# IGC Pharma, Inc.: Form 10-Q for the period ended Dec 31, 2022

- Company: [IGC Pharma, Inc.](/companies/igc.md) (CIK 1326205)
- Form: 10-Q
- Filed: 2023-02-14
- Accepted by EDGAR: Feb 14, 2023, 16:02 ET
- Period: 2022-12-31
- Accession: 0001185185-23-000133
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1326205/000118518523000133/indiaglob20221231_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1326205/000118518523000133/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-10-01 to 2022-12-31 | $332.0k | us-gaap:Revenues |
| Revenue | 9 months, 2022-04-01 to 2022-12-31 | $745.0k | us-gaap:Revenues |
| Cost of revenue | 3 months, 2022-10-01 to 2022-12-31 | $230.0k | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2022-04-01 to 2022-12-31 | $366.0k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2022-10-01 to 2022-12-31 | $102.0k | us-gaap:GrossProfit |
| Gross profit | 9 months, 2022-04-01 to 2022-12-31 | $379.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2022-10-01 to 2022-12-31 | $806.0k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2022-04-01 to 2022-12-31 | $3.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2022-10-01 to 2022-12-31 | $1.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2022-04-01 to 2022-12-31 | $4.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2022-10-01 to 2022-12-31 | −$2.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2022-04-01 to 2022-12-31 | −$7.5m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-10-01 to 2022-12-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2022-04-01 to 2022-12-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-10-01 to 2022-12-31 | −$2.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2022-04-01 to 2022-12-31 | −$7.5m | us-gaap:NetIncomeLoss |
| Operating cash flow | 9 months, 2022-04-01 to 2022-12-31 | −$5.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2022-12-31 | $4.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-12-31 | $9.4m | us-gaap:AssetsCurrent |
| Total assets | at 2022-12-31 | $20.1m | us-gaap:Assets |
| Current liabilities | at 2022-12-31 | $1.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-12-31 | $1.8m | us-gaap:Liabilities |
| Long-term debt | at 2022-12-31 | $141.0k | us-gaap:LongTermDebtNoncurrent |
| Short-term borrowings | at 2022-12-31 | $3.0k | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2022-12-31 | $18.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 25,338 characters.

The purpose of this Management’s Discussion and Analysis (“MD&A”) is to provide an understanding of India Globalization Capital, Inc.’s, dba IGC Inc. (“IGC,” “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 and nine months ended December 31, 2022, and the Annual Report on Form 10-K for the fiscal year ended March 31, 2022, filed with the SEC on June 23, 2022 (the “2022 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.

### Business Overview

IGC develops advanced formulations for treating diseases and conditions, including Alzheimer’s disease (AD), menstrual cramps (dysmenorrhea), premenstrual syndrome (PMS) and chronic pain. The Company’s leading drug candidate, IGC-AD1, has demonstrated in Alzheimer’s cell lines the potential to be effective in suppressing or ameliorating two key hallmarks of AD: plaques and tangles. IGC-AD1 is currently in a Phase 2B safety and efficacy clinical trial for agitation in dementia from AD (clinicaltrials.gov, NCT05543681). The Company also has lines of various cannabinol (CBD) based consumer products such as Holief, which includes gummies and pain relief creams for women experiencing PMS and menstrual cramps, and Sunday Seltzer, which includes a CBD-infused energy beverage, all currently available for purchase.

The Company currently has two main investigational small molecules in various stages of development:

1\) IGC-AD1, our lead therapeutic candidate, is a THC based formulation that has demonstrated in AD cell lines, in vitro, the potential in reducing a key peptide responsible for Aβ plaques, and the potential to decrease or inhibit the phosphorylation of tau a protein that is responsible for the formation of neurofibrillary tangles, both key hallmarks of AD. In addition, in the Phase 1 human trial it demonstrated the potential to reduce agitation in dementia due to AD. IGC-AD1 is currently in Phase 2B trials for treating agitation in dementia from AD, a condition that affects over 10-million individuals in North America and Europe, and

2\) TGR-63, a non-cannabinoid molecule, is an enzyme inhibitor shown in pre-clinical trials to reduce neurotoxicity in Alzheimer’s cell lines.

