What changed in this filing

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Item 1A. Risk Factors

2023-07-07 compared with 2022-06-23 · 66 added, 41 removed, 354 unchanged (23% of the section changed)

You should carefully consider the following risk factors, together with all other information included in this report, in evaluating the Company and our common stock.

If any of the following risks and uncertainties develops into actual events, they could have a material adverse effect on our business, financial condition, or results of operations.

If any of the following risks and uncertainties develop into actual events, they could have a material adverse effect on our business, financial condition, or results of operations.

In that case, the trading price of our common stock and other securities also could be adversely affected.

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Risks Related to Our Business, Industry, and Operations:

We have incurred significant losses and have an accumulated deficit.

If we cannot achieve profitability, the market price of our common stock could decline significantly.

As of March 31, 2023, we had cash and cash equivalents of $3.2 million and working capital of $4.6 million compared to cash and cash equivalents of $10.5 million and working capital of $12.7 million as of March 31, 2022, for continuing operations.

We have had a history of operating losses.

For Fiscal 2023 and Fiscal 2022, we had a net loss of approximately $11.5 million and $15 million, respectively.

Our revenue increased from Fiscal 2022 to Fiscal 2023.

Our short-term focus is to gain market share for our Life Sciences segment.

Accordingly, there can be no guarantee that our efforts will be successful.

If our revenues do not grow or if our operating expenses continue to increase, we may not be able to become profitable, and the market price of our common stock could decline.

If we continue to have losses, we will be required to seek additional financing.

No assurance can be given that we can raise any such financing, and such financing could be dilutive to our shareholders.

Our cannabinoid strategy makes it difficult to raise money as a public company.

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These programs can require a substantial investment while not assuring return or incremental sales.

The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty regarding demand for some or all the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.

Our revenue decreased and we have a history of operating losses and there can be no assurance that we can again achieve or maintain profitability.

Our revenue declined from Fiscal 2021 to Fiscal 2022.

Our short-term focus is to gain market share for our Life Sciences segment.

However, we have had a history of operating losses.

For Fiscal 2022 and Fiscal 2021, we had a net loss of approximately $15 million and $8.8 million, respectively.

Accordingly, there can be no guarantee that our efforts will be successful.

If we continue to have losses, we will be required to seek additional financing.

No assurance can be given that we can raise any such financing and such financing could be dilutive to our shareholders.

The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty regarding demand for some or all of the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.

We may engage in strategic transactions that could impact our liquidity, increase our expenses, and present significant distractions to our management, and which ultimately may not be successful.

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There can be no assurance that we will undertake or successfully complete any transactions of the nature described above.

Any transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition, and prospects if we are unable to execute on the planned objectives or capitalize on the relationship in the manner that was originally contemplated.

A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations.

The outbreak of COVID-19 has affected most of the world, including the U.S., South America, European and Asian countries.

On March 11, 2020, the World Health Organization declared the outbreak a pandemic.

The COVID-19 pandemic is affecting the United States and global economies and has and may continue to affect our operations and those of third parties on which we rely, including by causing disruptions in the supply of our products candidates and the conduct of current and future clinical trials.

As the end of the COVID-19 pandemic remains unknown, the full extent of the impact of COVID-19 on the Company remains unknown as well.

The impact of COVID-19 on our operations is reflected in reduced revenue and increased expenses in both our Infrastructure and the Life Sciences segments.

In addition, the COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to our product candidates.

The evolving COVID-19 pandemic is also likely to directly or indirectly impact the pace of enrollment in our clinical trial for IGC-AD1 for at least the next several months and possibly longer as patients may avoid or may not be able to travel to healthcare facilities and physicians' offices unless due to a health emergency.

Such facilities and offices may also be required to focus limited resources on non-clinical trial matters, including treatment of COVID-19 patients, and may not be available, in whole or in part, for clinical trial services or our other product candidates.

Additionally, while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.

The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, financing, or clinical trial activities or on healthcare systems, or the global economy as a whole.

However, these effects could have a material impact on our liquidity, capital resources, operations, and business and those of the third parties on which we rely.

The continued impact of the ongoing COVID-19 pandemic on the Company as well as on the regions in which we do business cannot be predicted.

Any transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition, and prospects if we are unable to execute the planned objectives or capitalize on the relationship in the manner that was originally contemplated.

Global Operations

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and c) distillation of crude oil into hemp extracts.

Due to the complexity of the processes used to manufacture our product candidates, we may be unable to initially or continue to pass federal, state, or international regulatory inspections in a cost-effective manner.

Due to the complexity of the processes used to manufacture our product candidates, we may be unable to initiate or continue to pass federal, state, or international regulatory inspections in a cost-effective manner.

