What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-08-11 · 274 added, 210 removed, 648 unchanged (43% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

Current assets:

1 unchanged sentence

Accounts receivable, net

Non-marketable securities

Investment in Non-marketable securities

Deposits and advances

Total current assets

Non-current assets:

Intangible assets, net

3 unchanged sentences

Operating lease asset

Total long-term assets

Total non-current assets

LIABILITIES AND STOCKHOLDERS' EQUITY

1 unchanged sentence

Accounts payable

Accrued liabilities and others

Accrued and other liabilities

Short-term loans

Total current liabilities

Non-current liabilities:

Long-term loans

6 unchanged sentences

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.

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

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

150,000,000 shares authorized;

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

51,041,017 and 47,827,273 shares issued and outstanding as of September 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.

| June 30, 2021 Form 10-Q

| September 30, 2021, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

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

Three months ended June 30,

Three months ended

September 30,

Six months ended

September 30,

Cost of revenue

5 unchanged sentences

Loss before income taxes

Income tax expense/benefit

Net loss attributable to common stockholders

1 unchanged sentence

Comprehensive loss

Loss per share attributable to common stockholders:

Basic & diluted

Weighted-average number of shares used in computing loss per share amounts:

Net Loss per share attributable to common stockholders:

Basic and Diluted

Weighted-average number of shares used in computing net loss per share amounts:

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

| June 30, 2021 Form 10-Q

| September 30, 2021, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three months ended September 30, 2020

Common Shares

4 unchanged sentences

Total Stockholders'

Balances as of March 31, 2020

Balances as of June 30, 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 September 30, 2020

Three months ended September 30, 2021

Balances as of June 30, 2021

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Loss on foreign currency translation

Balances as of September 30, 2021

Six months ended September 30, 2020

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

Other adjustments

Loss on foreign currency translation

Balances as of June 30, 2021

Balances as of September 30, 2020

Six months ended September 30, 2021

Balances as of March 31, 2021

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Other adjustments

Gain on foreign currency translation

Balances as of September 30, 2021

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

| June 30, 2021 Form 10-Q

| September 30, 2021, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three months ended

Six months ended

September 30,

Operating activities:

1 unchanged sentence

Depreciation and amortization

Impairment of investment

Common stock-based compensation and expenses, net

Provision for bad debt

Impairment of non-marketable securities

Common stock-based compensation and expenses

Forgiveness of PPP Loan

9 unchanged sentences

Purchase of property, plant, and equipment

Investment in marketable securities

Investment in/Proceed from marketable securities

Investment in non-marketable securities

3 unchanged sentences

Issuance of equity stock through offering (net of expenses)

Proceeds from long- term loan

Proceeds from/Repayment of long- term loan

Net cash provided by financing activities

5 unchanged sentences

Non-cash items:

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

Common stock issued/granted for stock-based compensation, including patent acquisition

Amortization of operating lease

1 unchanged sentence

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

| June 30, 2021 Form 10-Q

| September 30, 2021, Form 10-Q

India Globalization Capital, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED JUNE 30, 2021

THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021

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

4 unchanged sentences

NOTE 1 – BUSINESS DESCRIPTION

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.

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

On September 7, 2021, the Company announced the completion of all dose escalation studies associated with the Phase 1 trial.

Based on this study and subject to FDA concurrence, the cannabis-based investigational drug IGC-AD1 was generally safe and well-tolerated by the Alzheimer’s trial participants.

The Company has filed the safety and tolerability data with the FDA as part of its Annual Report.

In addition, the trial on the secondary endpoints, such as pharmacokinetics, genotyping, neuropsychiatric inventory, and measurement of suicide severity, have also been completed.

We expect to report this data as it becomes available and after 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 Company has filed thirteen 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 September 30, 2021, we have 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 U.S.

Patent and Trademark Office (“USPTO”) issued a 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 is a non-GMO, vegan, natural, women’s line of over-the-counter (“OTC”) products aimed at addressing dysmenorrhea and premenstrual 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.

4 unchanged sentences

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.

