indiaglob20220630

indiaglob20220630_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 June 30, 2022

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

Commission file number: 001-32830

INDIA GLOBALIZATION CAPITAL, 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

52,534,353 shares of our common stock were outstanding as of August 1, 2022.

| June 30, 2022, Form 10-Q

INDIA GLOBALIZATION CAPITAL, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

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	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33

SIGNATURES		34

| June 30, 2022, 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 on the sale of our products and services. The Company may not be able to complete human trials on our investigational drug candidate, or, once conducted, the results of human trials may not be favorable or as anticipated or may reflect lack of efficacy in humans or animals. Precautions including social distancing and travel restrictions, among others, surrounding the ongoing SARS CoV 2 (“COVID-19”) pandemic 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, 2022, filed with the Securities and Exchange Commission (“SEC”) on June 23, 2022, that 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.

| June 30, 2022, Form 10-Q

	June 30, 2022 ($)			March 31, 2022 ($)
ASSETS
Current assets:
Cash and cash equivalents		8,053			10,460
Accounts receivable, net		147			125
Inventory		3,622			3,548
Deposits and advances		905			978
Total current assets		12,727			15,111

Intangible assets, net		937			917
Property, plant, and equipment, net		9,161			9,419
Claims and advances		922			937
Operating lease asset		419			450
Total long-term assets		11,439			11,723
Total assets		24,166			26,834
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		456			981
Accrued liabilities and others		1,200			1,457
Short-term loans		3			3
Total current liabilities		1,659			2,441

Long-term loans		143			144
Other liabilities		16			16
Operating lease liability		308			341
Total non-current liabilities		467			501
Total liabilities		2,126			2,942

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 June 30, 2022, and March 31, 2022.
Common stock and additional paid-in capital, $0.0001 par value: 150,000,000 shares authorized; 51,840,603 and 51,054,017 shares issued and outstanding as of June 30, 2022 and March 31, 2022, respectively.		117,171			116,019
Accumulated other comprehensive loss		(3,187	)		(2,968	)
Accumulated deficit		(91,944	)		(89,159	)
Total stockholders’ equity		22,040			23,892
Total liabilities and stockholders’ equity		24,166			26,834

	Three months ended June 30,
	2022 ($)			2021 ($)
Revenue		212			77
Cost of revenue		(70	)		(51	)
Gross profit		142			26
Selling, general and administrative expenses		(1,550	)		(1,776	)
Research and development expenses		(1,394	)		(444	)
Operating loss		(2,802	)		(2,194	)
Impairment of investment		-			(37	)
Other income, net		17			443
Loss before income taxes		(2,785	)		(1,788	)
Income tax expense/benefit		-			-
Net loss attributable to common stockholders		(2,785	)		(1,788	)
Foreign currency translation adjustments		(219	)		(86	)
Comprehensive loss		(3,004	)		(1,874	)

Loss per share attributable to common stockholders:
Basic and diluted	$	(0.05	)	$	(0.04	)
Weighted-average number of shares used in computing loss per share amounts:		51,616,598			47,910,866

	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, 2021		47,827			109,720			(74,143	)		(2,774	)		32,803
Common stock-based compensation and expenses, net		-			125			-			-			125
Issuance of common stock through offering (net of expenses)		500			726			-			-			726
Other adjustments		(43	)		(43	)		-			-			(43	)
Net loss		-			-			(1,788	)		-			(1,788	)
Loss on foreign currency translation		-			-			-			(86	)		(86	)
Balances as of June 30, 2021		48,284			110,528			(75,931	)		(2,860	)		31,737


Balances as of March 31, 2022		51,054			116,019			(89,159	)		(2,968	)		23,892
Common stock-based compensation and expenses, net		787			1,152			-			-			1,152
Issuance of common stock through offering (net of expenses)		-			-			-			-			-
Net loss		-			-			(2,785	)		-			(2,785	)
Loss on foreign currency translation		-			-			-			(219	)		(219	)
Balances as of June 30, 2022		51,841			117,171			(91,944	)		(3,187	)		22,040

	Three months Ended June 30,
	2022 ($)			2021 ($)
Cash flows from operating activities:
Net loss		(2,785	)		(1,788	)
Adjustment to reconcile net loss to net cash:
Depreciation and amortization		162			157
Impairment of non-marketable securities		-			37
Common stock-based compensation and expenses, net		1,152			125
Loss on sale of Fixed Asset		68			-
Forgiveness of PPP Loan		-			(430	)

Changes in:
Accounts receivables, net		(23	)		13
Inventory		(74	)		2
Deposits and advances		73			4
Claims and advances		15			7
Accounts payable		(524	)		90
Accrued and other liabilities		(258	)		(46	)
Operating lease asset		31			(50	)
Operating lease liability		(33	)		28
Net cash used in operating activities		(2,196	)		(1,851	)

Cash flow from investing activities:
Purchase of property, plant, and equipment		(127	)		(93	)
Acquisition and filing cost of patents and rights		(31	)		(2	)
Net cash used in investing activities		(158	)		(95	)

Cash flows from financing activities:
Issuance of equity stock through offering (net of expenses)		-			726
Proceeds from/repayment of long-term loan		(1	)		-
Net cash (used in)/provided by financing activities		(1	)		726

