MODD US Equity☆

Item 1A. Risk Factors 20

Item 1B. Unresolved Staff Comments 36

Item 1C Cybersecurity 36

Item 2. Properties 36

Item 3. Legal Proceedings 36

Item 4. Mine Safety Disclosures 36

Part II

Item 6. Reserved 38

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 42

Item 8. Financial Statements and Supplementary Data F-1

Item 9A. Controls and Procedures 43

Item 9B. Other Information 44

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 44

Part III

Item 10. Directors, Executive Officers and Corporate Governance 45

Item 11. Executive Compensation 51

Item 14. Principal Accountant Fees and Services 58

Part IV

Signatures 61

i

FORWARD-LOOKING

STATEMENTS

This

Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of Section

27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934,

as amended (the “Exchange Act”), that relate to future events or to our future operations or financial performance. Any forward-looking

statement involves known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance

or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by

such forward-looking statement.

Words

such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “forecast,”

“intend,” “may,” “plan,” “potential,” “predict,” “project,” “targets,”

“likely,” “will,” “would,” “could,” “should,” “continue,” “scheduled”

and similar expressions or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements,

although not all forward-looking statements contain these identifying words. Although we believe that we have a reasonable basis for

each forward- looking statement contained in this report, we caution you that these statements are based on our estimates or projections

of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results,

level of activity, performance, experience or achievements to differ materially from those expressed or implied by any forward- looking

statement. Actual results, level of activity, performance, experience or achievements may differ materially from those expressed or implied

by any forward-looking statement as a result of various important factors, including our critical accounting policies and risks and uncertainties

relating to:

● our strategies, prospects, plans, expectations, forecasts or objectives;

● our ability to expand, protect and maintain our intellectual property rights;

● our analysis of the target market for our insulin pump;

● regulatory developments in the United States and other countries;

● general economic, business, political and social conditions;

● our ability to generate significant revenues and achieve profitability;

● our ability to manage the growth of our business;

● the success of competing third-party products;

● various other matters, many of which are beyond our control.

Our

fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in this Annual Report on Form 10-K, refers to the

fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2024 refers to the fiscal year ended March 31, 2024).

Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company”

refer to Modular Medical, Inc. and its consolidated subsidiary.

ii

PART

I

ITEM

1. BUSINESS

Overview

Modular Medical is a pre-revenue, medical device

company focused on the design, development, and commercialization of innovative insulin pumps using modernized technology to increase

pump adoption in the diabetes marketplace. Through the creation of an innovative two-part patch pump, we seek to fundamentally alter the

trade-offs between cost and complexity and access to the higher standards of care requiring considerable motivation that presently available

insulin pumps provide. By simplifying and streamlining the user experience from the initial introduction of the patient to our product,

prescription assistance, establishing insurance reimbursement, streamlined training and day-to-day use with strong clinical support, we

seek to expand the wearable insulin delivery device market beyond the highly motivated “super users” to expand the category

into the mass market. Our product seeks to serve both the type 1 and the rapidly growing, especially in terms of device adoption, type

2 diabetes markets for those individuals requiring insulin.

Differentiation

We

believe that there are a number of shortcomings and issues with currently available insulin pumps that prevent a substantial number of

people who require insulin on a daily basis from choosing an insulin pump to treat their diabetes. We believe that, by tailoring our

insulin pump to address such factors, we can expand the scope and adoption rate of insulin pump usage. We believe that to achieve broader

market acceptance, an insulin pump must be easier to learn to use, be less time-consuming to operate, more intuitive to both patients

and physicians, and meet the standards for coverage by insurance providers so that co-payments required from patients are affordable

and the hurdles to insurance coverage are significantly reduced.

Among

the more prominent issues are:

Our

team has substantial knowledge of the diabetes industry and experience in developing, obtaining marketing authorization for, and bringing

insulin pumps to market. Based on this experience, we believe that our innovative insulin pump, using a new and proprietary method of

pumping insulin, can address most or all of these shortcomings. It provides a state-of-the-art insulin pump capable of both basal (steady

flow) and bolus (mealtime dosing) insulin disbursement. It also has been designed considering a natural migration path to multi-chamber/multi-liquid

pumps, potentially offering an exciting array of new therapies to patients with diabetes and other conditions.

1

Our

goal is to become the leader in expanding access to insulin pump technology to a wider portion of diabetes sufferers and provide not

just care for the super users, but “diabetes care for the rest of us.” While our initial target market is people with type

1 diabetes, we believe there is a substantial opportunity to penetrate the type 2 marketplace, whether through our initial MODD1 pump

or further simplification of our pump to address the type 2 marketplace.

The

MODD1 is a high-precision pump that we believe represents the best choice for new pump patients because it is easy to afford, easy to

learn, easy to use, and has a revolutionary design and internal technology that enable precision with low-cost manufacture and high reproducibility.

Key

features include:

● One button interface, easy to learn and use;

● 90-day reusable, 3-day disposable;

● No external controller required, no charging, no battery replacement; and

● Slim profile, lighter weight.

