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What changed in IGC Pharma, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of IGC Pharma, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+313 added−262 removedSource: 10-K (2023-07-07) vs 10-K (2022-06-23)

Top changes in IGC Pharma, Inc.'s 2023 10-K

313 paragraphs added · 262 removed · 204 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

80 edited+44 added−17 removed108 unchanged
Biggest changeOver the Counter Products : We have created a cannabinoid-based women’s wellness brand, Holief™ available through online channels and a CBD-caffeine-infused energy drink, Sunday Seltzer™, available through wholesale channels. ● 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”). o Sunday Seltzer™ is an all-natural, organic, carbonated energy drink with natural caffeine from green tea extract, CBD, vitamins B, vitamin C, no added sugars, and no preservatives.
Biggest changeHolief™ 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 through Amazon and other online channels.
Table 1: NPI analysis for each of the three cohorts Domain Cohort 1 (n=7) Cohort 2 (n=6) Cohort 3 (n=5) Agitation Baseline Day Day Baseline Day Day Baseline Day 10 Day Day 0 10 15 Day 0 10 15 Day 0 15 Mean Score 4.7 3.3 3 4.3 2.1 1.5 4.2 3.2 1.4 Mean Change - 1.4 1.7 - 2.2 2.8 - 1 2.8 Mean Change% - 37% 48% - 53% 67% - 23% 67% p-values - 0.058 0.045 - 0.085 0.05 - 0.29 0.045 P(T According to the NPI Test, a reduction of 4 points or 30% in the score is considered clinically meaningful.
Table 1: NPI analysis for each of the three cohorts Domain Cohort 1 (n=7) Cohort 2 (n=6) Cohort 3 (n=5) Agitation Baseline Day Day Baseline Day Day Baseline Day Day Day 0 10 15 Day 0 10 15 Day 0 10 15 Mean Score 4.7 3.3 3 4.3 2.1 1.5 4.2 3.2 1.4 Mean Change - 1.4 1.7 - 2.2 2.8 - 1 2.8 Mean Change% - 37% 48% - 53% 67% - 23% 67% p-values - 0.058 0.045 - 0.085 0.05 - 0.29 0.045 P(T According to the NPI Test, a reduction of 4 points or 30% in the score is considered clinically meaningful.
Branded wellness and lifestyle products to be sold in multiple retail and online channels, subject to applicable federal, state, and local laws and regulations. 3. Partnerships and licensing agreements with third parties who can accelerate bringing our IP to market. The Company holds all rights to the patents that it filed with the USPTO.
Branded wellness and lifestyle products to be sold in multiple retail and online channels, subject to applicable federal, state, and local laws and regulations. 3. Partnerships and licensing agreements with third parties who can accelerate bringing our IP to the market. The Company holds all rights to the patents that it filed with the USPTO.
Information related to the product, patient population, phase of the investigation, study sites and investigator and other aspects of the clinical trial is made public as part of the registration.
Information related to the product, patient population, phase of the investigation, study sites, investigator and other aspects of the clinical trial is made public as part of the registration.
As a company engaged in the clinical-stage biopharmaceutical industry, we focus our research and development efforts, subject to results of future clinical trials, on seeking pharmaceutical solutions that may a) alleviate neuropsychiatric symptoms such as agitation, anxiety, and depression associated with dementia in Alzheimer’s disease; and b) halt the onset, progression, or cure Alzheimer’s disease.
As a company engaged in the clinical-stage pharmaceutical industry, we focus our research and development efforts, subject to results of future clinical trials, on seeking pharmaceutical solutions that may a) alleviate neuropsychiatric symptoms such as agitation, anxiety, and depression associated with dementia in Alzheimer’s disease; and b) halt the onset, progression, or cure Alzheimer’s disease.
Our ability to grow is limited by the disruption to the Hong Kong economy and the impact of COVID-19. If and when the economy recovers, there is potential opportunity for growth given the total size of the market. Business Seasonality The infrastructure segment has historically experienced seasonality with limited construction work available during the monsoon season.
Our ability to grow is limited by the disruption to the Hong Kong economy and the impact of COVID-19. If and when the economy recovers, there is a potential opportunity for growth given the total size of the market. Business Seasonality The infrastructure segment has historically experienced seasonality, with limited construction work available during the monsoon season.
In addition, we also used a paired 2-tailed t-test with 9 degrees of freedom to assess the statistical significance of the decrease both in the overall NPI and individual NPI domains. ● In Cohort 1 for those on IGC-AD1, the mean NPI decreased from a baseline 31.5 (SD 27.2) to 16.7 (SD 16.2) on day 10 ( p = 0.0044) and 14.8 (SD 16.0) on day 15 ( p = 0.0095). o Individual domains that showed improvement were in Agitation ( p = .05), Dilutions ( p = .05), Anxiety ( p = .09), and Appetite and Eating Disorders ( p = .01). ● In Cohort 2 for those on IGC-AD1, the mean NPI decreased from a baseline of 22.2 (SD 14.8) to 10.4 (SD 11.5) on day 10 ( p = 0.0026) and 12.4 (SD14.7) on day 15 ( p = 0.0127). o Individual domains that showed improvement were Agitation ( p = .06), Irritability ( p = .04), and Depression ( p = .01). 8 Table of Contents ● In Cohort 3 for those on IGC-AD1 the mean NPI decreased from a baseline of 16.0 (SD14.7) to 14.6 (SD10.9) on day 10 ( p = 0.6751) and 7.9 (SD 9.0) on day 15 ( p = 0.0113). o Individual domains that showed improvement was Agitation ( p = .06).
In addition, we also used a paired 2-tailed t-test with 9 degrees of freedom to assess the statistical significance of the decrease both in the overall NPI and individual NPI domains. ● In Cohort 1 for those on IGC-AD1, the mean NPI decreased from a baseline 31.5 (SD 27.2) to 16.7 (SD 16.2) on day 10 ( p = 0.0044) and 14.8 (SD 16.0) on day 15 ( p = 0.0095). o Individual domains that showed improvement were in Agitation ( p = .05), Dilutions ( p = .05), Anxiety ( p = .09), and Appetite and Eating Disorders ( p = .01). ● In Cohort 2 for those on IGC-AD1, the mean NPI decreased from a baseline of 22.2 (SD 14.8) to 10.4 (SD 11.5) on day 10 ( p = 0.0026) and 12.4 (SD14.7) on day 15 ( p = 0.0127). o Individual domains that showed improvement were Agitation ( p = .06), Irritability ( p = .04), and Depression ( p = .01). ● In Cohort 3 for those on IGC-AD1 the mean NPI decreased from a baseline of 16.0 (SD14.7) to 14.6 (SD10.9) on day 10 ( p = 0.6751) and 7.9 (SD 9.0) on day 15 ( p = 0.0113). o Individual domain that showed improvement was Agitation ( p = .06).
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as the imposition of clinical holds, FDA refusal to approve pending New Drug Applications (“NDA”), warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, civil penalties, and criminal prosecution.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as the imposition of clinical holds, FDA refusal to approve pending New Drug Applications (NDA), warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, civil penalties, and criminal prosecution.
This work also led to several patent filings including one that was granted by the United States Patent and Trademark Office (“USPTO”). In the fiscal year 2018, IGC acquired exclusive rights to the research data and patent filing. The research on the active ingredients of IGC-AD1 (IGC-AD1 Actives) showed that they, in combination, had potentially positive effects on Alzheimer’s disease.
This work also led to several patent filings including one that was granted by the United States Patent and Trademark Office (USPTO). In fiscal year 2018, IGC acquired exclusive rights to the research data and patent filing. The research on the active ingredients of IGC-AD1 (IGC-AD1 Actives) showed that they, in combination, had potentially positive effects on Alzheimer’s disease.
Regulatory Despite the passage of the 2018 Farm Bill, the FDA has not established guidance or rules on the infusion of hemp-based CBD into food and beverage products. This creates a complicated framework of local rules and regulations that we must navigate. When federal rules are clearly set, we expect the demand for CBD-based food and beverages will increase.
Regulatory Despite the passage of the 2018 Farm Bill, the FDA has not established guidance or rules on the infusion of hemp-based derivatives into food and beverage products. This creates a complicated framework of local rules and regulations that we must navigate. When federal rules are clearly set, we expect the demand for hemp-based food and beverages will increase.
Satisfaction of FDA premarket approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity of the product, or disease. 14 Table of Contents Pre-clinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product.
Satisfaction of FDA premarket approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity of the product, or disease. 17 Table of Contents Pre-clinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product.
Achieving favorable coverage and reimbursement from the Centers for Medicare and Medicaid Services (“CMS”) and/or the Medicare Administrative Contractors is typically a significant gating issue for successful introduction of a new product. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
Achieving favorable coverage and reimbursement from the Centers for Medicare and Medicaid Services (CMS) and/or the Medicare Administrative Contractors is typically a significant gating issue for successful introduction of a new product. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with Good Clinical Practice (“GCP”), an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; and (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with Good Clinical Practice (GCP), an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; and (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only. 18 Table of Contents
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only. 21 Table of Contents
Exclusivity Upon NDA approval of a new chemical entity or NCE, which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA or 505(b)(2) application seeking approval of a drug that references a version of the NCE drug.
Exclusivity Upon NDA approval of a new chemical entity or NCE, which is a drug that contains no active component that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA or 505(b)(2) application seeking approval of a drug that references a version of the NCE drug.
For example, in the state of Arizona, where we grew hemp, we were required to apply for licenses and register with the state the geo-location of all our operations, including the land on which hemp was grown and the facilities where hemp will be processed. These regulations are evolving, differ from jurisdiction to jurisdiction, and are subject to change.
For example, in the state of Arizona, where we grew hemp, we were required to apply for licenses and register with the state the geo-location of all our operations, including the land on which hemp was grown and the facilities where hemp would be processed. These regulations are evolving, differ from jurisdiction to jurisdiction, and are subject to change.
The FDA will not approve the product unless compliance with the current GMP is satisfactory, and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication studied. After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter.
The FDA will not approve the product unless compliance with the current GMP is satisfactory, and the NDA contains data that provides substantial evidence that the drug is safe and effective in the indication studied. After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter.
If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. 16 Table of Contents A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.
If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. 19 Table of Contents A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.
The misfolded structure of Aβ proteins, along with NFTs, generate a characteristic tendency for their aggregation (Chiti & Dobson, 2006) around damaged or dead neurons and within cerebral vasculature in the brain. It manifests by memory loss followed by progressive dementia.
The misfolded structure of Aβ proteins, along with NFTs, generates a characteristic tendency for their aggregation (Chiti & Dobson, 2006) around damaged or dead neurons and within cerebral vasculature in the brain. It manifests by memory loss followed by progressive dementia.
Specifically, the pre-clinical research on the IGC-AD1 Actives showed the following: Impact on plaque levels: Cao et al., (2014) reported a dose-dependent decrease in Aβ40 levels in N2a/APPswe cells (AD cell lines) in the presence of the IGC-AD1 Actives, after 24 hours of incubation.
Specifically, the pre-clinical research on the IGC-AD1 Actives showed the following: Impact on plaque levels: Cao et al., (2014) reported a dose-dependent decrease in Aβ40 levels in N2a/AβPPswe cells (AD cell lines) in the presence of the IGC-AD1 Actives, after 24 hours of incubation.
The hemp business also has seasonality as most of the hemp harvest in America occurs in the fall. Pricing pressure is based on the volume of hemp biomass being harvested. 12 Table of Contents Competition Competition for the Company’s products and services varies by market: 1.
The hemp business also has seasonality, as most of the hemp harvest in America occurs in the fall. Pricing pressure is based on the volume of hemp biomass being harvested. 15 Table of Contents Competition Competition for the Company’s products and services varies by market: 1.
The FDA’s current performance goals call for the FDA to complete review of 90 percent of standard (non-priority) NDAs within 10 months of receipt and within six months for priority NDAs, but two additional months are added to standard and priority NDAs for a new molecular entity (“NME”). 15 Table of Contents The FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee, which is typically a panel that includes clinicians and other experts, for review, evaluation, and a recommendation as to whether the application should be approved.
The FDA’s current performance goals call for the FDA to complete review of 90 percent of standard (non-priority) NDAs within 10 months of receipt and within six months for priority NDAs, but two additional months are added to standard and priority NDAs for a new molecular entity (NME). 18 Table of Contents The FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee, which is typically a panel that includes clinicians and other experts, for review, evaluation, and a recommendation as to whether the application should be approved.
ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability of the drug.
ETASU can include, but is not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability of the drug.
Pharmaceutical product development in the U.S. typically involves pre-clinical laboratory and animal tests and the submission to the FDA of an Investigational New Drug (“IND”), which must become effective before clinical testing may commence.
Pharmaceutical product development in the U.S. typically involves pre-clinical laboratory and animal tests and the submission to the FDA of an Investigational New Drug (IND), which must become effective before clinical testing may commence.
Our Phase 1 trial for IGC-AD1 may provide hope for those patients suffering from mild to severe dementia due to Alzheimer’s disease. Alzheimer ’ s Disease (AD) Pathology Alzheimer’s pathology can be divided into two categories, familial or inherited AD and sporadic AD. The histopathology of early onset familial AD and late onset sporadic AD are indistinguishable.
Our Phase 1 trial for IGC-AD1 may provide hope for those patients suffering from mild to severe dementia due to Alzheimer’s disease. 6 Table of Contents Alzheimer ’ s Disease (AD) Pathology Alzheimer’s pathology can be divided into two categories, familial or inherited AD and sporadic AD. The histopathology of early-onset familial AD and late-onset sporadic AD are indistinguishable.
Patients can have difficulty with multistep tasks such as getting dressed. Behavioral problems including hallucinations, delusions, paranoia, and impulsive behavior can also increase. When severe Alzheimer’s sets in, plaques and tangles spread throughout the patient’s brain and the brain shrinks significantly. People with severe Alzheimer’s are completely dependent on others for care.
Patients can have difficulty with multi-step tasks such as getting dressed. Behavioral problems, including hallucinations, delusions, paranoia, and impulsive behavior, can also increase. When severe Alzheimer’s sets in, plaques and tangles spread throughout the patient’s brain, and the brain shrinks significantly. People with severe Alzheimer’s are completely dependent on others for care.
Intellectual Property Our goal is to use our intellectual property (“IP”) to develop products that we can bring to market in one or more of the following channels: 1. Pharmaceutical products that are subject to FDA-approvals.
Intellectual Property Our goal is to use our intellectual property (IP) to develop products that we can bring to market in one or more of the following channels: 1. Pharmaceutical products that are subject to FDA-approvals.
They cannot communicate, and near the end of their life, they may be largely bed-ridden as the body shuts down (NIA, 2021). Currently, there are limited options to help Alzheimer’s patients with the debilitating symptoms of the disease or relief for the burden placed on their caregivers (Cheng, 2017).
