PetVivo Hldgs (OTC:PETV) released fourth-quarter financial results and hosted an earnings call on Monday. Read the complete transcript below.
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Summary
PetVivo Holdings Inc reported a 1% increase in revenues for fiscal year 2026, totaling $1.14 million, primarily from sales of Spring and Precise PRP products.
The company launched PetVivo AI, an AI-powered veterinary practice platform with promising beta feedback indicating significant reductions in customer acquisition costs and high gross margins.
The acquisition of Piezo Biomembrane (PBM) aims to enhance the development of biomaterials and medical devices, accelerating growth in both animal and human health markets.
Financially, the company saw an increase in operating expenses and a significant net loss of $10.5 million, attributed to impairment and marketing expenses for the Precise PRP product line.
Strategic alliances, including partnerships with Digitalandia and Veterinary Growth Partners, support the commercialization and expansion of the company’s flagship product, Spring, in international markets such as Canada.
Full Transcript
John Dolan, General Counsel
Good afternoon everyone. Thank you for joining us today to discuss our results for our fiscal year 2026 ended March 31, 2026. Before we begin, I’d like to direct your attention to the Forward Looking Statements slide displayed on your screen. Throughout today’s call, we may discuss the Company’s future plans, expectations, objectives, anticipated results, and other forward-looking statements. Please take a moment to review the information on this slide.
I will also provide the Company’s complete Safe Harbor statement at the conclusion of today’s call. Hosting the call today is our Chief Executive Officer John Lai and our Chief Financial Officer Gary Lowenthal, as well as 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 will provide some important cautions regarding the forward-looking statements made during the call.
Before we begin, I’d like to remind everyone that the call is being recorded in order to make it available for replay later today. The replay link will be available in the Investor Relations section at our website at petvivo.com. Now turning to our results for the fiscal year. Our fiscal 2026 represented another year of rapid transformation, IP and product development, and platform commercialization. We continue to focus our corporate resources and unique IP on the greatest opportunities in our marketplace.
The many exciting new opportunities we have been pursuing over the past year have required extraordinary attention and capital deployment to ensure their effective deployment and market acceptance. We remain razor-focused on our primary objective, which is the pursuit of creating strong high-margin recurring revenue streams. With this, to support the highest valuation of our company for the benefit of our stakeholders. The strong clinical validation and increasing market adoption of our flagship product Spring with Osseocushion Technology has brought us far along in our journey.
Over the course of the past year, it has set the stage for the launch of new technologies and products for both animal and human that promise to exceed even Spring’s original great potential. The year was highlighted by tremendous progress with new strategic alliances and collaborations with new key partners. This includes Digitalandia, an industry-leading pioneer in AI solutions, with whom we have an exclusive 10-year white label licensing agreement for their breakthrough next-generation Agenic PET technology.
This unique and innovative technology features specialized diagnostic AI agents that are protected by proprietary IP and five patent-pending innovations. Among this technology’s multiple capabilities, it addresses many of the critical challenges facing today’s veterinarian practices and the industry at large. This includes especially skyrocketing client acquisition costs and the challenges in capturing the fast-growing demographic of the Gen Z pet parents.
Based on this new partnership, we publicly launched a beta program of our new PetVivo AI veterinary practice platform that is exclusively powered by the Agenc PET technology. PetVivo AI is a new AI-powered software as a service platform for veterinarians that we believe is the first of its kind on the market. As such, we believe it provides us a strong first-mover advantage with the unique benefits and capabilities it provides veterinarian clinics.
It employs automated AI-powered engagement that intelligently converts the potential customer leads it generates into paying veterinary customers. An initial select group of veterinarian practices which we have engaged under a beta program have been providing us tremendous positive feedback and impressive results. PetVivo AI has demonstrated a remarkable 50 to 90% reduction in veterinary customer acquisition costs, lowering it from the $80 to $400 that is typically spent on each new customer target down to less than $43.
