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)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Issuer’s telephone number)
Securities registered pursuant to Section 12(g) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTC Markets Group, Inc. (OTCQX) |
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
requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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.
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
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
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 August 14, 2026 | |
| Common Stock, $ |
EXPLANATORY NOTE
Revision of Previously Issued Financial Statements
During the preparation of its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026, PetVivo Holdings, Inc. (the “Company”) identified an error in its previously issued unaudited interim financial statements as of and for the three months ended June 30, 2025, which were included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2026.
The error relates to the Company’s accounting for the June 30, 2025 amendment of certain convertible notes. The Company previously recognized a beneficial conversion feature associated with the amended notes as a debt discount with a corresponding increase to additional paid-in capital. Accounting Standards Update No. 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 in an Entity’s Own Equity (“ASU 2020-06”), eliminated the separate recognition model for beneficial conversion features and was effective for the Company before the June 30, 2025 amendment. Accordingly, the conversion feature should not have been separately recognized as a beneficial conversion feature.
The Company has revised its previously issued unaudited interim financial statements as of and for the three months ended June 30, 2025 to remove the beneficial conversion feature. The revision:
| ● | removed $763,259 previously presented as a beneficial conversion feature in the statement of changes in stockholders’ equity; |
| ● | increased the net carrying amount of the related convertible debt by $763,259 as of June 30, 2025; |
| ● | reduced additional paid-in capital and total stockholders’ equity by $763,259 as of June 30, 2025; and |
| ● | revised the related convertible-note disclosures. |
Because the beneficial conversion feature was recognized on June 30, 2025 and no related amortization was recorded during the three months ended June 30, 2025, the revision did not affect the Company’s revenue, operating loss, net loss, loss per share, cash, or net cash used in operating activities for that quarterly period.
The comparative financial information for the three months ended June 30, 2025 presented in this Quarterly Report on Form 10-Q has been restated to reflect the correction. The effects of the revision are described further in Note 1, “Summary of Significant Accounting Policies and Organization—Revision of Previously Issued Financial Statements,” and Note 9, “Convertible Notes Payable and Accrued Interest,” to the unaudited condensed consolidated financial statements included in this report.
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PETVIVO HOLDINGS, INC.
FORM 10-Q
FOR THE PERIOD ENDED June 30, 2026
INDEX
| Page | ||
| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | 4 | |
| PART I. FINANCIAL INFORMATION | 5 | |
| Item 1. | Financial Statements | 5 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
| Item 3. | Qualitative and Quantitative Disclosures About Market Risk | 32 |
| Item 4. | Controls and Procedures | 32 |
| PART II. OTHER INFORMATION | 33 | |
| Item 1. | Legal Proceedings | 33 |
| Item 1A. | Risk Factors | 33 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
| Item 3. | Defaults Upon Senior Securities | 34 |
| Item 4. | Mine Safety Disclosure | 34 |
| Item 5. | Other information | 34 |
| Item 6. | Exhibits | 34 |
| SIGNATURES | 35 | |
| 3 |
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 the 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, 2026, (“2026 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.
| 4 |
PART I.
ITEM 1. FINANCIAL STATEMENTS
PETVIVO HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, 2026 (Unaudited) | March 31, 2026 (As Revised) | |||||||
| Assets: | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses | ||||||||
| Subscriptions receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment, net | ||||||||
| Other Assets: | ||||||||
| Operating lease right-of-use assets | ||||||||
| Patents and trademarks, net | ||||||||
| Licensing Agreement, net | ||||||||
| Investments | ||||||||
| Security deposit | ||||||||
| Total Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity: | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Operating lease liabilities – current portion | ||||||||
| Notes payable and accrued interest – current portion | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 11) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred Stock, par value $ per share, shares authorized: | ||||||||
| Series B Preferred stock: shares issued and outstanding at June 30, 2026 and March 31, 2026 | ||||||||
| Common Stock, par value $, shares authorized, and issued and outstanding at June 30, 2026 and March 31, 2026, respectively | ||||||||
| Common stock to be issued | ||||||||
| Additional Paid-In Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
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PETVIVO HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| 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) | ||||||||
| Loss on Disposal of Assets | ( | ) | ||||||
| Unrealized Loss on Change in Derivative Liabilities | ( | ) | ||||||
| Other Income | ||||||||
| Interest Income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total Other Income (Expense) | ( | ) | ( | ) | ||||
| Loss before taxes | ( | ) | ( | ) | ||||
| Income Tax Provision | ||||||||
| Net Loss | ( | ) | ( | ) | ||||
| Less: Series B Preferred Stock Dividends | ( | ) | ( | ) | ||||
| Net Loss Available to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Net Loss Per Share: | ||||||||
| Basic and Diluted | $ | ) | $ | ) | ||||
| Weighted Average Common Shares Outstanding: | ||||||||
| Basic and Diluted | ||||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
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PETVIVO HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Three Months Ended June 30, 2026
| Common Stock | Series B Preferred Stock | Additional Paid-in | Common Stock To Be | Accumulated | ||||||||||||||||||||||||||||
| Shares | Amount | Capital | Amount | Capital | Issued | Deficit | Total | |||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Sale of common stock and warrants issued against subscription receivable | - | ( | ) | |||||||||||||||||||||||||||||
| Common stock issued for services | - | |||||||||||||||||||||||||||||||
| Common stock issued to employees and directors for compensation | - | ( | ) | |||||||||||||||||||||||||||||
| Common stock to be issued for employees and directors for compensation | - | - | ||||||||||||||||||||||||||||||
| Dividends declared on Series B Preferred stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Conversion of accrued dividends to common stock | - | |||||||||||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
Three Months Ended June 30, 2025
| Common Stock | Series A Preferred Stock | Series B Preferred Stock | Additional Paid-in | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital (As Revised) | Deficit (As Revised) | Total | ||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Common stock issued for services | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of A/P | - | - | ||||||||||||||||||||||||||||||||||
| Warrant exercise | - | - | ||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Dividends declared on Series B preferred stock | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Reclass of fair value of derivative liability | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
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PETVIVO HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Three Months Ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||
| Stock-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of Right-of-Use asset | ||||||||
| Unrealized loss on change in fair value of derivatives | ||||||||
| Loss on disposal of fixed assets | ||||||||
| Amortization of debt discount | ||||||||
| Common stock issued for services | ||||||||
| Changes in Operating Assets and Liabilities | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts receivable | ||||||||
| Inventory | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Accrued interest on notes payable | ||||||||
| Net Cash (Used In) Operating Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of equipment | ( | ) | ||||||
| Net Cash (Used in) Investing Activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds received from common stock subscription receivable | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds received from preferred stock subscription receivable | ||||||||
| Proceeds from the issuance of convertible debentures | ||||||||
| Proceeds from the exercise of warrants | ||||||||
| Proceeds from the issuance of notes payable | ||||||||
| Repayments of notes payable | ( | ) | ||||||
| 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 | $ | $ | ||||||
| Stock granted for consulting services | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES | ||||||||
| (Decrease) increase to operating lease right of use asset and operating lease liability | $ | $ | ( | ) | ||||
| Vesting of restricted stock units | $ | $ | ||||||
| Dividends declared on Series B preferred stock | $ | $ | ||||||
| Convertible debentures and accrued interest converted to common stock | $ | $ | ||||||
| Common stock issued for prepaid consulting fees | $ | |||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 8 |
PetVivo Holdings, Inc.
