What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-06-24 compared with 2023-07-07 · 102 added, 181 removed, 165 unchanged (63% of the section changed)

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Securities authorized for issuance under equity compensation plans

The following table shows (in thousands), as of March 31, 2023, information regarding outstanding awards available under our compensation plans (including individual compensation arrangements) under which our equity securities may be delivered.

The following table shows, as of March 31, 2024, information regarding outstanding awards available under our compensation plans (including individual compensation arrangements) under which our equity securities may be delivered.

Plan category

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

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

(2) Consists of 2 million shares as a special grant of common stock, as approved by our stockholders on January 7, 2020, 2.5 million shares as a special grant of common stock, as approved by our stockholders on January 11, 2021, 3.5 million shares as a special grant of common stock, as approved by our stockholders on October 15, 2021, 3 million shares as a special grant of common stock, as approved by stockholders on September 9, 2022, and 3 million shares as special grant of common stock, as approved by stockholders on August 18, 2023.

Holders of Record

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

As of June 18, 2024, we had approximately 44 registered shareholders of record of our common stock and 2 registered unit holders.

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

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Unregistered sales of equity securities

On March 22, 2024, the Company entered into a Share Purchase Agreement (the “SPA”) with Bradbury Strategic Investment Fund A, 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 approximately 8.8 million shares of unregistered common stock at a price of $0.34 per share.

In addition, the Company will issue 2 million shares of unregistered common stock for consulting services related to raising capital, including the March 2024 capital raised.

Shares are intended to be exempt from registration under the Securities Act of 1933, as amended (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.

Purchases of equity securities by the issuer and affiliated purchasers

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We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

IGC Pharma, Inc.

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

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

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

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

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

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

We were formerly known as India Globalization Capital, Inc.

and incorporated in Maryland on April 29, 2005.

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

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

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

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

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

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

IGC Pharma, a clinical-stage pharmaceutical company, is at the forefront of the fight against Alzheimer’s disease, focusing on innovations to combat this pervasive neurodegenerative condition.

Our flagship investigational new drug, IGC-AD1, represents an advancement in addressing the challenges posed by Alzheimer’s, particularly in managing agitation associated with the disease.

In our Phase 2 clinical trial, IGC-AD1 has demonstrated efficacy in reducing agitation in patients with Alzheimer’s disease.

The interim results reveal an Effect Size (“ES”) of 0.79 (p=0.04), indicating a clinical and statistically significant reduction in agitation compared to the use of a placebo.

This data underscores the potential of IGC-AD1 to provide tangible benefits for patients and caregivers grappling with the debilitating symptoms of Alzheimer’s.

One of the key distinguishing features of IGC-AD1 is its rapid onset of action.

Unlike traditional anti-psychotics, which may take between 6 to 12 weeks to exert their effects, our investigational drug has shown the potential to act within two weeks.

This accelerated timeline not only offers hope for expedited relief to patients but could also signify a paradigm shift in the treatment approach for Alzheimer’s-related agitation.

IGC Pharma is pursuing a robust pipeline comprising five assets, each targeting different facets of Alzheimer’s disease at various stages of development.

Our blockbuster drug, currently undergoing a Phase 2 clinical trial (clinicaltrials.gov, CT05543681), IGC-AD1 holds significant promise in alleviating the burden of agitation in this vulnerable population.

This CB1 partial agonist is specifically designed to address neuroinflammation associated with agitation in Alzheimer’s patients.

Through pre-clinical studies, TGR-63 has demonstrated its potential to disrupt the progression of Alzheimer’s by targeting Aβ plaques, a hallmark feature of the disease.

This approach offers new avenues for intervening in the underlying pathology of Alzheimer’s.

At the preclinical stage, we believe IGC-1C represents a forward-thinking approach to Alzheimer’s therapy by targeting tau protein and neurofibrillary tangles, crucial contributors to the neurodegenerative process.

By addressing these pathological mechanisms, IGC-1C holds promise for disease-modifying interventions.

Also in preclinical development, IGC-M3 aims to inhibit the aggregation of Aβ plaques, offering potential therapeutic benefits in early-stage Alzheimer’s by targeting the underlying pathology responsible for cognitive decline.

Designed to target multiple hallmarks of Alzheimer’s disease, including Aβ plaques and neurofibrillary tangles, LMP represents a comprehensive therapeutic approach to addressing the complex pathophysiology of the disease.

In addition to our pipeline of therapeutic candidates, IGC Pharma is attempting to leverage Artificial Intelligence (“AI”) to develop models for the early detection of Alzheimer’s and to optimize clinical trial design.

