You should read the following discussion in conjunction with the Condensed Consolidated Financial Statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements. See "Cautionary Statement Concerning Forward-Looking Statements" below, and "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022, as filed with the Securities and Exchange Commission, as the same may be updated from time to time, for a discussion of the uncertainties, risks and assumptions associated with these statements.

We are a medical technology company developing sugarBEAT®, a non-invasive, affordable, and flexible continuous glucose monitoring system for adjunctive use by persons with diabetes. sugarBEAT® consists of a disposable adhesive skin-patch connected to a rechargeable wireless transmitter that displays glucose readings at regular five minute intervals via a mobile app. sugarBEAT® works by extracting glucose from the skin into a chamber in the patch that is in direct contact with an electrode-based sensor. The transmitter sends the raw data to a mobile app where it is processed by an algorithm and displayed as a glucose reading, with the ability to track and trend the data over days, weeks, and months. While sugarBEAT®requires once per day calibration by the patient using a blood sample obtained by a finger stick, we believe sugarBEAT®will be adopted by non-insulin dependent persons with diabetes alongside insulin-injecting persons with diabetes, who all perform multiple daily finger sticks to manage their disease.

CE approval was granted by the European Notified Body BSI in May 2019, allowing the product to be made available for commercial sale. This approval is subject to an annual review of the underlying ISO 13485 accredited Quality Management System. The accreditation was successfully renewed in November 2021. In conjunction with the UK Licensee, the Company commenced a phase 1 launch whereby devices were made available to limited cohorts of users to gauge their feedback so that any fine-tuning could be completed prior to a mass market launch. The UK Licensee has also confirmed that it will undertake two Key Opinion Leader ("KOL") studies in the UK for its white-labelled service offering that is supported by sugarBEAT®. The KOL studies are intended to provide additional support for the UK Licensee's broader ongoing marketing plans.

The UK Licensee placed an initial order for sugarBEAT®in April 2021 and provided a forecast for its post-launch volume expectations, which the Company has used to establish both a short and medium term view to inform the Company's commercial operational requirements. In line with this view, the Company has taken the following actions during the fiscal year to date:

· Entered into a new leased facility to provide the additional space requirements

· Increased headcount of production operatives; this will be phased in line with

the volume forecasts currently available, however the Company has also factored

in an ability to scale further and faster should this be required.

· Moved forward with placing phased orders for raw materials to ensure future

· Commenced phased deliveries in December 2021 to the UK Licensee of its

In July 2020, Nemaura filed a PMA application with the FDA to use sugarBEAT® as an adjunct to finger prick testing for blood glucose trending. We, along with other applicants, were then informed by the FDA that the approval process was currently subject to delays as a result of the FDA's Center for Devices and Radiological Health ("CDRH") being actively engaged in responding to the current pandemic caused by COVID-19 which resulted in staff being reallocated to other approval requests associated with COVID-19. During April 2021 the FDA confirmed that they would recommence their review of the PMA application and this is now ongoing and in-progress. In December 2021 The FDA's Bio-monitoring research division conducted an audit of the clinical program submitted in support of the PMA application. A single 483 observation was raised, and the Company submitted a full response in January 2022. The FDA subsequently scheduled a pre-market inspection for during the second calendar quarter of 2022, intended to cover the FDA's Quality System/Current Good Manufacturing Practice regulations for Medical Devices (21 CFR Part 820). This audit was conducted in Q1 of this year and the company reported that a single 483 observation was raised to which the company responded in a timely manner, and dialogue with the FDA continues with respect to the pMA application.

In addition to this, Nemaura established that proBEAT™, which is based on the sugarBEAT® platform, can be classified under the Wellness guidance when it is used according to the FDA Wellness guidance notes, to provide prompts and educate users on factors affecting their blood sugar profiles. Nemaura launched proBEAT™ in the U.S. in December 2020, as part of a diabetes prevention and reversal program branded BEATdiabetes.life. During the quarter ended December 31, 2020, Nemaura licensed a clinically validated weight loss program for the management of diabetes from Healthimation, LLC, which was originally developed at the Joslin Diabetes Center, an affiliate of Harvard Medical School. This program, together with proBEAT™, forms the BEATdiabetes.life program that is currently being developed for commercialization in the U.S. KOL studies are being conducted to provide additional marketing support of the program in preparation for a broader U.S.-wide roll-out. While still in the relatively early stages, we are pleased with initial results and feedback received from these user-groups.

