What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-02-10 · 316 added, 419 removed, 545 unchanged (57% of the section changed)

6 unchanged sentences

Accounts receivable, net

Investment in Non-marketable securities

Deposits and advances

Total current assets

Non-current assets:

Intangible assets, net

Property, plant, and equipment, net

Non-marketable securities

Claims and advances

Operating lease asset

Total non-current assets

Total long-term assets

LIABILITIES AND STOCKHOLDERS ’ EQUITY

1 unchanged sentence

Accounts payable

Accrued and other liabilities

Accrued liabilities and others

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 December 31, 2021, and March 31, 2021.

authorized 1,000,000 shares, no shares issued or outstanding as of June 30, 2022, and March 31, 2022.

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

150,000,000 shares authorized;

51,054,017 and 47,827,273 shares issued and outstanding as of December 31, 2021, and March 31, 2021, respectively.

51,840,603 and 51,054,017 shares issued and outstanding as of June 30, 2022 and March 31, 2022, respectively.

Accumulated other comprehensive loss

3 unchanged sentences

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

| December 31, 2021, Form 10-Q

| June 30, 2022, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

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

Three months ended

Nine months ended

Three months ended June 30,

Cost of revenue

9 unchanged sentences

Comprehensive loss

Net Loss per share attributable to common stockholders:

Loss per share attributable to common stockholders:

Basic and diluted

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

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

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

| December 31, 2021, Form 10-Q5

| June 30, 2022, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Three months ended December 31, 2020

Common Shares

4 unchanged sentences

Total Stockholders’

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

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Loss on foreign currency translation

Balances as of December 31, 2021

Nine months ended December 31, 2020

Common Shares

Common Stock and

Additional Paid in

Accumulated Other

Comprehensive Loss

Total Stockholders’

Balances as of March 31, 2021

Common stock-based compensation & expenses, net

Common stock issued for investment

Common stock-based compensation and expenses, net

Issuance of common stock through offering (net of expenses)

Other adjustments

Loss on foreign currency translation

Balances as of December 31, 2020

Nine months ended December 31, 2021

Balances as of June 30, 2021

Balances as of March 31, 2022

Common stock-based compensation & expenses, net

Common stock-based compensation and expenses, net

Issuance of common stock through offering (net of expenses)

Other adjustments

Gain on foreign currency translation

Balances as of December 31, 2021

Loss on foreign currency translation

Balances as of June 30, 2022

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

| December 31, 2021, Form 10-Q

| June 30, 2022, Form 10-Q

India Globalization Capital, Inc.

1 unchanged sentence

(in thousands)

Nine months ended

Operating activities:

Three months Ended

Cash flows from operating activities:

Adjustment to reconcile net loss to net cash:

Depreciation and amortization

Provision for bad debt

Impairment of non-marketable securities

Common stock-based compensation and expenses

Common stock-based compensation and expenses, net

Loss on sale of Fixed Asset

Forgiveness of PPP Loan

Accounts receivables

Accounts receivables, net

Deposits and advances

5 unchanged sentences

Net cash used in operating activities

Investing activities:

Cash flow from investing activities:

Purchase of property, plant, and equipment

Proceed from marketable securities

Investment in non-marketable securities

Acquisition and filing cost of patents and rights

Net cash (used in)/provided by investing activities

Financing activities:

Net cash used in investing activities

Cash flows from financing activities:

Issuance of equity stock through offering (net of expenses)

Proceeds from/repayment of long-term loan

Net cash provided by financing activities

Net cash (used in)/provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

3 unchanged sentences

Supplementary information:

Cash paid for interest

Non-cash items:

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

Amortization of operating lease

Forgiveness of PPP Loan

Amortization of operating lease

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

| December 31, 2021, Form 10-Q

| June 30, 2022, Form 10-Q

India Globalization Capital, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED DECEMBER 31, 2021

THREE MONTHS ENDED JUNE 30, 2022

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

Unless the context requires otherwise, all references in this report to “ IGC, ” “ the Company, ” “ we, ” “ our ” and/or “ us ” refer to India Globalization Capital, Inc., together with our subsidiaries and beneficially owned subsidiary.

Our filings are available on www.sec.gov.

Our public filings with the Securities and Exchange Commission, the “ SEC ,” are available on www.sec.gov.

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

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NOTE 1 – BUSINESS DESCRIPTION

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 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.

IGC has two business segments:

Infrastructure and Life Sciences.