This AI-powered solution complements our medical device offerings, which we market to a network of thousands of veterinary clinics across North America and Europe. We see it creating new inroads for the adoption of our Spring medical device and other therapeutic offerings. Perhaps most importantly, PetVivo AI also creates a new recurring revenue stream with very high 80 to 90% gross margins along with low capex scalability. The final training of its AI engine is currently underway using real-world scenarios in our beta users, with the official commercial launch expected within the next few months.
The veterinarians can request a free demo of this solution on our newly launched PetVivo AI website and experience firsthand how the power of this technology can transform their practice. In support of the launch of PetVivo AI earlier this year, Digitalandia published a comprehensive technical white paper documenting the Agenic PET AI framework that underpins this technology. The paper validates the technical foundation underlying this new B2B platform and provides veterinary professionals, investors, and industry stakeholders with a detailed view into the multi-agent artificial intelligence architecture that enables its transformative clinical and economic benefits. Based on the conclusions of this report, we expect our PetVivo AI solution to rival the adoption of other mainstream AI applications. And as I mentioned, we also expect it to create new visibility for our brands, particularly Spring with Osseocushion Technology and several new solutions in our product pipeline. For our part, we launched an online video explainer that can walk you through the two-part ecosystem of PetVivo AI.
It shows how PetVivo AI intelligently connects pet parents with veterinary practices looking for new clients. If you haven’t yet watched it, we very much encourage you to do so as it will help you understand why we are so excited about this new offering. Regarding other key partners, we continue to advance our partnership with Austin, Texas-based Veterinary Growth Partners. VGP is a management services organization which helps veterinary practices improve their efficiency and profitability with management and marketing tools, consulting, and the introduction of new vendor relationships.
VGP is committed to actively promoting our Spring with Osseocushion Technology to its expansive member network of more than 7,300 veterinary clinic members across the U.S. We’ve been focused on product training of the veterinarians in their network and we’re planning to introduce our new PetVivo AI practice management platform to their clinic membership following this training period for Spring. During the last quarter of our fiscal year, we completed the majority of the tasks of Stage B of our three-part R&D program with Piezo Biomembrane.
At the spinoff from the University of Connecticut, PMB has been advancing its patented biodegradable piezoelectric materials for implantable and regenerative applications. The revolutionary functional biomaterials are designed to promote regeneration, restoration, and/or remodeling of damaged or injured tissue and bone in animals and humans. Stage A determined that respective products could be combined into a single offering and particularly one that demonstrates enhanced piezoelectric activity, with this activity potentially providing therapeutic benefits to animals and humans.
Stage B determined that combined offering could be produced at scale and it provided preliminary indications of safety for administration in animals. Soon, with the commencement of Stage C, we will definitively determine safety and efficacy. We plan to also pursue FDA clearance for a number of products incorporated in the piezoelectric materials in our biomaterial found in Spring, which mimics the extracellular matrix of animals and humans. Of course, this study and product development process will proceed more quickly given last week’s announcement of the acquisition of Piezo Biomembrane.
As a newly wholly owned subsidiary of PetVivo, PDM will continue to focus on the development, commercialization, licensing, and management of next-generation biomaterials, regenerative and restorative therapeutic technologies, and related intellectual property. DBM brings to us an advanced technology platform with a multitude of valuable assets, including proprietary know-how, licensed intellectual property rights, patents and patent applications, trade secrets, as well as biomaterials formulations, regulatory assets, manufacturing information, development materials, and clinical information.
All of this supports our development of functional biomaterials, medical devices, and other beneficial therapeutic applications for animal and human health. The PBM acquisition represents a transformative step in our long-term growth strategy that includes the development of multiple medical device and therapeutic products for both animal and human applications. By combining PBMS scientific innovations with our existing product development capabilities, commercialization expertise, regulatory expertise, and public company infrastructure, we expect our combination to accelerate the advancement of technologies that will serve as the foundation for numerous future products and strategic opportunities. The combined platform also creates new opportunities for securing government and private development grants and research collaborations, as well as R&D tax credit programs. With the pursuit of many such opportunities already underway, I should note that the completion of the acquisition is subject to customary closing conditions, including completion of due diligence, satisfaction of specified closing obligations, and completion of certain financing activities currently underway and advancing smoothly.
