What changed in this filing

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Item 1. Financial Statements

2022-02-10 compared with 2021-10-29 · 271 added, 229 removed, 693 unchanged (42% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

Current assets:

26 unchanged sentences

Preferred stock, $ 0.0001 par value:

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

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

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

150,000,000 shares authorized;

51,041,017 and 47,827,273 shares issued and outstanding as of September 30, 2021, and March 31, 2021, respectively.

51,054,017 and 47,827,273 shares issued and outstanding as of December 31, 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.

| September 30, 2021, Form 10-Q

| December 31, 2021, Form 10-Q

India Globalization Capital, Inc.

2 unchanged sentences

Three months ended

September 30,

Six months ended

September 30,

Nine months ended

Cost of revenue

13 unchanged sentences

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

| September 30, 2021, Form 10-Q

| December 31, 2021, Form 10-Q5

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three months ended September 30, 2020

Three months ended December 31, 2020

Common Shares

4 unchanged sentences

Total Stockholders’

Balances as of June 30, 2020

Balances as of September 30, 2020

Common stock-based compensation & expenses, net

Loss on foreign currency translation

Balances as of December 31, 2020

Three months ended December 31, 2021

Balances as of September 30, 2021

Three months ended September 30, 2021

Balances as of June 30, 2021

Common stock-based compensation & expenses, net

1 unchanged sentence

Loss on foreign currency translation

Balances as of September 30, 2021

Six months ended September 30, 2020

Balances as of December 31, 2021

Nine months ended December 31, 2020

Common Shares

8 unchanged sentences

Loss on foreign currency translation

Balances as of September 30, 2020

Six months ended September 30, 2021

Balances as of December 31, 2020

Nine months ended December 31, 2021

Balances as of March 31, 2021

3 unchanged sentences

Gain on foreign currency translation

Balances as of September 30, 2021

Balances as of December 31, 2021

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

| September 30, 2021, Form 10-Q

| December 31, 2021, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Six months ended

September 30,

Nine months ended

Operating activities:

15 unchanged sentences

Purchase of property, plant, and equipment

Investment in/Proceed from marketable securities

Proceed from marketable securities

Investment in non-marketable securities

Acquisition and filing cost of patents and rights

Net cash used in investing activities

Net cash (used in)/provided by investing activities

Financing activities:

12 unchanged sentences

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

| September 30, 2021, Form 10-Q

| December 31, 2021, Form 10-Q

India Globalization Capital, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021

THREE AND NINE MONTHS ENDED DECEMBER 31, 2021

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

7 unchanged sentences

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.

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 completed all dose escalation studies, and, as announced by the Company on December 2, 2021, the results of the clinical trial have been submitted in the Clinical/Statistical Report (“CSR”) filed with 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).

At the start of the trial, the participants receiving the active drug (N=11) had an average age and weight of 81.5 years (SD 5.5) and 138.8 lb (SD 24.7) respectively.

The placebo participants (N=2) had an average age and weight of 75 years (SD 4.2) and 196.4 lb (SD 17.0) respectively.

Primary Endpoint:

Safety & Tolerability (S&T):

S&T was assessed by recording both solicited and non-solicited Adverse Events (AEs).

The solicited AEs, assessed daily, were somnolence, falls, dizziness, asthenia, suicidal ideation, hypertension, psychiatric symptoms, and paradoxical nausea.

All AEs were graded as mild, moderate, severe, life threatening, and serious (SAE).

In all three Cohorts, a) there were no SAEs, b) no life-threatening AEs, and c) no deaths.

One AE, mild dizziness, reported in Cohort 1, was deemed to be related to IGC-AD1.

All other AEs across all cohorts were deemed to be not related to IGC-AD1 or to the placebo.

In Cohort 1, in the group that received IGC-AD1 (N=10), 50% reported hypertension, 40% reported asthenia, 30% reported somnolence and dizziness, 20% reported psychiatric symptoms and 10% reported falls.