A

proprietary survey of American healthcare payors representing 50 million covered lives (approximately 1/3 of U.S. covered lives) performed

for us by industry leading survey firm ISA in 2019 has demonstrated that payors are willing to grant equivalent or preferential coverage

for a product with this feature set at launch in exchange for discounts of approximately 20%.

Diabetes

Classifications and Therapies

Diabetes

is typically classified as either type 1 or type 2:

Glucose,

the primary source of energy for cells, must be maintained at certain levels in the blood in order to permit optimal cell function and

health. The brain works on pure glucose, and, when sufficient glucose is available, the brain allows insulin to be released that allows

the cells to absorb glucose. In people with diabetes, blood glucose levels are not well controlled by the brain due to the shortage of

insulin. Frequently, blood glucose levels become very high, a condition known as hyperglycemia, or very low, a condition called hypoglycemia.

Hyperglycemia can lead to serious long-term complications, including blindness, kidney disease, nervous system disorders, occlusive vascular

diseases, lower-limb amputation, stroke, cardiovascular disease, and death. Hypoglycemia can lead to confusion or loss of consciousness,

often requiring a visit to the emergency room or, in certain cases, result in seizures, coma, and/or death.

All

people with T1D, which is our primary market, require daily insulin. According to the Seagrove 2021 Diabetes Blue Book, approximately

18% of people with T2D in the United States, or approximately 4.7 million people, require insulin (basal alone represent 3.1 million

and basal plus mealtime represent 1.6 million) to manage their diabetes. In this Report, we refer to people with T1D and people with

T2D who require mealtime insulin as “insulin-requiring people with diabetes.”

2

Currently,

there are two primary therapies available for insulin-requiring people with diabetes: multiple daily insulin injections directly into

the body through syringes or insulin pens (a type of syringe), referred to as Multiple Daily Injection, or MDI therapy, or the use of

an insulin pump to deliver mealtime insulin boluses to help with glucose absorption after carbohydrate consumption and a continuous subcutaneous

insulin infusion, or CSII therapy, into the body. Generally, CSII therapy is considered to provide a number of advantages over MDI therapy,

primarily an improvement in glycemic control, as measured by certain diabetes management tests such as hemoglobin A1c (HbA1c) measure

and more recently Time in Range (TIR) where a continuous glucose measuring device is used to calculate this test. Among other clinical

benefits, a study conducted by Tandem Diabetes Care, Inc., or Tandem, in 2021 demonstrated that insulin pump use can decrease glucose

variability, reduce the number of hypoglycemia events, and reduce the fear of hypoglycemia.

Notwithstanding these advantages, we believe the

difficulty in use resulting from the complexity and cumbersome design of available insulin pumps, as well as high and often prohibitive

costs for both the patient and insurance provider, has resulted not only in dissatisfaction among many existing pump users. As noted in

a Seagrove Partners 2021 study, fewer than half of first-time pump users purchase a new pump after the warranty expires. We believe the

cost and complexity to the user has severely limited the adoption rate of insulin pumps by a large segment of the diabetes population

using MDI therapy, whom we refer to in this Report as “Almost Pumpers.”

We

define Almost Pumpers as insulin-requiring people with diabetes who are aware of pumps and their potential benefits but because of past

experiences, pump shortcomings, cost, complexity, and time and learning required to adopt and utilize currently available insulin pumps,

continue to receive their daily insulin through MDI therapy. We undertook one-on-one interviews with over 200 of these individuals to

understand their past experiences on or considering pumps, existing pump shortcomings, the cost and insurance challenges, complexity

to learn and time and complexity to operate that drives them to remain on MDI. With this detailed understanding, we brought a series

of prototype models to them to react to, so we could refine the design and include features that would motivate them to be able to use

this technology to better care for their diabetes. Our MODD1 pump has been well received by these individuals and our clinical advisors,

as applicable for this sector of the marketplace.

Our research, along with marketplace data provided

by Seagrove Partners in 2023, estimates that 33% of Americans with T1D have an insulin pump and 28% of Americans with T1D (44% of those

who currently utilize MDI) can be classified as having an interest in pump adoption and meeting the American Diabetes Association guidelines

of glucose control if their objections to the currently available suite of products can be overcome. They do not want to closely manage

their glucose levels and incur the associated time and effort involved; however, they understand, or are advised by their clinical care

team, that they need to do more to achieve a reasonable level of glucose. They are the Almost Pumpers. We have developed what we believe

to be the most technologically advanced delivery system overcome the objections and provide motivation for this market. We believe that

there are four addressable hurdles to adoption:

● Usability: the device needs to be easy to learn and to operate;

We believe this conversion process, engaging people

to try and thereby receive the benefits of our technology will substantially increase adoption of insulin pumps among with patients with

T1D and T2D who remain reliant upon multiple daily injections. Diabetes is a disease that appears randomly throughout the world. Therefore,

we cannot segment the market by socioeconomics, education or level of care. We intend to create an insulin pump that appeals to all Almost

Pumpers.

Market

The International Diabetes Federation estimated

that, in 2021, approximately 537 million people were living with diabetes worldwide, and by 2045, this number will increase to approximately

783 million people.