By integrating cutting-edge technology with innovative drug development, we are striving to make significant steps in the fight against Alzheimer’s disease.

Furthermore, IGC controls a total of 28 patent filings reflecting our commitment to innovation and intellectual property protection, including for IGC-AD1.

Our patent portfolio underscores our dedication to safeguarding our competitive advantage in the market.

IGC Pharma Inc., is a Maryland corporation established in 2005 with a fiscal year ending on March 31, spanning a 52- or 53-week period.

IGC has two segments:

Life Sciences and Infrastructure.

Life Sciences Segment

Pharmaceutical :

Since 2014, we have focused a portion of our business on the application of phytocannabinoids such as THC and CBD, among others, in combination with other compounds, to address efficacy for various ailments and diseases such as Alzheimer’s disease.

As previously disclosed, IGC submitted IGC-AD1, our investigational drug candidate for Alzheimer’s, to the FDA under Section 505(i) of the Federal Food, Drug, and Cosmetic Act and received approval on July 30, 2020, to proceed with the Phase 1 trial on Alzheimer’s patients and the Company completed all dose escalation studies, and as announced by the Company on December 2, 2021, the results of the clinical trial have been submitted in the Clinical/Statistical Report (CSR) filed with the FDA.

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

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

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

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

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

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

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

We believe that the pharmaceutical component of our Life Sciences strategy will take several more years to mature and involves considerable risk;

however, we also believe it may involve greater defensible growth potential and first-to-market advantage.

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 symptoms (PMS).

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

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

Infrastructure Segment

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

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

COVID-19 Update

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

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

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

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

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

Future shutdowns could have an adverse impact on our operations.

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

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

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

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

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

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

Life Sciences Segment and Infrastructure Segment.

Please refer to Note 1, “Nature of Operations,” and Item 8 of this Annual Report on Form 10-K, for further information on business segments .

The Global Economic Environment

In addition to the industry-specific factors, such as regulations around cannabinoid research, we are exposed to economic cycles.

Factors in the global economic environment that may impact our operations include, among other things, currency fluctuations, capital and exchange controls, global economic conditions including inflation, restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tax laws and regulations and procedures and actions affecting approval, production, pricing, and marketing of our products, as well as impacts of political or civil unrest or military action, including the current conflict between Russia and Ukraine, terrorist activity, unstable governments, and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.

Factors in the global economic environment that may impact our operations include, among other things, currency fluctuations, capital and exchange controls, global economic conditions including inflation, restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tax laws and regulations and procedures and actions affecting approval, production, pricing, and marketing of our products, as well as impacts of political or civil unrest or military action, terrorist activity, unstable governments, and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.

Operational Excellence

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

Workplace and Employees

We support broad public health strategies designed to prevent the spread of COVID-19 and are focused on the health and welfare of our employees.

We have mobilized to enable our employees to accomplish our most critical goals through a combination of remote work and in-person initiatives.

In addition to rolling out new technologies and collaboration tools, we have implemented processes and resources to support our employees in the event an employee receives a positive COVID-19 diagnosis.

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

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

Research and Development

With respect to our clinical trial activities, we have taken measures to implement remote and virtual approaches, including remote data monitoring where possible, to maintain safety and trial continuity and to preserve study integrity.

We have seen delays in initiating trial sites, due to COVID-19.

We cannot guarantee that we will continue to perform our trials in a timely and satisfactory manner as a result of the evolving effects of the COVID-19 pandemic.

Similarly, our ability to recruit and retain patients and principal investigators, and site staff who, as health care providers, may have heightened exposure to COVID-19 may adversely impact our clinical trial operations.

Fiscal 2024 Highlights

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

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

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

On January 4, 2023, the Company received a No-objection letter from Health Canada for approval to begin its trial in Canada “A, Phase 2, Multi-Center, Double-Blind, Randomized, Placebo-Controlled Trial of the Safety and Efficacy of IGC-AD1 on Agitation in Participants with Dementia due to Alzheimer’s Disease.”

On December 1, 2022, the Company announced that it had begun its Phase 2 clinical trials “A, Phase 2, Multi-Center, Double-Blind, Randomized, Placebo-Controlled Trial of the Safety and Efficacy of IGC-AD1 on Agitation in Participants with Dementia due to Alzheimer’s Disease” at two U.S.

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

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

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

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

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

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

During Fiscal year ended March 31, 2024, the Company entered into Share Purchase Agreements (the “SPAs”) with multiple investors, resulting in approximately $6 million in gross proceeds.

