Cover
Cover | 6 Months Ended |
Sep. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. |
Entity Registrant Name | MODULAR MEDICAL, INC. |
Entity Central Index Key | 0001074871 |
Entity Tax Identification Number | 87-0620495 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 16772 W. Bernardo Drive |
Entity Address, City or Town | San Diego |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 92127 |
City Area Code | (858) |
Local Phone Number | 800-3500 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 798,161 | $ 1,468,465 | $ 3,122,134 |
Prepaid expenses | 43,580 | 178,158 | 63,853 |
Other current assets | 2,920 | 2,466 | 306 |
TOTAL CURRENT ASSETS | 844,661 | 1,649,089 | 3,186,293 |
Property and equipment, net | 268,138 | 298,958 | 301,308 |
Right of use asset, net | 162,039 | 200,124 | 270,950 |
Security deposit | 100,000 | 100,000 | 100,000 |
TOTAL NON-CURRENT ASSETS | 530,177 | 599,082 | 672,258 |
TOTAL ASSETS | 1,374,838 | 2,248,171 | 3,858,551 |
CURRENT LIABILITIES | |||
Accounts payable | 692,772 | 169,284 | 367,019 |
Accrued expenses | 678,797 | 499,948 | 202,160 |
Short-term lease liability | 134,914 | 125,500 | 92,214 |
PPP note payable | 368,780 | ||
Convertible notes payable | 4,855,260 | 2,133,453 | |
TOTAL CURRENT LIABILITIES | 6,361,743 | 3,296,965 | 661,393 |
LONG-TERM LIABILITIES | |||
Long-term lease liability | 113,909 | 184,355 | 178,736 |
Bonus payable | 42,000 | 140,000 | |
TOTAL LIABILITIES | 6,475,652 | 3,523,320 | 980,129 |
STOCKHOLDERS’ EQUITY (DEFICIT) | |||
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding | |||
Common Stock, $0.001 par value, 50,000,000 shares authorized, 6,302,050 shares and 5,956,754 shares issued and outstanding as of March 31, 2021 and 2020, respectively | 6,328 | 6,302 | 5,957 |
Additional paid-in capital | 20,056,716 | 14,665,559 | 10,517,505 |
Accumulated deficit | (25,163,858) | (15,947,010) | (8,569,034) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (5,100,814) | (1,275,149) | 2,878,422 |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | 1,374,838 | 2,248,171 | 3,858,551 |
Common stock issuable | 923,994 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 1,374,838 | $ 2,248,171 | $ 3,858,551 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 | |
Common Stock, Shares, Outstanding | 6,327,521 | 6,302,050 | 5,956,754 |
Preferred Stock, Shares Issued | 0 | 0 | |
Common Stock, Shares, Issued | 6,302,050 | 5,956,754 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Operating expenses | ||||||
Research and development | $ 2,105,380 | $ 1,092,665 | $ 3,893,511 | $ 2,063,480 | $ 4,083,303 | $ 3,034,152 |
General and administrative expenses | 1,589,032 | 766,513 | 3,174,489 | 1,669,910 | 3,253,412 | 2,313,870 |
Total operating expenses | 3,694,412 | 1,859,178 | 7,068,000 | 3,733,390 | 7,336,715 | 5,348,022 |
Loss from operations | (3,694,412) | (1,859,178) | (7,068,000) | (3,733,390) | (7,336,715) | (5,348,022) |
Other income | 48 | 49 | 368,872 | 104 | ||
Interest expense | (685,793) | (1,194,670) | (39,791) | |||
Loss on debt extinguishment | (1,321,450) | |||||
Loss before income taxes | (4,380,157) | (1,859,129) | (9,215,248) | (3,733,286) | (7,376,376) | (5,319,273) |
Provision for income taxes | 1,600 | 1,600 | 1,600 | 1,600 | 1,600 | 1,600 |
Net loss | $ (4,381,757) | $ (1,860,729) | $ (9,216,848) | $ (3,734,886) | $ (7,377,976) | $ (5,320,873) |
Net loss per share | ||||||
Basic and diluted | $ (0.69) | $ (0.30) | $ (1.46) | $ (0.61) | $ (1.19) | $ (0.89) |
Shares used in computing net loss per share | ||||||
Basic and diluted | 6,323,925 | 6,200,053 | 6,320,916 | 6,156,602 | 6,211,562 | 5,954,923 |
Interest income | $ 130 | $ 28,749 | ||||
Loss before income taxes | $ (4,380,157) | $ (1,859,129) | $ (9,215,248) | $ (3,733,286) | $ (7,376,376) | $ (5,319,273) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Common Stock Issuable | Retained Earnings [Member] | Total |
Beginning balance, value at Mar. 31, 2019 | $ 5,947 | $ 9,696,471 | $ 19,800 | $ (3,248,161) | $ 6,474,057 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2019 | 5,946,754 | ||||
Shares issued for services | $ 10 | 19,790 | (19,800) | ||
Stock Issued During Period, Shares, Issued for Services | 10,000 | ||||
Net loss | (5,320,873) | (5,320,873) | |||
Ending balance, value at Mar. 31, 2020 | $ 5,957 | 10,517,505 | 923,994 | (8,569,034) | 2,878,422 |
Shares, Outstanding, Ending Balance at Mar. 31, 2020 | 5,956,754 | ||||
Placement of common stock | 923,994 | 923,994 | |||
Stock-based compensation | 801,244 | 801,244 | |||
Stock-based compensation | 344,716 | 344,716 | |||
Net loss | (1,874,157) | (1,874,157) | |||
Ending balance, value at Jun. 30, 2020 | $ 6,200 | 12,904,606 | (10,443,191) | 2,467,615 | |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 6,200,053 | ||||
Placement of common stock | $ 243 | 2,042,385 | (923,994) | 1,118,634 | |
Stock Issued During Period, Shares, New Issues | 243,299 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 5,957 | 10,517,505 | 923,994 | (8,569,034) | 2,878,422 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2020 | 5,956,754 | ||||
Warrants issued with convertible notes | |||||
Stock-based compensation | 645,320 | ||||
Net loss | (3,734,886) | ||||
Ending balance, value at Sep. 30, 2020 | $ 6,200 | 13,205,210 | (12,303,920) | 907,490 | |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 6,200,053 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 5,957 | 10,517,505 | 923,994 | (8,569,034) | 2,878,422 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2020 | 5,956,754 | ||||
Shares issued for services | $ 24 | 210,920 | 210,945 | ||
Stock Issued During Period, Shares, Issued for Services | 24,500 | ||||
Net loss | (7,377,976) | (7,377,976) | |||
Ending balance, value at Mar. 31, 2021 | $ 6,302 | 14,665,559 | (15,947,010) | (1,275,149) | |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 6,302,050 | ||||
Placement of common stock | $ 321 | 2,709,555 | (923,994) | 1,785,882 | |
Stock Issued During Period, Shares, New Issues | 320,796 | ||||
Stock-based compensation | 1,227,578 | 1,227,578 | |||
Beginning balance, value at Jun. 30, 2020 | $ 6,200 | 12,904,606 | (10,443,191) | 2,467,615 | |
Shares, Outstanding, Beginning Balance at Jun. 30, 2020 | 6,200,053 | ||||
Stock-based compensation | 300,604 | 300,604 | |||
Net loss | (1,860,729) | (1,860,729) | |||
Ending balance, value at Sep. 30, 2020 | $ 6,200 | 13,205,210 | (12,303,920) | 907,490 | |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 6,200,053 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 6,302 | 14,665,559 | (15,947,010) | (1,275,149) | |
Shares, Outstanding, Beginning Balance at Mar. 31, 2021 | 6,302,050 | ||||
Shares issued for services | $ 20 | 172,180 | 172,200 | ||
Stock Issued During Period, Shares, Issued for Services | 20,000 | ||||
Warrants issued with convertible notes | 3,700,632 | 3,700,632 | |||
Stock-based compensation | $ 2 | 655,918 | 655,920 | ||
Stock-based compensation, Shares | 1,836 | ||||
Net loss | (4,835,091) | (4,835,091) | |||
Ending balance, value at Jun. 30, 2021 | $ 6,324 | 19,194,289 | (20,782,101) | (1,581,488) | |
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 6,323,886 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 6,302 | 14,665,559 | (15,947,010) | (1,275,149) | |
Shares, Outstanding, Beginning Balance at Mar. 31, 2021 | 6,302,050 | ||||
Warrants issued with convertible notes | 3,700,632 | ||||
Stock-based compensation | 1,518,351 | ||||
Stock-based compensation, Shares | 5,472 | ||||
Net loss | (9,216,848) | ||||
Ending balance, value at Sep. 30, 2021 | $ 6,328 | 20,056,716 | (25,163,858) | (5,100,814) | |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 6,327,521 | ||||
Stock Issued During Period, Shares, New Issues | 20,000 | ||||
Beginning balance, value at Jun. 30, 2021 | $ 6,324 | 19,194,289 | (20,782,101) | (1,581,488) | |
Shares, Outstanding, Beginning Balance at Jun. 30, 2021 | 6,323,886 | ||||
Stock-based compensation | $ 4 | 862,427 | 862,431 | ||
Stock-based compensation, Shares | 3,365 | ||||
Net loss | (4,381,757) | (4,381,757) | |||
Ending balance, value at Sep. 30, 2021 | $ 6,328 | $ 20,056,716 | $ (25,163,858) | $ (5,100,814) | |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 6,327,521 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||||
Net loss | $ (9,216,848) | $ (3,734,886) | $ (7,377,976) | $ (5,320,873) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Gain on PPP note forgiveness | (368,780) | |||
Loss on debt extinguishment | 1,321,450 | |||
Stock-based compensation expense | 1,518,351 | 645,320 | ||
Depreciation and amortization | 53,599 | 52,314 | 111,015 | 35,431 |
Shares for services | 314,265 | 68,880 | ||
Amortization of lease right-of-use asset | 38,085 | 35,923 | 70,826 | |
Change in lease liability | (61,032) | 94,518 | 38,905 | |
Amortization of debt issuance costs | 824,439 | 12,253 | ||
Changes in assets and liabilities: | ||||
Prepaid expenses and other assets | (7,941) | 28,659 | ||
Accounts payable and accrued expenses | 799,687 | (151,519) | (86,747) | 530,250 |
Net cash used in operating activities | (4,784,725) | (3,029,671) | (5,908,662) | (4,094,839) |
Cash flows from investing activities | ||||
Purchases of property and equipment | (22,779) | (93,303) | (109,669) | (260,789) |
Net cash used in investing activities | (22,779) | (93,303) | (109,669) | (260,789) |
Cash flows from financing activities | ||||
Proceeds from private placement, net of issuance costs | 1,118,634 | 1,785,882 | 923,994 | |
Proceeds from issuance of convertible notes | 4,137,200 | 2,210,000 | ||
Proceeds from issuance of PPP note payable | 368,780 | 368,780 | ||
Net cash provided by financing activities | 4,137,200 | 1,487,414 | 4,364,662 | 923,994 |
Net decrease in cash and cash equivalents | (670,304) | (1,635,560) | (1,653,669) | (3,431,634) |
Cash and cash equivalents, at beginning of year | 1,468,465 | 3,122,134 | 3,122,134 | 6,553,768 |
Cash and cash equivalents, at end of year | 798,161 | 1,486,574 | 1,468,465 | 3,122,134 |
Noncash investing and financing activities: | ||||
Fair value of detachable warrants issued with convertible notes | 3,700,632 | |||
Stock-based compensation expense | 1,227,578 | 801,244 | ||
Other | 1,004 | |||
Other assets and prepaid expenses | 25,600 | (48,391) | ||
Security deposits | (92,500) | |||
Net decrease in cash and cash equivalents | $ (670,304) | $ (1,635,560) | (1,653,669) | (3,431,634) |
Income taxes | $ 1,600 | $ 1,600 |
THE COMPANY AND SUMMARY OF SIGN
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Modular Medical, Inc. (the Company) was incorporated in Nevada in October 1998 under the name Bear Lake Recreation, Inc. The Company had no material business operations 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 commercialization of an innovative insulin pump using modernized technology to increase pump adoption in the diabetes marketplace. Through the creation of a novel two-part, patch pump product, the Company seeks to fundamentally alter the trade-offs between cost and complexity and access to the higher standards of care that presently available insulin pumps provide. By simplifying and streamlining the user experience from introduction, prescription, reimbursement, training and day-to-day use, the Company seeks to expand the wearable insulin delivery device market beyond the highly motivated “super users” and expand the category into the mass market. The Company’s pump product seeks to serve both the type 1 and type 2 diabetes markets. Liquidity Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2014-15 (ASU 2014-15), Going Concern The Company expects to continue to incur operating losses for the foreseeable future and incur cash outflows from operations as it continues to invest in the development and subsequent commercialization of its product. The Company expects that its research and development and general and administrative expenses will continue to increase, and, as a result, it will eventually need to generate significant product revenues to achieve profitability. The Company’s expected operating losses and cash burn and the need to repay the convertible promissory notes and accrued interest in the first half of 2022 raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to raise additional capital, through the sale of additional equity or debt securities, to support its future operations. There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. As disclosed in note 9, the Company recently sold shares of its common stock to two of its officers, obtained access to a credit facility and filed a registration statement to offer shares of its common stock. The Company’s operating needs include the planned costs to operate its business, including amounts required to repay its convertible promissory notes (if not converted), fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its product, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product offering. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash. These condensed consolidated financial statements do not include any adjustments that might result from this uncertainty. Basis of Presentation The Company’s fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the condensed consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2022 refers to the fiscal year ending March 31, 2022). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Quasuras. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements of the Company have been prepared without audit. The condensed consolidated balance sheet as of March 31, 2021 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 months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending March 31, 2022 or for any other future period. All share and per share amounts have been presented to give retroactive effect to a 1-for-3 reverse stock split that occurred in November 2021. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could differ from those estimates. Reportable Segment The Company operates in one 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, stock-based compensation, 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-quality financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation up to limits of approximately $250,000. No reserve has been made in the financial statements for any possible loss due to financial institution failure. 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 technology and customer requirements, limited operating history and the volatility of public markets. COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s control, and cannot be predicted. Cash and Cash Equivalents Cash and cash equivalents include cash on 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 are originally recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three five Fair Value of Financial Instruments The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Due to their short-term nature, the carrying values of cash equivalents, accounts payable and accrued expenses approximate fair value. 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 net loss per share gives effect to all potentially dilutive common shares outstanding during the period. For the six months ended September 30, 2021 and 2020, outstanding options to purchase 1,597,650 1,160,030 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. Comprehensive Loss Comprehensive loss represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the three and six months ended September 30, 2021 and 2020, the Company’s comprehensive loss was the same as its net loss. Recently Adopted Accounting Pronouncement In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . | Note 1 – THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Modular Medical, Inc. (the Company) was incorporated in Nevada in October 1998 under the name Bear Lake Recreation, Inc. The Company had no material business operations 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 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: Liquidity Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2014-15 (ASU 2014-15), Going The Company expects to continue to incur operating losses for the foreseeable future and incur cash outflows from operations as it continues to invest in the development and subsequent commercialization of its product. The Company expects that its research and development and general and administrative expenses will continue to increase, and, as a result, it will eventually need to generate significant product revenues to achieve profitability. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to raise additional capital, through the sale of additional equity or debt securities, to support its future operations. There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. As discussed in notes 3 and 11, in February 2021, the Company commenced a private placement of its convertible promissory notes to investors to fund its operations. In addition, during fiscal 2021, the Company obtained additional equity financing through a private placement of its common stock (see note 6), and the Company obtained a loan from Silicon Valley Bank in April 2020 (see notes 3 and 12). The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its product, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product offering. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash. These consolidated financial statements do not include any adjustments that might result from this uncertainty. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Quasuras. All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year ends on March 31 of each calendar year. Use of Estimates The preparation of the accompanying consolidated 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. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could differ from those estimates. Reportable Segment The Company operates in one business segment and uses one measurement of profitability for its business. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are deposited with high credit-quality institutions within the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to limits of approximately $250,000. 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. COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s control, and cannot be predicted. 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. Property and Equipment Property and equipment are originally recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three five Fair Value of Financial Instruments The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Due to their short-term nature, the carrying values of cash equivalents, accounts payable and accrued expenses, approximate fair value. Research and Development The Company expenses research and development expenditures as incurred. General and Administrative General and administrative expense consists primarily of payroll and benefit related costs, rent, office expenses, equipment supplies and meetings and travel. Stock-Based Compensation The Company recognizes stock-based compensation for stock options granted to employees and non-employees on a straight-line basis over the requisite service period, usually the vesting period, based on the grant-date fair value. The Company estimates the value of stock options on the date of grant using the Black-Scholes pricing model. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the option price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and projected stock option exercise behaviors. Per-Share Amounts Basic net loss per share is computed by dividing net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share gives effect to all potentially dilutive common shares outstanding during the period. For the years ended March 31, 2021 and 2020, 1,197,252 1,059,315 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 accounts for uncertain tax positions in accordance with FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. All tax returns from 2016 to 2020 may be subject to examination by the U.S. federal and state tax authorities. As of March 31, 2021, the Company has not recorded any liability for unrecognized tax benefits related to uncertain tax positions. Comprehensive Loss Comprehensive loss represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the years ended March 31, 2021 and 2020, the Company’s comprehensive loss was the same as its net loss. |
LEASES
LEASES | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Leases [Abstract] | ||
LEASES | NOTE 2 – LEASES Effective April 1, 2019, the Company adopted ASU No. 2016-02, Leases 39 12,400 3% The Company obtained a right-of-use asset of $ 270,950 139,000 Future minimum payments under the facility operating lease, as of September 30, 2021, are listed in the table below. Operating Annual Fiscal Years lease 2022 76,716 2023 158,028 2024 40,692 Less: Imputed interest (26,613 ) Present value of lease liabilities $ 248,823 Cash paid for amounts included in the measurement of lease liabilities was $ 76,716 53,768 53,768 26,884 26,844 | NOTE 4 – LEASES Effective April 1, 2019, the Company adopted ASC No. 842, as amended, using the alternative transition method, which allowed the Company to initially apply the new lease standard at the adoption date (the “effective date method”). In January 2020, the Company executed a lease for a new, larger corporate facility in San Diego, California and paid a $100,000 security deposit. 39 12,400 with annual rent increases of approximately 3% . In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs. The right-to-use asset and corresponding liability for the facility lease have been measured at the present value of the future minimum lease payments. A discount rate of 11%, which approximated the Company’s incremental borrowing rate, was used to measure the lease asset and liability. Lease expense is recognized on a straight line basis over the lease term. The Company obtained a right-of-use asset of $ 270,950 139,000 Future minimum payments under the facility operating lease, net of the lease incentive Operating Annual Fiscal Years lease 2022 $ 153,432 2023 158,028 2024 40,692 Less: Imputed interest (42,297 ) Present value of lease liabilities $ 309,855 Rent expense was $ 107,540 35,766 |
PPP NOTE
PPP NOTE | 6 Months Ended |
Sep. 30, 2021 | |
Ppp Note | |
PPP NOTE | NOTE 3 – PPP NOTE On April 24, 2020, the Company received a $ 368,780 The Company applied to the Lender for forgiveness of the PPP Note in October 2020, and, in May 2021, the Company was notified by the Lender and the U.S. Small Business Administration that the outstanding principal and accrued interest for the PPP Note was forgiven in full. The Company accounted for the forgiveness of the PPP Note in accordance with Accounting Standards Codification Topic 470: Debt (ASC 470), and the amount forgiven was recorded as a gain on extinguishment and recognized in the other income line of the condensed consolidated statement of operations. |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Debt Disclosure [Abstract] | ||
CONVERTIBLE PROMISSORY NOTES | NOTE 4 – CONVERTIBLE PROMISSORY NOTES From February through April 2021, the Company sold $2,310,000 of convertible promissory notes (each an Original Notes and, collectively, the Original Notes), at par in a private placement transaction effected pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended. Effective April 30, 2021, pursuant to a revocation and replacement agreement between each holder of an Original Note and the Company (the Revocation Agreement), the $2,310,000 of Original Notes and accrued interest thereon as of April 30, 2021 were replaced with $2,360,550 aggregate principal amount of new Notes (as defined below). The Company accounted for the replacement of the Original Notes in accordance with ASC 470 and recorded a loss on extinguishment of $ 1,321,450 70,647 In April and May 2021, pursuant to a Securities Purchase Agreement by and between the Company and each investor (the SPA), the Company sold to investors $ 4,250,000 th Notes outstanding after the Trigger Date may be converted into shares of the Company’s common stock at an initial conversion price of $8.61 per share; provided that a Note holder may not convert any portion of its Note that would cause it to beneficially own in excess of 4.99% of the Company’s outstanding common stock. The conversion price and number of shares of Company common stock issuable upon conversion of the Notes are subject to adjustment from time to time for subdivisions and consolidations of shares and other standard dilutive and corporate events, as provided in the Notes. Subject to certain Exempt Issuances (as defined in the Notes), if while a Note is outstanding, the Company sells, issues or grants any shares of its common stock or other securities to acquire shares of common stock at a price per share less than the then conversion price, such conversion price shall be reduced to such lesser price, and the number of conversion shares issuable upon conversion of the Notes shall be increased, as provided in the Notes. If the Company completes an offering of its common stock or other securities in excess of $12,000,000 of gross proceeds (a Qualified Capital Raise, as defined in the Notes), each Note holder will be required to convert its Adjusted Note Amount (as defined below) into the securities of such Qualified Capital Raise. Adjusted Note Amount equals the product of (i) the sum of all outstanding principal plus accrued interest on a Note, multiplied by (ii) 1.25. The Notes contain a number of Company events of default (Events of Default) including, without limitation (i) failure to pay any principal or interest thereon when due, (ii) failure to timely deliver shares upon conversions, (iii) failure to comply with SEC reporting requirements under the Exchange Act, (iv) certain breaches of the SPA, the Notes, the Warrants, and the Registration Rights Agreement, (v) material restatements of the