What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-10 compared with 2023-02-14 · 320 added, 512 removed, 370 unchanged (69% of the section changed)

Financial Statements

India Globalization Capital, Inc.

IGC Pharma, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

June 30, 2023

March 31, 2023

Current assets:

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Preferred stock, $ 0.0001 par value:

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

authorized 1,000,000 shares, no shares issued or outstanding as of June 30, 2023, and March 31, 2023.

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

150,000,000 shares authorized;

53,077,436 and 51,054,017 shares issued and outstanding as of December 31, 2022, and March 31, 2022, respectively.

53,077,436 shares issued and outstanding as of June 30, 2023, and March 31, 2023, respectively.

Accumulated other comprehensive loss

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

| December 31, 2022, Form 10-Q

India Globalization Capital, Inc.

| June 30, 2023, Form 10-Q

IGC Pharma, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

Three months ended

Nine months ended

Three months ended June 30,

Cost of revenue

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Operating loss

Impairment of investment

Other income, net

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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, 2022, Form 10-Q

India Globalization Capital, Inc.

| June 30, 2023, Form 10-Q

IGC Pharma, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY

(in thousands)

Three months ended December 31, 2021

Common Shares

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Total Stockholders’

Balances as of September 30, 2021

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Foreign currency translation adjustments

Balances as of December 31, 2021

Three months ended December 31, 2022

Balances as of September 30, 2022

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Foreign currency translation adjustments

Balances as of December 31, 2022

Nine months ended December 31, 2021

Common Shares

Common Stock and

Additional Paid in

Accumulated Other

Comprehensive Loss

Total Stockholders’

Balances as of March 31, 2022

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Other adjustments

Net proceeds from the issuance of common stock

Foreign currency translation adjustments

Balances as of December 31, 2021

Nine months ended December 31, 2022

Balances as of June 30, 2022

Balances as of March 31, 2023

Common stock-based compensation & expenses, net

Issuance of common stock through offering (net of expenses)

Foreign currency translation adjustments

Balances as of December 31, 2022

Net proceeds from the issuance of common stock

Foreign currency translation

Balances as of June 30, 2023

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

| December 31, 2022, Form 10-Q

India Globalization Capital, Inc.

| June 30, 2023, Form 10-Q

IGC Pharma, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine months Ended

Three months Ended

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

Provision for bad debt

Impairment of non-marketable securities

Common stock-based compensation and expenses, net

Net loss on sale of property, plant, and equipment

Forgiveness of PPP Loan

Changes in operating assets and liabilities:

Other non-cash items

Accounts receivables, net

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Cash flow from investing activities:

Net sale/(purchase) of property, plant, and equipment

Investment in short term investments

Purchase of property, plant, and equipment

Sale of property, plant, and equipment

Acquisition and filing cost of patents and rights

Net cash provided by/(used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Issuance of equity stock through offering (net of expenses)

Net proceeds from the issuance of common stock

Repayment of long-term loan

Net cash provided by financing activities

Net cash used in financing activities

Effects of exchange rate changes on cash and cash equivalents

5 unchanged sentences

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

Forgiveness of PPP Loan

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

| December 31, 2022, Form 10-Q

India Globalization Capital, Inc.

| June 30, 2023, Form 10-Q

IGC Pharma, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED DECEMBER 31, 2022

THREE MONTHS ENDED JUNE 30, 2023

(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., dba IGC Inc., together with our subsidiaries and beneficially owned subsidiary.

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

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

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NOTE 1 – BUSINESS DESCRIPTION

Corporate History

India Globalization Capital, Inc.

(dba IGC, Inc., IGC) is a Maryland corporation established in 2005.

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

Business Overview

IGC develops advanced formulations for treating diseases and conditions, including Alzheimer’s disease (AD), menstrual cramps (dysmenorrhea), premenstrual syndrome (PMS) and chronic pain.

The Company’s leading drug candidate, IGC-AD1, has demonstrated in Alzheimer’s cell lines the potential to be effective in suppressing or ameliorating two key hallmarks of AD:

plaques and tangles.

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

The Company markets two wellness brands Holief and Sunday Seltzer.

Holief includes pain relief creams and gels for women experiencing PMS and menstrual cramps, and Sunday Seltzer, a lifestyle energy beverage brand.

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

We are a Maryland corporation established in 2005 with a fiscal year that is a 52- or 53-week period that ends on March 31.

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 proprietary 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.

IGC has two segments:

Life Sciences and Infrastructure.

Life Sciences Segment

Pharmaceutical :

Since 2014, the Company has focused primarily on the potential uses of phytocannabinoids, in combination with other compounds, to treat multiple diseases, such as Alzheimer’s disease.

As a company engaged in the clinical-stage pharmaceutical 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.

The Company currently has two main investigational small molecules in various stages of development:

IGC-AD1, our lead therapeutic candidate, is a tetrahydrocannabinol (THC) based formulation that has demonstrated in AD cell lines, in vitro, the potential in reducing a key peptide responsible for Aβ plaques, and the potential to decrease or inhibit the phosphorylation of tau a protein that is responsible for the formation of neurofibrillary tangles, both important hallmarks of AD.

In addition, in the Phase 1 human trial it demonstrated the potential to reduce agitation in dementia due to AD.

IGC-AD1 is currently in Phase 2B trials for treating agitation in dementia from AD, a condition that affects over 10-million individuals in North America and Europe, and

TGR-63, a non-cannabinoid molecule, is an enzyme inhibitor shown in pre-clinical trials to reduce neurotoxicity in Alzheimer’s cell lines.

The Company controls nine patents and seven patent applications, including two each for IGC-AD1 and TGR-63 and their uses related to Alzheimer’s.

The Company’s various personal care CBD-based over the counter (“OTC”) consumer products are sold through online and wholesale channels under the following two brands:

Holief™ is a vegan, non-GMO, cruelty free, paraben free, lab verified, CBD infused line of OTC products with plant-based ingredients aimed at supporting menstrual cramp (dysmenorrhea) discomforts and other premenstrual symptoms (“PMS”).

Sunday Seltzer™ is a vegan, organic, lightly carbonated energy drink with natural caffeine from green tea extract, CBD, vitamin B, and vitamin C, with 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 other flavors with no caffeine.

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

The Company operates two segments:

the Life Sciences segment described above and a legacy Infrastructure segment to execute construction contracts and the rental of heavy construction equipment in India.

The Company is currently actively executing a project in this segment.

| December 31, 2022, Form 10-Q

Other Recent Developments

The Company commenced its Phase 2 clinical trial on IGC-AD1 for agitation in dementia from Alzheimer’s at two U.

The Company also received a no-objection letter from Health Canada to begin trials in Canada and has commenced trials at a site in Montreal.

The trial is intended to enroll 146 patients with one half, the treated group, receiving IGC-AD1, and the other half, the control group, receiving a placebo.

The goal of the trial is to evaluate and establish the efficacy of IGC-AD1 in treating patients with Alzheimer’s dementia to reduce neuropsychiatric symptoms (“NPS”) such as agitation, which affects 76% of individuals with Alzheimer’s (Mussele et al., 2015).

