0 | 0 | 0 | (213) |
Net cash used in investing activities | (58,278) | (55,058) | (77,124) | (15,332) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from private placement of stock | 0 | 3,983,915 | 4,142,666 | 4,731,872 |
Payment to related party | 0 | (516) | (516) | (20,740) |
Proceeds from issuance of stock | 0 | 19,800 | 0 | 0 |
Net cash provided by financing activities | 0 | 4,003,199 | 4,142,150 | 4,711,132 |
Net decrease in cash and cash equivalents | (2,835,276) | 2,841,200 | 2,257,092 | 3,904,669 |
Cash and cash equivalents, at the beginning of the period | 6,553,768 | 4,296,676 | 4,296,676 | 392,007 |
Cash and cash equivalents, at the end of the period | 3,718,492 | 7,137,876 | 6,553,768 | 4,296,676 |
SUPPLEMENTAL DISCLOSURES: | ||||
Cash paid during the year for income tax payments | 0 | 0 | 1,589 | 1,600 |
Cash paid during the year for interest payments | $ 0 | $ 0 | $ 0 | $ 0 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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. | Modular Medical, Inc. (the “Company”) was organized under the laws of the State of Nevada on October 22, 1998, to engage in any lawful purpose. The Company has at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. Quasuras, Inc. (“Quasuras”) was incorporated in Delaware on April 20, 2015. Quasuras has developed a hardware technology allowing people with 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 too high. By addressing the time and effort required to effectively treat their condition, Quasuras believes it can address the less technically savvy, less motivated part of the market. Reorganization On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. Since 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 Reorganization, at their historical carrying amounts. Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras. The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. The following summarizes the more significant of such policies: Basis of Presentation The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Principles of Consolidation The consolidated financial statements include the accounts of Modular Medical, Inc. and its wholly-owned subsidiary Quasuras, Inc., and are collectively referred to as the “Company”. All material intercompany accounts, transactions and profits were eliminated in consolidation. Use of Estimates The preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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. The Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. Professional Fees The Company expenses the cost of legal, accounting, audit, tax and other professional services. Research and Development The Company expenses the cost of research and development as incurred. Research and development costs charged to operations were approximately $ 1,882,345 and $332,642 for the fiscal year ended March 31, 2019 and 2018, respectively. General and Administration General and administrative expense consists primarily of payroll and benefit related costs, rent, office expenses, equipment supplied and meetings and travel. Income Taxes The Company utilizes Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with FASB ASC Topic 740. When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the consolidated statements of income. At March 31, 2019 and 2018, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended March 31, 2019 and prior years or in computing its tax provision for 2019. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended March 31, 2016 to the present, generally for three years after they are filed. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances at financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to limits of approximately $250,000. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts. Risks and Uncertainties The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets. Contingencies Certain conditions may exist as of the date the 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’s management and legal counsel assess 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’s 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 all highly liquid debt instruments with original maturities of three months or less. At March 31, 2019 and March 31, 2018, the Company had $6,553,768 and $4,296,676, respectively, in cash. Deposits at the bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $6,269,116 and $3,933,002, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents. 