Company’s consolidated financial statements filed with the SEC, (vi) a holder’s inability to rely on Rule 144 for sales of shares underlying the Notes, (vii) the Company’s common stock is suspended or halted from trading and/or fails to be quoted or listed (as applicable) on the OTCQB, OTCQX, any tier of the Nasdaq Stock Market, the New York Stock Exchange, or the NYSE American within 10 days thereafter, (viii) failure to file with the SEC a registration statement covering the resale of shares of common stock underlying the Notes and Warrants within 60 calendar days following the Issue Date, (ix) failure to cause such registration statement to become effective within 120 calendar days following the Issue Date, or (x) certain mergers consolidations, business combinations and sales of all or substantially all of the Company’s assets in the event the Company is not the survivor of such transaction. Upon an Event of Default, a Note holder may declare all amounts under its Note(s) due and payable, in which event the Company will be required to pay such Note holder the sum of (i) the product of (a) all then outstanding principal amount and accrued interest thereon, multiplied by (b) 125%; and (ii) all collection costs including legal fees and expenses in connection therewith. At the option of a Note holder, in the event the Company receives cash proceeds as a result of certain events, including, but not limited to, payments from customers, issuances of debt or equity securities, exercise of warrants or asset sales, the Company will be required to use such proceeds to repay all or any lesser outstanding amounts due under such holder’s Note. The Notes include covenants, representations, warranties, other payment obligations and agreements by the Company including, without limitation, most-favored nation rights, rights of participation and first refusal and exchange rights. In connection with the issuance of the Notes, the Company issued Warrants to purchase in the aggregate 767,783 shares of its common stock at an initial exercise price of $24.00 per share. The Warrants may be exercised for a period of five years from the Trigger Date, provided that, if prior to the Trigger Date, the Company (i) completes a Qualified Capital Raise, the outstanding Warrants shall be cancelled or (ii) prepays a holder’s Note(s) in whole or in part, such holder’s pro-rata number of Warrants shall be cancelled. The fair value of the Warrants was $3,700,632, of which $2,379,182 was recorded as a debt discount, which is being amortized to interest expense over the term of the Warrants, and $1,321,450 was recorded as a loss on debt extinguishment. The Company calculated the fair value of the Warrants utilizing the Black-Scholes valuation model with the following assumptions: volatility of 88.98% 0.86% 5.75 zero In connection with the April and May 2021 sales of the $4,250,000 aggregate principal amount of the Notes, the Company incurred debt issuance costs of $116,000, which were recorded as a debt discount and are being amortized to interest expense over the term of the Notes using the effective interest rate method. The interest expense attributable to the debt discount, comprising the debt issuance costs and Warrants, during the three and six months ended September 30, 2021 was $485,820 and $824,439, respectively. The $6,610,550 aggregate principal amount of Notes are due and payable in full in the first quarter of fiscal 2023. Subsequent to the Trigger Date, the Notes can be converted into 767,783 | NOTE 3 – NOTES PAYABLE PPP Note On April 24, 2020, the Company received a $368,780 unsecured loan (the PPP Note) under the Paycheck Protection Program (the PPP), which was established under the U.S. government’s Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). The PPP Note to the Company was made through Silicon Valley Bank (the Lender), and the Company entered into a U.S. Small Business Administration Paycheck Protection Program Note (the Agreement) with the Lender evidencing the PPP Note. The full amount of the PPP Note is due in April 2022. Interest will accrue on the outstanding principal balance of the PPP Note at a fixed rate of 1.0% per annum, which shall be deferred for 10 months after the covered period during which the Company used the proceeds. The Company may prepay principal of the PPP Note at any time in any amount without penalty. The Agreement contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties or provisions of the PPP Note. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company. The Company applied to the Lender for forgiveness of the PPP Note in October 2020, and the amount which may be forgiven will be equal to the sum of the payroll and benefit costs and covered rent and utility payments incurred by the Company, as calculated in accordance with the terms of the CARES Act. Convertible Promissory Notes In February and March 2021, the Company sold $2,210,000 of convertible promissory notes (the Notes), at par in a private placement transaction effected pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the 2021 Placement). The Notes bear interest at an annual rate of 12%, and interest is accrued or payable monthly in cash. The Notes mature on September 30, 2021 (the Maturity Date) and may be prepaid prior to the Maturity Date. The aggregate principal amount of the Notes plus accrued but unpaid interest thereon shall automatically convert upon the closing of an offering of the Company’s equity securities to investors or a strategic corporate investor resulting in aggregate gross proceeds to the Company of at least $5,000,000 (excluding conversion of the Notes or other convertible securities issued for capital raising purposes) (a Qualified Financing). In the event of a Qualified Financing, all such outstanding principal and accrued interest shall convert into the same equity securities purchased by and on the same terms and conditions as the other investors in such Qualified Financing at a conversion price equal to 80% (a 20% discount) of the lowest price paid per unit or share by investors in the Qualified Financing. In the event that additional bridge financing is obtained by the Company, the Notes shall convert into the same securities and on the same terms and conditions as the other investors therein and all such purchases will be treated as one, single round of financing going forward. As of March 31, 2021, the Notes could be converted into 770,305 shares of common stock, excluding the effects of any payments of interest in kind. At any time on or following the Maturity Date, the holders of the Notes may demand repayment of the Notes, and the Company shall repay the outstanding aggregate principal amount plus accrued but unpaid interest thereon. The holders of the Notes, however, retain the right for 30 days after the Maturity Date to convert all or part of the aggregate principal amount plus accrued but unpaid interest on the Notes into the Company’s common stock at the conversion price of $2.87 per share or at a 20% discount to any financing consummated during the 30-day period following the Maturity Date. If a Qualified Financing has not occurred immediately prior to the consummation of a Change of Control (as defined below), the Note holders shall have the option of either (i) converting all or any portion of the aggregate principal amount of the Notes plus accrued but unpaid interest thereon into common stock of the Company at a conversion price equal to $2.87 per share or (ii) having the Company repay the aggregate principal amount of the Notes and accrued but unpaid interest. The term “Change of Control” means (i) a consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shares of capital stock of the Company immediately prior to such consolidation, merger or reorganization continue to represent a majority of the voting power of the surviving entity immediately after such consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; (iii) the sale or transfer of all or substantially all of the Company’s assets, or the exclusive license of all or substantially all of the Company’s material intellectual property; or (iv) the dissolution and winding up of the Company. The Company incurred debt issuance costs of $88,800, which were recorded as a debt discount and are being amortized to interest expense over the term of the Notes using the effective interest rate method. The interest expense related to the debt discount during the year ended March 31, 2021 was approximately $13,000. |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Equity [Abstract] | ||
STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION | NOTE 5 – STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION During the six months ended September 30, 2021, the Company issued 20,000 5,472 Amended 2017 Equity Incentive Plan In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the Plan) with 1,000,000 333,334 1,333,334 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 September 30, 2021, was $ 5,988,541 three years During the six months ended September 30, 2021, the Company granted options to purchase 457,157 43,039 5,464,619 845,979 The following assumptions were used in the fair value method calculations: Schedule of Fair Value Assumptions Three Months Ended September 30, Six Months Ended September 30, 2021 2020 2021 2020 Risk-free interest rates 0.8% 0.98% 0.28% 0.37% 0.8% 0.98% 0.28% 0.37% Volatility 367% 370% 88% 127% 89% 370% 88% 128% Expected life (years) 5.0 6.2 5.0 6.0 5.0 6.2 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 Plan is presented below: Schedule of Stock Option activity Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance at March 31, 2021 136,082 1,197,252 $ 5.25 Options granted (60,774 ) 60,774 12.69 Share awards (1,836 ) — — Options cancelled and returned to the Plan 7,547 (7,547 ) 8.61 Balance at June 30, 2021 81,089 1,250,479 5.58 Additional shares authorized under the Plan 1,333,334 — — Options granted (396,384 ) 396,384 12.15 Share awards (3,636 ) — — Options cancelled and returned to the Plan 49,213 (49,213 ) 7.02 Balance at September 30, 2021 1,063,546 1,597,650 7.17 There were no stock options exercised during the six months ended September 30, 2021 and 2020. The following table summarizes the range of outstanding and exercisable options as of September 30, 2021: Schedule of Outstanding and Exercisable Option, Range Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 17.70 1,597,650 8.09 $ 7.17 869,668 $ 4.62 $ 4,022,239 The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option at September 30, 2021. 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 six months ended September 30, 2021 and 2020, there were no such tax benefits associated with the exercise of stock options. | NOTE 5 – STOCK-BASED COMPENSATION Equity Compensation Plan In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the 2017 Plan) with 3,000,000 shares of common stock reserved for issuance. In January 2020, the Board approved an amendment to the 2017 Plan to increase the number of shares reserved for issuance by 1,000,000 shares. Under the 2017 Plan, eligible employees, directors and consultants may be granted a broad range of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock units. The 2017 Plan 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 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; 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 2017 Plan generally does not allow for the transfer of awards, and the Board may amend, suspend or terminate the 2017 Plan 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 March 31, 2021 was $2,242,352 related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 2 years. During the year ended March 31, 2021, options granted to purchase shares of its common stock to employees, directors and consultants had 10-year terms and a grant-date fair value of $1,101,737. Options to purchase 10,476 shares vested immediately on the respective grant dates. The following assumptions were used in the fair-value method calculations Year ended March 31, 2021 2020 Risk-free interest rates 0.28% 0.71% 0.77% 2.37% Volatility 87% 127% 86% 103% Expected life (years) 5.0 6.0 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 Shares Options Outstanding Available Number of Weighted Average for Grant Shares Exercise Price Balance at March 31, 2019 490,031 509,969 2.56 Additional shares authorized under the Plan 333,334 — — Options granted (572,402 ) 572,402 6.75 Options cancelled and returned to the Plan 23,056 (23,056 ) 6.75 Balance at March 31, 2020 274,019 1,059,315 4.74 Options granted (163,492 ) 163,492 8.64 Options cancelled and returned to the Plan 25,555 (25,555 ) 6.75 Balance at March 31, 2021 136,082 1,197,252 5.25 There were no stock options exercised during the years ended March 31, 2021 and 2020. The following table summarizes the range of outstanding and exercisable options Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 - $ 9.48 1,197,252 8.25 $ 5.25 742,913 $ 3.96 $ 8,763,260 The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option. The 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, 2021 and 2020, there were no such tax benefits associated with the exercise of stock options. |
