Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2019 | Feb. 03, 2020 | |
Document and Entity Information: | ||
Entity Registrant Name | Nemaura Medical Inc. | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2019 | |
Amendment Flag | false | |
Entity Central Index Key | 0001602078 | |
Current Fiscal Year End Date | --03-31 | |
Entity Common Stock, Shares Outstanding | 20,808,348 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-38355 | |
Entity Incorporation, State or Country Code | NV | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Current Assets: | ||
Cash | $ 1,067,663 | $ 3,740,664 |
Prepaid expenses and other receivables | 443,823 | 736,460 |
Inventory (raw materials) | 229,894 | 38,036 |
Total current assets | 1,741,380 | 4,515,160 |
Other Assets: | ||
Property and equipment, net of accumulated depreciation | 192,264 | 56,871 |
Intangible assets, net of accumulated amortization | 229,984 | 191,684 |
Total other assets | 422,248 | 248,555 |
Total assets | 2,163,628 | 4,763,715 |
Current Liabilities: | ||
Accounts Payable | 183,757 | 161,348 |
Liability due to related parties | 702,028 | 964,679 |
Other Liabilities and accrued expenses | 191,371 | 107,759 |
Deferred revenue | 66,050 | 65,175 |
Total current liabilities | 1,143,206 | 1,298,961 |
Non-current portion of deferred revenue | 1,254,950 | 1,237,850 |
Total liabilities | 2,398,156 | 2,536,811 |
Stockholders' Equity: | ||
Common stock, $0.001 par value, 42,000,000 shares authorized and 20,808,348 and 20,765,592 shares issued and outstanding at December 31, 2019 and March 31, 2019, respectively | 20,808 | 20,766 |
Additional paid in capital | 16,372,729 | 15,971,905 |
Accumulated deficit | (16,239,191) | (13,425,879) |
Accumulated other comprehensive loss | (388,874) | (339,888) |
Total stockholders' (deficit) equity | (234,528) | 2,226,904 |
Total liabilities and stockholders' equity | $ 2,163,628 | $ 4,763,715 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2019 | Mar. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 42,000,000 | 42,000,000 |
Common stock, shares issued | 20,808,348 | 20,765,592 |
Common stock, shares outstanding | 20,808,348 | 20,765,592 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | ||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | ||||
Research and development | 516,672 | 443,380 | 1,535,370 | 1,495,201 |
General and administrative | 542,697 | 489,545 | 1,896,230 | 1,357,044 |
Total operating expenses | 1,059,369 | 932,925 | 3,431,600 | 2,852,245 |
Loss from operations | (1,059,369) | (932,925) | (3,431,600) | (2,852,245) |
Interest income | 0 | 7,036 | 3,926 | 23,927 |
Loss before income tax benefit | (1,059,369) | (925,889) | (3,427,674) | (2,828,318) |
Provision for income tax benefit | 614,362 | 0 | 614,362 | 0 |
Net loss | (445,007) | (925,889) | (2,813,312) | (2,828,318) |
Other comprehensive loss: | ||||
Foreign currency translation adjustment | (25,834) | (38,626) | (48,986) | (311,718) |
Comprehensive loss | $ (470,841) | $ (964,515) | $ (2,862,298) | $ (3,140,036) |
Net loss per share, basic and diluted | $ (0.02) | $ (0.05) | $ (0.14) | $ (0.16) |
Weighted average number of common shares outstanding | 20,808,050 | 20,540,709 | 20,798,013 | 17,217,952 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Convertible preferred stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balance, Shares at Mar. 31, 2018 | 6,767,600 | 13,732,400 | ||||
Beginning Balance, Amount at Mar. 31, 2018 | $ 6,768 | $ 137 | $ 13,117,767 | $ (8,973,082) | $ (40,625) | $ 4,110,965 |
Conversion of preferred stock into common stock, Shares | 13,732,400 | (13,732,400) | ||||
Conversion of preferred stock into common stock, Amount | $ 13,732 | $ (137) | (13,595) | |||
Issuance of common shares and warrants under public offering -net of offering costs, Shares | 194,206 | |||||
Issuance of common shares and warrants under public offering -net of offering costs, Amount | $ 194 | 1,691,304 | 1,691,498 | |||
Issuance of common shares under ATM financing, net, Shares | 23,500 | |||||
Issuance of common shares under ATM financing, net, Amount | $ 23 | 293,979 | 294,002 | |||
Exercise of warrants, Shares | 5,000 | |||||
Exercise of warrants, Amount | $ 5 | 495 | 500 | |||
Stock-based compensation | 5 | 199,496 | 199,501 | |||
Foreign currency translation adjustment | (311,718) | (311,718) | ||||
Net loss | (2,828,318) | (2,828,318) | ||||
Ending Balance, Shares at Dec. 31, 2018 | 20,727,456 | |||||
Ending Balance, Amount at Dec. 31, 2018 | $ 20,727 | 15,289,446 | (11,801,400) | (352,343) | 3,156,430 | |
Beginning Balance, Shares at Sep. 30, 2018 | 20,505,000 | |||||
Beginning Balance, Amount at Sep. 30, 2018 | $ 20,505 | 13,219,168 | (10,875,510) | (313,717) | 2,050,446 | |
Issuance of common shares and warrants under public offering -net of offering costs, Shares | 194,206 | |||||
Issuance of common shares and warrants under public offering -net of offering costs, Amount | $ 194 | 1,691,304 | 1,691,498 | |||