Unfortunately, the infrastructure sector has been severely hampered by the COVID-19 pandemic, especially in India and Hong Kong where the business is based.

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 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

Our infrastructure business is based in the state of Kerala, India, which is among the Indian states most affected by COVID-19, and Hong Kong with strict quarantine and travel restrictions.

The restrictions continue to adversely impact our infrastructure business, financial condition, liquidity, and operations.

While 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 pandemic allows, we have limited visibility into when economic conditions will recover in India and Hong Kong.

| September 30, 2021, Form 10-Q

In response, we have oriented our current focus on a) the human trials on IGC-AD1 and getting an Alzheimer’s drug through trials and eventually to market, subject to FDA approval, and b) launching a cannabinoid-based women’s wellness line of products designed to assist in managing PMS and Dysmenorrhea.

Business Organization

As of June 30, 2021, the Company had the following direct operating subsidiaries:

As of September 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”).

4 unchanged sentences

Basis of presentation

The accompanying unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the U.S.

The accompanying condensed consolidated Balance Sheet as of September 30, 2021, condensed consolidated statements of operations for the three and six months ended September 30, 2021, and 2020, condensed consolidated statements of changes in stockholders’ deficit for the three and six months ended September 30, 2021, and 2020, and condensed consolidated statements of cash flows for the six months ended September 30, 2021, and 2020, are unaudited.

The Condensed Consolidated balance sheet as of March 31, 2021, which has been derived from audited financial statements, and these accompanying unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the U.S.

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

27 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

| September 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 three months ended June 30, 2021, and 2020.

No impairment has been recorded for the six months ended September 30, 2021, and 2020.

Short-term and long-term investments

5 unchanged sentences

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 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 ”.

Where the Company’s ownership interest is more than 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 June 30, 2021, the Company does not have any investment in marketable securities.

| June 30, 2021 Form 10-Q

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

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

| September 30, 2021, Form 10-Q

Stock – based compensation

13 unchanged sentences

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

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.

We had $ 138 thousand of accounts receivable, net of provision for doubtful debt of $ 71 thousand as of September 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.

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.

16 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

| September 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.

1 unchanged sentence

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 .

The computation of basic loss per share for the six months ended September 30, 2021, excludes potentially dilutive securities of approximately 2.2 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 six months ended September 30, 2021 and 2020, used for the computation of basic earnings per share (“EPS”) is 48,935,466 and 40,719,548 respectively.

Due to the loss incurred by the Company during the six months ended September 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 three months ended June 30, 2021, there were no impactful breaches in cybersecurity.

In the six months ended September 30, 2021, there were no impactful breaches in cybersecurity.

Intangible assets

1 unchanged sentence

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.

We perform an impairment analysis in the last month of the fiscal 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.

5 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.

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.

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

Management may also capitalize trademarks and similar 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

| September 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 three months ended June 30, 2021 and 2020 are as follows:

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

(in thousands)

Three months ended June 30,

Six months ended September 30,

Infrastructure segment

Rental income (1)

Construction contracts (2)

Construction income (2)

Purchase and resale of physical commodities (3)

14 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

| September 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.

19 unchanged sentences

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

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

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

GAAP are established by the FASB in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs.

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

Recently issued accounting pronouncements

Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

| September 30, 2021, Form 10-Q

NOTE 3 – INVENTORY

(in thousands)

June 30, 2021

September 30, 2021

March 31, 2021

2 unchanged sentences

Finished goods

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 in the form of work-in-progress as of September 30, 2021, is comprised of, but not limited to, harvested hemp crop hemp-based extracts , among other.

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.

During the six months ended September 30, 2021, inventory write down was of approximately $ 31 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.

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)

June 30, 2021

September 30, 2021

March 31, 2021

5 unchanged sentences

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.

Prepaid expense and other current assets include approximately $32 thousand statutory advances as of September 30, 2021, as compared to $ 36 thousand as of March 31, 2021.

Other receivables as of March 31, 2021, comprised inventory of $ 1.7 million that was on deposit with a vendor.

The vendor reported the inventory as stolen and filed an insurance claim.

The Company created a provision for the $ 1.7 million inventory during the current quarter.

