PetVivo (US:PETV)2024-02-12 21:25PART I. FINANCIAL INFORMATION This section presents the company's financial statements, notes, and management's analysis of its financial condition and operations Financial Statements The company presents its unaudited consolidated financial statements for the period ended December 31, 2023, including balance sheets, income statements, and cash flows Consolidated Balance Sheet Highlights (Unaudited) | Account | Dec 31, 2023 | Mar 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $80,085 | $475,314 | | Total Current Assets | $1,492,884 | $1,423,980 | | Total Assets | $3,629,802 | $2,438,952 | | Liabilities & Equity | | | | Total Current Liabilities | $1,662,120 | $1,453,680 | | Total Liabilities | $2,734,702 | $1,713,927 | | Total Stockholders' Equity | $895,100 | $725,025 | Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Dec 31, 2023 | Nine Months Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenues | $595,891 | $920,440 | | Gross Profit | $412,804 | $514,170 | | Operating Loss | $(2,133,624) | $(7,971,544) | | Net Loss | $(1,749,848) | $(8,304,578) | | Net Loss Per Share | $(0.12) | $(0.64) | Consolidated Statements of Cash Flows Highlights (Unaudited, Nine Months Ended Dec 31) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | $(5,895,484) | $(5,500,247) | | Net Cash Used in Investing Activities | $(279,802) | $(293,851) | | Net Cash Provided by Financing Activities | $5,780,057 | $61,804 | | Net Decrease in Cash | $(395,229) | $(5,732,294) | Note 1: Summary of Significant Accounting Policies and Organization The company commercializes medical devices and biomaterials for animals, with revenue primarily from product sales to distributors - The company's primary business is the commercialization of its lead product, Spryng™, for treating joint afflictions in dogs and horses25 - A significant portion of revenue comes from distribution agreements, with MWI accounting for 65% and Covetrus for 12% of total revenues for the nine months ended Dec 31, 20234749 Note 9: Commitments and Contingencies The company has operating lease obligations and recently settled a legal dispute with a former employee - As of December 31, 2023, the company has operating lease liabilities with total undiscounted cash flows amounting to $1,381,59282 - A legal matter with a former employee was settled for $180,000, with the expense recorded in September 2023 and paid in October 20238485 Note 10: Going Concern Significant net losses and negative cash flow raise substantial doubt about the company's ability to continue operations - The company incurred a net loss of $8.3 million for the nine months ended Dec 31, 2023, and had an accumulated deficit of $80.1 million87 - These conditions raise substantial doubt about the company's ability to continue as a going concern, which is dependent on raising additional capital or achieving profitability8788 Note 11: Stockholders' Equity The company details equity activities, including convertible debenture conversions and capital raises through stock and warrant sales - In July 2023, the company issued $550,000 in convertible debentures, which were converted in August 2023 into 385,000 shares of common stock and warrants to purchase 385,000 shares9596 - The conversion of debentures resulted in a recognized loss on extinguishment of debt of $534,36697 - The company raised net proceeds of $1.78 million in August 2023 and $317,000 in December 2023 through sales of common stock and warrants9899 Note 12: Subsequent Events Subsequent to the quarter, the company raised $1.248 million through the sale of common stock and warrants - On February 2, 2024, the company raised $1,248,000 by selling 1,386,469 units, each comprising one share and one warrant117 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the commercialization of Spryng™, financial results, and the need for additional capital to fund operations Current Business Operations The company focuses on commercializing Spryng™ for animal joint afflictions, supported by distribution agreements and clinical studies - The company's lead product, Spryng™, treats joint afflictions in dogs and horses and is protected by a portfolio of twenty-two patents118 - In December 2023, the distribution agreement with MWI was changed from exclusive to non-exclusive, and a new non-exclusive distribution agreement was signed with Covetrus North America129 - The company is conducting multiple clinical studies with Colorado State University and Ethos Veterinary Health to support product adoption and expand distribution channels, with expected completions in 2024130 Results of Operations Revenues increased for both the three and nine-month periods, but operating loss widened due to increased commercialization expenses Comparison of Results for the Three Months Ended December 31 | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenues | $595,891 | $510,109 | +16.8% | | Gross Profit | $412,804 | $286,422 | +44.1% | | Operating Loss | $(2,133,624) | $(2,318,818) | -8.0% | | Net Loss | $(1,749,848) | $(2,311,618) | -24.3% | Comparison of Results for the Nine Months Ended December 31 | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenues | $920,440 | $791,563 | +16.3% | | Gross Profit | $514,170 | $366,697 | +40.2% | | Operating Loss | $(7,971,544) | $(6,404,479) | +24.5% | | Net Loss | $(8,304,578) | $(6,388,635) | +30.0% | Liquidity and Capital Resources The company faces a working capital deficit and relies on future capital raises to fund ongoing operations and address going concern risk - The company had a working capital deficit of $169,236 as of December 31, 2023151 - Net cash used in operating activities for the nine months ended Dec 31, 2023, was $5.9 million, primarily due to the net loss153 - Management believes existing cash, supplemented by a February 2024 financing, is sufficient for at least the next two months, but acknowledges the need to raise more capital152161 Qualitative and Quantitative Disclosures About Market Risk This disclosure is not required as the company qualifies as a smaller reporting company - As a smaller reporting company, PetVivo Holdings, Inc. is not required to provide this information166 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of the end of the period - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2023168 - There were no significant changes in internal control over financial reporting during the quarter169 PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other regulatory disclosures Legal Proceedings The company may be involved in ordinary course legal proceedings and refers to Note 9 for a specific settled dispute - The company settled a legal dispute with a former employee, as detailed in Note 9 of the financial statements17184 Risk Factors A significant new risk factor involves a Nasdaq delisting notice for failing to meet stockholders' equity requirements - The company received a delisting notice from Nasdaq on November 17, 2023, for not meeting the minimum stockholders' equity requirement of $2.5 million173 - An appeal hearing was set for February 13, 2024, and a potential delisting could impair the stock's liquidity and the company's ability to raise capital173 Unregistered Sales of Equity Securities and Use of Proceeds The company engaged in several unregistered sales of common stock and warrants to investors and issued equity for services - In October and December 2023, the company sold a total of 477,224 shares of common stock and issued warrants to investors for proceeds totaling $517,000174 - The company issued an aggregate of 50,004 shares of restricted common stock to a consultant for services rendered from October to December 2023175 - In December 2023, options to purchase 195,700 shares were granted to the Board of Directors as compensation176 Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None179 Mine Safety Disclosure This disclosure is not required for the company - Not required180 Other Information The company reported no other information for this item - None181 Exhibits The report includes key exhibits such as new and amended distribution agreements and required certifications - Key exhibits filed include a new Distribution Agreement with Covetrus North America and a First Amendment to the Distribution Services Agreement with MWI Veterinary Supply Company183