What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-20 compared with 2020-08-19 · 252 added, 246 removed, 472 unchanged (51% of the section changed)

3 unchanged sentences

(in thousands, except share data)

June 30, 2020

March 31, 2020

September 30,

Current assets:

24 unchanged sentences

Preferred stock, $0.0001 per value:

authorized 1,000,000 shares, no share issued or outstanding as on June 30, 2020 and March 31, 2020

authorized 1,000,000 shares, no shares issued or outstanding as of September 30, 2020 or March 31, 2020.

Common stock and additional paid-in capital, $0.0001 par value:

150,000,000 shares authorized;

41,196,130 and 39,320,116 shares issued and outstanding as on June 30, 2020 and March 31, 2020, respectively.

41,304,365 and 39,320,116 shares issued and outstanding as of September 30, 2020 and March 31, 2020, respectively.

Accumulated other comprehensive loss

3 unchanged sentences

The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.

| June 30, 2020 Form 10-Q

| September 30, 2020 Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands, except loss per share)

Three months ended June 30,

Cost of revenues

Selling, general and administrative expenses

Three months ended September 30,

Six months ended September 30,

Cost of revenue

General and administrative expenses

Research and development expenses

2 unchanged sentences

Loss before income taxes

Income taxes expense

Income tax expense/benefit

Net loss attributable to common stockholders

5 unchanged sentences

The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.

| June 30, 2020 Form 10-Q

| September 30, 2020 Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Common Shares

4 unchanged sentences

Total Stockholders'

Balances as of March 31, 2019

Balances as of June 30, 2019

Common stock-based compensation & expenses, net

Loss on foreign currency translation

Balances as of September 30, 2019

Three Months Ended September 30, 2020

Balances as of June 30, 2020

Three Months Ended June 30, 2020

Common stock-based compensation & expenses, net

Loss on foreign currency translation

Balances as of September 30, 2020

Six months ended September 30, 2019

Common Shares

Common Stock and

Additional Paid in

Accumulated Other

Comprehensive Loss

Total Stockholders'

Balances as of March 31, 2019

Common stock-based compensation & expenses, net

Loss on foreign currency translation

Balances as of September 30, 2019

Six months ended September 30, 2020

Balances as of March 31, 2020

Common stock-based compensation & expenses, net

Common stock issued for investment

Loss on foreign currency translation

Balances as of June 30, 2020

Balances as of September 30, 2020

The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.

| June 30, 2020 Form 10-Q

| September 30, 2020 Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three months ended

Six months ended

September 30,

Operating activities:

10 unchanged sentences

Purchase of property, plant and equipment

Investment in marketable securities

Proceed from /Investment in marketable securities

Investment in non-marketable securities

2 unchanged sentences

Financing activities:

Issuance of equity stock (net of expenses)

Proceeds from long- term loan

1 unchanged sentence

Effects of exchange rate changes on cash and cash equivalents

Net increase/(decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

3 unchanged sentences

Non-cash items:

Common stock issued/granted including ESOP, consultancy and patent acquisition

Common stock issued/granted including ESOP, consultancy

Common stock issued/granted other than ESOP, consultancy

The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.

| June 30, 2020 Form 10-Q

| September 30, 2020 Form 10-Q

India Globalization Capital, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED JUNE 30, 2020

THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2020

(in thousands, except for share data and loss per share, unaudited)

8 unchanged sentences

(a) the execution of construction contracts, (b) the purchase and resale of physical commodities used in infrastructure, and (c) the rental of heavy construction equipment.

Information about our infrastructure products and service offerings is available at www.igcinc.us.

Our revenue for the three months ended June 30, 2019 was primarily derived from this segment.

The Company’s Life Sciences segment, formerly known as the Plant and Cannabinoid business, managed from the United States (“U.S.”), involves:

(a) the development of potential new drugs, subject to applicable regulatory approvals, (b) several CBD-based and non-CBD-based products and brands in various stages of development, for sale online and through stores, including non-CBD-based hand sanitizers, among others, (c) wholesale of hemp extracts including hemp crude extract and hemp isolate, among others, (d) hemp growing and processing facilities, (e) white labeling of hemp-based products and (f) the offering of tolling services like extraction and distillation to hemp farmers.

Our revenue for the three months ended June 30, 2020, was primarily derived from this segment.

The current COVID-19 pandemic and the associated social distancing and reduced foot traffic to stores continues to adversely impact our ability to distribute products and provide services.

The Company’s principal office in the U.S.

is in Maryland, and the Company has a facility in Washington State and offices in Colombia, Hong Kong, and India.

The Company’s revenue for the six months ended September 30, 2019 was primarily derived from this segment.

The Company’s Life Sciences segment, managed from the United States (“U.S.”), involves:

(a) the development of potential new drugs, subject to applicable regulatory approvals, (b) several hemp-based and non-hemp-based products and brands in various stages of development, for sale online and through stores, including tinctures, creams for pain relief, a beverage, and hand sanitizers, among others, (c) wholesale of hemp extracts including hemp crude extract and hemp isolate, among others, (d) hemp growing and processing facilities, (e) white labeling of hemp-based products and (f) the offering of tolling services like extraction and distillation to hemp farmers.

The Company’s revenue for the six months ended September 30, 2020 was primarily derived from this segment.

The Company’s principal office is located in the U.S.

Additionally, the Company has a facility in Washington and offices in Colombia, Hong Kong, and India.

Business updates

On July 30, 2020, IGC received notice from the FDA to proceed with a 12-subject Phase 1 human clinical trial (“removal of full clinical hold”) on its Investigational New Drug Application (“INDA”), submitted under Section 505(i) of the Federal Food, Drug, and Cosmetic Act, for IGC-AD1.

The Phase 1 trial will involve a randomized placebo controlled Multiple Ascending Dose (“MAD”) study to evaluate safety and tolerability of IGC-AD1 in subjects with mild to severe dementia due to Alzheimer’s disease.

In addition, the study will evaluate pharmacokinetics (“PK”) and collect data on other factors.

The Company’s IGC-AD1 formulation is based on a patent filed by the University of South Florida (“USF”) that uses a cannabinoid as one of the active ingredients.

