What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-07-07 compared with 2022-06-23 · 140 added, 130 removed, 206 unchanged (57% of the section changed)

MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the NYSE American under the symbol “IGC” with CUSIP number 45408X308.

Our common stock is listed on the NYSE American under “IGC” symbol with CUSIP number 45408X308.

The common stock of the Company is also quoted on the Frankfurt, Berlin, and Stuttgart (XETRA2) stock exchanges in Germany (ticker symbol:

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available for

column (a)(1)

(in thousands)

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See Note 14, “Stock-Based Compensation” of the Notes to the Consolidated Financial Statements included in this report.

(2) Consists of 2 million shares as a special grant of common stock, as approved by our stockholders on January 7, 2020, 2.5 million shares as a special grant of common stock, as approved by our stockholders on January 11, 2021, and 3.5 million shares as a special grant of common stock, as approved by our stockholders on October 15, 2021.

(2) Consists of 2 million shares as a special grant of common stock, as approved by our stockholders on January 7, 2020, 2.5 million shares as a special grant of common stock, as approved by our stockholders on January 11, 2021, 3.5 million shares as a special grant of common stock, as approved by our stockholders on October 15, 2021, and 3 million shares as special grant of common stock, as approved by stockholders on September 9, 2022.

Holders of Record

As of June 6, 2022, we had approximately 41 registered shareholders of record of our common stock and 2 registered unit holders.

As of July 6, 2023, we had approximately 37 registered shareholders of record of our common stock and 2 registered unit holders.

The number of record holders does not include persons who held our common stock in nominee or “street name” accounts through brokers.

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We currently anticipate that we will retain future earnings, if any, for the development, operation, and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.

Any future determinations related to dividend policy will be made at the discretion of our Board of Directors.

Any future determinations related to the dividend policy will be made at the discretion of our Board of Directors.

Unregistered sales of equity securities

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MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the consolidated statement of operations, liquidity and capital resources, and summary of cash flows, which apply to Fiscal 2022 ending on March 31, 2022 and Fiscal 2021 ending on March 31, 2021.

The following is a discussion and analysis of the consolidated statement of operations, liquidity, and capital resources, and a summary of cash flows, which apply to Fiscal 2023 ending on March 31, 2023, and Fiscal 2022, ending on March 31, 2022.

These statements should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this Annual Report on Form 10-K.

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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.

IGC Pharma, Inc.

is a clinical-stage pharmaceutical company with a diversified revenue model that develops both prescription drugs and over-the-counter (OTC) products.

Our focus is on developing innovative therapies for neurological disorders such as Alzheimer’s disease, epilepsy, Tourette syndrome, and sleep disorders.

We also focus on formulations for eating disorders, chronic pain, premenstrual syndrome (PMS), and dysmenorrhea, in addition to health and wellness OTC formulations.

The Company is developing its lead candidate, IGC-AD1, an investigational oral therapy for the treatment of agitation associated with Alzheimer’s disease.

IGC-AD1 is currently in Phase 2 (Phase 2B) clinical trials after completing nearly a decade of research and realizing positive results from pre-clinical and a Phase 1 trial.

This previous research into IGC-AD1 has demonstrated efficacy in reducing plaques and tangles, which are two important hallmarks of Alzheimer’s, as well as reducing neuropsychiatric symptoms associated with dementia in Alzheimer’s disease, such as agitation.

We were formerly known as India Globalization Capital, Inc.

and incorporated in Maryland on April 29, 2005.

Our fiscal year is the 52- or 53-week period ending March 31.

Currently, most of our revenue comes from the Life Sciences segment and, in the future, we believe, from our investigational drugs for treating Alzheimer’s disease.

We have also built a facility for a potential Phase 3 trial and have strategic relations for the procurement of Active Pharmaceutical Ingredients (APIs).

In addition, we have acquired and initiated work on TGR-63, a pre-clinical molecule that exhibits an impressive affinity for reducing neurotoxicity in Alzheimer’s cell lines.

The advancement of IGC-AD1 into Phase 2 trials represents a significant milestone for the company and positions us for multiple pathways to future success.

Although there can be no assurance, we anticipate that the positive outcomes from these and other trials will drive further growth, valuation, and market potential for IGC-AD1.

IGC has two segments:

Life Sciences and Infrastructure.

Infrastructure Segment

The infrastructure business, operating since 2008.

