MODD's Losses Widen Amid R&D Surge; Cash Dwindles

TL;DR

**MODD is burning cash at an alarming rate, making it a highly speculative bet despite FDA progress.**

AI Summary

Modular Medical, Inc. (MODD) reported a significant increase in net loss for the three and six months ended September 30, 2025, primarily driven by increased operating expenses. The net loss for the three months ended September 30, 2025, was $7.79 million, up from $4.96 million in the same period of 2024. For the six months ended September 30, 2025, the net loss widened to $14.49 million, compared to $9.09 million in the prior year. Research and development expenses surged to $10.73 million for the six months ended September 30, 2025, from $6.91 million in 2024, reflecting ongoing investment in product development, including the Pivot insulin pump. Selling, general and administrative expenses also increased to $3.91 million from $2.31 million over the same six-month period. Cash and cash equivalents decreased substantially from $13.09 million on March 31, 2025, to $5.32 million on September 30, 2025. The company raised approximately $3.9 million from a warrant inducement offering in September 2025 and $0.7 million from at-the-market stock sales during the six months ended September 30, 2025, to support operations, but faces substantial doubt about its ability to continue as a going concern without further capital. The company received FDA clearance for its MODD1 pump in September 2024 and is seeking FDA approval for its updated Pivot product.

Why It Matters

Modular Medical's escalating losses and dwindling cash reserves raise significant concerns for investors, highlighting the high-risk nature of pre-revenue medical device companies. While FDA clearance for MODD1 and ongoing development of the Pivot pump are positive steps, the company's reliance on dilutive equity financing to fund operations puts existing shareholders at risk. Employees face uncertainty regarding the company's long-term viability if additional capital isn't secured. For customers, the successful commercialization of the Pivot pump could offer a simplified insulin delivery system, but its market entry is contingent on further regulatory approval and financial stability. In the competitive diabetes device market, MODD's ability to innovate and scale will depend heavily on its funding strategy and execution against larger, more established players.

Risk Assessment

Risk Level: high — The company explicitly states "these conditions raise substantial doubt about the Company's ability to continue as a going concern within one year" and reported a net loss of $14.49 million for the six months ended September 30, 2025. Cash and cash equivalents plummeted from $13.09 million to $5.32 million in six months, indicating a rapid cash burn rate.

Analyst Insight

Investors should exercise extreme caution and consider MODD a high-risk, speculative investment. Monitor closely for successful FDA approval of the Pivot product and, more critically, for concrete evidence of significant new capital raises or revenue generation to alleviate going concern doubts.

Financial Highlights

net Income

-$14.49M

cash Position

$5.32M

Key Numbers

• $14.49M — Net Loss (for the six months ended September 30, 2025, up from $9.09M in 2024)
• $5.32M — Cash and Cash Equivalents (as of September 30, 2025, down from $13.09M on March 31, 2025)
• $10.73M — Research and Development Expenses (for the six months ended September 30, 2025, up from $6.91M in 2024)
• $3.9M — Proceeds from Warrant Inducement Offering (received in September 2025)
• $0.7M — Proceeds from At-the-Market Sales (for the six months ended September 30, 2025)
• 63.6M — Outstanding Shares (as of November 12, 2025)
• $7.79M — Net Loss (for the three months ended September 30, 2025, up from $4.96M in 2024)
• $3.91M — Selling, General and Administrative Expenses (for the six months ended September 30, 2025, up from $2.31M in 2024)

Key Players & Entities

• Modular Medical, Inc. (company) — registrant
• FDA (regulator) — United States Food and Drug Administration
• MODD1 (company) — initial product
• Pivot (company) — updated product
• Quasuras, Inc. (company) — wholly-owned subsidiary
• Nasdaq Stock Market, LLC (company) — exchange where common stock is registered
• Bloomberg (company) — publisher
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• Nevada (company) — state of incorporation

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has a substantial doubt about its ability to continue as a going concern without further capital. Cash and cash equivalents decreased from $13.09 million on March 31, 2025, to $5.32 million on September 30, 2025, indicating a rapid burn rate.
• Increased Operating Expenses [high — operational]: Net loss widened significantly, with R&D expenses increasing to $10.73 million for the six months ended September 30, 2025, from $6.91 million in the prior year. SG&A also rose to $3.91 million from $2.31 million.
• FDA Approval Dependency [medium — regulatory]: The company's success is heavily reliant on obtaining FDA approval for its updated Pivot product. While the MODD1 pump received clearance in September 2024, further regulatory hurdles for new products pose a significant risk.
• Reliance on Capital Infusions [medium — financial]: The company raised $3.9 million from a warrant inducement offering and $0.7 million from at-the-market sales to support operations, highlighting a dependence on external financing to cover operational deficits.

Industry Context

The medical device industry, particularly in diabetes management, is highly competitive and innovation-driven. Companies like Modular Medical are focused on developing advanced delivery systems, such as insulin pumps, to improve patient outcomes and convenience. Regulatory approvals, like FDA clearance, are critical gating items for market entry and commercial success.

Regulatory Implications

The company's reliance on FDA approvals for its products, such as the updated Pivot insulin pump, presents a significant regulatory hurdle. Delays or rejections in the approval process could severely impact commercialization timelines and financial performance.

What Investors Should Do

1. Monitor cash burn rate and future financing activities.
2. Track progress on FDA approval for the Pivot insulin pump.
3. Analyze the impact of increased R&D spending on future product success.

Key Dates

• 2024-09-30: FDA clearance for MODD1 pump — Marks a significant regulatory milestone, validating the company's product development capabilities and paving the way for market entry.
• 2025-09-30: End of Q2 Fiscal Year 2025 — Reporting period for the 10-Q, showing a substantial increase in net loss and decrease in cash reserves.
• 2025-09-30: Warrant Inducement Offering — Raised $3.9 million to provide short-term operational funding, but also indicates potential dilution for existing shareholders.

Glossary

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future. If substantial doubt exists, it must be disclosed. (The company explicitly states substantial doubt about its ability to continue as a going concern, a critical warning for investors.)

Warrant Inducement Offering

An offer to existing warrant holders to exercise their warrants, often with an incentive, to raise capital. (MODD used this to raise $3.9 million, indicating a need for immediate cash but potentially diluting equity.)

At-the-Market (ATM) Sales

A method of selling newly issued shares directly into the open market over time, typically used by smaller companies to raise capital gradually. (MODD raised $0.7 million through ATM sales, supplementing its cash position.)

Research and Development (R&D) Expenses

Costs incurred by a company in the process of developing new products or services, or improving existing ones. (A significant increase in R&D expenses ($10.73M) highlights investment in products like the Pivot insulin pump, but contributes to the widening net loss.)

Year-Over-Year Comparison

Modular Medical, Inc. has experienced a significant deterioration in its financial performance compared to the prior year. The net loss for the six months ended September 30, 2025, has widened to $14.49 million from $9.09 million in 2024, driven by a substantial increase in R&D expenses to $10.73 million. Concurrently, cash and cash equivalents have plummeted from $13.09 million to $5.32 million, raising serious going concern issues. While the company has secured some funding through warrant offerings and ATM sales, the overall financial health appears more precarious.

Key Financial Figures

• $0.001 — he registrant's common stock, par value $0.001 per share, was 63,599,550 as of Novembe

Filing Documents

• ea0264284-10q_modular.htm (10-Q) — 609KB
• ea026428401ex31-1_modular.htm (EX-31.1) — 15KB
• ea026428401ex31-2_modular.htm (EX-31.2) — 14KB
• ea026428401ex32-1_modular.htm (EX-32.1) — 11KB
• 0001213900-25-110819.txt ( ) — 4032KB
• modd-20250930.xsd (EX-101.SCH) — 42KB
• modd-20250930_cal.xml (EX-101.CAL) — 25KB
• modd-20250930_def.xml (EX-101.DEF) — 195KB
• modd-20250930_lab.xml (EX-101.LAB) — 370KB
• modd-20250930_pre.xml (EX-101.PRE) — 209KB
• ea0264284-10q_modular_htm.xml (XML) — 454KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION 1 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited): 1 Condensed Consolidated Balance Sheets as of September 30, 2025 and March 31, 2025 1 Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2025 and September 30, 2024 2 Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended September 30, 2025 and 2024 3 Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2025 and 2024 4 Notes to Condensed Consolidated Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 18 Item 4.

Controls and Procedures

Controls and Procedures 18

— OTHER INFORMATION

PART II — OTHER INFORMATION 19 Item 1.

Legal Proceedings

Legal Proceedings 19 Item 1A.

Risk Factors

Risk Factors 19 Item 2. Unregistered Sales of Equity Securities 20 Item 3. Defaults Upon Senior Securities 20 Item 4. Mine Safety Disclosures 20 Item 5. Other Information 20 Item 6. Exhibits 21

Signatures

Signatures 22 i Part I – FINANCIAL INFORMATION Item 1. Financial Statements Modular Medical, Inc. Condensed Consolidated Balance Sheets (In thousands, except par value) September 30, 2025 March 31, (Unaudited) 2025 ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,316 $ 13,095 Prepaid expenses and other 631 422 TOTAL CURRENT ASSETS 5,947 13,517 Property and equipment, net 6,459 4,453 Right of use asset, net 568 765 TOTAL ASSETS $ 12,974 $ 18,735 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 2,879 $ 338 Accrued expenses 715 504 Short-term lease liabilities 450 423 TOTAL CURRENT LIABILITIES 4,044 1,265 Long-term lease liabilities 161 393 TOTAL LIABILITIES 4,205 1,658 Commitments and Contingencies (Note 7) STOCKHOLDERS' EQUITY Preferred Stock, $ 0.001 par value, 5,000 shares authorized, none issued and outstanding — — Common Stock, $ 0.001 par value, 100,000 shares authorized; 61,171 and 53,706 shares issued and outstanding as of September 30, 2025 and March 31, 2025, respectively 61 54 Additional paid-in capital 107,515 101,776 Common stock issuable 438 — Accumulated deficit ( 99,245 ) ( 84,753 ) TOTAL STOCKHOLDERS' EQUITY 8,769 17,077 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,974 $ 18,735 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Modular Medical, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share data) Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Operating expenses Research and development $ 5,593 $ 3,702 $ 10,727 $ 6,907 Selling, general and administrative 2,236 1,294 3,906 2,309 Total operating expenses 7,829 4,996 14,633 9,216 Loss from operations ( 7,829 ) ( 4,996 ) ( 14,633 ) ( 9,216 ) Other income 41 42 143 125 Loss before inco

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