igcpharma20231231

igcpharma20231231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended December 31, 2023

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 001-32830

IGC PHARMA, INC.

(Exact name of registrant as specified in its charter)

Maryland

(State or other jurisdiction of incorporation or organization)

20-2760393

(I.R.S. Employer Identification No.)

10224 Falls Road, Potomac, Maryland

(Address of principal executive offices)

20854

(Zip Code)

(301) 983-0998

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		IGC		NYSE American LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☑		Smaller reporting company ☑
		Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

63,734,439 shares of our common stock were outstanding as of February 12, 2024.

| December 31, 2023, Form 10-Q

IGC PHARMA, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2023

Table of Contents

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Changes in Shareholder’s Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	31
Item 6.	Exhibits	31

SIGNATURES		32

| December 31, 2023, Form 10-Q

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain “forward-looking statements.” Additionally, we, or our representatives, may, from time to time, make other written or verbal forward-looking statements and discuss plans, expectations, and objectives regarding our business, financial condition, and results of operations. Without limiting the foregoing, statements that are in the future tense, and all statements accompanied by terms such as “believe,” “project,” “expect,” “trend,” “estimate,” “forecast,” “assume,” “intend,” “plan,” “target,” “anticipate,” “outlook,” “preliminary,” “will likely result,” “will continue,” and variations of them and similar terms are intended to be forward-looking statements” as defined by federal securities laws. Such statements are based on currently available information, which management has assessed but which is dynamic and subject to rapid change due to risks and uncertainties that affect our business.

For the next several years, we believe our success is highly correlated with the outcome of our clinical trials and secondarily with the sale of our products and services. The Company may not be able to complete human trials on our investigational drug candidates, or, once conducted, the results of human trials may not be favorable or as anticipated or may reflect a lack of efficacy in humans or animals. Precautions, including social distancing and travel restrictions, among others could lead to delays or expenses greater than anticipated or projected. Failure or delay with respect to any of the above factors could have a material adverse effect on our business, future results of operations, stock price, and financial condition.

Our projections and investments anticipate certain regulatory changes and stable pricing, which may not hold out over the next several years. We may not be able to protect our intellectual property adequately or receive patents. We may not receive regulatory approval for our products or trials. The patent applications we have licensed may not be granted by the United States Patent and Trademark Office (“USPTO”), even if the Company is in full compliance with USPTO requirements. We may not have adequate resources, including financial resources, to successfully conduct all requisite clinical trials, to bring a product based on the above-referenced patented formulations to market, or to pay applicable maintenance fees over time. We may not be able to successfully commercialize our products even if they are successful and receive regulatory approval, including, but not limited to, based on the Food and Drug Administration’s (“FDA”) current position on hemp and hemp-based products. Failure or delay with respect to any of the factors above could have a material adverse effect on our business, future results of operations, stock price, and financial condition.

This document also contains statements that are not approved by the FDA, including statements on hemp and hemp extracts and their potential efficacy on humans and animals. While these statements and claims are intended to be in compliance with federal and state laws, we cannot guarantee such compliance.

We caution you not to place undue reliance on forward-looking statements, which are based upon assumptions, expectations, plans, and projections subject to risks and uncertainties, including those, if any, identified in the “Risk Factors” set forth in this report or in our annual report on Form 10-K for the fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on July 7, 2023, this Form 10-Q for the fiscal quarter ended December 31, 2023 and other documents that we subsequently file with the SEC that update, supplement or supersede such information, which may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements speak only as of the date when they are made. Except as required by federal securities law, we do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations, or the occurrence of unanticipated events after the date of those statements.

| December 31, 2023, Form 10-Q

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

IGC Pharma, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(Unaudited)

	December 31, 2023 ($)			March 31, 2023 ($)
ASSETS
Current assets:
Cash and cash equivalents		1,378			3,196
Accounts receivable, net		92			107
Short term investments		-			154
Inventory		1,925			2,651
Deposits and advances		188			358
Total current assets		3,583			6,466

Non-current assets:
Intangible assets, net		1,182			1,170
Property, plant, and equipment, net		5,268			8,213
Claims and advances		999			1,003
Operating lease asset		227			326
Total non-current assets		7,676			10,712
Total assets		11,259			17,178
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		648			530
Accrued liabilities and others		1,288			1,368
Total current liabilities		1,936			1,898

