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spk01: Greetings and welcome to the Pet Vivo Holdings third quarter of fiscal year 2023 financial results conference call. My name is John Dolan, the Chief Business Development Officer and General Counsel at Pet Vivo. Today's call is being webcast and will be posted on the company's website for playback. Before we begin, I would like to remind everyone that comments made during this conference call by Pet Vivo's executives may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risk and uncertainties. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement. PetVivo's actual future results could differ materially from those expressed in such forward-looking statements for any reason, including those listed in its SEC filings. PetVivo assumes no obligation to update any such forward-looking statements. PetVivo filed its earnings release and Form 10-Q with the SEC today, which provide a detailed discussion of our financial results. These documents can be found in the SEC website and the investor relations section of our website. I would like to now turn the call over to John Lai, the CEO and president of Pet Vivo. Please go ahead, John.
spk02: Thank you, John, and welcome. Also joining me today will be Bob Fulks, our chief financial officer. I would like to begin by discussing some highlights from last quarter. Then Bob will discuss our financial results in greater detail. I will conclude by sharing some Additional thoughts on our business strategy, key focus areas for fiscal 2023 before we open the lineup for questions. Our key highlights for the third quarter of fiscal 2023 were we reported revenues of 510,000 as compared to 51,000 in the third quarter of fiscal 2022. Revenues for the third quarter included net revenues of 457,000 from shipments of spring to MWI Animal Health, subsidiary of Merisaurus Bergen. They are exclusive distribution partner, which we signed June 2022. We continue to expand our national presence highlighted by our attendance at the American Association of Equine Practitioners annual conference in November of 2022, which Dr. Manning, our senior technical veterinarian, did a theater presentation, actually two theater presentations, where we did get very good response and we opened accounts in over 47 states. We are starting to see the results of the investments we have made in expanding the awareness and efficacy and benefits of spring with companion animals. I would like to now turn the call over to Bob Foulkes, our Chief Financial Officer, who will discuss our financial results.
spk04: Thank you, John. And good afternoon, everyone. For the three months ended December 31st, 2022, we reported revenues of $510,000. as compared to $51,000 in the prior year. And as John noted, this increase was driven by revenues of $457,000 related to shipments of spring to MWI. For the nine months ended December 31st, 2022, we reported revenues of $792,000 as compared to $60,000 in the prior year period. This increase was driven by revenues of $575,000 related to shipments of spring to MWI. At December 31, 2022, the company had $375,000 in cash and working capital of $171,000. In January of 2023, we raised approximately $1.4 million. after deducting transaction expenses from the sale of just over 610,000 shares of our common stock in a registered direct offering at a price of $2.32 per share. We also entered into a lease agreement for approximately 14,000 square feet of production and warehouse space. This new facility will include multiple clean rooms for large-scale production of spring, as well as other medical devices and therapeutics in our product pipeline. We plan to move all of our production to this facility beginning in August of 2023. And just to conclude here, we continue to invest our resources to expand our sales and marketing efforts, clinical studies, and manufacturing capacity to gain vet acceptance and support increased revenues from the sale of spring. So now I will turn the call back over to John.
spk02: Thank you, Bob. I would like to talk about our business strategy and key focus areas for fiscal 2023. The first one is to generate clinical evidence to support the equine and small animals markets. So we have a whole series of studies that we have commissioned last year or the year before that many of them are coming to conclusion and for fiscal 2023, we expect quite a few of these to get to become public through publications as well as presentations. We're also focused on hiring at least two additional territorial sales managers, business development managers to focus our relationship with MWI, expanding that relationship. Another focus was we talked about doing promotion awareness of spring at these major conferences. We kicked off the conference season at the Veterinary Medical Expo in Orlando. What we're seeing, because we had talked about focusing on getting more podium presentations, even though we didn't officially do a podium presentation at this event, A couple of the veterinary doctors that were doing presentations brought up our product and kind of talked about the success they were having. So our booth got inundated with a bunch of veterinary doctors as well as vet techs, substantially big numbers, as well as at the AAEP when Dr. Manning did his theater presentations. Both days, the theater... was full to capacity, which in that place is probably about 100 vets. We were standing room only in a lot of those. So we continue to invest in those presentations at the various trade shows. And coming up in mid-March is our first small animal presentation by Ethos to one of the major organizations, the Veterinary Orthopedic Surgical Association. I think that one's mid-March. So we believe that will provide even more evidence and more podium presentations that will draw awareness in the marketplace. I would like to now turn the call over to John Dolan, who will provide an update on our clinical studies, clinical data derived from these studies about the efficacy of spring and will be helpful to gain more acceptance from the veterinary doctors. John, go ahead.