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 our property and equipment are generally as follows: computer equipment & software developed or acquired for internal use, three to ten years; office equipment, two to three years; buildings and improvements, five to fifteen years; leasehold improvements, two to ten years; and machinery and equipment, one to five years. As of March 31, 2019 and March 31, 2018, property, plant and equipment amounted to: March 31, 2019 March 31, 2018 Computer equipment and software $ 20,565 $ 15,103 Office equipment 49,724 — Machinery and equipment 21,937 — Less: accumulated depreciation (16,278 ) (1,844 ) $ 75,948 $ 13,259 Depreciation expenses for the year ended March 31, 2019 and 2018 was $14,435 and $1,844, respectively. 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. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: 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 fair value. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the notes payable approximates fair value. Earnings Per Share (“EPS”) Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). During the years ended March 31, 2019 and 2018 we incurred losses, therefore the effect of any common stock equivalent would be anti-dilutive during these periods. The following table sets for the computation of basic and diluted earnings per share for the fiscal years ended March 31, 2019 and 2018: March 31, 2019 March 31, 2018 Net Loss $ (2,539,498 ) $ (659,246 ) Net Loss Per Share Basic and Diluted: $ (0.153 ) $ (0.049 ) Weighted average number of shares used in computing basic and diluted net loss per share: Basic 16,589,633 13,336,309 Diluted 16,589,633 13,336,309 Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In January 2016, The FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses a diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We adopted this ASU in 2016 and the implementation did not have a material impact on our financial position or statement of operations. In August 2018, the FASB issued guidance that eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow hedge to be recorded in other comprehensive income, the change in fair value of derivative to be recorded in the same income statement line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020. Early adoption is permitted and the modified retrospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, Leases (“Topic 842”). Topic 842 requires an entity to recognize right-of -use assets and lease liability on its balance sheet and disclosure key information about leasing arrangements. For public companies, Topic 842 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. We have evaluated this ASU and believe this guidance will not have a material impact on our financial position and statement of operations. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. 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 flow. |
REORGANIZATION AND PRIVATE PLAC
REORGANIZATION AND PRIVATE PLACEMENT | 12 Months Ended |
Mar. 31, 2019 | |
Reorganization And Private Placement | |
REORGANIZATION AND PRIVATE PLACEMENT | On April 26, 2017, Modular Medical, Inc. issued 2,900,000 shares (the “Control Block”), of new, restricted common stock, par value, $0.001, per share, for a purchase price of $375,000, resulting in a change in control of Modular Medical, Inc. On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among, Modular Medical, Inc., 3 Quasuras Shareholders and Quasuras (the “Acquisition Agreement”), the Company acquired all 4,400,000 shares of Quasuras’ common stock which represented one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of our common stock, resulting in Quasuras becoming our wholly-owned subsidiary (the “Acquisition”). Simultaneously with the closing of the Acquisition and as a condition thereto, we sold (the “2017 Private Placement”), in a private placement an aggregate of 7,233,031 for cash and 568,182 from reissuance of previously canceled shares of our common stock pursuant to one or more exemptions from the registration requirements of the Securities Act, at a purchase price of $0.66 per share resulting in net proceeds to us of approximately $4,731,872. Simultaneously with the Acquisition and Private Placement, the Company cancelled all 2,900,000 Control Block shares it had issued in the Control Block Acquisition (the “Share Cancellation”). In connection with the Private Placement, we paid $41,928 as compensation in connection with sales of our shares therein. Following the Acquisition, the 2017 Private Placement and the Share Cancellation, we had issued and outstanding 15,983,273 shares of our common stock. The cash received in the private placement was recorded as the cash received in reorganization in the accompanying consolidated financial statements. Simultaneously with and as a condition to the closing of the Acquisition and the Private Placement, pursuant to an Intellectual Property Transfer Agreement, dated as of July 24, 2018, by and among us, Quasuras and Mr. DiPerna (the “IP Transfer Agreement”), Mr. DiPerna transferred to us all intellectual property rights owned directly and/or indirectly by him related to our proposed business. Separately, we agreed to pay Mr. DiPerna as part of his compensation for services to be performed for us pursuant to a Royalty Agreement (the “Royalty Agreement”) certain fees based upon future sales, if any, of our proposed product subject to a maximum $10,000,000 “cap” on the aggregate amount of fees that Mr. DiPerna could earn from such arrangement. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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. | As of March 31, 2019, and 2018, accrued expenses amounted to $178,929 and $14,955, respectively. Accrued expenses comprised of accrued legal and professional, consultant services and year end employee bonuses as of March 31, 2019 and March 31, 2018. |