INCOME TAXES
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | NOTE 6 – INCOME TAXES The Company determines deferred tax assets and liabilities based upon the differences between the financial statement and tax bases of the Company’s assets and liabilities using tax rates in effect for the year in which the Company expects the differences to affect taxable income. A valuation allowance is established for any deferred tax assets for which it is more likely than not that all or a portion of the deferred tax assets will not be realized. Based on the available information and other factors, management believes it is more likely than not that its federal and state net deferred tax assets will not be fully realized, and the Company has recorded a full valuation allowance. The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. All tax returns for fiscal 2016 to fiscal 2020 may be subject to examination by the U.S. federal and state tax authorities. As of September 30, 2021, the Company has not recorded any liability for unrecognized tax benefits related to uncertain tax positions. | NOTE 7 – INCOME TAXES The income tax provision (benefit) Year Ended March 31, 2021 2020 Current portion: Federal $ — $ — State 1,600 1,600 Current 1,600 1,600 Deferred portion: Federal (1,931,390 ) (1,180,434 ) State (576,868 ) (391,865 ) Deferred (2,508,258 ) (1,572,299 ) Change in valuation allowance 2,508,258 1,572,299 Provision for income taxes $ 1,600 $ 1,600 As of March 31, 2021, the Company had net operating loss carryforwards (NOLs) of approximately $ 13,954,000 14,019,000 The Company also had federal research and development tax credit carryforwards of approximately $ 535,000 141,000 A reconciliation of income taxes provided at the federal statutory Year Ended March 31, 2021 2020 Federal statutory rate (21 )% (21 )% State tax rate, net of federal benefit (7 )% (7 )% Permanent differences — % — % Research and development tax credits (6 )% (3 )% Section 179 assets — % — % Change in valuation allowance 34 % 31 % Effective income tax rate — % — % Significant components of the Company’s deferred tax assets and liabilities March 31, 2021 2020 Net operating loss carryforwards $ 3,909,434 $ 1,965,118 Stock-based compensation expense 554,892 364,989 Property and equipment (18,039 ) 6,842 Reserves, accruals & other (79,878 ) (7,181 ) Research and development tax credits 646,296 237,716 Total deferred tax assets 5,012,705 2,567,484 Less: valuation allowance (5,012,705 ) (2,567,484 ) Deferred tax assets, net $ — $ — 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, 2021 and 2020, will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at March 31, 2021 and 2020. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements at March 31, 2021 and 2020. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS In February 2021, the Company’s chairman of the Board and president and an existing investor, who is represented by a member of the Company’s board of directors, purchased $100,000 and $1,000,000, aggregate principal amount of the Original Notes, respectively. Effective April 30, 2021, the related party holders entered into revocation agreements with the Company pursuant to which their collective $ 1,100,000 50,091 1,026,630 and $ 102,663 , respectively, with $ 51,640 and $ 5,164 of interest payable thereon. For the three months ended September 30, 2021, the Company incurred interest expense of approximately $ 31,105 and $ 3,100 , respectively, and for the six months ended September 30, 2021, the Company incurred interest expense of approximately $ 51,600 and $ 5,160 , respectively, on the related party holder Notes. In May 2021, a member of the Board purchased $ 200,000 4,000 10,060 10,060 of interest was payable by the Company on the Director Note. | NOTE 11 – RELATED PARTY TRANSACTIONS Consulting Services During the year ended March 31, 2020, the Company entered into consulting agreements with a member of its board of directors. Under the consulting agreements, during the year ended March 31, 2020, the Company paid the director consulting fees of $140,625 The options were for a total of 15,687 shares of common stock, were fully vested on the grant dates and have terms of 10 years. 2021 Placement The Company’s chief executive officer and an existing investor, which is represented by a member of the Company’s board of directors, purchased $100,000 and $1,000,000, respectively, aggregate principal amount of the Notes (the Related Party Notes) in the 2021 Placement. As of March 31, 2021, $1,677 and $16,767 of interest was payable by the Company on the Related Party Notes to its chief executive officer and to the investor, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Litigations, Claims and Assessments In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. Indemnification In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No amounts were reflected in the Company’s consolidated financial statements for the six months ended September 30, 2021 and 2020 related to these indemnifications. The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any payments related to these indemnification agreements, and no claims for payment have been made under such agreements. | NOTE 10 – COMMITMENTS AND CONTINGENCIES Litigations, Claims and Assessments In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. Indemnification In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No amounts were reflected in the Company’s consolidated financial statements for the years ended March 31, 2021 and 2020 related to these indemnifications. The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any payments related to these indemnification agreements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS Officer Stock Purchases On October 28, 2021, the Company entered into purchase agreements with two of its executive officers, providing for the sale and issuance by the Company of 30,864 250,000 Credit Facility and Security Agreement On October 28, 2021, the Company issued a secured promissory note (the Bridge Note) to Manchester Explorer, L.P. (Manchester) that provides the Company with a $ 3,000,000 The principal amount of the Bridge Note and interest due thereon is payable to Manchester no later than the earlier of: (i) the Maturity Date and (ii) the date on which the Company has received proceeds in excess of $12,000,000 from a transaction or series of related transactions occurring prior to the Maturity Date, which such transactions constitute equity financings or other issuances of the Company's equity securities. Provided that no Event of Default (as such term is defined in the Bridge Note) has occurred, on any date prior to the Maturity Date, upon no less than three days written notice by the Company specifying the draw amount, Manchester will advance the draw amount to the Company. No draw amount can be in an amount less than $100,000 or exceed an amount equal to $3,000,000 minus the aggregate principal amount outstanding under the Note at the time of such draw request. If an Event of Default occurs and is continuing, Manchester may declare all of the Bridge Note, including any interest and other amounts due, to be due and payable immediately. In connection with the issuance of the Bridge Note, on October 28, 2021, the Company entered into a security agreement with Manchester under which the Company granted Manchester a continuing and unconditional first priority security interest in and to any and all of the Company’s property of any kind or description, tangible or intangible, wheresoever located and whether now existing or hereafter arising or acquired. On November 24, 2021 the Company filed an Amendment to the Articles of Incorporation to effectuate a reverse split of the Company’s issued and outstanding common stock at an exchange ratio of 1-for-3. The reverse stock split was effective as of November 29, 2021. All share and per share data in the condensed consolidated financial statements and footnotes has been retroactively restated to reflect the effects of the reverse stock split. | NOTE 12 – SUBSEQUENT EVENTS Convertible Promissory Notes Subsequent to March 31, 2021, the Company issued an additional $4,250,000 of the Notes in the 2021 Placement pursuant to a Securities Purchase Agreement between the Company and each investor (the SPA) and warrants to purchase shares of its common stock (the Warrants). The Notes are unsecured obligations of the Company with each Note having a stated maturity date of 12 months from its issue date (the Issue Date). The Notes bear interest at a rate of 12% per annum, payable on maturity, provided that, if the Company fails to pay any amounts when due under a Note, the interest rate increases to the greater of 16% or the maximum amount permitted by law. Each Note may be prepaid at the Company’s option during the first 270 calendar days following its Issue Date (the 270 th If the Notes remain outstanding after the Trigger Date, the Notes may be converted into shares of the Company’s common stock at an initial conversion price of $8.61 per share; provided, that a Note holder may not convert any portion of its Note that would cause it to beneficially own in excess of 4.99% of the Company’s outstanding common stock. If the Company completes an offering of its common stock or other securities in excess of $12,000,000 of gross proceeds (a Qualified Capital Raise), each Note holder will be required to convert its Adjusted Note Amount into the securities of such Qualified Capital Raise. For purposes hereof, Adjusted Note Amount equals the product of (i) the sum of all outstanding principal plus accrued but unpaid interest on a Note, multiplied by (ii) 1.25. The Notes contain a number of Company events of default (Events of Default) including, without limitation (i) failure to pay any principal or interest thereon when due, (ii) failure to timely deliver shares upon conversions, (iii) failure to comply with SEC reporting requirements under the Exchange Act, (iv) certain breaches of the SPA, the Notes, the Warrants, and the Registration Rights Agreement, (v) material restatements of the Company’s consolidated financial statements filed with the SEC, (vi) a holder’s inability to rely on Rule 144 for sales of shares underlying the Notes, (vii) the Company’s common stock is suspended or halted from trading and/or fails to be quoted or listed (as applicable) on the OTCQB, OTCQX, any tier of the Nasdaq Stock Market, the New York Stock Exchange, or the NYSE American within 10 days thereafter, (viii) failure to file with the SEC a registration statement covering the resale of shares of common stock underlying the Notes and Warrants within 60 calendar days following the Issue Date, (ix) failure to cause such registration statement to become effective within 120 calendar days following the Issue Date, or (x) certain merger consolidations, business combinations and sales of all or substantially all of the Company’s assets in the event the Company is not the survivor of such transaction. Upon an Event of Default, a Note holder may declare all amounts under its Note(s) due and payable, in which event the Company will be required to pay such Noteholder the product of (i) all then outstanding principal amount and accrued but unpaid interest thereon, multiplied by (ii) 125%; and all collection costs including legal fees and expenses in connection therewith. At the option of a Note holder, in the event the Company receive cash proceeds as a result of certain events including, but not limited to, from customers, issuances of debt or equity securities, exercise of warrants or asset sales, the Company will be required to use such proceeds to repay all or any lesser outstanding amounts due under such holder’s Note. The Notes also includes various covenants, including negative covenants, representations, warranties, other payment obligations and agreements by the Company including, without limitation, most-favored nation clauses, rights of participation and first refusal and exchange rights. In connection with the issuance of the Notes, the Company issued Warrants to purchase 761,912 shares of its common stock (Warrant Shares) at an initial exercise price of $24.00 per share. In the event that, prior to the Trigger Date, the Company (i) completes a Qualified Capital Raise, the outstanding Warrants shall be cancelled or (ii) prepays a holder’s Note(s) in whole or in part, such holder’s pro-rata number of its Warrants shall be cancelled. Effective April 30, 2021, each of the holders of the $2,210,000 of Notes outstanding at March 31, 2021 entered into a revocation and replacement agreement with the Company (the Revocation Agreement). Under the terms of the Revocation Agreement, the $2,210,000 of Notes and accrued interest of $50,091 were replaced with new Notes consistent with the terms described above. In May 2021, a member of the Board purchased $200,000 of the Notes. PPP Note As a result of the Company’s request for loan forgiveness, on May 29, 2021, the Company was notified that the outstanding principal and accrued interest for the PPP Note was forgiven in full by the U.S. Small Business Administration. |
