What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-07 · 254 added, 144 removed, 538 unchanged (43% of the section changed)

3 unchanged sentences

(in thousands, except share data)

June 30, 2024

September 30, 2024

March 31, 2024

25 unchanged sentences

Preferred stock, $ 0.0001 par value:

authorized 1,000,000 shares, no shares issued or outstanding as of June 30, 2024, and March 31, 2024.

authorized 1,000,000 shares, no shares issued or outstanding as of September 30, 2024, and March 31, 2024.

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

150,000,000 shares authorized;

75,636,419 and 66,691,195 shares issued and outstanding as of June 30, 2024, and March 31, 2024, respectively.

76,636,419 and 66,691,195 shares issued and outstanding as of September 30, 2024, and March 31, 2024, respectively.

Accumulated other comprehensive loss

3 unchanged sentences

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

IGC Pharma, Inc.

1 unchanged sentence

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

Three months ended June 30,

Three months ended

September 30,

Six months ended

September 30,

Cost of revenue

8 unchanged sentences

Comprehensive loss

Loss per share attributable to common stockholders:

Net loss per share attributable to common stockholders:

Basic and diluted

Weighted-average number of shares used in computing loss per share amounts:

Weighted-average number of shares used in computing net loss per share amounts:

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

IGC Pharma, Inc.

1 unchanged sentence

(in thousands)

Three months ended September 30, 2023

Common Shares

4 unchanged sentences

Total Stockholders’

Balances as of March 31, 2023

Balances as of June 30, 2023

Common stock-based compensation & expenses, net

Share money received but not allotted

Issuance of common stock through offering (net of expenses)

Cancellation/forfeiture of shares

Common stock subscribed

Foreign currency translation

Foreign currency translation adjustments

Balances as of September 30, 2023

Three months ended September 30, 2024

Balances as of June 30, 2024

Common stock-based compensation & expenses, net

Share money received but not allotted

Issuance of common stock through offering (net of expenses)

Cancellation/forfeiture of shares

Foreign currency translation adjustments

Balances as of September 30, 2024

Six months ended September 30, 2023

Common Shares

Common Stock and

Additional Paid in

Accumulated Other

Comprehensive Loss

Total Stockholders’

Balances as of March 31, 2023

1 unchanged sentence

Issuance of common stock through offering (net of expenses)

Share money received but not allotted

Cancellation/forfeiture of shares

Common stock subscribed

Foreign currency translation

Balances as of June 30, 2024

Foreign currency translation adjustments

Balances as of September 30, 2023

Six months ended September 30, 2024

Balances as of March 31, 2024

Common stock-based compensation & expenses, net

Share money received but not allotted

Issuance of common stock through offering (net of expenses)

Cancellation/forfeiture of shares

Foreign currency translation adjustments

Balances as of September 30, 2024

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

IGC Pharma, Inc.

1 unchanged sentence

(in thousands)

Three months Ended

Six months Ended

September 30,

Cash flows from operating activities:

2 unchanged sentences

Common stock-based compensation and expenses, net

Profit on sale of assets

Other non-cash items

10 unchanged sentences

Sale of property, plant, and equipment

Investment in short term investments

Acquisition and development of intangible assets

3 unchanged sentences

Repayment of long-term loan

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

6 unchanged sentences

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

IGC Pharma, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED JUNE 30, 2024

THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 2024

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

8 unchanged sentences

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.

While existing anti-psychotics can take as long as 6 to 12 weeks to show effects, IGC-AD1 has the potential to act within 2 weeks.

This significantly faster onset of action could significantly improve patient care and represents a potential breakthrough in managing Alzheimer’s-related agitation, although there can be no assurance thereof.

15 unchanged sentences

We remain steadfast in our pursuit of excellence and our mission to improve the lives of those affected by Alzheimer’s and related conditions.

IGC 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 business segments:

Life Sciences Segment and Infrastructure Segment.

For more information on the business segments, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

Phase 2 Clinical Trial

12 unchanged sentences

ML is a branch of AI that allows computers to learn from data without the need for explicit programming.

This technology plays a vital role in our efforts and could allow companies our size to do what previously was the domain of much larger pharmaceutical companies.

This technology plays arole in our efforts and could allow companies our size to do what previously was the domain of much larger pharmaceutical companies.

For instance, we are utilizing ML by training transformers, a powerful neural network architecture, to analyze vast datasets from our Phase 1 and unblinded Phase 2 interim clinical trial to identify patterns and optimize the clinical trial protocol for a potential Phase 3 trial.