The Company hopes to be the first natural tetrahydrocannabinol (“THC”) based medication for treating agitation in dementia from Alzheimer’s.

The trial is registered on clinicaltrials.gov with NCT05543681.

1) IGC-AD1 , our proprietary lead therapeutic candidate, is a Tetrahydrocannabinol (THC) based formulation that has demonstrated in Alzheimer’s cell lines the potential to reduce the buildup of Aβ plaques and the potential to decrease or inhibit the phosphorylation of tau, a protein that is responsible for the formation of neurofibrillary tangles (NFTs), both important hallmarks of Alzheimer’s.

In addition, Phase 1 human trial results demonstrated IGC-AD1’s potential to reduce agitation in dementia due to Alzheimer’s.

IGC-AD1 is currently in Phase 2B trials for treating agitation in dementia from Alzheimer’s, a condition that affects over 10 million individuals in North America and Europe, and

2) TGR-63 , non-cannabinoid small molecule that has shown promise in pre-clinical trials for reducing amyloid burden in an Alzheimer’s disease model.

In Alzheimer’s, the accumulation of beta-amyloid protein in the brain leads to the formation of Aβ plaques, which are associated with neurotoxicity and cell dysfunction, ultimately leading to cell death and cognitive decline.

The potential efficacy of TGR-63 lies in its ability to inhibit the aggregation of beta-amyloid.

If shown to be safe and efficacious in human trials in reducing the formation of Aβ plaques, this molecule could halt the neurotoxic process caused by beta-amyloid, thereby preventing or treating Alzheimer’s.

| June 30, 2023, Form 10-Q

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 syndrome (PMS).

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

In addition, we sell our product formulations to other companies that market them under their brand.

This is the white label part of the OTC business.

Phase 2 Clinical Trial

Typically, a Phase 2 trial is divided into a Phase 2A and a Phase 2B trial with the former designed to assess dosing requirements and the latter to establish efficacy.

In this document, we refer to the trial as Phase 2 and Phase 2B interchangeably.

The Company has initiated a Phase 2B 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.

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, the trial will evaluate the impact of CYP450 polymorphisms and specifically CYP2C9 on each of the NPS and assess any reductions in psychotropic drugs, among others.

CYP2C9 ranks amongst the most important drug metabolizing enzymes in humans, as it breaks down over 100 drugs, including nonsteroidal anti-inflammatory all drugs.

We seek to understand how various versions of the enzyme act on IGC-AD1.

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

Business Organization

As of December 31, 2022, the Company had the following operating subsidiaries:

As of June 30, 2023, 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).

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

The Company is a Maryland corporation, established in 2005.

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

And Colombia-based beneficially-owned subsidiary IGC Pharma SAS (formerly Hamsa Biopharma Colombia SAS) (Hamsa).

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

The Company’s principal office is in Maryland established in 2005.

Additionally, the Company has offices in Washington state, Colombia, and India.

The Company’s filings 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, 2022, and March 31, 2022, condensed consolidated statements of operations for the three months and nine months ended December 31, 2022, and 2021, and condensed consolidated statements of changes in stockholders’ deficit for the three months and nine months ended December 31, 2022, and 2021, and condensed consolidated statements of cash flows for the nine months ended December 31, 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.

The accompanying condensed consolidated Balance Sheet as of June 30, 2023, and March 31, 2023, condensed consolidated statements of operations for the three months ended June 30, 2023, and 2022, and condensed consolidated statements of cash flows for the three months ended June 30, 2023, and 2022, are unaudited.

The consolidated balance sheet as of March 31, 2023, has been derived from audited financial statements, and the accompanying as of June 30, 2023 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.

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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, 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.

These interim statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2023 (“Fiscal 2023”) contained in the Company’s Form 10-K for Fiscal 2023, filed with the SEC on July 7, 2023, specifically in Note 2 to the consolidated financial statements.

| June 30, 2023, Form 10-Q

Principles of consolidation

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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

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

| December 31, 2022, Form 10-Q

Management believes that the estimates and assumptions used in the preparation of the consolidated financial statements are prudent and reasonable.

Significant estimates and assumptions are generally used for, but not limited to, allowance for uncollectible accounts receivable;

sales returns;

normal loss during production;

future obligations under employee benefit plans;

the useful lives of property, plant, and equipment;

intangible assets;

impairment of goodwill and investments;

recoverability of advances;

the valuation of options granted, and warrants issued;

and income tax and deferred tax valuation allowances, if any.

Actual results could differ from those estimates.

Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates.

Critical accounting estimates could change from period to period and could have a material impact on IGC’s results, operations, financial position, and cash flows.

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.

Transactions between the Company and its subsidiaries are eliminated in the consolidated financial statements.

Presentation and functional currencies

IGC operates in the U.S., India, Colombia, and Hong Kong, and a portion of the Company’s financials are denominated in the Indian Rupee (“INR”), the Hong Kong Dollar (“HKD”), or the Colombian Peso (“COP”).

The Company operates in India, the U.S., Colombia, and Hong Kong, and a portion of the Company’s financials are denominated in the Indian Rupee (“INR”), the Hong Kong Dollar (“HKD”), or the Colombian Peso (“COP”).

As a result, changes in the relative values of the U.S.

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The accompanying financial statements are reported in USD.

The INR, HKD, and COP are the functional currencies for certain subsidiaries of the Company.

INR, HKD, and COP are the functional currencies for certain subsidiaries of the Company.

The translation of the functional currencies into USD is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues and expenses using average exchange rates prevailing during the reporting periods.

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Transaction gains and losses are recognized in the consolidated statements of operations.

Impairment of long-lived assets

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

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

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

For assets, the Company intends to dispose of by sale, a loss or profit is recognized for the amount by which the estimated fair value less cost to sell is less than the carrying value of the assets.

Fair value is determined based on quoted market prices, if available, or other valuation techniques including discounted future net cash flows.

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, 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 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.

Available-for-sale securities:

Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position.

Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs.

Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “Investments – Equity method and Joint Ventures.” 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.”

| December 31, 2022, Form 10-Q

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 December 31, 2022, the Company has approximately $ 88 thousand in short-term investments.

Stock – based compensation

The Company accounts for stock-based compensation to employees and non-employees in conformity ASC Topic 718, “Stock-Based Compensation.” The Company expenses stock-based compensation to employees over the requisite vesting period based on the award’s estimated grant-date fair value.

The Company accounts for forfeitures as they occur.

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

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

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 the binomial lattice model.

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

The assumptions 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.

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

The expected term represents the period that our stock-based awards are expected to be outstanding.

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.

Going Concern

The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Subtopic 205-40, “ Presentation of Financial Statements — Going Concern ”, which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern.

The Company is currently in a clinical trial stage and, thus, has not yet achieved profitability.

The Company expects to continue to incur significant operating and net losses and negative cash flows from operations in the near future.