CONSOLIDATED BALANCE SHEET DETA
CONSOLIDATED BALANCE SHEET DETAIL | 12 Months Ended |
Mar. 31, 2021 | |
Consolidated Balance Sheet Detail | |
CONSOLIDATED BALANCE SHEET DETAIL | NOTE 2 – CONSOLIDATED BALANCE SHEET DETAIL Schedule of Property Plant And Equipment March 31, Property and equipment, net: 2021 2020 Leasehold improvements $ 139,197 $ 139,197 Office equipment 56,476 49,724 Computer equipment and software 52,383 51,882 Machinery and equipment 202,993 112,198 Property and equipment, gross 451,049 353,001 Less: accumulated depreciation and amortization (152,091 ) (51,693 ) Property and equipment, net $ 298,958 $ 301,308 Schedule of Accured Expenses March 31, Accrued expenses: 2021 2020 Accrued wages and bonus $ 372,563 $ 198,160 Accrued placement fees 88,800 — Accrued interest 27,538 — Other 11,047 4,000 Accrued expenses $ 499,948 $ 202,160 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Debt Disclosure [Abstract] | ||
NOTES PAYABLE | NOTE 4 – CONVERTIBLE PROMISSORY NOTES From February through April 2021, the Company sold $2,310,000 of convertible promissory notes (each an Original Notes and, collectively, the Original Notes), at par in a private placement transaction effected pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended. Effective April 30, 2021, pursuant to a revocation and replacement agreement between each holder of an Original Note and the Company (the Revocation Agreement), the $2,310,000 of Original Notes and accrued interest thereon as of April 30, 2021 were replaced with $2,360,550 aggregate principal amount of new Notes (as defined below). The Company accounted for the replacement of the Original Notes in accordance with ASC 470 and recorded a loss on extinguishment of $ 1,321,450 70,647 In April and May 2021, pursuant to a Securities Purchase Agreement by and between the Company and each investor (the SPA), the Company sold to investors $ 4,250,000 th Notes outstanding after the Trigger Date may be converted into shares of the Company’s common stock at an initial conversion price of $8.61 per share; provided that a Note holder may not convert any portion of its Note that would cause it to beneficially own in excess of 4.99% of the Company’s outstanding common stock. The conversion price and number of shares of Company common stock issuable upon conversion of the Notes are subject to adjustment from time to time for subdivisions and consolidations of shares and other standard dilutive and corporate events, as provided in the Notes. Subject to certain Exempt Issuances (as defined in the Notes), if while a Note is outstanding, the Company sells, issues or grants any shares of its common stock or other securities to acquire shares of common stock at a price per share less than the then conversion price, such conversion price shall be reduced to such lesser price, and the number of conversion shares issuable upon conversion of the Notes shall be increased, as provided in the Notes. If the Company completes an offering of its common stock or other securities in excess of $12,000,000 of gross proceeds (a Qualified Capital Raise, as defined in the Notes), each Note holder will be required to convert its Adjusted Note Amount (as defined below) into the securities of such Qualified Capital Raise. Adjusted Note Amount equals the product of (i) the sum of all outstanding principal plus accrued interest on a Note, multiplied by (ii) 1.25. The Notes contain a number of Company events of default (Events of Default) including, without limitation (i) failure to pay any principal or interest thereon when due, (ii) failure to timely deliver shares upon conversions, (iii) failure to comply with SEC reporting requirements under the Exchange Act, (iv) certain breaches of the SPA, the Notes, the Warrants, and the Registration Rights Agreement, (v) material restatements of the Company’s consolidated financial statements filed with the SEC, (vi) a holder’s inability to rely on Rule 144 for sales of shares underlying the Notes, (vii) the Company’s common stock is suspended or halted from trading and/or fails to be quoted or listed (as applicable) on the OTCQB, OTCQX, any tier of the Nasdaq Stock Market, the New York Stock Exchange, or the NYSE American within 10 days thereafter, (viii) failure to file with the SEC a registration statement covering the resale of shares of common stock underlying the Notes and Warrants within 60 calendar days following the Issue Date, (ix) failure to cause such registration statement to become effective within 120 calendar days following the Issue Date, or (x) certain mergers consolidations, business combinations and sales of all or substantially all of the Company’s assets in the event the Company is not the survivor of such transaction. Upon an Event of Default, a Note holder may declare all amounts under its Note(s) due and payable, in which event the Company will be required to pay such Note holder the sum of (i) the product of (a) all then outstanding principal amount and accrued interest thereon, multiplied by (b) 125%; and (ii) all collection costs including legal fees and expenses in connection therewith. At the option of a Note holder, in the event the Company receives cash proceeds as a result of certain events, including, but not limited to, payments from customers, issuances of debt or equity securities, exercise of warrants or asset sales, the Company will be required to use such proceeds to repay all or any lesser outstanding amounts due under such holder’s Note. The Notes include covenants, representations, warranties, other payment obligations and agreements by the Company including, without limitation, most-favored nation rights, rights of participation and first refusal and exchange rights. In connection with the issuance of the Notes, the Company issued Warrants to purchase in the aggregate 767,783 shares of its common stock at an initial exercise price of $24.00 per share. The Warrants may be exercised for a period of five years from the Trigger Date, provided that, if prior to the Trigger Date, the Company (i) completes a Qualified Capital Raise, the outstanding Warrants shall be cancelled or (ii) prepays a holder’s Note(s) in whole or in part, such holder’s pro-rata number of Warrants shall be cancelled. The fair value of the Warrants was $3,700,632, of which $2,379,182 was recorded as a debt discount, which is being amortized to interest expense over the term of the Warrants, and $1,321,450 was recorded as a loss on debt extinguishment. The Company calculated the fair value of the Warrants utilizing the Black-Scholes valuation model with the following assumptions: volatility of 88.98% 0.86% 5.75 zero In connection with the April and May 2021 sales of the $4,250,000 aggregate principal amount of the Notes, the Company incurred debt issuance costs of $116,000, which were recorded as a debt discount and are being amortized to interest expense over the term of the Notes using the effective interest rate method. The interest expense attributable to the debt discount, comprising the debt issuance costs and Warrants, during the three and six months ended September 30, 2021 was $485,820 and $824,439, respectively. The $6,610,550 aggregate principal amount of Notes are due and payable in full in the first quarter of fiscal 2023. Subsequent to the Trigger Date, the Notes can be converted into 767,783 | NOTE 3 – NOTES PAYABLE PPP Note On April 24, 2020, the Company received a $368,780 unsecured loan (the PPP Note) under the Paycheck Protection Program (the PPP), which was established under the U.S. government’s Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). The PPP Note to the Company was made through Silicon Valley Bank (the Lender), and the Company entered into a U.S. Small Business Administration Paycheck Protection Program Note (the Agreement) with the Lender evidencing the PPP Note. The full amount of the PPP Note is due in April 2022. Interest will accrue on the outstanding principal balance of the PPP Note at a fixed rate of 1.0% per annum, which shall be deferred for 10 months after the covered period during which the Company used the proceeds. The Company may prepay principal of the PPP Note at any time in any amount without penalty. The Agreement contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties or provisions of the PPP Note. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company. The Company applied to the Lender for forgiveness of the PPP Note in October 2020, and the amount which may be forgiven will be equal to the sum of the payroll and benefit costs and covered rent and utility payments incurred by the Company, as calculated in accordance with the terms of the CARES Act. Convertible Promissory Notes In February and March 2021, the Company sold $2,210,000 of convertible promissory notes (the Notes), at par in a private placement transaction effected pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the 2021 Placement). The Notes bear interest at an annual rate of 12%, and interest is accrued or payable monthly in cash. The Notes mature on September 30, 2021 (the Maturity Date) and may be prepaid prior to the Maturity Date. The aggregate principal amount of the Notes plus accrued but unpaid interest thereon shall automatically convert upon the closing of an offering of the Company’s equity securities to investors or a strategic corporate investor resulting in aggregate gross proceeds to the Company of at least $5,000,000 (excluding conversion of the Notes or other convertible securities issued for capital raising purposes) (a Qualified Financing). In the event of a Qualified Financing, all such outstanding principal and accrued interest shall convert into the same equity securities purchased by and on the same terms and conditions as the other investors in such Qualified Financing at a conversion price equal to 80% (a 20% discount) of the lowest price paid per unit or share by investors in the Qualified Financing. In the event that additional bridge financing is obtained by the Company, the Notes shall convert into the same securities and on the same terms and conditions as the other investors therein and all such purchases will be treated as one, single round of financing going forward. As of March 31, 2021, the Notes could be converted into 770,305 shares of common stock, excluding the effects of any payments of interest in kind. At any time on or following the Maturity Date, the holders of the Notes may demand repayment of the Notes, and the Company shall repay the outstanding aggregate principal amount plus accrued but unpaid interest thereon. The holders of the Notes, however, retain the right for 30 days after the Maturity Date to convert all or part of the aggregate principal amount plus accrued but unpaid interest on the Notes into the Company’s common stock at the conversion price of $2.87 per share or at a 20% discount to any financing consummated during the 30-day period following the Maturity Date. If a Qualified Financing has not occurred immediately prior to the consummation of a Change of Control (as defined below), the Note holders shall have the option of either (i) converting all or any portion of the aggregate principal amount of the Notes plus accrued but unpaid interest thereon into common stock of the Company at a conversion price equal to $2.87 per share or (ii) having the Company repay the aggregate principal amount of the Notes and accrued but unpaid interest. The term “Change of Control” means (i) a consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shares of capital stock of the Company immediately prior to such consolidation, merger or reorganization continue to represent a majority of the voting power of the surviving entity immediately after such consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; (iii) the sale or transfer of all or substantially all of the Company’s assets, or the exclusive license of all or substantially all of the Company’s material intellectual property; or (iv) the dissolution and winding up of the Company. The Company incurred debt issuance costs of $88,800, which were recorded as a debt discount and are being amortized to interest expense over the term of the Notes using the effective interest rate method. The interest expense related to the debt discount during the year ended March 31, 2021 was approximately $13,000. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Equity [Abstract] | ||
