UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~September 3130, ~~2024~~2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission file number: 000-28827

________________________

PETMED EXPRESS, INC.

(Exact name of registrant as specified in its charter)

________________________


FLORIDA			65-0680967
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

420 South Congress Avenue, Delray Beach, Florida 33445

(Address of principal executive offices, including zip code)

(561) 526-4444

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	PETS	NASDAQ Global Select Market
Preferred Stock Purchase Rights	N/A	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o			Accelerated Filer x
Non-accelerated filer o			Smaller reporting company o
Emerging growth company o

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. o

Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2021,~~656~~369,~~457~~521 shares of Common Stock, $.001 par value per share, at ~~February~~December 105, 2025.

PART I - FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, certain information in this Quarterly Report on Form 10-Q includes 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"). All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position and our business outlook, business trends and other information, may be forward-looking statements. You can identify these forward-looking statements by the words "believes," "intends," "expects," “might,” "may," "will," "should," "plans," "projects," "contemplates," "intends," "budgets," “potential,” "predicts," "estimates," "anticipates," “future,” “goal,” and variations of such words or similar expressions. These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved, and actual future results may differ materially from what is expressed in or indicated by the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A, under the heading “Risk Factors,” in our Annual Report on Form 10-K for the year ended March 31, ~~2024~~2025 ~~(the “2024 Form 10-K”)~~ filed with the Securities and Exchange Commission (“SEC”) on ~~June~~October 14, ~~2024~~2025, and under “Part II, Item 1A., Risk Factors” in this Quarterly Report on Form 10-Q, if and as such risk factors may be updated from time to time in our periodic filings with the SEC. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and a reader, whether investing in our common stock or not, should not place undue reliance on these forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this Quarterly Report on Form 10-Q apply only as of the date of this Quarterly Report on Form 10-Q or as of the date they were made or as otherwise specified herein. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Investors and others should note that we use our websites (https://petmeds.com, https://petcarerx.com and https://www.investors.petmeds.com), as well as social media, press releases, SEC filings, public conference calls and webcasts, as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings, public conference calls and webcasts. The contents of our websites and social media posts, however, are not incorporated by reference into this Quarterly Report on Form 10-Q. Further, our references to website URLs in this filing are intended to be inactive textual references only.

NOTE REGARDING COMPANY REFERENCES

When used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise indicates, "PetMed Express," "PetMeds," "PetMed," "the Company," "we," "our," and "us" refers to PetMed Express, Inc. and its direct and indirect wholly owned subsidiaries, taken as a whole.

ITEM 1. FINANCIAL STATEMENTS.

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share amounts)

	December 31,2024		March 31,2024
	September 30,2025		March 31,2025
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	5036,~~101~~098	$	5554,~~296~~720
Accounts receivable, less allowance for credit losses of $88 and $273, respectively	2,259		3,283
Accounts receivable, less allowance for credit losses of $32 and $91, respectively	1,965		2,317
Inventories, net	1114,~~795~~768		2816,~~556~~205
Prepaid expenses and other current assets	36,~~888~~361		65,~~325~~330
Prepaid income taxes	~~340~~263		~~188~~299
Total current assets	6859,~~383~~455		9378,~~648~~871
Noncurrent assets:
Property and equipment, net	28,~~425~~338		2628,~~657~~859
Intangible and other assets, net	1511,~~035~~767		1613,~~503~~346
Goodwill	~~26,658~~—		26,658
Operating lease right-of-use assets	~~1,077~~741		~~1,432~~966
Deferred tax assets, net	5,217		4,986
Total noncurrent assets	40,846		69,829
Total noncurrent assets	76,412		76,236
Total assets	$	100,301	$	148,700
Total assets	$	144,795	$	169,884
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1019,~~945~~119	$	3723,~~024~~564
Sales tax payable	2425,~~483~~283		2524,~~012~~867
Accrued expenses and other current liabilities	10,~~922~~809		711,~~060~~711
Current operating lease liabilities	~~453~~477		~~459~~461
Deferred revenue	~~1,156~~995		2,~~603~~085
Total current liabilities	47,959		72,158
Income taxes payable	—		80
Operating lease liabilities, net of current lease liabilities	652		995
Total current liabilities	56,683		62,768
Total liabilities	48,611		73,153
Deferred tax liabilities, net	263		263
Commitments and contingencies (Note 7)
Operating lease liabilities, net of current lease liabilities	291		535
Total liabilities	57,237		63,566
Commitments and contingencies (Note 9)
Shareholders' equity:
Preferred stock, $.001 par value, 5,100,000 shares and 5,000,000 shares authorized respectively; 2,500 convertible shares issued and outstanding with a liquidation preference of $4 per share	9		9
Preferred stock, $0.001 par value, 5,000,000 shares authorized:
Common stock, $.001 par value, 40,000,000 shares authorized; 20,656,457 and 21,148,692 shares issued and outstanding, respectively	21		21
Convertible Preferred stock, $0.001 par value, with a liquidation preference of $4 per share, 250,000 shares authorized ; 2,500 and 2,500 convertible shares issued and outstanding, respectively	9		9
Additional paid-in capital	17,967		25,146
Series A Junior Participating Preferred Stock, $0.001 par value, 100,000 shares authorized; no shares issued or outstanding	—		—
Retained earnings	78,187		71,555
Common stock, $.001 par value, 40,000,000 shares authorized; 21,015,559 and 20,656,822 shares issued and outstanding, respectively	21		21
Total shareholders' equity	96,184		96,731
Additional paid-in capital	19,161		18,560
Total liabilities and shareholders' equity	$	144,795	$	169,884
Retained earnings	23,873		66,544
Total shareholders' equity	43,064		85,134
Total liabilities and shareholders' equity	$	100,301	$	148,700

See accompanying notes to unaudited condensed consolidated financial statements.

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share amounts) (Unaudited)

	Three Months EndedDecember 31,				Nine Months EndedDecember 31,
	Three Months EndedSeptember 30,				Six Months EndedSeptember 30,
	2024		2023		2024		2023
	2025		2024As Restated		2025		2024As Restated
Net sales	$	5244,~~984~~364	$	6558,~~317~~044	$	~~180~~95,~~506~~544	$	~~214~~124,~~560~~251
Cost of sales	3831,~~075~~949		4739,~~434~~271		~~130~~68,~~315~~726		~~154~~86,~~089~~441
Gross profit	1412,~~909~~415		1718,~~883~~773		5026,~~191~~818		6037,~~471~~810
Operating expenses:
General and administrative	1014,~~786~~176		1310,~~425~~492		2627,~~153~~124		4115,~~098~~366
Advertising	24,~~987~~341		56,~~762~~069		1410,~~583~~387		1814,~~539~~125
Depreciation and amortization	12,~~586~~278		1,~~770~~658		4,~~965~~561		53,~~161~~379
Total operating expenses	15,359		20,957		45,701		64,798
Impairment of goodwill and intangible assets	—		—		27,258		—
(Loss) income from operations	(450)		(3,074)		4,490		(4,327)
Total operating expenses	20,795		18,219		69,330		32,870
Other income:
(Loss) income from operations	(8,380)		554		(42,512)		4,940
Interest income, net	28		136		308		481
Other income:
Other, net	180		293		597		1,053
Interest (expense) income, net	(326)		185		(524)		280
Total other income	208		429		905		1,534
Other, net	195		186		382		417
(Loss) income before provision (benefit) for income taxes	(242)		(2,645)		5,395		(2,793)
Total other (expense) income	(131)		371		(142)		697
Provision (benefit) for income taxes	465		(618)		22		(345)
(Loss) income before (benefit) provision for income taxes	(8,511)		925		(42,654)		5,637
Net (loss) income	$	(707)	$	(2,027)	$	5,373	$	(2,448)
Provision (benefit) for income taxes	9		(1,401)		18		(443)
Net (loss) income per common share:
Net (loss) income	$	(8,520)	$	2,326	$	(42,672)	$	6,080
Basic	$	(0.03)	$	(0.10)	$	0.26	$	(0.12)
Net (loss) income per common share:
Diluted	$	(0.03)	$	(0.10)	$	0.26	$	(0.12)
Basic	$	(0.41)	$	0.11	$	(2.05)	$	0.30
Weighted average number of common shares outstanding:
Diluted	$	(0.41)	$	0.11	$	(2.05)	$	0.29
Basic	20,634,651		20,425,282		20,581,913		20,380,262
Weighted average number of common shares outstanding:
Diluted	20,634,651		20,425,282		20,987,260		20,380,262
Basic	20,889,124		20,597,807		20,822,270		20,555,544
Cash dividends declared per common share	$	—	$	—	$	—	$	0.60
Diluted	20,889,124		20,938,817		20,822,270		20,940,161

See accompanying notes to unaudited condensed consolidated financial statements.

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Nine Months EndedDecember 31,
	Six Months EndedSeptember 30,
	2024		2023
	2025		2024
Cash flows from operating activities:
Net income (loss)	$	5,373	$	(2,448)
Net (loss) income	$	(42,672)	$	6,080
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	4,~~965~~561		53,~~161~~379
Share based compensation	(7,179)		5,196
Impairment of goodwill and intangible assets	27,258		—
Deferred income taxes	(231)		(436)
Share based compensation	839		(7,631)
Bad debt expense	324		53
Deferred income taxes	—		(696)
Bad debt expense	6		176
(Increase) decrease in operating assets and increase (decrease) in operating liabilities:
Accounts receivable	~~700~~346		~~(119)~~1,488
Inventories, net	161,~~761~~437		~~(12~~15,~~438)~~464
Prepaid income taxes	~~(152)~~36		65(179)
Prepaid expenses and other current assets	2(1,~~437~~031)		(2,~~664)~~670
Operating lease right-of-use assets, net	~~355~~225		~~594~~245
Accounts payable	(264,~~078~~445)		7(20,~~929~~071)
Sales tax payable	~~(529)~~416		(~~1,942~~639)
Accrued expenses and other current liabilities	~~2,756~~(23)		(~~1,258~~221)
Lease liabilities	(~~349~~228)		(~~577~~240)
Deferred revenue	(1,~~447~~090)		75(953)
Net cash used in operating activities	(2,294)		(2,808)
Income taxes payable	(80)		—
Net cash used in operating activities	(14,445)		(1,128)
Cash flows from investing activities:
Purchase of minority interest investment in Vetster	–		(300)
Purchases of property and equipment	(3,916)		(1,948)
Acquisition of PetCareRx, net of cash acquired	–		(35,859)
Net cash used in investing activities	(3,916)		(1,948)
Purchases of property and equipment	(2,725)		(3,260)
Net cash used in investing activities	(2,725)		(39,419)
Cash flows from financing activities:
Dividends paid	(~~176~~23)		(~~12,419~~175)
Net cash used in financing activities	(176)		(12,419)
Cash paid for tax withholding on net settlement of restricted stock	(238)		—
Net decrease in cash and cash equivalents	(5,195)		(54,646)
Net cash used in financing activities	(261)		(175)
Cash and cash equivalents, at beginning of period	55,296		104,086
Net decrease in cash and cash equivalents	(18,622)		(3,251)
Cash and cash equivalents, at end of period	$	50,101	$	49,440
Cash and cash equivalents, at beginning of period	54,720		55,296
Cash and cash equivalents, at end of period	$	36,098	$	52,045
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	~~474~~66	$	43466
Dividends payable in accrued expenses and other current liabilities	$	321	$	~~1,498~~39
Non-cash investing activity for PPE additions	$	2,539	$	–
Non-cash investing activity for property and equipment additions	$	(854)	$	—

See accompanying notes to unaudited condensed consolidated financial statements.

