What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-06-24 compared with 2023-07-07 · 134 added, 129 removed, 608 unchanged (30% of the section changed)

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We have audited the accompanying consolidated balance sheets of IGC Pharma, Inc.

(formerly known as ‘India Globalization Capital, Inc.’) and its subsidiaries (the “Company”) as of March 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows, for each of the two years in the period ended March 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at March 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the two years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the “Company”) as of March 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows, for each of the two years in the period ended March 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2024, and 2023, and the consolidated results of its operations and its cash flows for each of the two years in the period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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Critical Audit Matters

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgements.

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

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Chennai, India

23237830BGZGZQ9446

June 24, 2024

24237830BKGUQV1424

IGC Pharma, Inc.

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Short term investments

Asset held for sale

Deposits and advances

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Operating loss

Impairment of investment

Impairment loss on PPE

Other income, net

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Common stock-based compensation & expenses, net

Net proceeds from issuance of common stock

Other adjustments

Issuance of common stock through offering (net of expenses)

Cancellation/forfeiture of shares

Common stock subscribed

Foreign currency translation adjustments

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Common stock-based compensation & expenses, net

Net proceeds from issuance of common stock

Issuance of common stock through offering (net of expenses)

Cancellation/forfeiture of shares

Common stock subscribed

Foreign currency translation adjustments

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Provision for bad debt

Permanent impairment of PPE

Impairment of non-marketable securities

Impairment of assets

Common stock-based compensation and expenses, net

Net loss on sale of property, plant, and equipment

Forgiveness of PPP Loan

Profit/Loss on sale of fixed assets, net

Accounts receivables, net

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Sale of property, plant, and equipment

Investment in short-term investments

Acquisition and filing cost of patents and rights

Proceeds from (Purchase of) short-term investments

Acquisition and development of intangible assets

Net cash used in investing activities

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Net proceeds from the issuance of common stock

Proceeds from common stock subscribed

Repayment of long-term loan

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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 consolidated financial statements.

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

NOTE 1 – NATURE OF OPERATIONS AND MANAGEMENT ’ S PLANS

Since 2014, our team has been committed to researching the application of cannabinoids such as THC and CBD in combination with other compounds to address various ailments, including Alzheimer’s disease.

With our research, we have developed intellectual property, formulations, and wellness and lifestyle brands.

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.

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, 2020).

To the best of our knowledge, this is the first human clinical trial using ultra-low doses of THC, in combination with another molecule, to treat symptoms of dementia in Alzheimer’s patients.

THC is a naturally occurring cannabinoid produced by the cannabis plant.

It is known for being a psychoactive substance that can impact mental processes in a positive or negative way depending on the dosage.

THC is biphasic, meaning that low and high doses of the substance may affect mental and physiological processes in substantially different ways.

For example, in some patients, low doses may relieve a symptom, whereas high doses may amplify a symptom.

Ultimately, the goal of IGC’s research is to discover and analyze whether, and at what level of dosing, IGC-AD1 provides relief of a given symptom.

IGC’s trial is based on micro dosing on patients suffering from Alzheimer’s disease.

The Company has filed forty-one (41) patent applications to address various diseases such as Alzheimer’s, Central Nervous System (“CNS”) disorders, pain, stammering, seizures in cats and dogs, eating disorders, stress-relief, and calm-restoring beverage, and fatigue.

As of March 31, 2023, our portfolio includes nine granted patents.

In addition, we license a patent filing from the University of South Florida titled “Ultra-Low dose THC as a potential therapeutic and prophylactic agent for Alzheimer’s Disease.” The USPTO issued a patent (#11,065,225) for this filing on July 20, 2021.

NOTE 1 – NATURE OF OPERATIONS

IGC Pharma is on a mission to transform Alzheimer’s treatment.

We are building a robust pipeline of five drug candidates, each targeting different aspects of the disease.

Our lead investigational drug tackles agitation, a major burden for patients and caregivers.

By addressing neuroinflammation, it offers a faster-acting solution compared to traditional medications.

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

At the preclinical stage, IGC-1C represents a potential breakthrough by targeting tau protein and neurofibrillary tangles, aiming to modify the disease course.