The Company has exclusive rights to the patent filing.

The Company has suffered losses and setbacks due to the COVID-19 pandemic, including being delayed in executing an ongoing construction contract, being unable to commission equipment, and having to slow down operations because of COVID-19.

In response to the COVID-19 pandemic, the Company manufactured and distributed alcohol-based hand sanitizers.

The majority of our revenue for the three months ended June 30, 2020, is from the sale of hand sanitizers.

In an effort to help some of the hardest hit communities, we donated hand sanitizers to the Federal Emergency Management Agency (“FEMA”), the Navajo Indians in Arizona, the Crow Indian reservation in Montana, and the Sioux reservation in South Dakota.

The current SARS-CoV-2 (“COVID-19”) pandemic and its impact on certain aspects of the economy has severely impacted our revenue and increased our expenses.

In the past 6 months, our ability to provide services and distribute our products has been impacted due to store closures and abandoned harvests of hemp.

Our facility on the West Coast and our Delhi office have had COVID-19 outbreaks that have led to closures, delays and expenses.

In response, we began decreasing our staff, delayed and may ultimately terminate the Evolve I, Inc.

acquisition, and have reoriented our sales focus to online.

In addition, we have begun our Phase 1 human trial on IGC-AD1.

IGC remains committed to its Infrastructure business line and intends to continue pursuing the execution of construction contracts, the purchase and resale of physical commodities used in infrastructure, and the rental of heavy construction equipment as the COVID-19 pandemic allows.

Investigational Drug Candidate (“IDC”) , IGC-AD1:

Subsequent to September 30, 2020, the Company received an approval from the Institutional Review Board (“IRB”), engaged a Principal Investigator, engaged a study site, and began enrolling participants for a Phase 1 trial on its IDC.

As previously reported, on July 30, 2020, IGC received notice from the FDA to proceed with a 12-subject Phase 1 human clinical trial (“removal of full clinical hold”) on its Investigational New Drug Application (“INDA”), IGC-AD1, submitted under Section 505(i) of the Federal Food, Drug, and Cosmetic Act.

In order to get an investigational drug approved as a pharmaceutical drug, the Sponsor, in this case IGC Pharma, LLC, a subsidiary of IGC, must conduct several trials and gather data.

These typically start with pre-clinical trials that involve testing the IDC on cells outside of a living organism (in vitro), followed by animal testing.

In our case, the in vitro data along with animal data was previously disclosed.

| September 30, 2020 Form 10-Q

Based on promising evidence, we decided to pursue human trials for which the FDA must give permission before the IDC can be tested on humans.

In 2018, we began the process of submitting an Investigational New Drug Application (INDA) to the FDA.

This involves presenting among others, the results of in vitro and animal studies, safety data, the protocol outlining how a potential trial will be run, how data will be collected, how patient data will be protected, how the IDC will be made, who will make it, what is in it, how stable the IDC is, as well as details on the Chemistry, Manufacturing and Controls (CMC) that will be followed.

In addition, we committed to getting an Informed Consent Form (ICF) from participants, that the ICF would be reviewed and approved by an IRB, and that the Sponsor will follow all the rules required for studying IDCs, including those surrounding COVID-19.

There are several stages, or phases, of trials that build on previous phases.

Phase zero, not a requirement, is typically in small doses to small groups to gather anecdotal evidence of efficacy and safety.

We gathered anecdotal unscientific evidence mostly to ascertain safety and get feedback from patients through 2018 and 2019.

Phase 1 studies are conducted to find the highest dose that a patient can tolerate without severe side effects.

Phase 2 clinical trials are conducted to ascertain if the IDC has the expected efficacy, that is it does what is expected, and phase 3 studies are conducted to measure responses against existing drugs or treatments.

Our Phase 1 study is a placebo-controlled study.

IGC-AD1 will be administered for three 14-day periods with the dose escalated in each period.

The participants will be monitored daily, certain data will be collected, and while safety is the main concern, we will also, for research purposes, collect data beyond safety.

For example, we expect to collect data on how fast the IDC is absorbed through the body, how long it lasts, and whether different individuals process it differently (polymorphisms of P4502C9 on pharmacokinetics).

In addition, we will monitor certain behavioral aspects of the patient that can help us in the next phases of the study.

The patients that we sign up for the study are individuals suffering from mild to severe dementia due to Alzheimer’s disease.

Other updates:

On July 17, 2020, the Company filed a provisional patent application with the USPTO for its IGC-511 formulation for a Cannabidiol based composition and method for treating pain.

On August 5, 2020, the USPTO issued the Company a patent (#10751300) for the Company’s cannabinoid formulation (IGC-502) for the treatment of seizures in humans and veterinary animals.

The Company is executing a road building contract in Kerala, India valued at approximately $1.2 million.

The Company estimates that it will take between 12 and 15 months to complete the work.

Work on this project has been temporarily delayed due to COVID-19.

We expect to re-start the project as soon as COVID-19 restrictions are lifted, and we are able to deploy our work force.

On July 17, 2020, the Company filed a provisional patent application with the USPTO for its IGC-511 formulation for Cannabidiol based composition and method for treating pain.

On July 6, 2020, the United States District Court for the District of Maryland entered an order formally and finally approving the January 2020 formal settlement agreement between the derivative plaintiffs, the Company, and the named defendant directors and officers, thereby resolving all pending derivative suits.

All derivative actions have now been formally terminated.

Please refer Part II, Item 1, Legal Proceedings.

On May 12, 2020, the Company completed an investment under the terms of a Share Subscription Agreement (“SSA”) with Evolve I, Inc., a Washington corporation (“Evolve”), by transferring part of the consideration to Evolve.

As of June 30, 2020, the Company owns an approximately 19.8% interest in Evolve.

| June 30, 2020 Form 10-Q

Work on this project had been temporarily delayed due to COVID-19 and was partially resumed during the three months ended September 30, 2020.

Business Organization

As of June 30, 2020, the Company had the following direct operating subsidiaries:

As of September 30, 2020, the Company had the following direct operating subsidiaries:

Techni Bharathi Private Limited (“TBL”), IGCare, LLC (“IGCare"), Holi Hemp, LLC (“Holi Hemp”), IGC Pharma, LLC (“IGC Pharma”), SAN Holdings, LLC (“SAN Holdings”), Sunday Seltzer, LLC (“Sunday Seltzer”) and Colombia-based beneficially owned subsidiary Hamsa Biochem SAS (“Hamsa”).