PAYABLE TO RELATED PARTY
PAYABLE TO RELATED PARTY | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Related Party Transactions [Abstract] | ||
PAYABLE TO RELATED PARTY | 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. | Payable to related party comprises of the amounts paid by the major shareholder on behalf of the Company. The payable is unsecured, non-interest bearing and due on demand. As of March 31, 2019 and 2018, respectively, the payable to related party amounted to $0 and $516. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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. | Common Stock On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement by and among the Company and Quasuras Inc., the Company acquired 100% of the issued and outstanding shares of Quasuras for 7,582,060 shares of common stock of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. The historical equity for Quasuras was restated pursuant to the reorganization. Preferred Stock The Company has 5,000,000 shares of preferred stock authorized. The par value of the shares is $0.001. As of March 31, 2019, none of the shares of preferred stock of the Company were issued. 2017 Equity Incentive Plan On October 19, 2017, the board of directors approved the 2017 Equity Incentive Plan (the “EIP”) that authorizes the board of directors or a committee of the board of directors to grant a broad range of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock units. The EIP has a 10-year term and has a reserve of 3,000,000 shares of the Company’s common stock for issuance. The term of options granted under the EIP may not exceed ten years. The term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. Generally, options granted under the Amended 2010 Plan vest over a three-year period and have a ten-year term. Under the EIP, the exercise or purchase price 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 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 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 100% of the fair market value per share on the date of grant unless otherwise determined by the board of directors; and (iii) In the case of other grants, such price as is determined by the board of directors. The board of directors 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 doesn’t allow for the transfer of the options, and the board of directors may amend, suspend or terminate the EIP at any time. Stock-Based Compensation Expense During the year ended March 31, 2019, the Company granted a total of 64,687 options to its chief executive officer in lieu of salary. The options expire 10 years from the respective grant dates and vested immediately upon grant. The fair value of these options was determined to be $42,761 and was included in general and administrative and research and development expenses for the year ended March 31, 2019. The following assumptions were used in the fair value method calculations: Year Ended Risk-free interest rates 2.73 - 3.01 % Volatility 71% - 112 % Expected life (years) 5.0 Dividend yield — % During the fiscal year ended March 31, 2019, the Company granted options to purchase 1,465,221 shares of common stock to certain directors and consultants. The fair value of the options granted was $1,021,733, and the Company has been recording stock-based compensation expense for each grant over the respective vesting periods. For the year ended March 31, 2019, the Company recorded total stock-based compensation expense of $532,108, which is less than the total fair value. The unamortized compensation cost as of March 31, 2019 was $529,625 related to stock options and is expected to be recognized as expense over a weighted average period of approximately 1.8 years. The table below provides a reconciliation of total fair value of the options granted and related expense recognized by the Company during fiscal 2019. Grantees Option Vesting Total Fair 2019 Stock-Based Unrecognized Consultants 1,280,000 July 25, 2018 to July 24, 2019 $ 682,240 $ 466,197 $ 216,043 Consultants 185,221 January 16, 2019 to January 15, 2022 $ 336,732 $ 23,150 $ 313,582 