Also in preclinical development, IGC-M3 focuses on early intervention by inhibiting Aβ plaque formation, potentially slowing cognitive decline.

In preclinical development, LMP is designed to target multiple hallmarks of Alzheimer’s disease, including Aβ plaques and neurofibrillary tangles for a comprehensive therapeutic effect.

We are also harnessing the power of Artificial Intelligence (“AI”) to develop early detection models, optimize clinical trials, and explore new applications for our drugs including for IGC-AD1.

Additionally, our 28 patent filings, including for IGC-AD1, demonstrates our commitment to innovation and protecting our intellectual property.

As of March 31, 2024, 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.

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

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

And Colombia-based beneficially-owned subsidiary IGC Pharma SAS.

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

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

Additionally, the Company have offices in Washington state, Colombia, South America, and India.

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

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

IGC has two segments:

Life Sciences and Infrastructure.

Life Sciences Segment and Infrastructure Segment.

Life Sciences Segment

Pharmaceutical :

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

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

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

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

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.

IGC Pharma, a clinical-stage company developing treatments for Alzheimer's disease, is committed to transforming patient care by offering faster-acting and more effective solutions.

Our lead drug, IGC-AD1, embodies this vision by tackling a critical challenge – managing agitation in Alzheimer's dementia.

Early results from our Phase 2 trial are promising:

IGC-AD1 effectively reduced agitation in patients compared to a placebo, and crucially, it did so much faster than traditional medications.

While existing anti-psychotics can take a long 6 to 12 weeks to show effects, IGC-AD1 has the potential to act within two weeks.

This significantly faster onset of action could significantly improve patient care and represents a potential breakthrough in managing Alzheimer's-related agitation.

In addition, we have created in-house wellness brands, available through online channels that are compliant with relevant federal, state, and local laws and regulations.

We derive revenue from our in-house wellness non-pharmaceutical formulations that are manufactured as non-GMO, vegan, products at our facility and are sold over-the-counter (“OTC”).

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.

The Company’s infrastructure business has been operating since 2008, it includes (i) Execution of Construction Contracts and (ii) Rental of Heavy Construction Equipment.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

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d) Cost of Revenue

Our cost of revenue includes costs associated with in-house and outsourced distribution, labor expense, components, manufacturing overhead, and outbound freight for our products division.

In our products division, cost of revenue also includes the cost of refurbishing or repackaging, if required, on products returned by customers that will be offered for resale.

Our cost of revenue includes costs associated with in-house and outsourced distribution, labor expenses, components, manufacturing overhead, and outbound freight for our products division.

In our products division, the cost of revenue also includes the cost of refurbishing or repackaging, if required, on products returned by customers that will be offered for resale.

e) Earnings/(Loss) per Share

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As of March 31, 2024, the Company’s cash and cash equivalents totaled $1.2 million.

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 .

On June 30, 2023, the Company successfully obtained a working capital facility totaling approximately $ 12 million for one year, and the Company is in the process of renewing the facility for another year during the month of June 2024.

In addition, on March 22, 2024, the Company entered into a share purchase agreement relating to the sale and issuance by our company to the investors of an aggregate of approximately 8.8 million shares of our common stock, for a total purchase price of $ 3 million or $ 0.34 per share, subject to the terms and subject to the conditions set forth in the 2024 SPA.

As of March 31, 2024, the Company received $ 500 thousand, and the remaining $ 2.5 million was received 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.

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A valuation allowance is established and recorded when management determines that some or all of the deferred tax assets are not likely to be realized and, therefore, it is necessary to reduce deferred tax assets to the amount expected to be realized.

In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on technical merits of the position.

If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement.

In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including the resolution of related appeals or litigation processes, based on the technical merits of the position.

As of March 31, 2024, and 2023, there was no significant liability for income tax associated with unrecognized tax benefits.

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The Company maintains its cash in bank accounts in the U.S., India, Colombia, and Hong Kong, which at times may exceed applicable insurance limits.

The cash and cash equivalents in the Company on March 31, 2023, and 2022, were approximately $ 3,196 thousand and $ 10,460 thousand, respectively.