9 unchanged sentences

Business Organization

As of June 30, 2024, the Company had the following operating subsidiaries:

As of September 30, 2024, the Company had the following operating subsidiaries:

IGCare LLC, HH Processors, LLC, IGC Pharma, LLC, IGC Pharma IP, LLC, SAN Holdings, LLC, Sunday Seltzer, LLC, Hamsa Biopharma India Pvt.

1 unchanged sentence

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

IGC has two business segments:

Life Sciences Segment and Infrastructure Segment.

For more information on the business segments, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

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

1 unchanged sentence

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying condensed consolidated Balance Sheet as of June 30, 2024, and March 31, 2024, condensed consolidated statements of operations for the three months ended June 30, 2024, and 2023, and condensed consolidated statements of cash flows for the three months ended June 30, 2024, and 2023, are unaudited.

The consolidated balance sheet as of March 31, 2024, has been derived from audited financial statements, and the accompanying as of June 30, 2024 unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the U.S.

The accompanying condensed consolidated balance sheet as of September 30, 2024, and March 31, 2024, condensed consolidated statements of operations for the three months and six months ended September 30, 2024, and 2023, and condensed consolidated statements of cash flows for the six months ended September 30, 2024, and 2023, are unaudited.

The consolidated balance sheet as of March 31, 2024, has been derived from audited financial statements, and the accompanying as of September 30, 2024 unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the U.S.

GAAP”) as determined by the Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the SEC.

23 unchanged sentences

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

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

The Company estimates that its current cash and cash equivalents balance with the working capital and investments with other financial options are sufficient to support operations beyond the twelve months following the date these consolidated financial statements and footnotes were issued.

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

Accounts receivable

1 unchanged sentence

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

We had $ 28 thousand of accounts receivable, net of provision for the doubtful debt of $ 24 thousand as of June 30, 2024, as compared to $ 39 thousand of accounts receivable, net of provision for the doubtful debt of $ 24 thousand as of March 31, 2024.

We had $ 44 thousand of accounts receivable, net of provision for the doubtful debt of $ 10 thousand as of September 30, 2024, as compared to $ 39 thousand of accounts receivable, net of provision for the doubtful debt of $ 24 thousand as of March 31, 2024.

Loss per share

The computation of basic loss per share for the three months ended June 30, 2024, excludes potentially dilutive securities of approximately 11 million shares, which includes share options, unvested shares such as restricted shares and restricted share units, granted to employees, non-employees, and advisors, and shares from the conversion of outstanding units, if any because their inclusion would be anti-dilutive.

The weighted average number of shares outstanding for the three months ended June 30, 2024, and 2023, used for the computation of basic earnings per share (“EPS”) is 72,813,538 and 53,077,436 , respectively.

Due to the loss incurred by the Company during the three months ended June 30, 2024, and 2023, all the potential equity shares are anti-dilutive, and accordingly, the fully diluted EPS is equal to the basic EPS.

The computation of basic loss per share for the six months ended September 30, 2024, excludes potentially dilutive securities of approximately 11 million shares, which includes share options, unvested shares, such as restricted shares and restricted share units, granted to employees, non-employees, and advisors, and shares from the conversion of outstanding units, if any because their inclusion would be anti-dilutive.

The weighted average number of shares outstanding for the six months ended September 30, 2024, and 2023, used for the computation of basic earnings per share (“EPS”) is 74,419,059 and 53,695,912 , respectively, as compared to 76,007,129 and 54,301,087 for the three months ended September 30, 2024, and 2023, respectively.

Due to the loss incurred by the Company during the six months ended September 30, 2024, and 2023, all the potential equity shares are anti-dilutive, and accordingly, the fully diluted EPS is equal to the basic EPS.

Cybersecurity

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

During the three months ended June 30, 2024, there were no impactful breaches in cybersecurity.

During the six months ended September 30, 2024, there were no impactful breaches in cybersecurity.

Revenue Recognition

16 unchanged sentences

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

| June 30, 2024, Form 10-Q

Net sales disaggregated by significant products and services for the three months ended June 30, 2024, and 2023 are as follows:

| September 30, 2024, Form 10-Q

Net sales disaggregated by significant products and services for the three months and six months ended September 30, 2024, and 2023 are as follows:

(in thousands)

Three months ended June 30,

Three months ended

September 30, 2024

(in thousands)

Three months ended

September 30, 2023

(in thousands)

Six months ended

September 30, 2024

(in thousands)

Six months ended

September 30, 2023

Infrastructure segment (1)

3 unchanged sentences

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

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

(2) Revenue from wellness and lifestyle consists of the sale of products such as gummies, hand sanitizers, tinctures, capsules, lotions and hemp derivatives.