Notes to Financial Statements
June 30, 2026
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Organization and Description
PetVivo Holdings, Inc. was incorporated in Nevada under its 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 PetVivo, Inc. becoming a wholly owned subsidiary of PetVivo Holdings, Inc. In April 2017, PetVivo Holdings, Inc. acquired another Minnesota corporation, Gel-Del Technologies, Inc., through a statutory merger, which is also a wholly-owned subsidiary of PetVivo Holdings, Inc. In April 2025, PetVivo Holdings, Inc. changed the name of its wholly-owned subsidiary PetVivo, Inc. to PetVivo Animal Health, Inc. to better reflect the industry in which PetVivo Holdings, Inc. sells its products.
The Company is in the business of licensing and commercializing our proprietary medical devices and biomaterials for the treatment and/or management 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 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. The Company currently has six (6) U.S. and four (4) foreign patents issued, with two (2) additional patent applications pending with the United States Patent and Trademark Office. The patents protect the Company’s biomaterials, products, production processes and methods of use. In February 2025, The Company signed an exclusive licensing agreement with VetStem, Inc. to market and sell their PrecisePRP™ (Platelet-Rich Plasma) product for both canine and equine. On July 24, 2026, the Company terminated the licensing agreement with VetStem, Inc.
The Company’s operations are conducted from its headquarter facilities in suburban Minneapolis, Minnesota with an outsourced distribution location in St. Joseph, Missouri.
(B) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (US GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and ASC 270-10-50. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete annual financial statements.
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full fiscal year. These interim condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the company’s annual report on Form 10-K for the fiscal year ended March 31, 2026.
Certain prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no effect on previously reported net income, total assets, total liabilities, or stockholders’ equity.
(C) Principles of Consolidation
The accompanying consolidated financial statements include all the accounts of PetVivo Holdings, Inc., and its four wholly owned corporations, Gel-Del Technologies, Inc., PetVivo Animal Health, Inc., Cosmeta Corp and PetVivo AI (collectively, the “Company”). All intercompany transactions have been eliminated upon consolidation.
The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act, enacted on April 5, 2012 and has elected to comply with certain reduced public company reporting requirements.
(D) Use of Estimates
In preparation of the consolidated 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 reporting period. Actual results could differ from those estimates. Significant estimates include allowance for credit losses, inventory obsolescence, estimated useful lives and potential impairment of property and equipment and intangibles, estimate of fair value of share-based payments, distributor rebate payable, provision for product returns, right of use lease assets and liabilities and valuation of deferred tax assets.
| 9 |
(E) Cash and Cash Equivalents
The
Company considers all highly-liquid, temporary cash investments with original maturity of three months or less to be cash equivalents.
The Company had
(F) Concentration Risk
The
Company maintains its cash with various financial institutions, which at times may exceed federally insured limits. At June 30, 2026, the Company did
(G) Accounts Receivable
Accounts
receivable is carried at its contractual amounts, less an estimated allowance for credit losses. Management estimates the credit
losses using a loss-rate approach based on historical loss information, adjusted for management’s expectations about current
and future economic conditions, as the basis to determine expected credit losses. Management exercises significant judgment in
determining expected credit losses. Key inputs include macroeconomic factors, industry trends, the creditworthiness of
counterparties, historical experience, the financial conditions of the customers, and the amount and age of past due accounts.
Management believes that the composition of receivables is consistent with historical conditions as credit terms and practices and
the client base has not changed significantly. Receivables are considered past due if full payment is not received by the
contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection
attempts have been exhausted. As of June 30, 2026 and March 31, 2026, the Company had
(H) Inventory
Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Inventory consists of raw materials, work-in-process and finished goods.
The
Company evaluates inventory for excess, and obsolescence based on factors such as current inventory levels, estimated product life
cycles, historical and forecasted customer demand, and input from the product development team. When necessary, an inventory write-off is
recorded to reduce the carrying value of inventory to its estimated net realizable value. These estimates and assumptions are
reviewed quarterly and annually and updated as needed based on the Company’s business plans and market conditions. The Company
recorded an inventory write-off of $
(I) Property & Equipment
Property
and equipment are recorded at cost. Expenditures for major additions and improvements 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
| 10 |
(J) 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
The Company calculates earnings (loss) per share (“EPS”) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, Earnings Per Share. Basic EPS is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the years ended June 30, 2026 and 2025, the Company reported a net loss; therefore, diluted EPS is calculated the same as basic EPS, as the inclusion of all potentially dilutive securities would be anti-dilutive.
The following securities were excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive:
| ● | Options and warrants: shares (2026); shares (2025) | |
| ● | Unvested RSUs: shares (2026); shares (2025) |
(L) Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606 “Revenue from Contracts with Customers.”
The Company derives revenue from the sale of its pet care products directly to its veterinarian customers in the United States. The Company recognizes revenue when performance obligations under the terms of a contract with the veterinarian customer are satisfied. Product sales occur once control or title is transferred based on the commercial terms. 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 with the Distributor 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. Product sales occur once control
or title is transferred based on the commercial terms in the Agreement. Revenue is recognized upon 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 of June 30, 2026 and March 31, 2026. As a result, there is no return liability recorded. Shipping
and handling costs are a fulfillment activity and are reported as cost of sales. In March 2025, the Company mutually terminated its non-exclusive distribution agreement with MWI. Therefore, we have
no distribution fees, no rebates and no right of return provisions. As a result, the Company no longer has any distribution fees, rebates
or return liabilities recorded during the three months period ending June 30, 2026 and 2025. The balance sheet continues to show a $
| 11 |
Assets and liabilities (included in accrued expenses) under the Agreement were as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Accounts receivable | $ | $ | ||||||
| Rebate liability | ||||||||
| Distribution fee payable | ||||||||
We currently don’t have any distributor agreements in place, as of June 30, 2026. Product sales for all domestic shipments into the United States occur once control or title is transferred based on the commercial terms purchase orders. Revenue is recognized upon delivery to the Distributor in the United States, with international shipments, freight terms are FOB our warehouses, as ownership transfers for these international shipments when our product is picked up; payment is due within 30 days for domestic orders and payment-in-advance for international distributors.