An

estimated 34 million people in the United States live with diabetes. Within this group, T1D accounts for approximately 1.8 million people

with the remainder being T2D. All people with T1D require daily insulin. However, of the approximately 32.2 million people with T2D,

about 1.6 million of them require MDI therapy to manage their diabetes. This represents a large and growing market with the effects of

diabetes accounting for roughly 25% of all healthcare dollars spent annually in the United States.

3

According

to the National Diabetes Health Care Provider Survey conducted by Seagrove Partners, LLC in 2021, approximately 25% of the 1.6 million

highly insulin intensive individuals with T2D have considered going “on pump.”

Insulin

pumps have been shown to provide a higher level of care for insulin-dependent people with diabetes and result in better glycemic control,

fewer comorbidities, fewer trips to the emergency room, and higher overall quality of life. They also result in lower overall costs to

the healthcare system, reducing typical expense per patient year from approximately $27,000 to $17,000.

Despite

these benefits, only 1 in 3 (33%) of the 1.8 million Americans with T1D and very few of the 1.6 million T2D intensively treated with

insulin currently use an insulin pump, for a total of approximately 670,000 current users, with only a slow increase of insulin pump

use. The remaining 68% of individuals with T1D and virtually all with T2D rely on MDI therapy for glucose control. Decades of advances

in technology advances have left these non-pumpers at a significant disadvantage from a control perspective versus their “pumping”

counterparts.

We

have identified a large segment of the market that we refer to as “Almost Pumpers.” Almost Pumpers are those insulin-requiring

people with diabetes (T1D or T2D) who feel that they would adopt the pump if it were less expensive, less time consuming, less technically

intimidating, and if there was no separate controller. We believe that they represent approximately 32% of the T1D market correlating

to a $1.9 billion growth opportunity.

Insulin

pumps on the market today require a substantial amount of time to manage the therapy, have high out-of-pocket costs that place these

technologies out of reach for a large part of the population, and are feature-heavy with complex systems, which we believe have hampered

adoption and intimidated many users. The most commonly used insulin pumps today require extensive training and hours of daily management.

The average pump user must go through 42 steps of setup and refill process every 72 hours to “stay on track.” Our product

only requires nine steps for setup and refill every 72 hours.

The

current reluctance to adopt the insulin pump has had serious consequences on the healthcare system. In the United States, people living

with T1D have struggled to attain glycemic targets. A 2019 analysis of the large T1D Exchange clinical registry found that only 21% of

U.S. adults with T1D achieved the ADA A1c goal (<7.0%). Further, according to a study published in JAMA Internal Medicine, researchers

found no significant improvements in diabetes care between 2005 and 2016, with persistent gaps in care related to socioeconomic status.

Another transition in the care of diabetes is

the measuring of glucose from finger-stick tests to continuous glucose monitoring, or CGM, sensors, which are wearable devices. These

sensors are placed under the skin and give a reading every five minutes of the user’s glucose level. While Dexcom has been a market

leader in this field, the introduction and rapid adoption of the Freestyle Libre by Abbott Labs has made CGM easier and more affordable,

expanded the product category, and doubled the market size. The Freestyle Libre product is a more affordable, easier to use and smaller

version of the popular Dexcom, Inc. (Dexcom) CGM product. Now, for the first time, there is an easy, less painful, i.e., no more finger

sticks, way for patients to have the data they need to understand more about their glucose levels and their insulin requirements. Access

to such data has motivated patients to ask their diabetes clinician how they can achieve better glycemic control and made them more comfortable

with using technology and wearables to treat their diabetes. Pumps offer a clear pathway to better control and better overall care. We

believe that the insulin pump market is ready for a similar transition as that experienced in the CGM space. Our MODD1 pump represents

a new and better offering to assist and induce a wide variety of patients to make the transition and overcome the objections to superior

control by becoming a “pumper.”

4

We believe the present pump marketplace is approximately a $1.9 billion

market, comprising 33% of T1D pumpers and a small group of T2D pumpers. Seagrove Partners surveyed clinicians, and, in its 2021 report,

estimated that 28% of T1D patients and 25% of T2D patients would adopt technology that was easier to use, learn and access and eligible

for insurance reimbursement. We believe this represents a total addressable market of approximately $3 billion for us, assuming cartridge

revenue of approximately $4,100 per patient, per year. We expect to spend approximately 15% of our total revenue on discounts and free

samples to encourage adoption of our pump product.

We

are dedicated to helping all people with diabetes gain access to high quality care. We aim to help people with diabetes - especially

Almost Pumpers and the historically underserved communities - gain access to insulin pump technology by making it affordable and easy

to use.

Diabetes

Care is at an Inflection Point

We

believe that the insulin pump market stands at a crossroads as a confluence of events makes the timing for a new product introduction

ideal.

2020

was a very difficult year in diabetes. Between COVID-19 and a loss of glycemic control during quarantines and isolation, deaths from

diabetes rose by 17% in 2020 versus the prior year. This was sharpest among the young who saw deaths rise 29% in the 25-44 year old demographic.

This became a pain point and a desire to find new and better solutions and has raised awareness among patients, caregivers, payors, and

policy makers.