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

6 unchanged sentences

(in thousands)

June 30, 2024

September 30, 2024

March 31, 2024

2 unchanged sentences

Finished goods

During the three months ended June 30, 2024, and 2023, the Company wrote off approximately $ 26 and $ 20 thousand of inventory due to abnormal loss due to the product expiration, idle facility expense, freight, handling costs, scrap, and wasted material (spoilage).

During the six months ended September 30, 2024, and 2023, the Company wrote off approximately $ 2 thousand and $ 3 thousand of inventory due to abnormal loss due to product expiration, idle facility expense, freight, handling costs, scrap, and wasted material (spoilage).

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

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

As of June 30, 2024, and March 31, 2024, our consolidated balance sheet reported approximately $ 392 thousand clinical trial-related inventory, respectively.

As of September 30, 2024, and March 31, 2024, our consolidated balance sheet reported approximately $ 392 thousand clinical trial-related inventory, respectively.

NOTE 4 – DEPOSITS AND ADVANCES

(in thousands)

June 30, 2024

September 30, 2024

March 31, 2024

2 unchanged sentences

Prepaid expenses and other current assets

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

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

Prepaid expenses and other current assets include approximately $ 34 thousand statutory advances as of June 30, 2024, and approximately $ 39 thousand as of March 31, 2024, respectively.

Prepaid expenses and other current assets include approximately $ 48 thousand statutory advances as of September 30, 2024, and approximately $ 39 thousand as of March 31, 2024, respectively.

NOTE 5 – INTANGIBLE ASSETS

(in thousands)

June 30, 2024

September 30, 2024

March 31, 2024

10 unchanged sentences

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 the three months ended June 30, 2024, and 2023, amounted to approximately $ 20 thousand and $ 18 thousand, respectively.

The Company regularly reviews its intangible assets to determine if any intangible asset is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period and concluded that, as of June 30, 2024, there was no impairment.

The amortization expense in the three months ended September 30, 2024, and 2023, amounted to approximately $ 20 thousand and $ 18 thousand, respectively, whereas the amortization expense in the six months ended September 30, 2024, and 2023 amounted to approximately $ 40 thousand and $ 36 thousand, respectively.

During the three months ended September 30, 2024, the company reversed its obligation towards one of its licensors, which also reversed the amortization expense of approximately $ 20 thousand.

Estimated annual amortization expense

8 unchanged sentences

Useful Life (years)

June 30, 2024

September 30, 2024

March 31, 2024

7 unchanged sentences

Total property, plant, and equipment, net

| June 30, 2024, Form 10-Q

The depreciation expense in the three months ended June 30, 2024, and 2023 amounted to approximately $ 142 thousand and $ 137 thousand, respectively.

| September 30, 2024, Form 10-Q

The depreciation expense in the three months ended September 30, 2024, and 2023 amounted to approximately $ 145 thousand and $ 140 thousand, respectively.

The depreciation expense in the six months ended September 30, 2024, and 2023 amounted to approximately $ 287 thousand and $ 277 thousand, respectively.

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

In addition, during the six months ended, September 30, 2024, the Company received approximately $ 562 thousand as advance for the land.

For more information, please refer to Note 16 – “Segment Information” for the non-current assets other than financial instruments held in the country of domicile and foreign countries.

4 unchanged sentences

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

During the three months ended June 30, 2024, the Company started negotiating with an interested buyer and received approximately $ 180 thousand as a deposit.

In the month of July 2024, the Company entered into an agreement with the buyer to sell the said land for a net realizable value of approximately $ 717 thousand.

During the quarter ended September 30, 2024, the Company entered into an agreement with the buyer to sell the said land for a net realizable value of approximately $ 716 thousand.

The agreement is subject to the final registration and execution.

As of June 30, 2024, the Company holds the ownership and possession of the said land.

The Company received net approximately $ 383 thousand as a deposit.

As of September 30, 2024, the Company holds the ownership and possession of the said land.

