PetVivo Holdings Inc Aktie

Good afternoon, everyone. Thank you for joining us today to discuss the results for the first quarter of our fiscal year ended June 30, 2026 -- sorry, it's for our fiscal quarter ended June 30, 2026.

Hosting the call today is our Chief Executive Officer, John Lai; and our Chief Financial Officer, Garry Lowenthal; as well as myself, John Dolan, PetVivo's Chief Business Development Officer and General Counsel.

Following our remarks, we'll open the call for your questions. Then before we conclude today's call, I will provide some important cautions regarding the forward-looking statements made during the call, such as regarding our company's plans, expectations, objectives and anticipated results.

If you are connected to the call via your browser, please also review our safe harbor statements that are on the screen right now.

I will give you a few seconds to take a look at these statements.

I would also 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 to the Investor Relations section on our website at petvivo.com.

Now turning to our results for the quarter. Our first quarter of fiscal 2027 was another period of strong business development and commercial success on several fronts with key advancements that we believe have greatly enhanced shareholder value and laid the groundwork for strong growth ahead. This has included further development of our IP and technology platforms, further product commercialization, meaningful international expansion and strategic M&A as well as the strengthening of our national sales team who have been improving the sales results of the company.

All of this has demonstrated our continued intense focus on the many fantastic opportunities we enjoy, several of which come into play only over the last several months. Their pursuit has required extraordinary attention and capital attraction to support their successful development and commercialization. Our primary objective has been and will continue to be the pursuit of high-margin reoccurring revenue streams, which we expect to support the highest valuation of our company for the benefit of our stakeholders.

The strengthening clinical validation and market adoption of our flagship product, Spryng with OsteoCushion Technology continues to serve as our foundation. Upon it, we are working to launch several new products and services for both animal and humans, which have great potential. Many of the activities have included the formation and advancement of new strategic alliances and collaborations with key partners and potential customers.

Naturally, the most recent exciting announcement is our entry of an agreement for the acquisition of PiezoBioMembrane or PBM, a leading developer of functional biomaterials and piezoelectric technologies, which were invented at the University of Connecticut. These biomaterials and technologies have been shown to have uniquely powerful regenerative, restructuring and/or restorative therapeutic applications for both humans and animals. While PBM has been our R&D partner for some time, their acquisition represents a transformative step in our long-term growth strategy.

Our merger will more closely combine PBM's great strength in scientific innovation and patented IP portfolio with our own great strengths that include complementary technologies, product development capabilities, commercialization experience, regulatory expertise and public company infrastructure. We expect our combination to accelerate the advancement of unique high-value technologies that will serve as the foundation for numerous future products and strategic opportunities. In fact, it has already created new opportunities for securing government and private development grants, research collaborations and R&D tax credits with the pursuit of many of these opportunities already underway.

Meanwhile, we are currently progressing through completing the customary closing conditions and related financing, and we expect to announce the official closing very soon. Meanwhile, we have been working closely with PBM in completing nearly all objectives that we set forth in Stage B of our joint 3-phase R&D program. This program was created to advance revolutionary functional biomaterials that are designed to promote regeneration, restoration and/or remodeling of damaged or injured tissue and bone in both animals and humans.

Stage A determined that our respective products could be combined into a single offering that demonstrates piezoelectric activity with this providing potential therapeutic benefits. Stage B has now determined our combined offering could be produced at scale, and it has provided preliminary indication of safety for administration in animals with a final safety study for this stage to be completed in the near future. Stage C, now underway concurrently, will determine definitive safety and efficacy based on the protocols we've established.

After completing Stage C, we plan to pursue FDA clearance of products for human applications that incorporate PBM's piezoelectric substances in biomaterials, including our flagship product, Spryng, which mimics the extracellular matrix in animals and humans. We recently filed for a federal government grant in collaboration with PBM and the University of Connecticut. The grant is intended to fund the advancement of at least 5 unique high-value technologies. A number of these technologies are expected to serve as a foundation for future products and strategic opportunities. We expect the government's decision on the grant to come before the end of the year.

We also recently announced the successful conclusion of our commercial partnership with VetStem that included a license and supply agreement for its PrecisePRP product line. While veterinarians may continue to use PrecisePRP in conjunction with Spryng if they choose to do so, we are now focused 100% on advancing our own proprietary technologies, especially those we recently acquired with PBM as well as other innovative products we have in development as part of our broader strategic growth initiatives.

Now before we get into other highlights for the quarter and recent developments, I'd like to turn the call over to our CFO, Garry Lowenthal, who will take us through the financial details for the quarter. Garry?

Thank you, John, and good afternoon, everyone. Thank you for joining us today to discuss the results of our first quarter of the fiscal 2027 that ended June 30, 2026.

Revenues for the period increased 13% to $338,000 compared to the same year ago period and grew -- also grew 33% revenue compared to the previous quarter. The growth reflected the success of our efforts to strengthen our sales and marketing teams and focus our efforts 100% on selling our proprietary flagship Spryng product and no longer including our previously licensed PrecisePRP VetStem product, which we now no longer sell.

Revenues for the period were derived from sales through our distributor network totaling $276,000 with direct sales to veterinary clinics totaling $62,000. This compares to the year ago quarter where sales consisted entirely of Spryng and our distributor sales were $198,000 and our direct veterinary clinics was $56,000. We see the significant improvement in sales also reflecting our renewed effort to better educate our customers on the benefits for flagship Spryng product with the expansion of our sales force over recent months. And especially with new sales force members who have greater experience and abilities, we expect this improvement in sales to continue over future quarters.

Gross profit for the quarter totaled $223,000 or 66% of revenues, improving from $187,000 or 63% of revenues in the same year ago quarter. We anticipate greater revenue margins going forward as we will be selling more of our flagship Spryng product with significantly higher gross margins than the discontinued PrecisePRP product line. Total operating expenses for the quarter decreased 10% to $1.8 million, with the decrease largely due to a 31% decrease in R&D expense and 9% decrease in general and administrative expense with this offset by a 2% increase in sales and marketing expense.

Given the decrease in these expenses, our operating loss decreased 13% to $1.6 million for the quarter. This resulted in the net loss for the quarter totaling $1.7 million or $0.05 per share, and this improved about 30% from a net loss of $2.3 million or $0.10 per share in the same year ago quarter. Also contributing to our improved bottom line was a large decrease in interest expense totaling only $5,000 for the quarter, which was down from $122,000 in the year ago quarter as well as recording no unrealized loss on the change in derivative liabilities as we no longer have derivative liabilities compared to the $320,000 a year ago quarter.

I would also like to point out our net cash used in operating activities during the quarter decreased substantially, totaling only about $966,000. This was down about 40% or a reduction of $668,000 compared to the same period a year ago as we better utilize our cash. This decrease in cash used in operating activities was primarily due to a decrease of $203,000 accounts payable and accrued expenses compared to a decrease of $80,000 a year ago.

Now let's turn to the balance sheet. Cash at the end of the quarter was $123,000, which compares to $201,000 at the end of the previous year. We expect our cash position to increase as an investor who subscribed to an equity offering completes the remaining subscription commitment that totaled [ $1.35 million ] at the end of last quarter.

Now this completes our financial review for the quarter. John?

Thank you, Garry. Now in addition to our recent activities with PBM, another key relationship we've been advancing is our partnership with Digital Landia, a pioneer in agentic AI solutions with whom we've secured an exclusive white label licensing agreement for the breakthrough AgenticPet technology. This unique and innovative technology features specialized diagnostic AI agents that are protected by proprietary IP and 5 patents pending. Among this technology's multiple capabilities, it addresses many of the critical challenges facing today's veterinarian practices. This includes skyrocketing client acquisition costs and the challenges in capturing the fast-growing demographic of Gen Z pet parents.

Veterinarians today are also challenged by what comes after a new client is acquired. That is being able to proactively diagnose their pets' afflictions or diseases and provide best treatment options and to do so cost effectively and efficiently for both the client and the practice. To address these challenges straight on, earlier this year, we beta launched our new PetVivo.ai veterinary practice platform. This AI-powered software-as-a-service platform is powered exclusively by Digital Landia's powerful AgenticPet technology. We believe it is the first of its kind on the market and its unique benefits and capabilities will provide us a clear first-mover advantage.

During the first quarter, we advanced its commercial rollout with the engagement of an additional select group of prominent veterinarian clinics under our ongoing beta launch development programs. Their inputs of expert knowledge have been further training the platform's AI agents in their main functions of pet owner customer acquisition and pet health care. Furthermore, the beta launch has also stimulated a number of incredibly beneficial improvements that are currently being tested and evaluated by the veterinary clinics. PetVivo.ai employs automated AI-powered customer engagement that intelligently converts the leads it generates into paying veterinary customers at a tremendous cost savings.

The beta program has demonstrated that PetVivo.ai can provide a 50% to 90% reduction in veterinary customer acquisition costs, lowering it from the typical $80 to $400 spent per customer target to less than $43. The platform expertly trained AI agents can also analyze a range of inputs, including pet behavior, medical records, diagnostic lab results and medical imagery, such as X-rays, MRIs, ultrasounds and CT scans as well as other patient medical information. It then uses this analysis to assist veterinarians in proactively diagnosing afflictions and diseases such as osteoarthritis and lameness. It also suggests treatment options, among which could include Spryng or future products we currently have under development.

PetVivo.ai's AI-powered diagnosis has demonstrated an amazing 97% accuracy with this alone representing a paradigm shift in the medical treatment of companion animals. Recently, our PetVivo.ai development team achieved several important technology milestones that we believe strengthens its foundation for future market adoption. We now deployed a highly resilient AI infrastructure with persistent patient memory and introduced smartphone-based diagnostic capabilities that have the potential to significantly expand access to veterinary care. We also launched a data monetization framework for PetVivo.ai, creating the opportunity for veterinary professionals to participate in the value generated from anonymized health data while integrating it seamlessly into their existing practice management systems.

As the regulatory landscape for digital health data continues to evolve, we see PetVivo.ai becoming an important data infrastructure platform that serves the entire industry from veterinarians and pharmaceutical companies to research and government organizations. And we are now focused on scaling the platform and expanding its adoption with our beta users. This AI-powered solution greatly complements our existing medical device offerings that we market to our existing network of thousands of veterinary clinics across North America and Europe. PetVivo.ai also creates a new recurring revenue stream, one with high 80% to 90% gross margins, along with low CapEx global scalability. In all, it provides us with our veterinarian clients multiple ways to win.

The final training of the PetVivo.ai engine is currently underway using real-world scenarios. A select group of veterinarian practices that we have engaged under our beta program have been providing us valuable feedback and impressive results. We expect to announce its official commercial launch within the next few months. Veterinarians new to the solution can request a free demo of our PetVivo.ai website and experience firsthand how the power of this technology can transform their practice. In support of our launch of PetVivo.ai, earlier this year, Digital Landia published a technical white paper documenting the Agentic Pet AI framework that underpins this technology.

The paper validates its technical foundation and provides veterinary professionals, investors and industry stakeholders with detailed insights into the multi-agent artificial intelligence architecture that enables its transformative clinical and economic benefits. Based on this report, we expect our PetVivo.ai solution to rival the adoption of other mainstream AI applications. We see it creating greater visibility for our existing brands, particularly Spryng with OsteoCushion Technology and the several new solutions in our product pipeline. Earlier this year, we launched on our PetVivo.ai website an online video explainer, which walks you through the 2-part ecosystem of PetVivo.ai. If you haven't seen it yet, we very much encourage you to do so as it will explain why we and others are so excited about this offering.

In addition to the work we've been doing with PBM and Digital Landia, we have continued to advance our new partnership with Austin, Texas-based Veterinary Growth Partners. VGP is a management services organization that helps veterinary practices improve their efficiency and profitability by providing management, business development and marketing tools and making introductions to new vendor relationships such as us.

VGP has committed to actively promote our Spryng with OsteoCushion Technology to their 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 upon its official commercial launch.

During the first quarter, our Spryng lead product also 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. Earlier this year, we announced that Health Canada, the federal agency responsible for regulating health products and protecting public health, officially recognized our Spryng with OsteoCushion Technology as a veterinary medical device authorized for commercialization in Canada.

This official acknowledgment will help make Spryng available in Canada as a veterinarian administered intra-articular injectable veterinary medical device that is designed to support joint health and aid in the management of lameness and other joint-related affliction in animals.

As the first such recognition by an international regulatory author body, this action represents a major milestone in our global commercialization strategy. We are now in the process of developing a new distributor network for Canada, like we have in the U.S., which we believe will speed our time to market with minimal investment. We anticipate the first of such distributor relationships to be secured within the next month or 2.

We see a great opportunity in Canada, where the animal health care market is expected to exceed $4.4 billion by 2031. Moreover, we believe we have first-mover advantage in this major market. To our knowledge, we believe our Spryng product is one of the first hydrogel-based intra-articular injectable veterinary medical devices to receive regulatory recognition from Health Canada, which permits commercialization in the country. We also continue to hear from veterinarians and distributors in Canada that there is substantial pent-up demand for such a product recognized by Health Canada.