Infrastructure Segment

The Infrastructure segment involves the execution of construction contracts and the rental of heavy construction equipment.

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

Life Sciences Segment

The Life Sciences segment involves our over the counter products (“OTC”) and our biopharmaceutical products.

Over the Counter Products :

We have created a cannabinoid-based women’s wellness brand, Holief™ available through online channels and a CBD-caffeine-infused energy drink, Sunday Seltzer™, available through wholesale channels.

Holief™ is an all-natural, non-GMO, vegan, line of OTC products aimed at treating menstrual cramps (dysmenorrhea) and premenstrual symptoms (“PMS”).

Sunday Seltzer™ is an all-natural, organic, carbonated energy drink with natural caffeine from green tea extract, CBD, vitamins B, vitamin C, no added sugars, and no preservatives.

The energy drink is available in two flavors, pomegranate-lemon, and peach-ginger.

In addition, Sunday Seltzer™ is also available in four flavors with CBD, vitamins B, vitamin C, and no caffeine.

Both Holief™ and Sunday Seltzer™ are compliant with relevant federal, state, and local laws, and regulations.

Biopharmaceutical :

Since 2014, this part of our business has focused primarily on the potential uses of phytocannabinoids, including Tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”), in combination with other compounds to treat multiple diseases, including Alzheimer’s.

As a company engaged in the clinical-stage biopharmaceutical industry, we focus our research and development efforts, subject to results of future clinical trials, on seeking pharmaceutical solutions that may a) alleviate neuropsychiatric symptoms such as agitation, anxiety, and depression associated with dementia in Alzheimer’s disease;

and b) halt the onset, progression, or cure Alzheimer’s disease.

We currently have one investigational new drug candidate, “IGC-AD1,” in a Phase 2 clinical trial for agitation in dementia from Alzheimer’s.

IGC-AD1 is a cannabis-based compound, which is made up of ultra-low doses of THC along with another compound as active ingredients.

The second molecule, TGR-63, is an enzyme inhibitor that has been shown, in pre-clinical trials, to reduce neurotoxicity in Alzheimer’s cell lines.

Neurotoxicity causes cell dysfunction and death in Alzheimer’s disease.

If shown to be efficacious in halting this process, this inhibitor has the potential to treat Alzheimer’s disease by ameliorating Aβ plaques.

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 U.S.

Food and Drug Administration (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 55 million people around the world expected to be impacted by Alzheimer’s disease by 2030 (WHO, 2021).

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).

| June 30, 2022, Form 10-Q

Phase 2 Clinical Trial Update

The Company has initiated a protocol titled “A Phase 2, Multi-Center, Double-Blind, Randomized, Placebo-controlled, trial of the safety and efficacy of IGC-AD1 on agitation in participants with dementia due to Alzheimer’s disease.” The protocol is powered at 146 Alzheimer’s patients with half receiving placebo and is a superiority, parallel group study.

While subject to changes, we expect to conduct the trial at three sites, one in Canada and two in the U.S.

The primary end point is agitation in dementia due to Alzheimer’s disease as rated by the Cohen-Mansfield Agitation Inventory (CMAI) over a six-week period.

The Phase 2 trial will also look at eleven exploratory objectives, including, changes in anxiety, changes in cognitive processes such as attention, orientation, language, and visual spatial skills as well as memory, changes in depression, delusions, hallucinations, euphoria/elation, apathy, disinhibition, irritability, aberrant motor behavior, sleep disorder, appetite, quality of life, and caregiver burden.

In addition, we will assess the impact of an important gene (CYP2C9) that encodes an enzyme that is involved in metabolizing the active ingredients of IGC-AD1 and many other drugs.

Each participant will receive two doses of IGC-AD1 (b.i.d.) or two doses of placebo per day for six-weeks.

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.

6 unchanged sentences

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 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.

Other Developments

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

We believe that the biopharmaceutical component of our Life Sciences strategy will at least take several more years to mature and involves considerable risk; however, we also believe it may involve greater defensible growth potential and first-to-market advantage.

Although there can be no assurance, 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.

While the bulk of our medium and longer-term focus is on clinical trials and getting IGC-AD1 to be an FDA approved drug, our shorter-term strategy, is to use our resources to provide white label services and market Holief™ and Sunday Seltzer™.

We believe this may provide us with several profit opportunities, although there can be no assurance of such profit opportunities.

The Company has filed fifteen (15) 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, 2022, we have four patents.

