U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Mark One

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2017

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission File No. 000-55167

 

PetVivo Holdings Inc.
 
(Name of small business issuer in its charter)

 

Nevada   99-0363559

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

5251 Edina Industrial Blvd.

Edina, Minnesota 55439

(Address of principal executive offices)

 

(952) 405-6216

(Issuer’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act:   Name of each exchange on which registered:
None    

 

Securities registered pursuant to Section 12(g) of the Act:

 

Common Stock, $0.001

(Title of Class)

 

Indicate by checkmark 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 requirements for the past 90 days. Yes [  ] No [X]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] Smaller reporting company [X]

 

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

 

Class  

Outstanding as of April 26, 2018

Common Stock, $0.001   18,279,075

 

 

 

 

 

 

PETVIVO HOLDINGS, INC.

FORM 10-Q

FOR THE PERIOD ENDED DECEMBER 31, 2017

 

INDEX

 

    Page
     
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS  
   
PART I. FINANCIAL INFORMATION F-1
   
Item 1. Financial Statements F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3. Qualitative and Quantitative Disclosures About Market Risk 9
Item 4. Controls and Procedures 9
     
PART II. OTHER INFORMATION 10
     
Item 1. Legal Proceedings 10
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 11
Item 4. Mine Safety Disclosure 11
Item 5. Other information 11
Item 6. Exhibits 11
     
SIGNATURES 12

 

  2  

 

 

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

 

Information included in this 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 by the forward-looking statements as a result of various factors. 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.

 

  3  

 

 

PART I

 

ITEM 1. FINANCIAL STATEMENTS

 

PETVIVO HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

    December 31, 2017     March 31, 2017  
Assets:                
Current Assets                
Cash and cash equivalents   $ 556,901     $ 25,434  
Accounts receivable     163       163  
Employee advance     1,000       -  
Prepaids     22,423       8,590  
Security deposit     8,201       -  
Total Current Assets     588,688       34,187  
                 
Property and Equipment:                
Property & equipment     112,271       103,503  
Less: accumulated depreciation     (103,470 )     (103,054 )
Total Fixed Assets     8,801       449  
                 
Other Assets:                
Trademark and patents-net     1,399,043       1,862,301  
Total Other Assets     1,399,043       1,862,301  
Total Assets   $ 1,996,532     $ 1,896,937  
                 
Liabilities and Stockholders’ Equity                
                 
Current Liabilities                
Accounts payable & accrued expenses   $ 1,278,807     $ 643,890  
Note payable and accrued interest-related party     196,063       197,055  
Notes payable and line of credit loan     66,230       131,247  
Convertible notes payable     115,736       105,000  
Total Current Liabilities     1,656,836       1,077,192  
                 
Commitments and Contingencies                
                 
Stockholders’ Equity:                
Common stock, par value $0.001, 250,000,000 shares authorized, issued 18,279,075 and 9,321,306 shares outstanding at December 31, 2017 and March 31, 2017     18,279       9,322  
Common stock to be issued     412,000       1,349,919  
Additional Paid-In Capital     46,699,288       30,567,761  
Accumulated Deficit     (46,789,871 )     (45,410,816 )
Total Stockholders’ Equity     339,696       (13,483,814 )
Non-Controlling Interest     -       14,303,559  
Total Stockholders’ Equity     339,696       819,745  
Total Liabilities and Stockholders’ Equity   $ 1,996,532     $ 1,896,937  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

  F- 1  

 

 

PETVIVO HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

    Three Months Ended     Nine Months Ended  
    December 31, 2017     December 31, 2016     December 31, 2017     December 31, 2016  
                         
Revenues   $ -     $ 2,163     $ 1,510     $ 7,079  
                                 
Cost of Sales     -       -       -       -  
                                 
Gross Profit   $ -     $ 2,163     $ 1,510     $ 7,079  
                                 
Operating Expenses:                                
                                 
Research and Development     16,659       42,192       62,818       117,235  
General and Administration     516,234       458,508       1,268,008       15,603,313  
Total Operating Expenses     532,893       500,700       1,330,826       15,720,548  
                                 
Operating Loss   $ (532,893 )   $ (498,537 )   $ (1,329,316 )   $ (15,713,469 )
                                 
Other Income (Expense)                                
Gain on Settlement of Debt     22,000       -       22,000       24,460  
Interest Expense     (45,675 )     (8,555 )     (71,739 )     (175,571 )
Total Other Income (Expense)     (23,675 )     (8,555 )     (49,739 )     (151,111 )
                                 
Net Loss before taxes   $ (556,568 )   $ (507,092 )   $ (1,379,055 )   $ (15,864,580 )
                                 
Income Tax Provision     -       -       -       -  
                                 
Net Loss     (556,568 )     (507,092 )     (1,379,055 )     (15,864,580 )
                                 
Net Loss Attributable To Non-Controlling Interest     -       225,092       -       772,794  
                                 
Net loss attributable to PetVivo   $ (556,568 )   $ (282,000 )   $ (1,379,055 )   $ (15,091,786 )
                                 
Net Loss Per Share- Basic And Diluted   $ (0.03 )   $ (0.03 )   $ (0.08 )   $ (1.68 )
                                 