From time-to-time, we honor returns for short-dated inventory (close to expiration). Inasmuch, sales periodically are subject to returns; the Company uses an expected value method to estimate returns and has determined that any returns would be immaterial as of June 30, 2026 and March 31, 2026. As a result, there is no return liability recorded. Shipping and handling costs are a fulfillment activity and are reported as cost of sales.
In December 2024, the Company entered into new wholesale distribution partnerships with Vedco, Inc. (“Vedco”) and Clipper Distributing, LLC (“Clipper”). A distribution service agreement was not signed with either distribution partner. Contracts with both distribution partners are evidenced by individual executed purchase orders. The purchase orders consist of a single performance obligation related to the sale of our pet care products. Product sales occur once control or title is transferred based on the terms in the purchase order. Revenue is recognized upon delivery to the Distributor for domestic shipments, and for international shipments, ownership transfers at the point of freight pickup from our warehouse, at which time we recognize the revenue for these international customers; payment is due within 30 days. Neither distribution partnership provides for a distribution fee payable or a rebate payable.
For
the three months ended June 30, 2026 and 2025, the Company recognized revenue from product sales to Vedco of $
Accounts receivable from Vedco was $
(M) Research and Development
The Company expenses research and development costs as incurred.
(N) Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:
| ● | 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. |
| 12 |
The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable and other liabilities. approximates their fair value as of June 30, 2026 and March 31, 2026, due to the short-term nature of these items.
The fair value of the Company’s debt approximates its carrying value as of June 30, 2026 and March 31, 2026, because the stated interest rates and terms of the debt are consistent with those currently available to the Company for similar instruments.
The Company accounts for stock-based compensation under the provisions of FASB ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. In accordance with ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting share-based payment transactions for acquiring goods and services from nonemployees are included. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.
Stock compensation of $ for the
period ending June 30, 2026 consisted of; i) employee stock awards: $
(P) Income Tax Provision
The Company is subject to income taxes in the U.S. The determination of these tax liabilities requires estimation, significant judgment, and interpretation of U.S. federal and state tax statutes, regulations, and case laws. Additionally, governing tax legislation could change significantly with little or no notice. It is important for us to monitor economic, political, and other conditions in the various countries with operations as changes in a jurisdiction’s conditions could impact the amount of deferred tax assets or our ability to utilize deferred tax assets in the future.
The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the consolidated financial statement carrying amounts and the tax bases of assets and liabilities, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws expected to apply when the related temporary differences reverse or the carryforwards are utilized. The Company establishes a valuation allowance to reduce deferred tax assets to the amount expected to be realized when, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. For the current period ending June 30, 2026 the Company has recorded a full valuation allowance against its deferred tax assets.
As required by FASB ASC 740, Income Taxes, 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 recognizes interest and penalties related to unrecognized income tax benefits in the provision for income tax expense. See Note 16.
The Company is not currently under examination by any federal or state jurisdiction.
(Q) Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This ASU is effective for public entities with fiscal years beginning after December 15, 2024. The Company adopted this guidance for the year ended March 31, 2026 and applied the guidance on a retrospective basis. The adoption did not have a material impact on the consolidated financial statements. Refer to Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Recently Issued Accounting Pronouncements section for further details.
In November 2024, the FASB issued ASU 2024-03, which requires public entities to disaggregate certain expense categories in the notes to the financial statements. The standard is effective for annual periods after December 15, 2026, and interim periods after December 15, 2027, with early adoption allowed. The Company is currently evaluating the impact of this guidance on its financial statement disclosures, but does not anticipate it will affect its results of operations or cash flows.
Effective January 1, 2026, the Company adopted ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Amendments to the Measurement of Credit Losses for Short-Term Receivables.” The update provides a practical expedient that permits an entity to assume that current economic conditions as of the balance sheet date remain unchanged over the remaining life of the asset, thereby removing the requirement to incorporate future macroeconomic forecasts for qualifying short-term accounts receivable and contract assets arising from revenue transactions.
The Company elected to apply the practical expedient prospectively to all current accounts receivable and contract assets within the scope of the guidance. The adoption of ASU 2025-05 did not have a material impact on our Condensed Consolidated Financial Statements and related footnote disclosures.
| 13 |
(R) Revision of Previously Issued Financial Statements
The Company identified an error in its accounting for the June 30, 2025 amendment of certain convertible notes. The Company previously recognized a beneficial conversion feature as a debt discount with a corresponding increase to additional paid-in capital. ASU 2020-06 eliminated the separate beneficial conversion feature recognition model, and the guidance was effective for the Company before the amendment. Accordingly, the Company corrected the error by removing the beneficial conversion feature and the related amortization of the debt discount.
For
the year ended March 31, 2026, the correction eliminated $
For
the three months ended June 30, 2025, the correction eliminated $
The following tables summarizes the effect of the errors on the Company’s audited consolidated balance sheet as of March 31, 2026 and unaudited consolidated balance sheet as of June 30, 2025:
March 31, 2026 As Previously Reported | Adjustment | March 31, 2026 As Revised | ||||||||||
| Audited consolidated balance sheets - Additional Paid-In Capital | $ | $ | ( | ) | $ | |||||||
| Audited consolidated statements of changes in stockholders’ equity - Beneficial conversion feature | ( | ) | ||||||||||
| Audited consolidated statements of changes in stockholders’ equity - Warrants issued with promissory notes | ||||||||||||
| Audited consolidated balance sheets - Accumulated Deficit | ( | ) | ( | ) | ||||||||
As Previously Reported | Adjustments |
As Revised | ||||||||||
| Unaudited condensed consolidated balance sheets - Additional Paid-In Capital | $ | $ | ( | ) | $ | |||||||
| Unaudited condensed consolidated statements of changes in stockholders’ equity - Beneficial conversion feature | ( | ) | ||||||||||
| Unaudited condensed consolidated balance sheets – Convertible notes payable and accrued interest, net of discount | ||||||||||||
| Unaudited condensed consolidated balance sheets - Total Stockholder’s Equity | ( | ) | ||||||||||
While the adjustments changed additional paid-in capital and accumulated deficit line items in the unaudited condensed consolidated balance sheets, they did not have an impact on total net cash used in operating activities, net cash used in investing activities, or net cash provided by financing activities.
The related notes to the unaudited condensed consolidated financial statements have also been revised to reflect the error corrections described above.