COVID-19

also encouraged (and required) trial and adoption of telehealth models and a great many people have found them to their liking with a

high proportion of patients and of health care providers (HCPs) that want to continue to use these technologies. We expect much of this

shift and newfound comfort with distance care models to persist and believes that this can provide a patient acquisition and engagement

model for insulin pumps and diabetes care, especially for pumps optimized for free trial and easy learning.

At

the same time, reimbursement for patch pumps has been increasingly moving to a pharmacy benefits manager (PBM) model, which simplifies

reimbursement and will further aid in a “frictionless launch.” This represents a fundamental shift in the insulin pump market,

making onboarding rapid and simplifying a previously complex and time-consuming “insurance journey.”

We

believe these CGM device users are increasingly interested in adopting technology and wearables to manage their diabetes. We believe

CGM device users are a natural market for a new type of pump, if it can meet their needs and address their objections and that the conjunction

of the above trends represents a unique opportunity in the insulin pump market’s history. The CGM device provides glucose-level

data, and, as necessary, the user can respond to address any issues with a simple button push on a pump to deliver their insulin versus

taking out a syringe and injecting glucose.

Diabetes

technology companies understand that we are at a turning point with new markets (T2D, T1D that are currently not using technologies).

This can be seen with increased discussion around this topic during recent national diabetes conferences, as well as an increase in marketing

promotion.

All

these recent changes support the high proportion of T1D and T2D intensively treated with insulin that we consider to be Almost Pumpers,

and we expect the number of Almost Pumpers to grow in the coming years and be more reachable with appropriate marketing strategies.

Our

Insulin Pump

Instead

of building complex, bespoke, and difficult to manufacture and maintain pumping and control systems, we began with the technology and

the user in mind. Using proprietary methods of insulin measurement, we were able to eschew complex mechanisms and instead built a product

candidate using only parts from high volume consumer electronics manufacturing lines, breaking the cost vs functionality curve that has

existed in the insulin pump space and representing the first truly modern insulin pump design. We consider this to be a new kind of product

for a new kind of patient.

In January 2024, we submitted a 510(k) premarket

notification to the United States Food and Drug Administration (“FDA”) for our MODD1 insulin pump. In March 2024, we received

comments from the FDA on our submission, and we are in the process of responding to those comments. A good part of our focus has shifted

to managing the process of preparing to move our initial production line to our manufacturing partner, Phillips-Medisize, a large tier-one

medical device manufacturer, which will manage and operate our production to produce products for human use. We believe that Phillips-Medisize

will be able to rapidly scale to higher volumes at lower cost. We continue to devote substantial time and resources, including exhibiting

at major diabetes conferences, to better understand the needs and preferences of Almost Pumpers and the specific patient/provider/payor

requirements to motivate change from MDI therapy. By making the bolus delivery at meals simple, we believe we will drive improved health

outcomes.

5

MODD1

has several distinguishing features:

1

- The pump has a simple button to press to deliver insulin as the patient requires it. The electronic pump uses a simple motor for

rotating a cam to motivate the insulin into the patient along with a low power Bluetooth and near-field communication (NFC) chips to

optionally allow the patient to communicate with their smart phone, tablet, or other mobile computing platform. Our mobile device

application is included in our 510(k) submission and will be a part of our introductory product.

2

- The pump snaps together with a three-day disposable cartridge that is patient filled with insulin for delivery. It includes a simple

coin cell that allows it to run through the 80-hour life of the cartridge.

3 - The infusion set contains a soft 6 mm cannula and an introducer

for insertion into the skin for insulin delivery, and it automatically removes the inserted needle used to transfer insulin to the body.

MODD1 comes with a variety of methods for the

patient to wear the pump. Options include: a base plate with adhesive for attaching to the body that has features for holding the pump

to the patient; overwraps to hold the product to the patient; and a velcro strap with a base plate suitable for wrapping around the arm

or leg of the patient.

The system will deliver a small continuous rate

called a basal that will provide approximately 50% of the total daily dose required, and the user will use the on-pump button to administer

boluses, typically before and after meals. The objective is to make the product simple to acquire and take home, simple to learn and most

importantly, simple to use and live with, to expand the pump market, drive adoption and ultimately better clinical outcomes.

Technological

Advantages

The adoption of new ultra-high volume technologies

will result in far easier manufacturing scale up, as parts sourcing and assembly processes are far easier. The MODD1 was designed from

the beginning for mass manufacturing, and we have partnered with a manufacturing partner, Phillips-Medisize, a Molex company, to establish

processes and “lights out” or near lights out production assembly lines whereby a minimal number of workers will be required

in the production facility. This advantage is compounded by the high availability and already optimized cost reduction in its components.

When we achieve production scale, we believe this should result in a cost of goods for MODD1, estimated on the competitors’ announced

margins and sales, of approximately 50% lower than our closest patch pump competitor.