Issuance of common shares under ATM financing, net, Shares | 23,500 | |||||
Issuance of common shares under ATM financing, net, Amount | $ 23 | 293,979 | 294,002 | |||
Stock-based compensation, Shares | 4,750 | |||||
Stock-based compensation | $ 5 | 84,995 | 85,000 | |||
Foreign currency translation adjustment | (38,626) | (38,626) | ||||
Net loss | (925,889) | (925,889) | ||||
Ending Balance, Shares at Dec. 31, 2018 | 20,727,456 | |||||
Ending Balance, Amount at Dec. 31, 2018 | $ 20,727 | 15,289,446 | (11,801,400) | (352,343) | 3,156,430 | |
Beginning Balance, Shares at Mar. 31, 2019 | 20,765,592 | |||||
Beginning Balance, Amount at Mar. 31, 2019 | $ 20,766 | 15,971,905 | (13,425,879) | (339,888) | 2,226,904 | |
Issuance of common shares under ATM financing, net, Shares | 14,338 | |||||
Issuance of common shares under ATM financing, net, Amount | $ 14 | 142,903 | 142,917 | |||
Exercise of warrants, Shares | 2,500 | |||||
Exercise of warrants, Amount | $ 3 | 25,997 | 26,000 | |||
Reverse split adjustment, Shares | 418 | |||||
Reverse split adjustment, Amount | ||||||
Restricted shares issued as stock-based compensation, Shares | 25,500 | |||||
Restricted shares issued as stock-based compensation, Amount | $ 25 | 231,924 | 231,949 | |||
Foreign currency translation adjustment | (48,986) | (48,986) | ||||
Net loss | (2,813,312) | (2,813,312) | ||||
Ending Balance, Shares at Dec. 31, 2019 | 20,808,348 | |||||
Ending Balance, Amount at Dec. 31, 2019 | $ 20,808 | 16,372,729 | (16,239,191) | (388,874) | (234,528) | |
Beginning Balance, Shares at Sep. 30, 2019 | 20,802,930 | |||||
Beginning Balance, Amount at Sep. 30, 2019 | $ 20,803 | 16,332,734 | (15,794,184) | (363,040) | 196,313 | |
Restricted shares issued as stock-based compensation to consultants and investor relations, Shares | 5,000 | |||||
Restricted shares issued as stock-based compensation to consultants and investor relations, Amount | $ 5 | 39,995 | 40,000 | |||
Reverse split adjustment, Shares | 418 | |||||
Reverse split adjustment, Amount | ||||||
Foreign currency translation adjustment | (25,834) | (25,834) | ||||
Net loss | (445,007) | (445,007) | ||||
Ending Balance, Shares at Dec. 31, 2019 | 20,808,348 | |||||
Ending Balance, Amount at Dec. 31, 2019 | $ 20,808 | $ 16,372,729 | $ (16,239,191) | $ (388,874) | $ (234,528) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of common shares and warrants under public offering net of offering costs | $ 328,245 | $ 328,245 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (2,813,312) | $ (2,828,318) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and Amortization | 47,550 | 21,924 |
Stock Based Compensation | 317,664 | 183,667 |
Changes in assets and liabilities: | ||
Prepaid expenses and other receivables | 206,716 | (236,976) |
Inventory | (186,137) | 0 |
Accounts payable | 21,259 | 155,286 |
Liability due to related party | (268,483) | 359,842 |
Other liabilities and accrued expenses | 110,780 | (44,318) |
Accrued interest receivable | 0 | 70,527 |
Net cash used in operating activities | (2,563,963) | (2,318,366) |
Cash Flows from Investing Activities: | ||
Capitalized patent costs | (50,570) | (13,844) |
Purchase of property and equipment | (162,615) | (43,216) |
Fixed rate savings account | 0 | 4,469,150 |
Net cash (used in) provided by investing activities | (213,185) | 4,412,090 |
Cash Flows from Financing Activities: | ||
Costs incurred in relation to ATM equity financing | (9,575) | (121,880) |
Costs incurred in relation to public offering | 0 | (217,922) |
Gross proceeds from issuance of common stock in relation to ATM financing | 152,492 | 455,105 |
Gross proceeds from warrant exercise/unit option purchase | 26,000 | 600 |
Gross proceeds from public offering | 0 | 2,019,743 |
Repayments of note payable | (28,207) | 0 |
Net cash provided by financing activities | 140,710 | 2,135,646 |
Net (decrease) increase in cash | (2,636,438) | 4,229,370 |
Effect of exchange rate changes on cash | (36,563) | (11,044) |
Cash at beginning of period | 3,740,664 | 822,335 |
Cash at end of period | 1,067,663 | 5,040,661 |
Supplemental disclosure of non-cash financing activities: | ||
Conversion of Series A preferred stock to common stock | 0 | 137,324 |
Deferred offering costs included in accrued expenses | 0 | 149,644 |