One case of dizziness was deemed by the principal investigator (PI) to be related to IGC-AD1.

In the placebo group (N=2) 100% reported hypertension, and 50% reported somnolence and falls.

In Cohort 2 for the IGC-AD1 group, 60% reported psychiatric symptoms, 50% reported somnolence and asthenia, 30% reported hypertension, 20% reported nausea and dizziness, and 10% reported falls and suicidal ideation.

In the placebo group 100% reported somnolence, 50% reported dizziness and hypertension.

In Cohort 3 for the IGC-AD1 group, 70% reported somnolence, 60% reported psychiatric symptoms, 50% reported dizziness and asthenia, and 30% reported hypertension.

In the placebo group 100% reported somnolence, and 50% reported hypertension and psychiatric symptoms.

| December 31, 2021, Form 10-Q

Secondary Endpoints:

Neuropsychiatric Inventory (NPI):

Neuropsychiatric Symptoms (NPS) such as delusions, hallucinations, agitation/aggression, depression, anxiety, elation/euphoria, apathy, disinhibition, irritability, aberrant motor behavior, sleep disorders, and appetite/eating disorders are prevalent in patients who have Alzheimer’s disease (Phan et al., 2019).

NPS in Alzheimer’s is a significant burden on patients and caregivers, and at some point, in the progression of Alzheimer’s disease, more than 97% of patients suffer from at least one symptom.

The Neuropsychiatric Inventory (NPI) (Cummings et al., 1994) measures the severity of each symptom and establishes both individual symptom scores as well as an overall NPI score.

Separately, the NPI also scores caregiver distress (NPI-D).

The NPI is used by about 50% of neurologists to assess and treat Alzheimer’s patients (Fernandez et al., 2010).

According to the NPI Test, a reduction of 4 points or 30% in the score is considered clinically meaningful.

In addition, we also used a paired 2-tailed t-test with 9 degrees of freedom to assess the statistical significance of the decrease both in the overall NPI and individual NPI domains.

In Cohort 1 for those on IGC-AD1, the mean NPI decreased from a baseline 31.5 (SD 27.2) to 16.7 (SD 16.2) on day 10 ( p = 0.0044) and 14.8 (SD 16.0) on day 15 ( p = 0.0095).

Individual domains that showed improvement were Agitation ( p = .05), Dilutions ( p = .05), Anxiety ( p = .09), and Appetite and Eating Disorders ( p = .01).

In Cohort 2 for those on IGC-AD1, the mean NPI decreased from a baseline of 22.2 (SD 14.8) to 10.4 (SD 11.5) on day 10 ( p = 0.0026) and 12.4 (SD14.7) on day 15 ( p = 0.0127).

Individual domains that showed improvement were Agitation ( p = .06), Irritability ( p = .04), and Depression ( p = .01).

In Cohort 3 for those on IGC-AD1 the mean NPI decreased from a baseline of 16.0 (SD14.7) to 14.6 (SD10.9) on day 10 ( p = 0.6751) and 7.9 (SD 9.0) on day 15 ( p = 0.0113).

Individual domains that showed improvement was Agitation ( p = .06).

There was a non-clinically significant improvement between baseline and day 10 in Cohort 3 (NPI dropped less than 4 points and ( p >> .05).

This may be related to the overall decrease of mean NPI between cohort baselines, Cohort 1 = 31.5, Cohort 2 = 22.2, Cohort 3 = 16.0 and that further improvement from a mean NPI = 16.0 takes longer, as measured on day 15 (mean NPI = 7.9).

To the best of our knowledge, this is the first human clinical trial using ultra low doses of THC, in combination with another molecule, to treat symptoms of dementia in Alzheimer’s patients.

THC is a naturally occurring cannabinoid produced by the cannabis plant.

It is known for being a psychoactive substance that can impact mental processes in a positive or negative way depending on the dosage.