The cash and cash equivalents in the Company on March 31, 2024, and 2023 were approximately $ 1.2 million and $ 3.2 million, respectively.

j) Short-term and long-term investments

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

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

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

Available-for-sale securities:

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k) Property, plant, and equipment ( “ PP&E ” )

Property, plant, and equipment are recorded at cost net of accumulated depreciation and depreciated over their estimated useful lives using the straight-line method.

Upon retirement or disposition, cost and related accumulated depreciation of the Property, plant and equipment are de-recognized, and any gain or loss is reflected in the results of operation.

Cost of additions and substantial improvements to property and equipment are capitalized.

PP&E are recorded at cost net of accumulated depreciation and depreciated over their estimated useful lives using the straight-line method.

Upon retirement or disposition, cost and related accumulated depreciation of the PP&E are de-recognized, and any gain or loss is reflected in the results of the operation.

The cost of additions and substantial improvements to property and equipment are capitalized.

The cost of maintenance and repairs of the property and equipment are charged to operating expenses as incurred.

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The Company does not anticipate non-performance by the counterparties and, accordingly, does not require collateral.

During Fiscal 2023, sales were spread across customers in Asia and U.S.

and the credit concentration risk is low.

During Fiscal 2024, sales were spread across customers in Asia and U.S., and the credit concentration risk is low.

n) Stock – Based Compensation

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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 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.

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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.

The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe it is more likely than not that an impairment loss has been incurred.

The Company has analyzed a variety of factors on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe 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.

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

r) 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 the costs of developing software to be used solely to meet internal needs and applications used to deliver our services.

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

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.

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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.

As of March 31, 2024, and 2023, our consolidated balance sheet reported approximately $ 392 thousand and $ 407 thousand 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.

s) Cybersecurity

t) Cybersecurity

We have a cybersecurity policy in place and tighter cybersecurity measures to safeguard against hackers.

In Fiscal 2024, there were no impactful breaches in cybersecurity.

t) Research and Development Expenses

u) Research and Development Expenses

During Fiscal 2024 and 2023, the Company recorded research and development expenses of approximately $ 3.8 million and $ 3.5 million, respectively.

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

v) Recently issued and adopted accounting pronouncements

w) Recently issued and adopted accounting pronouncements

Changes to U.S.

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Finished goods

Work-and in-progress consist of products in the manufacturing process as on reporting date, including but not limited to gummies, tincture, and hemp derivatives.

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

During Fiscal 2023, the Company charged $ 376 thousand of inventory in selling, general and administration due to product expiration, handling costs, scrap, and wasted material (spoilage) as compared to approximately $ 252 thousand for Fiscal 2022.

During Fiscal 2024, and Fiscal 2023, the Company wrote off approximately $ 1 million and $ 376 thousand of inventory due to abnormal loss due to the NRV adjustment, product expiration, idle facility expense, freight, handling costs, scrap, and wasted material (spoilage).

This charge was recorded in Selling, General, and Administrative Expenses.

As of March 31, 2024, and March 31, 2023, our consolidated balance sheet reported approximately $ 392 thousand and $ 407 thousand clinical trial-related inventory, respectively.

NOTE 4 – DEPOSITS AND ADVANCES

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Prepaid expense and other current assets

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

Prepaid and other current assets include approximately $ 25 thousand in statutory advances for Fiscal 2023, as compared to $ 170 thousand in Fiscal 2022.

The Company decided to move advances paid to suppliers worth approximately $ 164 thousand to claims and advances, considering recovering might take more than 12 months.

The Advances to suppliers and consultants primarily relate to advances to vendors.

Prepaid and other current assets include approximately $ 39 thousand and approximately $ 25 thousand in statutory advances for Fiscal 2024 and Fiscal 2023, respectively.

NOTE 5 – INTANGIBLE ASSETS

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Unamortized intangible assets

Other intangibles

Software development cost

Total unamortized intangible assets

Total intangible assets

The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing of forty-one (41) patent applications in different countries along with nine (9) granted patents.

The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing various patent applications in different countries along with granted patents.

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.

The amortization expense in Fiscal 2023 and 2022 amounted to approximately $ 57 thousand and $ 24 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 March 31, 2023, there was no impairment.