Weighted Average Common Shares Outstanding-Basic And Diluted     17,168,329       9,081,482       16,506,923       9,000,488  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

  F- 2  

 

 

PETVIVO HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

    Common Stock     Additional
Paid-in
    Accumulated     Non- controlling     Stock to be        
    Shares     Amount     Capital     Deficit     Interest     Issued     Total  
Balance March 31, 2016     7,931,639     $ 7,931     $ 28,224,376     $ (29,879,283 )   $ 15,280,865.00     $ 1,576,649.00     $ 15,210,538  
                                                         
Common stock to be issued     -       -       -       -       -       1,349,919.00       1,349,919  
                                                         
Common shares issued to settle debt     788,325       789       1,575,860       -       -       (1,576,649 )     -  
                                                         
Common stock issued for cash     66,500       67       99,684       -       -       -       99,751  
                                                         
Common stock issued for services     437,500       438       382,062       -       -       -       382,500  
                                                         
Common shares issued for interest     97,342       97       151,379       -       -       -       151,476  
                                                         
Stock issued for services-Gel-Del     -       -       -       -       12,859       -       12,859  
                                                         
Warrants issued for services     -       -       134,400       -       -       -       134,400  
                                                         
Net Loss     -       -       -       (15,531,533 )     (990,165 )     -       (16,521,698 )
                                                         
Balance March 31, 2017     9,321,306       9,322       30,567,761       (45,410,816 )     14,303,559       1,349,919       819,745  
                                                         
Common stock issued to reduce accrued salaries     2,100,128       2,100       1,207,819       -       -       (1,209,919 )     -  
Common stock issued to reduce debt     37,741       38       13,172       -       -       (13,210 )     -  
Proceeds from stock sale     -       -       -       -       -       877,000       877,000  
Common stock returned     (681,600 )     (682 )     (342,045 )     -       -       -       (342,727 )
Stock based compensation granted                     112,527                       176,825       289,352  
Stock granted for debt conversion                                             13,210       13,210  
Common stock issued for cash     1,620,000       1,620       565,380       -       -       (567,000 )     -  
Common stock issued for services     431,500       431       214,394       -       -       (214,825 )     -  
Common stock issued for services-Gel-Del     -       -       -       -       32,171       -       32,171  
Inducement dividend     -       -       30,000       -       -       -       30,000  
Change in ownership in VIE     5,450,000       5,450       14,330,280       -       (14,335,730 )     -       -  
Net loss     -       -       -       (1,379,055 )     -       -       (1,379,055 )
                                                         
Balance December 30, 2017     18,279,075     $ 18,279     $ 46,699,288     $ (46,789,871 )   $ -     $ 412,000     $ 339,696  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

  F- 3  

 

 

PETVIVO HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

    For the Nine Months Ended  
    December 31, 2017     December 31, 2016  
CASH FLOWS FROM OPERATING ACTIVITIES:                
                 
Net Loss For The Period   $ (1,379,055 )   $ (15,864,580 )
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:                
Induced dividend from warrant exercise     30,000       -  
Gain on debt settlement     (22,000 )     -  
Non cash consulting expense     -       134,400  
Stock based compensation     321,523       232,500  
Stock compensation adjustment     (342,727 )     -  
Stock issued for interest     -       151,476  
Depreciation and amortization     483,317       583,966  
Goodwill and patent impairment loss     -       14,081,031  
Forgiveness of debt     -       (24,460 )
Changes in Operating Assets and Liabilities                
Increase (decrease) in prepaid expense     (13,833 )     5,390  
Increase (decrease) in advances and receivables     (1,000 )     15,900  
Increase in accounts payable and accrued expense     677,924       596,423  
Net Cash Used In Operating Activities     (245,851 )     (87,954 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Decrease in security deposit     (8,201 )     -  
Purchase of equipment     (8,768 )        
Change in intangible assets     (19,643 )     (31,833 )
Net Cash Used in Investing Activities     (36,612 )     (31,833 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Proceeds from stock sale     877,000       99,750  
Stock issued to convert debt     13,210          
Decrease in notes to related parties     (2,168 )     4,305  
Proceeds from loan     -       12,500  
Debt conversion     (12,500 )     -  
Common stock subscribed     -       60,200  
Repayments of convertible notes     -       (35,000 )
Repayments of loans and line of credit     (61,612 )     (19,137 )
Net Cash Provided by Financing Activities     813,930       122,618  
                 
Net Increase in Cash     531,467       2,831  
Cash at Beginning of Period     25,434       258  
Cash at End of Period   $ 556,901     $ 3,089  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
Cash Paid During The Year For:                
Interest     -       -  
Income taxes paid     -       -  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Shares issued as payment for accrued salaries   $ 1,209,919     $ -  
Change in variable interest equity   $ 14,335,730     $ -  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

  F- 4  

 

 

PetVivo Holdings, Inc.

Notes to Financial Statements

December 31, 2017

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) 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.

 

The accompanying condensed consolidated financial statements are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and note disclosures, which are included in annual financial statements, have been omitted pursuant to these rules and regulations. We believe the disclosures made in these interim unaudited financial statements are adequate to make the information not misleading.