Now, before we get into more of the other exciting recent developments and our outlook for the rest of the year, I would like to turn the call over to our Chief Financial Officer, Gary Lowenthal, who will take us through the financial details for the quarter and year.
John Lai, CEO and President
Thank you, John, and good afternoon, everyone. Thank you for joining us today to discuss the results of our fiscal year ended March 31, 2026. Revenues for the year increased 1% to $1.14 million. Revenues for the period consisted of sales of Spring and Precise PRP products, with sales to our distributor network totaling $886,000 and direct sales to veterinary clinics totaling $255,000. This compared to the previous year where sales consisted entirely of Spring, with distributor sales totaling $956,000 and veterinary clinic sales at $176,000.
We should note that in the third quarter of fiscal 2025, we had a special promotion with our distributors and vet clinics for our Spring product, which was not repeated in the third quarter of fiscal 2026. We believe this led to proportionally lower sales of Spring during the year. We also believe the lower Spring sales were due to customers opting to use Precise PRP alone and not in conjunction with Spring. Despite the benefits of using these together, our renewed efforts to better educate our customers on the benefits of Spring, combined with the expansion of our sales force with better sales abilities over recent months, have restored greater sales in Spring. We expect this improvement to continue over future quarters. Gross profit for fiscal year ending 2026 totals $754,700, or 66.1% of revenues. It decreased from $994,900, or 87.8% of revenues in the previous year. The decrease was due to the low gross margin associated with sales of our Precise PRP product line per license agreement with Vet Stem. However, we were able to maintain a fairly good overall high gross margin despite the lower margin associated with Precise PRP and the greater proportion of this lower margin product in our sales mix.
In addition to lower than expected market acceptance of the Precise PRP products, the low gross margins associated with the PRP product is one of the primary reasons we decided to renegotiate our Vet Stem partnership and evaluate the long-term viability of selling PRP under the current licensing arrangement with Vet Stem. We have since entered negotiations for a transition agreement with Vet Stem, which is currently underway. Meanwhile, we anticipate higher gross margin going forward with our sales force and distributors now focused on generating greater sales this Spring with higher gross margins exceeding 90%.
Total operating expenses in fiscal 2026 increased 8% to $9.8 million. The increase was primarily due to a loss on impairment for the Precise PRP product line. Specifically, the increase in operating expense was primarily due to a 16% increase in sales and marketing expense to $3.1 million, related to the commercialization of the Precise PRP product line. This increase was offset by a 10% reduction of general administrative costs and an 11% reduction in research and development expense.
We also took a $1 million impairment expense for the Precise PRP product line due to the lower than expected market acceptance. Also, due to the increased sales and marketing expense and the $1 million impairment expense, our operating loss increased 8.5% to $9.1 million. This increase contributed to a net loss for the fiscal year end of 2026 totaling $10.5 million or $0.38 per share, as compared to a net loss of $8.4 million or $0.41 per share in the prior year.
The net loss was also due to the increase in other expenses that included unrealized loss on change in derivative liabilities, loss on disposal of assets, amortization of debt discount, and interest expense on convertible notes. Net cash used in operating activities during the year totaled $6.1 million as compared to $5.3 million in fiscal ending 2025. The increase in cash used in operating activities was primarily due to an increase in inventory ramp-up of the Precise PRP product line, as well as an increase in stock-based compensation expense and a $1 million loss on the impairment related to the license agreement with Vet Stem.
This was partially offset by a decrease of accounts payable and accrued expenses of $649,000 compared to last year. Now let’s turn to our balance sheet. Our current assets totaled $1.8 million at March 31, 2026. In contrast, our current liabilities were substantially reduced to $1.4 million from $4.3 million at the end of the prior year, a decrease of 68%. We also had an 80% decrease in total liabilities from $5.1 million in the previous fiscal year to only $1.4 million in the year ending on March 31, 2026.
