PetVivo Holdings, Inc.

Let's begin. Good afternoon, everyone. Thank you for joining us today to discuss PetVivo's results for its fiscal second quarter ended September 30th, 2024. Hosting the call today is our Chief Executive Officer John Lai, our Chief Financial Officer Gary Lowenthal, and myself, John Dolan, PetVivo's Chief Business Development Officer and General Counsel. Following our remarks, we'll open the call to your questions. Then before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made during the call. I'd like to remind everyone that today's call is being recorded and it will be made available for telecom replay per the instructions in today's press release that is available in the investor relations section of our website. Before we provide the financial details for the I would like to first provide an introductory overview and a few highlights for those new to PetVivo who have joined us today. In our fiscal second quarter of 2025, we achieved strong financial and operational progress on a number of fronts as we continue to advance the rollout of our flagship product that promotes the restoration of proper joint mechanics, Spring, with osteocushing technology. This injectable intraarticular veterinary device is composed of patented biocompatible microparticles derived from natural resources. The novel technology is a real result of years of R&D and independent clinical studies. Spring's unique, lubricious, and viscoelastic characteristics address a prevalent unmet medical need to reduce the joint pain and discomfort caused by osteoarthritis and poor joint biomechanics. Afflictions that affect millions of pets and horses worldwide. More than 80% of dogs and cats and more than half of all horses experience this at some time during their lifetime. Spring's porous and spongy microparticles are specially designed to absorb and release synovial fluid in the joint in response to mechanical forces. In this way, they mimic the physical properties of natural cartilage. Most importantly, Spring has been clinically shown to go beyond the simple masking of symptoms to address the common root cause of lameness, which is missing or damaged cartilage. As the word continues to spread amongst veterinary practices and from our presentations at leading veterinary conferences about these breakthrough medical benefits, we are seeing increased demand from our distribution network. In fact, our sequential revenue growth of 62% in the second fiscal quarter was driven largely by substantial increases in distributor sales, which are up 147% or $101,000. Sequentially, and up to 24% or $33,000 over the past year, and these numbers continue to Meanwhile, we've been able to maintain our very favorable high gross margins of 89.5%. Earlier this year, our distribution of Spring surpassed the major milestone of more than 800 clinics across all 50 states. This has led to now more than 10,000 dogs, cats, and horses that have experienced the benefits of Spring nationwide. To further accelerate our growth, since the beginning of last quarter, we have added highly experienced sales and marketing personnel to support our growing distribution relationship with market leaders, including MWI and Covetris. They will also support our direct sales and marketing to leading veterinary clinics nationwide. Now, before we get some more exciting developments and our outlook for the rest of the year, including comments from our chief executive officer, John Lai, I would like to turn the call over to our CFO, Gary Lowenthal, to take us through our financial results for the quarter. Gary?

Thanks, John, and good afternoon, everyone. Thank you for joining us today. As John mentioned, we saw sequential revenue growth of 62%, which was largely driven by a substantial increase in our distributor sales, which were made up of 147% or $101,000 sequentially, and up to 24% or $33,000 versus the same year-ago quarter. Our revenues in the fiscal second quarter compared to the same year-ago quarter decreased 3% to $201,000. The decrease was largely due to the decreased direct sales to veterinary clinics, which was partially offset by the increased sales via distributors. The distributor sales growth reflects how we have greatly expanded our distributor channel and how we have continued to lay the foundation for the greater adoption of our spring season. Given the many operational changes and new marketing and sales staff onboarding processes during the quarter, we were pleased to keep revenue fairly even for the quarter versus the year-ago. We expect future quarters to be much stronger versus prior periods now with these expanded new teams in place. Now, for our gross profit in the second quarter, the totaled $180,000 or .5% of our revenues as compared to $186,000 or the same .5% of revenues in fiscal second quarter 2024. Operating expenses totaled $2.4 million, decreasing 25% from the same fiscal quarter of 2024. This extraordinary expense reduction was due to our strategic company-wide reduction and restructuring program that decreased general administrative expenses by $425,000 versus the same year-ago quarter. It also reduced sales and market expenses by $458,000 compared to the year-ago quarter. These decreases were partially offset by an increase in research and development of $106,000 due to additional clinical trials that will help support our future sales. Our net loss improved to $2.2 million or $0.11 a loss per share, basic undiluted share, from a net loss of $3.7 million or $0.28 a share per basic undiluted share in the same year or quarter ago. The large expense reduction was due to a strategic corporate restructuring and a company-wide class reduction program implemented in the first and second fiscal quarters of the year, continuing throughout the year. Operating expenses decreased by $1.6 million, or 27%, compared to the fiscal half of 2024. The expense reduction was due to a strategic company-wide class reduction and restructuring program. We decreased G&A costs by $954,000 and sales and marketing we reduced by $866,000 versus the same year-ago quarter. The decreases were partially offset by an increase in research and development of $200,000 due to additional clinical trials. Now turning to the balance sheet and cash flow statement. Cash and cash equivalents totaled $126,000 at the end of September 30, 2024. Subsequent to the second quarter end, starting October 1st, the company raised additional net proceeds of $312,500, which helps keep us in a good position to execute our growth plan over the next several months. Net cash use and operating activities decreased 34%, or $800,000 for the quarter, compared to the same fiscal quarter of 2024, if we are more efficient with the use of our cash spending. This completes our financial summary for the quarter. I'd now like to turn call back over to our Chief Business Development Officer and General Counsel, John Dolan. John?

