Q4 2024 PetVivo Holdings Inc Earnings Call

June 28, 2024

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Yes.

John Dolan: Each of these tests demonstrated significant results. The study was presented at the annual American College of Veterinary Surgeons Conference held in October of last year and received a very favorable response. Then in January of this year, Ethos completed another key study in collaboration with Colorado Animal, especially an emergency, also known as Case. They studied the effects of spring and pain and function secondary to hip osteoarthritis and dogs. Case enrolled in the initial cohort of nine dogs; each was skeletonally mature and demonstrated hip pain without other joint pain and with radiographic osteoarthritis in one or both hips.

Sure.

Okay.

Good afternoon.

And thank you for joining us today to discuss <unk> results for its fiscal year ended March 31 2024.

John Dolan: Of the nine dogs who completed the study at day 84, 77.8% had a greater than three-point reduction in total CBPI score. While 77.8% had improved hip extension on Goniumatri. This research reported that all subjects had improved visual aimless scores and quality of life assessments. These results were presented to the Veterinary Orthopedic Society Annual Conference in February of 2024. Further details and summaries of these nearly studies and other past studies are available for download from our springhealth.com website. We also received positive results from two other tolerance clinical studies, which were completed at the year end of this year.

Hosting the call today is chief Executive Officer of Pet vivo, John Lee, The Companys, Chief Financial Officer, Gerry Law and Tal.

And me John Dolan, the company's Chief business Development Officer, and General Counsel.

Following our remarks at the end of this call will open the call to your questions.

John Dolan: But before we conclude today's call I'll provide some important cautions regarding forward looking statements made by management during the call.

Speaker Change: I'd like to remind everyone that today's call is being recorded and it will be made available for telecom replay for the instructions in today's press release, which is available in the Investor Relations section of the company's website.

Now I'd like to turn the call over to the pet vivo CFO, Gary Lowenthal, Gary. Please go ahead.

John Dolan: Both tolerance studies conducted by Initib, one for cats and the other one for dogs. And there was still another study underway at Colorado State University which is evaluating the intraarticular injection of spring on naturally occurring elbow osteoarthritis associated with pain and dogs. This CSU study is expected to be completed in September of this year. All of these studies are key to our distribution strategy since a large national and international distributors generally prior a university study or other independently conducted study by an independent institution before including a product in their catalogs. These studies also further our golden market strategy by attracting the attention and endorsements of key opinion leaders, as well as being invited to make podium presentations at animal health conferences.

Gary Lowenthal: Good afternoon. Thank you Dan and good afternoon, everyone. Thank you for joining us today to discuss our results for our fiscal year 2024.

Gary Lowenthal: As you saw in our earnings release issued earlier today, we reported strong financial and operational progress, including revenues of 6% to $969000 driven by sales of our lead veterinary medical device spring with Ostial cushion technology, our revenue growth was driven largely by.

Gary Lowenthal: Our expanded distributor network with sales by distributors up 15% to $732000.

Gary Lowenthal: This helped drive our gross profit up 6% to $740000 with strong gross margins, improving 40 basis points to 76, 3% or.

Gary Lowenthal: Our lead product spring provides veterinarians and innovative treatment for dogs and horses suffering from osteoarthritis.

John Lai: Now, with that, I would like to turn the call back over to John Lai.

Gary Lowenthal: Common inflammatory joint disease.

Gary Lowenthal: Eddie show the disease affects EBIT per center dogs over eight years of age 61% of cats over six and more more than half of horses over 15 years. So it's no wonder that the animal osteoarthritis market is projected to reach $3.7 billion. This year growing at more than 10% CAGR.

John Lai: Thank you, John. We look forward to the upcoming year as I will go over the key highlights for this year continue well into 2025. One of the major events has been cost reduction. We reduced the cost of pet evil operation starting in April by about 40%. We focus also the shift from large animals to small animals. As these studies came out, we started to put together the proper literature for the distribution teams for Echo mattress and MWI Animal Health. So it was very crucial to have positive studies with ethos and the cruise ship study, the CCL as well as the hip display show.

In light of this large and fast growing market during our 2020 for fiscal year <unk>.

Eddie: We achieved a major milestone with the distribution of spring, reaching more than 600 veterinary clinics across 49 states.