They cannot communicate, and near the end of their life, they may be largely bedridden as the body shuts down (NIA, 2021). Currently, there are limited options to help Alzheimer’s patients with the debilitating symptoms of the disease or relief for the burden placed on their caregivers (Cheng, 2017).
The conduct of the pre-clinical tests must comply with federal regulations and requirements, including the FDA’s good laboratory practices regulations and the U.S. Department of Agriculture’s (“USDA’s”) regulations implementing the Animal Welfare Act.
The conduct of the pre-clinical tests must comply with federal regulations and requirements, including the FDA’s good laboratory practices regulations and the U.S. Department of Agriculture’s (USDA’s) regulations implementing the Animal Welfare Act.
As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”) to help ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use (“ETASU”).
As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (REMS) to help ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use (ETASU).
Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee. 17 Table of Contents Special Protocol Assessment A company may reach an agreement with the FDA under the Special Protocol Assessment (“SPA”), process as to the required design and size of clinical trials intended to form the primary basis of an efficacy claim.
Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee. 20 Table of Contents Special Protocol Assessment A company may reach an agreement with the FDA under the Special Protocol Assessment (SPA), process as to the required design and size of clinical trials intended to form the primary basis of an efficacy claim.
We also lease our small fleet of heavy construction equipment, including grader, rollers etc. to construction companies. Our infrastructure business revenue is less than 1% of the global revenue of the rental, construction, and commodities markets. We currently have 1 customer and 1 subcontractor/supplier of infrastructure materials.
We also lease our small fleet of heavy construction equipment, including graders, rollers, etc., to construction companies. Our infrastructure business revenue is less than 1% of the global revenue of the rental, construction, and commodities markets. We currently have one customer and one subcontractor/supplier of infrastructure materials.
Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an abbreviated new drug application (“ANDA”).
Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an abbreviated new drug application (ANDA).
The Company holds all rights to the patents that have been filed by us with the USPTO. 13 Table of Contents The table below summarizes the nature of the activity, type of license required and held, and encumbrances in obtaining permits for each location where the Company operated through its subsidiaries in Fiscal 2022: Location Nature of Activity Type of License Required Type of License held Encumbrances in Obtaining Permit U.S.
The Company holds all rights to the patents that have been filed by us with the USPTO. 16 Table of Contents The table below summarizes the nature of the activity, type of license required and held, and encumbrances in obtaining permits for each location where the Company operated through its subsidiaries in Fiscal 2023: Location Nature of Activity Type of License Required Type of License held Encumbrances in Obtaining Permit U.S.
Alzheimer’s disease, and the dementia associated with it, is a progressive disease. Symptoms such as agitation, anxiety, depression, sleep disturbance (sundown syndrome), delusions, and hallucinations often begin to appear in patients in their mid-60s. 5 Table of Contents The NIA categorizes Alzheimer’s in three stages - mild, moderate, and severe (NIA, 2019).
Alzheimer’s disease, and the dementia associated with it, is a progressive disease. Symptoms such as agitation, anxiety, depression, sleep disturbance (sundown syndrome), delusions, and hallucinations often begin to appear in patients in their mid-60s. The NIA categorizes Alzheimer’s in three stages–- mild, moderate, and severe (NIA, 2019).
Research has shown that micro-dosing of THC could increase the functioning of mitochondria on AD cell lines and potentially promote the growth of new pathways (neurogenesis) (Suliman, et al., 2017). Micro-dosing of THC affects the brain radically differently from the normal dosing in the FDA-approved prescription drug, Dronabinol.
Research has shown that micro-dosing of THC could increase the functioning of mitochondria on AD cell lines (Cao et al., 2014) and potentially promote the growth of new pathways (neurogenesis) (Suliman, et al., 2018). Micro-dosing of THC affects the brain radically differently from the normal dosing in the FDA-approved prescription drug, Dronabinol.
The data presented here is not exhaustive. Primary Endpoint: Safety & Tolerability (S&T) S&T was assessed by recording both solicited and non-solicited Adverse Events (AEs). The solicited AEs, assessed daily, were somnolence, falls, dizziness, asthenia, suicidal ideation, hypertension, psychiatric symptoms, and paradoxical nausea.
The data presented here is not exhaustive. 8 Table of Contents Primary Endpoint: Safety & Tolerability (S&T) S&T was assessed by recording both solicited and non-solicited Adverse Events (AEs). The solicited AEs, assessed daily, were somnolence, falls, dizziness, asthenia, suicidal ideation, hypertension, psychiatric symptoms, and paradoxical nausea.
(“Hamsa Biopharma”), a directly owned subsidiary of the Company, executed a Term Sheet with JNCASR, and on March 28, 2022, entered into an agreement for exclusive global rights corresponding to the molecules, technology, patent, and patent filings.
(Hamsa Biopharma), a directly owned subsidiary of the Company, executed a Term Sheet with JNCASR, and on March 28, 2022, entered into an agreement for exclusive global rights corresponding to the molecules, technology, patent, and patent filings.
In the placebo group (N=2) 100% reported hypertension, and 50% reported somnolence and falls. 7 Table of Contents ● In Cohort 2 for the IGC-AD1 group, 60% reported psychiatric symptoms, 50% reported somnolence and asthenia, 30% reported hypertension, 20% reported nausea and dizziness, and 10% reported falls and suicidal ideation.
In the placebo group (N=2) 100% reported hypertension, and 50% reported somnolence and falls. ● In Cohort 2 for the IGC-AD1 group, 60% reported psychiatric symptoms, 50% reported somnolence and asthenia, 30% reported hypertension, 20% reported nausea and dizziness, and 10% reported falls and suicidal ideation.
Separately, the NPI also scores caregiver distress (NPI-D). The NPI is used by about 50% of neurologists to assess and treat Alzheimer’s patients (Fernandez et al., 2010). In the Phase 1 trial conducted on patients with Alzheimer’s disease, we measured changes in NPS as assessed by the NPI-12 as well as caregiver distress as assessed by the NPI-D.
The NPI is used by about 50% of neurologists to assess and treat Alzheimer’s patients (Fernandez et al., 2010). 9 Table of Contents In the Phase 1 trial conducted on patients with Alzheimer’s disease, we measured changes in NPS as assessed by the NPI-12 as well as caregiver distress as assessed by the NPI-D.
Under the 2018 Farm Bill, Hemp is classified as a cannabis plant that has 0.3% or less THC by dry weight. Marijuana is classified as a cannabis plant that has THC above 0.3% by dry weight.
Hemp and Marijuana are both cannabis plants. Under the 2018 Farm Bill, Hemp is classified as a cannabis plant that has 0.3% or less THC by dry weight. Marijuana is classified as a cannabis plant that has THC above 0.3% by dry weight.
Core business competencies and advantages Our core competencies include: ● a network of doctors, scientists with Ph.D. degrees, and intellectual property legal experts with a sophisticated understanding of drug discovery, research, FDA filings, intellectual protection, and product formulation; ● knowledge of various cannabinoid strains, their phytocannabinoid profile, extraction methodology, and impact on various pathways; ● knowledge of plant and cannabinoid-based combination therapies; ● knowledge of research and development in the field; ● patents IGC-501, IGC-502, IGC-504, and IGC-507 for treatment of pain, treatment of seizures in humans and veterinary animals, treatment of cachexia and eating disorders in humans and veterinary animals, and Alzheimer’s Disease, respectively; and ● facilities and a team with experience in manufacturing, marketing, and selling products.
Core business competencies and advantages Our core competencies include: ● a network of doctors, scientists with Ph.D. degrees, and intellectual property legal experts with a sophisticated understanding of drug discovery, research, FDA filings, intellectual protection, and product formulation; ● knowledge of various cannabinoid strains, their phytocannabinoid profile, extraction methodology, and impact on various pathways; ● knowledge of plant and cannabinoid-based combination therapies; ● knowledge of research and development in the field; ● patents IGC-501, IGC-502, IGC-504, IGC-505, IGC-507, and IGC-514 for treatment of pain, treatment of seizures in humans and veterinary animals, treatment of cachexia and eating disorders in humans and veterinary animals, method and composition for treating seizure disorders, Alzheimer’s Disease and Self Assembly of Naphthalene Diimide Derivatives and Process Thereof, respectively; ● facilities and a team with experience in manufacturing, marketing, and selling products.
Alzheimer ’ s disease The National Institute on Aging (“NIA”) at the National Institutes of Health (“NIH”) defines Alzheimer’s as an irreversible progressive brain disorder that destroys memory and thinking skills. According to the Alzheimer’s Association, approximately 10% of Americans over 65 have Alzheimer’s disease and many more could be undiagnosed.
Alzheimer ’ s disease The National Institute on Aging (NIA) at the National Institutes of Health (NIH) defines Alzheimer’s as an irreversible, progressive brain disorder that destroys memory and thinking skills. According to the Alzheimer’s Association, approximately 11% of Americans over 65 have Alzheimer’s dementia, and many more could be undiagnosed.
Some researchers suspect that half of the 80 and over population will develop Alzheimer’s (Piedmont Healthcare, (n.d); Alzheimer’s Association, 2021). Alzheimer’s is the third leading cause of death, after heart disease and cancer. (NIA, 2019). The Alzheimer’s crisis is growing and by 2030, World Health Organization (“WHO” 2020), estimates that 55 million people worldwide will have dementia.
Some researchers suspect half of the 80 and over population will develop Alzheimer’s (Alzheimer’s Association, 2023). Alzheimer’s is the third leading cause of death, after heart disease and cancer. (NIA, 2019). The Alzheimer’s crisis is growing, and by 2030, World Health Organization (WHO, 2020) estimates that 55 million people worldwide will have dementia.
IGC-AD1 Studies on Alzheimer ’ s While investigating cannabinoid-based combination therapies, researchers at the University of South Florida (“USF”) discovered the potential for cannabis to play a role in treating Alzheimer’s. The discovery was featured on Dr. Sanjay Gupta’s CNN show Weed 2.
Also linked to Alzheimer’s: ● Metabolism disruption ● Mitochondrial dysfunction ● Neuroinflammation IGC-AD1 Studies on Alzheimer ’ s While investigating cannabinoid-based combination therapies, researchers at the University of South Florida (USF) discovered the potential for cannabis to play a role in treating Alzheimer’s. The discovery was featured on Dr. Sanjay Gupta’s CNN show Weed 2.
Their results were published in Advanced Therapeutics under the title “Naphthalene Monoimide Derivative Ameliorates Amyloid Burden and Cognitive Decline in a Transgenic Mouse Model of Alzheimer’s Disease” on January 28, 2021. On November 11, 2021, Hamsa Biopharma India Pvt. Ltd.
Their results were published in Advanced Therapeutics under the title “Naphthalene Monoimide Derivative Ameliorates Amyloid Burden and Cognitive Decline in a Transgenic Mouse Model of Alzheimer’s Disease” on January 28, 2021.
JNCASR’s research based on Alzheimer’s cell lines identified one lead NMI molecule, TGR-63, from a family of NMI molecules, with the potential to reduce beta amyloid (Aβ) plaques. Further, they demonstrated that the molecule reduces cognitive decline in a transgenic mouse model of Alzheimer’s.
In Alzheimer’s patients, neurotoxicity is linked to beta amyloid (Aβ) plaques and Neuro Fibrillary Tangles (NFT). JNCASR’s research based on Alzheimer’s cell lines identified one lead NMI molecule, TGR-63, from a family of NMI molecules, with the potential to reduce beta amyloid (Aβ) plaques. Further, they demonstrated that the molecule reduces cognitive decline in a transgenic mouse model of Alzheimer’s.
Rationale For IGC-AD1 Phase 2 The rationale for targeting agitation associated with dementia due to Alzheimer’s: Currently, there is no approved medication for agitation associated with dementia in AD, and about 76% of AD patients suffer from agitation as rated by the CMAI (Van der Mussele, et al., 2015).
Rationale For IGC-AD1 Phase 2 The rationale for targeting agitation associated with dementia due to Alzheimer’s: About 76% of AD patients suffer from agitation as rated by the CMAI (Van der Mussele, et al., 2015).
These include Agitation (including “sundown syndrome”), anxiety, disturbance of sleep cycle, depression, inappropriate sexual behavior, disinhibition, and irritability, among others (Lyketsos et al., 2011). These behavioral disturbances not only affect patient’s quality of life but also cause extreme emotional distress for the caregivers.
There is a spectrum of behavioral disorders that can affect patients with AD. These include agitation, anxiety, disturbance of the sleep cycle, depression, inappropriate sexual behavior, disinhibition, and irritability, among others (Lyketsos et al., 2011). These behavioral disturbances not only affect the patient’s quality of life but also cause extreme emotional distress for the caregivers.
Impact on Mitochondria : In a novel and non-obvious finding it was discovered that THC in low doses has the unique property of enhancing mitochondrial functioning in isolated mitochondria obtained from N2a/AβPPswe cells (Cao et al., 2014).
Impact on Mitochondria : In a novel and non-obvious finding, it was discovered that THC in low doses has the unique property of enhancing mitochondrial functioning in isolated mitochondria obtained from N2a/AβPPswe cells (Cao et al., 2014). This finding is contrary to what THC does at higher doses, alluding to a bi-phasic nature of THC.
We also have contract workers and advisors in the U.S., India, Colombia, and Hong Kong. Available Information The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the Securities and Exchange Commission (the “SEC”).
Available Information The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are filed with the Securities and Exchange Commission (the SEC).
This finding is contrary to what THC does at higher doses, alluding to a bi-phasic nature of THC. 6 Table of Contents Results with a mouse model: Cao’s group extended their in vivo study to aged APP/PS1 mice to evaluate THC’s neuroprotective effects on behavioral models. They used a radial arm water maze (RAWM) to test spatial memory.
Results with a mouse model: Cao’s group extended their in vivo study to aged APP/PS1 mice to evaluate THC’s neuroprotective effects on behavioral models. They used a radial arm water maze (RAWM) to test spatial memory.
NPS like agitation, apathy, delusions, hallucinations, and sleep impairment are common accompaniments of dementia. Loss of functionality, including progressive difficulty in performing instrumental and basic activities of daily living are also seen with disease progression (Tang et al., 2019). There is a spectrum of behavioral disorders that can affect patients with AD.
Symptoms of AD depend on the stage of the disease: preclinical, mild, moderate, or severe. NPS like agitation, apathy, delusions, hallucinations, and sleep impairment are common accompaniments of dementia. Loss of functionality, including progressive difficulty in performing instrumental and basic activities of daily living, are also seen with disease progression (Tang et al., 2019).
Al., 2006). NMI Compounds Researchers at the Jawaharlal Nehru Centre for Advanced Scientific Research (“JNCASR”), in India, conducted approximately 10 years of research and discovery work on naphthalene monoimide (“NMI”) compounds and the role of NMI compounds on neurotoxicity associated with Alzheimer’s. In Alzheimer’s patients, neurotoxicity is linked to beta amyloid (Aβ) plaques and Neuro Fibrillary Tangles (NFT).