Effects of exchange rate changes on cash and cash equivalents		(52	)		(9	)
Net decrease in cash and cash equivalents		(2,407	)		(1,229	)
Cash and cash equivalents at the beginning of the period		10,460			14,548
Cash and cash equivalents at the end of the period		8,053			13,319

Supplementary information:
Cash paid for interest					-
Non-cash items:
Common stock issued/granted for stock-based compensation, including patent acquisition		1,152			125
Forgiveness of PPP Loan		-			(430	)
Amortization of operating lease		28			27

	*(in thousands)* *Three months ended June 30,*
	2022 ($)		2021 ($)
Infrastructure segment
Rental income (1)		10		-
Construction contracts (2)		-		15

Life Sciences segment
Wellness and lifestyle (3)		80		62
White labeling services (4)		122		-
Total		212		77

	*(in thousands)*
	As of June 30, 2022 ($)		As of March 31, 2022 ($)
Raw materials		2,242		2,247
Work-in-Progress		628		584
Finished goods		752		717
Total		3,622		3,548

	*(in thousands)*
	As of June 30, 2022 ($)			As of March 31, 2022 ($)
*Amortized intangible assets*
Patents		522			290
Other intangibles		32			32
Accumulated amortization		(61	)		(51	)
Total amortized intangible assets		493			271

*Other intangible assets*
Patents		444			646
Other intangibles		-			-
Total unamortized intangible assets		444			646
Total intangible assets		937			917

Estimated amortization expense	*(in thousands)* *($)*
For the year ended 2024		11
For the year ended 2025		12
For the year ended 2026		14
For the year ended 2027		15
For the year ended 2028		16

	*(in thousands, except useful life)*
	Useful Life (years)	As of June 30, 2022 ($)			As of March 31, 2022 ($)
Land	N/A		4,266			4,438
Buildings and facilities	25		2,966			2,810
Plant and machinery	5-20		4,351			4,594
Computer equipment	3		241			241
Office equipment	3-5		184			145
Furniture and fixtures	5		142			141
Vehicles	5		161			163
Construction in progress	N/A		-			108
Total gross value			12,311			12,639
Less: Accumulated depreciation			(3,150	)		(3,220	)
Total property, plant, and equipment, net			9,161			9,419

(1)	The claims receivable is due from the Cochin International Airport (“CIA”) which is partially owned by the State Government of Kerala. While the Company has initiated collection proceedings in the Commercial Court of Ernakulam, the Company believes it will be difficult to receive the amount in the next 12 months because of the time required for legal collection proceedings. The decrease in claims receivable was mainly due to foreign exchange translation as a result of a decrease in the value of the Indian Rupee.

(2)	Includes $200 thousand owed to one of our manufacturers for the purchase of equipment.

As of June 30, 2022, the following table summarizes the maturity of our lease liabilities:


June-23	149
June-24	149
June-25	133
June-26	87
June-27	-
Less: Present value discount	(84	)
Total lease liabilities	434

	Granted in Fiscal 2023			Granted in Fiscal 2022
Expected life of options	5 years			5 years
Vested options		100	%		100	%
Risk free interest rate		2.64	%		2.42	%
Expected volatility		285	%		282	%
Expected dividend yield	Nil			Nil

Non-vested shares	*Shares* *(in thousands)* *(#)*			Weighted average grant date fair value ($)
Non-vested shares as of March 31, 2022		5,283			1.17
Granted		1,660			0.43
Vested		(1,022	)		(1.12	)
Cancelled/forfeited		-			-
Non-vested shares as of June 30, 2022		5,921			0.98

Options	*Shares* *(in thousands)* *(#)*		Weighted average grant date fair value ($)		Weighted average exercise price ($)
Options outstanding as of March 31, 2022		300		0.93		0.34
Granted		-		-		-
Exercised		-		-		-
Cancelled/forfeited		-		-		-
Options outstanding as of June 30, 2022		300		0.93		0.34

	*(in thousands)* *Three months ended* *June 30, 2022* *($)*		*(in thousands)* *Three months ended* *June 30, 2021* *($)*
Operating lease costs		37		37
Short term lease costs		45		31
Variable lease costs		-		-
Total lease costs		82		68

	*(in thousands)*		*(in thousands)*
	*As of* *June 30, 2022* *($)*		*As of* *March 31, 2022* *($)*
Assets
Operating lease asset		419		450
Total lease assets		419		450

Liabilities
Current liabilities:
Accrued liabilities and others (current portion – operating lease liability)		126		123
Noncurrent liabilities:
Operating lease liability (non-current portion – operating lease liability)		308		341
Total lease liability		434		464

	*(in thousands)* *As of* *June 30, 2022* *($)*
Supplemental cash flow and non-cash information related to leases is as follows:
Cash paid for amounts included in the measurement of lease liabilities
–Operating cash flows from operating leases		26
Right-of-use assets obtained in exchange for operating lease obligations		419

	*(in thousands)*
	As of
	June 30, 2022 ($)		March 31, 2022 ($)
Statutory reserve		16		16
Total		16		16

SEC Form 10-Q filed by India Globalization Capital Inc.