The Company intends to continue infrastructure operations as the COVID-19 pandemic permits, including:

(i) Execution of Construction Contracts – The Company is executing a $1.2 million road-building contract in Kerala, India and was recently awarded another road reconstruction project for $289 thousand.

(ii) Rental of Heavy Construction Equipment – We rent equipment, such as motor grader and rollers, to construction contractors.

There was minimal revenue from rentals in Fiscal 2022 due to seasonality and COVID-19 pandemic disruptions.

Life Sciences Segment

Over the Counter Products :

We have created a cannabinoid-based women’s wellness brand, Holief™ for the online channel and a CBD and caffeine infused energy drink, Sunday Seltzer™, for distribution in wholesale channels.

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

The products are available online and through Amazon and other online channels.

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, 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.

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.

Pharmaceutical :

Since 2014, we have focused a portion of our business on the application of phytocannabinoids such as THC and 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 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 and the Company completed all dose escalation studies, and as announced by the Company on December 2, 2021, the results of the clinical trial have been submitted in the Clinical/Statistical Report (CSR) filed with the FDA.

The Company is motivated by the potential that, with future successful results from appropriate further trials, IGC-AD1 could contribute to relief for some of the 55 million people around the world expected to be impacted by Alzheimer’s disease by 2030 (WHO, 2021).

We have a two-pronged approach for our Alzheimer’s drug development strategy, the first prong is to investigate IGC-AD1 as an Alzheimer’s symptoms modifying agent and the second is to investigate TGR-63 as a disease modifying agent.

This involves conducting more trials on IGC-AD1 over the next few years, subject to FDA approval, with the anticipated goal of demonstrating safety and efficacy and potentially obtaining FDA approval for IGC-AD1 as a cannabinoid-based new drug that can help manage agitation for patients suffering from Alzheimer’s disease.

Currently, IGC-AD1 is in a Phase 2B safety and efficacy clinical trial for agitation in dementia from Alzheimer’s (clinicaltrials.gov, NCT05543681).

The progress we are making in the clinic, gives us confidence in the potential of IGC-AD1 as a potentially groundbreaking therapy, with the potential to treat Alzheimer’s and also to manage devastating symptoms that separate families, increase admissions to nursing homes, and drive the cost of Alzheimer’s care, although there can be no assurance.

We have a two-pronged approach for our Alzheimer’s investigational drug development strategy, the first prong is to investigate IGC-AD1 as an Alzheimer’s symptoms modifying agent, and the second is to investigate TGR-63 as a disease modifying agent.

This involves conducting more trials on IGC-AD1 over the next few years, subject to FDA approval, with the anticipated goal of demonstrating safety and efficacy and potentially obtaining FDA approval for IGC-AD1 as a cannabinoid-based new drug that can help to manage agitation for patients suffering from Alzheimer’s disease.

The second prong is to investigate the potential efficacy of TGR-63 on memory and/or decreasing or managing plaques and tangles, some of the hallmarks of Alzheimer’s disease.

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 take several more years to mature and involves considerable risk;

We believe that the pharmaceutical component of our Life Sciences strategy will 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.

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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.

Over-the-Counter Products :

We have created a women’s wellness brand, Holief™ available through online channels that are compliant with relevant federal, state, and local laws, and regulations.

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

The products are available online and through Amazon and other online channels.

Holief™ is compliant with relevant federal, state, and local laws, and regulations.

Infrastructure Segment

The Company’s infrastructure business has been operating since 2008, it includes:

(i) Execution of Construction Contracts and (ii) Rental of Heavy Construction Equipment.

COVID-19 Update

The infrastructure business, based in India and Hong Kong, had significantly lower revenue in Fiscal Year 2022 due to the continued impact of the COVID-19 pandemic and restrictions imposed by governmental entities.

We have limited visibility into when economic conditions will recover in India and especially Hong Kong.

Specifically:

We incurred increased expenses on a $1.2 million road-building contract in India due to COVID-19 restrictions.

We manufactured, distributed, and donated alcohol-based hand sanitizers to help communities hit hard by the COVID-19 pandemic.

We incurred the expense to provide hand sanitizers to the Federal Emergency Management Agency (“FEMA”), the Navajo Nation in Arizona, the Crow reservation in Montana, and the Sioux reservation in South Dakota.

Pandemic restrictions made it difficult to transport and process our harvested hemp crop in Arizona on a timely basis.

This resulted in a $1.7 million adjustment to our inventory that also increased our SG&A.