Gross amount of insurance funded through note payable | $ 132,352 | $ 0 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Text Block [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES Nemaura Medical Inc. (“Nemaura” or the “Company”), through its operating subsidiaries, performs medical device research and manufacturing of a continuous glucose monitoring system (“CGM”), named sugarBEAT. The sugarBEAT device is a non-invasive, wireless device for use by persons with Type I and Type II diabetes and may also be used to screen pre-diabetic patients. The sugarBEAT device extracts analytes, such as glucose, to the surface of the skin in a non-invasive manner where it is measured using unique sensors and interpreted using a unique algorithm. Nemaura is a Nevada holding company organized in 2013. Nemaura owns one hundred percent (100%) of Region Green Limited, a British Virgin Islands corporation (“RGL”) formed on December 12, 2013. RGL owns one hundred percent (100%) of Dermal Diagnostic (Holdings) Limited, an England and Wales corporation (“DDHL”) formed on December 11, 2013, which in turn owns one hundred percent (100%) of Dermal Diagnostics Limited, an England and Wales corporation formed on January 20, 2009 (“DDL”), and one hundred percent (100%) of Trial Clinic Limited, an England and Wales corporation formed on January 12, 2011 (“TCL”). DDL is a diagnostic medical device company headquartered in Loughborough, Leicestershire, England, and is engaged in the discovery, development and commercialization of diagnostic medical devices. The Company’s initial focus has been on the development of the sugarBEAT device, which consists of a disposable patch containing a sensor, and a non-disposable miniature transmitter device with a re-chargeable power source, which is designed to enable trending or tracking of blood glucose levels. All of the Company’s operations and assets are located in England. The following diagram illustrates Nemaura’s corporate structure as of December 31, 2019: Nemaura Medical Inc. Nevada Corporation Region Green Limited British Virgin Islands Corporation Dermal Diagnostics (Holdings) Limited England and Wales Corporation Dermal Diagnostics Limited England and Wales Corporation Trial Clinic Limited England and Wales Corporation The Company was incorporated in 2013, and has reported recurring losses from operations to date and an accumulated deficit of $16,239,191 as of December 31, 2019. These operations have resulted in the successful completion of clinical programs to support a CE mark (European Union approval of the product) approval, as well as a De Novo 510(k) medical device application to the US Food and Drug Administration (“FDA”) submission. The Company expects to continue to incur losses from operations until revenues are generated through licensing fees or product sales. However, given the completion of the requisite clinical programs, these losses are expected to be reduced over time. Management has entered into licensing, supply, or collaboration agreements with unrelated third parties relating to the United Kingdom, Europe, Qatar and all countries in the Gulf Cooperation Council. Management has evaluated the expected expenses to be incurred along with its available cash and credit facility and has determined that the Company has the ability to continue as a going concern for at least one year subsequent to the date of issuance of these condensed consolidated financial statements. The Company had an $8 million unsecured senior credit facility made available from certain major stockholders on August 1, 2019. Further details of the terms of this loan are included in Note 4. The Company has $1,067,663 of readily available cash on hand at December 31, 2019. We believe the cash position as of December 31, 2019, plus the credit facility made available from certain major stockholders, is adequate for our current level of operations through at least February 2021, and for the achievement of certain of our product development milestones. Our plan is to utilize the cash on hand plus loan draw down to continue establishing commercial manufacturing operations for the commercial supply of the sugarBEAT device and patches now that CE mark approval has been received. Management's strategic plans include the following: · support the UK and EU launch of sugarBEAT; · pursuing additional capital raising opportunities; · obtaining further regulatory approval for the sugarBEAT device in other countries such as the USA; · exploring licensing and partnership opportunities in other territories; and · developing the sugarBEAT device for commercialization for other applications. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Basis of Presentation | NOTE 2 – BASIS OF PRESENTATION (a) Basis of presentation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. However, such information reflects all adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for a fair statement of the financial condition and results of operations for the interim periods. The results for the three and nine months ended December 31, 2019 are not indicative of annual results. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The accompanying condensed consolidated financial statements include the accounts of the Company and the Company’s subsidiaries. References to “we”, “us”, “our”, or the “Company” refer to Nemaura Medical Inc. and its consolidated subsidiaries. The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, and all significant intercompany balances and transactions have been eliminated in consolidation. The functional currency for the majority of the Company’s operations is the Great Britain Pound Sterling (“GBP”), and the reporting currency is the US Dollar (“USD”). (b) Changes to significant accounting policies There have been no material changes to our significant accounting policies as detailed in our Form 10-K for the year ended March 31, 2019. (c) Recently adopted accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2014-09 (“ASC 606”), Revenue from Contracts with Customers. While the Company is not currently recognizing revenue, we have implemented the guidelines within ASC 606. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company may enter into product development and other agreements with collaborative partners. The terms of the agreements may include non-refundable signing and licensing fees, milestone payments and royalties on any product sales derived from collaborations. The Company has entered into license agreements and for these, recognizes up front license payments as revenue upon delivery of the license only if the license has stand-alone value to the customer. However, where further performance criteria must be met, revenue is deferred and recognized over the period the Company is expected to complete its performance obligations. Royalty revenue will be recognized upon the sale of the related products provided the Company has no remaining performance obligations under the agreement. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Recent accounting pronouncements In March 2016, the FASB issued ASU No. 2016-02 , Leases. |
LICENSING AGREEMENT
LICENSING AGREEMENT | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Licensing Agreement | NOTE 3 – LICENSING AGREEMENTS United Kingdom and the Republic of Ireland, the Channel Islands and the Isle of Man In March 2014, the Company entered into an Exclusive Marketing Rights Agreement with an unrelated third party, which granted the third party the exclusive right to market and promote the sugarBEAT device and related patches under its own brand in the United Kingdom and the Republic of Ireland, the Channel Islands and the Isle of Man. The Company received a non-refundable, up-front cash payment of GBP 1,000,000 (approximately $1.321 million and $1.303 million as of December 31, 2019 and March 31, 2019, respectively), which is wholly non-refundable, upon signing the agreement. As the Company has continuing performance obligations under the agreement, the up-front fees received from this agreement have been deferred and will be recorded as income over the term of the commercial licensing agreement. As the Company now expects commercialization of the sugarBEAT device to occur in the second quarter ending September 30, 2020, approximately $66,000 and $65,000 of the deferred revenue has been classified as a current liability as of December 31, 2019 and March 31, 2019, respectively. Further details of licensing agreements are disclosed in the Form 10-K for the year ended March 31, 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Related Party Transactions | NOTE 4 – RELATED PARTY TRANSACTIONS Nemaura Pharma Limited (“Pharma”), NDM Technologies Limited (“NDM”) and Black and White Health Care Limited (“B&W”) are entities controlled by the Company’s Chief Executive Officer and majority stockholder, Dewan F.H. Chowdhury. In accordance with the SEC Staff Accounting Bulletin 55, these condensed consolidated financial statements are intended to reflect all costs associated with the operations of DDL and TCL. Pharma has a service agreement with DDL, to undertake development, manufacture and regulatory approvals under Pharma’s ISO13485 Accreditation. In lieu of these services, DDL invoices Pharma on a periodic basis for said services. Services are provided at cost plus a service surcharge amounting to less than 10% of the total costs incurred. The following is a summary of activity between the Group and Pharma, NDM and B&W for the nine months ended December 31, 2019 and 2018, and the year ended March 31, 2019. These amounts are unsecured, interest free, and payable on demand. Nine Months Ended December 31, 2019 (unaudited) ($) Nine Months Ended December 31, 2018 (unaudited) ($) Year Ended Liability due to related party, beginning of period 964,679 613,818 613,818 Amounts invoiced by DDL to Pharma (5,874 ) — (977 ) Amounts invoiced by Pharma to DDL, NM and TCL (1) 1,369,272 1,539,114 2,312,412 Amounts repaid by DDL to Pharma (1,642,019 ) (1,130,755 ) (1,569,496 ) Amounts invoiced by B&W to DDL — — 2,206 Amounts repaid by DDL to B&W — — (5,622 ) Foreign exchange differences 15,970 (103,383 ) (84,843 ) Forgiveness of payable accounted for as an equity contribution — — (302,819 ) Liability due to related party, end of the period 702,028 918,794 964,679 (1) These amounts are included primarily in research and development expenses charged to the Company by Pharma. The Company has an $8 million unsecured senior credit facility made available from certain majority stockholders as of August 1, 2019. The first $3.5 million became available immediately for draw down, which will help fund the Company’s European commercial launch. The credit facility is non-dilutive carrying 8% interest with quarterly interest only payments. The principal is due on maturity in 5 years. There has been no draw down to date. No decision to date has been made on when the remaining capital will be needed and will be available for draw down. The Company routinely reviews its statement of cash flows presentation of related party transactions for financing or operating classification based on the underlying nature of the item and intended repayment. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY Reverse stock split The Company was notified by NASDAQ on July 15, 2019 that the Company no longer met the requirements of NASDAQ Rule 5550(a)(2) requiring listed securities to maintain a minimum closing bid price of $1.00 per share. The Company effected: (i) A reverse split of the Company’s issued and outstanding common stock, par value $0.001 per share on a one (1) for ten (10) basis; and (ii) A decrease in the Company’s authorized number of shares of common stock on the same basis from 420,000,000 shares of common stock to 42,000,000 shares of common stock which were effective with NASDAQ at the opening of business on December 5, 2019. On December 19, 2019 the Company received confirmation from NASDAQ that the Company has regained compliance with the Minimum Bid Price Rule and the matter is now resolved. The activity described in these condensed consolidated financial statements reflects this one for ten reverse split. All shares and amounts included have been retroactively restated as required by accounting standards. Other equity transactions On October 5, 2017, the Company entered into common stock exchange agreements with each of its three largest stockholders, to exchange, in the aggregate, 13,732,400 shares of the Company’s common stock for 13,732 shares of Series A Convertible Preferred Stock (the “Series A Preferred”). Each share of Series A Preferred is convertible into 1,000 shares of the Company’s common stock, automatically upon the occurrence of all of certain triggering events, as set forth in the Certificate of Designation for the Series A Preferred, namely (a) the sugarBEAT device to be commercialized has CE mark regulatory approval; (b) retail sales having commenced; and (c) retail sales exceeding $5 million, inclusive of advanced sales or voluntarily by the holder after February 7, 2018, if these triggering events have not occurred. Each holder of issued and outstanding Series A Preferred is entitled to a number of votes equal to the number of shares of common stock into which the Series A Preferred is convertible. Holders of Series A Preferred are entitled to vote on any and all matters presented to stockholders of the Company, except as provided by law. The Series A Preferred has no preference to the common stock as to dividends or distributions of assets upon liquidation or winding up of the Company (which has been agreed to by the holders of the Series A Preferred). The Company determined that the fair value of the shares of Series A Preferred issued for the shares of common stock was equivalent to the fair value of the shares of common stock exchanged. On November 6, 2017, the transactions contemplated by the exchange agreements were consummated and 13,732,400 shares of common stock were cancelled. As a result, the Company had 6,767,600 shares of common stock issued and outstanding as of March 31, 2018. On June 5, 2018, the three holders of the Company’s Series A Preferred each delivered notices of conversion to voluntarily convert their Series A Preferred, in the aggregate amount of 13,732 of Series A Preferred shares, into 13,732,400 shares of common stock. The holders had the right to voluntarily convert each share of Series A Preferred into 1,000 shares of common stock of the Company. On October 19, 2018, the Company entered into an Equity Distribution Agreement (“Distribution Agreement”) with Maxim Group LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time, through Maxim (the “Offering”), up to $20,000,000 in shares of its common stock (the “Shares”). Between October 19, 2018, and March 31, 2019, the Company issued 23,500 shares of its common stock through the Distribution Agreement and received gross proceeds of $455,105. $161,103 of costs were incurred in relation to this transaction. For the nine months ended December 31, 2019, a total of 14,339 shares were issued under the Distribution Agreement generating gross proceeds of $152,492 and costs of $9,575. As of December 31, 2019, the Company may sell, from time to time, the remaining $19,392,402 in shares of common stock under the Distribution Agreement. There was no activity in the three months ended December 31, 2019. On December 18, 2018, the Company