STOCK-BASED COMPENSATION | NOTE 5 – STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION During the six months ended September 30, 2021, the Company issued 20,000 5,472 Amended 2017 Equity Incentive Plan In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the Plan) with 1,000,000 333,334 1,333,334 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 September 30, 2021, was $ 5,988,541 three years During the six months ended September 30, 2021, the Company granted options to purchase 457,157 43,039 5,464,619 845,979 The following assumptions were used in the fair value method calculations: Schedule of Fair Value Assumptions Three Months Ended September 30, Six Months Ended September 30, 2021 2020 2021 2020 Risk-free interest rates 0.8% 0.98% 0.28% 0.37% 0.8% 0.98% 0.28% 0.37% Volatility 367% 370% 88% 127% 89% 370% 88% 128% Expected life (years) 5.0 6.2 5.0 6.0 5.0 6.2 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 Plan is presented below: Schedule of Stock Option activity Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance at March 31, 2021 136,082 1,197,252 $ 5.25 Options granted (60,774 ) 60,774 12.69 Share awards (1,836 ) — — Options cancelled and returned to the Plan 7,547 (7,547 ) 8.61 Balance at June 30, 2021 81,089 1,250,479 5.58 Additional shares authorized under the Plan 1,333,334 — — Options granted (396,384 ) 396,384 12.15 Share awards (3,636 ) — — Options cancelled and returned to the Plan 49,213 (49,213 ) 7.02 Balance at September 30, 2021 1,063,546 1,597,650 7.17 There were no stock options exercised during the six months ended September 30, 2021 and 2020. The following table summarizes the range of outstanding and exercisable options as of September 30, 2021: Schedule of Outstanding and Exercisable Option, Range Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 17.70 1,597,650 8.09 $ 7.17 869,668 $ 4.62 $ 4,022,239 The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option at September 30, 2021. 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 six months ended September 30, 2021 and 2020, there were no such tax benefits associated with the exercise of stock options. | NOTE 5 – STOCK-BASED COMPENSATION Equity Compensation Plan In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the 2017 Plan) with 3,000,000 shares of common stock reserved for issuance. In January 2020, the Board approved an amendment to the 2017 Plan to increase the number of shares reserved for issuance by 1,000,000 shares. Under the 2017 Plan, eligible employees, directors and consultants may be granted a broad range of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock units. The 2017 Plan 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 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; 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 2017 Plan generally does not allow for the transfer of awards, and the Board may amend, suspend or terminate the 2017 Plan 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 March 31, 2021 was $2,242,352 related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 2 years. During the year ended March 31, 2021, options granted to purchase shares of its common stock to employees, directors and consultants had 10-year terms and a grant-date fair value of $1,101,737. Options to purchase 10,476 shares vested immediately on the respective grant dates. The following assumptions were used in the fair-value method calculations Year ended March 31, 2021 2020 Risk-free interest rates 0.28% 0.71% 0.77% 2.37% Volatility 87% 127% 86% 103% Expected life (years) 5.0 6.0 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 Shares Options Outstanding Available Number of Weighted Average for Grant Shares Exercise Price Balance at March 31, 2019 490,031 509,969 2.56 Additional shares authorized under the Plan 333,334 — — Options granted (572,402 ) 572,402 6.75 Options cancelled and returned to the Plan 23,056 (23,056 ) 6.75 Balance at March 31, 2020 274,019 1,059,315 4.74 Options granted (163,492 ) 163,492 8.64 Options cancelled and returned to the Plan 25,555 (25,555 ) 6.75 Balance at March 31, 2021 136,082 1,197,252 5.25 There were no stock options exercised during the years ended March 31, 2021 and 2020. The following table summarizes the range of outstanding and exercisable options Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 - $ 9.48 1,197,252 8.25 $ 5.25 742,913 $ 3.96 $ 8,763,260 The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option. The 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, 2021 and 2020, there were no such tax benefits associated with the exercise of stock options. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 6 – STOCKHOLDERS’ EQUITY Private Placement Between March and December 2020, the Company completed a private placement of shares of its common stock (the 2020 Placement). The Company sold 320,796 |
ROYALTY AGREEMENT
ROYALTY AGREEMENT | 12 Months Ended |
Mar. 31, 2021 | |
Royalty Agreement | |
ROYALTY AGREEMENT | NOTE 8 – 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 on the Company’s product. The Company is obligated to make royalty payments under the agreement to the Founder on any sales of the royalty product sold or otherwise commercialized by the Company equal to (a) $0.75 on each sale of a royalty product or (b) 5% of the gross sale price of the royalty product, whichever is less. The royalty payments will cease, and the agreement will terminate, at such time as the total sum of royalty payments actually paid to the Founder, pursuant to the agreement, reaches $10,000,000. The Company has the option to terminate the agreement at any time upon payment, to the Founder, of the difference between total royalty payments actually made to him to date and the sum of $10,000,000. All payments of the royalties, if due, for the preceding quarter, will be made by the Company to the Founder within thirty days after the end of each calendar quarter. |
RETIREMENT SAVINGS PLAN
RETIREMENT SAVINGS PLAN | 12 Months Ended |
Mar. 31, 2021 | |
Retirement Savings Plan | |
RETIREMENT SAVINGS PLAN | NOTE 9 – RETIREMENT SAVINGS PLAN Effective March 2020, the Company adopted the Modular Medical, Inc. 401(k) Plan (the Savings Plan), which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. Full-time and part-time employees who are at least 21 years of age are eligible to participate in the Savings Plan at the time of hire. Participants may contribute up to 15% of their earnings to the Savings Plan. The Plan became effective and began accepting participant contributions in April 2020. |
THE COMPANY AND SUMMARY OF SI_2
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Liquidity | Liquidity Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2014-15 (ASU 2014-15), Going Concern The Company expects to continue to incur operating losses for the foreseeable future and incur cash outflows from operations as it continues to invest in the development and subsequent commercialization of its product. The Company expects that its research and development and general and administrative expenses will continue to increase, and, as a result, it will eventually need to generate significant product revenues to achieve profitability. The Company’s expected operating losses and cash burn and the need to repay the convertible promissory notes and accrued interest in the first half of 2022 raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to raise additional capital, through the sale of additional equity or debt securities, to support its future operations. There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. As disclosed in note 9, the Company recently sold shares of its common stock to two of its officers, obtained access to a credit facility and filed a registration statement to offer shares of its common stock. The Company’s operating needs include the planned costs to operate its business, including amounts required to repay its convertible promissory notes (if not converted), fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its product, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product offering. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash. These condensed consolidated financial statements do not include any adjustments that might result from this uncertainty. | Liquidity Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2014-15 (ASU 2014-15), Going The Company expects to continue to incur operating losses for the foreseeable future and incur cash outflows from operations as it continues to invest in the development and subsequent commercialization of its product. The Company expects that its research and development and general and administrative expenses will continue to increase, and, as a result, it will eventually need to generate significant product revenues to achieve profitability. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to raise additional capital, through the sale of additional equity or debt securities, to support its future operations. There can be no assurance that such additional capital, whether in the form of debt or equity financing, will be sufficient or available and, if available, that such capital will be offered on terms and conditions acceptable to the Company. As discussed in notes 3 and 11, in February 2021, the Company commenced a private placement of its convertible promissory notes to investors to fund its operations. In addition, during fiscal 2021, the Company obtained additional equity financing through a private placement of its common stock (see note 6), and the Company obtained a loan from Silicon Valley Bank in April 2020 (see notes 3 and 12). The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its product, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product offering. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash. These consolidated financial statements do not include any adjustments that might result from this uncertainty. |
Basis of Presentation | Basis of Presentation The Company’s fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the condensed consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2022 refers to the fiscal year ending March 31, 2022). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Quasuras. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements of the Company have been prepared without audit. The condensed consolidated balance sheet as of March 31, 2021 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 months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending March 31, 2022 or for any other future period. All share and per share amounts have been presented to give retroactive effect to a 1-for-3 reverse stock split that occurred in November 2021. | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Quasuras. All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year ends on March 31 of each calendar year. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could differ from those estimates. | Use of Estimates The preparation of the accompanying consolidated 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. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could differ from those estimates. |
Reportable Segment | Reportable Segment The Company operates in one | Reportable Segment The Company operates in one business segment and uses one measurement of profitability for its business. |
Research and Development | Research and Development The Company expenses research and development expenditures as incurred. | Research and Development The Company expenses research and development expenditures as incurred. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of payroll and benefit costs, rent, stock-based compensation, legal and accounting fees, and office and other administrative expenses. | General and Administrative General and administrative expense consists primarily of payroll and benefit related costs, rent, office expenses, equipment supplies and meetings and travel. |
Concentration of Credit Risk | 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-quality financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation up to limits of approximately $250,000. No reserve has been made in the financial statements for any possible loss due to financial institution failure. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are deposited with high credit-quality institutions within the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to limits of approximately $250,000. |
Risks and Uncertainties | 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 technology and customer requirements, limited operating history and the volatility of public markets. COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s control, and cannot be predicted. | 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. COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s control, and cannot be predicted. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on 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 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. |