The ongoing COVID-19 pandemic and the resulting containment measures that have been in effect from time to time in various countries and territories since early 2020 have had a number of substantial negative impacts on businesses around the world and on global, regional, and national economies, including widespread disruptions in supply chains for a wide variety of products and resulting increases in the prices of many goods and services.

Currently, our production facilities in all of our locations continue to operate as they had before the COVID-19 pandemic, with few changes other than for enhanced safety measures intended to prevent the spread of the virus.

Some of our ongoing clinical trials experienced short-term interruptions in the recruitment of patients due to the COVID-19 pandemic, as hospitals prioritized their resources towards the COVID-19 pandemic and government imposed travel restrictions.

Some clinical trials experienced increased expenses due to new protocols to protect participants from COVID-19.

Additionally, certain suppliers had difficulties meeting their delivery commitments, and we are experiencing longer lead times for components.

Future shutdowns could have an adverse impact on our operations.

However, the extent of the impact of any future shutdown or delay is highly uncertain and difficult to predict.

It is not possible at this time to estimate the complete impact that COVID-19 could have on our business, including our customers and suppliers, as the effects will depend on future developments, which are highly uncertain and cannot be predicted.

Infections may resurge or become more widespread, including due to new variants and the limitation on our ability to travel and timely sell and distribute our products, as well as any closures or supply disruptions may be prolonged for extended periods, all of which would have a negative impact on our business, financial condition, and operating results.

Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact on our business due to the continued global economic impact of the COVID-19 pandemic.

We cannot anticipate all of the ways in which health epidemics such as COVID-19 could adversely impact our business.

See Item 1A, “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business.

The Global Economic Environment

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We remain focused on continuing to build excellence broadly in three areas, cannabinoid-based investigations, drug development and product manufacturing, and online marketing.

We believe these will give us a competitive advantage, including building an increasingly agile and adaptable commercialization engine with a strong customer-focused market expertise.

Although there can be no assurance, we believe these will give us a competitive advantage, including building an increasingly agile and adaptable commercialization engine with a strong customer-focused market expertise.

Workplace and Employees

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We have developed plans regarding the opening of our sites to enable our employees to return to work in our global offices, the field, and our manufacturing facilities, which take into account applicable public health authority and local government guidelines, and which are designed to ensure community and employee safety.

We are moving to a more flexible mix of virtual and in-person working to advance our culture, drive innovation and agility and enable greater balance and well-being for our workforce.

We are moving to a more flexible mix of virtual and in-person work to advance our culture, drive innovation and agility and enable greater balance and well-being for our workforce.

Research and Development

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Fiscal 2023 Highlights

On March 28, 2022, Hamsa Biopharma India Pvt.

Ltd., a directly owned subsidiary of the Company, signed a License Agreement with Jawaharlal Nehru Centre for Advanced Scientific Research (“JNCASR”), an autonomous institution under the Department of Science and Technology, Government of India, to obtain an exclusive license on the developed proprietary technology and know-how, and ownership or assignment of certain patents and patent filings relating to small molecule inhibitors with a naphthalene monoimide scaffold.

The agreement with JNCASR is filed on Form 8K on May 12, 2022.

On February 11, 2022, the Company received a Good Manufacturing Practice (“GMP“) certification for its R&D facility in Maryland.

The Company completed all dose escalation studies, and as announced by the Company on December 2, 2021, the results of the Phase 1 clinical trial on IGC’s THC based investigational new drug candidate, IGC-AD1, for patients with Alzheimer’s disease, have been submitted in the Clinical/Statistical Report (“CSR”) filed with the FDA.

October 28, 2021, the Company won Best CBD Topical award for its broad-spectrum hemp extract cream called Holi Wonder™ at the U.S.

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.

The Company licenses a patent filing from the University of South Florida titled “Ultra-Low dose THC as a potential therapeutic and prophylactic agent for Alzheimer’s Disease.” The USPTO issued 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.

During Fiscal 2022, 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 million of the Company’s shares of common stock, par value $0.0001 per share (the “Shares”).

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

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

Small Business Administration (“SBA”).

On March 20, 2023, the Company announced the changing of its name to IGC Pharma, Inc.

from India Globalization Capital, Inc., as a part of a rebranding strategy that better reflects IGC Pharma’s strategic focus and vision for the future.

On March 8, 2023, the Company filed in USPTO the provisional patent application titled “Composition, Synthesis, and Medical Use of Hybrid Cannabinoid”.