This led to more than 4500 Springs Orange has been distributed nationwide.

Eddie: Helping us achieve these numbers.

Our new distribution partner co veteran North America, who is helping us market sell and distribute spring throughout the United States.

Becker's program began selling spring in January of this year, and we recognized $106000 in sales by collectors before fiscal year end March 31.

John Lai: We also added VP of Sales and Marketing. So these two individuals have a very extensive background in the small animal side of the market. So the vision of marketing and sales are aligned properly. Our sales representative has been put on a new compensation schedule. The schedule is really motivating, and it's geared towards unit sales of the spring syringes. And we made investments and manufacturing improvements that should assist in the cost reduction of the syringe manufacturing as well as improve girls' profit margin and enhanced product quality. We are also observing at major trade shows at various social media blogs.

Eddie: This represents 11% of our total revenues for the year.

Eddie: Excuse me also during the year, we expanded our sales and marketing team.

Speaker Change: <unk> in our intellectual property portfolio and reported positive results from two key clinical animal studies.

Speaker Change: I would like to take it through the financial details for the year.

Speaker Change: Our revenues in fiscal 'twenty, four which ended March 31 increased 6% to $969000, primarily due to the expansion of our distribution channels.

Speaker Change: Revenues, primarily consisted of sales of our spring product to our distributors totaling $732000, which was up 15% year over year.

Speaker Change: Fail to veterinary clinics totally through $237000, which was down 16% compared to a year ago period, while the year ago period due to the transition from solely equine sales the horses to a good companion animals, such as dogs and cats.

John Lai: A very well acceptance of veterinary doctors of spring and spring product is being mentioned in many. We are austere arthritis conferences and social media. Also, we have been getting continued education credits on June 8th, 2024. We had a very good presentation at the Long Island Veterinary Medical Association, which provided two CE credits, and we had a really good turnout. I believe it was close to 70 veterinary doctors and vet techs also starting July 15th, 2024.

Speaker Change: This transition was enabled by the positive clinical studies published prior to and during the year, our distributor partnership with M. Wi generated 65% of our total revenues from spring sold during the fiscal year.

Speaker Change: In January of this year collectors began telling spring, we recognize product sales to convert risk of $106000 or 11% of total revenue for the year.

Speaker Change: Gross profit totaled $740000 or <unk> 76, 3% of revenues as compared to 670000 or 75, 9% of revenues for fiscal 2023.

Speaker Change: The increase in gross margin resulted from really Mora of a favorable product shifts. We also have reduced our production costs. The operating expenses increased 20% to $11 4 million compared to fiscal 'twenty three the increase in operating expenses was due to increase in Genk G&A tech costs of $1 $7 million.

John Lai: There will be one credit webinar being offered through Commissions, Clinicians, I'm sorry, brief. That organization has 55,000 veterinary doctors and vet techs, so it'll be on discussions of innovative and new types of interarticular injections for away.

Speaker Change: Research and development of $270000 to owners in 2000, and this was partially offset by $11000 decrease in sales and marketing.

Speaker Change: The net loss.

Speaker Change: Totaled $11 million or 17 cents, a share about per basic and diluted share as compared to a net loss of $8 7 million or <unk> 85 cents per basic and diluted share in the same year a period last year.

Unknown Executive: Now, with that, I would like to open up this call to your questions, operator. Would you please explain to the listeners how they can ask questions? Yes, for everyone joining by the web application, you just click on the reactions button and then click on raise hand. For everyone that join over the phone, please dial star nine to raise and lower your hand, and once you have been prompted, dial star six to mute or unmute. So, again, for everyone that join over the web application, just click on the reactions button. on the toolbar and then click Raise hand.

Speaker Change: Now turning to the balance sheet.

Cash and cash equivalents totaled $87000 at March 31 to 24.

Speaker Change: Subsequent to the year end, we raised net proceeds of $1.8 million through a private equity offering.

Speaker Change: The complete hubs and Miss of our financial summary for the year.

Speaker Change: Now I'd like to turn the call order achieved through our business development Officer, John Dolan.

John Dolan: Thank you Gary.