2 unchanged sentences

The Company’s filings are available on www.sec.gov.

We have employees, contract workers and advisors in the U.S., India, Colombia, and Hong Kong.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

GAAP”) as determined by the Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the Securities Exchange Commission (“SEC”).

Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.

Accordingly, they do not include all the information and footnotes required by U.S.

GAAP for complete financial statements.

In the opinion of Management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included.

1 unchanged sentence

These interim statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2020 (“Fiscal 2020”) contained in the Company’s Form 10-K for Fiscal 2020, filed with the SEC on July 13, 2020, specifically in Note 2 to the consolidated financial statements.

| September 30, 2020 Form 10-Q

Principles of consolidation

26 unchanged sentences

Dollar (USD), the INR, the HKD or the COP affect financial statements.

| June 30, 2020 Form 10-Q

The accompanying financial statements are reported in USD.

5 unchanged sentences

Transaction gains and losses are recognized in the consolidated statements of operations.

Reclassifications

Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation.

A short-term loan in the amount of approximately $50 thousand has been reclassified to non-current liability from current liability.

Impairment of long – lived assets

5 unchanged sentences

Unlike goodwill, long-lived assets are assessed for impairment only where there are any specific indicators for impairment.

No impairment has been recorded for the three months ended June 30, 2020, and 2019.

No impairment has been recorded for the six months ended September 30, 2020, and 2019.

| September 30, 2020 Form 10-Q

Short-term and long-term investments

8 unchanged sentences

Where the Company does not have significant influence, the Company has accounted for the investment in accordance with ASC Topic 321, “ Investments-Equity Securities ”.

As of June 30, 2020, investment in marketable securities is valued at fair value and investment in non-marketable securities with ownership less than 20% is valued at cost as per ASC Topic 321, “ Investments-Equity Securities ”.

| June 30, 2020 Form 10-Q

As of September 30, 2020, investment in marketable securities is valued at fair value and investment in non-marketable securities with ownership less than 20% is valued at cost as per ASC Topic 321, “ Investments-Equity Securities ”.

Stock – Based Compensation

6 unchanged sentences

The assumptions used in calculating the fair value of stock-based awards represent Management’s best estimates.

The closing share price of the Company’s common stock on the date of grant is considered the fair-value of the share.

Generally, the closing share price of the Company’s common stock on the date of grant is considered the fair-value of the share.

The volatility factor is determined based on the Company’s historical stock prices.

1 unchanged sentence

The Company has never declared or paid any cash dividends.

Equity awards issued to non-employees are recorded at their fair value on the grant date as they are immediately exercisable and not forfeitable on the date of grant.

Accounts receivable

1 unchanged sentence

If the financial condition of a customer deteriorates, additional allowances may be required.

We had $264 thousand of accounts receivable, net of provision for doubtful debt of $9 thousand as of June 30, 2020, as compared to $133 thousand of accounts receivable, net of provision for doubtful debt of $9 thousand as of March 31, 2020.

Inventory is valued at the lower of cost or net realizable value, net realizable value defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Inventory consists of raw materials, finished goods related to wellness products, hand sanitizers, finished CBD products, among others as well as work-in-progress such as extracted crude oil, CBD isolate, growing crops, and herbal oils, among others.

We had $241 thousand of accounts receivable, net of provision for doubtful debt of $10 thousand as of September 30, 2020, as compared to $133 thousand of accounts receivable, net of provision for doubtful debt of $9 thousand as of March 31, 2020.

Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Inventory consists of raw materials, finished goods related to wellness products, hand sanitizers, finished hemp-based products, beverages, among others as well as work-in-progress such as extracted crude oil, hemp-based isolate, growing crops, and herbal oils, among others.

Work-in-progress also includes product manufacturing in process, costs of growing hemp, in accordance with applicable laws and regulations including but not limited to labor, utilities, fertilizers and irrigation.

2 unchanged sentences

Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes.

| September 30, 2020 Form 10-Q

Harvested crops are measured at net realizable value, with changes recognized in profit or loss only when the harvested crop:

4 unchanged sentences

Hence, the Company values its harvested crops at cost.

Please refer note – “Note 3 - Inventory”, for further information.

Please refer to Note 3 – “Inventory”, for further information.

Fair value of financial instruments

4 unchanged sentences

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

| June 30, 2020 Form 10-Q

The carrying amounts of the Company’s financial instrument includes cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair values due to the nature of the items.

Please refer to Note 16 - “Fair Value of Financial Instruments”, for further information.

Earnings/(Loss) per Share

The computation of basic loss per share for the three months ended June 30, 2020, excludes potentially dilutive securities of approximately 3.2 million shares which includes share options, unvested shares such as restricted shares and restricted share units, granted to employees and advisors, warrants, and shares from the conversion of outstanding units, if any, because their inclusion would be anti-dilutive.

The weighted average number of shares outstanding for the three months ended June 30, 2020 and 2019, used for the computation of basic earnings per share (“EPS”) is 40,189,222 and 39,508,110, respectively.

Due to the loss incurred during the three months ended June 30, 2020 and 2019, all the potential equity shares are anti-dilutive and accordingly, the fully diluted EPS is equal to the basic EPS.

Loss per Share

The computation of basic loss per share for the six months ended September 30, 2020, excludes potentially dilutive securities of approximately 3.3 million shares which includes share options, unvested shares such as restricted shares and restricted share units, granted to employees and advisors, warrants, and shares from the conversion of outstanding units, if any, because their inclusion would be anti-dilutive.

The weighted average number of shares outstanding for the six months ended September 30, 2020 and 2019, used for the computation of basic earnings per share (“EPS”) is 40,719,548 and 39,529,440, respectively.

Due to the loss incurred during the six months ended September 30, 2020 and 2019, all the potential equity shares are anti-dilutive and accordingly, the fully diluted EPS is equal to the basic EPS.

Cybersecurity

We have a cybersecurity policy in place and tighter cybersecurity measures to safeguard against hackers.