THC is biphasic, meaning that low and high doses of the substance may affect mental and physiological processes in substantially different ways.

For example, in some patients, low doses may relieve a symptom, whereas high doses may amplify a symptom.

Ultimately, the goal of IGC’s research is to discover and analyze whether, and at what level of dosing, IGC-AD1 provides relief of a given symptom.

IGC’s trial is based on micro dosing on patients suffering from Alzheimer’s disease.

With further trials, subject to FDA approvals, the Company intends to pursue the efficacy of IGC-AD1 for indications of Agitation in patients with dementia from Alzheimer’s.

The Company has filed thirteen (13) 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.

As of December 31, 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.

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

| December 31, 2021, Form 10-Q

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

7 unchanged sentences

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 September 30, 2021, the Company had the following direct operating subsidiaries:

As of December 31, 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 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.

The accompanying condensed consolidated Balance Sheet as of December 31, 2021 and March 31, 2021, condensed consolidated statements of operations for the three and nine months ended December 31, 2021, and 2020, condensed consolidated statements of changes in stockholders’ deficit for the three and nine months ended December 31, 2021, and 2020, and condensed consolidated statements of cash flows for the nine months ended December 31, 2021, and 2020, are unaudited.

The 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”).

3 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, 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.

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, specifically in Note 2 to the consolidated financial statements.

Principles of consolidation

6 unchanged sentences

Actual results could differ from those estimates.

| December 31, 2021, 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.

| September 30, 2021, Form 10-Q

Presentation and functional currencies

6 unchanged sentences

dollars is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues and expenses using average exchange rates prevailing during the reporting periods.

Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of shareholders’ equity.

Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as other comprehensive (loss), a separate component of shareholders’ equity.

Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred.

2 unchanged sentences

The Company reviews its long-lived assets, with finite lives, for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable.

Such circumstances include, though are not limited to, significant or sustained declines in revenues or earnings, future anticipated cash flows, business plans and material adverse changes in the economic climate, such as changes in operating environment, competitive information, and impact of changes in government policies.

Such circumstances include, though are not limited to, significant or sustained declines in revenues or earnings, future anticipated cash flows, business plans, and material adverse changes in the economic climate, such as changes in the operating environment, competitive information, and impact of changes in government policies.

For assets that the Company intends to hold for use if the total of the expected future undiscounted cash flows produced by the assets or subsidiary company is less than the carrying amount of the assets, a loss is recognized for the difference between the fair value and carrying value of the assets.

2 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 six months ended September 30, 2021, and 2020.

No impairment has been recorded for the nine months ended December 31, 2021, and 2020.

Short-term and long-term investments

Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relationship to our investment guidelines and market conditions.

Short-term and long-term investments consist of corporate, various government agency and municipal debt securities, as well as certificates of deposit that have maturity dates that are greater than 90 days.

Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relation to our investment guidelines and market conditions.

Short-term and long-term investments consist of corporate, various government agencies, and municipal debt securities, as well as certificates of deposit that have maturity dates that are greater than 90 days.

Certificates of deposit and commercial paper are carried at cost which approximates fair value.

5 unchanged sentences

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

As of December 31, 2021, the Company does not have any investment in marketable securities.

| December 31, 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 ”.

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

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

The Company accounts for forfeitures as they occur.

Stock-based awards are recognized on a straight-line basis over the requisite vesting period.

For stock-based employee compensation cost recognized at any date will be at least equal to the amount attributable to the share-based compensation that is vested at that date.

The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model.

For stock-based compensation cost recognized at any date will be at least equal to the amount attributable to the share-based compensation that is vested at that date.

Compensation expense for the portion of the restricted stock units that contains a performance and market vesting condition is recognized over the derived service period based on the fair value of the awards on the grant date.

Compensation expense for the portion of the restricted stock that contains performance and service vesting conditions is recognized over the requisite service period based on fair value of the awards on the grant date.