For this international launch, we believe we have a competitive advantage with our clinical studies, particularly our canine studies. Our clinical data has long demonstrated the advantages of our Spryng technology over competitive products, including a better long-term safety profile. We have continued to expand the awareness of the benefits of Spryng among other key decision-makers, including exhibiting at a number of major conferences so far this year.

In April, we exhibited our lead products at the International Veterinary Academy of Pain Management Forum held in Dallas, Texas. More recently, we exhibited at the Texas Equine Veterinary Association 2026 Summer CE Symposium that was held in Horseshoe Bay, Texas at the end of July. The symposium brought together some of the nation's most respected equine veterinarians in the country.

We were able to demonstrate the research-backed benefits of Spryng to 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. Such 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.

Such published studies include a publication in the Veterinary Record, the official journal of the British Veterinary Association, which provided a peer-reviewed clinical study that evaluated our Spryng with OsteoCushion Technology. This publication was the third such peer-reviewed study published so far this year, with this representing another important milestone in the continued expansion of the scientific evidence supporting the effectiveness of Spryng.

Over the last several weeks, we have also been advancing the development and publication of new canine and equine studies that address the tolerance and efficacy of Spryng. This includes the analysis of clinical data generated from our earlier announced canine elbow pilot study conducted by Orthobiologic Innovations, a leader in R&D for regenerative and sports medicine. The study was led by prominent veterinarians Sherman and Debra Cannap, who are currently working with our technical service veterinarians to incorporate the results into a white paper in preparation for submission to industry journals.

We also have additional canine and equine studies for tolerance and efficacy of Spryng in the initial stages of development. We also continue to advance our pipeline of new products with this greatly expanded and strengthened with the entry into a definitive agreement related to the acquisition of PBM last month. These new products include new functional biomaterials as well as tissue and bone mimicking biomaterials that may be used to enhance the delivery of pharmacologically active agents and/or promote the regeneration, restoration and/or remodeling of damaged or injured tissue and bone in both animals and humans.

Our Collagen-Elastin Hydrogel Particles or what we call CEHM, when combined with PBM technology can effectively create the structure or scaffolding that can assist in facilitating functional activity in the body to restore, restructure and/or remodel its natural tissue. PBM technology enhanced, CEHM, integrates with the host tissue and assists in the remodeling, restructuring and restoring of that tissue to a more normal and healthier state.

Also, animal and human applications could include 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 a healthy state. This could include assisting the healing process by delivering existing FDA-approved antibiotic, antiviral and anesthetic substances.

Altogether, our technology, both commercially deployed and under development have created an exciting future for PetVivo, one which we believe will be transformative and not only for veterinarians and their precious 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 our high-growth U.S. and international markets. Industry analysts say that the U.S. animal health care alone will double by $11.3 billion by 2030. Such massive growth is unusual for such an already large market, so we see it providing us exceptionally strong tailwinds.

As part of our strategy to seize the great market opportunity, we have continued to strengthen our business development and sales teams with key appointments. This includes the recent appointment of Jennifer Douglas as our new field business development manager for the Texas market. This followed by the appointment in May of a new inside sales representative for the Northwest U.S. region, we are also planning to appoint 2 additional regional business development managers for the Midwest and Southwest regions, which is currently in progress. They will complement our expanding inside and field sales teams and are focused on distributor and direct sales.

As we continue to grow and expand over the coming quarters, we will remain committed to advancing the best in pet health solutions and ensuring that our products reach more veterinary professionals and pet owners with our success in these efforts driving greater value for our stakeholders.

I would now like to turn the call over to our CEO, John Lai, to provide some additional insights into the recent developments and then open the call to address any of your comments or questions. John?

Thank you, John. So we do -- we did implement a proprietary AI system for Investor Relations and just gathering of information from people visiting our site and then allowing them to opt in to receive weekly updates. And I think we are up to 38,000 people that have shown interest in getting weekly updates from PetVivo. So I'm pretty proud of that system and how it has been working for us.

We also this week started having commercials, 30-second commercials on Fox Business, Bloomberg TV as well as CNBC. And the CNBC ads are actually in the New York regional market, and it runs during market hours. I think there's one right before the open of the market and then the other 4 is placed along the way -- along the various times during the market. And hopefully, that will draw more attention to our stock and also have people look into the future of PetVivo as we evolve from the animal side and development of human therapeutics.

I would like now to open up to questions. Operator, could you please instruct our calling as well as our web attendees on how to ask questions.

[Operator Instructions] Okay. John Lai. We have one person that raised their hand. The phone number ending with 619. You are allowed to talk now.

[Operator Instructions]

Just a couple of quick questions. You spoke about your filing with the government for grants, right, with PBM?

Yes. It's part of the technology effort. We were able to file for grants that I think we said in the call here, 5 different categories of products for grant availability, and we would get acknowledgment of how much grants we get. And we also, with the acquisition of PBM are available for what is called R&D tax credits from the State of Connecticut and so on.

Just a quick question. Given the fact that the deal hasn't officially closed, what entity filed those grants under what name those grants are?

So it was both of us.

And what happens if the transaction is not completed?

Well, it's unlikely that it's not going to be completed. But I actually never thought of that aspect because as far as everybody was concerned, it's pretty much completed. Everybody is moving towards that. So you would have to ask the attorneys. I can't answer that.

John, I can answer it too if it make sense. Yes, the grant formally is filed under UConn, the University of Connecticut with PBM and with PetVivo as being sponsors of it. However, there will likely be an amendment to that in the near future to include PetVivo as one of the applicants. So that will take place.

The -- to answer your question with regards to what happens if the -- if the merger didn't take place, I'm going to agree with John. We're just tightening up the formalities of it right now. The agreement signed, we're just working with the team to get some of the closing conditions completed, which is more administrative. So I -- we shouldn't have an issue with that. If it, for some reason, didn't happen, the grant would still go forward. The grant would still go forward, and we would still be the beneficiaries of that grant.

Well, thank you, John for asking -- for answering the legal question.

Sorry, guys. So just to be clear, University of Connecticut is the filer of the grant. Upon completion of PetVivo's merger or acquisition of PBM, PetVivo would be added to the grant. And if that didn't transpire, I'm still not clear. What happens to the PetVivo venture?

No.

No. Actually, it does -- the closing of the transaction has no impact on whether PetVivo will be an applicant of the grant. That's just a formal amendment that we've already agreed to do. That's -- the grant is a separate issue. We're still under an agreement with PBM to do joint development of these products. And so that will -- that's continuing. That's continuing onward.

Like I said, the grant is a separate issue. We've already done the application filing and all parties, University of Connecticut, PetVivo as well as PBM will benefit from that grant if it is accepted.

Understood. All right. And also just on this last -- on this topic on the PBM transaction. It's my understanding that as part of the closing conditions, there needs to be a capital raise of $5 million in order to finalize the transaction. What are your plans, if you can discuss in terms of raising the capital?

Well, we can't go into detail, but everyone is pretty confident it's secured and it's close, but it's not done until it's done, but it's close.

Understood. Okay. So you're working on it, you're working towards that end.

Yes. Everybody would have signed such a strong agreement and did a news release and an 8-K filing if everybody wasn't pretty confident. But as you know, nothing is done until it's done.

Of course. Of course. Only taxes. Only taxes. Pivoting to a little bit of a different question. You -- first of all, congratulations on all of the undertakings you've gone through over the last year or so. What percent of your SG&A is dedicated to research and development? Because it sounds like a very robust undertaking. So I'm just curious, in terms of your SG&A, what percent is dedicated to research and development?

So that's going to change quite a bit because a lot of it is going to be grant money driven. So you got to keep in mind the PiezoBio side in the last 2 years, I think, maybe 2.5 years has received $5 million in grants. And us in the past have received about $8 million, and we haven't filed for any grants in quite a while. But the combination of the products and the multiple product pipeline, I feel we will get some pretty good grant amount, but once again until the government says you have it, do you have no idea?

No, no, no. This is separate from the brand application. I'm talking about all the different product development you discussed on the call...

Okay. Got it.

Which are multiple. So it sounds very involved and very comprehensive. So my question is regarding what percent of your current SG&A is dedicated to those ventures.

John Dolan, would you like to [indiscernible] or the CFO.

I can answer. It's in our 10-Q filing, and I actually talked about it in my speech. We had $233,000 of $1.8 million total operating expenses for R&D. We do break out research and development separate from G&A and sales and marketing from that. Because right now, last year, we spent about -- we spent roughly about 12%, 12.5%. But as we go through with this with PBM and with the new types of products and the new money coming in, there's a larger amount of that is going to be earmarked for R&D and clinical studies. And we can't give you the percent right now, but it will be significantly more than $233,000 that we spent last quarter.

So it's my understanding, these are all sort of white boarded projects you're looking for future funding to go full speed ahead. Is that correct?

I can help answer that.

That's good assessment. Yes, go ahead, John.

I agree. I agree with that assessment. We've -- one thing that we should point out here is that we have approximately 8 people on staff that dedicate at least a portion of their time period and work towards product development and R&D. And that includes clinical studies as well as identification of new products and actually formulation of new products.

Each one of the products that we spoke about on this call have been taken to the formulation stage -- so guaranteed, there will be some further development that will be done, but we -- there are at different stages, but each one of the products that we've talked about on this call, we have made we have made.

It's a matter of taking it through the various steps and the stages like we had discussed with the PiezoBio product, we go through a series of stages. And in that process, we went through 3 stages. First one was, can you formulate the product. In these situations with the products we talked about, we've been able to formulate the products. Second stage is safety. A few of these products, we've run them through safety, but we have got to do more safety studies. Last stage is final safety and efficacy. And with all of these products that are in development, we still need to do that stage. So we are -- go ahead.

That would be the most capital-intensive phase I would assume.

Correct. Because then you're not only doing internal studies, but you're also engaging outside parties to do clinical studies.

Have you estimated the amount of capital you will need to take all those products to that stage?

That is still in process. I don't know whether we can really come out and state that on this particular call. But we have done a budget on the first product that we will end up taking through to -- and that one likely will end up going through an FDA process also because we anticipate that one will be used in both human and in animals. So we do have a budget put in place or a partial budget put in place for that particular product. And that one is actually in the process of Stage B right now.

Okay. First of all, thank you very much your candor. One last question. You talked about gross margins being -- if I remember correctly, somewhere around 66% percentile. Prior to having a licensing agreement with VetStem, the gross margins were closer to the high 80s percentile. So am I to assume that the last quarter still included VetStem sales?

CFO, I can answer that. Yes, we did -- the last quarter was roughly 40% VetStem sales. That's why it's down. Our fiscal year ended March 31, our margins for our flagship product is 90.3% right now. It's actually a little higher than...

That's what I remember. I remember them being like -- that's incredible. So that's why I'm sort of question here.

Yes. And you have a good memory, it is 66% for the last quarter. But -- so this quarter is going to be half a quarter, it's going to be a little mixed. But starting next quarter, it's going to be all the PRP product -- excuse me, pardon me, our Spryng flagship product. And any new product we have is ours, which will have similar margins in the high 80% or the low 90% range.

[Operator Instructions]

Well, if there are no more questions, then I would like to conclude the Q&A session and thank everyone for joining us and then turn this call back over to John Dolan with -- I believe he has legal disclosures.

Thank you, John. Now before we conclude today's call, I would 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 words or phrases usually containing the words believe, estimate, project, intend, 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. Any forward-looking statements made during this 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. Factors that would cause or contribute to such differences include, but are not limited to, various risks as detailed in the company's periodic report filings with the U.S. Securities and Exchange Commission.

For more information about risks and uncertainties associated with the company's business, please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of the company's SEC filings, including, but not limited to, our annual report on the Form 10-K and quarterly reports on the Form 10-Q.

Any forward-looking statements made during the 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 or its expectations with regard thereto, or to any changes in its events, conditions or circumstances of which any forward-looking statement is based, except as required by law.

I would like to remind everyone that this call will be available for replay either later this evening or tomorrow morning. Please refer to today's earnings release for dial-in replay instructions available via the company's website at www.petvivo.com.

Thank you for attending today's presentation. This concludes the conference call.

Goodbye.

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, Garry 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 to 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 reoccurring 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, Spryng with OsteoCushion 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 promised to exceed even Spryng's original great potential. The year was highlighted by tremendous progress with new strategic alliances and collaborations with new key partners. This includes Digital Landia, an industry-leading pioneer in agentic AI solutions with whom we have an exclusive 10-year white label licensing agreement for the breakthrough next-generation AgenticPet technology.

This unique and innovative technology features specialized diagnostic AI agents that are protected by proprietary IP and patent pending innovations. Among these technologies, 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 AgenticPet 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 Spryng medical device and other therapeutic offerings.

Perhaps most importantly, PetVivo.ai also creates a new reoccurring 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 and our beta users with the official commercial launch expected within the next few months. Veterinarians can request a free demo of this solution on our newly launched PetVivo.ai website and experienced firsthand how the power of this technology can transform their practice.

In support of the launch of PetVivo AI earlier this year, Digital Landia published a comprehensive technical white paper documenting the AgenticPet AI framework that underpins this technology. The paper validates the technical foundation underlying this new B2B platform and it 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 Spryng with OsteoCushion Technology and several new solutions in our product pipeline. For our part, we launched an online video explainer that can walk you through the 2-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 are 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 helped 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 Spryng with OsteoCushion 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 Spryng.