In three months ended June 30, 2020, there were no impactful breaches in cybersecurity.

In the six months ended September 30, 2020, there were no impactful breaches in cybersecurity.

Intangible Assets

The Company's intangible assets consist of trademarks and other intellectual property, all of which are accounted for in accordance with ASC Topic 350, Intangibles – Goodwill and Other .

The Company employs the non-amortization approach to account for purchased intangible assets having indefinite lives.

Under the non-amortization approach, intangible assets having indefinite lives are not amortized into the results of operations, but instead are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value.

We perform an impairment analysis on March 1 annually on the indefinite-lived intangible assets following the steps laid out in ASC 350-30-35-18.

Our annual impairment analysis includes a qualitative assessment to determine if it is necessary to perform the quantitative impairment test.

In performing a qualitative assessment, we review events and circumstances that could affect the significant inputs used to determine if the fair value is less than the carrying value of the intangible assets.

If a quantitative analysis is necessary, we would analyze various aspects including revenues from the business, associated with the intangible assets.

In addition, intangible assets will be tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred.

The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe it is more likely that an impairment loss has been incurred.

| September 30, 2020 Form 10-Q

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated period of benefit.

In accordance with ASC 360-10-35-21, definite lived intangibles are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value.

Revenue Recognition

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (ASC 606).

The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

ASC 606 prescribes a 5-step process to achieve its core principle.

The Company recognizes revenue from trading, rental, or product sales as follows:

Identify the contract with the customer

Identify the contractual performance obligations

Determine the amount of consideration/price for the transaction

Allocate the determined amount of consideration/price to the performance obligations

Recognize revenue when or as the performing party satisfies performance obligations.

The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the Infrastructure and Life Sciences segment.

Revenue in the Infrastructure Business is recognized for the renting business when the equipment is rented, and terms of the agreement have been fulfilled during the period.

The revenue from the purchase and resale of physical infrastructure commodities is recognized once the bill of lading along with the invoice have been transferred to the customer.

Revenue from the execution of infrastructure contracts is recognized on the basis of the output method as and when part of the performance obligation has been completed and approval from the contracting agency has been obtained after survey of the performance completion as of that date.

In the Life Sciences segment, the revenue from the wellness and lifestyle business is recognized once goods have been sold to the customer and the performance obligation has been completed.

In retail sales, we offer consumer products through our online and physical stores.

Revenue is recognized when control of the goods is transferred to the customer.

This generally occurs upon our delivery to a third-party carrier or, to the customer directly.

Revenue from tolling services is recognized when the performance obligation, such as processing of the material, has been completed and output material has been transferred to the customer.

We license our products to processors.

The royalty income from licensing is recognized once goods have been sold by the processor to its customers.

Net sales disaggregated by significant products and services for the six months ended September 30, 2020 and 2019 were as follows:

(in thousands)

Six months ended September 30,

Infrastructure segment

Rental income (1)

Construction contracts (2)

Purchase and resale of physical commodities (3)

Life Sciences segment

Wellness and Lifestyle (4)

Tolling/White labeling service (5)

(1) Rental income consists of income from rental of heavy construction equipment.

(2) Construction income consists of the execution of contracts directly or through subcontractors.

The Company expects to complete the project within 12 to15 months, depending on the status of the COVID-19 pandemic.

(3) Relates to the income from purchase and resale of physical commodities used in infrastructure, like steel, wooden doors, marble, and tiles.

(4) Relates to revenue from Life Sciences segment such as sale of hand sanitizer, bath bombs, gummies, hemp crude extract, hemp isolate, and hemp distillate and royalty income from the sale of Hyalolex™, now named Hyalolex™ Drops of Clarity™.

(5) Relates to income from tolling and white label services.

| September 30, 2020 Form 10-Q

Lessor Accounting

Under the guidance, contract consideration will be allocated to its lease components and non-lease components (such as maintenance).

Under the current ASU guidance, contract consideration will be allocated to its lease components and non-lease components (such as maintenance).

For the Company as a lessor, any non-lease components will be accounted for under ASC Topic 606, “ Revenue from Contracts with Customers ”, unless the Company elects a lessor practical expedient to not separate the non-lease components from the associated lease component.

11 unchanged sentences

Leases on nonaccrual status remain classified as such until there is sustained payment performance that, in the Company’s judgment, would indicate that all contractual amounts will be collected in full.

| June 30, 2020 Form 10-Q

Lessee Accounting

11 unchanged sentences

All right-of-use assets are reviewed for impairment.

There was no impairment for right-of-use lease assets as of June 30, 2020.

There was no impairment for right-of-use lease assets as of September 30, 2020.

| September 30, 2020 Form 10-Q

The Company categorizes leases at their inception as either operating or finance leases.

6 unchanged sentences

Newly issued ASUs not listed below are expected to have no impact on the Company’s consolidated financial position and results of operations, because either the ASU is not applicable, or the impact is expected to be immaterial.

Not yet adopted

Investments , Derivatives and Hedging:

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815):

Clarifying the Interactions between Topics 321, 323 and 815.

The new standard addresses accounting for the transition into and out of the equity method and measurement of certain purchased options and forward contracts to acquire investments.

The amendment is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company is evaluating the impact of this update.

Recently adopted

In August 2018, the FASB issued ASU 2018-13.

Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.

The amendments in the standard apply to all entities that are required, under existing GAAP, to make disclosures about recurring or nonrecurring fair value measurements.

ASU 2018-13 removes, modifies, and adds certain disclosure requirements in ASC 820, Fair Value Measurement.

The standard is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The adoption of this guidance did not have a material impact on our consolidated financial statements.

Collaborative Arrangement :

Clarifying the Interaction Between Topic 808 and Topic 606, which clarifies when transactions between participants in a collaborative arrangement are within the scope of the FASB’s revenue standard, Topic 606.

The standard is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with early adoption permitted.

The adoption of this guidance did not have a material impact on our consolidated financial statements.

| June 30, 2020 Form 10-Q

Intangibles-Goodwill and Other-Internal-Use Software :

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.

ASU 2018-15 (Subtopic 350-40) aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.

The adoption of this guidance did not have a material impact on our consolidated financial statements.

