IGC 10-K & 10-Q changes, risk factors and insider trading

As of March 31, 2024,2025, we had cash and cash equivalents of approximately $405 thousand and working capital of approximately $639 thousand compared to cash and cash equivalents of $1.2 million and working capital of approximately $1.4 million compared to cash and cash equivalents of $3.2 million and working capital of $4.6 million as of March 31, 2023,2024, for continuing operations.

Our cannabinoid strategymedication makes it difficult to raise money as a public company.

Marijuana and hemp plants are bothWithin the same species, the dioecious plantspecies Cannabis sativa L.L, Mostmost countries differentiatedefine hemp from marijuana by the amount of THC. Under the 2018 Farm Bill, hemp is classified as a cannabis plant that has 0.3% or less THC by dry weight. Marijuana is classified as a cannabis plant that has THC above 0.3% by dry weight. Both marijuana and hemp produce other cannabinoids, such as CBD.

CBD, mentioned in the context of products, refers to hemp extracts naturally rich in cannabinoids like CBD but with 0.3% or less THC by dry weight. Despite havingderiving noIGC-AD1 directfrom legal involvement in selling marijuana,hemp, the Company is often incorrectly classified as a “cannabis company” or a “marijuana company,”, with all the nuances that accompany that label, including being blacklisted by banks, investment banks, and until recently by the largest stock clearing services company. The near-monopoly nature of some of these institutions, especially clearing houses, makes it difficult for the Company to raise money, deposit share certificates, or even have investment banking relationships. As we cannot control how others perceive us, there can be no assurance that we will be able to raise enough capital for our planned expansion.

We currently operate onin athe U.S., globalCanada, scaleColombia, and India, and buy raw materials and equipment from China, and our operations and expenses could be affected by currency fluctuations, capital and exchange controls, global economic conditions including inflation, expropriation, and other restrictive government actions, changes in intellectual property legal protections and remedies, trade regulations, tax laws, and regulations, and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including but not limited to the current conflict between Russia and Ukraine,conflicts, terrorist activity, unstable governments, and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.

SomeIndia, emergingand market countriesColombia may be particularly vulnerable to periods of financial or political instability or significant currency fluctuations or may have limited resources for healthcare spending. As a result of these and other factors, our strategy to grow in emerging markets may not be successful, and growth rates in these markets may not be sustainable.

We continue to monitor the global trade environmentenvironment, especially with China and the countries we operate in, and potential trade conflicts and impediments that could impact our business. If trade restrictions or tariffs reduce global economic activity, potential impacts could include declining sales, increased costs, volatility in foreign exchange rates, a decline in the value of our financial assets and pension plan investments, required increases of our pension funding obligations, increased government cost control efforts, delays or failures in the performance of customers, suppliers and other third parties on whom we may depend for the performance of our business, and the risk that our allowance for doubtful accounts may not be adequate.

Our operations are subject to numerous laws and regulations in the U.S., India, Colombia, and Hong KongColombia, relating to the protection of the public and necessary disclosures regarding financial services. Liability under these laws involves inherent uncertainties. Violations of financial regulation laws are subject to civil and, in some cases, criminal sanctions. We may not have been, or may not be, or may be alleged to have not been or to not be, at all times, in complete compliance with all requirements, and we may incur costs or liabilities in connection with such requirements or allegations. We may also incur unexpected interruptions to our operations, administrative injunctions requiring operation stoppages, fines judgments, settlements, or other financial obligations or penalties, which could negatively impact our financial condition and results of operations. See Item 3, Legal Proceedings of this report, for further information on the current status of legal proceedings, if any. There can also be no assurance that any insurance coverage we have will be adequate or that we will prevail in any future cases. We can provide no assurance that we will be able to obtain liability insurance that would protect us from any such lawsuits. In the event that we are not covered by insurance, our management could spend significant time and resources addressing any such issues. The legal fees necessary to defend against multiple lawsuits can be significant, impacting the Company’s overall bottom line when not covered by insurance or where the fees exceed the Company’s insurance policy limits.

