U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from _______ to _______
Commission
File No.
(Name of small business issuer in its charter)
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
| ||||
| The
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001
(Title of Class)
Indicate
by check mark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
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Indicate
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405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging Growth Company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
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| Class | Outstanding as of November 10, 2022 | |
| Common Stock, $0.001 |
PETVIVO HOLDINGS, INC.
FORM 10-Q
FOR THE PERIOD ENDED September 30, 2022
INDEX
| Page | ||
| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | i | |
| PART I. FINANCIAL INFORMATION | 1 | |
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 |
| Item 3. | Qualitative and Quantitative Disclosures About Market Risk | 24 |
| Item 4. | Controls and Procedures | 24 |
| PART II. OTHER INFORMATION | 25 | |
| Item 1. | Legal Proceedings | 25 |
| Item 1A. | Risk Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 26 |
| Item 4. | Mine Safety Disclosure | 26 |
| Item 5. | Other information | 26 |
| Item 6. | Exhibits | 26 |
| SIGNATURES | 27 | |
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Information included in this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of PetVivo Holdings, Inc. (the “Company”), to be materially different from future results, performance, or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies, and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in “Risk Factors” included in documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for our fiscal year ended March 31, 2022 (“2022 10-K Report”) and risks described in other SEC filings. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
| i |
PART I.
ITEM 1. FINANCIAL STATEMENTS
PETVIVO HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2022 (Unaudited) | March 31, 2022 | |||||||
| Assets: | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory, net | ||||||||
| Prepaid expenses and other assets | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment, net | ||||||||
| Other Assets: | ||||||||
| Operating lease right-of-use | ||||||||
| Patents and trademarks, net | ||||||||
| Security deposit | ||||||||
| Total Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Operating lease liability – short term | ||||||||
| Note payable and accrued interest | ||||||||
| Total Current Liabilities | ||||||||
| Other Liabilities | ||||||||
| Note payable and accrued interest (net of current portion) | ||||||||
| Operating lease liability (net of current portion) | ||||||||
| Total Other Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (see Note 9) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, par value $, shares authorized, and shares issued and outstanding at September 30, 2022 and March 31, 2022 | ||||||||
| Common stock, par value $, shares authorized, and shares issued and outstanding at September 30, 2022 and March 31, 2022, respectively | ||||||||
| Additional Paid-In Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
PETVIVO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of Sales | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Sales and Marketing | ||||||||||||||||
| Research and Development | ||||||||||||||||
| General and Administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Forgiveness of PPP loan and accrued interest | ||||||||||||||||
| Interest Income (Expense) | ( | ) | ( | ) | ||||||||||||
| Total Other Income (Expense) | ( | ) | ||||||||||||||
| Loss before taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income Tax Provision | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Per Share: | ||||||||||||||||
| Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Common Shares Outstanding: | ||||||||||||||||
| Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| 2 |
PETVIVO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Six Months Ended September 30, 2022
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Cash paid to exercise warrants | ||||||||||||||||||||
| Vesting of restricted stock units | ( | ) | ||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
Six Months Ended September 30, 2021
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance at March 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common stock sold | ||||||||||||||||||||
| Cash paid to exercise warrants | ||||||||||||||||||||
| Stock issued for debt conversion | ||||||||||||||||||||
| Cashless warrant exercises | ( | ) | ||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common stock sold | ||||||||||||||||||||
| Warrants sold | - | |||||||||||||||||||
| Cash paid to exercise warrants | ||||||||||||||||||||
| Cashless warrant exercise | ( | ) | ||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Stock and warrants granted for debt conversion | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2021 | $ | $ | $ | ( | $ | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
PETVIVO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended | ||||||||
| September 30, 2022 | September 30, 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Loss For The Period | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||
| Stock-based compensation | ||||||||
| Stock issued for services | ||||||||
| Depreciation and amortization | ||||||||
| Forgiveness of PPP loan and accrued interest | ( | ) | ||||||
| Changes in Operating Assets and Liabilities | ||||||||
| Increase in prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Increase in accounts receivable | ( | ) | ||||||
| Increase in inventory | ( | ) | ( | ) | ||||
| Decrease in deferred offering costs | ||||||||
| Interest accrued on convertible notes payable | ||||||||
| Interest accrued on notes payable - related party | ||||||||
| Increase in accounts payable and accrued expenses | ||||||||
| Decrease in accrued expenses - related party | ( | ) | ||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Disbursements for patents and trademarks | ( | ) | ||||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from stock and warrants sold | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Repayments of note payable | ( | ) | ( | ) | ||||
| Repayments of PPP loan | ( | ) | ||||||
| Repayments of notes payable - related party | ( | ) | ||||||
| Repayments of notes payable - directors | ( | ) | ||||||
| Net Cash Provided by Financing Activities | ||||||||
| Net (Decrease) Increase in Cash | ( | ) | ||||||
| Cash at Beginning of Period | ||||||||
| Cash at End of Period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash Paid During The Period For: | ||||||||
| Interest | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE ON NON-CASH FINANCING AND INVESTING ACTIVITIES | ||||||||
| Stock granted for debt conversion | $ | |||||||
| Stock granted for share-settled debt obligation conversion | $ | |||||||
| Stock granted for consulting services | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
PetVivo Holdings, Inc.
Notes to Consolidated Financial Statements
September 30, 2022
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
| (A) | Organization and Description |
The Company is in the business of licensing and commercializing our proprietary medical devices and biomaterials for the treatment of afflictions and diseases in animals, initially for dogs and horses. The Company began commercialization of its lead product Spryng™ with OsteoCushion™ Technology, a veterinarian-administered, intraarticular injection for the management of lameness and other joint afflictions such osteoarthritis in dogs and horses, in September 2021. The Company has a pipeline of additional products for the treatment of animals in various stages of development. A portfolio of nineteen patents protects the Company’s biomaterials, products, production processes and methods of use. The Company’s operations are conducted from its headquarter facilities in suburban Minneapolis, Minnesota.
| (B) | Basis of Presentation |
PetVivo Holdings, Inc. (the “Company”) was incorporated in Nevada under a former name in 2009 and entered its current business in 2014 through a stock exchange reverse merger with PetVivo, Inc., a Minnesota corporation. This merger resulted in Minnesota PetVivo becoming a wholly-owned subsidiary of the Company. In April 2017, the Company acquired another Minnesota corporation, Gel-Del Technologies, Inc., through a statutory merger, which is also a wholly-owned subsidiary of the Company.
| (C) | Principles of Consolidation |
The accompanying consolidated financial statements include the accounts of the Company and its two wholly-owned Minnesota corporations, Gel-Del Technologies, Inc. and PetVivo, Inc. All intercompany accounts have been eliminated upon consolidation.
| (D) | Use of Estimates |
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, inventory obsolescence, estimated useful lives and potential impairment of property and equipment and intangibles, estimate of fair value of share-based payments, future rebates payable to a distributor, product refund liabilities, lease assets and liabilities and valuation of deferred tax assets.
| (E) | Cash and Cash Equivalents |
The Company considers all highly-liquid, temporary cash investments with an original maturity of three months or less to be cash equivalents.
| (F) | Concentration-Risk |
The Company maintains its cash with various financial institutions, which at times may exceed federally insured limits. As of September 30, 2022 and March 31, 2022, the Company did have cash balances in excess of the federally insured limits.
| 5 |
| (G) | Property & Equipment |
Property
and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged
to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual
values) over the assets estimated useful life of
| (H) | Patents and Trademarks |
The Company capitalizes direct costs for the maintenance and advancement of their patents and trademarks and amortizes these costs over the lesser of the useful life of 60 months or the life of the patent. We evaluate the recoverability of intangible assets periodically by considering events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.
| (I) | Loss Per Share |
Basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The Company had warrants outstanding as of September 30, 2022, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these warrants is $ per share. These warrants are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had restricted stock units outstanding as of September 30, 2022 which are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had options outstanding as of September 30, 2022, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these options is $ per share. These options are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had warrants outstanding as of September 30, 2021, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these warrants is $ per share. These warrants were excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had restricted stock units outstanding as of September 30, 2021 which were excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company uses the guidance in Accounting Standards Codification (“ASC”) 260 to determine if-converted loss per share. ASC 260 states that convertible securities should be considered exercised at the later date of the first day of the reporting period’s quarter or the inception date of the debt instrument. Also, the if-converted method shall not be applied for the purposes of computing diluted EPS if the effect would be anti-dilutive.
| (J) | Revenue Recognition |
The Company derives revenue from the sale of our pet care products directly to its veterinarian customers in the United States. For performance obligations related to the sale of our pet care products, control transfers to the customer at a point in time. Revenue is recognized upon delivery to the customer, which is when control of these products is transferred and in an amount that reflects the consideration the Company expects to receive for these products. Shipping costs charged to customers are reported as an offset to the respective shipping costs. The Company does not have any significant financing components as payment is received at or shortly after the point of sale.
| 6 |
The
Company entered into a Distribution Services Agreement (the “Agreement”) with MWI Veterinary Supply Co. (the
“Distributor”) on June 17, 2022. Contracts are evidenced by individual executed purchase orders subject to the terms of
the Agreement. The contracts consist of a single performance obligation related to the sale of our pet care products. Control
transfers to the Distributor at a point in time. Revenue is recognized upon satisfaction of the performance obligation which is
delivery to the Distributor; payment is due within 60 days. The Agreement provides for a distribution fee payable to the Distributor
equal to
For
the three and six months ended September 30, 2022, the Company recognized revenue from product sales under the Agreement of $
| Accounts receivable | $ | |||
| Rebate liability | ||||
| Distribution fee payable | $ |
| (K) | Research and Development |
The Company expenses research and development costs as incurred.
| (L) | Fair Value of Financial Instruments |
The Company applies the accounting guidance under FASB ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
| ● | Level 1 - quoted market prices in active markets for identical assets or liabilities. | |
| ● | Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| ● | Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
The Company’s financial instruments consist of accounts receivable, accounts payable, accrued expenses and note payable and accrued interest. The carrying amount of the Company’s financial instruments approximates their fair value as of September 30, 2022 and March 31, 2022, due to the short-term nature of these instruments and the Company’s borrowing rate of interest.
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of the Company’s note recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.
The
Company had
| 7 |
| (M) | Stock-Based Compensation - Non-Employees |
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under the guidance of Sub-topic 505-50 of the FASB ASC (“Sub-topic 505-50”).
Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:
| ● | Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB ASC the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration the contractual term of the instruments and the holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate the holder’s expected exercise behavior. | |
| ● | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. | |
| ● | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | |
| ● | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. |
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time or if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised.
| (N) | Income Taxes |
The Company accounts for income taxes under ASC Topic 740. Deferred tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
As required by ASC Topic 450, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
| 8 |
The Company is not currently under examination by any federal or state jurisdiction.
The Company’s policy is to record tax-related interest and penalties as a component of operating expenses.
| (O) | Inventory |
Inventories are recorded in accordance with ASC 330, Inventory, and are stated at the lower of cost or net realizable value. We account for inventories using the first in first out (FIFO) methodology.
| (P) | Recent Accounting Pronouncements |
The Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s financial management.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of the standard had no impact on the consolidated financial statements.
All other new issued, but not yet effective, accounting pronouncements have been deemed either immaterial or not applicable.