6

The

adoption of modern, miniaturized technologies has led to numerous other advantages, as well. For example, our MODD1 pump is smaller in

overall volume than Insulet’s popular Omnipod product and has a lower profile to the skin. Despite this, the MODD1 holds a full

3 milliliter, or mL, (300 units) of insulin, in line with full sized pumps such as those offered by Tandem and Medtronic, 50% more than

the 2mL reservoir in the Omnipod. We believe that this volume advantage over other patch pumps will be significant as 24% of type 1 and

over 50% of the rapidly growing type 2 market require more than 2mL of insulin every three days (the expected wear time of patch pumps).

In addition, our new pumping modality will provide

what we believe is the most even (and thus closest to the function of a healthy pancreas) delivery of basal insulin in the industry.

We intend to demonstrate the impact of our system on glycemic control in a clinical study specifically focused on improved adherence,

more bolus deliveries per day and providing the clinicians with clear data on patient use.

The

technology allows the patient to simply add insulin and operate. The battery is included in each cartridge, and the device is operated

without a controller. As a result, no charging is required. MODD1 has also been made push-button simple to deliver insulin to appeal

to a wider audience of users.

This new technology has made the MODD1 lighter

than existing offerings. Compared to the Insulet Omnipod, MODD1 weighs 20 grams (vs. 26 grams) empty and 23 grams (vs. 28 grams) fully

filled (despite carrying 50% more insulin), reductions of 23% and 18%, respectively. Also, unlike existing patch pumps, the MODD1 can

be removed from the needle and taken off and replaced later if the user desires. This avoids loss of insulin in a pump due to accidental

dislodging of the soft canula, an issue for other patch pumps with which users have expressed considerable dissatisfaction.

Our approach to the care of diabetes can be further

enhanced by leveraging the MODD1 single-pumping chamber technology and reusable pump approach to apply to dual (or more) chamber pumping

solutions. We believe that such multi-chamber pumps will be integral to the realization of high time-in-range artificial pancreas solutions

that require no human intervention because of the application of, for instance, drugs to raise glucose levels coupled with drugs to lower

glucose. They will be the next step forward from the cumbersome and awkward solutions today that require the user to announce meals,

count and input carbohydrates, and adjust delivery for exercise and sleep to prevent overdosing of insulin. Instead, if a user overdosed

insulin, the user would simply pump in a drug to release sugar stores to raise it up. We believe that a pre-filled peel and stick patch

pump with the ability to function in a fully autonomous closed loop system with a CGM device, which is measuring and transmitting glucose-level

information, represents the next generation of diabetes care. We believe that we have demonstrated our technology and have secured, and

will continue securing, intellectual property protection on our approach.

We

believe this technology, especially applied in a dual chamber capacity, will open up numerous applications outside of diabetes where

medication compliance of complex therapy regimes is difficult. Example applications would include weight loss, fertility, and simplifying

the delivery of complex multi-drug cocktails, especially those with diverse and challenging dosing schedules.

Our

Solution

Our

proposed pump has been designed and developed to address the aforementioned shortcomings of the existing pump market and to appeal to:

(i) the substantial group of Almost-Pumpers, who may be interested in using an insulin pump, but have not done so because of the complexity,

cost or cumbersome nature of existing products and (ii) people who are using one of the currently available insulin pumps but are dissatisfied

with such products. We believe that, owing to our new proprietary technology, our proposed insulin pump will be the simplest and least

expensive product on the market and the easiest for providers to prescribe.

Our

current pump has been built to test what we believe to be our novel approach to insulin pumps. By providing a pump that we believe will

establish industry standards in terms of technology, simplicity to understand, ease of use and price, we believe our MODD 1 pump will

offer the vast majority of benefits afforded by more expensive and complex pumps, but it will remain accessible to a substantially greater

percentage of diabetes sufferers requiring daily insulin therapy.

We believe people generally will not use technology

that intimidates them, especially for a life-sustaining therapy. In addition, we believe that physicians are hesitant to prescribe such

technology due to the level of training and support required with the present pump product offerings. It is our belief that broadly-needed

medical products, such as is intended with our proposed pump, must be user-friendly and affordable. We believe this approach is fundamentally

different from that applied to the existing pump market today, where most pumps are continuously adding complex features appealing to

super users and leaving the other people with diabetes further behind.

Our

current goal is to successfully design, develop and obtain all required regulatory approvals for our proposed insulin pump, and, thereafter,

commercialize the finished product. Our long-term goal is to become a leading provider of insulin pump therapy by focusing on both consumer

and clinical needs.

7

To

achieve our above stated immediate and current goals, we intend to pursue the following business strategies:

● Use of innovative proprietary technology.

Based

on the substantial experience of Paul DiPerna, our President, Chief Financial Officer, Treasurer and Chairman of our board of directors,

in engineering design and innovative technology in the medical device industry and, in particular, with the invention, market vision

and technical development of insulin pumps, we have generated proprietary technology that has been incorporated into our proposed insulin

pump. We believe this technology allowing for a two-part, yet small enough to wear, pump product, along with simplified mechanics for

pumping, has greatly assisted us in creating a simpler, user-friendly pump. We believe the completed design, engineering and technology

being incorporated into our pump will make it substantially simpler and more affordable than those currently available. These features,

together with the safety and reliability of our proposed pump, are designed to create the next generation of insulin pumps that will

feature important and well-differentiated attributes compared to those currently available and make it available to consumers across

mostly all socioeconomic groups in the United States and around the world.