If we are unable to comply with manufacturing regulations, we may be subject to fines, unanticipated compliance expenses, recall or seizure of any approved products, total or partial suspension of production, and/or enforcement actions, including injunctions and criminal or civil prosecution.

These possible sanctions would adversely affect our business, results of operations, and financial condition.

These possible sanctions would adversely affect our business, the results of operations, and financial condition.

Legal claims could be filed that may have a material adverse effect on our business, operating results, and financial condition.

We may, in the future face risks of litigation and liability claims, the extent of such exposure can be difficult or impossible to estimate and which can negatively impact our financial condition and results of operations.

Our operations are subject to numerous laws and regulations of the U.S., India, Colombia, and Hong Kong relating to the protection of the public and necessary disclosures regarding financial services.

Our operations are subject to numerous laws and regulations in the U.S., India, Colombia, and Hong Kong relating to the protection of the public and necessary disclosures regarding financial services.

Liability under these laws involves inherent uncertainties.

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See Item 3, Legal Proceedings of this report for further information on the current status of legal proceedings, if any.

There can also be no assurance that any insurance coverage we take will be adequate or that we will prevail in any future cases.

There can also be no assurance that any insurance coverage we have will be adequate or that we will prevail in any future cases.

We can provide no assurance that we will be able to obtain liability insurance that would protect us from any such lawsuits.

In the event that we are not covered by insurance, our management could expend significant time and resources addressing any such issues.

In the event that we are not covered by insurance, our management could spend significant time and resources addressing any such issues.

And the legal fees necessary to defend against multiple lawsuits can be significant, impacting the Company’s overall bottom line when not covered by insurance or where the fees exceed the Company’s insurance policy limits.

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While there may be ample public support for legislative authorization, numerous factors impact the legislative process.

Any one of these factors could slow or halt use and handling of cannabinoids in the U.S.

Any one of these factors could slow or halt the use and handling of cannabinoids in the U.S.

or in other jurisdictions, which would negatively impact our development of phytocannabinoids-based therapies and our ability to test and productize these therapies.

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adding a sufficient number of clinical trial sites;

manufacturing sufficient quantities of product candidate for use in clinical trials.

manufacturing sufficient quantities of the product candidate for use in clinical trials.

We could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs or IECs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board (DSMB), for such trial or the FDA or other regulatory authorities.

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Even if the preclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities.

For diseases like Alzheimer’s disease, the FDA has stated that one single Phase 3 trial is adequate for approval if it demonstrates robust and unquestionable efficacy.

However, the circumstances under which a single adequate and controlled study can be used as the sole basis of demonstrating efficacy of a drug are exceptional.

For diseases like Alzheimer’s, the FDA has stated that one single Phase 3 trial is adequate for approval if it demonstrates robust and unquestionable efficacy.

However, the circumstances under which a single adequate and controlled study can be used as the sole basis for demonstrating the efficacy of a drug are exceptional.

The FDA or any foreign regulatory bodies can delay, limit, or deny approval of our product candidates or require us to conduct additional preclinical or clinical testing or abandon a program for many reasons, including:

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Further, IGC-AD1 is based on a new approach to treating symptoms of Alzheimer ’ s Disease, which makes it difficult to predict the time and cost of development and subsequent obtaining of regulatory approval.

Efforts by biopharmaceutical and pharmaceutical companies in treating Alzheimer’s Disease have seen limited success in drug development, and there are no FDA-approved disease modifying therapeutic options available for patients with Alzheimer’s Disease.

Efforts by biopharmaceutical and pharmaceutical companies in treating Alzheimer’s Disease have seen limited success in drug development, and there is no FDA-approved disease modifying therapeutic options available for patients with Alzheimer’s Disease.

We cannot be certain that our approach will lead to the development of approvable or marketable products.

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We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once enrolled, we may be unable to retain a sufficient number of patients to complete any of our trials.

Patient enrollment and retention in clinical trials depends on many factors, including:

Patient enrollment and retention in clinical trials depend on many factors, including:

the patient eligibility criteria defined in the protocol;

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An overestimate of our customers’ future requirements for products may lead to excess inventory, which would increase costs and potentially require us to write-off inventory that becomes obsolete.

If we underestimate our customers’ future requirements, we may have inadequate inventory, which could interrupt and delay delivery of our products to our customers and could cause our revenues to decline.

If we underestimate our customers’ future requirements, we may have inadequate inventory, which could interrupt and delay the delivery of our products to our customers and could cause our revenues to decline.

If any of these events occur, they could negatively impact our revenues, which could prevent us from achieving or sustaining profitability.

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Failure to supply our partners with commercial products may lead to adverse consequences.

Climate change concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties and damage our reputation.