NOTE 2 – INVENTORY
As
of September 30, 2022, and March 31, 2022, the Company had inventory of $
The inventory components are as follows:
| September 30, 2022 | March 31, 2022 | |||||||
| Finished goods | $ | $ | ||||||
| Work in process | ||||||||
| Raw materials | ||||||||
| Total Net | $ | $ | ||||||
| 9 |
NOTE 3 – PREPAID EXPENSES AND OTHER ASSETS
As
of September 30, 2022, the Company had $
As
of March 31, 2022, the Company had $
NOTE 4 –PROPERTY AND EQUIPMENT
The components of property and equipment were as follows:
| September 30, 2022 | March 31, 2022 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Production equipment | ||||||||
| R&D equipment | ||||||||
| Computer equipment and furniture | ||||||||
| Total, at cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total Net | $ | $ | ||||||
Depreciation
expense was $
NOTE 5 – PATENTS AND TRADEMARKS
The components of patents and trademarks, all of which are finite-lived, were as follows:
| September 30, 2022 | March 31, 2022 | |||||||
| Patents | $ | $ | ||||||
| Trademarks | ||||||||
| Total at cost | ||||||||
| Accumulated Amortization | ( | ) | ( | ) | ||||
| Total net | $ | $ | ||||||
Amortization
expense was $
NOTE 6 – ACCRUED EXPENSES
The components of accrued expenses were as follows:
| September 30, 2022 | March 31, 2022 | |||||||
| Accrued payroll and related taxes | $ | $ | ||||||
| Accrued lease termination expense | ||||||||
| Total | $ | $ | ||||||
Pursuant
to a lease wherein our subsidiary, Gel-Del Technologies, Inc., was the lessee until and through the lease’s termination in fiscal
year 2017-2018, the Company had recorded approximately $
| 10 |
NOTE 7 – NOTE PAYABLE
In
January 2020, the Company entered into a lease amendment for our corporate office facility whereby the lease term was extended through
November of 2026 in exchange for a loan of $
NOTE 8 – RETIREMENT PLAN
In
February 2021, the Company established a 401(k) retirement plan for its employees in which eligible employees can contribute a percentage
of their compensation. The Company may also make discretionary contributions. For the three months ended September 30, 2022 and 2021,
the Company made contributions to the plan of $
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Lease Obligations
The
Company entered into an -month lease for
The
Company entered into a month lease for
Rent
expense for the three months ended September 30, 2022 and 2021 was $
The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of September 30, 2022:
| 2023 | $ | |||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| Less: amount representing interest | ( | ) | ||
| Total | $ |
| 11 |
In
compliance with ASC 842, the Company recognized, based on
| Present value of future base rent lease payments | $ | |||
| Base rent payments included in prepaid expenses | ||||
| Present value of future base rent lease payments – net | $ |
As of September 30, 2022, the present value of future base rent lease payments – net is classified between current and non-current assets and liabilities as follows:
| Operating lease right-of-use asset | $ | |||
| Total operating lease assets | $ | |||
| Operating lease current liability | $ | |||
| Operating lease other liability | $ | |||
| Total operating lease liabilities | $ |
Employment Agreements
The Company has employment agreements with its executive officers. As of September 30, 2022, these agreements contain severance benefits ranging from one month to six months if terminated without cause.
Legal Proceedings
The Company has received correspondence from an attorney representing Dr. David Masters, our former Chief Technology Officer and former director, alleging that the Company, among other items, breached its settlement and consulting agreement with him and owes him additional monies pursuant to these agreements. His attorney also alleges that the Company promised to enter into a new employment agreement with him and failed to fulfill that promise. The Company believes that Dr. Masters’ claims are without merit and has retained legal counsel. The Company does not believe that this matter will have a material impact on its financial position or results of operations.
Purchase Commitment
We
issued purchase orders as of September 30, 2022 totaling $
NOTE 10 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.
The
Company incurred net losses of $
| 12 |
Management intends to raise additional funds through the offering of its equity securities. Management believes that the actions presently being taken to further implement its business plan will enable the Company to continue as a going concern. While the Company believes in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and raise additional funds.
COVID-19 has had an impact on the global economy, which directly or indirectly may have an impact on our ability to continue as a going concern.
These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 11 – STOCKHOLDERS’ EQUITY
Equity Incentive Plan
On July 10, 2020, our Board of Directors unanimously approved the PetVivo Holdings, Inc “2020 Equity Incentive Plan” (the “2020 Plan”), subject to approval by our stockholders at the Regular Meeting of Stockholders held on September 22, 2020, when it was approved by our stockholders and became effective. The number of shares of our common stock available and that may be issued as awards under the 2020 Plan is shares. Unless sooner terminated by the Board, the 2020 Plan will terminate at midnight on . The number of shares available to grant under the Plan was at September 30, 2022.
Employees, consultants and advisors of the Company (or any subsidiary), and non-employee directors of the Company will be eligible to receive awards under the 2020 Plan. In the case of consultants and advisors, however, their services cannot be in connection with the offer and sale of securities in a capital-raising transaction nor directly or indirectly to promote or maintain a market for PetVivo common stock.
The 2020 Plan is administered by the Compensation Committee of our Board of Directors (the “Committee”), which has full power and authority to determine when and to whom awards will be granted, and the type, amount, form of payment, any deferral payment, and other terms and conditions of each award. Subject to provisions of the 2020 Plan, the Committee may amend or waive the terms and conditions, or accelerate the exercisability, of an outstanding award. The Committee also has the authority to interpret and establish rules and regulations for the administration of the 2020 Plan. In addition, the Board of Directors may also exercise the powers of the Committee.
The aggregate number of shares of PetVivo common stock available and reserved to be issued under the 2020 Plan is shares, but includes the following limits:
| ● | the maximum aggregate number of shares of Common Stock granted as an Award to any Non-Employee Director in any one Plan Year will be shares; provided that such limit will not apply to any election of a Non-Employee Director to receive shares of Common Stock in lieu of all or a portion of any annual Board, committee chair or other retainer, or any meeting fees otherwise payable in cash. |
Awards can be granted for no cash consideration or for any cash and other consideration as determined by the Committee. Awards may provide that upon the grant or exercise thereof, the holder will receive cash, shares of PetVivo common stock, other securities or property, or any combination of these in a single payment, installments or on a deferred basis. The exercise price per share of any stock option and the grant price of any stock appreciation right may not be less than the fair market value of PetVivo common stock on the date of grant. The term of any award cannot be longer than ten years from the date of grant. Awards will be adjusted in the event of a stock dividend or other distribution, recapitalization, forward or reverse stock split, reorganization, merger or other business combination, or similar corporate transaction, in order to prevent dilution or enlargement of the benefits or potential benefits provided under the 2020 Plan.
The 2020 Plan permits the following types of awards: stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units, performance awards, non-employee director awards, other stock-based awards, and dividend equivalents.
| 13 |
Common Stock
For the six months ended September 30, 2022, the Company issued shares of common stock as follows:
| i) |
shares in July 2022 pursuant to a warrant holder’s exercise of warrants for purchase
with a weighted average strike price of $ | |
| ii) |
shares in August 2022 pursuant to a warrant holder’s exercise of warrants for purchase
with a weighted average strike price of $ | |
| iii) |
shares in August 2022 to service providers for consulting services valued at $ | |
| iv) | shares in related to vesting of restricted stock units. |
For the six months ended September 30, 2021, the Company issued shares of common stock as follows:
| i) |
shares in April 2021 pursuant to a conversion of a $ | |
| ii) | ||
| iii) |
shares in May 2021 pursuant to John Lai’s (CEO and a Director of the Company) cashless
exercise of a warrant for purchase of | |
| iv) |
shares in May 2021 pursuant to a warrant holder’s cashless exercise of a warrant for
purchase of | |
| v) |
shares during May and June of 2021 in exchange for $ | |
| vi) |
shares in June 2021 pursuant to a warrant holder’s cashless exercise of a warrant for
purchase of | |
| vii) |
shares in July 2021 in exchange for $ | |
| viii) |
shares and warrants, as part of the units issued on August 13, 2021 in the Public Offering,
in exchange for net proceeds of $ | |
| ix) |
shares and warrants in August 2021 pursuant to a conversion of $ | |
| x) |
shares in August 2021 pursuant to a warrant holder’s cashless exercise of a warrant
for purchase of | |
| xi) |
shares in September 2021 pursuant to a warrant holder’s exercise of warrants for purchase
of | |
| xii) |
shares in September 2021 to a service provider for future marketing and investor relations
services valued at $ |
Time-Based Restricted Stock Units
We
have granted time-based restricted stock units to certain participants under the 2020 Plan that are stock-settled with common shares.
Time-based restricted stock units granted under the 2020 Plan vest over three years. Stock-based compensation expense included in the
Consolidated Statements of Operations for time-based restricted stock units was $
| 14 |
Our time-based restricted stock unit activity for the year ended March 31, 2022, and the six month period ended September 30, 2022 is as follows:
| Units Outstanding | Weighted Average Grant Date Fair Value Per Unit | Aggregate Intrinsic Value (1) | ||||||||||
| Balance at March 31, 2021 | ||||||||||||
| Granted | $ | - | ||||||||||
| Expired | ( | ) | $ | - | ||||||||
| Vested | ( | ) | $ | - | ||||||||
| Balance at March 31, 2022 | $ | $ | ||||||||||
| Vested | ( | ) | $ | |||||||||
| Balance at September 30, 2022 | $ | $ | ||||||||||
| 1) |
Stock Options
Stock options issued to employees typically vest over and have a contractual term of . Stock-based compensation expense included in the Consolidated Statements of Operations for stock options was $ for the three months ended September 30, 2022 and $ for the six months ended September 30, 2022. At September 30, 2022, there was approximately $ of total unrecognized stock option expense which is expected to be recognized on a straight-line basis over a weighted-average period of years.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Annually, we make predictive assumptions regarding future stock price volatility, dividend yield, expected term and forfeiture rate. The dividend yield assumption is based on expected annual dividend yield on a grant date. To date, no dividends on common stock have been paid by us. Expected volatility for grants is based on our average historical volatility over a similar period as the expected term assumption used for our options as the expected volatility. The risk-free interest rate is based on yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group. We use the “simplified method” to determine the expected term of the stock option grants. We utilize this method because we do not have sufficient public company exercise data in which to make a reasonable estimate.
| Six Months Ended September 30, 2022 | Year Ended March 31, 2022 | |||||||
| Expected term | years | years | ||||||
| Expected volatility | - | % | - | % | ||||
| Risk-free interest rate | - | % | – | % | ||||
| Expected dividend yield | % | % | ||||||
| Fair value on the date of grant | $ | - $ | $ | - $ | ||||
| Options Outstanding | Weighted- Average Exercise Price Per Share (1) | Weighted-Average Remaining Contractual Life | Aggregate Intrinsic Value (2) | |||||||||||||
| Balance at March 31, 2021 | - | |||||||||||||||
| Granted | $ | - | ||||||||||||||
| Balance at March 31, 2022 | $ | years | $ | |||||||||||||
| Granted | $ | |||||||||||||||
| Balance at September 30, 2022 | $ | years | $ | |||||||||||||
| Options exercisable at September 30, 2022 | ||||||||||||||||
| (1) | |
| (2) |
| 15 |
| September 30, 2022 | ||||
| Number of: | ||||
| Non-vested options, beginning of period | ||||
| Non-vested options, end of period | ||||
| Vested options, end of period | ||||
| September 30, 2022 | ||||
| Weighted-average grant date fair value of: | ||||
| Non-vested options, beginning of period | $ | | ||
| Non-vested options, end of period | $ | |||
| Vested options, end of period | $ | |||
| Forfeited options, during the period | ||||
Warrants
During
the three and six months ended September 30, 2022,
During
the six months ended September 30, 2021, the Company issued warrants to purchase an aggregate of
| ● | warrants
to purchase | |
| ● | warrants
to purchase | |
| ● | warrants
to purchase |
These warrants’ values were arrived at by using the Black-Scholes option pricing model with the following assumptions:
i) an expected volatility of the Company’s shares on the date of the grants of approximately
ii) risk-free rate identical to the U.S. Treasury
| 16 |
A summary of warrant activity for the year ended March 31, 2022 and six month period ended September 30, 2022 is as follows:
| Number of Warrants | Weighted- Average Exercise Price | Warrants Exercisable | Weighted- Average Exercisable Price | |||||||||||||
| Outstanding, March 31, 2021 | $ | $ | ||||||||||||||
| Issued and granted | $ | |||||||||||||||
| Exercised for cash | ( | ) | $ | ( | ) | |||||||||||
| Cashless warrant exercises | ( | ) | $ | ( | ) | |||||||||||
| Expired | ( | ) | $ | ( | ) | |||||||||||
| Cancelled | ( | ) | $ | ( | ) | |||||||||||
| Outstanding, March 31, 2022 | $ | $ | ||||||||||||||
| Exercised for cash | ( | ) | $ | ( | ) | |||||||||||
| Expired | ( | ) | $ | ( | ) | |||||||||||
| Outstanding, September 30, 2022 | $ | $ | ||||||||||||||
| Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||
| Range of Warrant Exercise Price | Number of Warrants | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (Years) | Number of Warrants | Weighted- Average Exercise Price | |||||||||||||||||
| $ | -$ | $ | $ | |||||||||||||||||||
| $ | - | $ | $ | |||||||||||||||||||
| $ | - | $ | $ | |||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||
Stock-based compensation expense included in the Consolidated Statements of Operations for warrants was $ and $ for the three months ended September 30, 2022 and 2021, respectively. Stock-based compensation expense included in the Consolidated Statements of Operations for warrants was $ and $ for the six months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was no future unrecognized warrant expense.