NOTE 7 – LEFT BLANK INTENTIONALLY

1 unchanged sentence

(in thousands)

June 30, 2024

September 30, 2024

March 31, 2024

6 unchanged sentences

(in thousands)

June 30, 2024

September 30, 2024

March 31, 2024

1 unchanged sentence

Provision for expenses

Short-term lease liability

Other current liability

Short-term lease liabilities

Other current liabilities

| September 30, 2024, Form 10-Q

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

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

Other current liability also includes statutory payables of approximately $ 23 thousand and $ 25 thousand as of June 30, 2024, and March 31, 2024, respectively, and approximately $ 3 thousand of short-term loans as of June 30, 2024, and March 31, 2024, respectively.

| June 30, 2024, Form 10-Q

Other current liabilities also includes statutory payables of approximately $ 18 thousand and $ 25 thousand as of September 30, 2024, and March 31, 2024, respectively, and approximately $ 3 thousand of short-term loans as of September 30, 2024, and March 31, 2024, respectively.

In addition, during the six months ended, September 30, 2024, the Company received approximately $ 562 thousand as advance for the land.

Please refer to Note 6 – “Property, plant and, equipment”, for more information.

NOTE 11 – LOANS AND OTHER LIABILITIES

Loan as of June 30, 2024:

Loan as of September 30, 2024:

On June 11, 2020, the Company received an Economic Injury Disaster Loan (“EIDL”) for approximately $ 150 thousand at an annual interest rate of 3.75 %.

2 unchanged sentences

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

For the three months ended June 30, 2024, the interest expense and principal payment for the EIDL were approximately $ 1 thousand and 1 thousand, respectively.

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

As of June 30, 2024, approximately $ 136 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

For the six months ended September 30, 2024, the interest expense and principal payment for the EIDL were approximately $ 3 thousand and $ 2 thousand, respectively.

For the six months ended September 30, 2023, the interest expense and principal payment for the EIDL were approximately $ 3 thousand and $ 2 thousand, respectively.

As of September 30, 2024, approximately $ 135 thousand of the loan is classified as Long-term loans and approximately $ 3 thousand as Short-term loans.

On June 30, 2023, (the “Effective Date”), the Company entered into a Master Loan and Security Agreement along with the General Banking Facility Letter (collectively called the “Credit Agreement”) with O-Bank, CO., LTD., a banking corporation incorporated under the laws of Taiwan, as administrative agent and lender (the “Lender’) pursuant to which the Borrower may borrow up to USD$ 12,000 ,000.00 only or the equivalent thereof in other major currencies (the “Credit Facility”).

The Credit Facility under the Credit Agreement contained a maturity date on the first anniversary of the Effective Date.

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

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

On July 29, 2024, the Company entered into an amendment to extend the Credit Agreement with O-Bank, CO., LTD, effective July 8, 2024.

The amendment extended the term of the Loan Agreement, which was set to expire, under the same terms and conditions as previously disclosed on the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission on July 7, 2023, with the exception of a reduction in the facility fees from $ 120 ,000 to $ 84 ,000.

All other material terms of the Credit Agreement remain unchanged.

Other Liability:

(in thousands)

June 30, 2024

September 30, 2024

March 31, 2024

4 unchanged sentences

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

There are no such matters that are deemed material to the condensed consolidated financial statements as of June 30, 2024, except as disclosed in the legal proceedings section below.

There are no such matters that are deemed material to the condensed consolidated financial statements as of September 30, 2024, except as disclosed in the legal proceedings section below.

| September 30, 2024, Form 10-Q

In the U.S., we provide health insurance, life insurance, and a 401(k) plan wherein the Company matches up to 6 % of the employee’s pre-tax contribution up to a maximum annual amount determined by the IRS.

5 unchanged sentences

NOTE 13 – SECURITIES

As of June 30, 2024, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 75,636,419 shares of common stock were issued and outstanding.

The Company is also authorized to issue up to 1,000,000 shares of preferred stock, par value $ 0.0001 per share, and no preferred shares were issued and outstanding as of June 30, 2024.

As of September 30, 2024, the Company was authorized to issue up to 150,000,000 shares of common stock, par value $ 0.0001 per share, and 76,636,419 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 September 30, 2024.

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

7 unchanged sentences

During fiscal 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.

| June 30, 2024, Form 10-Q

On September 25, 2024, the Company entered into the 2024 Share Purchase Agreement (the “September 2024 SPA”) with Moran Global Strategies, Inc., a Virginia corporation (“MGS”), which is owned by James Moran, a director of IGC, relating to the sale and issuance by our company to the investors of an aggregate of 588,235 shares of our common stock, for a total purchase price of $ 200 ,000.

or $ 0.34 per share, subject to the terms and conditions set forth in the September 2024 SPA .

The investment is subject to customary closing conditions, including NYSE approval.

