What changed in this filing

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Item 1A. Risk Factors

2020-07-13 compared with 2019-06-14 · 129 added, 43 removed, 231 unchanged (43% of the section changed)

You should carefully consider the following risk factors, together with all other information included in this report in evaluating our company and our common stock.

You should carefully consider the following risk factors, together with all other information included in this report in evaluating the C ompany and our common stock.

If any of the following risks and uncertainties develops into actual events, they could have a material adverse effect on our business, financial condition or results of operations.

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Our cannabinoid strategy makes it difficult to find, retain, and attract management.

The environment we work in is heavily regulated, and while we have experience in regulated industries, it is also heavily scrutinized.

The environment in which we work is heavily regulated, and while we have experience in regulated industries, it is also heavily scrutinized.

This regulatory scrutiny takes a toll on management and makes it very difficult to attract and retain talent.

Management spends a great deal of time and money explaining and justifying actions, strategy, and business plans to regulators.

A myriad of complex factors including regulations regarding money laundering, inter-state commerce, DOJ, FDA, NYSE, SEC, state laws, among others, affect every decision.

A myriad of complex factors including regulations regarding money laundering, inter-state commerce, DOJ, FDA, NYSE, SEC, FTC, and state laws, among others, affect every decision.

Navigating this complex set of regulatory landmines and staying focused on generating shareholder value is an arduous task and there can be no assurance that we will be successful in steering clear of all the potential issues, any of which could adversely impact the stock price or lead to delisting from the NYSE American.

Our cannabinoid strategy makes it difficult to raise money as a public company.

Our Plant and Cannabinoid Business is based on:

a) R&D on cannabinoids;

b) medical trials on the efficacy of cannabinoids;

c) licensing our intellectual property;

and d) growing, processing and distributing hemp.

Despite having no direct involvement in selling any controlled substances, the Company is often considered a “cannabis company” with all the nuances that accompany that label, including being blacklisted by banks, investments banks, and by the largest clearing services company.

Despite having no direct involvement in selling THC, the Company is often incorrectly classified as a “cannabis company” or a “marijuana company”, with all the nuances that accompany that label, including being blacklisted by banks, investments banks, and by the largest stock clearing services company.

Due to the near-monopoly nature of some of these institutions, such as clearing houses, it makes it very difficult for the Company to raise money, deposit share certificates, or even have investment banking relationships.

As we cannot control how others perceive us, there can be no assurance that we will be able to raise enough capital for our planned expansion.

We have a history of operating losses and there can be no assurance that we can again achieve or maintain profitability.

Our short-term focus is to gain market share for our Plant and Cannabinoid Business.

The Company depends on the performance of carriers, wholesalers, retailers, and other resellers.

The Company distributes its products through wholesalers, retailers, and resellers, many of whom may distribute products from competing manufacturers.

The Company also intends to sell its products and resells third-party products in most of its major markets directly to consumers, small and mid-sized businesses, and other customers through its retail and online stores and its direct sales force.

The Company intends to invest in programs to enhance reseller sales, including staffing selected resellers’ stores with Company employees and contractors, and improving product placement displays.

These programs can require a substantial investment while not assuring return or incremental sales.

The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty regarding demand for some or all of the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.

Our revenue decreased and w e have a history of operating losses and there can be no assurance that we can again achieve or maintain profitability.

Our revenue declined from Fiscal 2019 to Fiscal 2020.

Our short-term focus is to gain market share for our Life Sciences segment.

However, we have had a history of operating losses.

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If we continue to have losses, we will be required to seek additional financing.

No assurance can be given the we can raise any such financing and such financing could be dilutive to our shareholders.

No assurance can be given that we can raise any such financing and such financing could be dilutive to our shareholders.

We expect to acquire companies , and we are subject to evolving and often expensive corporate governance regulations and requirements.

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As a public reporting company whose shares are listed for trading on the NYSE American, we are subject to various regulations.

