What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-11 compared with 2021-02-16 · 360 added, 225 removed, 498 unchanged (54% of the section changed)

3 unchanged sentences

(in thousands, except share data)

December 31 ,

Current assets:

Cash and cash equivalents

Marketable securities

Accounts receivable, net

Non-marketable securities

Deposits and advances

19 unchanged sentences

Stockholders' equity:

Preferred stock, $0.0001 per value:

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

Preferred stock, $ 0.0001 par value:

authorized 1,000,000 shares, no shares issued or outstanding as of June 30, 2021 and March 31, 2021.

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

150,000,000 shares authorized;

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

48,284,017 and 47,827,273 shares issued and outstanding as of June 30, 2021 and March 31, 2021, respectively.

Accumulated other comprehensive loss

3 unchanged sentences

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

| December 31, 2020 Form 10-Q

| June 30, 2021 Form 10-Q

India Globalization Capital, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except loss per share)

Three months ended December 31 ,

Nine months ended December 31 ,

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

Three months ended June 30,

Cost of revenue

2 unchanged sentences

Operating loss

Impairment of investment

Other income, net

Loss before income taxes

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.

| December 31, 2020 Form 10-Q

| June 30, 2021 Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three Months Ended December 31 , 2019

Common Shares

4 unchanged sentences

Total Stockholders'

Balances as of September 30, 2019

Common stock-based compensation & expenses, net

Foreign currency translation adjustments

Balances as of December 31 , 2019

Three Months Ended December 31 , 2020

Balances as of September 30, 2020

Common stock-based compensation & expenses, net

Foreign currency translation adjustments

Balances as of December 31 , 2020

Nine months ended December 31 , 2019

Common Shares

Common Stock and

Additional Paid in

Accumulated Other

Comprehensive Loss

Total Stockholders'

Balances as of March 31, 2020

Common stock-based compensation & expenses, net

Issuance of equity stock through offering (net of expenses)

Common stock issued for investment

Loss on foreign currency translation

Balances as of December 31 , 2019

Nine months ended December 31 , 2020

Balances as of June 30, 2020

Balances as of March 31, 2021

Common stock-based compensation & expenses, net

Issuance of equity stock through offering (net of expenses)

Common stock issued for investment

Other adjustments

Loss on foreign currency translation

Balances as of December 31 , 2020

Balances as of June 30, 2021

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

| December 31, 2020 Form 10-Q

| June 30, 2021 Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Nine months ended

December 31 ,

Three months ended

Operating activities:

1 unchanged sentence

Depreciation and amortization

Impairment of investment

Common stock-based compensation and expenses, net

Accounts receivables, net

Forgiveness of PPP Loan

Accounts receivables

Deposits and advances

2 unchanged sentences

Accrued and other liabilities

Operating lease asset

Operating lease liability

Net cash used in operating activities

1 unchanged sentence

Purchase of property, plant, and equipment

Proceed from marketable securities

Investment in marketable securities

Investment in non-marketable securities

Acquisition and filing cost of patents and rights

Net cash provided by /(used in) investing activities

Net cash used in investing activities

Financing activities:

Issuance of equity stock (net of expenses)

Proceeds from borrowings, net

Issuance of equity stock through offering (net of expenses)

Proceeds from long- term loan

Net cash provided by financing activities

4 unchanged sentences

Supplementary information:

Cash paid for interest

Non-cash items:

Common stock issued/granted including ESOP, consultancy

Common stock issued/granted other than ESOP, consultancy

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

Amortization of operating lease

Forgiveness of PPP Loan

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

| December 31, 2020 Form 10-Q

| June 30, 2021 Form 10-Q

India Globalization Capital, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED DECEMBER 31 , 2020

THREE MONTHS ENDED JUNE 30, 2021

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

1 unchanged sentence

Our filings are available on www.sec.gov.

The information contained on our websites, including www.igcinc.us, is not incorporated by reference in this report, and you should not consider such information to be a part of this report.

The information contained on our various websites, including www.igcinc.us, is not incorporated by reference in this report, and you should not consider such information to be a part of this report.

We exclude our investments and minority non-controlling interests, and any information provided by them is not incorporated by reference in this report, and you should not consider such information to be a part of this report.

NOTE 1 – BUSINESS DESCRIPTION

At IGC, we are dedicated to the future of pharmaceuticals and wellness products through innovative research in cannabinoid sciences.

Devastating diseases such as Alzheimer’s, Parkinson’s, Epilepsy and chronic pain collectively affect more than one billion people worldwide.

We believe life-altering solutions are within the reach of the current generation by applying creative concepts, dedicated study, and a passion for community and wellness empowerment, to cutting edge research, technology and product development.

Since 2014, our team has been committed to researching the application of cannabinoids, sometimes in combination with other compounds, to address various ailments, using our research to develop intellectual property, formulations and multiple wellness and lifestyle brands.

Separately, and in addition, since 2008, we have an infrastructure business managed from India, which involves the execution of construction projects, the purchase and resale of physical commodities mostly used in infrastructure, and the rental of heavy construction equipment.

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.

SEC Settlement update

On December 21, 2020, the Company and our CEO, Ram Mukunda, reached a settlement (“Settlement”), with the SEC related to disclosures made in our March 26, 2018 press release regarding the timeframe for the availability of our first cannabis product, Hyalolex™, now known as Hyalolex Drops of Clarity™.