entered into a placement agency agreement with Dawson James Securities, Inc. with respect to the issuance and sale of an aggregate of up to 240,000 units, each unit consisting of one share of common stock, par value $0.001 per share, together with one warrant to purchase one share of common stock at an exercise price equal to $10.40 per share, in a public offering. The warrants offered in the public offering will terminate on the fifth anniversary of the date of issuance. The public offering price for each unit was $10.40. The closing of the offering occurred on December 20, 2018 and at such closing the Company sold 194,206 shares of common stock and 194,206 warrants for gross proceeds of $2,019,743. The net proceeds to the Company from the sale of the shares of common stock and the warrants was $1,691,498, after deducting $328,245 of placement agent commissions and other offering expenses payable by the Company. As of December 31, 2019, 8,636 of the warrants had been exercised, generating $89,811 of additional proceeds. There was no activity in the three month period ended December 31, 2019. Effective December 18, 2018, the Company issued a unit purchase option to the placement agent to purchase 9,710 shares and 9,710 warrants. The Company has classified this option as equity. The unit purchase option has a term of three years and an exercise price of $13.00. Earnings (loss) per share The following table sets forth the computation of basic and diluted earnings (loss) per share (“EPS”) for the periods indicated. Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 ($) ($) ($) ($) Net loss attributable to common stockholders (445,007 ) (925,889 ) (2,813,312 ) (2,828,318 ) Weighted average basic and diluted shares outstanding 20,808,050 20,540,709 20,798,013 17,217,952 Basic and diluted earnings (loss) per share: (0.02 ) (0.05 ) (0.14 ) (0.16 ) The Company excludes warrants outstanding, which are anti-dilutive given the Company is in a loss position, from the basic and diluted earnings per share calculation. Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period. For the three and nine month periods ended December 31, 2019 and 2018, warrants to purchase one million shares of common stock were anti-dilutive and were excluded from the calculation of diluted loss per share . |
OTHER ITEMS
OTHER ITEMS | 9 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ITEMS | NOTE 6 – OTHER ITEMS (a) Investor relations agreements The Company enters into contracts with various investor relations specialists to help support the ongoing financing activities of the business. Further details of historic fees paid and arrangements are detailed in our Form 10-K for the year ended March 31, 2019. Investor Relations Company 1 - Investor Relations Company 2 - During the quarter ended December 31, 2019, no further shares were issued and cash fees of $15,000 were expensed to investor relations. Investor Relations Company 3 - (b) Management Consultancy Agreements Management Consulting Company 1 On October 1, 2019, 5,000 shares were issued to management company 1 in relation to services rendered in the three month period ending December 31, 2019. The total expensed to investor relations was $40,000 in the three month period ended December 31, 2019 calculated on a fair value of $0.80 per share. In addition $61,667 was expensed to investor relations relating to cash fees expensed in the three month period to December 31, 2019. For the nine months cash expense totaled $156,176 and stock based compensation was $84,525. Management Consulting Company 2 - This contract ended on September 30, 2019 and total stock compensation expense for the three and nine months ended December 31, 2019 was $0 and $141,000 respectively. Total stock-based compensation recognized during the three and nine months ended December 31, 2019 was $40,000 and $317,664, respectively and $69,167 and $183,667 for the three and nine months ended December 31, 2018, respectively. (c) R&D Tax Credit During the three months ended December 31, 2019, the Company received $614,362 from HMRC (Her Majesty’s Revenue and Customs) in tax credits relating to the reimbursement of research and development expenses incurred during the years ended March 31, 2019 and 2018. This amount is reflected as a credit provision for income taxes in the Company’s condensed consolidated statements of comprehensive loss for the three and nine months ended December 31, 2019. (d) Debt Financing During the three months ended December 31, 2019, the Company entered into an agreement with a bank to finance an invoice payable related to an insurance policy. The principal was $132,342 to be repaid over 9 monthly repayments with interest charged at an annual percentage rate of 13.9%. The remaining balance of $104,135 is included within other liabilities and accrued expenses on the December 31, 2019 condensed consolidated balance sheet. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