Chief Executive Officer 64,687 * $ 42,761 $ 42,761 — Total 1,529,908 $ 1,061,733 $ 532,108 $ 529,625 * Options were fully vested as of the grant date, as disclosed above. The following assumptions were used in the fair value method calculation for the consultant options: Year Ended Risk-free interest rates 2.54 - 2.82 % Volatility 104% - 110 % Expected life (years) 5.21 - 5.88 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 Shares Number of Weighted Balance at April 1, 2017 — — — Shares authorized under the Plan 3,000,000 — — Balance at March 31, 2018 3,000,000 — $ — Options granted 1,529,908 1,529,908 $ 0.86 Balance at March 31, 2019 1,470,092 1,529,908 $ 0.86 There were no stock options exercised during the years ended March 31, 2019 or 2018. The following table summarizes the range of outstanding and exercisable options as of March 31, 2019: Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $0.66 - $2.25 1,529,908 9.39 $ 0.86 918,020 0.68 $ — 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 years ended March 31, 2019 and 2018, there were no such tax benefits associated with the exercise of stock options. |
INCOME TAXES
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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. | Based on the available information and other factors, management believes it is more likely than not that the net deferred tax assets at, March 31, 2019 and 2018, will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at, March 31, 2019 and 2018. At March 31, 2019 and 2018, the Company had federal net operating loss carry-forwards of approximately $817,000 and $182,500, respectively, expiring beginning in 2037. Deferred tax assets consist of the following components: March 31, 2019 March 31, 2018 Net loss carryforward $ 817,000 $ 182,500 Valuation allowance (817,000 ) (182,500 ) Total deferred tax assets $ — $ — |
ROYALTY AGREEMENT
ROYALTY AGREEMENT | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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. | On July 12, 2017, the Company entered into a royalty agreement with the founder and major shareholder. Pursuant to the agreement, the founder and major shareholder is assigning and transferring all of his rights in the intellectual property in return for royalty payments. The Company shall pay royalty to the founder on any sales of the royalty product sold or otherwise commercialized by the Company, equal to (a) US $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 shall cease and this agreement shall terminate, at such time as the total sum of royalty payments actually paid to the founder, pursuant to this agreement, reaches $10,000,000. The Company shall have the option to terminate this 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, shall be made by the Company within thirty days after the calendar quarter. |
LEASE AGREEMENT
LEASE AGREEMENT | 12 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASE AGREEMENT | On August 21, 2017, the Company entered into a sublease agreement to rent office space. The term of the lease commences on September 1, 2017 and expires on December 14, 2019. The monthly rent for the lease is $3,000. For the remaining lease term, the rent balance is $27,000, $3,000 payable monthly. The Company paid a deposit of $7,500 upon execution of the lease which has been recorded as a security deposit in the accompanying consolidated financial statements. |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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. | Payable to related party comprises of the amounts paid by the major shareholder on behalf of the Company. The payable is unsecured, non-interest bearing and due on demand. As of March 31, 2019 and 2018, respectively, the payable to related party amounted to $0 and $516. |
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 | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Reorganization | On July 24, 2017, pursuant to a Reorganization and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary of the Company. Since 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 Reorganization, at their historical carrying amounts. Pursuant to the reorganization, the Company changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras. The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. The following summarizes the more significant of such policies: | |
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. | The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. |
Principles of Consolidation | The consolidated financial statements include the accounts of Modular Medical, Inc. and its wholly-owned subsidiary Quasuras, Inc., and are collectively referred to as the “Company”. All material intercompany accounts, transactions and profits were eliminated in consolidation. | |