PETMED EXPRESS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: ~~Summary~~Restatement of ~~Significant~~Previously ~~Accounting~~Issued ~~Policies~~Consolidated Financial Statements

As further described below, our unaudited consolidated financial statements for the three and six months ended September 30, 2024, have been restated to reflect the correction of material errors.

Restatement Background

The need for restatement was identified: (1) in part by the Audit Committee Investigation (the “Investigation”) as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, as filed with the SEC on October 14, 2025 (the “2025 Form 10-K”); and (2) during financial analyses conducted in connection with the preparation of the Company’s consolidated financial statements for the fiscal year ended March 31, 2025. The Company participates in a range of vendor-funded programs through which it receives reimbursements for certain activities, including advertising, sales incentives, and other promotional efforts, typically linked to purchase or sales volume thresholds. These programs are designed to offset costs incurred in connection with stocking, promoting, and selling vendor products.

The Company identified certain errors in its accounting for payments, rebates and discounts from suppliers arising from a misapplication of US GAAP. Historically, the Company accounted for (1) certain promotional sales reimbursements as a component of its revenues and (2) certain co-operative advertising expenses as a component of advertising costs that were not specific, incremental or identifiable. The Company notes that these payments, rebates and discounts should be accounted for as a component of (reduction to) cost of sales. Furthermore, after a thorough review of the Company's vendor agreements, the Company also identified the following additional errors within our accounting for vendor consideration which was also included in the Restatement:

1)A specific vendor whose marketing and advertising arrangements, previously categorized as cost of sales, needed to be reclassified to offset advertising expenses.

2)A specific vendor whose promotional sales reimbursements, previously categorized as advertising expenses, needed to be reclassified to cost of sales.

Restatement Adjustments

The following table summarizes the effect of the errors on the Company’s consolidated statements of operations for the three and six months ended September 30, 2024:


	Three Month Ended September 30, 2024
	As Reported			Adjustment		As Restated
Net sales	$	59,570		$	(1,526)	$	58,044
Cost of sales	$	42,259		$	(2,988)	$	39,271
Gross profit	$	17,311		$	1,462	$	18,773

Advertising	$	4,606		$	1,463	$	6,069
Total operating expenses	$	16,756		$	1,463	$	18,219

Advertising Costs of Acquiring a New Customer	$60					$79
Advertising Costs as a Percentage of Sales	7.7		%			10.5		%


	Six Months Ended September 30, 2024
	As Reported			Adjustment		As Restated
Net sales	$	127,522		$	(3,271)	$	124,251
Cost of sales	$	92,240		$	(5,799)	$	86,441
Gross profit	$	35,282		$	2,528	$	37,810

Advertising	$	11,596		$	2,529	$	14,125
Total operating expenses	$	30,341		$	2,529	$	32,870

Advertising Costs of Acquiring a New Customer	$59					$72
Advertising Costs as a Percentage of Sales	9.1		%			11.4		%

Note 2: Summary of Significant Accounting Policies

Organization

PetMed Express, Inc. and subsidiaries, d/b/a PetMeds® and PetCareRx, Inc. d/b/a PetCareRx® (collectively, the “Company”), is a leading nationwide direct-to-consumer pet pharmacy and online provider of prescription and non-prescription medications, food, supplements, supplies and vet services for dogs, cats, and horses. The Company markets and sells directly to consumers through its websites, customer contact center, and mobile application. The Company offers consumers an attractive alternative for obtaining pet medications, foods, and supplies in terms of convenience, price, speed of delivery, and valued customer service.

Founded in 1996, the Company’s executive headquarters offices are currently located in Delray Beach, Florida. The Company’s fiscal year end is March 31, and references herein to fiscal ~~2025~~2026 or fiscal ~~2024~~2025 refer to the Company's fiscal years ending March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all of the information and footnotes required by accounting principles generally accepted in the United States ("GAAP") for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company at ~~December~~September 3130, ~~2024~~2025, the Statements of Operations for the three and ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024, and Cash Flows for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024. The results of operations for the three and ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 are not necessarily indicative of the operating results expected for the fiscal year ending March 31, ~~2025~~2026. These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in our ~~2024~~2025 Form 10-K. The unaudited condensed consolidated financial statements include the accounts of PetMed Express, Inc. and its direct and indirect wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Fair Value of Financial Instruments

The carrying amounts of the Company's cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments.

Deferred Revenue

Deferred revenue is recorded when payments are received or due in advance of performing our service obligations and revenue is recognized over the service period. Deferred revenue represents prepayments of PetPlus memberships with PetCareRx, Inc. (“PetCareRx”). The total deferred revenue as of December 31, 2024 and March 31, 2024 for these memberships was $1.2 million and $2.6 million, respectively. Memberships provide discounted pricing, free standard shipping, veterinary telehealth services and local Caremark Pharmacy prescription pickup. The membership fee is an annual charge and automatically renews one year from the initial enrollment date. The Company generally recognizes the revenue ratably over the term of the membership.7

Deferred revenue is recorded when payments are received or due in advance of performing our service obligations and revenue is recognized over the service period. Deferred revenue includes prepayments of PetPlus memberships with PetCareRx, Inc. (“PetCareRx”). The total deferred revenue as of September 30, 2025 and March 31, 2025 for these memberships was $1.0 million and $1.0 million, respectively. Memberships provide discounted pricing, free standard shipping, veterinary telehealth services and local Caremark Pharmacy prescription pickup. The membership fee is an annual charge and automatically renews one year from the initial enrollment date. The Company generally recognizes the revenue ratably over the term of the membership. Deferred revenue at March 31, 2025 also includes $1.1 million collected from our customers prior to delivery of AutoShip products, which is recorded as deferred revenue on the condensed consolidated balance sheets.

Long-lived Assets

Long-lived assets, which primarily includes fixed assets, definite lived intangibles, right-of-use assets, and other assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to the undiscounted cash flows expected to be generated by the asset group from its use and eventual disposition of that asset group. Assets are considered to be impaired if the carrying amount of an asset group exceeds the future undiscounted cash flows. If impairment is determined to exist, any related impairment loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less cost of disposal. The Company determined that all of its long-lived assets are part of a single entity-wide asset group for the purpose of long-lived asset impairment assessment.

5During the three months ended June 30, 2025, the Company identified triggering events for the Company’s long-lived asset group. These triggering events included a downward revision to the Company’s forecast and a decrease in the Company’s market capitalization which fell below the Company’s carrying value for a sustained period beginning in the fourth quarter of fiscal 2025. As a result of the identified triggering events, the Company performed a recoverability test for the identified long-lived asset group. The undiscounted cash flow projections were based on estimates made by management of current and future strategic and operational plans and future financial performance projected, using various assumptions including, but not limited to: revenues, gross profits, operating expenses, and working capital through the remaining useful life of the primary asset in the asset group. The results of the test indicated that the carrying amounts for the long-lived asset group were expected to be recoverable.

toGoodwill ~~the undiscounted cash flows expected to be generated from the asset. Management determined that no impairment of long-lived assets existed as of December 31, 2024.~~

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. The Company is required to assess goodwill for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs its annual impairment assessment in the fourth fiscal quarter of each year. An impairment test of goodwill consists of comparing the carrying amount of the single reporting unit to the fair value of the unit. An impairment loss is recognized by the amount that the carrying amount exceeds the fair value, limited to the amount of goodwill. The Company has concluded that it has one reporting unit and ~~Intangible~~has ~~Assets~~assigned the entire balance of goodwill to this reporting unit.

~~Goodwill~~For ~~represents~~ the ~~excess~~three ofmonths ~~the~~ended ~~purchase~~June ~~price~~30, ~~over~~2025, the ~~fair~~Company ~~value~~identified ofpotential ~~net~~impairment ~~assets~~triggering ~~acquired~~events inindicating athat ~~business~~the ~~combination.~~fair ~~The~~value ~~Company~~of isits ~~required~~reporting tounit ~~assess~~was ~~goodwill~~more ~~and~~likely ~~other~~than ~~indefinite-lived~~not ~~intangible~~less ~~assets~~than ~~for~~its ~~impairment~~carrying ~~annually,~~value oras ~~more~~of ~~frequently~~June if30, ~~circumstances indicate impairment may have occurred~~2025. ~~Goodwill~~ ~~was~~These ~~evaluated~~triggering ~~for~~events ~~impairment~~included ~~using~~ a ~~qualitative~~downward ~~assessment~~revision ~~and~~to the Company’s ~~concluded~~forecast ~~that~~due itto ~~was~~continued ~~not~~revenue ~~more~~declines ~~likely~~and ~~than~~a ~~not~~decrease ~~that~~in ~~goodwill~~the ~~was~~Company’s ~~impaired~~stock asprice ofand ~~December~~market ~~31,~~capitalization ~~2024. The~~that ~~Company~~was ~~performs~~sustained ~~its annual impairment assessment~~ in the ~~fourth~~first ~~fiscal~~ quarter of ~~each~~fiscal ~~year~~2026. ~~The~~ ~~Company~~In ~~has~~accordance ~~concluded~~with ~~that~~Accounting itStandards ~~has~~Codification ~~one~~(“ASC”) ~~reporting~~350, ~~unit~~Intangibles ~~and~~- ~~has~~Goodwill ~~assigned~~and Other, the ~~entire~~Company ~~balance~~performed ofa quantitative goodwill toimpairment ~~this~~test ~~reporting~~as ~~unit. If the carrying value~~ of anJune ~~indefinite-lived intangible asset exceeds its fair value~~30, ~~an impairment loss is recognized in an amount equal to that excess~~2025.

The fair value of the single reporting unit was estimated using an income approach, employing a discounted cash flow model. As part of the discounted cash flow model, the Company’s ~~other~~developed ~~indefinite-lived~~estimates, ~~intangible~~assumptions ~~assets~~and ~~are~~judgments ~~primarily~~about future results. The discounted cash flow projections were based on estimates made upby management of current and future strategic and operational plans and future financial performance. Valuation assumptions used in the Company's discounted cash flow valuation also include projected capital expenditures, earnings before interest expense, income taxes, depreciation and amortization expense (EBITDA), depreciation expense, working capital, discount rates, tax rates and terminal growth rates. The Company applied a ~~trade~~terminal ~~name~~growth ~~which~~rate ~~was~~of ~~evaluated~~3%, income tax rate of 25.3% and discount rate of 14.0% based on a weighted average cost of capital adjusted for ~~impairment~~the ~~using~~relevant risk associated with the characteristics of the single reporting unit. As a ~~qualitative~~result ~~assessment~~of ~~and~~this impairment test, the Company ~~concluded~~determined ~~that~~the itcarrying ~~was~~value ~~not~~of ~~more~~the ~~likely~~reporting ~~than~~unit ~~not~~exceeded ~~that~~its ~~the~~fair ~~other~~value, ~~indefinite-lived~~resulting ~~assets~~in ~~were~~a ~~impaired~~goodwill asimpairment charge of ~~December~~$26.7 million 31during the three months ended June 30, ~~2024.~~

2025, which represented the entirety of the goodwill balance previously recorded. There was no tax impact to the impairment as goodwill is not tax deductible.