In addition, we license two patent filings, 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;

Jawaharlal Nehru Centre for Advanced Scientific Research (“JNCASR”) for exclusive global rights corresponding to the molecules, technology, patent, and patent filings that were the subject of JNCASR’s research into naphthalene monoimide (NMI) compounds and the role of NMI compounds have on neurotoxicity associated with Alzheimer’s Disease.” The U.S.

Patent and Trademark Office (“USPTO”) issued a patent (#9230708 B2) for this filing on January 5, 2016.

| June 30, 2022, Form 10-Q

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 premenstrual symptoms (“PMS”) in women.

Holief™ is a non-GMO, vegan, natural, women’s line of OTC products aimed at addressing dysmenorrhea and PMS in women.

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

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

| December 31, 2021, Form 10-Q

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

The infrastructure business segment involves:

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

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

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

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.

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 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”).

The Company’s fiscal year is the 52-week or 53-week period that ends on March 31.

As of June 30, 2022, the Company had the following operating subsidiaries:

Techni Bharathi Private Limited (TBL), IGCare LLC, Holi Hemp, LLC, IGC Pharma LLC, SAN Holdings LLC, Sunday Seltzer, LLC, Hamsa Biopharma India Pvt.

Ltd., and Colombia-based beneficially-owned subsidiary Hamsa Biopharma Colombia SAS (formerly Hamsa Biochem SAS) (Hamsa).

The Company’s fiscal year is the 52- or 53-week period that ends on March 31.

The Company is a Maryland corporation established in 2005.

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

The Company’s public filings with the SEC are available on www.sec.gov.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

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”).

The accompanying condensed consolidated Balance Sheet as of June 30, 2022, and March 31, 2022, condensed consolidated statements of operations for the three months ended June 30, 2022, and 2021, and condensed consolidated statements of changes in stockholders’ deficit for the three months ended June 30, 2022, and 2021, and condensed consolidated statements of cash flows for the three months ended June 30, 2022, and 2021, are unaudited.

The consolidated balance sheet as of March 31, 2022, has been derived from audited financial statements, and 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.

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 SEC.

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

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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, 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, 2022 (“Fiscal 2022”) contained in the Company’s Form 10-K for Fiscal 2022, filed with the SEC on June 23, 2022, specifically in Note 2 to the consolidated financial statements.

Principles of consolidation

1 unchanged sentence

Intercompany accounts and transactions have been eliminated.

In the opinion of the Management, the interim statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

In the opinion of Management, the interim statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Use of estimates

2 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.

| June 30, 2022, Form 10-Q

Presentation and functional currencies

16 unchanged sentences

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

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

No impairment has been recorded for the three months ended June 30, 2022, and 2021.

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 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.

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.

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

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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 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 accounts for the investment in accordance with ASC Topic 321, “ Investments-Equity Securities ”.

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

| December 31, 2021, Form 10-Q

Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “Investments – Equity method and Joint Ventures.” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income / (loss) is recognized in other comprehensive income / (loss).

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

As of June 30, 2022, the Company does not have any investment in marketable securities.

| June 30, 2022, 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 over the requisite vesting period based on the estimated grant-date fair value of the awards.

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 accounts for forfeitures as they occur.

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

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.

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.

For performance-based awards, stock-based compensation expense is recognized over the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable by best of management estimate.

For performance-based awards with a vesting schedule based entirely on the attainment of performance conditions, stock-based compensation expense associated with each tranche is recognized over the expected achievement period for the operational milestone, beginning at the point in time when the relevant operational milestone is considered probable to be achieved.

For market-based awards, stock-based compensation expense is recognized over the expected achievement period.

The fair value of such awards is estimated on the grant date using binomial lattice model.

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

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

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The Company has never declared or paid any cash dividends.

For further information refer to Note 14, “Stock-Based Compensation” of Notes to Consolidated Financial Statements.

Accounts receivable

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

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.

We had $ 147 thousand of accounts receivable, net of provision for the doubtful debt of $ 92 thousand as of June 30, 2022, as compared to $ 124 thousand of accounts receivable, net of provision for the doubtful debt of $ 93 thousand as of March 31, 2022.

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, harvested crops, and herbal oils, among others.

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 hemp crude oil, hemp-based isolate, growing crops, harvested 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.

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

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

- has a reliable, readily determinable, and realizable market value;

- has relatively insignificant and predictable costs of disposal;

- is available for immediate delivery.

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

Hence, the Company values its harvested crops at cost.