(S) Warrants
The Company evaluates warrants to purchase shares of its common stock to determine the appropriate accounting and classification based on the terms of each instrument and the applicable accounting guidance. Warrants issued in share-based payment transactions for goods or services are accounted for in accordance with ASC 718, Compensation—Stock Compensation. Other freestanding warrants are evaluated under ASC 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, as applicable.
Warrants that meet the criteria for equity classification are initially measured at fair value and recorded in additional paid-in capital and are not subsequently remeasured, except as otherwise required by applicable accounting guidance. Warrants that do not meet the criteria for equity classification are recorded as liabilities at fair value and are subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings until the warrants are exercised, expire, or otherwise no longer require liability classification.
| 14 |
NOTE 2 – INVENTORY
Inventory consists of the following at June 30, 2026, and March 31, 2026:
The inventory components are as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Finished Goods, net of allowances | $ | $ | ||||||
| Work in process | ||||||||
| Raw materials | ||||||||
| Total Net | $ | $ | ||||||
As
of March 31, 2026, the Company recorded an inventory write-off of $
NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
As
of June 30, 2026, the Company had $
As
of March 31, 2026, the Company had $
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment consists of the following at June 30, 2026, and March 31, 2026:
| June 30, 2026 | March 31, 2026 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Production equipment | ||||||||
| R&D equipment | ||||||||
| Computer equipment and furniture | ||||||||
| Total, at cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total Net | $ | $ | ||||||
During
the three months ended June 30, 2026, and June 30, 2025, depreciation expense was $
| 15 |
NOTE 5 – PATENTS AND TRADEMARKS
The components of patents and trademarks, all of which are finite lived, were as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Patents | $ | $ | ||||||
| Trademarks | ||||||||
| Total at cost | ||||||||
| Accumulated Amortization | ( | ) | ( | ) | ||||
| Total net | $ | $ | ||||||
During
the three months ended June 30, 2026, and June 30, 2025, amortization expense was $
NOTE 6 –LICENSING AGREEMENTS
The components of licensing agreements, all of which are finite-lived, were as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| License Agreements | $ | $ | ||||||
| Accumulated Impairment Losses | ( | ) | ( | ) | ||||
| Contract Payable | ( | ) | ( | ) | ||||
| Accumulated Amortization | ( | ) | ( | ) | ||||
| Total net | $ | $ | ||||||
In
February 2025, the Company signed an exclusive licensing agreement with VetStem, Inc. to market and sell their PrecisePRP™ (Platelet-Rich
Plasma) for both canine and equine products. The exclusive licensing agreement is a five-year agreement whereby the Company paid an initial
licensing fee of $
Amortization
expense was $
As
of March 31, 2026, the Company decided the long-term viability of selling the VetStem PrecisePRP products was not in the Company’s
best interests, as the market is not accepting the PRP product as expected. The Company sent VetStem a Notice of Termination for the
license agreement, along with a transition period to move the remaining inventory within a six-to-nine-month period. This licensing agreement
Notice of Termination effectively reduces the licensing agreement from 60 months to 24 months, resulting in a licensing agreement impairment
expense for the reduction of the licensing period. As of March 31, 2026, the Company recorded an impairment expense of $
| 16 |
In
September 2025, the Company signed an exclusive licensing agreement with Digital Landia Holding Corp to utilize their Artificial Intelligence
(AI) under a B2B white-label model to target a bigger share of the veterinary industry within North America, the United Kingdom, and
potentially other markets. The Company will market the software as its own brand and logo through exclusive Software-as-a-Service access
rights. The exclusive licensing agreement is a ten-year agreement whereby the Company issued shares of its common stock, with
a fair value of $
Amortization
expense was $
NOTE 7 – ACCRUED EXPENSES
The components of accrued expenses were as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Contract payable | $ | $ | ||||||
| Accrued payroll and related taxes | ||||||||
| Accrued expenses | ||||||||
| Total | $ | $ | ||||||
NOTE 8 – NOTES PAYABLE AND ACCRUED INTEREST
In
February and March 2026, the Company entered into two separate promissory notes totaling $
As
of June 30, 2026, total non-convertible notes payable, including accrued interest, were $
Total Interest
expense for all Notes for the three months ended June 30, 2026 and 2025 is $
| 17 |
NOTE 9 – CONVERTIBLE NOTES PAYABLE AND ACCRUED INTEREST
On
March 8, 2024, the Company entered into a convertible promissory note for $
From
September 1, 2024 through March 31, 2025, the Company borrowed $
On
September 30, 2025, the Company repaid a $
On
September 30, 2025, the Company issued shares of common stock, with a fair value of $
The
total convertible notes payable, including accrued interest, for these convertible notes is $
Interest
expense, including amortization of debt discount, on these convertible notes payable for the three months ending June 30, 2026 and 2025
is $
June 30, 2025 Amendment to Convertible Notes and Extinguishment Accounting
On June 30, 2025, the Company and the noteholders
entered into an amendment to fix the conversion price at $
The Company evaluated the amendment under ASC 470-50, Modifications and Extinguishments, and concluded that the amendment represented a substantial modification due to the reclassification of the conversion feature from a liability to equity and the resulting change in economic substance. Accordingly, the Company accounted for the amendment as an extinguishment of the existing notes and the issuance of new convertible notes.
The new debt instrument issued upon extinguishment
was recorded at its estimated fair value of $
The accounting impact of the amendment is summarized as follows, as of June 30, 2025:
| Description | Amount | |||
| Carrying amount of extinguished debt | $ | |||
| Fair value of new debt issued | $ | |||
| Fair value of derivative reclassified to equity | $ | |||
| 18 |
The amended convertible notes were matured and were fully converted on September 30, 2025.
Convertible Notes Issued with Warrants
On
February 14, 2025, a total of
Fair Value Allocation of Proceeds from Convertible Notes
When convertible notes are issued with warrants, and no derivative liability is present, the proceeds are allocated between the debt and the warrants based on their relative fair values at issuance. When convertible notes are issued with both detachable warrants and embedded derivative liabilities, the proceeds are allocated using a sequential approach: first to the derivative liability at fair value, then to the warrants at fair value, and the residual amount to the debt host. For convertible notes that include only an embedded derivative liability and no warrants, the proceeds are allocated first to the derivative liability at fair value, with the residual amount allocated to the debt host.
Derivative Liabilities – Variable Conversion Features
The
Company had $
The derivative liabilities were measured at fair value on a recurring basis and classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. The initial fair value of the embedded derivatives was recorded as a debt discount with a corresponding derivative liability and was amortized to interest expense over the contractual term of the related notes using the effective interest method.