On January 4, 2023, the Company received a No-objection letter from Health Canada for approval to begin its trial in Canada “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.”

On December 1, 2022, the Company announced that it had begun its Phase 2 clinical trials “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” at two U.S.

sites with plan to add between three to five additional sites in the United States, Canada, and possibly South Africa, to increase population diversity.

On September 20, 2022, the USPTO granted a second patent (#11,446,276) for the treatment of Alzheimer’s disease titled “Extreme low dose THC as a therapeutic and prophylactic agent for Alzheimer’s disease.” The original patent application was initiated by the University of South Florida (USF) and filed on August 1, 2016.

On May 25, 2017, the Company entered into an exclusive license agreement with USF with respect to the patent application and the associated research conducted on Alzheimer’s disease.

IGC-AD1, described above, is based on some of this research.

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.

Results of Operations

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Net loss attributable to common stockholders

Revenue – Revenue in Fiscal 2022 and Fiscal 2021, was primarily derived from our Life Sciences segment, which involved sales of in-house brands and alcohol-based hand sanitizers, among others.

Revenue was approximately $397 thousand and $898 thousand for Fiscal 2022 and Fiscal 2021, respectively.

In Fiscal 2022 we de-emphasized the manufacturing and sale of low margin hand sanitizers and shifted our focus to higher margin white label services and the sale of products under our brands.

This decreased our revenue.

The infrastructure business had lower revenue in Fiscal 2022 due to the continued impact of the COVID-19 pandemic and restrictions imposed by government entities.

Cost of revenue – Cost of revenue amounted to approximately $203 thousand for Fiscal 2022, compared to $785 thousand in Fiscal 2021.

This decrease in the cost of revenue was attributable to decreased revenue.

The cost of revenue in Fiscal 2022 is primarily attributable to the cost of raw materials, labor, and other direct overheads required to produce our products.

Our gross margin increased from 12% to 48%, which reflects our increased focus on higher-margin services and the sale of products under our brand.

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 $5.3 million or 68% to $13.2 million for Fiscal 2022, from approximately $7.9 million for Fiscal 2021.

The increase of approximately $5.3 million is attributed to one-time expenses, which include law-suit settlement expenses of approximately $264 thousand;

impairment of facility of $833 thousand;

net realizable value (“NRV”) adjustment of $1.7 million for the hemp crop;

approximately $475 thousand in provisions for advances paid;

and approximately $1.7 million in provisions against inventory that was stolen at our vendor’s facility.

In addition, the increase of approximately $1.3 million is attributable to an increase in non-cash expenses.

Adjusting for approximately $5.3 million in one-time and non-cash expenses, the SG&A for the fiscal year 2022 was lower by approximately $500 thousand.

Research and Development expenses:

Research and Development (“R&D”) expenses were attributed to our Life Sciences segment.

The R&D expenses increased by approximately $1.4 million or 151% to $2.3 million in Fiscal 2022, from approximately $929 thousand for Fiscal 2021.

Expenses increased by $1.4 million due to the now completed Phase 1 clinical trial.

We expect R&D expenses to increase with the progression of Phase 2 trials on IGC-AD1 and pre-clinical trials on TGR-63 .

Impairment loss – Impairment loss amounted to approximately $49 thousand for Fiscal 2022, compared to $169 thousand in Fiscal 2021.

This decrease in the impairment loss was attributable to the Company recording an impairment of $169 thousand as of March 31, 2021, in Evolve I.

During Fiscal 2022, the Company received 44 thousand shares of IGC common stock, which had been granted pursuant to the Purchase Agreement.

Accordingly, the Company canceled the shares and impaired its remaining investment of approximately $37 thousand.

Other Income, net –Other income for Fiscal 2022 and 2021 is approximately $461 thousand and $82 thousand, respectively.

The increase was due to the forgiveness of a PPP loan in the amount of $430 thousand.

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

Revenue – During Fiscal 2023, the Company generated approximately $911 thousand in revenue, representing a significant increase from the $397 thousand generated in Fiscal 2022.

The primary source of revenue in both years was from the Life Sciences segment, encompassing the sale of our formulations as white labeled manufactured products and sales of branded holistic women’s health care products, among others.

The growth can be attributed to higher sales volume driven by increased sales and marketing efforts.

The Company implemented robust marketing and sales activities, which contributed to the successful expansion of its customer base and increased demand.