Compliance with these evolving regulations is costly and requires a significant diversion of management time and attention, particularly with regard to our disclosure on controls and procedures and our internal control over financial reporting.

Compliance with these evolving regulations is costly and requires a significant diversion of management time and attention, particularly regarding our disclosure on controls and procedures and our internal control over financial reporting.

As we have made and continue to make acquisitions in foreign countries, our internal controls and procedures may not be able to prevent errors or fraud in the future.

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• exposure to unknown or unanticipated liabilities, including foreign laws with which we are unfamiliar;

• disruption of our business and diversion of our management’s time and attention in order to develop acquired products, product candidates or technologies;

• disruption of our business and diversion of our management’s time and attention to develop acquired products, product candidates or technologies;

• incurrence of substantial debt or dilutive issuances of equity securities to pay for acquisitions, which we may not be able to obtain on favorable terms, if at all;

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• difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;

• entering into a long-term relationship with a partner that proves to be unreliable or counterproductive;

• entering a long-term relationship with a partner that proves to be unreliable or counterproductive;

• impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

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Generally, there is a high rate of failure for drug candidates proceeding through clinical trials.

We may suffer significant setbacks in our clinical trials similar to the experience of a number of other companies in the pharmaceutical and biotechnology industries.

We may suffer significant setbacks in our clinical trials, similar to the experience of several other companies in the pharmaceutical and biotechnology industries.

Further, even if we view the results of a clinical trial to be positive, the FDA or other regulatory authorities may disagree with our interpretation of the data.

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In addition, our inability to properly design, commence and complete clinical trials may negatively impact the timing and results of our clinical trials and ability to seek approvals for our drug candidates.

The farming of hemp is inherently risky, and failed crops can impact our balance sheet and profitability.

As the Farm Bill, legalizing hemp, became effective in 2019, legal hemp farming is relatively new in the U.S.

and few farmers have developed the requisite experience to grow, dry, and store hemp.

There are many factors that contribute to crop failure including:

picking the right seeds that can be germinated in a particular climate and soil condition, appropriate plant nutrition, pest control, and weather and hours of sunshine, among others.

Unlike other plants, growing hemp also involves growing a flower that will test at THC levels that are below legal levels of 0.3% THC by dry weight.

Therefore, if plants that are cultivated grow to levels of THC that are higher than the legal limit (“hot” plant), 1% for example, they will fail the state testing protocols and, in many cases, cannot be transported across state borders and will have to be destroyed.

In Arizona, where we cultivate hemp, while our plants passed inspection, across the entire hemp farming industry, approximately 40% of the crops failed inspection this past season.

In addition, the flowers of a hemp plant, unfortunately, look like those of the marijuana plant and attract thieves that believe it is marijuana and steal them.

The plants that are harvested must be dried to a particular moisture level, in order to be stored, or they could develop mold.

While many farmers grow plants all over the west coast, the support infrastructure to manage the yield and dry hemp plants did not exist before the onset of winter.

Therefore, growing hemp involves forethought and management of the entire chain of growing, drying, testing, transportation, and processing.

This past season, no plant insurance was available;

however, we anticipate that this will change.

While, we have taken many precautions to avert potential problems, we cannot guarantee that all or a portion of our plants will not be hot, stolen, or destroyed by extreme weather, among other risks, any of which could adversely impact our balance sheet and profitability.

The installation and delivery of equipment ordered from China may be delayed substantially as a result of shipping restrictions imposed due to COVID-19 and may impact our production and business adversely .

The Company ordered equipment from China for the processing of hemp.

Upon delivery of the equipment, the Chinese manufacturer is contracted to travel to the U.S.

to help commission and certify the equipment.

However, due to the recent outbreak of COVID-19, shipping and travel restrictions imposed to contain the epidemic and avoid further transmission have resulted in delays and may result in substantial delay in the shipping of the equipment.