Under the terms of the Settlement, without admitting or denying the factual allegations, we and Mr.

Mukunda consented to the entry of an order by the SEC pursuant to which:

(i) we and Mr.

Mukunda will cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and (3) of the Securities Act;

(ii) we and Mr.

Mukunda paid civil monetary penalties of $175,000 and $35,000, respectively to the SEC;

and (iii) we have retained an independent compliance consultant to conduct a compliance program assessment and make recommendations related to our internal policies and procedures regarding the effectiveness of our disclosure controls and procedures with an emphasis on our press releases and social media posts.

Phase 1 Trial updates

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

The Phase 1 trial is proposed to 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”) of IGC-AD1 as it relates to polymorphisms of CYP2C9 and collect data on neurological and psychological factors.

Our 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.

We have exclusive rights to the patent filing.

Hyalolex Drops of Clarity™, an oral tincture, is also modeled around the patent filing by USF.

During the quarter the Company prepared to enroll patients.

| December 31, 2020 Form 10-Q

Since 2014, we have focused a portion of our business on application of phytocannabinoids such as Tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”), among others, in combination with other compounds, to address efficacy for various ailments, especially Alzheimer's disease.

As previously disclosed, IGC submitted IGC-AD1, our investigational drug candidate for Alzheimer’s, to the U.S.

Food and Drug Administration (“FDA”) under Section 505(i) of the Federal Food, Drug, and Cosmetic Act and received approval, on July 30, 2020, to proceed with the Phase 1 trial, on Alzheimer’s patients.

The Company has completed all dose escalation studies associated with the Phase 1 trial and is in the process of compiling safety and tolerability data for submission to the FDA.

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

The Company has filed twelve patent applications to address various diseases such as Alzheimer's, Central Nervous System (“CNS”) disorders, pain, stammering, seizures in cats and dogs, eating disorders, stress-relief and calm-restoring beverage, and fatigue.

As of June 30, 2021, we have been awarded three patents.

In addition, we license a patent filing from the University of South Florida titled “Ultra-Low dose THC as a potential therapeutic and prophylactic agent for Alzheimer’s Disease.”

The USPTO issued patent (#11,065,225) for this filing on July 20, 2021.

The granted patent relates to IGC’s proprietary formulation, IGC-AD1, intended to assist in the treatment of individuals living with Alzheimer’s disease.

The Company is developing three brands, including Holief™, among others.

Holief is a non-GMO, vegan, natural, women’s line of over-the-counter (“OTC”) products, aimed at addressing dysmenorrhea and pre-menstrual-symptoms (“PMS”) in women.

Holief, in development, seeks to connect, via a cloud-based platform, women with health care professionals who can help address dysmenorrhea, or period cramps, and PMS.

Approximately 31.3 million (Statista, 2021) women in America suffer from dysmenorrhea and PMS.

Since our inception, the Company has operated its Infrastructure business segment from India.

The infrastructure business segment 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.

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

The infrastructure sector has been severely hampered by the COVID-19 pandemic, especially in India and Hong Kong.

COVID-19 update

We believe that the current COVID-19 pandemic and its impact on certain aspects of the economy have negatively impacted our revenue and increased our expenses.

In the past nine 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 of the U.S.

and our Delhi office have had COVID-19 outbreaks that have led to closures, delays and expenses.

In response, we have and continue to make efforts to decrease our overhead expenses and have oriented our primary focus on the human trials on IGC-AD1.

In response, we have made and continue to make efforts to decrease our overhead expenses and have oriented our primary focus on the human trials 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.

| June 30, 2021 Form 10-Q

Business Organization

As of December 31, 2020, the Company had the following direct operating subsidiaries:

As of June 30, 2021, 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”).

10 unchanged sentences

The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year.

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.

These interim statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2021 (“Fiscal 2021”) contained in the Company’s Form 10-K for Fiscal 2021, filed with the SEC on June 14, 2021, specifically in Note 2 to the consolidated financial statements.

Principles of consolidation

6 unchanged sentences

Actual results could differ from those estimates.

| December 31, 2020 Form 10-Q

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

13 unchanged sentences

Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the condensed consolidated financial statements.

| June 30, 2021 Form 10-Q

Presentation and functional currencies

16 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 nine months ended December 31, 2020, and 2019.

No impairment has been recorded for the three months ended June 30, 2021, and 2020.

Short-term and long-term investments

4 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.

| December 31, 2020 Form 10-Q

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

2 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 December 31, 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 – b ased c ompensation

As of June 30, 2021, the Company does not have any investment in marketable securities.

| June 30, 2021 Form 10-Q

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 ”.

12 unchanged sentences

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

We had $226 thousand of accounts receivable, net of provision for doubtful debt of $10 thousand as of December 31, 2020, as compared to $133 thousand of accounts receivable, net of provision for doubtful debt of $9 thousand as of March 31, 2020.

We had $ 162 thousand of accounts receivable, net of provision for doubtful debt of $ 63 thousand as of June 30, 2021, as compared to $ 175 thousand of accounts receivable, net of provision for doubtful debt of $ 63 thousand as of March 31, 2021.

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.