For the three months ended September 30, 2022 and 2021, the total stock-based compensation on all instruments was $ and $, respectively. For the six months ended September 30, 2022 and 2021, the total stock-based compensation on all instruments was $ and $, respectively.
NOTE 12 – SUBSEQUENT EVENT
On October 14, 2022, the stockholders of the Company approved the PetVivo Holdings, Inc. Amended and Restated 2020 Equity Incentive Plan (the “Amended Plan”), which increased the number of shares of the Company’s common stock which may be granted under the Amended Plan from to .
| 17 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
PetVivo Holdings, Inc. (the “Company”, “PetVivo”, “we” or “us) is an emerging biomedical device company focused on the manufacturing, commercialization, and licensing of innovative medical devices and therapeutics for animals. The Company began commercialization of its lead product Spryng™ with OsteoCushion™ Technology, a veterinarian-administered, intra-articular injection for the management of lameness and other joint afflictions such as osteoarthritis in dogs and horses, in September 2021. The Company has a pipeline of additional products for the treatment of animals in various stages of development. A portfolio of nineteen patents protects the Company’s biomaterials, products, production processes, and methods of use.
In August 2021, we received net proceeds of approximately $9.8 million in a registered public offering (“Public Offering”) of 2.5 million units at a public offering price of $4.50 per unit. Each unit consisted of one share of our common stock and one warrant to purchase one share of our common stock at an exercise price of $5.625 per share. The shares of common stock and warrants were transferable separately immediately upon issuance. In connection with the Public Offering, the Company’s common stock and warrants were registered under Section 12(b) of the Exchange Act and began trading on The Nasdaq Capital Market, LLC under the symbols “PETV” and “PETVW”, respectively.
The Company was incorporated in March 2009 under Nevada law under a different name. The Company operates as one segment from its corporate headquarters in Edina, Minnesota.
CURRENT BUSINESS OPERATIONS
The Company is primarily engaged in the business of commercializing and licensing products in the veterinary market to treat and/or manage afflictions of companion animals such as dogs and horses. The Company’s lead product, Spryng™, is based on proprietary technology developed for human biomedical applications, and we intend to leverage the investments already expended in this development to commercialize treatments for pets in a capital and time-efficient way.
The Company’s lead product, Spryng™ is derived from proprietary biomaterials that simulate a body’s cellular or acellular tissue by virtue of their reliance upon natural protein and carbohydrate compositions which incorporate such “tissue building blocks” as collagen, elastin and heparin. Since these are naturally-occurring in the body, we believe they have an enhanced biocompatibility with living tissues differentiated from polymeric biomaterials such as those based upon alpha-hydroxy polymers (e.g. PLA, PLGA, and the like) polyacrylamides and other “synthetic” biomaterials that may lack the multiple “natural” proteins and carbohydrates incorporated into our biomaterials. These proprietary protein-based biomaterials appear to mimic the body’s tissue thus allowing integration and tissue repair in long-term implantation in certain applications.
The Company’s lead product, Spryng™ is a veterinary medical device designed to help reinforce and augment articular cartilage tissue for the management of lameness and other joint related afflictions, such as osteoarthritis, in companion animals. Spryng™ is an intra-articular injectable product of biocompatible and insoluble particles that are slippery, wet-permeable, durable, and resilient to enhance the force cushioning function of the synovial fluid and cartilage. The particles mimic natural cartilage in composition, structure, and hydration. Multiple joints can be treated simultaneously. Our particles are comprised of collagen, elastin, and heparin, similar components found in natural cartilage. These particles show an effectiveness to reinforce and augment the cartilage, which enhances the functionality of the joint (e.g. provide cushion or shock-absorbing features to the joint and to provide joint lubricity).
| 18 |
Osteoarthritis, a common inflammatory joint disease in both dogs and horses, is a chronic, progressive, degenerative joint disease that is caused by a loss of synovial fluid and/or the deterioration of joint cartilage. Osteoarthritis affects approximately 14 million dogs and 1 million horses in the $11 billion companion animal veterinary care and product sales market.
Despite the market size, veterinary clinics and hospitals have very few treatments and/or drugs for use in treating osteoarthritis in dogs, horses and other pets. As there is no cure for osteoarthritis, current solutions treat symptoms but do not manage the cause. The current treatment for osteoarthritis in dogs generally consists of the use of nonsteroidal anti-inflammatory drugs (or “NSAIDs”) which are approved to alleviate pain and inflammation but present the potential for side effects relating to gastrointestinal, kidney and liver damage and do not halt or slow joint degeneration. The Company offers an alternative to traditional treatments that only address the symptoms of the affliction. Spryng™ with OsteoCushion™ Technology addresses the affliction, loss of synovial fluid and/or the deterioration of joint cartilage, rather than treating just the symptoms and, to the best our knowledge, has elicited minimal adverse side effects in dogs and horses. Spryng™-treated dogs and horses have shown an increase in activity even after they no longer are receiving pain medication or other treatments. Other treatments for osteoarthritis include steroid and/or hyaluronic acid injections, which are used for treating pain, inflammation and/or joint lubrication, but can be slow acting and/or short lasting.
We believe Spryng™ is an optimal solution to safely improve joint function in animals for several reasons:
| ● | Spryng™ addresses the underlying problems which relate to deterioration of cartilage causing bones to contact each other and a lack of synovial fluid. Spryng™ provides a biocompatible lubricious cushion to the joint, which establishes a barrier between the bones, thereby protecting the remaining cartilage and bone. | |
| ● | Spryng™ is easily administered with the standard intra-articular injection technique. Multiple joints can be treated simultaneously. | |
| ● | Case studies indicate many dogs and horses have long-lasting multi-month improvement in lameness after having been treated with Spryng™. | |
| ● | After receiving a Spryng™ injection, many canines are able to discontinue the use of NSAID’s, eliminating the risk of negative side effects. | |
| ● | Spryng™ is an effective and economical solution for treating osteoarthritis. A single injection of Spryng™ is approximately $600 to $900 per joint and typically lasts for at least 12 months. |
Historically, drug sales represent up to 30% of revenues at a typical veterinary practice (Veterinary Practice News). Revenues and margins at veterinary practices are being eroded because online, big-box and traditional pharmacies have recently started filling veterinary prescriptions. Veterinary practices are looking for ways to replace lost prescription revenues with safe and effective products. Spryng™ is a veterinarian-administered medical device that will help veterinarians provide a new solution for treating dogs and horses which have lameness due to synovial joint issues, while expanding revenues and margins for their practices.
Spryng™ is classified as a veterinary medical device under the United States Food and Drug Administration (“FDA”) rules and pre-market approval is not required by the FDA. Spryng™ completed a safety and efficacy study in rabbits in 2007. Since that time, more than 1,000 horses and dogs have been treated with Spryng™. We entered into a clinical trial services agreement with Colorado State University on November 5, 2020. We expect this university clinical study to be completed in December 2023. Additionally, the Company successfully completed an equine tolerance study in March 2022 and began a canine clinical study with Ethos Veterinary Health in May 2022 with anticipated completion in fiscal 2023. We anticipate these and other studies that we plan to initiate will be primarily used to support our commercialization efforts and expand the use of Spryng™ in other applications.
We commenced sales of Spryng™ in the second quarter of fiscal 2022 and plan to increase our commercialization efforts of Spryng™ in the United States through our distribution relationship with MWI Veterinary Supply Co. (“Distributor” or “MWI”) and use the use of sales reps, clinical studies and market awareness to educate and inform key opinion leaders on the benefits of Spryng™. We plan to support our commercialization efforts with the use of social media and other methods to educate and inform key opinion leaders and high prescriber veterinarians for companion animals of the availability and benefits of Spryng™.
We entered into a Distribution Services Agreement (“Distribution Agreement”) with MWI on June 17, 2022. Pursuant to the Agreement, we appointed MWI to distribute, advertise, promote, market, supply, and sell the Company’s lead product, Spryng™ on an exclusive basis for two (2) years within the United States (the “Territory”), transitioning to a non-exclusive basis thereafter; provided however that the Company shall extend the exclusivity for an additional one (1) year if MWI achieves certain performance targets agreed upon by the parties. The Company can continue to sell Spryng™ within the Territory to established accounts, which include: (a) customers who have purchased Spryng™ from the Company prior to the date of the Agreement, (b) customers who require that they deal directly with the Company, (c) governmental agencies, and (d) customers that order via the internet who are not directly solicited by MWI to purchase Spryng™. All customers must be licensed veterinary practices.
| 19 |
We have established an ISO 7 certified clean room manufacturing facility located in our Minneapolis facility using a patented and scalable self-assembly production process, which reduces the infrastructure requirements and manufacturing risks to deliver a consistent, high-quality product while being responsive to volume requirements. We recently began manufacturing commercial quantities and anticipate our ISO 7 certified facility will be able to handle projected production in units for at least the next five years.
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our 2022 10-K Report and the consolidated financial statements and related notes in Item 1, Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q (“10-Q Report”). The following discussion may contain forward-looking statements, and our actual results may differ materially from the results suggested by these forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of our 2022 10-K Report under the heading “Risk Factors,” as updated and supplemented by risks described in other SEC filings. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
We are a smaller reporting company and have not generated material revenues to date and have incurred substantial losses in connection with our limited operations. We need substantial capital to pursue our current plans to commercialize our initial product, Spyng™.
RESULTS OF OPERATIONS
| For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 223,280 | $ | 4,977 | $ | 281,454 | $ | 9,122 | ||||||||
| Cost of Sales | 148,159 | - | 201,179 | 5,051 | ||||||||||||
| Operating Expenses | 2,194,689 | 1,108,333 | 4,165,936 | 1,625,946 | ||||||||||||
| Other Income (Expense) | 7,979 | (2,118 | ) | 8,644 | 25,772 | |||||||||||
| Net Loss | $ | (2,111,589 | ) | $ | (1,105,474 | ) | $ | (4,077,017 | ) | $ | (1,596,103 | ) | ||||
| Net loss per share - basic and diluted | $ | (0.21 | ) | $ | (0.13 | ) | $ | (0.41 | ) | $ | (0.21 | ) | ||||
For The Three Months Ended September 30, 2022 Compared to The Three Months Ended September 30, 2021
Revenues. Revenues were $223,280 for the three months ended September 30, 2022 compared to revenues of $4,977 for the three months ended September 30, 2021. Revenue in the three months ended September 30, 2022 consisted of sales of our Spryng™ product to veterinary clinics in the amount of $105,016 and to our Distributor of $118,264, respectively. In the three months ended September 30, 2021, our revenues of $4,977 consisted of sales to veterinary clinics. The increase in our revenues in the three months ended September 30, 2022 is due to (i) increased sales to veterinary clinics due to our marketing and other commercialization efforts which began in September 2021, and (ii) sales to our Distributor pursuant to our Distribution Agreement.
| 20 |
Cost of Sales. Cost of sales was $148,159 and $0 for the three months ended September 30, 2022 and 2021, respectively. Cost of sales includes product costs related to the sale of our Spryng™ products and labor and overhead costs. The Company began commercialization of its Spryng™ product in September 2021, which resulted in increased cost of sales in the three months ended September 30, 2022 compared to the same period in the prior year.
Operating Expenses. Operating expenses were $ 2,194,689 and $1,108,333 for the three months ended September 30, 2022 and 2021, respectively. Operating expenses consisted of general and administrative, sales and marketing, and research and development expenses. The Company began commercialization of its Spryng™ product in September 2021, which resulted in increased general and administrative expenses and sales and marketing expenses related to the sale of its Spryng™ product in the three months ended September 30, 2022 compared to the same period in the prior year.
General and administrative (“G&A”) expenses were $1,186,320 and $756,186 for the three months ended September 30, 2022 and 2021, respectively. G&A expenses include compensation and benefits, contracted services, consulting fees, stock compensation and incremental public company costs. The increase in G&A expenses was related to compensation and benefits, legal and consulting fees, stock compensation and incremental public company costs.