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. | The preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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. | The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. |
Professional Fees | The Company expenses the cost of legal, accounting, audit, tax and other professional services. | |
Research and Development | The Company expenses research and development expenditures as incurred. | The Company expenses the cost of research and development as incurred. Research and development costs charged to operations were approximately $ 1,882,345 and $332,642 for the fiscal year ended March 31, 2019 and 2018, respectively. |
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. | General and administrative expense consists primarily of payroll and benefit related costs, rent, office expenses, equipment supplies and meetings and travel. |
Income Taxes | The Company utilizes Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with FASB ASC Topic 740. When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the consolidated statements of income. At March 31, 2019 and 2018, the Company had not taken any significant uncertain tax positions on its tax returns for periods ended March 31, 2019 and prior years or in computing its tax provision for 2019. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities for the period ended March 31, 2016 to the present, generally for three years after they are filed. | |
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. | Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances at financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to limits of approximately $250,000. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts. |
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. | The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets. |
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. | Certain conditions may exist as of the date the 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’s management and legal counsel assess 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’s 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. | Cash and cash equivalents include cash in hand and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At March 31, 2019 and March 31, 2018, the Company had $6,553,768 and $4,296,676, respectively, in cash. Deposits at the bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances held at the bank aggregated to approximately $6,269,116 and $3,933,002, respectively. No reserve has been made in the financial statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such accounts and believes we are not exposed to any significant risk on cash and cash equivalents. |
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. | 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 our property and equipment are generally as follows: computer equipment & software developed or acquired for internal use, three to ten years; office equipment, two to three years; buildings and improvements, five to fifteen years; leasehold improvements, two to ten years; and machinery and equipment, one to five years. As of March 31, 2019 and March 31, 2018, property, plant and equipment amounted to: March 31, 2019 March 31, 2018 Computer equipment and software $ 20,565 $ 15,103 Office equipment 49,724 — Machinery and equipment 21,937 — Less: accumulated depreciation (16,278 ) (1,844 ) $ 75,948 $ 13,259 Depreciation expenses for the year ended March 31, 2019 and 2018 was $14,435 and $1,844, respectively. |
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. | 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. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: 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 fair value. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the notes payable approximates fair value. |
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 | Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). During the years ended March 31, 2019 and 2018 we incurred losses, therefore the effect of any common stock equivalent would be anti-dilutive during these periods. The following table sets for the computation of basic and diluted earnings per share for the fiscal years ended March 31, 2019 and 2018: March 31, 2019 March 31, 2018 Net Loss $ (2,539,498 ) $ (659,246 ) Net Loss Per Share Basic and Diluted: $ (0.153 ) $ (0.049 ) Weighted average number of shares used in computing basic and diluted net loss per share: Basic 16,589,633 13,336,309 Diluted 16,589,633 13,336,309 |