12 unchanged sentences

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

| December 31, 2020 Form 10-Q

Fair value of financial instruments

ASC Topic 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.

| June 30, 2021 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 15 - “Fair Value of Financial Instruments”, for further information .

Loss per s hare

The computation of basic loss per share for the nine months ended December 31, 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 nine months ended December 31, 2020 and 2019, used for the computation of basic earnings per share (“EPS”) is 40,915,196 and 39,543,480 respectively.

Due to the loss incurred during the nine months ended December 31, 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 three months ended June 30, 2021, excludes potentially dilutive securities of approximately 1.9 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 the three months ended June 30, 2021 and 2020, used for the computation of basic earnings per share (“EPS”) is 47,910,866 and 40,189,222 respectively.

Due to the loss incurred by the Company during the three months ended June 30, 2021 and 2020, 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 have taken cybersecurity measures that we expect are likely to safeguard the Company against breaches.

In the nine months ended December 31, 2020, there were no impactful breaches in cybersecurity.

Intangible a ssets

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 .

In the three months ended June 30, 2021, there were no impactful breaches in cybersecurity.

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.

7 unchanged sentences

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.

| December 31, 2020 Form 10-Q

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.

Revenue Recognition

8 unchanged sentences

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

| June 30, 2021 Form 10-Q

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.

9 unchanged sentences

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 nine months ended December 31, 2020 and 2019 are as follows:

Net sales disaggregated by significant products and services for the three months ended June 30, 2021 and 2020 are as follows:

(in thousands)

Nine months ended December 31 ,

Three months ended June 30,

Infrastructure segment

7 unchanged sentences

(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, beverages, hemp crude extract, hemp isolate, and hemp distillate and royalty income from the 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, lotion, 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.

| December 31, 2020 Form 10-Q

Lessor Accounting

5 unchanged sentences

The lessor practical expedient to not separate non-lease components from the associated component must be elected for all existing and new leases.

| June 30, 2021 Form 10-Q

As lessor, the Company expects that post-adoption substantially all existing leases will have no change in the timing of revenue recognition until their expiration or termination.

The Company expects to elect the lessor practical expedient to not separate non-lease components such as maintenance from the associated lease for all existing and new leases and to account for the combined component as a single lease component.

The timing of revenue recognition is expected to be the same for the majority of the Company’s new leases as compared to similar existing leases;

The timing of revenue recognition is expected to be the same for most the Company’s new leases as compared to similar existing leases;

however, certain categories of new leases could have different revenue recognition patterns as compared to similar existing leases.

16 unchanged sentences

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

There was no impairment for right-of-use lease assets as of December 31, 2020.

| December 31, 2020 Form 10-Q

There was no impairment for right-of-use lease assets as of June 30, 2021.

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

2 unchanged sentences

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

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.

| June 30, 2021 Form 10-Q

NOTE 3 – INVENTORY

(in thousands)

December 31 , 2020

June 30, 2021

March 31, 2021

2 unchanged sentences

Finished goods

Inventory in the form of work-in-progress as of December 31, 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, beverages and personal protection equipment, among others.

During the nine months ended December 31, 2020 the Company wrote off approximately $342 thousand inventory due to abnormal amounts of idle facility expense, freight, handling costs, scrap, and wasted material (spoilage) as compared to approximately zero for the nine months ended December 31, 2019.

Inventory in the form of work-in-progress as of June 30, 2021, is comprised of, but not limited to, various hemp-based extracts such as crude oil, hemp distillate, and hemp isolate.

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, gummies, lotions, beverages, and personal protection equipment, among others.

During the three months ended June 30, 2021, there was write down of inventory of approximately $ 60 thousand.

Write downs are due to abnormal amounts of idle facility expense, freight, handling costs, scrap, and wasted material (spoilage).

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.

As previously reported, one of our vendors holding $ 1.74 million of our inventory had reported a theft at their facility.

The vendor has filed an insurance claim.

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

The Company continues to pursue the vendor for compensation.

NOTE 4 – DEPOSITS AND ADVANCES

(in thousands)

December 31 , 2020

June 30, 2021

March 31, 2021

1 unchanged sentence

Advances for property, plant and equipment

Statutory advances

Advances for inventory

Other receivables

Prepaid expense and other current assets

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.

Please refer to Note 3 – “Inventory” for details of Advances for inventory.

| December 31, 2020 Form 10-Q

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

Prepaid and other current assets include approximately $ 36 thousand statutory advances as of June 30, 2021, as compared to $29 thousand as of June 30, 2020.

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

NOTE 5 – INTANGIBLE ASSETS

1 unchanged sentence

(in thousands)

December 31 , 2020

June 30, 2021

March 31, 2021

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 approximately 12 patents and 35 trademarks.

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

| June 30, 2021 Form 10-Q

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 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 the three months ended December 31, 2020 and 2019, amounted to approximately $4 thousand and $2 thousand, respectively, whereas the amortization expense in the nine months ended December 31, 2020 and 2019, amounted to approximately $10 thousand and $6 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 December 31, 2020, there was no impairment.

The amortization expense in the three months ended June 30, 2021 and 2020, amounted to approximately $ 5 thousand and $ 3 thousand, respectively.