This significant improvement was due to the conversion of $1.6 million to convertible debt, a $798,000 reduction in our long-term lease obligations due to a lease termination, a $274,000 reduction of our accounts payables due to settlement payments with trade vendors, a $495,000 reduction in accrued expenses, and the extinguishment of $440,000 in our derivative liabilities. Our accounts payable decreased 33% from $821,100 at the end of the prior year to less than $547,400 at March 31, 2026.
This highlights the strongest balance sheet we’ve had in many, many years. In the final quarter of fiscal 2026, we raised additional capital from the exercise of warrants and the sale of equity securities, bringing in net proceeds of $877,500. This brought our working capital to $482,600 as of March 31, 2026. Now this completes our financial review for the year. Thank you, Gary. Throughout fiscal 2026, Spring continued to receive favorable reports from veterinarians, especially regarding its ease of use and effectiveness in the management of osteoarthritis in horses and companion animals. Our diligent efforts also resulted in Health Canada, the federal agency responsible for regulating health products and protecting public health, officially recognizing PetVivo’s Spring with OsteoCushion technology as a veterinary medical device, which has initiated our efforts for commercialization in Canada.
This important regulatory milestone expands our international commercial opportunities and reflects the quality and safety of our innovative technology. We believe this regulatory acknowledgment will lead to making Spring with OsteoCushion technology available in Canada as a veterinarian-administered intra-articular injectable veterinary medical device intended to support joint health and aid in the management of lameness and other joint-related afflictions in animals.
As what we believe is the first such recognition by an international regulatory body of a veterinary hydrogel medical device, this action represents a major milestone in our global commercialization strategy. It has also effectively created a new large international market opportunity for us and has paved the way for the commercial rollout of Spring in Canada, which we are preparing to launch near the end of July. Preparation has included developing the proper product labeling for Canada, including a version translated into French for certain Canadian customers.
We’ve also been developing a distributor network in Canada like we have in the United States, which we believe will speed our market expansion with little investment. We see the opportunity for Canada as quite substantial. The Canadian overall animal healthcare market is reportedly growing at a 6.8% CAGR and is expected to exceed 4.4 billion by 2031. Moreover, we believe we have meaningful first-mover advantage in this significant market. To our knowledge, we believe our Spring with OsteoCushion technology is one of the first hydrogel-based intra-articular injectable veterinary medical devices to receive regulatory recognition from Health Canada that permits commercialization in Canada. We also continue to hear from veterinarians and distributors that there is substantial pent-up demand for an innovative product that has been recognized by Health Canada for commercialization in the Canadian market. We believe we also have a competitive advantage with our clinical studies, particularly our canine studies. We believe our clinical data demonstrates the advantages of our Spring technology over competitive products, including a better long-term safety profile.
Also during the year, we continued to advance our strategic collaboration with Commonwealth Markets, the syndicated ownership group behind the 2023 Kentucky Derby winner. Commonwealth has integrated Spring into the care protocols of its top-tier Thoroughbred stables, where it is being used to promote joint health, extend performance longevity, and support recovery in high-impact training and racing environments. This adoption by Commonwealth represents a strong validation of the effectiveness of Spring, and we believe it will open doors to other significant opportunities.
We have continued to expand the awareness of the benefits of Spring among other key decision-makers, including presenting at a number of major conferences earlier this year. This included the Florida Veterinary Medical Association Ocala Equine Conference, which was held at the World Equestrian Center in Ocala, Florida, the American College of Veterinary Sports Medicine and Rehabilitation Symposium in Lexington, Kentucky, and at the International Veterinary Academy of Pain Management Forum, which was held in Dallas, Texas.
At these events, we demonstrated the research-backed benefits of Spring to veterinarians, including leading surgeons, sports medicine, and rehabilitation experts in the veterinary industry. Such introductions are typically significant drivers of product adoption and new sales. We are planning to exhibit at several more conferences later this year, which we plan to announce on our website in the coming months. The conferences also present the opportunity to share the results of recent studies, like our new canine elbow study, as well as other completed and published studies.