We are simultaneously pursuing the vendor for compensation.

NOTE 5 – INTANGIBLE ASSETS

1 unchanged sentence

(in thousands)

June 30, 2021

March 31, 2021

September 30, 2021

Other intangibles

5 unchanged sentences

Total intangible assets

| June 30, 2021 Form 10-Q

| September 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 13 patents.

1 unchanged sentence

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 June 30, 2021 and 2020, amounted to approximately $ 5 thousand and $ 3 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 June 30, 2021, there was no impairment.

The amortization expense in the three months ended September 30, 2021 and 2020, amounted to approximately $ 6 thousand and $ 3 thousand, respectively, whereas the amortization expense in the six months ended September 30, 2021 and 2020, amounted to approximately $ 11 thousand and $ 6 thousand, respectively.

Estimated amortization expense

8 unchanged sentences

Useful Life (years)

June 30, 2021

September 30, 2021

March 31, 2021

8 unchanged sentences

Total property, plant and equipment, net

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

The depreciation expense in the three months ended September 30, 2021, and 2020, amounted to approximately $ 157 thousand and $ 104 thousand, respectively.

The depreciation expense in the six months ended September 30, 2021, and 2020, amounted to approximately $ 309 thousand and $ 178 thousand, respectively.

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

2 unchanged sentences

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

| September 30, 2021, Form 10-Q

NOTE 7 – INVESTMENTS IN NON-MARKETABLE SECURITIES

1 unchanged sentence

(in thousands)

September 30,

Investment in Evolve I (i)

1 unchanged sentence

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.

During the six months ended September 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.

1 unchanged sentence

(in thousands)

September 30,

Investment in equity shares of unlisted company

2 unchanged sentences

(in thousands)

June 30, 2021

September 30, 2021

Claims receivable (1)

4 unchanged sentences

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.

Includes $ 200 thousand owed 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 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.

The total short-term lease expense and cash paid for the six months ended September 30, 2021, and 2020 are approximately $ 82 thousand and $ 129 thousand, respectively.

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

| September 30, 2021, Form 10-Q

In November 2019, the Company entered into an 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.

12 unchanged sentences

Three months ended

June 30, 2021

September 30, 2021

(in thousands)

Three months ended

June 30, 2020

Six months ended

September 30, 2021

Operating lease costs

5 unchanged sentences

(in thousands)

June 30, 2021

September 30, 2021

March 31, 2021

7 unchanged sentences

(in thousands)

June 30, 2021

September 30, 2021

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

2 unchanged sentences

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

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

| September 30, 2021, Form 10-Q

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

Present value discount

Total lease liabilities

| June 30, 2021 Form 10-Q

NOTE 10 – ACCRUED AND OTHER LIABILITIES

(in thousands)

June 30, 2021

September 30, 2021

Compensation and other contributions

3 unchanged sentences

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

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.

Other current liability also includes $ 117 thousand and $ 90 thousand of current operating lease liability and statutory payables of approximately $ 33 thousand and $ 24 thousand as of September 30, 2021, and March 31, 2021, respectively and $ 125 thousand expenses relates to one-off IRS related tax penalty.

NOTE 11 – LOANS AND OTHER LIABILITIES

1 unchanged sentence

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 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 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%.

1 unchanged sentence

This is accounted as other income, net.

Loan as of June 30, 2021:

Loan as of September 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 %.

2 unchanged sentences

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

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.

For the six months ended September 30, 2021, the interest expense and principal payment for the EIDL was approximately $ 1.4 thousand and $ 1 thousand respectively.

As of September 30, 2021, approximately $ 146 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

| September 30, 2021, Form 10-Q

Other Liability:

(in thousands)

June 30, 2021

September 30, 2021

March 31, 2021

1 unchanged sentence

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

1 unchanged sentence

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

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

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

As of September 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.

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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.

The Company has created a provision for $ 200,000 as of September 30, 2021.

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

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NOTE 13 – SECURITIES

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.

As of September 30, 2021, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 51,041,017 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 September 30, 2021.

We have one security listed on the NYSE American:

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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.

