What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-06-14 compared with 2020-07-13 · 250 added, 300 removed, 536 unchanged (51% of the section changed)

9 unchanged sentences

To the Shareholders and the Board of Directors of India Globalization Capital, Inc.

Opinions on the Consolidated Financial Statements

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of India Globalization Capital, Inc.

3 unchanged sentences

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's Consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Consolidated financial statements are free of material misstatement, whether due to error or fraud.

2 unchanged sentences

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Commitments and Contingencies

Description of the Matter

As described in Note 12 to the consolidated financial statements as at March 31, 2021, the Company is involved in a legal proceeding and has made accrual with respect to the same, where appropriate.

Where a liability is reasonably possible and may be material, such matters have been disclosed.

Management assessed the probability of occurrence and the estimation of any potential loss based on whether any loss or range of loss can be reasonably estimated.

For example, in assessing the probability of occurrence in a particular legal proceeding, management exercises judgment to determine whether it can reasonably estimate any loss or range of loss that may arise from that proceeding.

Auditing management’s accounting for and disclosure of loss contingencies was complex and highly judgmental as it involved our assessment of the significant judgments made by management when assessing the probability of occurrence for contingencies or when determining whether an estimate of the loss or range of loss could be made.

How we addressed the matter in our audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the identification and evaluation of contingencies and related indemnities.

For example, we tested controls over the Company’s assessment of the likelihood of loss and the Company’s determinations regarding the measurement of loss.

To test the Company’s assessment of the probability of occurrence or determination of an estimate of loss, or range of loss, among other procedures, we read the minutes of the meetings of the Board of Directors and committees of the Board of Directors, read letters received directly by us from external counsel, and evaluated the current status of contingencies based on discussions with management.

We also evaluated the appropriateness of the related disclosures.

Manohar Chowdhry & Associates

2 unchanged sentences

Chennai, India

June 12, 2021

India Globalization Capital, Inc.

1 unchanged sentence

(In thousands, except share data)

March 31, 2020

March 31, 2019

Current assets:

2 unchanged sentences

Accounts receivable, net

Non-Marketable securities

Deposits and advances

10 unchanged sentences

Accrued liabilities and others

Short-term loan

Short-term loans

Total current liabilities

Long-term loans

Other liabilities

4 unchanged sentences

Stockholders' equity:

Preferred stock, $0.0001 per value:

authorized 1,000,000 shares, no share issued or outstanding as on March 31, 2020 and March 31, 2019

Preferred stock, $0.0001 par value:

authorized 1,000,000 shares, no shares issued or outstanding as of March 31, 2021 or March 31, 2020.

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

150,000,000 shares authorized;

39,320,116 and 39,501,407 shares issued and outstanding as on March 31, 2020 and March 31, 2019, respectively.

47,827,273 and 39,320,116 shares issued and outstanding as of March 31, 2021 and March 31, 2020, respectively.

Accumulated other comprehensive loss

5 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except loss per share)

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

Years Ended March 31,

Cost of revenues

General and administrative expenses

Cost of revenue

Selling, general and administrative expenses

Research and development expenses

3 unchanged sentences

Loss before income taxes

Income taxes expense

Income tax expense/benefit

Net loss attributable to common stockholders

9 unchanged sentences

Common Shares

Common Stock and Additional Paid in Capital

Accumulated Deficit

Accumulated Other Comprehensive Loss

Total Stockholders' Equity

Balances as of March 31, 201 8

Bricoleur Note penalty shares

Common stock issued through public offering, net

Share based compensation & other expenses

Common stock issued through private placement, net

Adoption of ASU 2018-07

Common Stock and

Additional Paid in

Accumulated Other

Comprehensive Loss

Total Stockholders'

Balances as of April 1, 2019

Common stock-based compensation & expenses, net

Cancellation of IGC shares

Net income loss

Loss on foreign currency translation

Balances as of March 31, 2020

Share based compensation & other expenses

Cancellation of IGC shares

Net income loss

Loss on foreign currency translation

Balances as of April 1, 2020

Common stock-based compensation & expenses, net

Common stock issued for ATM

Common stock issued for investment

Deconsolidation adjustment

Gain on foreign currency translation

Balances as of March 31, 2021

7 unchanged sentences

Depreciation and amortization

Non-cash Interest

Gain on settlement of note payable, net

Impairment of investment

Share based compensation and other expenses

Accounts receivable

Common stock-based compensation and expenses, net

Accounts receivables, net

Deposits and advances

1 unchanged sentence

Accounts payable

Accrued liabilities and others

Accrued and other liabilities

Net cash used in operating activities

1 unchanged sentence

Purchase of property, plant, and equipment

Sale of property, plant, and equipment

Investment in marketable securities

Loan repayment

Investment in non-marketable securities

Acquisition and filing cost of patents and rights

Net cash used by investing activities

Net cash (used in)/provided by investing activities

Cash flows from financing activities:

