UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period
ended
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer
Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(
(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 | ||
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. ☑
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).
☑
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 ☐ |
| 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
 | | September 30, 2026, Form 10-Q |
i
IGC PHARMA, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2026
Table of Contents
| | September 30, 2026, Form 10-Q |
i
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,” “hope,” “potential,” “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. 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 but not limited to the 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 transition report on Form 10-KT for the nine months transition period ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on March 18, 2026, this quarterly report on Form 10-Q 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.
| | September 30, 2026, Form 10-Q |
ii
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
IGC Pharma, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| September 30, 2026 (Unaudited) ($) | December 31, 2025 (Audited) ($) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Current investment | ||||||||
| Deposits and advances | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Intangible assets, net | ||||||||
| Property, plant, and equipment, net | ||||||||
| Claims and advances | ||||||||
| Operating lease asset | - | |||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | ||||||||
| Accrued liabilities and others | ||||||||
| Current loans | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Non-current loans | ||||||||
| Operating lease liability | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies – See Note 12 | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock and additional paid-in capital, $ | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | ||||||||
The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.
| | September 30, 2026, Form 10-Q |
1
IGC Pharma, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except loss per share and share data)
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| ($) | ($) | ($) | ($) | |||||||||||||
| Revenue | ||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Selling, general, and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Research and development expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense)/income, net | ( | ) | ( | ) | ||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | ||||||||||||||||
| Net loss attributable to common stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||
| Basic and diluted | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Weighted-average number of shares used in computing loss per share amounts: | ||||||||||||||||
The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.
| | September 30, 2026, Form 10-Q |
2
IGC Pharma, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
| Three months ended September 30, 2025 | Number of Common Shares | Common Stock and Additional Paid in Capital ($) | Accumulated Deficit ($) | Accumulated Other Comprehensive Loss ($) | Total Stockholders’ Equity ($) | |||||||||||||||
| Balances as of June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||
| Common stock-based compensation & expenses, net | - | |||||||||||||||||||
| Common stock subscribed but not yet issued | - | - | - | |||||||||||||||||
| Issuance of common stock through offering (net of expenses) | ||||||||||||||||||||
| Other adjustments | - | - | - | - | - | |||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||
| Foreign currency translation adjustments | - | ( | ) | ( | ) | |||||||||||||||
| Reclassification due to the liquidation of Subsidiaries | - | - | ( | ) | - | |||||||||||||||
| Balances as of September 30, 2025 | ( | ) | ( | ) | ||||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||
| Balances as of June 30, 2026 | ( | ) | ( | ) | ||||||||||||||||
| Common stock-based compensation & expenses, net | ||||||||||||||||||||
| Common stock subscribed but not yet issued | - | ( | ) | ( | ) | |||||||||||||||
| Issuance of common stock through offering (net of expenses) | ||||||||||||||||||||
| Other adjustments | - | - | - | - | - | |||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | - | ( | ) | ( | ) | |||||||||||||||
| Reclassification due to the liquidation of Subsidiaries | - | - | - | - | - | |||||||||||||||
| Balances as of September 30, 2026 | ( | ) | ( | ) | ||||||||||||||||
| Nine months ended September 30, 2025 | Number of Common Shares | Common Stock and Additional Paid in Capital ($) | Accumulated Deficit ($) | Accumulated Other Comprehensive Loss ($) | Total Stockholders’ Equity ($) | |||||||||||||||
| Balances as of December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||
| Common stock-based compensation & expenses, net | - | |||||||||||||||||||
| Common stock subscribed but not yet issued | - | - | - | |||||||||||||||||
| Issuance of common stock through offering (net of expenses) | ||||||||||||||||||||
| Other adjustments | - | ( | ) | |||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | - | ( | ) | ( | ) | |||||||||||||||
| Reclassification due to the liquidation of Subsidiaries | - | - | ( | ) | - | |||||||||||||||
| Balances as of September 30, 2025 | ( | ) | ( | ) | ||||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| Balances as of December 31, 2025 | ( | ) | ( | ) | ||||||||||||||||
| Common stock-based compensation & expenses, net | ||||||||||||||||||||
| Common stock subscribed but not yet issued | - | |||||||||||||||||||
| Issuance of common stock through offering (net of expenses) | ||||||||||||||||||||
| Other adjustments | - | - | - | - | - | |||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Foreign currency translation adjustments | - | ( | ) | ( | ) | |||||||||||||||
| Reclassification due to the liquidation of Subsidiaries | - | - | - | - | - | |||||||||||||||
| Balances as of September 30, 2026 | ( | ) | ( | ) | ||||||||||||||||
The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.
| | September 30, 2026, Form 10-Q |
3
IGC Pharma, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Nine months ended September 30, | ||||||||
| 2026 ($) | 2025 ($) | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustment to reconcile net loss to net cash: | ||||||||
| Depreciation and amortization | ||||||||
| Impairment of assets | ||||||||
| Stock-based compensation and expenses, net | ||||||||
| Other items | ( | ) | ||||||
| Changes in: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Deposits and advances | ||||||||
| Claims and advances | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued and other liabilities | ( | ) | ||||||
| Operating lease asset | ||||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flow from investing activities: | ||||||||
| Purchase of property, plant, and equipment | ( | ) | ( | ) | ||||
| Sale of property, plant, and equipment | ||||||||
| Investment in marketable securities | ( | ) | ||||||
| Acquisition and development of intangible assets | ( | ) | ( | ) | ||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from the issuance of common stock | ||||||||
| Net proceeds from the loan | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effects of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net (decrease)/ increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | ||||||||
| Supplementary information: | ||||||||
| Cash paid for interest | ||||||||
| Other item: | ||||||||
| Unrealized loss from current investment | ||||||||
| Amortization of debt discount and issuance cost | ||||||||
| Net change in fair value of derivative liability (gain) | ( | ) | ||||||
| Profit/Loss on sale of fixed assets, net | ( | ) | ||||||
| Provision for bad debt | ||||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Settlement of the following due to executive officers through common stock subscriptions (Note 11 and Note 13): | ||||||||
| Compensation payable during the period (Other item) | ||||||||
| Compensation | ||||||||
| Loans | ||||||||
The accompanying notes should be read in connection with these Condensed Consolidated Financial Statements.
| | September 30, 2026, Form 10-Q |
4
IGC Pharma, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026
(in thousands, except for share data and loss per share, unaudited)
Unless the context requires otherwise, all references in this report to “IGC,” “IGC Pharma,” “the Company,” “we,” “our,” and “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.igcpharma.com, 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, Inc. is a clinical-stage biotechnology company developing novel therapeutic candidates for neuropsychiatric and neurodegenerative disorders, with a primary focus on Alzheimer’s disease (“AD”). Our strategy is to address both high-burden symptoms and underlying disease mechanisms through differentiated pharmaceutical formulations, supported by targeted clinical development and data-driven research.
Our lead product candidate, IGC-AD1, is being evaluated in CALMA, a randomized, double-blind, placebo-controlled Phase 2 clinical trial for agitation associated with Alzheimer’s dementia — a condition affecting a substantial proportion of patients and associated with significant patient distress, caregiver burden, and healthcare utilization. Beyond symptom management, preclinical studies of IGC-AD1 suggest activity against biological pathways associated with AD pathology, which we believe may support its evaluation in broader disease-modifying settings, although there can be no assurance.
As of September 30, 2026, the Company had completed enrollment in its CALMA Phase 2 clinical trial evaluating IGC-AD1 for the treatment of agitation associated with Alzheimer’s dementia, with 168 participants randomized, including planned over-enrollment. The trial remained ongoing as of September 30, 2026.
Beyond IGC-AD1, our pipeline includes earlier-stage candidates targeting AD mechanisms, including TGR-63 and other investigational compounds in preclinical evaluation. These programs are intended to broaden our long-term portfolio while maintaining a disciplined focus on clinical execution and capital efficiency.
We are also developing two proprietary artificial intelligence (“AI”)-enabled platforms. MINT-AD is designed to support risk stratification and longitudinal assessment in AD using multimodal datasets and is intended as a clinical and research decision-support tool. The Agentic Harmonization Assistant (“AHA”) is designed to assist with the harmonization and analysis of fragmented biomedical datasets; we announced its beta version on June 23, 2026. MINT-AD and AHA remain under development and have not been approved or cleared as diagnostic or therapeutic products.
We operate as a clinical-stage organization and do not currently generate revenue from pharmaceutical product sales. Our limited revenue to date has been derived primarily from life-sciences activities outside our core drug-development programs. We fund our operations through equity and debt financings and expect to continue to incur operating losses as we advance our clinical and research programs.