 

Although these interim financial statements at December 31, 2017 and for the nine months ended December 31, 2017 and 2016 are unaudited, in the opinion of our management, such statements include all adjustments (consisting of normal recurring entries) necessary to present fairly our financial position, results of operations and cash flows for the periods presented. The results for the nine months ended December 31, 2017 are not necessarily indicative of the results to be expected for the year ended March 31, 2018 or for any future period.

 

These unaudited interim financial statements should be read and considered in conjunction with our audited financial statements and the notes thereto for the year ended March 31, 2017, included in our annual report on Form 10-K filed with the SEC.

 

The Company is in the business of distribution of medical devices and biomaterials for the treatment of afflictions and diseases in animals. The Company’s management development and other operations are conducted from its headquarter facilities in suburban Minneapolis, Minnesota.

 

(B) Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of the Company and its two wholly-owned Minnesota corporations. All intercompany accounts have been eliminated upon consolidation.

 

The accounting for the acquisition of Gel-Del Technologies, Inc. began with the Security Exchange Agreement on April 10, 2015 which was uncompleted and abandoned in 2016, and as adjusted for completion pursuant to the Agreement and Plan of Merger effective April 10, 2017 (the “Merger”). To complete the Merger, the Company issued 5,450,000 shares valued at market at $0.40 per share, which equaled $2,180,000.

 

(C) 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 estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest.

 

  F- 5  

 

 

(D) 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. At December 31, 2017 and March 31, 2018, the Company had no cash equivalents.

 

(E) Concentration-Risk

 

The Company maintains its cash with various financial institutions, which at times may exceed federally insured limits.

 

(F) Machinery & Equipment

 

Machinery and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of furniture fixtures and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of five (3) years for equipment, (5) years for automobile, and (7) years for furniture and fixtures.

 

(G) Patents and Trademarks

 

The company capitalizes direct costs for the maintenance and advancement of their patents and trademarks and amortizes these costs over a useful life of 60 months.

 

  F- 6  

 

 

(H) 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 has 2,646,036 warrants outstanding as of December 31, 2017 with varying exercise prices ranging from $3.50 to $0.30/share. The weighted average exercise price for these warrants is $ 0.52 per share. These warrants are antidilutive and have been excluded from the weighted average number of shares.

 

(I) Revenue Recognition

 

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. Revenues consist of Kush product sales to veterinary clinics.

 

(J) Research and Development

 

The Company expenses research and development costs as incurred.

 

(K) Fair Value of Financial Instruments

 

The Company applies the accounting guidance under Financial Accounting Standards Board (“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, notes payable, notes payable - related party, and convertible notes payable. The carrying amount of the Company’s financial instruments approximates their fair value as of December 31, 2017 and March 31, 2017, due to the short-term nature of these instruments.

 

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 notes 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 December 31, 2017 and March 31, 2017.

 

  F- 7  

 

 

(L)Recent Accounting Pronouncements

 

The FASB issued ASC 606 as guidance on the recognition of revenue from contracts with customers in May 2014 with amendments in 2015 and 2016. Revenue recognition will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The company will adopt the guidance on April 1, 2018 and apply the cumulative catchup transition method. The transition adjustment to be recorded to stockholders’ equity upon adoption of the new standard is not expected to be material. The Company does not expect the adoption on this new standard to have any material effect upon the financial statements.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this ASU supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects to recognize ROU assets and related obligations upon adoption of ASU 2016-02. The Company does not expect the adoption on this new standard to have any material effect upon the financial statements.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

 

NOTE 2 - CONVERTIBLE NOTES PAYABLE

 

The Company has one convertible note outstanding as of December 31, 2017 in the amount of $105,000 plus accrued interest of $10,736. The note terms include: twelve percent annual interest rate with the stipulation including upon completion of the Company’s next qualified equity financing round the note holder shall be allowed to exchange this note pursuant to the same terms and conditions offered in the qualified offering.

 

NOTE 3 - RELATED PARTY PAYABLE

 

At December 31, 2017, the company is obligated for officers’ notes payable, accounts payable and accrued interest in the total amount of $196,063. The note payable to officer terms are accrual of interest at eight percent annually, with a stipulation including if the Company receives additional financing in the amount greater than $1,400,000, the Company will immediately pay the officer the principal amount of the note along with all interest due.

 

  F- 8  

 

 

NOTE 4 - NOTE PAYABLE

 

The Company is obligated on the following notes at December 31, 2017:

 

1.   Third Party Individuals   $ 181,966  
2.   Bank Credit Line     18,333  
    Total   $ 200,299  

 

NOTE 5 - GOING CONCERN

 

As reflected in the accompanying condensed consolidated financial statements, the Company had no significant revenue and had a negative equity and recurring material losses. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management intends to raise additional funds either through a private placement or public 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 viability 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.