The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model and lattice model.

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

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

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.

We had $ 164 thousand of accounts receivable, net of provision for the doubtful debt of $ 72 thousand as of December 31, 2021, as compared to $ 175 thousand of accounts receivable, net of provision for the 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, 2021, Form 10-Q

Fair value of financial instruments

2 unchanged sentences

Observable inputs such as quoted prices in active markets;

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;

Inputs, other than the quoted prices in active markets, which are observable either directly or indirectly;

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

| 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.

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

Please refer to Note 15 – “Fair Value of Financial Instruments”, for further information .

Loss per share

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 .

The computation of basic loss per share for the nine months ended December 31, 2021, excludes potentially dilutive securities of approximately 6.2 million shares which includes share options, unvested shares such as restricted shares and restricted share units, granted to employees, non-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 nine months ended December 31, 2021, and 2020, used for the computation of basic earnings per share (“EPS”) is 49,643,942 and 40,915,196 , respectively.

Due to the loss incurred by the Company during the nine months ended December 31, 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 six months ended September 30, 2021, there were no impactful breaches in cybersecurity.

In the nine months ended December 31, 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 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.

We perform an impairment analysis annually in the last month of the fiscal year on the indefinite-lived intangible assets following the steps laid out in ASC 350-30-35-18.

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

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

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

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

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

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

| December 31, 2021, Form 10-Q

Revenue Recognition

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

| 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.

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

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

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

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

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

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

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

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

Net sales disaggregated by significant products and services for the nine months ended December 31, 2021, and 2020 are as follows:

(in thousands)

Six months ended September 30,

Nine months ended December 31,

Infrastructure segment

8 unchanged sentences

(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 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™.

(4) Relates to revenue from wellness and lifestyle segment such as sale of hand sanitizer, bath bombs, lotion, gummies, beverages, textiles, 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, 2021, Form 10-Q

Lessor Accounting

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

| 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.

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

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

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

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

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

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

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

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

There was no impairment for right-of-use lease assets as of December 31, 2021.

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

On certain lease agreements, the Company may receive rent holidays and other incentives.

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

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

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

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

| December 31, 2021, Form 10-Q

Recently issued accounting pronouncements

1 unchanged sentence

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)

September 30, 2021

December 31, 2021

March 31, 2021

2 unchanged sentences

Finished goods

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 in the form of work-in-progress as of December 31, 2021, is comprised of, but not limited to, harvested hemp crop hemp-based extracts, among others.

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

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

During the nine months ended December 31, 2021, inventory write down was approximately $ 22 thousand.

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

2 unchanged sentences

(in thousands)

September 30, 2021

December 31, 2021

March 31, 2021

1 unchanged sentence

Advances for property, plant, and equipment

Other receivables

Other receivables and deposits

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.

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

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

Prepaid expense and other current assets include approximately $62 thousand of statutory advances as of December 31, 2021, as compared to $ 36 thousand as of March 31, 2021.

Other receivables and deposits as of March 31, 2021, comprised an 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.

The Company created a provision for the $ 1.7 million inventory during the nine months ended December 31, 2021.

We are simultaneously pursuing the vendor for compensation.

| December 31, 2021, Form 10-Q

NOTE 5 – INTANGIBLE ASSETS

1 unchanged sentence

(in thousands)

September 30, 2021

December 31, 2021

March 31, 2021

Other intangibles

5 unchanged sentences

Total intangible assets

| 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 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.

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 September 30, 2021, there was no impairment.

The amortization expense in the three months ended December 31, 2021, and 2020, amounted to approximately $ 7 thousand and $ 4 thousand, respectively, whereas the amortization expense in the nine months ended December 31, 2021, and 2020, amounted to approximately $ 18 thousand and $ 10 thousand, respectively.