In accordance with ASC 820, Fair Value Measurement, the fair value measurement for the goodwill impairment is categorized as a Level 3 fair value measurement. This is due to the significant unobservable inputs used in the valuation, including the forecasted revenues, discount rate, and terminal growth rate, which require significant management judgment and estimation.

Intangible Assets

The Company acquired definite-lived intangible assets in the acquisition that are being amortized based on their estimated useful lives in accordance with ASC Topic 350, Intangibles - Goodwill and Other. These definite-lived intangible assets are being amortized over periods ranging from three to seven years. Acquired trade name is not being amortized and is subject to a review for impairment on an annual basis, or more frequently if circumstances indicate an impairment may have occurred. If the carrying amount of an indefinite lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

During the first quarter of our fiscal year ending 2026, because of the triggering events the Company performed the quantitative test which resulted in additional impairment related to the PCRX trade name of $0.6 million, due to a reduction in actual and forecasted revenues.

The fair value of the trade name was determined using the "relief from royalty" method.

This method estimates the value of the trade name by calculating the present value of the royalty payments that would have been avoided by owning the trade name rather than licensing it. Key assumptions used in this valuation include:

•Royalty Rate: A hypothetical royalty rate of 0.5% was applied, based on comparable market transactions and industry benchmarks for similar trade names. This rate reflects the estimated arm's-length royalty that a market participant would be willing to pay for the use of the trade name.

•Forecasted Revenues: Future revenue projections associated with the use of the trade name were based on the Company's internal forecasts, incorporating expectations for market growth. These forecasts were adjusted to reflect the impact of the identified triggering event.

•Discount Rate: A discount rate of 14.0% was utilized, representing the Company's weighted average cost of capital (WACC) adjusted for the specific risks associated with the trade name and the relevant industry.

•Capitalization Rate: A capitalization growth rate of 11.0% was applied to project cash flows beyond the discrete forecast period, reflecting long-term sustainable growth expectations.

In accordance with ASC 820, Fair Value Measurement, the fair value measurement for the trade name impairment is categorized as a Level 3 fair value measurement. This is due to the significant unobservable inputs used in the relief from royalty valuation, including the royalty rate, forecasted revenues, discount rate, and terminal growth rate, which require significant management judgment and estimation.

Recent Accounting Pronouncements

~~The~~Recently ~~Company~~Issued ~~does~~Accounting not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company's consolidated financial position, results of operations, or cash flows. Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". ~~This Update applies to all public entities that are required to report segment information in accordance with Topic 280.~~ The ~~amendments~~FASB inissued this ~~Update~~ASU ~~revise~~to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ~~The~~and ~~amendments~~information inused ~~this Update do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds~~ to ~~determine~~assess ~~its~~segment ~~reportable segments~~performance. ~~The~~This ~~Update~~update isbecame effective ~~for~~with ~~fiscal~~the ~~years~~Company’s ~~beginning~~Fiscal ~~after~~Year ~~December~~2025 ~~15,~~annual ~~2023,~~reporting period and ~~interim~~with ~~periods~~the ~~within~~Company’s ~~fiscal~~Fiscal ~~years~~Year ~~beginning~~2026 ~~after~~interim ~~December~~reporting ~~15, 2024. Early adoption is permitted. The Update should be applied retrospectively to all prior~~ periods ~~presented in the financial statements~~. The ~~Company is currently evaluating the impact of adopting this Update.~~

adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements and resulted in additional segment disclosures within Footnote 4, “Segment Reporting”.

In December 2023, the FASB issued Update 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This Update applies to all entities that are subject to Topic 740. The amendments in this Update revise income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as the effectiveness of certain other income tax disclosures. The Update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Update should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact of adopting this Update.

~~Note~~In 2November 2024, the FASB issued ASU No.2024-03, Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): ~~Revenue~~ ~~Recognition~~Disaggregation of Income Statement Expenses (“ASU 2024-03”) to require public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, and may be applied on a retrospective or prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adopting this Update.

In ~~accordance~~July ~~with ASC Topic 606 ("Revenue from Contracts with Customers")~~2025, the ~~Company~~FASB ~~primarily~~issued ~~generates~~ASU ~~revenue~~No. ~~by selling prescription and non~~2025-~~prescription pet medication products~~05, ~~pet~~Financial ~~food,~~Instruments ~~supplements,~~– ~~and~~Credit ~~supplies,~~Losses ~~from~~(Topic ~~one~~326): Measurement of ~~the~~Credit ~~Company’s~~Losses ~~two~~for ~~warehouses. Certain~~Accounts ~~pet~~Receivable ~~supplies~~and ~~offered~~Contract onAssets ~~the~~(“ASU ~~Company’s~~2025-05”) ~~websites are drop shipped~~ to ~~customers.~~simplify ~~The Company considers itself~~ the ~~principal~~estimation inof ~~the~~credit ~~arrangement~~losses ~~because~~on ~~the~~current ~~Company~~accounts ~~controls~~receivable ~~the~~and ~~specified~~current ~~good~~contract ~~before~~assets itarising isfrom ~~transferred~~transactions toaccounted ~~the~~for ~~customer.~~under ~~Revenue~~ASC ~~contracts contain one performance obligation, which is delivery of the product~~606. ~~Customer~~The ~~care~~amendments ~~and~~allow ~~support~~all isentities ~~deemed not~~ to beelect a ~~material~~practical ~~right~~expedient to ~~the~~assume ~~contract.~~that ~~The~~the ~~transaction~~current ~~price~~conditions isas ~~adjusted~~of at the ~~date~~balance ofsheet ~~sale~~date ~~for~~will ~~any~~remain ~~applicable~~unchanged ~~sales~~for ~~discounts~~the ~~and~~remaining anlife ~~estimate~~ of ~~product~~the ~~returns,~~asset ~~which~~when ~~are~~developing ~~based on historical patterns, however this is not considered~~ a ~~key~~reasonable ~~judgment.~~and ~~Revenue~~supportable isforecast ~~recognized~~as ~~when~~part ~~control~~of ~~transfers~~estimating toexpected ~~the~~credit ~~customer~~losses aton ~~the~~these ~~point in time at which the shipment of the product occurs~~assets. This ~~key~~ASU ~~judgment~~ is ~~determined~~effective asfor ~~the~~annual ~~shipping~~reporting ~~point,~~periods ~~which~~beginning ~~represents~~after ~~the~~December ~~point in time when the Company has a present right to payment~~15, ~~title has transferred to the customer~~2025, and ~~the~~interim ~~customer~~reporting ~~has~~periods ~~assumed~~within ~~the~~those ~~risks~~fiscal ~~and rewards of ownership~~years. ~~Additionally,~~Early ~~the~~adoption ~~Company~~is ~~has~~permitted. ~~external~~Entities ~~relationships~~that ~~for~~elect ~~telehealth veterinary and insurance services. Virtually all~~ the ~~Company’s~~practical ~~sales~~expedient ~~are paid by credit cards~~ and, ~~the~~if ~~Company~~applicable, ~~usually~~make ~~receives~~ the ~~cash~~accounting ~~settlement~~policy inelection ~~two~~are required to ~~three~~apply ~~banking~~the ~~days~~amendments prospectively. The ~~Credit~~Company ~~card~~is ~~sales~~currently ~~minimize~~evaluating the ~~accounts~~impact ~~receivable~~of ~~balances~~adopting ~~relative~~this ~~to sales~~Update.

6In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”) to modernize the accounting for internal-use software costs, primarily by simplifying the requirements to capitalize software development costs. This ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years and may be applied using a prospective, retrospective or modified transition approach. Early adoption is permitted. The Company is currently evaluating the impact of adopting this Update.

Note 3: Revenue Recognition

In accordance with ASC Topic 606 ("Revenue from Contracts with Customers"), the Company primarily generates revenue by selling prescription and non-prescription pet medication products, pet food, supplements, and supplies, membership fees, and veterinary services. Certain pet supplies offered on the Company’s websites are drop shipped to customers. The Company considers itself the principal in the arrangement because the Company controls the specified good before it is transferred to the customer. Revenue contracts contain one performance obligation, which is delivery of the product. Customer care and support is deemed not to be a material right to the contract. The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are based on historical patterns, however this is not considered a key judgment. Revenue is recognized when control transfers to the customer at the point in time at which the shipment of the product occurs. This key judgment is determined as the shipping point, which represents the point in time when the Company has a present right to payment, title has transferred to the customer, and the customer has assumed the risks and rewards of ownership. Virtually all the Company’s sales are paid by credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize the accounts receivable balances relative to sales. Revenue is recorded net of sales tax, discounts and return allowances. Return allowances are estimated using historical experience and not material.

Outbound shipping and handling fees are an accounting policy election and are included in sales as the Company considers itself the principal in the arrangement given its responsibility for supplier selection and discretion over pricing. Shipping costs associated with outbound freight after control over a product has transferred to a customer are an accounting policy election and are accounted for as fulfillment costs and are included in cost of sales.

Membership fees represent the amounts recognized from two membership models. The first is the PetPlus membership for PetCareRx customers, and the second is a partner membership, which allows employees in-network to join the PetPlus membership program through their employers. These memberships provide discounted pricing, free standard shipping, veterinary telehealth services and local Caremark Pharmacy prescription pickup which represent a single stand-ready performance obligation to provide these benefits. The PetPlus membership fee is an upfront annual charge and automatically renews one year from the initial enrollment date. The Company recognizes the revenue ratably over the term of the PetPlus membership which is generally one year. As shown in the following table, under the PetPlus program, the Company recognized $1.0 million and $3.7 million of previously deferred annual membership fees in the three and nine months ended December 31, 2024, and had $1.2 million of deferred revenue as of December 31, 2024.10

	(amounts in millions)
Deferred revenue, March 31, 2024	$	2.6
Deferred memberships fees and others received	1.1
Deferred membership fee revenue and others recognized	(1.5)
Deferred revenue, June 30, 2024	2.1
Deferred memberships fees and others received	0.7
Deferred membership fee revenue and others recognized	(1.2)
Deferred revenue, September 30, 2024	1.6
Deferred memberships fees and others received	0.5
Deferred membership fee revenue and others recognized	(1.0)
Deferred revenue, December 31, 2024	$	1.2

Membership fees represent the amounts recognized from two membership models. The first is the PetPlus membership for PetCareRx customers, and the second is a partner membership, which allows employees in-network to join the PetPlus membership program through their employers. These memberships provide discounted pricing, free standard shipping, veterinary telehealth services and local Caremark Pharmacy prescription pickup which represent a single stand-ready performance obligation to provide these benefits. The PetPlus membership fee is an upfront annual charge and automatically renews one year from the initial enrollment date. The Company recognizes the revenue ratably over the term of the PetPlus membership which is generally one year. On March 31, 2025, the Company also had deferred $1.1 million of AutoShip revenue. As shown in the following table, under the PetPlus and other programs, the Company recognized $0.7 million and $2.4 million of previously deferred annual membership fees and AutoShip revenue in the three and six months ended September 30, 2025, and had $1.0 million of deferred revenue as of September 30, 2025.