As per the September 2024 SPA, the investor received piggyback registration rights subject to certain restrictions.

During the quarter ended September 30, 2024, the Company received the purchase price, and the issuance of common stock are under process.

During the quarter ended on September 30, 2024, Techni Bharathi Private Limited (TBL), a wholly owned subsidiary of IGC Pharma Inc., buy-backed its shares worth of approximately $ 300 thousand from IGC Pharma Inc.

The above transaction has no impact on the consolidated financial statement and ownership of IGC Pharma on TBL.

NOTE 14 – STOCK-BASED COMPENSATION

As of June 30, 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.

As of September 30, 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.

1 unchanged sentence

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

As of June 30, 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.

As of September 30, 2024, the management confirmed that five milestones had been achieved, and the rest were probable to be achieved by March 31, 2028.

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

| September 30, 2024, Form 10-Q

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

Granted in Fiscal 2025

7 unchanged sentences

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

For the three months ended June 30, 2024, the Company’s share-based expense and option-based expense shown in Selling, general, and administrative expenses (including research and development) were $ 268 thousand and $ 165 thousand, respectively, and for the three months ended June 30, 2023, the Company’s share-based expense and option-based expense was $ 354 thousand and $ 4 thousand, respectively.

For the six months ended September 30, 2024, the Company’s share-based expense and option-based expense shown in Selling, general, and administrative expenses (including research and development) were $ 536 thousand and $ 330 thousand, respectively, and for the six months ended September 30, 2023, the Company’s share-based expense and option-based expense was $ 901 thousand and $ 6 thousand, respectively.

Non-vested shares

4 unchanged sentences

Cancelled/forfeited

Non-vested shares as of June 30, 2024

Non-vested shares as of September 30, 2024

(in thousands)

5 unchanged sentences

Cancelled/forfeited

Options outstanding as of June 30, 2024

| June 30, 2024, Form 10-Q

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 up to 4 (four) years.

Options outstanding as of September 30, 2024

As of September 30, 2024, there was a combined unrecognized expense of $ 2.34 million related to non-vested shares and share options that the Company expects to be recognized over a life of up to 4 years.

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

As of June 30, 2024, the Company’s investments may consist of money market funds, debt and equity funds, and other marketable securities, among others, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets.

As of September 30, 2024, the Company’s investments may consist of money market funds, debt and equity funds, and other marketable securities, among others, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets.

The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle.

3 unchanged sentences

Level 3 investments are valued using the cost method.

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2024, and March 31, 2024, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

| September 30, 2024, Form 10-Q

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of September 30, 2024, and March 31, 2024, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

(in thousands)

As of June 30, 2024

As of September 30, 2024

Adjusted Cost

7 unchanged sentences

Certificates of Deposit

| June 30, 2024, Form 10-Q

NOTE 16 – SEGMENT INFORMATION

8 unchanged sentences

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

| September 30, 2024, Form 10-Q

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

1 unchanged sentence

(in thousands)

Three months ended June 30,

Three months ended

September 30, 2024

(in thousands)

Three months ended

September 30, 2023

(in thousands)

Six months ended

September 30, 2024

(in thousands)

Six months ended

September 30, 2023

Infrastructure segment

7 unchanged sentences

Three months ended

June 30, 2024

Percentage of

Total Revenue

September 30, 2024

Six months ended

September 30, 2024

(in thousands)

Three months ended

June 30, 2023

Percentage of

Total Revenue

| June 30, 2024, Form 10-Q

September 30, 2023

Six months ended

September 30, 2023

| September 30, 2024, Form 10-Q

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

4 unchanged sentences

(India and Colombia)

June 30, 2024

September 30, 2024

Intangible assets, net

14 unchanged sentences

Total non-current assets

NOTE 17 – SUBSEQUENT EVENT

In the month of July 2024, the Company entered into an Agreement to Sell (“Agreement”) to sell the land situated in Nagpur for a net realizable value of approximately $ 717 thousand.

The above-said agreement is subject to the final registration and execution.

The Company holds the ownership and possession of the said land.

On July 08, 2024, the Company successfully renewed the working capital credit facility from O- Bank, totaling $ 12 million for one year.

This credit facility serves to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations.

| June 30, 2024, Form 10-Q

NOTE 17 – SUBSEQUENT EVENTS

| September 30, 2024, Form 10-Q

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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

The MD&A should be read in conjunction with our unaudited condensed financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q for the three months ended June 30, 2024, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the SEC on June 24, 2024 (the “2024 Form 10-K”).