Climate change may cause extreme weather events that, among other things, could damage our facilities and equipment, injure our employees, disrupt operations at one or more of our primary locations, negatively affect our ability to service and interact with our clients, and adversely affect the value of our assets.

Any of these events may increase our costs including our costs to insure against these events.

Climate change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase the credit exposures to those clients.

Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or exacerbate, climate change.

We also may be negatively impacted by any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.

New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees, and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.

Currency fluctuations may reduce our assets and profitability.

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Factors that may contribute to the variability of quarterly revenue, operating results, or profitability include:

Fluctuations in revenue due to seasonality of the marketplace, which results in uneven revenue and operating results over the year;

Fluctuations in revenue due to the seasonality of the marketplace, which results in uneven revenue and operating results over the year;

Additions and departures of key personnel;

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We may not successfully register the provisional patents with the USPTO.

We have filed fifteen (15) provisional patents with the USPTO, in the combination therapy space, for the indications of pain, Alzheimer’s, medical refractory epilepsy, eating disorders, and cachexia as part of our intellectual property strategy focused on the phytocannabinoid-based health care industry.

Although, six patents have been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO.

We have filed forty-one (41) patent applications with the USPTO and also in other different countries, in the combination therapy space, for the indications of pain, Alzheimer’s, medical refractory epilepsy, eating disorders, and Tourette syndrome as part of our intellectual property strategy focused on the phytocannabinoid-based health care industry.

Although nine patents have been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO.

If we are unsuccessful in registering patents, our ability to create a valuable line of products can be adversely affected.

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For more information, please see Item 9A, “Controls and Procedures.”

The Company is subject to complex and changing laws and regulations worldwide related to climate change and ESG initiatives, which expose the Company to potential liabilities, increased costs, and other adverse effects on the Company ’ s business.

We are subject to transitional and physical risks related to climate change.

Transitional risks include, for example, a disorderly global transition away from fossil fuels that may result in increased energy prices;

customer preference for low or no-carbon products;

stakeholder pressure to decarbonize assets;

or new legal or regulatory requirements that result in new or expanded carbon pricing, taxes, restrictions on greenhouse gas emissions, and increased greenhouse gas disclosure and transparency.

These risks could increase operating costs, including the cost of our electricity and energy use, or other compliance costs.

Physical risks to our operations include water stress and drought;

flooding and storm surge;

extreme temperatures and storms, which could impact pharmaceutical production, increase costs, or disrupt supply chains of medicines for patients.

Our supply chain is likely subject to these same transitional and physical risks and would likely pass along any increased costs to us.

We do not anticipate that these risks will have a material financial impact on the Company in the near term.

Governmental authorities, non-governmental organizations, customers, investors, employees, and other stakeholders are increasingly sensitive to ESG matters, such as equitable access to medicines and vaccines, product quality and safety, diversity, equity and inclusion, environmental stewardship, support for local communities, value chain environmental and social due diligence, corporate governance, and transparency, and addressing human capital factors in our operations.

This focus on ESG matters may lead to new expectations or requirements that could result in increased costs associated with research, development, manufacture, or distribution of our products.

Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for companies to establish validated Net Zero targets or offer more sustainable products.

While we strive to improve our ESG performance and meet our voluntary goals, if we do not meet, or are perceived not to meet, our goals or other stakeholder expectations in key ESG areas, we risk negative stakeholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, reduced demand for our products or other negative impacts on our business and operations.

While we monitor a broad range of ESG matters, we cannot be certain that we will manage such matters successfully, or that we will successfully meet the expectations of investors, employees, consumers, governments, and other stakeholders.

A pandemic, epidemic, or outbreak of infectious disease, such as COVID-19, may materially and adversely affect our business and operations.

As the end of the COVID-19 pandemic remains unknown, the full extent of the impact of COVID-19 on the Company remains unknown as well.

The impact of COVID-19 on our operations is reflected in reduced revenue and increased expenses in both our Infrastructure and the Life Sciences segments.

The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, financing, clinical trial activities or on healthcare systems, or the global economy as a whole.

However, these effects could have a material impact on our liquidity, capital resources, operations, and business and those of the third parties on which we rely.

The continued impact of the ongoing COVID-19 pandemic on the Company as well as on the regions in which we do business cannot be predicted.

Risks Related to ownership of our common stock:

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We intend to use the net proceeds from the sale of IGC shares in ATM offerings, sales proceeds, sale of capital assets, and other funds to fund working capital and capital expenditure requirements.

It may also be used for clinical trials, share repurchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes.

It may also be used for clinical trials, share repurchases, debt repayments, and investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes.

Management’s judgments may not result in positive returns on investor investment, and the investor will not have an opportunity to evaluate the economic, financial, or other information upon which the Management bases its decisions.

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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-K

Item 1A. Risk Factors