Greetings, and welcome to the PetVivo 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 PetVivo. 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 PetVivo's executives may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to risks 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 PetVivo. Please go ahead, John..

Thank you, John, and welcome. Also joining me today will be Bob Folkes, 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 line up 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 Spryng to MWI Animal Health subsidiary of AmerisourceBergen. They are our 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 benefits of Spryng with Companion Animals.

I would like to now turn the call over to Bob Folkes, our Chief Financial Officer, who will discuss our financial results..

Thank you, John, and good afternoon, everyone. For the three months ended December 31, 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 Spryng to MWI.

For the nine months ended December 31, 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 Spryng to MWI. At December 31, 2022, the company had $375,000 in cash and working capital of $171,000.

In January 2023, we raised approximately $1.4 million after dejecting 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 Spryng as well other medical device 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 Spryng. So now I will turn the call back over to John..

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 animal 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 - 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 Spryng 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 that we're having. So our booth got inundated with a bunch of veterinary doctors as well vet techs, substantially big numbers. As well as at the AAEP, when Dr.

Manning did his theater presentations, both days, the theater was full of capacity which, in that place, is probably about 100 vets. We were standing room only in a lot of us.

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 Spryng and will be helpful to gain more acceptance from the veterinary doctors. John, go ahead..

five small animal clinical trials, i.e., canine and feline; and two equine clinical studies. We are fortunately working with a number of world-renowned research organizations such as Colorado State University, Ethos Veterinary Health and Inotiv 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 Spryng.

I'd like to turn it back now to John Lai..

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..

Absolutely [Operator Instructions].

Hello I'm on..

Yes, you are?.

Hi John, [Joe Saldhani], John, that was great - I think it was a great start in the relationship with MWI. So congratulations to 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 number of animals in each of the markets, I guess, between the two small animals and also the horses, and the differentiation between the size of show horse market versus the pet market.

So that way, people can get a better idea of number of number animals that MWI is going to be helping to get access to it and how many vets service all these people?.

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 where they have accounts.

So they would do a promotional e-mail 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 Spryng and they should drop by our booth. So that's a very good introductory approach for us.

So the size of the market in terms of dogs in the United States, there's about 64 million dogs, 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 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 get to the smaller animal vets. The market is 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..

Yes, it does.

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 you guys?.

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 actual disruption of friction between bone-on-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 multimodal approach, you're using NSAIDs, then you move on nonorganic asset, then you go on to steroids and then and then eventually stem cells joint replacement.

We're actually disrupting and changing that equation because we feel once the Spryng particles are injected into the joint, you're going to lead to a tremendous reduction in the need of NSAIDs or any the other materials or complete elimination of it, which helps reduce the side effects onto the horse.

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..

Years ago, there was a company that that got involved with very early turned out to be a major [indiscernible] where they injected the hyaluronic acid into the actual cartilage that was already leaking. The problem with that is, obviously, it's like putting air into a leaking balloon, air seeps out.

I mean it could be fair to say that this is like a cartilage-type material and actually acts differently than the hyaluronic, which is actually a well-known use for equine as well as humans essential.

But the point is, isn't that a fair way of looking at it that, you're not facing the leakage that you would normally get with the hyaluronic acid coming out of the cartilage?.

Well, yes - but also duration, duration is the key here. So once our particle goes in, that our matrix particles start forming a staffing, 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, okay..

I think you'll have the same type of luck, the same type of luck that Biomatrix had I think we could easily suppress that..

Thank you..

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 risk and those type of 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 of 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..

Right, thank you..

We have another question..

Go ahead..

[Operator Instructions] Please unmute yourself, perfect..

Hi, [Dave Demi] 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 0.5 million unit capacity, $100 million in revenue estimated from that current production facility.

Has anything changed as far that capacity capability or what has prompted the expansion into another facility at this point in time?.

Well, thanks for the question David. So 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 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 Spryng for the next product pipeline and then rotate back forth. So there's tremendous efficiencies and scalability in this new facility.

And you would see that it's probably 3.5 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..

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?.

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 - they're ready to roll out any time, we just have to have studies to support it.

So we need to prep for that and have that place ready..

Terrific, so it gives you some dual path leveragability in your facility is kind of the net-net of that?.