The Company estimates that its current cash and cash equivalents balance with working capital credit facility and equity investment is sufficient to support operations beyond the twelve months following the date these consolidated financial statements and footnotes were issued.

These estimates are based on assumptions that may prove to be wrong, and the Company could use its available capital resources sooner than it currently expects.

Accounts receivable

We make estimates of the collectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness, and current economic trends.

If a customer’s financial condition deteriorates, additional allowances may be required.

We had $ 251 thousand of accounts receivable, net of provision for the doubtful debt of $ 35 thousand as of December 31, 2022, as compared to $ 125 thousand of accounts receivable, net of provision for the doubtful debt of $ 93 thousand as of March 31, 2022.

| December 31, 2022, Form 10-Q

Inventory is valued at the lower of cost or net realizable value, 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 and 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, and costs of growing hemp, in accordance with applicable laws and regulations, including but not limited to labor, utilities, fertilizers, and irrigation.

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

Primary costs include raw materials, packaging, direct labor, overhead, shipping, and the depreciation of manufacturing equipment.

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

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

Fair value of financial instruments

ASC 820, “ Fair Value Measurement, ” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Observable inputs such as quoted prices in active markets.

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

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

Earnings/(Loss) per share

The computation of basic loss per share for the nine months ended December 31, 2022, excludes potentially dilutive securities of approximately 6.1 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 nine months ended December 31, 2022, and 2021, used for the computation of basic earnings per share (“EPS”), is 52,412,830 and 49,643,942 , respectively.

Due to the loss incurred by the Company during the nine months ended December 31, 2022, and 2021, all the potential equity shares are anti-dilutive, and accordingly, the fully diluted EPS is equal to the basic EPS.

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

We had $ 17 thousand of provision for the doubtful debt of $ 225 thousand as of June 30, 2023, as compared to $ 107 thousand of accounts receivable as of March 31, 2023.

Loss per share

The computation of basic loss per share for the three months ended June 30, 2023, excludes potentially dilutive securities of approximately 10 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.

In addition, the Company entered into a private placement agreement on June 30, 2023.

As per the terms of the agreement, the Company will issue 10 million shares of unregistered common stock.

The weighted average number of shares outstanding for the three months ended June 30, 2023, and 2022, used for the computation of basic earnings per share (“EPS”) is 53,077,436 and 51,616,598 , respectively.

Due to the loss incurred by the Company during the three months ended June 30, 2023, and 2022, all the potential equity shares are anti-dilutive, and accordingly, the fully diluted EPS is equal to the basic EPS.

| June 30, 2023, Form 10-Q

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 nine months ended December 31, 2022, there were no impactful breaches in cybersecurity.

| December 31, 2022, Form 10-Q

Intangible assets

The Company’s intangible assets are accounted for in accordance with ASC Topic 350, Intangibles – Goodwill and Other.

Intangible assets having indefinite lives are not amortized, but instead are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value.

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

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

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

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

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

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated period of benefit.

In accordance with ASC 360-10-35-21, definite lived intangibles are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value.

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

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

We have a cybersecurity policy in place and have taken cybersecurity measures to safeguard against hackers, however, there can be no assurance thereof.

During the three months ended June 30, 2023, there were no impactful breaches in cybersecurity.

Revenue Recognition

9 unchanged sentences

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

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.

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

2 unchanged sentences

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.

We license our products to processors.

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

| December 31, 2022, Form 10-Q

Net sales disaggregated by significant products and services for the nine months ended December 31, 2022, and 2021 are as follows:

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 the three months ended June 30, 2023, and 2022 are as follows:

(in thousands)

Nine months ended December 31,

Three months ended June 30,

Infrastructure segment (1)

Rental income (1)

Construction contracts (2)

Life Sciences segment

1 unchanged sentence

White labeling services (3)

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

(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 from white label services, which refers to a fully supported product or service made by us but sold by another company.

Lessor Accounting

Under the current ASU guidance, contract consideration will be allocated to its lease and non-lease components (such as maintenance).

For the Company as a lessor, any non-lease components will be accounted for under ASC Topic 606, “ Revenue from Contracts with Customers, ” unless the Company elects a lessor practical expedient not to separate the non-lease components from the associated lease component.

The amendments in ASU 2018-11 also provide lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under the new revenue guidance (“Topic 606”).

To elect the practical expedient, the timing and pattern of transfer of the lease and non-lease components must be the same, and the lease component must meet the criteria to be classified as an operating lease if accounted for separately.

If these criteria are met, the single component will be accounted for under either Topic 842 or Topic 606, depending on which component(s) are predominant.

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

As a 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.

The Company expects to elect the lessor practical expedient to not separate non-lease components such as maintenance from the associated lease for all existing and new leases and to account for the combined component as a single lease component.

The timing of revenue recognition is expected to be the same for most of the Company’s new leases as compared to similar existing leases;

however, certain categories of new leases could have different revenue recognition patterns as compared to similar existing leases.

For leases that are accounted for as operating leases, income is recognized on a straight-line basis over the term of the lease contract.

Generally, when a lease is more than 180 days delinquent (where more than three monthly payments are owed), the lease is classified as being non-accrual, and the Company stops recognizing leasing income on that date.

Payments received on leases in nonaccrual status generally reduce the lease receivable.

Leases on nonaccrual status remain classified as such until there is sustained payment performance that, in the Company’s judgment, would indicate that all contractual amounts will be collected in full.

| December 31, 2022, Form 10-Q

Lessee Accounting

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

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

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

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

In addition, the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification, and initial direct costs.

Further, the Company will adopt a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less), and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets.

Under ASU 2016-02 (Topic 842), lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date:

(i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;

and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease.

The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received.

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

There was no impairment for right-of-use lease assets as of December 31, 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, that defer the commencement date of required payments.

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

(1) Infrastructure segment consists of income from the rental of heavy construction equipment and construction contracts.

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

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

Recently issued accounting pronouncements

Changes to U.S.

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

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.

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.

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.

| June 30, 2023, Form 10-Q

NOTE 3 – INVENTORY

(in thousands)

December 31, 2022

June 30, 2023

March 31, 2023

2 unchanged sentences

Finished goods

Inventory in the form of work-in-progress is moved into raw materials as we process the hemp extracts into different hemp derivatives used in the production of finished goods.

Finished goods comprise, but is not limited to, hand sanitizers, gummies, lotions, and beverages, among others.

| December 31, 2022, Form 10-Q

During the nine months ended December 31, 2022, the Company wrote off approximately $ 110 thousand of inventory due to abnormal amounts of idle facility expense, freight, handling costs, scrap, and wasted material (spoilage).

During the three months ended June 30, 2023, the Company wrote off approximately $ 20 thousand of inventory due to abnormal loss due to idle facility expense, freight, handling costs, scrap, and wasted material (spoilage).

This charge was recorded in Selling, general, and administrative expenses.

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 June 30, 2023, and March 31, 2023, our consolidated balance sheet reported approximately $ 397 thousand and $ 407 clinical trial-related inventory, respectively.