1 unchanged sentence

Issuance of equity stock through private placement (net of expenses)

Proceed from option exercised

Repayment of loan

Proceeds from borrowings, net

Net cash (used in)/provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalent at the beginning of the period

Cash and cash equivalent at the end of the period

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Supplementary information:

1 unchanged sentence

Non-cash items:

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

Common stock issued as penalty on notes payable

Common stock issued/granted including ESOP, consultancy

Common stock issued/granted other than ESOP, consultancy

Amortization of operating lease

5 unchanged sentences

NOTE 1 – NATURE OF OPERATIONS AND MANAGEMENT ’ S PLANS

Since 2014, our team has been committed to researching the application of cannabinoids such as Tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”) in combination with other compounds to address various ailments, including Alzheimer's disease.

With our research, we have developed intellectual property, formulations, and wellness and lifestyle brands.

In Fiscal 2021, we were awarded a patent for our cannabinoid-based formulation treatment of seizures in humans and veterinary animals.

This followed our Fiscal 2019 and Fiscal 2020 awards of patents for our formulation addressing pain and formulations addressing Cachexia and eating disorders, respectively.

Since 2014, the Company has also filed nine other patent applications to address various diseases such as Alzheimer's, pain, stammering, seizures, eating disorders, and fatigue, among others.

IGC has two segments:

Infrastructure and Life Sciences.

The Company’s Infrastructure Business, managed from India, involves:

Life Sciences and Infrastructure.

The Company’s Life Sciences segment, managed from the United States, involves:

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

Our revenue in Fiscal 2021 was primarily derived from this business segment.

The Company’s Infrastructure segment, managed from India, involves:

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

1 unchanged sentence

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

The Company’s Life Sciences segment, managed from the United States, involves:

a) the development of potential new drugs, subject to applicable regulatory approvals , b) several CBD-based products and brands, in various stages of development, for sale online and through stores, 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.

In Fiscal 2020 we completed the development of several products building out our “house of brands” that we intend to market online and through retail stores.

We are enthusiastic about what we believe to be the immense potential of these unique concepts to address various segments of the exponentially growing cannabinoid wellness and lifestyle product market.

In Fiscal 2020, the Company generated $411 thousand revenue from its Life Sciences segment, however COVID-19 has forced the Company to delay the launch of some of the brands and products.

In Fiscal 2020 the Company in response to the COVID-19 pandemic adapted its manufacturing facilities and operations to include alcohol-based hand sanitizers which go on sale in Fiscal 2021.

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

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

In the Pharmaceutical channel, we created a patent-pending formulation based on ultra-low dosing of THC in combination with other compounds that, in Fiscal 2021, under an INDA filed with the FDA, underwent the first phase of a phase 1 trial on safety and tolerability.

The phase 1 trial is ongoing at the time of this filing.

We are motivated by the potential that, with future successful results after appropriate further trials, IGC-AD1 could contribute to symptom relief for some of the 50 million people around the world that are expected to be impacted by Alzheimer's disease by 2030 (WHO, 2020).

Data from pre-clinical studies, including cell lines and animal models, showed the formulation, IGC-AD1, inhibited the accumulation of the neurotoxic protein beta-amyloid (“Aβ”) that leads to the buildup of plaques, as well as the hyperphosphorylation of tau that leads to Neuro Fibrillary Tangles (“NFT”) two of the hallmarks of Alzheimer's disease.

In pre-clinical studies, certain combinations of IGC-AD1 also showed memory improvement and neurogenesis.

For the Retail Channel, in Fiscal 2021, we developed wellness and lifestyle brands, Holief™, Herbo™, and Sunday Seltzer™.

We plan on marketing these brands, including to the U.S.

based Latino market, which is among the fastest-growing segment in the U.S.

GDP that in 2018 was around $2.6 Trillion.

(Forbes, 2020).

It is projected that the Hispanic population will reach 111.22 million by 2060 from 59 million in 2018 (Statista, 2021).

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.

As of March 31, 2021, the Company had the following direct operating subsidiaries:

3 unchanged sentences

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

Business updates

• The Company is executing a road building contract in Kerala, India valued initially at approximately $0.6 million.

Throughout Fiscal 2020, the Company worked on execution of the contract as well as sought approval for an expansion of the contract.

The total value of the contract was increased to approximately $1.1 million.

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

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

We expect to re-start the project in second quarter of Fiscal 2021.

• The Company filed an INDA with the FDA for a double-blind, placebo-controlled, 100-person trial, for its proprietary patent pending formulation based on IGC-AD1 that uses ultra-low doses of tetrahydrocannabinol (“THC”) with other natural compounds intended to assist in the management of the care of patients suffering from Alzheimer’s disease.