Business Organization
As of September 30, 2026, the Company had the following operating subsidiaries: HH Processors, LLC, IGC Pharma IP, LLC, IGC Pharma, LLC, SAN Holdings, LLC, Hamsa Biopharma India Pvt. Ltd., and Colombia-based beneficially owned subsidiary IGC Pharma SAS. The Company’s fiscal year ends on December 31. The Company’s principal office is in Maryland, and it is a Maryland corporation established in 2005. Additionally, the Company has offices in Colombia, South America, and India. The Company’s filings are available on www.sec.gov.
| | September 30, 2026, Form 10-Q |
5
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying condensed consolidated balance sheet as of September 30, 2026, and December 31, 2025, condensed consolidated statements of operations and comprehensive loss and of changes in stockholders’ equity for the three months and nine months ended September 30, 2026, and 2025, and condensed consolidated statements of cash flows for the nine months ended September 30, 2026, and 2025, are unaudited. The consolidated balance sheet as of December 31, 2025, has been derived from audited financial statements, and the accompanying unaudited condensed consolidated financial statements as of September 30, 2026 (“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. As a result of the change in fiscal year-end from March 31 to December 31, comparative amounts for the nine months ended September 30, 2025, were derived from the Company’s accounting records for the corresponding calendar period and were not previously reported as a discrete fiscal period. The three months ended September 30, 2025, were previously reported in the Company’s Quarterly Report on Form 10-Q for that quarter
In addition, certain prior-period amounts may have been reclassified to conform to the current-period presentation. These reclassifications had no effect on previously reported total current liabilities, total liabilities, stockholders’ equity, or net loss.
Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the Company’s audited consolidated financial statements for the nine-month transition period ended December 31, 2025, contained in the Company’s transition report on Form 10-KT for the nine months ended December 31, 2025, filed with the SEC on March 18, 2026, specifically in Note 2 to the consolidated financial statements.
Principles of consolidation
The interim statements include the consolidated accounts of the Company and its subsidiaries. In the opinion of the Company’s management, the interim statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Transactions between the Company and its subsidiaries are eliminated in the consolidated financial statements. In the event of the liquidation of foreign subsidiaries, the cumulative translation adjustment is reclassified from accumulated other comprehensive loss to accumulated deficit through earnings. (ASC 830-30-40-1).
Presentation and functional currencies
IGC operates in the U.S., India, and Colombia, and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”), or the Colombian Peso (“COP”). As a result, changes in the relative values of the U.S. Dollar (“USD”), the INR, or the COP affect our financial statements.
The accompanying financial statements are reported in USD. The INR and COP are the functional currencies for certain subsidiaries of the Company. The translation of the functional currencies into USD is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues and expenses using average exchange rates prevailing during the reporting periods. Adjustments resulting from the translation of functional currency financial statements to the reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of stockholders’ equity. Transactions in currencies other than the functional currency during the period are converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of operations.
Going Concern
The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Subtopic 205-40, “Presentation of Financial Statements—Going Concern”, which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern.
The Company is currently in the clinical trial stage and has not yet achieved profitability. The Company expects to continue to incur significant operating and net losses, as well as negative cash flow from operations, in the near future.
For
the three months ended September 30, 2026, and 2025, the Company incurred net losses of approximately $
| | September 30, 2026, Form 10-Q |
6
During
the nine months ended September 30, 2026, the Company raised approximately $
Subsequent
to September 30, 2026, the Company raised approximately $
The
Company estimates that its current cash and cash equivalents, investments, anticipated financing activities,
and amounts reasonably expected to be available under its $
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. We had $
Current Investments
Lease
The
Company has elected the short-term lease exemption under ASC 842 for leases with a lease term of
Intangible assets
The Company’s intangible assets are accounted for in accordance with ASC Topic 350, Intangibles – Goodwill and Other. Intangible assets having indefinite lives are not amortized but instead are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value. We perform an impairment analysis on December 1 annually on the indefinite-lived intangible assets following the steps laid out in ASC 350-30-35-18. Our annual impairment analysis includes a qualitative assessment to determine if it is necessary to perform the quantitative impairment test. In performing a qualitative assessment, we review events and circumstances that could affect the significant inputs used to determine if the fair value is less than the carrying value of the intangible assets. If quantitative analysis is necessary, we would analyze various aspects, including revenues from the business associated with the intangible assets. In addition, intangible assets will be tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. The Company has analyzed a variety of factors on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe it is more likely than not that an impairment loss has been incurred.
Intangible assets with finite useful lives are amortized using the straight-line method over their estimated period of benefit. In accordance with ASC 360-10-35-21, definite-lived intangibles are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value.
The Company intends to capitalize trademarks and related expenses exceeding $2,500 per trademark.
| | September 30, 2026, Form 10-Q |
7
Software Development Costs
The Company is developing three proprietary software platforms:
1. A clinical data management platform designed for the collection, analysis, and real-time monitoring of clinical trial data.
2. MINT- AD – An AI-driven cognitive decline risk stratification and treatment personalization platform aimed at assisting in the early detection of AD and providing data-informed therapeutic suggestions; and
3. Agentic Harmonization Assistant (“AHA”) to support MINT-AD and the Company’s broader AI research and development efforts, IGC Pharma has and is developing AHA, an agentic analytics and data harmonization architecture designed to support large-scale AD research.
In accordance with ASC 985-20, Software to Be Sold, Leased, or Marketed, and ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software, the Company capitalizes development costs incurred after technological feasibility has been established (for software to be marketed) or when management has authorized and committed to funding the project and it is probable that the project will be completed and used as intended (for internal-use software). Costs incurred during the research and planning phase are expensed as incurred.
Effective January 1, 2026, the Company elected to early adopt ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40), on a prospective basis. The adoption did not have a material impact on the Company’s consolidated financial statements.
Capitalized
costs include direct labor, third-party development services, cloud computing infrastructure directly related
to model development and deployment, and associated overhead. These costs are amortized on a straight-line
basis over their estimated useful lives, typically
As
of the quarter ended September 30, 2026, the Company capitalized approximately $
Loss per share
The
computation of basic and diluted loss per share for the nine months ended September 30, 2026, excludes
potentially dilutive securities of approximately
The
weighted average number of shares outstanding for the nine months ended September 30, 2026, and 2025, used for
the computation of basic earnings per share (“EPS”), is
Cybersecurity
The Company maintains a cybersecurity risk management program designed to identify, assess, and mitigate risks from cybersecurity threats. The Company’s cybersecurity program, governance framework, and board oversight are described in Item 1C of the Company’s Annual Report on Form 10-KT for the nine-month transition period ended December 31, 2025.
There have been no material changes to the Company’s cybersecurity risk management program during the three months ended September 30, 2026. During the period, the Company did not identify any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, the Company’s business strategy, results of operations, or financial condition.
Revenue Recognition
The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). 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.
| | September 30, 2026, Form 10-Q |
8
ASC 606 prescribes a 5-step process to achieve its core principle. The Company recognizes revenue from trading, rental, or product sales as follows:
I. Identify the contract with the customer.
II. Identify the contractual performance obligations.
III. Determine the amount of consideration/price for the transaction.
IV. Allocate the determined amount of consideration/price to the performance obligations.
V. Recognize revenue when or as the performing party satisfies performance obligations.
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 Life Sciences segment.
In the Life Sciences segment, the revenue from the wellness and lifestyle business is recognized once goods have been sold to the customer and the performance obligation has been completed. In retail sales, we offer consumer products through our online stores. Revenue is recognized when control of the goods is transferred to the customer. 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.
Net sales disaggregated by significant products and services for the three months and nine months ended September 30, 2026, and 2025 are as follows:
| (in thousands) | ||||||||||||||||
| Three months ended September 30, 2026 ($) | Three months ended September 30, 2025 ($) | Nine months ended September 30, 2026 ($) | Nine months ended September 30, 2025 ($) | |||||||||||||
| Life Sciences segment | ||||||||||||||||
| Wellness and lifestyle (1) | ||||||||||||||||
| White labeling services (2) | ||||||||||||||||
| Total | ||||||||||||||||
| (1) | |
| (2) |
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, as clarified by ASU 2025-01. The Company is evaluating the impact of this standard on its disclosures.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which is effective for annual reporting periods beginning after December 15, 2028, and interim periods within those annual periods, with early adoption permitted. The Company has not yet adopted ASU 2025-10 and is evaluating the impact, if any, on its consolidated financial statements and disclosures.