During the last quarter of our fiscal year, we completed the majority of the test in Stage B of our 3-part R&D program with PiezoBioMembrane as 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 our 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 a preliminary indication 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 piezoelectric materials in our biomaterial found in Spryng, which mimics the extracellular matrix of animals and humans. Of course, the study product development process will proceed more quickly given the last week's announcement of the acquisition of PiezoBioMembrane.

As a newly whole wholly owned subsidiary of PetVivo, PBM will continue to focus on the development, commercialization, licensing and management of next-generation biomaterials regenerative and restorative therapeutic technologies and related intellectual property. PBM brings to us an advanced technology platform with a multitude of valuable assets, including proprietary know-how, licensed intellectual property rates, 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 posing obligations and complete 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, Garry Lowenthal, who will take us through the financial details for the quarter and year. Gary?

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 Spryng and PrecisePRP products with sales through 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 Spryng with distributor sales totaling $956,000 in 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 Spryng product, which was not repeated in the third quarter of fiscal 2026. We believe this led to proportionately lower sales of Spryng during the year.

We also believe that lower Spryng in sales were also due to customers opting to use PrecisePRP alone and not conjectural Spryng with this despite the benefits of using these together. Our renewed efforts to better educate our customers on the benefits of Spryng, combined with the expansion of our sales force with better sales abilities over recent months has restored greater sales in Spryng, and we expect this improvement to continue over future quarters. Gross profit for fiscal year ending 2026 totaled $754,000 or 66.1% of revenues, a decrease 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 PrecisePRP product line for our license agreement with VetStem.

However, we were able to maintain fairly good overall high gross margin despite the lower margins associated with PrecisePRP and the greater proportion of this lower margin products in our sales mix. In addition to lower-than-expected market acceptance of the PrecisePRP products, the low gross margins associated with the PRP product is one of the primary reasons we decided to renegotiate our VetStem partnership and evaluate the long-term viability of selling PRP under the current licensing arrangement with VetStem. We have since entered negotiations for a transition agreement with VetStem, which is currently underway. Meanwhile, we anticipate higher gross margin going forward with our sales force and distributors now focused on generating greater sales of Spryng with higher gross margins exceeding 90%.

Total operating expense as fiscal 2026 increased 8% to $9.8 million. The increase was primarily due to a loss on impairment for the PrecisePRP product line. Specifically, the increase in operating expense was primarily due to a 16% increase in sales and marketing expense to $3.1 million, with this related to commercialization of the PrecisePRP product line. This increase was offset by a 10% reduction of general and administrative costs and the 11% reduction in research and development expense. We also took a $1 million impairment expense for the PrecisePRP product, the product line due to the lower-than-expected market acceptance. Also due to the increase of sales and marketing expense in 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 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. That's negative [ 41% ].

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 our 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 PrecisePRP 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 VetStem. This was partially offset by a decrease of accounts payable accrued expenses of $649,000 compared to last year the same period, $271,000.

Now let's turn to our balance sheet. Our current assets totaled $1.8 million at March 31, 2026. In contrast, our current liabilities was 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 ended March 31, 2026. This significant improvement was due to the conversion of $1.6 million of 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 to trade vendors, a $495,000 reduction in accrued expenses and the extinguishment of $448,000 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.

John?

Thank you, Gary. Throughout fiscal 2026, Spryng 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 Spryng 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 Spryng 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 lateness 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 is paved the way for the commercial rollout of the Spryng 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 health care 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 Spryng 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 Spryng 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 Spryng into the care protocols of its top-tier thoroughbred tables, 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 Spryng, and we believe we'll open doors to other significant opportunities.

We have continued to expand the awareness of the benefits of Spryng 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 Spryng 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 Albo study as well as other completed and published studies. We currently have additional canine Equine studies for tolerance at an efficacy of Spryng in the initial stages of development. We also continue to advance our pipeline of new products. with this greatly expanded and strengthened with the acquisition of PBM last week. This includes new functional biomaterials as well as tissue and bone mimic in 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 assistant facilitating biological activity for the body to restore and/or remodel its natural tissue.

The PBM technology-enhanced CHM integrates with the host tissue and assist 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 nebulizer. We are also investigating potential topical treatments for [indiscernible] such as ocular ulcers as well as wound treatment where our functional biomaterial technology can help remodel and restart tissue to its original state. This could include assisting the healing process by delivering existing FDA-approved antibiotic antiviral and aesthetic 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, whom many of you know, to be one of the greater MLB players of all time. He is now the Founder and Chairman and CEO of the alternative investment group, A-Rod 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 Digital Landia's launch of its public access beta to B2C AgenticPet 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, created 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, genetics, 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 and proactively diagnosing inflections and diseases such as osteoarthritis and lameness and suggest treatment options.

AgenticPet's AI-powered diagnosis both an amazing 97% accuracy and as such represents a paradigm shift in the medical treatment of companion animals. The solution targets Gen Zs who represent 20% of U.S. pet households with ownership growing more than 43% annually. Digital Landia reported at the public B2C beta launch of AgenticPet 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 prevented pet health care and confirm 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 -- offered 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 introduce smartphone-based diagnostic capabilities that have the potential to significantly expand access to veterinary care.

The Agentic 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 U.S. international markets. Industry analysis say that the U.S. animal market alone will double to $11.3 billion by 2030. Such massive growth is rare for such an already large industry, and it therefore provides an exceptional strong tailwinds.

As we continue to grow and expand over the coming quarters, we will remain committed to advancing the best in pet health solutions and ensuring our products reach more binary professionals and pet owners with our success in the efforts driving greater value for our stakeholders.

Now I would like to turn the call over to our CEO, John Lai, to provide some additional insights into these recent developments and answer any questions from our listeners.

John?

Thank you, John. One of the first things I'd like to bring up is our new Tier 1 AI IR marketing program we have put it in place close to 90 days, and we have well over 30,000 people or e-mails that have agreed to get updates as we do some updates to the shareholders. So we are building a large base of interested people on what's happening with PetVivo, the company. And it's a really neat system where our customer acquisition costs or potential shareholder acquisition cost is extremely low.

John Dolan had a very good job of talking about the Digital Landia, PetVivo AI and the other components we have coming in. So we're looking 1 of the key catalysts we should be looking at as we move forward to year-end is our animal studies that we're doing with Piezo and the University of Connecticut. We anticipate these large animal studies to be completed right around calendar year-end for dogs and horses. That will give us some very powerful marketing data to go into the veterinary market as we position the IDE filings into the human market for our Spryng and the in the nanofiber technology.

I'd just like to basically open it up now to Q&A. Operator, could you give -- provide the instructions to our calling people for us to answer questions.

[Operator Instructions]

Well, if we don't have any questions, I'll just give a quick little summary. We anticipate development of additional products. So just keep on our website or get onto the IR program, where we'll update you as we provide timetables of additional products coming in for both the human side as well as the animal side. And we anticipate over the next 12 months, there will be a lot of news announcements as well as continued updates.

So if there's no more questions, I will turn it over to John Dolan to provide a wrap up and thank you, everyone, for joining us on the call.

Now before we conclude today's call, I would 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 and 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 words or phrases usually containing the word believe, estimate, project, intend, 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. Any forward-looking statements made during this 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.

Factors that would cause or contribute to such differences include, but are not limited to, various risks as detailed in the company's periodic report filings with the U.S. Securities and Exchange Commission. 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 section of the company's SEC filings, including, but not limited to, our annual report on the Form 10-K and quarterly reports on the Form 10-Q. Any forward-looking statements made during the conference call speaks as of today's date. The company expressly disclaims any obligations or undertakings to date or revise any forward-looking statements made during the conference call to reflect the changes in its expectations with regard thereto or any changes in its events, conditions or circumstances of which any forward-looking statements is based, except as required by law.

I would like to remind everyone that this call will be made available for replay starting later this evening or likely tomorrow. Please refer to today's earnings release for dial-in replay instructions available via the company's website at www.petvivo.com. Thank you for attending today's presentation. This concludes the conference call.

I think we're live right now. So let's jump in. Thank you, everyone, for joining today -- into today's webinar, inside the PetVivo story. What veterinarians are seeing, and how access is expanding. So my name is Andrew Eriksen. I'm a Managing Director on the Allele Capital team. We work with the PetVivo team here, and I'll be moderating today's call. So today, we're going to introduce the speakers. I'll walk through a little bit of background on the PetVivo story, talk about how their Spryng technology is being used in practice today and talk a little bit about the commercial landscape, and what they're seeing on their side.

So we will run through the presentation. If you have any questions, there will be a Q&A chat box on either platform that you're watching on. So submit your questions there, and we'll make sure we get to those at the end of the call.

So without further ado, let's jump in. I will start with some brief introductions from the team. So John, maybe you can kick things off for us and introduce yourself.

Thanks for having us on here. So my name is John Lai. I'm the CEO of PetVivo. I've been the CEO for about 14 years, and I'll pass it off to the next person.

Dr. Juli, if you don't mind, you can go next.

Sure. My name is Dr. Juli Goldstein. I've been a veterinarian for over 20 years in both small animal practice and academic settings. And with PetVivo, I serve as the technical services veterinarian where I get to work with veterinarians every day that are implementing our products and helping to drive those discussions and case selections.

Perfect. And finally, but certainly not least, Bryan?

Yes. Bryan Monninger. I'm a lifelong pet and animal lover and have over 25 years' experience within the animal industry. And then currently, the VP of Sales and Distributor Relations for PetVivo. So manage the entire sales team as well as our technical veterinarians.

Perfect. Perfect. Thank you all. So just jumping in here, I think the best place to start is a little bit of background, right? So for those of you who are maybe not familiar, PetVivo is a biomedical device company, currently focused on manufacturing, commercialization and licensing of innovative medical devices and therapeutics for companion animals. So they have a commercial product that is based on the Spryng technology, which the team will get into. But just to get things going here. Maybe, John, I'll throw it over to you for a quick background on who really is PetVivo? What's the brief history of the company? How did we get to where we are today? And how would you personally describe the company, and where you guys are focused?

So PetVivo has been focused on bringing innovative next-generation of products for each category that we feel. So we were initially funded by NIH and Department of Defense. Science was developed at the Mayo Clinic, a little over $7 million was put in. And so most of the work were done on the human side initially. So when I was brought in as CEO of the company, I said I want to take it into the animal side because of all the work that was already done on the human side.

So the uniqueness here is our particles, the Spryng particles were declared on the human side as human medical device. So that means when you get into the companion animal side of the FDA, you didn't have to do the studies to get approval to sell and market. So that's one of the major advantages we have. So PetVivo Holdings is unique in the sense that it's really 4 wholly owned subsidiaries. One is petvivo.ai. The focus there is to provide innovation into the veterinary space, create an atmosphere where the pet owner and the veterinary doctor works together to provide better health outcomes for their pets.

So we're really building the bond and trust. Also we're providing the pet owner an ability to do a lot of the work in identifying what may be wrong with their animal, whether the app will tell them, "Hey, you should consult with your vet, there could be a possibility here." And then from the veterinary side, we're allowing the vet clinic or the vet manager to help reduce the cost of customer acquisition because you're able to target ads specifically in your area and the general trend right now that's happening within the veterinary industry is like VCA and so on. They're giving free first visits to pet owners just to bring them in because the customer acquisition costs right now on average is about $145 per new customer. And the lifetime value of that customer is significantly larger. So we're providing an opportunity that we believe will bring that cost down significantly.

Secondarily, from a management standpoint, the veterinary doctor can onboard multiple pieces of data, condense it for them, so save their onboarding time by about 80%. That means they have more time to actually practice veterinary medicine and interact with the pet owner. So we're building that bond from PetVivo AI. The next part is PetVivo Animal Health. Currently, we have two products within this space. One is Spryng with OsteoCushion technology and the second product is PrecisePRP. And I'll leave that to Dr. Juli to explain, but these are quite innovative technologies as part of the trend in the veterinary medicine, this multimodal approach and people in the veterinary space will understand how these products feed off of each other to provide longer-term health for the animal.

The third piece, which we've been really moving forward with because of our partnership with PiezoBio, which is a spin-off in the University of Connecticut. They developed a very innovative advanced technology in nanofibers. And these nanofibers in combination with Spryng help create an electrical field that electrical field is created by pressure of the joint. So once it's injected in the joint, it enhances our matrix that our particle creates to help attract a lot of the cytokine cells, whatever proteins are needed to help the joint repair itself or improve joint function because that's one of the technical advantages of Spryng as it provides long-term functionality.

So that human aspect with the Connecticut partnership will allow us to look at getting into the human side of the market because we're seeing a lot of benefits occurring in small animal studies as we expand to larger animal studies with dogs and horses through the University of Connecticut and PiezoBio, we expect to get a lot of valuable data that can be used on the PetVivo animal side.

And then our fourth unit, which is Gel-Del Technologies has to deal with the manufacturing of these particles and other combination products. Now the uniqueness there is that we did certifications actually for human medical device manufacturing, ISO 5, 7 and 8, which is not required in the veterinary animal. So we try to bring the highest standards of manufacturing into the marketplace. So that's a brief summary of the four units of PetVivo Holdings, which in itself is like four individual businesses that are targeted to different segments of the market with different business models.

