UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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. |
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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 |
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