The Company controls nine patents and seven patent applications, including two each for IGC-AD1 and TGR-63 and their use related to Alzheimer’s.

The Company’s various personal care CBD-based over the counter (“OTC”) consumer products are sold through online and wholesale channels under the following two brands:

- Holief™ is a vegan, non-GMO, cruelty free, paraben free, lab verified, CBD infused line of OTC products with plant-based ingredients aimed at supporting period cramp discomforts and other PMS symptoms.
- Sunday Seltzer™ is a vegan, organic, lightly carbonated energy drink with natural caffeine from green tea extract, CBD, vitamin B, and vitamin C, with no added sugars, and no preservatives. The energy drink is available in two flavors, pomegranate-lemon, and peach-ginger. In addition, Sunday Seltzer™ is also available in four other flavors with no caffeine.

Both Holief™ and Sunday Seltzer™ are compliant with applicable federal, state, and local laws, and regulations.

IGC operates two segments: the Life Sciences segment described above and a legacy Infrastructure segment to execute construction contracts and the rental of heavy construction equipment in India. The Company is currently actively executing a project in this segment.

### Other Developments

The Company commenced its Phase 2 clinical trial for agitation in dementia from Alzheimer’s at two U.S. sites and one Canadian site with plans to add between five to ten additional sites in the United States, Canada, and possibly South America to increase population diversity, promoting both the inclusion of underrepresented populations and helping the Company to better understand the impact of IGC-AD1 on the population of the Americas. The trial is intended to enroll 146 patients with one half, the treated group, receiving IGC-AD1, and the other half, the control group, receiving a placebo. The goal of the trial is to evaluate and establish the efficacy of IGC-AD1 in treating patients with Alzheimer’s dementia to reduce neuropsychiatric symptoms (“NPS”) such as agitation, which affects 76% of individuals with Alzheimer’s (Mussele et al., 2015). The Company hopes to be the first natural THC based medication to treat agitation in dementia due to Alzheimer’s.

### Strategy

The Life Sciences segment strategy includes:

1\. Subject to FDA approval, developing IGC-AD1 as a drug for treating agitation in dementia due to Alzheimer’s and investigating and developing TGR-63 for the potential treatment of Alzheimer’s disease.

2\. Marketing Holief™, Sunday Seltzer™, and white label services.

We believe developing a drug for either treatment of symptoms or as a disease modifying agent has considerable risk due to the need for multi-year trials and FDA approval. However, there could be a considerable upside and significant value creation to the extent we obtain a first-to-market advantage, of which there can be no assurance. If we were to obtain a first-to-market advantage, such an advantage could result in significant growth when an approved drug is marketed. Our HoliefTM strategy includes expanding the line of products and developing online services that connect women with healthcare professionals who can help with PMS and dysmenorrhea, more specifically. Building an online community that brings women together can create brand equity and loyalty.

We believe that additional investment in clinical trials, R&D, facilities, marketing, advertising, and acquisition of complementary products and businesses will be critical to the ongoing growth of the Life Sciences segment. 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. While there can be no assurance, we believe this strategy can improve our existing products and lead to the creation of new hemp-based products that can provide treatment options for multiple conditions, symptoms, and side effects.

Our Infrastructure segment strategy entails executing the current construction contracts that are in effect.

### COVID-19 Update

Our infrastructure business is based in the state of Kerala, India. COVID-19 has had and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures in response. The Company continues to monitor the situation and take appropriate action. The extent to which the COVID-19 pandemic may impact the Company’s operational and financial performance remains uncertain and will depend on many factors outside the Company’s control. Additional future impacts on the Company may include material adverse effects on demand for the Company’s products and services.