NOTE 3 – INVENTORY

(in thousands)

June 30, 2020

September 30, 2020

March 31, 2020

2 unchanged sentences

Finished Goods

Inventory in the form of work-in-progress as of June 30, 2020, is comprised of, but not limited to, various hemp-based extracts such as crude oil, hemp distillate, and hemp isolate.

Inventory in the form of work-in-progress as of September 30, 2020, is comprised of, but not limited to, various hemp-based extracts such as crude oil, hemp distillate, and hemp isolate.

The Company accounts all hemp extracts as Work-in-Progress until they are in the processing facility.

Inventory also includes cost related to growing crops like seeds, fertilizer, other raw materials, labor, farm related overheads and the depreciation of farming equipment, hand sanitizers, personal protection equipment, among others.

NOTE 4 – DEPOSITS AND ADVANCES

(in thousands)

June 30, 2020

September 30, 2020

March 31, 2020

4 unchanged sentences

Prepaid expense and other current assets

The Advances to suppliers and consultants primarily relate to advance to suppliers in our Life Sciences and Infrastructure segment.

Advances for Property, Plant and Equipment include an advance paid for equipment for our processing facility in the State of Washington.

| June 30, 2020 Form 10-Q

The Advances to suppliers and consultants primarily relate to advances to suppliers in our Life Sciences and Infrastructure segment.

Advances for Property, Plant and Equipment include an advance paid for equipment for our processing facility.

| September 30, 2020 Form 10-Q

NOTE 5 – INTANGIBLE ASSETS

1 unchanged sentence

(in thousands)

June 30, 2020

September 30, 2020

March 31, 2020

6 unchanged sentences

Total Intangible assets

The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing 10 patents and 32 trademarks.

The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing approximately 11 patents and 35 trademarks.

It also includes acquisition costs related to brands and domains.

The amortization of patent and patent rights is up to 20 years, commencing from the date of grant.

The amortization of website and domains is up to 10 years.

Trademarks and other patents that have not been granted have not been amortized.

The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets.

The amortization expense in three months ended June 30, 2020 and 2019, amounted to approximately $3 thousand and nil, respectively.

The Company regularly reviews its intangible assets to determine if any intangible asset is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period and concluded that, as of June 30, 2020, there was no impairment.

The amortization of patent and patent rights with finite life is up to 20 years, commencing from the date of grant.

The amortization expense in the three months ended September 30, 2020 and 2019, amounted to approximately $3 thousand and $4 thousand, respectively, whereas the amortization expense in the six months ended September 30, 2020 and 2019, amounted to approximately $6 thousand and $4 thousand, respectively.

Estimated amortization expense

8 unchanged sentences

Useful Life (years)

June 30, 2020

September 30, 2020

March 31, 2020

8 unchanged sentences

Total Property, plant and equipment, net

| June 30, 2020 Form 10-Q

Depreciation expense in the three months ended June 30, 2020 and 2019, amounted to approximately $74 thousand and $17 thousand, respectively.

| September 30, 2020 Form 10-Q

The depreciation expense in the three months ended September 30, 2020 and 2019, amounted to approximately $104 thousand and 24, respectively, whereas depreciation expense in the six months ended September 30, 2020 and 2019, amounted to approximately $178 thousand and $41 thousand, respectively.

The net increase in total Property, Plant & Equipment is primarily due to the set-up of product manufacturing, processing, and packaging facilities, in the U.S.

subsidiaries.

The net decrease in land and accumulated depreciation is primarily due to foreign exchange translations because of a decline in value of foreign currencies.

The construction is progress relates to the Washington facility under construction.

The net increase in land and accumulated depreciation is primarily due to foreign exchange translations because of a decline in value of foreign currencies.

The construction in progress relates to the Washington facility under construction.

For more information, please refer to Note 18 – Segment Information for the non-current assets other than financial instruments held in the country of domicile and foreign countries.

1 unchanged sentence

(in thousands)

June 30, 2020

March 31, 2020

September 30, 2020

Investment in equity shares of unlisted company

1 unchanged sentence

On May 12, 2020, the Company completed an investment under the terms of the Share Subscription Agreement (“SSA”) with Evolve I, Inc., a Washington corporation (“Evolve”), by transferring part of the consideration to Evolve.

As of June 30, 2020, the Company owns approximately 19.8% interest in Evolve.

As of September 30, 2020, the Company owns approximately 19.8% interest in Evolve.

The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period.

1 unchanged sentence

(in thousands)

June 30, 2020

March 31, 2020

September 30, 2020

Claims receivable (1)

2 unchanged sentences

The claims receivable is due from the Cochin International Airport (“CIA”) that is partially owned by the State Government of Kerala.

As of March 31, 2020, the receivable is due for over one year.

As of September 30, 2020, the receivable is due for over one year.

The Company continues to carry the full value of the receivables without interest and without any impairment, because it believes that there is minimal risk that CIA will become insolvent and unable to make the payment.

While the Company has initiated collection proceedings, it believes it will be difficult to receive the amount in the next 12 months because of the time required for legal collection proceedings.

The decrease in claims receivable was mainly due to foreign exchange translation as a result of a decline in value of Indian Rupee.

The increase in claims receivable was mainly due to foreign exchange translation as a result of a decline in value of Indian Rupee.

Includes a loan of $200 thousand to one of our manufacturers for the purchase of equipment, at an annual interest rate of three percent (3%), due on April 1, 2021.

| September 30, 2020 Form 10-Q

NOTE 9 – LEASES

The Company has short-term leases primarily consisting of spaces with the remaining lease term being less than or equal to 12 months.

The total short-term lease expense and cash paid for the three months ended June 30, 2020 and 2019 are approximately $63 thousand and $39 thousand, respectively.

The Company also has an operating lease as of June 30, 2020.

| June 30, 2020 Form 10-Q

The total short-term lease expense and cash paid for the six months ended September 30, 2020 and 2019 are approximately $129 thousand and $80 thousand, respectively.

The Company also has an operating lease as of September 30, 2020.

In November 2019, the Company entered into an office lease agreement with a lease term of less than 12 months.

2 unchanged sentences

The lease contract does not contain any material residual value guarantees or material restrictive covenants.