In addition, the Company also received a $12 million credit line from O Bank.

This is a significant achievement and underscores our commitment to expanding operations and generating value for stakeholders.

The Company has announced, on March 20, 2024, positive interim results from its ongoing Phase 2 trial investigation IGC-AD1.

The trial has shown promising results in reducing Alzheimer’s agitation, which is a major challenge for patients and their caregivers alike.

This development marks a significant step forward in the fight against Alzheimer’s and brings hope to millions of people affected by this devastating disease.

On January 17, 2024, the Company announced that Clincloud, a clinical research facility in Florida, has dosed its first patient as part of the Company’s ongoing Phase 2 trial.

On January 23, 2024, the Company announced details about its drug candidate TGR-63, which specifically targets amyloid-beta plaque, which has the potential to significantly improve the treatment of Alzheimer’s disease.

Subsequently, on February 1, 2024, the Company announced further positive results from preclinical studies of TGR-63, demonstrating its potential as an effective treatment for Alzheimer’s disease.

These studies demonstrated that TGR-63 was successful in reducing plaque burden in Alzheimer’s cell lines and animal models, making it a promising therapeutic candidate for the disease.

The company had significant following achievements in our intellectual property rights:

● On October 25, 2023, Divisional Direction of Patents, Mexico, issued a Granting Office Action (the “GOA”) to the Company titled “METHOD AND COMPOSITION FOR TREATING CNS DISORDER”, for the treatment of Alzheimer’s disease.

Subsequently, Divisional Direction of Patents in Mexico granted a patent on January 3, 2024.

● On October 18, 2023, the European Patent Office (“EPO”) issued a patent (#3193862) to the Company titled “CANNABINOID COMPOSITION AND METHOD FOR TREATING PAIN”.

The patent introduces a method for treating pain in humans.

Utilizing a cream base infused with a unique blend of cannabinoids, including THC and CBD, alongside other compounds, this revolutionary cream or gel is designed for transdermal absorption.

It interacts harmoniously with the peripheral nervous and immune systems, delivering effective pain relief without psychotropic or adverse side effects.

● 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.

On July 21, 2023, IGC Pharma and the University of Los Andes (Faculty of Engineering) signed a Master Cooperation Agreement to conduct innovative research in AI applied to the pharmaceutical industry and to join efforts to create academic spaces that allow for generating research and development projects and innovation.

Results of Operations

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Operating loss

Impairment Loss on PPE

Other income, net

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Net loss attributable to common stockholders

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

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

Revenue – During Fiscal 2024, the Company generated approximately $1.3 million in revenue, representing an increase from the $911 thousand generated in Fiscal 2023.

The primary source of revenue in both years was from the Life Sciences segment, encompassing the sale of our formulations as white-labeled manufactured products, among others.

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

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

The increase in revenue derived from the Company’s commitment to its current strategy of driving sales in formulations both as branded and white-labeled products in the Life Science segment.

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

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

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

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

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

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

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

Cost of revenue – The cost of revenue amounted to approximately $612 thousand for Fiscal 2024, compared to $469 thousand in Fiscal 2023, this represents a gross margin of 54% and 49%, respectively.

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

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

For Fiscal 2024, the Company reported SG&A expenses of approximately $6.7 million, representing a decrease of approximately $2 million, or 21%, compared to the $8.5 million recorded in Fiscal 2023.

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

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

This decline in SG&A expenses is attributable to a reduction in non-cash expenses and costs related to employees and Legal & professional services.

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

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

In Fiscal 2024, the Company reported R&D expenses of approximately $3.8 million, representing an increase of $312 thousand or 9% compared to approximately $3.5 million in Fiscal 2023.

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

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

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

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

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

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

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

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

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

Impairment loss on Property, Plant, and Equipment ( “ PPE ” ) – During Fiscal 2024, as the Company focused on liquidating all non-operating assets to reduce the cost and generate cash, the Company impaired the land situated in Nagpur, India, by approximately $3.3 million to $720 thousand from $4.1 million.

The Company believes it can sell the above-said non-operating land as it is without any improvement.

Selling this land will give immediate cash, which the Company can use in its operating segments.

During Fiscal 2023, there was no impairment loss on PPE.

Other Income, net – During Fiscal 2024, the Company reported approximately $143 thousand in other income, which represents an increase of approximately $78 thousand as compared to the $65 thousand recorded in Fiscal 2023.

The increase in other income 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.