Estimated amortization expense

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Useful Life (years)

September 30, 2021

December 31, 2021

March 31, 2021

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Total property, plant, and equipment, net

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.

| December 31, 2021, Form 10-Q

The depreciation expense in the three months ended December 31, 2021, and 2020, amounted to approximately $ 117 thousand and $ 124 thousand, respectively.

The depreciation expense in the nine months ended December 31, 2021, and 2020, amounted to approximately $ 427 thousand and $ 302 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.

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

The construction in progress relates to the Maryland office 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.

| September 30, 2021, Form 10-Q

NOTE 7 – INVESTMENTS IN NON-MARKETABLE SECURITIES

1 unchanged sentence

(in thousands)

September 30,

December 31, 2021

March 31, 2021

Investment in Evolve I (i)

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

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.

During the nine months ended December 31, 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 canceled the partial shares received by it and impaired its remaining investment of approximately $ 37 thousand.

Long-term investment

(in thousands)

September 30,

December 31, 2021

March 31, 2021

Investment in equity shares of unlisted company

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(in thousands)

September 30, 2021

December 31, 2021

March 31, 2021

Claims receivable (1)

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Non-current advances (2)

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

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

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.

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

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

| December 31, 2021, Form 10-Q

NOTE 9 – LEASES

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

The total short-term lease expense and cash paid for the 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.

The total short-term lease expense and cash paid for the nine months ended December 31, 2021, and 2020 are approximately $ 131 thousand and $ 197 thousand, respectively.

The Company also has four operating leases as of December 31, 2021.

In November 2019, the Company entered into a 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.

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Three months ended

September 30, 2021

December 31, 2021

(in thousands)

Six months ended

September 30, 2021

Nine months ended

December 31, 2021

Operating lease costs

5 unchanged sentences

(in thousands)

September 30, 2021

December 31, 2021

March 31, 2021

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(in thousands)

September 30, 2021

December 31, 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

| September 30, 2021, Form 10-Q

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

| December 31, 2021, Form 10-Q

As of December 31, 2021, the following table summarizes the maturity of our lease liabilities:

Present value discount

2 unchanged sentences

(in thousands)

September 30, 2021

December 31, 2021

March 31, 2021

Compensation and other contributions

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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 $ 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.

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

Other current liability also includes $ 120 thousand and $ 90 thousand of the current operating lease liability and statutory payables of approximately $ 30 thousand and $ 24 thousand as of December 31, 2021, and March 31, 2021, respectively.

NOTE 11 – LOANS AND OTHER LIABILITIES

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.

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

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 September 30, 2021:

This is accounted in the company’s condensed consolidated statements of operations and comprehensive loss for the nine months ended December 31, 2021, as other income, net.

Loan as of December 31, 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 %.

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

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

For the nine months ended December 31, 2021, the interest expense and principal payment for the EIDL was approximately $ 3.2 thousand and $ 2 thousand, respectively.

As of December 31, 2021, approximately $ 145 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

| December 31, 2021, Form 10-Q

Other Liability:

(in thousands)

September 30, 2021

December 31, 2021

March 31, 2021

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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 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.

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

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

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

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 September 30, 2021.

As of October 20, 2021, the defendants in the shareholder action including the Company, have reached an agreement to settle the litigation, subject to final approval by the United States District Court for the District of Maryland (“Court”).

A final settlement approval hearing has been scheduled for April 13, 2022, where the Court will consider, among other things, whether the settlement is fair, reasonable, and adequate, and whether the litigation should be dismissed on the merits and with prejudice.

The Company has created a provision for $ 153 thousand as of December 31, 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 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:

common stock, $.0001 par value (ticker symbol:

As of December 31, 2021, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 51,054,017 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 December 31, 2021.

Our common stock is listed on the NYSE American (ticker symbol:

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

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

During the nine months ended December 31, 2021, the Company raised approximately $ 4.1 million of net proceeds from issuance of equity stock through the offering through the sale of 1.75 million shares of common stock.