Thank you very much, Gary. An important part of our strategy for increasing the adoption of spring is to create greater awareness of its benefits and effectiveness among key decision-makers and on scale. Toward this end, we participated in three major veterinary conferences in the past quarter, as well as in a number of smaller conferences. In October, we exhibited at the ACBS Summit and the American College of Veterinary Surgery Summit, where we demonstrated spring to leading veterinarian surgeons. Both events were a great opportunity to demonstrate the advantages of spring, including the beneficial results we have seen when administered to horses and companion animals throughout the U.S. We also presented spring to leading veterinary pain management experts at the International Veterinary Academy of Pain Management, Pain Management Forum. Our veterinary medical advisor, Marie Bartling, spoke on the topic entitled, How do we elevate our strategy for managing osteoarthritis in pets, which was very well received. Also, during the second quarter, we teamed up with Orthobiologic Innovations, a leader in R&D for regenerative and sports medicine. Together, we are pursuing new clinical trials for spring, as well as product development and marketing. One trial that we did begin with them at this point is an elbow study treating dogs with osteoarthritis in the elbow. We anticipate that that study will be completed in either Q1 or Q2 of calendar year 2025. Studies such as these have been essential to our distribution strategy. This is because the large national and international distributors typically require university or independently conducted studies before considering a new product for inclusion in their catalogs. Some have begun to do this already, and the additional studies will help with their veterinary and training courses for spring. Now I would like to turn the call back over to our CFO, Gary Lowenthal.

Thank you, John. As I indicated earlier, in our fiscal second quarter, we saw a strong sequential increase in our top line revenue, which was supported by increased sales to distributors as we expanded our nationwide distributor network. The slight decrease in revenue year over year was in part due to our continued transition from the smaller equine market to a larger companion animal market, with this including the onboarding of experienced sales professionals who will help us capture that market. Given how the companion animal market is a dramatically larger opportunity, we have realigned our sales force for pursuing it. Given how the companion animal market is a dramatically larger opportunity, we have realigned our sales force as we pursue it. We have cut a lot of costs, and we laid a really strong foundation for this transition. In fact, the sequential top line sales growth was even more impressive when considering we had a 25% reduction in operating expenses. Furthermore, we reduced our cash burn by more than $1 million down to $1.4 million in the fiscal second quarter of 2025 versus $2.4 million the same period a year ago. During the quarter, we also better positioned our sales for growth by appointing for the first time two internal marketing reps who will support our four new field sales development managers. Subsequent to the quarter, we continued to expand our sales team. This included hiring another top sales manager, Cindy Gill, who will help to further the adoption of our breakthrough animal bed tech device. We also greatly enhanced our corporate governance with the appointment of a former president and chief executive officer, Mike Eldred, to our board as an independent director. Mike's experience and strong record of business achievement with pharmaceutical and animal health brings to our board a valuable resource for achieving our business goals. We anticipate his significant knowledge and extensive background in the veterinary space will help support the adoption of spring by the veterinarians. As John Dolan mentioned earlier, we made substantial progress in expanding our clinical studies. However, with our existing competing clinical studies, we believe we have more than enough clinical data to help us secure large corporate clients with many veterinary clinics nationwide. We estimate that 75% of all veterinary clinics are owned by large corporate groups, and over the next few quarters, we expect to land a large number of them. I would like to turn the call over to our chief executive officer, John Lye.

Thank you,

Gary.

Now looking ahead, the current fiscal third quarter is typically our largest and best quarter of the year. This is due to exposures at major veterinary conferences like American Association of Equine Practitioners, also known as AAEP. It occurs in every December. Our presence will be further elevated this year with our advisory board member, Dr. Tracy Turner, being inaugurated as the president of the AAEP for the upcoming conference. Tracy has been widely recognized for his pioneering of the use of thermography as a diagnostic state in horse lameness, evaluation, and its benefit use in horse welfare regulations. He has extensively published studies and lectures nationally and internationally on these topics. As a result of our continued participation in major conferences, and key opinion leaders talking about SPRING, as well as expanding our sales force, we expect to grow a milestone of 800 clinics achieved earlier this year to expand to over 1500 clinics using SPRING before the end of our fiscal year. This all combined with our expanding distribution network, completion of additional clinical studies that confirms the efficacy and the benefits of our product and more efficient operating structure, we believe we are well positioned to accelerate revenue growth into the rest of the year and beyond. Moreover, I believe we are now in the strongest position to capitalize on the vast opportunity in the 5.7 billion U.S. animal health market and to ride the growth that is projected to double to the 11.3 billion by 2023. Given these positive factors and looking ahead to the fiscal full year of 2025, we continue to anticipate revenue growth of approximately 1.5 million that would represent over 50% growth in the prior year. As we grow, we will maintain commitment to advancing pet health solutions to ensure that our product reaches more veterinary professionals and pet owners. We look forward to building on these achievements as we continue to strengthen our market presence and drive sustained value for our stakeholders. Now that we would like to open the call to questions, operator, would you please explain to the listeners how they may ask questions?