We currently have additional canine and equine studies for tolerance and efficacy of Spring in the initial stages of development. We also continue to advance our pipeline of new products, which is greatly expanded and strengthened with the acquisition of PBM last week. This includes new functional biomaterials as well as tissue and bone-mimicking biomaterials that may be used to enhance the delivery of pharmacological agents and/or promote the regeneration, restoration, and/or remodeling of damaged or injured tissue and bone in animals and humans.
Our collagen elastin hydrogel particles, or CEHM, when combined with PBM technology, can effectively create the structure or scaffolding and assist in facilitating biological activity for the body to restore and/or remodel its natural tissue. The PBM technology-enhanced CEHM integrates with the host tissue and assists in the remodeling and restoring of tissue to a more normal and healthy state. This includes animal and human applications, such as using our functional biomaterial particle technology for physical and drug therapy treatments via the respiratory system using a nebulizer.
We are also investigating potential topical treatments for eye afflictions such as ocular ulcers, as well as wound treatment where our functional biomaterial technology can help remodel and restore tissue to its original state. This could include assisting the healing process by delivering existing FDA-approved antibiotic, antiviral, and anesthetic substances. Beyond industry events, in May we were also invited to present at the Market Movers Investor Summit, which was held at the historic Bank of New York.
The conference provided us an opportunity to elevate awareness of the company in the institutional investor community. The exclusive event featured a fireside chat by Alex Rodriguez, who many of you know to be one of the greatest MLB players of all time. He is now the founder, Chairman, and CEO of the alternative investment group AROD Corp. It was a fun and exciting event for sure. Now, another exciting event which I had mentioned earlier, which occurred in the final quarter of the fiscal year, was Digitalandia’s launch of its public access beta to its B2C Agenic pet solution for pet owners.
The B2C platform is designed to educate and engage pet owners while serving as a gateway to the company’s planned B2B veterinary platform, creating an integrated ecosystem that facilitates collaboration between pet owners and veterinary professionals. The B2B launch will include access to all of its specialized AI agents, such as veterinarian, behavioral scientists, nutritionists, geneticists, vaccination specialists, trainers, radiologists, blood and fecal analysis, and urinalysis agents.
Key for us is that its special B2B AI agents support the broader adoption of our veterinary products and services. The agents assist veterinarians in proactively diagnosing afflictions and diseases such as osteoarthritis and lameness and suggest treatment options. Agenic Pet’s AI-powered diagnosis boasts an amazing 97% accuracy and as such represents a paradigm shift in the medical treatment of companion animals. The solution targets Gen Zers, who represent 20% of US pet households, with ownership growing more than 43% annually.
Digital Landia reported that the public B2C beta launch of Agenic Pet crushed expectations with the onboarding of 1,000 plus active beta users in less than 72 hours. They believe this demonstrated pent-up demand for AI-driven preventive pet health care and confirmed that pet owners are seeking proactive solutions that catch health issues before symptoms emerge rather than relying on outdated reactive care models. The successful beta program is anticipated to strengthen the value proposition of our PetVivo AI B2B SaaS-based service offering for thousands of vet clinics in our nationwide network.
Finally, and recently, PetVivo AI achieved several important technology milestones that strengthened the foundation for future growth. This platform technology has deployed a highly resilient AI infrastructure, developed a proprietary AI platform with persistent patient memory, and introduced smartphone-based diagnostic capabilities that have the potential to significantly expand access to veterinary care. The agency platform has also launched a data monetization framework, creating the opportunity for veterinary professionals to participate in the value generated from anonymized health data while integrating seamlessly into their existing practice management systems. As the regulatory landscape for digital health data continues to evolve, we believe PetVivo AI is well-positioned to become an important data infrastructure platform serving veterinarians, pharmaceutical companies, and research organizations, and we are now focused on scaling the platform and expanding adoption altogether. Our technologies have created an exciting future for PetVivo that is transformative to not only veterinarians and the patients they serve but potentially for humans as well.
Looking ahead, we expect to see continued sales momentum and market penetration for the duration of fiscal 2027 and beyond. In fact, we have never been in a better position to accelerate our growth and expand across high-growth US and international markets.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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