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

| December 31, 2021, Form 10-Q

NOTE 14 – STOCK-BASED COMPENSATION

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.

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

In addition, 5.9 million restricted share units (RSUs) fair valued at $ 6.96 million with a weighted average value of $ 1.19 per share, have been granted but not yet issued from different Incentive Plans and Grants.

This includes 4 million RSUs granted to employees and directors, which consists of a vesting schedule based entirely on the attainment of both operational milestones (performance conditions) and market conditions, assuming continued employment either as an employee, or director with the Company.

The performance based RSUs are accounted upon certification by the management confirming the probability of achievement of milestones.

As of December 31, 2021, the management confirmed none of the milestones had been achieved but were considered probable to be achieved by March 31, 2027.

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, which 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.

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

The options are valued using a Black-Scholes Pricing Model and Market based RSU are valued based on lattice model , with the following assumptions:

Granted in Fiscal 2022

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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 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 nine months ended December 31, 2021, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) was $ 1.0 million and $ 24 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.

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.

Non-vested shares

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Cancelled/forfeited

Non-vested shares as of September 30, 2021

Non-vested shares as of December 31, 2021

(in thousands)

5 unchanged sentences

Cancelled/forfeited

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

Options outstanding as of December 31, 2021

There was a combined unrecognized expense of $ 6.2 million related to non-vested shares and share options that the Company expects to be recognized over the weighted average life of 4.04 years.

| December 31, 2021, Form 10-Q

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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.

As of December 31, 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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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:

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 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)

September 30, 2021

December 31, 2021

Cash and cash equivalents:

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The CEO reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance.

Therefore, and before our Life Sciences segment started, the Company had determined that it operated in a single operating and reportable segment.

Therefore, and before our Life Sciences segment started, the Company determined that it operated in a single operating and reportable segment.

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

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

| September 30, 2021, Form 10-Q

| December 31, 2021, Form 10-Q

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

2 unchanged sentences

(in thousands)

Six months ended

September 30, 2021

Nine months ended

December 31, 2021

Percentage of

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(in thousands)

Six months ended

September 30, 2020

Nine months ended

December 31, 2020

Percentage of

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(in thousands)

Six months ended

September 30, 2021

Nine months ended

December 31, 2021

Percentage of

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(in thousands)

Six months ended

September 30, 2020

Nine months ended

December 31, 2020

Percentage of

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(2) Hong Kong

| September 30, 2021, Form 10-Q

| December 31, 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)

September 30, 2021

December 31, 2021

Intangible assets, net

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NOTE 17 – SUBSEQUENT EVENTS

| September 30, 2021, Form 10-Q

On January 18, 2022, the Board of Directors of the Company appointed former Congressman Jim Moran (“Congressman Moran”) to serve on the Board as a Class C director until the Company’s 2022 annual meeting of stockholders.

Congressman Moran’s compensation will be consistent with the Company’s standard compensation for non-employee directors.

As a new non-employee director, Congressman Moran was granted 150,000 Restricted Stock Units (“RSUs”) of the Company’s common stock.

Of these, 50,000 RSUs vest immediately while the remaining 100,000 RSUs vest in equal annual instalments over two years .

| December 31, 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 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 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 nine months ended December 31, 2021, and the Annual Report on Form 10-K for the fiscal year ended March 31, 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 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:

Our primary source of revenue in the three months ended December 31, 2021, and December 31, 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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the offering of tolling services like extraction and distillation to hemp-farmers and retailers.

Other hemp related lifestyle products

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

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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 September 30, 2021, in part due to the COVID-19 pandemic.

There was no revenue from this business line during the three months ended December 31, 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 September 30, 2021, in part due to the COVID-19 pandemic.

This business is seasonal and had minimal revenue during the three months ended December 31, 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

| December 31, 2021, Form 10-Q

Company Highlights

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.

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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.

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

During the nine months ended December 31, 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”).

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 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.