Sales and marketing expenses were $867,985 and $235,767 for the three months ended September 30, 2022 and 2021, respectively. Sales and marketing expenses include compensation, consulting, tradeshows and stock compensation costs to support the launch of our Spryng™ product. The increase in sales and marketing expenses was due to the launch and commercialization of Spryng.™
Research and development (“R&D”) expenses were $140,384 and $116,380 for the three months ended September 30, 2022 and 2021, respectively. The increase in R&D expenses was related to the timing of clinical studies in the three months ended September 30, 2022 compared to the same period in the prior year.
Operating Loss. As a result of the foregoing, our operating loss was $2,119,568 and $1,103,356 for the three months ended September 30, 2022 and 2021, respectively. The increase in our operating loss was related to the increased operating expenses incurred to support the launch of Spryng™ and the incremental public company costs incurred in the three months ended September 30, 2022 compared to the same period in the prior year.
Other Income (Expense). Other income was $7,979 for the three months ended September 30, 2022 as compared to other expense of $2,118 for the three months ended September 30, 2021. Other income in 2022 consisted of net interest income. Other expense in 2021 consisted of net interest expense.
Net Loss. Our net loss for the three months ended September 30, 2022 was $2,111,589 or ($0.21) per share as compared to a net loss of $1,105,474 or ($0.13) per share for the three months ended September 30, 2021. The increase in our net loss was related to the increased operating expenses incurred to support the launch of Spryng™ and the incremental public company costs compared to the same period in the prior year. The weighted average number of shares outstanding was 10,053,463 compared to 8,749,233 for the three months ended September 30, 2022 and 2021, respectively.
For The Six Months Ended September 30, 2022 Compared to The Six Months Ended September 30, 2021
Revenues. Revenues were $281,454 for the six months ended September 30, 2022 compared to revenues of $9,122 for the six months ended September 30, 2021. Revenue for the six months ended September 30, 2022 consisted of sales of our Spryng™ product to veterinary clinics in the amount of $163,190 and to our Distributor in the amount of $118,264, respectively. In the six months ended September 30, 2021, our revenues of $9,122 consisted of sales to veterinary clinics. The increase in our revenues in the six months ended September 30, 2022 is due to (i) increased sales to veterinary clinics due to our marketing and other commercialization efforts which began in September 2021, and (ii) sales to our Distributor pursuant to the Distribution Agreement.
Cost of Sales. Cost of sales was $201,179 and $5,051 for the six months ended September 30, 2022 and 2021, respectively. Cost of sales includes product costs related to the sale of products and labor and overhead costs. The Company began commercialization of its Spryng™ product in September 2021, which resulted in increased cost of sales in the six months ended September 30, 2022 compared to the same period in the prior year.
| 21 |
Operating Expenses. Operating expenses were $4,165,936 and $1,625,946 for the six months ended September 30, 2022 and 2021, respectively. Operating expenses consisted of general and administrative, sales and marketing, and research and development expenses. The Company began commercialization of its Spryng™ product in September 2021, which resulted in increased general and administrative expenses and sales and marketing expenses related to the sale of its Spryng™ product in the six months ended September 30, 2022 compared to the same period in the prior year.
General and administrative (“G&A”) expenses were $2,429,342 and $1,087,131 for the six months ended September 30, 2022 and 2021, respectively. G&A expenses include compensation and benefits, contracted services, consulting fees, stock compensation and incremental public company costs. The increase in G&A expenses was related to compensation and benefits, legal and consulting fees, stock compensation and incremental public company costs.
Sales and marketing expenses were $1,524,554 and $285,498 for the six months ended September 30, 2022 and 2021, respectively. Sales and marketing expenses include compensation, consulting, tradeshows and stock compensation costs to support the launch of our Spryng™ product. The increase in sales and marketing expenses was due to the launch and commercialization of Spryng™ .
Research and development (“R&D”) expenses were $212,040 and $ 253,317 for the six months ended September 30, 2022 and 2021, respectively. The decrease in R&D expenses was related to the timing of clinical studies in the six months ended September 30, 2022 compared to the same period in the prior year.
Operating Loss. As a result of the foregoing, our operating loss was $4,085,661 and $1,621,875 for the six months ended September 30, 2022 and 2021, respectively. The increase in our operating loss, was related to the costs to support the launch of Spryng™ and the incremental public company costs incurred in the six months ended September 30, 2022 compared to the same period in the prior year.
Other Income. Other income was $8,644 for the six months ended September 30, 2022 as compared to other income of $25,772 for the six months ended September 30, 2021. Other income in 2022 consisted of net interest income. Other income in 2021 consisted of the forgiveness of PPP loan and accrued interest of $31,680 partially offset by interest expense of $5,908.
Net Loss. Our net loss for the six months ended September 30, 2022 was $4,077,017 or ($0.41) per share as compared to a net loss of $1,596,103 or ($0.21) per share for the six months ended September 30, 2021. The weighted average number of shares outstanding was 10,021,090 compared to 7,757,099 for the six months ended September 30, 2022 and 2021, respectively.
LIQUIDITY AND CAPITAL RESOURCES
On August 13, 2021, we closed an underwritten public offering of 2,500,000 units, at a price of $4.50 per unit. Net proceeds from the Public Offering were approximately $9,781,000, net of commissions and expenses of the offering.
As of September 30, 2022, our current assets were $3,383,330, including $2,337,093 in cash and cash equivalents. In comparison, our current liabilities as of that date were $1,253,771 including $1,187,227 of accounts payable and accrued expenses. Our working capital as of September 30, 2022 was $2,129,559.
The Company has continued to realize losses from operations. However, as a result of our Public Offering, we believe we will have sufficient cash to meet our anticipated operating costs and capital expenditure requirements for the next four months. We will need to raise additional capital in the future to support our efforts to commercialize Spryng™ and our ongoing operations. We expect to continue to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund our business expansion. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. There can be no guarantee that the Company will be successful in its ability to raise additional capital to fund its business plan.
Net Cash Used in Operating Activities – We used $3,749,581 of net cash in operating activities for the six months ended September 30, 2022. This cash used in operating activities was primarily attributable to our net loss of $4,077,017, an increase in inventories of $206,654, an increase in prepaid expenses and other assets of $180,658 and an increase in accounts receivable of $126,546, partially offset by stock compensation expense of $537,202 and stock issued for services of $166,114.
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Net Cash Used in Investing Activities – We used $83,566 of net cash in investing activities for the six months ended September 30, 2022, consisting of costs capitalized for manufacturing and computer equipment.
Net Cash Provided by Financing Activities – Cash provided from financing activities was $63,413 the six months ended September 30, 2022 consisting of cash received from the exercise of warrants partially offset by $3,145 in repayments of a note payable.
Inventory
Inventories are stated at cost, subject to the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. Net realizable value is the estimated selling price less estimated costs of completion, disposal, and transportation. We regularly review inventory quantities on hand through an inventory count.
At September 30, 2022, the Company’s inventory has a carrying value of $304,967 and is broken down into $45,479 of finished goods, $21,525 of work in process and $237,963 in raw materials.
At March 31, 2022, the Company’s inventory had a carrying value of $98,313 and was broken down into $11,889 of finished goods, $22,960 of work in process and $63,464 in raw materials.
MATERIAL COMMITMENTS
Note Payable
As of September 30, 2022, we are obligated on a note and accrued interest of $30,605.
Purchase Commitment
We issued purchase orders as of September 30, 2022 totaling $100,000 for inventory that we expect to receive within the next six months.
OFF-BALANCE SHEET ARRANGEMENTS
As of September 30, 2022, and as of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors’ report accompanying our 2022 10-K Report and financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. In August 2021, we raised approximately $9,781,000 from the sale of units in a Public Offering. Our working capital at September 30, 2022 was $2,129,559. We believe this working capital is sufficient to fund operations for the next four months (see “Liquidity and Capital Resources” above).
We have continued to realize losses from operations. However, as a result of our Public Offering, we believe we will have sufficient cash to meet our anticipated operating costs and capital expenditure requirements for at least the next four months. We will need to raise additional capital in the future to support our efforts to commercialize Spryng™ and our ongoing operations. We expect to continue to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund our business expansion. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. There can be no guarantee that the Company will be successful in its ability to raise additional capital to fund its business plan.
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CRITICAL ACCOUNTING POLICIES
We prepare our consolidated financial statements in accordance with generally accepted accounting standards in the United States of America. Our significant accounting policies are described in Note 1 to our consolidated financial statements attached hereto. We believe these accounting policies involve the most significant judgments and estimates used in the preparation of the consolidated financial statements.
RECENTLY ISSUED ACCOUNTING STANDARDS
The Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s financial management.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this standard had no impact on the consolidated financial statements.
All other newly issued but not yet effective accounting pronouncements have been deemed either immaterial or not applicable.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and pursuant to Instruction 6 to Item 201(e) of Regulation S-K, we are not required to provide this information.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures.
We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures.
Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.
Changes in internal control over financial reporting.
There were no significant changes in our internal control over financial reporting in the second quarter of our fiscal year ending March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business, the resolution of which we do not anticipate would have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations.
Refer to Note 9. Commitments and Contingencies, in the Notes to Consolidated Financial Statements set forth in Part I, Item 1 Financial Statements of this Quarterly Report, for further information regarding legal contingencies.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in our 2022 10-K Report. The risks discussed in our 2022 10-K Report could materially affect our business, financial condition and future results. The risks described in our 2022 Form 10-K Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be insignificant also may materially and adversely affect our business, financial condition or operating results in the future.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
For the three months ended September 30, 2022, the Company issued 106,914 shares of common stock as follows:
| i) | 24,217 shares in July 2022 pursuant to a warrant holder’s exercise of warrants for purchase with a weighted average strike price of $1.33 per share for cash proceeds of $32,188; | |
| ii) | 24,447 shares in August 2022 pursuant to a warrant holder’s exercise of warrants for purchase with a weighted average strike price of $1.41 per share for cash proceeds of $34,370; and | |
| iii) | 25,000 shares in August 2022 to service providers for consulting services valued at $49,920; and | |
| iv) | 33,250 shares in July and August 2022 in related to vesting of restricted stock units issued to five employees. |
All of these transactions described above were exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving a public offering. The purchasers of securities in each of these transactions represented their intention to acquire the securities for investment only and not with a view to offer or sell, in connection with any distribution of the securities, and appropriate legends were affixed to the share certificates and instruments issued in such transactions.
Use of Proceeds from IPO
On August 13, 2021, we completed our Public Offering pursuant to which we issued and sold an aggregate of 2,500,000 units at the public offering price of $4.50 per unit. Each unit consisted of one share of our common stock and one warrant to purchase one share of our common stock at an exercise price of $5.625 per share. The shares of common stock and warrants were transferable separately immediately upon issuance. At the closing of the Public Offering, the underwriter exercised its over-allotment option to purchase an additional 375,000 warrants for an aggregate purchase price of $3,850.
The offer and sale of all of the units in our Public Offering were registered under the Securities Act pursuant to a registration statement on Form S-1, as amended (File No. 333-249452), which was declared effective by the SEC on August 10, 2021 (“Registration Statement”). ThinkEquity, a division of Fordham Financial Management, Inc. acted as the sole book-running manager for the offering. In connection with the Public Offering, the Company’s common stock and warrants were registered under Section 12(b) of the Exchange Act and began trading on The Nasdaq Capital Market, LLC under the symbols “PETV” and “PETVW” respectively.
We received aggregate gross proceeds from our Public Offering of $11,253,850 (inclusive of the underwriter’s exercise of its overallotment option to purchase warrants). After deducing underwriting discounts and commissions and other offering expenses, we received net proceeds of approximately $9,781,000 from the Public Offering.
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As disclosed in the Registration Statement, we used a portion of the net proceeds from the Public Offering for debt repayment of $101,400 consisting of (i) $36,808 in accrued salary and expenses relating to the CEO; (ii) $20,000 in a note payables to four directors, which accrued interest at a rate of 6.5% per annum and matured in September 2021; and (iii) repayment of $44,554 in a note payable to our former Director of Science and Technology and a director, which accrued interest at a rate of 8% per annum, and maturity date of June 30, 2022.
There has been no material change in our intended use of proceeds from our Public Offering as described in the Prospectus filed with the SEC pursuant to Rule 424(b)(4) on August 13, 2021.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not required.
ITEM 4. MINE SAFETY DISCLOSURES
Not required.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
The following exhibits are filed as part of this Quarterly Report.