As we cannot predict how long these restrictions will be in place, the delay in shipping equipment, and the delay in Chinese engineers traveling to the U.S., could and likely will adversely impact the production of our products and the provision of services to other farmers, customers and Company products.

This may also result in other market entrants obtaining a first mover advantage and may adversely impact our revenue in the Life Sciences segment.

A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.

The recent outbreak of COVID-19 has affected most of the world, including the U.S., European and Asian countries.

On March 11, 2020, the World Health Organization declared the outbreak a pandemic.

The COVID-19 pandemic is affecting the United States and global economies and has and may continue to affect our operations and those of third parties on which we rely, including by causing disruptions in the supply of our products candidates and the conduct of current and future clinical trials.

As the end of the COVID-19 pandemic remains unknown, the full extent of the impact of COVID-19 on the Company remains unknown as well.

The impact of COVID-19 on our operations is reflected in reduced revenue and increased expenses in both our Infrastructure and the Life Sciences segments.

In addition, the COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to our product candidates.

The evolving COVID-19 pandemic is also likely to directly or indirectly impact the pace of enrolment in our clinical trial for IGC-AD1 for at least the next several months and possibly longer as patients may avoid or may not be able to travel to healthcare facilities and physicians' offices unless due to a health emergency.

Such facilities and offices may also be required to focus limited resources on non-clinical trial matters, including treatment of COVID-19 patients, and may not be available, in whole or in part, for clinical trial services or our other product candidates.

Additionally, while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.

The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, financing, or clinical trial activities or on healthcare systems or the global economy as a whole.

However, these effects could have a material impact on our liquidity, capital resources, operations, and business and those of the third parties on which we rely.

Extreme weather conditions, crop diseases, pests and fluctuations in market demand can create substantial seasonal volatility for our business and results of operations.

A significant portion of the Company’s Life Sciences segment is seasonal and is subject to weather conditions that affect hemp prices and crop yields.

Our production is also vulnerable to crop diseases and pest infestations, which may vary in severity, depending on the stage of production at the time of infection or infestation, the type of treatment applied and climatic condition.

We consider the possibility of the occurrence of these adverse seasonal weather conditions in making our production plans to mitigate such risks.

However, such events may occur at any time of the year, and the occurrence of any of these events may create the volatility for our business and results of operations.

The market prices of hemp crops and agricultural produce are constantly affected by both demand and supply cycle of the hemp industry.

As a result, movements of the market prices would have significant impact on IGC’s earnings.

Whilst efforts have been made by Management to implement certain strategies that mitigate the cyclical nature of the business, there can be no assurance that IGC will be fully shielded from the negative effects of cyclical movements of the market prices of crops and agricultural produce.

We are dependent upon regulatory approvals and fixed term licenses for our ability to grow, harvest, process, and transport hemp and other products derived therefrom.

Our current authorization for growing, harvesting, processing and transport of cannabis is valid for a single growing season at a time and notification to AZDA is needed to renew the license for subsequent growing seasons.

All licenses are subject to ongoing compliance and reporting requirements and renewal.

There can be no assurance that AZDA will renew a license, even if the Company is in full compliance with all obligations related thereto.

There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the hemp market or any particular product, or consistent with currently held views.

The Management believes that the hemp industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the hemp produced.

Consumer perception can be significantly influenced by scientific research or findings, regulatory proceedings, litigation, media attention and other publicity regarding the consumption of hemp products.

Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the hemp industry and demand for its products and services, which could affect the Company’s business, financial condition and results of operations and cash flows.

The Company’s dependence upon consumer perception means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse effect on the Company, its business, financial condition, results of operations and cash flows.

Further, adverse publicity, reports or other media attention regarding the safety, efficacy and quality of hemp in general, or the Company’s products specifically, or associating the consumption of cannabis with illness or other negative effects or events, could have a material adverse effect.

Such adverse publicity or other media attention could arise even if the adverse effects associated with such products resulted from consumers’ failure to consume such products legally, appropriately, or as directed.