NOTE 4 – DEPOSITS AND ADVANCES

(in thousands)

December 31, 2022

June 30, 2023

March 31, 2023

2 unchanged sentences

Prepaid expenses and other current assets

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

Prepaid expenses and other current assets include approximately $ 21 thousand of statutory advances as of June 30, 2023, as compared to $ 25 thousand as of March 31, 2023.

NOTE 5 – INTANGIBLE ASSETS

(in thousands)

December 31, 2022

June 30, 2023

March 31, 2023

Amortized intangible assets

2 unchanged sentences

Total amortized intangible assets

Unamortized intangible assets

Other intangible assets

Other intangibles

1 unchanged sentence

Total intangible assets

The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing 16 patents.

| June 30, 2023, Form 10-Q

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

It also includes acquisition costs related to domains and licenses.

The amortization of patent and patent rights with finite life is up to 20 years, commencing from the date of grant or acquisition.

Accordingly, the amortization expense in the three months ended December 31, 2022, and 2021 amounted to approximately $ 14 thousand and $ 7 thousand, respectively, whereas the amortization expense in the nine months ended December 31, 2022, and 2021 amounted to approximately $ 38 thousand and $ 18 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, 2022, there was no impairment.

Estimated amortization expense

The intangible with finite life is up to 20 years are amortized on straight-line basis, commencing from the date of grant or acquisition.

The amortization expense in the three months ended June 30, 2023, and 2022, amounted to approximately $ 18 thousand and $ 10 thousand, respectively.

Estimated annual amortization expense

(in thousands)

4 unchanged sentences

For the year ended 2028

| December 31, 2022, Form 10-Q

NOTE 6 – PROPERTY, PLANT, AND EQUIPMENT

1 unchanged sentence

Useful Life (years)

December 31, 2022

June 30, 2023

March 31, 2023

4 unchanged sentences

Furniture and fixtures

Construction in progress

Total gross value

1 unchanged sentence

Total property, plant, and equipment, net

The depreciation expense in the three months ended December 31, 2022, and 2021 amounted to approximately $ 158 thousand and $ 117 thousand, respectively.

The depreciation expense in the nine months ended December 31, 2022, and 2021 amounted to approximately $ 466 thousand and $ 427 thousand, respectively.

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

As of December 31, 2022, the Company disposed of fully depreciated assets in the amount of approximately $ 1.6 million from its subsidiaries.

This resulted in a reduction in the value of total gross assets but did not affect the net value of assets as the disposed assets had previously been fully depreciated.

In addition, the Company sold a property in Puerto Rico for net proceeds of approximately $ 485 thousand (acquired for approximately $ 480 thousand) and accounted for a profit of approximately $ 5 thousand in other income.

The depreciation expense in the three months ended June 30, 2023, and 2022 amounted to approximately $ 137 thousand and $ 152 thousand, respectively.

The net decrease in Total property, plant, and equipment is primarily due to depreciation.

The Company sold a fully depreciated property in India for net proceeds of approximately $ 43 thousand and accounted for a profit of approximately $ 43 thousand in other income.

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 – LEFT BLANK INTENTIONALLY

| June 30, 2023, Form 10-Q

NOTE 8 – CLAIMS AND ADVANCES

(in thousands)

December 31, 2022

June 30, 2023

March 31, 2023

Claims receivable (1)

Non-current deposits

Non-current advances

1 unchanged sentence

While the Company has initiated collection proceedings internally or with the appropriate authorities, it believes receiving the amount in the next 12 months will be challenging because of the time required for collection proceedings.

Includes $ 140 thousand owed to one of our manufacturers for the equipment purchase.

| December 31, 2022, 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, 2022, and 2021 are approximately $ 134 thousand and $ 131 thousand, respectively.

The Company also has four operating leases as of December 31, 2022.

The Company has entered into a lease agreement for approximately five years, expiring in 2025.

The annual lease expense is approximately $ 122 thousand.

The lease contract does not contain any material residual value guarantees or material restrictive covenants.

The remaining lease term for the operating lease is 2.9 years with a discount rate of 7 %.

The lease does not provide a readily determinable implicit rate.

Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

The Company has three lease agreements for three to four years, expiring between 2023 and 2024.

The total annual lease expense is approximately $ 6 thousand.

The lease contracts do not contain any material residual value guarantees or material restrictive covenants.

The remaining lease term for the operating leases is between 2 - 1.4 years with a discount rate of 7 %.

The lease does not provide a readily determinable implicit rate.

Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

(in thousands)

Three months ended

December 31, 2022

(in thousands)

December 31, 2021

(in thousands)

Nine months ended

December 31, 2022

(in thousands)

Nine months ended

December 31, 2021

Operating lease costs

Short term lease costs

Total lease costs

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

(in thousands)

December 31, 2022

March 31, 2022

Operating lease asset

Total lease assets

Current liabilities:

Accrued liabilities and others (current portion-operating lease liability)

Noncurrent liabilities:

Operating lease liability (non-current portion-operating lease liability)

Total lease liability

| December 31, 2022, Form 10-Q

(in thousands)

December 31, 2022

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

Cash paid for amounts included in the measurement of lease liabilities

–Operating cash flows from operating leases

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

As of December 31, 2022, the following table summarizes the maturity of our lease liabilities:

Present value discount

Total lease liabilities

It includes $ 140 thousand owed to the company by one of our manufacturers for the equipment purchase.

NOTE 9 – LEFT BLANK INTENTIONALLY

NOTE 10 – ACCRUED AND OTHER LIABILITIES

(in thousands)

December 31, 2022

June 30, 2023

March 31, 2023

4 unchanged sentences

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

In addition, the provision for expenses includes provision for legal, professional, and marketing expenses.

Other current liability also includes statutory payables of approximately $ 48 thousand and $ 55 thousand as of December 31, 2022 and March 31, 2022, respectively and approximately $ 3 thousand of short-term loans as of December 31, 2022, and March 31, 2022, respectively.

In addition, provision for expenses includes provision for legal, professional, and marketing expenses.

Other current liability also includes statutory payables of approximately $ 48 thousand and $ 31 thousand as of June 30, 2023, and March 31, 2023, respectively, and approximately $ 3 thousand of short-term loans as of June 30, 2023, and March 31, 2023, respectively.

NOTE 11 – LOANS AND OTHER LIABILITIES

Loan as of December 31, 2022:

Loan as of June 30, 2023:

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 %.

The Company must pay principal and interest payments of $ 731 every month beginning June 5, 2021.

For each installment payment, the U.S.

Small Business Administration (“SBA”) will apply the payment first to pay interest accrued to the day SBA receives the payment then to any remaining balance to reduce principal.

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

For the nine months ended December 31, 2022, the interest expense and principal payment for the EIDL were approximately $ 4.1 thousand and $ 2 thousand, respectively.

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

As of December 31, 2022, approximately $ 141 thousand of the loan is classified as long-term loans and approximately $ 3 thousand as short-term loans.

| December 31, 2022, Form 10-Q

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 30 years from the date of the loan.