The MD&A should be read in conjunction with our unaudited condensed financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q for the three months and six months ended September 30, 2024, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the SEC on June 24, 2024 (the “2024 Form 10-K”).

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

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Life Sciences Segment and Infrastructure Segment.

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

Life Sciences Segment

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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.

While existing anti-psychotics can take as long as 6 to 12 weeks to show effects, IGC-AD1 has the potential to act within 2 weeks.

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

| June 30, 2024, Form 10-Q

Company Highlights for the Quarter ended June 30, 2024

On June 25, 2024, the Company shared positive pre-clinical results for TGR-63, showing its potential in combating Alzheimer’s disease in an Alzheimer’s mouse model.

On May 28, 2024, the Company announced patient enrollment at Neurostudies, Inc.

in Port Charlotte, Florida, for its Phase 2 clinical trial investigating IGC-AD1, the lead investigational drug, as a potential treatment for agitation in Alzheimer’s disease.

On April 16, 2024, the Company announced that interim data from its Phase 2 clinical trial demonstrates a clinically significant reduction, approaching statistical significance, in agitation in Alzheimer’s at week two compared to placebo.

On April 9, 2024, the Company welcomed Pablo Arbelaez, Ph.D., a renowned AI expert and researcher, to support the development of the Phase 2 clinical trial of IGC-AD1, the lead therapeutic candidate addressing agitation in Alzheimer’s disease.

| June 30, 2024, Form 10-Q

Results of Operations for the Three Months Ended June 30, 2024, and June 30, 2023

| September 30, 2024, Form 10-Q

Company Highlights for the Quarter ended September 30, 2024

On September 4, 2024, the Company announced the advancement of its proprietary formulation, IGC-AD1, toward clinical trials as a potential anti-amyloid disease-modifying treatment for Alzheimer’s disease.

On August 22, 2024, the Company announced preclinical research demonstrating the therapeutic potential of IGC-1C, a novel small-molecule modulator.

As a result of AI modeling, on August 20, 2024, the Company announced that a proprietary molecule, IGC-1A, has been identified as a potential GLP-1 agonist.

Identifying IGC-1A as a potential GLP-1 agonist marks a significant milestone for IGC Pharma, presenting a substantial market opportunity and improving patient care for various conditions.

On July 9, 2024, the Company announced preclinical analyses of TGR-63 to demonstrate blood-brain barrier permeability and safety profile.

| September 30, 2024, Form 10-Q

Results of Operations for the Three Months Ended September 30, 2024, and September 30, 2023

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

The following table presents an overview of our results of operations for the three months ended June 30, 2024, and June 30, 2023:

The following table presents an overview of our results of operations for the three months ended September 30, 2024, and September 30, 2023:

Statement of Operations (in thousands, unaudited)

Three months ended

September 30,

Cost of revenue

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Income tax expense/benefit

Revenue – Revenue was approximately $272 thousand and $555 thousand for the three months ended June 30, 2024, and June 30, 2023, respectively.

Revenue – Revenue was approximately $412 thousand and $291 thousand for the three months ended September 30, 2024, and September 30, 2023, respectively.

Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white-label manufactured products and sales of holistic health care products, among others.

The decrease in revenue is attributed to the completion of our Infrastructure project in India as well as the white-label project in the U.S., both of which comprise approximately 50% of June 2023 revenue.

The increase in revenue is attributed to the white-label project in the U.S.

The Company is committed to its current strategy of driving sales in formulations both as branded and white-labeled products in the Life Science segment.

Cost of revenue – Cost of revenue amounted to approximately $109 thousand for the three months ended June 30, 2024, compared to $300 thousand in the three months ended June 30, 2023, this represents gross margins of 60% and 46%, respectively.

Cost of revenue – Cost of revenue amounted to approximately $214 thousand for the three months ended September 30, 2024, compared to $117 thousand in the three months ended September 30, 2023, this represents gross margins of 48% and 60%, respectively.

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

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

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

There is insufficient revenue to model or project gross margins.

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

During the three months ended June 30, 2024, SG&A expenses increased by approximately $23 thousand or 1% to approximately $1.7 million as compared to the three months ended June 30, 2023.

During the three months that ended September 30, 2024, SG&A expenses decreased by approximately $356 thousand or 25% to approximately $ 1 million during the three months ended September 30, 2024.

The decrease of $356 thousand is attributed to a decrease in marketing and corporate expenses.

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

The R&D expenses increased by approximately $142 thousand or 19% to approximately $889 thousand during the three months ended June 30, 2024, from approximately $747 thousand.