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

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

| 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, which are observable either directly or indirectly;

Inputs, other than the quoted prices in active markets, that 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.

| June 30, 2022, Form 10-Q

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 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 .

Earnings/(Loss) per share

The computation of basic loss per share for the three months ended June 30, 2022, excludes potentially dilutive securities of approximately 7.1 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 three months ended June 30, 2022, and 2021, used for the computation of basic earnings per share (“EPS”) is 51,616,598 and 47,910,866 , respectively.

Due to the loss incurred by the Company during the three months ended June 30, 2022, and 2021, all the potential equity shares are anti-dilutive, and accordingly, the fully diluted EPS is equal to the basic EPS.

Cybersecurity

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

In the nine months ended December 31, 2021, there were no impactful breaches in cybersecurity.

We have a cybersecurity policy in place and have taken cybersecurity measures that, while there can be no assurance, we expect are likely to safeguard the Company against breaches.

In the three months ended June 30, 2022, 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 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.

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

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

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 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.

| December 31, 2021, Form 10-Q

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

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

Revenue Recognition

8 unchanged sentences

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

| June 30, 2022, Form 10-Q

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

9 unchanged sentences

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

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

Net sales disaggregated by significant products and services for the three months ended June 30, 2022, and 2021 are as follows:

(in thousands)

Nine months ended December 31,

Three months ended June 30,

Infrastructure segment

Rental income (1)

Construction income (2)

Purchase and resale of physical commodities (3)

Construction contracts (2)

Life Sciences segment

Wellness and lifestyle (3)

Tolling/White labeling service (5)

White labeling services (4)

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

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

(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, 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

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

(3) Relates to revenue from the Life Sciences segment including the sale of wellness and lifestyle products such as hand sanitizers, bath bombs, lotions, gummies, beverages, hemp crude extract, hemp isolate, and hemp distillate.

(4) Relates to revenue from the Life Sciences segment, including income white label services, which refers to a fully supported product or service that is made by us but sold by another company.

Lessor Accounting

5 unchanged sentences

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

| June 30, 2022, 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 December 31, 2021.

There was no impairment for right-of-use lease assets as of June 30, 2022.

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, which defer the commencement date of required payments.

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

| December 31, 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.

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.

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 condensed 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 condensed financial statements.

| June 30, 2022, Form 10-Q

NOTE 3 – INVENTORY

(in thousands)

December 31, 2021

June 30, 2022

March 31, 2022

2 unchanged sentences

Finished goods

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 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).

Inventory in the form of work-in-progress as of June 30, 2022, comprises, but it is not limited to, various hemp-based extracts such as hemp crude oil, hemp distillate, and hemp isolate.

Finished goods comprises, but it’s not limited to, hand sanitizers, gummies, lotions, and beverages, among others.

During the three months ended June 30, 2022, the Company wrote off approximately $ 73 thousand of inventory 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.

1 unchanged sentence

(in thousands)

December 31, 2021

June 30, 2022

March 31, 2022

Advances to suppliers and consultants

Advances for property, plant, and equipment

Other receivables and deposits

1 unchanged sentence

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 nine months ended December 31, 2021.

We are simultaneously pursuing the vendor for compensation.

| December 31, 2021, Form 10-Q

Prepaid expense and other current assets include approximately $ 125 thousand of statutory advances as of June 30, 2022, as compared to $ 170 thousand as of March 31, 2022.

NOTE 5 – INTANGIBLE ASSETS

Amortized intangible assets

(in thousands)

December 31, 2021

March 31, 2021

June 30, 2022

Amortized intangible assets

Other intangibles

1 unchanged sentence

Total amortized intangible assets

Indefinite lived intangible assets

Other intangible assets

Other intangibles

1 unchanged sentence

Total intangible assets

| June 30, 2022, Form 10-Q

The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing 15 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 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.

The Company regularly reviews its intangible assets to determine if any intangible asset is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period and concluded that, as of December 31, 2021, there was no impairment.

The amortization expense in the three months ended June 30, 2022, and 2021, amounted to approximately $ 10 thousand and $ 5 thousand, respectively.

Estimated amortization expense

8 unchanged sentences

Useful Life (years)

December 31, 2021

June 30, 2022

March 31, 2022

Buildings & facilities

Buildings and facilities

Plant and machinery

6 unchanged sentences

Total property, plant, and equipment, net

| 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 the value of foreign currencies.

The construction in progress relates to the Maryland office extension.