Non-current liabilities:
Long-term loans		138			141
Other liabilities		17			21
Operating lease liability		115			207
Total non-current liabilities		270			369
Total liabilities		2,206			2,267

Commitments and Contingencies – See Note 12

Stockholders’ equity:
Preferred stock, $0.0001 par value: authorized 1,000,000 shares, no shares issued or outstanding as of December 31, 2023, and March 31, 2023.
Common stock and additional paid-in capital, $0.0001 par value: 150,000,000 shares authorized; 63,734,439 and 53,077,436 shares issued and outstanding as of December 31, 2023, and March 31, 2023, respectively.		123,258			118,965
Accumulated other comprehensive loss		(3,425	)		(3,389	)
Accumulated deficit		(110,780	)		(100,665	)
Total stockholders’ equity		9,053			14,911
Total liabilities and stockholders’ equity		11,259			17,178

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

| December 31, 2023, Form 10-Q

Table of Contents

IGC Pharma, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

(Unaudited)

	Three months ended December 31,						Nine months ended December 31,
	2023			2022			2023			2022
	($)			($)			($)			($)

Revenue		204			332			1,050			745
Cost of revenue		(71	)		(230	)		(488	)		(366	)
Gross profit		133			102			562			379
Selling, General and Administrative expenses		(2,228	)		(1,574	)		(5,272	)		(4,943	)
Research and development expenses		(903	)		(806	)		(2,918	)		(2,968	)
Operating loss		(2,998	)		(2,278	)		(7,628	)		(7,532	)
Impairment Loss on PPE		(2,623	)		-			(2,623	)		-
Other income, net		32			29			136			56
Loss before income taxes		(5,589	)		(2,249	)		(10,115	)		(7,476	)
Income tax expense/benefit		-			-			-			-
Net loss attributable to common stockholders		(5,589	)		(2,249	)		(10,115	)		(7,476	)
Foreign currency translation adjustments		18			(61	)		(36	)		(462	)
Comprehensive loss		(5,571	)		(2,310	)		(10,151	)		(7,938	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.09	)		(0.04	)		(0.18	)		(0.14	)
Weighted-average number of shares used in computing net loss per share amounts:		63,725,084			53,063,473			57,039,035			52,412,830

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

| December 31, 2023, Form 10-Q

Table of Contents

IGC Pharma, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

Three months ended December 31, 2022	Number of Common Shares		Common Stock and Additional Paid in Capital ($)		Accumulated Deficit ($)			Accumulated Other Comprehensive Loss ($)			Total Stockholders’ Equity ($)
Balances as of September 30, 2022		53,058		117,899		(94,386	)		(3,369	)		20,144
Common stock-based compensation & expenses, net		19		483		-			-			483
Issuance of common stock through offering (net of expenses)		-		-		-			-			-
Cancellation/forfeiture of shares		-		-		-			-			-
Net loss		-		-		(2,249	)		-			(2,249	)
Foreign currency translation adjustments		-		-		-			(61	)		(61	)
Balances as of December 31, 2022		53,077		118,382		(96,635	)		(3,430	)		18,317

Three months ended December 31, 2023
Balances as of September 30, 2023		63,707		122,732		(105,191	)		(3,443	)		14,098
Common stock-based compensation & expenses, net		27		526		-			-			526
Issuance of common stock through offering (net of expenses)		-		-		-			-			-
Cancellation/forfeiture of shares		-		-		-			-			-
Net loss		-		-		(5,589	)		-			(5,589	)
Foreign currency translation adjustments		-		-		-			18			18
Balances as of December 31, 2023		63,734		123,258		(110,780	)		(3,425	)		9,053

Nine months ended December 31, 2022	Number of Common Shares			Common Stock and Additional Paid in Capital ($)		Accumulated Deficit ($)			Accumulated Other Comprehensive Loss ($)			Total Stockholders’ Equity ($)
Balances as of March 31, 2022		51,054			116,019		(89,159	)		(2,968	)		23,892
Common stock-based compensation & expenses, net		1,815			2,260		-			-			2,260
Issuance of common stock through offering (net of expenses)		208			103		-			-			103
Cancellation/forfeiture of shares		-			-		-			-			-
Net loss		-			-		(7,476	)		-			(7,476	)
Foreign currency translation adjustments		-			-		-			(462	)		(462	)
Balances as of December 31, 2022		53,077			118,382		(96,635	)		(3,430	)		18,317