The R&D expenses decreased by approximately $351 thousand or 28% to approximately $917 thousand during the three months ended September 30, 2024, from approximately $1.3 million.

It is primarily attributable to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on the other small molecule assets.

We anticipate increased R&D expenses as the development of our other small molecule assets targeting Alzheimer’s and the Phase 2 trial on Alzheimer’s expand.

Other income, net – Other net income decreased by approximately $46 thousand or 72% during the thousand months ended June 30, 2024.

As a result, the total other income for the three months ended June 30, 2024, and 2023 is approximately $18 thousand and $64 thousand, respectively.

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

Other income, net – Other net income increased by approximately $3 thousand or 8% during the thousand months ended September 30, 2024.

As a result, the total other income for the three months ended September 30, 2024, and 2023 is approximately $43 thousand and $40 thousand, respectively.

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

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

Results of Operations for the Six Months Ended September 30, 2024, and September 30, 2023

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

The following table presents an overview of our results of operations for the six months ended September 30, 2024, and September 30, 2023:

Statement of Operations (in thousands, unaudited)

Six months ended

September 30,

Cost of revenue

Selling, general and administrative expenses

Research and development expenses

Operating loss

Other income, net

Loss before income taxes

Income tax expense/benefit

Revenue – Revenue was approximately $684 thousand and $846 thousand for the six months ended September 30, 2024, and September 30, 2023, respectively.

Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white-label manufactured products and sales of holistic health care products, among others.

The decrease in revenue is attributed to the completion of our Infrastructure project in India as well as the white-label project in the U.S.

The Company is committed to its current strategy of driving sales in formulations both as branded and white-labeled products in the Life Science segment.

Cost of revenue – Cost of revenue amounted to approximately $323 thousand for the six months ended September 30, 2024, compared to $417 thousand in the six months ended September 30, 2023, this represents gross margins of 53% and 51%, respectively.

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

There is insufficient revenue to model or project gross margins.

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

During the six months that ended September 30, 2024, SG&A expenses decreased by approximately $333 thousand or 11% to approximately $2.7 million during the six months ended September 30, 2024, from approximately $3 million.

The decrease of $333 thousand is attributed to a decrease in marketing and corporate expenses.

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

The R&D expenses decreased by approximately $209 thousand or 10% to approximately $1.8 million during the six months ended September 30, 2024, from approximately $2 million.

It is primarily attributable to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on the other small molecule assets.

We anticipate increased R&D expenses as the development of our other small molecule assets targeting Alzheimer’s and the Phase 2 trial on Alzheimer’s expand.

Other income, net – Other net income decreased by approximately $43 thousand or 41% during the thousand six months ended September 30, 2024.

As a result, the total other income for the six months ended September 30, 2024, and 2023 is approximately $61 thousand and $104 thousand, respectively.

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

| September 30, 2024, Form 10-Q

Liquidity and Capital Resources

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

On July 29, 2024, the Company entered into an amendment to extend the Credit Agreement with O-Bank, CO., LTD, effective July 8, 2024.

The amendment extends the term of the Credit Agreement, which was set to expire, under the same terms and conditions as previously disclosed on the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission on July 7, 2023, with the exception of a reduction in the facility fees from $120,000 to $84,000.

All other material terms of the Credit Agreement remain unchanged.

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, par value $0.0001 per share (the “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”).

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.

During the quarter ended June 30, 2024, the Company issued approximately 8.8 million shares of unregistered common stock at a price of $0.34 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.

During fiscal 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.

The investment is subject to customary closing conditions, including NYSE approval.

As per the September 2024 SPA, the investor will receive piggyback registration rights subject to certain restrictions.

| September 30, 2024, Form 10-Q

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

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(in thousands, unaudited)

June 30 31, 2024

September 30, 2024

March 31, 2024

Percent Change

Cash and cash equivalents

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Cash and cash equivalents

Cash and cash equivalents increased by approximately $626 thousand to $1.8 million in the three months ended June 30, 2024, from $1.2 million as of March 31, 2024, an increase of approximately 52%.

| June 30, 2024, Form 10-Q

Cash and cash equivalents increased by approximately $348 thousand to $1.5 million in the six months ended September 30, 2024, from $1.2 million as of March 31, 2024, an increase of approximately 29%.

The increase is primarily attributable to the fund raised by the Company during the quarter ended September ended 30, 2024.

