IGC Pharma, Inc. 10-Q

Item 1A. Risk Factors The following are the material changes to the risk factors disclosed in Part I, Item 1A, “Risk Factors” in our Transition Report on Form 10-KT for the period ended December 31, 2025, filed with the SEC on March 18, 2026. Risks Related to Our Clinical Development and IGC-AD1 Our business is highly dependent on the successful development of our lead product candidate, IGC-AD1, and we may not successfully complete clinical development or obtain regulatory approval. Our ability to advance IGC-AD1 depends on the successful execution and completion of our ongoing Phase 2 CALMA clinical trial. We may experience delays in patient enrollment, including failure to achieve targeted enrollment within expected timelines, or at all. Although target enrollment has been reached, the trial remains subject to risks relating to patient follow-up, evaluability, protocol deviations, data cleaning, database lock, site closeout, statistical analysis, safety findings, and timing of topline results. Clinical trials are inherently complex and subject to numerous risks, including delays in site initiation, variability in site performance, patient recruitment challenges, protocol deviations, and unforeseen operational or logistical issues. Any such delays could increase development costs, extend timelines, and adversely affect our business and financial condition. Even if we complete the CALMA clinical trial, the results may not demonstrate sufficient safety, tolerability, or efficacy to support continued development or regulatory approval. Clinical trial outcomes are inherently uncertain and may be influenced by factors including trial design, statistical assumptions, patient population characteristics, dosing regimens, and variability in individual patient responses. Negative or inconclusive results could delay or prevent further development and materially adversely affect the value of IGC-AD1. The timing of key clinical milestones, including database lock and the availability of topline data, is uncertain and subject to change. Delays in data collection, data cleaning, monitoring, or analysis could postpone the release of clinical results, which may adversely affect investor expectations, our stock price, and our ability to raise capital. We may not obtain regulatory approval for IGC-AD1. The U.S. Food and Drug Administration (“FDA”) and other regulatory authorities may require additional preclinical or clinical studies, impose delays in the review process, or determine that our data are insufficient to support approval. Regulatory requirements are evolving and may change during the course of development. Failure to obtain regulatory approval would prevent us from commercializing IGC-AD1 and could materially adversely affect our business. We will require substantial additional capital to continue the development of IGC-AD1 and our other product candidates. Our ability to obtain financing depends on market conditions and other factors beyond our control, and such financing may not be available on acceptable terms, or at all. If we are unable to secure sufficient funding, we may be required to delay, scale back, or discontinue our development programs. The biopharmaceutical industry is highly competitive, and our product candidates may face significant competition. Competing therapies, including those currently approved or under development for Alzheimer’s disease or agitation, may demonstrate superior efficacy, safety, or cost-effectiveness. In addition, changes in the standard of care could reduce the commercial opportunity for IGC-AD1, even if approved. We are developing and utilizing artificial intelligence and data-driven tools, including our MINT-AD platform, to support research and development activities. These technologies are emerging and subject to significant technical, regulatory, and operational risks. They may not perform as expected, may produce inaccurate or non-generalizable results, and may be subject to evolving regulatory oversight, including potential FDA regulation of software-based tools. Any limitations or failures of these technologies could adversely affect our clinical development efforts. Our operations and clinical development activities may also be adversely affected by general economic and geopolitical conditions, including supply chain disruptions, labor shortages, regulatory changes, and global market volatility. These factors may impact clinical trial execution, access to clinical sites and personnel, and overall development timelines. Risks Related to Our Convertible Debt Instruments The Company has issued convertible promissory notes that contain variable-rate conversion features, which could result in substantial dilution to existing stockholders. Upon the occurrence and continuation of an event of default, the holders of these notes may convert outstanding amounts into shares of the Company’s common stock at a conversion price equal to a discount to the market price, including at 75% of the lowest trading price of the Company’s common stock during a specified period preceding conversion. As of June 30, 2026, the aggregate principal amount of such convertible instruments was approximately $937 thousand. Conversions at discounted prices may result in the issuance of a significant number of shares, particularly in periods of stock price volatility or decline, which could materially dilute the ownership interests of existing stockholders and adversely affect the market price of the Company’s common stock. Although these instruments include a 4.99% beneficial ownership limitation and a 19.99% share issuance cap in compliance with applicable NYSE American listing standards, such limitations may not prevent substantial dilution over time, particularly if conversions occur in multiple transactions or if stockholder approval is obtained to exceed applicable thresholds. In addition, the existence of these convertible instruments may create downward pressure on the trading price of the Company’s common stock, limit the Company’s ability to obtain additional financing on favorable terms, and could result in increased volatility in the market price of its securities. | June 30, 2026, Form 10-Q 32 Table of Contents