IGC Update on Iron Ore Subsidiary
January 06 2017 - 4:32PM
India Globalization Capital, Inc. (NYSE-MKT:IGC) announces today an
update on its iron ore subsidiary Ironman.
As previously reported, in December 2011, IGC acquired a 95%
equity interest in Linxi HeFei Economic and Trade Co., known as
Linxi H&F Economic and Trade Co., a People’s Republic of
China-based company (“PRC Ironman”), by acquiring 100% of the
equity of H&F Ironman Limited, a Hong Kong company (“HK
Ironman”). The Acquisition was accounted for under the acquisition
method of accounting in accordance with ASC Topic 805, “Business
Combinations.” Further information on this acquisition and the
purchase price allocation was set out in IGC’s Form 10-K for fiscal
year ended March 31, 2012 filed with the SEC on July 16, 2012. In
February 2015, IGC filed a lawsuit in the circuit court of Maryland
related to the acquisition seeking to have the court order
rescission of the underlying 2011 Acquisition Agreement and to void
any past or future transfer of IGC shares to the
defendants-sellers.
As reported in IGC’s Form 10-K for the fiscal year ended March
31, 2016 filed with the SEC on July 14, 2016, PRC Ironman assets
include three beneficiation plants located on 2.2 square kilometers
of hills in southwest Linxi in the autonomous region of eastern
Inner Mongolia, under the administration of Chifeng City, Inner
Mongolia, which is located 250 miles from Beijing, 185 miles from
Tianjin Port and 125 miles from Jinzhou Port. At the time of
purchase on December 30, 2011, the beneficiation plants consisted
of buildings with a gross value of approximately $1 million plant
and equipment with gross value of approximately $5 million and
construction in progress with a gross value of approximately $4
million, along with other assets such as office equipment,
furniture, fixtures, computer equipment and vehicles.
Effective December 30, 2016, IGC gave up control of the PRC Ironman
assets described above, and effectively cancelled approximately 2.2
million shares of common stock of IGC. The approximate net impact
on the Company’s financial statements to be reflected in IGC’s Form
10-Q for the quarter ended December 31, 2016 is a reduction in
common stock and a corresponding reduction in gross assets by
approximately $8 million, and a one-time increase in income of
approximately $300,000 depending on the RMB to USD exchange
rate.
IGC will continue its focus on emerging opportunities including
developing phytocannabinoid-based therapies.
About IGC
In the United States, we develop phytocannabinoid-based
therapies. IGC has assembled a portfolio of patent filings that
encompasses the indications of Pain, Medical Refractory Epilepsy
and Cachexia using cannabinoids. We are based in Bethesda,
Maryland.
Our website: www.igcinc.us. Twitter @IGCIR
Facebook.com/IGCIR/
Forward-looking Statements
Some of the statements contained in this press release that are
not historical facts constitute forward-looking statements under
the federal securities laws. Forward-looking statements can be
identified by the use of the words "may," "will," "should,"
"could," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "intends," "potential," "proposed" or the
negative of those terms. These statements are not a guarantee of
future developments and are subject to risks, uncertainties, and
other factors, some of which are beyond IGC's control and are
difficult to predict. Consequently, actual results may differ
materially from information contained in the forward-looking
statements as a result of future changes or developments in IGC's
business and acquisition and diversification strategy, competitive
environment, infrastructure demands, and governmental, regulatory,
political, economic, legal and social conditions in, among other
places, China and India. Except as required by federal securities
laws, IGC undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information
or future events, or otherwise. Other factors and risks that could
cause or contribute to actual results differing materially from
such forward-looking statements have been discussed in greater
detail in IGC's Form 10-K for fiscal year ended March 31, 2016, and
in subsequent reports filed with the U.S. Securities and Exchange
Commission.
Contact Info:
Claudia Grimaldi
301-983-0998