spk01: Thank you, John. We have a robust upcoming year when it comes to clinical trials. Pet Vivo has a total of seven clinical trials in progress at this time, five small animal clinical trials, i.e., canine and feline, and two equine clinical studies. We are fortunate to be working with a number of world-renowned research organizations, such as Colorado State University, Ethos Veterinary Health, and Innative Inc. We anticipate public disclosure of these clinical study results to begin in March 2023 and continue intermittently throughout the remainder of our next fiscal year. The company plans to organize and conduct more clinical studies in addition to the ones in progress in order to support our relationship with MWI and gain vet acceptance of spring. I'd like to turn it back now to John and Lai.
spk02: Thank you, John. I would like to now open it up to a Q&A session. Operator, will you please explain to the callers or people that are online what they need to do to ask a question?
spk06: Absolutely. If you would like to ask a question at this point, please just type your question into the chat box and also click the button to raise your hand. I will look for your raised hand and click on you. If you are dialing in to this call, the process is to hit star nine in order to raise your hand. And then once prompted, hit star six to unmute yourself so that you can ask your questions. Please hit star six so that you can unmute yourself. There you go.
spk08: Hello, am I on? Yes, you are. Oh, hey, John. Joe Salvani. John, that was great. I think it was a great start in the relationship with MWI. So congratulations for the takeoff. I was fortunate enough to visit you over at the World Equestrian Village and got a chance to talk to some of the MWI guys and they tell me it's doing great. So congratulations. Thank you. Hopefully you'll see a very big ramp up as they go throughout the distribution. Could you basically just talk about the size of the markets in terms of the number of animals in each of the markets that you're, I guess, between the two small animals and also the horses and the differentiation between the size of the show horse market versus the pet market. So that way people can get a better idea of the number of animals that MWI is going to be helping to get access to and how many vets serve as all these people.
spk02: So the MWI relationship is working out extremely well for both parties. And we're both very happy because what happens before every one of these shows, MWI does business with like 90% of the veterinary doctors in the United States. So they have accounts. So they would do a promotional email for us. to the vets that they know or the vet techs that are coming to the show to kind of give them a little highlight about spring and they should drop by our booth. So that's a very good introductory approach for us. So the size of the market, you know, in terms of dogs in the United States, there's about 64 million dogs, about 53 million cats. And the numbers for horses range anywhere from 8 million to 14 million. It's just depending on the source because there are quite a bit of wild horses out there too. Currently, I would say that the product mix or the revenues or majority of it are coming from the equine space just because of the The vets, they tend to see the horses a lot more often than if a small animal vet does the injection. They don't see them for a while. And also the small animal side will pick up probably second half of 2023 on a calendar basis because once those studies start coming out, the MWI reps now will have data to be able to get to the small animal vets. The market's quite large in terms of OA lameness and potential rehab markets. I mean, it is north of 4.8 billion a year in the United States. So I hope that answers the question.
spk08: Yeah, it does. And I think that is there any other organic and basically organically derived products that are out in the marketplace that are basically veterinarian medical devices right now? Or is this pretty much an open market for you guys?