Al., 2006). 11 Table of Contents NMI Compounds Researchers at the Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR), in India conducted approximately 10 years of research and discovery work on naphthalene monoimide (NMI) compounds and the role of NMI compounds on neurotoxicity associated with Alzheimer’s.
There was minimal revenue from rentals in Fiscal 2022 due to seasonality and COVID-19 pandemic disruptions. Business Strategy The Life Sciences business strategy includes: 1. Subject to FDA approval, developing IGC-AD1 as a drug for treating agitation in dementia due to Alzheimer’s and investigating and developing TGR-63 for the potential treatment of Alzheimer’s disease. 2.
See Item 1A, “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business. Business Strategy The Life Sciences business strategy includes: 1. Subject to FDA approval, developing IGC-AD1 as a drug for treating agitation in dementia due to Alzheimer’s and investigating and developing TGR-63 for the potential treatment of Alzheimer’s disease. 2.
Phase 2 Clinical Trial Update The Company has initiated a protocol titled “A Phase 2, Multi-Center, Double-Blind, Randomized, Placebo- controlled, trial of the safety and efficacy of IGC-AD1 on agitation in participants with dementia due to Alzheimer’s disease”. The protocol is powered at 146 Alzheimer’s patients with half receiving placebo and is a superiority, parallel group study.
In this document, we refer to the trial as Phase 2 and Phase 2B interchangeably. The Company has initiated a Phase 2B protocol titled “A Phase 2, Multi-Center, Double-Blind, Randomized, Placebo-controlled, trial of the safety and efficacy of IGC-AD1 on agitation in participants with dementia due to Alzheimer’s disease”.
Governmental Regulations In the U.S. we are subject to oversight and regulations, for some or all of our activities, by the following agencies: SEC, state regulators, NYSE, FTC, and the FDA. The cannabis plant consists of several strains or varieties. Hemp and Marijuana are both cannabis plants.
General business license; Instituto Nacional de Vigilancia de Medicamentos y Alimentos (INVIMA) Permits; Fondo Nacional De Estupefacientes (FNE) Permits. None. Governmental Regulations In the U.S., we are subject to oversight and regulations, for some or all of our activities, by the following agencies: SEC, state regulators, NYSE, FTC, and the FDA. The cannabis plant consists of several strains or varieties.
Infrastructure segment: The infrastructure industry in India and Hong Kong is highly competitive. Our differentiation is based primarily on price and local and industry knowledge of construction requirements in the regions where we operate.
It is unclear how future FDA guidance and ruling on hemp-based food, beverage, and cosmetic products will impact the market. 2. Infrastructure segment: The infrastructure industry in India and Hong Kong is highly competitive. Our differentiation is based primarily on price and local and industry knowledge of construction requirements in the regions where we operate.
To create and sustain a safe and healthy workplace, we have implemented initiatives designed to address risk evaluation, education and training of employees, use of appropriate personal protective equipment, and compliance with relevant health and safety standards. Employees. As of March 31, 2022, we employed a team of approximately 52 full-time employees in our two segments.
To create and sustain a safe and healthy workplace, we have implemented initiatives designed to address risk evaluation, education and training of employees, use of appropriate personal protective equipment, and compliance with relevant health and safety standards. Environmental, Social, and Governance (ESG) Efforts .
While subject to changes, we expect to conduct the trial at four sites, two in Canada and two in the U.S. The primary end point is agitation in dementia due to Alzheimer’s disease as rated by the Cohen-Mansfield Agitation Inventory (CMAI) over a six-week period.
The primary end point is agitation in dementia due to Alzheimer’s disease as rated by the Cohen-Mansfield Agitation Inventory (CMAI) over a six-week period.
Life Sciences segment: We are developing affordable medical products including products subject to FDA approval, which can help individuals suffering from debilitating diseases like Alzheimer’s. While we face competition from well-funded pharmaceutical companies, our products are differentiated by the use of cannabinoids.
Life Sciences segment : We are developing affordable medical products including products subject to FDA approval, which can help individuals suffering from debilitating diseases like Alzheimer’s. We face competition from well-funded pharmaceutical companies. With our existing research, patent filings, and experienced team, we have an early-mover advantage in cannabinoid-based products to treat the symptoms of Alzheimer’s.
While there can be no guarantee, we expect the Phase 2 trial to take between 12 and 18 months to complete, barring a variety of unknown factors such as a resurgence of COVID and the enforcement of lockdowns and travel restrictions. Symptoms of AD depend on the stage of the disease: preclinical, mild, moderate, or severe.
While there can be no guarantee, we expect the Phase 2 trial to take between 12 and 18 months to complete, barring a variety of unknown factors, such as a resurgence of COVID and the enforcement of lockdowns and travel restrictions. Agitation is a behavioral syndrome characterized by increased, often undirected, motor activity, restlessness, aggressiveness, and emotional distress.
IGC-AD1 is currently being tested as a symptom modifying agent. Subject to further study, research, and development, TGR-63, on the other hand, could give the Company a potential disease modifying agent to expand the Company’s pursuit of a drug that can potentially treat or modify Alzheimer’s.
Subject to further study, research, and development, TGR-63, on the other hand, could give the Company a potential disease modifying agent to expand the Company’s pursuit of a drug that can potentially treat or modify Alzheimer’s. 12 Table of Contents Contract Research Organization (CRO) and Clinical Trial Software The IGC-Pharma Electronic Data Capture system (IGC-EDC) is a secure and user-friendly data management software designed to collect clinical trial data in electronic format.
Marketing Holief™, Sunday Seltzer™ and white label services. 11 Table of Contents We believe developing a drug for either symptoms or as a disease modifying agent has considerable risk due to the need for multi-year trials and FDA approval.
Marketing Holief™, and formulations. 14 Table of Contents We believe developing a drug for either symptoms or as a disease-modifying agent has less risk due to the need for multi-year trials and FDA approval. However, there is a considerable upside and significant value creation to the extent we obtain a first-to-market advantage, of which there can be no assurance.
Impact on Tau Protein : IGC-AD1 Actives lowered the level of phosphorylated Tau (pTau) expression in N2a/APPswe cells in a dose-dependent manner. The mode of action was attributed to the direct interaction of IGC AD1 Actives with GSK3 protein kinase, which lowers pTau expression (Cao et al., 2014).
Impact on Tau Protein : IGC-AD1 Actives lowered the level of phosphorylated Tau (pTau) expression in N2a/AβPPswe cells in a dose-dependent manner.
Impact on neurotoxicity : Analysis on the neurotoxicity at various doses in N2a/APPswe cells after incubation for up to 24 hours showed that the Actives were non-toxic to cells at all doses (Cao et al., 2014).
The mode of action was attributed to the direct interaction of IGC AD1 Actives with GSK3 protein kinase, which lowers pTau expression (Cao et al., 2014). 7 Table of Contents Impact on neurotoxicity : Analysis of the neurotoxicity at various doses in N2a/AβPPswe cells after incubation for up to 24 hours showed that the IGC-AD-1 Actives were non-toxic to cells at all doses (Cao et al., 2014).
We also face competition from companies with experience in wholesaling hemp crude extract and hemp isolate as well as companies that provide white labeling and tolling services. It is unclear how future FDA guidance and ruling on hemp-based CBD-infused food, beverage, and cosmetic products will impact the market. 2.
Our wellness and lifestyle products compete with multiple well-established companies, in the food, beverage, and skincare industries. We also face competition from companies with experience in wholesaling hemp crude extract and hemp isolate as well as companies that provide white labeling and tolling services.
We believe that additional investment in clinical trials, research, and development (“R&D”), facilities, marketing, advertising, and acquisition of complementary products and businesses will be critical to ongoing growth of the Life Sciences segment. These investments will fuel the development and delivery of innovative products that drive positive patient and customer experiences.
We believe that building an online community that brings women together can create brand equity, loyalty, generate revenue, and drive valuation. We believe that additional investment in clinical trials, research, and development (R&D), facilities, marketing, advertising, and acquisition of complementary products and businesses will be critical to the ongoing growth of the Life Sciences segment.
In addition, the COVID-19 pandemic could continue to affect our operations and result in lower revenue and/or higher costs in Fiscal 2023. Infrastructure segment In Fiscal 2022, our infrastructure business focused on projects in the state of Kerala. While executing this construction project, we took advantage of other opportunities to generate revenue from our infrastructure assets.
In Fiscal 2023, our sales and suppliers were concentrated, which represents some risk. Two customers accounted for over 10% of sales. Infrastructure segment In Fiscal 2023, our infrastructure business focused on projects in the state of Kerala. While executing this construction project, we took advantage of other opportunities to generate revenue from our infrastructure assets.
We hope to leverage our R&D and intellectual property to develop ground-breaking, science-based products that are proven effective through clinical trials, subject to FDA approval. We believe this strategy can improve our existing products and lead to the creation of new hemp-based products that can provide treatment options for multiple conditions, symptoms, and side effects.
These investments will fuel the development and delivery of innovative products that drive positive patient and customer experiences. We hope to leverage our R&D and intellectual property to develop ground-breaking, science-based products that are proven effective through clinical trials, subject to FDA approval.
The word “Holief” was created by combining the words “holistic” and “relief.” The brand includes multiple, hemp-based CBD-infused products for women. Holief™ includes a patented formulation with menthol and CBD, for treating the pain and symptoms of Premenstrual Syndrome (PMS) and period cramps. These products provide an all-natural alternative to opioids and other pain medications.
Holief™ includes a patented formulation for treating the pain and symptoms of Premenstrual Syndrome (PMS) and period cramps. These products provide a natural alternative to pain medications such as opioids. The products are available online and through Amazon and other online channels.
Pursuant to the agreement, IGC (through Hamsa Biopharma) acquired exclusive global rights to the molecule, which it intends to pursue as a drug development candidate, subject to further study, research, and development. 9 Table of Contents Rationale for the Acquisition of TGR-63 As described above, IGC is currently engaged in human trials with IGC-AD1 that targets certain symptoms associated with dementia in Alzheimer’s.
Rationale for the Acquisition of TGR-63 As described above, IGC is currently engaged in human trials with IGC-AD1 that targets certain symptoms associated with dementia in Alzheimer’s. IGC-AD1 is currently being tested as a symptom modifying agent.
Our Holief™ strategy includes expanding the line of products and developing online services that connect women with healthcare professionals who can help with PMS and dysmenorrhea. Building an online community that brings women together can create brand equity and loyalty.
If we were to obtain a first-to-market advantage, such an advantage could result in significant growth if and when an approved drug launches. Our Holief™ formulation strategy includes expanding the line of products and formulations, and developing online services that connect women with healthcare professionals who can help with PMS and dysmenorrhea.
The completion of outstanding items in the agreement occurred on May 10, 2022, and the agreement with JNCASR was filed on Form 8K on May 12, 2022.
The completion of outstanding items in the agreement occurred on May 10, 2022, and the agreement with JNCASR was filed on Form 8K on May 12, 2022. Pursuant to the agreement, IGC (through Hamsa Biopharma) acquired exclusive global rights to the molecule, which it intends to pursue as a drug development candidate, subject to further study, research, and development.
In addition, the trial will evaluate the impact of CYP450 polymorphisms and specifically CYP2C9 on each of the NPS and assess any reductions in psychotropic drugs, among others. Each participant will receive two doses of IGC-AD1 (b.i.d.) or two doses of placebo per day for six-weeks.
We seek to understand how various versions of the enzyme act on IGC-AD1. Each participant will receive two doses of IGC-AD1 (b.i.d.) or two doses of placebo per day for six weeks.
Infrastructure segment The Company’s infrastructure business has been operating since 2008, it includes: (i) Execution of Construction Contracts – The Company is executing a $1.2 million road-building contract in Kerala, India and was recently awarded another road reconstruction project for $289 thousand; and (ii) Rental of Heavy Construction Equipment – We rent equipment, such as a motor grader and rollers, to construction contractors.
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 second molecule, TGR-63, is an enzyme inhibitor that has been shown, in pre-clinical trials, to reduce neurotoxicity in Alzheimer’s cell lines. Neurotoxicity causes cell dysfunction and death in Alzheimer’s disease. If shown to be efficacious in halting this process, this inhibitor has the potential to treat Alzheimer’s disease by ameliorating Aβ plaques.
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 created a women’s wellness brand, Holief™ available through online channels that is compliant with relevant federal, state, and local laws and regulations.
ITEM 1. BUSINESS Corporate History IGC has two business segments: Infrastructure and Life Sciences. We are a Maryland corporation established in 2005 with a fiscal year that is the 52- or 53-week period that ends on March 31. Infrastructure Segment The India based infrastructure segment involves the execution of construction contracts.
ITEM 1. BUSINESS Overview IGC Pharma, Inc., formerly known as India Globalization Capital Inc., is a clinical-stage pharmaceutical company with a diversified revenue model that develops both prescription drugs and over-the-counter (OTC) products. IGC is a Maryland corporation established in 2005 with a fiscal year that is a 52- or 53-week period that ends on March 31.
Our Life Sciences revenue is less than 1% of the relevant global market, which implies tremendous opportunity for growth. We also plan to market these brands to the fast-growing U.S. Hispanic and Latino market.
Markets and Distribution Life Sciences segment There is a growing awareness around PMS, dysmenorrhea, and menopause. Approximately 31.3 million (Statista, 2021) women in America suffer from dysmenorrhea and PMS. Our Life Sciences revenue is less than 1% of the relevant global market, which implies a tremendous opportunity for growth.
Life Sciences Segment Biopharmaceutical : Since 2014, this part of our business has focused primarily on the potential uses of phytocannabinoids, including Tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”), in combination with other compounds to treat multiple diseases, including Alzheimer’s.
The Company also has a line of consumer product such as Holief TM , which includes gummies and pain relief creams for women experiencing PMS and menstrual cramps, all currently available for purchase. 5 Table of Contents Pharmaceutical : Since 2014, the Company has focused primarily on the potential uses of phytocannabinoids, including Tetrahydrocannabinol (THC) and Cannabidiol (CBD), in combination with other compounds to treat multiple diseases, including Alzheimer’s.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny claims of intellectual property infringement, even those without merit, may require us to: ● defend against infringement claims which are expensive and time consuming; ● cease making, licensing, or using, either temporarily or permanently, products that incorporate the challenged intellectual property; ● re-design, re-engineer, or re-brand our products or packaging; or ● enter into royalty or licensing agreements to obtain the right to use a third party’s intellectual property. 26 Table of Contents In the event of claims by third parties for infringement of intellectual property rights we license from third parties under wholesale license agreements, we could be liable for costs of defending allegations of infringement, and there are no assurances the licensors will either adequately defend the licensed intellectual property rights or that they would prevail in the related litigation.
