IGC Reports Financial Results for the September 30, 2021 Quarter

Rhea-AI Summary

India Globalization Capital, Inc. (NYSE American: IGC) reported financial results for Q2 of fiscal 2022, ending September 30, 2021. Revenue declined to approximately $56,000 from $125,000 in the same quarter last year, with Infrastructure segment revenue at $3,000 down from $67,000. SG&A expenses surged to about $4.1 million due to inventory theft and legal costs. R&D expenses increased slightly to $276,000 and the net loss widened to approximately $4.3 million or ($0.08) per share. The company is progressing with the Phase 1 trial of its THC-based drug IGC-AD1 for Alzheimer’s, expecting future FDA submissions.

Positive

• Progress in Phase 1 clinical trial of IGC-AD1 for Alzheimer's, showing safety and tolerability.
• Good Manufacturing Practice (GMP) certificate received for hemp processing facility.
• Provisional patent application filed for addressing Neuropsychiatric Symptoms in dementia.

Negative

• Revenue dropped significantly to $56,000 compared to $125,000 year-over-year.
• SG&A expenses increased by approximately $2.6 million, largely due to inventory theft.
• Net loss increased to approximately $4.3 million, up from $1.65 million in the prior year.

BETHESDA, Md.--(BUSINESS WIRE)-- India Globalization Capital, Inc. (NYSE American: IGC) announces its financial results for the three months ended September 30, 2021, which is the second quarter of the Company’s 2022 fiscal year.

The highlights for the quarter are:

• As previously disclosed, on September 7, 2021, the Company announced the completion of its Phase 1 clinical trial on IGC’s tetrahydrocannabinol (“THC”) based investigational new drug, IGC-AD1, intended to alleviate certain symptoms of individuals who have Alzheimer’s disease. The primary endpoint of this Phase 1 trial was safety and tolerability. Based on this study and subject to FDA concurrence the cannabis-based investigational drug IGC-AD1 was generally safe and well-tolerated by the Alzheimer’s trial participants. The trial’s secondary endpoints including pharmacokinetics, genotyping, Neuropsychiatric Inventory (NPI), and measurement of suicide severity, have also been completed. We expect to report this data as it becomes available and after submission to the FDA.

• The Company is preparing an INDA submission to the FDA for a Phase 2/3 trial for the use of IGC-AD1 to address symptoms associated with Alzheimer’s disease. The Company believes that this may be the first such filing using low doses of a natural phytocannabinoid, THC, on patients suffering from Alzheimer’s disease.

• On September 17, 2021, the Company filed a provisional patent application (IGC-513) with the United States Patent and Trademark Office (“USPTO”) for addressing Neuropsychiatric Symptoms (NPS) associated with dementia using a dosing pattern of IGC-AD1 that was employed in the recently completed Phase 1 trial on patients suffering from Alzheimer's disease. The patent filing specifically addresses reducing the overall presence and severity of NPS in dementia as measured by the NPI, a tool that assesses the presence of twelve symptoms such as delusion, hallucination, agitation/aggression, depression, anxiety, elation/euphoria, apathy, disinhibition, irritability, aberrant motor behavior, sleep disorder, appetite and eating disorders.

• On October 5, 2021, the Company received a Good Manufacturing Practice (GMP) certificate for its hemp processing facility in Vancouver Washington where it manufactures tinctures, lotions, gummies and other topical and consumable products.
  
  
• During the six months ended September 30, 2021, the Company raised approximately $4.1 million of net proceeds from the issuance of equity stock. The Company had entered an “at the market” (“ATM”) offering pursuant to a Sales Agreement entered on January 13, 2021, with The Benchmark Company, LLC for the issuance and sale of up to $75,000,000 of the Company’s shares of common stock, par value $0.0001 per share.

Revenue in the quarters ended September 30, 2021, and September 30, 2020, were primarily derived from our Life Sciences segment, which involved sales of products such as lotion, gummies, and alcohol-based hand sanitizers, among others. Revenue was approximately $56 thousand and $125 thousand for the three months ended September 30, 2021, and the three months ended September 30, 2020, respectively. Revenue in our Infrastructure segment for the three months ended September 30, 2021, was $3 thousand and $67 thousand in the three months ended September 30, 2020. The revenue relates to the execution of a construction contract. Primarily due to COVID-19, we have limited visibility on when either of our segments will stabilize, generate significant revenue, and become predictable. We expect volatility in both segments in the foreseeable future.

Selling, General and Administrative (SG&A) expenses increased by approximately $2.6 million to approximately $4.1 million for the three months ended September 30, 2021, from approximately $1.48 million for the three months ended September 30, 2020. The $2.6 million increase in SG&A is attributable to the following: approximately $1.7 million to a provision for stolen inventory at our vendor’s premises, approximately $352 thousand for previously announced legal settlements and associated legal expenses, approximately $125 thousand for an IRS tax penalty, and non-cash increases of $223 thousand and $55 thousand for common stock-based compensation and depreciation respectively. The remaining increase of about $ 153 thousand is related to marketing and other operating expenses.

Research and Development (“R&D”) expenses were attributed to conducting the Phase 1 trial on patients suffering from Alzheimer’s disease and product research in our Life Sciences segment. The R&D expenses for the three months ended September 30, 2021, are approximately $276 thousand and approximately $219 thousand for the three months ended September 30, 2020. We expect R&D expenses to increase with progression in trials on IGC-AD1, subject to FDA approval.