Many U.S. state laws conflict with the federal Controlled Substances Act. While we do not, and do not intend, to distribute or sell marijuana in the U.S., itIt is unclear whether regulatory authorities in the U.S. would object to the registration or public offering of securities in the U.S. by our Company to; the status of our Company as a reporting company,company; or even to investors investing in our Company, if we engage in legal cannabinoids cultivation and supply pursuant to the laws and authorization of the jurisdiction where the activity takes place. In addition, the status of cannabinoids under the Controlled Substances Act may have an adverse effect on federal agency approval of pharmaceutical use of phytocannabinoid products. Any such objection or interference could delay indefinitely or increase substantially the costs to access the equity capital markets, test our therapies, or create products from the Life Sciences segment.

We could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs or IECs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board (“DSMB”), for such trial or the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, an inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and while we have agreements governing their committed activities, we have limited influence over their actual performance.

We have filed twenty-eightthirty-one (2831) patent applications with the USPTO and also in other different countries in the combination therapy space for the indications of pain, Alzheimer’s, medical refractory epilepsy, eating disorders, and Tourette syndrome as part of our intellectual property strategy focused on the phytocannabinoid-based health care industry. Although twelve patents have been issued, there is no guarantee that our remaining applications will result in a successful registration with the USPTO. If we are unsuccessful in registering patents, our ability to create a valuable line of products can be adversely affected. This, in turn, may have a material and adverse impact on the trading price of our common stock.

We may be subject to various privacy and security regulations, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by The Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations, including the related final published omnibus rule. HIPAA mandates, among other things, the adoption of uniform standards for the electronic exchange of information in common health care transactions, as well as standards relating to the privacy and security of individually identifiable health information. These obligations would require the Company to adopt administrative, physical, and technical safeguards to protect such information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates” — independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates, and possibly other persons and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thereby complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and criminal penalties.

Any of these factors could negatively affect our business, financial condition, or results of operations. Investors should be aware of the potential risks associated with this process and its potential impact on our financial performance before investing in our company.

Clinical Trial Operational Excellence

Cost of revenue – The cost of revenue amounted to approximately $612$652 thousand for Fiscal 2024,2025, compared to $469$612 thousand inutin Fiscal 2023,2024, this represents a gross margin of 54%49% and 49%,54%, respectively. The cost of revenue is primarily attributable to the cost of raw materials, labor, and other direct overheads required to produce our products and services in both segments. The slight decrease in gross margin is attributed to the Company’s strategic efforts to develop new formulations using a broader range of active ingredients, which, while affecting margins in the short term, are expected to open new commercial avenues in the long term.

Selling, general, and administrative (“SG&A”) expenses –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. For Fiscal 2024,2025, the Company reported SG&A expenses of approximately $6.7$4.4 million, representing a decrease of approximately $2$2.3 million, or 21%,35%, compared to the $8.5$6.7 million recorded in Fiscal 2023.2024. This significant decline in SG&A expenses is attributable to the Company’s focused efforts to optimize corporate-level operational efficiency by lowering employee–related costs due to headcount alignment and compensation restructuring, implementing better inventory management systems, and reducing spending on legal and professional services through more efficient vendor management. In a reductiondemonstration of cost and cash discipline, management elected to convert approximately $750 thousand in non-cashaccrued expensesbonuses into performance-based compensation, payable only upon the achievement of defined business milestones, which also align with shareholder interest. These optimizations allowed the Company to preserve capital and costsextend relatedits operational runway while maintaining the infrastructure necessary to employeessupport clinical development and Legalstrategic & professional services.initiatives.

Research and Development (“R&D”) expenses – R&D expenses were primarily associated with the Life Sciences segment, reflecting the Company’s investment in R&D activities. In Fiscal 2024,2025, the Company reported R&D expenses of approximately $3.8$3.7 million, representing a an increasedecrease of $312$118 thousand or 9%3% compared to approximately $3.5$3.8 million in Fiscal 2023.2024. The increase in R&D expenses is primarily attributed to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on TGR-63, indicating the Company’s dedication to advancing its product pipeline. As the development of TGR-63 and the Phase 2 trial on Alzheimer’s gaingains momentum, the Company anticipates further increases increase in R&D expenses.