Biggest changeAny claims of intellectual property infringement, even those without merit, may require us to: ● defend against infringement claims which are expensive and time consuming; ● cease making, licensing, or using, either temporarily or permanently, products that incorporate the challenged intellectual property; ● re-design, re-engineer, or re-brand our products or packaging; or ● enter into royalty or licensing agreements to obtain the right to use a third party’s intellectual property.
The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty regarding demand for some or all the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.
The financial condition of these resellers could weaken, these resellers could stop distributing the Company’s products, or uncertainty regarding demand for some or all of the Company’s products could cause resellers to reduce their ordering and marketing of the Company’s products.
Any transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition, and prospects if we are unable to execute on the planned objectives or capitalize on the relationship in the manner that was originally contemplated.
Any transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition, and prospects if we are unable to execute the planned objectives or capitalize on the relationship in the manner that was originally contemplated.
The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, financing, or clinical trial activities or on healthcare systems, or the global economy as a whole.
The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, financing, clinical trial activities or on healthcare systems, or the global economy as a whole.
Our operations are subject to numerous laws and regulations of the U.S., India, Colombia, and Hong Kong relating to the protection of the public and necessary disclosures regarding financial services. Liability under these laws involves inherent uncertainties. Violations of financial regulation laws are subject to civil, and, in some cases, criminal sanctions.
Our operations are subject to numerous laws and regulations in the U.S., India, Colombia, and Hong Kong relating to the protection of the public and necessary disclosures regarding financial services. Liability under these laws involves inherent uncertainties. Violations of financial regulation laws are subject to civil, and, in some cases, criminal sanctions.
Factors that may contribute to the variability of quarterly revenue, operating results or profitability include: ● Fluctuations in revenue due to seasonality of the marketplace, which results in uneven revenue and operating results over the year; ● Additions and departures of key personnel; ● Strategic decisions made by us and our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, and changes in business strategy; and ● Economic conditions, including but not limited to, the adverse impact on operating results due to the COVID-19 pandemic.
Factors that may contribute to the variability of quarterly revenue, operating results, or profitability include: ● Fluctuations in revenue due to the seasonality of the marketplace, which results in uneven revenue and operating results over the year; ● Additions and departures of key personnel; ● Strategic decisions made by us and our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, and changes in business strategy; and ● Economic conditions, including but not limited to the adverse impact on operating results due to the COVID-19 pandemic.
It may also be used for clinical trials, share repurchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes.
It may also be used for clinical trials, share repurchases, debt repayments, and investments, including but not limited to, mutual funds, treasury bonds, cryptocurrencies, and other asset classes.
If we are unable to comply with manufacturing regulations, we may be subject to fines, unanticipated compliance expenses, recall or seizure of any approved products, total or partial suspension of production, and/or enforcement actions, including injunctions, and criminal or civil prosecution. These possible sanctions would adversely affect our business, results of operations, and financial condition.
If we are unable to comply with manufacturing regulations, we may be subject to fines, unanticipated compliance expenses, recall or seizure of any approved products, total or partial suspension of production, and/or enforcement actions, including injunctions and criminal or civil prosecution. These possible sanctions would adversely affect our business, the results of operations, and financial condition.
Any of these occurrences may harm our business, financial condition, and prospects significantly. 24 Table of Contents Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including: ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; ● regulatory authorities may withdraw approvals of such product; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients; ● we could be sued and held liable for harm caused to patients; ● the product may become less competitive; and ● our reputation may suffer.
Any of these occurrences may harm our business, financial condition, and prospects significantly. 27 Table of Contents Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including: ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; ● regulatory authorities may withdraw approvals of such product; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients; ● we could be sued and held liable for harm caused to patients; ● the product may become less competitive; and ● our reputation may suffer.
Patient enrollment and retention in clinical trials depends on many factors, including: ● the patient eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature of the trial protocol; ● the existing body of safety and efficacy data with respect to the product candidate; ● the proximity of patients to clinical sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; ● competing clinical trials being conducted by other companies or institutions; ● our ability to maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
Patient enrollment and retention in clinical trials depend on many factors, including: ● the patient eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature of the trial protocol; ● the existing body of safety and efficacy data with respect to the product candidate; ● the proximity of patients to clinical sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; ● competing clinical trials being conducted by other companies or institutions; ● our ability to maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
For diseases like Alzheimer’s disease, the FDA has stated that one single Phase 3 trial is adequate for approval if it demonstrates robust and unquestionable efficacy. However, the circumstances under which a single adequate and controlled study can be used as the sole basis of demonstrating efficacy of a drug are exceptional.
For diseases like Alzheimer’s, the FDA has stated that one single Phase 3 trial is adequate for approval if it demonstrates robust and unquestionable efficacy. However, the circumstances under which a single adequate and controlled study can be used as the sole basis for demonstrating the efficacy of a drug are exceptional.
The Drug Enforcement Administration ( “ DEA ” ) interim final rule related to statutory amendments to the Controlled Substances Act made by the Agriculture Improvement Act of 2018 ( “ AIA ” ), regarding the scope of regulatory controls over marijuana, tetrahydrocannabinols and other related constituents may have an adverse impact on our Company.
The Drug Enforcement Administration (DEA) interim final rule related to statutory amendments to the Controlled Substances Act made by the Agriculture Improvement Act of 2018 (AIA) regarding the scope of regulatory controls over marijuana, tetrahydrocannabinols, and other related constituents may have an adverse impact on our Company.
If we underestimate our customers’ future requirements, we may have inadequate inventory, which could interrupt and delay delivery of our products to our customers and could cause our revenues to decline. If any of these events occur, they could negatively impact our revenues, which could prevent us from achieving or sustaining profitability.
If we underestimate our customers’ future requirements, we may have inadequate inventory, which could interrupt and delay the delivery of our products to our customers and could cause our revenues to decline. If any of these events occur, they could negatively impact our revenues, which could prevent us from achieving or sustaining profitability.
As a result, the control share acquisition statute could discourage offers to acquire our common stock and could increase the difficulty of completing an offer. 30 Table of Contents Board of Directors The Maryland General Corporation Law provides that a Maryland corporation which is subject to the Exchange Act and has at least three outside directors (who are not affiliated with an acquirer of the company) under certain circumstances may elect by resolution of the board of directors or by amendment of its charter or bylaws to be subject to statutory corporate governance provisions that may be inconsistent with the corporation’s charter and bylaws.
As a result, the control share acquisition statute could discourage offers to acquire our common stock and could increase the difficulty of completing an offer. 34 Table of Contents Board of Directors The Maryland General Corporation Law provides that a Maryland corporation which is subject to the Exchange Act and has at least three outside directors (who are not affiliated with an acquirer of the company) under certain circumstances may elect by resolution of the board of directors or by amendment of its charter or bylaws to be subject to statutory corporate governance provisions that may be inconsistent with the corporation’s charter and bylaws.
Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we have agreements governing their committed activities, we have limited influence over their actual performance. 22 Table of Contents The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for IGC-AD1 or any other product candidates, our business will be substantially harmed.
Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we have agreements governing their committed activities, we have limited influence over their actual performance. 25 Table of Contents The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for IGC-AD1 or any other product candidates, our business will be substantially harmed.
Effective August 21, 2020, the interim rule to align DEA regulations in response to hemp legalization under the 2018 Farm Bill became effective. In order to meet the AIA’s definition of hemp, and thus qualify for the exception in the definition of marijuana, a cannabis-derived product must itself contain 0.3% or less delta-9-Tetrahydrocannabinol (“THC”) on a dry weight basis.
Effective August 21, 2020, the interim rule to align DEA regulations in response to hemp legalization under the 2018 Farm Bill became effective. In order to meet the AIA’s definition of hemp and thus qualify for the exception in the definition of marijuana, a cannabis-derived product must itself contain 0.3% or less delta-9-Tetrahydrocannabinol (THC) on a dry weight basis.
ITEM 1A. RISK FACTORS You should carefully consider the following risk factors, together with all other information included in this report in evaluating the Company and our common stock. If any of the following risks and uncertainties develops into actual events, they could have a material adverse effect on our business, financial condition, or results of operations.
ITEM 1A. RISK FACTORS You should carefully consider the following risk factors, together with all other information included in this report, in evaluating the Company and our common stock. If any of the following risks and uncertainties develop into actual events, they could have a material adverse effect on our business, financial condition, or results of operations.
Clinical trials can be delayed or terminated for a variety of reasons, including but not limited to: ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory approval to commence a trial; ● reaching an agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining Institutional Review Board (“IRB”) approval at each site, or Independent Ethics Committee (“IEC”) approval at sites outside the United States; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● having patients complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● adding a sufficient number of clinical trial sites; or ● manufacturing sufficient quantities of product candidate for use in clinical trials.
Clinical trials can be delayed or terminated for a variety of reasons, including but not limited to: ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory approval to commence a trial; ● reaching an agreement on acceptable terms with prospective contract research organizations (CROs), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining Institutional Review Board (IRB) approval at each site, or Independent Ethics Committee (IEC) approval at sites outside the United States; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● having patients complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● adding a sufficient number of clinical trial sites; or ● manufacturing sufficient quantities of the product candidate for use in clinical trials.
Efforts by biopharmaceutical and pharmaceutical companies in treating Alzheimer’s Disease have seen limited success in drug development, and there are no FDA-approved disease modifying therapeutic options available for patients with Alzheimer’s Disease. We cannot be certain that our approach will lead to the development of approvable or marketable products.
Efforts by biopharmaceutical and pharmaceutical companies in treating Alzheimer’s Disease have seen limited success in drug development, and there is no FDA-approved disease modifying therapeutic options available for patients with Alzheimer’s Disease. We cannot be certain that our approach will lead to the development of approvable or marketable products.
The Company established a Good Manufacturing Practice (“GMP”) certified processing facility in the State of Washington for processes such as: a) production of products such as lotions, creams, and oils, among others, to support our products and to support white labeling; b) extraction of hemp into crude oil; and c) distillation of crude oil into hemp extracts.
The Company established a Good Manufacturing Practice (GMP) certified processing facility in the State of Washington for processes such as: a) production of products such as lotions, creams, and oils, among others, to support our products and to support white labeling; b) extraction of hemp into crude oil; and c) distillation of crude oil into hemp extracts.
Although, six patents have been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO. If we are unsuccessful in registering patents, our ability to create a valuable line of products can be adversely affected.
Although nine patents have been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO. If we are unsuccessful in registering patents, our ability to create a valuable line of products can be adversely affected.
We could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs or IECs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board (“DSMB”), for such trial or the FDA or other regulatory authorities.
We could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs or IECs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board (DSMB), for such trial or the FDA or other regulatory authorities.
Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates. 23 Table of Contents We have concentrated our research and development efforts on the treatment of Alzheimer ’ s Disease, which has seen limited success in drug development.
Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates. 26 Table of Contents We have concentrated our research and development efforts on the treatment of Alzheimer ’ s Disease, which has seen limited success in drug development.
Government financing and economic pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria (e.g., through health technology assessments) or other means of cost control. We continue to monitor the global trade environment and potential trade conflicts and impediments that could impact our business.
Government financing and economic pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria (e.g., through health technology assessments) or other means of cost control. 23 Table of Contents We continue to monitor the global trade environment and potential trade conflicts and impediments that could impact our business.
These transactions include those between a Maryland corporation and the following persons (a “Specified Person”): An interested stockholder, who is defined as any person (other than a subsidiary) who beneficially owns 10% or more of the corporation’s voting stock, or who is an affiliate or an associate of the corporation who, at any time within a two-year period prior to the transaction, was the beneficial owner of 10% or more of the voting power of the corporation’s voting stock; or an affiliate of an interested stockholder.
These transactions include those between a Maryland corporation and the following persons (a Specified Person): An interested stockholder, who is defined as any person (other than a subsidiary) who beneficially owns 10% or more of the corporation’s voting stock, or who is an affiliate or an associate of the corporation who, at any time within a two-year period prior to the transaction, was the beneficial owner of 10% or more of the voting power of the corporation’s voting stock; or an affiliate of an interested stockholder.
Because the Company’s markets are volatile, competitive, and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of components or products, or not fully utilize firm purchase commitments. Our accounting personnel may make unintentional errors.
Because the Company’s markets are volatile, competitive, and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of components or products, or not fully utilize firm purchase commitments. 31 Table of Contents Our accounting personnel may make unintentional errors.
There can also be no assurance that any insurance coverage we take will be adequate or that we will prevail in any future cases. We can provide no assurance that we will be able to obtain liability insurance that would protect us from any such lawsuits.
There can also be no assurance that any insurance coverage we have will be adequate or that we will prevail in any future cases. We can provide no assurance that we will be able to obtain liability insurance that would protect us from any such lawsuits.
Due to the complexity of the processes used to manufacture our product candidates, we may be unable to initially or continue to pass federal, state, or international regulatory inspections in a cost-effective manner.
Due to the complexity of the processes used to manufacture our product candidates, we may be unable to initiate or continue to pass federal, state, or international regulatory inspections in a cost-effective manner.
Any one of these factors could slow or halt use and handling of cannabinoids in the U.S. or in other jurisdictions, which would negatively impact our development of phytocannabinoids-based therapies and our ability to test and productize these therapies. Many U.S. state laws conflict with the federal Controlled Substances Act.
Any one of these factors could slow or halt the use and handling of cannabinoids in the U.S. or in other jurisdictions, which would negatively impact our development of phytocannabinoids-based therapies and our ability to test and productize these therapies. 24 Table of Contents Many U.S. state laws conflict with the federal Controlled Substances Act.
Any modification, amendment, or reformulation of information contained in such reports could be significant and result in material liability to us and have a material and adverse impact on the trading price of our common stock. We do not anticipate declaring any cash dividends on our common stock.
Any modification, amendment, or reformulation of information contained in such reports could be significant and result in material liability to us and have a material and adverse impact on the trading price of our common stock. 33 Table of Contents We do not anticipate declaring any cash dividends on our common stock.
This in turn may have a material and adverse impact on the trading price of our common stock. We may be unable to protect our intellectual property rights and/or intellectual property rights licensed to us and may be subject to intellectual property litigation and infringement claims by third parties.
This in turn may have a material and adverse impact on the trading price of our common stock. 29 Table of Contents We may be unable to protect our intellectual property rights and/or intellectual property rights licensed to us and may be subject to intellectual property litigation and infringement claims by third parties.
If we raise funds by issuing additional securities in the future or stock options to purchase our common stock are exercised, the newly issued shares will also dilute your percentage ownership in our Company. 28 Table of Contents Our common stock price has fluctuated considerably and has recently reached our highest price levels, which may not be sustained.
If we raise funds by issuing additional securities in the future or stock options to purchase our common stock are exercised, the newly issued shares will also dilute your percentage ownership in our Company. Our common stock price has fluctuated considerably and has recently reached our highest price levels, which may not be sustained.