Unfavorable research reports, newspaper articles, social media, or testimonials can adversely affect our sales and consequently our stock price.

In addition, parties outside of the hemp industry with which the Company does business may perceive that they are exposed to reputational risk because of the Company’s hemp related business activities.

For example, the Company could receive a notification from a financial institution advising it that they would no longer maintain banking relationships with those in the hemp industry.

The Company may, in the future, have difficulty establishing or maintaining bank accounts or other business relationships that it needs to operate its business.

Failure to establish or maintain business relationships could have a material adverse effect.

We may fail to expand our growing and manufacturing capability in time to meet market demand for our products and product candidates, and the FDA may refuse to accept our facilities or those of our contract manufactures as being suitable for the production of our products and product candidates.

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In addition, before we can begin commercial manufacture of any medicinal product candidates for sale in the U.S., we must obtain FDA regulatory approval for the product, which requires a successful FDA inspection of the manufacturing facilities, which includes the facilities of the processor(s) and quality systems in addition to other product-related approvals.

The Company also established an approximately $2.4 million facility it intends to qualify as a Good Manufacturing Practice (GMP) certified processing facility in the State of Washington for processes such as:

a) production of products such as lotions, creams, and oils, among others, to support our products and to support white labeling;

b) extraction of hemp into crude oil;

and c) distillation of crude oil into hemp extracts.

There can be no assurance that the facility will receive the GMP certification.

Due to the complexity of the processes used to manufacture our product candidates, we may be unable to initially, or continue to, pass federal, state, or international regulatory inspections in a cost-effective manner.

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We may in the future face risks of litigation and liability claims, the extent of such exposure can be difficult or impossible to estimate and which can negatively impact our financial condition and results of operations.

Our operations are subject to numerous U.S., Indian and Hong Kong laws and regulations relating to the protection of the public and necessary disclosures in regard to financial services.

Our operations are subject to numerous laws and regulations of the U.S., India, Colombia, and Hong Kong relating to the protection of the public and necessary disclosures regarding financial services.

Liability under these laws involves inherent uncertainties.

Violations of financial regulation laws are subject to civil, and, in some cases, criminal sanctions.

Although we are not aware of any compliance related issues, we may not have been, or may not be, at all times, in complete compliance with all requirements, and we may incur costs or liabilities in connection with such requirements.

We may also incur unexpected interruptions to our operations, administrative injunctions requiring operation stoppages, fines and other penalties, which could negatively impact our financial condition and results of operations.

We may not have been, or may not be, or may be alleged to have not been or to not be, at all times, in complete compliance with all requirements, and we may incur costs or liabilities in connection with such requirements or allegations.

We may also incur unexpected interruptions to our operations, administrative injunctions requiring operation stoppages, fines judgments, settlements, or other financial obligations or penalties, which could negatively impact our financial condition and results of operations.

As of March 31, 2020, the Company and several of its officers and directors are parties to four (4) shareholder lawsuits.

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We can provide no assurance that we will be able to obtain liability insurance that would protect us from any such lawsuits.

In the event that are not covered by insurance, our management could expend significant time and resources addressing any such issues.

In the event that we are not covered by insurance, our management could expend significant time and resources addressing any such issues.

And, the legal fees necessary to defend against multiple lawsuits can be significant, impacting the Company’s overall bottom line when not covered by insurance or where the fees exceed the Company’s insurance policy limits.

Continued listing on the NYSE is an operating risk for the Company.

As previously disclosed, on October 29, 2018, NYSE suspended trading of the Company’s common stock and commenced proceedings to delist the Company’s stock from trading on the Exchange.

After a successful appeal, the Company’s stock was relisted for trading on the NYSE American on February 26, 2019.

However, given the current regulatory environment for hemp-based products, there remains risk with respect to the Company’s ability to maintain its listing with the NYSE.

This risk may limit the Company’s ability to pursue other business opportunities.