### Results of Operations for the Three Months Ended December 31, 2022, and December 31, 2021

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 December 31, 2022, and December 31, 2021:

### Statement of Operations (in thousands, unaudited)

|  | Three months ended December 31, 2022 ($) | 2021 ($) | Change ($) | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | 332 | 142 | 190 | 134% |
| Cost of revenue | (230) | (80) | (150) | 188% |
| **Gross profit** | **102** | **62** | **40** | **65%** |
| Selling, general and administrative expenses | (1,574) | (2,070) | 496 | (24)% |
| Research and development expenses | (806) | (377) | (429) | 114% |
| **Operating loss** | **(2,278)** | **(2,385)** | **107** | **(4)%** |
| Other income, net | 29 | 4 | 25 | **625%** |
| **Loss before income taxes** | **(2,249)** | **(2,381)** | **132** | **(6)%** |
| **Income tax expense/benefit** | - | - | - | - |
| **Net loss** | **(2,249)** | **(2,381)** | **132** | **(6)%** |

*Revenue –* Revenue was approximately $332 thousand and $142 thousand for the three months ended December 31, 2022, and December 31, 2021, respectively. Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white label manufactured products, sales of holistic women’s health care products and beverages including the Company’s energy drink, among others. The increase in sales was primarily related to increased sales of the Company’s services and products. The Infrastructure segment revenue was approximately $41 thousand and $8 thousand for the three months ended December 31, 2022, and December 31, 2021, respectively. The increase in revenue derived from the Infrastructure segment relates to progress in construction activity.

*Cost of revenue –* The cost of revenue amounted to approximately $230 thousand for the three months ended December 31, 2022, compared to $80 thousand in the three months ended December 31, 2021, this represents gross margins of 31% and 44%, respectively. The change in the cost of revenue is primarily attributable to the cost of raw materials required to produce our products and the cost related to low margin Infrastructure revenue.

*Selling, general and administrative expenses (“*SG&A”) – SG&A expenses were approximately $1.5 million and $2.07 million for the three months ended December 31, 2022, and December 31, 2021, respectively. The decrease of $496 thousand is attributed to a reduction of compensation, legal and marketing expenses. SG&A expenses consist primarily of employee-related expenses, sales commission, professional fees, legal fees, marketing, other corporate expenses, allocated general overhead and provisions, depreciation and write-offs relating to doubtful accounts, and advance, if any.

*Research and Development expenses –* R&D expenses were attributed to our Life Sciences segment. The R&D expenses increased by approximately $429 thousand, or 114%, to $806 thousand during the three months ended December 31, 2022, from approximately $377 thousand during the three months ended December 31, 2021. The increase is primarily attributable to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on TGR-63. We anticipate increased R&D expenses as the development of TGR-63 and the Phase 2 trial on Alzheimer’s pick up more momentum.

### Results of Operations for the Nine Months Ended December 31, 2022, and December 31, 2021

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 December 31, 2022, and December 31, 2021:

### Statement of Operations (in thousands, unaudited)

|  | Nine months ended December 31, 2022 ($) | 2021 ($) | Change ($) | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | 745 | 275 | 470 | 171% |
| Cost of revenue | (366) | (149) | (217) | 146% |
| **Gross profit** | **379** | **126** | **253** | **201%** |
| Selling, general and administrative expenses | (4,943) | (7,956) | 3,013 | (38)% |
| Research and development expenses | (2,968) | (1,097) | (1,871) | 171% |
| **Operating loss** | **(7,532)** | **(8,927)** | **1,395** | **(16)%** |
| Impairment of investment | - | (37) | 37 | (100)% |
| Other income, net | 56 | 451 | (395) | (88)% |
| **Loss before income taxes** | **(7,476)** | **(8,513)** | **1,037** | **(12)%** |
| **Income tax expense/benefit** | - | - | - | - |
| **Net loss** | **(7,476)** | **(8,513)** | **1,037** | **(12)%** |

*Revenue –* Revenue was approximately $745 thousand and $275 thousand for the nine months ended December 31, 2022, and December 31, 2021, respectively. Revenue in both quarters was primarily derived from our Life Sciences segment, which involved providing white label manufactured products, sales of holistic women’s health care products and beverages including the Company’s energy drink, among others. The increase in sales was primarily related to increased sales of the Company’s services and products. The Infrastructure segment revenue was approximately $59 thousand and $26 thousand for the nine months ended December 31, 2022, and December 31, 2021, respectively. The increase in revenue derived from the Infrastructure segment relates to progress on the construction activity.