We may be subject to various privacy and security regulations, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by The Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations, including the related final published omnibus rule.
We may be subject to various privacy and security regulations, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by The Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, including the related final published omnibus rule.
The market price of shares of our common stock has fluctuated substantially in recent years and is likely to fluctuate significantly from its current level. Our common stock has also been volatile, with our 52-week closing price range being at a low of $0.74 and a high of $4.65 per share.
The market price of shares of our common stock has fluctuated substantially in recent years and is likely to fluctuate significantly from its current level. Our common stock has also been volatile, with our 52-week closing price range being at a low of $0.31 and a high of $0.94 per share.
The continued impact of the ongoing COVID-19 pandemic on the Company as well as on the regions in which we do business cannot be predicted. 20 Table of Contents Global Operations We operate on a global scale and could be affected by currency fluctuations, capital and exchange controls, global economic conditions including inflation, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, trade regulations, tax laws and regulations, and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including but not limited to the current conflict between Russia and Ukraine, terrorist activity, unstable governments, and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.
Global Operations We operate on a global scale and could be affected by currency fluctuations, capital, and exchange controls, global economic conditions including inflation, expropriation, and other restrictive government actions, changes in intellectual property legal protections and remedies, trade regulations, tax laws and regulations, and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including but not limited to the current conflict between Russia and Ukraine, terrorist activity, unstable governments, and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.
All our data is stored on the cloud on multiple servers which helps us mitigate the overall risk of losing data. We are in the process of implementing tighter cybersecurity measures to safeguard against hackers.
All our data is stored on the cloud on multiple servers which helps us mitigate the overall risk of losing data. We are in the process of implementing tighter cybersecurity measures to safeguard against hackers. Complying with these security measures and compliances would incur further costs.
We may not successfully register the provisional patents with the USPTO. We have filed fifteen (15) provisional patents with the USPTO, in the combination therapy space, for the indications of pain, Alzheimer’s, medical refractory epilepsy, eating disorders, and cachexia as part of our intellectual property strategy focused on the phytocannabinoid-based health care industry.
We may not successfully register the provisional patents with the USPTO. We have filed forty-one (41) patent applications with the USPTO and also in other different countries, in the combination therapy space, for the indications of pain, Alzheimer’s, medical refractory epilepsy, eating disorders, and Tourette syndrome as part of our intellectual property strategy focused on the phytocannabinoid-based health care industry.
Complying with these security measures and compliances would incur further costs. 27 Table of Contents The states in which we and our distributors and suppliers and their service providers operate require that we maintain certain information about our customers and transactions. If we fail to maintain such information, we could be in violation of state laws.
The states in which we and our distributors and suppliers and their service providers operate require that we maintain certain information about our customers and transactions. If we fail to maintain such information, we could be in violation of state laws.
Our business relies heavily on our management team and any unexpected loss of key officers may adversely affect our operations. The continued success of our business is largely dependent on the continued services of our key employees. The loss of the services of certain key personnel, without adequate replacement, could have an adverse effect on our performance.
The continued success of our business is largely dependent on the continued services of our key employees. The loss of the services of certain key personnel, without adequate replacement, could have an adverse effect on our performance.
In that case, the trading price of our common stock and other securities also could be adversely affected. We make various statements in this section, which constitute “ forward-looking statements. ” See “ Forward-Looking Statements. ” Risks Related to Our Business, Industry and Operations: Our cannabinoid strategy makes it difficult to raise money as a public company.
In that case, the trading price of our common stock and other securities also could be adversely affected. We make various statements in this section, which constitute “ forward-looking statements. ” See “ Forward-Looking Statements. ” Risks Related to Our Business, Industry, and Operations: We have incurred significant losses and have an accumulated deficit.
Further, a cannabis derivative, extract or product that exceeds the 0.3% THC limit is a Schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less THC on a dry weight basis. While we strive to ensure compliance, further tightening of these definitions may have an adverse impact on our products.
Further, a cannabis derivative, extract, or product that exceeds the 0.3% THC limit is a Schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less THC on a dry weight basis.
Continued development in the phytocannabinoids industry is dependent upon continued state legislative authorization of cannabinoids as well as legislation and regulatory policy at the federal level. The federal Controlled Substances Act currently makes cannabinoids use and possession illegal on a national level. While there may be ample public support for legislative authorization, numerous factors impact the legislative process.
The federal Controlled Substances Act currently makes cannabinoids use and possession illegal on a national level. While there may be ample public support for legislative authorization, numerous factors impact the legislative process.
We do not have redundancy for all our systems; many of our critical applications reside in only one of our data centers, and our disaster recovery planning may not account for all eventualities. These facts could cause reputational harm, loss of customers, or loss of future business, thereby reducing our revenue.
We do not have redundancy for all our systems; many of our critical applications reside in only one of our data centers, and our disaster recovery planning may not account for all eventualities.
We have never declared or paid cash dividends on our common stock and do not plan to pay any cash dividends in the near future.
We have never declared or paid cash dividends on our common stock and do not plan to pay any cash dividends in the near future. Our current policy is to retain all funds and earnings for use in the operation and expansion of our business.
No assurance can be given that we can raise any such financing and such financing could be dilutive to our shareholders. 19 Table of Contents We may engage in strategic transactions that could impact our liquidity, increase our expenses, and present significant distractions to our management, and which ultimately may not be successful.
We may engage in strategic transactions that could impact our liquidity, increase our expenses, and present significant distractions to our management, and which ultimately may not be successful.
Marijuana is classified as a cannabis plant that has THC above 0.3% by dry weight. Both marijuana and hemp produce other cannabinoids such as CBD. CBD mentioned in the context of products, refers to hemp extracts naturally rich in cannabinoids like CBD, but with 0.3% or less THC by dry weight.
CBD, mentioned in the context of products, refers to hemp extracts naturally rich in cannabinoids like CBD, but with 0.3% or less THC by dry weight.
Marijuana and hemp plants are both the same species, the dioecious plant Cannabis sativa L. Most countries differentiate hemp from marijuana by the amount of THC. Under the 2018 Farm Bill, hemp is classified as a cannabis plant that has 0.3% or less THC by dry weight.
Under the 2018 Farm Bill, hemp is classified as a cannabis plant that has 0.3% or less THC by dry weight. Marijuana is classified as a cannabis plant that has THC above 0.3% by dry weight. Both marijuana and hemp produce other cannabinoids, such as CBD.
Our current policy is to retain all funds and earnings for use in the operation and expansion of our business. 29 Table of Contents Maryland anti-takeover provisions and certain anti-takeover effects of our Charter and Bylaws may inhibit a takeover at a premium price that may be beneficial to our stockholders.
Maryland anti-takeover provisions and certain anti-takeover effects of our Charter and Bylaws may inhibit a takeover at a premium price that may be beneficial to our stockholders.
The Company depends on the performance of carriers, wholesalers, retailers, and other resellers. The Company distributes its products through wholesalers, retailers, and resellers, many of whom may distribute products from competing manufacturers.
While we strive to ensure compliance, further tightening of these definitions may have an adverse impact on our products. 22 Table of Contents The Company depends on the performance of carriers, wholesalers, retailers, and other resellers. The Company distributes its products through wholesalers, retailers, and resellers, many of whom may distribute products from competing manufacturers.
Our suppliers and distributors and their third-party service providers hold customer data, some of which is hosted in third-party facilities. A security incident or cybersecurity attack at those facilities or ours may compromise the confidentiality, integrity, or availability of customer data.
A security incident or cybersecurity attack at those facilities or ours may compromise the confidentiality, integrity, or availability of customer data.
Our revenue decreased and we have a history of operating losses and there can be no assurance that we can again achieve or maintain profitability. Our revenue declined from Fiscal 2021 to Fiscal 2022. Our short-term focus is to gain market share for our Life Sciences segment. However, we have had a history of operating losses.
We have had a history of operating losses. For Fiscal 2023 and Fiscal 2022, we had a net loss of approximately $11.5 million and $15 million, respectively. Our revenue increased from Fiscal 2022 to Fiscal 2023. Our short-term focus is to gain market share for our Life Sciences segment.
And the legal fees necessary to defend against multiple lawsuits can be significant, impacting the Company’s overall bottom line when not covered by insurance or where the fees exceed the Company’s insurance policy limits. 21 Table of Contents Our Company is in a highly regulated industry. Significant and unforeseen changes in policy may have material impacts on our business.
In the event that we are not covered by insurance, our management could spend significant time and resources addressing any such issues. And the legal fees necessary to defend against multiple lawsuits can be significant, impacting the Company’s overall bottom line when not covered by insurance or where the fees exceed the Company’s insurance policy limits.
Failure to supply our partners with commercial products may lead to adverse consequences. 25 Table of Contents Currency fluctuations may reduce our assets and profitability. We have assets located in foreign countries that are valued in foreign currencies. Fluctuation of the U.S. dollar relative to the foreign currency may adversely affect our assets and profit.
We have assets located in foreign countries that are valued in foreign currencies. Fluctuation of the U.S. dollar relative to the foreign currency may adversely affect our assets and profit. Our business relies heavily on our management team, and any unexpected loss of key officers may adversely affect our operations.
For Fiscal 2022 and Fiscal 2021, we had a net loss of approximately $15 million and $8.8 million, respectively. Accordingly, there can be no guarantee that our efforts will be successful. If we continue to have losses, we will be required to seek additional financing.
Accordingly, there can be no guarantee that our efforts will be successful. If our revenues do not grow or if our operating expenses continue to increase, we may not be able to become profitable, and the market price of our common stock could decline. If we continue to have losses, we will be required to seek additional financing.
For more information, please see Item 9A, “Controls and Procedures.” Risks Related to ownership of our common stock: Future sales of common stock by us could cause our stock price to decline and dilute your ownership in our Company.
The continued impact of the ongoing COVID-19 pandemic on the Company as well as on the regions in which we do business cannot be predicted. 32 Table of Contents Risks Related to ownership of our common stock: Future sales of common stock by us could cause our stock price to decline and dilute your ownership in our Company.
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A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and operations. The outbreak of COVID-19 has affected most of the world, including the U.S., South America, European and Asian countries. On March 11, 2020, the World Health Organization declared the outbreak a pandemic.
Added
If we cannot achieve profitability, the market price of our common stock could decline significantly. As of March 31, 2023, we had cash and cash equivalents of $3.2 million and working capital of $4.6 million compared to cash and cash equivalents of $10.5 million and working capital of $12.7 million as of March 31, 2022, for continuing operations.
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In the event that we are not covered by insurance, our management could expend significant time and resources addressing any such issues.
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No assurance can be given that we can raise any such financing, and such financing could be dilutive to our shareholders. Our cannabinoid strategy makes it difficult to raise money as a public company. Marijuana and hemp plants are both the same species, the dioecious plant Cannabis sativa L. Most countries differentiate hemp from marijuana by the amount of THC.
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Our Company is in a highly regulated industry. Significant and unforeseen changes in policy may have material impacts on our business. Continued development in the phytocannabinoids industry is dependent upon continued state legislative authorization of cannabinoids as well as legislation and regulatory policy at the federal level.
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Failure to supply our partners with commercial products may lead to adverse consequences. 28 Table of Contents Climate change concerns could disrupt our businesses, adversely affect client activity levels, adversely affect the creditworthiness of our counterparties and damage our reputation.
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Climate change may cause extreme weather events that, among other things, could damage our facilities and equipment, injure our employees, disrupt operations at one or more of our primary locations, negatively affect our ability to service and interact with our clients, and adversely affect the value of our assets.
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Any of these events may increase our costs including our costs to insure against these events. Climate change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase the credit exposures to those clients.
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Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or exacerbate, climate change.
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We also may be negatively impacted by any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.
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New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees, and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products. Currency fluctuations may reduce our assets and profitability.
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In the event of claims by third parties for infringement of intellectual property rights we license from third parties under wholesale license agreements, we could be liable for costs of defending allegations of infringement, and there are no assurances the licensors will either adequately defend the licensed intellectual property rights or that they would prevail in the related litigation.
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These facts could cause reputational harm, loss of customers, or loss of future business, thereby reducing our revenue. 30 Table of Contents Our suppliers and distributors and their third-party service providers hold customer data, some of which is hosted in third-party facilities.
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For more information, please see Item 9A, “Controls and Procedures.” The Company is subject to complex and changing laws and regulations worldwide related to climate change and ESG initiatives, which expose the Company to potential liabilities, increased costs, and other adverse effects on the Company ’ s business. We are subject to transitional and physical risks related to climate change.
Added
Transitional risks include, for example, a disorderly global transition away from fossil fuels that may result in increased energy prices; customer preference for low or no-carbon products; stakeholder pressure to decarbonize assets; or new legal or regulatory requirements that result in new or expanded carbon pricing, taxes, restrictions on greenhouse gas emissions, and increased greenhouse gas disclosure and transparency.
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These risks could increase operating costs, including the cost of our electricity and energy use, or other compliance costs. Physical risks to our operations include water stress and drought; flooding and storm surge; wildfires; extreme temperatures and storms, which could impact pharmaceutical production, increase costs, or disrupt supply chains of medicines for patients.
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Our supply chain is likely subject to these same transitional and physical risks and would likely pass along any increased costs to us. We do not anticipate that these risks will have a material financial impact on the Company in the near term.
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Governmental authorities, non-governmental organizations, customers, investors, employees, and other stakeholders are increasingly sensitive to ESG matters, such as equitable access to medicines and vaccines, product quality and safety, diversity, equity and inclusion, environmental stewardship, support for local communities, value chain environmental and social due diligence, corporate governance, and transparency, and addressing human capital factors in our operations.
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This focus on ESG matters may lead to new expectations or requirements that could result in increased costs associated with research, development, manufacture, or distribution of our products. Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for companies to establish validated Net Zero targets or offer more sustainable products.
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While we strive to improve our ESG performance and meet our voluntary goals, if we do not meet, or are perceived not to meet, our goals or other stakeholder expectations in key ESG areas, we risk negative stakeholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, reduced demand for our products or other negative impacts on our business and operations.
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While we monitor a broad range of ESG matters, we cannot be certain that we will manage such matters successfully, or that we will successfully meet the expectations of investors, employees, consumers, governments, and other stakeholders. A pandemic, epidemic, or outbreak of infectious disease, such as COVID-19, may materially and adversely affect our business and operations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company believes its existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conducting of its business.
Biggest changeIn addition, we own and have short-term lease facilities in the U.S. and India that are used for sales, storage accounting, management, and R&D. We own approximately 5 acres of land in India. The Company believes its existing facilities and equipment, which are used by all reportable segments, are in good operating condition and suitable for conducting its business.