Newly issued ASUs not discussed above are not expected to have a material impact on the Company’s consolidated financial position and results of operations because either the ASU is not applicable or the impact is expected to be immaterial.
| | September 30, 2026, Form 10-Q |
9
NOTE 3 – INVENTORY
| (in thousands) | ||||||||
| As of September 30, 2026 (Unaudited) ($) | As of December 31, 2025 (Audited) ($) | |||||||
| Raw materials | ||||||||
| Finished goods | ||||||||
| Total | ||||||||
We
capitalize inventory costs related to our investigational drug, provided that management determines there is a
potential alternative use for the inventory in future research and development projects or other purposes. As
of September 30, 2026, and December 31, 2025, the Company’s consolidated balance sheet reported
approximately $
NOTE 4 – DEPOSITS AND ADVANCES
| (in thousands) | ||||||||
| As of September 30, 2026 (Unaudited) ($) | As of December 31, 2025 (Audited) ($) | |||||||
| Advances to suppliers and consultants | ||||||||
| Other receivables and deposits | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total | ||||||||
The
Advances to suppliers and consultants primarily relate to advances to vendors. Prepaid expenses and other
current assets include approximately $
NOTE 5 – INTANGIBLE ASSETS
| (in thousands) | (in thousands) | |||||||||||||||||||||||
| September 30, 2026 (Unaudited) ($) | December 31, 2025 (Audited) ($) | |||||||||||||||||||||||
| Intangible Assets | Gross Amount | Accumulated Amortization | Net Amount | Gross Amount | Accumulated Amortization | Net Amount | ||||||||||||||||||
| Amortized Assets | ||||||||||||||||||||||||
| Patents | ( | ) | ( | ) | ||||||||||||||||||||
| Other intangibles | ( | ) | ( | ) | ||||||||||||||||||||
| Total amortized intangible assets | ( | ) | ( | ) | ||||||||||||||||||||
| Unamortized Assets | ||||||||||||||||||||||||
| Favorable Contract | ||||||||||||||||||||||||
| Software development cost | ||||||||||||||||||||||||
| Patents | ||||||||||||||||||||||||
| Other intangibles | ||||||||||||||||||||||||
| Total unamortized intangible assets | ||||||||||||||||||||||||
| Total Intangible Assets | ( | ) | ( | ) | ||||||||||||||||||||
| | September 30, 2026, Form 10-Q |
10
The gross amount of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing various patent applications in different countries, along with granted patents. It also includes acquisition costs related to domains and licenses.
The
amortization of patents and patent rights with a finite life is up to
As
of September 30, 2026, the Company has capitalized approximately $
As
of September 30, 2026, the Company recognized approximately $
The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, and reviews indefinite-lived intangible assets at least annually. The Company concluded that there was no impairment as of September 30, 2026.
| Estimated annual amortization expense | (in thousands) ($) | |||
| For the year ended 2026 | ||||
| For the year ended 2027 | ||||
| For the year ended 2028 | ||||
| For the year ended 2029 | ||||
| For the year ended 2030 | ||||
The increase in estimated amortization beginning in 2028 reflects the commencement of amortization of the Favorable Contract.
NOTE 6 – PROPERTY, PLANT, AND EQUIPMENT
| (in thousands, except useful life) | ||||||||||
| Useful Life (years) | As of September 30, 2026 (Unaudited) ($) | As of December 31, 2025 (Audited) ($) | ||||||||
| Buildings and facilities | ||||||||||
| Plant and machinery | ||||||||||
| Computer equipment | ||||||||||
| Office equipment | ||||||||||
| Furniture and fixtures | ||||||||||
| Vehicles | ||||||||||
| Total gross value | ||||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||||
| Total property, plant, and equipment, net | ||||||||||
The
depreciation expense in the three months ended September 30, 2026, and 2025 amounted to approximately $
Disposition of Assets
On
September 29, 2025, HH Processors LLC (formerly “Holi Hemp LLC”), a wholly owned subsidiary of the
Company, entered into a Sale of Assets and Manufacturing Agreement (the “Favorable Contract”) with
Wellness Essentials Northwest LLC (the “Buyer”) to sell certain equipment, inventory, and related
operating assets of its Vancouver, Washington facility.
| | September 30, 2026, Form 10-Q |
11
NOTE 7 – RESERVED
NOTE 8 – CLAIMS AND ADVANCES
| (in thousands) | ||||||||
| As of September 30, 2026 (Unaudited) ($) | As of December 31, 2025 (Audited) ($) | |||||||
| Claims receivable(1) | ||||||||
| Non-current deposits | ||||||||
| Total | ||||||||
| (1) |
NOTE 9 – RESERVED
NOTE 10 – ACCRUED LIABILITIES AND OTHERS
| (in thousands) | ||||||||
| As of September 30, 2026 (Unaudited) ($) | As of December 31, 2025 (Audited) ($) | |||||||
| Compensation and other contributions | ||||||||
| Provision for expenses | ||||||||
| Current lease liability | ||||||||
| Derivative Liability | ||||||||
| Other current liability | ||||||||
| Total | ||||||||
Compensation
and other contribution-related liabilities consist primarily of accrued salaries and bonuses payable to
employees. Provisions for expenses include estimated amounts for legal, professional, and marketing services.
As of September 30, 2026, the derivative liability of approximately $
NOTE 11 – LOANS AND OTHER LIABILITIES
Loan as of September 30, 2026, and December 31, 2025:
| (in thousands) | (in thousands) | |||||||||||||||||||||||
| September 30, 2026 (Unaudited) ($) | December 31, 2025 (Audited) ($) | |||||||||||||||||||||||
| Description of Loans | Non-Current | Current | Total | Non-Current | Current | Total | ||||||||||||||||||
| Related-Party Loan (1) | ||||||||||||||||||||||||
| Loan from Executive Officers | ||||||||||||||||||||||||
| Non-Related Party Loan | ||||||||||||||||||||||||
| FirstFire Global Opportunities Fund, LLC(2) | ||||||||||||||||||||||||
| Vanquish Funding Group Inc. (3) | ||||||||||||||||||||||||
| SBA Economic Injury Disaster Loan(4) | ||||||||||||||||||||||||
| ODK Capital, LLC (5) | ||||||||||||||||||||||||
| Total non-related party loan | ||||||||||||||||||||||||
| Total Loans | ||||||||||||||||||||||||
| 1. |
| | September 30, 2026, Form 10-Q |
12
| 2. |
The Company
determined that the conversion feature requires bifurcation as an embedded derivative under ASC 815-15. The
total debt discount of approximately $
The terms of the FirstFire transaction, including the conversion provisions, beneficial ownership limitation, exchange cap, Events of Default and other material provisions, are more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2026.
| 3. |
The Company
determined that the conversion feature requires bifurcation as an embedded derivative under ASC 815-15. The
total aggregate debt discount of approximately $
The terms of the VFG-1 transaction, including the conversion provisions, beneficial ownership limitation, exchange cap, Events of Default and other material provisions, are more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2026. The terms of the VFG-2 transaction are more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2026.
| 4. |
| 5. |
| 6. | The
Company maintains a revolving working capital credit facility with O-Bank that provides for maximum aggregate
borrowings of up to $ |
| | September 30, 2026, Form 10-Q |
13
NOTE 12 – COMMITMENTS AND CONTINGENCIES
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 condensed consolidated financial statements as of September 30, 2026, except as disclosed in Part II, Item 1, ‘Legal Proceedings,’ of this report.