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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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

| December 31, 2021, Form 10-Q

COVID-19 Update

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Results of Operations for the Three Months Ended

September 30, 2021, and September 30, 2020

December 31, 2021, and December 31, 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 September 30, 2021 and September 30, 2020:

The following table presents an overview of our results of operations for the three months ended December 31, 2021, and December 31, 2020:

Statement of Operations (in thousands, unaudited)

Three months ended September 30,

Three months ended December 31,

Cost of revenue

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Loss before income taxes

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.

Revenue – Revenue in the quarter ended December 31, 2021, and December 31, 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 $142 thousand and $108 thousand for the three months ended December 31, 2021, and December 31, 2020, respectively.

Revenue in the Life Sciences segment in the three months ended December 31, 2020, was $56 thousand as compared to $134 thousand in the three months ended December 31, 2021, albeit with a change in product mix.

Revenue in our Infrastructure segment for the three months ended December 31, 2020, was $52 thousand compared to $8 thousand in the three months ended December 31, 2021.

The revenue relates to the execution of a construction contract.

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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

Cost of revenue – Cost of revenue amounted to approximately $80 thousand for the three months ended December 31, 2021, compared to $94 thousand in the three months ended December 31, 2020.

The cost of revenue in the three months ended December 31, 2021, is primarily attributable to raw materials that are required to produce our products.

| December 31, 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.

SG&A expenses decreased by approximately $116 thousand or 5% to approximately $2.07 million for the three months ended December 31, 2021, from approximately $2.19 million for the three months ended December 31, 2020.

The decrease of approximately $116 thousand consists of one-time $245 thousand inventory-related adjustments during the three months ended December 31, 2020.

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 R&D expenses for the three months ended December 31, 2021, are approximately $377 thousand compared to approximately $154 thousand for the three months ended December 31, 2020, increase of approximately $223 thousand or 145%.

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.

Of the increase of $223 thousand, $100 thousand is attributed to one-off expense related to the completion of Phase 1 clinical trial and $50 thousand to one-off expense related to the grant of licensed patent from the University of South Florida.

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

Other income, net –Other net income increased by approximately $1 thousand or 33% during the three months ended December 31, 2021.

The total other income for the three months ended December 31, 2021, and 2020 was approximately $4 thousand and $3 thousand, respectively.

Other income includes interest income and rental income, among others.

Results of Operations for the Nine Months Ended

December 31, 2021, and December 31, 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:

The following table presents an overview of our results of operations for the nine months ended December 31, 2021 and December 31, 2020:

Statement of Operations (in thousands, unaudited)

Six months ended September 30,

Nine months ended December 31,

Cost of revenue

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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.

Revenue – Revenue in the nine months ended December 31, 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 $275 thousand and $817 thousand for the nine months ended December 31, 2021, and the nine months ended December 31, 2020, respectively.

| December 31, 2021, Form 10-Q

Revenue in the Life Sciences segment in the nine months ended December 31, 2020, was $698 thousand as compared to $249 thousand in the nine months ended December 31, 2021, albeit with a change in product mix.

Revenue in our Infrastructure segment for the nine months ended December 31, 2020, and December 31, 2021, was $119 thousand and $26 thousand, respectively.

Such revenue relates to execution of a construction contract.

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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 $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.

Cost of revenue – Cost of revenue amounted to approximately $149 thousand for the nine months ended December 31, 2021, compared to $731 thousand in the nine months ended December 31, 2020.

The cost of revenue in the nine months ended December 31, 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 $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.

Selling, general and administrative expenses increased by approximately $2.5 million or 47% to approximately $7.96 million for the nine months ended December 31, 2021, from approximately $5.4 million for the nine months ended December 31, 2020.