Property and Equipment | Property & Equipment Property and equipment are originally recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three five | Property and Equipment Property and equipment are originally recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three five |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Due to their short-term nature, the carrying values of cash equivalents, accounts payable and accrued expenses approximate fair value. | Fair Value of Financial Instruments The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: · Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Due to their short-term nature, the carrying values of cash equivalents, accounts payable and accrued expenses, approximate fair value. |
Per-Share Amounts | 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 net loss per share gives effect to all potentially dilutive common shares outstanding during the period. For the six months ended September 30, 2021 and 2020, outstanding options to purchase 1,597,650 1,160,030 | Per-Share Amounts Basic net loss per share is computed by dividing net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share gives effect to all potentially dilutive common shares outstanding during the period. For the years ended March 31, 2021 and 2020, 1,197,252 1,059,315 |
Reclassification | 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. | |
Comprehensive Loss | Comprehensive Loss Comprehensive loss represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the three and six months ended September 30, 2021 and 2020, the Company’s comprehensive loss was the same as its net loss. | Comprehensive Loss Comprehensive loss represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the years ended March 31, 2021 and 2020, the Company’s comprehensive loss was the same as its net loss. |
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncement In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . | |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation for stock options granted to employees and non-employees on a straight-line basis over the requisite service period, usually the vesting period, based on the grant-date fair value. The Company estimates the value of stock options on the date of grant using the Black-Scholes pricing model. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the option price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and projected stock option exercise behaviors. | |
Income Taxes | 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 accounts for uncertain tax positions in accordance with FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. All tax returns from 2016 to 2020 may be subject to examination by the U.S. federal and state tax authorities. As of March 31, 2021, the Company has not recorded any liability for unrecognized tax benefits related to uncertain tax positions. |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Future minimum payments under the facility operating lease, net of the lease incentive | Future minimum payments under the facility operating lease, as of September 30, 2021, are listed in the table below. | Future minimum payments under the facility operating lease, net of the lease incentive |
LEASES | Operating Annual Fiscal Years lease 2022 76,716 2023 158,028 2024 40,692 Less: Imputed interest (26,613 ) Present value of lease liabilities $ 248,823 | |
LEASES | Operating Annual Fiscal Years lease 2022 $ 153,432 2023 158,028 2024 40,692 Less: Imputed interest (42,297 ) Present value of lease liabilities $ 309,855 |
STOCKHOLDERS_ EQUITY (DEFICIT_2
STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Tables) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Equity [Abstract] | ||
Schedule of Fair Value Assumptions | The following assumptions were used in the fair value method calculations: Schedule of Fair Value Assumptions | The following assumptions were used in the fair-value method calculations |
STOCKHOLDERS' EQUITY (DEFICIT) & STOCK-BASED COMPENSATION | Three Months Ended September 30, Six Months Ended September 30, 2021 2020 2021 2020 Risk-free interest rates 0.8% 0.98% 0.28% 0.37% 0.8% 0.98% 0.28% 0.37% Volatility 367% 370% 88% 127% 89% 370% 88% 128% Expected life (years) 5.0 6.2 5.0 6.0 5.0 6.2 5.0 6.0 Dividend yield — — — — | Year ended March 31, 2021 2020 Risk-free interest rates 0.28% 0.71% 0.77% 2.37% Volatility 87% 127% 86% 103% Expected life (years) 5.0 6.0 5.0 6.0 Dividend yield —% —% |
Schedule of Stock Option activity | A summary of stock option activity under the Plan is presented below: Schedule of Stock Option activity | A summary of stock option activity |
STOCKHOLDERS' EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Details 2) | Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance at March 31, 2021 136,082 1,197,252 $ 5.25 Options granted (60,774 ) 60,774 12.69 Share awards (1,836 ) — — Options cancelled and returned to the Plan 7,547 (7,547 ) 8.61 Balance at June 30, 2021 81,089 1,250,479 5.58 Additional shares authorized under the Plan 1,333,334 — — Options granted (396,384 ) 396,384 12.15 Share awards (3,636 ) — — Options cancelled and returned to the Plan 49,213 (49,213 ) 7.02 Balance at September 30, 2021 1,063,546 1,597,650 7.17 | Shares Options Outstanding Available Number of Weighted Average for Grant Shares Exercise Price Balance at March 31, 2019 490,031 509,969 2.56 Additional shares authorized under the Plan 333,334 — — Options granted (572,402 ) 572,402 6.75 Options cancelled and returned to the Plan 23,056 (23,056 ) 6.75 Balance at March 31, 2020 274,019 1,059,315 4.74 Options granted (163,492 ) 163,492 8.64 Options cancelled and returned to the Plan 25,555 (25,555 ) 6.75 Balance at March 31, 2021 136,082 1,197,252 5.25 |
Schedule of Outstanding and Exercisable Option, Range | The following table summarizes the range of outstanding and exercisable options as of September 30, 2021: Schedule of Outstanding and Exercisable Option, Range | The following table summarizes the range of outstanding and exercisable options |
STOCKHOLDERS' EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Details 3) | Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 17.70 1,597,650 8.09 $ 7.17 869,668 $ 4.62 $ 4,022,239 | Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 - $ 9.48 1,197,252 8.25 $ 5.25 742,913 $ 3.96 $ 8,763,260 |
CONSOLIDATED BALANCE SHEET DE_2
CONSOLIDATED BALANCE SHEET DETAIL (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Consolidated Balance Sheet Detail | |
Schedule of Property Plant And Equipment | Schedule of Property Plant And Equipment |
CONSOLIDATED BALANCE SHEET DETAIL | March 31, Property and equipment, net: 2021 2020 Leasehold improvements $ 139,197 $ 139,197 Office equipment 56,476 49,724 Computer equipment and software 52,383 51,882 Machinery and equipment 202,993 112,198 Property and equipment, gross 451,049 353,001 Less: accumulated depreciation and amortization (152,091 ) (51,693 ) Property and equipment, net $ 298,958 $ 301,308 |
Schedule of Accured Expenses | Schedule of Accured Expenses |
CONSOLIDATED BALANCE SHEET DETAIL (Details 2) | March 31, Accrued expenses: 2021 2020 Accrued wages and bonus $ 372,563 $ 198,160 Accrued placement fees 88,800 — Accrued interest 27,538 — Other 11,047 4,000 Accrued expenses $ 499,948 $ 202,160 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Equity [Abstract] | ||
assumptions were used in the fair-value method calculations | The following assumptions were used in the fair value method calculations: Schedule of Fair Value Assumptions | The following assumptions were used in the fair-value method calculations |
STOCK-BASED COMPENSATION | Three Months Ended September 30, Six Months Ended September 30, 2021 2020 2021 2020 Risk-free interest rates 0.8% 0.98% 0.28% 0.37% 0.8% 0.98% 0.28% 0.37% Volatility 367% 370% 88% 127% 89% 370% 88% 128% Expected life (years) 5.0 6.2 5.0 6.0 5.0 6.2 5.0 6.0 Dividend yield — — — — | Year ended March 31, 2021 2020 Risk-free interest rates 0.28% 0.71% 0.77% 2.37% Volatility 87% 127% 86% 103% Expected life (years) 5.0 6.0 5.0 6.0 Dividend yield —% —% |
stock option activity | A summary of stock option activity under the Plan is presented below: Schedule of Stock Option activity | A summary of stock option activity |
STOCK-BASED COMPENSATION (Details 2) | Options Outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance at March 31, 2021 136,082 1,197,252 $ 5.25 Options granted (60,774 ) 60,774 12.69 Share awards (1,836 ) — — Options cancelled and returned to the Plan 7,547 (7,547 ) 8.61 Balance at June 30, 2021 81,089 1,250,479 5.58 Additional shares authorized under the Plan 1,333,334 — — Options granted (396,384 ) 396,384 12.15 Share awards (3,636 ) — — Options cancelled and returned to the Plan 49,213 (49,213 ) 7.02 Balance at September 30, 2021 1,063,546 1,597,650 7.17 | Shares Options Outstanding Available Number of Weighted Average for Grant Shares Exercise Price Balance at March 31, 2019 490,031 509,969 2.56 Additional shares authorized under the Plan 333,334 — — Options granted (572,402 ) 572,402 6.75 Options cancelled and returned to the Plan 23,056 (23,056 ) 6.75 Balance at March 31, 2020 274,019 1,059,315 4.74 Options granted (163,492 ) 163,492 8.64 Options cancelled and returned to the Plan 25,555 (25,555 ) 6.75 Balance at March 31, 2021 136,082 1,197,252 5.25 |
summarizes the range of outstanding and exercisable options | The following table summarizes the range of outstanding and exercisable options as of September 30, 2021: Schedule of Outstanding and Exercisable Option, Range | The following table summarizes the range of outstanding and exercisable options |
STOCK-BASED COMPENSATION (Details 3) | Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 17.70 1,597,650 8.09 $ 7.17 869,668 $ 4.62 $ 4,022,239 | Options Outstanding Options Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted Aggregate $ 1.98 - $ 9.48 1,197,252 8.25 $ 5.25 742,913 $ 3.96 $ 8,763,260 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
The income tax provision (benefit) | The income tax provision (benefit) |
INCOME TAXES | Year Ended March 31, 2021 2020 Current portion: Federal $ — $ — State 1,600 1,600 Current 1,600 1,600 Deferred portion: Federal (1,931,390 ) (1,180,434 ) State (576,868 ) (391,865 ) Deferred (2,508,258 ) (1,572,299 ) Change in valuation allowance 2,508,258 1,572,299 Provision for income taxes $ 1,600 $ 1,600 |
A reconciliation of income taxes provided at the federal statutory | A reconciliation of income taxes provided at the federal statutory |
INCOME TAXES (Details 2) | Year Ended March 31, 2021 2020 Federal statutory rate (21 )% (21 )% State tax rate, net of federal benefit (7 )% (7 )% Permanent differences — % — % Research and development tax credits (6 )% (3 )% Section 179 assets — % — % Change in valuation allowance 34 % 31 % Effective income tax rate — % — % |
Significant components of the Company’s deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities |
INCOME TAXES (Details 3) | March 31, 2021 2020 Net operating loss carryforwards $ 3,909,434 $ 1,965,118 Stock-based compensation expense 554,892 364,989 Property and equipment (18,039 ) 6,842 Reserves, accruals & other (79,878 ) (7,181 ) Research and development tax credits 646,296 237,716 Total deferred tax assets 5,012,705 2,567,484 Less: valuation allowance (5,012,705 ) (2,567,484 ) Deferred tax assets, net $ — $ — |
THE COMPANY AND SUMMARY OF SI_3
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2021Numbershares | Sep. 30, 2020shares | Mar. 31, 2021shares | Mar. 31, 2020shares | |
Number of Operating Segments | Number | 1 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 1,597,650 | 1,160,030 | 1,197,252 | 1,059,315 |
Minimum [Member] | ||||
Property, Plant and Equipment, Useful Life | 3 years | 3 years | ||
Maximum [Member] | ||||
Property, Plant and Equipment, Useful Life | 5 years | 5 years |
LEASES (Details)
LEASES (Details) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Leases [Abstract] | ||
2022 | $ 76,716 | $ 153,432 |
2023 | 158,028 | 158,028 |
2024 | 40,692 | 40,692 |
Imputed interest | (26,613) | (42,297) |
Present value of lease liabilities | 248,823 | 309,855 |
Present value of lease liabilities | $ 248,823 | $ 309,855 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Apr. 02, 2020 | |
Leases [Abstract] | ||||||||||
Lessee, Operating Lease, Term of Contract | 39 months | |||||||||
Operating Leases, Rent Expense | $ 12,400 | $ 26,884 | $ 26,844 | $ 53,768 | $ 53,768 | $ 107,540 | $ 35,766 | |||
[custom:OperatingLeasesAnnualRentIncreasePercentange-0] | 0.03 | |||||||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 270,950 | 270,950 | ||||||||
Lease Incentive Received | $ 139,000 | |||||||||
[custom:CashPaidforLeaseLiabilities-0] | $ 76,716 | $ 76,716 |
PPP NOTE (Details Narrative)
PPP NOTE (Details Narrative) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 | Apr. 24, 2020 | Mar. 31, 2020 |
Ppp Note | ||||
Unsecured Debt, Current | $ 368,780 | $ 368,780 |
CONVERTIBLE PROMISSORY NOTES (D
CONVERTIBLE PROMISSORY NOTES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | May 31, 2021 | |
Short-term Debt [Line Items] | |||||