Nine months ended December 31, 2023
Balances as of March 31, 2023		53,077			118,965		(100,665	)		(3,389	)		14,911
Common stock-based compensation & expenses, net		1,157			1,433		-			-			1,433
Issuance of common stock through offering (net of expenses)		10,000			2,860		-			-			2,860
Cancellation/forfeiture of shares		(500	)		-		-			-			-
Net loss		-			-		(10,115	)		-			(10,115	)
Foreign currency translation adjustments		-			-		-			(36	)		(36	)
Balances as of December 31, 2023		63,734			123,258		(110,780	)		(3,425	)		9,053

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

| December 31, 2023, Form 10-Q

Table of Contents

IGC Pharma, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine months Ended December 31,
	2023 ($)			2022 ($)
Cash flows from operating activities:
Net loss		(10,115	)		(7,476	)
Adjustment to reconcile net loss to net cash:
Depreciation and amortization		473			504
Common stock-based compensation and expenses, net		1,433			2,260
Impairment of assets		3,358			-
Other non-cash items		(42	)		39

Changes in:
Accounts receivables, net		14			(127	)
Inventory		(8	)		(200	)
Deposits and advances		169			656
Claims and advances		4			(91	)
Accounts payable		117			(516	)
Accrued and other liabilities		(83	)		(572	)
Operating lease asset		99			93
Operating lease liability		(92	)		(100	)
Net cash used in operating activities		(4,673	)		(5,530	)

Cash flow from investing activities:
Purchase of property, plant, and equipment		(123	)		(305	)
Sale of property, plant, and equipment		42			544
Investment in short term investments		154			(88	)
Acquisition and filing cost of patents and rights		(67	)		(144	)
Net cash provided by investing activities		6			7

Cash flows from financing activities:
Net proceeds from the issuance of common stock		2,860			103
Repayment of long-term loan		(3	)		(2	)
Net cash provided by financing activities		2,857			101

Effects of exchange rate changes on cash and cash equivalents		(8	)		(93	)
Net decrease in cash and cash equivalents		(1,818	)		(5,515	)
Cash and cash equivalents at the beginning of the period		3,196			10,460
Cash and cash equivalents at the end of the period		1,378			4,945

Supplementary information:
Non-cash items:
Common stock issued/granted for stock-based compensation, including patent acquisition		1,433			2,260

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

| December 31, 2023, Form 10-Q

Table of Contents

IGC Pharma, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS AND NINE MONTHS ENDED DECEMBER 31, 2023

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

Unless the context requires otherwise, all references in this report to “IGC,” “the Company,” “we,” “our” and/or “us” refer to IGC Pharma, Inc., together with our subsidiaries and beneficially owned subsidiary. Our public filings with the Securities and Exchange Commission, the “SEC,” are available on www.sec.gov. The information contained on our various websites, including www.igcinc.us, is not incorporated by reference in this report, and you should not consider such information to be a part of this report. We exclude our investments and minority non-controlling interests, and any information provided by them is not incorporated by reference in this report, and you should not consider such information to be a part of this report.

NOTE 1 – BUSINESS DESCRIPTION

Overview

IGC Pharma is a clinical-stage pharmaceutical company developing novel therapies for Alzheimer’s disease and conditions related to the central nervous system. The company is pursuing five assets: IGC-AD1, TGR-63, LMP, IGC-1C, and IGC-M3, all of which target Alzheimer’s disease and are at various stages of development.

Our most clinically advanced investigational new drug for Alzheimer’s, IGC-AD1, has shown significant promise in preclinical studies. In Alzheimer’s cell lines, IGC-AD1 has demonstrated the potential to effectively suppress or ameliorate two key hallmarks of Alzheimer’s disease: plaques and tangles. In animal models, it has shown effectiveness in improving memory. Furthermore, in a Phase 1 multiple ascending dose (“MAD”) trial, it exhibited potential efficacy in reducing neuropsychiatric symptoms, including agitation, anxiety, and depression. IGC-AD1 is currently in a Phase 2B, multi-center, randomized, double-blind, placebo-controlled trial, specifically designed to address agitation in dementia from Alzheimer’s disease (clinicaltrials.gov, NCT05543681). Alzheimer’s impacts more than 15 million individuals in North America and Europe. The Company has 13 trial sites under contract in the US and Canada for its Phase 2B trial.