During the six months ended September 30, 2021, the Company raised approximately $ 4.1 million 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.

| September 30, 2021, Form 10-Q

NOTE 14 – STOCK-BASED COMPENSATION

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.

Additionally, options held by advisors to purchase 210,000 shares of common stock fair valued at $ 96 thousand with a weighted average of $ 0.46 per share, that have been granted but are to be issued over a vesting period, between Fiscal 2023 and Fiscal 2026.

As of September 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, 1.9 million restricted share units fair valued at $ 2.5 million with a weighted average value of $ 1.33 per share, have been granted but not yet issued from different Incentive Plans and Grants.

Additionally, options held by advisors and directors to purchase 360 thousand shares of common stock fair valued at $ 305 thousand with a weighted average of $ 0.85 per share, that have been granted but are to be issued over a vesting period, between Fiscal 2022 and Fiscal 2026.

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

| 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 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 six months ended September 30, 2021, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $ 535 thousand and $ 14 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.

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

Non-vested shares

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Cancelled/forfeited

Non-vested shares as of June 30, 2021

Non-vested shares as of September 30, 2021

(in thousands)

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Cancelled/forfeited

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.

Options outstanding as of September 30, 2021

There was a combined unrecognized expense of $ 2.07 million related to non-vested shares and share options that the Company expects to be recognized over weighted average life of 1.43 years.

| September 30, 2021, Form 10-Q

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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.

As of September 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.

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Level 3 investments are valued using cost-method.

For further information refer Note 7, “Investments in Non-Marketable Securities.”

| 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:

For further information refer to Note 7, “Investments in Non-Marketable Securities.”

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of September 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)

June 30, 2021

September 30, 2021

Cash and cash equivalents:

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

| June 30, 2021 Form 10-Q

| September 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)

Three months ended

June 30, 2021

Six months ended

September 30, 2021

Percentage of

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(in thousands)

Three months ended

June 30, 2020

Six months ended

September 30, 2020

Percentage of

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(in thousands)

Three months ended

June 30, 2021

Six months ended

September 30, 2021

Percentage of

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(in thousands)

Three months ended

June 30, 2020

Six months ended

September 30, 2020

Percentage of

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(2) Hong Kong

| June 30, 2021 Form 10-Q

| September 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.

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(India, Hong Kong, and Colombia)

June 30, 2021

September 30, 2021

Intangible assets, net

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NOTE 17 – SUBSEQUENT EVENTS

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

| September 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 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 and the six months ended September 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.

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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:

Our primary source of revenue in the three months ended September 30, 2021, and September 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,

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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.

There was no revenue from this business line during the three months ended September 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.

This business is seasonal and had minimal revenue during the three months ended September 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.

| September 30, 2021, Form 10-Q

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.

On October 28, 2021, the Company won Best CBD Topical award for its broad-spectrum hemp extract cream called Holi Wonder™ at the USA CBD Expo event held in Chicago, Illinois, U.S.

On October 5, 2021, the Company received a Good Manufacturing Practice [GMP] certification for its facilities in Vancouver, Washington, U.S.

where it makes its products.

On September 17, 2021, the Company filed a provisional patent application with the USPTO for our IGC-513 for compositions and methods for treating patients with Dementia due to Alzheimer's disease.

On September 7, 2021, the Company announced the completion of its Phase 1 clinical trial on IGC’s tetrahydrocannabinol (“THC”)- based investigational new drug, IGC-AD1, intended to alleviate certain symptoms of individuals who have Alzheimer’s disease.

The primary endpoint of this Phase 1 trial was safety and tolerability.

Based on this study and subject to FDA concurrence the cannabis-based investigational drug IGC-AD1 was generally safe and well-tolerated by the Alzheimer’s trial participants.

The safety and tolerability data has been filed with the FDA in IGC’s Annual Report.

The trial’s secondary endpoints including pharmacokinetics, genotyping, neuropsychiatric inventory, and measurement of suicide severity, have also been completed.

We expect to report this data as it becomes available and after submission to the FDA.