In addition to annual membership fees earned under the PetPlus program, the Company also earns membership fees on a month-to-month basis under its PetCareRx partner membership program. For the three and nine months ended December 31, 2024, membership fees earned under the partner program were $0.9 million and $2.8 million, respectively. For the three and nine months ended December 31, 2023, membership fees earned under the partner program were $0.7 million and $2.1 million, respectively.


(amounts in millions)	2025		2024
Deferred revenue, March 31	$	2.1	2.6
Deferred memberships fees and others received	0.8		1.1
Deferred membership fee revenue and others recognized	(1.8)		(1.5)
Deferred revenue, June 30	1.1		2.1
Deferred memberships fees and others received	0.6		0.7
Deferred membership fee revenue and others recognized	(0.7)		(1.2)
Deferred revenue, September 30	$	1.0	$	1.6

~~The~~In addition to annual membership fees earned under the PetPlus program, the Company ~~has~~also noearns ~~material~~membership ~~contract~~fees ~~asset~~on ora ~~liability~~month-to-month ~~balances~~basis atunder ~~December~~its PetCareRx partner membership program. For the three and six months ended September 3130, ~~2024~~2025, ormembership ~~March~~fees earned under the partner program were $1.1 million and $2.1 million. For the three and six months ended September 3130, 2024, ~~respectively~~membership fees earned under the partner program were $0.9 million and $1.8 million.

The Company has no material contract asset or liability balances at September 30, 2025 or March 31, 2025, respectively.

The Company disaggregates sales in the following categories: reorder sales vs new order sales vs membership fees. The following table illustrates sales in those categories:

	Three Months Ended December 31,								Increase (Decrease)
	Three Months Ended September 30,								Increase (Decrease)
Net Sales (in thousands)	~~2024~~2025		%		~~2023~~2024 As Restated		%		$		%
Reorder sales	$	4537,~~076~~408	8584.13	%	$	5448,~~067~~724	8283.89	%	$	(811,~~991~~316)	(1623.62)	%
New order sales	65,~~075~~332		1112.50	%	87,~~803~~251		1312.5	%	(21,~~728~~919)		(3126.05)	%
Membership fees	1,~~833~~624		3.57	%	2,~~447~~069		3.76	%	(~~614~~445)		(2521.15)	%
Total net sales	$	5244,~~984~~364	100.0	%	$	6558,~~317~~044	100.0	%	$	(1213,~~333~~680)	(1823.96)	%

711

	Nine Months Ended December 31,								Increase (Decrease)
	Six Months Ended September 30,								Increase (Decrease)
Net Sales (in thousands)	~~2024~~2025		%		~~2023~~2024 As Restated		%		$		%
Reorder sales	$	~~149~~78,~~367~~713	82.74	%	$	~~174~~101,~~250~~520	81.37	%	$	(2422,~~883~~807)	(1422.35)	%
New order sales	2413,~~913~~577		1314.82	%	3318,~~054~~338		1514.48	%	(84,~~141~~761)		(2426.60)	%
Membership fees	63,~~226~~254		3.4	%	74,~~256~~393		3.45	%	(1,~~030~~139)		(1425.29)	%
Total net sales	$	~~180~~95,~~506~~544	100.0	%	$	~~214~~124,~~560~~251	100.0	%	$	(3428,~~054~~707)	(1523.91)	%

~~The~~Note ~~Company~~4: Segment changed the definition of a new order sale on July 1, 2024, to include sales from customers who have not previously ordered from the Company over the past twelve months compared to the prior definition which was thirty-six months. The reorder and new order sales amounts for the three and nine months ended December 31, 2024, and the reorder and new order sales amounts for the three and nine months ended December 31, 2023 reflect this new customer definition change. Reporting

~~Under~~The ~~the~~Company ~~previous~~has ~~definition of~~ a ~~new~~single ~~customer,~~segment ~~reorder~~that ~~and~~derives ~~new order~~ sales ~~were~~from ~~$57.7~~customers ~~million~~through ~~and~~the ~~$5.2~~sale ~~million,~~of ~~respectively,~~products ~~for~~which ~~the~~are ~~three~~shipped ~~months~~directly ~~ended~~to ~~December 31, 2023~~customers. ~~Under~~The ~~the~~accounting ~~previous~~policies ~~definition~~ of athe ~~new~~Company's ~~customer,~~single ~~reorder~~segment ~~and~~are ~~new~~the ~~order~~same ~~sales~~as ~~were~~those ~~$188.1~~described ~~million~~in ~~and $19.2 million, respectively, for~~ the ~~nine~~Company's ~~months~~Significant ~~ended~~Accounting ~~December 31, 2023~~Policies.

~~Note~~The ~~3: Net~~Company’s chief operating decision maker (~~Loss~~“CODM”) ~~Income~~is ~~Per~~the ~~Share~~Chief Executive Officer. The CODM assesses performance for the segment and decides how to allocate resources based on consolidated net income and Adjusted EBITDA that is reconciled to GAAP net loss reported on the accompanying Consolidated Statements of Operations below. The CODM uses consolidated net income and Adjusted EBITDA to evaluate income generated from segment assets in deciding whether to reinvest profits into the segment or into other parts of the entity. Adjusted EBITDA is used to monitor budget versus actual results and forecast versus actual results and is utilized when establishing management’s compensation in collaboration with the Board of Directors. Consolidated net income and Adjusted EBITDA should only be considered as supplemental to, and alongside with, other GAAP based financial performance measures, including various cash flow metrics, net income, net margin, and our other GAAP results.

The table below provides a summary of significant expense categories regularly provided to the CODM reconciled to Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net (loss) income, for the three and six months ended September 30, 2025 and 2024. The CODM does not review segment assets at a different asset level or category than those disclosed within the consolidated balance sheets.


	Three Months Ended
($ in thousands)	September 30, 2025		September 30, 2024 (As Restated)
Net Sales	44,364		58,044
Significant expense categories:
Cost of sales	31,949		39,271
Advertising	4,341		6,069
Other segment expenses (1)	10,390		10,606
Adjusted EBITDA	$	(2,316)	$	2,098

(Add) subtract:
Share-based compensation expense (reversal)	248		573
Income taxes	9		(1,401)
Depreciation and amortization	2,278		1,658
Interest income (expense), net	326		(185)

Employee severance	1,223		305
Sales tax expense (income)	—		(1,178)
Professional fees (2)	2,120		—

Net (loss) income	$	(8,520)	$	2,326


	Six Months Ended
($ in thousands)	September 30, 2025		September 30, 2024 (As Restated)
Net Sales	95,544		124,251
Significant expense categories:
Cost of sales	68,726		86,441
Advertising	10,387		14,125
Other segment expenses (1)	21,443		23,124
Adjusted EBITDA	$	(5,012)	$	561

(Add) subtract:
Share-based compensation (reversal) expense	839		(7,631)
Income taxes	18		(443)
Depreciation and amortization	4,561		3,379
Interest income, net	524		(280)
Acquisition/Partnership transactions and other items	—		180
Employee severance	1,319		454
Sales tax expense (income)	—		(1,178)
Professional fees (2)	3,141		—
Impairment of goodwill and intangible assets	27,258		—
Net (loss) income	$	(42,672)	$	6,080

(1) Consists of all other expenses on an Adjusted EBITDA basis, including salaries and wages, operating expenses such as utilities, insurance, professional fees, etc.

(2) Consists of professional fees related to the investigation.

Note 5: Net (Loss) Income Per Share

In accordance with the provisions of ASC Topic 260 (“Earnings Per Share”) basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share includes the dilutive effect of potential restricted and performance stock and the effects of the potential conversion of preferred shares, calculated using the treasury stock method. Unvested restricted stock and convertible preferred shares issued by the Company represent the only dilutive effect reflected in the diluted weighted average shares outstanding.

813

The following is a reconciliation of the numerators and denominators of the basic and diluted net (loss) income per share computations for the periods presented (in thousands, except for share and per share amounts):

	Three Months Ended December 31,				Nine Months EndedDecember 31,
	Three Months Ended September 30,				Six Months EndedSeptember 30,
	2024		2023		2024		2023
	2025		2024		2025		2024
Net (loss) income (numerator):
Net (loss) income	$	(~~707~~8,520)	$	(2,~~027)~~326	$	5(42,~~373~~672)	$	(26,~~448)~~080
Shares (denominator):
Weighted average number of common shares outstanding used in basic computation	20,~~634~~889,~~651~~124		20,~~425~~597,~~282~~807		20,~~581~~822,~~913~~270		20,~~380~~555,~~262~~544
Common shares issuable upon vesting of restricted stock	—		—330,885		~~395,222~~—		—374,492
Common shares issuable upon conversion of preferred shares	—		—10,125		~~10,125~~—		—10,125
Shares used in diluted computation	20,634,651		20,425,282		20,987,260		20,380,262
Weighted average number of common shares outstanding used in diluted computation	20,889,124		20,938,817		20,822,270		20,940,161
Net (loss) income per common share:
Basic	$	(0.0341)	$	(0.~~10)~~11	$	0(2.2605)	$	(0.~~12)~~30
Diluted	$	(0.0341)	$	(0.~~10)~~11	$	0(2.2605)	$	(0.~~12)~~29

For the three months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024, ~~986~~263,~~378~~752 and ~~825~~661,~~825~~440 shares issuable upon vesting of restricted stock and 10,125 and ~~10,125~~zero shares issuable upon conversion of preferred shares, respectively, were excluded from the computation of diluted net (loss) income per common share, as their inclusion would have had an anti-dilutive effect on diluted net (loss) income per common share.

For the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024, ~~519~~719,~~852~~174 and ~~837~~504,~~084~~930 shares issuable upon vesting of restricted stock and ~~zero and~~ 10,125 and zero shares issuable upon conversion of preferred shares, respectively, were excluded from the computation of diluted net (loss) income per common share, as their inclusion would have had an anti-dilutive effect on diluted net (loss) income per common share.