spk02: So I feel our product is quite disruptive and unique in the sense that it deviates from what everyone else has been focused on. Our product is targeted at the root cause of osteoarthritis and other lameness issues. while competitive products are focused at more treating the symptoms while we're focused at the actual disruption of friction between bone and bone contact. So I feel we're unique in that sense. And that's what becomes part of the educational process because when a veterinary doctor leaves vet school, they learn that it's a lifetime management of osteoarthritis. It's a multimodal approach. you're using NSAIDs, then you move on to organic acid, then you go on to steroids, and then eventually stem cells and then joint replacement. We're actually disrupting and changing that equation because we feel once the spring particles are injected into the joint, you're going to lead to a tremendous reduction in the need of NSAIDs or any of the other materials or complete elimination of it, which helps reduce the side effects onto the horse. Because all these other items have long-term negative effects and side effects, while ours is purely neutral, and that's how we got the veterinary device designation.
spk08: Years ago, there was a company I got involved with very early that turned out to be a major hormone for me called Biomatrix, where they injected the hyaluronic acid into the actual cartilage that was already leaking uh the problem with that is obviously it's like putting air into a leaking balloon the air seeps out i mean it could be fair to say that since this is like a cartilage type material uh actually acting differently than the hyaluronic which is actually a well-known uh use of for equine as well as human adventure but the point is isn't that a fair way of looking at that you're not facing the leakage that you would normally get with the hyaluronic acid coming out of the cartilage.
spk02: Well, yeah, but also duration. Duration is the key here. So once our particles goes in, that our matrix particles start forming a scaffolding, which actually in essence, over probably the next month or two, the joint actually improves. While if you're using other products that are focused on symptoms, they tend to diminish after the initial injection. And each time you're using an HA product, you're probably diminishing the efficacy as well as the soft tissue.
spk08: Okay.
spk01: John, would you like me to add a little bit to that? Sure, go ahead. Actually, you're exactly right. When you were talking about medical devices, there are a few products in the market that have been classified as medical device. Polyglycan, for example, is one. And the HA products, high-visc and those type products out there that you've already mentioned are also considered that. John has hit it on the head, though. Many of the products that are out in the market are trying to address certain symptoms that end up taking place when you end up losing or having damaged cartilage. For example, lubrication of the joint. If you put HA into a joint, you're looking to lubricate that joint. The issue is, is you're exactly right also. Within probably 48 hours that HA is out of the joint, you may get some beneficial results for maybe a couple months, but then you end up losing the effectiveness of that particular medical device. Now, John has hit it on the head with our product. What we're doing is we're injecting a solid into the joint, a particulate that's sponge-like. that fills in all the gaps in the cartilage. So when I say it's a particle, the nice thing about that is that it is large enough where it can't get by the synovial membrane. So it stays inside that joint, thereby filling in all the gaps. So in other words, as John had mentioned before, you're treating the affliction or you're addressing the affliction by recreating that cushion between the bones.
spk06: We have another question.
spk08: Thank you.
spk06: Go ahead. For the number ending in 3600, please unmute yourself. Perfect.
spk07: Hi, Dave Deming. Congratulations, gentlemen, on an excellent quarter. Just had a question along the lines of from past investor presentations. you have a robust manufacturing facility with about a half million unit capacity, a hundred million in revenue estimated from that current production facility. Has anything changed as far as that capacity capability or what has prompted the expansion into another facility at this point in time?
spk02: Well, thanks for the question, David. The expansion actually, if you look at it, has multiple clean room and potential for what we call current manufacturing practice, current good manufacturing practice certifications. It has the ability to scale at much higher volumes with the addition of automated equipment. Also that, you know, it clearly identifies future potential product pipelines to run through there. Because if you're just using our current facility, you would have to shut down the manufacturing of spring for the next product pipeline and then rotate back and forth. So there's tremendous efficiencies and scalability in this new facility. And you would see that it's probably three and a half times the size of what we currently have from a production standpoint. So that's one way to answer it. So we're just really positioning for future growth, potential future rapid growth.
spk07: Oh, excellent. So what particular products would you have in mind then to be simultaneously scaling in a facility that can serve both of those end results?
spk02: So we're not moving into the other facility until probably August. And as you see on our studies, everything is in equine, canine, and feline. So we'll have those products out the next year. We could have a couple of other products that we're ready to, they're ready to roll out anytime. We just have to have studies to support it. So we need to prep for that and have that place ready.