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

During the six months ended September 30, 2021, the Company raised approximately $4.1 million of net proceeds from the issuance of equity stock.

The Company had entered an “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”).

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

The PPP Note was established under the CARES Act and administered by the SBA.

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

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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.

The second prong is to investigate the potential efficacy of IGC-AD1 on memory and on 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.

however, we believe it may involve more significant 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.

We believe that the additional investment in clinical trials, research, and development (“R&D”), facilities, marketing, and advertising, 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.

| September 30, 2021, Form 10-Q

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.

Our infrastructure business is based in the state of Kerala, India, which is among the Indian states most affected by COVID-19, and Hong Kong with strict quarantine and travel restrictions.

The restrictions continue to adversely impact our infrastructure business, financial condition, liquidity, and operations.

In response, we have oriented our current focus on a) the human trials on IGC-AD1 and getting an Alzheimer’s drug through trials and to market, subject to FDA approval, and b) launching a cannabinoid-based women’s wellness line of products designed to assist in managing PMS and Dysmenorrhea.

Results of Operations for the Three Months Ended

June 30, 2021 and June 30, 2020

September 30, 2021, and September 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:

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

Statement of Operations (in thousands, unaudited)

Three months ended June 30,

Three months ended September 30,

Cost of revenue

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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.

Revenue – Revenue in the quarter ended September 30, 2021, and September 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 $56 thousand and $125 thousand for the three months ended September 30, 2021, and the three months ended September 30, 2020, respectively.

Revenue in the Life Sciences segment in the three months ended September 30, 2020, was $58 thousand as compared to $53 thousand in the three months ended September 30, 2021, albeit with a change in product mix.

Revenue in our Infrastructure segment for the three months ended September 30, 2020, was $67 and $3 thousand in the three months ended September 30, 2021.

The revenue relates to the execution of a 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 areas reopen from the pandemic.

Cost of revenue – Cost of revenue amounted to approximately $18 thousand for the three months ended September 30, 2021, compared to $99 thousand in the three months ended September 30, 2020.

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

| September 30, 2021, Form 10-Q

Selling, general and administrative expenses (SG&A)– SG&A 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.

SG&A expenses increased by approximately $2.6 million or 177% to approximately $4.1 million for the three months ended September 30, 2021, from approximately $1.48 million for the three months ended September 30, 2020.

The $2.6 million increase in SG&A is attributable to the following:

approximately $1.7 million to a provision for stolen inventory at our vendor’s premises, approximately $352 thousand relates to provision of previously announced legal settlements and associated legal expenses, approximately $125 thousand for an IRS tax penalty, and non-cash increase of $223 thousand and $55 thousand for Common stock-based compensation and depreciation respectively.

The remaining increase of about $153 thousand in the quarter is related to marketing and other operating 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 September 30, 2021, are approximately $276 thousand and approximately $219 thousand for the three months ended September 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, subject to FDA approval.

Other income, net – Other net income increased by approximately $15 thousand or 79% during the three months ended September 30, 2021.

The total other income for the three months ended September 30, 2021, and 2020 is approximately $4 thousand and $19 thousand, respectively.

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

Results of Operations for the Six Months Ended

September 30, 2021, and September 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 six months ended September 30, 2021 and September 30, 2020:

Statement of Operations (in thousands, unaudited)

Six months ended September 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

Revenue – Revenue in the six months ended September 30, 2021, 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 $133 thousand and $709 thousand for the six months ended September 30, 2021, and the six months ended September 30, 2020, respectively.

| September 30, 2021, Form 10-Q

Revenue in the Life Sciences segment in the six months ended September 30, 2020, was $642 thousand as compared to $115 thousand in the six months ended September 30, 2021, albeit with a change in product mix.

Revenue in our Infrastructure segment for the six months ended September 30, 2020, and September 30, 2021, was $67 and $18 respectively.

Such revenue relates to execution of a 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.

Cost of revenue – Cost of revenue amounted to approximately $69 thousand for the six months ended September 30, 2021, compared to $637 thousand in the six months ended September 30, 2020.

The cost of revenue in the six months ended September 30, 2021, is primarily attributable to raw materials 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.