*Cost of revenue –* The cost of revenue amounted to approximately $366 thousand for the nine months ended December 31, 2022, compared to $149 thousand in the nine months ended December 31, 2021, this represents gross margins of 51% and 46%, respectively. The change in cost of revenue is primarily attributable to the cost of raw materials required to produce our products and the cost related to low margin Infrastructure revenue. While gross margins increased, year over year, there is lack of visibility moving forward due to overall inflationary pressures.

*Selling, general and administrative expenses –* SG&A expenses were approximately $5 million and $7.96 million for the nine months ended December 31, 2022, and December 31, 2021, respectively. The decrease of $3 million is attributed to an adjustment of one-time expenses and a reduction of compensation, legal and marketing expenses. SG&A expenses consist primarily of employee-related expenses, sales commission, professional fees, legal fees, marketing, other corporate expenses, allocated general overhead and provisions, depreciation and write-offs relating to doubtful accounts, and advance, if any.

*Research and Development expenses –* R&D expenses were attributed to our Life Sciences segment. The R&D expenses increased by approximately $1.8 million or 171% to $2.9 million during the nine months ended December 31, 2022, from approximately $1.1 million during the nine months ended December 31, 2021. The increase is primarily attributable to the progression of Phase 2 trials on IGC-AD1 and pre-clinical studies on TGR-63. We anticipate additional R&D expenses as the Phase 2 trial commences with patient sign-ups.

*Impairment of investment –* During the nine months ended December 31, 2022, there was no investment impairment. However, during the nine months ended December 31, 2021, the Company exited its investment and acquisition of Evolve I, Inc. (“Evolve”). The Company received shares of IGC common stock, which had granted to Evolve as consideration to the Share Subscription Agreement (SSA), in exchange for the return of its shareholding in Evolve. Accordingly, the Company cancelled the IGC shares received by it and impaired its remaining investment of approximately $37 thousand.

*Other income, net –* Other net income decreased by approximately $395 thousand or 88% during the nine months ended December 31, 2022. As a result, the total other income for the nine months ended December 31, 2022, and 2021 is approximately $56 thousand and $451 thousand, respectively. During the nine months ended December 31, 2021, the other income included a one-time income of approximately $430 thousand related to the forgiveness of the PPP Note. Other income includes interest and rental income, dividend income, profit from sale of assets, unrealized gains from investments, net income, and income from scrap sales.

### Liquidity and Capital Resources

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 Company commitments and contractual obligations.

The Company believes its existing balances of cash, cash equivalents, and short term investments, and other short-term liquidity arrangements will be sufficient, to satisfy its working capital needs, capital asset purchases, debt repayments, investments, including but not limited to, mutual funds, treasury bonds, and other asset classes, clinical trials, and other liquidity requirements, if any, associated with its existing operations over the short . The Company expects to raise capital for its trials as and when it is able to do so, but there can be no assurance thereof. In addition, there can be no assurance of the terms thereof and any subsequent equity financing sought may have dilutive effects on our current shareholders. 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 statement on Form S-3 to raise capital through at-the-market Offerings or otherwise. Please refer to Item 1A “Risk Factors” of the Company’s 2022 Form 10-K for further information on the risks related to the Company.

*(in thousands, unaudited)*

|  | As of December 31, 2022 ($) | As of March 31, 2022 ($) | Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | 4,945 | 10,460 | (5,515) | (53)% |
| Working capital | 7,998 | 12,670 | (4,672) | (37)% |

#### Cash and cash equivalents

Cash and cash equivalents decreased by approximately $5.5 million to approximately $5 million in the nine months ended December 31, 2022, from $10.4 million as of March 31, 2022, a decrease of approximately 53%.