Great. Great. Thank you. Yes, yes, brief, but certainly detailed, right? I think there's a lot going on for PetVivo Holdings, which is exciting in nature, and there's a lot of exciting things coming down the pipeline, which we don't have enough time today to get into all those details, but we'll be constantly updating folks as those occur. But no, I appreciate that background, John. I think it's a good opportunity to springboard into Dr. Juli and some of the things she is seeing in Spryng in practice, right? So Dr. Juli, I will throw it over to you. You're now full-time with PetVivo, and you've had some experience with seeing other veterinarians using Spryng in their practice. So I would love to hear a little more -- John alluded to at the outset about your direct experience with the product, but love to get a little more perspective on the product from you and, kind of, what you're seeing in practice?

Absolutely. So one of the really unique things about my job that I mentioned before is I speak to veterinarians daily, discussing how they're using the product, discussing this disease. Osteoarthritis is a very complex, challenging disease for pets. Humans get it as well and other species, we all suffer from this disease. And I want to throw out a little statistic before I jump into what veterinarians are saying, is that we think about it in all species as an old pet, an old human, an old dog disease. And it's really not. In fact, we're seeing -- studies have shown that dogs -- 40% of dogs that are under 4 years old. That's still -- in my mind, that's still a puppy. And I think in our pet owners' minds it is as well. They're showing radiographic evidence of this disease already happening. And so that message is sticking in the minds of veterinarians because ultimately, the owners are coming when their dogs are older. They think it's normal to have mobility issues when they're senior pets. But we've been working really hard to educate our pet owners that this is not just an old dog or an old cat disease.

So that provides an opportunity to really improve the quality of life in pets. And what I'm hearing from veterinarians is that with our products, it's giving them more options. So when you're treating osteoarthritis, there's no magic bullet, unfortunately. There's no magic cure. And so the best outcomes that we see with these patients are implementing what we call a multimodal approach. So using things like rehabilitation, laser therapies, nonsteroidal anti-inflammatories. And Spryng and PrecisePRP have provided another option in that toolbox to work concurrently with all the other things that were -- veterinarians have in their toolbox, if you will, to help provide ultimately the comfort and the quality of life with our pets. And so it's been very exciting because we get a lot of positive feedback from clinicians, especially with pet owners.

Pet owners are very educated these days, and there's a lot of resources out there and they want more holistic options. And when you're talking about medicine, that's not really available. There's not a ton of holistic options, and Spryng especially provides that for pet owners and clinicians that want to implement that for their patients. So it's been really exciting and to hear all the positive feedback.

Yes. No, that's a super helpful background. I think that kind of helps set the stage in terms of -- there's obviously a market here -- need -- I think the landscape is much bigger than people realize, like you said, with how early onset we're seeing in these animals. And so there really is a dire need here. There's not really a great solution. And so I think that's a void Spryng fills. Maybe it would be helpful for the audience as well as Dr. Juli, if you don't mind, just can you explain in practical terms how is Spryng designed to work in the joint, and how are vets typically thinking about incorporating it into their plans, like when does this come into development for them? And how does it work just so people can get a better understanding of the use case here.

Sure. So Spryng has a dual mechanism of action. So it does two different things within the joint. And as I mentioned before, this is a naturally derived product. So it's composed of collagen and elastin, things most people have heard of, and it serves to mimic the natural tissues or extracellular matrix that the joint capsule is partially composed of. So the veterinarians inject it into the joint, and then the first thing it does is it helps with the lubrication properties of the joint or the synovial fluid. So that's that fluid in that capsule that's so important for a smoothness of movement. So when you think about it, most people are familiar with arthritis and you think about that kind of bone-on-bone effect. And that's because there's no cartilage and the fluid is very unhealthy in there. And actually, that joint fluid is the first thing -- one of the first things when arthritis happens that becomes unhealthy or degraded. So Spryng goes in there and it helps improve that, which it helps improve movement.

Then the second thing that Spryng does after about two weeks, it then incorporates within that joint capsule itself. And that location is where we get all that nasty cell signaling. So John kind of mentioned this before with having -- with the Piezo product, getting those positive cytokines. So within the joint when arthritis happens, it's this domino effect, right? And so we have unhealthy tissue that then sends out signals to say, put more inflammation in here and it continues on. When you have healthy tissue and healthy joint capsule, that doesn't happen.

So Spryng serves as a scaffold, if you will, so that the joint can then produce healthier joint tissue with the hope of decreasing those signals that are causing this inflammation to perpetuate. So that's the -- that's about the basic way that it works. It's obviously very complex science, but it's basically allowing improved mobility for the patient because we're having a healthier joint environment overall. So -- and then how veterinarians are incorporating it? So it's unique because there's a lot of ways that vets are using this product because it's provided that option. One example, I mentioned the multimodal effect. But one example I'd like to start off with.

So times are tough. Finances are hard for the average pet owner and surgery is expensive, no matter who you're talking about. And a lot of times, when you have something like a torn cruciate or torn ACL, it's very similar to that in humans. That's an expensive surgery for pet owners. And a lot of times, that's not an option, or it's not an option in the immediate term. And so what I'm seeing a lot of clinicians do is inject those joints with Spryng because; a, either surgery is not an option, which is standard of care for a cruciate tear, or the owners need that time to get that -- their finances together to pay for that surgery. And so this is a wonderful option because otherwise, what they're doing is just is masking the problem. They're throwing various pain medications at their patients because they need it for comfort. But that can be problematic too in certain pets that their bodies can't handle that.

So that's a really exciting option that's been offered to veterinarians. They're using it to support not only their senior dogs with OA, but their younger dogs as we start to recognize this disease in our younger patients. So that's a very common use of Spryng. I have some clinicians that they're doing their yearly Spryng injection. Just to maintain that health of that joint as the patient ages when it already has the early signs of arthritis. And so those are probably two really exciting examples. There's many more we could have a whole multiple hour discussion about how to use this. But again, it's that nice support tool that they can have for these unique patients.

Yes. No, that's amazing. That's incredibly helpful. And I can certainly speak from personal experience, too, where we had a family dog where there was a $10,000 check that had to come, and sometimes you don't always have the convenience, like you said of masking the problem, right? That is something that folks do, but sometimes you don't have that luxury to masking, it is something you need to do sooner rather than later. And so having a solution that you can practically get ahead of some of these problems, just is a tremendous opportunity, I think, for a lot of folks and obviously, most supportive to the pet. So one thing I would just like to add on quickly, Juli, was -- with your experience because, obviously, it's immediate, and it's really interesting is when you talk to vets about Spryng, what do you think they value the most about? Is it the mechanism? Is it the duration? Is it how these patients are doing post the therapy, like what is, like, the driving factor as to why vets are really considering using and are using Spryng in today's environment?

Sure. Well, all the things that you mentioned, but I think ultimately, it provides a way to have quality of life for their patients. And that's as veterinarians, we take an oath to do no harm, take away pain, help the animals that are placed in front of us, and we need those options to do that. And Spryng has been a wonderful and positive way that they can offer to their pet owners, their pet parents to improve their pet's quality of life, and that's ultimately why we're all here.

Yes. Yes. Fantastic. Thank you for that. John, I'd like to pivot over to the commercial landscape and get a little bit of Bryan's intake on some of this stuff, too. But as you think about, given your position kind of leading the company here and some of the things you said at the outset of the call, hearing some of the feedback you hear from clinics that Juli just explained to us, how do you think that lines up with how you think about Spryng's place in the broader joint health landscape, right? How is that? What you're hearing from these veterinarians and these clinics line up with what you're thinking in terms of the development of this technology and with PetVivo story, really.

So understanding the macro environment, veterinary doctors are trying to use less pharmaceuticals, just like human doctors. So Spryng offers that opportunity because in the human trials, we showed it was totally neutral to the body. So if you think of NSAIDs and so on, we have found after 2, 3 weeks of injection of Spryng, you're going to see a reduction in different pharmaceutical meds for masking the pain and so on. And as Dr. Juli suggested, the evidence showed prolonged use of NSAIDs and so on will cause gastric tract issues, kidney issues, and liver issues. So the more we can help minimize side effects of pharmaceuticals, it's the benefit. And there is a big push in human doctors as well as veterinary doctors. So we're starting to really hit the proper trends that's happening in the marketplace. And ours is a much longer-term solution than other methods out there. But the best results come when you hit some of the short-term issues that's creating the problem.

So if there's a really inflamed joint, you want to bring that down because you're blocking IL-6 or interleukin-6 which is the key marker for inflammation. So once you block that, you have a more stable drug. Then when you inject the Spryng, Spryng can do its job over time because as that scaffolding effect, it draws in the proper cytokines and proteins to help that joint repair itself. So the key is we want to make sure that the veterinary doctors, we're catching them on the right trend, and we believe we are with our introduction of products because it really helps minimize the time that the doctor needs to use the therapy. And as Dr. Juli said, you do an annual injection as a prophylactic product. And we're educating the industry. It's all part of our continued medical education.

We're seeing the insurance companies start understanding this. Insurance companies are actually putting together committees to identify advanced technologies that could reduce their cost of future situations like operations that are $7,000 to $10,000. If you can prolong that joint functionability and maintain quality of life, that's a major savings to them, especially when more and more people are getting smart. They're buying insurance earlier, so they're locking in the rate, and they're going to be taken care of going forward. So it's much easier to manage when you don't have surprises in health issues that may arrive -- that may occur.

Yes, absolutely. So I appreciate that context and that makes a lot of sense. So now what I'd like to do is shift a little bit and connect the clinical side of the story to the commercial and the access side of the story, which I'd like to throw over to Bryan here. So Bryan, maybe from your perspective, it would be good to start kind of the high-level access strategy, right? How are you thinking about working to make Spryng and PrecisePRP for that matter, more accessible to veterinarians, both in the U.S. and internationally and start at the top of the funnel here? And how are you thinking about it?

Yes. So it's, as you said, no matter how good the product is, if the industry or the profession doesn't have access to it, it's a problem, right? So PetVivo, we've made big strides over the last couple of years. We're basically now partnered strategically with every single major U.S. veterinary distributor as well as we've got distributor partners now already set up in the U.K., the EU, Mexico and we'll be coming soon to Canada because we have received the Health Canada approval as a veterinary medical device as well.

Very nice, very nice. And can you touch a little bit on that, I think it would be helpful to understand too is, can you touch a little bit on that distribution and partner strategy, and how that's evolved over time? Obviously, you're taking a global approach, not just focusing on the United States and kind of the market there, even though that's probably the highest near-term market. But how do you think about that distribution and partner strategy for the near-term and long-term?

Yes. So the partner strategy makes sense from the point of view of we don't want to make it difficult for the profession or the clinics, right? So really, we want to be wherever their preferred partner is, right? So that's why it's really helped broadening our number of distributor partners. Because now really no matter what a doctor or a clinic prefers as far as how they get supplied, Spryng and PrecisePRP are available through those channels. And obviously, we are -- we started and are most focused in the U.S. and North America. But as interest has grown around the globe, we have sought to be able to provide it in those areas as well. And so we're continuing to follow up on that because the veterinary industry is a very large thing, but it's also very small in a lot of ways. And so you do get a lot of exposure globally, just even by attending major global conferences that are held here in the U.S. every year, which we've been doing.

Awesome, awesome. Yes, very multipronged approach and leveraging the partner strategy to distribute as wide as possible, I think, always makes a lot of sense for this type of product and market. So very helpful. Now I want to be cognizant of time. I see some questions coming in. So -- and some questions that I can answer, some of the things that we probably didn't even get to yet. So I think it's a good time to pivot to that. So couple of questions here. Like I said at the outset of the call. If you have any questions, feel free to submit them now as well, and we'll try to get to them. And for any questions we don't get to, we'll certainly follow up with e-mail. We have everyone's information who submitted, so we will do that. But let's jump into this Q&A here. So looking at the list here. I think this first one would be a good one for John. It says for investors who are following the story after today, what are the top 1 or 2 milestones you suggest they watch over the next 6 to 12 months to measure your execution?

So I think one of the first ones to look for is probably really enhancing and expanding our partnership with Piezo. We see that there's potential for multiple products using that technology for both the animal health side as well as the human side. So that's one key milestone. A second one would probably be more studies getting published and coming out. I'm personally very excited about the studies we're doing with Piezo in the dog and the equine side because those directly impact our sales and marketing team because hopefully, we will have a lot of good data that we can submit as we move into the human market. As we file that for an IDE, hopefully by the first quarter, calendar quarter of next year. So as you see progressions of that, I think those are very pivotal type events that signal, we're making very good advancements and that we're providing the veterinary side as well as the human side, good scientific data to support that we're creating innovative technologies for the improvement of life for the animals as well as eventually rolling into the human sector.

Fantastic. No, that's great. A few different things for people to keep an eye out for. That's exciting. This next one, definitely probably for Bryan on the sales and distribution side. It says, from a sales and distribution perspective, what are you most focused on as you work to expand access to Spryng and the rest of the portfolio?