The depreciation expense in the three months ended June 30, 2022, and 2021, amounted to approximately $ 152 thousand for each of the periods.

The net decrease in total Property, Plant and Equipment is primarily due to depreciation and foreign exchange translations of a decrease in value of foreign currencies.

As of June 30, 2022, the construction in progress related to the Maryland office extension is completed and moved to Building and facilities.

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.

NOTE 7 – INVESTMENTS IN NON-MARKETABLE SECURITIES

Short-term investment

(in thousands)

December 31, 2021

March 31, 2021

Investment in Evolve I (i)

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

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

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)

December 31, 2021

March 31, 2021

Investment in equity shares of unlisted company

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

NOTE 7 – LEFT BLANK INTENTIONALLY

| June 30, 2022, Form 10-Q

NOTE 8 – CLAIMS AND ADVANCES

(in thousands)

December 31, 2021

June 30, 2022

March 31, 2022

Claims receivable (1)

Non-current deposits

Non-current advances (2)

3 unchanged sentences

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 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.

The total short-term lease expense and cash paid for the three months ended June 30, 2022, and 2021 are approximately $ 45 thousand and $ 31 thousand, respectively.

The Company also has four operating leases as of June 30, 2022.

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

13 unchanged sentences

Three months ended

December 31, 2021

June 30, 2022

(in thousands)

Nine months ended

December 31, 2021

Three months ended

June 30, 2021

Operating lease costs

2 unchanged sentences

Total lease costs

| June 30, 2022, Form 10-Q

Right of use assets and lease liabilities for our operating leases were recorded in the consolidated balance sheet as follows:

1 unchanged sentence

(in thousands)

December 31, 2021

June 30, 2022

March 31, 2022

7 unchanged sentences

(in thousands)

December 31, 2021

June 30, 2022

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

| December 31, 2021, Form 10-Q

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

As of June 30, 2022, the following table summarizes the maturity of our lease liabilities:

Present value discount

2 unchanged sentences

(in thousands)

December 31, 2021

June 30, 2022

March 31, 2022

2 unchanged sentences

Other current liability

| June 30, 2022, Form 10-Q

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

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.

Other current liability also includes $ 126 thousand and $ 123 thousand of the current operating lease liability and statutory payables of approximately $ 29 thousand and $ 55 thousand as of June 30, 2022, and March 31, 2022, 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”) 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 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:

Loan as of June 30, 2022:

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 %.

1 unchanged sentence

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

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

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

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

For the three months ended June 30, 2022, the interest expense and principal payment for the EIDL was approximately $ 1 thousand and $ 1 thousand respectively and for the three months ended June 30, 2021, the interest expense was approximately $ 469 .

As of June 30, 2022, approximately $ 143 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

Other Liability:

(in thousands)

December 31, 2021

June 30, 2022

March 31, 2022

4 unchanged sentences

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

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

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.

There are no such matters that are deemed material to the condensed consolidated financial statements as of June 30, 2022, except as disclosed in legal proceedings section below.

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

5 unchanged sentences

NOTE 13 – SECURITIES

As of December 31, 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.

As of June 30, 2022, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 51,840,603 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, 2022.

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

2 unchanged sentences

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

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

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

| June 30, 2022, Form 10-Q

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 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.

| December 31, 2021, Form 10-Q

NOTE 14 – STOCK-BASED COMPENSATION

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.

As of June 30, 2022, 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, 6.9 million restricted share units (RSUs) fair valued at $ 6.9 million with a weighted average value of $ 1 per share, have been granted but not yet issued from different Incentive Plans and Grants.

This includes 3.9 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 valued using a Black-Scholes Pricing Model and Market based RSU are valued based on lattice model , with the following assumptions:

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

As of June 30, 2022, Management confirmed two of the milestones had been achieved and rest were considered probable to be achieved by March 31, 2027.

Additionally, options held by advisors and directors to purchase 300 thousand shares of common stock fair valued at $ 278 thousand with a weighted average of $ 0.93 per share have been granted but are to be exercised over a service period ending in Fiscal 2031.

Options exercised before the service period are expensed when exercised.

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

Granted in Fiscal 2023

6 unchanged sentences

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

For the nine months ended December 31, 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 three months ended June 30, 2022, the Company’s share-based expense and option-based expense shown in Selling, General and Administrative expenses (including research and development) was $ 1.14 million and $ 8 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.

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.