Hello everyone. For anyone that has questions, please, if you attend over your computer, you can select the react option and then click raise hand. For anyone that dialed in, use dial star nine to raise and lower your hand. Afterwards, I will allow you to talk so you can unmute using star six. For anyone that dialed in over the phone, just dial star nine to raise or lower your hand. Okay, we have a question from number ending with 662. I will allow to talk. So in order to unmute, please dial star six. Number ending with 662. Seems like just make sure that you are unmuted. You had been allowed to talk by dialing star six.

Okay, can you hear

me now? Yes, there we go. Now we can hear you. Okay, I'm sorry. I'm an investor and I'm reading your prospectus. Scott cash and cash equivalents down under total assets of 12.4 million. What would that 12.4 million be?

This is Gary Lowenthal, CFO. I have no idea what you're looking at.

That I'm looking at key stats under the prospectus I was sent where you're raising a million and a half dollars.

I'm looking at the regulatory filing that was filed today. And do you want to look at that regulatory file filed this afternoon? The balance sheet September 30th is right there. And we don't have 12.4 million in the bank account right now. It never said that. So I don't know what you're looking at. I'm just looking at the regulatory filing that was filed today with the Securities and Change Commission.

It's

key

stats OTCQBPETV.

Okay, I'm looking at the Securities and Change Commission as all our reports. I'm looking at Form 10Q filed November 14th which today our current assets show on September 30th $126,239 of actual cash and cash equivalents. And March 31st at the end of the fiscal year with $87,401. Okay,

this is total assets of 630.24 2.9 million cash and cash equivalents. MRQ 12.4 million.

I don't know what you're looking at but I can tell you the total assets is different than cash and cash equivalents. The total assets as of September 30th was ,186,744. The balance sheet is broken.

How is it coming on raising the million and a half dollars?

What's the date of the prospectus? It's all disclosed in our filings. We've had several 8Ks every time we raise money and we have a 10Q that's been filed. We've never missed a filing report. All our 10Ks are on time and our 10Qs are on time. We raised since October 1st we raised $312,500. We continue to raise money. Of the last time we raised money we have preferred stock. We end up raising $1.5 million on the preferred stock. Thank you.

You're welcome. Great. So for anyone that would like to ask another question, please dial star nine to raise your hand. Or if you joined over the desktop application, just click on the react option and click raise hand.

Operator, if we don't have any more questions, I would close off the Q&A. Well thank you, operator. I would just like to once again thank everyone for dialing in today. We are looking forward to talking with you again and presenting our third quarter of 2025 results when we report again in February. As always, take care and thank you everyone for joining us today. John, please go ahead and wrap up the call.

Thank you, John. Before we conclude today's call, I would like to provide the company's Safe Harbor statement that includes cautions regarding forward-looking statements made during today's call. The information that we have provided in this conference call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the company's future revenue, future plans, objectives, expectations, and events, assumptions, and estimates. Forward-looking statements can be identified by the use of words or phrases usually containing the words believe, estimate, project, intend, expect, should, will, or similar expressions. Statements that are not historical facts are based on the company's current expectations, beliefs, assumptions, estimates, forecasts, and projections for its business and the industry and markets related to its business. Any forward-looking statement made during this conference call are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict. Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Factors that would cause or contribute to such differences include but not limited to various risks as detailed in the company's periodic report filings with the Securities and Exchange Commission. For more information about risks and uncertainties associated with company's business, please refer to the management's discussion and analysis of financial conditions or results of operations and risk factors sections of the company's SEC filings, including but not limited to its annual report on the Form 10-K and quarterly reports for Form 10-Q. Any forward-looking statements made during this call speaks as of today's date. The company expressly disclaims any obligations or undertaking to update or revise any forward-looking statements made during the conference call to reflect any changes in its expectations with regards thereto or any changes in the events, conditions, or circumstances of which any forward-looking statements is based, except as required by law. I would like to remind everyone that this call will be available for replay starting later this evening or tomorrow. Please refer today's earnings release for dialing replay instructions available via the company's website at .petvivo.com. Thank you for attending today's presentation. This concludes the conference call.