 

These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

  F- 9  

 

 

NOTE 6 - COMMON STOCK

 

From April 1, 2017 to December 31, 2017, the Company issued 8,957,769 shares of common stock of which 1,418,528 were issued to reduce accrued salaries valued at $867,192; 431,500 shares were for services valued at market for $214,825; and 1,620,000 shares for cash of $567,000. In addition, 5,450,000 shares were issued as part of the Company’s merger of Gel-Del Technologies, Inc. In December, 2017, 37,741 shares were issued to settle debt valued at $13,210.

 

As of December 31, 2017, the Company had 2,646,036 warrants outstanding. On August 5, 2015, 40,000 warrants were issued as settlement for business advising, management consulting, fund raising and public relations consulting at exercise price of $3.50/share for a five year term. On April 11, 2016, 20,000 warrants were issued as part of subscription agreements at an exercise price of $2.00/share for a term of five years. On June 7, 2016, 13,250 warrants were issued as part of a subscription agreement at an exercise price of $2.00/share for a term of five years.

 

On September 15, 2017, the Company issued 100,000 warrants to David Deming and 100,000 warrants to Peter Vezmar at an exercise price of $0.35/share for a five year term. On September 19, 2016, 60,000 warrants were issued as part of a subscription agreement at an exercise price of $1.50/share for a term of five years. On July 28, 2017, 750,000 warrants were issued to the President upon the transfer of his 1.25 million shares to the new CEO at an exercise price of $0.30/share for a vesting term of two years. On November 6, 2017, the Company issued 100,000 warrants to David Merrill as a board member at an exercise price of $1.00/share for a five year term. On December 7, 2017, the Company issued 1,500,000 warrants as part of subscription agreements at an exercise price of $0.50/share for a three year term. On December 18, 2017, the Company issue 22,786 warrants as part of a conversion of a note payable at an exercise price of $0.50/share for a three year term. On December 28, 2017, one warrant holder exercised 60,000 warrants at $1.00/share.

 

NOTE 7 - AGREEMENT AND PLAN OF MERGER

 

In November 2014early 2015, we entered into a business combination agreement with Gel-Del Technologies, Inc, a Minnesota corporation (“Gel-Del”) and incident thereto in early 2015 shareholder approval of this agreement was obtained from both our shareholders and Gel-Del shareholders. We then concluded for this pending merger that Gel-Del was a VIE entity for which we were the primary beneficiary. Accordingly, for future accounting purposes, we consolidated our financial statements with those of Gel-Del as our VIE entity. We also valued Gel-Del in this uncompleted merger based on the trading price of our common stock in early 2015.

 

In late 2016 we abandoned the uncompleted 2015 business combination since Gel-Del management no longer agreed to complete it due to a substantial decline in the value of our common stock as well as a perceived higher value of Gel-Del based on additional patents granted for Gel-Del technology. During early 2017, our management and Gel-Del management again entered into a definitive agreement to effect a merger to replace the abandoned merger, provided we issue an additional 31.3% of our common stock to Gel-Del shareholders than was required by our abandoned merger. This 2017 merger agreement was then concluded through a statutory triangular merger, whereby Gel-Del and a wholly-owned Minnesota subsidiary of ours (formed expressly for the purpose of this transaction) completed a statutory merger under Minnesota Statutes (the “Merger”). Pursuant to the Merger, Gel-Del was the surviving entity and concurrently became our wholly-owned subsidiary, resulting in our obtaining full ownership of Gel-Del. Our primary reason to effect the Merger was to obtain 100% ownership and control of Gel-Del and its patented bioscience technology, including ownership of Gel-Del’s Cosmeta subsidiary. The effective and acquisition date for the Merger was April 10, 2017 when the Merger was filed officially with the Secretary of State of Minnesota.

 

As a result of the Merger we issued a total of 5,450,000 shares of our common stock pro rata to the pre-merger shareholders of Gel-Del, resulting in each common share of Gel-Del outstanding immediately prior to the Merger effective date being converted into the right to receive 0.788 common shares of our company. Gel-Del did not have any outstanding options, warrants, other derivative securities or rights convertible into securities.

 

Incident to the Merger, we also recorded an impairment loss of $14,335,730 related to an adjustment of our earlier valuation of Gel-Del which had been used in the abandoned 2015 business combination.

 

Total consideration for this Gel-Del merger was comprised of 5,450,000 shares of our common stock with an estimated fair value of $2,180,000, which 5,450,000 shares then represented approximately 30% of our total post-merger outstanding common stock. The Merger was accounted for using the acquisition method of accounting and the purchase price was allocated to the net assets acquired at their estimated fair value as follows:

 

Current assets   $ 13,918  
Property and equipment     107,300  
Intangible assets (patents & trademarks)     2,180,000  
Non-controlling interest in Gel-Del     1,422,180  
         
Total assets acquired     3,723,398  
         
Total liabilities assumed     1,543,398  
         
Net assets acquired   $ 2,180,000  

 

The allocation of $1,422,180 for the controlling interest in Gel-Del was completely eliminated or impaired after the Merger became effective in order to remove it from future consolidated interim and annual financial statements.

