PetVivo Holdings, Inc. (NASDAQ:PETV) Q4 2022 Results Conference Call June 29, 2022 5:00 PM ET
Company Participants
John Lai – Chief Executive Officer and President
John Dolan – Chief Business Development Officer and General Counsel
Robert Folkes – Chief Financial Officer
Conference Call Participants
Gary Zwetchkenbaum – Plum Tree Consulting LLC
John Lai
John Dolan, can you start the introductions?
John Dolan
Yes. Thank you, John. Greetings, and welcome to the PetVivo Holdings Fiscal Year Ended March 31, 2022 Financial Results Conference Call. I’m 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 through playback.
Before we would 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 with the SEC today, which provided a detailed discussion of our financial results. We filed our 10-K on Friday, June 24, 2022. Both of these documents can be found in the SEC website and the Investor Relations section of our website.
I would like to now turn the conference over to John Lai, the CEO and President of PetVivo. Please go ahead, John.
John Lai
Thank you, John, and welcome, everyone. Joining me today will be Robert Folkes, our Chief Financial Officer. I would like to begin by discussing some of the highlights from the last fiscal year. Then Bob Folkes will discuss our financial results, financial conditions in much greater detail. I will conclude by sharing additional thoughts on the business strategy and key focus areas for fiscal 2023 and we’ll then open it up for questions.
Our key highlights for fiscal 2022 were that we raised $11.25 million in the NASDAQ uplift in August of 2021. The last two quarters, we generated over $100,000 in sales in Spryng. And then also rebranded our product, the name Spryng and launched two websites, Sprynghealth.com and Petvivo.com site specifically targeting the veterinary space with Sprynghealth.com. We are also partnering with Ethos, which is a private organization that does clinical research. So we’re doing a canine tolerance study, as well as an efficacy study over the next several quarters. And we really attracted some very seasoned management team. So basically putting all the right pieces in the right places to really help the company and drive sales.
I would like now to turn the call over to Robert Folkes, our Chief Financial Officer, who will be discussing our recent completed register offering and our financial conditions.
Robert Folkes
Thank you, John, and good afternoon, everyone. The most significant event from last year was uplifting to NASDAQ that John mentioned, in which the company raised — our net proceeds was $9.78 million in August of 2021. And this really provided the necessary capital for the company to commercialize Spryng, which began in September of 2021.
At March 31, 2022, the company had $6.1 million in cash and cash equivalents and working capital of $5.6 million. We increased our inventory to $98,000 in order to support our expected revenue growth in 2023. We continue to use the net proceeds from our initial public offering to expand our sales and marketing efforts and clinical studies to gain better acceptance and increase revenues from the sale of Spryng.
And now I will turn the call back to John.
John Lai
Thank you, Bob. I would like to talk more about our recent developments and key focus areas for fiscal 2023. As we reported in our 8-K on June 24, the company entered into a distribution service agreement with MWI Animal Health, a subsidiary of AmerisourceBergen ticker symbol ABC. We are excited to partner with MWI as they are one of the largest distributors in the veterinary products in the world with over 400 territorial managers in the United States. We expect the distribution agreement will help expand our awareness of Spryng, as well as the introduction of our product within the United States to veterinary physicians, and we anticipate distribution or shipment by the second half of July 2022. So we expect the product to be shipped to multiple distribution centers for MWI.
I would also like to discuss our clinical studies, which will help us support our relationship with MWI. Many national distributors such as MWI like to see third-party university studies as other third-party publications including products before they include in their product catalog. In addition, we expect to have more clinical data about efficacy of Spryng that will help us gain more acceptance within the veterinary space.
We entered into a clinical trial service agreement with Colorado State University on November 5th of 2020 to evaluate the injection of Spryng into elbows, so it was a double-blind elbow study. Because of COVID, we were delayed significantly, but the study has been going — moving forward and enrollments of dogs have been picking up and we expect the completion of this study sometime in November of 2023. We also entered into a canine clinical study with Ethos Veterinary Health in May of 2022 with anticipated completion date in sometime in fiscal 2023. So that means March — by before March 2023. This pilot study will help evaluate the intra-articular injection of Spryng in dogs in the stifle disease. We will initially product tolerance and then eventually efficacy. We expect to conduct additional trials or studies in order to gain better acceptance of Spryng.
As I mentioned at the beginning of the call, we have established a new website Sprynghealth.com, within that Dr. Tracy Turner boarded equine surgeon and a recognized veterinary expert in equine lameness, and a Member of our Advisory Board has developed a video Q&A series. I believe there are 16 short videos on answering certain questions with the use of the product Spryng in treating joint health issues. Dr. Turner consults in the United States Equestrian Federation. He has worked at the four Pan Am Games and two World Equestrian Games and in 2020 the Tokyo Games.
I would like to open it up for questions. Operator, could you kind of go over the instructions on how people calling in can ask questions?
Question-and-Answer Session
Operator
[Operator Instructions] Okay. It looks like we have a couple of questions here. The first one is Gary Z.
John Lai
Hi, Gary. Go ahead.