Yes absolutely. And also a disaster recovery type potential situation. So we won't get disrupted in the Spryng aspect, no matter what. Well, I shouldn't say, you could have a major disaster where a lot of stuff gets taken out. But otherwise, we're doing the right thing to make sure we don't interrupt Spryng 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, some veterinary doctors are actually started to inject some cats and seen 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..

That's it, thanks for the overview..

Thank you..

We are now allowing the number ending in 9170..

Go ahead..

My name is [Elizabeth Cantordale] just wanted to call in real quick, less of a question, first off, congratulations on the great quarter?.

Thank you..

So I started using those, product back in October on a family friend race horse, this horse in the past, very expensive horse, so it’s a very, very well that ended up with a bad ankle. His ankle became the size of a softball. He just couldn't really run any more.

So one injection, and he performed incredibly just a week later and then ended up winning quite a few races within the last past four months or five months. So we are five months out from injection now, and we were thinking that it would be time for another one, start wearing off. The results are just getting better.

We feel that maybe that protein matrix has started to rebuild the joints. 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 veterinarian in the racing world, and he's just so impressed. He said he's never seen anything like this before..

So yes, I remember the early onset, he didn't believe this stuff would work..

No we did it. It's such an incredible step-up from what we were using before. Cortisone, over time, as most of you know, degrades the joint 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 we say generally it lasts a year, it all varies. We have seen last well beyond a year. And we're comfortable saying a year because when we did the human studies on the human side, we track the humans for a year and we're able to identify the particle still in the body.

So we have seen situations where 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 have so far lasted eight years, which was really surprising.

So 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..

He did you, he ran incredibly. May I'd wanted to wait, but the trainer they, that's their livelihood. So he wanted the horse right back on the track. And what was it, gosh, a month or two ago, he went as fast as he ever had in the last two years in a five-degree weather just won the race for fun.

I mean think there are 20 lengths between him and the rest of the pack. And it is absolutely incredible..

Well, that's great to hear. Thank you..

Yes..

[Operator Instructions] [John Salek], you can unmute yourself..

Yes sorry. 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?.

So we stated probably back in August of 2020, when we went on NASDAQ, if you look at the PowerPoint from back then, the milestones would get these studies out, because studies allow our regional sales reps to work with the MWI sales reps to point to specific data to the vets.

And those mouse we believe there will be very good adoption for the canine side once that gets published. So John Dolan talked of seven them that are in process. So we feel there's, multiple milestones from that standpoint. So these papers we'll 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 was the type of number..

Yes, you're hitting the ballpark..

Yes..

Okay.

And then - so timing on those clinical trials and studies, can you give any kind of time frame, timetable on how it will be released?.

No we completed the Ethos one which was on to 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 the clinician had requested to get it present at the Veterinary Orthopedic Surgical Annual Conference, which is mid-March, so that's coming right up.

And I think it bodes well because we don't get to feed the results of study that they're actually getting to present there because that's all Board-certified surgeons. 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, [Watson] 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 an emphasis for the MWI sales reps to go into those clinics and start converting. So 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.

So you usually see a vet order one to three syringes on their first turn, then 45 days later or a little longer, they get reports back from the owners of dog and the horses as much quicker, then the next turn, 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 very good adoption rate. And what I mean by adoption rate is once the vet tries it to hook on the product because they're seeing the benefits.

Does that answer your question?.

Yes, that's great. Thank you..

Thank you..

We have a question from 9170..

Go ahead. Hello..

Oh, I already spoke I'm not sure why it put me back in the queue..

Okay, thank you..

9081 would you like to say anything else. Okay now we have a new question from [Fritz Gerald]..

Go ahead. Hello..

Fritz you are unmated if you like to ask your question..

Is there another question may be we'll move on he can log back in..

Yes I think, no that is the last one I believe from [Axiom Capital]. Okay I think he logged out he now log back in..

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?.

Yes, we do one moment..

Okay..

Go ahead..

It must be the Internet connect in New York. Sir, you are unmuted on our side, you'd like to ask a question..

Well, if there are no more questions, we probably should - hold it, 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..

I see some here in the chat box, if you'd like to address them.

What was the dollar amount of the sell-through in Q3 at MWI?.

I already answered that one..

Okay. Are you saying that the Q3 MWI sold Spryng and then yes that's other one..

Yes. So we're good. They're having problems. They're going to call me direct and ask whatever question they have..

Okay, thank you..

So if there are no more questions, we can end this call. For everyone, thank you for attending. And operator, please officially end the call..

Goodbye..