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.

Selling, general and administrative expenses increased by approximately $2.6 million or 82% to approximately $5.9 million for the six months ended September 30, 2021, from approximately $3.2 million for the six months ended September 30, 2020.

The $2.6 million increase in SG&A is attributable to the following:

approximately $1.7 million to a provision for stolen inventory at our vendor’s premises, approximately $352 relates to provision of previously announced legal settlements and associated legal expenses, approximately $125 thousand for an IRS tax penalty, and non-cash increase of $183 thousand and $135 thousand for Common stock-based compensation and depreciation respectively.

The remaining increase of about $134 thousand in six month is related to marketing and other operating expenses.

Research and Development expenses – 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 six months ended September 30, 2021, are approximately $720 thousand and approximately $441 thousand for the six months ended September 30, 2020.

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.

Impairment of investment – On May 12, 2020, the Company acquired 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.

During the six-months ended September 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, net – Other net income increased by approximately $379 thousand during the six months ended September 30, 2021.

The total other income for the six months ended September 30, 2021, and 2020 is approximately $447 thousand and $68 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.

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

Liquidity and Capital Resources

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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

| September 30, 2021, Form 10-Q

Please refer to Item 1A.

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(in thousands, unaudited)

June 30, 2021

September 30, 2021

March 31, 2021

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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.

Cash and cash equivalents decreased by approximately $149 thousand to $14.39 million in the three months ended September 30, 2021, from $14.5 million as of March 31, 2021, a decrease of approximately 1%.

The major decrease was due to approximately $125 thousand in purchase of property, plant, and equipment and a net cash loss of approximately $4.15 million, part of which was set-off with approximately $4.1 million of net proceeds from the issuance of equity stock through an ATM offering.

Of the $3.8 million net cash loss, approximately $1.7 million relates to a provision for inventory stolen at the vendor premises and approximately $152 thousand relates to one-off settlement related legal expense.

Summary of Cash flows

(in thousands, unaudited)

Three months ended June 30,

Six months ended September 30,

Percent Change

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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.

Net cash used in operating activities for the six months ended September 30, 2021, was approximately $4.1 million.

This consists of a net loss of approximately $6 million and non-cash items totaling approximately $2.2 million, which in turn consist of an amortization/depreciation charge of approximately $320 thousand, stock-based expenses totaling approximately $549 thousand, approximately $1.7 million for a provision related to stolen inventory, approximately $37 thousand related to impairment of investment and gain due to forgiveness of PPP Note of approximately $430 thousand.

Changes in operating assets and liabilities had a net negative impact of approximately $216 thousand on cash, of which approximately $20 thousand is related to inventory.

Net cash used in operating activities for the six months ended September 30, 2020, was approximately $6.4 million.

This consists of a net loss of approximately $3.5 million and non-cash items totaling approximately $550 thousand, which in turn consist of an amortization/depreciation charge of approximately $185 thousand and stock-based expenses totaling approximately $365 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.

Changes in operating assets and liabilities had a negative impact of approximately $3.5 million on cash, of which approximately $2.4 million was due to an 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.

Net cash used in investing activities for the six months ended September 30, 2021, was approximately $140 thousand, which is comprised of expenses of approximately $15 thousand for the acquisition and filing expenses related to patents and purchase of property, plant and equipment of approximately $125 thousand.

| September 30, 2021, Form 10-Q

Net cash used in investing activities for the six months ended September 30, 2020, was $195 thousand, which is comprised of approximately $48 thousand for the acquisition and filing expenses related to patents and trademarks, purchase of property, plant and equipment of $1.2 million and investments of approximately $149 thousand in non-marketable securities and proceeds of $1.2 million 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.

Net cash provided by financing activities was approximately $4.1 million for the six months ended September 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 $530 thousand for the six months ended September 30, 2020, which is comprised of proceeds from loans.

Off-Balance Sheet Arrangements

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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.

There were no impactful breaches in cybersecurity during the six months ended September 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.

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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

| September 30, 2021, Form 10-Q

Quantitative and Qualitative Disclosures about Market Risk

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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