 

  F- 10  

 

 

NOTE 8 – INCOME TAXES

 

The Company has not filed tax returns for 2014, 2015, 2016, and 2017. The Company’s subsidiaries, Gel-Del Technologies, Inc., and Cosmeta Corp have not filed tax returns for tax years 2013, 2014, 2015, 2016, and 2017. It should be noted that the tax liability for all the companies for those years is likely to be none or minimal as a result of net operating losses recorded in those years. Gel-Del Technologies, Inc. and Cosmeta Corp file consolidated returns. There are penalties for not filing timely returns. These penalties have not been determined at this time, however, due to the operating losses, penalties are expected to be minimal. The Company is now in the process of filing all untimely returns, which will soon be submitted as required.

 

NOTE 9 – LEASE AND COMMITMENTS

 

The Company entered into an eighty-four month lease for 3,577 square feet of newly constructed office, laboratory and warehouse space located in Edina, Minnesota on May 3, 2017. The base rent is $2,078 per month and the Company is responsible for its proportional share of common space expenses, property taxes, and building insurance. Future minimum rental commitments are as follows:

 

2018   $ 24,932  
2019     24,932  
2020     24,932  
2021     24,932  
2022     24,932  
2023     24,932  
2024     21,774  
    $ 171,366  

 

NOTE 10 – SUBSEQUENT EVENTS

 

On February 2018, the Company converted note payables in the amount of $181,966 into 425,287 shares of common stock and 330,673 purchase warrants with an exercise price of $0.50 per share with a three year term.

 

In February 2018, the Company granted 10,000 shares valued at $1.50 per share for consulting and business management services.

 

In February 2018, the Company engaged a new patent law firm and granted 20,000 purchase warrants with an exercise price of $1.00 per share with a three year term.

 

All of the foregoing securities issuances were unregistered and made as non-public transactions, and accordingly exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.

 

  F- 11  

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

GENERAL

 

We are a biomedical device company engaged in the business of developing, manufacturing and commercializing biomedical technology and related healthcare patented products to treat pets and other animals suffering from arthritis and other painful afflictions. Our initial product, which is now being commercialized, is a medical device featuring the injection of patented gel-like protein-based biomaterials into the afflicted body parts of dogs, horses, and other pets and animals suffering from osteoarthritis.

 

We were incorporated in Nevada in 2009 under a former name. In 2014, we entered our current business through a reverse merger with PetVivo Inc., a Minnesota corporation founded in 2013. From this merger, PetVivo Inc. became our wholly owned subsidiary, and concurrently we changed our Nevada corporate name to PetVivo Holdings, Inc. Our common stock is publicly traded in the over-the-counter (OTC) market under the symbol “PETV.”

 

Merger With Gel-Del

 

Through a merger effective in April 2017, we acquired Gel-Del Technologies, Inc., a Minnesota corporation (“Gel-Del”). Prior to this Gel-Del merger, we had licensed Gel-Del’s biomedical technology for use in treatment of pets and other animals. While working together incident to this licensing arrangement, we and Gel-Del determined to merge and combine the two companies into one entity producing, marketing and selling medical products based on Gel-Del technology for both humans and animals.

 

Our merger with Gel-Del was effected through a statutory merger transaction resulting in an exchange by the shareholders of Gel-Del on a pro rata basis of 100% of all outstanding capital stock of Gel-Del in exchange for 5,450,000 shares of our restricted common stock, which represented approximately 30% of our total outstanding common shares post-merger. This merger became effective upon its filing with the Secretary of State of Minnesota on April 10, 2017, resulting in Gel-Del becoming our wholly owned subsidiary. Upon the effectiveness of this merger, each common share of Gel-Del outstanding immediately prior to consummation of the merger was converted into the right to receive 0.798 of a common share of our Company. Gel-Del did not have any outstanding options, warrants or other derivative securities or rights.

 

From this merger, we acquired all Gel-Del technology and related patents and other intellectual property (IP) rights and production techniques, as well as Gel-Del’s modern development and operational facilities being established in Edina, Minnesota. All of our management, development, marketing and administrative operations are now conducted from this suburban Minneapolis headquarters.

 

Gel-Del is a biomaterial and medical device development and manufacturing company founded in 1999. Gel-Del’s proprietary patented biomaterials simulate a body’s cellular tissue and thus can be readily and effectively utilized to manufacture implantable therapeutic medical devices. The chief advantage of Gel-Del biomaterials is their enhanced biocompatibility with living tissues throughout the body. We are first commercializing Gel-Del’s technology in the veterinary field for the treatment of osteoarthritis. Gel-Del has also successfully completed a pivotal clinical trial using novel Gel-Del biomaterial as a dermal filler for human cosmetic applications. Gel-Del’s core competencies relate to the development and production of medical devices containing its proprietary thermoplastic protein-based biomaterials that mimic the body’s tissue to allow integration, tissue repair, and regeneration for long-term implantation. Gel-Del biomaterials are produced using a patented and scalable self-assembly production process.

 

PLANNED BUSINESS OPERATIONS

 

We are an emerging biomedical device company focused on the licensing and commercialization of innovative medical devices and therapeutics for pets, based in suburban Minneapolis, Minnesota. We operate in the $15 billion US veterinary care market that has grown at a CAGR of 6.4% over the past five years according to the American Pet Products Association. Despite the market size, veterinary clinics and hospitals have very few treatments and/or drugs for use in pets and other animals.