Non-vested shares

4 unchanged sentences

Cancelled/forfeited

Non-vested shares as of December 31, 2021

Non-vested shares as of June 30, 2022

| June 30, 2022, Form 10-Q

(in thousands)

5 unchanged sentences

Cancelled/forfeited

Options outstanding as of December 31, 2021

Options outstanding as of June 30, 2022

There was a combined unrecognized expense of $ 5 million related to non-vested shares and share options that the Company expects to be recognized over the weighted average life of 3.25 years.

| December 31, 2021, Form 10-Q

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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.

As of June 30, 2022, the Company’s marketable securities, if any, may consist of liquid funds, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets.

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

3 unchanged sentences

For further information refer 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 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:

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2022, and March 31, 2022, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

(in thousands)

December 31, 2021

June 30, 2022

Cash and cash equivalents:

9 unchanged sentences

Total investments

| June 30, 2022, Form 10-Q

NOTE 16 – SEGMENT INFORMATION

8 unchanged sentences

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

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

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

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

| December 31, 2021, Form 10-Q

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

1) The table below shows revenue reported by segment:

Product & Service

Products and Services

(in thousands)

Nine months ended

December 31, 2021

Three months ended

June 30, 2022

Percentage of

3 unchanged sentences

(in thousands)

Nine months ended

December 31, 2020

Three months ended

June 30, 2021

Percentage of

3 unchanged sentences

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

| June 30, 2022, Form 10-Q

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

1 unchanged sentence

(in thousands)

Nine months ended

December 31, 2021

Three months ended

June 30, 2022

Percentage of

Total Revenue

(2) Hong Kong

(in thousands)

Nine months ended

December 31, 2020

Three months ended

June 30, 2021

Percentage of

Total Revenue

(2) Hong Kong

| 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)

December 31, 2021

June 30, 2022

Intangible assets, net

Property, plant, and equipment, net

Non-marketable securities

Claims and advances

6 unchanged sentences

(India, Hong Kong, and Colombia)

Total as of March 31, 2021

March 31, 2022

Intangible assets, net

5 unchanged sentences

NOTE 17 – SUBSEQUENT EVENTS

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

None to report.

| June 30, 2022, 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 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 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, 2022, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2022 filed with the SEC on June 23, 2022 (the “2022 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 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,

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

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

white labeling of hemp-based products, and

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

Other hemp related lifestyle products

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

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

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

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

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

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

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

| December 31, 2021, Form 10-Q

IGC has two segments:

Life Sciences and Infrastructure.

Infrastructure Segment

The Infrastructure segment involves the execution of construction contracts and the rental of heavy construction equipment.

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

Life Sciences Segment

The Life Sciences segment involves our over the counter products (“OTC”) and our biopharmaceutical products.

Over the Counter Products :

Holief™ is an all-natural, non-GMO, vegan, line of OTC products aimed at treating menstrual cramps (dysmenorrhea) and premenstrual symptoms (“PMS”).

Sunday Seltzer™ is an all-natural, organic, carbonated energy drink with natural caffeine from green tea extract, CBD, vitamins B, vitamin C, no added sugars, and no preservatives.

The energy drink is available in two flavors, pomegranate-lemon, and peach-ginger.

In addition, Sunday Seltzer™ is also available in four flavors with CBD, vitamins B, vitamin C, and no caffeine.

Both Holief™ and Sunday Seltzer™ are compliant with relevant federal, state, and local laws, and regulations.

Biopharmaceutical :

and b) halt the onset, progression, or cure Alzheimer’s disease.

We currently have one investigational new drug candidate, “IGC-AD1”, in a Phase 2 clinical trial for agitation in dementia from Alzheimer’s.

IGC-AD1 is a cannabis-based compound, which is made up of ultra-low doses of THC along with another compound as active ingredients.

The second molecule, TGR-63, is an enzyme inhibitor that has been shown, in pre-clinical trials, to reduce neurotoxicity in Alzheimer’s cell lines.

Neurotoxicity causes cell dysfunction and death in Alzheimer’s disease.

If shown to be efficacious in halting this process, this inhibitor has the potential to treat Alzheimer’s disease by ameliorating Aβ plaques.

| June 30, 2022, Form 10-Q

Food and Drug Administration (the “FDA”).

Other Developments

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

We believe this may provide us with several profit opportunities, although there can be no assurance of such profit opportunities.

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.

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.

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.

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

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

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

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

| December 31, 2021, Form 10-Q

While subject to changes, we expect to conduct the trial at three sites, one in Canada and two in the U.S.