Estimated amortization expense

5 unchanged sentences

For the year ended 2026

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

(in thousands, except useful life)

Useful Life (years)

December 31 , 2020

June 30, 2021

March 31, 2021

8 unchanged sentences

Total property, plant and equipment, net

| December 31, 2020 Form 10-Q

The depreciation expense in the three months ended December 31, 2020 and 2019, amounted to approximately $124 thousand and 22 thousand, respectively, whereas depreciation expense in the nine months ended December 31, 2020 and 2019, amounted to approximately $302 thousand and $63 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 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.

The depreciation expense in the three months ended June 30, 2021, and 2020, amounted to approximately $ 152 thousand and $ 74 thousand, respectively.

The net decrease in total Property, Plant & Equipment is primarily due to depreciation and foreign exchange translations.

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

The construction in progress relates to the Maryland facility extension .

For more information, please refer to Note 16 – Segment Information for the non-current assets other than financial instruments held in the country of domicile and foreign countries.

| June 30, 2021 Form 10-Q

NOTE 7 – INVESTMENTS IN NON-MARKETABLE SECURITIES

Short-term investment

(in thousands)

December 31 , 2020

Investment in equity shares of unlisted company

Investment in Evolve I (i)

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 December 31, 2020, the Company owns an approximate 19.8% interest in Evolve.

The Company may try to find an amicable resolution for the disposition of the current holding.

On May 12, 2020, the Company acquired an 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 exit the acquisition.

As of June 30, 2021, the Company received back partial shares of IGC common stock, which had been given pursuant to the SSA, in exchange for the return of its shareholding in Evolve.

Accordingly, the Company cancelled the partial shares received by it and impaired its remaining investment of approximately $ 37 thousand.

Long-term investment

(in thousands)

Investment in equity shares of unlisted company

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.

1 unchanged sentence

(in thousands)

December 31 , 2020

June 30, 2021

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 December 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 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.

While the Company has initiated collection proceedings in the Commercial Court of Ernakulam, the Company 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 decrease in value of Indian Rupee .

Includes a loan of $ 200 thousand to one of our manufacturers for the purchase of equipment.

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 nine months ended December 31, 2020 and 2019 are approximately $197 thousand and $154 thousand, respectively.

The Company also has an operating lease as of December 31, 2020.

| December 31, 2020 Form 10-Q

The total short-term lease expense and cash paid for the three months ended June 30, 2021 and 2020 are approximately $ 31 thousand and $ 63 thousand, respectively.

The Company also has four operating leases as of June 30, 2021.

| June 30, 2021 Form 10-Q

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

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

The Company renewed three lease agreements for terms between three to four years expiring between 2023 and 2024.

The total annual lease expense is approximately $ 26 thousand.

The lease contracts do not contain any material residual value guarantees or material restrictive covenants.

The remaining lease term for the operating leases is between 2.7 - 3.5 years with a discount rate of 7 %.

The lease does not provide a readily determinable implicit rate.

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

(in thousands)

Three months ended

December 31 , 2020

June 30, 2021

(in thousands)

Nine months ended

December 31 , 2020

Three months ended

June 30, 2020

Operating lease costs

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(in thousands)

December 31 , 2020

(in thousands)

June 30, 2021

March 31, 2021

Operating lease asset

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(in thousands)

December 31 , 2020

June 30, 2021

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

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

As of December 31, 2020, the following table summarizes the maturity of our lease liabilities:

As of June 30, 2021, the following table summarizes the maturity of our lease liabilities:

Present value discount

Total lease liabilities

| December 31, 2020 Form 10-Q

| June 30, 2021 Form 10-Q

NOTE 10 – ACCRUED AND OTHER LIABILITIES

(in thousands)

December 31 , 2020

June 30, 2021

Compensation and other contributions

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Other current liability

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

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 $88 thousand and $89 thousand of current operating lease liability and statutory payables of approximately $51 thousand and $27 thousand as of December 31, 2020 and March 31, 2020, respectively.

Other current liability also includes $ 114 thousand and $ 90 thousand of current operating lease liability and statutory payables of approximately $ 35 thousand and $ 24 thousand as of June 30, 2021 and March 31, 2021, respectively.

NOTE 11 – LOANS AND OTHER LIABILITIES

Short-term and Long -term loans:

During the nine months ended December 31, 2020, the Company repaid a secured loan of $50 thousand.

As of December 31, 2020, the Company has the following loans:

Forgiveness of Paycheck Protection Program Promissory Note:

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.

The Loan was 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%.

As of the three months ended December 31, 2020, the interest expense for the PPP Note was approximately $702.

As of December 31, 2020, approximately $250 thousand of the loan is classified as Short-term loans and approximately$180 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.

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 PPP Note was to mature after 2 years on May 3, 2022, with monthly repayments of approximately $18 thousand commencing November 1, 2020 and interest accrued on the outstanding principal balance at an annual fixed rate of 1.00%.

On June 10, 2021, the Company received forgiveness for the full amount borrowed of approximately $430 thousand.

This is accounted as other income, net.

Loan as of June 30, 2021:

On June 11, 2020, the Company received an Economic Injury Disaster Loan (“EIDL”) 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.

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.

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 December 31, 2020, approximately $148 thousand of the loan is classified as Long-term loans and approximately $2 thousand as Short-term loans.

| December 31, 2020 Form 10-Q

For the three months ended June 30, 2021, the interest expense for the EIDL was approximately $ 469 .