● Keep costs low during our design and development process.

To

attempt to ensure that we have sufficient funds to design, develop, and obtain all required regulatory approvals for our proposed insulin

pump without having to sacrifice quality and efficiency, we intend to maintain a tight budget and limit expenditures where possible.

We believe this will be possible because of the extensive knowledge and experience of Mr. DiPerna, not only in the diabetes industry

and more specifically in the insulin pump device market, but also his experience in designing and developing insulin pumps and other

medical devices and his ability to manage a small, focused development team. We currently expect that various other expenses, such as

sales and marketing costs, will not be incurred until such time as regulatory clearances are obtained.

Commercialization

Strategy: Overcoming the Insurance Hurdles

Our

goal is to establish MODD1 as the best option for new pump patients as we expand the market into the Almost Pumpers (Type 1 and Type

2) and newly motivated CGM users. We seek to grow the market by providing first-line insulin pump therapy that is well suited to meet

the needs of both diabetes patients requiring insulin and their clinicians.

o 20% discount vs Insulet will drive preferred status;

o Designed to use pharmacy benefit manager, or PBM, codes as a disposable;

8

Europe

represents another large potential market for MODD1, as approximately 60 million people in Europe live with diabetes. Approximately $161

billion is spent annually on diabetes healthcare costs in Europe based on data from a Seagrove Partners 2023 study. At present, cost

containment is restricting pump uptake across Europe. Current pump usage hovers between 10% and 20% in many markets. Single payor healthcare

systems across Europe traditionally attempt to contain costs in the short term and seek low price technologies with moderate medical

benefits. We anticipate MODD1 will offer a rebalance of this risk/reward strategy in that payors will incur only minor incremental short-term

costs with the benefit of longer -term cost savings associated with reliable pump use. We intend to employ a partnership strategy across

Europe following in-house managed regulatory and pricing activities in the major markets (e.g., UK) and more cost receptive markets (e.g.,

Nordics). We have begun the approval process for Europe and are targeting European and United Kingdom approval towards mid 2025.

Marketing

MODD1

tackles the most significant barriers to pump use-access and affordability-and makes it easier for clinicians, caregivers and individuals

to manage diabetes care. We believe that MODD1 will be the only insulin pump that patients can take home immediately from the doctor’s

office. Our commercialization plan will drive adoption and is designed to expand the market and is intended to do the following:

● Facilitate patient trials. To facilitate patient trials, we intend to:

o Designed to use existing PBM codes as a disposable

o No new reimbursement code: Reimbursed at launch

9

Tie-in

with telehealth.

In

recent years, telehealth has gone mainstream, and patients and providers have become comfortable with it. There are less than 4,000 patient-facing

endocrinologists in the United States. The treatment of diabetes will be significantly enhanced with telehealth to drive more volume

and clinical enhancements through their practices. Telemedicine is a force multiplier for a small group of doctors to better serve a

large market. MODD1 was designed to be affordable enough for free sampling and trial, and simple enough for self-guided user training.

We believe that by combining telehealth support with MODD1, we will decrease the burden of diabetes care and improve the lives of people

with diabetes.

10

Soft Launch

We intend to initiate a “soft launch” following FDA clearance

of the MODD1 device. Our plan is to select a group of clinicians who are well trained, experienced and have the support infrastructure

to take on initial patients and monitor them carefully to provide clinical feedback on our performance to further refine our product and

the support infrastructure prior to full commercial launch. Many of these clinicians will have been those who assisted in the development

of the MODD1 offering.

We

intend to continue to modify, refine and finalize our system to best meet:

Manufacturing

Our

pump product comprises the pump, a disposable cartridge that holds the insulin reservoir, a baseplate that affixes the pump product to

the user’s body and the infusion set, which includes a cannula to infuse the insulin into the body. We intend to manufacture the

pump, the cartridge and the baseplate and purchase the infusion set from third parties. Prior to shipment, our pump product will be packaged

with an infusion set. In connection therewith:

We

have commenced working with Phillips-Medisize to prepare for the transfer to its facility. We expect to transfer the cartridge automation

equipment to this contract manufacturer in mid 2024 to verify and validate into its manufacturing process. Phillips Medisize would then

perform all manufacturing operations to ensure compliance with FDA regulations.

FDA

Clearance

The

FDA requires us to meet all applicable regulations for insulin pumps, a subcategory of infusion pumps, which are generally considered

Class II devices by the FDA. In January 2024, we submitted a 510(k) premarket notification to the FDA for our MODD1 insulin pump. In

March 2024, we received comments from the FDA, and we are in the process of responding to those comments.

Commercialization

Steps

To commercialize our product, we must successfully complete a number

of material steps, including:

● Continue to ensure it meets:

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As

with any medical device attempting to enter and successfully compete with existing products in an established and competitive marketplace,

we will face significant hurdles to accomplish the above steps to commercialization including:

Looking

Forward

Going

forward, we expect to continue to evolve the MODD1 pumps and their capabilities and functionality both in response to patient needs and

as part of our current platform roadmap.