 

  4  

 

 

The role of pets in the family has greatly evolved in recent years. Many pet owners consider their pets an important member of the family. They are now willing to spend greater amounts of money on their pets to maintain their health and quality of life.

 

We intend to leverage investments already expended in the development of human therapeutics to commercialize treatments for pets in a capital and time efficient way. A key component of this strategy is the accelerated timeline to revenues for veterinary medical devices, which enter the market earlier than the more stringently regulated veterinary pharmaceuticals or human therapeutics.

 

The company is planning to aggressively launch its lead product Kush Canine during the first half of 2018. Kush Canine is a veterinarian-administered joint injection for the treatment of osteoarthritis in dogs. The Kush Canine device is made from natural components that perform like cartilage for the treatment of pain and inflammation associated with osteoarthritis.

 

We believe that Kush Canine is a superior treatment that safely improves joint function. The reparative Kush Canine particles are lubricious, cushioning and long lasting. The spongy protein-based particles in Kush Canine mimic the composition and protective function of cartilage (i.e., providing both a slippery cushion and healing scaffolding). The Kush Canine particles protect the joint as an artificial cartilage. Based on industry sources, we estimate osteoarthritis afflicts 20 million owned dogs in the United States and the European Union, which we believe makes canine osteoarthritis a $2.3 billion market opportunity.

 

Osteoarthritis is a condition with degenerating cartilage, creating joint stiffness from mechanical stress resulting in inflammation and pain. The lameness caused by osteoarthritis worsens with time from the ongoing loss of protective cushion and lubricity (i.e., loss of slippery padding). There is no effective current treatment for osteoarthritis, only palliative pain therapy or joint replacement. Non-steroidal anti-inflammatory drugs (NSAIDS) are used to alleviate the pain and inflammation, but long-term use has been shown to cause gastric problems. NSAIDS do not treat the cartilage degeneration issue to halt or slow the progression of the osteoarthritis condition.

 

We believe that our Kush Canine osteoarthritis treatment is far superior to current treatments of using NSAID’s. NSAID’s have many side effects, especially in canines, whereas the company’s injected Kush Canine treatment has been found to elicit no adverse side effects. Remarkably, Kush treated dogs show an increase in activity even after they no longer are receiving pain drugs. No special training is required for the administration of the Kush Canine devices. The treatment is injected into synovial joint space using standard intra-articular injection technique and multiple joints can be treated simultaneously. Kush Canine immediately treats the effects of osteoarthritis and no special post treatment care is required.

 

Historically, industry data has shown that drug sales represent up to 30% of revenues at a typical veterinary practice. And we believe that revenues and margins at veterinary practices are being eroded because online, big box and traditional pharmacies recently started filling veterinary prescriptions. Veterinary practices are looking for ways to replace the lost prescription revenues. Our treatments expand practice revenues & margins because they are veterinarian-administered. Our Kush Canine device is veterinarian-administered to expand practice revenues and margins. We believe that the increased revenues and margins provided by Kush Canine will accelerate its adoption rate and propel it forward as the standard of care for canine osteoarthritis.

 

  5  

 

 

We also intend to launch in 2018 our Kush Equine device for the treatment of equine lameness in horses. The Kush Equine product has similar features and benefits as our Kush Canine device.

 

We estimate that 1 million owned horses in the United States and European Union suffer from lameness and/or other joint/bone disease each year, making the treatment of such afflicted horses an annual market opportunity worth $600 million.

 

We plan to commercialize our products in the United States through distribution relationships supported by regional and national distributors and veterinary associations and other groups as complemented by the use of social media to educate and inform pet owners, and in Europe and rest of world through collaborating commercial partners and distributors.

 

We believe most veterinarians in the United States buy a majority of their equipment and supplies from one of several large veterinary products distributors. Our product distribution will leverage the existing supply chain and veterinary clinic and clinician relationships already established by these large distributors, and we plan to support this distribution channel with regional sales representatives. Our representatives will support our distributors and the veterinary clinics and hospitals. We will also target pet owners with product education and treatment awareness campaigns utilizing a variety of social media tools. The unique nature and the anticipated benefits provided by our Kush products are expected to generate significant consumer response.

 

RESULTS OF OPERATIONS

 

We are a development stage company with no history of commercial revenues, and we have incurred recurring substantial losses since inception. The following discussion should be read in conjunction with our unaudited financial statements and related notes included in this report.

 

Results of Operations for the Three Months Ended December 31, 2017 and 2016

 

Revenue – Revenue was $0 for the three months ended December 31, 2017 compared to $2,163 for the three months ended December 31, 2016. Revenue in the three months ended December 31, 2016 consisted of Kush product sample sales to veterinary clinics.