For the three months ended June 30, 2023, and June 30, 2022, the interest expense and principal payment for the EIDL was approximately $ 1 thousand and $ 1 thousand, respectively.

As of June 30, 2023, approximately $ 140 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

The Credit Agreement serves to satisfy ongoing liquidity requirements and ensure the Company’s ability to sustain its operations.

The Credit Agreement matures on June 30, 2024, with an option to renew.

Borrowings under the Credit Agreement will bear interest, calculated according to the interest rate mentioned in the Certificate of Deposit (as defined in the Credit Agreement), as the case may be, plus an applicable margin of 1 %, and the Company shall bear the tax.

Interest is due and payable in full by the Company on the last business day of each interest period.

As of June 30, 2023, the entire amount of $ 12 million remains unused.

| June 30, 2023, Form 10-Q

Other Liability:

(in thousands)

December 31, 2022

June 30, 2023

March 31, 2023

4 unchanged sentences

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

Accordingly, no such matters that are deemed material to the condensed consolidated financial statements as of December 31, 2022, except as disclosed in the legal proceedings section below.

There are no such matters that are deemed material to the condensed consolidated financial statements as of June 30, 2023, 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.

In addition, under applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (“Gratuity Plan”) covering certain categories of employees.

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (“Gratuity Plan”) covering certain categories of employees.

The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the Company.

3 unchanged sentences

NOTE 13 – SECURITIES

As of December 31, 2022, the Company was authorized to issue up to 150,000,000 shares of common stock, a par value of $ 0.0001 per share, and 53,077,436 shares of common stock were issued and outstanding.

The Company is also authorized to issue up to 1,000,000 shares of preferred stock, a par value of $ 0.0001 per share, and no preferred shares were issued and outstanding as of December 31, 2022.

As of June 30, 2023, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 53,077,436 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, 2023.

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

3 unchanged sentences

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.

On January 13, 2021, the Company entered into a Sales Agreement (the “Agreement”) with The Benchmark Company, LLC (the “Sales Agent”), under 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.

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 (the “Securities Act”).

On June 30, 2023, the Company entered into a SPA with Bradbury Asset Management and three unrelated investors resulting in approximately $ 3 million in gross proceeds.

The completion of the private placement is subject to customary closing conditions, including approval by the NYSE.

Under the terms of the private placement, IGC will issue 10 million shares of unregistered common stock at a price of $ 0.30 per share.

Shares are intended to be exempt from registration under the Securities Act, by virtue of the provisions of Section 4(a)(2) of the Securities Act and Regulation D and/or Regulation S adopted thereunder.

NOTE 14 – STOCK-BASED COMPENSATION

As of December 31, 2022, under the Company’s previous 2008 and current 2018 Omnibus Incentive Plans, a total of 8,412,627 shares of common stock have been issued to employees, non-employees, and advisors.

In addition, 5.8 million restricted share units (“RSUs”), valued at $ 5.7 million with a weighted average value of $ 0.98 per share, have been granted but not yet issued from different Incentive Plans and Grants.

This includes 3 million RSUs granted to employees and directors, which consists of a vesting schedule based entirely on the attainment of either operational milestones (performance conditions) or market conditions, assuming continued employment either as an employee or director with the Company.

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

As of December 31, 2022, management confirmed two milestones had been achieved, and the rest were probable to be achieved by March 31, 2027.

| December 31, 2022, Form 10-Q

As of June 30, 2023, 10 million restricted share units (RSUs), fair valued at $ 7 million with a weighted average value of $ 0.70 per share, have been granted but not yet issued from different Incentive Plans and Grants.

This includes 5 million RSUs granted to employees and directors, which consists of a vesting schedule based entirely on the attainment of both operational milestones and market conditions, assuming continued employment either as an employee or director with the Company.

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

As of June 30, 2023, Management confirmed three of the milestones had been achieved, and the rest were considered probable to be achieved by March 31, 2027.

| June 30, 2023, Form 10-Q

Additionally, options held by advisors and directors to purchase 150 thousand shares of common stock fair valued at $ 69 thousand with a weighted average of $ 0.46 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 is valued based on a lattice model, with the following assumptions:

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

Granted in Fiscal 2024

Granted in Fiscal 2023

Expected life of options

3 unchanged sentences

Expected dividend yield

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 (“SG&A”) expenses (including research and development).

For the nine months ended December 31, 2022, the Company’s share-based and option-based expenses shown in SG&A expenses (including research and development) were $ 2.2 million and $ 23 thousand, respectively.

For the nine months ended December 31, 2021, the Company’s share-based and option-based expenses were $ 1.0 million thousand and $ 24 thousand, respectively.

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

For the three months ended June 30, 2023, the Company’s share-based expense and option-based expense shown in Selling, general and administrative expenses (including research and development) were $ 354 thousand and $ 4 thousand, respectively and for the three months ended June 30, 2022, the Company’s share-based expense and option-based expense was $ 1.14 million and $ 8 thousand, respectively.

Non-vested shares

4 unchanged sentences

Cancelled/forfeited

Non-vested shares as of December 31, 2022

Non-vested shares as of June 30, 2023

(in thousands)

5 unchanged sentences

Cancelled/forfeited

Options outstanding as of December 31, 2022

Options outstanding as of June 30, 2023

There was a combined unrecognized expense of $ 3.5 million related to non-vested shares and share options that the Company expects to be recognized over the weighted average life of 5 years.

| December 31, 2022, Form 10-Q

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

As of December 31, 2022, the Company’s investments may consist of money market funds, debt and equity funds, and other marketable securities, among others 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, 2023, the Company’s investments may consist of money market funds, debt and equity funds, and other marketable securities, among others 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.

Financial instruments are classified as current if they are expected to be liquidated within the next twelve months.

The Cash Deposits are classified as Level 2 as they do not have regular market pricing, but its fair value can be determined based on other data values or market prices.

The Certificate of Deposits are classified as Level 2 as they do not have regular market pricing, but their fair value can be determined based on other data values or market prices.

The Company’s remaining investments have been classified as Level 3 instruments as there is little or no market data.

Level 3 investments are valued using the cost method.

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

As of December 31, 2022

| June 30, 2023, Form 10-Q

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2023, and March 31, 2023, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

(in thousands)

As of June 30, 2023

Adjusted Cost

3 unchanged sentences

As of March 31, 2023

(in thousands)

Adjusted Cost

2 unchanged sentences

Certificate of Deposits

| December 31, 2022, Form 10-Q

NOTE 16 – SEGMENT INFORMATION

FASB ASC 280, “ Segment Reporting ” establishes standards for reporting information about reportable segments.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group (“CODM”), in deciding how to allocate resources and assess performance.

The CODM evaluates revenues and gross profits based on product lines and routes to market.

2 unchanged sentences

The Company’s CODM is the Company’s chief executive officer (“CEO”).

The CEO reviews financial information presented on an operating segment basis to make operating decisions and assess financial performance.