Approximately 10%-12% of revenue in both years was derived from the Infrastructure segment.

The Company remains committed to its current strategy of driving sales in formulated white labeled and wellness products.

By continuing to focus on sales and marketing initiatives, the Company aims to further strengthen its position in the market and drive sustained revenue growth.

Cost of revenue – The cost of revenue amounted to approximately $469 thousand for Fiscal 2023, compared to $203 thousand in Fiscal 2022.

This represents a gross margin of about 49% for both years.

The cost of revenue is primarily attributable to the cost of raw materials, labor, and other direct overheads required to produce our products in the Life Science segment.

Selling, general and administrative expenses – Selling, general, and administrative (SG&A) expenses primarily encompass various costs such as employee-related expenses, sales commissions, professional fees, legal fees, marketing expenses, other corporate expenses, allocated general overhead, provisions, depreciation, and write-offs related to doubtful accounts and advances.

For Fiscal 2023, the Company reported SG&A expenses of approximately $8.5 million, representing a decrease of approximately $4.7 million, or 36%, compared to the $13.2 million recorded in Fiscal 2022.

This decline in SG&A expenses are attributable to a reduction in one-time expenses of approximately $4.2 million and a decrease of approximately $500 thousand in compensation, legal and marketing expenses, net realizable value (“NRV”) adjustments, and other SG&A expenses.

By effectively managing and reducing these expenses, the Company achieved cost savings during Fiscal 2023.

Research and Development (R&D) expenses – R&D expenses were primarily associated with the Life Sciences segment, reflecting the Company’s investment in R&D activities.

In Fiscal 2023, the Company reported R&D expenses of approximately $3.5 million, representing an increase of $1.2 million or 49% compared to approximately $2.3 million in Fiscal 2022.

The increase in R&D expenses is primarily attributed to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on TGR-63, indicating the Company’s dedication to advancing its product pipeline.

As the development of TGR-63 and the Phase 2B trial on Alzheimer’s gain momentum, the Company anticipates further increases in R&D expenses.

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

We anticipate increased R&D expenses as the development of TGR-63 and the Phase 2B trial on Alzheimer’s pick up more momentum.

Impairment loss – During Fiscal 2023, there was no investment impairment.

In Fiscal 2022, there was an impairment of approximately $49 thousand, which was attributed to the cancelation of 44 thousand shares of IGC common stock.

Other Income, net – During Fiscal 2023, the Company reported approximately $65 thousand in other income, which represents a decrease compared to the $461 thousand recorded in Fiscal 2022.

The decrease in other income for Fiscal 2023 can be primarily attributed to the absence of a one-time forgiveness of the PPP (Paycheck Protection Program) loan, which amounted to approximately $430 thousand in Fiscal 2022.

The component of other income typically includes interest and rental income, dividend income, profits from the sale of assets, unrealized gains from non-debt investments, net income, and income from the sale of scraps.

These sources contribute to the overall other income generated by the Company.

Liquidity and capital resources

Our sources of liquidity are cash and cash equivalents, funds raised through “at the market” (“ATM”) offerings, cash flows from operations, short-term and long-term borrowings, and short-term liquidity arrangements.

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

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

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

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

The Company continues to utilize the ATM to raise capital.

Shares issuable under the ATM could be dilutive to the Company’s shareholders.

In addition, the Company shifted its focus to higher margin white label services and the sale of products under our brands.

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

On June 30, 2023, the Company successfully obtained a working capital credit facility totaling $12 million and in addition sold 10,000,000 shares for $3,000,000.

The equity and the credit facility serve to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations.

Furthermore, the Company intends to raise additional funds through private placement and ATM offerings, subject to market conditions.

The Company expects to raise capital for its trials as and when it is able to do so, but there can be no assurance thereof.

In addition, there can be no assurance of the terms thereof and any subsequent equity financing sought may have dilutive effects on our current shareholders.

While there is no guarantee that we will be successful, we are applying to non-dilutive funding opportunities such as Small Business Research and Development programs.

In addition, subject to limitations on the amount of capital that can be raised, the Company expects to utilize its shelf registration on statement on Form S-3 to raise capital through at-the-market offerings or otherwise.

Please refer to Item 1A.

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March 31, 2022

Percent Change

Cash, cash equivalents

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Cash and cash equivalents

Cash and cash equivalents decreased by approximately $4 million to $10.5 million in Fiscal 2022, from $14.5 million in Fiscal 2021, a decrease of approximately 28%.