In
the U.S., we provide health insurance, life insurance, and a 401(k) plan wherein the Company matches up to
NOTE 13 – SECURITIES
As
of September 30, 2026, the Company was authorized to issue up to
Our
common stock is listed on the NYSE American (ticker symbol: IGC). This security also trades on the Frankfurt,
Stuttgart, and Berlin stock exchanges (ticker symbol: IGS1). The Company also has
During
the three months ended September 30, 2026, the Company issued
In
addition, Mr. Mukunda and Ms. Grimaldi also exercised previously granted stock options to purchase an
aggregate of
During
the nine months ended September 30, 2026, the Company entered into the 2026 Securities Purchase Agreements
(“2026 SPAs”) with multiple investors, relating to the sale and issuance by our Company to the
investors of an aggregate of
During
the nine months ended September 30, 2026, the Company issued
During
the nine months ended September 30, 2026, the Company closed multiple Subscription Agreements (the “2025
Subscription Agreement”) with certain investors named therein, pursuant to which the Company agreed to
issue and sell to the Investors, in a registered direct offering, an aggregate of
During
the nine months ended September 30, 2026, the Company entered into several consulting and advisory
arrangements for investor-relations, investor-outreach, and related services that provide for the potential
future issuance of restricted common stock, warrants, and/or options, subject to the satisfaction of specified
service and performance conditions and, in certain cases, approval by the Board of Directors or an authorized
committee. Any securities issued under these arrangements will constitute restricted securities issued in
reliance on Section 4(a)(2) of the Securities Act and will be subject to applicable Rule 144 resale
restrictions. As of September 30, 2026, the Company had issued an aggregate of
| | September 30, 2026, Form 10-Q |
14
NOTE 14 – STOCK-BASED COMPENSATION
As
of September 30, 2026, approximately
Additionally,
the Company has outstanding options held by advisors and directors to purchase approximately
The
above awards include approximately
The
amounts disclosed above include share-based awards granted to non-employees in exchange for consulting,
investor-relations, investor-outreach and related services. The Company accounts for these awards in
accordance with ASC 718, and the related compensation expense and unrecognized compensation cost are included
in the aggregate amounts disclosed in this Note. As of September 30, 2026, the Company had issued an aggregate
of
The options are valued using a Black-Scholes Pricing Model, and Market-based RSUs are valued based on a lattice model, with the following assumptions:
| Granted
in Fiscal 2026 | Granted
in Fiscal 2025 | |||||||
| Expected life of options | ||||||||
| Vested options | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | ||||||||
The
expense associated with stock-based payments to employees, directors, advisors, and contractors is allocated
over the vesting or service period and recognized in the Selling, general, and administrative expenses
(including research and development). For the nine months ended September 30, 2026, the Company’s
stock-based expense and option-based expense, shown in Selling, general, and administrative expenses
(including research and development), were $
For
the nine months ended September 30, 2025, the Company’s stock-based expense and option-based expense,
shown in Selling, general, and administrative expenses (including research and development), were $
| Non-vested shares | Shares (in thousands) (#) | Weighted average grant date fair value ($) | ||||||
| Non-vested shares as of December 31, 2025 | ||||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Cancelled/forfeited | ( | ) | ||||||
| Non-vested shares as of September 30, 2026 | ||||||||
| Options | Shares (in thousands) (#) | Weighted average grant date fair value ($) | Weighted average exercise price ($) | |||||||||
| Options outstanding as of December 31, 2025 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Cancelled/forfeited | ( | ) | ||||||||||
| Options outstanding as of September 30, 2026 | ||||||||||||
| | September 30, 2026, Form 10-Q |
15
As
of September 30, 2026, the Company had approximately $
NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS
As of September 30, 2026, the Company’s marketable securities consist of liquid funds and ETPs, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets. The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle. Financial instruments are classified as current if they are expected to be liquidated within the next twelve months. The Company’s remaining investments have been classified as Level 3 instruments as there is little or no market data. Level 3 investments are valued using the measurement alternative under ASC 321.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of September 30, 2026, and December 31, 2025, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:
(in thousands)
As of September 30, 2026
| Particular | Adjusted Cost ($) | Gain ($) | Loss ($) | Fair Value ($) | Cash & Cash Equivalents ($) | Current Investments ($) | ||||||||||||||||||
| Level 1 | ||||||||||||||||||||||||
| Cash | ||||||||||||||||||||||||
| Marketable Securities | ||||||||||||||||||||||||
| Level 2 | ||||||||||||||||||||||||
| Certificates of Deposit | ||||||||||||||||||||||||
| Level 3 | ||||||||||||||||||||||||
| TOTAL | ||||||||||||||||||||||||
As of December 31, 2025
| Particular | Adjusted Cost ($) | Gain ($) | Loss ($) | Fair Value ($) | Cash & Cash Equivalents ($) | Current Investments ($) | ||||||||||||||||||
| Level 1 | ||||||||||||||||||||||||
| Cash | ||||||||||||||||||||||||
| Marketable Securities | ||||||||||||||||||||||||
| Level 2 | ||||||||||||||||||||||||
| Certificates of Deposit | ||||||||||||||||||||||||
| Level 3 | ||||||||||||||||||||||||
| TOTAL | ||||||||||||||||||||||||
| | September 30, 2026, Form 10-Q |
16
The following table presents the Company’s liabilities measured at fair value on a recurring basis as of September 30, 2026:
| (in thousands) | ||||||||||||||||
| Particular | Level 1 ($) | Level 2 ($) | Level 3 ($) | Total ($) | ||||||||||||
| September 30, 2026 | ||||||||||||||||
| Derivative Liability | ||||||||||||||||
| December 31, 2025 | ||||||||||||||||
| Derivative Liability | ||||||||||||||||
The derivative liability relates to the embedded conversion features of the VFG and FirstFire Notes. For more information, please refer to Note 11, “Loans and Other Liabilities”. The Company classifies the derivative liability within Level 3 as its valuation relies on significant unobservable inputs.
The
fair value was estimated using a probability-weighted expected payoff model incorporating the following
inputs: probability of default (
| Amount ($) | ||||
| Balance at December 31, 2025 | ||||
| Initial recognition upon issuance of Notes during nine months: | ||||
| VFG-1 | ||||
| VFG-2 | ||||
| FirstFire | ||||
| Change in fair value recognized in other income | ( | ) | ||
| Balance at September 30, 2026 | ||||
Changes
in the fair value of the derivative liability, if any, are recognized in other (expense)/income in the
condensed consolidated statements of operations. As of September 30, 2026, derivative liabilities related to
the VFG Notes and FirstFire Note were approximately $
NOTE 16 – SEGMENT INFORMATION
FASB
ASC 280, “Segment Reporting,” establishes standards for reporting information about
reportable segments. Operating segments are defined as components of an enterprise about which separate
financial information is available and is evaluated regularly by the chief operating decision maker, or
decision-making group (“CODM”), in deciding how to allocate resources and in assessing
performance. The Company operates as
The following provides information required by ASC 280-10-50-38 “Entity-wide Information”:
1)
| (in thousands) | ||||||||||||||||
| Three months ended September 30, 2026 ($) | Three months ended September 30, 2025 ($) | Nine months ended September 30, 2026 ($) | Nine months ended September 30, 2025 ($) | |||||||||||||
| Life Sciences segment | ||||||||||||||||
| Wellness and lifestyle | ||||||||||||||||
| White labeling services | ||||||||||||||||
| Total | ||||||||||||||||
All revenue for both periods presented was generated from customers located in the United States. For information on revenue by product and service, please refer to Note 2, “Summary of Significant Accounting Policies”.
| | September 30, 2026, Form 10-Q |
17
2)
| (in thousands) Three months ended September 30, | ||||||||
| 2026 ($) | 2025 ($) | |||||||
| United States (U.S.) | ||||||||
| Revenue | ||||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Selling, general, and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Common stock-based compensation and expenses, net | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Others | ||||||||
| Selling, general, and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Common stock-based compensation and expenses, net | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Total Operating loss | ( | ) | ( | ) | ||||
| (in thousands) Nine months ended September 30, | ||||||||
| 2026($) | 2025($) | |||||||
| United States (U.S.) | ||||||||
| Revenue | ||||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Selling, general, and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Common stock-based compensation and expenses, net | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Others | ||||||||
| Selling, general, and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Common stock-based compensation and expenses, net | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Total Operating loss | ( | ) | ( | ) | ||||
3)
| (in thousands) | ||||||||||||
| Nature of assets | USA (Country of Domicile) ($) | Foreign Countries (India and Colombia) ($) | Total as of September 30, 2026 ($) | |||||||||
| Intangible assets, net | ||||||||||||
| Property, plant, and equipment, net | ||||||||||||
| Claims and advances | ||||||||||||
| Operating lease asset | ||||||||||||
| Total non-current assets | ||||||||||||
| (in thousands) | ||||||||||||
| Nature of assets | USA (Country of Domicile) ($) | Foreign Countries (India and Colombia) ($) | Total as of December 31, 2025 ($) | |||||||||
| Intangible assets, net | ||||||||||||
| Property, plant, and equipment, net | ||||||||||||
| Claims and advances | ||||||||||||
| Operating lease asset | ||||||||||||
| Total non-current assets | ||||||||||||
NOTE 17 – SUBSEQUENT EVENTS
| ● | Subsequent to September 30, 2026, the Company: |
| ● | raised
approximately $ |
| ● | made
all scheduled loan payments, including interest, of approximately $ |
| ● | entered
into amendments, on October 22, 2026, with each of Mr. Mukunda and Ms. Grimaldi to the June 30, 2026,
agreements so that they cover only the exchange of loans, credit card advances, and accrued interest of
$ |
| | September 30, 2026, Form 10-Q |
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The purpose of this Management’s Discussion and Analysis (“MD&A”) is to provide an understanding of IGC Pharma, Inc.’s (“IGC,” “IGC Pharma,” the “Company,” “we,” “our,” and/or “us”) consolidated financial condition and results of operations and cash flows. The MD&A should be read in conjunction with our unaudited condensed financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2026, and in the Transition Report on Form 10-KT for the nine months ended December 31, 2025, filed with the SEC on March 18, 2026 (the “2025 Form 10-KT”). The Company’s actual results could differ materially from those discussed here. Factors that could cause differences include those discussed in the “Forward-Looking Statements” and “Risk Factors” sections and discussed elsewhere in this report. The risks and uncertainties can cause actual results to differ significantly from those in our forward-looking statements or implied in historical results and trends. Accordingly, we caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as expressly required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those outlined in the forward-looking statements.
Overview
IGC Pharma, Inc. (“IGC,” the “Company,” “we,” “us,” or “our”) is a clinical-stage biotechnology company focused on the development of novel therapeutic candidates for neuropsychiatric and neurodegenerative disorders, with a primary emphasis on Alzheimer’s disease. Our core strategy is to address high-burden symptoms and underlying disease mechanisms through differentiated pharmaceutical formulations, supported by targeted clinical development and data-driven research approaches.
Our lead product candidate, IGC-AD1, is currently being evaluated in the CALMA, a randomized, double-blind, placebo-controlled Phase 2 clinical trial for the treatment of agitation in Alzheimer’s dementia, a neuropsychiatric condition affecting a substantial proportion of patients and associated with significant patient distress, caregiver burden, and healthcare utilization. In addition to symptom management, preclinical studies of IGC-AD1 suggest activity against biological pathways associated with Alzheimer’s disease pathology, supporting its potential evaluation in broader disease-modifying contexts.