• IGC filed a provisional patent, IGC 510, Compositions and Methods using CBD for treating stammering and symptoms of Tourette syndrome with the USPTO.

• The Company established an approximately $0.5 million facility in San Juan, Puerto Rico to house and conduct trials.

• As part of an out-reach and marketing campaign, we distributed samples of Hyalolex™ Drops of Clarity™, to dispensaries in Puerto Rico.

The formulation is currently available in about 51 dispensaries in Puerto Rico.

While this is a small market penetration, it allows us to collect data.

Based on feedback received from customers and dispensaries in Puerto Rico, the Company has expanded the scope of the Hyalolex™ formulation to potentially target other ailments, such as anxiety and sleep disorders, and has introduced a line of products including tinctures, among others.

These will all be branded under Hyalolex™, with the original formulation branded as Hyalolex™ Drops of Clarity™.

Post COVID-19 based stay-in-place restrictions we expect to manufacture and distribute these products initially in Puerto Rico and subsequently online and in other states.

• In Fiscal 2020 the Company in response to the COVID-19 pandemic adapted its manufacturing facility to include FDA-registered alcohol-based hand sanitizers, which go on sale in Fiscal 2021.

• The Company advanced its branding and product strategy with the development of several brands aimed at various sectors of the market.

The progress includes filing trademark applications and intent to use applications;

securing URLs;

creating product formulations, labelling, and packaging;

obtaining product insurance;

securing product development teams;

conducting focus groups;

performing quality and taste testing;

and organizing and registering limited liability companies to mitigate risk, among others.

• The Company grows hemp in Arizona.

The crop has passed inspection by the Arizona Department of Agriculture (“AZDA”) and has been certified as legal by AZDA.

However, the harvest is delayed due to of the difficulty in finding workers because of the social distancing rules brought on by COVID-19.

• We prepared our facilities in Washington for the dual purpose of manufacturing finished products as well as for extraction and distillation.

Most of our hemp processing and distillation equipment is sourced from China.

Currently, due to COVID-19 the commissioning and certification of the equipment is delayed as the technicians are unable to travel from China to the U.S.

• On February 15, 2020, the Company signed a Share Subscription Agreement (“SSA”) with Evolve I, to acquire 20% of Evolve I.

As of March 31, 2020, the Company has not completed its due diligence.

• In January 2020, the Company and the named defendant directors and officers executed a formal settlement agreement on specific final terms of settlement with the plaintiffs in all pending derivative lawsuits.

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.

Please See Item 3 Legal Proceedings.

• IGC recently received notification that on March 24, 2020, the USPTO issued a method and composition patent (#10,596,159 B2) for the Company’s cannabinoid formulation for the treatment of cachexia and eating disorders in humans and veterinary animals.

IGC filed this application for its IGC-504 formulation (#15/751,901) on August 11, 2016.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

9 unchanged sentences

Management believes that the estimates and assumptions used in the preparation of the consolidated financial statements are prudent and reasonable.

Significant estimates and assumptions are generally used for, but not limited to:

allowance for uncollectible accounts receivable;

Significant estimates and assumptions are generally used for, but not limited to allowance for uncollectible accounts receivable;

sales returns;

normal loss during production;

future obligations under employee benefit plans;

21 unchanged sentences

Refer to Note 17 - “Revenue Recognition.”

d ) Cost of Sales

Our cost of sales includes costs associated with in-house and outsourced distribution, labor expense, components, manufacturing overhead, and outbound freight for our products division.

In our products division, cost of sales also includes the cost of refurbishing, if required, on products returned by customers that will be offered for resale and the cost of inventory write-downs associated with adjustments of held inventories to their net realizable value.

These expenses are reflected in the Company’s consolidated statements of operations when the product is sold and net sales revenues are recognized or, in the case of inventory write-downs, when circumstances indicate that the carrying value of inventories is in excess of their net realizable value.

d) Cost of Revenue

Our cost of revenue includes costs associated with in-house and outsourced distribution, labor expense, components, manufacturing overhead, and outbound freight for our products division.

In our products division, cost of revenue also includes the cost of refurbishing or repackaging, if required, on products returned by customers that will be offered for resale.

(e) Earnings/(Loss) per Share

The computation of basic loss per share for Fiscal 2020, excludes potentially dilutive securities of about 5 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, shares to be issued to Evolve I pursuant to the Share Subscription Agreement, if any, because their inclusion would be anti-dilutive.

The computation of basic loss per share for Fiscal 2021, excludes potentially dilutive securities of approximately 1.8 million shares which includes share options, unvested shares such as restricted shares and restricted share units, granted to employees and advisors, 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 Fiscal 2021 and 2020, used for the computation of basic earnings per share (“EPS”) is 41,963,382 and 39,490,014, respectively.