Given the current regulatory environment for hemp-based products and increased scrutiny of the industry related thereto, there remains risk with respect to the Company’s ability to maintain its listing with the NYSE American.

This risk may limit the Company’s ability to pursue other business opportunities and a delisting by the NYSE American could impact the liquidity of the Company’s common stock.

Our expansion is dependent on laws and regulations pertaining to hemp and cannabinoids.

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Further, any adverse pronouncements from regulators about businesses related to the legal cannabis industry, or the hemp industry could adversely affect our stock price.

Our company is in a very new and highly regulated industry.

Our C ompany is in a very new and highly regulated industry.

Significant and unforeseen changes in policy may have material impacts on our business.

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or in other jurisdictions, which would negatively impact our development of phytocannabinoid-based therapies and our ability to test and productize these therapies.

state laws are in conflict with the federal Controlled Substances Act.

state laws conflict with the federal Controlled Substances Act.

While we do not, and we do not intend, to distribute or sell marijuana in the U.S., it is unclear whether regulatory authorities in the U.S.

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In addition, the status of cannabinoids under the Controlled Substances Act may have an adverse effect on federal agency approval of pharmaceutical use of phytocannabinoid products.

Any such objection or interference could delay indefinitely or increase substantially the costs to access the equity capital markets, test our therapies, or create products from these plant and cannabinoid-based therapies.

Our business is dependent on continuing relationships with clients and strategic partners.

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The business and our results could be adversely affected if we are unable to maintain continuing relationships and pre-qualified status with key clients and strategic partners.

Our product candidates may be unable to achieve the expected market acceptance and, consequently, limit our ability to generate revenue from new products.

Our product candidates may be unable to achieve the expected market acceptance, consequently, limit ing our ability to generate revenue from new products.

Even when product development is successful and regulatory approval has been obtained, our ability to generate sufficient revenue depends on the acceptance of our products by customers.

We cannot assure you that Hyalolex™ and other products will achieve the expected level of market acceptance and revenue.

We cannot assure you that our products will achieve the expected level of market acceptance and revenue.

The market acceptance of any product depends on a number of factors such as, the price of the product, the effect of the product, the taste of the product, reputation of the Company, competition, and marketing and distribution support.

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Business interruptions could delay us in the process of developing our product candidates and could disrupt our product sales.

Loss of our manufacturing facilities, our growing plants, stored inventory or laboratory facilities through fire, theft, natural disasters or other causes, or loss of our botanical raw material due to pathogenic infection or other causes, could have an adverse effect on our ability to meet demand for cannabinoid products or to continue product development activities and to conduct our business.

Loss of our manufacturing facilities, our growing plants, stored inventory or laboratory facilities through fire, theft, natural disasters or other causes, or loss of our botanical raw material due to pathogenic infection, waste, destruction or other causes, could have an adverse effect on our ability to meet demand for cannabinoid products or to continue product development activities and to conduct our business.

Failure to supply our partners with commercial product may lead to adverse consequences.

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If our competitors’ market or develop alternative products that are approved more quickly or marketed more effectively than our product candidates or are demonstrated to be safer or more effective than our products, our commercial opportunities will be reduced or eliminated.

The plant and cannabinoid products industry is characterized by advancing technology, competition and a strong emphasis on developing proprietary products.

The Life Sciences products industry is characterized by advancing technology, competition, and a strong emphasis on developing proprietary products.

We face competition from a number of sources, some of which may target the same indications as our products or product candidates, such as pharmaceutical companies, including generic drug companies, biotechnology companies, drug delivery companies, and academic and research institutions, many of which have greater financial resources, marketing capabilities, including well-established sales forces, manufacturing capabilities, research and development capabilities, experience in obtaining regulatory approvals for product candidates and other resources than us.

We may not be able to differentiate any products that we may market from those of our competitors, successfully develop or introduce new products that are less costly or offer better performance than those of our competitors, or offer purchasers of our products payment and other commercial terms as favorable as those offered by our competitors.