As of September 30, 2026, the Company had completed enrollment in the CALMA Phase 2 clinical trial, with 168 participants randomized, including planned over-enrollment. The trial remains ongoing, and there can be no assurance regarding its results, future development, or regulatory approval.
Beyond IGC-AD1, our development pipeline includes additional early-stage therapeutic candidates targeting Alzheimer’s disease mechanisms, including TGR-63 and other investigational compounds currently in preclinical evaluation. These programs are intended to expand our long-term development portfolio while maintaining a disciplined focus on clinical execution and capital efficiency.
The Company is also developing MINT-AD, a proprietary, artificial intelligence, enabled data platform designed to support risk stratification and longitudinal assessment in Alzheimer’s disease using multimodal datasets. MINT-AD is intended as a clinical and research decision-support tool and is not currently approved as a diagnostic device. On June 23, 2026, the Company announced the beta version of AHA. MINT-AD and AHA remain under development and have not been approved or cleared as diagnostic or therapeutic products.
Life Sciences Segment
IGC Pharma, a clinical-stage company developing treatments for Alzheimer’s disease, is committed to transforming patient care by striving to offer faster acting and more effective solutions. Our lead drug, IGC-AD1, embodies this vision by tackling a critical challenge – managing agitation in Alzheimer’s dementia. In a previously completed early-stage study, IGC-AD1 was associated with reductions in agitation scores relative to placebo, including observations within two weeks. That study was not designed to establish comparative onset versus approved therapies, and the ongoing CALMA Phase 2 trial has not been unblinded or completed. Interim and blinded observations are preliminary, are not statistically powered to establish efficacy, and may not be predictive of topline or final results. While existing anti-psychotics can take as long as 6 to 12 weeks to show effects; we believe IGC-AD1 has the potential to act within two weeks. This potentially faster onset of action could significantly improve patient care and represents a potential breakthrough in managing Alzheimer’s-related agitation, although there can be no assurance thereof. In addition, we have created in-house wellness brands, available through online channels that are compliant with relevant federal, state, and local laws and regulations. We derive revenue from our in-house wellness non-pharmaceutical formulations that are sold over-the counter (“OTC”).
During the three months ended September 30, 2026, the Company completed enrollment in its CALMA Phase 2 clinical trial and continued clinical trial activities in preparation for the completion of the treatment period and subsequent data analysis.
MINT-AD – Artificial Intelligence Platform
Overview
The Company is developing a proprietary Multimodal Interpretable Transformer for Alzheimer’s Disease (“MINT-AD”). MINT-AD is an artificial intelligence (“AI”) platform designed to enhance the detection and management of Alzheimer’s disease (“AD”) by providing clinicians with scalable, interpretable, and predictive diagnostic support. The platform is engineered to transition AD diagnostics from specialized, high-cost environments—such as neurology clinics utilizing Positron Emission Tomography (“PET”) scans—to primary care settings, rural areas, and underserved populations, although there is no assurance we will be successful in this regard. MINT-AD is intended as a clinical and research decision-support tool and is not currently approved as a diagnostic device. In addition, the Company is developing the Agentic Harmonization Assistant (“AHA”), a proprietary artificial intelligence-enabled platform designed to assist with the harmonization and analysis of fragmented biomedical datasets. On June 23, 2026, the Company announced the beta version of AHA. MINT-AD and AHA remain under development and have not been approved or cleared as diagnostic or therapeutic products.
| | September 30, 2026, Form 10-Q |
19
The Market Opportunity and Diagnostic Gap
According to the World Alzheimer Report, an estimated 400 million individuals globally may carry AD-related pathology prior to the onset of clinical symptoms. Currently, a significant “diagnostic gap” exists due to a lack of accessible early-detection tools for primary care physicians. This gap leads to delayed diagnoses, reduced eligibility for clinical trials, and sub-optimal patient outcomes. MINT-AD is intended to bridge this gap by offering a cost-effective, non-invasive alternative for early cognitive risk assessment.
Proprietary Technology and Architecture
MINT-AD leverages a “Transformer” architecture—a state-of-the-art deep learning model—to harmonize and analyze diverse, multimodal datasets. The platform processes a wide array of data sources to produce clinically actionable insights, including:
| ● | Neuroimaging and Biomarkers: High-resolution brain scans and genetic risk factors; |
| ● | Lifestyle and Environmental Data: Social determinants of health and longitudinal patient history; and |
| ● | Cognitive Metrics: Quantitative performance data and clinical observations. |
Use of MINT-AD
The Company is aiming to position MINT-AD as a practical, AI-driven assistant for healthcare providers. The platform is designed to support the clinical workflow through three primary objectives:
| o | Risk Stratification – Utilizing AI to analyze multimodal data and identify individuals at high risk of Alzheimer’s disease. This enables physicians to prioritize screening for at-risk patients within their practice, particularly in settings where access to specialists and expensive neuroimaging is limited; |
| o | Predictive Modeling – Forecasting cognitive decline trajectories two to five years in advance. By identifying potential decline before clinical symptoms manifest, MINT-AD provides a window for early intervention, preventative care strategies, and timely enrollment in clinical trials; and |
| o | Structured Plan Support – Assisting the clinician in creating a structured intervention plan for the individual. This step moves beyond diagnosis by leveraging the platform’s interpretable insights to help physicians tailor personalized care plans, monitor disease progression, and manage long-term patient outcomes. |
Our Business Strategy
The business strategy includes:
| ● | Completing the CALMA trial. | |
| ● | Completing Agentic Harmonization Assistant (“AHA”) and MINT-AD. | |
| ● | Advancing tox studies to enable disease-modifying trials with IGC-AD1. | |
| ● | Applying for non-dilutive grants. | |
| ● | Advancing TGR-63 as a potential therapeutic for AD. | |
| ● | Strengthening clinical credibility and visibility. |
We believe developing a drug for both symptom and disease-modifying agents has less risk due to the need for expensive multi-year trials. However, there is considerable upside and significant value creation to the extent we obtain a first-in-class advantage, of which there can be no assurance. If we were to obtain a first-in-class advantage, such an advantage could result in significant growth if and when an approved drug such as IGC-AD1 launches.
| | September 30, 2026, Form 10-Q |
20
We believe that additional investment in clinical trials, AI, R&D, facilities, marketing, advertising, and the acquisition of complementary products and businesses will be critical to the ongoing growth of the Life Sciences segment. Although there can be no assurance, we believe 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. Although there can be no assurance, we believe this strategy can improve our existing products and lead to the creation of new products that can provide treatment options for multiple conditions, symptoms, and side effects. Management is committed to its core short-term goals, completion of the CALMA trial on IGC-AD1, and deploying AHA and MINT-AD.
The Global Economic Environment
In addition to the industry-specific factors, such as regulations around cannabinoid research, we are exposed to economic cycles. Factors in the global economic environment that may impact our operations include, among other things, currency fluctuations, capital and exchange controls, global economic conditions including inflation, 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 our products, as well as impacts of political or civil unrest or military action, terrorist activity, unstable governments, and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.
Business Updates
During the three months ended September 30, 2026, the Company continued to advance the CALMA clinical trial evaluating IGC-AD1 for the treatment of agitation associated with Alzheimer’s disease.
CALMA Phase 2 Clinical Trial
| ● | On September 28, 2026, the Company announced the completion of enrollment in its CALMA Phase 2 clinical trial, with 168 participants randomized, including planned over-enrollment intended to strengthen the evaluable dataset for end-of-treatment, secondary, and exploratory analyses. |
Following the protocol-defined six-week treatment period, final participant dosing is expected to conclude mid-November 2026, after which the Company expects to proceed with database lock, unblinding, and topline analysis. The Company anticipates reporting topline results during the December 2026/January 2027 timeframe, subject to clinical trial and data management uncertainties.