 

Cost of Sales – We did not incur any cost of sales for either three month period ended December 31, 2017 and 2016, and accordingly our gross profit was the same as our revenue for both periods

 

Operating Expenses – Operating expenses for the three months ended December 31, 2017 were $532,893 compared to $500,700 for the three months ended December 31, 2016, an increase of $32,193 for the 2017 three-month period. Research and development expenses were $16,659 for the three months ended December 31, 2017 compared to $42,192 for the comparable 2016 period, which decrease in 2017 was due to our development activities being substantially completed in 2016. Most of our expenses in both of these quarters were general and administrative expenses, which were $516,234 for the three months ended December 31, 2017 compared to $458,508 for the comparable three-months of 2016, which increase in the 2017 period was due an increase in stock based compensation for services.

 

Other Income (Expenses) – There was a gain on settlement of debt for third quarter of 2017 compared with no other income for the third quarter of 2016. Other expenses consisted of interest expense of $45,675 for the three months ended December 31, 2017 compared to interest expense of $8,555 for the comparable quarter of 2016, which increase in interest expense in the 2017 three-month period was due to higher interest payments made on outstanding debt during the 2017 period.

 

Net Loss – Our net loss for the three months ended December 31, 2017 was $556,568 compared to $507,092 for the three months ended December 31, 2016, which increase was due primarily to an increase in stock based compensation for services for the 2017 period.

 

Results of Operations for the Nine Months Ended December 31, 2017 and 2016

 

Revenue – Revenue was $1,510 for the nine months ended December 31, 2017 compared to $7,079 for the nine months ended December 31, 2016. Revenue in both nine-month periods consisted of Kush product sample sales to veterinary clinics.

 

  6  

 

 

Cost of Sales – We did not incur any cost of sales for either nine -month period ended December 31, 2017 and 2016, and accordingly our gross profit was the same as revenue for both periods.

 

Operating Expenses – Operating expenses for the nine months ended December 31, 2017 were $1,330,826 compared to $15,720,548 for the nine months ended December 31, 2016; a decrease of $14,389,722 in the first three quarters of 2017 was due primarily to adjustment for the valuation of goodwill, trademarks, and patents in the first three quarters of 2016. Research and development expenses decreased from $117,235 in the first three quarters of 2016 to $62,818 in the first three quarters of 2017, which decrease in 2017 was due to development being completed in 2016. Most of our expenses in both nine month periods were general and administrative expenses, which were $1,268,008 for the nine months ended December 31, 2017 compared to $15,603,313 for the nine months ended December 31, 2016 due to our valuation before adjustment of intellectual property (IP) and goodwill.

 

Other Income (Expenses) – Other income for the nine months ended December 31, 2017 was $22,000 compared to $24,460 for the nine months ended December 31, 2016 from gains on a debt settlement. Other expenses consisted of interest expense of $71,739 for the first three quarters of 2017 compared to interest expense of $175,571 for the first three quarters of 2016. This decrease was due to considerably less debt during the 2017 period.

 

Net Loss – Our net loss for the nine months ended December 31, 2017 was $1,379,055 compared to $15,864,580 for the nine months ended December 31, 2016, a decrease of $14,485,525 for the first three quarters of 2017 was attributable primarily to the adjustment for the valuation of goodwill and trademark and patents in 2016.

 

Liquidity and Capital Resources

 

Our financial position and future prospects depend significantly on our access to financing to fund our operations during our development stage. Much of our current cost structure is based on costs related to personnel and facilities, and not subject to material variability. In order to fund our operations and working capital needs, we historically have utilized loans from accredited investors and others, equity sales of common stock to accredited investors and others having pre-existing relationships with us, and substantial issuances of stock-based compensation to satisfy outstanding debt and pay for development, management, financial, professional and other services.

 

As of December 31, 2017, our current assets were $588,688 including approximately $556,901 in cash and cash equivalents. In comparison, our current liabilities as of that date were $1,656,836 consisting of $1,278,807 of accounts payable/accrued expenses and $378,029 of notes payable. Our working capital deficiency as of December 31, 2017 was $1,068,148.

 

We will need to raise substantial additional capital through private or public offerings of our equity or debt securities, or a combination thereof, and we may have to use a material portion of any capital raised to repay past due debt obligations. To the extent any capital raised is insufficient both satisfy operational working capital needs and meet any required debt payments, we will most likely need to either extend, refinance or convert to equity our outstanding indebtedness.

 

We currently have some cash to support our operations, although we will require substantial additional financing to fund our operational working capital and projected commercial growth for all the next 12 months and beyond. Financing may be sought by us from a number of sources such as private or public sales of our equity or convertible debt securities, and/or loans from affiliates, banks or other financial institutions. In the event we cannot obtain any such financing when needed on terms acceptable to us, if at all, our business would suffer substantially.

 

Liquidity represents the ability of a company to generate sufficient cash to provide for its immediate cash needs, which our continued losses have made it difficult for us to accomplish. Over the past couple years; we have continued to incur substantial losses without any source of revenues or liquid assets, which has caused a serious and harmful effect to our liquidity and a substantial strain on our ongoing business operations.

 

  7  

 

 

We have not generated any operating cash flows since we are a development stage company which has not yet realized any commercial revenues.

 

Net Cash Used in Operating Activities -- We used $245,851 of net cash in operating activities for the nine months ended December 31, 2017 compared to cash used of $87,954 for the nine months ended December 31, 2016. This increase in cash used in operating activities during the 2017 first three quarters was attributable primarily to increased issuances of common stock and warrants to satisfy interest and services expenses.