Impairment loss on Property, Plant, and Equipment (“PPE”) – During Fiscal 2025, there was no impairment loss on PPE. During Fiscal 2024, as the Company focused on liquidating all non-operating assets to reduce the cost and generate cash, the Company impaired the land situated in Nagpur, India, by approximately $3.3 million to $720 thousand from $4.1 million. The Company believes it can sell the above-said non-operating land as it is without any improvement. Selling this land will give immediate cash, which the Company can use in its operating segments. During Fiscal 2023, there was no impairment loss on PPE.

Other Income, net – During Fiscal 2024,2025, the Company reported approximately $143$325 thousand in other income, which represents an increase of approximately $78 $182 thousand as compared to the $65$143 thousand recorded in Fiscal 2023.2024. The increase in other income is attributable to profit from the saletax credit of assets. The component of other income typically includes interest and rental income, dividend income, profits from the sale of assets, unrealized gains from non-debt investments, net income, and income from the sale of scraps. These sources contribute to the overall other income generated by the Company.$194 thousand.

Our sources of liquidity are cash and cash equivalents, funds raised through the ATM offering, cash flows from operations, short-term and long-term borrowings, and short-term liquidity arrangements. The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations. The Company does not have any material long-term debt, capital lease obligations, or other long-term liabilities except as disclosed in this report. Please refer to Note 12, “Commitments and contingencies”, Note 11, “Loans and Other Liabilities,” and Note 9, “Leases” in Item 1 of this report for further information on Companythe Company’s commitments and contractual obligations.

DuringPursuant Fiscalto 2024,the Master Loan and Security Agreement (the Credit Agreement) with O-Bank, Co., Ltd., the Company successfully obtained a working capital credit facility totaling $12 million and, in addition, signedraised twoapproximately SPAs to raise $6$4.64 million in exchange for approximately 18.814.2 million shares. Out of $6 million, the Company received $2.5 million after the end of Fiscal 2024, in April 2024. 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.conditions, although there can be no assurance that such financing efforts will be successful or as to any private placement or the terms of such offering. Any equity issuances would be dilutive to shareholders. Please refer,refer to Note 13 – “Securities”, for more information.

Cash and cash equivalents decreased by approximately $2$793 millionthousand to $405 thousand in Fiscal 2025 from $1.2 million in Fiscal 2024 from $3.2 million in Fiscal 2023,2024, a decrease of approximately 63%66%. This is discussed in the summary of cash flows, as follows:

The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the Infrastructure and Life Sciences segment.

Revenue in the Infrastructure segment is recognized for the renting business when the equipment is rented and the terms of the agreement have been fulfilled during the period. Revenue from the execution of infrastructure contracts is recognized on the basis of the output method as and when part of the performance obligation has been completed and approval from the contracting agency has been obtained after a survey of the performance completion as of that date. 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.

During Fiscal 2025, there was no impairment loss on PPE. During Fiscal 2024, as the Company focused on liquidating all non-operating assets to reduce costs and generate cash, the Company impaired the land situated in Nagpur, India, by approximately $3.3 million to $720 thousand from $4.1 million. The Company believes it can sell the above-said non-operating land as it is without any improvement. Selling this land will give immediate cash, which the company can use in its operating segments. During Fiscal 2023, there was no impairment loss on PPE.

During Fiscal 2024, the Company has begunbegan working on overlaying machine learning technologies and Artificial Intelligence (“AI”) into the internal clinical trial software framework for trial management with the expectation that this can lead to improved decision-making, contextual data entry, computational models, trial design (Phase 3), and data analysis, the company believes it is probable that the project will be completed and the software will be used to perform the function intended. TheAs of Fiscal year ended 2025, the Company capitalized approximately $405 $863 thousand in software development costs. Please refer to Note 5, “Intangible Assets,” for more information.