As of June 30, 2021, approximately $ 147 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

Other Liability:

Other liability consists of a gratuity reserve for employees in our subsidiaries in India and was $17 thousand and $16 thousand as of December 31, 2020 and March 31, 2020, respectively.

(in thousands)

June 30, 2021

March 31, 2021

Statutory reserve

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

| June 30, 2021 Form 10-Q

NOTE 12 – COMMITMENTS AND CONTINGENCIES

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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 December 31, 2020, except as disclosed below.

As of December 31, 2020, 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.

There are no such matters that are deemed material to the condensed consolidated financial statements as of June 30, 2021, except as disclosed below.

As of June 30, 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.

The Company filed a motion to dismiss on October 11, 2019, which the court denied on January 29, 2021.

The Company’s responsive pleading is due on February 15, 2021.

The Company denies any and all liability and intends to vigorously defend the litigation.

See Part II, Item 1 – Legal Proceedings.

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 June 30, 2021.

For the current state of the consolidated Shareholder Class Action Litigation, please refer to Part II, Item 1 – Legal Proceedings.

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 December 31, 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 December 31, 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 9,147 shares of common stock and 182,944 warrants to purchase 18,294 shares of common stock.

The warrants expire on March 8, 2021.

As of June 30, 2021, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 48,284,017 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, 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 or market.

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 14 – INTENTIONALLY LEFT BLANK

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 (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.

During the three months ended June 30, 2021, the Company raised approximately $ 726 thousand of net proceeds from issuance of equity stock through the offering.

The Company may use these funds for working capital and capital expenditures, 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

As of December 31, 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.

As of June 30, 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, 1.7 million restricted share units fair valued at $ 805 thousand with a weighted average value of $ 0.47 per share, have been granted but not yet issued from different Incentive Plans and Grants.

1 unchanged sentence

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

| December 31, 2020 Form 10-Q

| June 30, 2021 Form 10-Q

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

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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 nine months ended December 31, 2020, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $459 thousand and $64 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 nine months ended December 31, 2019, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $525 thousand and $17 thousand respectively.

For the three months ended June 30, 2021, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $ 120 thousand and $ 5 thousand, respectively.

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) was $ 160 thousand and $ 6 thousand, respectively.

Non-vested shares

4 unchanged sentences

Cancelled/forfeited

Non-vested shares as of December 31 , 2020

Non-vested shares as of June 30, 2021

(in thousands)

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Cancelled/forfeited

Options outstanding as of December 31 , 2020

Options outstanding as of June 30, 2021

There was a combined unrecognized expense of $ 117 thousand related to non-vested shares and share options that the Company expects to be recognized over weighted average life of 1.82 years.

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

As of December 31, 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 $3.1 million and increase due to dividend income of approximately $14 thousand and approximately $5 thousand unrealized gain during the nine months ended December 31, 2020.

As of June 30, 2021, the Company’s marketable securities, if any, may 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 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.”

| December 31, 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 December 31, 2020 and March 31, 2020, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

| June 30, 2021 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, 2021 and March 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

(in thousands)

December 31 , 2020

June 30, 2021

Cash and cash equivalents:

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-Non-marketable securities

Total Investment

NOTE 17 – INTENTIONALLY LEFT BLANK

| December 31, 2020 Form 10-Q

Total investments

NOTE 16 – SEGMENT INFORMATION

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

| June 30, 2021 Form 10-Q

The following provides information required by ASC 280-10-50-38 “Entity-wide Information”:

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(in thousands)

Nine months ended

December 31 , 2020

Three months ended

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Percentage of

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(in thousands)

Nine months ended

December 31 , 2019

Three months ended

June 30, 2020

Percentage of

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

| December 31, 2020 Form 10-Q

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

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(in thousands)

Nine months ended

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Three months ended

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Percentage of

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(2) Hong Kong

North America

(in thousands)

Nine months ended

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Three months ended

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Percentage of

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(2) Hong Kong

North America

| June 30, 2021 Form 10-Q

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

4 unchanged sentences

(India, Hong Kong, and Colombia)

December 31 , 2020

June 30, 2021

Intangible assets, net

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Total non-current assets

| December 31, 2020 Form 10-Q

(in thousands)

Nature of assets

USA (Country of Domicile)

(Country of Domicile)

Foreign Countries

8 unchanged sentences

NOTE 17 – SUBSEQUENT EVENTS

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 will act 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” offering as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the “Offering”).

On January 29, 2021, in Tchatchou v.

India Globalization Capital, Inc., Civil Action No.

8:18-cv-03396, a shareholder class action litigation initiated against the Company on November 2, 2018, the United States District Court for the District of Maryland entered an order denying the Company’s Motion to Dismiss Consolidated Amended Complaint for Violation of Federal Securities Laws.

The Company’s responsive pleading is due on February 15, 2021.

The Company denies any and all liability and intends to vigorously defend the litigation.

See Part II, Item 1 – Legal Proceedings.

| December 31, 2020 Form 10-Q

The Company licenses a patent filing from the University of South Florida titled “Ultra-Low dose THC as a potential therapeutic and prophylactic agent for Alzheimer’s Disease.” The USPTO issued patent (#11,065,225) for this filing on July 20, 2021.

The granted patent relates to IGC’s proprietary formulation, IGC-AD1, intended to assist in the treatment of individuals living with Alzheimer’s disease.

