The proxy reveals a company burning cash with no path to profitability, a going concern warning, and a request for massive equity plan dilution. The two director departures (Goldberg, Volkart) and widespread late Section 16 filings suggest governance strain. Watch for the shareholder vote outcome on the 2.5M share increase and any subsequent capital raise announcements, which will likely be highly dilutive given the going concern status.
Price Chart
Executive Summary
Modular Medical's definitive proxy statement for the fiscal 2027 annual meeting seeks shareholder approval to elect six directors, increase the 2017 Equity Incentive Plan share pool by 2,500,000 shares (a ~26% dilution on current outstanding), and ratify Farber Hass Hurley as auditor. The company disclosed a net loss of $28.2M for fiscal 2026, a going concern warning, and significant related-party transactions including a $350K bridge note from CEO Besser. CEO compensation is minimal ($1 salary), but President/CFO DiPerna received $662,871 total compensation. The filing is routine governance but highlights severe financial distress and aggressive dilution.
Key Facts
- Net loss of $28,241,433 for fiscal 2026, widening from $18,824,126 in fiscal 2025
- Proposal to increase 2017 Plan shares by 2,500,000, representing ~26% dilution on 9,495,823 shares outstanding
- Substantial doubt about ability to continue as a going concern disclosed in Form 10-Q for June 30, 2026
- CEO James Besser paid de minimis $1 annual salary; total compensation $46,999 (all option awards)
- President/CFO Paul DiPerna received $662,871 total compensation ($360K salary + $302,871 option awards)
- COO Kevin Schmid received $375,718 total compensation ($300K salary + $75,718 option awards)
- AWM Investment Company holds 9.99% stake with 646,550 shares/warrants
- Related party: CEO Besser provided $350,000 bridge note at 12% interest, repaid in March 2026
- Two executive officer family members received $153,900 and $66,600 in compensation during fiscal 2026
- Directors Morgan Frank and Jeffrey Goldberg declined to stand for re-election
- Audit fees: $102K in fiscal 2026 vs $94K in fiscal 2025
- TSR: initial $100 investment fell to $(90.49) as of March 31, 2026
Financial Impact
Proposed 2,500,000 share increase to equity plan represents ~26% dilution on current 9.5M shares outstanding; net loss widened 50% to $28.2M; going concern warning indicates high risk of additional dilutive capital raises
Risk Factors
- Going concern risk: substantial doubt about ability to continue within one year
- Massive dilution: 2.5M additional shares requested for equity plan, plus expected future capital raises
- Widening losses: net loss grew 50% YoY to $28.2M with no revenue disclosed
- Related party transactions: CEO bridge note and family member compensation raise governance concerns
- Widespread late Section 16 filings by nearly all directors indicate poor compliance controls
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| DEF 14A Filing (Primary) | 0001213900-26-105495 |
| Document: 0001213900-26-105495-index-headers.html | 0001213900-26-105495 |
| Document: 0001213900-26-105495-index.html | 0001213900-26-105495 |
| Document: 0001213900-26-105495.txt | 0001213900-26-105495 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 1, 2026 26d ago | DEF 14A | $2.08 | awaiting T+60 | — | $1.61 (+22.60%) |
Aug 19, 2026 9w ago | EFFECT | $3.32 | awaiting T+60 | — | $1.61 (+51.51%) |
Aug 5, 2026 11w ago | S-3 | $2.03 | awaiting T+60 | — | $1.61 (+20.69%) |
Apr 23, 2026 26w ago | S-3 | $4.65 $2.64 | ▲ +43.16% | ▲ +48.18% | $1.61 (+65.34%) |
Apr 21, 2026 26w ago | 8-K | $5.00 $3.24 | ▲ +35.20% | ▲ +42.10% | $1.61 (+67.80%) |
Apr 21, 2026 26w ago | 424B5 | $5.00 $3.24 | ▲ +35.20% | ▲ +42.10% | $1.61 (+67.80%) |
Apr 16, 2026 27w ago | 8-K | $4.82 $3.99 | ▼ −17.22% | ▼ −24.27% | $1.61 (−66.60%) |
Mar 4, 2026 33w ago | 424B4 | $5.70 $5.14 | ▲ +9.82% | ▲ +19.91% | $1.61 (+71.75%) |
Mar 4, 2026 33w ago | EFFECT | $5.70 $5.14 | ▼ −9.82% | ▼ −19.91% | $1.61 (−71.75%) |
Feb 27, 2026 34w ago | S-1 | $7.41 $4.90 | ▲ +33.87% | ▲ +43.26% | $1.61 (+78.27%) |
US Market Status
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