12 unchanged sentences

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

We had $133 thousand of accounts receivable, net of provision, for doubtful debt of $9 thousand as of March 31, 2020 as compared to $84 thousand, net of provision, for doubtful debt of $6 thousand as of March 31, 2019.

We had $175 thousand of accounts receivable, net of provision for doubtful debt of $63 thousand as of March 31, 2021, as compared to $133 thousand of accounts receivable, net of provision for doubtful debt of $9 thousand as of March 31, 2020.

h) Cash and cash equivalents

8 unchanged sentences

Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position.

Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except as indicated in the following sentence.

All or a portion of the unrealized holding gain and loss of an available-for sale security that is designated as being hedged in a fair value hedge shall be recognized in earnings during the period of the hedge, pursuant to paragraphs 815-25-35-1 through 35-4.

Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs.

Where the Company’s ownership interest is in excess of 20% and the Company enjoys significant interest, the Company has accounted for the investment based on the equity method in accordance with ASC 323, “Investments – Equity method and Joint Ventures”.

Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “ Investments – Equity method and Joint Ventures.

” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income / (loss) is recognized in other comprehensive income / (loss).

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 March 31, 2021, 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.

j) Property, plant, and equipment (PP&E)

4 unchanged sentences

k) Fair value of financial instruments

820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

2 unchanged sentences

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

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.

The carrying amounts of the Company’s financial instruments include 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 15, “Fair value of financial instruments,” for further information.

8 unchanged sentences

m) Stock – Based Compensation

The Company accounts for stock-based compensation to employees and non-employees in conformity with the provisions of ASC 718, Stock-Based Compensation .

The Company accounts for stock-based compensation to employees and non-employees in conformity with the provisions of ASC Topic 718, “ Stock-Based Compensation.

” The Company expenses stock-based compensation to employees over the requisite vesting period based on the estimated grant-date fair value of the awards.

4 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.

n) Commitments and contingencies

1 unchanged sentence

We record associated legal fees as incurred.

Information regarding our commitments and contingencies is incorporated by reference in Note 12 of this Annual Report on Form 10-K.

Information regarding our commitments and contingencies is incorporated by reference in Note 12, “Commitments and contingencies” of this Annual Report on Form 10-K.

o) 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.

p) Change in inventory valuation method

On April 1, 2019, the Company changed its methodology for the valuation of inventory from first-in-first-out to weighted average cost method.

The newly adopted accounting principle is preferable because the weighted average cost method of accounting for all inventories will improve financial reporting by better matching revenues and expenses and better reflecting the current value of inventory.

The change did not impact the financial statements for the prior years.

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 and work-in-progress such as extracted crude oil, CBD isolate, growing crops, crude oil, herbal oils, among others.

p) Intangible assets

The Company's intangible assets are accounted for in accordance with ASC Topic 350, Intangibles – Goodwill and Other.

Intangible assets having indefinite lives are not amortized, 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 than not that an impairment loss has been incurred.

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.

The Company intends to capitalize trademarks and related expenses exceeding $2,500 per trademark.

Management may also capitalize trademarks and related expenses up to $2,500 per trademark based on its potential and benefit in coming years.

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.

6 unchanged sentences

- is available for immediate delivery.

The Company believes its harvested crops does not have a readily available market.

The Company believes its harvested crops do not have a readily available market.

Hence, the Company values its harvested crops at cost.

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

Abnormal amounts of idle facility expense, freight, handling costs, scrap, discontinued products and wasted material (spoilage) are expensed in the period they are incurred.

r) Cybersecurity

4 unchanged sentences

All research and development costs are expensed in the period in which they are incurred.

Goodwill represents the excess cost of an acquisition over the fair value of our share of net identifiable assets of the acquired subsidiary at the date of acquisition.

Goodwill on acquisition of subsidiaries would be disclosed separately.

Goodwill is stated at cost less impairment losses incurred, if any.

As of March 31, 2020, there was no Goodwill.

Lessor Accounting

For lessors, however, the accounting remains largely unchanged from the current model, changes have been made to align certain lessor and lessee accounting guidance and the key aspects of the lessor accounting model with new revenue recognition standard.

Under the new 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.

13 unchanged sentences

The Company adopted ASU 2016-02 effective April 1, 2019 using the modified retrospective approach.

The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

The standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

In connection with the adoption, the Company will elect to utilize the modified retrospective presentation whereby the Company will continue to present prior period financial statements and disclosures under ASC 840.

In addition, the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs.

Further, the Company will adopt a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e.

leases with terms of 12 months or less).

and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets.

Further, the Company will adopt a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less), and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets.