Policy Text Block [Abstract] | |
Basis of presentation | (a) Basis of presentation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. However, such information reflects all adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for a fair statement of the financial condition and results of operations for the interim periods. The results for the three and nine months ended December 31, 2019 are not indicative of annual results. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The accompanying condensed consolidated financial statements include the accounts of the Company and the Company’s subsidiaries. References to “we”, “us”, “our”, or the “Company” refer to Nemaura Medical Inc. and its consolidated subsidiaries. The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, and all significant intercompany balances and transactions have been eliminated in consolidation. The functional currency for the majority of the Company’s operations is the Great Britain Pound Sterling (“GBP”), and the reporting currency is the US Dollar (“USD”). |
Changes to significant accounting policies | (b) Changes to significant accounting policies There have been no material changes to our significant accounting policies as detailed in our Form 10-K for the year ended March 31, 2019. |
Recently adopted accounting pronouncements | (c) Recently adopted accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2014-09 (“ASC 606”), Revenue from Contracts with Customers. While the Company is not currently recognizing revenue, we have implemented the guidelines within ASC 606. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company may enter into product development and other agreements with collaborative partners. The terms of the agreements may include non-refundable signing and licensing fees, milestone payments and royalties on any product sales derived from collaborations. The Company has entered into license agreements and for these, recognizes up front license payments as revenue upon delivery of the license only if the license has stand-alone value to the customer. However, where further performance criteria must be met, revenue is deferred and recognized over the period the Company is expected to complete its performance obligations. Royalty revenue will be recognized upon the sale of the related products provided the Company has no remaining performance obligations under the agreement. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Recent accounting pronouncements In March 2016, the FASB issued ASU No. 2016-02 , Leases. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Table Text Block Supplement [Abstract] | |
Schedule of Related Party Transactions | The following is a summary of activity between the Group and Pharma, NDM and B&W for the nine months ended December 31, 2019 and 2018, and the year ended March 31, 2019. These amounts are unsecured, interest free, and payable on demand. Nine Months Ended December 31, 2019 (unaudited) ($) Nine Months Ended December 31, 2018 (unaudited) ($) Year Ended Liability due to related party, beginning of period 964,679 613,818 613,818 Amounts invoiced by DDL to Pharma (5,874 ) — (977 ) Amounts invoiced by Pharma to DDL, NM and TCL (1) 1,369,272 1,539,114 2,312,412 Amounts repaid by DDL to Pharma (1,642,019 ) (1,130,755 ) (1,569,496 ) Amounts invoiced by B&W to DDL — — 2,206 Amounts repaid by DDL to B&W — — (5,622 ) Foreign exchange differences 15,970 (103,383 ) (84,843 ) Forgiveness of payable accounted for as an equity contribution — — (302,819 ) Liability due to related party, end of the period 702,028 918,794 964,679 (1) These amounts are included primarily in research and development expenses charged to the Company by Pharma. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings (loss) per share (“EPS”) for the periods indicated. Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 ($) ($) ($) ($) Net loss attributable to common stockholders (445,007 ) (925,889 ) (2,813,312 ) (2,828,318 ) Weighted average basic and diluted shares outstanding 20,808,050 20,540,709 20,798,013 17,217,952 Basic and diluted earnings (loss) per share: (0.02 ) (0.05 ) (0.14 ) (0.16 ) |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details Narrative) - USD ($) | 9 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | ||
Accumulated deficit | $ (16,239,191) | $ (13,425,879) |
Cash available on hand | $ 1,067,663 | |
Unsecured senior credit facility description | Company had an $8 million unsecured senior credit facility made available from certain major stockholders on August 1, 2019. |
LICENSING AGREEMENT (Details Na
LICENSING AGREEMENT (Details Narrative) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Licensing Agreement Details Narrative | ||
Non-refundable, upfront cash payment | $ 1,321,000 | $ 1,303,000 |
Deferred revenue | $ 66,000 | $ 65,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | ||
Related Party Transactions [Abstract] | ||||
Liability due to related party, beginning of period | $ 964,679 | $ 613,818 | $ 613,818 | |
Amounts invoiced by DDL to Pharma | (5,874) | 0 | (977) | |
Amount invoiced by Pharma to DDL, NM and TCL | [1] | 1,369,272 | 1,539,114 | 2,312,412 |
Amounts repaid by DDL to Pharma | (1,642,019) | (1,130,755) | (1,569,496) | |
Amounts invoiced by B&W to DDL | 0 | 0 | 2,206 | |
Amounts repaid by DDL to B&W | 0 | 0 | (5,622) | |
Foreign exchange differences | 15,970 | (103,383) | (84,843) | |
Forgiveness of payable accounted for as equity contribution | 0 | 0 | (302,819) | |
Liability due to related party, end of the period | $ 702,028 | $ 918,794 | $ 964,679 | |
[1] | These amounts are included primarily in research and development expenses charged to the Company by Pharma. |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Unsecured senior credit facility description | Company has an $8 million unsecured senior credit facility made available from certain majority stockholders as of August 1, 2019. The first $3.5 million became available immediately for draw down, which will help fund the Company’s European commercial launch. |
Credit facility rate | 8.00% |
Line of credit maturity term | 5 years |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||||
Net loss attributable to common stockholders | $ (445,007) | $ (925,889) | $ (2,813,312) | $ (2,828,318) |
Weighted average basic and diluted shares outstanding | 20,808,050 | 20,540,709 | 20,798,013 | 17,217,952 |
Basic and diluted earnings (loss) per share | $ (0.02) | $ (0.05) | $ (0.14) | $ (0.16) |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Nov. 06, 2017 | Oct. 05, 2017 | Dec. 20, 2018 | Dec. 18, 2018 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Reverse stock split | one (1) for ten (10) basis | ||||||||||
Conversion of common stock | 13,732,400 | ||||||||||
Common stock converted into convertible Preferred Stock | 13,732 | ||||||||||
Conversion basis | Each share of Series A Preferred into 100 shares of common stock of the Company | ||||||||||
Cancellation of common stock | 13,732,400 | ||||||||||
Common Stock, Shares Issued | 20,808,348 | 20,765,592 | 20,808,348 | 6,767,600 | |||||||
Common Stock, Shares Outstanding | 20,808,348 | 20,765,592 | 20,808,348 | 6,767,600 | |||||||
Sale of remaining common stock | 19,392,402 | 19,392,402 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Proceeds from warrants | $ 89,811 | ||||||||||
Proceeds from sale of common stock and warrants | $ 0 | $ 2,019,743 | |||||||||
Warrants exercised | 8,636 | ||||||||||
Distribution Agreement | |||||||||||
Number of common stock sold | 14,339 | 23,500 | |||||||||
Proceeds from common stock sold | $ 152,492 | $ 455,105 | |||||||||
Related cost | $ 9,575 | $ 161,103 | |||||||||
Placement agency agreement | |||||||||||
Number of common stock sold | 194,206 | 240,000 | |||||||||
Public offering price | $ 10.4 | ||||||||||
Common stock, par value | 0.001 | ||||||||||
Sale of warrants | 194,206 | ||||||||||
Proceeds from warrants | $ 2,019,743 | ||||||||||
Proceeds from sale of common stock and warrants | 1,691,498 | ||||||||||
Placement agent commissions | $ 328,245 | ||||||||||
Warrants exercisable | $ 13 | ||||||||||
Warrants term | 3 years | ||||||||||
Share capital | |||||||||||
Anti-dilutive common stock | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Warrants [Member] | |||||||||||
Anti-dilutive common stock | 185,570 | 185,570 | |||||||||
Warrants One [Member] | |||||||||||
Anti-dilutive common stock | 9,710 | 9,710 | |||||||||
Warrants One [Member] | Placement agency agreement | |||||||||||
Anti-dilutive common stock | 9,710 | ||||||||||
Option [Member] | |||||||||||
Anti-dilutive common stock | 9,710 | 9,710 | |||||||||
Option [Member] | Placement agency agreement | |||||||||||
Anti-dilutive common stock | 9,710 |
OTHER ITEMS (Details Narrative)
OTHER ITEMS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock compensation expense | $ 317,664 | $ 183,667 | |||
Reimbursement of research and development expenses | $ 614,362 | ||||
Repayment of debt Financing | $ 132,342 | ||||
Interest rate | 13.90% | ||||
Other liabilities and accrued expenses | $ 104,135 | 104,135 | |||
Investor relations agreements [Member] | Investor relations company 2 [Member] | |||||
Related party expenses | $ 15,000 | $ 47,500 | |||
Stock issued | 12,500 | ||||
Investor relations expenses | $ 12,376 | ||||
Investor relations agreements [Member] | Investor relations company 3 [Member] | |||||
Stock compensation expense | 0 | 17,888 | |||
Management Consultancy Agreement [Member] | Management Consulting Company 1 [Member] | |||||
Related party expenses | 40,000 | 156,176 | |||
Stock compensation expense | 84,525 | ||||
Cash fees expenses | 61,667 | ||||
Management Consultancy Agreement [Member] | Management Consulting Company 2 [Member] | |||||
Stock compensation expense | 40,000 | $ 69,167 | 317,664 | $ 183,667 | |
Stock compensation expense | $ 0 | $ 141,000 |