Gary Zwetchkenbaum
It’s Gary Zwetchkenbaum by the way. But, John, and I’d like to congratulate you guys and the whole PetVivo team on a great exclusive distribution agreement with MWI Animal Health, a subsidiary of Amerisource. John, if you can — John, if you would discuss a little bit about the agreement? Meaning you had I think a sales staff of roughly 5 people including your National Sales Manager, how many outside salespeople are you getting from MWI who will be selling Spryng and how many of their support staff will be taking orders for your products with phone and et cetera? And I also understand that MWI is going to be a customer. And they’re going to purchase inventory to sell to their veterinary customers directly. So if you can tell me a little bit about how the orders begin and when you are going to start sales, if it starts in July, and if you would, please?
John Lai
Yes. So I’ll take the last one first. I think it was related to — oh guy, I can’t remember which was the first. I’ll just try to answer it. Then if I miss it, let me know. So basically, in theory, there should be about potentially over 700 sales reps and will have the ability to — I got to mute you Gary because I’m getting feedback. Can you mute yourself? Thank you. So basically, there’s 700. We, as part of the agreement with the MWI, will provide educational source material, as well as training of key trainers and sales managers to help roll the product out properly. So there is a little time involved in that. And as discussed in the 8-K, we talked about promoting, marketing, and then doing distribution.
So basically, they were shipped to various distribution centers of their order from us, put it into the distribution centers, and then they will be able to support their salespeople to get product in the hands of the veterinary doctors much faster than we could have, we were fulfilling. Furthermore, we will be expanding in-house additional sales reps to be able to support the 700 plus reps in the field.
So our people will become like manufacturers’ reps that have very good experience in handling 100, 200 sales reps under them from the years’ of experience in the field. So we’ll be hiring more people in that space in the next 60 days. Also, we’re looking at potentially a in-house support staff to be able to be customer service oriented to assist with MWI questions as well as the veterinary doctor questions. I believe I answered all the questions you had.
Gary Zwetchkenbaum
Anyway, I’m excited about the release and hopefully to hear updates on sales as you go through this quarter and the next quarter. But thank you very much.
Operator
We have a second question now.
John Lai
I believe, it’s Anthony, right?
Unidentified Analyst
John, it’s [indiscernible]. Can you hear me?
John Lai
Yes. I can.
Unidentified Analyst
I wanted to just make sure that I was clear on which of your products are currently in the market?
John Lai
So it’s Spryng with OsteoCushion technology, I understand the 8-K says other veterinary products, which they do for the next two years and possibly three years. So as part of our plan and in the previous presentations, as well as our PowerPoint, that’s up on our website, the most recent one just got uploaded I believe yesterday, does have other products in the veterinary space. So definitely, that would be a possibility of helping us get faster adoption of the other products.
Operator
We have another question here who called in. [Operator Instructions]
Unidentified Analyst
My question is about your target market in the horse area, particularly related to the cost of the product. Does that fit into like only horses that will race? Is this horses that an average family farm might have? Who’s your target market for this product?
John Lai
So it would be pretty much any one that has a horse, because if you look at the chart within our PowerPoint, it shows the costs of a Spryng injection is between $600 to $900. What we have seen in real world cases is that after the injection there is a reduction in the use of other products such as the various HA injections and so on. So, there is a potential reduction in NSAIDs and so on. So there’s a cost savings. The economics really works out. We’ve seen that with Fender Bender, and other racehorses, but not just racehorses but horses in general, the amount of follow-up therapy needed for other products is reduced.
Unidentified Analyst
And if I can follow that up with another question. Based on the — sort of the — for lack of a better word, because I’m not an accountant to money you have in the bank. You — how many — how much powder you anticipate going before you’re going to need to do another raise of money?
John Lai
Yes. But since the uplift, we have always targeted sometime in the first quarter of — calendar quarter of 2023. We always figured and stated in those presentations that we believe we would have material events that would justify a better valuation to bring in a small amount of capital.
Unidentified Analyst
Okay. And if you don’t mind one more question. Does this product you’re planning on bringing to the dog market, also maybe the cat market too I don’t know, do you anticipate the injection costs for a typical customer and/or typical suburban dog owner to be less than $600 to $900 or what do you anticipate there?
John Lai
No, it would be pretty much the same. So we are selling to canine customers already, okay?
Unidentified Analyst
Canine customers.
John Lai
Yes, yes. The difference is, now we have a group that’s already have established relationships with many of the veterinary doctors. MWI probably have accounts open with over 90% of existing veterinary clinics. So it’s much easier to go in and get the attention and start talking about the product. So if you look at our chart that I talked about, the product uniqueness or pipeline or costs, you’ll see that there’s significant economic benefits of using ours versus the competitive ones. Just your standard generic [indiscernible] is going to be $400 a year. And that’s pretty much focused on masking the symptoms with potential side effects, and also the compliance issue with the dog owner or the pet owner trying to give the pill to the dog.
Operator
Looks like that’s all the questions for now.
John Lai
Okay. If there are no more questions, I think we can end the conference call.
Operator
Goodbye.
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