Subsequent to June 30, 2021, and through July 23, 2021, the Company raised approximately $ 3.4 million from the ATM, net of commission.

For additional information about the ATM, see Note 13, “Securities”.

Employment contract :

Ram Mukunda has served as President and Chief Executive Officer of our Company since its inception.

On July 14, 2014, the Company and Mr.

Mukunda entered into the 2014 Employment Agreement.

Pursuant to the 2014 Employment Agreement, which was effective until July 2021, we pay Mr.

Mukunda a base salary of $ 300,000 per year.

Mukunda’s employment agreement has been extended for one additional year to July 2022.

The Employment Agreement provides that the Board of Directors of our Company may review and update the targets and amounts for the net revenue and salary and contract bonuses on an annual basis.

Mukunda is entitled to benefits, including insurance, participation in company-wide 401(k), reimbursement of business expenses, 20 days of annual paid vacation, sick leave, domestic help, driver, cook and a car (subject to partial reimbursement by Mr.

Mukunda of rental payments for the car and reimbursement of business expenses).

| June 30, 2021 Form 10-Q

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

The purpose of this Management’s Discussion and Analysis (“MD&A”) is to provide an understanding of the Company's consolidated financial condition, and results of operations and cash flows, and should be read in conjunction with our unaudited condensed financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q for the three months ended June 30, 2021, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2021, filed with the SEC on June 14, 2021 (the “2021 Form 10-K”).

The Company’s actual results could differ materially from those discussed here.

Factors that could cause differences include those discussed in the “Forward-Looking Statements” and “Risk Factors” sections, as well as discussed elsewhere in this report.

The risks and uncertainties can cause actual results to differ significantly from those in our forward-looking statements or implied in historical results and trends.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.

We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Our primary source of revenue in the three months ended June 30, 2021 and June 30, 2020, was from our Life Sciences segment, which includes a biopharmaceutical component, and a wellness and lifestyle business, which involves:

development of potential new drugs, subject to applicable regulatory approvals, that use ultra-low doses of phytocannabinoids including cannabidiol (“CBD”) and tetrahydrocannabinol (“THC”), among others, in combination with other compounds, believed to assist in managing symptoms of diseases like Alzheimer’s,

hand sanitizers and several hemp-based CBD products and brands, in various stages of development, for sale online and/or through stores,

wholesale of hemp extracts including hemp crude extract, and hemp isolate, among others,

white labeling of hemp-based products, and

the offering of tolling services like extraction and distillation to hemp-farmers and retailers.

The Company’s second segment, the Infrastructure segment, involves:

Execution of Construction Contracts – The Company is executing a road building contract in Kerala, India valued at approximately $1.2 million.

Work on this project is sporadic based on COVID-19 restrictions.

The Company intends to continue operations in this business line as the COVID-19 pandemic permits.

Purchase and Resale of Physical Commodities Used in Infrastructure – This business line includes the purchase and resale of commodities, including steel, wooden doors, marble, and tiles, among others.

This work has been adversely affected due to COVID-19.

There was no revenue from this business line during the three months ended June 30, 2021, in part due to the COVID-19 pandemic.

The Company intends to continue operations in this business line as the COVID-19 pandemic permits.

Rental of Heavy Construction Equipment – We own heavy construction equipment such as motor grader and rollers, that we rent to construction contractors.

This business is seasonal and had minimal revenue during the three months ended June 30, 2021, in part due to the COVID-19 pandemic.

The Company intends to continue operations in this business line as the COVID-19 pandemic permits.

The Company operates both segments in compliance with applicable state, national, and local laws and regulations and only in locations and regions where it is legal to do so.

Company Highlights

On June 10, 2021, the Company received forgiveness for the full amount borrowed as per the Paycheck Protection Program Promissory Note (the “PPP Note”) of approximately $430 thousand.

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

Small Business Administration (“SBA”).

On June 23, 2021, the Company announced completion of Cohort 3, the final cohort, of its Phase 1 clinical trial on IGC’s tetrahydrocannabinol (“THC”)- based investigational new drug, IGC-AD1, intended to alleviate the symptoms of individuals suffering from Alzheimer’s disease.

As previously disclosed, IGC submitted IGC-AD1, its investigational drug candidate for Alzheimer’s, to the U.S.

Food and Drug Administration (“FDA”) under Section 505(i) of the Federal Food, Drug, and Cosmetic Act.

IGC received approval to proceed with the Phase 1 trial, on Alzheimer’s patients, from the FDA on July 30, 2020.

| June 30, 2021 Form 10-Q

During the three months ended June 30, 2021, the Company raised approximately $726 thousand of net proceeds from issuance of equity stock through offering.

The Company had entered “at the market” (“ATM”) offering pursuant to the Sales Agreement (the “Agreement”) entered on January 13, 2021 with The Benchmark Company, LLC (the “Sales Agent”) for 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”).

We have a two-pronged strategy for our Life Sciences, biopharmaceutical component:

the initial prong is to investigate IGC-AD1 for safety and efficacy in managing the symptoms of Alzheimer’s disease.

This involves conducting Phase 1 through Phase 3 trials on IGC-AD1 over the next several years, subject to FDA regulatory approval and adequate funding, with the anticipated goal of demonstrating safety and efficacy and potentially obtaining FDA approval for IGC-AD1 as a phytocannabinoid-based formulation that can help manage some symptoms for patients suffering from Alzheimer’s disease.