ITEM 2. PROPERTIES Our corporate headquarters is located in Potomac, Maryland. We own property of approximately 40,000 square feet that is used for general management and R&D operations. In addition, we are leasing, through December 2025, approximately 16,000 square feet in Vancouver, Washington for manufacturing, sales, and distribution of our Life Sciences segment products and services.
ITEM 2. PROPERTIES Our corporate headquarters is located in Potomac, Maryland. We own approximately 40,000 square feet of property used for general management and R&D operations. In addition, we are leasing, through December 2025, approximately 16,000 square feet in Vancouver, Washington, for manufacturing, sales, and distribution of our Life Sciences segment products and services.
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In Puerto Rico, we own property of approximately 1,355 square feet that we use primarily for medical trials and related operations. In addition, we own and have short-term lease facilities in the U.S., and India that are used for sales, storage accounting, management, and R&D. We own approximately 5 acres of land in India.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeClarke (“Clarke”) filed a complaint against the Company and IGC’s President and Chief Executive Officer, Ram Mukunda (“Mukunda”) (the “Apogee Litigation”). The litigation was originally initiated by IGC on February 8, 2021 (India Globalization Capital, Inc. v. Apogee Financial Investments, Inc., Civil Action No. 1:21-cv-01131, U.S.
Biggest changeClarke (Clarke) filed a complaint against the Company and IGC’s President and Chief Executive Officer, Ram Mukunda (Mukunda) (the Apogee Litigation). The litigation was originally initiated by IGC on February 8, 2021 (India Globalization Capital, Inc. v. Apogee Financial Investments, Inc., Civil Action No. 1:21-cv-01131, U.S.
On March 7, 2022, the Court granted the motion to dismiss in substantial part, leaving only two claims: Apogee’s cross-claim against the Company for alleged breach of the purchase agreement; and Clarke’s claim against the Company for alleged breach of an alleged promise to issue him shares of the Company.
On March 7, 2022, the Court granted the motion to dismiss in substantial part, leaving only two claims: Apogee’s cross-claim against the Company for an alleged breach of the purchase agreement; and Clarke’s claim against the Company for an alleged breach of an alleged promise to issue him shares of the Company.
District Court for the Southern District of New York), wherein IGC alleged that Apogee breached a purchase agreement dated December 18, 2014, related to IGC’s intended purchase of a business known as Midtown Partners & Co., LLC (“Midtown”). In response to the original lawsuit filed by IGC, Apogee and Clarke filed a counterclaim as well as the Apogee Litigation.
District Court for the Southern District of New York), wherein IGC alleged that Apogee breached a purchase agreement dated December 18, 2014, related to IGC’s intended purchase of a business known as Midtown Partners & Co., LLC (Midtown). In response to the original lawsuit filed by IGC, Apogee, and Clarke filed a counterclaim as well as the Apogee Litigation.
ITEM 3. LEGAL PROCEEDINGS The Company may be involved in legal proceedings, claims, and assessments arising in the ordinary course of business. 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 consolidated financial statements as of March 31, 2022.
ITEM 3. LEGAL PROCEEDINGS The Company may be involved in legal proceedings, claims, and assessments arising in the ordinary course of business. 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 consolidated financial statements as of March 31, 2023.
As of March 31, 2022, the Company and one of its officers are parties to the following litigation matters: Apogee Financial Investments, Inc., et al. v. India Globalization Capital, Inc., et al., Civil Action No. 1:21-cv-03809 (U.S. District Court for the Southern District of New York). On April 29, 2021, Apogee Financial Investments, Inc. (“Apogee”) and John R.
As of March 31, 2023, the Company and one of its officers are parties to the following litigation matters: Apogee Financial Investments, Inc., et al. v. India Globalization Capital, Inc., et al., Civil Action No. 1:21-cv-03809 (U.S. District Court for the Southern District of New York). On April 29, 2021, Apogee Financial Investments, Inc. (Apogee) and John R.
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As of March 31, 2022, the Company and two of its officers were parties to the following litigation matters: Tchatchou v. India Globalization Capital, Inc., et al., Civil Action No. 8:18-cv-03396 (U.S. District Court for the District of Maryland).
Added
On February 21, 2023, IGC and Mukunda filed a motion for summary judgment seeking judgment on both IGC’s underlying Complaint against Apogee and Apogee’s and Clarke’s claims against Apogee and Mukunda. On April 19, 2023, after the close of the Company’s fiscal year, Apogee and Clarke filed a response to the motion.
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On November 2, 2018, IGC shareholder Alde-Binet Tchatchou instituted a shareholder class action complaint on behalf of himself and all others similarly situated in the United States District Court for the District of Maryland.
Added
Both Apogee and Clarke withdrew their claims against Mukunda at that time. The Company filed its reply in support of summary judgment on May 16, 2023. The court is expected to issue a decision sometime during fiscal year 2024 (on or before March 31, 2024).
Removed
On May 13, 2019, the plaintiff filed an amended complaint against IGC, Ram Mukunda, and Claudia Grimaldi, (collectively, the “Class Action Defendants”), alleging violations of federal securities laws. On February 28, 2019, all pending shareholder class actions were consolidated, and the Tchatchou litigation was designated as the lead case. Harris-Carr v.
Added
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 36 Table of Contents PART II
Removed
India Globalization Capital, Inc., et al., Civil Action No. 8:18-cv-03408 (U.S. District Court for the District of Maryland). On November 2, 2018, IGC shareholder Gabe Harris-Carr instituted a shareholder class action complaint on behalf of himself and all others similarly situated in the United States District Court for the District of Maryland.
Removed
IGC, Ram Mukunda, and Claudia Grimaldi were named as defendants. On February 28, 2019, all pending shareholder class actions, including the Harris-Carr litigation, were consolidated, and the Tchatchou litigation, described above, was designated as the lead case.
Removed
On May 13, 2019, the plaintiff in the Tchatchou litigation filed an amended complaint, which becomes the operative complaint for the consolidated matter and supersedes the Harris-Carr complaint. The Company reached a settlement of the Tchatchou and Harris-Carr litigations during Fiscal 2022, subject to court approval.
Removed
After the end of the Company’s Fiscal Year, the Court approved the settlement, and all shareholder class action matters have been resolved and dismissed as a result. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 32 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 33 Item 6. [Reserved] 34 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 36 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 37 Item 6. [Reserved] 37 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 48 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(2) Consists of 2 million shares as a special grant of common stock, as approved by our stockholders on January 7, 2020, 2.5 million shares as a special grant of common stock, as approved by our stockholders on January 11, 2021, and 3.5 million shares as a special grant of common stock, as approved by our stockholders on October 15, 2021.
Biggest change(2) Consists of 2 million shares as a special grant of common stock, as approved by our stockholders on January 7, 2020, 2.5 million shares as a special grant of common stock, as approved by our stockholders on January 11, 2021, 3.5 million shares as a special grant of common stock, as approved by our stockholders on October 15, 2021, and 3 million shares as special grant of common stock, as approved by stockholders on September 9, 2022.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the NYSE American under the symbol “IGC” with CUSIP number 45408X308. The common stock of the Company is also quoted on the Frankfurt, Berlin, and Stuttgart (XETRA2) stock exchanges in Germany (ticker symbol: IGS1).
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the NYSE American under “IGC” symbol with CUSIP number 45408X308. The common stock of the Company is also quoted on the Frankfurt, Berlin, and Stuttgart (XETRA2) stock exchanges in Germany (ticker symbol: IGS1).
Further information on the securities can be referred to in Note 13, “Securities” of Part II, Item 8. Securities authorized for issuance under equity compensation plans The following table shows (in thousands), as of March 31, 2022, information regarding outstanding awards available under our compensation plans (including individual compensation arrangements) under which our equity securities may be delivered.
Further information on the securities can be referred to in Note 13, “Securities” of Part II, Item 8. Securities authorized for issuance under equity compensation plans The following table shows (in thousands), as of March 31, 2023, information regarding outstanding awards available under our compensation plans (including individual compensation arrangements) under which our equity securities may be delivered.
We currently anticipate that we will retain future earnings, if any, for the development, operation, and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determinations related to dividend policy will be made at the discretion of our Board of Directors.
We currently anticipate that we will retain future earnings, if any, for the development, operation, and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determinations related to the dividend policy will be made at the discretion of our Board of Directors. Unregistered sales of equity securities None.
Plan category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (in thousands) (b) Weighted- average exercise price of outstanding options, warrants and rights (c) Number of securities available for future issuance (excluding shares in column (a)(1) (in thousands) Equity compensation plans approved by security holders: 2018 Omnibus Incentive Plan (1) - $ - - Special Grant (2) 6,293 $ 1.17 - (1) Consists of our 2018 Omnibus Incentive Plans, as approved by our stockholders on November 8, 2017.
Plan category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (in thousands) (b) Weighted- average exercise price of outstanding options, warrants and rights (c) Number of securities available for future issuance (excluding shares in column (a) (in thousands) Equity compensation plans approved by security holders: 2018 Omnibus Incentive Plan (1) - $ - - Special Grant (2) 5,696 $ 0.98 2,280 (1) Consists of our 2018 Omnibus Incentive Plans, as approved by our stockholders on November 8, 2017.
Holders of Record As of June 6, 2022, we had approximately 41 registered shareholders of record of our common stock and 2 registered unit holders. The number of record holders does not include persons who held our common stock in nominee or “street name” accounts through brokers.
Holders of Record As of July 6, 2023, we had approximately 37 registered shareholders of record of our common stock and 2 registered unit holders. The number of record holders does not include persons who held our common stock in nominee or “street name” accounts through brokers.
Unregistered sales of equity securities None. 33 Table of Contents Purchases of equity securities by the issuer and affiliated purchasers None.
Purchases of equity securities by the issuer and affiliated purchasers None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Fiscal 2022 compared to Fiscal 2021 The following table presents an overview of our results of operations for Fiscal 2022 and Fiscal 2021: Statement of Operations (in thousands, audited) Fiscal 2022 ($) 2021 ($) Change ($) Percent Change Revenue 397 898 (501 ) (56 )% Cost of revenue (203 ) (785 ) 582 (74 )% Gross profit 194 113 81 72 % Selling, general and administrative expenses (13,292 ) (7,908 ) (5,384 ) 68 % Research and development expenses (2,330 ) (929 ) (1,401 ) 151 % Operating loss (15,428 ) (8,724 ) (6,704 ) 77 % Impairment (49 ) (169 ) 120 (71 )% Other income, net 461 82 379 462 % Loss before income taxes (15,016 ) (8,811 ) (6,205 ) 70 % Income tax expense/benefit - - - - Net loss attributable to common stockholders (15,016 ) (8,811 ) (6,205 ) 70 % Revenue – Revenue in Fiscal 2022 and Fiscal 2021, was primarily derived from our Life Sciences segment, which involved sales of in-house brands and alcohol-based hand sanitizers, among others.
Biggest changeSubject to further research and study, the combination is intended to reduce side effects caused by hydantoin anticonvulsant drugs such as phenobarbital, by reducing the dosing of anticonvulsant drugs in humans, dogs, and cats. 41 Table of Contents Results of Operations Fiscal 2023 compared to Fiscal 2022 The following table presents an overview of our results of operations for Fiscal 2023 and Fiscal 2022: Statement of Operations (in thousands, audited) Fiscal 2023 ($) 2022 ($) Change ($) Percent Change Revenue 911 397 514 129 Cost of revenue (469 ) (203 ) (266 ) 131 Gross profit 442 194 248 128 Selling, general and administrative expenses (8,552 ) (13,292 ) 4,740 (36 ) Research and development expenses (3,461 ) (2,330 ) (1,131 ) 49 Operating loss (11,571 ) (15,428 ) 3,857 (25 ) Impairment - (49 ) 49 (100 ) Other income, net 65 461 (396 ) (86 ) Loss before income taxes (11,506 ) (15,016 ) 3,510 (23 ) Income tax expense/benefit - - - - Net loss attributable to common stockholders (11,506 ) (15,016 ) 3,510 (23 ) Revenue – During Fiscal 2023, the Company generated approximately $911 thousand in revenue, representing a significant increase from the $397 thousand generated in Fiscal 2022.
This involves conducting more trials on IGC-AD1 over the next few years, subject to FDA approval, with the anticipated goal of demonstrating safety and efficacy and potentially obtaining FDA approval for IGC-AD1 as a cannabinoid-based new drug that can help manage agitation for patients suffering from Alzheimer’s disease.
This involves conducting more trials on IGC-AD1 over the next few years, subject to FDA approval, with the anticipated goal of demonstrating safety and efficacy and potentially obtaining FDA approval for IGC-AD1 as a cannabinoid-based new drug that can help to manage agitation for patients suffering from Alzheimer’s disease.
The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the Infrastructure and Life Sciences segment. Revenue in the Infrastructure segment is recognized for the renting business when the equipment is rented and terms of the agreement have been fulfilled during the period.
The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the Infrastructure and Life Sciences segment. Revenue in the Infrastructure segment is recognized for the renting business when the equipment is rented, and the terms of the agreement have been fulfilled during the period.
Stock-based awards are recognized on a straight-line basis over the requisite vesting period. For stock-based employee compensation cost recognized at any date will be at least equal to the amount attributable to the share-based compensation that is vested at that date.
Stock-based awards are recognized on a straight-line basis over the requisite vesting period. For stock-based employee compensation the cost recognized at any date will be at least equal to the amount attributable to the share-based compensation that is vested at that date.
We have a two-pronged approach for our Alzheimer’s drug development strategy, the first prong is to investigate IGC-AD1 as an Alzheimer’s symptoms modifying agent and the second is to investigate TGR-63 as a disease modifying agent.
We have a two-pronged approach for our Alzheimer’s investigational drug development strategy, the first prong is to investigate IGC-AD1 as an Alzheimer’s symptoms modifying agent, and the second is to investigate TGR-63 as a disease modifying agent.
Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “ Investments – Equity method and Joint Ventures. ” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income / (loss) is recognized in other comprehensive income / (loss).
Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “Investments – Equity method and Joint Ventures.” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income/(loss) is recognized in other comprehensive income/(loss).
The Company does not have any material long-term debt, capital lease obligations or other long-term liabilities, except as disclosed in this report. Please refer to Note 12, “Commitments and contingencies”, Note 11, “Loans and Other Liabilities” and Note 9, “Leases” in Item 8 of this report for further information on Company commitments and contractual obligations.
The Company does not have any material long-term debt, capital lease obligations, or other long-term liabilities, except as disclosed in this report. Please refer to Note 12, “Commitments and contingencies”, Note 11, “Loans and Other Liabilities” and Note 9, “Leases” in Item 1 of this report for further information on Company commitments and contractual obligations.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of the consolidated statement of operations, liquidity and capital resources, and summary of cash flows, which apply to Fiscal 2022 ending on March 31, 2022 and Fiscal 2021 ending on March 31, 2021.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of the consolidated statement of operations, liquidity, and capital resources, and a summary of cash flows, which apply to Fiscal 2023 ending on March 31, 2023, and Fiscal 2022, ending on March 31, 2022.