We believe there are additional applications for sugarBEAT® and the underlying BEAT technology platform, which may include:

· a web-server accessible by physicians and diabetes professionals to track the

condition remotely, thereby reducing healthcare costs and managing the

· a complete virtual doctor that monitors a person's vital signs and transmits

· other patches using the BEAT technology platform to measure alternative

· a continuous temperature monitoring system which could have various

· monitoring disease progression in COVID-19 patients using continuous lactate

During this period of product development, the Company has experienced recurring losses and negative cash flows from operations. As of June 30, 2022, the Company had cash balances of $14,751,833, working capital of ($465,873) (deficit), total stockholders' equity of $3,958,150 (deficit) and an accumulated deficit of $41,710,773.

While the Company expects to continue to incur losses from operations for the near-term and these losses could be significant as product development, regulatory activities, clinical trials, and other commercial and product development related expenses are incurred, the Company reached a significant milestone during the three month period ended December 31, 2021, as the Company commenced commercial delivery of its sugarBEAT®device to its UK Licensee.

Management's strategic assessment continues to include the following potential options:

· obtaining further regulatory approval for the sugarBEAT® device in other global

territories, including the U.S., Europe and the Middle East;

· signing new/additional licensing and collaboration opportunities beyond our

· pursuing further capital raising opportunities to support and accelerate the

· developing the sugarBEAT®device platform for commercialization for other

December 2021 marked a significant milestone in the Company's evolutionary journey with the first two commercial deliveries of the sugarBEAT® non-invasive glucose monitor ("CGM") being made to the UK licensee, MySugarWatch Limited ("MSW"). It is expected that MSW will sell the CGM under the brand MySugarWatch® and MSW has developed a subscription-based diabetes coaching and management service that will be provided alongside the CGM, primarily targeting those with type 2 diabetes.

The deliveries reflect the phased delivery schedule agreed upon with MSW in relation to MSW's initial order that was placed earlier in 2021, as a result of which the Company is now able to recognize revenue for the first time in its corporate history.

Furthermore, on September 24, 2021, the Company entered into a License, Supply and Distribution Agreement with 'MySugarWatch DuoPack Limited' ("MSW-DP"), a sister company of MSW, whereby MSW-DP will provide CGM sensors free of charge with certain medications that are widely prescribed to persons with Type 2 diabetes. These medications are due to come off patent in the fourth calendar quarter of 2022 in Europe and the UK, and 2023 in the U.S. The agreed sale price of sensors to MSW-DP under the terms of the agreement is $20 per box of 5 sensors for the U.S. market, and in Europe and the UK 12.50 Euros in the first 12 months from product launch and 10 Euros thereafter per box of 5 sensors. Nemaura's anticipated cost of goods per sensor on large-scale production is $1 per sensor. As of January 2022, there were over 2 million prescriptions written for these medications each month in the combined key EU and UK territories. The Company believes this will provide an opportunity for rapid market penetration in the use of its CGM sensors, at a scale that can enable the targeted lower cost of goods to be achieved and thereby support both revenue and margin growth into the future.

Management is now focused on fulfilling the remainder of the UK licensees' initial orders and supporting MSW's UK launch, while also developing the capabilities of the Company to develop and service new channels of business across other geographic markets via the use of our BEAT platform. This includes expansion of the consumer metabolic health offering Miboko, launched in late 2021, to employers and insurers across the U.S.

In July 2021, the Company entered into an At The Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC (the "Agent") pursuant to which the Company may offer and sell from time to time to or through the Agent shares of the Company's common stock. On April 1, 2022, the Company and Agent entered into an amendment (the "Amendment") to the ATM Agreement, pursuant to which the parties agreed to expand the meaning of the defined term "Registration Statement" in the ATM Agreement to include, for the period from April 1, 2022 and thereafter, a new shelf registration statement (File Number 333-263618) on Form S-3 ("New Registration Statement") that was filed on March 16, 2022 with the SEC and declared effective by the SEC on March 28, 2022. No other changes to the ATM Agreement were made by the Amendment.