The fair value of the derivative liabilities was estimated using a binomial option pricing model. The significant assumptions utilized in determining the fair value of the derivative liabilities, based on the weighted-average of the convertible notes, were as follows:
| Input | Inception | March 31, 2025 | June 30, 2025 | |||||||||
| Closing stock price | $ | $ | $ | | ||||||||
| Conversion price | $ | $ | $ | |||||||||
| Remaining contractual term (years) | ||||||||||||
| Expected volatility | % | % | % | |||||||||
| Risk-free interest rate | % | % | % | |||||||||
| Dividend yield | % | % | % | |||||||||
| 19 |
The following table summarizes activity in the Company’s derivative liabilities:
| Amount | ||||
| Fair value at inception | $ | |||
| Change in fair value during fiscal 2025 | ||||
| Fair value at March 31, 2025 | ||||
| Change in fair value through June 30, 2025 | ||||
| Fair value at amendment in June 30, 2025 | ||||
| Derivative liabilities reclassified to equity upon amendment | ( | ) | ||
| Fair value at June 30, 2026 | $ | |||
The Company recognized an unrealized
loss of $
On September 30, 2025, all outstanding convertible notes containing embedded derivative features were converted into shares of the Company’s common stock. No gain or loss was recognized upon conversion. As a result, the Company had no outstanding derivative liabilities as of June 30, 2026 and March 31, 2026.
Interest
expense related to the amortization of debt discounts associated with derivative liabilities was $
NOTE 10 – RETIREMENT PLAN
In February 2021, the Company established a defined contribution retirement
plan under Section 401(k) of the Internal Revenue Code for eligible employees. Participants may contribute a portion of their eligible
compensation to the plan, subject to applicable statutory limitations. The Company may make discretionary employer contributions. Employer
contribution expense was $
NOTE 11 – COMMITMENTS AND CONTINGENCIES
The Company accounts for contingencies in accordance with ASC 450, Contingencies. A liability is recorded when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonable possible but not probable, or if the amount cannot be estimated, the nature of the contingency and an estimate of the possible loss, if determinable, is disclosed. Remote contingencies are generally not disclosed unless related to guarantee.
Lease Obligations
The Company leases property and equipment under operating leases, typically with terms greater than 12 months, and determine if an arrangement contains a lease at inception. In general, an arrangement contains a lease if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability at the present value of lease payments over the lease term on the commencement date. The related right of use (‘‘ROU”) operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease renewal and/or termination options is at our discretion and is included in the determination of the lease term and lease payment obligations when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement.
| 20 |
The Company classifies our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Consolidated Balance Sheets.
None of our lease agreements contain material restrictive covenants or residual value guarantees.
Buildings
The
Company entered into an eighty-four month lease for
The
Company entered into a sixty-three month lease for
On
January 10, 2023, the Company entered into a new lease agreement for approximately
Lease Termination
Effective
June 30, 2025, the Company terminated its ten-year lease for approximately
Upon
termination of the lease, the Company derecognized the related operating lease right-of-use asset of $
| 21 |
The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of June 30, 2026:
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
| Less: amount representing interest | ||||
| Total | $ |
In
compliance with ASC 842 Leases, 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 June 30, 2026 and March 31, 2026, operating lease right-of-use assets and operating lease liabilities were classified as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Operating lease right-of-use asset | $ | $ | ||||||
| Total operating lease assets | ||||||||
| Operating lease current liability | ||||||||
| Operating lease non-current liability | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Employment Agreements
The Company has employment agreements with its executive officers. As of June 30, 2026, these agreements contain severance benefits ranging from one month to six months if terminated without cause.
Legal Proceedings
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. In June 2026, a former employee filed a whistleblower retaliation complaint with the Occupational Safety and Health Administration (OSHA) under Sarbanes-Oxley Act (SOX), 18 U.S.C. § 1514A. The claimant alleges they were wrongfully terminated after reporting alleged governance and honesty in shareholder relations.
The Company is cooperating with OSHA’s ongoing investigation, denies all allegations and intends to vigorously defend against these allegations. At this preliminary stage, the outcome is uncertain. Although the Company cannot predict the ultimate outcome of this matter, based on currently available information, management cannot estimate the possible loss or range of loss because such amount cannot be reasonably estimated. Management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.
| 22 |
NOTE 12 – GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
The
Company incurred a net loss $
Management’s plans to address these conditions include continuing efforts to improve operating results, reduce operating costs, increase revenues, and obtain additional capital through debt and/or equity financing arrangements. The Company has historically relied on external financing to fund its operations and expects to continue to seek additional financing as needed.
There can be no assurance that the Company will be successful in achieving profitable operations, securing additional financing on acceptable terms, or successfully implementing its business plan. Accordingly, management has concluded that substantial doubt about the Company’s ability to continue as a going concern is not alleviated.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 13 – 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”), which authorized the issuance of up to shares of our common stock as awards under the 2020 Plan, subject to approval by our stockholders at the Annual Meeting of Stockholders held on September 22, 2020, when it was approved by our stockholders and became effective. 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 . Unless sooner terminated by the Board, the Amended Plan will terminate at midnight on July 10, 2030.
The Amended 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 Amended 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 Amended Plan. In addition, the Board of Directors may also exercise the powers of the Committee.
The number of shares available to grant under the Amended Plan was shares at June 30, 2026.
Sale of Common Stock
In
March 2026, the Company entered into a private placement with an over ten percent shareholder, pursuant to which it agreed to sell
shares of restricted common stock at a purchase price of $
per share for aggregate proceeds of $
| 23 |
In June 2026, the Company entered into
a private placement with an over ten percent shareholder, pursuant to which it agreed to sell
shares of restricted common stock at a purchase price of $
per share for aggregate proceeds of $
Preferred Stock
On
March 26, 2025, the Company entered into a Subscription Agreement to receive shares of Series B Preferred Stock. The Company
initially received $
Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, no distributions of available funds and assets will be made to the holders of Common Stock until the holders of Series B Preferred Stock and Series A Preferred Stock receive a per share amount equal to the original issue price.