Yes. The team is actively focused on really -- we're very lucky because with our products, we're able to provide. We've got a really strong and impactful basically animal welfare story. We've also got a very strong science and medical story. And then also have a great kind of revenue flow story as well for the clinic. So it's really taking that high level of interest we're getting from those perspectives, and turning it into action, and turning it into initial usage and then broader client/patient usage within the clinics.

Great. Thank you for that. And I think we've got time for one more, which I think works well because I want to send this one towards Dr. Juli. So Dr. Juli, this one says, based on the conversations you're having with veterinarians using Spryng, what gives you the most confidence that it has a place in their joint management toolkit?

Great. That's a great question. And I think I'm speaking with all types of veterinarians, so general practitioners, surgeons, rehabilitation specialists, internists, and I'm getting across the board a lot of positive feedback that we're seeing improvement in pets mobility, and ultimately, quality of life. And hearing those diverse conversations from veterinarians that have very similar, but different approaches in their practice, all saying that same positive, it's helping these pets really does give me the confidence that this is the perfect product to put in your multimodal osteoarthritis toolbox.

Fantastic. Fantastic. And yes, I think that's about all the time we have today. I see there's 1 or 2 other questions in here. So like I said, we'll get back to you on those directly for those who submitted those. Unfortunately, this is up against time for right now.

So what I'd like to do is just thank you, everyone, again for -- today for joining today's call. I think it was a great opportunity to not only hear the PetVivo story, but what this broader platform is, the several opportunities to have within that PetVivo story. We heard from Dr. Juli directly on what veterinarians are seeing and the feedback on Spryng, and why there's a lot of optimism for the product moving forward. And then we got to understand the sales and distribution, right, and how it's going to expand access to these vets, but also the patients, the animals at the end of the day who need this technology to improve their situation.

So I think this was very helpful. John, I guess I'll throw it over to you really quickly for a 30-, 45-second closing remarks you have for the audience.

Well, thanks for having us on. One of the things is, as we move forward, I do encourage people to go to our website and look at the announcements we made because we are making very good advancements in educating the public as well as veterinary doctors because Dr. Juli and Dr. Kirsty, they've been getting CE credits, continued education credit courses, putting up there for veterinary doctors, which they all have to take on an annual basis. So that's helping us really educate the vet side. And our goal on my side is and Bryan's is to also to educate the consumers, the pet owners because the pet owners working with the veterinary doctors is what's going to really drive adoption. So we're excited for the next year because we think we're going to see a lot of advancements, tangible advancements within PetVivo.

Fantastic, fantastic. Well, thank you all for joining today. Thank you to the audience for joining the call. I hope it was helpful. Just as a brief kind of compliance reminder, this session was for informational purposes only and does not constitute an offer to buy or sell securities, but we thank you, everyone, for joining the call today, and look forward to keeping you updated on PetVivo.

Good afternoon, everyone. Thank you for joining us today to discuss our results for our Third Quarter and First 9 months of Fiscal 2026 ended December 31, 2025. Hosting our call today is our Chief Executive Officer, John Lai; and our Chief Financial Officer, Garry 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 our Investor Relations section at our website at petvivo.com.

Now turning to our results. Our third fiscal quarter represented another period of rapid transformation and platform advancement as we continue to intensify our focus and apply our limited resources on the greatest opportunities ahead of us. Many of these new opportunities were introduced over the course of the past year, therefore, requiring extraordinary attention and focus to ensure their successful launch.

Our primary objective has always been to create for our stakeholders the greatest opportunities for rapid growth and market expansion, including strong reoccurring revenues and to support the highest potential value for our company for the benefit of our stakeholders. The clinical validation and broad market adoption of our flagship product, Spryng, with OsteoCushion technology has brought us far along.

And now over the course of the last year, it has set the stage for the launch of technology and products that promise to exceed even Spryng's greatest potential. Toward this goal, we have made tremendous progress with new strategic alliances and collaborations with several key partners. This includes Digital Landia, a leading pioneer in Agentic AI solutions.

As you know, we signed an exclusive 10-year white label licensing agreement with Digital Landia for its breakthrough next-generation AgenticPet AI technology. AgenticPet's highly valuable and innovative technology features 10 specialized diagnostic AI agents that are protected by proprietary IP and 5 patent-pending innovations. Among this technology's many capabilities, the solution addresses the critical challenges facing today's veterinary industry.

This includes skyrocketing client acquisition costs and the difficulty in capturing the fastest-growing demographic of Gen Z pet parents. Following the signing with Digital Landia, we are moving quickly to publicly launch our new PetVivo AI veterinary practice platform that is exclusively powered by this AgenticPet AI technology. PetVivo AI is a new AI-powered Software-as-a-Service platform for veterinarians, which we believe is the first of its kind on the market, providing us what we believe to be a strong first-mover advantage.

We engaged an initial select group of veterinarians practices under a beta stage program for PetVivo AI who have been providing us tremendous positive feedback. PetVivo AI has demonstrated in this beta testing to deliver a remarkable 50% to 90% reduction in veterinary customer acquisition costs, lowering it from about $80 to $400 typically spent per new customer targets down to less than $43 per target customer.

PetVivo AI then employs automated AI-powered engagement that intelligently converts the leads it generates into paying veterinary customers. This AI-powered solution greatly complements our existing medical device offerings, which we market to our existing network of thousands of veterinary clinics across North America and Europe.

Perhaps most importantly, PetVivo AI has created a new reoccurring revenue stream, which has high 80% to 90% gross margins, combined with low CapEx scalability. Interested veterinarians are able to request a free demo of this amazing solution on our newly launched PetVivo AI website where they can experience for themselves the power of this new platform that can transform their practice.

In support of the launch of PetVivo AI during the quarter, Digital Landia published a comprehensive technical white paper documenting the AgenticPet AI framework that powers this technology. The paper validates the technical foundation underlying our new B2B platform. It provides veterinary professionals, investors and industry stakeholders with detailed visibility into the multi-agent artificial intelligence architecture that enables transformative clinical and economic benefits for their practice.

Given the strength of this report, we expect our PetVivo AI solution to rival mainstream AI applications in terms of adoption rates. We also expect it to create tremendous visibility for our brands, particularly Spryng with OsteoCushion technology and PrecisePRP and eventually, the other new solutions in our product pipeline. The white paper is available to download from Digital Landia's website at digitallandia.com.

For our part, during the quarter, we launched an online video explainer that walks you through the 2-part ecosystem of PetVivo AI. It shows how PetVivo AI intelligently connects pet parents with veterinary practices looking for new clients. The professionally produced video explains all 10 specialized AI agents from behavioral scientists to radiologists and demonstrates the complete user journey for both pet parents and vets.

If you haven't yet watched it, we very much encourage you to do so as then you will understand why we are so excited about this new offering. Regarding other key new partners during the quarter, we joined forces with Austin, Texas-based Veterinary Growth Partners. As a management services organization, VGP supports veterinary practices with management and marketing tools, consulting and vendor relationships designed to improve their efficiency and profitability.

VGP has committed to actively promote our Spryng with OsteoCushion technology and PrecisePRP products to its expansive member network of more than 7,300 veterinary clinic members across the United States. Product training of these veterinarians in their network is currently underway, and we're planning to introduce our new PetVivo AI practice management platform to VGP's clinic membership following this training period for Spryng and PrecisePRP.

Also during the quarter, we substantially completed Stage B of our strategic partnership with PiezoBioMembrane, a spin-off from the University of Connecticut, who offers advanced biocompatible piezoelectric materials for implantable and regenerative applications.

This important partnership with PBM is furthering the R&D of revolutionary functional biomaterials that can promote regeneration, restoration and/or remodeling of damaged or injured tissue and bone in animals as well as in humans. Stage A of the 3-stage R&D project successfully determined that materials of our respective products can be combined into a single offering and demonstrated its piezoelectric activity, which can potentially provide therapeutic benefits to animals and humans.

Stage B has now determined that the combined product can be mass produced at scale and with preliminary indication for safety and administration in animals. Stage C, which is expected to begin in the second quarter of 2026, is anticipated to demonstrate definitive safety and efficacy of this functional biomaterial in animals.

Upon successful completion of Stage C, we are also planning to initiate the process for FDA clearance for human applications. We anticipate that these products, these new functional biomaterials may be available for commercialization by the end of this year, 2026 or the beginning of next year, 2027.

We have also continued to advance commercial launch of PrecisePRP, a proprietary and revolutionary allogenic platelet-rich plasma, PRP, regenerative product for horses and dogs that highly complements our Spryng product offering. Sold under an exclusive licensing and supply agreement with our strategic partner, VetStem, this product has been receiving favorable reports from veterinarians, especially regarding its ease of use.

Part of our commercialization efforts have been to exhibit and research backed benefits of PrecisePRP along with Spryng at various major industry conferences. This includes the American Association of Equine Practitioners Conference held in December that was attended by leading veterinarian, sports medicine and rehabilitation experts.

Such events help drive the greater adoption of Spryng and PrecisePRP by expanding awareness among key decision-makers of its effectiveness in the management of osteoarthritis in animals. We also continued to advance our strategic collaboration with Commonwealth Markets, the syndicated ownership group behind the 2023 Kentucky Derby winner.

Commonwealth has now integrated Spryng and PrecisePRP into the care protocols of its top-tier thoroughbred stables. These 2 products are now being used as a management solution to promote joint health, extend performance longevity and support recovery in high-impact training and racing environments.

This adoption by Commonwealth represents a tremendous validation of the effectiveness of Spryng and PrecisePRP, which we believe will open the door to greater opportunities. During the quarter, we also further developed our entrance of the European marketplace after our engagement of Nupsala Group in the previous quarter.

For those unfamiliar with Nupsala, Nupsala is a leading U.K.-based veterinary group that operates as both a veterinary wholesaler and referral provider. Their specialization is musculoskeletal health, orthobiologics, a regenerative medicine for companion animals and horses. Nupsala has begun to inventory, market and offer Spryng throughout the U.K. An initial order has already been shipped and the official education and training of Nupsala's sales force is scheduled to begin before the end of this current calendar quarter.

This new international engagement follows our previously announced first entrance into the international market with the signing of Eq Especialidades to distribute products in the Mexico marketplace. We see Mexico as a very attractive market for animal health solutions, especially since the country's veterinary healthcare market is projected to grow at a compounded annual growth rate or CAGR of 11% and reach more than $2.4 billion within the next several years.

Personal horse ownership is deeply intertwined with Mexican culture and tradition, which also makes Mexican marketplace an exceptionally ideal one. The European animal health market is also a large opportunity, estimated at more than $16.6 billion today. This market is projected to more than double to $34.8 billion by 2033, growing at a CAGR of 8.6%, which is remarkable for an already large market.

On the R&D front, we completed the accumulation of data from the earlier announced canine elbow pilot study conducted by Orthobiologic Innovations, a leader in R&D for regenerative and sports medicine. The study was led by 2 prominent veterinarians, Sherman and Debra Canapp.

They are currently working in cooperation with our technical service veterinarians to incorporate the results into a white paper in preparation for submission to industry journals for potential publication. In terms of enhancing our corporate governance during the quarter, we were expected -- we were excited to announce the appointment of Josh Ruben to our Board of Directors.

He has brought to us a wealth of experience in healthcare and life sciences finance, capital markets and corporate strategy, along with a proven track record in the execution of multimillion-dollar M&A and capital transactions. Josh currently serves as a Managing Director of Life Sciences at Trinity Capital, which is focused on venture lending to healthcare companies.

He previously served in financial director roles with RBC Capital Markets and Wells Fargo Securities. We expect Josh's deep understanding of the life sciences industry and strategic insights into growth stage companies like PetVivo to prove invaluable as we continue to expand our market presence.

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 CFO, Garry Lowenthal, who will take us through the financial details for the quarter. Garry?

Thank you, John. Good afternoon, everyone. Thank you for joining us today to discuss our results for the first 9 months of fiscal year 2026. For this reporting period, we'd like to focus on the results for the 9-month period as a better reflection of our progress, particularly given the change in sales mix during the period resulting from new product introductions.

Revenues for the 9 months ended December 31, 2025, totaled $887,000, decreasing only 2% from the same year ago period. Revenues for period consist of sales of our Spryng products totaling $400,800 and PrecisePRP products totaling $486,000. This compared to the same year ago period where sales consist entirely of Spryng.

The slight decrease in our revenues for the period was primarily due to a decrease in Spryng product sales, offset by increase in sales of PrecisePRP. In the year ago period, we had a special promotion with our distributors and vet clinics at the Annual American Association of Practitioners Conference held in December.

In the fiscal third quarter that was not repeated in the fiscal third quarter of 2026 that just ended in December. This contributed to the lower sales of Spryng in this most recent period. Going forward, though, we plan to reimplement special promotions to incentivize our distributors and veterinary clinics whereby improving sales of our Spryng product.

We believe the decrease in Spryng sales was also due to customers opting to use PrecisePRP alone in that conjunction with Spryng. However, we believe the best outcomes would be created by using these 2 products together. We believe renewed efforts to better educate our customers on the benefits of using both products together will help drive greater sales of Spryng in the future quarters. Gross profit in the first 9 months totaled $551,500 or 62.2% of revenues, which was a decrease of $812,000 or 89% of revenues in the same period a year ago due to the lower gross margins of the PrecisePRP product line.