The remaining lease term for the operating lease is 5.4 year and discount rate of 7%.

The remaining lease term for the operating lease is 5.17 year with a discount rate of 7%.

The lease does not provide a readily determinable implicit rate.

2 unchanged sentences

Three months ended

June 30, 2020

September 30, 2020

(in thousands)

Six months ended

September 30, 2020

Operating lease costs

4 unchanged sentences

(in thousands)

June 30, 2020

September 30, 2020

Operating lease asset

5 unchanged sentences

Total lease liability

| September 30, 2020 Form 10-Q

(in thousands)

June 30, 2020

September 30, 2020

Supplemental cash flow and non-cash information related to leases is as follows:

2 unchanged sentences

Right-of-use assets obtained in exchange for operating lease obligations

As of June 30, 2020, the following table summarizes the maturity of our lease liabilities:

As of September 30, 2020, the following table summarizes the maturity of our lease liabilities:

Present value discount

Total Lease liabilities

| June 30, 2020 Form 10-Q

NOTE 10 – ACCRUED AND OTHER LIABILITIES

(in thousands)

June 30, 2020

March 31, 2020

Salaries and other contribution

September 30, 2020

Compensation and other contributions

Provision for expenses

1 unchanged sentence

Salaries and other contribution related liabilities consist of accrued salaries to employees.

Provision for expenses include provision for legal, professional, and marketing expenses, including a provision of $200 thousand for the lawsuit as discussed in Note 12, “Commitments and Contingencies”.

Other current liability also includes $84 thousand and $89 thousand of current operating lease liability and statutory payables of approximately $35 thousand and $27 thousand as of June 30, 2020 and March 31, 2020, respectively.

Provision for expenses include provision for legal, professional, and marketing expenses.

Other current liability also includes $86 thousand and $89 thousand of current operating lease liability and statutory payables of approximately $42 thousand and $27 thousand as of September 30, 2020 and March 31, 2020, respectively.

| September 30, 2020 Form 10-Q

NOTE 11 – LOANS AND OTHER LIABILITIES

Long -term loan s :

As of June 30, 2020, the Company has the following loans:

The Company had one secured loan of $50 thousand, at an annual interest rate of 15%.

On May 3, 2020, the Company signed the Paycheck Protection Program Promissory Note and Agreement for a loan of approximately $430,000.

The Loan is established under the terms and conditions of the SBA program of the United States Small Business Administration (“SBA”) and the USA CARES Act (2020)(H.R.

748)(15 U.S.C 636 et seq.) (the “Act”) and matures after 2 years on May 3, 2022, with monthly repayments of approximately $18,000 commencing November, 2020.

Short -term and Long -term loans:

During the three months ended September 30, 2020, the Company repaid a secured loan of $50 thousand.

As of September 30, 2020, the Company has the following loans:

On May 3, 2020, the Company signed the Paycheck Protection Program Promissory Note (the “PPP Note”) and Agreement for a loan of approximately $430 thousand.

The Loan is established pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S.

Small Business Administration (“SBA”).

The PPP Note matures after 2 years on May 3, 2022, with monthly repayments of approximately $18 thousand commencing November 1, 2020.

Interest will accrue on the outstanding principal balance at an annual fixed rate of 1.00%.

The CARES Act and the PPP Note provide a mechanism for forgiveness of up to the full amount borrowed.

Under the PPP Note, the Company may apply for and be granted forgiveness for all or part of the PPP Note.

The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during the eight or twenty-four week period after the loan origination for certain purposes including payroll costs, rent payments on certain leases, and certain qualified utility payments, provided that at least 60% of the loan amount is used for eligible payroll costs;

the employer maintaining or rehiring employees and maintaining salaries at certain levels;

and other factors.

Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during the covered eight or twenty-four-week period will qualify for forgiveness.

Forgiveness of the loan is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on future adherence to the forgiveness criteria.

The Company intends to use the entire loan amount for qualifying expense, though no assurance is provided that the Company will obtain forgiveness of the PPP Note in whole or in part.

On June 11, 2020, the Company also received an Economic Injury Disaster Loan for approximately $150 thousand at an annual interest rate of 3.75%.

3 unchanged sentences

Other Liability:

(in thousands)

As of June 30,

As of March 30,

Statutory reserve

The statutory reserve is a gratuity reserve for employees in our subsidiaries in India.

Other liability consists of a gratuity reserve for employees in our subsidiaries in India and was $16 thousand and $16 thousand as of September 30, 2020 and March 31, 2020, respectively.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.

There are no such matters that are deemed material to the condensed consolidated financial statements as of June 30, 2020, except as disclosed below.

| June 30, 2020 Form 10-Q

As of June 30, 2020, several law firms have filed shareholder lawsuits, including three derivative suits (two of which have been consolidated), citing, among other things, the NYSE American delisting proceedings initiated in October 2018 (and overturned in February 2019) and subsequent fall in share price.

Those derivative suits have now been settled.

Pursuant to the settlement agreement, which was filed with the Court as an exhibit to an Amended Consent Motion for Preliminary Approval of Derivative Settlement on April 30, 2020, the Company will adopt certain corporate governance modifications, and the derivative plaintiffs will receive $200,000.00 from the Company’s insurer to cover their attorneys’ fees and a nominal service award.

The Company has recorded a provision for $200,000 as of June 30, 2020.

On June 30, 2020, the Court held a hearing to evaluate the fairness and reasonableness of the settlement and to determine whether the settlement will be approved.

On July 6, 2020, the Court entered an order formally and finally approving the settlement and resolving all pending derivative suits.

There are no such matters that are deemed material to the condensed consolidated financial statements as of September 30, 2020, except as disclosed below.

| September 30, 2020 Form 10-Q

As of September 30, 2020, several law firms have filed shareholder lawsuits, two of which have been consolidated, citing, among other things, the Company’s NYSE American delisting proceedings initiated in October 2018 (and overturned in February 2019) and subsequent fall in share price.

The Company filed a motion to dismiss on October 11, 2019 seeking to dismiss the consolidated suit in its entirety.

The motion to dismiss remains pending before the United States District Court for the District of Maryland.