Note 46: ~~Stock~~Share-Based Compensation

The Company's ~~records~~incentive ~~compensation~~equity ~~expense~~grants ~~associated~~have ~~with~~been ~~restricted~~made ~~stock in accordance with ASC Topic 718 (“Compensation - Stock Compensation”). The Company had 423,619 common shares issued, net of forfeitures,~~ under the 2016 Employee Equity Compensation Restricted Stock Plan (the “2016 Employee Plan”) (which 2016 Employee Plan was succeeded by the 2022 Employee Plan in April 2023, and no further awards will be granted under the 2016 Employee Plan), 55,074 common shares issued, net of forfeitures, under the 2022 Employee Equity Compensation Plan (as amended) (the “2022 Employee Plan”), and 257,567 common shares issued, net of forfeitures, under the 2015 Outside Director Equity Compensation Plan (as amended) (the “2015 Director Plan”). At December 31, 2024, all outstanding shares under these plans were issued with service-based vesting conditions with the exception of 2,000 performance stock units which vested on July 1, 2024. The Company records stock-based compensation expense for these awards on a straight-line basis over the requisite service period. The Company reverses stock-based compensation expense previously recorded upon forfeiture of unvested awards except for the performance restricted shares with a market condition issued to the former Chief Executive Officer (“CEO”) and performance stock units (“PSUs”) with a market condition issued to the former Chief Financial Officer (“CFO”) as described in the following paragraphs. For the three months ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense related to restricted stock awards of $0.5 million and $1.7 million, respectively. For the nine months ended December 31, 2024 and 2023, the Company recorded a (reversal) of previously recorded stock-based compensation expense and stock-based compensation expense related to restricted stock awards of $(7.2) million and $5.2 million, respectively. plans:

•In ~~June~~July ~~2023~~2015, the ~~Board~~Company’s of2015 ~~Directors~~Outside ~~amended~~Director ~~and~~Equity ~~restated~~Compensation ~~the~~Restricted Stock Plan (“2015 Director Plan”) ~~and~~became effective upon the ~~2022~~approval ~~Employee~~of the plan by the Company’s shareholders. The 2015 Director Plan ~~(collectively~~authorized 400,000 shares of the ~~"Plans")~~Company's tocommon ~~include~~stock available for issuance under the ~~ability~~plan toand ~~grant~~provides ~~restricted~~for ~~stock~~an ~~units~~automatic ~~("RSUs")~~increase ~~and~~every ~~performance~~year ~~stock~~in ~~units~~the amount of shares available for issuance under the plan of 10% of the shares authorized under the plan.

9•In July 2016, the Company’s 2016 Employee Equity Compensation Restricted Stock Plan (“2016 Employee Plan”) became effective upon the approval of the plan by the Company’s shareholders. The 2016 Employee Plan authorized 1,000,000 shares of the Company's Common stock available for issuance under the plan. In July 2022, the Company’s 2022 Employee Equity Compensation Restricted Stock Plan (“2022 Employee Plan”) became effective upon the approval of the plan by the Company’s shareholders.

~~("PSUs") under the Plans.~~ •The ~~amendments~~2022 ~~and~~Employee ~~restatement~~Plan ofreplaced the ~~Plans~~2016 ~~did~~Employee ~~not~~Plan, ~~increase~~and ~~the~~as ~~maximum number~~ of ~~shares~~April of2023 ~~common~~no ~~stock~~further ~~that~~awards ~~could~~were ~~be awarded under the Plans. At December 31~~granted, ~~2024,~~or ~~the~~will ~~Company~~be ~~had 83~~granted,~~500~~ ~~RSUs outstanding~~ under the ~~2024~~2016 ~~Omnibus~~Employee ~~Incentive~~ Plan. ~~(the~~The ~~“2024~~2022 ~~Omnibus~~Employee Plan~~”),~~ ~~290~~authorized 1,000 ~~RSUs outstanding under the 2024 Inducement Incentive Plan (the “2024 Inducement Plan”)~~,000 ~~569,365~~shares ~~RSUs~~of ~~outstanding under~~ the ~~2022~~Company's ~~Employee~~common ~~Plan~~stock ~~and~~available ~~22,316~~for ~~RSUs outstanding under the 2015 Director Plan~~issuance.

In August 2021, the Company issued 90,000 shares of restricted stock and 510,000 performance restricted shares with a market condition to the Company’s former CEO, in accordance with the former CEO’s employment agreement, under the 2016 Employee Plan. In April 2024, the Company and former CEO entered into a Transition and Separation Agreement pursuant to which the Company cancelled the 510,000 performance restricted shares and accelerated vesting on 30,000 remaining unvested restricted shares which otherwise would not have vested. Cancellation of the 510,000 shares resulted in an $8.8 million reversal of compensation expense, partially offset by $0.1 million of compensation expense from the accelerated vesting of the 30,000 shares in the nine months ended December 31, 2024.14

•On ~~April~~August 298, 2024, the Company ~~appointed~~adopted athe ~~new~~PetMed ~~CEO~~Express, ~~and~~Inc. in2024 ~~conjunction~~Omnibus ~~with~~Incentive ~~her~~Plan ~~new employment agreement, she received a grant of 483,092 RSUs under~~ (the ~~Company’s~~“2024 ~~2022~~Omnibus ~~Employee Equity Compensation~~ Plan.”) ~~Such~~pursuant ~~RSUs~~to ~~will~~which ~~vest in one-third increments on each of~~ the ~~first~~Company ~~three~~reserved ~~anniversaries~~850,000 ofshares ~~the date~~ of ~~grant~~common sostock, ~~long~~par asvalue ~~the~~$.001 ~~CEO~~per ~~continues~~share, tofor ~~be employed by~~ the ~~Company~~issuance onof ~~each~~equity ~~vesting~~awards ~~date,~~granted ~~and~~under such ~~RSUs will otherwise contain the standard provisions for RSU grants by the Company~~plan.

In•On ~~August~~September ~~2022~~27, ~~the Company issued 13~~2024,~~000~~ ~~restricted shares and 3,000 performance restricted shares to~~ the Company's ~~former~~adopted ~~CFO, in accordance with~~ the ~~CFO's~~PetMed ~~employment agreement~~Express, ~~under~~Inc. ~~the~~2024 ~~2016~~Inducement ~~Employee~~Incentive Plan. ~~One-third of~~ (the ~~restricted~~“2024 ~~shares~~Inducement ~~were~~Plan”) ~~scheduled~~pursuant to ~~vest~~which ~~on each of~~ the ~~first~~Company ~~three~~reserved ~~anniversaries~~350,000 ofshares ~~the date~~ of ~~grant~~common stock, ~~subject~~par tovalue ~~the~~$.001 ~~CFO’s~~per ~~continued~~share, ~~employment~~of ~~with~~ the Company’s ~~through~~common ~~the~~stock ~~applicable~~(subject ~~vesting~~to ~~date, with any unvested RSUs being forfeited upon~~ the ~~CFO~~adjustment ~~ceasing~~provisions ~~to be an employee~~ of the ~~Company.~~Inducement ~~The~~Plan) ~~performance~~for ~~restricted shares were based on~~ the ~~attainment~~issuance of ~~performance~~equity ~~criteria~~awards ~~equally~~granted ~~weighted~~under ~~between adjusted EBITDA and revenue. On June 8, 2023,~~ the ~~Company~~Inducement ~~determined that the performance criteria were not attained over the applicable performance period and accordingly, the performance restricted shares were cancelled~~Plan.

InThe ~~June 2023, the~~ Company ~~granted~~records ~~the~~compensation ~~Company's~~expense ~~former~~associated ~~CFO~~with ~~11,750~~restricted ~~RSUs~~stock ~~under~~in ~~the~~accordance ~~2022~~with ~~Employee~~ASC ~~Plan,~~Topic of718 ~~which~~(“Share ~~3,750~~Based ~~RSUs~~Payments”) ~~were~~(ASU ~~awarded~~2016-09). The invalue ~~recognition~~ of the ~~CFO’s~~restricted ~~contributions~~stock ~~during~~is ~~fiscal~~determined ~~year~~based ~~2023~~on ~~and~~ the ~~remaining~~market ~~8,000~~value ~~awarded~~of asthe astock ~~part~~at of the ~~equity~~issuance ~~award~~date. ~~cycle~~The ~~for~~restriction ~~fiscal~~period ~~year~~or ~~2024.~~forfeiture ~~One-third~~period ofis ~~the~~determined ~~RSUs~~by ~~were~~the ~~scheduled~~Company’s toCompensation ~~vest~~and onHuman ~~each~~Capital ofCommittee ~~the~~and ~~first~~is ~~three~~to ~~anniversaries~~be ofno ~~the~~less ~~date~~than of1 ~~grant,~~year ~~subject~~and tono ~~the~~more ~~CFO’s~~than ~~continued~~ten ~~employment~~years ~~with~~unless ~~the~~otherwise ~~Company~~specified ~~through~~by the ~~applicable~~Compensation ~~vesting~~and ~~date,~~Human ~~with~~Capital ~~any~~Committee. ~~unvested~~The ~~RSUs~~following ~~being~~table ~~forfeited~~presents ~~upon~~ the ~~former~~number ~~CFO~~of ~~ceasing~~common toshares beissued anunder ~~employee~~each of the Company~~. Also~~'s inplans: ~~June 2023, the former CFO was awarded 8,000 PSUs with a market condition.~~

On May 16, 2024, the Company granted the former CFO 74,850 RSUs of which 14,970 would vest on June 30, 2024, 22,455 would vest August 31, 2024 and 37,425 would vest on August 31, 2025. On May 31, 2024, the Company and the former CFO entered into a Transition and Separation Agreement pursuant to which the former CFO agreed to leave the Company following a transition period. Upon the completion of the transition period and contingent on the former CFO’s complying with the terms of the Agreement, the Company accelerated the vesting of all unvested restricted shares and RSUs that were originally scheduled to vest on or before August 3, 2025. Under the Agreement, PSUs with a market condition were cancelled. Acceleration and cancellation of the former CFO’s restricted shares, RSUs and PSUs resulted in net additional compensation expense of $0.2 million in the three months ended June 30, 2024.


Plan Name						Common Shares Issued
2016 Employee Plan						422,438
2015 Director Plan						247,307
2022 Employee Plan						417,563
2024 Omnibus Plan						190,353
2024 Inducement Plan						136,735

OnAs ~~August~~of 8September 30, ~~2024~~2025, ~~the~~all ~~Company~~shares ~~adopted~~in the ~~2024~~2022 ~~Omnibus~~Employee Plan, ~~pursuant~~2016 Employee Plan and 2015 Director Plan were issued subject to ~~which~~a ~~the~~restriction ~~Company~~or ~~reserved~~forfeiture ~~850~~or vesting period that lapses ratably on the first,~~000~~ ~~shares~~second, and third anniversaries of ~~common~~the ~~stock~~date of grant, ~~par~~and the fair value ~~$.001~~of ~~per~~which ~~share~~is being amortized over a one to three-year restriction period, with the exception of performance restricted shares which were issued to the Company’'s ~~common~~former ~~stock~~Chief ~~for~~Executive Officer and the ~~issuance~~former ofCompany's ~~equity~~Chief ~~awards~~Financial ~~granted~~Officer and Company's current Chief Executive Officer.

OnFor the three months ended September 30, 272025 and September 30, 2024, the Company ~~adopted~~recognized compensation expense (reversal) related to the 2016 and 2022 Employee Plan, the 2015 Director Plan, 2024 Omnibus Plan and 2024 Inducement Plan ~~pursuant~~of to$0.2 ~~which~~million and $0.6 million, respectively. For the ~~Company~~six ~~reserved~~months ~~350~~ended September 30,~~000~~ ~~shares~~2025 ofand ~~common~~September 30, ~~stock~~2024, ~~par~~the ~~value~~Company recognized compensation expense (reversal) of $0.~~001~~8 ~~per~~million ~~share~~and $(7.6) million, ofrespectively. All stock-based compensation expense is recognized as a payroll-related expense and it is included within the general and administrative expenses line item within the Company’s ~~common~~Consolidated ~~stock~~Statements ~~(subject~~of toOperations, and the ~~adjustment~~offset ~~provisions~~is ofincluded in the ~~Inducement~~additional ~~Plan)~~paid-in ~~for~~capital ~~the~~line ~~issuance~~item of ~~equity~~the ~~awards~~Company’s ~~granted~~Consolidated ~~under~~Balance Sheets. See Footnote 11, "Income Taxes" for tax impact of the ~~Inducement~~Company's ~~Plan~~stock compensation expense.