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PETVIVO HOLDINGS, INC.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| November 10, 2022 | By: | /s/ John Lai |
| John Lai | ||
| Its: | CEO, President and Director (Principal Executive Officer) | |
| November 10, 2022 | By: | /s/ Robert J. Folkes |
| Robert J. Folkes | ||
| Its: | Chief Financial Officer (Principal Financial and Accounting Officer) |
| 27 |
EXHIBIT 31.1
Certification of Principal Executive Officer
Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended,
As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
I, John Lai, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of PetVivo Holdings, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: | November 10, 2022 | By: | /s/ John Lai |
John Lai CEO, President, and Director (Principal Executive Officer) |
EXHIBIT 31.2
Certification of Principal Financial Officer
Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended,
As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
I, Robert J. Folkes, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of PetVivo Holdings, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: | November 10, 2022 | By: | /s/ Robert J. Folkes |
Robert J. Folkes Chief Financial Officer (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
Certification of Principal Executive Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of PetVivo Holdings, Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John Lai, Principal Executive Officer of the Company, certifies to the best of his knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
| Date: | November 10, 2022 | By: | /s/ John Lai |
John Lai CEO, President, and Director (Principal Executive Officer) |
EXHIBIT 32.2
Certification of Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of PetVivo Holdings, Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Robert J. Folkes, Principal Financial Officer of the Company, certifies to the best of his knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
| Date: | November 10, 2022 | By: | /s/ Robert J. Folkes |
Robert J. Folkes Chief Financial Officer (Principal Financial and Accounting Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 250,000,000 | 250,000,000 |
| Common stock, shares issued | 10,095,275 | 9,988,361 |
| Common stock, shares outstanding | 10,095,275 | 9,988,361 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Statement [Abstract] | ||||
| Revenues | $ 223,280 | $ 4,977 | $ 281,454 | $ 9,122 |
| Cost of Sales | 148,159 | 201,179 | 5,051 | |
| Gross Profit | 75,121 | 4,977 | 80,275 | 4,071 |
| Operating Expenses: | ||||
| Sales and Marketing | 867,985 | 235,767 | 1,524,554 | 285,498 |
| Research and Development | 140,384 | 116,380 | 212,040 | 253,317 |
| General and Administrative | 1,186,320 | 756,186 | 2,429,342 | 1,087,131 |
| Total Operating Expenses | 2,194,689 | 1,108,333 | 4,165,936 | 1,625,946 |
| Operating Loss | (2,119,568) | (1,103,356) | (4,085,661) | (1,621,875) |
| Other Income (Expense) | ||||
| Forgiveness of PPP loan and accrued interest | 31,680 | |||
| Interest Income (Expense) | 7,979 | (2,118) | 8,644 | (5,908) |
| Total Other Income (Expense) | 7,979 | (2,118) | 8,644 | 25,772 |
| Loss before taxes | (2,111,589) | (1,105,474) | (4,077,017) | (1,596,103) |
| Income Tax Provision | ||||
| Net Loss | $ (2,111,589) | $ (1,105,474) | $ (4,077,017) | $ (1,596,103) |
| Net Loss Per Share: | ||||
| Basic and Diluted | $ (0.21) | $ (0.13) | $ (0.41) | $ (0.21) |
| Weighted Average Common Shares Outstanding: | ||||
| Basic and Diluted | 10,053,463 | 8,749,233 | 10,021,090 | 7,757,099 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
The Company is in the business of licensing and commercializing our proprietary medical devices and biomaterials for the treatment of afflictions and diseases in animals, initially for dogs and horses. The Company began commercialization of its lead product Spryng™ with OsteoCushion™ Technology, a veterinarian-administered, intraarticular injection for the management of lameness and other joint afflictions such osteoarthritis in dogs and horses, in September 2021. The Company has a pipeline of additional products for the treatment of animals in various stages of development. A portfolio of nineteen patents protects the Company’s biomaterials, products, production processes and methods of use. The Company’s operations are conducted from its headquarter facilities in suburban Minneapolis, Minnesota.
PetVivo Holdings, Inc. (the “Company”) was incorporated in Nevada under a former name in 2009 and entered its current business in 2014 through a stock exchange reverse merger with PetVivo, Inc., a Minnesota corporation. This merger resulted in Minnesota PetVivo becoming a wholly-owned subsidiary of the Company. In April 2017, the Company acquired another Minnesota corporation, Gel-Del Technologies, Inc., through a statutory merger, which is also a wholly-owned subsidiary of the Company.
The accompanying consolidated financial statements include the accounts of the Company and its two wholly-owned Minnesota corporations, Gel-Del Technologies, Inc. and PetVivo, Inc. All intercompany accounts have been eliminated upon consolidation.
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, inventory obsolescence, estimated useful lives and potential impairment of property and equipment and intangibles, estimate of fair value of share-based payments, future rebates payable to a distributor, product refund liabilities, lease assets and liabilities and valuation of deferred tax assets.
The Company considers all highly-liquid, temporary cash investments with an original maturity of three months or less to be cash equivalents.
The Company maintains its cash with various financial institutions, which at times may exceed federally insured limits. As of September 30, 2022 and March 31, 2022, the Company did have cash balances in excess of the federally insured limits.
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the assets estimated useful life of 3 to 5 years for production and computer equipment and furniture and 5 to 7 years for leasehold improvements.
The Company capitalizes direct costs for the maintenance and advancement of their patents and trademarks and amortizes these costs over the lesser of the useful life of 60 months or the life of the patent. We evaluate the recoverability of intangible assets periodically by considering events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.
Basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The Company had warrants outstanding as of September 30, 2022, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these warrants is $ per share. These warrants are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had restricted stock units outstanding as of September 30, 2022 which are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had options outstanding as of September 30, 2022, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these options is $ per share. These options are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had warrants outstanding as of September 30, 2021, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these warrants is $ per share. These warrants were excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had restricted stock units outstanding as of September 30, 2021 which were excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company uses the guidance in Accounting Standards Codification (“ASC”) 260 to determine if-converted loss per share. ASC 260 states that convertible securities should be considered exercised at the later date of the first day of the reporting period’s quarter or the inception date of the debt instrument. Also, the if-converted method shall not be applied for the purposes of computing diluted EPS if the effect would be anti-dilutive.
The Company derives revenue from the sale of our pet care products directly to its veterinarian customers in the United States. For performance obligations related to the sale of our pet care products, control transfers to the customer at a point in time. Revenue is recognized upon delivery to the customer, which is when control of these products is transferred and in an amount that reflects the consideration the Company expects to receive for these products. Shipping costs charged to customers are reported as an offset to the respective shipping costs. The Company does not have any significant financing components as payment is received at or shortly after the point of sale.
The Company entered into a Distribution Services Agreement (the “Agreement”) with MWI Veterinary Supply Co. (the “Distributor”) on June 17, 2022. Contracts are evidenced by individual executed purchase orders subject to the terms of the Agreement. The contracts consist of a single performance obligation related to the sale of our pet care products. Control transfers to the Distributor at a point in time. Revenue is recognized upon satisfaction of the performance obligation which is delivery to the Distributor; payment is due within 60 days. The Agreement provides for a distribution fee payable to the Distributor equal to 5% of gross monthly sales payable in 45 days; the distribution fee is netted against revenue. The Agreement provides for a rebate payable to the Distributor based on annual sales volume that is retroactively applied. The rebate is estimated under the expected value method and is netted against revenue. Sales are subject to various right of return provisions; the Company uses an expected value method to estimate returns and has determined that any returns would be immaterial. As a result, there is no refund liability recorded. Shipping and handling costs are a fulfillment activity and are reported as cost of sales.
For the three and six months ended September 30, 2022, the Company recognized revenue from product sales under the Agreement of $118,264. Assets and liabilities under the Agreement were as follows at September 30, 2022:
The Company expenses research and development costs as incurred.
The Company applies the accounting guidance under FASB ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
The Company’s financial instruments consist of accounts receivable, accounts payable, accrued expenses and note payable and accrued interest. The carrying amount of the Company’s financial instruments approximates their fair value as of September 30, 2022 and March 31, 2022, due to the short-term nature of these instruments and the Company’s borrowing rate of interest.
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of the Company’s note recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.
The Company had no assets and liabilities measured at fair value on a recurring basis at September 30, 2022 and March 31, 2022.
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under the guidance of Sub-topic 505-50 of the FASB ASC (“Sub-topic 505-50”).
Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time or if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised.
The Company accounts for income taxes under ASC Topic 740. Deferred tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
As required by ASC Topic 450, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company is not currently under examination by any federal or state jurisdiction.
The Company’s policy is to record tax-related interest and penalties as a component of operating expenses.
Inventories are recorded in accordance with ASC 330, Inventory, and are stated at the lower of cost or net realizable value. We account for inventories using the first in first out (FIFO) methodology.
The Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s financial management.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of the standard had no impact on the consolidated financial statements.
All other new issued, but not yet effective, accounting pronouncements have been deemed either immaterial or not applicable.
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INVENTORY |
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORY | NOTE 2 – INVENTORY
As of September 30, 2022, and March 31, 2022, the Company had inventory of $304,967 and $98,313, respectively.
The inventory components are as follows:
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PREPAID EXPENSES AND OTHER ASSETS |
6 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Prepaid Expenses And Other Assets | |
| PREPAID EXPENSES AND OTHER ASSETS | NOTE 3 – PREPAID EXPENSES AND OTHER ASSETS
As of September 30, 2022, the Company had $612,128 in prepaid expenses and other assets consisting primarily of $309,000 in insurance costs, $99,000 in investor relations services, $75,000 in tradeshows, $38,000 in clinical studies, $33,000 in Nasdaq and FINRA fees and $33,000 in software subscription fees.
As of March 31, 2022, the Company had $547,664 in prepaid expenses and other assets consisting primarily of $220,000 in investor relations services, $148,000 in insurance costs, $71,000 in clinical studies, $46,000 in tradeshows and $45,000 in Nasdaq fees.
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PROPERTY AND EQUIPMENT |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY AND EQUIPMENT | NOTE 4 –PROPERTY AND EQUIPMENT
The components of property and equipment were as follows:
Depreciation expense was $28,719 and $11,756 for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense was $54,044 and $23,627 for the six months ended September 30, 2022 and 2021, respectively.
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PATENTS AND TRADEMARKS |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PATENTS AND TRADEMARKS | NOTE 5 – PATENTS AND TRADEMARKS
The components of patents and trademarks, all of which are finite-lived, were as follows:
Amortization expense was $2,240 and $2,333 for the three months ended June 30, 2022 and 2021, respectively. Amortization expense was $4,466 and $4,062 for the six months ended September 30, 2022 and 2021, respectively.
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ACCRUED EXPENSES |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||
| ACCRUED EXPENSES | NOTE 6 – ACCRUED EXPENSES
The components of accrued expenses were as follows:
Pursuant to a lease wherein our subsidiary, Gel-Del Technologies, Inc., was the lessee until and through the lease’s termination in fiscal year 2017-2018, the Company had recorded approximately $332,000 as a potential payable to the lessor. This liability remains outstanding as of September 30, 2022 and March 31, 2022 and is included in accrued expenses.
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NOTE PAYABLE |
6 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Debt Disclosure [Abstract] | |
| NOTE PAYABLE | NOTE 7 – NOTE PAYABLE
In January 2020, the Company entered into a lease amendment for our corporate office facility whereby the lease term was extended through November of 2026 in exchange for a loan of $42,500. The note payable accrues interest at a rate of 6% per annum. At September 30, 2022 and March 31, 2022, the amount outstanding on the note was $30,605 and $33,750, respectively. At September 30, 2022, the Company classified $6,737 as a current liability and $23,868 in other liabilities. At March 31, 2022, the Company classified $6,549 as a current liability and $27,201 in other liabilities.
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RETIREMENT PLAN |
6 Months Ended |
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Sep. 30, 2022 | |
| Retirement Benefits [Abstract] | |
| RETIREMENT PLAN | NOTE 8 – RETIREMENT PLAN
In February 2021, the Company established a 401(k) retirement plan for its employees in which eligible employees can contribute a percentage of their compensation. The Company may also make discretionary contributions. For the three months ended September 30, 2022 and 2021, the Company made contributions to the plan of $8,183 and $0, respectively. For the six months ended September 30, 2022 and 2021, the Company made contributions to the plan of $14,341 and $0, respectively.
