Is It Too Late For India Globalization Capital, Inc. (NYSEMKT:IGC) Investors?


India Globalization Capital, Inc. (NYSEMKT: IGC) seems to be benefiting from the increasing hope that federal drug regulators will bow to pressure to reclassify marijuana. The company develops and markets cannabis-based therapies for a wide range of indications. Removing marijuana from Schedule 1 list and putting it on a less controlled drug group is expected to expand the legal marijuana industry, which is estimated at billions of dollars in the next few years.

Lawmakers in Washington D.C. and their state counterparts have recently increased their lobbying to have DEA reclassify cannabis. They argue that confusion about whether marijuana is useful as a treatment or not can be cleared by broadly researching the plant. But there is no way researchers can freely study marijuana given that access to it is strictly controlled.

For a developer of cannabis treatments such as India Globalization Capital, Inc. (NYSEMKT: IGC), removing pot from Schedule 1 list should pave the way for more research to allow for developing for better medicines based on the plant.

India Globalization Capital, Inc. (NYSEMKT: IGC) strengthening the balance sheet

India Globalization Capital, Inc. (NYSEMKT: IGC) has been raising funds in the recent times to strengthen its balance sheet to increase its financial flexibility so that it can take advantage of opportunities when they come. The company’s fundraiser has mainly been through equity issuance. In February it raised $600,000 through a private placement of more than 2.1 million newly-minted shares. The net proceeds to the company after subtracting fees and expenses related to the security offering were $590,000.

India Globalization Capital, Inc. (NYSEMKT: IGC) raised another $300,000 in March again through a private placement of its common stock shares. The March offering generated $290,000 in net proceeds.

ATM Agency Agreement

Recently, India Globalization Capital, Inc. (NYSEMKT: IGC) said it had agreed with a division of IFS Securities called Brinson Patrick to be the sales agent of its equity offerings. During the period, the company hopes to offer shares valued at $10 million. Brinson Patrick will take 5% of the gross sales price per share as compensation for agency in the securities offering.


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