UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported):
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone
number, including area code: (
(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 | ||
| The |
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:
| Exhibit No. | Description | |
| 10.1* | Modular Medical, Inc. Two-Part FDA Submission and Clearance Milestone Bonus Program | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Indicates a management contract or compensatory plan or arrangement. |
1
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.
Cover |
Oct. 02, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Oct. 02, 2023 |
| Entity File Number | 001-41277 |
| Entity Registrant Name | MODULAR MEDICAL, INC. |
| Entity Central Index Key | 0001074871 |
| Entity Tax Identification Number | 87-0620495 |
| Entity Incorporation, State or Country Code | NV |
| Entity Address, Address Line One | 10740 Thornmint Road |
| Entity Address, City or Town | San Diego |
| Entity Address, State or Province | CA |
| Entity Address, Postal Zip Code | 92127 |
| City Area Code | 858 |
| Local Phone Number | 800-3500 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock |
| Trading Symbol | MODD |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |
-8?20$3;
M8T.P6BP^0"X99K>]9!:G