In addition, there are a number of established products already commercially available and under development by other companies that treat the indications that our product candidates are intended to treat.

In addition, there are several established products already commercially available and under development by other companies that treat the indications that our product candidates are intended to treat.

Currency fluctuations may reduce our assets and profitability.

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• Strategic decisions made by us and our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, and changes in business strategy;

• Economic conditions, including but not limited to, the adverse impact on operating results due to the COVID-19 pandemic.

We may not successfully register the provisional patents with the USPTO.

We have filed ten provisional patents with the USPTO, in the combination therapy space, for the indications of pain, medical refractory epilepsy, eating disorders, and cachexia as part of our intellectual property strategy focused on the phytocannabinoid-based health care industry.

Although, one patent has been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO.

Although, two patents have been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO.

If we are unsuccessful in registering patents, our ability to create a valuable line of products can be adversely affected.

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● re-design, re-engineer, or re-brand our products or packaging;

● enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property.

● enter into royalty or licensing agreements to obtain the right to use a third party’s intellectual property.

In the event of claims by third parties for infringement of intellectual property rights we license from third parties under wholesale license agreements, we could be liable for costs of defending allegations of infringement, and there are no assurances the licensors will either adequately defend the licensed intellectual property rights or that they would prevail in the related litigation.

In that event, we would incur additional costs and may deprived from generating royalties from these agreements.

We may face risks relating to h ealth c are p rivacy and s ecurity l aws .

We may face risks relating to health care privacy and security laws.

We may be subject to various privacy and security regulations, including but not limited to HIPAA, as amended by HITECH, and their respective implementing regulations, including the related final published omnibus rule.

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Some of our lines of business will rely on third-party service providers to host and deliver services and data, and any interruptions or delays in these hosted services, security or privacy breaches, including cybersecurity attacks, or failures in data collection could expose us to liability claims, increased costs, reduced revenue, and harm our business and reputation.

Our lines of business and services, but especially our development of cannabinoids-based combination therapies for products, including Hyalolex™, and other products for PD, chronic pain, post-traumatic stress disorder, and eating disorders, and our long-term use and/or development of blockchain technologies to solve critical issues facing the Cannabinoids industry, rely on services hosted and controlled directly by our suppliers and distributors and their third-party service providers.

We do not have redundancy for all of our systems;

Our lines of business and services, but especially our development of cannabinoids-based combination therapies for products, including Hyalolex™, Drops of Clarity™ and other products in that brand, chronic pain, post-traumatic stress disorder, and eating disorders, and our long-term use and/or development of blockchain technologies to solve critical issues facing the cannabinoids industry, rely on services hosted and controlled directly by our suppliers and distributors and their third-party service providers.

We do not have redundancy for all our systems;

many of our critical applications reside in only one of our data centers, and our disaster recovery planning may not account for all eventualities.

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If we supply inaccurate information or experience interruptions in our ability to capture, store and supply information in near real time or at all, our reputation could be harmed, we could lose customers, or we could be found liable for damages or incur other losses.

All of our data, except accounting data, is stored in the cloud on multiple servers that helps us mitigate the overall risk of losing data.

All our data is stored on the cloud on multiple servers that helps us mitigate the overall risk of losing data.

We have a cybersecurity policy in place and are in the process of implementing tighter cybersecurity measures to safeguard against hackers.

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Laws and regulations relating to the handling of personal data may impede the adoption of our services or result in increased costs, legal claims, fines against us, or reputational damage.

Risks Related to o wnership of o ur c ommon s tock

We rely on third parties to process, manufacture and to compound some of our products, we have no control over these third part ies and we may not be able to obtain quality products on a timely basis or in sufficient quantity.

Some of our products are manufactured or compounded by unaffiliated third parties.

We do not have any long-term contracts with any of these third parties, and we expect to compete with other companies for raw materials, production and import capacity.

