EDINA, MN—PetVivo Holdings Inc. (formerly NASDAQ:PETV), a company specializing in medical devices for veterinary applications, has successfully raised $1.21 million through a private offering, as detailed in a recent SEC Form 8-K filing. The transaction, which involved the sale of 3,025,000 units to three accredited investors on Monday, included shares of newly designated Series A Convertible Preferred Stock and warrants to purchase common stock.
The offering took place on July 16, 2024, at a purchase price of $0.40 per unit. Each unit consists of one share of Series A Convertible Preferred Stock and one warrant, with the warrants exercisable for $0.90 per share until the third anniversary of the date of issuance. These securities were sold to accredited investors, including two who are major shareholders, holding more than 5% of the company's stock.
The Series A Convertible Preferred Stock comes with voting rights equivalent to the number of common shares they can be converted into and will automatically convert to common stock on the first anniversary of the initial issuance date, subject to certain conditions. The conversion price is the lesser of $0.40 or a variable price based on future equity offerings, with a floor of $0.25.
The capital raise comes after the suspension of trading of PetVivo's securities on The Nasdaq Stock Market on April 5, 2024, and the subsequent decision by the Nasdaq Listing Council on June 24, 2024, to affirm the delisting of the company’s securities. PetVivo's common stock and warrants will remain listed until all review and appeal procedures under Nasdaq Listing Rules have expired.
The funds raised are expected to support PetVivo's ongoing operations and strategic initiatives. The company's core focus remains on the development and commercialization of innovative medical devices and therapeutics for pets.
The information provided herein is based on the press release statement and the SEC Form 8-K filing by PetVivo Holdings, Inc.
In other recent news, Petvivo Holdings, Inc. has rolled out a cost reduction strategy that includes voluntary salary reductions by top executives. The company's newly appointed CFO, Garry Lowenthal, is leading this initiative. Starting May 1, 2024, CEO Mr. Lai's annual salary will decrease from $350,000 to $150,000, and John Dolan, the Chief Business Development Officer, and General Counsel, will see his annual salary cut from $230,000 to $120,000.
This move is part of Petvivo's broader effort to reduce labor and operating costs. The company expects these measures to decrease the operating loss and monthly cash expenditure, thereby bolstering the company's financial position in the long term. Petvivo has not yet disclosed the expected savings from this cost reduction program or its impact on the overall financial performance.
These recent developments reflect Petvivo's commitment to financial prudence and operational efficiency.
InvestingPro Insights
In light of PetVivo Holdings Inc.'s recent capital raise and the operational challenges it faces, a closer look at its financial metrics and stock performance provides valuable context. According to real-time data from InvestingPro, PetVivo has experienced a significant return over the last week, with a 10.2% increase in price total return. This could be indicative of investor optimism following the capital infusion. Moreover, the company's gross profit margin stands at an impressive 76.34% for the last twelve months as of Q4 2024, pointing to a strong ability to control costs relative to revenue.
However, it's important to note that PetVivo's short-term obligations exceed its liquid assets, which may raise concerns about the company's liquidity and ability to meet its immediate financial obligations. Additionally, the company has not been profitable over the last twelve months, with a basic and diluted EPS (Continuing Operations) of -0.78 USD. This is consistent with the company's recent delisting from NASDAQ and highlights the importance of the funds raised to stabilize and grow its operations.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available, which can be accessed at https://www.investing.com/pro/PETV. These tips delve into aspects such as volatility, debt levels, and cash flow, which are critical for making informed investment decisions. Interested readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking even more insights and data points.
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