On September 27, 2024, the Company’s new CFO received a grant of 250,000 RSUs under the Company’s 2024 Inducement Plan. Such RSUs will vest in one-third increments on each of the first three anniversaries of the date of grant so long as the CFO continues to be employed by the Company on each vesting date, and such RSUs will otherwise contain the standard provisions for RSU grants by the Company.

All stock-based compensation expense is recognized as a payroll-related expense and is included within the general and administrative expenses line item within the Company’s unaudited Condensed Consolidated Statements of Operations,

with the offset included in the additional paid-in capital line item of the Company’s unaudited Condensed Consolidated Balance Sheets.

Restricted Stock Awards

The fair value assigned to restricted stock awards (“RSAs”) is the market price of the Company’s stock at the grant date. The vesting period ranges from one to three years. Restricted stock award activity in the ~~nine~~six months ended ~~December 31~~September 30, ~~2024~~2025 was as follows:

	2015 Director Plan	2016 Employee Plan	2022 Employee Plan	Total	Weighted-Average Grant Date Fair Value
Non-vested restricted stock outstanding at March 31, 2024	23,707	605,343	74,076	703,126	$	19.39
Granted and issued	–	–	–	–	$	–
Vested	(13,666)	(60,540)	(46,742)	(120,948)	$	22.10
Forfeited	–	(533,641)	(27,334)	(560,975)	$	18.71
Balance at December 31, 2024	10,041	11,162	–	21,203	$	21.96

At December 31, 2024 and 2023, there were 21,203 and 728,446 RSAs subject to restriction and forfeiture outstanding, respectively. For the three months ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense related to RSAs of $0.1 million and $1.6 million, respectively. For the nine months ended December 31, 2024 and 2023, the Company recorded a (reversal) of previously recorded stock-based compensation expense and stock-based compensation expense related to RSAs of $(8.2) million and $5.0 million, respectively.


	2015 Director Plan Number of Shares	2016 Employee Plan Number of Shares	2022 Employee Plan Number of Shares	2024 Omnibus Plan Number of Shares	2024 Inducement Plan Number of Shares	All Plans Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested restricted stock outstanding at March 31, 2025	9,207	8,686	—	—	—	17,893	$	21.39
Granted and issued	—	—	—	10,000	15,000	25,000	$	2.84
Vested	(6,166)	(7,114)	—	—	—	(13,280)	$	21.68
Forfeited	(3,041)	(947)	—	—	—	(3,988)	$	20.85
Non-vested restricted stock outstanding at September 30, 2025	–	625	—	10,000	15,000	25,625	$	3.23

At September 30, 2025 and 2024, there were 25,625 and 29,248 RSAs subject to restriction and forfeiture outstanding, respectively. For the three months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense (reversal) related to RSAs of $(24) thousand and $0.2 million, respectively. For the six months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense (reversal) related to RSAs of $48 thousand and $(8.3) million, respectively.

Restricted Stock Units

The Company first granted restricted stock units (“RSUs”) in the year ended March 31, 2024. The fair value assigned to RSUs is the market price of the Company’s stock on the grant date. The vesting period for employees and members of the Board of Directors generally ranges from one to three years. For the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, RSU activity under the 2022 Employee Plan, 2015 Director Plan, 2024 Omnibus Plan and 2024 Inducement Plan was as follows:

	RSUs	Weighted-Average Grant Date Fair Value Per RSU
	2015 Director Plan Number of Shares	2022 Employee Plan Number of Shares		2024 Omnibus Plan Number of Shares	2024 Inducement Plan Number of Shares	All Plans Number of Shares	Weighted-Average Grant Date Fair Value Per RSU
Balance at March 31, 2024	85,080	$	12.75
Balance at March 31, 2025	22,316	568,416		321,022	290,000	1,201,754	$	4.49
Granted	~~1,037,258~~—	$—	~~4.04~~	6,627	—	6,627	$	3.20
Vested and issued	(6610,~~739~~097)	$(250,830)	~~8.38~~	(76,336)	(95,068)	(432,331)	$	4.38
Forfeited	(907,~~418~~219)	$(265,265)	~~5.84~~	(130,502)	(168,265)	(571,251)	$	4.35
Balance at December 31, 2024	965,181	$	4.33
Balance at September 30, 2025	5,000	52,321		120,811	26,667	204,799	$	5.04

The total grant-date fair value of RSUs granted during the three months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024 was $~~0.2 million and zero, respectively. The total grant-date fair value of RSUs granted during the nine months ended December~~10 ~~31,~~thousand ~~2024~~ and ~~2023 was~~ $41.2 million ~~and $1.1 million~~, respectively. For the three months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024, the Company recorded stock-based compensation expense related to RSUs of $0.43 million and $0.14 million, respectively. ~~For the nine months ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $1.1 million and $0.2 million, respectively.~~

The total grant-date fair value of RSUs granted during the six months ended September 30, 2025 and 2024 was $21 thousand and $4.0 million, respectively. For the six months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense related to RSUs of $0.8 million and $0.7 million, respectively.

Performance Stock Units

The fair value assigned to PSUs is determined using the market price of the Company’s stock on the grant date for awards with a performance condition, and by using a Monte Carlo simulation for awards with a market condition. PSUs with a performance condition generally vest over one year. PSUs with a market condition generally vest over three years. Stock-based compensation expense associated with PSUs with a performance condition are re-assessed each reporting period based upon the estimated performance attainment on the reporting date until the performance conditions are met. 16

11The fair value assigned to performance stock units (“PSUs”) is determined using the market price of the Company’s stock on the grant date for awards with a performance condition, and by using a Monte Carlo simulation for awards with a market condition. PSUs with a performance condition generally vest over one year. PSUs with a market condition generally vest over three years. Stock-based compensation expense associated with PSUs with a performance condition are re-assessed each reporting period based upon the estimated performance attainment on the reporting date until the performance conditions are met. The ultimate number of shares of common stock that are issued to an employee is the result of the actual performance of the Company or individual at the end of the performance period compared to the performance targets.

~~The~~For ~~ultimate~~the ~~number~~six ofmonths ~~shares~~ended ofSeptember 30, ~~common~~2025, ~~stock~~PSU ~~that~~activity ~~are~~under ~~issued to an employee is~~ the ~~result~~2022 ofEmployee ~~the~~Plan, ~~actual~~2015 ~~performance~~Director ofPlan, ~~the~~2024 ~~Company~~Omnibus orPlan ~~individual~~and at2024 ~~the~~Inducement ~~end~~Plan ofwas ~~the~~as ~~performance period compared to the performance targets.~~ follows:

For the nine months ended December 31, 2024, PSU activity under the 2022 Employee Plan, 2015 Director Plan, 2024 Omnibus Plan and 2024 Inducement Plan was as follows:


	2015 Director Plan Number of Shares	2022 Employee Plan Number of Shares	2024 Omnibus Plan Number of Shares	2024 Inducement Plan Number of Shares	All Plans Number of Shares	Weighted-Average Grant Date Fair Value Per PSU
Balance at March 31, 2025	—	—	146,772	—	146,772	$	3.47
Granted	—	—	—	—	—	$	—
Vested and issued	—	—	—	—	—	$	—
Forfeited	—	—	(146,772)	—	(146,772)	$	3.47

Balance at September 30, 2025	—	—	—	—	—	$	—

	PSUs	Weighted-Average Grant Date Fair Value Per PSU
Balance at March 31, 2024	12,000	$	10.48
Granted	–	$	–
Vested and issued	(2,000)	$	13.95
Forfeited	(10,000)	$	9.79
Balance at December 31, 2024	–	$	–

There were no PSU’s granted in the three months ended and six months ended September 30, 2025 and 2024. For the three months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense (reversal), net of forfeitures, related to PSUs of $(78) thousand and $0 thousand, respectively. For the six months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense (reversal)expense, net of forfeitures, related to PSUs of $(35) thousand and $(36) thousand, respectively.

InNote ~~the~~7: Fair nine months ended December 31, 2024, 10,000 PSUs were forfeited. The total grant-date fair value of PSUs granted during the nine months ended December 31, 2024 and 2023 was zero and $0.1 million, respectively. There were no PSU’s granted in the three months ended December 31, 2024 and 2023. For the three months ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense, net of forfeitures, related to PSUs of zero and $20 thousand, respectively. For the nine months ended December 31, 2024 and 2023, the Company recorded stock-based compensation (benefit) expense, net of forfeitures, related to PSUs of $(36) thousand and $44 thousand, respectively. Value

Note 5: Fair Value

The Company carries cash and cash equivalents at fair value in the unaudited Condensed Consolidated Balance Sheets. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. ASC Topic 820 (“Fair Value Measurement”) establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. At ~~December~~September 3130, ~~2024~~2025 and March 31, ~~2024~~2025, the Company had invested the majority of its $5036.1 million and $5554.37 million cash and cash equivalents balance in money market funds which are classified within Level 1.

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Note 68: Intangible and Other Assets, Net

Intangible assets and other assets, net consisted of the following (in thousands):

	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted Average Remaining Useful Life (Years)
December 31, 2024
September 30, 2025
Intangible Assets
Toll-free telephone number	Indefinite	$	375	$	–	$	375	Indefinite
Internet domain names	Indefinite	485		–		485		Indefinite
Trade Names - PetCareRx	Indefinite	~~2,600~~800		–		~~2,600~~800		Indefinite
Customer Relationships -PetCareRx	7 years	6,700		(12,~~675~~393)		54,~~025~~307		54.255 years
Developed Technology - PetCareRx	3 years	3,000		(12,~~750~~500)		~~1,250~~500		10.255 years
		$	1311,~~160~~360	$	(34,~~425~~893)	$	96,~~735~~467
Other Assets
Minority interest investment in Vetster	N/A	5,300		–		5,300		N/A
Balance December 31, 2024		$	18,460	$	(3,425)	$	15,035
Balance September 30, 2025		$	16,660	$	(4,893)	$	11,767
March 31, 2024
March 31, 2025
Intangible Assets
Toll-free telephone number	Indefinite	$	375	$	–	$	375	Indefinite
Internet domain names	Indefinite	485		–		485		Indefinite
Trade Names - PetCareRx	Indefinite	21,~~600~~400				21,~~600~~400		Indefinite
Customer Relationships -PetCareRx	7 years	6,700		(~~957~~1,914)		$	54,~~743~~786	65 years
Developed Technology - PetCareRx	3 years	3,000		(12,000)		$	21,000	21 ~~years~~year
		$	1311,~~160~~960	$	(13,~~957~~914)	$	118,~~203~~046
Other Assets
Minority interest investment in Vetster	N/A	5,300		–		5,300		N/A
Balance March 31, 2024		$	18,460	$	(1,957)	$	16,503
Balance March 31, 2025		$	17,260	$	(3,914)	$	13,346

Amortization expense for intangible assets was $0.5 million and $0.5 million for the three months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024. Amortization expense for intangible assets was $1.50 million and $1.0 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024. The indefinite life intangibles are not being amortized and are subject to an annual review for impairment in accordance with the ASC Topic 350 (“Goodwill and Other Intangible Assets”). The Company recorded a $0.6 million trade name impairment for the six months ended September 30, 2025.

