Modular Medical (MODD) risk factors, FY2025 10-K

Risks Related to Our Business, Operations and Industry

1. 01We might not be able to continue as a going concern
2. 02We are a pre-revenue medical device company and have a history of significant operating losses; we expect to continue to incur operating losses, and we may never achieve or maintain profitability
3. 03We will need substantial additional funding to complete subsequent phases of the development of our insulin pump products and to operate our business and such funding may not be available or, if it is available, such financing is likely to substantially dilute our existing stockholders
4. 04We have a limited operating history and historical financial information upon which you may evaluate our performance
5. 05The amount of financing we require will depend on a number of factors, many of which are beyond our control. Our results of operations, financial condition and stock price are likely to be adversely affected if our funding requirements increase or are otherwise greater than we expect
6. 06Our future cash requirements may differ significantly from our current estimates
7. 07We may not be able to utilize a significant portion of our net operating losses and tax credits
8. 08Technological breakthroughs in diabetes monitoring, treatment or prevention could render our insulin pump products obsolete
9. 09Any failure to attract and retain skilled directors, executives, employees and consultants could impair our product development and commercialization activities
10. 10Our operations are substantially dependent upon key personnel
11. 11We may not be able to identify, negotiate and maintain the strategic alliances necessary to develop and commercialize our products and technologies, and we will be dependent on our corporate partners if we do
12. 12We may not receive the necessary regulatory clearance or approvals for our insulin pump products, and failure to timely obtain necessary clearances and/or approvals could harm our then operations, including our ability to commercialize our products
13. 13If the FDA requires us to go through a lengthier, more rigorous examination for our future product candidates than we had expected, product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business
14. 14Our competitors may develop products that are more effective, safer and less expensive than ours
15. 15We expect to rely on third-party manufacturers and will be dependent on their quality and effectiveness
16. 16We may not be able to successfully scale-up manufacturing of our products in sufficient quality and quantity, which would delay or prevent us from commercializing our products
17. 17We are dependent upon third-party suppliers to manufacture our product, and this makes us vulnerable to supply shortages and price increases; we may not be able to obtain an adequate supply of components on a timely basis or at all
18. 18We may be subject to potential product liability and other claims that could materially impact our business and financial condition
19. 19Legislative, regulatory, or medical cost reimbursement changes may adversely impact our business
20. 20We are subject to extensive regulation by the FDA, which could restrict the sales and marketing of our insulin pump products and could cause us to incur significant costs
21. 21Medical devices may be marketed only for the indications for which they are approved or cleared. Further, 510(k) clearance can be revoked if safety or effectiveness problems develop once the device is on the market
22. 22The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations and could result in stockholders losing their entire investment
23. 23Our success depends substantially upon our ability to obtain and maintain intellectual property protection relating to our insulin pump products and research technologies
24. 24If we are sued for infringing on third-party intellectual property rights, it will be costly and time-consuming, and an unfavorable outcome would have a significant adverse effect on our business
25. 25If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected
26. 26Intellectual property rights do not necessarily address all potential threats to our competitive advantage
27. 27Healthcare reform and drug-pricing reform laws could adversely affect our products and financial condition
28. 28We may bring infringement claims or other legal proceedings against third parties, causing us to spend substantial resources on litigation and exposing our own intellectual property portfolio to challenge
29. 29We may become involved in disputes with our present or future contract partners over intellectual property ownership or other matters, which would have a significant effect on our business
30. 30Our insulin pump products will be subject to recalls, which would harm our reputation, business operations and financial results

Risks Related to Our Securities

1. 31Any disruption and/or instability in economic conditions and capital markets could adversely affect our ability to access the capital markets, and thus adversely affect our business and liquidity
2. 32International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our business, results of operations and financial condition
3. 33Ongoing uncertainty regarding trade policies may also complicate our short- and long-term strategic planning, and that of our partners and customers, including decisions regarding hiring, product strategy, capital investment, supply chain design and geographic expansion
4. 34Third parties might attempt to gain unauthorized access to our network or seek to compromise our products
5. 35We are subject to oversight by the SEC and other regulatory agencies. Investigations by those agencies could divert management’s focus and could have a material adverse effect on our reputation and financial condition
6. 36If we are unable to satisfy the continued listing requirements of the Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected
7. 37We are a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our common stock may be less attractive to investors
8. 38We do not expect any cash dividends to be paid on our shares of common stock for the foreseeable future
9. 39If the beneficial ownership of our common stock continues to be concentrated, it may prevent our stockholders from influencing significant corporate decisions
10. 40Future sales of our securities could adversely affect the market price of our common stock and our future capital-raising activities could involve the issuance of equity securities, which would dilute your investment and could result in a decline in the trading price of our common stock
11. 41Our articles of incorporation allow for our board of directors to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock
12. 42Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity
13. 43Our board of directors is able to adopt recapitalizations through forward or reverse splits of our outstanding shares of common stock without stockholder approval