Net loss for the three months ended September 30, 2021, was approximately $4.3 million or ($0.08) per share, compared to approximately $1.65 million or ($0.04) per share for the three months ended September 30, 2020.

About IGC: IGC operates two lines of business: (i) infrastructure and (ii) life sciences. The Company is based in Potomac, Maryland, U.S.A. social media: www.igcinc.us / www.igcpharma.com

Forward-looking Statements: This press release contains forward-looking statements. These forward-looking statements are based largely on IGC’s expectations and are subject to several risks and uncertainties, certain of which are beyond IGC’s control. For the next several years, our success is highly correlated primarily with the successful outcome of our clinical trials and the recovery of the world and local economies following the COVID-19 pandemic, and, secondarily, on the sale of our products and services candidates. IGC may not be able to complete human trials on our investigational drug candidates, or, once conducted, the results of human trials testing may not be favorable or as anticipated. Our projections and investments anticipate stable pricing, which may not hold out over the next several years, and certain regulatory changes, specifically in states where medical cannabis has been, is, or will be legalized and the diseases which we anticipate our products will target are approved conditions for treatment or usage with cannabis/cannabinoids. 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. An additional risk factor worth highlighting specifically related to patent licensing is that the patent applications we have licensed may not be granted by the 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 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. Failure or delay with respect to any of the factors above could have a material adverse effect on our business, future results of operations, our stock price, and our financial condition. Actual results could differ materially from these forward-looking statements as a result of, the factors described both herein and in IGC’s SEC filings. IGC incorporates by reference the Risk Factors identified in its Annual Report on Form 10-K filed with the SEC on June 14, 2021, Quarterly Reports on Form 10-Q filed with the SEC on August 11, 2021 and October 29, 2021, as if fully incorporated and restated herein. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this release will in fact occur.

< Financial Tables to Follow>

India Globalization Capital, Inc. CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
		September 30, 2021 ($)					March 31, 2021 ($)
ASSETS
Current assets:
Cash and cash equivalents			14,399					14,548
Accounts receivable, net			138					175
Inventory			5,498					5,478
Non-Marketable securities			-					80
Deposits and advances			1,669					3,236
Total current assets			21,704					23,517
Intangible assets, net			411					407
Property, plant and equipment, net			10,589					10,840
Non-Marketable securities			11					12
Claims and advances			611					603
Operating lease asset			510					488
Total long-term assets			12,132					12,350
Total assets			33,836					35,867
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable			418					476
Accrued liabilities and others			1,594					1,588
Short-term loans			3					304
Total current liabilities			2,015					2,368
Long-term loans			146					276
Other liabilities			15					15
Operating lease liability			404					405
Total non-current liabilities			565					696
Total liabilities			2,580					3,064
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 September 30, 2021 and March 31, 2021.			-					-
Common stock and additional paid-in capital, $0.0001 par value: 150,000,000 shares authorized; 51,041,017 and 47,827,273 shares issued and outstanding as of September 30, 2021 and March 31, 2021, respectively.			114,371					109,720
Accumulated other comprehensive loss			(2,840	)				(2,774	)
Accumulated deficit			(80,275	)				(74,143	)
Total stockholders' equity			31,256					32,803
Total liabilities and stockholders' equity			33,836					35,867

These financial statements should be read in connection with the accompanying notes on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC on October 29, 2021.

India Globalization Capital, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except loss per share and share data)
		Three months ended September 30,
		2021   ($)					2020   ($)
Revenue			56					125
Cost of revenue			(18	)				(99	)
Gross Profit			38					26
Selling, general and administrative expenses			(4,110	)				(1,483	)
Research and development expenses			(276	)				(219	)
Operating loss			(4,348	)				(1,676	)
Impairment of investment			-					-
Other income, net			4					19
Loss before income taxes			(4,344	)				(1,657	)
Net loss attributable to common stockholders			(4,344	)				(1,657	)
Foreign currency translation adjustments			20					142
Comprehensive loss			(4,324	)				(1,515	)
Loss per share attributable to common stockholders:
Basic & diluted		$	(0.09	)			$	(0.04	)
Weighted-average number of shares used in computing loss per share amounts:			49,948,930					41,244,109

These financial statements should be read in connection with the accompanying notes on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC on October 29, 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211029005572/en/

Claudia Grimaldi

301-983-0998

Source: India Globalization Capital, Inc.

FAQ

What were India Globalization Capital's financial results for Q2 of fiscal 2022?

For the three months ended September 30, 2021, IGC reported revenue of approximately $56,000 and a net loss of about $4.3 million.

What is IGC's progress on IGC-AD1 for Alzheimer's disease?

IGC completed its Phase 1 clinical trial of IGC-AD1, which was found to be generally safe and well-tolerated.

How did SG&A expenses change for IGC in Q2 2022?

SG&A expenses increased to approximately $4.1 million in Q2 2022, largely due to stolen inventory and legal settlements.

What future plans does IGC have for IGC-AD1?

IGC is preparing to submit an Investigational New Drug Application (INDA) to the FDA for Phase 2/3 trials of IGC-AD1.