Subsequent Business Updates
| ● | On October 13, 2026, the Company announced the introduction of PRISM™, an application layer of its patent-pending MINT-AD™ Alzheimer’s AI platform, designed to support potential healthcare applications, including early Alzheimer’s risk stratification, cognitive health tracking, clinical trial optimization, and personalized brain-health programs. PRISM™ remains under development, and its intended applications are subject to further evaluation and applicable regulatory requirements. |
| ● | On October 7, 2026, Mr. Terry Lierman, a member of the Company’s Board of Directors, was appointed by Maryland Governor Wes Moore as a Public Member of the Commission on Re-Imagining Health Care in Maryland, reflecting his experience and commitment to advancing healthcare policy and public service. |
| | September 30, 2026, Form 10-Q |
21
Results of Operations for the Three Months Ended September 30, 2026, and September 30, 2025
The historical results presented below are not necessarily indicative of the results that may be expected for any future period. The following table presents an overview of our results of operations for the three months ended September 30, 2026, and September 30, 2025:
Statement of Operations (in thousands, unaudited)
| Three months ended September 30, | ||||||||||||||||
| 2026 ($) | 2025 ($) | Change ($) | Percent Change | |||||||||||||
| Revenue | 328 | 191 | 137 | 72 | % | |||||||||||
| Cost of revenue | (267 | ) | (92 | ) | (175 | ) | 190 | % | ||||||||
| Gross profit | 61 | 99 | (38 | ) | (38 | )% | ||||||||||
| Selling, general, and administrative expenses | (979 | ) | (1,410 | ) | 431 | (31 | )% | |||||||||
| Research and development expenses | (1,013 | ) | (1,588 | ) | 575 | (36 | )% | |||||||||
| Operating loss | (1,931 | ) | (2,899 | ) | 968 | (33 | )% | |||||||||
| Other (expense)/income, net | (115 | ) | 1,078 | (1,193 | ) | (111 | )% | |||||||||
| Loss before income taxes | (2,046 | ) | (1,821 | ) | (225 | ) | 12 | % | ||||||||
| Income tax expense/benefit | - | - | - | - | ||||||||||||
| Net loss | (2,046 | ) | (1,821 | ) | (225 | ) | 12 | % | ||||||||
Revenue – Revenue increased by approximately $137 thousand, or 72%, to approximately $328 thousand for the three months ended September 30, 2026, from approximately $191 thousand for the three months ended September 30, 2025, primarily due to higher white label revenue of approximately $321 thousand compared with approximately $153 thousand. Revenue in both periods was derived from our Life Sciences segment.
Cost of revenue – Cost of revenue was approximately $267 thousand for the three months ended September 30, 2026, compared with approximately $92 thousand for the three months ended September 30, 2025, and gross margin decreased to 19% from 52%. The decrease in gross margin was primarily due to the transition of production to third-party manufacturers following the 2025 sale of our Vancouver, Washington manufacturing operations. Cost of revenue consists primarily of raw materials, labor and other direct costs. Gross margin may fluctuate based on product mix and is expected to remain below historical levels in the near term.
Selling, General and Administrative expenses (“SG&A”)– 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. During the three months ended September 30, 2026, SG&A expenses decreased by approximately $431 thousand, or 31%, to approximately $979 thousand from approximately $1.4 million for the three months ended September 30, 2025, primarily due to lower stock-based compensation of approximately $127 thousand and lower other operating expenses of approximately $304 thousand, including lower depreciation and manufacturing running costs following the 2025 sale of our Vancouver, Washington manufacturing operations.
Research and Development expenses (“R&D”)– R&D expenses were attributed to our Life Sciences segment. The R&D expenses decreased by approximately $575 thousand, or 36%, to approximately $1.0 million for the three months ended September 30, 2026, from approximately $1.6 million for the three months ended September 30, 2025. The decrease was primarily due to lower clinical trial costs of approximately $362 thousand, because site activation for the Phase 2 CALMA trial was largely completed in the first six months of 2026 and costs in the third quarter related mainly to patient enrollment, and lower non-cash stock-based compensation of approximately $213 thousand. R&D expenses relate primarily to the Phase 2 CALMA trial of IGC-AD1 and preclinical studies of TGR-63.
Other (expense)/income, net – Other (expense)/income, net was an expense of approximately $115 thousand for the three months ended September 30, 2026, compared with income of approximately $1.1 million for the three months ended September 30, 2025. The change was primarily due to the gain of approximately $1.1 million on the sale of our Vancouver, Washington manufacturing operations in the three months ended September 30, 2025, which did not recur, and interest and amortization of debt discount and issuance costs on the Loans in the three months ended September 30, 2026. Other income consists of interest and rental income, dividend income, gains on the sale of assets, unrealized gains on investments and income from scrap sales.
| | September 30, 2026, Form 10-Q |
22
Results of Operations for the Nine Months Ended September 30, 2026, and September 30, 2025
The historical results presented below are not necessarily indicative of the results that may be expected for any future period. The following table presents an overview of our results of operations for the nine months ended September 30, 2026, and September 30, 2025:
Statement of Operations (in thousands, unaudited)
| Nine months ended September 30, | ||||||||||||||||
| 2026 ($) | 2025 ($) | Change ($) | Percent Change | |||||||||||||
| Revenue | 910 | 849 | 61 | 7 | % | |||||||||||
| Cost of revenue | (746 | ) | (442 | ) | (304 | ) | 69 | % | ||||||||
| Gross profit | 164 | 407 | (243 | ) | (60 | )% | ||||||||||
| Selling, general, and administrative expenses | (3,662 | ) | (3,188 | ) | (474 | ) | 15 | % | ||||||||
| Research and development expenses | (3,675 | ) | (3,436 | ) | (239 | ) | 7 | % | ||||||||
| Operating loss | (7,173 | ) | (6,217 | ) | (956 | ) | 15 | % | ||||||||
| Other (expense)/income, net | (211 | ) | 1,599 | (1,810 | ) | (113 | )% | |||||||||
| Loss before income taxes | (7,384 | ) | (4,618 | ) | (2,766 | ) | 60 | % | ||||||||
| Income tax expense/benefit | - | - | - | - | ||||||||||||
| Net loss | (7,384 | ) | (4,618 | ) | (2,766 | ) | 60 | % | ||||||||
Revenue – Revenue increased by approximately $61 thousand, or 7%, to approximately $910 thousand for the nine months ended September 30, 2026, from approximately $849 thousand for the nine months ended September 30, 2025, primarily due to higher white label revenue of approximately $871 thousand compared with approximately $793 thousand. Revenue in both periods was derived from our Life Sciences segment.
Cost of revenue – Cost of revenue was approximately $746 thousand for the nine months ended September 30, 2026, compared with approximately $442 thousand for the nine months ended September 30, 2025, and gross margin decreased to 18% from 48%, primarily due to the transition of production to third-party manufacturers following the 2025 sale of our Vancouver, Washington manufacturing operations.
Selling, General and Administrative expenses (“SG&A”)– 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. During the nine months ended September 30, 2026, SG&A expenses increased by approximately $474 thousand, or 15%, to approximately $3.7 million from approximately $3.2 million for the nine months ended September 30, 2025, primarily due to the absence of a credit of approximately $700 thousand recognized in the prior-year period upon the conversion of accrued cash bonuses into performance-based compensation and higher stock-based compensation of approximately $273 thousand, partially offset by lower other operating expenses of approximately $499 thousand, including lower depreciation and manufacturing running costs following the 2025 sale of our Vancouver, Washington manufacturing operations.
Research and Development expenses (“R&D”)– R&D expenses were attributed to our Life Sciences segment. The R&D expenses increased by approximately $239 thousand, or 7%, to approximately $3.7 million for the nine months ended September 30, 2026, from approximately $3.4 million for the nine months ended September 30, 2025. The increase was primarily due to higher clinical trial costs of approximately $87 thousand, mainly for site activation for the Phase 2 CALMA trial in the first six months of 2026, and higher non-cash stock-based compensation of approximately $236 thousand, partially offset by lower other operating expenses.
Other (expense)/income, net – Other (expense)/income, net was an expense of approximately $211 thousand for the nine months ended September 30, 2026, compared with income of approximately $1.6 million for the nine months ended September 30, 2025. The change was primarily due to two items in the nine months ended September 30, 2025 that did not recur: the gain of approximately $1.1 million on the sale of our Vancouver, Washington manufacturing operations and tax credits of approximately $465 thousand, and approximately $188 thousand of amortization of debt discount on the loans in the nine months ended September 30, 2026, partially offset by a gain of approximately $40 thousand from the change in fair value of the derivative liability.
Liquidity and Capital Resources
Our sources of liquidity are cash and cash equivalents, funds raised through the ATM offering, cash flows from operations, current and non-current 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. The Company does not have any material non-current debt, capital lease obligations, or other non-current liabilities except as disclosed in this report. Please refer to Note 12, “Commitments and Contingencies,” and Note 11, “Loans and Other Liabilities,” in Item 1 of this report for further information on the Company’s commitments and contractual obligations.
Pursuant to the Master Loan and Security Agreement (the “Credit Agreement”) with O-Bank, Co., Ltd., the Company successfully obtained a revolving working capital credit facility totaling $12 million. In addition, the Company has executed Securities Purchase Agreements (“2026 SPAs”) with multiple investors, relating to the sale and issuance by our Company to the investors of an aggregate of 205,747 shares of our common stock, for a total purchase price of approximately $60 thousand, or $0.29 per share, subject to the terms and conditions set forth in the 2026 SPAs. The Company expects to fund its planned operations through available cash, additional equity and debt financings, and potential borrowings under its O-Bank working capital facility, subject to applicable terms and conditions. Based on its current operating plans and anticipated financing activities, management believes the Company will have sufficient resources to meet its obligations for at least twelve months following the issuance of these condensed consolidated financial statements. The Company continues to manage its expenditures and prioritize funding for its clinical development and core Life Sciences programs. However, additional financing is subject to market and contractual conditions and may not be available on acceptable terms or when required. For more information, please refer to Note 11, “Loans and Other Liabilities.”
| | September 30, 2026, Form 10-Q |
23
On October 27, 2023, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or principal, shares of its common stock having an aggregate offering price of up to $60 million, subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the Sales Agreement (the “Offering”). As of September 30, 2026, the Company had raised approximately $9.9 million under the $60 million Sales Agreement. The Company is subject to the limitations of Instruction I.B.6 to Form S-3, which limits offerings to one-third of the aggregate market value of the Company’s public float in any 12-month period.