Under ASU 2016-02 (Topic 842), lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date:

8 unchanged sentences

The Company recognizes lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments.

v) Recently issued and adopted accounting pronouncements

Please refer to Note 9, “Leases,” for further information.

u) Recently issued and adopted accounting pronouncements

Changes to U.S.

2 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

Recently adopted

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

2 unchanged sentences

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.

We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements

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

The adoption of this standard 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.

We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

The standard was 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.

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.

We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

Credit Losses:

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial instruments.

The amendments in this update change how companies measure and recognize credit impairment for many financial assets.

The amendment is effective for fiscal years beginning after January 2023.

The Company is evaluating the impact of this update.

NOTE 3 – INVENTOR Y

On April 1, 2019, the Company changed its methodology for the valuation of inventory from first-in-first-out to weighted average cost method.

The change did not impact the financial statements for the prior years.

ASU 2018-15 (Subtopic 350-40) which 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 was 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)

5 unchanged sentences

Inventory in the form of work-in-progress as of March 31, 2021, 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 overhead and the depreciation of farming equipment, among others.

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, beverages, and personal protection equipment, among others.

During Fiscal 2021, the Company wrote off approximately $307 thousand of inventory due to abnormal amounts of idle facility expense, freight, handling costs, scrap, and wasted material (spoilage) as compared to approximately zero for Fiscal 2020.

This charge was recorded in Selling, general and administrative expenses.

One of our vendors that holds $1.74 million of our inventory reported a theft at their facility.

The Company moved the amount associated with the inventory to Deposits and Advances.

NOTE 4 – DEPOSITS AND ADVANCES

3 unchanged sentences

Advances to suppliers and consultants

Other advances

Advances for Property, Plant and Equipment

Statutory advances

Other receivables

Prepaid expense and other current assets

The Advances to suppliers and consultants primarily relate to retainers given to attorneys and advance to suppliers in our infrastructure business.

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

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.

Prepaid and other current assets include approximately $36 thousand statutory advances for Fiscal 2021, as compared to 27 thousand in Fiscal 2020.

Please refer to Note 3, “Inventory,” for details of Other receivables.

NOTE 5 – INTANGIBLE ASSETS

2 unchanged sentences

March 31, 2021

March 31, 2019

Other intangibles

Accumulated amortization

Total amortized intangible assets

Unamortized intangible assets

Indefinite lived intangible assets

Other intangibles

Total unamortized intangible assets

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 26 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/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 value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing 12 patents.

It also includes acquisition costs related to brands, domains, and licenses.

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

The amortization expense in Fiscal 2021 and 2020, amounted to approximately $16 thousand and $10 thousand, 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 March 31, 2021, there was no impairment.

21 unchanged sentences

Depreciation expense in Fiscal 2021 and 2020, amounted to approximately $462 thousand and $134 thousand, respectively.

The net increase in total Property, Plant & Equipment is primarily due to the purchase of an office building, a facility for clinical trials in Puerto Rico, and set-up of hemp cultivation, product manufacturing, processing and packaging facilities, in the U.S.

subsidiaries during Fiscal 2020.

The net decrease in land and accumulated depreciation is primarily due to foreign exchange translations as a result of a decline in value of Indian Rupee.

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

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 increase in land is primarily due to foreign exchange translations because of an increase 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.

NOTE 7 – INVESTMENTS IN NON-MARKETABLE SECURITIES

Short-term investment

(in thousands)

March 31, 2020

March 31, 2019

Investment in Evolve I (i)

On May 12, 2020, the Company acquired approximately 19.8% shareholding in Evolve I, Inc., a Washington corporation (“Evolve”) under the terms of a Share Subscription Agreement (“SSA”) for a consideration of approximately $249 thousand.

However, based on an assessment of the business environment, the Company decided to dispose the holding and amicably exit the acquisition.

In light of the above, the Company recorded an impairment charge of $169 thousand as of March 31, 2021.

Long-term investment

(in thousands)

Investment in equity shares of unlisted company

Investment in MTP (i)

Pursuant to the December 18, 2014 Purchase Agreement with Apogee, we issued Apogee 1.2 million shares of IGC’s common stock valued at $888 thousand for the purchase of a 24.9% ownership interest in Midtown Partners & Co., LLC (“MTP”).

During Fiscal 2018, after considering several factors, the Company concluded that it no longer had significant influence over MTP.

Hence, we do not record any impact from MTP’s earnings/(losses) and instead we maintain the same value of approximately $773 thousand since Fiscal 2017.

In the last quarter of Fiscal 2020 Midtown Partners LLC became noncompliant with FINRA.

Based on this and the Company impaired its investment in MTP.

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.

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

NOTE 8 – CLAIMS AND ADVANCES

6 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.