IGC operates in India, U.S., Colombia, and Hong Kong,Colombia, and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”), the Hong Kong Dollar (“HKD”), or the Colombian Peso (“COP”). As a result, changes in the relative values of the U.S. Dollar (“USD”), the INR, the HKD, or the COP affect financial statements.

The accompanying financial statements are reported in USD. The INR, HKD, and COP are the functional currencies for certain subsidiaries of the Company. The translation of the functional currencies into U.S. dollars 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 reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of shareholders’ equity. Transactions in currencies other than the functional currency during the year 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. The exchange rates used for translation purposes are as follows:

We have a cybersecurity policy in place and have implemented tighter cybersecurity measures to safeguard against hackers. Complying with these security measures and compliances is expected to incur further expenses. In Fiscal 20242025 and Fiscal 2023,2024, there were no known or detected detectedmaterial breaches in cybersecurity.

Our ability to advance IGC-AD1 depends on the successful execution and completion of our ongoing Phase 2 CALMA clinical trial. We may experience delays in patient enrollment, including failure to achieve targeted enrollment within expected timelines, or at all. ClinicalAlthough trialstarget enrollment has been reached, the aretrial inherently complex andremains subject to numerousrisks risks,relating including delays in site initiation, variability in site performance,to patient recruitment challenges,follow-up, evaluability, protocol deviations, anddata unforeseencleaning, operationaldatabase orlock, logisticalsite issues.closeout, statistical Anyanalysis, suchsafety delays could increase development costs, extend timelines,findings, and adverselytiming affectof ourtopline business and financial condition.results.

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. As of MarchJune 31,30, 2026, the aggregate principal amount of such convertible instruments was approximately $353$937 thousand. 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.

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 six months ended March 31,June 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.

Our lead product candidate, IGC-AD1, is currently being evaluated in the CALMACALMA, 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 June 30, 2026, the CALMA trial had reached the Company’s previously disclosed contexts.target enrollment of 146 patients, with 146 participants randomized at baseline. The Company continued limited over-enrollment and patient follow-up activities intended to address potential attrition and support the planned clinical analyses. Following completion of these activities, the Company expects to proceed with database activities, site closeout, and topline analysis. The trial remains ongoing, and there can be no assurance regarding its results, future development, or regulatory approval.

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 tool and is not currently approved as a diagnostic device. As of June 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.

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 Earlya resultspreviously fromcompleted ourearly-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 arehas promising:not IGC-AD1been effectivelyunblinded reducedor agitation incompleted. patients compared to a placebo,Interim and crucially,blinded itobservations didare sopreliminary, fasterare thannot traditionalstatistically medications.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,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”). As of June 30, 2026, CALMA had reached the Company’s previously disclosed target enrollment of 146 patients, with 146 participants randomized at baseline. The Company continued limited over-enrollment and patient follow-up activities intended to account for potential attrition and support a high-quality evaluable dataset as the trial advances toward completion and topline analysis.

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. As of June 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.

During the three months ended June March 31,30, 2026, the Company continued to advance the CALMA clinical trial evaluating IGC-AD1 for the treatment of agitation associated with Alzheimer’s disease.

Clinical trial activities are subject to inherent uncertainties, including patient enrollment rates, protocol adherence, regulatory oversight, and data integrity, any of which could materially affect trial timelines or results. TheDuring the quarter ended June 30, 2026, the Company reached its previously disclosed target enrollment of 146 patients, with 146 participants randomized at baseline; the CALMA trial remains ongoingongoing, towith completelimited over-enrollment 146 patients. Subsequent to March 2026, the Company has completed approximately 80%and patient enrollmentfollow-up inactivities its Phase 2 CALMA clinical trial evaluating IGC-AD1 for agitation associated with AD.continuing.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026, and MarchJune 31,30, 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 MarchJune 31,30, 2026, and MarchJune 31,30, 2025:

Revenue – Revenue was approximately $317$265 thousand and $330$328 thousand for the three months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, respectively. Revenue in both quartersperiods was primarily derived from our Life Sciences segment, encompassing the sale of our formulations as white-labeled manufactured products, among others. There is a decrease in revenue as our core focus is on advancing IGC-AD1, completing the Phase 2 trial, and developing MINT-AD for the early diagnosis of Alzheimer’s disease.

Cost of revenue – Cost of revenue amounted to approximately $262$217 thousand for the three months ended MarchJune 31,30, 2026, compared to $176 $174 thousand in the three months ended MarchJune 31,30, 2025. This represents gross margins of 17%18% and 47%, respectively. The cost of revenue is primarily attributable to the cost of raw materials, labor, and other direct overheads required to produce our products in the Life Sciences segment. Typically, the gross margin in the Life Sciences business will fluctuate from one quarter to the next based on the mix among white-label, private-label, and branded products. There is insufficient revenue to model or project gross margins. In the near term, the Company expects gross margins to remain lower than historical levels as operations stabilize and supply chain arrangements are transitioned to third-party manufacturers. While the transition may result in a temporary reduction in gross margins, management believes the transaction provides long-term operational efficiencies and improved financial flexibility.

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 MarchJune 31,30, 2026, SG&A expenses increased by approximately $671$234 thousandthousand, or 118%19%, to approximately $1.2$1.4 million as compared to approximately $570$1.2 thousandmillion during the three months ended MarchJune 31,30, 2025. The increase of $671$234 thousand is attributed to an absence of a $700 thousand credit recognized in the prior-year period related to the conversion of accrued cash bonuses into performance-based compensation by the Board of Directors. In addition, the increase of approximately $127$273 thousand related to stock-basednon-cash compensationexpense, which was offset by decreases of approximately $98$39 thousand in operating expenses.

Research and Development expenses (“R&D”)– R&D expenses were attributed to our Life Sciences segment. The R&D expenses increased by approximately $275$539 thousandthousand, or 28%63%, to approximately $1.3$1.4 million during the three months ended MarchJune 31,30, 2026, from approximately $851 $997 thousand,thousand during the three months ended MarchJune 31,30, 2025. ItThe isR&D expenses are primarily attributableattributed to the progression of CALMAPhase 2 trials on IGC-AD1 and pre-clinicalpreclinical studies on theTGR-63, other small molecule assets. We anticipate increased R&D expenses asindicating the Company’s dedication to advancing its product pipeline. As the development of our other small molecule assets targeting Alzheimer’sTGR-63 and the CALMAPhase 2 trial on Alzheimer’s expands.gains momentum, the Company anticipates an increase in R&D expenses.

Other (expense)/income, income, net – OtherThe netCompany incomerecorded decreasedother byexpense, net, of approximately $159$152 thousand or 74% during the three months ended March 31, 2026. As a result, the total other income for the three months ended MarchJune 31,30, 2026, andcompared to 2025other isincome, net, of approximately $56$306 thousand andfor $215the three months ended June 30, 2025, a decrease of approximately $458 thousand, respectively.or 150%. Other income includesconsists of interest and rental income, dividend income, profitgains fromon the sale of assets, unrealized gains fromon investments, investments, net income,net, and income from scrap sales. Other expense consists of interest, amortization of debt discount and issuance costs, and non-operational one-time items. The primarychange reasonis forprimarily attributable to approximately $120 thousand of interest and amortization expense on outstanding loans during the decreasethree ismonths aended one-timeJune 30, 2026, and approximately $263 thousand of tax credit of approximately $194 thousand that the Companycredits received during the three months ended June March 31,30, 2025.

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 companyCompany to the investors of an aggregate of 172,414205,747 shares of our common stock, for a total purchase price of approximately $50,000,$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 transactions and thedebt creditfinancings, facilityand servepotential borrowings under its O-Bank working capital facility, subject to minimizeapplicable ongoing liquidity requirementsterms and ensureconditions. Based on its current operating plans and anticipated financing activities, management believes the Company’s abilityCompany will have sufficient resources to sustainmeet its operations.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.”

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 MarchJune 31,30, 2026, the Company had raised approximately $4.5 $7.7 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. Based on the Company’s public float as of September 3, 2025, the available capacity under the Sales Agreement is approximately $4.7 million.

In addition to it, on February 2,9, 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 onin August 2,August, 2027.

AsDuring the transition period ofended MarchDecember 31, 2026,2025, the Company invested approximately $50 thousand in a U.S.-listed digital asset through an ETP, which is approximately valued at $28$23 thousand.thousand as of June 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- 3S-3 to raise capital through at-the-market offerings or otherwise. Please refer to Note 13, “Securities”, for more information.

Cash and cash equivalents decreased by approximately $693$569 thousand, or 77%,63%, to $207$331 thousand as of MarchJune 31,30, 2026, from $900 thousand as of December 31, 2025. The decrease was primarily driven by approximately $1.2$2.6 million in cash used in operating activities, and approximately $424 thousand in cash used in investment activities, partially offset by approximately $0.7$2.4 million in net proceeds from financing activities. Working capital deficit increased by approximately $1.4$1.6 million to $1.7$2 million as of MarchJune 31,30, 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 quarter. For more information, please refer to Note 11, “Loans and Other Liabilities”.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025,2026, was approximately $730$2.6 thousand.million. It consists of a net loss of approximately $1.2$5.3 million, a positive impact on cash due to non-cash expenses of approximately $763$2.1 thousand,million, and a negativepositive change in operating assets and liabilities of approximately $296$621 thousand. Non-cash expenses consist of an amortization and depreciation charge of approximately $154$114 thousand, stock-based expenses of approximately $455$1.8 thousand,million, impairmentand lossother items of approximately $152$274 thousand, and an approximately $2 thousand decrease in other non-cash items.thousand. In addition, changes in operating assets and liabilities had a negative positive impact of approximately $296$621 thousand on cash, of which a net negativepositive impact of approximately $447$604 thousand is due to an increase in accounts payable, a positive impact of approximately $53 thousand is due to a decreasepositive increase in accrued and other liabilities, andpartially offset a positive impact ofby approximately $73$44 thousand is due to an increase in inventory,accounts receivable and net other current assets and liabilities of approximately $78 $8 thousand.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026, was approximately $170$424 thousand, which was comprised of approximately $169$418 thousand for the acquisition and development of intangible assets, and approximately $1$6 thousand forfrom the netpurchase purchase of property, plant, and equipment.

Net cash usedprovided inby investing activities for the threesix months ended MarchJune 31,30, 2025, was approximately $142$438 thousand, which was comprised of expenses of approximately $148$262 thousand for the acquisition and development of intangible assets, and approximately $6$726 thousand forof proceeds from the sale of property, plant, netand equipment, partially offset by approximately $26 thousand from the purchase of property, plant, and equipment.

Net cash provided by financing activities was approximately $710 thousand$2.4 million for the threesix months ended MarchJune 31,30, 2026, which was comprised of net proceeds from the issuance of equity stock of approximately $1.1 $87 thousandmillion and net proceeds from borrowings of approximately $623 thousand,$1.3 million, including proceeds from the related-party loan of approximately $144 $377 thousand, proceeds from VFG promissory notes of approximately $470 thousand, proceeds from FirstFire promissory note of approximately $282$302 thousand and proceeds from the OnDeck loan of approximately $214 thousand, partially offset by scheduled loan repayments of approximately $17$49 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 $805$1.6 thousandmillion for the threesix months ended MarchJune 31,30, 2025, which was comprised of net proceeds from the issuance of equity stock of approximately $805$1.6 million, partially offset by scheduled loan repayments of approximately $1 thousand. Please refer to Note 13, “Securities”, for more information.

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 MarchJune 31,30, 2026, this investment was valued at approximately $28$23 thousand, reflecting a decline in fair value of approximately $22$27 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”.

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:cybersecurity.

AsDuring the transition period ofended MarchDecember 31, 2026,2025, the Company invested approximately $50 thousand in a U.S.-listed digital asset through an ETP, which wasis approximately valued at approximately $28$23 thousand.thousand as of June 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).

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Newly issued ASUs not 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.