The second prong is to investigate the potential efficacy of IGC-AD1 on memory and/or decreasing or managing plaques and tangles, some of the hallmarks of Alzheimer’s disease.

Our pipeline of investigational phytocannabinoid formulations also includes pain creams and tinctures for pain relief.

We believe that the biopharmaceutical component of our Life Sciences strategy will take several years to implement and involves considerable risk;

however, we believe it may involve greater defensible growth potential and first-to-market advantage.

Our consumer service and products strategy includes advancing the women’s line of products, under the brand www.holief.com, and developing and creating a cloud-based platform that connects women with health care professionals who can help with PMS and dysmenorrhea.

We believe that the additional investment in clinical trials, research, and development (“R&D”), facilities, marketing, and advertising, as well and the acquisition of products and businesses supporting our Life Sciences segment, are likely to be critical to the development and delivery of innovative products and positive patient and customer experiences.

Part of our strategy is to leverage our R&D and our intellectual property to develop products that we believe are likely to be well-differentiated and -supported by science through planned pre-clinical and clinical trials.

We believe this strategy has the potential to improve existing products and lead to the creation of new products, which, based on scientific study and research, may offer positive results for the management of certain conditions, symptoms, and side effects.

COVID-19 Update

As our infrastructure business is based in Asia (India and Hong Kong), the COVID-19 pandemic and restrictions imposed by governmental entities adversely impacted, and continues to impact, our financial condition, liquidity, and operations.

We anticipate that reduced revenue from Infrastructure will continue in Fiscal 2022 as the pandemic continues to affect the regions where we do business.

Results of Operations for the Three Months Ended

June 30, 2021 and June 30, 2020

The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

The following table presents an overview of our results of operations for the three months ended June 30, 2021 and June 30, 2020:

Statement of Operations (in thousands, unaudited)

Three months ended June 30,

Cost of revenue

Selling, general and administrative expenses

Research and development expenses

Operating loss

Impairment of investment

Other income, net

Loss before income taxes

| June 30, 2021 Form 10-Q

Revenue – Revenue in the three months ended June 30, 2021, and June 30, 2020, was primarily derived from our Life Sciences segment, which involved sales of products such as lotion, gummies, and alcohol-based hand sanitizers, among others.

Revenue was approximately $77 thousand and $584 thousand for the three months ended June 30, 2021, and the three months ended June 30, 2020, respectively.

Revenue in the Life Sciences segment in the three months ended June 30, 2020, was $584 thousand as compared to $62 thousand in the three months ended June 30, 2021, albeit with a change in product mix.

Revenue in our Infrastructure segment for the three months ended June 30, 2020, was nil and $15 thousand in the three months ended June 30, 2021.

Such revenue relates to execution of construction contract.

Primarily due to COVID-19, we have limited visibility on when either of our segments will stabilize, generate significant revenue, and become predictable.

We expect volatility in both segments in the foreseeable future.

We expect to be opportunistic in providing personal protection equipment, including hand sanitizers, as the country reopens from the pandemic.

Cost of revenue – Cost of revenue amounted to approximately $51 thousand for the three months ended June 30, 2021, compared to $538 thousand in the three months ended June 30, 2020.

The cost of revenue in the three months ended June 30, 2021, is primarily attributable to raw materials that are required to produce our products.

Selling, general and administrative expenses – Selling, general and administrative expenses consist primarily of employee-related expenses, sales commission, professional fees, legal fees, marketing, other corporate expenses, allocated general overhead and provisions, depreciation and write-offs relating to doubtful accounts and advances, if any.

Selling, general and administrative expenses increased by approximately $21 thousand or 1% to approximately $1.8 million for the three months ended June 30, 2021, from approximately $1.8 million for the three months ended June 30, 2020.

The increase of approximately $21 thousand is attributed to increased product sales and marketing related expenses.

Research and Development expenses – Research and Development (“R&D”) expenses were attributed to conducting the Phase 1 trial on patients suffering from Alzheimer’s disease and product research in our Life Sciences segment.

The R&D expenses for the three months ended June 30, 2021 are approximately $444 thousand and approximately $222 thousand for the three months ended June 30, 2020.

The cost associated with this work is mostly associated with the clinical trial on patients suffering from Alzheimer’s disease, research comprising of plant extracts that could be productized and data to support the efficacy of the extracts, product research, designing, formulating and market analysis.

We expect R&D expenses to increase with progression in trials on IGC-AD1.

Impairment of investment – On May 12, 2020, the Company acquired an approximately 19.8% shareholding in Evolve I, Inc.

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

As of June 30, 2021, the Company received back partial shares of IGC common stock, which had been given pursuant to the SSA, in exchange for the return of its shareholding in Evolve.

Accordingly, the Company cancelled the partial shares received by it and impaired its remaining investment of approximately $37 thousand.

Other income, net – Other net income increased by approximately $394 thousand or 804% during the three months ended June 30, 2021.

The total other income for the three months ended June 30, 2021, and 2020 is approximately $443 thousand and $49 thousand, respectively.

Other income includes interest income, rental income, and income from sale of scrap, among others.

During the three months ended June 30, 2021, the other income included approximately $430 thousand related to forgiveness of PPP Note.