Our portfolio includes four other small molecule assets, each at distinct stages of development, all with a singular mission — to transform the landscape of Alzheimer’s treatment. LMP targets neuroinflammation, Aβ plaques, and neurofibrillary tangles, TGR-63 targets Aβ plaque, where we seek to disrupt the progression of Alzheimer’s disease. IGC-M3 targets the inhibition of Aβ plaque aggregation with the potential to create a profound impact on early-stage Alzheimer’s. IGC-1C targets tau and neurofibrillary tangles, IGC-1C represents a forward-thinking approach to Alzheimer’s therapy.

Furthermore, IGC controls a total of 21 patent filings. IGC maintains a state-of-the-art manufacturing facility in Washington State, which is poised for potential use in a Phase 3 trial and commercialization of IGC-AD1. In Bogota, Colombia, we also operate an R&D laboratory and an internal Contract Research Organization (“CRO”) that provides clinical trial services. We are actively expanding our technological capabilities with a primary focus on Generative Artificial Intelligence (“AI”) to enhance various aspects of clinical trial operations and data analysis. Our Company is investing in and pursuing AI development with an immediate focus on clinical trial processes, and analysis. Our AI initiatives are centered on informing clinical trials, developing a methodology for early detection of Alzheimer’s, and investigating the interaction of our molecules with cannabinoids.

Collectively, these core assets and initiatives underscore our commitment to advancing the field of pharmaceuticals, delivering groundbreaking treatments, and creating lasting value for our investors. We remain steadfast in our pursuit of excellence and our mission to improve the lives of those affected by Alzheimer’s and related conditions.

Our manufacturing facility is also utilized to produce women’s wellness products under the brand “Holief.” IGC Pharma is a Maryland corporation established in 2005 with a fiscal year ending on March 31, spanning a 52- or 53-week period. The Company operates in two primary business segments: Life Sciences and Infrastructure.

Life Sciences Segment

Pharmaceutical: Since 2014, the Company has focused primarily on the potential uses of phytocannabinoids, in combination with other compounds, to treat multiple diseases, such as 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.

| December 31, 2023, Form 10-Q

Table of Contents

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 syndrome (“PMS”). The products are available online and through Amazon and other online channels. In addition, we white label our product formulations to other companies that market them under their brand.

Phase 2 Clinical Trial Update

In this document, we use the terms Phase 2 and Phase 2B interchangeably, though typically, a Phase 2 trial is divided into a Phase 2A and a Phase 2B trial. Phase 2A is designed to assess dosing requirements, while Phase 2B is intended to establish efficacy. Our company has started a Phase 2B protocol called “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 trial is powered at 146 Alzheimer’s patients, with half receiving a placebo, and is a superior, parallel-group study.

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 Phase 2 trial will also look at eleven exploratory objectives, including changes in anxiety, changes in cognitive processes such as attention, orientation, language, and visual spatial skills as well as memory, changes in depression, delusions, hallucinations, euphoria/elation, apathy, disinhibition, irritability, aberrant motor behavior, sleep disorder, appetite, quality of life, and caregiver burden. 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. CYP2C9 ranks amongst the most important drug metabolizing enzymes in humans, as it breaks down over 100 drugs, including nonsteroidal anti-inflammatory drugs. 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 and (ii) rental of heavy construction equipment.

Business Organization

As of December 31, 2023, the Company had the following operating subsidiaries: Techni Bharathi Private Limited (TBL), IGCare LLC, HH Processors, LLC (formerly Holi Hemp LLC), IGC Pharma LLC, SAN Holdings LLC, Sunday Seltzer LLC, Hamsa Biopharma India Pvt. Ltd., Colombia-based beneficially-owned subsidiary IGC Pharma SAS (formerly Hamsa Biopharma Colombia SAS) and IGC Pharma IP LLC. The Company’s fiscal year is the 52- or 53-week period that ends on March 31. The Company’s principal office is in Maryland. Additionally, the Company has offices in Washington state, Colombia, and India. The Company’s filings are available on www.sec.gov. IGC Pharma, Inc. was incorporated in 2005.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying condensed consolidated Balance Sheet as of December 31, 2023, and March 31, 2023, condensed consolidated statements of operations for the three months and nine months ended December 31, 2023, and 2022, and condensed consolidated statements of cash flows for the nine months ended December 31, 2023, and 2022, are unaudited. The consolidated balance sheet as of March 31, 2023, has been derived from audited financial statements, and the accompanying as of December 31, 2023 unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the SEC.

SEC Form 10-Q filed by IGC Pharma Inc.