The amortization expenses in Fiscal 2024 and 2023 amounted to approximately $ 74 thousand and $ 57 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 conclude that, as of March 31, 2024, there was no impairment.

Estimated amortization expense

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The depreciation expense in Fiscal 2024 and 2023 amounted to approximately $ 563 thousand and $ 417 thousand, respectively.

The net decrease in total property, plant, and equipment (net) is primarily due to depreciation and foreign exchange translations because of a decrease in value of foreign currencies.

In addition, Fiscal 2023, 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.

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 net decrease in total property, plant, and equipment is primarily due to the impairment of land by approximately $ 3.3 million.

During Fiscal 2024, the Company focused on liquidating all non-operating assets to reduce costs and generate cash.

As a result, the Company sold a fully depreciated property in India for net proceeds of approximately $ 43 thousand and accounted for the same in other income, and 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.

For more information, please refer to Note 18, “Segment Information,” for the non-current assets other than financial instruments held in the country of domicile and foreign countries.

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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.

The Company decided to move advances paid to some suppliers worth approximately $ 164 thousand to claims and advances, considering recovering might take more than 12 months.

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

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 Fiscal 2023 and 2022 are approximately $ 178 thousand.

The total short-term lease expense and cash paid for Fiscal 2024 and 2023 are approximately $ 100 thousand and $ 178 thousand, respectively.

The Company also has four operating leases as of March 31, 2024.

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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 1 - 1.7 years with a discount rate of 7 %.

The remaining lease term for the operating leases is less than 1 year with a discount rate of 7 %.

The lease does not provide a readily determinable implicit rate.

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

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.

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 the principal.

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

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In addition, employees receive benefits from a provident fund, a defined contribution plan.

The employee and employer each make monthly contributions to the plan equal to 12 % of the covered employee’s salary.

The contribution is made to the Indian Government’s provident fund.

The employee and employer each make monthly contributions to the plan as required by the law.

The contribution is made to the Foreign Government’s funds.

NOTE 13 – SECURITIES

As of March 31, 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 March 31, 2023.

As of March 31, 2024, the Company was authorized to issue up to 150,000,000 shares of common stock, par value of $ 0.0001 per share, and 66,691,195 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 of $ 0.0001 per share, and no preferred shares were issued and outstanding as of March 31, 2024.

We have one security listed on the NYSE American:

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The unit holders are requested to contact the Company or our transfer agent, Continental Stock Transfer & 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 (Benchmark or 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 Offering).

During Fiscal 2023, the Company raised approximately $ 103 thousand from the ATM, net of commission.

The management may use these funds for working capital and capital expenditure requirements, along with clinical trials, share repurchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes.

On October 27, 2023, the Company entered into a Sales Agreement (the “Agreement”) with A.G.P./Alliance Global Partners (the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or principal shares of its common stock having an aggregate offering price of up to $ 60 million (“Shares”), subject to certain limitations on the amount of common stock that may be offered and sold by the Company set forth in the Sales Agreement (the “Offering”).

Prior to entering into the Sales Agreement with A.G.P./Alliance Global Partners, the Company terminated the Sales Agreement dated January 13, 2021, with The Benchmark Company.

On June 30, 2023, the Company entered into a Share Purchase Agreement (the “June 2023 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 issued 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 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.

On March 22, 2024, the Company entered into a Share Purchase Agreement (the “March 2024 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 issued 2 million shares of unregistered common stock for consulting services related to raising capital, including the March 2024 capital raised.

NOTE 14 – STOCK-BASED COMPENSATION

As of March 31, 2023, under both 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.

As of March 31, 2024, under both the Company’s previous 2008 and current 2018 Omnibus Incentive Plans approximately 9.1 million shares of common stock have been issued to employees, non-employees, and advisors.

In addition, 7.6 million restricted share units (“RSUs”) fair valued at $ 4.6 million with a weighted average value of $ 0.61 per share, have been granted but not yet issued from different Incentive Plans and Grants.

This includes 2.9 million RSUs granted to employees and directors, which consists of a vesting schedule based entirely on the attainment 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 upon certification by the management confirming the probability of achievement of milestones.