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Competition

Today,

in the United States, only three companies are commercializing insulin pumps to T1D patients and insulin treated T2D patients and have

significant market share:

Medtronic pump and infusion set Tandem pump and infusion set

These

three insulin pump offerings are vying for the attention of the most motivated and well insured in hope of converting them away from

their reliance on MDI. The t:slim X2 and Minimed 770G each have a ~$5,000 list price that is covered through Durable Medical Equipment

(DME) reimbursement and daily consumables, which comprise cartridge, tubing and set for each three-day period, as well. These products

have controllers integrated into the pump, making them cumbersome and bulky, along with long (> 20 inch) tubing between the pump and

the cannular site. The Omnipod is the third offering, a patch pump that attaches to your body for 72 hours and uses a separate controller

to manage the insulin delivery process. Insurance coverage for Omnipod can be provided via DME but also via Pharmacy Benefit (PB). The

Omnipod patch pump is more expensive per day and less accurate than other insulin pumps, according to a Mende 2022 study. Around 33%

of people living with T1D are currently using insulin pumps; of these, the vast majority are using one of these three offerings, a statistic

that has not changed significantly over the last 5+ years.

All

of these pump products require extensive training to initiate and two to four hours per day to use and manage on an ongoing basis. We

believe this level of sophistication and effort combined with the cost and awkwardness of these products contribute to the limited uptake.

Although

there are purely mechanical pumps available to patients with a small percentage of T2D patients using the Mannkind V-Go patch pump, a

fixed basal rate and a button to deliver small boluses. This pump is simple to use, though gives little performance decision to the user

(e.g., no possibility to change the basal rate, no possibility to stop bolus doses, small reservoir, pump that needs to be changed every

day, etc.). The last available patch pump is provided by Cequr, called Simplicity, a bolus only delivery option without basal delivery.

Beta Bionics, Inc. and Deka Research and Development Corp. have received clearance for their tube-based pumps in the last 12 months,

but it is too early to assess their commercial traction.

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Medtronic

has launched a new version of its insulin pump, the Minimed 780G, already available in some European countries with an advanced algorithm,

but no obvious change in hardware. Tandem is now selling a small, no display pump called Mobi. The Mobi has a small 2mL reservoir and

is controlled by a separate unit, similar to the current Omnipod product. Insulet has also launched the Omnipod 5, a similar patch pump

to its current offering, that includes an AID algorithm.

Approximately

79% of the people who rely upon MDI therapy choose to not administer a shot outside of their house, which creates a poorly controlled

group. MODD1 is designed to focus upon a segment of these people and mobilize them via a simple, easy to use, affordable product.

Intellectual

Property

Our

success depends in part on our ability to obtain patents and trademarks, maintain trade secret and know-how protection, enforce our proprietary

rights against infringers, and operate without infringing on the proprietary rights of third parties. Because of the length of time and

expense associated with developing new products and bringing them through the regulatory approval process, the health care industry places

considerable emphasis on obtaining patent protection and maintaining trade secret protection for new technologies, products, processes,

know-how, and methods.

As

of March 31, 2024, we held four U.S. utility and no foreign patents, and we also held 22 pending applications in the United States and

abroad. The patents and patent applications cover various aspects of our technology, including our proprietary fluid movement technology

and associated features of our insulin delivery methodology. There can be no assurance that the pending patent applications will result

in the issuance of patents, that patents issued to or licensed by us will not be challenged or circumvented by competitors, or that these

patents will be found to be valid or sufficiently broad to protect our technology or provide us with a competitive advantage.

Government

Regulation

Our

operations are subject to comprehensive federal, state, and local laws and regulations in the jurisdictions in which we or our research

and development partners do business. The laws and regulations governing our business and interpretations of those laws and regulations

and are subject to frequent change. Our ability to operate profitably will depend in part upon our ability, and that of our research

and development partners and affiliates, to operate in compliance with applicable laws and regulations. The laws and regulations relating

to medical products and healthcare services that apply to our business and that of our partners and affiliates continue to evolve, and

we must, therefore, devote significant resources to monitoring developments in legislation, enforcement, and regulation in such areas.

As the applicable laws and regulations change, we are likely to make conforming modifications in our business processes from time to

time. We cannot provide assurance that a review of our business by courts or regulatory authorities will not result in determinations

that could adversely affect our operations or that the regulatory environment will not change in a way that restricts our operations.

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FDA

Regulation

In

the United States, medical devices are strictly regulated by the FDA. Under the FDCA, a medical device is defined as “an instrument,

apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component, part

or accessory which is, among other things: intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation,

treatment, or prevention of disease, in man or other animals; or intended to affect the structure or any function of the body of man

or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other

animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes.” This definition

provides a clear distinction between a medical device and other FDA regulated products such as drugs. If the primary intended use of

a medical product is achieved through chemical action or by being metabolized by the body, the product is usually a drug or biologic.

If not, it is generally a medical device.

We

have developed an insulin pump delivery system, which is regulated by the FDA as a medical device under the FDCA, as implemented and

enforced by the FDA. The FDA regulates the development, testing, manufacturing, labeling, packaging, storage, installation, servicing,

advertising, promotion, marketing, distribution, import, export, and market surveillance of medical devices.