On January 5, 2026, we entered into a Subscription Agreement (the “2025 Subscription Agreement”) with certain investors named therein, pursuant to which the Company agreed to issue and sell to the Investors, in a registered direct offering, an aggregate of 779,997 shares of the Company’s common stock, at a purchase price of $0.30 per share, for gross proceeds of approximately $234 thousand, before deducting the Company’s estimated offering expenses.
In addition to it, on February 9, 2026, the Company, through its subsidiary HH Processors, LLC, entered into a loan agreement with ODK Capital LLC (“OnDeck”), pursuant to which the Company received approximately $214 thousand in financing (the “OnDeck Loan”). The OnDeck Loan bears interest and is repayable in periodic installments in accordance with the terms and conditions set forth in the loan agreement, approximately $3 thousand per week. The OnDeck Loan matures in August, 2027. For more information, please refer to Note 11, “Loans and Other Liabilities.”
During the nine months ended September 30, 2026, the Company issued two promissory notes to VFG with aggregate principal of approximately $591 thousand and received aggregate net proceeds of approximately $470 thousand, partially offset by scheduled loan repayments of approximately $308 thousand. The aggregate principal of approximately $283 thousand remained outstanding as of September 30, 2026. The notes mature in February and March 2027 and are convertible upon specified events of default at variable conversion prices, subject to applicable ownership and exchange limitations. The related conversion features were accounted for as derivative liabilities under ASC 815. For more information, please refer to Note 11, “Loans and Other Liabilities.”
| | September 30, 2026, Form 10-Q |
24
On April 14, 2026, the Company issued an approximately $346 thousand promissory note to FirstFire, receiving net proceeds of approximately $302 thousand. The note matures on April 16, 2027, and remains fully outstanding as of September 30, 2026. For more information, please refer to Note 11, “Loans and Other Liabilities.”
During the three months ended September 30, 2026, the Company settled approximately $586 thousand of accrued officers’ compensation in shares, and approximately $568 thousand of officers’ loans and advances is to be settled in shares. For more information, please refer to Note 11, “Loans and Other liabilities”.
During the transition period ended December 31, 2025, the Company invested approximately $50 thousand in a U.S.-listed digital asset through an ETP, which is approximately valued at $36 thousand as of September 30, 2026. The investment is classified as a current marketable security and is marked to market each period. The Company does not directly hold cryptocurrencies or other digital tokens.
The equity and the credit facility serve to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations. Furthermore, the Company intends to raise additional funds through private placement and ATM offerings, subject to market conditions, although there can be no assurance that such financing efforts will be successful. The Company expects to raise further capital for its research and development initiatives as and when it is able to do so, in an ATM offering or private placement. In addition, there can be no assurance of the terms thereof, and any subsequent equity financing sought may have dilutive effects on our current stockholders. While there is no guarantee that we will be successful, we are applying to non-dilutive funding opportunities such as Small Business Research and Development programs. In addition, subject to limitations on the amount of capital that can be raised, the Company expects to utilize its shelf registration on a statement on Form S-3 to raise capital through at-the-market offerings or otherwise. Please refer to Note 13, “Securities”, for more information.
| (in thousands) | ||||||||||||||||
| As of September 30, 2026 (Unaudited) ($) | As of December 31, 2025 (Audited) ($) | Change | Percent Change | |||||||||||||
| Cash and cash equivalents | 377 | 900 | (523 | ) | (58 | )% | ||||||||||
| Working capital | (1,794 | ) | (366 | ) | (1,428 | ) | 390 | % | ||||||||
Cash and cash equivalents
Cash and cash equivalents decreased by approximately $523 thousand, or 58%, to $377 thousand as of September 30, 2026, from $900 thousand as of December 31, 2025. The decrease was primarily driven by approximately $4 million in cash used in operating activities and approximately $617 thousand in cash used in investing activities, partially offset by approximately $4.1 million in net proceeds from financing activities. Working capital deficit increased by approximately $1.4 million to $1.8 million as of September 30, 2026, from approximately $366 thousand as of December 31, 2025. The increase in the working capital deficit was primarily driven by operating cash consumption and current borrowings during the period. For more information, please refer to Note 11, “Loans and Other Liabilities”.
| | September 30, 2026, Form 10-Q |
25
Summary of Cash flows
| (in thousands, unaudited) | ||||||||||||||||
| Nine months ended September 30, | ||||||||||||||||
| 2026 ($) | 2025 ($) | Change | Percent Change | |||||||||||||
| Cash used in operating activities | (3,990 | ) | (4,227 | ) | 237 | 6 | % | |||||||||
| Cash (used in) provided by investing activities | (617 | ) | 64 | (681 | ) | (1,064 | )% | |||||||||
| Cash provided by financing activities | 4,109 | 4,766 | (657 | ) | (14 | )% | ||||||||||
| Effects of exchange rate changes on cash and cash equivalents | (25 | ) | 32 | (57 | ) | (178 | )% | |||||||||
| Net (decrease)/increase in cash and cash equivalents | (523 | ) | 635 | (1,158 | ) | (182 | )% | |||||||||
| Cash and cash equivalents at the beginning of the period | 900 | 470 | 430 | 91 | % | |||||||||||
| Cash and cash equivalents at the end of the period | 377 | 1,105 | (728 | ) | (66 | )% | ||||||||||
Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2026, was approximately $4.0 million. It consists of a net loss of approximately $7.4 million, a positive impact on cash due to non-cash expenses of approximately $2.6 million, and a positive change in operating assets and liabilities of approximately $748 thousand. Non-cash expenses consist of a depreciation and amortization charge of approximately $172 thousand, stock-based expenses of approximately $2.1 million, and other items of approximately $328 thousand. In addition, changes in operating assets and liabilities had a positive impact of approximately $748 thousand on cash, of which a positive impact of approximately $647 thousand is due to an increase in accounts payable, a positive impact of approximately $116 thousand is due to an increase in accrued and other liabilities, partially offset by approximately $55 thousand is due to an increase in accounts receivable, and net other current assets and liabilities of approximately $40 thousand.
Net cash used in operating activities for the nine months ended September 30, 2025, was approximately $4.2 million. It consists of a net loss of approximately $4.6 million, a positive impact on cash due to non-cash expenses of approximately $1.1 million, and a negative change in operating assets and liabilities of approximately $735 thousand. Non-cash expenses consist of a depreciation and amortization charge of approximately $414 thousand, stock-based expenses of approximately $1.6 million, an impairment loss of approximately $152 thousand, profit on sale of fixed assets of approximately $1.1 million, and an approximately $13 thousand decrease in other non-cash items. In addition, changes in operating assets and liabilities had a negative impact of approximately $735 thousand on cash, of which a net negative impact of approximately $953 thousand is due to a decrease in accrued and other liabilities, a positive impact of approximately $223 thousand is due to a decrease in deposits and advances, a negative impact of approximately $207 thousand is due to a decrease in accounts payable, a positive impact of approximately $90 thousand is due to a decrease in inventory, a positive impact of approximately $116 thousand is due to a decrease in operating lease assets, and net other current assets and liabilities of approximately $4 thousand.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2026, was approximately $617 thousand, which was comprised of approximately $611 thousand for the acquisition and development of intangible assets, and approximately $6 thousand from the purchase of property, plant, and equipment.
Net cash provided by investing activities for the nine months ended September 30, 2025, was approximately $64 thousand, which was comprised of approximately $559 thousand for the acquisition and development of intangible assets, and approximately $703 thousand of proceeds from the sale of property, plant, and equipment, partially offset by approximately $55 thousand from the purchase of property, plant, and equipment, and approximately $25 thousand for the investment in short-term investments.
Financing Activities
Net cash provided by financing activities was approximately $4.1 million for the nine months ended September 30, 2026, which was comprised of net proceeds from the issuance of equity stock of approximately $3.1 million and net proceeds from borrowings of approximately $1.0 million, including proceeds from the related-party loan of approximately $412 thousand, proceeds from VFG promissory notes of approximately $470 thousand, proceeds from FirstFire promissory note of approximately $302 thousand and proceeds from the OnDeck loan of approximately $214 thousand, partially offset by scheduled loan repayments of approximately $392 thousand. Please refer to Note 13, “Securities”, and Note 11, “Loans and Other Liabilities”, for more information.