The Company anticipates that a decision may be issued by March 31, 2021, although it can provide no assurances of the same.

In the U.S., we provide health insurance, life insurance, and a 401(k) plan wherein the Company matches up to 6% of the employee’s pre-tax contribution up to a maximum annual amount determined by the IRS.

5 unchanged sentences

NOTE 13 – SECURITIES

As of June 30, 2020, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $0.0001 per share, and 41,196,130 shares of common stock were issued and outstanding.

The Company is also authorized to issue up to 1,000,000 shares of preferred stock, par value $0.0001 per share, and no preferred shares were issued and outstanding as of June 30, 2020.

As of September 30, 2020, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $0.0001 per share, and 41,304,365 shares of common stock were issued and outstanding.

The Company is also authorized to issue up to 1,000,000 shares of preferred stock, par value $0.0001 per share, and no preferred shares were issued and outstanding as of September 30, 2020.

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

IW) to purchase 1,167,217 shares of common stock by surrendering 10 warrants and a payment of $5.00 in exchange for each share of common stock.

We have 91,472 units outstanding that can be separated into common stock and warrants.

We have 91,472 units outstanding that can be separated into 9,147 shares of common stock and 182,944 warrants to purchase 18,294 shares of common stock.

We have one security listed on the NYSE American:

6 unchanged sentences

IW) which effectively allows the holder to exercise the warrants into two shares of common stock.

NOTE 1 4 – RELATED PARTY TRANSACTIONS

We pay an affiliate of our CEO $4,500 per month for office space and certain general and administrative services, provided in Maryland.

NOTE 14 – INTENTIONALLY LEFT BLANK

NOTE 15 – STOCK-BASED COMPENSATION

As of June 30, 2020, under both the Company’s previous 2008 and current 2018 Omnibus Incentive Plans, a total of 8,207,627 shares of common stock have been issued to employees and advisors.

As of September 30, 2020, under both the Company’s previous 2008 and current 2018 Omnibus Incentive Plans, a total of 8,327,627 shares of common stock have been issued to employees and advisors.

1.9 million restricted share units fair valued at $789 thousand with a weighted average value of $0.42 per share, have been granted but not yet issued from different Incentive Plans and Grants.

Additionally, options held by advisors to purchase 160 thousand shares of common stock fair valued at $65 thousand with a weighted average of $0.4 per share, that have been granted but are to be issued over a vesting period, between Fiscal 2020 and Fiscal 2024.

Additionally, options held by advisors to purchase 210,000 shares of common stock fair valued at $96 thousand with a weighted average of $0.46 per share, that have been granted but are to be issued over a vesting period, between Fiscal 2020 and Fiscal 2024.

Options granted and issued before the vesting period are expensed when issued.

The options are fair valued using a Black-Scholes Pricing Model with the following assumptions:

6 unchanged sentences

Expected dividend yield

| June 30, 2020 Form 10-Q

The expense associated with share-based payments to employees, directors, advisors, and contractors is allocated over the vesting or service period and recognized in the selling, general and administrative expenses (including research and development).

For the three months ended June 30, 2020, the Company’s share-based expense and option-based expense shown in selling, general and administrative expenses (including research and development) are $160 thousand and $6 thousand, respectively.

| September 30, 2020 Form 10-Q

For the three months ended June 30, 2019, the Company’s share-based expense and option-based expense shown in selling, general and administrative expenses (including research and development) are $202 thousand and $6 thousand, respectively.

For the six months ended September 30, 2020, the Company’s share-based expense and option-based expense shown in selling, general and administrative expenses (including research and development) was $305 thousand and $60 thousand, respectively.

The expense associated with share-based payments to employees, directors, advisors and contractors is allocated over the vesting or service period and recognized in the Common Stock and Additional Paid in Capital.

For the six months ended September 30, 2019, the Company’s share-based expense and option-based expense shown in selling, general and administrative expenses (including research and development) was $349 thousand and $12 thousand respectively.

Non-vested shares

2 unchanged sentences

grant date fair value

Non-vested shares as on March 31, 2020

Non-vested shares as of March 31, 2020

Cancelled/Forfeited

Non-vested shares as on June 30 , 2020

Non-vested shares as of September 30, 2020

(in thousands)

3 unchanged sentences

exercise price

Options outstanding as on March 31, 2020

Options outstanding as of March 31, 2020

Cancelled/Forfeited

Options outstanding as on June 30 , 2020

Options outstanding as of September 30, 2020

There was a combined unrecognized expense of $426 thousand related to non-vested shares and share options that the Company expects to be recognized over weighted average life of 0.9 years.

NOTE 16 – FAIR VALUE OF FINANCIAL INSTRUMENTS

As of June 30, 2020, the Company’s marketable securities consist of liquid funds, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets.

The increase in value of marketable securities is comprised of re-invested income of approximately $10 thousand and approximately $7 thousand unrealized gain during the three months ended June 30, 2020.

As of September 30, 2020, the Company’s marketable securities consist of liquid funds, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets.

The decrease in value of marketable securities is due to realization of approximately $1.25 million and increase due to dividend income of approximately $13 thousand and approximately $6 thousand unrealized gain during the six months ended September 30, 2020.

The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle.

3 unchanged sentences

For further information refer Note 7 – Investments in Non-Marketable Securities.

| June 30, 2020 Form 10-Q

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2020 and March 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

| September 30, 2020 Form 10-Q

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of September 30, 2020 and March 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

(in thousands)

June 30, 2020

September 30, 2020

Cash and cash equivalents:

9 unchanged sentences

Total Investment

NOTE 1 7 – REVENUE RECOGNITION

Revenue in the Infrastructure Business is recognized for the renting business when the equipment is rented, and terms of the agreement have been fulfilled during the period.

The revenue from the purchase and resale of physical infrastructure commodities is recognized once the bill of lading along with the invoice have been transferred to the customer.

In the Life Sciences segment, the revenue from the wellness and lifestyle business is recognized once goods have been sold to the customer and the performance obligation has been completed.

In retail sales, we offer consumer products through our online and physical stores.

Revenue is recognized when control of the goods is transferred to the customer.

This generally occurs upon our delivery to a third-party carrier or, to the customer directly.