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.

While the Company has initiated collection proceedings in the Commercial Court of Ernakulam, 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 increase in claims receivable was mainly due to foreign exchange translation as a result of an increase 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.

The decrease is due to a provision for advances of $240 thousand in Fiscal 2020.

NOTE 9 – LEASES

1 unchanged sentence

The total short- term lease expense and cash paid for Fiscal 2021 and 2020 are approximately $233 thousand and $206 thousand, respectively.

The Company also has an operating lease as on March 31, 2020.

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

The Company also has an operating lease as of March 31, 2021.

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

This lease was amended in March 2020, with a new lease term from March 1, 2020 to November 30, 2025.

3 unchanged sentences

The lease does not provide a readily determinable implicit rate.

Therefore, the Company discount lease payments based on an estimate of its incremental borrowing rate.

Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

(in thousands)

March 31, 2021

(in thousands)

March 31, 2020

Operating lease costs

Short term lease costs

Variable lease costs

Total lease costs

1 unchanged sentence

(in thousands)

March 31, 2021

March 31, 2020

Operating lease asset

8 unchanged sentences

March 31, 2021

(in thousands)

March 31, 2020

Cash paid for amounts included in the measurement of lease liabilities

8 unchanged sentences

March 31, 2020

Salaries and other contribution

Compensation and other contributions

Provision for expenses

Other current liability

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 $89 thousand of current operating lease liability in Fiscal 2020 and statutory payables of approximately $27 thousand and $4 thousand as of March 31, 2020 and 2019, respectively.

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

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

Other current liability also includes $90 thousand and $89 thousand of current operating lease liability and statutory payables of approximately $24 thousand and $27 thousand as of March 31, 2021 and March 31, 2020, respectively.

NOTE 11 – LOANS AND OTHER LIABILITIES

Short-term loan:

As of March 31, 2020, the Company had one secured loan of $50 thousand, at an annual interest rate of 15%.

Short-term and Long -term loans:

During Fiscal 2021, the Company repaid a secured loan of $50 thousand.

As of March 31, 2021, 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%.

For the year ended March 31, 2021, the interest expense for the PPP Note was approximately $3 thousand.

As of March 31, 2021, approximately $302 thousand of the loan is classified as Short-term loans and approximately $128 thousand of the loan as Long-term loans.

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.

As of March 31, 2021, the loan liability for the PPP Note principal repayment was approximately $90 thousand.

The Company believes it has used 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%.

The Company must pay principal and interest payments of $731 every month beginning June 5, 2021.

The SBA will apply each installment payment first to pay interest accrued to the day SBA receives the payment and will then apply any remaining balance to reduce principal.

All remaining principal and accrued interest is due and payable in 30 years from the date of the loan.

As of March 31, 2021, approximately $148 thousand of the loan is classified as Long-term loans and approximately $2 thousand as Short-term loans.

Other Liability:

7 unchanged sentences

There are no such matters that are deemed material to the consolidated financial statements as of March 31, 2021, except as disclosed below.

As of March 31, 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.

During the quarter ended September 30, 2019, the Company reached a preliminary agreement to resolve all derivative suits, subject to agreement on specific final terms of settlement and approval by the court.

In January 2020, the Company and the named defendant directors and officers reached agreement with the plaintiffs in all pending derivative lawsuits on specific final terms of settlement, and all parties executed a mutually acceptable settlement agreement.

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.

As of March 31, 2021, several law firms have filed shareholder lawsuits, two of which have been consolidated and remain pending, citing, among other things, the Company’s September 25, 2018 press release and the NYSE American delisting proceedings initiated in October 2018 (and overturned in February 2019) and subsequent fall in share price.

Class Action Defendants, including the Company, have reached a preliminary agreement in principle to settle the litigation, subject to agreement to final settlement terms and approval by the United States District Court for the District of Maryland.

The Company anticipates that a final settlement will be executed and approved sometime in Fiscal 2022, although there can be no assurance thereof.

The Company has created a provision for $200,000 as of March 31, 2021.

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.

For the current state of the consolidated Shareholder Class Action Litigation, please refer to Note 21 - Subsequent Events.

For the current state of the consolidated Shareholder Class Action Litigation, please refer to Item 3 – Legal Proceedings, and Note 19 - Subsequent Events.

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 March 31, 2020, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $0.0001, and 39,320,116 shares of common stock were issued and outstanding.

The Company is also authorized to issue of up to 1,000,000 shares of preferred stock, par value $0.0001 per share.

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.

As of March 31, 2021, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $0.0001 per share, and 47,827,273 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 March 31, 2021.