Summary of Cash flows

(in thousands, unaudited)

Three months ended

Six months ended

September 30,

Cash used in operating activities

Cash used in investing activities

Cash provided by (used in) financing activities

Cash (used in) provided by investing activities

Cash provided by financing activities

Effects of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of period

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Operating Activities

Net cash used in operating activities for the three months ended June 30, 2024, was approximately $1.8 million.

It consists of a net loss of approximately $2.4 million, a positive impact on cash due to non-cash expenses of approximately $564 thousand, and a positive change in operating assets and liabilities of approximately $62 thousand.

Net cash used in operating activities for the six months ended September 30, 2024, was approximately $2.7 million.

It consists of a net loss of approximately $4.1 million, a positive impact on cash due to non-cash expenses of approximately $1.1 million, and a positive change in operating assets and liabilities of approximately $249 thousand.

Non-cash expenses consist of an amortization and depreciation charge of approximately $307 thousand and stock-based expenses of approximately $804 thousand.

In addition, changes in operating assets and liabilities had a positive impact of approximately $62 thousand on cash, of which a net negative impact of approximately $118 thousand is due to an increase in deposits and advances, and a positive impact of approximately $151 thousand is due to increase in accrued and other liabilities, and net other current assets and liabilities of approximately $29 thousand.

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

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

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

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

In addition, changes in operating assets and liabilities had a positive impact of approximately $249 thousand on cash, of which a net negative impact of approximately $227 thousand is due to an increase in deposits and advances, and a positive impact of approximately $467 thousand is due to increase in accrued and other liabilities, a net negative impact of approximately $5 thousand is due to an increase in accounts payable and net other current assets and liabilities of approximately $14 thousand.

Net cash used in operating activities for the six months ended September 30, 2023, was approximately $3.1 million.

It consists of a net loss of approximately $4.5 million, a positive impact on cash due to non-cash expenses of approximately $1.1 million, and a positive change in operating assets and liabilities of approximately $272 thousand.

Non-cash expenses consist of an amortization and depreciation charge of approximately $313 thousand, stock-based expenses of approximately $907 thousand, and an approximately $52 thousand decrease in other non-cash items and approximately $42 thousand decrease in profit on sale of assets.

In addition, changes in operating assets and liabilities had a positive impact of approximately $272 thousand on cash, of which approximately $30 thousand is due to a decrease in accounts receivables, approximately $19 thousand increase in accounts payable, approximately $185 thousand increase in accrued and other liabilities and approximately $98 thousand increase in other net current assets and liabilities.

| September 30, 2024, Form 10-Q

Investing Activities

Net cash used in investing activities for the three months ended June 30, 2024, was approximately $131 thousand, which comprised of expenses of approximately $93 thousand for the acquisition and development of intangible assets, and approximately $38 thousand for the net purchase of property, plant, and equipment.

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

Net cash used in investing activities for the six months ended September 30, 2024, was approximately $196 thousand, which is comprised of expenses of approximately $145 thousand for the acquisition, and development of intangible assets, and approximately $51 thousand for the net purchase of property, plant, and equipment.

Net cash provided by investing activities for the six months ended September 30, 2023, was approximately $67 thousand, which is comprised of expenses of approximately $48 thousand for the acquisition filing expenses related to intellectual property, approximately $13 thousand for the net purchase of property, plant, and equipment and approximately $128 thousand of investment in marketable securities.

Financing Activities

Net cash provided by financing activities was approximately $2.5 million for the three months ended June 30, 2024, which is comprised of net proceeds from issuance of equity stock of approximately $2.5 million and re-payment of the loan of approximately $1 thousand.

Net cash provided by financing activities was approximately $3.3 million for the six months ended September 30, 2024, which is comprised of net proceeds from issuance of equity stock of approximately $3.3 million, and re-payment of the loan of approximately $2 thousand.

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

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

| June 30, 2024, Form 10-Q

Net cash provided by financing activities was approximately $2.8 million for the six months ended September 30, 2023, which is comprised of net proceeds from issuance of equity stock of approximately $2.8 million and re-payment of the loan of approximately $2 thousand.

| September 30, 2024, Form 10-Q

Off-Balance Sheet Arrangements

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Recent accounting pronouncements that may apply to us are described in Note 2, “Significant Accounting Policies” to the Notes to the Unaudited Condensed Consolidated Financial Statements in this report and in the Notes to the Audited Consolidated Financial Statements in Part II of our 2024 Form 10-K.

| June 30, 2024, Form 10-Q

| September 30, 2024, Form 10-Q

Quantitative and Qualitative Disclosures about Market Risk

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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-Q

Item 1. Financial Statements