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COMMITMENTS AND CONTINGENCIES |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES
Lease Obligations
The Company entered into an -month lease for 3,577 square feet of newly constructed office, laboratory and warehouse space located in Edina, Minnesota in May 2017. The base rent has annual increases of 2% and the Company is responsible for its proportional share of common space expenses, property taxes, and building insurance. This lease is terminable by the landlord if damage causes the property to no longer be utilized as an integrated whole and by the Company if damage causes the facility to be unusable for a period of 45 days. In January 2020, the Company entered into a lease amendment to extend the lease term through November of 2026 in exchange for receipt of a loan of $42,500 recorded to note payable. The monthly base rent as of September 30, 2022 and March 31, 2022 is $2,205.
The Company entered into a month lease for 2,400 square feet of office space located in Edina, Minnesota in January 2022. The base rent has annual increases of 2.5% and the Company is responsible for its proportional share of common space expenses, property taxes, and building insurance. The monthly base rent as of September 30, 2022 and March 31, 2022 is $2,673.
Rent expense for the three months ended September 30, 2022 and 2021 was $25,541 and $22,892, respectively. Rent expense for the six months ended September 30, 2022 and 2021 was $60,976 and $34,403, respectively.
The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of September 30, 2022:
In compliance with ASC 842, the Company recognized, based on the extended lease term to November 2026 and a treasury rate of 0.12%, an operating lease right-to-use asset for approximately $189,600 and corresponding and equal operating lease liabilities for the lease. As of September 30, 2022, the present value of future base rent lease payments based on the remaining lease term and weighted average discount rate of approximately 4.6 years and 0.28%, respectively, are as follows:
As of September 30, 2022, the present value of future base rent lease payments – net is classified between current and non-current assets and liabilities as follows:
Employment Agreements
The Company has employment agreements with its executive officers. As of September 30, 2022, these agreements contain severance benefits ranging from one month to six months if terminated without cause.
Legal Proceedings
The Company has received correspondence from an attorney representing Dr. David Masters, our former Chief Technology Officer and former director, alleging that the Company, among other items, breached its settlement and consulting agreement with him and owes him additional monies pursuant to these agreements. His attorney also alleges that the Company promised to enter into a new employment agreement with him and failed to fulfill that promise. The Company believes that Dr. Masters’ claims are without merit and has retained legal counsel. The Company does not believe that this matter will have a material impact on its financial position or results of operations.
Purchase Commitment
We issued purchase orders as of September 30, 2022 totaling $100,000 for inventory that we expect to receive within the next six months.
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GOING CONCERN |
6 Months Ended |
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Sep. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 10 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.
The Company incurred net losses of $4,077,017 for the six months ended September 30, 2022, had net cash used in operating activities of $3,749,581 for the same period and has an accumulated deficit of $67,203,438 at September 30, 2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months after the date of issuance of these financial statements. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to achieve a level of profitability and/or to obtain adequate financing through the issuance of debt or equity in order to finance its operations.
Management intends to raise additional funds through the offering of its equity securities. Management believes that the actions presently being taken to further implement its business plan will enable the Company to continue as a going concern. While the Company believes in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and raise additional funds.
COVID-19 has had an impact on the global economy, which directly or indirectly may have an impact on our ability to continue as a going concern.
These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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STOCKHOLDERS’ EQUITY |
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| STOCKHOLDERS’ EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY
Equity Incentive Plan
On July 10, 2020, our Board of Directors unanimously approved the PetVivo Holdings, Inc “2020 Equity Incentive Plan” (the “2020 Plan”), subject to approval by our stockholders at the Regular Meeting of Stockholders held on September 22, 2020, when it was approved by our stockholders and became effective. The number of shares of our common stock available and that may be issued as awards under the 2020 Plan is shares. Unless sooner terminated by the Board, the 2020 Plan will terminate at midnight on . The number of shares available to grant under the Plan was at September 30, 2022.
Employees, consultants and advisors of the Company (or any subsidiary), and non-employee directors of the Company will be eligible to receive awards under the 2020 Plan. In the case of consultants and advisors, however, their services cannot be in connection with the offer and sale of securities in a capital-raising transaction nor directly or indirectly to promote or maintain a market for PetVivo common stock.
The 2020 Plan is administered by the Compensation Committee of our Board of Directors (the “Committee”), which has full power and authority to determine when and to whom awards will be granted, and the type, amount, form of payment, any deferral payment, and other terms and conditions of each award. Subject to provisions of the 2020 Plan, the Committee may amend or waive the terms and conditions, or accelerate the exercisability, of an outstanding award. The Committee also has the authority to interpret and establish rules and regulations for the administration of the 2020 Plan. In addition, the Board of Directors may also exercise the powers of the Committee.
The aggregate number of shares of PetVivo common stock available and reserved to be issued under the 2020 Plan is shares, but includes the following limits:
Awards can be granted for no cash consideration or for any cash and other consideration as determined by the Committee. Awards may provide that upon the grant or exercise thereof, the holder will receive cash, shares of PetVivo common stock, other securities or property, or any combination of these in a single payment, installments or on a deferred basis. The exercise price per share of any stock option and the grant price of any stock appreciation right may not be less than the fair market value of PetVivo common stock on the date of grant. The term of any award cannot be longer than ten years from the date of grant. Awards will be adjusted in the event of a stock dividend or other distribution, recapitalization, forward or reverse stock split, reorganization, merger or other business combination, or similar corporate transaction, in order to prevent dilution or enlargement of the benefits or potential benefits provided under the 2020 Plan.
The 2020 Plan permits the following types of awards: stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units, performance awards, non-employee director awards, other stock-based awards, and dividend equivalents.
Common Stock
For the six months ended September 30, 2022, the Company issued shares of common stock as follows:
For the six months ended September 30, 2021, the Company issued shares of common stock as follows:
Time-Based Restricted Stock Units
We have granted time-based restricted stock units to certain participants under the 2020 Plan that are stock-settled with common shares. Time-based restricted stock units granted under the 2020 Plan vest over three years. Stock-based compensation expense included in the Consolidated Statements of Operations for time-based restricted stock units was $182,377 and $79,064 for the three months ended September 30, 2022 and 2021, respectively and $364,754 and $108,108 for the six months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there were approximately $ of total unrecognized pre-tax compensation expense related to time-based restricted stock units that is expected to be recognized over a weighted-average period of years.
Our time-based restricted stock unit activity for the year ended March 31, 2022, and the six month period ended September 30, 2022 is as follows:
Stock Options
Stock options issued to employees typically vest over and have a contractual term of . Stock-based compensation expense included in the Consolidated Statements of Operations for stock options was $ for the three months ended September 30, 2022 and $ for the six months ended September 30, 2022. At September 30, 2022, there was approximately $ of total unrecognized stock option expense which is expected to be recognized on a straight-line basis over a weighted-average period of years.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Annually, we make predictive assumptions regarding future stock price volatility, dividend yield, expected term and forfeiture rate. The dividend yield assumption is based on expected annual dividend yield on a grant date. To date, no dividends on common stock have been paid by us. Expected volatility for grants is based on our average historical volatility over a similar period as the expected term assumption used for our options as the expected volatility. The risk-free interest rate is based on yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group. We use the “simplified method” to determine the expected term of the stock option grants. We utilize this method because we do not have sufficient public company exercise data in which to make a reasonable estimate.
Warrants
During the three and six months ended September 30, 2022, no warrants were issued.
During the six months ended September 30, 2021, the Company issued warrants to purchase an aggregate of 3,043,556 shares of common stock in connection with its public offering of units, as follow:
These warrants’ values were arrived at by using the Black-Scholes option pricing model with the following assumptions:
i) an expected volatility of the Company’s shares on the date of the grants of approximately 315% based on historical volatility. ii) risk-free rate identical to the U.S. Treasury 5-year treasury bill rate on the date of the grants of 0.82%.
A summary of warrant activity for the year ended March 31, 2022 and six month period ended September 30, 2022 is as follows:
Stock-based compensation expense included in the Consolidated Statements of Operations for warrants was $ and $ for the three months ended September 30, 2022 and 2021, respectively. Stock-based compensation expense included in the Consolidated Statements of Operations for warrants was $ and $ for the six months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was no future unrecognized warrant expense.
For the three months ended September 30, 2022 and 2021, the total stock-based compensation on all instruments was $ and $, respectively. For the six months ended September 30, 2022 and 2021, the total stock-based compensation on all instruments was $ and $, respectively.
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SUBSEQUENT EVENT |
6 Months Ended |
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Sep. 30, 2022 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENT | NOTE 12 – SUBSEQUENT EVENT
On October 14, 2022, the stockholders of the Company approved the PetVivo Holdings, Inc. Amended and Restated 2020 Equity Incentive Plan (the “Amended Plan”), which increased the number of shares of the Company’s common stock which may be granted under the Amended Plan from to . |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Policies) |
6 Months Ended | |||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||
| Organization and Description |
The Company is in the business of licensing and commercializing our proprietary medical devices and biomaterials for the treatment of afflictions and diseases in animals, initially for dogs and horses. The Company began commercialization of its lead product Spryng™ with OsteoCushion™ Technology, a veterinarian-administered, intraarticular injection for the management of lameness and other joint afflictions such osteoarthritis in dogs and horses, in September 2021. The Company has a pipeline of additional products for the treatment of animals in various stages of development. A portfolio of nineteen patents protects the Company’s biomaterials, products, production processes and methods of use. The Company’s operations are conducted from its headquarter facilities in suburban Minneapolis, Minnesota. |
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| Basis of Presentation |
PetVivo Holdings, Inc. (the “Company”) was incorporated in Nevada under a former name in 2009 and entered its current business in 2014 through a stock exchange reverse merger with PetVivo, Inc., a Minnesota corporation. This merger resulted in Minnesota PetVivo becoming a wholly-owned subsidiary of the Company. In April 2017, the Company acquired another Minnesota corporation, Gel-Del Technologies, Inc., through a statutory merger, which is also a wholly-owned subsidiary of the Company. |
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| Principles of Consolidation |
The accompanying consolidated financial statements include the accounts of the Company and its two wholly-owned Minnesota corporations, Gel-Del Technologies, Inc. and PetVivo, Inc. All intercompany accounts have been eliminated upon consolidation. |
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| Use of Estimates |
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include collectability of accounts receivable, inventory obsolescence, estimated useful lives and potential impairment of property and equipment and intangibles, estimate of fair value of share-based payments, future rebates payable to a distributor, product refund liabilities, lease assets and liabilities and valuation of deferred tax assets. |
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| Cash and Cash Equivalents |
The Company considers all highly-liquid, temporary cash investments with an original maturity of three months or less to be cash equivalents. |
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| Concentration-Risk |
The Company maintains its cash with various financial institutions, which at times may exceed federally insured limits. As of September 30, 2022 and March 31, 2022, the Company did have cash balances in excess of the federally insured limits.
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| Property & Equipment |
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the assets estimated useful life of 3 to 5 years for production and computer equipment and furniture and 5 to 7 years for leasehold improvements. |
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| Patents and Trademarks |
The Company capitalizes direct costs for the maintenance and advancement of their patents and trademarks and amortizes these costs over the lesser of the useful life of 60 months or the life of the patent. We evaluate the recoverability of intangible assets periodically by considering events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. |
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| Loss Per Share |
Basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The Company had warrants outstanding as of September 30, 2022, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these warrants is $ per share. These warrants are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had restricted stock units outstanding as of September 30, 2022 which are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had options outstanding as of September 30, 2022, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these options is $ per share. These options are excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had warrants outstanding as of September 30, 2021, with varying exercise prices ranging from $ to $ per share. The weighted average exercise price for these warrants is $ per share. These warrants were excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company had restricted stock units outstanding as of September 30, 2021 which were excluded from the weighted average number of shares because they are considered anti-dilutive.
The Company uses the guidance in Accounting Standards Codification (“ASC”) 260 to determine if-converted loss per share. ASC 260 states that convertible securities should be considered exercised at the later date of the first day of the reporting period’s quarter or the inception date of the debt instrument. Also, the if-converted method shall not be applied for the purposes of computing diluted EPS if the effect would be anti-dilutive. |
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| Revenue Recognition |
The Company derives revenue from the sale of our pet care products directly to its veterinarian customers in the United States. For performance obligations related to the sale of our pet care products, control transfers to the customer at a point in time. Revenue is recognized upon delivery to the customer, which is when control of these products is transferred and in an amount that reflects the consideration the Company expects to receive for these products. Shipping costs charged to customers are reported as an offset to the respective shipping costs. The Company does not have any significant financing components as payment is received at or shortly after the point of sale.