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

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

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

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

1 unchanged sentence

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

| June 30, 2023, Form 10-Q

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

2 unchanged sentences

(in thousands)

Nine months ended

December 31, 2022

Three months ended

June 30, 2023

Percentage of

3 unchanged sentences

(in thousands)

Nine months ended

December 31, 2021

Three months ended

June 30, 2022

Percentage of

2 unchanged sentences

Life Sciences segment

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

| December 31, 2022, Form 10-Q

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

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, 2022

Three months ended

June 30, 2023

Percentage of

1 unchanged sentence

(in thousands)

Nine months ended

December 31, 2021

Three months ended

June 30, 2022

Percentage of

Total Revenue

3) The table below shows the non-current assets other than financial instruments held in the country of domicile and foreign countries.

| June 30, 2023, Form 10-Q

3) The table below shows the non-current assets other than financial instruments held in the country of domicile (U.S.) and foreign countries.

(in thousands)

3 unchanged sentences

(India, Hong Kong, and Colombia)

December 31, 2022

June 30, 2023

Intangible assets, net

15 unchanged sentences

NOTE 17 – SUBSEQUENT EVENTS

None to report.

| December 31, 2022, Form 10-Q

On July 11, 2023, the Canadian Intellectual Property Office issued a patent (#2,961,410) to the Company titled “CANNABINOID COMPOSITION AND METHOD FOR TREATING PAIN”.

The patent relates to compositions and methods for treating multiple types of seizure disorders in humans using a combination of cannabinoids with other compounds.

Subject to further research and study, the combination may be used for relieving pain in patients with psoriatic arthritis, fibromyalgia, scleroderma, shingles, and related pain-generating conditions.

| June 30, 2023, 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 India Globalization Capital, Inc.’s, dba IGC Inc.

(“IGC,” “the Company,” “we,” “our,” and/or “us”), consolidated financial condition and results of operations and cash flows.

The MD&A 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 nine months ended December 31, 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 purpose of this Management’s Discussion and Analysis (“MD&A”) is to provide an understanding of IGC Pharma, Inc.’s (“IGC,” the “Company,” “we,” “our,” and/or “us”) consolidated financial condition and results of operations and cash flows.

The MD&A 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, 2023, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2023, filed with the SEC on July 7, 2023 (the “2023 Form 10-K”).

The Company’s actual results could differ materially from those discussed here.

3 unchanged sentences

We disclaim any obligation, except as expressly 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 outlined in the forward-looking statements.

Business Overview

IGC develops advanced formulations for treating diseases and conditions, including Alzheimer’s disease (AD), menstrual cramps (dysmenorrhea), premenstrual syndrome (PMS) and chronic pain.

The Company’s leading drug candidate, IGC-AD1, has demonstrated in Alzheimer’s cell lines the potential to be effective in suppressing or ameliorating two key hallmarks of AD:

plaques and tangles.

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

The Company also has lines of various cannabinol (CBD) based consumer products such as Holief, which includes gummies and pain relief creams for women experiencing PMS and menstrual cramps, and Sunday Seltzer, which includes a CBD-infused energy beverage, all currently available for purchase.

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.

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.

Life Sciences Segment

Pharmaceutical :

Since 2014, the Company has focused primarily on the potential uses of phytocannabinoids, in combination with other compounds, to treat multiple diseases, such as Alzheimer’s disease.

The Company currently has two main investigational small molecules in various stages of development:

IGC-AD1, our lead therapeutic candidate, is a THC based formulation that has demonstrated in AD cell lines, in vitro, the potential in reducing a key peptide responsible for Aβ plaques, and the potential to decrease or inhibit the phosphorylation of tau a protein that is responsible for the formation of neurofibrillary tangles, both key hallmarks of AD.

In addition, in the Phase 1 human trial it demonstrated the potential to reduce agitation in dementia due to AD.

IGC-AD1 is currently in Phase 2B trials for treating agitation in dementia from AD, a condition that affects over 10-million individuals in North America and Europe, and

TGR-63, a non-cannabinoid molecule, is an enzyme inhibitor shown in pre-clinical trials to reduce neurotoxicity in Alzheimer’s cell lines.

The Company controls nine patents and seven patent applications, including two each for IGC-AD1 and TGR-63 and their use related to Alzheimer’s.

The Company’s various personal care CBD-based over the counter (“OTC”) consumer products are sold through online and wholesale channels under the following two brands:

Holief™ is a vegan, non-GMO, cruelty free, paraben free, lab verified, CBD infused line of OTC products with plant-based ingredients aimed at supporting period cramp discomforts and other PMS symptoms.

Sunday Seltzer™ is a vegan, organic, lightly carbonated energy drink with natural caffeine from green tea extract, CBD, vitamin B, and vitamin C, with 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 other flavors with no caffeine.

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

IGC operates two segments:

the Life Sciences segment described above and a legacy Infrastructure segment to execute construction contracts and the rental of heavy construction equipment in India.

The Company is currently actively executing a project in this segment.

| December 31, 2022, Form 10-Q

Other Developments

The Company commenced its Phase 2 clinical trial for agitation in dementia from Alzheimer’s at two U.S.

sites and one Canadian site with plans to add between five to ten additional sites in the United States, Canada, and possibly South America to increase population diversity, promoting both the inclusion of underrepresented populations and helping the Company to better understand the impact of IGC-AD1 on the population of the Americas.

The trial is intended to enroll 146 patients with one half, the treated group, receiving IGC-AD1, and the other half, the control group, receiving a placebo.

The Company hopes to be the first natural THC based medication to treat agitation in dementia due to Alzheimer’s.

The Life Sciences segment strategy includes:

1) IGC-AD1 , our proprietary lead therapeutic candidate, is a Tetrahydrocannabinol (THC) based formulation that has demonstrated in Alzheimer’s cell lines, the potential to reduce the buildup of Aβ plaques and the potential to decrease or inhibit the phosphorylation of tau, a protein that is responsible for the formation of neurofibrillary tangles (NFTs), both important hallmarks of Alzheimer’s.

In addition, Phase 1 human trial results demonstrated IGC-AD1’s potential to reduce agitation in dementia due to Alzheimer’s.

IGC-AD1 is currently in Phase 2B trials for treating agitation in dementia from Alzheimer’s, a condition that affects over 10-million individuals in North America and Europe, and

| June 30, 2023, Form 10-Q

2) TGR-63 , is a non-cannabinoid small molecule that has shown promise in pre-clinical trials for reducing amyloid burden in an Alzheimer’s disease model.

The potential efficacy of TGR-63 lies in its ability to inhibit the aggregation of beta-amyloid.

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, although there can be no assurance, 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.

Although there can be no assurance, we believe that additional investment in clinical trials, research, and development (“R&D’), facilities, marketing, advertising, and acquisition of complementary products and businesses supporting our Life Sciences segment will be critical to the development and delivery of innovative products and 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 planned pre-clinical and clinical trials.

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™.

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 syndrome (PMS).

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

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.

Company Highlights

During the three months ended June 30, 2023, the Company generated approximately $555 thousand in revenue, representing an increase of approximately $343 thousand, or 161%, compared to the approximately $212 thousand recorded during the three months ended June 30, 2022.