The primary end point is agitation in dementia due to Alzheimer’s disease as rated by the Cohen-Mansfield Agitation Inventory (CMAI) over a six-week period.

On June 7, 2022, the USPTO issued a patent (#11,351,152) to the Company titled “Method and Composition for Treating Seizures Disorders.” The patent relates to compositions and methods for treating multiple types of seizure disorders and epilepsy in humans and animals using a combination of the CBD with other compounds.

Subject to further research and study, the combination is intended to reduce side effects caused by hydantoin anticonvulsant drugs such as phenobarbital, by reducing the dosing of anticonvulsant drugs in humans, dogs, and cats.

On May 10, 2022, Hamsa Biopharma India Pvt.

(“Hamsa Biopharma”), a directly owned subsidiary of the Company, completed outstanding items in the agreement executed with the Jawaharlal Nehru Centre for Advanced Scientific Research (“JNCASR”).

The agreement was signed on March 28, 2022, for exclusive global rights corresponding to certain molecules, technology, patent, and patent filings as discussed herein.

The Life Sciences segment strategy includes:

Subject to FDA approval, developing IGC-AD1 as a drug for treating agitation in dementia due to Alzheimer’s and investigating and developing TGR 63 for the potential treatment of Alzheimer’s disease.

Marketing Holief TM , Sunday Seltzer TM , and white label services.

We believe developing a drug for either symptoms or as a disease modifying agent has considerable risk due to the need for multi-year trials and FDA approval.

However, there is considerable upside and significant value creation to the extent we obtain first-to-market advantage, of which there can be no assurance.

If we were to obtain first-to-market advantage, such advantage could result in significant growth if and when an approved drug launches.

Our Holief TM strategy includes expanding the line of products and developing online services that connect women with healthcare professionals who can help with PMS and dysmenorrhea.

Building an online community that brings women together can create brand equity and loyalty.

| June 30, 2022, Form 10-Q

We believe that additional investment in clinical trials, R&D, facilities, marketing, advertising, and acquisition of complementary products and businesses will be critical to ongoing growth of the Life Sciences segment.

These investments will fuel the development and delivery of innovative products that drive positive patient and customer experiences.

We hope to leverage our R&D and intellectual property to develop ground-breaking, science-based products that are proven effective through clinical trials, subject to FDA approval.

While there can be no assurance, we believe this strategy can improve our existing products and lead to the creation of new hemp-based products that can provide treatment options for multiple conditions, symptoms, and side effects.

Our Infrastructure segment strategy includes winning and executing competitively bid construction contracts, such as building roads, bridges, and other civil works in Kerala, India.

COVID-19 Update

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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.

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

December 31, 2021, and December 31, 2020

June 30, 2022, and June 30, 2021

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 December 31, 2021, and December 31, 2020:

The following table presents an overview of our results of operations for the three months ended June 30, 2022, and June 30, 2021:

Statement of Operations (in thousands, unaudited)

Three months ended December 31,

Three months ended June 30,

Cost of revenue

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Loss before income taxes

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.

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 $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

Income tax expense/benefit

Revenue – Revenue in the three months ended June 30, 2022, and June 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 $212 thousand and $77 thousand for the three months ended June 30, 2022, and June 30, 2021, respectively.

The Infrastructure segment had lower revenue during the three months ended June 30, 2022 due to the slower recovery from the COVID-19 pandemic, the ensuing disruption, and the onset of the monsoon season in India, which hampers construction activity.

We anticipate lower revenue from the Infrastructure segment for the foreseeable future.

| June 30, 2022, Form 10-Q

Cost of revenue – Cost of revenue amounted to approximately $70 thousand for the three months ended June 30, 2022, compared to $51 thousand in the three months ended June 30, 2021.

The cost of revenue in the three months ended June 30, 2022, is primarily attributable to raw materials that are required to produce our products.

Our gross margin increased from 34% to 67%, which reflects our increased sales from higher-margin Life Sciences segment as opposed to the lower margin infrastructure segment, which has traditionally been a lower margin business.

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 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 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 $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 nine months ended December 31, 2021 and December 31, 2020:

Statement of Operations (in thousands, unaudited)

Nine months ended December 31,

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 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.

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 $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 $2.5 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.

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 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 $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.

SG&A expenses decreased by approximately $226 thousand or 13% to approximately $1.5 million for the three months ended June 30, 2022, from approximately $1.8 million for the three months ended June 30, 2021.