The Company entered into a Distribution Services Agreement (the “Agreement”) with MWI Veterinary Supply Co. (the “Distributor”) on June 17, 2022. Contracts are evidenced by individual executed purchase orders subject to the terms of the Agreement. The contracts consist of a single performance obligation related to the sale of our pet care products. Control transfers to the Distributor at a point in time. Revenue is recognized upon satisfaction of the performance obligation which is delivery to the Distributor; payment is due within 60 days. The Agreement provides for a distribution fee payable to the Distributor equal to 5% of gross monthly sales payable in 45 days; the distribution fee is netted against revenue. The Agreement provides for a rebate payable to the Distributor based on annual sales volume that is retroactively applied. The rebate is estimated under the expected value method and is netted against revenue. Sales are subject to various right of return provisions; the Company uses an expected value method to estimate returns and has determined that any returns would be immaterial. As a result, there is no refund liability recorded. Shipping and handling costs are a fulfillment activity and are reported as cost of sales.
For the three and six months ended September 30, 2022, the Company recognized revenue from product sales under the Agreement of $118,264. Assets and liabilities under the Agreement were as follows at September 30, 2022:
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| Research and Development |
The Company expenses research and development costs as incurred. |
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| Fair Value of Financial Instruments |
The Company applies the accounting guidance under FASB ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
The Company’s financial instruments consist of accounts receivable, accounts payable, accrued expenses and note payable and accrued interest. The carrying amount of the Company’s financial instruments approximates their fair value as of September 30, 2022 and March 31, 2022, due to the short-term nature of these instruments and the Company’s borrowing rate of interest.
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of the Company’s note recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.
The Company had no assets and liabilities measured at fair value on a recurring basis at September 30, 2022 and March 31, 2022.
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| Stock-Based Compensation - Non-Employees |
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under the guidance of Sub-topic 505-50 of the FASB ASC (“Sub-topic 505-50”).
Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time or if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised. |
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| Income Taxes |
The Company accounts for income taxes under ASC Topic 740. Deferred tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
As required by ASC Topic 450, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company is not currently under examination by any federal or state jurisdiction.
The Company’s policy is to record tax-related interest and penalties as a component of operating expenses. |
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| Inventory |
Inventories are recorded in accordance with ASC 330, Inventory, and are stated at the lower of cost or net realizable value. We account for inventories using the first in first out (FIFO) methodology. |
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| Recent Accounting Pronouncements |
The Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s financial management.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of the standard had no impact on the consolidated financial statements.
All other new issued, but not yet effective, accounting pronouncements have been deemed either immaterial or not applicable. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Tables) |
6 Months Ended | |||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
| SCHEDULE OF RECOGNIZED REVENUE ASSETS AND LIABILITIES |
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INVENTORY (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF INVENTORY | The inventory components are as follows:
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PROPERTY AND EQUIPMENT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROPERTY AND EQUIPMENT | The components of property and equipment were as follows:
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PATENTS AND TRADEMARKS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF COMPONENTS OF PATENTS AND TRADEMARKS | The components of patents and trademarks, all of which are finite-lived, were as follows:
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ACCRUED EXPENSES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||
| SCHEDULE OF COMPONENTS OF ACCRUED EXPENSES | The components of accrued expenses were as follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF ANNUAL UNDISCOUNTED OPERATING LEASE LIABILITY | The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of September 30, 2022:
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| SCHEDULE OF BASE RENT LEASE PAYMENTS |
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| SCHEDULE OF LEASE CURRENT AND NON-CURRENT ASSETS AND LIABILITIES | As of September 30, 2022, the present value of future base rent lease payments – net is classified between current and non-current assets and liabilities as follows:
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STOCKHOLDERS’ EQUITY (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF TIME BASED RESTRICTED STOCK UNITS | Our time-based restricted stock unit activity for the year ended March 31, 2022, and the six month period ended September 30, 2022 is as follows:
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| SCHEDULE OF ESTIMATED FAIR VALUES ASSUMPTIONS |
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| SCHEDULE OF STOCK OPTION ACTIVITY |
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| SCHEDULE OF ADDITIONAL INFORMATION ABOUT STOCK OPTIONS |
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| SCHEDULE OF WARRANT ACTIVITY | A summary of warrant activity for the year ended March 31, 2022 and six month period ended September 30, 2022 is as follows:
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| SCHEDULE OF RANGE OF WARRANT PRICES |
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SCHEDULE OF RECOGNIZED REVENUE ASSETS AND LIABILITIES (Details) |
Sep. 30, 2022
USD ($)
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|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Accounts receivable | $ 124,488 |
| Rebate liability | |
| Distribution fee payable | $ 6,224 |
SCHEDULE OF INVENTORY (Details) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Finished goods | $ 45,479 | $ 11,889 |
| Work in process | 21,525 | 22,960 |
| Raw materials | 237,963 | 63,464 |
| Total Net | $ 304,967 | $ 98,313 |
INVENTORY (Details Narrative) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Inventory, Net | $ 304,967 | $ 98,313 |
PREPAID EXPENSES AND OTHER ASSETS (Details Narrative) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Prepaid expenses and other assets | $ 612,128 | $ 547,664 |
| Insurance Costs [Member] | ||
| Prepaid expenses and other assets | 309,000 | 148,000 |
| Investor Relations Services [Member] | ||
| Prepaid expenses and other assets | 99,000 | 220,000 |
| Trade Shows [Member] | ||
| Prepaid expenses and other assets | 75,000 | 46,000 |
| Clinical studies [Member] | ||
| Prepaid expenses and other assets | 38,000 | 71,000 |
| Nasdaq Fees [Member] | ||
| Prepaid expenses and other assets | 33,000 | $ 45,000 |
| Software Subscription Fees [Member] | ||
| Prepaid expenses and other assets | $ 33,000 |
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Total, at cost | $ 599,774 | $ 516,208 |
| Accumulated depreciation | (258,703) | (204,659) |
| Total Net | 341,071 | 311,549 |
| Leasehold Improvements [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total, at cost | 216,159 | 216,159 |
| Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total, at cost | 250,738 | 197,967 |
| R and D Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total, at cost | 25,184 | 25,184 |
| Computer Equipment and Furniture [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total, at cost | $ 107,693 | $ 76,898 |
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Property, Plant and Equipment [Abstract] | ||||
| Depreciation expense | $ 28,719 | $ 11,756 | $ 54,044 | $ 23,627 |
SCHEDULE OF COMPONENTS OF PATENTS AND TRADEMARKS (Details) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Patents | $ 3,870,057 | $ 3,870,057 |
| Trademarks | 26,142 | 26,142 |
| Total at cost | 3,896,199 | 3,896,199 |
| Accumulated Amortization | (3,852,213) | (3,847,747) |
| Total net | $ 43,986 | $ 48,452 |
PATENTS AND TRADEMARKS (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||
| Amortization expense | $ 2,240 | $ 2,333 | $ 4,466 | $ 4,062 |
SCHEDULE OF COMPONENTS OF ACCRUED EXPENSES (Details) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accrued payroll and related taxes | $ 432,848 | $ 452,137 |
| Accrued lease termination expense | 332,238 | 332,238 |
| Total | $ 765,086 | $ 784,375 |
ACCRUED EXPENSES (Details Narrative) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accrued expense | $ 332,000 | $ 332,000 |
NOTE PAYABLE (Details Narrative) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
Jan. 31, 2020 |
|---|---|---|---|
| Debt Disclosure [Abstract] | |||
| Notes payable | $ 30,605 | $ 33,750 | $ 42,500 |
| Debt instrument, interest rate | 6.00% | ||
| Notes payable, current liabilities | 6,737 | 6,549 | |
| Note payable other liabilities | $ 23,868 | $ 27,201 |
RETIREMENT PLAN (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Retirement Benefits [Abstract] | ||||
| Discretionary contributions | $ 8,183 | $ 0 | $ 14,341 | $ 0 |
SCHEDULE OF ANNUAL UNDISCOUNTED OPERATING LEASE LIABILITY (Details) |
Sep. 30, 2022
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| 2023 | $ 29,711 |
| 2024 | 60,588 |
| 2025 | 61,964 |
| 2026 | 63,372 |
| 2027 | 55,103 |
| Total | 270,738 |
| Less: amount representing interest | (1,146) |
| Total | $ 269,592 |
SCHEDULE OF BASE RENT LEASE PAYMENTS (Details) |
Sep. 30, 2022
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| Present value of future base rent lease payments | $ 269,592 |
| Base rent payments included in prepaid expenses | |
| Present value of future base rent lease payments – net | $ 269,592 |
SCHEDULE OF LEASE CURRENT AND NON-CURRENT ASSETS AND LIABILITIES (Details) - USD ($) |
Sep. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Operating lease right-of-use asset | $ 269,592 | |
| Total operating lease assets | 269,592 | $ 299,101 |
| Operating lease current liability | 59,807 | 59,178 |
| Operating lease other liability | 209,785 | $ 239,923 |
| Total operating lease liabilities | $ 269,592 |
GOING CONCERN (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Mar. 31, 2022 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
| Net loss | $ 2,111,589 | $ 1,965,428 | $ 1,105,474 | $ 490,629 | $ 4,077,017 | $ 1,596,103 | |
| Net cash used in operating activities | 3,749,581 | $ 1,340,137 | |||||
| Accumulated deficit | $ 67,203,438 | $ 67,203,438 | $ 63,126,421 | ||||
SCHEDULE OF ESTIMATED FAIR VALUES ASSUMPTIONS (Details) - $ / shares |
6 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2022 |
Mar. 31, 2022 |
|
| Expected term | 7 years | 7 years |
| Expected volatility, minimum | 173.20% | 205.00% |
| Expected volatility, maximum | 207.80% | 210.50% |
| Risk-free interest rate, mimimum | 2.96% | 1.47% |
| Risk-free interest rate, maximum | 3.69% | 2.14% |
| Expected dividend yield | 0.00% | 0.00% |
| Minimum [Member] | ||
| Fair value on the date of grant | $ 1.87 | $ 1.39 |
| Maximum [Member] | ||
| Fair value on the date of grant | $ 2.79 | $ 1.99 |
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Mar. 31, 2022 |
|||||
| Equity [Abstract] | ||||||
| Options Outstanding, Beginning | 195,000 | |||||
| Weighted Average Exercise Price Per Share, Beginning | [1] | $ 1.56 | ||||
| Aggregate Intrinsic Value, Beginning | [2] | $ 100,200 | ||||
| Options Outstanding, Granted | 198,789 | 195,000 | ||||
| Weighted Average Exercise Price Per Share, Granted | [1] | $ 2.26 | $ 1.56 | |||
| Weighted Average Remaining Contractual Life | 6 years 7 months 6 days | 6 years 10 months 24 days | ||||