We were able to maintain our high gross margin despite increased purchases of lower-margin PrecisePRP finished goods associated with the exclusive license agreement with VetStem, Incorporated and the consequent greater proportion of this lower-margin product in our sales mix. We are exploring ways to improve our gross margin with the PrecisePRP product as well as improve our product mix to include a higher Spryng gross margin.

Total operating expenses decreased 2% to $6.7 million compared to the same year-ago period. The improvement was due to reduced general and administrative costs and research and development costs, with this reflecting the strategic cost reduction and restructuring program we implemented last year.

Likewise, operating loss increased 2% to $6.1 million from $6 million in the same year ago same period. The increase was primarily due to the increase in sales and marketing expenses related to the rollout of our new PrecisePRP product line, which has been well received by veterinarians in our network.

Net loss for the first 9 months was $7.5 million or $0.27 per share as compared to a net loss of $6 million or $0.30 a share for the same year ago period. The increase in net loss was primarily due to unrealized loss on change in derivative liabilities, loss on disposal of certain assets, amortization of debt discount and interest expense on our convertible notes. Net cash used in operating activities during the 9 months totaled $5.3 million.

This cash used in operating activities were primarily attributed to our decrease of accounts payables and accrued expenses of $840,000 and the increase in PrecisePRP production and inventory purchases as we ramped up the market demand for this new product line. Now let's turn to the balance sheet.

Our current assets totaled $1.4 million at the end of the period ended December 31, '25. In comparison, our current liabilities were significantly reduced to only $980,000 from the same period last year of $4.2 million.

And as of December 31, our working capital as of December 31 totaled $395,000. Subsequent to the end of the period, since January 1 of this year, we raised additional capital from exercise of warrants and the sale of equity securities, bringing in an additional $477,500 of additional proceeds.

Also notably, our total liabilities decreased to $1 million at December 31, down from $5.1 million on just March 31 in this 9-month period. The substantial 81% decrease in total liabilities in just 9 months was primarily due to the conversion of all convertible notes into common stock extinguishment of our derivative liabilities related to these convertible notes as well as a major reduction in accounts payables due to the settlement of vendors and trade vendors, the reduction of accrued expenses and the termination of a 10-year lease obligation.

In fact, our accounts payable decreased 53% from $821,000 just March of this past year, at the end of our fiscal year, last fiscal year to less than $386,000 by the end of December. This highlights our strongest balance sheet in many years.

Now this completes our financial review for the period. John?

Thank you, Garry. As I mentioned earlier, the combination of Spryng with PrecisePRP has been receiving very favorable reports from veterinarians, especially regarding their ease of use and effectiveness in the management of osteoarthritis in horses and companion animals. Our successful results led to Health Canada recently acknowledging Spryng with OsteoCushion technology as a veterinary medical device for use in Canada.

Canada has recognized how this veterinarian administered intra-articular injection device can support joint health and aid in the management of lameness and other joint-related afflictions in animals. This action represents a major milestone in our global commercialization strategy as the first such recognition by an international regulatory body.

As such, it has opened up a large new international market opportunity. The Canadian animal healthcare market is reportedly growing at 6.8% CAGR to exceed $4.4 billion by 2031. The official acknowledgment by Health Canada paves the way for commercial launch in the country. Preparations are underway, and we're currently planning for the official launch at the beginning of the third calendar quarter of 2026.

Meanwhile, we will continue to expand the awareness of the benefits of both of these innovative products among key decision leaders, including presenting them at a number of major conferences. As previously mentioned, we exhibited at the American Association of Equine Practitioners Conference in December.

Then just last week, we exhibited at the Florida Veterinary Medical Association, Ocala Equine Conference held at the World Equestrian Center in Ocala, Florida. And currently, we are exhibiting at the Western Veterinary Conference in Las Vegas, Nevada. At these events, we demonstrated the research-backed benefits of Spryng and PrecisePRP to veterinarians, including leading surgeons, sports medicine and rehabilitation experts in the veterinary industry.

We are planning to exhibit at 2 more major conferences this spring, which are typically significant drivers of product adoption and new sales. The conferences also present the opportunity to share recent studies like our canine elbow study as well as other completed and well-published studies that we have done. We currently have additional canine and equine studies for tolerance and efficacy of Spryng and PrecisePRP in the initial stages of development.

We also continue to advance our pipeline of new products. This includes new functional biomaterial 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.

I want to reemphasize another exciting event that occurred in the current quarter, that being Digital Landia's launch of their public access beta to its B2C agentic pet solutions for pet owners. The launch includes access to all of its 10 specialized AI agents, veterinarian, behavioral scientists, nutritionists, geneticists, vaccination specialists, trainer, blood analysis, radiologists, urinalysis and fecal analysis.

The launch targets Gen Z pet owners who represent 20% of U.S. pet households and where pet ownership is growing at more than 43% annually. The B2B AgenticPet has the capability to intake animal medical data such as physician medical records, medical imaging and lab results and then assist veterinarians in diagnosing afflictions and diseases and then suggest treatment options.

Given how AgenticPet accomplishes this with an amazing 97% accuracy, this technology represents a paradigm shift in how we address the physical health of companion animals. Digital Landia recently reported that the launch of the B2C AgenticPet crushed expectations with the onboarding of 1,000 active beta users in less than 72 hours.

They believe this rapid onboarding validates the massive pent-up demand for AI-driven preventive pet healthcare. The fast adoption confirms the market thesis that pet owners are desperately seeking proactive solutions that catch health issues before symptoms emerge rather than relying upon outdated reactive care models.

The success of the beta program also strengthens the value proposition of the B2B PetVivo AI solution for thousands of veterinarian clinics in the PetVivo nationwide network. Altogether, our technologies have created an exciting future for PetVivo that is transformative to not only the 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 2026 and beyond. In fact, we have never been in a better position to accelerate our growth and expand across high-growth U.S. and international markets. The U.S. animal health market alone is expected to double to $11.3 billion by 2030.

Such massive growth is rare for such an already large industry and provides us strong tailwinds. To better tap the market opportunity, we are in advanced discussions with an outside sales and marketing firm that specializes in our industry and brings our experienced sales team and established distribution network. They would complement our own in-house sales team.

We hope to provide additional details on this soon. As we continue to grow and expand over the coming quarters, we will remain committed to advancing the best in pet health solutions and ensure our products reach more veterinary professionals and pet owners with our success in these efforts driving greater value for our stakeholders.

Now, I would like to turn the call over to our CEO, John Lai, to provide some insights into some of the recent developments and answer any questions from our listeners. John?

Thank you, John. I would like to now open it up to our Q&A session formally. And operator, could you please provide the necessary instructions for our participants to be able to ask questions.

[Operator Instructions]

So I do see a question on there that says updates on getting on the NASDAQ listings. So the plan was not for NASDAQ, but more New York Amex, and we're working towards that. And a function of that is stock price and the life science microcap market is kind of going through a more correctional phase, but we anticipate as future events occur that we will get the necessary pricing that we would like to be able to uplist on to the New York Amex.

We have a raise hands for the number ending with 619. [Operator Instructions] Number ending with 619.

John, can you talk a little bit about your -- the previous guidance you gave on the last conference call and how you see that guidance in light of this quarter's results?

I'm going to let Garry answer that question because I can't recall what guidance we gave. I don't think we gave a guidance. Garry?

I believe it was around -- yes, I believe it was $2 million to $2.5 million for fiscal year.

I don't recall the guidance you're referring to. Is that in a previous call or a press release?

Last quarter's conference call?

Okay. Well, we just explained in our half hour conversation of why the revenues were down for the last 90 days. And we have a brand-new product. And like we had said that some of the veterinarians were ordering either Spryng or the PrecisePRP. And now our job is to show through studies that we've already done that having both products work together has better results.

We've also got involved in some acquisitions through the Digital Landia as well, and that revenue won't actually kick into the first quarter of our next fiscal year being April 1. And then we have some whole new product pipeline that's actually going to monetize into the middle of the year.

So are you pushing out the uptick in sales? Should we expect the previous guidance that was given to be reflected on the next conference call? How should we think about that?

I wouldn't look at something that happened 90 days ago. What we did is we -- in the past, we've had big promotions that we had our salespeople have in December of every year. This past December, we didn't do that. We changed the model. It turned out it didn't really work. We have -- we rely on our revenue with the largest distributor in the entire industry.

And in the past, we loaded them up in December. So that's why our December and our third quarter numbers were unusually high. And that's what we decided to spread it out more evenly into the fourth quarter and then the first quarter coming up. And the other thing we're doing is we're actually outsourcing to a third-party organization that does -- outsource inside sales, and they specialize and work with all distributors, not just a handful. And so we're enhancing our entire sales organization as well.

One more question. Can you talk a little bit about the CapEx that's going to be required to roll out the education of the veterinarian system in terms of its -- of the Digital Landia platform?

I'm going to let John Lai answer that.

And who's going to be responsible for that rollout?

So there are multiple aspects to that. So one of the things that has occurred is the accreditation organization race. We have 4 different webinars now that have continued education credits to give into the veterinary doctors, and we started onboarding the VGP Group, which is the Veterinary Growth Practices, which has over 7,300 clinics.

So that just started to occur on the Digital Landia side, from the standpoint of PetVivo.ai. The onboarding will be part of our current clinics to put them into the system, so they're able to use it to see how efficient it is for them because the open architecture platform allows them to load the app and the app will go on any existing system that the vet is using to gather the data for the vet.

So the onboarding time is greatly reduced. So the vet doesn't have to go into this application, go into that application to pull x-rays, go into that one to pull urology or urine analysis. This does it all for the vet. So they're able to do actual vet work in looking at the diagnosis. Also, when you're allowing -- so that's why it takes time to allow them to build out the B2C side.

So each vet that comes in, they say, I want to look for potential new customers within a 5-mile radius that may have osteoarthritis issues with their dog or cat, it would automatically provide them with a very good detailed list of potential customers, and then they're able to reach out to those customers and offer them specials on vaccine or Spryng product that may fit their current situation.

So a lot of it is going to be influencer-driven as the model indicates that influencers will get a residual commission on the B2C side as they bring people into the B2C. So it's a dual ecosystem, one feeds on the other. So that's being built up right now. They're probably at over 30-some thousand that have signed up to get the system.

And I don't have the count on their side exactly how many are using the system, but they've been limited to 100 users a day by giving access codes where they can get in and get the full functioning system for the B2C. But we're not far away from launching our B2B.

And PetVivo is going to recognize revenues from the implementation from the vets implementing.

Yes. Yes, correct. Yes, because we're able to show the vets, they're saving significant costs. So it's a true SaaS model that has the economics, financials and convenience for the vet that we believe we're changing the ecosystem for them and the clinic ownership's revenue source or potential earnings source is greatly enhanced using the PetVivo.ai system.

So does that -- just so I understand, that needs to sign up download the PetVivo Agentic AI system, reap the benefits of that sign-up through new customers, graded information from those customers, correct?

Correct. Correct. That and chances are because we have these partnerships and their Spryng users, we'll probably do some early promotional to get them on board. And so once they -- we feel once they try the system, the conversion rate into a paying customer is going to be pretty high.

I guess my question is who's going to support that ecosystem?

That's all part of Digital Landia's contract. They provide continued updates. They're providing the functional system. And so they would be doing that. Our CapEx is very minimal from that standpoint. So we would be -- our expenditure in that area would be more soft dollars of promoting to veterinary clinic groups that may have a big influence on a large group of clinics.

Do you have expectations for revenues and P&L a year or 2 year about?

No, no, not on the pet side because we have a general idea, but we're not giving any guidance yet.

And by the way, that revenue it's a recurring revenue model. So it's monthly recurring revenue when it kicks in. So that's -- those that convert to the fee paying. You go from freemium to what's called premium model. And again, the important point that John Lai talked about was it's very little CapEx cost for us. That's Digital Landia. That's their responsibility.

Well, but it also will help reduce our cost to reach out to customers being the veterinary doctors of Spryng and PrecisePRP and other products that we'll be introducing into the network as well as using the B2C component where we will be able to push ads towards people that have osteoarthritis issues or lameness issues or potential rehab issues.

Okay. So you view Digital Landia or PetVivo's AI as a direct-to-consumer marketing.

No, that's one. It's more veterinary doctors focused, but because it's a dual ecosystem, we're able to do both. So we're able to -- as the vet goes, okay, I want to see who in my 10-mile radius may have severe case of osteoarthritis. They can search that network within the 10-mile radius, still have a list of potential customers that aren't customers of theirs.

They can offer them a special promotion to come in for the exam. They may say the exam is going to be $10. So VCA has been launching a model like that, where they open a new clinic, the first visit is free, just to get people in the door to develop a lifetime customer.

Well, our app will create a much better experience for the pet owner as well as the veterinary doctor where they're more inclusive into the health of the animal because they're working together on doing the diagnostics and the pet owner now has a good understanding of what the vet is telling them in terms of what needs to be done. So it's really -- you're building the trust between the vet and the pet owner.