#### Summary of Cash flows

*(in thousands, unaudited)*

|  | Nine months ended December 31, 2022 | 2021 | Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Cash used in operating activities | (5,530) | (6,575) | 1,045 | (16)% |
| Cash (used in)/ provided by investing activities | 7 | (189) | 196 | (104)% |
| Cash provided by financing activities | 101 | 4,143 | (4,042) | (98)% |
| Effects of exchange rate changes on cash and cash equivalents | (93) | 14 | (107) | 100% |
| **Net decrease in cash and cash equivalents** | **(5,515)** | **(2,607)** | **(2,908)** | **112%** |
| Cash and cash equivalents at the beginning of period | 10,460 | 14,548 | (4,088) | (28)% |
| **Cash and cash equivalents at the end of the period** | **4,945** | **11,941** | **(6,996)** | **(59)%** |

\| December 31, 2022, Form 10-Q

#### Operating Activities

Net cash used in operating activities for the nine months ended December 31, 2022, was approximately $5.5 million. It consists of a net loss of approximately $7.5 million, a positive impact on cash due to non-cash expenses of approximately $2.8 million, and a negative change in operating assets and liabilities of approximately $856 thousand. Non-cash expenses consist of an amortization and depreciation charge of approximately $504 thousand, stock-based expenses of approximately $2.3 million, and net loss on the sale of a property, plant, and equipment of approximately $39 thousand. In addition, changes in operating assets and liabilities had a negative impact of approximately $856 thousand on cash, of which approximately $127 thousand is due to a decrease in accounts receivables, approximately $572 thousand decrease in accrued and other liabilities, and approximately $157 thousand decrease in other net current assets and liabilities.

Net cash used in operating activities for the nine months ended December 31, 2021, was approximately $6.6 million. This consists of a net loss of approximately $8.5 million and non-cash items totaling approximately $2.89 million, which in turn consist of an amortization and depreciation charge of approximately $486 thousand, stock-based expenses totaling approximately $1.1 million, approximately $1.7 million for a provision related to stolen inventory, approximately $37 thousand related to the impairment of investment and gain due to forgiveness of the PPP Note of approximately $430 thousand. Changes in operating assets and liabilities had a net negative impact of approximately $944 thousand on cash, of which approximately $51 thousand is related to inventory.

#### Investing Activities

Net cash provided by investing activities for the nine months ended December 31, 2022, was approximately $7 thousand, which comprised net proceeds from the sale of property, plant, and equipment of approximately $239 thousand, adjusted with cash expenses of approximately $144 thousand for the acquisition and filing expenses related to patents and approximately $88 thousand of a short-term investment.

Net cash used in investing activities for the nine months ended December 31, 2021, was approximately $189 thousand, which comprised expenses of approximately $37 thousand for the acquisition and filing expenses related to patents and purchase of property, plant, and equipment of approximately $152 thousand.

#### Financing Activities

Net cash provided by financing activities from the issuance of equity stock through our ATM offering, net of all expenses related to the issuance of stock, was approximately $101 thousand and $4.1 million for the nine months ended December 31, 2022, and 2021, respectively.

### Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions, or foreign currency forward contracts. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

### Critical Accounting Policies

While all accounting policies impact the 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. Our management believes the policies that fall within this category are the policies on revenue recognition, inventory, accounts receivable, foreign currency translation, impairment of long-lived assets and investments, stock-based compensation, and cybersecurity.

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 2022 Form 10-K, as well as Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2022 Form 10-K, 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 which may be applicable 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 2022 Form 10-K.

## Controls and procedures

As filed, 2,363 characters.

### 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 and Principal Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

Our management, including the Chief Executive Officer and Principal Financial Officer, carried out 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 to ensure 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 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 December 31, 2022, 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 December 31, 2022, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

## Risk factors

As filed, 144 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Filed Feb 14, 2023.
Source: SEC EDGAR, the filing index for accession 0001185185-23-000133. Last ingested by Listed: Nov 6, 2026, 16:27 ET. No prices; not investment advice.