| Options Outstanding, Ending | 393,789 | 195,000 | ||||
| Weighted Average Exercise Price Per Share, Ending | [1] | $ 1.91 | $ 1.56 | |||
| Aggregate Intrinsic Value, Ending | [2] | $ 68,841 | $ 100,200 | |||
| Stock options exercisable | 43,789 | |||||
| ||||||
SCHEDULE OF ADDITIONAL INFORMATION ABOUT STOCK OPTIONS (Details) |
6 Months Ended |
|---|---|
|
Sep. 30, 2022
$ / shares
shares
| |
| Equity [Abstract] | |
| Non-vested options, beginning of year | shares | 195,000 |
| Non -vested options, end of year | shares | 350,000 |
| Vested options, end of year | shares | 43,789 |
| Weighted-average grant date fair value, non-vested options, beginning of year | $ 1.56 |
| Weighted-average grant date fair value, non-vested options, end of year | 1.89 |
| Weighted-average grant date fair value, vested options, end of year | 2.07 |
| Weighted-average grant date fair value, forfeited options, during the year |
SCHEDULE OF WARRANT ACTIVITY (Details) - Warrant [Member] - $ / shares |
6 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2022 |
Mar. 31, 2022 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Number of Warrants, Outstanding, Beginning balance | 3,757,484 | 1,081,668 |
| Weighted-Average Exercise Price, Outstanding, Beginning balance | $ 4.95 | $ 2.02 |
| Warrants Exercisable, Outstanding, Beginning balance | 3,693,734 | 881,982 |
| Weighted-Average Exercise Price, Beginning balance | $ 5.00 | $ 2.00 |
| Number of Warrants, Issued and granted | 3,043,556 | |
| Weighted-Average Exercise Price, Issued and granted | $ 5.63 | |
| Number of Warrants, Exercised for cash | (48,664) | (6,094) |
| Weighted-Average Exercise Price, Exercised for cash | $ (1.37) | $ (6.90) |
| Number of Warrants, Cashless warrant exercises | (237,724) | |
| Weighted-Average Exercise Price, Cashless warrant exercises | $ (1.58) | |
| Number of Warrants, Expired | (22,500) | (15,922) |
| Weighted-Average Exercise Price, Expired | $ (1.33) | $ (5.27) |
| Number of Warrants, Cancelled | (108,000) | |
| Weighted-Average Exercise Price, Cancelled | $ (1.79) | |
| Number of Warrants, Outstanding, Ending balance | 3,686,320 | 3,757,484 |
| Weighted-Average Exercise Price, Outstanding, Ending balance | $ 5.02 | $ 4.95 |
| Warrants Exercisable, Outstanding, Ending balance | 3,641,320 | 3,693,734 |
| Weighted-Average Exercise Price, Ending balance | $ 5.06 | $ 5.00 |
SCHEDULE OF RANGE OF WARRANT PRICES (Details) - Warrant [Member] - $ / shares |
6 Months Ended | |||
|---|---|---|---|---|
Sep. 30, 2022 |
Mar. 31, 2022 |
Apr. 30, 2021 |
Mar. 31, 2021 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | $ 4.44 | |||
| Number of Warrants, Outstanding | 3,686,320 | |||
| Weighted-Average Exercise Price, outstanding | $ 5.02 | $ 4.95 | $ 2.02 | |
| Weighted-Average Remaining Contractual Life (Years), Outstanding | 3 years 8 months 1 day | |||
| Number of Warrants, Exercisable | 3,641,320 | 3,693,734 | 881,982 | |
| Weighted-Average Exercise Price, Exercisable | $ 5.06 | $ 5.00 | $ 2.00 | |
| Range One [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Number of Warrants, Outstanding | 347,073 | |||
| Weighted-Average Exercise Price, outstanding | $ 1.35 | |||
| Weighted-Average Remaining Contractual Life (Years), Outstanding | 3 years 11 months 4 days | |||
| Number of Warrants, Exercisable | 347,073 | |||
| Weighted-Average Exercise Price, Exercisable | $ 1.35 | |||
| Range One [Member] | Minimum [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | 1.20 | |||
| Range One [Member] | Maximum [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | $ 2.00 | |||
| Range Two [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Number of Warrants, Outstanding | 207,938 | |||
| Weighted-Average Exercise Price, outstanding | $ 2.48 | |||
| Weighted-Average Remaining Contractual Life (Years), Outstanding | 1 year 10 months 2 days | |||
| Number of Warrants, Exercisable | 162,938 | |||
| Weighted-Average Exercise Price, Exercisable | $ 2.55 | |||
| Range Two [Member] | Minimum [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | 2.01 | |||
| Range Two [Member] | Maximum [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | $ 4.00 | |||
| Range Three [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Number of Warrants, Outstanding | 3,131,309 | |||
| Weighted-Average Exercise Price, outstanding | $ 5.60 | |||
| Weighted-Average Remaining Contractual Life (Years), Outstanding | 3 years 9 months 3 days | |||
| Number of Warrants, Exercisable | 3,131,309 | |||
| Weighted-Average Exercise Price, Exercisable | $ 5.60 | |||
| Range Three [Member] | Minimum [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | 4.01 | |||
| Range Three [Member] | Maximum [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Warrant exercise price | $ 6.67 |
STOCKHOLDERS’ EQUITY (Details Narrative) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Aug. 13, 2021
USD ($)
$ / shares
shares
|
Jul. 10, 2020
shares
|
Aug. 31, 2022
USD ($)
$ / shares
shares
|
Jul. 31, 2022
USD ($)
$ / shares
shares
|
Sep. 30, 2021
USD ($)
$ / shares
shares
|
Aug. 31, 2021
USD ($)
$ / shares
shares
|
Jul. 31, 2021
USD ($)
$ / shares
shares
|
Jun. 30, 2021
$ / shares
shares
|
May 31, 2021
$ / shares
shares
|
Apr. 30, 2021
USD ($)
$ / shares
shares
|
Jun. 30, 2021
USD ($)
$ / shares
shares
|
Sep. 30, 2022
USD ($)
shares
|
Sep. 30, 2021
USD ($)
$ / shares
shares
|
Jun. 30, 2021
USD ($)
$ / shares
shares
|
Sep. 30, 2022
USD ($)
shares
|
Sep. 30, 2021
USD ($)
$ / shares
shares
|
Mar. 31, 2022 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Stock issued for services | $ | $ 49,920 | $ 210,000 | |||||||||||||||
| Conversion of shares | shares | 80,522 | ||||||||||||||||
| Conversion of notes | $ | $ 230,000 | ||||||||||||||||
| Accrued interest | $ | $ 2,658 | ||||||||||||||||
| Conversion price per share | $ / shares | $ 2.89 | ||||||||||||||||
| Common stock sold | $ | 4,968,531 | $ 343,098 | |||||||||||||||
| Stock options contractual term | 6 years 7 months 6 days | 6 years 10 months 24 days | |||||||||||||||
| Stock-based Compensation | $ | 284,475 | 104,092 | $ 515,706 | $ 159,766 | |||||||||||||
| Warrants issued | $ | $ 0 | $ 0 | |||||||||||||||
| Measurement Input, Price Volatility [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrant measurement inputs | 315 | 315 | |||||||||||||||
| Measurement Input, Expected Term [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrants exercise term | 5 years | 5 years | |||||||||||||||
| Measurement Input, Risk Free Interest Rate [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrant measurement inputs | 0.82 | 0.82 | |||||||||||||||
| Time-Based Restricted Stock Units [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Restricted stock compensation expense | $ | $ 182,377 | $ 79,064 | $ 364,754 | $ 108,108 | |||||||||||||
| Unrecognized pre-tax compensation expenses | $ | 1,323,000 | $ 1,323,000 | |||||||||||||||
| Unrecognized compensation expenses recognition period | 1 year 9 months 18 days | ||||||||||||||||
| Equity Option [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Unrecognized compensation expenses recognition period | 2 years 4 months 24 days | ||||||||||||||||
| Stock options vesting period | 3 years | ||||||||||||||||
| Stock options contractual term | 7 years | ||||||||||||||||
| Stock-based Compensation | $ | 102,763 | $ 109,290 | |||||||||||||||
| Unrecognized compensation expenses | $ | $ 327,000 | $ 327,000 | |||||||||||||||
| IPO [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Common stock sold, shares | shares | 2,500,000 | ||||||||||||||||
| Warrant exercise price | $ / shares | $ 4.50 | ||||||||||||||||
| Conversion of shares | shares | 43,556 | ||||||||||||||||
| Conversion of notes | $ | $ 196,000 | ||||||||||||||||
| Conversion price per share | $ / shares | $ 4.50 | ||||||||||||||||
| Warrant exercise price | $ | $ 9,780,783 | ||||||||||||||||
| Common Stock [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Common stock sold, shares | shares | 106,914 | 2,932,230 | |||||||||||||||
| Common Stock [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Common stock sold, shares | shares | 2,511,000 | 49,014 | |||||||||||||||
| Stock issued for services, shares | shares | 25,000 | 42,000 | |||||||||||||||
| Stock issued for services | $ | $ 25 | $ 42 | |||||||||||||||
| Vesting of restricted stock units, shares | shares | 33,250 | 33,250 | |||||||||||||||
| Common stock sold | $ | 2,511 | $ 50 | |||||||||||||||
| Warrant [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrant exercise price | $ / shares | $ 4.44 | ||||||||||||||||
| Proceeds from warrant exercise | $ | $ 40,000 | ||||||||||||||||
| Number of warrants purchase | shares | 4,500 | ||||||||||||||||
| Stock-based Compensation | $ | $ 20,831 | $ 25,028 | $ 41,662 | $ 51,658 | |||||||||||||
| Warrant [Member] | Think Equity [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrant exercise price | $ / shares | $ 5.625 | $ 5.625 | $ 5.625 | ||||||||||||||
| Number of warrants purchase | shares | 500,000 | 500,000 | 500,000 | ||||||||||||||
| Warrants exercise term | 5 years | 5 years | 5 years | ||||||||||||||
| Warrant [Member] | IPO [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Number of warrants purchase | shares | 3,043,556 | 3,043,556 | 3,043,556 | ||||||||||||||
| Warrant Holders [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Common stock sold, shares | shares | 24,447 | 24,217 | 1,594 | 40,038 | 43,324 | 79,767 | |||||||||||
| Warrant exercise price | $ / shares | $ 1.41 | $ 1.33 | $ 1.27 | $ 1.40 | $ 2.22 | $ 1.40 | $ 2.22 | $ 1.27 | $ 2.22 | $ 1.27 | |||||||
| Proceeds from warrant exercise | $ | $ 34,370 | $ 32,188 | $ 2,031 | ||||||||||||||
| Number of warrants purchase | shares | 1,594 | 48,786 | 56,250 | 90,500 | 56,250 | 1,594 | 56,250 | 1,594 | |||||||||
| Service Provider [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Stock issued for services, shares | shares | 25,000 | 42,000 | |||||||||||||||
| Stock issued for services | $ | $ 49,920 | $ 210,000 | |||||||||||||||
| John Lai's [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Common stock sold, shares | shares | 36,915 | ||||||||||||||||
| Warrant exercise price | $ / shares | $ 1.33 | ||||||||||||||||
| Number of warrants purchase | shares | 42,188 | ||||||||||||||||
| Accredited Investors [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Common stock sold, shares | shares | 11,000 | 49,014 | |||||||||||||||
| Common stock sold | $ | $ 77,000 | $ 343,098 | |||||||||||||||
| Shares issued price per share | $ / shares | $ 7.00 | $ 7.00 | $ 7.00 | $ 7.00 | |||||||||||||
| Investors [Member] | Warrant [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrant exercise price | $ / shares | $ 5.625 | $ 5.625 | $ 5.625 | ||||||||||||||
| Common stock sold | $ | $ 4,805,528 | ||||||||||||||||
| Warrants to purchase common stock | shares | 2,500,000 | 2,500,000 | 2,500,000 | ||||||||||||||
| Warrants exercise term | 5 years | 5 years | 5 years | ||||||||||||||
| Director [Member] | Warrant [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Warrant exercise price | $ / shares | $ 5.625 | $ 5.625 | $ 5.625 | ||||||||||||||
| Conversion of notes | $ | $ 196,000 | ||||||||||||||||
| Warrants to purchase common stock | shares | 43,556 | 43,556 | 43,556 | ||||||||||||||
| Warrants exercise term | 5 years | 5 years | 5 years | ||||||||||||||
| Conversion of Stock, Amount Issued | $ | $ 83,724 | ||||||||||||||||
| 2020 Equity Incentive Plan [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Number of shares of our common stock authorized | shares | 1,000,000 | ||||||||||||||||
| Expiration date | Jul. 10, 2030 | ||||||||||||||||
| Number of shares available to grant | shares | 143,850 | 143,850 | |||||||||||||||
| Common stock available and reserved to be issued | shares | 1,000,000 | ||||||||||||||||
| 2020 Equity Incentive Plan [Member] | Non employee Director [Member] | |||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||
| Maximum aggregate number of shares of common stock granted | shares | 10,000 | ||||||||||||||||
SUBSEQUENT EVENT (Details Narrative) - shares |
6 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Oct. 14, 2022 |
Oct. 13, 2022 |
Sep. 30, 2022 |
Mar. 31, 2022 |
|
| Subsequent Event [Line Items] | ||||
| Common stock, granted | 198,789 | 195,000 | ||
| Amended and Restated 2020 Equity Incentive Plan [Member] | Subsequent Event [Member] | ||||
| Subsequent Event [Line Items] | ||||
| Common stock, granted | 3,000,000 | 1,000,000 |