Common Stock
During the three months ended June 30, 2026, the Company issued shares of common stock as follows:
| i) |
shares in April 2026 and June 2026 in connection with the sale of stock at a price of $ per share in exchange for proceeds of
$ |
| ii) |
shares in June 2026 to a service provider for consulting services fair valued based on the market price on the date of grant of $ |
| iii) |
shares to employees in April 2026 to June 2026 for performance services fair valued at $ |
| iv) |
shares in April 2026, fair valued at $ |
| v) |
shares in April 2026 to the board of directors for advisory services and compensation fair valued at $ |
The
Company has issued shares of common stock to providers of investor relations services. The value of these shares are reported as a prepaid
expense and are amortized to expense over the contractual life of the respective consulting agreements. The amortization of stock issued
for services was $
Stock Options
Stock
options issued to employees and directors typically vest over (one year for directors) and have a contractual term of . Stock-based compensation expense for stock options was $
| 24 |
No stock options were granted during the three months ended June 30, 2026; therefore, no weighted-average assumptions are presented for the period.
| Options Outstanding | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Life | Aggregate Intrinsic Value (1) | |||||||||||
| Balance at March 31, 2026 | $ | years | $ | |||||||||||
| Granted | ||||||||||||||
| Cancelled | ||||||||||||||
| Balance at June 30, 2026 | $ | years | $ | |||||||||||
| Options exercisable at June 30, 2026 | $ | years | $ | |||||||||||
| (1) |
Warrants
During
the three months ended June 30, 2026, the Company issued warrants to purchase an aggregate of
Three Months Ended |
Year Ended | |||||||
| June 30, 2026 | March 31, 2026 | |||||||
| Stock price on valuation date | $ | $ | - $ | |||||
| Exercise price | $ | $ | - $ | |||||
| Term (years) | – | |||||||
| Volatility | % | – | % | |||||
| Risk-free rate | % | % – | % | |||||
A summary of warrant activity for three months ended June 30, 2026 is as follows:
| Number of Warrants | Weighted- Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Weighted- Average Exercisable Price | |||||||||||||
| Outstanding, March 31, 2026 | $ | $ | ||||||||||||||
| Granted and issued | ||||||||||||||||
| Exercised | - | - | ||||||||||||||
| Expired | - | - | ||||||||||||||
| Outstanding, June 30, 2026 | $ | $ | ||||||||||||||
| 25 |
Stock-based
compensation expense for warrants was $ and $ for the three months ended June 30, 2026, and 2025, respectively. At June
30, 2026, there was $
NOTE 14 – SEGMENT REPORTING
The
Company manages the business activities on a consolidated basis and operates in
| For the Three Months Ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| NET REVENUE | $ | $ | ||||||
| Cost of Sales | ||||||||
| Gross Profit | ||||||||
| OPERATING EXPENSES | ||||||||
| Sales and marketing | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| NET OPERATING LOSS | $ | ( | ) | $ | ( | ) | ||
NOTE 15 – INVESTMENTS IN EQUITY SECURITIES
In
March 2025, the Company signed a strategic alliance agreement with Digital Landia Corp, a pioneer in Agentic AI solutions for a Pet AI
platform. Under the agreement, PetVivo exchanged $
The
Company holds equity investments in Digital Landia Corp, a privately held entity, that does not have readily determinable fair values
for its common stock. The Company elected the measurement alternative for eligible non-marketable equity securities under ASC
321-10-35-2. These investments are carried at historical cost and adjusted upward or downward for observable price changes in orderly
transactions for the identical or similar investment of the same issuer, less any impairment. As of the date of this report, as of June
30, 2026, the Company continues to use the $
As
of June 30, 2026, the $
NOTE 16 – INCOME TAXES
No income tax benefit has been recorded for the periods ended June 30, 2026, and 2025, as the Company has incurred operating losses and maintains a full valuation allowance against its net deferred tax assets.
Interim
Effective Tax Rate: The Company’s effective tax rate was
Discrete Items: There have been no discrete items in the period ending June 30, 2026.
Uncertain Tax Positions: There have been no material changes to the total amount of unrecognized tax benefits or our position on uncertain tax standards since June 30, 2026.
NOTE 17 – SUBSEQUENT EVENTS
In accordance with ASC 855, the following information below are subsequent transactions from the end of the June 30, 2026 reporting period to the date of this filing on August 14, 2026.
In
July 2026, the Company issued shares of restricted stock for the conversion of accrued dividends on Series B Preferred Stock
valued at $
In
July 2026, the Company issued shares of restricted stock to employees for performance bonuses valued at market on the date
of grant of $
On
July 9, 2026, the Company received proceeds of $
On July 24, 2026, the Company terminated the VetStem, Inc. licensing agreement. With the licensing termination, the
Company is obligated to pay a fee of $
On
July 27, 2026, the Company received proceeds of $
Between
August 7 through August 11, 2026, the Company received proceeds of $
On
August 11, 2026, the Company received proceeds of $
On August 13, 2026, of the February 9, 2022 registered tradeable warrants, trading under the ticker symbol “PETVW” expired, pursuant to the terms of the warrant.
| 26 |
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 has a pipeline of seventeen products for the treatment of animals and humans. A portfolio of ten issued patents (consisting of six U.S. patents and four foreign patents), two U.S. patent applications, and six proprietary trade secrets protects the Company’s biomaterials, products, production processes and methods of use. 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 as osteoarthritis in dogs and horses, in the second quarter of its fiscal year ended March 31, 2022.
In August 2021, we received net proceeds of approximately $9.7 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. Presently, the Company is trading on the OTC Markets Group, under the OTCQX Best Market tier under the same symbols “PETV” and “PETVW,” respectively.
The Company was incorporated in March 2009 under Nevada law. 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. Most of our technology was developed for human biomedical applications, and we intend to leverage the investments already expended in their development to commercialize treatments for horses and companion animals in a capital and time-efficient way.
Many of the Company’s products are derived from proprietary biomaterials that simulate a body’s cellular tissue by virtue of their reliance upon natural protein and carbohydrate compositions which incorporate such “tissue building blocks” as collagen, elastin, and proteoglycans such as heparin. Since these are naturally-occurring in the body, we believe they have an enhanced biocompatibility with living tissues compared to synthetic biomaterials such as those based upon alpha-hydroxy polymers (e.g PLA, PLGA, and the like), polyacrylamides, and other “natural” biomaterials that may lack the multiple proteins incorporated into our biomaterials. These proprietary protein-based biomaterials that are similar to the body’s tissue thus allowing integration and tissue repair in long-term implantation in certain applications.
Our initial product, Spryng® is a veterinary medical device designed and engineered to provide a bio-integrative scaffold in the affected joint, promoting restoration of proper joint mechanics. 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 naturally derived collagen, elastin, and a glycosaminoglycan (i.e. heparin); such particles mimic the composition and mechanical properties of extracellular matrix and natural cartilage. Spryng® assists in promoting a constructive restoration of diseased synovial tissue to improve the biomechanics and mechanical homeostasis of the joint. Furthermore, these particles are designed and engineered to provide a bio-integrative scaffold in the affected joint, promoting restoration of proper joint mechanics.
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.
