MODULAR MEDICAL, INC. : Entering into a Material Definitive Agreement, Unrecorded Sale of Equity Securities, Other Events, Financial Statements and Exhibits (Form 8-K)

Item 1.01. Conclusion of a significant definitive agreement.

On May 2, 2022, Modular Medical, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with Sio Capital Managementan institutional investor (the “Investor”), pursuant to which the Company has agreed to sell, under a registered direct offer (the “Registered Offer”), a total of 449,438 shares (the “Shares ”) of the ordinary shares of the Company, par value $0.001
per share (the “Common Shares”), at a purchase price per share of $4.45 and pre-funded warrants (the “Pre-funded Warrants”) to purchase an aggregate of 1,348,314 common shares at a purchase price per pre-funded warrant of
$4.44. The pre-funded warrants will be exercisable immediately on the date of issue at an exercise price of $0.01 per share and can be exercised at any time until all the Pre-funded Warrants are exercised in full.

In connection with a concurrent private placement (the “Private Placement” and, together with the Registered Offering, the “Offers”) under the Purchase Agreement, the Company issued to the investor warrants (the “Private Placement Warrants”) to purchase an aggregate of 1,438,202 shares of common stock at an exercise price of $6.60
per share. The private placement warrants will be exercisable six months from the date of issue and will have a term of five years.

The investor (together with its affiliates) will not be able to exercise any portion of the pre-funded warrants or private placement warrants to the extent that the investor holds more than 9.99% of the outstanding common shares of the Company immediately after exercise. Pursuant to the terms of the Purchase Agreement, the Company has agreed to cause to be filed within 30 days a registration statement on Form S-1 providing for the resale by common stockholders of its common stock issuable upon the exercise of the private placement warrants. Offerings.

Sales of these securities under the Purchase Agreement are expected to close on or about May 5, 2022subject to customary closing conditions.

Oppenheimer & Co. Inc. acts as sole placement agent (the “Placement Agent”) for the Company, on a “reasonable best efforts” basis, in connection with the Offers. The Selling Agent will be entitled to a cash fee of 6.0% of the aggregate gross proceeds of the Registered Offering and reimbursement of certain disbursements up to $75,000.

The net proceeds to the Company from the Registered Offering, after deducting the fees and expenses of the Placement Agent but before payment of the Company’s estimated offering costs, are expected to be approximately $7.4 million. The Company intends to use the net proceeds of the Registered Offering for general corporate purposes and working capital.

Pursuant to the purchase agreement, except with respect to certain exempted issues, the Company is prohibited from issuing common stock or common stock equivalents for 90 days after closing and from engaging in certain transactions at a variable rate for a period of six months from the closing date.

The Shares and Prefunded Warrants have been offered and sold by the Company pursuant to a Prospectus Supplement which has been filed with the Security and Exchange Commission (the “SEC”) on May 4, 2022pursuant to the company’s pre-registration statement on Form S-3 (File No. 333-264193), which was declared effective by the
SECOND on April 19, 2022.

The Prefunded Mandate, Private Placement Mandate and Purchase Agreement forms are filed as Exhibits 4.1, 4.2 and 10.1, respectively, to this current report on Form 8-K. The foregoing summaries of the terms of these documents are subject to and qualified in their entirety by these documents, which are incorporated herein by reference.

The legal notice and consent of Lucosky Brookman LLP relating to the securities is filed as Schedule 5.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 3.02. Unrecorded sales of Equity securities.

The applicable information set forth in Section 1.01 of this Current Report on Form 8-K is incorporated by reference into this Section 3.02. The common shares underlying the private placement warrants were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but were eligible for exemption under section 4(a)(2) and/or Regulation D of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a “public offering”, as defined in Section 4(a)(2) of the Securities Act, due to the insignificant number of persons involved in the transaction, the size of the offer, the manner of the offer and the number of securities offered. The Company has not made an offer in which it sold a large number of securities to a large number of investors. Further, the investor had the necessary investment intention as required by Section 4(a)(2) of the Securities Act since the investor accepted and received the securities bearing a legend stating that these securities are restricted pursuant to Rule 144 of the Securities Act. This restriction guarantees that these securities will not be immediately redistributed on the market and will therefore not be the subject of a “public offer”. Based on an analysis of the above factors, the Company has satisfied the requirements to qualify for the exemption under Section 4(a)(2) of the Securities Act.

Item 8.01. Other events.

On May 3, 2022, the Company issued a press release announcing the offers. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial statements and supporting documents.

(d) Exhibits:


Exhibit No.   Description
    4.1         Form of Pre-Funded Warrant
    4.2         Form of Private Placement Warrant
    5.1         Opinion of Lucosky Brookman LLP
   10.1         Form of Securities Purchase Agreement
   99.1         Press Release, dated May 3, 2022
    104       Cover Page Interactive Data File (embedded within the Inline XBRL document)

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