Net cash provided by financing activities was approximately $4.8 million for the nine months ended September 30, 2025, which was comprised of net proceeds from the issuance of equity stock of approximately $4.8 million, partially offset by scheduled loan repayments of approximately $2 thousand. Please refer to Note 13, “Securities”, for more information.
| | September 30, 2026, Form 10-Q |
26
Treasury Strategy and Capital Allocation Considerations
The Company’s primary capital allocation priority is funding its clinical development programs, including the Phase 2 CALMA trial for IGC-AD1, while maintaining sufficient liquidity to support ongoing operations. Management prioritizes the preservation of cash and cash equivalents and the disciplined deployment of capital toward activities that advance the Company’s pipeline.
During the transition period ended December 31, 2025, the Company invested approximately $50 thousand in a U.S.-listed ETP linked to digital assets as part of an initial assessment of treasury diversification alternatives. As of September 30, 2026, this investment was valued at approximately $36 thousand, reflecting a decline in fair value of approximately $14 thousand. The Company does not currently hold any digital assets directly. Any future treasury allocation decisions will be evaluated in the context of the Company’s liquidity requirements, clinical development milestones, and the availability of capital as described under “Liquidity and Capital Resources” above. Digital asset investments involve significant volatility risk, as discussed in Item 1A — “Risk Factors”.
Off-Balance Sheet Arrangements
As of September 30, 2026, the Company did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on its financial condition, results of operations, liquidity, capital expenditures, or capital resources. The embedded conversion features of the Company’s convertible notes are accounted for as derivative liabilities and are recognized on the condensed consolidated balance sheet; accordingly, they are not off-balance sheet arrangements. Please refer to Note 11, “Loans and Other Liabilities”, for more information.
Critical Accounting Policies
While all accounting policies impact financial statements, certain policies may be viewed as critical. Critical accounting policies are those that are both most important to the portrayal of financial condition and results of operations and that require management’s most subjective or complex judgments and estimates. In addition to the policies described below, our significant accounting policies are discussed in Note 2, “Summary of Significant Accounting Policies,” to the accompanying condensed consolidated financial statements and in the Notes to the Audited Consolidated Financial Statements in Part II of our 2025 Form 10-KT. Our management believes that the following policy falls within this category, in addition to the policies on going concern, revenue recognition, inventory, accounts receivable, foreign currency translation, impairment of long-lived assets and investments, stock-based compensation, and cybersecurity.
Digital Asset Investments
During the transition period ended December 31, 2025, the Company invested approximately $50 thousand in a U.S.-listed digital asset through an ETP, which is approximately valued at $36 thousand as of September 30, 2026. The investment is classified as a current marketable security and is marked to market each period. The Company does not directly hold cryptocurrencies or other digital tokens. Holdings in ETPs will be accounted for as equity securities under ASC 321, Investments – Equity Securities, and measured at fair value with changes recognized in earnings. Fair value will be determined using quoted prices in active markets (Level 1 inputs).
For direct holdings of digital assets, the Company will present in the notes a roll-forward of activity, including the opening balance, additions, dispositions, gains and losses recognized during the period, and the ending balance, as well as any significant concentrations and restrictions.
Please see our disclosures in Note 2 – Summary of Significant Accounting Policies to the Notes to the Unaudited Condensed Consolidated Financial Statements in this report, in the Notes to the Audited Consolidated Financial Statements in the 2025 Form 10-KT, as well as Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2025 Form 10-KT, for a discussion of all our critical and significant accounting policies.
Recent Accounting Pronouncements
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Newly issued ASUs not listed are expected to have no impact on the Company’s consolidated financial position and results of operations because either the ASU is not applicable, or the impact is expected to be immaterial. Recent accounting pronouncements that may apply to us are described in Note 2, “Significant Accounting Policies” to the Notes to the Unaudited Condensed Consolidated Financial Statements in this report and in the Notes to the Audited Consolidated Financial Statements in Part II of our 2025 Form 10-KT.
| | September 30, 2026, Form 10-Q |
27
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Item 3 does not apply to us because we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Management maintains disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to Management, including our Chief Executive Officer (our principal executive officer) and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
Our Management, including the Chief Executive Officer and Principal Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective in ensuring that the information required to be disclosed in the reports filed or submitted by us under the Exchange Act was recorded, processed, summarized, and reported within the requisite time periods specified in SEC rules and forms and that such information was accumulated and communicated to our Management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Our Management, including our Chief Executive Officer and Principal Financial Officer, evaluated our “internal control over financial reporting” as defined in Exchange Act Rule 13a-15(f) to determine whether any changes in our internal control over financial reporting occurred during the three months ended September 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there were no changes in our internal control over financial reporting during the three months ended September 30, 2026, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
| | September 30, 2026, Form 10-Q |
28
PART II – OTHER INFORMATION
Item 1. 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 have been no material developments in the legal proceedings previously disclosed in Part I, Item 3, “Legal Proceedings”, of our Annual Report on Transition Form 10-KT for the transition period ended December 31, 2025, filed with the SEC on March 18, 2026 (the “2025 Form 10-KT”). For a description of our material pending legal proceedings, please refer to the 2025 Form 10-KT.
Item 1A. Risk Factors
The following are the material changes to the risk factors disclosed in Part I, Item 1A, “Risk Factors” in our Transition Report on Form 10-KT for the period ended December 31, 2025, filed with the SEC on March 18, 2026.
Risks Related to Our Phase 2 CALMA Trial
Our business depends heavily on the successful development of our lead product candidate, IGC-AD1. Our ability to advance IGC-AD1 depends on successfully executing and completing our ongoing Phase 2 CALMA clinical trial. Target enrollment has been reached; however, the trial remains subject to risks relating to data cleaning, database lock, site closeout, statistical analysis, and safety findings. Even if we complete the CALMA clinical trial, the results may not demonstrate sufficient safety, tolerability, or efficacy to support continued development or regulatory approval, all or any of which could adversely affect the value of IGC-AD1. The precise timing of key clinical milestones, such as the availability of topline data, is uncertain because it involves multiple statistical analyses, including by independent statisticians, and depends heavily on their schedules.
Risks Related to Our Convertible Debt Instruments
The Company has issued convertible promissory notes that contain variable-rate conversion features, which could result in substantial dilution to existing stockholders. Upon the occurrence and continuation of an event of default, the holders of these notes may convert outstanding amounts into shares of the Company’s common stock at a conversion price equal to a discount to the market price, including at 75% of the lowest trading price of the Company’s common stock during a specified period preceding conversion. The Company issued such convertible instruments with an aggregate original principal amount of approximately $937 thousand, of which approximately $308 thousand has been repaid. The aggregate principal of approximately $629 thousand remained outstanding as of September 30, 2026. Conversions at discounted prices may result in the issuance of a significant number of shares, particularly in periods of stock price volatility or decline, which could materially dilute the ownership interests of existing stockholders and adversely affect the market price of the Company’s common stock. Although these instruments include a 4.99% beneficial ownership limitation and a 19.99% share issuance cap in compliance with applicable NYSE American listing standards, such limitations may not prevent substantial dilution over time, particularly if conversions occur in multiple transactions or if stockholder approval is obtained to exceed applicable thresholds. In addition, the existence of these convertible instruments may create downward pressure on the trading price of the Company’s common stock, limit the Company’s ability to obtain additional financing on favorable terms, and could result in increased volatility in the market price of its securities.
| | September 30, 2026, Form 10-Q |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended September 30, 2026, the Company issued an aggregate of 225,758 shares of its common stock to two investor-relations consultants, consisting of 75,758 shares to Opus8, Inc. and 150,000 shares to AJO Capital, Inc., as consideration for investor-relations services rendered under their respective consulting agreements. In connection with its agreement, Opus8, Inc. was also granted an option to purchase 25,000 shares of common stock at an exercise price of $0.30 per share. The Company received no cash consideration for these securities, and no underwriting discounts or commissions were paid. The securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering. The shares are restricted securities and bear a restrictive legend.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
On October 22, 2026, the Company and each of Mr. Ram Mukunda and Ms. Claudia Grimaldi amended the Stock Purchase Agreements dated June 30, 2026, as described in Note 17, “Subsequent Events,” which is incorporated herein by reference. A copy of the amendment is filed as Exhibit 10.12 to this report.
Other
than disclosed above, during the three months ended September 30, 2026, no director or officer of the Company
| | September 30, 2026, Form 10-Q |
30
Item 6. Exhibits
| * | Filed herewith. |
| ** | Furnished herewith. |
| | September 30, 2026, Form 10-Q |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| IGC PHARMA, INC. | ||
| Date: November 6, 2026 | By: | /s/ Ram Mukunda |
| Ram Mukunda | ||
| President and Chief Executive Officer (Principal Executive Officer) | ||
| Date: November 6, 2026 | By: | /s/ Claudia Grimaldi |
| Claudia Grimaldi | ||
| Vice-President & Chief Compliance
Officer (Principal Financial Officer) | ||
| | September 30, 2026, Form 10-Q |
32