John Dolan: For those of you who've been following our progress you've heard about the numerous case studies and veterinarian reports that indicate long lasting improvement in lameness animals, particularly in horses, and dogs lasting 12 months or longer.

Speaker Change: Over the course of last fiscal year. There were two key clinical studies of spring completed and there was a result announced.

Speaker Change: The first was completed in September 2023 by ethos veterinarian health.

Ethos: Ethos evaluated the benefits and tolerability of an intrinsic per injection of spring a collagen based biomaterial into this staple giant of dogs with suspected cruciate ligament rupture.

Unknown Executive: And for everyone that joined over the phone, dialed star nine.

Ethos: The study involved a simons two stage study design with an initial court cohort of 22 patients with unilateral cranial cruciate ligament disease.

Ethos: An additional 18 patients were unlisted wants to treat more shown to be effective for a total of 40 subjects.

Ethos: The research reported that on average there was significant improvement in all clinical variables within the range for gradual improvement there.

John Dolan: So operator, since I don't see any questions and so on, I think we can conclude the call. Actually, John, what we can do is there's still the forward-looking statements that we should probably go through. Go ahead, John. You read them.

Ethos: Tests included in this study were the modified Glasgow composite pain scale to test painting.

Ethos: The visual lameness score where in the veterinarian assesses mobility and the Liverpool osteoarthritis in dogs questionnaire, when the owner assesses the mobiles mobile Ian and movement. Each of these tests demonstrated significant results.

Unknown Executive: Sorry. All right.

Unknown Executive: Thank you, everyone.

Unknown Executive: Before we conclude today's call, I'd 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 the words or phrases usually containing the words believe, estimates, project, intent, 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.

Speaker Change: This study was presented at the annual American College of Veterinary Surgeons Conference held in October of last year and received a very favorable response.

Ethos: Then in January of this year ethos completed another key study in collaboration with Colorado animals specially at emergency also known as case based.

They studied the effects of spring in pain and function secondary to hip osteoarthritis in dogs case enrolled an initial cohort of nine dogs, each risk skeleton really mature and demonstrated hip pain without other joint pain and with radio graphic osteoarthritis in one or both hips.

Ethos: Of the nine dogs, who completed the study at day 80 day 80, 477.8% had a greater than three point reduction in total see BPI score.

Unknown Executive: Any forward-looking statements made during the 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.

Speaker Change: Or 77.8% had improved hepatic sanction.

Speaker Change: Gonyo might documentary.

Speaker Change: This research reported that all subjects had improved visual lameness scores and quality of life assessments. These results were presented to the veterinary Society of Orthopedic Society Annual conference in February of 2024.

Unknown Executive: For more information about risks and uncertainties associated with the 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 on Form 10-Q. Any forward-looking statements made during this conference call speak as of today's date. The company expressly describes any obligations or undertakings to update or revise any forward-looking statements made during the conference call to reflect any changes in its events, conditions, or circumstances of which any forward-looking statements is based, except as required by law.

Speaker Change: Further details and summaries of these nearly studies and other past studies are available for download from our spring helped dotcom website.

Speaker Change: We also received positive results from two other tolerance clinical studies, which were completed at the year end of this year. Both tolerance studies conducted by Inogen, one for cash and the other one for dogs.

Speaker Change: There is still another study underway at Colorado State University, which is evaluating the intra articular injection of spring a naturally occurring elbow osteoarthritis associated with pain in dogs. The CSU study is expected to be completed in September of this year.

Speaker Change: All of these studies are key to our distribution set strategy since a large national and international distributors generally require a university study or other independently conducted a study by an independent institution before including a product in their catalogs.

Unknown Executive: I would like to remind everyone that this call will be available for replay. Please refer to today's earnings release for dial-in replay instructions available via the company's website at www.petsivo.com.

Speaker Change: These studies also further our go to market strategy by attracting the attention and endorsement of key opinion leaders as well has been invited to make podium presentations at animal health conferences and trade shows.

Unknown Executive: Thank you all for attending today's presentation.

Unknown Executive: This concludes our conference call.

John lie: Now with that I would like to turn the call back over to John lie.

Thank you John.

John: We look forward to the upcoming year as I will go over the key highlights for this shared continue well into 2025.

Speaker Change: One of the major.