The major decrease was due to approximately $741 thousand used in the purchase of property, plant, and equipment and acquisition of intangible assets and a net cash loss of approximately $7.5 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.

Summary of Cash flows

Cash and cash equivalents decreased by approximately $7.3 million to $3.2 million in Fiscal 2023 from $10.5 million in Fiscal 2022, a decrease of approximately 69% is discussed in the summary of cash flows, as follows:

(in thousands, audited)

Percent Change

Cash used in operating activities

Cash (used in)/provided by investing activities

Cash used in investing activities

Cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net increase/(decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

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It consists of a net loss of approximately $11.5 million, a positive impact on cash due to non-cash expenses of approximately $3.7 million, and changes in operating assets and liabilities of approximately $0.8 million.

Non-cash expenses consist of an amortization/depreciation charge of approximately $651 thousand, impairment of investment of $49 thousand, provision against debtor & advances of $1.7 million, stock-based expenses of approximately $2.2 million, and a one-time impairment of PPE of $833 thousand and an off set of $430 thousand due to the forgiveness of a PPP Loan.

In addition, changes in operating assets and liabilities had a positive impact of approximately $2.5 million on cash, of which approximately $1.9 million is due to an adjustment in inventory and approximately $504 thousand increase in accounts payable..

Non-cash expenses consist of an amortization and depreciation charge of approximately $0.7 million, stock-based expenses of approximately $2.8 million and other non-cash expenses of approximately $0.2 million.

In addition, changes in operating assets and liabilities had a positive impact of approximately $0.8 million on cash, of which approximately $0.9 million is due to an adjustment in inventory and approximately $0.1 million decrease in other net current assets and liabilities.

Net cash used in operating activities for Fiscal 2022 was approximately $7.5 million.

It consists of a net loss of approximately $8.8 million, a positive impact on cash due to non-cash expenses of approximately $1.3 million, and a negative impact due to changes in operating assets and liabilities of approximately $3.3 million.

Non-cash expenses consist of an amortization/depreciation charge of approximately $478 thousand, impairment of investment of $169 thousand, and stock-based expenses of approximately $658 thousand.

In addition, changes in operating assets and liabilities had a negative impact of approximately $3.3 million on cash, of which approximately $1.2 million is due to an adjustment in inventory, approximately $2.2 million due to deposits and advances, and a positive impact of approximately $100 thousand for other adjustments in net assets.

It consists of a net loss of approximately $15 million, a positive impact on cash due to non-cash expenses of approximately $5 million, and changes in operating assets and liabilities of approximately $2.5 million.

Non-cash expenses consist of an amortization/depreciation charge of approximately $0.6 million, impairment of investment of $0.1 million, provision against debtor & advances of $1.7 million, stock-based expenses of approximately $2.2 million, and a one-time impairment of PPE of $0.8 million and an offset of $0.4 million due to the forgiveness of a PPP Loan.

In addition, changes in operating assets and liabilities had a positive impact of approximately $2.5 million in cash, of which approximately $1.9 million is due to an adjustment in inventory and an approximately $0.6 million increase in accounts payable.

Investing Activities

Net cash used in investing activities for Fiscal 2022, was approximately $742 thousand, which comprises approximately $535 thousand for the acquisition and filing expenses related to intellectual property, approximately $207 thousand for the purchase of property, plant, and equipment.

Net cash provided by investing activities during Fiscal 2021 was approximately $3.4 million which comprises approximately $122 thousand for the acquisition and filing expenses related to intellectual property, purchase of property, plant, and equipment of $1.5 million, sale of property, plant, and equipment of approximately $47 thousand and investments of approximately $149 thousand in non-marketable securities, and proceeds from investment of approximately $5 million, in marketable securities.

Net cash used in investing activities for Fiscal 2023, was approximately $0.2 million, which comprises approximately $0.3 million for the acquisition and filing expenses related to intellectual property, approximately $0.2 million for the purchase of property, plant, and equipment and approximately $0.1 million of a short-term investment.

Net cash used in investing activities for Fiscal 2022, was approximately $0.7 million, which comprises approximately $0.5 million for the acquisition and filing expenses related to intellectual property, approximately $0.2 million for the purchase of property, plant, and equipment.

Financing Activities

Net cash provided by financing activities was approximately $0.1 million for Fiscal 2023, which comprises net proceeds from issuance of equity stock through the ATM offering, net of all expenses related to the issuance of stock.