Liquidity and Capital Resources

Our sources of liquidity are cash and cash equivalents, funds raised through the ATM offering, cash flows from operations, short-term and long-term borrowings, and short-term liquidity arrangements.

The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations.

The Company does not have any material long-term debt, capital lease obligations or other long-term liabilities, except as disclosed in this report.

Please refer to Note 12, “Commitments and contingencies”, Note 11, “Loans and Other Liabilities” and Note 9, “Leases” in Item 1 of this report for further information on Company commitments and contractual obligations.

While the Company believes its existing balances of cash, cash equivalents and marketable securities and other short-term liquidity arrangements will be sufficient to satisfy its working capital needs, capital asset purchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes, clinical trials and other liquidity requirements, if any, associated with its existing operations over the next 12 months, it will raise money as and when it is able to do so.

The Company continues to utilize the ATM to raise capital.

Management is actively monitoring the impact of COVID-19 on the Company’s financial condition, liquidity, operations, suppliers, industry, legal expenses, and workforce.

| June 30, 2021 Form 10-Q

Please refer to Item 1A.

“Risk Factors” for further information on the risks related to the Company.

(in thousands, unaudited)

June 30, 2021

March 31, 2021

Percent Change

Cash and cash equivalents

Working capital

Cash and cash equivalents

Cash and cash equivalents decreased by approximately $1.2 million to $13.3 million in the three months ended June 30, 2021, from $14.5 million as of March 31, 2021, a decrease of approximately 8%.

The major decrease was due to approximately $93 thousand in purchase of property, plant, and equipment and a net cash loss of approximately $1.9 million, part of which was set-off with approximately $726 thousand of net proceeds from issuance of equity stock through offering.

Summary of Cash flows

(in thousands, unaudited)

Three months ended June 30,

Percent Change

Cash used in operating activities

Cash used in investing activities

Cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of period

Cash and cash equivalents at the end of the period

Operating Activities

Net cash used in operating activities for the three months ended June 30, 2021, was approximately $1.9 million.

This consists of a net loss of approximately $1.8 million and non-cash items totaling approximately $110 thousand, which in turn consist of an amortization/depreciation charge of approximately $157 thousand, stock-based expenses totaling approximately $125 thousand and gain due to forgiveness of PPP Note of approximately $430 thousand.

Changes in operating assets and liabilities had an impact of approximately $48 thousand on cash.

Net cash used in operating activities for the three months ended June 30, 2020, was approximately $4 million.

This consists of a net loss of approximately $1.9 million and non-cash items totaling approximately $243 thousand, which in turn consist of an amortization/depreciation charge of approximately $77 thousand and stock-based expenses totaling approximately $166 thousand.

Changes in operating assets and liabilities had a negative impact of approximately $2.35 million on cash, of which approximately $2.28 million was due to increase in inventory.

Investing Activities

Net cash used in investing activities for the three months ended June 30, 2021, was approximately $95 thousand, which is comprised of expenses of approximately $2 thousand for the acquisition and filing expenses related to patents and purchase of property, plant and equipment of approximately $93 thousand.

| June 30, 2021 Form 10-Q

Net cash used in investing activities for the three months ended June 30, 2020, was $1.1 million, which is comprised of approximately $26 thousand for the acquisition and filing expenses related to patents and trademarks, purchase of property, plant and equipment of $944 thousand and investments of approximately $149 thousand in non-marketable securities and $17 thousand in marketable securities.

Financing Activities

Net cash provided by financing activities was approximately $726 thousand for the three months ended June 30, 2021, which is comprised of net proceeds from issuance of equity stock through ATM offering, net of all expenses related to issuance of stock.

Net cash provided by financing activities was $580 thousand for the three months ended June 30, 2020, consisting of proceeds from loans.

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts.

Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

Critical Accounting Policies

While all accounting policies impact the financial statements, certain policies may be viewed as critical.

Critical accounting policies are those that are both most important to the portrayal of financial condition and results of operations and that require Management’s most subjective or complex judgments and estimates.

Our Management believes the policies that fall within this category are the policies on revenue recognition, inventory, accounts receivable, foreign currency translation, impairment of long-lived assets and investments, stock-based compensation, and cybersecurity.

We have a cybersecurity policy in place and have taken cybersecurity measures that we expect are likely to safeguard the Company against breaches.

There were no impactful breaches in cybersecurity during the three months ended June 30, 2021.

Please see our disclosures in Note 2 – Summary of Significant Accounting Policies to the Notes to the Unaudited Condensed Consolidated Financial Statements in this report, in the Notes to the Audited Consolidated Financial Statements in the 2021 Form 10-K, as well as Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2021 Form 10-K, for a discussion of all our critical and significant accounting policies.

Recent Accounting Pronouncements

The recent accounting pronouncements are discussed in Note 2 – Summary of Significant Accounting Policies to the Notes to the Unaudited Condensed Consolidated Financial Statements in this report and in the Notes to the Audited Consolidated Financial Statements in Part II of our Annual Report on Form 10-K for fiscal year ended March 31, 2021, filed with the SEC on June 14, 2021.

| June 30, 2021 Form 10-Q

Quantitative and Qualitative Disclosures about Market Risk

Item 3 does not apply to us because we are a smaller reporting company.

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