At the beginning of the call, you mentioned -- I believe you mentioned that Digital Landia's PetVivo.ai platform should have the same adoption rate as the current AI platforms. Are you talking about the large language model platforms like ChatGPT or what platforms are you referring to?

So subscription model platforms is generally around 20-some percent that actually end up paying for the system, like Sofie, which is a veterinary system. I think they have like 25% of the people that try the system will convert into a full-time regular customer.

Okay. So it's not based around AI models, it's based around subscription models. Correct?

Yes, it's a SaaS model, but it's based on AI where we're giving a much better outcomes and platform and operating efficiency, but it's still you're selling a service. Is there any more questions?

[Operator Instructions]

So if there's no more questions, operator, I would like to conclude the Q&A session. And then I would like to thank everyone for joining us on today's call and look forward to updating everyone again in the fourth quarter and full year results. As always, take care, and thank you for joining us. But before everybody goes, John Dolan, will you please go ahead and wrap up the call and give all the necessary disclosures.

Thank you, John. Now before we conclude today's call, I would 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 words or phrases usually containing the words believe, estimate, project, intend, 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.

Any forward-looking statements made during this 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.

Factors that would cause or contribute to such differences include, but not limited to, various risks as detailed in the company's periodic report filings with the U.S. Securities and Exchange Commission.

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, our Annual Report on the Form 10-K and quarterly reports on the Form 10-Q.

Any forward-looking statements made during the 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, conditions or circumstances of which any forward-looking statement is based, except as required by law.

I would like to remind everyone that this call will be available for replay starting tomorrow. Please refer to today's earnings release for dial-in replay instructions available via the company's website at www.petvivo.com. Thank you for attending today's presentation. This concludes the conference call.

Good afternoon, everyone. Thank you for joining us today to discuss our results for our second quarter of fiscal 2026, which ended on September 30, 2025. Hosting the call today is our Chief Executive Officer, John Lai; our Chief Financial Officer, Garry Lowenthal; our commercial operations adviser, Mike Eldred; and myself, John Dolan, PetVivo's Chief Business Development Officer and General Counsel. Following our remarks, we'll open the call for 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. The replay instructions can be found in today's press release that is available in the Investor Relations section of our website.

Now turning to our results for the quarter. Our growth in product momentum continued into the second quarter as we further expanded the use of our flagship animal osteoarthritis veterinary medical device, Spryng with OsteoCushion technology.

We have also advanced the commercialization of PrecisePRP, our new breakthrough regenerative health product that can be administered alongside Spryng. PrecisePRP for dogs generated increased revenue during the quarter as its adoption continues to spread in the canine market. We expect the PrecisePRP revenue to further increase at an accelerated pace with the recent reintroduction to the equine market of PrecisePRP for horses.

We have also continued to advance the research, development and use of other technologies we've gained from new major partnerships that we formed over the last several months. These innovative technologies, which includes PrecisePRP, involve diagnostics and medical treatments that are transformative for our platform and particularly for the veterinarians and pet owners we serve.

Since the market introduction of Spryng in late 2021, it has now been used by more than 1,200 veterinary clinics across all 50 states. Now with the recent addition of our first distributor in Europe, which soon followed from our first international distributor we signed in Mexico, we can include several additional international clinics who are now using Spryng. Mexico is a very attractive market for our animal health solutions, especially since the country's veterinary health care market is projected to grow at a compounded annual growth rate or CAGR of 11% and is anticipated to reach approximately $2.4 billion within the next six years.

Personal horse ownership is deeply intertwined with Mexican culture and tradition, which makes the Mexican marketplace exceptionally ideal. However, the European animal market is much larger, estimated at more than $16.56 billion today and is projected to more than double to $34.8 billion by 2033, growing at a CAGR of 8.6%. In just the U.K., where our new European distributor, Nupsala Group operates the market currently exceeds $2.6 billion and is growing at a 7.8% CAGR. For each of these markets, their high growth rates are particularly noteworthy given their already very large signs.

As sales continue to ramp up in Mexico and kick off in the U.K., our U.S. distributor network increased their sales by 35% over the same year ago quarter, reaching $237,000 and representing 75% of our total revenues for the quarter. The growth in distributor sales, combined with the expansion of our in-house sales force and product offerings drove a 51% increase in total revenue for the quarter totaling $303,000 and making it one of our best quarters yet. In fact, it was our highest revenue-generating fiscal second quarter on record. And on a first half comparative basis, revenues were up 85% to more than $600,000, marking our best first half ever. This performance reflects the success of our sales and marketing efforts. These efforts remain strongly focused on the large end market as we continue to expand our larger and fast-growing companion animal market.

Our growth has also been driven by a strong performance of our sales and marketing leadership, including April Boyce, our VP of Sales and Marketing; and Mike Eldred, our commercial and operations adviser as well as the several new highly experienced territory managers we have deployed nationwide over the past year and our new team of professional sales representatives and technical service veterinarians who support them. Together, they have been developing deep relationships with the nation's leading veterinary clinics, veterinary corporate entities, consolidators and distributors, with this setting the stage for continued strong growth.

During the quarter, we were excited to announce the appointment of Josh Ruben to our Board of Directors. He brings to us a wealth of experience in health care and life sciences, finance, capital markets and corporate strategy. Josh currently serves as the Managing Director of Life Sciences at Trinity Capital, where he is focused on venture lending to health care companies. He previously served in financial director roles with RBC Capital Markets and Wells Fargo Securities. Josh boasts a tremendous track record in the successful execution of multibillion-dollar M&A and capital transactions. This deep understanding of the life sciences industry and strategic insights into growth-stage companies like PetVivo will be invaluable as we continue to grow and expand our market presence in the veterinary markets and begin to explore the introduction of products to the human markets.

Now before we get into more of the other exciting recent developments and our outlook for the second half of the fiscal year, I would like to turn the call over to our CFO, Garry Lowenthal, who will take us through the financial details for the quarter. Garry?

Thank you, John, and good afternoon, everyone, on our call. Thank you for joining us today to discuss the results of our second quarter of fiscal 2026 ending September 30. As John mentioned, we had another great quarter with revenues at $303,000. This was an increase of 51% over the first quarter of last year. A result on a first half year basis were even stronger with revenues up 85% to more than $600,000 and despite the second fiscal quarter being traditionally our slowest quarter of the year, we generated an increase from the previous first quarter. This growth was largely driven by a number of key factors, including our expanded North American distributor network with their contribution increasing 35% compared to the year ago quarter, reaching $237,000 or 75% of revenues.

Our expanded in-house sales force also helped drive sales, which included sales of our new product offerings such as PrecisePRP. Gross profit totaled $220,000 or 72.6% of revenues, which was an increase of 23% from $180,000 or 89.5% of revenues in the same quarter a year ago. The decreased gross margin was due primarily to the new PrecisePRP product, which carries a smaller merger and as we increase the sales mix with this new product offering.

Total operating expenses decreased 3% to $2.3 million from $2.4 million a year ago. The reduction in operating expenses was due to reduced research and development costs as well as the strategic cost reduction and restructuring program we implanted the last fiscal year. Combined with the increase in sales, the lower operating expenses helped decrease our operating loss by 5% compared to the same year ago quarter, bringing down approximately $2 million.

Net loss totaled $3 million or $0.11 per basic and diluted share compared to a net loss of $2.2 million or $0.11 per basic and diluted share same year-ago quarter. The increased loss was due to an increase in interest expense from debt discount as all of our convertible notes were converted at September 20. Excluding the $942,000 of debt discount recorded as interest expense, the net loss actually improved 5% to $2.1 million.

Net cash used in operating activities increased $3.8 million from $3.1 million in the same year ago quarter. The increase was primarily due to the increase in inventory purchases of the company's new PrecisePRP product line to meet growing demand and trade vendors settlement payments as our accounts payables decreased substantially during the fiscal quarter.

Now turning to our balance sheet. Our available cash totaled $768,000 as of September 30, '25 up from $220,000 at the end of our fiscal year ending March 31 of this year. The increase was primarily due to financing activities that we conducted during the quarter. Also notably, our total liabilities decreased to $1.1 million from $5.1 million just last March 31, 2025 end of our fiscal year. This 79% decrease was primarily due to the extinguishment of derivative liabilities related to our convertible notes as well as a massive reduction in accounts payable due to settlement payments with trade vendors and the conversion of all of our convertible notes to common stock on September 30.

Finally, I'd like to mention that during the quarter, we qualified to begin trading on the OTCQX Best Market. To qualify for the OTCQX, public companies must meet higher financial standards, follow best practices in corporate governance and demonstrate compliance with applicable security laws. Furthermore, trading on the OTCQX, we are now penny stock exempt. We believe our uplift from the OTCQB to the OTCQX demonstrates our commitment to transparency strong corporate governance and delivering long-term value to our shareholders. We also believe that trading on the OTCQX enhances our visibility within the investment community and provide greater liquidity and accessibility for investors as we continue to execute on our strategic growth initiatives. Now this completes our financial summary for the quarter.

John?

Thank you, Garry. The growth for the quarter demonstrated the success of our overall strategy for driving greater adoption of Spryng as well as increasing the awareness and acceptance of PrecisePRP for the treatment of osteoarthritis in animals. PrecisePRP is a proprietary and revolutionary allogeneic platelet-rich plasma product, or PRP, designed for horses and dogs that was developed by VetStem. PetVivo has been granted the exclusive license to commercialize PrecisePRP canine and equine in the United States. PrecisePRP is a first-in-class off-the-shelf PRP product for use by veterinarians. It is a leucoreduced allogenic pooled freeze-dried PRP that provides a species-specific source of concentrated platelets and plasma for intra-articular administration.

Unlike other PRP mechanical kits currently in the market, Precise PRP does not require a blood draw or centrifugation, thereby making a truly off-the-shelf product that is easy and convenient to administer. We have begun to sell this breakthrough regenerative product under an exclusive licensing and supply agreement with VetStem that we signed in February of 2025. The combination of Spryng and PrecisePRP has received very favorable reports from veterinarians regarding the ease of use of these products and the effectiveness in the management of osteoarthritis in horses and companion animals. We have continued to work on expanding the awareness of the benefits of both of these innovative products among key decision makers.

In July, we exhibited at the Texas Equine Veterinary Association 2025 Summer CE Symposium held in Marble Falls, Texas. We also attended other smaller industry events during the quarter. At these events, we demonstrated the research-backed benefits of Spryng to veterinarians, including leading sports medicine and rehabilitation experts in the veterinary industry. We also have the opportunity to exhibit jointly with VetStem at the 2025 Fetch Kansas City Veterinary Conference held in August at the Kansas City Convention Center. Together with VetStem, we exhibited the PrecisePRP technology at this conference. These conferences are very important to our marketing efforts as they allow us to discuss firsthand with decision makers, the benefits of administering Spryng and/or PrecisePRP to horses and companion animals. We can discuss with them the anecdotal reports as well as present the positive results from several clinical studies that have been conducted by leading independent investigators. From these events, we usually gain a better understanding of our target market and the types of veterinarians we should be more focused on. This includes vets who specialize in sports medicine, rehabilitation and our pain management as well as surgery.

Regarding additional studies, we have completed the accumulation of data from a canine elbow pilot study conducted by ERCO biologic Innovations, a leader in R&D for regenerative and sports medicine. The study was led by two prominent veterinarians, Sherman and Debra Canapp, and we expect the data to be ready for presentation by the end of the calendar year. Studies like this, canine elbow study as well as our other completed studies related to the management of stifle cranial cruciate ligament disease and hip osteoarthritis continue to play a crucial role in our sales and distribution strategy. Veterinarians as well as large national and international distributors generally want to review university or independent entity conducted research before adding new products like ours to their treatment regimens or distribution catalog.

Our internal sales team and outside distributors also use these studies in their commercialization efforts, including related veterinarian training. The study studies also help with our engagement of new industry partners such as veterinary Growth Partners, VGP, with whom we recently joined forces. VGP is a management services organization or MSO, that supports veterinary practices by offering practice management and marketing tools, consulting and vendor relationships. VGP has committed to actively promote Spryng and PrecisePRP to their expansive member network of more than 7,300 veterinary hospital clinics across the United States.

As I mentioned earlier, during the quarter, we entered into the European marketplace for the first time with the engagement of U.K.-based Nupsala Group. Nupsala Group Is a leading U.K.-based veterinary group that operates as both a veterinary wholesaler, and referral provider with a specialization in musculoskeletal health, orthobiologics and regenerative medicine for companion animals and horses. Nupsala is committed to inventory market and promote throughout the United Kingdom our Spryng with OsteoCushion technology. An initial order was shipped and the official education and training in Nupsala's sales force is scheduled to begin in mid-January.

During the quarter, we also advanced our new strategic collaboration with Commonwealth Markets, the syndicated ownership group who is behind 2023 Kentucky Derby winner , Mage and the 2022 Dubai World Cup Champion named Country Grammer. Our partnership with Commonwealth has been centered on the clinical use and promotion of Spryng and PrecisePRP. As part of our collaboration, Commonwealth has integrated Spryng and PrecisePRP into the care protocols of a number of their top-tier thoroughbred stables. In this environment, they are using these technologies as both a preventative measure and/or a management solution to promote joint health and extend performance longevity. It is also being used to support recovery after high-impact training and racing.