We license our products to processors.

The royalty income from licensing is recognized once goods have been sold by the processor to its customers.

| June 30, 2020 Form 10-Q

Net sales disaggregated by significant products and services for the three months ended June 30, 2020 and 2019 were as follows:

(in thousands)

Three months ended June 30,

Infrastructure segment

Rental income (1)

Construction contracts (2)

Purchase and resale of physical commodities (3)

Life Sciences segment

Wellness and Lifestyle (4)

Tolling/White labeling service (5)

(1) Rental income consists of income from rental of heavy construction equipment.

(2) Construction income consists of the execution of contracts directly or through subcontractors.

The Company expects to complete the project within 12 to15 months, depending on the status of the COVID-19 pandemic.

(3) Relates to the income from purchase and resale of physical commodities used in infrastructure, like steel, wooden doors, marble, and tiles.

(4) Relates to revenue from Life Sciences segment such as sale of hand sanitizer, hemp crude extract, hemp isolate, and hemp distillate and royalty income from the sale of Hyalolex™, now named Hyalolex™ Drops of Clarity™.

(5) Relates to income from tolling and white label services.

NOTE 17 – INTENTIONALLY LEFT BLANK

| September 30, 2020 Form 10-Q

NOTE 18 – SEGMENT INFORMATION

14 unchanged sentences

(in thousands)

Three months ended

June 30, 2020

Six months ended

September 30, 2020

Percentage of

2 unchanged sentences

Life Sciences segment

| June 30, 2020 Form 10-Q

(in thousands)

Three months ended

June 30, 2019

Six months ended

September 30, 2019

Percentage of

2 unchanged sentences

Life Sciences segment

For information for revenue by product and service, refer Note 17, “Revenue Recognition”.

For information for revenue by product and service, refer Note 2, “Summary of Significant Accounting Policies”.

| September 30, 2020 Form 10-Q

2) The table below shows the revenue attributed to the country of domicile (U.S.) and foreign countries.

1 unchanged sentence

(in thousands)

Three months ended

June 30, 2020

Six months ended

September 30, 2020

Percentage of

3 unchanged sentences

(in thousands)

Three months ended

June 30, 2019

Six months ended

September 30, 2019

Percentage of

8 unchanged sentences

(India, Hong Kong, and Colombia)

June 30, 2020

September 30, 2020

Intangible assets, net

Property, plant and equipment, net

Investments in unlisted securities

Non- marketable securities

Claims and advances

1 unchanged sentence

Total non-current assets

| June 30, 2020 Form 10-Q

| September 30, 2020 Form 10-Q

(in thousands)

6 unchanged sentences

Property, plant and equipment, net

Investments in unlisted securities

Non- marketable securities

Claims and advances

2 unchanged sentences

NOTE 19 – SUBSEQUENT EVENTS

On August 18, 2020, the Company received an official USPTO Notice of Allowance for its U.S.

Trademark NO3A™, U.S.

Serial Number:

On August 5, 2020, the USPTO issued the Company a patent (#10751300) for the Company’s cannabinoid formulation (IGC-502) for the treatment of seizures in humans and veterinary animals.

On July 30, 2020, IGC received approval from the FDA to proceed with Phase 1 human clinical trials (“removal of full clinical hold”) on its Investigational New Drug Application (“INDA”) for IGC-AD1 submitted under Section 505(i) of the Federal Food, Drug, and Cosmetic Act.

The Phase 1 trial will involve a randomized placebo controlled Multiple Ascending Dose (“MAD”) study to evaluate safety and tolerability of IGC-AD1 in subjects with dementia due to Alzheimer’s disease.

In addition, the study will evaluate pharmacokinetics (“PK”) and collect data on other factors.

The drug IGC-AD1 is based on a patent filed by the University of South Florida (“USF”) that uses a cannabinoid as one of the active ingredients.

The Company has exclusive rights to the patent filing.

On July 17, 2020, the Company filed a provisional patent application with the USPTO for its IGC-511 formulation for Cannabidiol based composition and method for treating pain.

In January 2020, the Company entered into a binding agreement for the settlement of three previously disclosed derivative lawsuits:

Mukunda, et al.

, Civil Action No.

1:18-cv-03698-DKC, filed in the United States District Court for the District of Maryland on November 30, 2018;

Mukunda, et al.

, Civil Action No.

8:19-cv-00493-DKC, filed in the United States District Court for the District of Maryland on February 20, 2019;

Mukunda, et al.

, Civil Action No.

8:19-cv-01673-PWG, filed in the United States District Court for the District of Maryland on June 6, 2019.

Pursuant to the settlement agreement, which was filed with the Court as an exhibit to an Amended Consent Motion for Preliminary Approval of Derivative Settlement on April 30, 2020, the Company will adopt certain corporate governance modifications, and the derivative plaintiffs will receive $200,000 from the Company’s insurer to cover their attorneys’ fees and a nominal service award.

Shareholders were given notice of the proposed settlement through the Company’s filing of an SEC Form 8-K report, the issuance of a press release, publication in Investor’s Business Daily, and posting in the “Investors” section of the Company’s website, all of which were deemed by the court to constitute sufficient notice to shareholders of the settlement.

Shareholders were given the opportunity to assert objections to the final settlement, and no objections were received by the parties to the derivative suit or filed with the court.

On June 30, 2020, the Court held a hearing to evaluate the fairness and reasonableness of the settlement and to determine whether the settlement will be approved.

On July 6, 2020, the Court entered an order formally and finally approving the settlement and resolving all pending derivative suits.

On May 26, 2020, the Company received an official USPTO Notice of Allowance for its U.S.

Trademark Holief™, U.S.

Serial Number:

| June 30, 2020 Form 10-Q

The Company received an approval from the Institutional Review Board (“IRB”) , engaged a Principal Investigator, engaged a study site, and began enrolling participants for a Phase 1 trial on its Investigational Drug Candidate (“IDC”).

The Company was informed of a theft incident related to $1.73 million of inventory held with a processor.

The processor’s insurance is expected to cover the Company inventory and has assured delivery of complete inventory as per the agreement.

| September 30, 2020 Form 10-Q

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-Q

Item 1. Financial Statements