spk07: Terrific. So you, it gives you some dual path leverageability in your facility is kind of the net of that.
spk02: Yeah, absolutely. And also, you know, a disaster recovery type potential situation. So we won't get disrupted in the spring aspect, no matter what. Well, I shouldn't say, you know, you could have a major disaster where a lot of stuff could taken out, but otherwise it's, we're doing the right thing to make sure we don't interrupt spring and with the momentum we have going right now. Because we're seeing a lot of veterinary doctors now actually putting up videos of success stories of dogs and horses and some veterinary doctors are actually started to inject some cats and seeing really good results. I mean, those videos are very powerful when they're coming from the vets themselves to let the public and other veterinary doctors know how well the product is working.
spk07: Terrific. Thanks for the overview. Thank you.
spk06: We are now allowing the number ending in 9170.
spk02: Go ahead.
spk06: You have to unmute yourself by, okay, perfect.
spk05: Hi, my name is Elizabeth Cantor-Deo. Just wanted to call in real quick, less of a question. First off, congratulations on the great quarter. Thank you. So I started using this product back in October on a family friend's racehorse. This horse in the past, very expensive horse, always did very, very well, but ended up with a bad ankle. This ankle became the size of a softball. Just couldn't really run anymore. So one injection and he performed incredibly just a week later and then ended up winning quite a few races within the last four months or five months. We are five months out from injection now. And we were thinking that, you know, it'd be time for another one. Start wearing off. The results are just getting better. I always feel that, you know, maybe that protein matrix has, you know, started to rebuild the joints. I'm very surprised. I really thought we'd be ready for another injection. So, but my father, as some of you know, is a very high level of veterinarian in the, the reasoning world. And he's just, he's so impressed. You know, he says he's never seen anything like this before.
spk02: So I, I, yeah, I remember him. the early onsets. He didn't believe this stuff would work. No, no, no, no, we didn't.
spk05: It's such an incredible step up from what we were using before because cortisone over time, as most of you know, degrades the joints, which from what we understand about this is just not going to be the case, which is huge for longevity. You buy a $300,000 horse, you want it to last. Correct. So
spk02: You know, we say generally it lasts a year. It all varies. We have seen it last well beyond a year. And we're comfortable saying a year because when we did the human studies on the human side, we tracked the humans for a year and were able to identify the particles still in the body. So we have seen situations where, uh, In birth defect puppies, where they came of age, where everything is pretty grown in, we have done injections of defective hips, where the particles so far lasted eight years, which was really surprising. And I talked about the improvement after the matrix is going into the joint. Once that scaffolding starts to formulate, it tends to keep the joint functioning even better. So when you first did the injection in the horse, I kind of said you wanted to wait 10 days, but I guess the trainer and your dad said it was okay to let the horse run after a few days, which kind of surprised me, but the horse did extremely well.
spk05: He did. He ran incredibly. You know, my dad wanted to wait, but the trainer, you know, they... their, that's their livelihood. So he wanted the horse right back on the track. And, um, what was it? Gosh, a month, month or two ago, he, um, he went as fast as he ever had in the last two years and five degree weather and just won the race for fun. And I think there was 20 lengths between him and the rest of the pack. And it's just absolutely incredible.
spk02: Well, that's great to hear. Thank you.
spk05: Yeah.
spk06: Are there any more questions?
spk04: If not... Looks like there's one more in there.
spk06: I see. I think he already spoke.
spk04: Oh, okay.
spk06: Let me just... I will allow him to talk if he should have... Oh, I see another one just came up. John Salek, if you can unmute yourself.
spk03: Yes. Thanks for the call. My question relates to... If you could just go over again your burn rate and then also... Your milestones, what are the milestones that are sort of in progress or that you see developing over the next 12 months?