 

Net Cash Used in Investing Activities – We used $36,612 of net cash in investing activities in the nine months ended December 31, 2017, consisting of a security deposit increase of $8,201, new equipment purchase of $8,768 and a capitalized patent cost of $19,643, compared to $31,833 net cash used in investing activities in the nine months ended December 31, 2016 which consisted of capitalized patent cost of $31,833.

 

Net Cash Provided by Financing Activities – During the nine months ended December 31, 2017, funds were provided by financing activities with an amount of net cash of $813,930 consisting of common stock purchased of $877,000, an increase stock issued to convert notes of $13,210, repayments of loans and line of credit of $61,612, debt conversion of $12,500, and a reduction in notes to related parties. In comparison, during the nine months ended December 31, 2016, we were provided by financing activities with net cash of $122,618 including proceeds from sales of common stock of $99,750, proceeds of loans of $12,500, common stock subscribed of $60,200, an increase in notes to related parties of $4,305, offset by aggregate repayments of $54,137 on notes, loans and a line of credit.

 

MATERIAL COMMITMENTS

 

Accrued Salary

 

We are indebted to related parties. At December 31, 2017, we are obligated for unpaid officers’ salaries and advances of $468,564. This amount is included in accounts payable and accrued expenses.

 

Notes Payable

 

As of December 31, 2017, we are obligated on the following notes:

 

1.   Third Party Individuals   $ 181,966  
2.   Bank Credit Line     18,333  
    Total   $ 200,299  

 

OFF-BALANCE SHEET ARRANGEMENTS

 

As of December 31, 2017 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 March 31, 2017 and March 31, 2016 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. We have suffered recurring losses from operations, have a working capital deficit and are currently in default of the payment terms of certain note agreements. These factors raise substantial doubt about our ability to continue as a going concern.

 

  8  

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable

 

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.

 

Management’s report on internal control over financial reporting.

 

Our chief executive officer and our chief financial officer are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, 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 and includes those policies and procedures that:

 

  Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
     
  Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
     
  Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our chief executive officer and our chief financial officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. Based on our assessment, our chief executive officer and our chief financial officer believe that, as of December 31, 2017, our internal control over financial reporting was not effective, due to the following:

 

  Deficiencies in Segregation of Duties. Due to our limited staff including our accounting personnel, segregation of functions and duties with respect to our related cash and control over the disbursements maybe limited.
     
  Deficiencies in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions.

 

  9  

 

 

As part of the preparation of this report, we have applied compensating procedures and processes as necessary to attempt to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the period covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.

 

Changes in internal control over financial reporting.

 

There were no significant changes in our internal control over financial reporting during the third quarter of our fiscal year ended March 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

AUDIT COMMITTEE

 

Our board of directors has established an audit committee consisting of our three independent directors. The audit committee’s primary function is to provide advice with respect to our financial matters and to assist our board of directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee’s primary duties and responsibilities are to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management’s establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving our properties or us. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against our properties or us.

 

ITEM 1A. RISK FACTORS

 

Not required

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Unregistered sales of our equity securities in the quarter ended December 31, 2017 are as follows:

 

In October through December, the Company sold an aggregate of 1,750,000 unregistered common shares valued at $775,000 to thirty-one accredited individuals in private placements, which proceeds were for working capital purposes.

 

The sale of all the foregoing unregistered securities made to accredited investors and was pursuant to transactions not involving a public offering and thus exempt from registration in reliance on the exemption under Section 4(a)(2) of the Securities Act of 1933, as amended.

 

  10  

 

 

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.

 

Exhibit No.   Description
10.19   Agreement and Plan of Merger dated March 20, 2017 among PetVivo Holdings, Inc., PetVivo Holdings NewCo, Inc., and Gel-Del Technologies Inc. incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 2017.
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*
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*
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*
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*
101.ins   XBRL Instance Document**
101.sch   XBRL Taxonomy Schema**
101.cal   XBRL Taxonomy Calculation Linkbase**
101.def   XBRL Taxonomy Definition Linkbase**
101.lab   XBRL Taxonomy Label Linkbase**
101.pre   XBRL Taxonomy Presentation Linkbase**

 

 

* Filed herewith.

 

  11  

 

 

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.

 

April 27, 2018

By: /s/ Wesley Hayne
    Wesley Hayne
  Its: Chief Executive Officer
     

April 27, 2018

By:

/s/ John Lai

   

John Lai

  Its: Chief Financial Officer

 

  12  

 

 

 

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, Wesley Hayne, 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: April 27, 2018 By: /s/ Wesley Hayne
   

Wesley Hayne

Chief 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, 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: April 27, 2018 By: /s/ John Lai
   

John Lai

Chief Financial 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 December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Wesley Hayne, Chief 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: April 27, 2018 By: /s/ Wesley Hayne
   

Wesley Hayne

Chief 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 December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John Lai, Chief Financial Officer of the Company, certifies to the best of her 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: April 27, 2018 By: /s/ John Lai
   

John Lai

Chief Financial Officer