We have one security listed on the NYSE American:

1 unchanged sentence

This security also trades on the Frankfurt, Stuttgart, and Berlin stock exchanges (ticker symbol:

We have redeemable warrants quoted on the OTC markets (ticker symbol:

IGC.IW, CUSIP number 45408X118 expiring on March 8, 2021) to purchase common stock.

The units are not listed on an exchange.

Ten units may be separated into one share of common stock and 20 warrants (IGC:

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, and $6,100 per month for facilities and services provided in the State of Washington.

The payment for the facilities and services provided in the State of Washington ended on December 31, 2019.

The Company had 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.

The warrants expired on March 8, 2021.

As on March 31, 2021 the Company has no outstanding warrants.

The Company also has 91,472 units outstanding that can be separated into common stock.

Ten units may be separated into one share of common stock.

The unit holders are requested to contact the Company or our transfer agent, Continental Stock Transfer & Trust, to separate their units into common stock.

On January 13, 2021, the Company entered into a Sales Agreement (the “Agreement”) with The Benchmark Company, LLC (“Benchmark”) (the “Sales Agent”) pursuant to which the Sales Agent is acting as the Company’s sales agent with respect to the issuance and sale of up to $75,000,000 of the Company’s shares of common stock, par value $0.0001 per share (the “Shares”), from time to time in an “at the market” (“ATM”) offering as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the “Offering”).

As of March 31, 2021, the Company raised approximately $14.2 million from the ATM, net of commission.

The management may use these funds for working capital and capital expenditure requirements, along with clinical trials, share repurchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes.

NOTE 14 – STOCK-BASED COMPENSATION

During Fiscal 2020, no stock options were granted under 2018 Omnibus Incentive Plan (“2018 ESOP Plan”).

During Fiscal 2020, 252 thousand restricted share units, vesting over three years, were granted as inducement shares to employees.

These inducement shares are not part of 2018 ESOP Plan.

On February 25, 2020, the Company filed a Registration Statement on Form S-8 which registered 4 million shares of common stock $0.0001 par value of the Company issuable pursuant to the 2018 ESOP Plan, along with 2 million shares as a special grant of common stock to be issued, from time to time and at the Company’s Board of Directors’ discretion, to current and new directors, officers, employees, and advisors, as approved by the Company’s shareholders on January 7, 2020.

The Company has granted 1,610 thousand restricted stock and restricted stock units from the special grant fair valued at $521 thousand vesting between Fiscal 2021 and 2022.

As of March 31, 2020, under both the Company’s previous 2008 and current 2018 Omnibus Incentive Plans:

a total of 6,432,127 shares of common stock have been issued to employees and advisors;

1.7 million restricted share units fair valued at $621 thousand with a weighted average value of $0.37 per share, have been granted;

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

As of March 31, 2021, under both the Company’s previous 2008 and current 2018 Omnibus Incentive Plans, a total of 8,337,627 shares of common stock have been issued to employees and advisors.

In addition, 1.6 million restricted share units fair valued at $703 thousand with a weighted average value of $0.43 per share, have been granted but not yet issued from different Incentive Plans and Grants.

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, have been granted but are to be issued over a vesting period, between Fiscal 2023 and Fiscal 2025.

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:

Granted in Fiscal 2020

Granted in Fiscal 2019

Expected life of options

3 unchanged sentences

Expected dividend yield

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 general and administrative expenses (including research and development).

For Fiscal 2020, the Company’s share-based expense and option-based expense shown in general and administrative expenses and (including research and development) were $747 thousand and $23 thousand, respectively.

For Fiscal 2019, the share-based expense and option-based expense for employees and advisors were $515 thousand and $59 thousand, respectively, of which $515 thousand share-based expense and $48 thousand option-based expense related to general and administrative expenses (including research and development).

(in thousands)

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 Fiscal 2021, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $589 thousand and $69 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 Fiscal 2020, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $747 thousand and $23 thousand, respectively.

Non-vested shares

Weighted average grant date fair value

Non-vested shares as on March 31, 2019

(in thousands)

Weighted average

grant date fair value

Non-vested shares as of March 31, 2020

Cancelled/Forfeited

Non-vested shares as on March 31, 2020

Non-vested shares as of March 31, 2021

(in thousands)

Weighted average grant date fair value

Weighted average exercise price

Options outstanding as on March 31, 2019

Weighted average

grant date fair value

Weighted average

exercise price

Options outstanding as of March 31, 2020

Cancelled/Forfeited

Options outstanding as on March 31, 2020

There was combined unrecognized expense of $671 thousand related to non-vested shares and share options that the Company expects to be recognized over weighted average life of 1.32 years.

Options outstanding as of March 31, 2021

There was a combined unrecognized expense of $140 thousand related to non-vested shares and share options that the Company expects to be recognized over weighted average life of 2.07 years.