On June 30, 2023, the Company secured a $12 million revolving line of credit from the Hong Kong Branch of O-Bank Co.

(“O-Bank” or the “Bank”).

This funding will support the working capital needs of the Company, primarily related to Alzheimer’s research.

On June 30, 2023, the Company entered into the Share Purchase Agreement (“SPA”), and under the terms of the SPA, the Company issued 10 million shares of unregistered common stock at a price of $0.3 per share.

On June 6, 2023, the Company received a Notice of Allowance from the Commissioner of Patents, Canada, for its patent filing on the use of cannabinoids in the treatment of seizures (IGC-501).

The formulation also received an intent to grant from the European Patent Office, protecting the formulation in the U.S., Canada, and certain European countries.

| June 30, 2023, Form 10-Q

Business Strategy

The Life Sciences business 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™, Sunday Seltzer™, and white label services.

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

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

If we were to obtain a first-to-market advantage, such an advantage could result in significant growth when an approved drug is marketed.

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, more specifically.

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

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

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

Marketing Holief TM , and formulations.

We believe developing a drug for both symptom and disease-modifying agent has less risk due to the need for expensive multi-year trials.

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

If we were to obtain a first-in-class advantage, such an advantage could result in significant growth if and when an approved drug such as IGC-AD1 launches.

We believe that additional investment in clinical trials, artificial intelligence (“AI"), research, and development (R&D), facilities, marketing, advertising, and acquisition of complementary products and businesses will be critical to the ongoing growth of the Life Sciences segment.

Although there can be no assurance, we believe 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 entails executing the current construction contracts that are in effect.

COVID-19 Update

Our infrastructure business is based in the state of Kerala, India.

COVID-19 has had and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures in response.

The Company continues to monitor the situation and take appropriate action.

The extent to which the COVID-19 pandemic may impact the Company’s operational and financial performance remains uncertain and will depend on many factors outside the Company’s control.

Additional future impacts on the Company may include material adverse effects on demand for the Company’s products and services.

| December 31, 2022, Form 10-Q

Results of Operations for the Three Months Ended December 31, 2022, and December 31, 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, 2022, and December 31, 2021:

Statement of Operations (in thousands, unaudited)

Three months ended

Cost of revenue

Selling, general and administrative expenses

Research and development expenses

Operating loss

Other income, net

Loss before income taxes

Income tax expense/benefit

Revenue – Revenue was approximately $332 thousand and $142 thousand for the three months ended December 31, 2022, and December 31, 2021, respectively.

Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white label manufactured products, sales of holistic women’s health care products and beverages including the Company’s energy drink, among others.

The increase in sales was primarily related to increased sales of the Company’s services and products.

The Infrastructure segment revenue was approximately $41 thousand and $8 thousand for the three months ended December 31, 2022, and December 31, 2021, respectively.

The increase in revenue derived from the Infrastructure segment relates to progress in construction activity.

Cost of revenue – The cost of revenue amounted to approximately $230 thousand for the three months ended December 31, 2022, compared to $80 thousand in the three months ended December 31, 2021, this represents gross margins of 31% and 44%, respectively.

The change in the cost of revenue is primarily attributable to the cost of raw materials required to produce our products and the cost related to low margin Infrastructure revenue.

Selling, general and administrative expenses (“SG&A”) – SG&A expenses were approximately $1.5 million and $2.07 million for the three months ended December 31, 2022, and December 31, 2021, respectively.

The decrease of $496 thousand is attributed to a reduction of compensation, legal and marketing expenses.

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 advance, if any.

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

The R&D expenses increased by approximately $429 thousand, or 114%, to $806 thousand during the three months ended December 31, 2022, from approximately $377 thousand during the three months ended December 31, 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 increased R&D expenses as the development of TGR-63 and the Phase 2 trial on Alzheimer’s pick up more momentum.

| December 31, 2022, Form 10-Q

Results of Operations for the Nine Months Ended December 31, 2022, and December 31, 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 nine months ended December 31, 2022, and December 31, 2021:

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

Results of Operations for the Three Months Ended

June 30, 2023, and June 30, 2022

The results presented below are not necessarily indicative of the results that may be expected for any future period.

The following table presents an overview of our results of operations for the three months ended June 30, 2023, and June 30, 2022:

Statement of Operations (in thousands, unaudited)

Nine months ended

Three months ended June 30,

Cost of revenue

2 unchanged sentences

Operating loss

Impairment of investment

Other income, net

1 unchanged sentence

Income tax expense/benefit

Revenue – Revenue was approximately $745 thousand and $275 thousand for the nine months ended December 31, 2022, and December 31, 2021, respectively.

The increase in sales was primarily related to increased sales of the Company’s services and products.

The Infrastructure segment revenue was approximately $59 thousand and $26 thousand for the nine months ended December 31, 2022, and December 31, 2021, respectively.

The increase in revenue derived from the Infrastructure segment relates to progress on the construction activity.

Cost of revenue – The cost of revenue amounted to approximately $366 thousand for the nine months ended December 31, 2022, compared to $149 thousand in the nine months ended December 31, 2021, this represents gross margins of 51% and 46%, respectively.

The change in cost of revenue is primarily attributable to the cost of raw materials required to produce our products and the cost related to low margin Infrastructure revenue.

While gross margins increased, year over year, there is lack of visibility moving forward due to overall inflationary pressures.

Selling, general and administrative expenses – SG&A expenses were approximately $5 million and $7.96 million for the nine months ended December 31, 2022, and December 31, 2021, respectively.

The decrease of $3 million is attributed to an adjustment of one-time expenses and a reduction of compensation, legal and marketing expenses.

Revenue – During the three months ended June 30, 2023, the Company generated approximately $555 thousand in revenue, representing an increase of approximately $343 thousand, or 161%, compared to the approximately $212 thousand recorded during the three months ended June 30, 2022.

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

The Infrastructure segment revenue was approximately $167 thousand and $10 thousand for the three months ended June 30, 2023, and June 30, 2022, respectively.

The increase in revenue derived from the Infrastructure segment relates to the completion of a construction contract.

The Company remains committed to its current strategy of driving sales in formulations both as branded and white-labeled products.

| June 30, 2023, Form 10-Q

Cost of revenue – Cost of revenue amounted to approximately $300 thousand for the three months ended June 30, 2023, compared to $70 thousand in the three months ended June 30, 2022, this represents gross margins of 46% to 67%, respectively.

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.

The decrease in gross margin is reflective of a change in the mix of revenue between Infrastructure and Life Science.

Typically, the gross margin in the Life Sciences business, while higher than in the infrastructure, will fluctuate from one quarter to another based on the mix within the Life Science business between white label, private label, and branded products.

It is early to model or project gross margins.

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

During the three months ended June 30, 2023, SG&A expenses increased by approximately $97 thousand or 6% to approximately $1.6 million, from approximately $1.5 million recorded for the three months ended June 30, 2022.

The increase in SG&A expenses is attributed to operational expenses.