On April 19, 2022, the Company engaged in a three-year partnership agreement with Vetster Inc. (“Vetster”), a Canadian veterinary telehealth company. The Company also purchased a 5% minority interest in Vetster in the amount of $5.0 million and received warrants for additional equity in Vetster, which are tied to future performance milestones. Under the terms of the agreement, Vetster became the exclusive provider of telehealth and telemedicine services to the Company. The minority interest investment is being valued on the cost basis and the investment will be evaluated periodically for any impairment. On October 3, 2023, the Company purchased additional shares in Vetster in the amount of $0.3 million, which increased the minority interest investment to $5.3 million. Following this round, the Company’s minority ownership changed to approximately 4.8% of Vetster’s outstanding shares.

Note 79: Commitments and Contingencies

Legal Matters and Routine Proceedings

On April 18, 2024, Plaintiff Timothy Fitchett (“Plaintiff”) filed an action against the Company in the Court of Common Pleas of Allegheny County, Pennsylvania, on behalf of himself and purportedly on behalf of a class of others ~~similarly situated. Plaintiff alleges that the Company violated Pennsylvania’s Unfair Trade Practices and Consumer~~

1318

similarly situated. Plaintiff alleges that the Company violated Pennsylvania’s Unfair Trade Practices and Consumer Protection Law by representing “reg.” prices for products which the Company allegedly never charged for those products. On May 13, 2024, the Company removed the matter to the U.S. District Court for the Western District of Pennsylvania in Pittsburgh. The ~~company~~Company successfully opposed the Plaintiff's motion to remand the case back to the Court of Common Pleas. On the face of the ~~Complaint~~complaint, Plaintiff is seeking damages for himself in the amount of the allegedly illusory discounts he allegedly believed he was receiving when purchasing products from the Company or, in the alternative, a complete refund of amounts he paid to the Company, and he is also seeking a liability determination for members of the proposed class. The Company denies liability in this matter and intends to defend the action accordingly. The Company cannot determine materiality or estimate a range of potential liability, if any, at this time if the Company were determined to be liable.

The Company may from time to time be involved in various other claims and lawsuits in the ordinary course of business, including claims related to products, product warranties, contracts, employment, intellectual property, consumer protection, pharmacy and other regulatory matters. The Company has settled complaints that had been filed with various states’ pharmacy boards in the past. There can be no assurances made that other states will not attempt to take similar actions against the Company in the future. The Company also intends to vigorously defend its trade or service marks. There can be no assurance that the Company will be successful in protecting its trade or service marks. Legal costs related to the above matters are expensed as incurred. From time to time, the Company may be involved in and subject to disputes and legal proceedings, as well as demands, claims and threatened litigation that arise in the ordinary course of its business. These proceedings may include allegations involving business practices, infringement of intellectual property, employment or other matters. The ultimate outcome of any legal proceeding is often uncertain, there can be no assurance that the Company will be successful in any legal proceeding, and unfavorable outcomes could have a negative impact on our results of operations and financial condition. In accordance with ASC Topic 450-20 ("Loss Contingencies"), the Company records a liability in its financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews the status of each significant matter each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss to the extent necessary to make the financial statements not misleading. If the loss is not probable and cannot be reasonably estimated, a liability is not recorded in the Company’s financial statements. Gain contingencies are not recorded until they are realized. Legal costs related to any legal matters are expensed as incurred.

Note 810: Changes in Shareholders’ Equity:

Changes in Shareholders’ Equity for the three and ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 is summarized below (in thousands):

	~~Common Stock~~		Common Stock	~~AdditionalPaid-InCapital~~				~~RetainedEarnings~~		AdditionalPaid-InCapital		RetainedEarnings
Beginning balance at March 31, 2024:	$	21		$	25,146			$	71,555
			Share			Amounts
Stock based compensation (reversal)	—			(8,204)				—
Beginning balance at March 31, 2025:			20,657			$	21			$	18,560	$	66,544
Dividends forfeited	—			—				1,250
Net share settlement of restricted stock units			178			—				(28)		—
Net income	—			—				3,754
Stock based compensation			—			—				591		—
Ending balance at June 30, 2024:	$	21		$	16,942			$	76,559
Dividends forfeited			—			—				—		1
Stock based compensation expense	—			573				—
Net loss			—			—				—		(34,152)
Dividends forfeited	—			—				4
Ending balance at June 30, 2025:			20,835			$	21			$	19,123	$	32,393
Net income	—			—				2,326
Net share settlement of restricted stock units			180			—				(209)		—
Ending balance at September 30, 2024:	$	21		$	17,515			$	78,889
Stock based compensation expense			—			—				247		—
Stock based compensation expense	—			452				—
Dividends forfeited			—			—				—		—
Dividends forfeited	—			—				5
Net loss			—			—				—		(8,520)
Net loss	—			—				(707)
Ending balance at September 30, 2025:			21,016			$	21			$	19,161	$	23,873
Ending balance at December 31, 2024:	$	21		$	17,967			$	78,187

1419

Changes in Shareholders’ Equity for the three and ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024 is summarized below (in thousands):

	~~Common Stock~~		Common Stock	~~AdditionalPaid-InCapital~~				~~RetainedEarnings~~		AdditionalPaid-InCapital		RetainedEarnings
Beginning balance at March 31, 2023:	$	21		$	18,277			$	91,659
			Share			Amounts
Stock based compensation expense	—			1,760				—
Beginning balance at March 31, 2024:			21,149			$	21			$	25,146	$	71,555
Dividends declared	—			—				(6,346)
Cancellation of restricted stock, net			(548)	—		—				—		—
Net loss	—			—				(1,136)
Stock based compensation (reversal)			—			—				(8,204)		—
Ending balance at June 30, 2023:	$	21		$	20,037			$	84,177
Dividends forfeited			—			—				—		1,250
Stock based compensation expense	—			1,728				—
Net loss			—			—				—		3,754
Dividends declared	—			—				(6,308)
Ending balance at June 30, 2024:			20,601			$	21			$	16,942	$	76,559
Net income	—			—				715
Issuance of restricted stock, net			62			—				—		—
Ending balance at September 30, 2023:	$	21		$	21,765			$	78,584
Stock based compensation expense			—			—				573		—
Stock based compensation expense	—			1,708				—
Dividends declared			—			—				—		4
Net loss	—			—				(2,027)
Net income			—			—				—		2,326
Ending balance at December 31, 2023:	$	21		$	23,473			$	76,557
Ending balance at September 30, 2024:			20,663			$	21			$	17,515	$	78,889

There were no76,064 and zero shares of common stock that were purchased orfor ~~retired~~net settlement in the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 or ~~2023~~2024, respectively.

On December 2, 2024, the Board of Directors (the “Board”) of the Company adopted a rights agreement and declared a dividend of one right (a “Right”) for each outstanding share of Company common stock, to shareholders of record at the close of business on December 16, 2024 (the “Record Date”). The description and terms of the Rights are set forth in a rights agreement, dated as of December 3, 2024 (the “Rights Agreement”), between the Company and Continental Stock Transfer & Trust Company, a federally chartered trust company, as rights agent.

The Board adopted the Rights Agreement to protect the investment of shareholders during a period in which it believes shares of the Company do not reflect the inherent value of the business or its long-term growth potential, and during which there have been recent significant accumulations of common stock by certain shareholders. The Rights Agreement is intended to enable shareholders to realize the long-term value of their investment in the Company by reducing the likelihood that any entity, person, or group is able to gain a control or control-like position in the Company through open market accumulation without paying all shareholders an appropriate control premium or providing the Board sufficient opportunity to make informed judgments and take actions that are in the best interests of all shareholders.

In general terms, the Rights Agreement imposes significant dilution upon any person or group (other than the Company and certain other excluded persons and exempt persons), that is or becomes the beneficial owner of 12.5% or more of the common stock without the prior approval of the Board following the first public announcement by the Company of the adoption of the Rights Agreement. The term “beneficial ownership” is defined in the Rights Agreement and includes, among other things, certain derivative arrangements.

In general, each Right entitles its registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share (“Preferred Stock”), of the Company at an exercise price of $27.00 per Right, subject to adjustment under certain circumstances (the “Purchase Price”). The Rights will become exercisable if (among other things) any person or group acquires 12.5% or more of the outstanding common stock, including through derivatives agreements, without the approval of the Board (an “Acquiring Person”). If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person or any associate or affiliate thereof may, upon exercise of a Right, purchase for the Purchase Price shares of Common Stock with a market value of two times the Purchase Price, based on the market price of the Common Stock prior to such acquisition. If the Company is acquired in a merger or similar transaction after an Acquiring Person becomes such, all holders of Rights except the Acquiring Person or any associate or affiliate thereof may, upon exercise of a Right, purchase for the Purchase Price shares of the acquiring company with a market value of two times the Purchase Price, based on the market price of the acquiring company’s stock prior to such transaction. Any Rights held by an Acquiring Person will be void and may not be exercised.

1520

~~based~~On onNovember 26, 2025, the ~~market~~Board ~~price~~unanimously ofapproved ~~the~~an ~~acquiring~~amendment ~~company’s~~to ~~stock~~the ~~prior~~Rights Agreement, pursuant to ~~such~~which ~~transaction.~~the ~~Any~~expiration date of the Rights ~~held~~Agreement bywas anextended ~~Acquiring~~for ~~Person~~one ~~will~~year befrom ~~void~~the close of business on December 2, 2025 until the close of business on December 2, 2026. All other terms and ~~may~~conditions ~~not~~of bethe ~~exercised~~Rights Agreement remain unchanged.

~~The~~After giving effect to such amendment, the Rights will expire on the earliest to occur of (a) the close of business on December 2, ~~2025~~2026, (b) the time at which the Rights are redeemed by the Company (as provided in the Rights Agreement), or (c) the time at which the Rights are exchanged by the Company (as provided in the Rights Agreement). There was no impact to the Company’s current period financial statements from adopting this Rights Agreement.

In connection with the adoption of the Rights Agreement, the Board adopted Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company (the “Articles of Amendment”), which designates the rights, preferences, and privileges of 100,000 shares of a new series of the Company’s preferred stock, par value $0.001 per share, designated as Series A Junior Participating Preferred Stock. The Company filed the Articles of Amendment with the Secretary of State of the State of Florida on December 3, 2024.