John: Events has been cost reduction we reduced our costs.

John: Of Pep evil operation starting in April by about 40%.

Speaker Change: We focus also the shift from large animals to small animals.

Speaker Change: As these studies came out we started to put together the proper literature for the distribution teams for Ecopetrol and MW I animal health.

Speaker Change: So it was very crucial to have positive studies with T cells.

Speaker Change: And.

Speaker Change: And the cruise ship study to see CLO as well as the hip dysplasia.

Speaker Change: We also added.

Speaker Change: VP of sales and marketing.

So these two individuals have a very extensive background in the small animal side of the market.

Speaker Change: So the vision of marketing and sales are aligned properly our sales representatives has been put on the new compensation schedule.

Speaker Change: This schedule is really motivating and it's geared towards unit sales of the spring surrenders.

Speaker Change: And we made investments in manufacturing improvements that should assist in the cost reduction.

Of the syringe manufacturing as well as improved gross profit margin and enhanced product quality.

Speaker Change: We are also observing at major trade shows.

Speaker Change: At various social media blogs.

Speaker Change: Very well our acceptance of veterinary dock doctors of spring and spring product is being mentioned in linear.

Speaker Change: Osteoarthritis conference, Susan and social media.

Speaker Change: Also.

Speaker Change: We have been getting a continue agitation credits.

Susan: On June eight 2024, we had a very good presentation at the long Island Veterinary Medical Association.

Speaker Change: Which provided to Aussie.

Speaker Change: CE credits and we had a really good turnout I believe there was close to 70.

Speaker Change: Veterinary doctors in bed tax.

Speaker Change: Also starting July 15 2024.

Speaker Change: There will be a one credit webinar being offered through commissions.

Speaker Change: Connotations I'm sorry brief.

Speaker Change: That organization has 55000.

Speaker Change: Veterinary doctors in bed tax so it will be.

Speaker Change:

Discussions of innovative and new types of interject, there injections for Huawei.

Speaker Change: Now with that I would like to open up.

Speaker Change: This call to your questions. Operator would you please explain to the listeners on how they can ask questions.

Speaker Change: Yes for everyone joining by the web application.

Speaker Change: Just click on their reactions button, and then click on Grace hence.

Speaker Change: For everyone that has joined over the phone.

Speaker Change: Please dial star nine to raise or lower your hand.

Speaker Change: And once you have been.

<unk> dialed.

I'll start seeks to mute or on mute.

Speaker Change: Right.

So again.

And for everyone that joined overdose.

Speaker Change: Over the web application.

Just click on the reaction sputter.

Speaker Change: On the toolbar.

Speaker Change: And then click race hand.

Speaker Change: And for everyone that joined over the phone dialed star nine.

Speaker Change: Yes.

Speaker Change: So operator since I don't see any questions. So on <unk> I think we can conclude the call.

Speaker Change: Actually John what we can do is theres still the forward looking statements that we should only go through go ahead, John you're right I'm, sorry, all right. Thank you everyone.

John: Before we conclude today's call I'd like to provide the company's safe Harbor statement that includes cautions regarding forward looking statements made during today's call there.

John: 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.

John: Forward looking statements can be identified by the use of the words or phrases usually containing the words believe estimates project intend expect should will or similar expressions stay.

John: Statements that are not historical facts are based on the company's current expectations beliefs assumptions estimates forecasts and projections for its business and industry and markets related to its business any forward looking statements made during the conference call are not guarantees of future performance and involve certain risks.

John: Uncertainties and assumptions, which are difficult to predict.

John: Actual outcomes and results may differ materially from what is expressed in such forward looking statements.

John: For more information about risks and uncertainties associated with the company's business. Please refer to the management's discussion and analysis of financial conditions and 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 corridor.

John: Quarterly reports from Form 10-Q.

John: Any forward looking statements made during this conference 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 regard thereto or any changes in its events.

John: Conditions or circumstances of which any forward looking statements is based.

John: Except as required by law.

John: I would like to remind everyone that this call will be available for replay.

Please refer to today's earnings release for dial in replay instructions available via the company's website at www Dot pet vivo dotcom.

Speaker Change: You all for attending today's presentation. This concludes our conference call.

Speaker Change: Okay.

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