In addition to this clinical implementation, we are also exploring co-branded content educational initiatives and industry outreach reach to elevate awareness around joint wellness to support the broader adoption of Spryng and PrecisePRP across the equine health community. Our unique partnership with Commonwealth, a recognized leader at the highest leveled sport represents a tremendous affirmation of our Spryng and PrecisePRP technologies. Their championship-caliber horses and progressive approach to wellness makes them the ideal partner to showcase the benefits of these revolutionary restorative technologies. So by combining our technical our clinical expertise and commercial capabilities of Commonwealth's vast network, we can provide more veterinarians with cutting-edge effective solutions that enhance recovery and long-term solidness in competitive horses.

Also during the quarter, we made great progress with our strategic alliance and collaboration with another key partner, Digital Landia, who is a leading pioneer in agentic AI solutions. Following the end of the quarter, we signed an exclusive 10-year white-label licensing agreement with Digital Landia for its patented breakthrough next-generation an Agentic Pet AI technology. Our efforts are now focused on integrating this amazing technology into our platform as a first-of-kind global pet care ecosystem.

In support of the diagnostic process, it can decipher animal behavior and communication through real-time analysis of vocalizations, body language and physiological signals captured via a vet's or a pet parent's smartphone camera. Furthermore, the AI system has the capabilities to receive animal medical data such as physician's medical records, medical imaging and lab results to assist the veterinarian in diagnosing afflictions in diseases as well as suggesting treatment options. Given how it accomplishes this with an amazing 97% accuracy, Digital Landia's agentic AI presents a paradigm shift in how we understand pets and their physical health. The underlying technology features 5 patent-pending innovations with 9 specialized diagnostic agents accessible to veterinarians for all patients. By aligning our clinical proven therapies with such powerful AI technology, we believe PetVivo is uniquely positioned at the intersection of AI innovation in veterinary care.

This agentic pet AI technology also addresses two critical challenges facing the veterinary industry, skyrocketing client acquisition costs and the difficulties in capturing the exploding Gen Z pet parent demographic. We believe the implementation of this agentic pet AI technology has the potential to deliver a 90% to 98% reduction in client acquisition costs, lowering it from $50 to $150 per patient to just $1.50 to $5 per targeted client outreach. They can also simultaneously provide veterinarian practices with unprecedented access to the fast-growing market segment of Gen Z pet parents.

Also, earlier this week, Digital Landia announced a publication of a comprehensive technical white paper documenting the agentic pet AI framework that will power our new PetVivo B2B veterinary practice platform, which we will market through our wholly owned subsidiary, PetVivo AI, Inc. The white paper validates the technical foundation underlying the platform. It provides veterinary professionals, investors and industry stakeholders with detailed visibility into the multi-agent artificial intelligence architecture, which will enable transformative clinical and economic benefits for veterinary practices. Given the strength of this report, we expect our PetVivo AI solution to rival mainstream AI applications in terms of adoption rates and thereby create tremendous visibility of our brands, particularly Spryng with OsteoCushion technology and PrecisePRP. Beta testing continues and has been advancing well, and we anticipate the official commercial launch to take place in the near future. The launch will introduce both Digital Landia's agentic pet B2B B2C app and PetVivo's new B2B platform.

Now for an introduction to a functional Spryng-like product, in the first fiscal quarter of this year, we established a strategic partnership with PiezoBioMembrane, a spin-off from the University of Connecticut that is pioneering biodegradable piezoelectric materials designed for implantable and regenerative applications. Through this collaboration, we have been advancing the research and development of revolutionary functional biomaterials that can promote regeneration, restoration and/or remodeling of damage or injured tissue and bone in both animals and humans. The combination of these two technologies, Spryng and PiezoBioMembrane's piezoelectric material is creating exciting new future for PetVivo, one that we believe will be transformative for not only our growth outlook, but also for veterinarians and their many precious patients.

We have now completed Stage A of our 3-phase joint research and development project that successfully demonstrated that materials from our mutual products can be combined into a single offering, which can generate piezoelectric activity that provide therapeutic benefits to animals and humans. Stage B, which is now underway, will determine if the combined products can be mass produced at scale and demonstrates a preliminary indication of safety for administration in animals. This stage is progressing very well to date. The final stage, Stage C, which is expected to begin in the second calendar quarter of next year, will determine definitive safety and efficacy of the product. Altogether, our latest new 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 strong sales momentum and market penetration for the duration of fiscal 2026 and beyond. In fact, we have never been in a better position to accelerate our growth and expand across high-growth markets. The U.S. animal health market is expected to double to $11.3 billion by 2030. Such massive growth is rare for such an already large industry and it provides us amazing tailwinds.

For the full fiscal year ending March 31, 2026, we continue to see another year of record growth and improving bottom line as we continue to expand the use of Spryng and PrecisePRP as well as advance our other new products on our expanding medical therapeutics platform. The third and fourth quarter of the fiscal year have been traditionally the strongest particularly given the increase in annual industry events during the third fiscal quarter and typically drive greater product awareness and new orders. In fact, given our current growth momentum, we see the fiscal third quarter having the potential to produce another very robust revenue outcome.

As we continue to grow and expand over the coming quarters, we will remain committed to advancing the best in pet health solutions and ensuring our products reach more veterinary professionals and patent owners with our success in these efforts driving greater value for our stakeholders.

Now I would like to turn the call over to our commercial and operations adviser, Mike Eldred, to provide us an update on the company's sales, marketing operations efforts as well as some other exciting events occurred in the company. Mike?

Thank you, John. And I hope everyone on the call had a wonderful week. Overall, I'm extremely pleased with the Sales performance and our Vice President of Sales and Marketing, April Boyce is doing a wonderful job enhancing our digital marketing initiatives. We are now expanding our sales team and adding a few more inside sales reps, so we can have a stronger team out there communicating to the veterinarians and bringing awareness and selling the product.

Additionally, we are implementing a new CRM system called HubSpot which will be critical so we can keep track of all of our call notes and follow-ups and all the veterinarians that need additional details on the product and sales follow-up calls.

Having our new PrecisePRP equine, as John mentioned, is a wonderful thing to strengthen our portfolio. Previously, we just had the canine PRP, but now having both products in our portfolio, that gives us a better opportunity to train distributors and train them on both products so they can help us out there in the marketplace, sell the product. We'll be excited to launch to have a bigger launch at AAP coming up here in December in Denver.

So overall, I'm just extremely excited with the performance, and we're taking all steps we can to make sure that we continue to drive forward and become known as the leader in regenerative medicine. And if anybody has any specific questions on any of the sales and marketing initiatives, I'd be more than happy to answer afterwards, but I think John Dolan has done a pretty good job summing up the great progress that we've made.

So overall, nothing out of the norm that's selling these products. It just takes time, and we're making great progress. So now I'll turn it over to our CEO, John Lai, and he can take it from here.

Thank you, Mike. Now I would like to open up the call to the Q&A session, excuse me. Operator, could you please instruct our listeners to how they can ask questions?

[Operator Instructions] Okay, we have one raised head and now you are allowed to talk.

My name is Peter Sullivan. So a couple of questions. You quoted the number somewhere around 1,200 clinics that have used your product, how many of your -- how many clinics are like really heavy users? And you can define that however you want, but something more than a few cases here or there.

So the learning curve or the time that it takes for a vet to really bring on the product ranges anywhere from 6 months to a year after they use it because one of the major selling points of Spryng with OsteoCushion is the longevity of the product. The only way to establish longevity is the actual time. So like with the VGP, I believe, they tried the product, probably close to two years ago or even more before they felt comfortable to come on board in a big way. So it is a time-consuming adoption process. So yes, it's -- I would -- I don't have those numbers in front of me how much are -- how many of those are active users. But as you can see from the anecdotal evidence, we're continuing to grow the adoption or the clinic numbers that are potentially coming on board.

Sure. And can I ask a follow-up question?

Absolutely.

Can you break down the revenue between Spryng and PRP?

I'm going to leave that to the CFO because I don't -- I have it, but I don't know if we can disclose because that's more of a -- I don't think we'd break that down right now in our financial reporting. Garry, you want to answer that?

Absolutely. It's actually a really good question. We added roughly about 42% that was the PRP for this last quarter and 58% was Spryng. And keep in mind that it's just the canine, it wasn't the equine, it wasn't the horse.

The PRP was just the canine version?

Just the canine. We just started shipping the equine in this quarter, literally about a month ago.

And I think it's important to note that small animal veterinarians, joint injections is not something they do every day. It's something that they're getting more familiar with and starting to do it as a means to increase revenue in their clinics as they start to lose the pharmacies. The equine veterinarians on the other hand, Spryng and this PrecisePRP equine. Equine veterinarians know how to inject joints. They do it every day. I think we'll see a good ramp-up with the equine PRP, and we're starting to take more efforts on Spryng. But the companion animal market is a slow growth, but it's long term it's going to be a much significant market for us.

Yes. I mean that's kind of why I asked about your heavy user clinics because even though I'm not a veterinarian, I know a few -- and they were like, I wouldn't even try to do this thing. And so it's not surprising to hear that they're -- that it's sort of slow to get into those clinics.

We're focusing on the canine, you got to think about -- we're focusing on the progressive clinics. There's a lot of corporate accounts, like you've got the VCAs, the Mars, all the MVAs, any veterinary clinic that's emergency or has 3 to 5 doctors is a relatively good-sized clinic. Obviously, those are our targets then we start to focus on the single veterinarians when we run out of the things to do.

Do you have any corporate -- I don't know what the right word to use is, but these big corporate clinics, have any of them adopted your product corporate-wide yet?

No. No, because every corporate is different. Sometimes a lot of the corporate clinics now they still allow the veterinarians to have their own decision-making process. We do have some veterinarians that are probably part of a corporate group but like, for instance, like Mars, who has a formulary, no, there's -- that's a significant progress or process to get a corporate mandate to use the product.

I'm not much of a -- I'm not super knowledgeable. Is it -- are there some products that would like not yours but some products that would have a corporate blessing to use?

Yes. Any of the normal drugs that are used maybe for NSAIDs or anti-inflammatories, flea and tick, those kind of -- anything that's prescribed daily or monthly by veterinarians is something for sure, but a specialized product that is a special area, it's a learning curve. They all have to get comfortable with it.

Okay. And then I have one more question, and I hope I am not monopolizing somebody else's time. Do you do a breakdown or can you do a breakdown between companion versus Equine regardless of the product, but just how that revenue breaks down?

Yes. I mean Garry could do that at some point in time. I mean that's -- the other thing too is those are two very separate markets. Equine veterinarians buy differently than canine veterinarians. So yes, we track those separately. But once again, we just got the equine PRP and that is -- that's going to be a good upscale and a big launch for us, but once again, it takes time. And you got to realize a lot of these veterinarians already have centrifuges, they have other things, they have product themselves. So they've got to work through that. But we hope it's somewhat like a hockey stick.

Yes. Peter, this is Garry, the CFO. Since we've just -- we're now shipping the equine. In the future, we're going to do some segment reporting, but we're also going to break out equine and canine in the future just because the PrecisePRP is going to be kind of really big for us and we're going to break it out by the companion animals from all animals versus the horses.

Peter, I should follow up also. You have quite a bit of adoption from VCA clinics out in California, Nevada and Arizona. Yes, it's -- they're able to order and buy the product. It's not on their official formulary, but like Mike said, they allow the vets to choose the product outside if they want to use it. So we're starting to get good traction into those areas, and that should eventually lead to the approval process as a formulary.

Sure. Okay. Yes, I think it's helpful to track both the Spryng, PRP breakdown and companion versus equine to see kind of the underlying growth in the individual products. So I appreciate you breaking that stuff down. So that's all I have for questions. Thank you.

Okay. So let's just give one last warning about -- or one last chance for anybody to ask a question. If not, I will be giving closing notes and having John Dolan, our General Counsel, give the disclosures.

Okay. If there's no more questions, then I would like to thank everyone for joining us today. We look forward to talking with you again soon and presenting our second fiscal quarter results when we report again. And as always, take care and thank you for joining us today.

John, please go ahead and wrap up the call.

Thank you, John. Now before we conclude today's call, I would 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 words or phrases usually containing the words believe, estimate, project, intend, 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.

Any forward-looking statement made during this 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.

Factors that would cause or contribute to such differences include, but are not limited to, various risks as detailed in the company's periodic report filings with the U.S. Securities and Exchange Commission. 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 our operations and Risk Factors sections of the company's SEC filings, including, but not limited to, our annual report on the Form 10-K and quarterly reports on the Form 10-Q. Any forward-looking statements made during the conference call speaks as of today's date. The company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements made during the conference call to reflect any changes in its expectations with regards thereto or any changes to its events, conditions or circumstances on which any forward-looking statement is based, except as required by law.

I would like to remind everyone that this call will be available for replay starting later this evening or by tomorrow morning. Please refer to today's earnings release for dial-in replay instructions available via the company's website at www.petvivo.com.

Thank you again for attending today's presentation. This concludes the conference call. Operator, you may disconnect.

Goodbye.