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

As of March 31, 2021, 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 $86 thousand and approximately $4 thousand unrealized gain during Fiscal 2020.

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

17 unchanged sentences

Total Investment

NOTE 1 7 – EMPLOYEE BENEFITS

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees.

The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the Company.

(in thousands)

Year Ended March 31,

Projected Benefit Obligation (PBO) at the beginning of the year

Foreign exchange adjustment

interest cost

Benefits paid

Actuarial (gain)/loss

PBO at the end of the year

Funded status

Net gratuity cost for the years ended March 31, 2020 and 2019 included:

(in thousands)

Year Ended March 31,

Interest cost

Expected return on plan assets

Actuarial (gain)/loss

Net gratuity cost

The weighted average actuarial assumptions used to determine benefit obligations and net periodic gratuity cost are:

Year Ended March 31,

Discount rate

Rate of increase in compensation levels

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards.

The expected payout of the accumulated benefit obligation as of March 31 is as follows.

(in thousands)

As of March 31,

Expected contribution during the year ending Year 1

Expected benefit payments for the years ending March 31:

Provident fund .

In addition to the above benefits, all employees in India receive benefits from a provident fund, a defined contribution plan.

The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee’s salary.

The contribution is made to the Government’s provident fund.

NOTE 16 – INCOME TAXES

30 unchanged sentences

NOTE 17 – REVENUE RECOGNITION

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

Revenue in the Infrastructure segment 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 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.

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 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 is recognized once goods have been sold to its customer by the processor.

Net sales disaggregated by significant products and services for Fiscal 2020 and Fiscal 2019 were as follows:

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 Fiscal 2021 and 2020 are as follows:

(in thousands)

8 unchanged sentences

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

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

There was revenue of $101 thousand from the $1.1 million NHAI construction contracts during Fiscal 2020.

The Company expects to complete the project 12 and 15 months.

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

(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 hemp crude extract, hemp isolate, and hemp distillate and royalty income from sale of Hyalolex™, now named Hyalolex™ Drops of Clarity™.

(4) Relates to revenue from wellness and lifestyle segment such as sale of hand sanitizer, bath bombs, gummies, beverages, 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 18 – SEGMENT INFORMATION

280, “Segment Reporting” establishes standards for reporting information about reportable segments.

FASB ASC 280, “ Segment Reporting ” establishes standards for reporting information about reportable segments.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group (“CODM”), in deciding how to allocate resources and in assessing performance.

6 unchanged sentences

As of the date of this report and in preparation for the new and different source of revenue, the Company has determined that it operates in two operating and reportable segments:

a) Infrastructure Business and b) Life Sciences segment.

(a) Infrastructure segment and (b) Life Sciences segment.

The Company does not include intercompany transfers between segments for Management reporting purposes.

19 unchanged sentences

(2) Hong Kong

North America

(in thousands)

2 unchanged sentences

(2) Hong Kong

North America

3) The table below shows the non-current assets other than financial instruments held in the country of domicile and foreign countries.

24 unchanged sentences

NOTE 19 – SUBSEQUENT EVENTS

In January 2020, the Company entered into a binding agreement for the settlement of three (3) 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.

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 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.

On May 5, 2020, the Company also received Economic Injury Disaster Loan Emergency Advance for $10,000 and an Economic Injury Disaster Loan for approximately $150 thousand on June 11, 2020.

We continue to monitor the impact from restrictions imposed by the COVID-19 pandemic on our financial condition, liquidity, operations, suppliers, industry, and workforce.

Revenue from the infrastructure segment continues to be adversely affected as we are unable to fully deploy our workforce.

In response to the evolving circumstances, we adapted our facilities to manufacture, label, and distribute FDA-registered alcohol-based hand sanitizers and hand rubs.

While there is a general lack of visibility, we anticipate drastically reduced revenue from Infrastructure, compensated by increased revenue in the Life Sciences segment based on the strategic positioning.

After March 31, 2021, the Company raised approximately $790 thousand from the ATM, net of commission, as of June 7, 2021.

On May 14, 2021, the Company announced it had completed Cohort 1 of three cohorts in its Phase 1 trial.

This was followed by Company announcement for completion of Cohort 2 on June 7, 2021.

On April 6, 2021, after the close of the Company’s Fiscal Year 2021, the plaintiffs and the Class Action Defendants in the Tchathou shareholder class action litigation reached a preliminary agreement in principle to settle all pending shareholder litigation matters, including the Tchatchou and Harris-Carr matters described above in Item 3 – Legal Proceedings.

The settlement is subject to the agreement and execution of formal settlement documentation and approval by the United States District Court for the District of Maryland.

At present, the vast majority of the settlement is expected to be paid by the Company’s insurance policy.

The Company and the Class Action Defendants are represented by counsel in the litigation.

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data