spk02: So, you know, we stated probably back in August of 2021 when we went on NASDAQ, if you look at the PowerPoint from back then, the milestones would get these studies out because the studies allow our regional sales reps to work with the MWI sales reps to to point to specific data, uh, to the vets and those mouse, we, we believe there will be very good adoption for the, for the canine side once that gets published. So John Dolan talked to seven of them that are in process. So we feel there's multiple milestones from that standpoint. Um, we're. So these papers will get published, so that will also help in the adoption. The burn rate, I think it's probably around 2 million per quarter. Bob, you can comment on that if I'm not too far off, but I kind of recall looking at it that that was the type of number.
spk04: Yeah, you're in the ballpark.
spk02: Yes.
spk03: Okay, and then, so timing on those clinical trials and studies, can you give any kind of timeframe, timetable?
spk02: Well, we completed the Ethos one, which was on torn cruise ships and dogs, because we're focusing each study on a different joint. So that one was completed at the end of October, the first cohort, and Uh, the clinician had requested to be able to present at the, uh, veterinary orthopedic surgical, uh, annual conference, which is mid March. So that's coming right up. And I think, uh, I think it bodes well, because we don't get to see the results of the study that they're actually getting to present there because, uh, that's, uh, all board certified surgeons for, uh, so, so, so it's a pretty prestigious organization. And once that gets presented, we'll have an abstract for the salespeople to use. And on top of that, Ethos is a very well-respected private research organization. They do work for Merck Animal Health, Zoetis, and so on. They're owned by NVA, National Veterinary Association. The parent actually owns 2,000 small animal vet clinics. So I feel we'll... give also a emphasis for the MWI sales reps to go into those clinics and start converting. So, you know, we're seeing MWI really make good inroads in getting to the veterinary doctors because recent rounds of ordering have been very small unit volumes. You usually see a vet order one to three syringes on their first turn. Then 45 days later, a little longer, they get reports back from the owners of the dog and the horses is much quicker. Then the next term we see a larger order and then eventually it gets up into 40, 50 units a month. So we're seeing that kind of progression. We're also seeing a very good adoption rate. And what I mean by adoption rate is once the vet tries it, they're hooked on the product because they're seeing the benefits. Does that answer your question?
spk03: Yeah, that's great. Thank you.
spk02: Thank you.
spk06: All right, and we have a question from 9170. Go ahead. Hello?
spk05: Oh, I already spoke. I'm not sure why it put me back in the queue.
spk02: Oh, okay.
spk05: Thank you.
spk06: Thank you. For 9081, would you like to say anything else? Okay, now we have a new question, one moment, from Fitzgerald.
spk02: Go ahead.
spk06: Hello? Gerald, you are unmuted if you'd like to ask your question.
spk02: Is there another question? Maybe we move on and he can log back in.
spk06: I think, no, that is the last one, I believe, from Axon Capital. Okay, I think he just logged out. He's going to log back in.
spk02: Oh, okay. We'll give him a minute. Well, while we're waiting for them, I'll just expand a little bit more on the milestones. Right now we're at a point, it's just basically providing clinical evidence for the salespeople to convert more and more of the veterinary doctors into the channel purchasing our product. And in the small animal side, it's all data driven. So we feel pretty good with the seven studies we have that we have invested in from 2021 and 2022 that these will come to fruition here by the end of 2023. Calendar. Do we have Axiom Capital back?
spk06: Yes, we do. One moment. Okay. Go ahead.
spk02: It must be their internet connection in New York.
spk06: Good girl. You are unmuted on our side. If you'd like to ask your question.
spk02: Well, you know, if there are no more questions, we probably should. Oh, I got one coming, being typed in. Hang on. No, we can't hear you. So I got the text message asking if they could hear me. I go, no.
spk06: I see some here in the chat box if you'd like to address them. I see what was the dollar amount of the sell-through in Q3 at MWI?
spk02: I already answered that one.
spk06: Okay. Are you saying that the Q3 MWI sold Aspiring? And then, yeah, that's the other one.
spk02: Yeah. So we're good. They're having problems. They're going to call me direct and ask whatever question they have. Perfect. Okay. Thank you. So if there are no more questions, we can end this call. Everyone, thank you for attending. And operator, please officially end the call.
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