As of March 31, 2023, the management confirmed two milestones had been achieved, and the rest were probable to be achieved by March 31, 2027.

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, which have been granted but are to be issued over a vesting period, between Fiscal 2022 and Fiscal 2026.

This includes 4.9 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 the management, confirming the probability of achievement of milestones.

As of March 31, 2024, the management confirmed that five milestones had been achieved, and the rest were probable to be achieved by March 31, 2028.

Additionally, options held by advisors and directors to purchase 3.7 million shares of common stock fair valued at $ 925 thousand with a weighted average of $ 0.25 per share, which have been granted but are to be issued over a vesting period between Fiscal 2022 and Fiscal 2027.

Options granted and issued before the vesting period are expensed when issued.

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

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

Expected life of options

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Risk free interest rate

5.24 % 2.42 %

Expected volatility

1 unchanged sentence

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 Fiscal 2023, the Company’s common stock-based compensation and expenses shown in Selling, general and administrative expenses (including research and development) was $ 2.8 million.

For Fiscal 2022, the Company’s common stock-based compensation and expenses shown in Selling, general and administrative expenses (including research and development) was $ 2.2 million.

For Fiscal 2024, the Company’s share-based expense and option-based expense shown in Selling, general, and administrative expenses (including research and development) were $ 1.7 million and $ 59 thousand, respectively.

For Fiscal 2023, the Company’s share-based expenses and option-based expenses shown in Selling, general, and administrative expenses (including research and development) were $ 2.8 million and $ 29 thousand, respectively.

Non-vested shares

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Options outstanding as of March 31, 2024

There was a combined unrecognized expense of $ 2.7 million related to non-vested shares and share options that the Company expects to be recognized over a life of four years .

There was a combined unrecognized expense of $ 3.21 million related to non-vested shares and share options that the Company expects to be recognized over a life of up to 5 (five) years.

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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(in thousands)

March 31, 2023

Cash and cash equivalents:

Total cash and cash equivalents

-Marketable securities

-Non-marketable securities

Total investments

March 31, 2022

Cash and cash equivalents:

Total cash and cash equivalents

-Marketable securities

-Non-marketable securities

Total investment

As of March 31, 2024

Adjusted Cost

Cash Equivalents

Money Market Fund

Certificates of Deposit

As of March 31, 2023

Adjusted Cost

Cash Equivalents

Money Market Fund

Certificates of Deposit

NOTE 16 – INCOME TAXES

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Based upon the Company’s current operating results management cannot conclude that it is more likely than not that such assets will be realized.

The Company files income tax returns in India, Hong Kong, Colombia, and the U.S.

The Company files income tax returns in India, Colombia, and the U.S.

The Company has a carry-forward R&D tax credit of approximately $ 4,542 thousand

NOTE 17 – REVENUE RECOGNITION

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.

12 unchanged sentences

White labeling 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.

(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.

NOTE 18 – 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 in assessing performance.

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

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

Based on our integration and Management strategies, we operate in two reportable segments:

(i) Infrastructure segment and (ii) Life Sciences segment.

(i) Life Sciences segment and (ii) Infrastructure segment.

The Company’s CODM is the Company’s Chief Executive Officer (“CEO”).

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

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

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

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

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

1) The table below shows revenue reported by segment:

1) The table below shows revenue reported by segments:

Product & Service

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Life Sciences segment

For information for revenue by product and service, refer Note 17, “Revenue Recognition.”

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

For information on revenue by product and service, refer to Note 17, “Revenue Recognition.”

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

Revenue is generally attributed to the geographic location of customers:

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(India, Hong Kong, and Colombia)

Total as of March 31, 2023

March 31, 2024

Intangible assets, net

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(India Hong Kong and Colombia)

Total as of March 31, 2022

March 31, 2023

Intangible assets, net

4 unchanged sentences

NOTE 19 – SUBSEQUENT EVENTS

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

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

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

As disclosed in Note 13 “Securities,” the Company entered into the 2024 SPA.

As of March 31, 2024, the Company had received $ 500 thousand of the total $ 3 million due under the March 2024 SPA, while the remaining $ 2.5 million was received in April 2024.

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

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data