Device

Premarket Regulatory Requirements

Before

being introduced into the U.S. market, each medical device must obtain marketing clearance or approval from the FDA through the premarket

notification (or 510(k)) process, the de novo classification process, or the premarket approval, or PMA, process, unless they

are determined to be Class I devices or to otherwise qualify for an exemption from one of these available forms of premarket review and

authorization by the FDA. Under the FDCA, medical devices are classified into one of three classes - Class I, Class II or Class III -

depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurance

of safety and effectiveness. Classification of a device is important because the class to which a device is assigned determines, among

other things, the necessity and type of FDA review required prior to marketing the device. Class I devices are those for which reasonable

assurance of safety and effectiveness can be maintained through adherence to general controls which include compliance with the applicable

portions of the FDA’s Quality System Regulation (the “QSR”), as well as regulations requiring facility registration

and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional

materials. The Class I designation also applies to devices for which there is insufficient information to determine that general controls

are sufficient to provide reasonable assurance of the safety and effectiveness of the device or to establish special controls to provide

such assurance, but that are not life-supporting or life-sustaining or for a use which is of substantial importance in preventing impairment

of human health, and that do not present a potential, unreasonable risk of illness or injury.

Class

II devices are those for which general controls alone are insufficient to provide reasonable assurance of safety and effectiveness and

there is sufficient information to establish “special controls.” These special controls can include performance standards,

post-market surveillance requirements, patient registries and FDA guidance documents describing device-specific special controls. While

most Class I devices are exempt from the premarket notification requirement, most Class II devices require a premarket notification prior

to commercialization in the United States; however, the FDA has the authority to exempt Class II devices from the premarket notification

requirement under certain circumstances. As a result, manufacturers of most Class II devices must submit premarket notifications to the

FDA under Section 510(k) of the FDCA (21 U.S.C. § 360(k)) in order to obtain the necessary clearance to market or commercially distribute

such devices. To obtain 510(k) clearance, manufacturers must submit to the FDA adequate information demonstrating that the proposed device

is “substantially equivalent” to a “predicate device” that is already on the market. A predicate device is a

legally marketed device that is not subject to PMA, meaning, (i) a device that was legally marketed prior to May 28, 1976 (“pre-amendments

device”) and for which a PMA is not required, (ii) a device that has been reclassified from Class III to Class II or I or (iii)

a device that was found substantially equivalent through the 510(k) process. If the FDA agrees that the device is substantially equivalent

to the predicate device identified by the applicant in a premarket notification submission, the agency will grant 510(k) clearance for

the new device, permitting the applicant to commercialize the device. Premarket notifications are subject to user fees, unless a specific

exemption applies.

If

there is no adequate predicate to which a manufacturer can compare its proposed device, the proposed device is automatically classified

as a Class III device. In such cases, a device manufacturer must then fulfill the more rigorous PMA requirements or can request a risk-based

classification determination for its device in accordance with the de novo classification process.

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Devices

that are intended to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable

risk of harm or are of substantial importance in preventing impairment of health, and devices that are not substantially equivalent to

a predicate device and for which safety and effectiveness cannot be assured solely by the general controls and special controls are placed

in Class III. Such devices generally require FDA approval through the PMA process, unless the device is a pre-amendments device not yet

subject to a regulation requiring premarket approval. The PMA process is more demanding than the 510(k) process. For a PMA, the manufacturer

must demonstrate through extensive data, including data from preclinical studies and one or more clinical trials, that the device is

safe and effective for its proposed indication. The PMA must also contain a full description of the device and its components, a full

description of the methods, facilities and controls used for manufacturing, and proposed labeling. Following receipt of a PMA submission,

the FDA determines whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application

for review, it has 180 days under the FDCA to complete its review and determine whether the proposed device can be approved for commercialization,

although in practice, PMA reviews often take significantly longer, and it can take up to several years for the FDA to issue a final decision.

Before approving a PMA, the FDA generally also performs an on-site inspection of manufacturing facilities for the product to ensure compliance

with the QSR.

The de

novo classification process allows a manufacturer whose novel device is automatically classified into Class III to request down-classification

of its device to Class I or Class II, on the basis that the device presents low or moderate risk, as an alternative to following the

typical Class III device pathway requiring the submission and approval of a PMA application. With our submission in January 2024, the

FDA has confirmed our MODD 1 qualifies as a 510(k) eligible device and does not require a de novo classification.

Clinical

trials are almost always required to support PMAs and are sometimes required to support 510(k) and de novo classification

submissions. In our case, usability studies of our intended users are required and have been completed. All clinical investigations of

devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption,

or IDE, regulations that govern investigational device labeling, prohibit promotion of investigational devices, and specify recordkeeping,

reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk,”

as defined by the FDA, the agency requires the study sponsor to submit an IDE application to the FDA, which must become effective prior

to commencing human clinical trials. The IDE will automatically become effective 30 days after receipt by the FDA, unless the FDA denies

the application or notifies the sponsor that the investigation is on hold and may not begin until the sponsor provides supplemental information