Modular Medical, Inc. (MODD) - Q1 2026 Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2025 (Fiscal Q1 2026). Modular Medical, Inc. is a pre-revenue medical device company developing innovative insulin pumps. The company received FDA clearance for its initial product, the MODD1, in September 2024 and expects initial shipments by October 2025. It is currently preparing a 510(k) submission for an updated tubeless version called the "Pivot."
Key Financial Metrics
| Metric | Q1 2026 (Ended June 30, 2025) | Q1 2025 (Ended June 30, 2024) |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(6.70) million | $(4.14) million |
| Operating Expenses | $6.80 million | $4.22 million |
| Cash and Cash Equivalents | $7.52 million | $5.05 million |
| Net Cash Used in Operating Activities | $(5.37) million | $(3.55) million |
| Net Cash Used in Investing Activities | $(0.93) million | $(0.84) million |
| Net Cash Provided by Financing Activities | $0.73 million | $0.21 million |
| Accumulated Deficit | $(91.46) million | $(70.07) million |
Material Changes vs. Prior Period
- Increased Burn Rate: Net loss increased by approximately 62% year-over-year, driven by higher operating expenses.
- R&D Expansion: Research and development expenses rose 60% to $5.13 million, primarily due to increased personnel costs (headcount grew from 36 to 55), materials, and stock-based compensation.
- SG&A Growth: Selling, general, and administrative expenses increased 65% to $1.67 million, reflecting expanded sales, marketing, and administrative headcount (from 4 to 12 employees).
- Capital Raise: The company raised approximately $0.73 million through an At-The-Market (ATM) offering and warrant exercises during the quarter, compared to $0.21 million in the prior year.
- Share Count: Outstanding shares increased from approximately 53.7 million to 55.3 million due to ATM sales and equity issuances.
Outlook, Risks, and Management Commentary
- Going Concern Warning: Management and the independent auditor have expressed substantial doubt about the company's ability to continue as a going concern for at least one year from the filing date. The company has no revenue and expects to continue incurring losses.
- Liquidity Needs: With $7.52 million in cash, the company states it will need to raise additional capital to fund operations, commercialization, and R&D. Failure to secure funding may require curtailing operations.
- Nasdaq Compliance: On June 30, 2025, the company received notice from Nasdaq that it failed to maintain the minimum $1.00 bid price requirement. It has 180 days (until December 29, 2025) to regain compliance or face potential delisting.
- Commercialization Timeline: Initial shipments of the MODD1 are targeted for October 2025. The company intends to replace the MODD1 with the "Pivot" product upon receiving FDA clearance, expected in the first half of 2026.
- Commitments: The company has outstanding purchase orders for machinery and equipment totaling approximately $2.43 million and technology commitments of $0.9 million.
Investor Verification Checklist
- Cash Runway: Verify if the current $7.5 million cash balance is sufficient to cover the projected burn rate of ~$5.4 million per quarter until revenue generation begins.
- Financing Plans: Confirm the status of any planned equity or debt offerings to address the "substantial doubt" regarding going concern status.
- Nasdaq Status: Monitor the stock price to ensure it meets the $1.00 minimum bid price requirement within the 180-day compliance window to avoid delisting.
- Product Launch: Validate the timeline for the October 2025 MODD1 shipment and the subsequent regulatory submission for the Pivot product.
- Capital Expenditures: Assess the impact of the $2.43 million in outstanding equipment purchase orders on future cash flow.