Gain (Loss) on Extinguishment of Debt | $ 1,321,450 | ||||
Amortization of Debt Issuance Costs | $ 70,647 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 88.98% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.86% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 9 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | 0.00% | |
[custom:NotesAndAccuredInterestCouldBeConvertedIntoCommonStock-0] | 767,783 | 767,783 | |||
Convertible Notes Payable [Member] | |||||
Short-term Debt [Line Items] | |||||
Convertible Notes Payable | $ 4,250,000 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.86% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 9 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | 0.00% | ||
Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.80% | 0.28% | 0.80% | 0.28% | 0.28% | 0.77% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 367.00% | 88.00% | 89.00% | 88.00% | 87.00% | 86.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | ||||
Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.98% | 0.37% | 0.98% | 0.37% | 0.71% | 2.37% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 370.00% | 127.00% | 370.00% | 128.00% | 127.00% | 103.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 2 months 12 days | 6 years | 6 years 2 months 12 days | 6 years | 6 years | 6 years |
STOCKHOLDERS' EQUITY (DEFICIT_2
STOCKHOLDERS' EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Details 2) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Offsetting Assets [Line Items] | |||||
Number of Option, Beginning Balance | 136,082 | 136,082 | 274,019 | 490,031 | |
Number of Options, Granted | (163,492) | (572,402) | |||
Number of Options, cancelled and returned to the Plan | (25,555) | (23,056) | |||
Number of Option, Ending Balance | 136,082 | 274,019 | |||
Equity Option [Member] | |||||
Offsetting Assets [Line Items] | |||||
Shares Available for Grant, Beginning Balance | 81,089 | 136,082 | 136,082 | ||
Number of Option, Beginning Balance | 1,250,479 | 1,197,252 | 1,197,252 | 1,059,315 | 509,969 |
Weighted Average Exercise Price, Beginning Balance | $ 5.58 | $ 5.25 | $ 5.25 | $ 4.74 | $ 2.56 |
Shares available for grant, Granted | (396,384) | (60,774) | |||
Number of Options, Granted | 396,384 | 60,774 | 163,492 | 572,402 | |
Weighted Average Exercise Price, Options Granted | $ 12.15 | $ 12.69 | $ 8.64 | $ 6.75 | |
Shares available for grant, Awards | (3,636) | (1,836) | |||
Shares available for grant, Cancelled and Returned to the Plan | 49,213 | 7,547 | |||
Number of Options, cancelled and returned to the Plan | (49,213) | (7,547) | 25,555 | 23,056 | |
Weighted Average Exercise Price, Options cancelled and returned to the Plan | $ 7.02 | $ 8.61 | $ 6.75 | $ 6.75 | |
Shares available for grant, Additional Shares authorized under the Plan | 1,333,334 | ||||
Shares Available for Grant, Ending Balance | 1,063,546 | 81,089 | 1,063,546 | 136,082 | |
Number of Option, Ending Balance | 1,597,650 | 1,250,479 | 1,597,650 | 1,197,252 | 1,059,315 |
Weighted Average Exercise Price, Ending Balance | $ 7.17 | $ 5.58 | $ 7.17 | $ 5.25 | $ 4.74 |
STOCKHOLDERS' EQUITY (DEFICIT_3
STOCKHOLDERS' EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Details 3) - USD ($) | 6 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 136,082 | 274,019 | 490,031 | ||
Equity Option [Member] | |||||
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,597,650 | 1,250,479 | 1,197,252 | 1,059,315 | 509,969 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 1 month 2 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 7.17 | $ 5.58 | $ 5.25 | $ 4.74 | $ 2.56 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 869,668 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 4.62 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 4,022,239 | ||||
Equity Option [Member] | Minimum [Member] | |||||
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ 1.98 | ||||
Equity Option [Member] | Maximum [Member] | |||||
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ 17.70 |
STOCKHOLDERS_ EQUITY (DEFICIT_3
STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Aug. 31, 2020 | Jan. 31, 2020 | Oct. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 1,333,334 | 333,334 | 1,000,000 | |||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 5,988,541 | $ 5,988,541 | ||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | (163,492) | (572,402) | ||||||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | $ 862,431 | $ 655,920 | $ 300,604 | $ 344,716 | $ 1,518,351 | $ 645,320 | ||||||
Equity Option [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 396,384 | 60,774 | 163,492 | 572,402 | ||||||||
[custom:FairValueofOptionGranted] | 5,464,619 | |||||||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | $ 845,979 | |||||||||||
Employee Stock [Member] | Equity Option [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 43,039 | |||||||||||
Common Stock [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 243,299 | 20,000 | 320,796 | 320,796 | ||||||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 3,365 | 1,836 | 5,472 | |||||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | $ 4 | $ 2 | ||||||||||
Common Stock [Member] | Employee Stock [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 457,157 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | May 31, 2021 | |
Related Party Transaction [Line Items] | |||||||
Interest Expense | $ 685,793 | $ 1,194,670 | $ 39,791 | ||||
C E O And Investor [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Notes Cancelled | 1,100,000 | 1,100,000 | |||||
Interest Payable | $ 50,091 | $ 50,091 | |||||
C E O And Investor [Member] | Notes Payable Other Payables 1 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest Payable | 51,640 | 51,640 | |||||
Notes Payable | 1,026,630 | 1,026,630 | |||||
Interest Expense | 31,105 | $ 3,100 | 5,160 | 51,600 | |||
C E O And Investor [Member] | Notes Payable Other Payables 2 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest Payable | 5,164 | 5,164 | |||||
Notes Payable | 102,663 | 102,663 | |||||
Interest Expense | 4,000 | $ 10,060 | |||||
Member Of Board [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest Payable | $ 10,060 | $ 10,060 | |||||
Notes Payable | $ 200,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 28, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Subsequent Event [Line Items] | ||||||
Stock Issued During Period, Value, New Issues | $ 1,118,634 | $ 1,785,882 | $ 923,994 | |||
Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 243,299 | 20,000 | 320,796 | 320,796 | ||
Stock Issued During Period, Value, New Issues | $ 243 | $ 321 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Stock Issued During Period, Value, New Issues | $ 250,000 | |||||
Subsequent Event [Member] | Revolving Credit Facility [Member] | Manchester Explorer L P [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Long-term Line of Credit | $ 3,000,000 | |||||
Subsequent Event [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 30,864 |
CONSOLIDATED BALANCE SHEET DE_3
CONSOLIDATED BALANCE SHEET DETAIL (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 451,049 | $ 353,001 |
Less: accumulated depreciation and amortization | (152,091) | (51,693) |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 139,197 | 139,197 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 56,476 | 49,724 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 52,383 | 51,882 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 202,993 | $ 112,198 |
CONSOLIDATED BALANCE SHEET DE_4
CONSOLIDATED BALANCE SHEET DETAIL (Details 2) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Interim Period, Costs Not Allocable [Line Items] | |||
Accrued expenses | $ 678,797 | $ 499,948 | $ 202,160 |
Accured Wages and Bonus [Member] | |||
Interim Period, Costs Not Allocable [Line Items] | |||
Accrued expenses | 372,563 | 198,160 | |
Accured Placement Fees [Member] | |||
Interim Period, Costs Not Allocable [Line Items] | |||
Accrued expenses | 88,800 | ||
Accured Interest [Member] | |||
Interim Period, Costs Not Allocable [Line Items] | |||
Accrued expenses | 27,538 | ||
Accrued Other Expenses [Member] | |||
Interim Period, Costs Not Allocable [Line Items] | |||
Accrued expenses | $ 11,047 | $ 4,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Risk-free interest rates | 0.86% | |||||
Expected Life (years) | 5 years 9 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | 0.00% | ||
Minimum [Member] | ||||||
Risk-free interest rates | 0.80% | 0.28% | 0.80% | 0.28% | 0.28% | 0.77% |
Volatility | 367.00% | 88.00% | 89.00% | 88.00% | 87.00% | 86.00% |
Expected Life (years) | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | ||||
Maximum [Member] | ||||||
Risk-free interest rates | 0.98% | 0.37% | 0.98% | 0.37% | 0.71% | 2.37% |
Volatility | 370.00% | 127.00% | 370.00% | 128.00% | 127.00% | 103.00% |
Expected Life (years) | 6 years 2 months 12 days | 6 years | 6 years 2 months 12 days | 6 years | 6 years | 6 years |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 2) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Offsetting Assets [Line Items] | |||||
Number of Option, Beginning Balance | 136,082 | 136,082 | 274,019 | 490,031 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period | 333,334 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | (163,492) | (572,402) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | 25,555 | 23,056 | |||
Number of Option, Ending Balance | 136,082 | 274,019 | |||
Equity Option [Member] | |||||
Offsetting Assets [Line Items] | |||||
Number of Option, Beginning Balance | 1,250,479 | 1,197,252 | 1,197,252 | 1,059,315 | 509,969 |
Weighted Average Exercise Price, Beginning Balance | $ 5.58 | $ 5.25 | $ 5.25 | $ 4.74 | $ 2.56 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 396,384 | 60,774 | 163,492 | 572,402 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 12.15 | $ 12.69 | $ 8.64 | $ 6.75 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | 49,213 | 7,547 | (25,555) | (23,056) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 7.02 | $ 8.61 | $ 6.75 | $ 6.75 | |
Number of Option, Ending Balance | 1,597,650 | 1,250,479 | 1,597,650 | 1,197,252 | 1,059,315 |
Weighted Average Exercise Price, Ending Balance | $ 7.17 | $ 5.58 | $ 7.17 | $ 5.25 | $ 4.74 |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 3) - USD ($) | 12 Months Ended | ||||
Mar. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 136,082 | 274,019 | 490,031 | ||
Equity Option [Member] | |||||
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 1,197,252 | 1,597,650 | 1,250,479 | 1,059,315 | 509,969 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 8 years 4 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 5.25 | $ 7.17 | $ 5.58 | $ 4.74 | $ 2.56 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 742,913 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 3 years 11 months 16 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 8,763,260 | ||||
Equity Option [Member] | Minimum [Member] | |||||
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price | $ 1.98 | ||||
Equity Option [Member] | Maximum [Member] | |||||
Offsetting Assets [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price | $ 9.48 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | |
Common Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 243,299 | 20,000 | 320,796 | 320,796 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Current portion: | ||||||
Federal | ||||||
State | 1,600 | 1,600 | ||||
Current | 1,600 | 1,600 | ||||
Deferred portion: | ||||||
Federal | (1,931,390) | (1,180,434) | ||||
State | (576,868) | (391,865) | ||||
Deferred | (2,508,258) | (1,572,299) | ||||
Change in valuation allowance | 2,508,258 | 1,572,299 | ||||
Provision for income taxes | $ 1,600 | $ 1,600 | $ 1,600 | $ 1,600 | $ 1,600 | $ 1,600 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | (21.00%) | (21.00%) |
State tax rate, net of federal benefit | (7.00%) | (7.00%) |
Permanent differences | 0 | 0 |
Research and development tax credits | (6.00%) | (3.00%) |
Section 179 assets | 0.00% | 0.00% |
Change in valuation allowance | 34.00% | 31.00% |
Effective income tax rate | 0.00% | 0.00% |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 3,909,434 | $ 1,965,118 |
Stock-based compensation expense | 554,892 | 364,989 |
Property and equipment | (18,039) | 6,842 |
Reserves, accruals & other | (79,878) | (7,181) |
Research and development tax credits | 646,296 | 237,716 |
Total deferred tax assets | 5,012,705 | 2,567,484 |
Less: valuation allowance | (5,012,705) | (2,567,484) |
Deferred tax assets, net |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Mar. 31, 2021USD ($) |
Domestic Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carry-forwards | $ 13,954,000 |
Research and development tax credit carryforwards | 535,000 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carry-forwards | 14,019,000 |
Research and development tax credit carryforwards | $ 141,000 |