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

The R&D expenses increased by approximately $1.8 million or 171% to $2.9 million during the nine months ended December 31, 2022, from approximately $1.1 million during the nine months ended December 31, 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 R&D expenses as the Phase 2 trial commences with patient sign-ups.

Impairment of investment – During the nine months ended December 31, 2022, there was no investment impairment.

However, during the nine months ended December 31, 2021, the Company exited its investment and acquisition of Evolve I, Inc.

The Company received shares of IGC common stock, which had granted to Evolve as consideration to the Share Subscription Agreement (SSA), in exchange for the return of its shareholding in Evolve.

Accordingly, the Company cancelled the IGC shares received by it and impaired its remaining investment of approximately $37 thousand.

| December 31, 2022, Form 10-Q

Other income, net – Other net income decreased by approximately $395 thousand or 88% during the nine months ended December 31, 2022.

As a result, the total other income for the nine months ended December 31, 2022, and 2021 is approximately $56 thousand and $451 thousand, respectively.

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

Other income includes interest and rental income, dividend income, profit from sale of assets, unrealized gains from investments, net income, and income from scrap sales.

The R&D expenses decreased by approximately $647 thousand or 46% to $747 thousand during the three months ended June 30, 2023, from approximately $1.4 million for the three months ended June 30, 2022.

The decrease is primarily attributable to a one-time non-cash expense during the three months ended June 30, 2022.

Other than one-time non-cash expenses, the R&D expenses for both quarters are approximately the same.

Other income, net – Other net income increased by approximately $47 thousand or 276% during the three months ended June 30, 2023.

The total other income for the three months ended June 30, 2023, and 2022, is approximately $64 thousand and $17 thousand, respectively.

The increase in other income for the three months ended June 30, 2023, is attributable to profit from the sale of assets.

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

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The Company does not have any material long-term debt, capital lease obligations or other long-term liabilities, except as disclosed in this report.

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.

The Company believes its existing balances of cash, cash equivalents, and short term investments, and other short-term liquidity arrangements will be sufficient, to satisfy its working capital needs, capital asset purchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, and other asset classes, clinical trials, and other liquidity requirements, if any, associated with its existing operations over the short .

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.

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

On June 30, 2023, the Company successfully entered into a Master Loan and Security Agreement (the “Credit Agreement”) with O-Bank, CO., LTD., pursuant to which the Company may borrow up to $12 million and, in addition, sold 10 million shares for $3 million pursuant to an SPA with Bradbury Asset Management and three unrelated investors.

The equity raise and the Credit Agreement serve to satisfy 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, although there can be no assurance thereof.

The Credit Agreement matures on June 30, 2024, with an option to renew.

Interest is due and payable in full by the Company on the last business day of each interest period.

As of June 30, 2023, the entire amount of $12 million remains unused.

The Company expects to raise further capital for its research and development initiatives 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 “Risk Factors” of the Company’s 2022 Form 10-K for further information on the risks related to the Company.

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

| June 30, 2023, Form 10-Q

Please refer to Item 1A.

“Risk Factors” of our Form 10-K for the fiscal year ended March 31, 2023, for further information on the risks related to the Company.

(in thousands, unaudited)

December 31, 2022

June 30, 2023

March 31, 2023

3 unchanged sentences

Cash and cash equivalents

Cash and cash equivalents decreased by approximately $5.5 million to approximately $5 million in the nine months ended December 31, 2022, from $10.4 million as of March 31, 2022, a decrease of approximately 53%.

Cash and cash equivalents decreased by approximately $1.4 million to $2 million in the three months ended June 30, 2023, from $3.2 million as of March 31, 2023, a decrease of approximately 46%.

Summary of Cash flows

(in thousands, unaudited)

Nine months ended

Percent Change

Three months ended June 30,

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 financing activities

Effects of exchange rate changes on cash and cash equivalents

2 unchanged sentences

Cash and cash equivalents at the end of the period

| December 31, 2022, Form 10-Q

Operating Activities

Net cash used in operating activities for the nine months ended December 31, 2022, was approximately $5.5 million.

Net cash used in operating activities for the three months ended June 30, 2023, was approximately $1.5 million.

It consists of a net loss of approximately $2.1 million, a positive impact on cash due to non-cash expenses of approximately $459 thousand, and a positive change in operating assets and liabilities of approximately $148 thousand.

Non-cash expenses consist of an amortization and depreciation charge of approximately $155 thousand, stock-based expenses of approximately $357 thousand, and an approximately $53 thousand decrease in other non-cash items.

In addition, changes in operating assets and liabilities had a positive impact of approximately $148 thousand on cash, of which approximately $118 thousand is due to a decrease in accounts receivables, approximately $142 thousand increase in accounts payable, approximately $91 thousand increase in accrued and other liabilities and approximately $33 thousand increase in other net current assets and liabilities.

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 change in operating assets and liabilities of approximately $793 thousand.

Non-cash expenses consist of an amortization and depreciation charge of approximately $504 thousand, stock-based expenses of approximately $2.3 million, and net loss on the sale of a property, plant, and equipment of approximately $39 thousand.

In addition, changes in operating assets and liabilities had a negative impact of approximately $856 thousand on cash, of which approximately $127 thousand is due to a decrease in accounts receivables, approximately $572 thousand decrease in accrued and other liabilities, and approximately $157 thousand decrease in other net current assets and liabilities.

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 and 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 the 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.

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.

| June 30, 2023, Form 10-Q

Investing Activities

Net cash provided by investing activities for the nine months ended December 31, 2022, was approximately $7 thousand, which comprised net proceeds from the sale of property, plant, and equipment of approximately $239 thousand, adjusted with cash expenses of approximately $144 thousand for the acquisition and filing expenses related to patents and approximately $88 thousand of a short-term investment.

Net cash used in investing activities for the nine months ended December 31, 2021, was approximately $189 thousand, which comprised 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.

Net cash used in investing activities for the three months ended June 30, 2023, was approximately $5 thousand, which comprised of expenses of approximately $28 thousand for the acquisition and filing expenses related to intellectual property, approximately $23 thousand for the purchase of property, plant, and equipment.

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.

Financing Activities

Net cash provided by financing activities from the issuance of equity stock through our ATM offering, net of all expenses related to the issuance of stock, was approximately $101 thousand and $4.1 million for the nine months ended December 31, 2022, and 2021, respectively.

| December 31, 2022, Form 10-Q

Net cash used by financing activities was approximately $1 thousand for the three months ended June 30, 2023 and June 30, 2022, which is comprised of re-payment of loan.

Off-Balance Sheet Arrangements

3 unchanged sentences

Critical Accounting Policies

While all accounting policies impact the financial statements, certain policies may be viewed as critical.

While all accounting policies impact financial statements, certain policies may be viewed as critical.

Critical accounting policies are those that are both most important to the portrayal of financial condition and results of operations and that require management’s most subjective or complex judgments and estimates.

7 unchanged sentences

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 2023 Form 10-K.

| December 31, 2022, Form 10-Q

| June 30, 2023, Form 10-Q

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

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