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

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

During Fiscal 2024, the Company successfully obtained a working capital credit facility totaling $12 million and, in addition, signed two SPAs to raise $6 million in exchange for approximately 18.8 million shares.

Out of $6 million, the Company received $2.5 million after the end of Fiscal 2024, in April 2024.

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

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

Please refer, Note 13 – “Securities”, for more information.

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.

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It consists of a net loss of approximately $13 million, a positive impact on cash due to non-cash expenses of approximately $5.9 million, and changes in operating assets and liabilities of approximately $1.9 million.

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

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

Non-cash expenses consist of an amortization and depreciation charge of approximately $637 thousand, stock-based expenses of approximately $1.7 million, impairment loss of approximately $3.4 million, and an approximately $49 thousand decrease in other non-cash items.

In addition, changes in operating assets and liabilities had a positive impact of approximately $1.9 million on cash, of which approximately $1 million is due to an adjustment in inventory, approximately $243 thousand increase in accounts payable, approximately $315 thousand increase in claims and advances and approximately $328 thousand increase in other net current assets.

Net cash used in operating activities for Fiscal 2023 was approximately $7 million.

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

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

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

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

Investing Activities

Net cash used in investing activities for Fiscal 2024, was approximately $317 thousand, which comprises approximately $377 thousand for the acquisition and development of intangible assets, approximately $94 thousand from the net purchase of property, plant, and equipment, and approximately $154 thousand from a short-term investment.

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

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

Financing Activities

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

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

Net cash provided by financing activities was approximately $3.5 million for Fiscal 2024, which comprises net proceeds from the issuance of equity stock of approximately $3.5 million and re-payment of a long-term loan of approximately $3 thousand.

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

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates, and such differences may be material.

For further information on significant accounting policies, see discussion in Note 2 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Management believes that the following accounting policies are the most critical to understanding and evaluating our consolidated financial condition and results of operations.

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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.

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

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

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White label services (4)

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

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

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

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

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

Accounts receivable

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

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

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

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.”

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

The fair values of these investments approximate their carrying values.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In making this determination, the Company evaluates, among other things, the duration and extent to which the fair value of a security is less than its cost;

the financial condition of the issuer and any changes thereto;

and the Company’s intent to sell, or whether it will more likely than not be required to sell, the security before recovery of its amortized cost basis.

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

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

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

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

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

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

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

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.

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

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

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

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

Stock-Based compensation

The Company accounts for stock-based compensation to employees and non-employees in conformity with the provisions of ASC Topic 718, “ Stock-Based Compensation.

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

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

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

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

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

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

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

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

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

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

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.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax base of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company has incurred net operating loss for financial-reporting and tax-reporting purposes.

Accordingly, for Federal and State income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal, state, and foreign deferred tax assets.

(3) 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.

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

Property, plant, and equipment

Property, plant, and equipment are recorded at cost, net of accumulated depreciation.

Depreciation is recorded using the straight-line method over the estimated useful lives of the assets.

Please refer to Note 2, “Significant accounting policies” and Note 6, “Property, plant, and equipment” of Item 8 in this document, for more information.

Property, plant, and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

If property, plant, and equipment are considered to be impaired, an impairment loss is recognized.

During Fiscal 2024, as the Company focused on liquidating all non-operating assets to reduce costs and generate cash, the Company impaired the land situated in Nagpur, India, by approximately $3.3 million to $720 thousand from $4.1 million.

The Company believes it can sell the above-said non-operating land as it is without any improvement.

Selling this land will give immediate cash, which the company can use in its operating segments.

During Fiscal 2023, there was no impairment loss on PPE.

Software Development Costs

Software development costs, including costs to develop software products or the software component of products to be marketed or sold to external users, are expensed before the software or technology reaches technological feasibility, which is typically reached shortly before the release of such products.

Software development costs also include developing software to be used solely to meet internal needs and applications used to deliver our services.

Once the preliminary project stage is complete, these software development costs meet the criteria for capitalization, and it is probable that the project will be completed, and the software will be used to perform the function intended.

During Fiscal 2024, the Company has begun working on overlaying machine learning technologies and Artificial Intelligence (“AI”) into the internal clinical trial software framework for trial management with the expectation that this can lead to improved decision-making, contextual data entry, computational models, trial design (Phase 3), and data analysis, the company believes it is probable that the project will be completed and the software will be used to perform the function intended.

The Company capitalized approximately $405 thousand in software development costs.

Please refer to Note 5, “Intangible Assets,” for more information.

Foreign currency translation

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity