IGC Pharma, Inc.

Previous wording

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 months ended June 30, 2025, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on June 27, 2025 (the 2025 Form 10-K). 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.

Current wording

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 six months ended September 30, 2025, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on June 27, 2025 (the 2025 Form 10-K). 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.

Previous wording

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. Early results from our Phase 2 trial are promising: IGC-AD1 effectively reduced agitation in patients compared to a placebo, and crucially, it did so faster than traditional medications. While existing anti-psychotics can take as long 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 manufactured as non-GMO, vegan, products at our facility and are sold over-the-counter (OTC).

Current wording

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. Early results from our Phase 2 trial are promising: IGC-AD1 effectively reduced agitation in patients compared to a placebo, and crucially, it did so faster than traditional medications. While existing anti-psychotics can take as long 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

Previous wording

Currently, the AI team is working on developing a Multimodal Interpretable Transformer for Alzheimer’s Disease (MINT-AD). This tool aims to support clinicians in real-world decision-making towards reducing Alzheimer’s false negatives and delayed diagnosis. We are developing MINT-AD for three aims/phases: risk stratification for AD, cognitive decline prediction 2-5 years in advance, and deployment as a physician’s tool.

Current wording

Currently, we are working on developing a Multimodal Interpretable Transformer for Alzheimer’s Disease (MINT-AD). This tool aims to support clinicians in real-world decision-making towards reducing Alzheimer’s false negatives and delayed diagnosis. We are developing MINT-AD for three aims/phases: risk stratification for AD, cognitive decline prediction 2-5 years in advance, and deployment as a physician’s tool.

Previous wording

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.

Current wording

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 Phase 2 trial on IGC-AD1, and deploying MINT-AD.

Previous wording

Cost of revenue – Cost of revenue amounted to approximately $174 thousand for the three months ended June 30, 2025, compared to $109 thousand in the three months ended June 30, 2024. This represents gross margins of 47% and 60%, 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.

Current wording

Cost of revenue – Cost of revenue amounted to approximately $92 thousand for the three months ended September 30, 2025, compared to $214 thousand in the three months ended September 30, 2024, this represents gross margins of 52% and 48%, 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 Science segment. Typically, the gross margin in the Life Sciences business will fluctuate from one quarter to another based on the mix within the Life Sciences business between white label, private label, and branded products. There is insufficient revenue to model or project gross margins.

Previous wording

Revenue– Revenue was approximately $328 thousand and $272 thousand for the three months ended June 30, 2025, and June 30, 2024, respectively. Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white-label manufactured products and sales of holistic health care products, among others. 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. In the future, our revenue from white label may not increase as we allocate more resources to expanding our core pharma-focused programs.

Current wording

Revenue – Revenue was approximately $519 thousand and $684 thousand for the six months ended September 30, 2025, and September 30, 2024, respectively. Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white-label manufactured products and sales of holistic health care 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. In addition, there was a planned transition period associated with the disposition of the Company’s Vancouver manufacturing facility pursuant to the Favorable Contract. During this period, production and fulfillment activities were reduced as operations were transferred to the Buyer under the Favorable Contract. For more information, please refer to Note 7 – “Disposition of Assets”.

Previous wording

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 June 30, 2025, SG&A expenses decreased by approximately $462 thousand or 28% to approximately $1.2 million as compared to the three months ended June 30, 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. These optimizations allowed the Company to preserve capital and extend its operational runway while maintaining the infrastructure necessary to support clinical development and strategic initiatives.

Current wording

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 six months ended September 30, 2025, SG&A expenses decreased by approximately $93 thousand or 3% to approximately $2.6 million during the six months ended September 30, 2025, from approximately $2.7 million. This decline in SG&A expenses is attributable to the Company’s focused efforts to optimize corporate-level operational efficiency by lowering employee–related costs through headcount alignment and compensation restructuring, and reducing spending on legal and professional services through more efficient vendor management. These optimizations allowed the Company to preserve capital and extend its operational runway while maintaining the infrastructure necessary to support clinical development and strategic initiatives..

Previous wording

Other income, net – Other net income increased by approximately $288 thousand or 1,600% during the three months ended June 30, 2025. As a result, the total other income for the three months ended June 30, 2025, and 2024 is approximately $306 thousand and $18 thousand, respectively. Other income includes interest and rental income, dividend income, profit from the sale of assets, unrealized gains from investments, net income, and income from scrap sales. The primary reason for increase is a tax credit of approximately $263 thousand company received during three months ended June 30, 2025.