If we experience significant increased demand, or need to replace an existing manufacturer, there can be no assurance that additional manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any manufacturer or compounder would allocate sufficient capacity to us in order to meet our requirements.

In addition, even if we are able to expand existing or find new sources, we may encounter delays in production and added costs as a result of the time it takes to engage third parties.

Any delays, interruption or increased costs in the manufacturing or compounding of our products could have an adverse effect on our ability to meet retail customer and consumer demand for our products and result in lower revenues and net income both in the short and long-term.

We face risks associated with the manufacture of our products which could adversely affect our business and financial results.

We are subject to the risks inherent in manufacturing our products, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in supply chain or information systems, loss or impairment of key manufacturing sites or suppliers, product quality control, safety, increase in commodity prices and energy costs, licensing requirements and other regulatory issues, as well as natural disasters and other external factors over which we have no control.

If such an event were to occur, it could have an adverse effect on our business and financial results.

The Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation risk.

The Company records a write-down for product and component inventories that become obsolete or exceed anticipated demand, or for which cost exceeds net realizable value.

The Company may also accrue necessary cancellation fee reserves for orders of excess products and components.

The Company reviews long-lived assets, including capital assets held at its suppliers’ facilities and inventory prepayments, for impairment whenever events or circumstances indicate the assets may not be recoverable.

If the Company determines that an impairment has occurred, it records a write-down equal to the amount by which the carrying value of the asset exceeds its fair value.

Although the Company believes its inventory, capital assets, inventory prepayments and other assets and purchase commitments are currently recoverable, no assurance can be given that the Company will not incur write-downs, fees, impairments and other charges given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.

The Company orders components for its products and builds inventory in advance of product announcements and shipments.

Manufacturing purchase obligations cover the Company’s forecasted component and manufacturing requirements, typically for periods up to 150 days.

Because the Company’s markets are volatile, competitive and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of components or products, or not fully utilize firm purchase commitments.

Our accounting personnel may make unintentional errors.

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For more information, please see Item 9A, “Controls and Procedures.”

Risks Related to ownership of our common stock

Future sales of common stock by us could cause our stock price to decline and dilute your ownership in our Company.

Our certificate of incorporation authorizes the issuance of up to 150,000,000 shares of Common Stock, par value $0.0001 per share and 1,000,000 shares of preferred stock, par value $0.0001 per share.

The Company has 11,672,178 outstanding public warrants (IGC:

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In addition, the stock market, in general, has historically experienced significant price and volume fluctuations.

Our common stock has also been volatile, with our 52-week price range being at a low of $0.25 and a high of $14.58 per share.

Our common stock has also been volatile, with our 52-week closing price range being at a low of $0.3 and a high of $2.07 per share.

These fluctuations are often unrelated to the operating performance of particular companies.

These broad market fluctuations may cause declines in the market price of our common stock.

In addition, it is possible, given our current trading price, that we may fail to comply with the minimum trading price required to trade our shares on the NYSE American.

In addition, it is possible, given our current trading price, that we may fail to comply with the minimum trading price required to trade our shares on the NYSE American, resulting in delisting of our shares.

The stock market in general has recently experienced relatively large price and volume fluctuations, particularly in response to the COVID-19 outbreak.

In particular, the market prices of securities of smaller biotechnology and medical device companies have experienced dramatic fluctuations that often have been unrelated or disproportionate to the operating results of these companies.

Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock.

In addition, price volatility may increase if the trading volume of our common stock remains limited or declines.

Our publicly-filed reports are subject to review by the SEC, and any significant changes or amendments required as a result of any such review may result in material liability to us and may have a material adverse impact on the trading price of our common stock.

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UNRESOLVED STAFF COMMENTS

Our headquarters is located in Maryland.

As of March 31, 2019, the Company owned about 6,000 square feet of office space in India and U.S., and rented about 18,000 square feet in India and U.S.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors