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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): October 2, 2023
MODULAR MEDICAL, INC. |
(Exact name of registrant as specified in its charter) |
Nevada |
|
001-41277 |
|
87-0620495 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
10740 Thornmint Road, San Diego, California |
|
92127 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone
number, including area code: (858) 800-3500
(Former name or former
address, if changed since last report)
Check the appropriate
box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section
12(b) of the Act:
Title of each class |
|
Trading symbol(s) |
|
Name of each exchange on which registered |
Common Stock |
|
MODD |
|
The Nasdaq Stock Market LLC |
Indicate by check mark
whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.02 Unregistered Sales of Equity
Securities.
The relevant information
in Item 5.02 on this Current Report on Form 8-K, regarding the options issued pursuant to the Bonus Program (as defined below) is incorporated
herein by reference. The shares of common stock underlying such options have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), but qualified for exemption under Section 4(a)(2) and/or Regulation D of the Securities Act.
Item 5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 2, 2023, the Board of Directors
of Modular Medical, Inc. (the “Company”) approved the Modular Medical, Inc. Two-Part FDA Submission and Clearance
Milestone Bonus Program (the “Bonus Program”) to motivate and incentivize the Company’s employees. Under the terms
of the Bonus Program, a bonus will be granted to certain of the Company’s employees, including the Company’s executive
officers, in the event that the Company achieves the following milestones for its initial insulin pump product (the
“MODD-1”): (i) completion of all verification and validation testing by December 31, 2023 and 510(k) premarket
submission to the U.S. Food and Drug Administration (the “FDA”) by January 31, 2024 (“Milestone
1”) and (ii) receipt of notification of FDA clearance of the MODD-1 by August 1,
2024 (“Milestone 2”). The following summary is qualified in its entirety by the provisions of the Bonus Program, which
is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Under the Bonus Program, executive officers received
options (the “Executive Bonus Program Options”) to purchase shares of the Company’s common stock, as set forth in the
table below.
Name | |
Position | | |
Milestone 1
Options | | |
Milestone 2
Options | |
James Besser | |
Chief Executive Officer | | |
135,136 | | |
- | |
Paul DiPerna | |
Chairman, President, Chief Financial Officer and Treasurer | | |
90,091 | | |
45,046 | |
Kevin Schmid | |
Chief Operating Officer | | |
37,538 | | |
18,769 | |
The Executive Bonus Program Options were granted
on October 2, 2023 (the “Grant Date”) under the Company’s Amended 2017 Equity Incentive Plan (the “2017 Plan”),
have an exercise price of $1.11 per share (the closing price of the Company’s common stock on the Grant Date) and a term of 10 years.
In the event that a milestone is not achieved the respective options will be canceled.
In addition to the Executive Bonus Program Options,
pursuant to the Bonus Program, certain non-executive employees of the Company will be eligible to receive a bonus in cash or options to
purchase shares of common stock, based on an election made by each employee, in the aggregate amount of approximately $757,000. Each eligible
employee is required to make her or his election by October 5, 2023. If the employees elect to receive options, the options will be granted
under the 2017 Plan and priced on the date of grant, October 5, 2023. In the event the employees elect to receive cash they will receive
70% of such bonus within 30 days of achievement of Milestone 1 and 30% of such bonus within 30 days of achievement of Milestone 2 in accordance
with regular payroll practices. In the event that a milestone is not achieved, the respective options will be canceled and the respective
bonuses will not be paid.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
* | Indicates
a management contract or compensatory plan or arrangement. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
MODULAR MEDICAL, INC. |
|
|
|
Date: October 5, 2023 |
By: |
/s/ James E. Besser |
|
|
James E. Besser |
|
|
Chief Executive Officer |
2
Exhibit 10.1
Modular Medical, Inc.
Two-Part FDA Submission and Clearance Milestone
Bonus Program
Modular Medical, Inc. (“Modular Medical”) is implementing
a Two-Part FDA Submission and Clearance Milestone Bonus Program (the “Bonus Program”). The Bonus Program requirements are
set forth below.
Milestone I: All V&V testing must be completed by December
31, 2023, and submission of the 510K to the FDA must be completed by January 31, 2024.
Milestone I Achievement Bonus:
10% of annual salary (or 70% of bonus) to be paid in employees’
choice of either a cash bonus in the first full semi-monthly payroll to occur after 510K submission to the FDA or in fully-vested common
stock options (“Milestone 1 Options”). The Milestone 1 Options will be subject to the following terms:
| ● | Milestone
1 Option Grant Date - the third business day after the date the bonus program is approved
by the Board of Directors (the “BOD”). |
| ● | Exercise
Price - the closing price of the Company’s common stock on Nasdaq on the Grant Date. |
| ● | Vesting
terms – the Milestone 1 Options will vest in full upon achievement of Milestone I.
If Milestone I is not achieved, the Milestone 1 Options will be canceled on February 1, 2024. |
Employees
must be employed on the date of the 510K submission for the Milestone 1 Options to vest or bonus to be paid.
Milestone
II: Receive Notification of FDA clearance on or before August 1, 2024
Milestone
II Achievement Bonus:
5%
of annual salary (or 30% of bonus) to be paid in employees’ choice of a cash bonus in the first full semi-monthly payroll to occur
after receipt of notification of FDA clearance (“FDA Notice”) on or before August 1, 2024 or in fully-vested common stock
options (“Milestone II Options”). The Milestone II Options will be subject to the following terms:
| ● | Milestone
II Option Grant Date - the third business day after the date the Bonus Program is approved
by the BOD. |
| ● | Exercise
Price - the closing price of the Company’s common stock on Nasdaq on the Milestone
II Option Grant Date. |
| ● | Vesting
terms – the Milestone II Options will vest in full upon achievement of Milestone II.
If Milestone II is not achieved, the Milestone II Options will be canceled on August 2, 2024. |
Optionees must be employed and/or in Continuous Service on the date
of FDA Notice for the Milestone II Options to vest or bonus to be paid.
Effective Date: This Two-Part Milestone Bonus Program will be
effective upon approval by the BOD.
Employee Election: Employees must submit their election for
the form of bonus payments for Milestones I and II within three days of approval of the Bonus Program by the BOD.
Tax Considerations: Employees are responsible for any tax liabilities
associated with milestone bonuses. Modular Medical will make required tax withholdings and provide necessary tax documentation as required
by law or as authorized by the employee.
Non-Guarantee: Participation in this Milestone Bonus Program
does not guarantee the receipt of a bonus, as it is contingent on successful milestone achievement. Modular Medical reserves the right
to adjust milestone bonus percentages, criteria, or eligibility at its sole discretion.
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