Current wording

Other income, net – Other net income increased by approximately $1.3 million or 2,170% during the six months ended September 30, 2025. As a result, the total other income for the six months ended September 30, 2025, and 2024 is approximately $1.4 million and $61 thousand, respectively. Other income includes interest and rental income, dividend income, profit from the sale of assets, unrealized gains from investments, net income, and income from scrap sales. Increase in other income is attributed to tax credit of approximately $263 thousand and profit from the disposition of assets, please refer to Note -7 “Disposition of Assets”.

Previous wording

In the first quarter of Fiscal 2026, the Company entered into the 2025 Share Purchase Agreements (2025 SPAs) with multiple investors, relating to the sale and issuance by our company to the investors of an aggregate of 2,803,333 shares of our common stock, for a total purchase price of $841,000 , or $0.30 per share, subject to the terms and conditions set forth in the 2025 SPAs. The investments are subject to customary closing conditions, including NYSE approval. As per the 2025 SPA, the investor received piggyback registration rights subject to certain restrictions.

Current wording

In the first quarter of Fiscal 2026, the Company entered into the 2025 Share Purchase Agreements (2025 SPAs) with multiple investors, relating to the sale and issuance by our company to the investors of an aggregate of 2,803,333 shares of our common stock, for a total purchase price of $841,000, or $0.30 per share, subject to the terms and conditions set forth in the 2025 SPAs. The investments are subject to customary closing conditions, including NYSE approval.

Previous wording

Cash and cash equivalents increased by approximately $49 thousand to $454 thousand in the three months ended June 30, 2025, from $405 thousand as of March 31, 2025, an increase of approximately 12%.

Current wording

Cash and cash equivalents increased by approximately $700 thousand to $1.1 million in the six months ended September 30, 2025, from $405 thousand as of March 31, 2025, an increase of approximately 173%.

Previous wording

Net cash used in operating activities for the three months ended June 30, 2025, was approximately $1.4 million. It consists of a net loss of approximately $1.6 million, a positive impact on cash due to non-cash expenses of approximately $569 thousand, and a negative change in operating assets and liabilities of approximately $377 thousand. Non-cash expenses consist of an amortization and depreciation charge of approximately $141 thousand, stock-based expenses of approximately $452 thousand, and other non-cash items with a negative impact of approximately $24 thousand. In addition, changes in operating assets and liabilities had a negative impact of approximately $377 thousand on cash, of which a net negative impact of approximately $53 thousand is due to an increase in accounts receivables, and a negative impact of approximately $599 thousand is due to decrease in accrued and other liabilities, a positive impact of approximately $183 thousand is due to decrease in deposits and advances, a positive impact of approximately $51 thousand is due to increase in accounts payable and net other current assets and liabilities of approximately $41 thousand.

Current wording

Net cash used in operating activities for the six months ended September 30, 2025, was approximately $3.5 million. It consists of a net loss of approximately $3.4 million, a positive impact on cash due to non-cash expenses of approximately $363 thousand, and a negative change in operating assets and liabilities of approximately $441 thousand. Non-cash expenses consist of an amortization and depreciation charge of approximately $260 thousand, stock-based expenses of approximately $1.2 million, and profit on sale of fixed assets of approximately $1.1 million. In addition, changes in operating assets and liabilities had a negative impact of approximately $441 thousand on cash, of which a net positive impact of approximately $220 thousand is due to an increase in deposits and advances, and a negative impact of approximately $506 thousand is due to an increase in accrued and other liabilities, a net negative impact of approximately $253 thousand is due to an increase in accounts payable, a net positive impact of approximately $85 thousand is due to an increase in operating lease assets, and net other current assets and liabilities of approximately $13 thousand.

Previous wording

Net cash used in operating activities for the three months ended June 30, 2024, was approximately $1.8 million. It consists of a net loss of approximately $2.4 million, a positive impact on cash due to non-cash expenses of approximately $564 thousand, and a positive change in operating assets and liabilities of approximately $62 thousand. Non-cash expenses consist of an amortization and depreciation charge of approximately $162 thousand and stock-based expenses of approximately $402 thousand. In addition, changes in operating assets and liabilities had a positive impact of approximately $62 thousand on cash, of which a net negative impact of approximately $118 thousand is due to an increase in deposits and advances, and a positive impact of approximately $151 thousand is due to increase in accrued and other liabilities, and net other current assets and liabilities of approximately $29 thousand.

Current wording

Net cash used in operating activities for the six months ended September 30, 2024, was approximately $2.7 million. It consists of a net loss of approximately $4.1 million, a positive impact on cash due to non-cash expenses of approximately $1.1 million, and a positive change in operating assets and liabilities of approximately $249 thousand. Non-cash expenses consist of an amortization and depreciation charge of approximately $307 thousand and stock-based expenses of approximately $804 thousand. In addition, changes in operating assets and liabilities had a positive impact of approximately $249 thousand on cash, of which a net negative impact of approximately $227 thousand is due to an increase in deposits and advances, and a positive impact of approximately $467 thousand is due to increase in accrued and other liabilities, a net negative impact of approximately $5 thousand is due to an increase in accounts payable and net other current assets and liabilities of approximately $14 thousand.

Previous wording

Net cash provided by investing activities for the three months ended June 30, 2025, was approximately $580 thousand, which comprised of approximately $114 thousand for the acquisition and development of intangible assets, and approximately $693 thousand for the net purchase of property, plant, and equipment.

Current wording

Net cash used in investing activities for the six months ended September 30, 2025, was approximately $206 thousand, which is comprised of expenses of approximately $411 thousand for the acquisition and development of intangible assets, approximately $25 thousand for the investment in short term investment, and approximately $642 thousand for the net purchase of property, plant, and equipment.

Previous wording

Net cash used in investing activities for the three months ended June 30, 2024, was approximately $131 thousand, which comprised of expenses of approximately $93 thousand for the acquisition and development of intangible assets, and approximately $38 thousand for the net purchase of property, plant, and equipment.

Current wording

Net cash used in investing activities for the six months ended September 30, 2024, was approximately $196 thousand, which is comprised of expenses of approximately $145 thousand for the acquisition, and development of intangible assets, and approximately $51 thousand for the net purchase of property, plant, and equipment.

Previous wording

Net cash provided by financing activities was approximately $2.5 million for the three months ended June 30, 2024, which was comprised of net proceeds from issuance of equity stock of approximately $2.5 million and re-payment of the loan of approximately $1 thousand. Please refer to Note 13 – “Securities”, for more information.

Current wording

Net cash provided by financing activities was approximately $3.9 million for the six months ended September 30, 2025, which is comprised of net proceeds from issuance of equity stock of approximately $3.9 million, and re-payment of the loan of approximately $2 thousand. Please refer to Note 13 – “Securities”, for more information.

Previous wording

Net cash provided by financing activities was approximately $851 thousand for the three months ended June 30, 2025, which was comprised of net proceeds from issuance of equity stock of approximately $852 thousand and re-payment of the loan of approximately $1 thousand. Please refer to Note 13 – “Securities”, for more information.

Current wording

Net cash provided by financing activities was approximately $3.3 million for the six months ended September 30, 2024, which is comprised of net proceeds from issuance of equity stock of approximately $3.3 million, and re-payment of the loan of approximately $2 thousand. Please refer to Note 13 – “Securities”, for more information.

Previous wording

Management continually evaluates opportunities to optimize the Company’s capital structure and enhance stockholders’ equity while maintaining adequate liquidity to support operations. Since early 2024, we have assessed the potential use of digital assets, including bitcoin and other cryptocurrencies, as part of our treasury management strategy.

Current wording

Management continually evaluates opportunities to optimize the Company’s capital structure and enhance stockholders’ equity while maintaining adequate liquidity to support operations. Since early 2024, we have assessed the potential use of digital assets, including digital assets and other cryptocurrencies, as part of our treasury management strategy. We believe that allocating a portion of our cash reserves to digital assets could diversify our treasury holdings, potentially enhance our balance sheet if the assets appreciate, and align with emerging best practices of certain public companies.

Previous wording

We expect to begin implementing this policy during the quarter ending September 30, 2025. The timing, size, and type of investments will be based on prevailing market conditions, liquidity needs, and risk management considerations. These investments involve material risks, as discussed in Item 1A – Risk Factors.

Current wording

We began implementing this policy during the quarter ending September 30, 2025. The timing, size, and type of investments will be based on prevailing market conditions, liquidity needs, and risk management considerations. These investments involve material risks, as discussed in Item 1A – “Risk Factors”.

Previous wording

The Company may invest in digital assets, such as bitcoin and other cryptocurrencies, either directly or through ETPs that hold such assets. Direct holdings of digital assets will be accounted for in accordance with ASC 350-60, Intangibles – Goodwill and Other – Crypto Assets, and measured at fair value with changes recognized in earnings, in accordance with ASU 2023-08. 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).

Current wording

During the six months ended September 30, 2025, the Company invested approximately $25 thousand in a U.S.-listed digital asset through ETPs. The investment is classified as a short-term 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).