The offer and sale of shares of Common Stock through the Agent will be made pursuant to the New Registration Statement, and a related prospectus supplement filed with the SEC pursuant to which the Company is offering shares of its common stock having an aggregate offering price of up to $3,000,000.

Termination of Chief Financial Officer

Effective July 1, 2022, Justin Mclarney was terminated as the Company's Chief Financial Officer. The Company has commenced a search for a U.S.-based replacement Chief Financial Officer. In the meantime, the Company's finance team, which has significant experience with the Company, will continue to support the Company with respect to its accounting and financial reporting requirements, and Dewan Fazlul Hoque Chowdhury, Chief Executive Officer, President, member of the Board of Directors and significant stockholder of the Company, will act as principal financial officer and principal accounting officer of the Company.

The outbreak of COVID-19 in December 2019 has since rapidly increased its exposure globally. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. We continue to monitor the impact of COVID-19 on our own operations and are working with our employees, suppliers, and other stakeholders to mitigate the risks posed by its spread, but COVID-19 is not expected to have any long-term detrimental effect on the Company's success. While key suppliers have not always been accessible throughout the whole period of the outbreak, we have been able to be flexible in our priorities and respond favorably to the challenges faced during this period. We also recognize that one of the consequences of this pandemic has been a surge in the uptake of technologies for remote monitoring of patients and patient self-monitoring, which potentially enhances the prospects for the Company, its CGM product and its planned digital healthcare offering.

Comparative Results for the Three Months Ended June 30, 2022 and 2021

There was no revenue recognized in the three month period ended June 30, 2022 or June 30, 2021. Revenue is generally recognized as goods are dispatched and invoiced to our customer. Given lead times on manufacture, no goods were dispatched during the quarter ended June 30, 2022. This resulted in no revenue recognized this quarter.

Research and development ("R&D") expenses were $330,055 and $288,484 for the three months ended June 30, 2022 and 2021, respectively. This amount consisted primarily of expenditures on wages and sub-contractor activities incurred for improvements made to the sugarBEAT®device. The increase of $41,571 was driven by further improvements made to our device.

General and administrative expenses were $1,880,938 and $1,332,185 for the three months ended June 30, 2022 and 2021, respectively. These expenses consisted of fees for legal, professional, consultancy, audit services, investor relations, insurance, advertising and general and operational wages. As with prior quarters, the increase in expenses was being driven predominantly by increased wages, as additional headcount has been added to support the operational scale up process across both our UK and U.S. teams. Increases have also been seen in insurance and advertising costs, which are considered to be directly related to the commercialization steps taken during the period. In addition to this, a non-cash item charge of $613,687 was booked as a result of the mark-to-market impact from the revaluation of the foreign currency forward contracts in place as of the fiscal period end.

As the Company continues to scale up to service its existing order book, it is expected that general and administrative expenses will continue to increase in a similar way moving forward, as the business transitions to a more operational focused base that will encompass an increase in functional expenses relating to production, sales, marketing, customer service, as well as enhancements to other existing functions.

For the three months ended June 30, 2022 and 2021, other comprehensive loss was $444,937 and$10,706, respectively. Currently all transactions recorded through other comprehensive loss arise from fluctuations in the USD:GBP exchange rate and the impact that this has on consolidation of the Company's non-USD denominated assets and liabilities.

We have experienced net losses and negative cash flows from operations since our inception. We have sustained cumulative losses of $41,710,773 through June 30, 2022. We have historically financed our operations through a combination of debt and equity funding.

As of June 30, 2022, the Company had a net working deficit of $465,873, which included cash balances of $14,751,833. The Company reported a net loss for the three month periods ended June 30, 2022 and 2021 of $3,979,297 and $3,343,725, respectively. This loss is after taking account of interest and debt accretion charges arising from the note purchase agreements for the three month periods ended June 30, 2022 and 2021 of $1,768,304 and $1,723,056, respectively.

Having reviewed the Company's forward looking cashflow requirements in relation to the cash balance held at June 30, 2022, management is aware of the need to raise additional funds in order to finance the ongoing commercialization of sugarBEAT®. The Company had $14,751,833 of cash at June 30, 2022, however the terms of the existing debt held on balance sheet will fall due for repayment as of February 2023, which will trigger a requirement to either restructure the debt or obtain additional, new, funding.