Net cash provided by financing activities was approximately $14.7 million for Fiscal 2021, which comprises proceeds from borrowings of approximately $580 thousand, repayment of loan of approximately $50 thousand, and approximately $14.2 million net proceeds from ATM sales.

Net cash provided by financing activities was approximately $4.1 million for Fiscal 2022, which comprises net proceeds from issuance of equity stock through the ATM offering, net of all expenses related to the issuance of stock.

Critical Accounting Policies and Estimates

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

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

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

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

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This generally occurs upon our delivery to a third-party carrier or to the customer directly.

Revenue from tolling services is recognized when the performance obligation, such as processing of the material, has been completed and output material has been transferred to the customer.

Revenue from white label services is recognized when the performance obligation has been completed and output material has been transferred to the customer.

Net sales disaggregated by significant products and services for Fiscal 2023 and 2022 are as follows:

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(2) Construction income consists 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.

(3) Revenue from wellness and lifestyle consists of sale of products such as gummies, hand sanitizers, bath bombs, lotions, beverages, hemp crude extract, hemp isolate, and hemp distillate.

(4) Revenue from white label services consists of rebranding our formulations or the customer’s products as per customer’s requirement.

Accounts receivable

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We had $107 thousand of accounts receivable, net of provision for the doubtful debt of $17 thousand as of March 31, 2023, as compared to $125 thousand of accounts receivable, net of provision for the doubtful debt of $93 thousand as of March 31, 2022.

Most of our account receivables are from infrastructure segment.

Short-term and long-term investments

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

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

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

Short-term and long-term investments consist of equity investment, mutual funds, corporate, various government securities, and municipal debt securities, as well as certificates of deposit.

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.

” 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’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 March 31, 2022, the Company does not have any investment in marketable securities.

We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents.

The fair values of these investments approximate their carrying values.

In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments.

Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations.

Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method.

Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income.

Fair value is calculated based on publicly available market information or other estimates determined by management.

If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than the cost.

To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence.

In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee.

If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established.

If market, industry, and/or investee conditions deteriorate, we may incur future impairments.

Equity investments with readily determinable fair values are measured at fair value.

Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative).

We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than the carrying value.

Changes in value are recorded in other income (expense), net.

As of March 31, 2023, the Company has approximately $154 thousand in short-term investments.

The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made.

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The Company’s assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security, which would have an adverse impact on the Company’s financial condition and operating results.

The estimated amount of liability is based on the information available to us with respect of bank debt and other borrowings.

During Fiscal 2022 and Fiscal 2021 the Company impaired investments of approximately $49 thousand and $169 thousand, respectively.

The estimated amount of liability is based on the information available to us with respect to bank debt and other borrowings.

During Fiscal 2023, there was no impairment and Fiscal 2022, the Company impaired investments of approximately $49 thousand, respectively.

Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Inventory consists of raw materials, finished goods related to wellness products, hand sanitizers, finished hemp-based products, beverages, among others as well as work-in-progress such as extracted crude oil, hemp-based isolate, growing crops, and herbal oils, among others.

Work-in-progress also includes product manufacturing in process, costs of growing hemp, in accordance with applicable laws and regulations including but not limited to labor, utilities, fertilizers, and irrigation.

Inventory consists of finished goods related to wellness products, hand sanitizers, finished hemp-based products, beverages.

Work-and in-progress consist of products in the manufacturing process as on reporting date, including but not limited to primary cost.

Inventory is primarily accounted for using the weighted average cost method.

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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, in fiscal 2021, the Company values its harvested crops at cost.

Please refer to Note 3, “Inventory,” of Notes to Consolidated Financial Statements for further information.

We capitalize inventory costs related to our investigational drug, provided that management determines there is a potential alternative use for the inventory in future research and development projects or other purposes.

As of March 31, 2023, and 2022, our consolidated balance sheet reported approximately $407 thousand and no clinical trial related inventory, respectively.

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

For further information refer to Note 3, “inventory” of Notes to Consolidated Financial Statements.

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

Stock-Based compensation

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

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

For stock-based employee compensation the 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.

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

Generally, the closing share price of the Company’s common stock on the date of grant is considered the fair-value of the share.

Generally, the closing share price of the Company’s common stock on the date of the grant is considered the fair value of the share.

The volatility factor is determined based on the Company’s historical stock prices.

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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 5. Market for Registrant’s Common Equity