The decrease is from decreased marketing and legal expenses.

Research and Development expenses – R&D expenses were attributed to our Life Sciences segment.

The R&D expenses increased by approximately $950 thousand or 214% to $1.4 million during the three months ended June 30, 2022, from approximately $444 thousand during three month ended June 30, 2021.

The increase is primarily attributable to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on TGR-63 .

We anticipate additional increases to R&D expenses as the Phase 2 trial commences with patient sign ups.

Impairment of investment – During the three month ended June 30, 2022, there was no impairment of investment.

During the three month ended June 30, 2021, the Company decided to dispose of its holding in and exit the acquisition of Evolve I.

As a result, Company impaired the investment of $37 thousand in the three months ended June 30, 2021.

Other income, net – Other net income decreased by approximately $426 thousand or 96% during the three months ended June 30, 2022.

The total other income for the three months ended June 30, 2022, and 2021, is approximately $17 thousand and $443 thousand, respectively.

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

Other income includes interest income and rental income, dividend income, and unrealized gains from marketable securities, net, and income from sale of scrap, among others.

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.

| December 31, 2021, Form 10-Q

Please refer to Item 1A.

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(in thousands, unaudited)

December 31, 2021

June 30, 2022

March 31, 2022

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Working capital

| June 30, 2022, Form 10-Q

Cash and cash equivalents

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.

Cash and cash equivalents decreased by approximately $2.4 million to $8 million in the three months ended June 30, 2022, from $10.4 million as of March 31, 2022, a decrease of approximately 23%.

The major decrease was due to approximately $158 thousand in purchase of property, plant, and equipment and acquisition of intangible assets and approximately $2.2 million of net cash loss.

Summary of Cash flows

(in thousands, unaudited)

Nine months ended December 31,

Three months ended June 30,

Percent Change

Cash used in operating activities

Cash (used in)/ provided by investing activities

Cash provided by financing activities

Cash used in investing activities

Cash (used in)/provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

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Operating Activities

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 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 $3.3 million on cash, of which approximately $911 thousand was due to an investment in inventory.

Net cash used in operating activities for the three months ended June 30, 2022, was approximately $2.2 million.

It consists of a net loss of approximately $2.8 million, a positive impact on cash due to non-cash expenses of approximately $1.4 million, and a negative changes in operating assets and liabilities of approximately $793 thousand.

Non-cash expenses consist of an amortization/depreciation charge of approximately $162 thousand and stock-based expenses of approximately $1.2 million.

In addition, changes in operating assets and liabilities had a negative impact of approximately $793 thousand on cash, of which approximately $258 thousand is due to decrease in accrued and other liabilities and approximately $524 thousand decrease in accounts payable.

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

It consists of a net loss of approximately $1.8 million, a negative impact on cash due to non-cash expenses of approximately $110 thousand, and changes in operating assets and liabilities of approximately $48 thousand.

Non-cash expenses consist of an amortization/depreciation charge of approximately $157 thousand, stock-based expenses of approximately $125 thousand, and a gain due to forgiveness of PPP Note of $430 thousand.

In addition, changes in operating assets and liabilities had a positive impact of approximately $48 thousand on cash, of which approximately $46 thousand is due to decrease in accrued and other liabilities and operating lease assets.

Investing Activities

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.

Net cash used in investing activities for the three months ended June 30, 2022, was approximately $158 thousand, which comprised of expenses of approximately $31 thousand for the acquisition and filing expenses related to patents and purchase of property, plant, and equipment of approximately $127 thousand.

Net cash used in investing activities for the three months ended June 30, 2021, was approximately $95 thousand, which 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.

Financing Activities

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.

Net cash used by financing activities was approximately $1 thousand for the three months ended June 30, 2022, which is comprised of re-payment of loan.

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.

| June 30, 2022, Form 10-Q

Off-Balance Sheet Arrangements

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

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

There were no impactful breaches in cybersecurity during the nine months ended December 31, 2021.

We have a cybersecurity policy in place and have taken cybersecurity measures that, although there can be no assurance, we expect are likely to safeguard the Company against breaches.

There were no impactful breaches in cybersecurity during the three months ended June 30, 2022.

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 2021 Form 10-K.

| December 31, 2021, Form 10-Q

Changes to U.S.

GAAP are established by the Financial Accounting Standards Board (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 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.

Recent accounting pronouncements which may be applicable to us are described in Note 2, “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 2022 Form 10-K.

| June 30, 2022, 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