The $2.5 million increase in Selling, general & administrative expenses is attributable to the following:

approximately $1.7 million to a provision for stolen inventory at our vendor’s premises, approximately $172 thousand to investor relations related expenses, approximately $125 thousand for an IRS tax penalty, and non-cash increase of $499 thousand and $125 thousand for to Common stock-based compensation and depreciation expenses, respectively.

Research and Development expenses – Research and Development 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 Research and Development expenses for the nine months ended December 31, 2021, are approximately $1.1 million compared to approximately $595 thousand for the nine months ended December 31, 2020.

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

Of the increase of $502 thousand, $100 thousand is attributed to one-off expense related to completion of Phase 1 clinical trial and $50 thousand to one-off expense related to the grant of licensed patent from University of South Florida.

We expect Research and Development expenses to increase with progression in trials on IGC-AD1.

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.

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.

During the nine-months ended December 31, 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 $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 six months ended September 30, 2021, the other income included approximately $430 thousand related to forgiveness of PPP Note.

Other income, net – Other net income increased by approximately $380 thousand during the nine months ended December 31, 2021.

The total other income for the nine months ended December 31, 2021, and 2020 is approximately $451 thousand and $71 thousand, respectively.

Other income includes interest income, rental income, among others.

During the nine months ended December 31, 2021, the other income included approximately $430 thousand related to forgiveness of the 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.

| September 30, 2021, Form 10-Q

| December 31, 2021, Form 10-Q

Please refer to Item 1A.

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(in thousands, unaudited)

September 30, 2021

December 31, 2021

March 31, 2021

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Cash and cash equivalents

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%.

Cash and cash equivalents decreased by approximately $2.6 million to $11.9 million in the nine months ended December 31, 2021, from $14.5 million as of March 31, 2021, a decrease of approximately 18%.

The major decrease was due to approximately $152 thousand in purchase of property, plant, and equipment and a net cash loss of approximately $5.6 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)

Six months ended September 30,

Nine months ended December 31,

Percent Change

Cash used in operating activities

Cash used in investing activities

Cash (used in)/ provided by investing activities

Cash provided by financing activities

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Operating Activities

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.

Net cash used in operating activities for the nine months ended December 31, 2021, was approximately $6.6 million.

This consists of a net loss of approximately $8.5 million and non-cash items totaling approximately $2.89 million, which in turn consist of an amortization/depreciation charge of approximately $486 thousand, stock-based expenses totaling approximately $1.1 million, 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 the PPP Note of approximately $430 thousand.

Changes in operating assets and liabilities had a net negative impact of approximately $944 thousand on cash, of which approximately $51 thousand is related to inventory.

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

Net cash used in operating activities for the nine months ended December 31, 2020, was approximately $8.3 million.

This consists of a net loss of approximately $5.9 million and non-cash items totaling approximately $835 thousand, which in turn consist of an amortization/depreciation charge of approximately $312 thousand and stock-based expenses totaling approximately $523 thousand.

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.

Changes in operating assets and liabilities had a negative impact of approximately $3.3 million on cash, of which approximately $911 thousand was due to an investment in inventory.

Investing Activities

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.

Net cash used in investing activities for the nine months ended December 31, 2021, was approximately $189 thousand, which is comprised of expenses of approximately $37 thousand for the acquisition and filing expenses related to patents and purchase of property, plant, and equipment of approximately $152 thousand.

| December 31, 2021, Form 10-Q

Net cash provided by investing activities for the nine months ended December 31, 2020, was $1.5 million, which is comprised of approximately $92 thousand for the acquisition and filing expenses related to patents and trademarks, purchase of property, plant, and equipment of $1.4 million and investments of approximately $149 thousand in non-marketable securities and proceeds of $3 million in marketable securities.

Financing Activities

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.

Net cash provided by financing activities was approximately $4.1 million for the nine months ended December 31, 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 nine months ended December 31, 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 six months ended September 30, 2021.

There were no impactful breaches in cybersecurity during the nine months ended December 31, 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.

| September 30, 2021, Form 10-Q

| December 31, 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