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, | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In January 2016, The FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses a diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We adopted this ASU in 2016 and the implementation did not have a material impact on our financial position or statement of operations. In August 2018, the FASB issued guidance that eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow hedge to be recorded in other comprehensive income, the change in fair value of derivative to be recorded in the same income statement line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020. Early adoption is permitted and the modified retrospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, Leases (“Topic 842”). Topic 842 requires an entity to recognize right-of -use assets and lease liability on its balance sheet and disclosure key information about leasing arrangements. For public companies, Topic 842 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. We have evaluated this ASU and believe this guidance will not have a material impact on our financial position and statement of operations. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
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. | 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 flow. |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of property, plant and equipment | March 31, 2019 March 31, 2018 Computer equipment and software $ 20,565 $ 15,103 Office equipment 49,724 — Machinery and equipment 21,937 — Less: accumulated depreciation (16,278 ) (1,844 ) $ 75,948 $ 13,259 | |
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 | March 31, 2019 March 31, 2018 Net Loss $ (2,539,498 ) $ (659,246 ) Net Loss Per Share Basic and Diluted: $ (0.153 ) $ (0.049 ) Weighted average number of shares used in computing basic and diluted net loss per share: Basic 16,589,633 13,336,309 Diluted 16,589,633 13,336,309 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 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 — % | Year Ended Risk-free interest rates 2.73 - 3.01 % Volatility 71% - 112 % Expected life (years) 5.0 Dividend yield — % |
Stock-based compensation | Grantees Option Vesting Total Fair 2019 Stock-Based Unrecognized Consultants 1,280,000 July 25, 2018 to July 24, 2019 $ 682,240 $ 466,197 $ 216,043 Consultants 185,221 January 16, 2019 to January 15, 2022 $ 336,732 $ 23,150 $ 313,582 Chief Executive Officer 64,687 * $ 42,761 $ 42,761 — Total 1,529,908 $ 1,061,733 $ 532,108 $ 529,625 * Options were fully vested as of the grant date, as disclosed above. | |
Assumptions used in fair value method of options granted | Year Ended Risk-free interest rates 2.54 - 2.82 % Volatility 104% - 110 % Expected life (years) 5.21 - 5.88 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 | Options outstanding Shares Number of Weighted Balance at April 1, 2017 — — — Shares authorized under the Plan 3,000,000 — — Balance at March 31, 2018 3,000,000 — $ — Options granted 1,529,908 1,529,908 $ 0.86 Balance at March 31, 2019 1,470,092 1,529,908 $ 0.86 |
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 $ — | Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $0.66 - $2.25 1,529,908 9.39 $ 0.86 918,020 0.68 $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of deferred tax assets | March 31, 2019 March 31, 2018 Net loss carryforward $ 817,000 $ 182,500 Valuation allowance (817,000 ) (182,500 ) Total deferred tax assets $ — $ — |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Accumulated depreciation | $ (16,278) | $ (1,844) | |
Property and equipment, net | $ 110,402 | 75,948 | 13,259 |
Computers and equipment | |||
Property and equipment, gross | 20,565 | 15,103 | |
Office equipment | |||
Property and equipment, gross | 49,724 | 0 | |
Machinery and equipment | |||
Property and equipment, gross | $ 21,937 | $ 0 |
ORGANIZATION AND SUMMARY OF S_5
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 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 | Mar. 31, 2019 | Mar. 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) | $ (2,539,498) | $ (659,246) |
Net Loss Per Share: | ||||||||||
Basic and Diluted | $ (0.06) | $ (0.04) | $ (0.19) | $ (0.09) | $ (0.153) | $ (0.049) | ||||
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 | 16,589,633 | 13,336,309 |
ORGANIZATION AND SUMMARY OF S_6
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Research and development costs | $ 608,019 | $ 504,787 | $ 1,945,043 | $ 1,008,127 | $ 1,882,345 | $ 332,642 |
Uninsured cash and cash equivalents | $ 3,463,816 | $ 3,463,816 | $ 6,269,116 | |||
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 |
ACCRUED EXPENSES (Details Narra
ACCRUED EXPENSES (Details Narrative) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accrued expenses | $ 20,418 | $ 40,615 | $ 516 |
PAYABLE TO RELATED PARTY (Detai
PAYABLE TO RELATED PARTY (Details Narrative) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Related Party Transactions [Abstract] | ||
Payable to related party | $ 0 | $ 516 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Expected life (years) | 5 years | |
