Modular Medical, Inc., a pre-revenue medical device company focused on developing innovative insulin pumps, reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company recorded a net loss of $4.956 million for the three months ended September 30, 2024, compared to a net loss of $4.183 million for the same period in 2023. For the six months ended September 30, 2024, the net loss increased to $9.093 million from $7.920 million in the prior year.

Total operating expenses for the three months ended September 30, 2024, rose to $4.996 million, up from $4.190 million in the same quarter of 2023. This increase was attributed to higher research and development (R&D) costs, which were driven by increased stock-based compensation, employee-related costs, and depreciation expenses. R&D expenses for the six months ended September 30, 2024, totaled $5.1 million, compared to $4.2 million for the same period in 2023.

The company’s cash and cash equivalents significantly decreased to $3.893 million as of September 30, 2024, down from $9.232 million at the end of March 2024. Total current assets also fell to $4.176 million from $9.697 million during the same period. Despite these declines, total current liabilities decreased slightly to $1.244 million from $1.455 million, resulting in total stockholders’ equity dropping to $6.916 million from $11.535 million.

Modular Medical's financial activities included net cash used in operating activities of $7.314 million for the six months ended September 30, 2024, compared to $6.484 million in the previous year. The company raised approximately $1.923 million through at-the-market sales of stock during the same period, a notable increase from no proceeds reported in the prior year.

Strategically, Modular Medical received FDA clearance in September 2024 for its initial product, the MODD1 insulin pump, which is expected to enhance its market position in the diabetes sector. However, the company faces substantial doubt regarding its ability to continue as a going concern within the next year, necessitating additional capital to support ongoing operations and R&D initiatives.

As of September 30, 2024, Modular Medical had a total of 34.37 million common stock shares outstanding, reflecting its ongoing efforts to raise funds through equity sales. The company continues to navigate a challenging financial landscape while preparing for the commercialization of its MODD1 product.