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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. our Spryng® product addresses the affliction, loss of synovial fluid and/or the deterioration of joint cartilage, rather than treating just the symptoms and, to the best of 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 should expand practice revenues and margins. We believe that the increased revenues and margins provided by Spryng® will accelerate its adoption rate and propel it forward as the standard of care for canine and equine lameness related to or due to synovial joint issues.
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 distribution relationships while using sales reps, clinical studies, and market awareness to educate and inform key opinion leaders on the 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.
In December 2023, the Company and MWI agreed to change the Distribution Agreement from an exclusive distribution agreement to a non-exclusive distribution agreement, effective as of January 1, 2024. This is consistent with the Company’s strategy to create multiple sales channels for its products. In March 2025, the Company mutually terminated its non-exclusive distribution agreement with MWI. In December 2023, the Company entered into a non-exclusive distribution agreement with Covetrus North America, LLC (“Covetrus Distribution Agreement”), to market, distribute and sell the Company’s products in the United States, including the District of Columbia. The Covetrus Distribution Agreement had an initial term of one year, which was not automatically renewed. The Company mutually terminated its non-exclusive distribution agreement with Covetrus North America, LLC in February 2025.
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In December 2024, we entered into new wholesale distribution partnerships with Vedco Inc. (“Vedco”) and Clipper Distributing, LLC (“Clipper”), both leaders in logistical solutions and supply of products to veterinarians through the channel-of-distribution for veterinarians. Both MWI and Covetrus have the capability to purchase directly from Vedco and/or Clipper.
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 2,000 horses and dogs have been treated with Spryng®. We entered into a clinical trial services agreement with Colorado State University on November 5, 2020. This university clinical study was completed in March 2024. Additionally, the Company successfully completed an equine tolerance study in March 2022 and began a two canine clinical study with Ethos Veterinary Health, the first beginning in May of 2022 which was completed in October 2023, and the second began in June of 2023 which has not been completed yet. We anticipate these and other studies that we plan to initiate will be primarily used to expand our distribution outlets since the large international and national distributors generally require a third-party university study and other third-party studies prior to including a product in their catalog of products.
We manufacture our products in an ISO 7 certified clean room manufacturing facility in Minneapolis using our patented and scalable self-assembly production process, which minimizes the infrastructure requirements and manufacturing risks to deliver a consistent, high-quality product while being responsive to volume requirements.
We also have a pipeline of therapeutic devices for both veterinary and human clinical applications. Some such devices may be regulated by the FDA or other equivalent regulatory agencies, including but not limited to the Center for Veterinary Medicine (“CVM”). We anticipate growing our product pipeline through the acquisition or in-licensing of additional proprietary products from human medical device companies specifically for use in pets. In addition to commercializing our own products in strategic market sectors and in view of the Company’s vast proprietary product pipeline, the Company may establish strategic out-licensing partnerships to provide secondary revenues.
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our 2026 10-K Report and the condensed 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 2026 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 incurred substantial losses in connection with our operations. We will need substantial capital to pursue our current plans to commercialize our initial product, Spryng™.
RESULTS OF OPERATIONS
| For the Three Months Ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Revenues | $ | 337,572 | $ | 297,500 | ||||
| Cost of Sales | 114,255 | 110,774 | ||||||
| Total Operating Expenses | 1,832,166 | 2,031,043 | ||||||
| Total Other Income (Expense) | (5,039 | ) | (466,720 | ) | ||||
| Net Loss | $ | (1,613,888 | ) | $ | (2,311,037 | ) | ||
| Net loss per share - basic and diluted | $ | (0.04 | ) | $ | (0.09 | ) | ||
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For The Three Months Ended June 30, 2026, Compared to The Three Months Ended June 30, 2025
Total Revenues. Revenues were $337,572 and $297,500 for the three months ended June 30, 2026 and 2025, respectively. Revenues in the three months ended June 30, 2026, consist of sales of our Spryng® products of $208,495 and Precise PRP products of $129,076. Revenues in the three months ended June 30, 2025, consisted of sales of our Spryng® products of $148,243 and Precise PRP products of $149,257. The increase in our revenues in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, is due to higher Spryng® product sales from our distributor, Vedco, Inc.
Cost of Sales. Cost of sales were $114,255 and $110,774 for the three months ended June 30, 2026 and 2025, respectively. Cost of sales includes product costs related to the sale of our Spryng® products and labor and overhead costs and product costs related to the sale of Precise PRP products. The increase in our cost of sales in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, is due to lower priced Precise PRP canine sales to accelerate the sale of overstocked Precise PRP inventory driving cost of sales higher.
Operating Expenses. Operating expenses were $1,832,166 and $2,031,043 for the three months ended June 30, 2026 and 2025, respectively. The decrease is primarily due to decreased general and administrative (“G&A”) expenses and research and development (“R&D”) expenses. The significant reduction of R&D expenses was due to the limited cash flow during the three months ended June 30, 2026.
General and administrative (“G&A”) expenses were $967,442 and $1,068,818 for the three months ended June 30, 2026 and 2025, respectively. General and administrative expenses include compensation and benefits, contracted services, legal and consulting fees, and stock compensation expenses. The reduction in general and administrative expenses was due to reduced consulting fees.
Sales and marketing expenses were $631,305 and $621,712 for the three months ended June 30, 2026 and 2025, respectively. Sales and marketing expenses include compensation, consulting, tradeshows, and stock compensation costs to support the launch of our Spryng® product.
Research and development (“R&D”) expenses were $233,419 and $340,513 for the three months ended June 30, 2026 and 2025, respectively. The decrease was primarily related to decreased clinical studies due to tight cash flow constraints.
Operating Loss. As a result of the foregoing, our operating loss was $1,608,849 and $1,844,317 for the three months ended June 30, 2026 and 2025, respectively. The decrease was related to cost-cutting initiatives in general and administrative and research and development expenses.
Other Income (Expense). Other expense was $5,039 for the three months ended June 30, 2026 compared to other expense of $466,720 for the three months ended June 30, 2025. Other expense in 2026 consisted of interest expense. Other expense in 2025 consisted of interest expense, unrealized loss on change in derivative liabilities and loss on disposal of assets.
Net Loss. Our net loss for the three months ended June 30, 2026 was $1,613,888 or ($0.04) per share as compared to a net loss of $2,311,037 or ($0.09) per share for the three months ended June 30, 2025. The decrease was primarily related to interest expense, the loss on change in derivative liabilities and the loss on disposal of assets. The weighted average number of shares outstanding was 37,055,261 compared to 24,302,790 for the three months ended June 30, 2026 and 2025, respectively.