We believe that the biopharmaceutical component of our Life Sciences strategy will take several more years to mature and involves considerable risk; however, we also believe it may involve greater defensible growth potential and first-to-market advantage.
We believe that the pharmaceutical component of our Life Sciences strategy will take several more years to mature and involves considerable risk; however, we also believe it may involve greater defensible growth potential and first-to-market advantage.
The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASC 606 prescribes a 5-step process to achieve its core principle.
The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. 44 Table of Contents ASC 606 prescribes a 5-step process to achieve its core principle.
We are moving to a more flexible mix of virtual and in-person working to advance our culture, drive innovation and agility and enable greater balance and well-being for our workforce.
We are moving to a more flexible mix of virtual and in-person work to advance our culture, drive innovation and agility and enable greater balance and well-being for our workforce.
Available-for-sale securities: Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position. Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs.
Available-for-sale securities: Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position. 45 Table of Contents Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs.
Although there can be no assurance, we believe that additional investment in clinical trials, research, and development (“R&D”), facilities, marketing, advertising, and acquisition of complementary products and businesses supporting our Life Sciences segment will be critical to the development and delivery of innovative products and positive patient and customer experiences.
Although there can be no assurance, we believe that additional investment in clinical trials, research, and development (R&D), facilities, marketing, advertising, and acquisition of complementary products and businesses supporting our Life Sciences segment will be critical to the development and delivery of innovative products and positive patient and customer experiences.
Operational Excellence We remain focused on continuing to build excellence broadly in three areas, cannabinoid-based investigations, drug development and product manufacturing, and online marketing. We believe these will give us a competitive advantage, including building an increasingly agile and adaptable commercialization engine with a strong customer-focused market expertise.
Operational Excellence We remain focused on continuing to build excellence broadly in three areas, cannabinoid-based investigations, drug development and product manufacturing, and online marketing. Although there can be no assurance, we believe these will give us a competitive advantage, including building an increasingly agile and adaptable commercialization engine with a strong customer-focused market expertise.
Liquidity and capital resources Our sources of liquidity are cash and cash equivalents, funds raised through “at the market” (“ATM”) offerings, cash flows from operations, short-term and long-term borrowings, and short-term liquidity arrangements. The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations.
Liquidity and capital resources Our sources of liquidity are cash and cash equivalents, funds raised through the ATM offering, cash flows from operations, short-term and long-term borrowings, and short-term liquidity arrangements. The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations.
Complying with these security measures and compliances is expected to incur further expenses. In Fiscal 2022 and Fiscal 2021, there were no known or detected breaches in cybersecurity. 44 Table of Contents Recently issued and adopted accounting pronouncements Changes to U.S.
Complying with these security measures and compliances is expected to incur further expenses. In Fiscal 2023 and Fiscal 2022, there were no known or detected breaches in cybersecurity. Recently issued and adopted accounting pronouncements Changes to U.S.
Foreign currency translation IGC operates in India, U.S., Colombia, and Hong Kong, and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”), the Hong Kong Dollar (“HKD”), or the Colombian Peso (“COP”). As a result, changes in the relative values of the U.S. Dollar (“USD”), the INR, the HKD, or the COP affect financial statements.
Foreign currency translation IGC operates in India, U.S., Colombia, and Hong Kong, and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”), the Hong Kong Dollar (“HKD”), or the Colombian Peso (“COP”). As a result, changes in the relative values of the U.S.
The estimated amount of liability is based on the information available to us with respect of bank debt and other borrowings. During Fiscal 2022 and Fiscal 2021 the Company impaired investments of approximately $49 thousand and $169 thousand, respectively.
The estimated amount of liability is based on the information available to us with respect to bank debt and other borrowings. During Fiscal 2023, there was no impairment and Fiscal 2022, the Company impaired investments of approximately $49 thousand, respectively.
The cost of revenue in Fiscal 2022 is primarily attributable to the cost of raw materials, labor, and other direct overheads required to produce our products.
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.
It consists of a net loss of approximately $8.8 million, a positive impact on cash due to non-cash expenses of approximately $1.3 million, and a negative impact due to changes in operating assets and liabilities of approximately $3.3 million.
It consists of a net loss of approximately $11.5 million, a positive impact on cash due to non-cash expenses of approximately $3.7 million, and changes in operating assets and liabilities of approximately $0.8 million.
The exchange rates used for translation purposes are as follows: Period End Average Rate Period End Rate Period (P&L rate) (Balance sheet rate) Year ended March 31, 2022 INR 74.50 Per USD INR 75.91 Per USD HKD 7.78 Per USD HKD 7.83 Per USD COP 3,830 Per USD COP 3,748 Per USD Year ended March 31, 2021 INR 74.23 Per USD INR 73.15 Per USD HKD 7.75 Per USD HKD 7.77 Per USD COP 3,693 Per USD COP 3,691 Per USD Cybersecurity We have a cybersecurity policy in place and have implemented tighter cybersecurity measures to safeguard against hackers.
The exchange rates used for translation purposes are as follows: Period End Average Rate Period End Rate Period (P&L rate) (Balance sheet rate) Year ended March 31, 2023 INR 80.32 Per USD INR 82.18 Per USD HKD 7.8 Per USD HKD 7.8 Per USD COP 4,465 Per USD COP 4,645 Per USD Year ended March 31, 2022 INR 74.50 Per USD INR 75.91 Per USD HKD 7.78 Per USD HKD 7.83 Per USD COP 3,830 Per USD COP 3,748 Per USD Cybersecurity We have a cybersecurity policy in place and have implemented tighter cybersecurity measures to safeguard against hackers.
Most of our account receivables are from infrastructure segment. Short-term and long-term investments Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relationship to our investment guidelines and market conditions.
Short-term and long-term investments Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relation to our investment guidelines and market conditions.
For market-based awards, stock-based compensation expense is recognized over the expected achievement period. The fair value of such awards is estimated on the grant date using binomial lattice model. 43 Table of Contents The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model.
For market-based awards, stock-based compensation expense is recognized over the expected achievement period. The fair value of such awards is estimated on the grant date using binomial lattice model. The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model. The assumptions used in calculating the fair value of stock-based awards represent Management’s best estimates.
Investing Activities Net cash used in investing activities for Fiscal 2022, was approximately $742 thousand, which comprises approximately $535 thousand for the acquisition and filing expenses related to intellectual property, approximately $207 thousand for the purchase of property, plant, and equipment.
Net cash used in investing activities for Fiscal 2022, was approximately $0.7 million, which comprises approximately $0.5 million for the acquisition and filing expenses related to intellectual property, approximately $0.2 million for the purchase of property, plant, and equipment.
Non-cash expenses consist of an amortization/depreciation charge of approximately $651 thousand, impairment of investment of $49 thousand, provision against debtor & advances of $1.7 million, stock-based expenses of approximately $2.2 million, and a one-time impairment of PPE of $833 thousand and an off set of $430 thousand due to the forgiveness of a PPP Loan.
Non-cash expenses consist of an amortization/depreciation charge of approximately $0.6 million, impairment of investment of $0.1 million, provision against debtor & advances of $1.7 million, stock-based expenses of approximately $2.2 million, and a one-time impairment of PPE of $0.8 million and an offset of $0.4 million due to the forgiveness of a PPP Loan.
The accompanying financial statements are reported in USD. The INR, HKD, and COP are the functional currencies for certain subsidiaries of the Company.
Dollar (“USD”), the INR, the HKD, or the COP affect financial statements. 47 Table of Contents The accompanying financial statements are reported in USD. The INR, HKD, and COP are the functional currencies for certain subsidiaries of the Company.
Inventory Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.
Inventory Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of finished goods related to wellness products, hand sanitizers, finished hemp-based products, beverages.
In addition, changes in operating assets and liabilities had a positive impact of approximately $2.5 million on cash, of which approximately $1.9 million is due to an adjustment in inventory and approximately $504 thousand increase in accounts payable.. Net cash used in operating activities for Fiscal 2021 was approximately $10.8 million.
In addition, changes in operating assets and liabilities had a positive impact of approximately $0.8 million on cash, of which approximately $0.9 million is due to an adjustment in inventory and approximately $0.1 million decrease in other net current assets and liabilities. Net cash used in operating activities for Fiscal 2022 was approximately $7.5 million.
The expected term represents the period that our stock-based awards are expected to be outstanding. The Company has never declared or paid any cash dividends. For further information refer to Note 14, “Stock-Based Compensation” of Notes to Consolidated Financial Statements.
The Company has never declared or paid any cash dividends. For further information, refer to Note 14, “Stock-Based Compensation” of Notes to Consolidated Financial Statements.
(2) Construction income consists of the execution of contracts directly or through subcontractors. (3) Relates to revenue from the Life Sciences segment including the sale of wellness and lifestyle products such as hand sanitizers, bath bombs, lotions, gummies, beverages, hemp crude extract, hemp isolate, and hemp distillate.
(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.
Short-term and long-term investments consist of corporate, various government agency 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 cost which approximates fair value.
Short-term and long-term investments consist of equity investment, mutual funds, corporate, various government securities, and municipal debt securities, as well as certificates of deposit. Certificates of deposit and commercial paper are carried at cost which approximates fair value.
The Company is motivated by the potential that, with future successful results from appropriate further trials, IGC-AD1 could contribute to relief for some of the 55 million people around the world expected to be impacted by Alzheimer’s disease by 2030 (WHO, 2021).
The Company is motivated by the potential that, with future successful results from appropriate further trials, IGC-AD1 could contribute to relief for some of the 55 million people around the world expected to be impacted by Alzheimer’s disease by 2030 (WHO, 2021). 38 Table of Contents Currently, IGC-AD1 is in a Phase 2B safety and efficacy clinical trial for agitation in dementia from Alzheimer’s (clinicaltrials.gov, NCT05543681).
While the bulk of our medium and longer-term focus is on clinical trials and getting IGC-AD1 to be an FDA approved drug, our shorter-term strategy, is to use our resources to provide white label services and market Holief™ and Sunday Seltzer™.
While the bulk of our medium and longer-term focus is on clinical trials and getting IGC-AD1 to be an FDA approved drug, our shorter-term strategy, is to use our resources to provide white label services and market Holief™. We believe this may provide us with several profit opportunities, although there can be no assurance of such profit opportunities.
As previously disclosed, IGC submitted IGC-AD1, our investigational drug candidate for Alzheimer’s, to the FDA under Section 505(i) of the Federal Food, Drug, and Cosmetic Act and received approval on July 30, 2020, to proceed with the Phase 1 trial on Alzheimer’s patients.
As previously disclosed, IGC submitted IGC-AD1, our investigational drug candidate for Alzheimer’s, to the FDA under Section 505(i) of the Federal Food, Drug, and Cosmetic Act and received approval on July 30, 2020, to proceed with the Phase 1 trial on Alzheimer’s patients and the Company completed all dose escalation studies, and as announced by the Company on December 2, 2021, the results of the clinical trial have been submitted in the Clinical/Statistical Report (CSR) filed with the FDA.
Work-in-progress also includes product manufacturing in process, costs of growing hemp, in accordance with applicable laws and regulations including but not limited to labor, utilities, fertilizers, and irrigation. Inventory is primarily accounted for using the weighted average cost method. Primary costs include raw materials, packaging, direct labor, overhead, shipping, and the depreciation of manufacturing equipment.
Work-and in-progress consist of products in the manufacturing process as on reporting date, including but not limited to primary cost. Inventory is primarily accounted for using the weighted average cost method. Primary costs include raw materials, packaging, direct labor, overhead, shipping, and the depreciation of manufacturing equipment.
Net cash provided by financing activities was approximately $14.7 million for Fiscal 2021, which comprises proceeds from borrowings of approximately $580 thousand, repayment of loan of approximately $50 thousand, and approximately $14.2 million net proceeds from ATM sales. Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with U.S.
Net cash provided by financing activities was approximately $4.1 million for Fiscal 2022, which comprises net proceeds from issuance of equity stock through the ATM offering, net of all expenses related to the issuance of stock. Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with U.S.
Revenue from tolling services is recognized when the performance obligation, such as processing of the material, has been completed and output material has been transferred to the customer. 41 Table of Contents Net sales disaggregated by significant products and services for Fiscal 2022 and 2021 are as follows: (in thousands) Year Ended March 31 2022 ($) 2021 ($) Infrastructure segment Rental income (1) 23 1 Construction contracts (2) 15 174 Life Sciences segment Wellness and lifestyle (3) 316 688 White label services (4) 43 35 Total 397 898 (1) Rental income consists of income from rental of heavy construction equipment.
Net sales disaggregated by significant products and services for Fiscal 2023 and 2022 are as follows: (in thousands) Year Ended March 31 2023 ($) 2022 ($) Infrastructure segment Rental income (1) 37 23 Construction contracts (2) 76 15 Life Sciences segment Wellness and lifestyle (3) 416 316 White label services (4) 382 43 Total 911 397 (1) Rental income consists of income from rental of heavy construction equipment.
In addition, changes in operating assets and liabilities had a negative impact of approximately $3.3 million on cash, of which approximately $1.2 million is due to an adjustment in inventory, approximately $2.2 million due to deposits and advances, and a positive impact of approximately $100 thousand for other adjustments in net assets.
In addition, changes in operating assets and liabilities had a positive impact of approximately $2.5 million in cash, of which approximately $1.9 million is due to an adjustment in inventory and an approximately $0.6 million increase in accounts payable.
The assumptions used in calculating the fair value of stock-based awards represent Management’s best estimates. Generally, the closing share price of the Company’s common stock on the date of grant is considered the fair-value of the share. The volatility factor is determined based on the Company’s historical stock prices.
Generally, the closing share price of the Company’s common stock on the date of the grant is considered the fair value of the share. The volatility factor is determined based on the Company’s historical stock prices. The expected term represents the period that our stock-based awards are expected to be outstanding.
Both Holief™, and Sunday Seltzer™ are compliant with relevant federal, state, and local laws, and regulations. 35 Table of Contents Biopharmaceutical : Since 2014, we have focused a portion of our business on the application of phytocannabinoids such as Tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”), among others, in combination with other compounds, to address efficacy for various ailments and diseases such as Alzheimer’s disease.
Life Sciences Segment Pharmaceutical : Since 2014, we have focused a portion of our business on the application of phytocannabinoids such as THC and CBD, among others, in combination with other compounds, to address efficacy for various ailments and diseases such as Alzheimer’s disease.
We cannot guarantee that we will continue to perform our trials in a timely and satisfactory manner as a result of the evolving effects of the COVID-19 pandemic. Similarly, our ability to recruit and retain patients and principal investigators, and site staff who, as health care providers, may have heightened exposure to COVID-19, may adversely impact our clinical trial operations.