In evaluating the going concern position of the Company, management has considered the ability of the Company to raise additional funding in combination with one or more of the different funding options available to it at this time. Based on current and ongoing engagement with potential funding providers, management believes that there is a reasonable expectation that funding could be provided by one, or more, of the following options:

Equity funding - the company has immediate access to funds through the ATM facility that is currently in place; in addition to this, there are various alternative mechanisms available to the company similar to those used previously e.g. direct sale of shares to interested third parties, similar to the stake sold to Tiger Trading Partners L.L.C. in February 2022, as well as other mechanisms to sell common stock via an underwritten agreement or the further exercise of warrants by the current warrant holders etc.

Debt funding - the Company continues to be in ongoing discussions with third party debt providers, including the incumbent, to enable the existing debt facility to be restructured or renewed, should management feel that this route offers a more attractive option compared to the sale of equity that is dependent on the current market conditions.

Alternative funding as used in the past such as the sale of licenses. As product development is now at a significant more advanced stage then it was, it is management's belief that the sufficient funding could be provided through the sale of licenses in a similar way to the UK license agreement sale that help provided early-stage development funding.

However, as a consequence of this funding requirement being triggered without the funding bridge having been put in place by the filing date of these unaudited condensed consolidated financial statements, ASC 205-40 requires that Management recognize and disclose this point as an event which creates a substantial doubt as to the Company's ability to continue as a going concern for at least one year from the date of filing of these unaudited condensed consolidated financial statements.

Net cash used in operating activities for the three months ended June 30, 2022 was $2,384,143, reflecting a net loss of $3,979,297, adjusted for the add back of the accretion of debt discount expense of $1,768,304, the mark-to-market charge booked in relation to the revaluation of the foreign currency forward contracts of $613,687 and the depreciation and amortization charge of $98,792. Cash was also impacted by increases in inventory of $137,386, which was directly driven as a result of commercial scale up.

Prepayments increased by $355,329, which was as a result of an increase in amount paid to Hamilton Court ($600,000), our forward contract provider, partially offset by a movement on value added tax debtor of $143,000.

There was also a $43,609 decrease in accounts payable during the fiscal period, with decreases seen in both other liabilities and accrued expenses of $120,812.

Net cash used in operating activities for the three months ended June 30, 2021 was $1,690,028, with the key drivers being driven by the net loss of $3,343,725, which includes non-cash charges of $36,133 in relation to depreciation and amortization, $1,723,056 in relation to the accretion of debt discount. In addition, we saw an increase in prepaid expenses of $550,211. An increase of $31,583 was also seen in inventory as the business moved to prepare its capacity to support of the imminent expectation of product launch. The Company also saw reductions in accounts payable of $145,898, as well as increases in accruals of $363,052 and deferred revenue of $515,731 and reduction in the liability due to related parties of $256,583.

Net cash used in investing activities for the three months ended June 30, 2022, was $217,712, which reflected patent filing costs of $25,598, the purchase of property and equipment of $192,114 driven by the procurement to support the transition to operational production.

Net cash used in investing activities was $398,221 for the three months ended June 30, 2021, which reflects $293,285 in software development that is being treated as work-in-progress for the BEATdiabetes.life platform. The Company also spent $22,714 on patent filing costs and $82,222 on the purchase of property and equipment to support future production and sensor development.

Net cash used in financing activities for the three months ended June 30, 2022 was $74,282, comprising $4,700,000 from proceeds of long term debt offset by $4,774,282 for the scheduled repayments of notes payable.

Net cash provided by financing activities for the three months ended June 30, 2021 was $1,463,658. $2,963,658 was raised in relation to the exercise of warrants offset by scheduled repayments against debt facilities of $1,500,000.

We have no off-balance sheet arrangements, including unrecorded derivative instruments that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

When we prepare our unaudited condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"), we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgements that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. We believe our critical accounting policies affect our more significant judgments and estimates used in the preparation of the unaudited condensed consolidated financial statements. During the three month period ended June 30, 2022, we have made no material changes or additions with regard to such policies and estimates.

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