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Risk-free interest rates | 1.34% | 2.73% |
Volatility | 87.00% | 71.00% |
Expected life (years) | 5 years | |
Maximum | ||
Risk-free interest rates | 2.41% | 3.01% |
Volatility | 102.00% | 112.00% |
Expected life (years) | 6 years |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Option shares | 1,529,908 | ||||||||
Total fair value of options | $ 1,021,733 | ||||||||
Stock-based compensation expense | $ 186,745 | $ 156,355 | $ 194,428 | $ 191,170 | $ 166,170 | $ 537,528 | $ 374,006 | 532,108 | $ 0 |
Unrecognized expense | $ 529,625 | ||||||||
Consultants | |||||||||
Option shares | 1,280,000 | ||||||||
Vesting periods | July 25, 2018 to July 24, 2019 | ||||||||
Total fair value of options | $ 682,240 | ||||||||
Stock-based compensation expense | 466,197 | ||||||||
Unrecognized expense | $ 216,043 | ||||||||
Consultants | |||||||||
Option shares | 185,221 | ||||||||
Vesting periods | January 16, 2019 to January 15, 2022 | ||||||||
Total fair value of options | $ 336,732 | ||||||||
Stock-based compensation expense | 23,150 | ||||||||
Unrecognized expense | $ 313,582 | ||||||||
Chief Executive Officer | |||||||||
Option shares | 64,687 | ||||||||
Vesting periods | Options were fully vested as of the grant date, as disclosed above. | ||||||||
Total fair value of options | $ 42,761 | ||||||||
Stock-based compensation expense | 42,761 | ||||||||
Unrecognized expense | $ 0 |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Expected life (years) | 5 years | |
Dividend yield | 0.00% | 0.00% |
Consultant Options | ||
Dividend yield | 0.00% | |
Minimum | ||
Risk-free interest rates | 1.34% | 2.73% |
Volatility | 87.00% | 71.00% |
Expected life (years) | 5 years | |
Minimum | Consultant Options | ||
Risk-free interest rates | 2.54% | |
Volatility | 104.00% | |
Expected life (years) | 5 years 2 months 16 days | |
Maximum | ||
Risk-free interest rates | 2.41% | 3.01% |
Volatility | 102.00% | 112.00% |
Expected life (years) | 6 years | |
Maximum | Consultant Options | ||
Risk-free interest rates | 2.82% | |
Volatility | 110.00% | |
Expected life (years) | 5 years 10 months 17 days |
STOCKHOLDERS' EQUITY (Details 3
STOCKHOLDERS' EQUITY (Details 3) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Granted | 996,535 | |||||
Equity Incentive Plan | ||||||
Shares available for grant, beginning | 1,369,606 | 1,447,406 | 1,470,092 | 1,470,092 | 3,000,000 | 0 |
Granted | (896,049) | (77,800) | (22,686) | 1,529,908 | 3,000,000 | |
Shares available for grant, ending | 473,557 | 1,369,606 | 1,447,406 | 473,557 | 1,470,092 | 3,000,000 |
Number of options outstanding, beginning | 1,630,394 | 1,552,594 | 1,529,908 | 1,529,908 | 0 | 0 |
Number of options granted | 896,049 | 77,800 | 22,686 | 1,529,908 | 0 | |
Number of options outstanding, ending | 2,526,443 | 1,630,394 | 1,552,594 | 2,526,443 | 1,529,908 | 0 |
Weighted average exercise price outstanding, beginning | $ 0.95 | $ 0.88 | $ 0.86 | $ 0.86 | $ .00 | $ 0 |
Weighted average exercise price granted | 2.25 | 2.25 | 2.25 | .84 | 0 | |
Weighted average exercise price outstanding, ending | $ 1.41 | $ 0.95 | $ 0.88 | $ 1.41 | $ 0.86 | $ .00 |
STOCKHOLDERS' EQUITY (Details 4
STOCKHOLDERS' EQUITY (Details 4) - Option 1 - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Mar. 31, 2019 | |
Exercise price range | .66-2.25 | .66-2.25 |
Number of options outstanding, ending | 2,526,443 | 1,529,908 |
Weighted average remaining contractual life (in years) | 9 years 1 month 13 days | 9 years 4 months 20 days |
Weighted average exercise price outstanding | $ 1.41 | $ .86 |
Number of options exercisable | 1,462,222 | 918,020 |
Weighted average exercise price exercisable | $ .80 | $ .68 |
Aggregate intrinsic value exercisable | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
STOCKHOLDERS' EQUITY | ||||
Unamortized compensation cost related to stock options | $ 1,627,097 | $ 529,625 | ||
Weighted-average period | 2 years 9 months 29 days | 1 year 9 months 18 days | ||
Options granted | 996,535 | |||
Options vested | 116,535 | |||
Stock based compensation expense | $ 220,578 | $ 532,108 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,870,261 | 17,840,261 | 15,983,273 | 15,983,273 |
Common stock, shares outstanding | 17,870,261 | 17,840,261 | 15,983,273 | 15,983,273 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net loss carryforward | $ 817,000 | $ 182,500 |
Valuation allowance | (817,000) | (182,500) |
Total deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forwards | $ 817,000 | $ 182,500 |
Related Party Transaction (Deta
Related Party Transaction (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transactions [Abstract] | ||||||
Director consulting fee | $ 0 | $ 0 | $ 0 | $ 0 | $ 260,396 | $ 232,961 |
Stock option | 22,500 | 60,000 | ||||
Term | 10 years |