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LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2026, our current assets were $941,019, including $122,633 in cash and cash equivalents. In comparison, our current liabilities as of that date were $1,313,312 including $798,202 of accounts payable and accrued expenses. Our working capital deficit as of June 30, 2026 was $372,293.
The Company has continued to realize losses from operations. As a result, we do not believe we will have sufficient cash to meet our anticipated operating costs and capital expenditure requirements for at least the next twelve months. Our cash needs are expected with proceeds of $1.35 million from an investor purchase option subscription agreement. We are also working with a few investment banks for an additional capital raise between $5 - $10 million. Furthermore, we are negotiating with a private investor for up to $10 million investment into our new human subsidiary, Cosmeta Corp.
The additional capital in the future will support our efforts to continue 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 $965,779 of net cash in operating activities for the three months ended June 30, 2026. This cash used in operating activities was primarily attributable to our net loss of $1,613,888.
Net Cash Used in Investing Activities – During the three months ended June 30, 2026, net cash used in investing activities was $12,370.
Net Cash Provided by Financing Activities – During the three months ended June 30, 2026, net cash provided by financing activities of $900,000 consisted of proceeds of common stock receivable of $750,000 and proceeds of $150,000 from the issuance of notes payable.
MATERIAL COMMITMENTS
Notes Payable
As of June 30, 2026, we are obligated on non-convertible notes and accrued interest of $476,456.
VetStem, Inc. Termination of Licensing Agreement
As of June 30, 2026, we have been in discussions with VetStem, Inc. for the termination of the licensing agreement for the PrecisePRP product line. On July 24, 2026, we signed a licensing termination agreement, as discussed in Note 17-Subequent Events.
OFF-BALANCE SHEET ARRANGEMENTS
As of June 30, 2026, 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 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. Our working capital deficit at June 30, 2026, was $372,293.
The Company incurred a net loss $1,613,888 for the three months ended June 30, 2026, had net cash used in operating activities of $965,779 for the same period, and has an accumulated deficit of $103,051,394 on June 30, 2026. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.
Management’s plans to address these conditions include continuing efforts to improve operating results, reduce operating costs, increase revenues, and obtain additional capital through debt and/or equity financing arrangements. The Company has historically relied on external financing to fund its operations and expects to continue to seek additional financing as needed.
There can be no assurance that the Company will be successful in achieving profitable operations, securing additional financing on acceptable terms, or successfully implementing its business plan. Accordingly, management has concluded that substantial doubt about the Company’s ability to continue as a going concern is not alleviated.
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 condensed consolidated financial statements attached hereto. We believe our significant accounting policies, as described in Note 1 to the condensed consolidated financial statements, involve the most significant judgments and estimates used in the preparation of the condensed 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 do 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.
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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This ASU is effective for public entities with fiscal years beginning after December 15, 2024. The Company adopted this guidance for the year ended March 31, 2026 and applied the guidance on a retrospective basis. The adoption did not have a material impact on the consolidated financial statements. Refer to Note 16 for further details.
The Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effective dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles, other than ASU 2023-09, Income Taxes (Topic 740) discussed above, and do 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 formal review of the Company’s financial management.
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
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
During the quarter, the Company’s management performed an evaluation, under the supervision and with the participation of the Company’s Chief Executive Office (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(c) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The term “disclosure controls and procedures” means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on that evaluation our CEO and CFO concluded that as of June 30, 2026, our disclosure controls and procedures were not effective due to previously disclosed material weaknesses in internal control over financial reporting. These material weaknesses relate to the design and operation of controls over the accounting for modifications of convertible notes, measurement of beneficial conversion features, warrant debt discounts, and derivative liabilities.
Remediation
Management is in the process of implementing measures designed to ensure that the control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include: (i) tightening the ICFR controls moving forward, (ii) improving existing training program associated with our accounting for convertible notes, warrant discounts and derivative liabilities, and (iii) hiring additional accounting personnel, including adding a senior accounting position with derivative accounting and warrant discount experience. We believe that these actions will remediate the material weaknesses with our internal control over financial reporting. Management plans on implementing these remedial steps during the remainder of the fiscal year. The material weaknesses will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed 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 (GAAP) 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 our 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 if 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 management assessed the effectiveness of our internal control over financial reporting as of June 30, 2026. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework (revised 2013). This assessment included an evaluation of the design and procedures of our control over financial reporting.
No changes were made during the quarter ending June 30, 2026. Based on our assessment, our management concluded that as of June 30, 2026, our internal control over financial reporting was not effective.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. In June 2026, a former employee filed a whistleblower retaliation complaint with the Occupational Safety and Health Administration (OSHA) under Sarbanes-Oxley Act (SOX), 18 U.S.C. § 1514A. The claimant alleges they were wrongfully terminated after reporting alleged governance and honesty in shareholder relations.
The Company is cooperating with OSHA’s ongoing investigation, denies all allegations and intends to vigorously defend against these allegations. At this preliminary stage, the outcome is uncertain. Although the Company cannot predict the ultimate outcome of this matter, based on currently available information, management cannot estimate the possible loss or range of loss because such amount cannot be reasonably estimated. Management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.
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 Annual Report on Form 10-K for our fiscal year ended March 31, 2026. As of this Quarterly Report, our continued negotiations with VetStem resulted in the termination of the licensing agreement on July 24, 2026. The risks discussed in our Annual Report on Form 10-K for the period ending March 31, 2026 regarding the OSHA complaint could materially affect our business, financial condition, and future results. The risks described in our latest Annual Report on Form 10-K 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
In April 2026, the Company issued 176,174 shares of common stock for the conversion of dividends declared on Series B preferred stock fair valued at $125,000.
In April 2026, the Company issued 62,500 shares of common stock to 5 board members for advisory and consulting services fair valued at $42,000.
In April 2026 and June 2026, the Company issued 937,500 shares of common stock in exchange for proceeds of $750,000 as part of a private placement subscription agreement.
In April 2026 through June 2026, the Company issued 368,152 shares of common stock to 6 employees for performance awards fair valued at $280,475.
In June 2026, the Company issued 200,000 shares to a service provider for consulting services valued at market on the date of grant of $160,000.
All of the 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 consultants in these transactions represented their intention to acquire these 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.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not required.
ITEM 5. OTHER INFORMATION
No director/officer adopted, modified or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter.
ITEM 6. EXHIBITS
The following exhibits are filed as part of this Quarterly Report.
** Filed herewith
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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.
| August 14, 2026 | By: | /s/ John Lai |
| John Lai | ||
| Its: | CEO, President, and Director | |
| (Principal Executive Officer) |
| August 14, 2026 | By: | /s/ Garry Lowenthal |
| Garry Lowenthal | ||
| Its: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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