We cannot guarantee that we will continue to perform our trials in a timely and satisfactory manner as a result of the evolving effects of the COVID-19 pandemic.
Hence, in fiscal 2021, the Company values its harvested crops at cost. Please refer to Note 3, “Inventory,” of Notes to Consolidated Financial Statements for further information. Abnormal amounts of idle facility expense, freight, handling costs, scrap, discontinued products and wasted material (spoilage) are expensed in the period they are incurred.
As of March 31, 2023, and 2022, our consolidated balance sheet reported approximately $407 thousand and no clinical trial related inventory, respectively. Abnormal amounts of idle facility expense, freight, handling costs, scrap, discontinued products and wasted material (spoilage) are expensed in the period they are incurred. Please refer to Note 3, “Inventory,” for further information.
Non-cash expenses consist of an amortization/depreciation charge of approximately $478 thousand, impairment of investment of $169 thousand, and stock-based expenses of approximately $658 thousand.
Non-cash expenses consist of an amortization and depreciation charge of approximately $0.7 million, stock-based expenses of approximately $2.8 million and other non-cash expenses of approximately $0.2 million.
Where the Company does not have significant influence, the Company has accounted for the investment in accordance with ASC Topic 321, “ Investments-Equity Securities. ” As of March 31, 2022, the Company does not have any investment in marketable securities. 42 Table of Contents Impairment The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made.
Impairment The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made.
If the financial condition of a customer deteriorates, additional allowances may be required. We had $124 thousand of accounts receivable, net of provision for the doubtful debt of $93 thousand as of March 31, 2022, as compared to $175 thousand of accounts receivable, net of provision for the doubtful debt of $63 thousand as of March 31, 2021.
We had $107 thousand of accounts receivable, net of provision for the doubtful debt of $17 thousand as of March 31, 2023, as compared to $125 thousand of accounts receivable, net of provision for the doubtful debt of $93 thousand as of March 31, 2022.
Summary of Cash flows (in thousands, audited) Fiscal 2022 ($) 2021 ($) Change ($) Percent Change Cash used in operating activities (7,462 ) (10,800 ) 3,338 (31 )% Cash (used in)/provided by investing activities (742 ) 3,387 (4,129 ) (122 )% Cash provided by financing activities 4,142 14,688 (10,546 ) (72 )% Effects of exchange rate changes on cash and cash equivalents (26 ) 15 (41 ) (273 )% Net increase/(decrease) in cash and cash equivalents (4,088 ) 7,290 (11,378 ) (156 )% Cash and cash equivalents at the beginning of the period 14,548 7,258 7,290 100 % Cash and cash equivalents at the end of the period 10,460 14,548 (4,088 ) (28 )% Operating Activities Net cash used in operating activities for Fiscal 2022, was approximately $7.5 million.
(in thousands, audited) As of March 31, 2023 ($) As of March 31, 2022 ($) Change ($) Percent Change Cash, cash equivalents 3,196 10,460 (7,264 ) (69 )% Working capital 4,568 12,670 (8,102 ) (64 )% Cash and cash equivalents Cash and cash equivalents decreased by approximately $7.3 million to $3.2 million in Fiscal 2023 from $10.5 million in Fiscal 2022, a decrease of approximately 69% is discussed in the summary of cash flows, as follows: (in thousands, audited) Fiscal 2023 ($) 2022 ($) Change ($) Percent Change Cash used in operating activities (7,047 ) (7,462 ) 415 (6 )% Cash used in investing activities (235 ) (742 ) 507 (68 )% Cash provided by financing activities 100 4,142 (4,042 ) (98 )% Effects of exchange rate changes on cash and cash equivalents (82 ) (26 ) (56 ) 215 % Net decrease in cash and cash equivalents (7,264 ) (4,088 ) (3,176 ) 78 % Cash and cash equivalents at the beginning of the period 10,460 14,548 (4,088 ) (28 )% Cash and cash equivalents at the end of the period 3,196 10,460 (7,264 ) (69 )% 43 Table of Contents Operating Activities Net cash used in operating activities for Fiscal 2023 was approximately $7 million.
Life Sciences Segment Over the Counter Products : We have created a cannabinoid-based women’s wellness brand, Holief™ for the online channel and a CBD and caffeine infused energy drink, Sunday Seltzer™, for distribution in wholesale channels. ● 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”).
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.
Net cash provided by investing activities during Fiscal 2021 was approximately $3.4 million which comprises approximately $122 thousand for the acquisition and filing expenses related to intellectual property, purchase of property, plant, and equipment of $1.5 million, sale of property, plant, and equipment of approximately $47 thousand and investments of approximately $149 thousand in non-marketable securities, and proceeds from investment of approximately $5 million, in marketable securities. 40 Table of Contents Financing Activities Net cash provided by financing activities was approximately $4.1 million for Fiscal 2022, which comprises net proceeds from issuance of equity stock through the ATM offering, net of all expenses related to the issuance of stock.
Financing Activities Net cash provided by financing activities was approximately $0.1 million for Fiscal 2023, which comprises net proceeds from issuance of equity stock through the ATM offering, net of all expenses related to the issuance of stock.
This generally occurs upon our delivery to a third-party carrier or, to the customer directly.
This generally occurs upon our delivery to a third-party carrier or to the customer directly. Revenue from white label services is recognized when the performance obligation has been completed and output material has been transferred to the customer.
This resulted in a $1.7 million adjustment to our inventory that also increased our SG&A. 36 Table of Contents The Global Economic Environment In addition to the industry-specific factors such as regulations around cannabinoid research, we are exposed to economic cycles.
See Item 1A, “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business. The Global Economic Environment In addition to the industry-specific factors, such as regulations around cannabinoid research, we are exposed to economic cycles.
Our gross margin increased from 12% to 48%, which reflects our increased focus on higher-margin services and the sale of products under our brand. 38 Table of Contents Selling, general and administrative expenses – Selling, general and administrative expenses consist primarily of employee-related expenses, sales commission, professional fees, legal fees, marketing, other corporate expenses, allocated general overhead and provisions, depreciation, and write-offs relating to doubtful accounts and advances, if any.
Selling, general and administrative expenses – Selling, general, and administrative (SG&A) expenses primarily encompass various costs such as employee-related expenses, sales commissions, professional fees, legal fees, marketing expenses, other corporate expenses, allocated general overhead, provisions, depreciation, and write-offs related to doubtful accounts and advances.
The R&D expenses increased by approximately $1.4 million or 151% to $2.3 million in Fiscal 2022, from approximately $929 thousand for Fiscal 2021. Expenses increased by $1.4 million due to the now completed Phase 1 clinical trial. We expect R&D expenses to increase with the progression of Phase 2 trials on IGC-AD1 and pre-clinical trials on TGR-63 .
As the development of TGR-63 and the Phase 2B trial on Alzheimer’s gain momentum, the Company anticipates further increases in R&D expenses. attributable to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on TGR-63 . We anticipate increased R&D expenses as the development of TGR-63 and the Phase 2B trial on Alzheimer’s pick up more momentum.
(4) Relates to revenue from the Life Sciences segment, including income white label services, which refers to a fully supported product or service that is made by us but sold by another company. Accounts receivable We make estimates of the collectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness, and current economic trends.
Accounts receivable We make estimates of the collectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness, and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.
In addition, the increase of approximately $1.3 million is attributable to an increase in non-cash expenses. Adjusting for approximately $5.3 million in one-time and non-cash expenses, the SG&A for the fiscal year 2022 was lower by approximately $500 thousand. Research and Development expenses: Research and Development (“R&D”) expenses were attributed to our Life Sciences segment.
Research and Development (R&D) expenses – R&D expenses were primarily associated with the Life Sciences segment, reflecting the Company’s investment in R&D activities. In Fiscal 2023, the Company reported R&D expenses of approximately $3.5 million, representing an increase of $1.2 million or 49% compared to approximately $2.3 million in Fiscal 2022.
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Overview IGC has two segments: Life Sciences and Infrastructure. Infrastructure Segment The infrastructure business, operating since 2008. The Company intends to continue infrastructure operations as the COVID-19 pandemic permits, including: (i) Execution of Construction Contracts – The Company is executing a $1.2 million road-building contract in Kerala, India and was recently awarded another road reconstruction project for $289 thousand.
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Overview IGC Pharma, Inc. is a clinical-stage pharmaceutical company with a diversified revenue model that develops both prescription drugs and over-the-counter (OTC) products. Our focus is on developing innovative therapies for neurological disorders such as Alzheimer’s disease, epilepsy, Tourette syndrome, and sleep disorders.
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(ii) Rental of Heavy Construction Equipment – We rent equipment, such as motor grader and rollers, to construction contractors. There was minimal revenue from rentals in Fiscal 2022 due to seasonality and COVID-19 pandemic disruptions.
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We also focus on formulations for eating disorders, chronic pain, premenstrual syndrome (PMS), and dysmenorrhea, in addition to health and wellness OTC formulations. The Company is developing its lead candidate, IGC-AD1, an investigational oral therapy for the treatment of agitation associated with Alzheimer’s disease.
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The products are available online and through Amazon and other online channels. o Sunday Seltzer™ is an all-natural, organic, carbonated energy drink with natural caffeine from green tea extract, CBD, vitamins B, vitamin C, no added sugars, and no preservatives. The energy drink is available in two flavors, pomegranate-lemon, and peach-ginger.
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IGC-AD1 is currently in Phase 2 (Phase 2B) clinical trials after completing nearly a decade of research and realizing positive results from pre-clinical and a Phase 1 trial.
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In addition, Sunday Seltzer™ is also available in four flavors with CBD, vitamins B, vitamin C, and no caffeine.
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This previous research into IGC-AD1 has demonstrated efficacy in reducing plaques and tangles, which are two important hallmarks of Alzheimer’s, as well as reducing neuropsychiatric symptoms associated with dementia in Alzheimer’s disease, such as agitation. We were formerly known as India Globalization Capital, Inc. and incorporated in Maryland on April 29, 2005.
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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.
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Our fiscal year is the 52- or 53-week period ending March 31. Currently, most of our revenue comes from the Life Sciences segment and, in the future, we believe, from our investigational drugs for treating Alzheimer’s disease.
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We believe this may provide us with several profit opportunities, although there can be no assurance of such profit opportunities. COVID-19 Update The infrastructure business, based in India and Hong Kong, had significantly lower revenue in Fiscal Year 2022 due to the continued impact of the COVID-19 pandemic and restrictions imposed by governmental entities.
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We have also built a facility for a potential Phase 3 trial and have strategic relations for the procurement of Active Pharmaceutical Ingredients (APIs). In addition, we have acquired and initiated work on TGR-63, a pre-clinical molecule that exhibits an impressive affinity for reducing neurotoxicity in Alzheimer’s cell lines.
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We have limited visibility into when economic conditions will recover in India and especially Hong Kong. Specifically: 1. We incurred increased expenses on a $1.2 million road-building contract in India due to COVID-19 restrictions. 2. We manufactured, distributed, and donated alcohol-based hand sanitizers to help communities hit hard by the COVID-19 pandemic.
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The advancement of IGC-AD1 into Phase 2 trials represents a significant milestone for the company and positions us for multiple pathways to future success. Although there can be no assurance, we anticipate that the positive outcomes from these and other trials will drive further growth, valuation, and market potential for IGC-AD1. IGC has two segments: Life Sciences and Infrastructure.
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We incurred the expense to provide hand sanitizers to the Federal Emergency Management Agency (“FEMA”), the Navajo Nation in Arizona, the Crow reservation in Montana, and the Sioux reservation in South Dakota. 3. Pandemic restrictions made it difficult to transport and process our harvested hemp crop in Arizona on a timely basis.
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The progress we are making in the clinic, gives us confidence in the potential of IGC-AD1 as a potentially groundbreaking therapy, with the potential to treat Alzheimer’s and also to manage devastating symptoms that separate families, increase admissions to nursing homes, and drive the cost of Alzheimer’s care, although there can be no assurance.
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Fiscal 2022 Highlights ● On March 28, 2022, Hamsa Biopharma India Pvt.
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Holief™ is compliant with relevant federal, state, and local laws, and regulations. Infrastructure Segment The Company’s infrastructure business has been operating since 2008, it includes: (i) Execution of Construction Contracts and (ii) Rental of Heavy Construction Equipment.
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Ltd., a directly owned subsidiary of the Company, signed a License Agreement with Jawaharlal Nehru Centre for Advanced Scientific Research (“JNCASR”), an autonomous institution under the Department of Science and Technology, Government of India, to obtain an exclusive license on the developed proprietary technology and know-how, and ownership or assignment of certain patents and patent filings relating to small molecule inhibitors with a naphthalene monoimide scaffold.
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COVID-19 Update The ongoing COVID-19 pandemic and the resulting containment measures that have been in effect from time to time in various countries and territories since early 2020 have had a number of substantial negative impacts on businesses around the world and on global, regional, and national economies, including widespread disruptions in supply chains for a wide variety of products and resulting increases in the prices of many goods and services.
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The agreement with JNCASR is filed on Form 8K on May 12, 2022. ● On February 11, 2022, the Company received a Good Manufacturing Practice (“GMP“) certification for its R&D facility in Maryland. ● The Company completed all dose escalation studies, and as announced by the Company on December 2, 2021, the results of the Phase 1 clinical trial on IGC’s THC based investigational new drug candidate, IGC-AD1, for patients with Alzheimer’s disease, have been submitted in the Clinical/Statistical Report (“CSR”) filed with the FDA. ● October 28, 2021, the Company won Best CBD Topical award for its broad-spectrum hemp extract cream called Holi Wonder™ at the U.S.
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Currently, our production facilities in all of our locations continue to operate as they had before the COVID-19 pandemic, with few changes other than for enhanced safety measures intended to prevent the spread of the virus.
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CBD Expo event held in Chicago, Illinois, U.S. 37 Table of Contents ● On October 5, 2021, the Company received a Good Manufacturing Practice (“GMP”) certification for its facilities in Vancouver, Washington, U.S. where it makes its products. ● On September 17, 2021, the Company filed a provisional patent application with the USPTO for our IGC-513 for compositions and methods for treating patients with dementia due to Alzheimer's disease. ● The Company licenses 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.
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Some of our ongoing clinical trials experienced short-term interruptions in the recruitment of patients due to the COVID-19 pandemic, as hospitals prioritized their resources towards the COVID-19 pandemic and government imposed travel restrictions. Some clinical trials experienced increased expenses due to new protocols to protect participants from COVID-19.
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The granted patent relates to IGC’s proprietary formulation, IGC-AD1, intended to assist in the treatment of individuals living with Alzheimer’s disease. ● During Fiscal 2022, the Company raised approximately $4.1 million of net proceeds from the issuance of equity stock.
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Additionally, certain suppliers had difficulties meeting their delivery commitments, and we are experiencing longer lead times for components. Future shutdowns could have an adverse impact on our operations.

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