Note 911: Income Taxes

For the three months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024, the Company recorded an income tax provision of approximately $~~0.5~~9 ~~million~~thousand and an income tax benefit of approximately $01.64 million, respectively, and for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 and ~~2023~~2024, the Company recorded an income tax provision of $2218 thousand and an income tax benefit of $0.34 million, respectively. The increase in the income tax provision for the nine months ended December 31, 2024 is related to the cancellation of the former CEO’s performance stock units resulting in additional $8.7 million of increased income during the year. The effective tax rate for the three months ended ~~December~~September 3130, ~~2024~~2025 was approximately (~~192~~0.1)%, compared to approximately 23(151.45)% for the three months ended ~~December~~September 3130, ~~2023~~2024, and the effective tax rate for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 was approximately 0.40%, compared to approximately 12(7.49)% for the ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024. The ~~projected full-year~~ effective tax rate ~~used~~ for ~~purposes of~~ the ~~income tax provision for the~~ three ~~and nine~~ months ended ~~December~~September 3130, ~~2024~~2025 ~~reflects~~differs from the ~~$1.8 million~~statutory ~~impact~~rate ofprimarily as a ~~favorable~~result ~~permanent difference associated with the cancellation~~ of the ~~former~~goodwill ~~CEO’s~~impairment ~~performance restricted shares. No tax benefit was recorded for the original compensation expense due to expected limitation under Internal Revenue Code Section 162 (m)~~ and ~~therefore, there is no tax benefit to reverse upon cancellation of~~ the ~~stock.~~Company ~~The~~maintaining ~~impact~~a ofvaluation ~~this~~allowance ~~favorable~~against ~~permanent difference is partially offset by~~ the ~~impacts~~majority of ~~stock-based~~our ~~compensation~~deferred ~~recognized for book and~~ tax ~~purposes~~assets.

~~Under~~As ~~Internal~~of ~~Revenue Code Section 382~~September 30, ~~if a corporation undergoes an “ownership change”~~2025, the ~~corporation’s~~Company ~~ability~~maintained toa ~~use~~valuation ~~its~~allowance ~~pre-change~~against ~~net~~the ~~operating~~majority ~~loss~~of ~~and~~our deferred tax ~~credit~~assets ~~carryforwards~~for towhich ~~offset~~realization ~~its~~cannot ~~post-change income and tax liabilities may~~ be ~~limited. Generally,~~considered ~~an ownership change occurs when the equity ownership of one or~~ more ~~stockholders~~likely orthan ~~groups~~not ~~of stockholders who owns~~ at ~~least~~this 5%time. ofManagement aassesses ~~corporation’s~~the ~~stock~~need ~~increases~~for ~~its~~the ~~ownership~~valuation byallowance ~~more~~on ~~than~~a 50quarterly ~~percentage~~basis. ~~points~~In ~~over~~assessing ~~their~~the ~~lowest~~need ~~ownership~~for ~~percentage in~~ a ~~testing~~valuation ~~period (typically three years). On April 3~~allowance, ~~2023,~~the ~~100%~~Company ofconsiders ~~the~~all ~~issued~~positive and ~~outstanding~~negative ~~stock~~evidence, ofincluding ~~PetCareRx~~future ~~was~~reversals ~~acquired~~of byexisting ~~the~~taxable ~~Company.~~temporary ~~The~~differences, ~~merger~~projected ~~triggered~~future antaxable ~~ownership~~income, ~~change~~tax ofplanning ~~PetCareRx~~strategies, ~~within~~and ~~the~~past ~~meaning~~financial ~~of Section 382~~performance.

AsOn aJuly ~~result~~4, ~~of the acquisition~~2025, the ~~Company~~“One ~~performed~~Big aBeautiful ~~Section~~Bill ~~382~~Act”, ~~analysis~~or to“OBBBA”, ~~determine~~was ifsigned ~~the~~into ~~net~~law, ~~operating~~which ~~losses~~represents ~~carried~~the ~~forward~~enactment ~~would~~date ~~have~~under aU.S. ~~utilization limitation~~GAAP. ~~Any~~ ~~limitation~~Key ~~could~~corporate ~~result~~tax inprovisions include the ~~expiration~~restoration of a100% ~~portion~~bonus ~~of the federal net operating loss carryforward before utilization~~depreciation, ~~which~~immediate ~~would~~expensing ~~reduce~~for ~~the~~domestic ~~Company's~~research ~~gross~~and ~~deferred~~experimental ~~tax assets. As of April 3~~expenditures, ~~2023,~~changes ~~and prior~~ to ~~the~~Section ~~acquisition,~~163(j) ~~PetCareRx had approximately $96.0 million of net operating losses and $1.9 million of disallowed~~ interest ~~expense. The~~limitations, ~~results~~updates ofto ~~the~~Global ~~Section~~Intangible ~~382~~Low-Taxed ~~analysis~~Income ~~determined~~(“GILTI”), ~~the net operating losses~~ and ~~disallowed~~Foreign-Derived ~~interest~~Intangible ~~expense~~Income in(“FDII”) ~~total~~rules, ~~would~~amendments beto ~~limited~~energy credits, and ~~reduced~~expanded toSection ~~approximately~~162(m) ~~$14~~aggregation requirements.~~5 million.~~

~~Note~~In ~~10: Related~~accordance ~~Party~~with ~~Transaction~~ASC 740, the effects of the new tax legislation are recognized in the period of enactment. Management has evaluated the provisions of the OBBBA, recalculated temporary differences, reassessed valuation allowances, and considered any necessary adjustments. Based on this evaluation, management concluded that the effects of the OBBBA are not material to the Company’s consolidated financial statements for the three and six months ended September 30, 2025. Management will continue to monitor forthcoming guidance, interpretations, and technical clarifications to assess whether any future adjustments or additional disclosures may be required.

OnNote ~~September 29, 2024 the Company entered into a master services agreement with Fabric, Inc ( “Fabric”), a privately-held company.~~12: ~~Under~~Subsequent this agreement, Fabric will provide cloud-based product services to the Company with a one-year term with auto-renewal unless either party provides notice at least 90 days in advance. Per the terms of the agreement, the Company will pay Fabric $115,000 the first year and $100,000 for each potential year thereafter with potential changes in the amounts paid based on actual usage of Fabric’s services. There was no expense related to this contract for the three and nine months ended December 31, 2024. There was no amount owed by the Company to Fabric as of December 31, 2024. Sandra Campos, Chief Executive Officer and President of the Company, is an equity-holder in Fabric and serves on the Board of Directors of Fabric. This transaction was reviewed and approved by the Company’s Audit Committee of the Board of Directors in accordance with the Company’s related party transaction policy.Events

16Unsolicited and Non-Binding Acquisition Proposals Received

In December, 2025, the Company received public unsolicited and non-binding acquisition proposals to acquire all of the outstanding shares of the Company at prices ranging from $4 to $4.25 per share in cash, subject to various conditions such as due diligence and the execution of a mutually acceptable definitive agreement, but not subject to any financing contingency. The Company’s Board, consistent with its fiduciary duties and in consultation with its financial and legal advisors, will carefully review and consider the acquisition proposals to determine the course of action that it believes is in the best interests of the Company and its stockholders.

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

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended ~~December~~September 3130, ~~2024~~2025, and our ~~2024~~2025 Form 10-K.

Certain information in this Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. You can identify these forward-looking statements by the words "believes," "intends," "expects," "may," "will," "should," "plans," "projects," "contemplates," "intends," "budgets," "predicts," "estimates," "anticipates," or similar expressions. These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions. Actual future results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of our ~~2024~~2025 Form 10-K under the heading “Risk Factors.” A reader, whether investing in our common stock or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Restatement

As described in the explanatory note in Note 1 to unaudited condensed consolidated financial statements, we have restated our consolidated financial statements and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Affected Periods.

Executive Summary

PetMed Express, Inc. and subsidiaries, d/b/a PetMeds®, and PetCareRx, Inc. is a leading nationwide direct-to-consumer pet pharmacy and online provider of prescription and non-prescription medications, foods, supplements, supplies and vet services for dogs, cats and horses. PetMeds markets and sells directly to consumers through its websites, toll-free numbers, and mobile application. We offer consumers an attractive alternative for obtaining pet medications, foods, and supplies in terms of convenience, price, speed of delivery, and valued customer service.

Founded in 1996, our executive headquarters offices are currently located at 420 South Congress Avenue, Delray Beach, Florida 33445, and our telephone number is (561) 526-4444. We have a March 31 fiscal year end.

Presently, our product line includes approximately 126,000 of the most popular pet medications, health products, food and supplies for dogs, cats, and horses.

We market our products through national advertising campaigns which aim to increase the recognition of the “PetMeds®” brand name, and "PetCareRx" brand name, increase traffic to our websites at www.petmeds.com and www.petcarerx.com, acquire new customers, and maximize repeat purchases. Our sales consist of products sold mainly to retail consumers. The average purchase was approximately $9798 and $9396 for the quarters ended ~~December~~September 3130, ~~2024~~2025, and ~~December~~September 3130, ~~2023~~2024, respectively.

Critical Accounting Policies

Our discussion and analysis of our financial condition and the results of our operations contained herein are based upon our condensed consolidated financial statements and the data used to prepare them. Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. On an ongoing basis we re-evaluate our judgments and estimates including those related to product returns, bad debts, inventories, and income taxes. We base our estimates and judgments on our historical experience, knowledge of current conditions, and our beliefs of what could occur in the future considering available information. Actual results may differ from these estimates under different assumptions or conditions. Our estimates are guided by observing the following critical accounting policies.

There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K, filed on June 14, 2024, except as noted below:22

17There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K, filed on October 14, 2025, except as noted below:

Long-lived Assets

Long-lived assets, which primarily includes fixed assets, definite lived intangibles, right-of-use assets, and other assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to the undiscounted cash flows expected to be generated by the asset group from its use and eventual disposition of that asset group. Assets are considered to be impaired if the carrying amount of an asset group exceeds the future undiscounted cash flows. ~~Management~~If impairment is determined ~~that~~to noexist, any related impairment loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less cost of disposal. The Company determined that all of its long-lived assets ~~existed~~are aspart of ~~December 31,~~a ~~2024~~single entity-wide asset group for the purpose of long-lived asset impairment assessment.

During the three months ended June 30, 2025, the Company identified triggering events for the Company’s long-lived asset group. These triggering events included a downward revision to the Company’s forecast and a decrease in the Company’s market capitalization which fell below the Company’s carrying value for a sustained period beginning in the fourth quarter of fiscal 2025. As a result of the identified triggering events, the Company performed a recoverability test for the identified long-lived asset group. The undiscounted cash flow projections were based on estimates made by management of current and future strategic and operational plans and future financial performance projected using various assumptions regarding revenues, gross profits, operating expenses, and working capital through the remaining useful life of the primary asset in the asset group. The results of the test indicated that the carrying amounts for the long-lived asset group were expected to be recoverable.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. The Company is required to assess goodwill ~~and other indefinite-lived intangible assets~~ for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs its annual impairment assessment in the fourth fiscal quarter of each year. ~~The~~ ~~Company~~An ~~has~~impairment ~~concluded~~test ~~that~~of itgoodwill ~~has~~consists ~~one~~of ~~reporting~~comparing ~~unit~~the ~~and~~carrying ~~has~~amount ~~assigned~~of the ~~entire~~single ~~balance~~reporting ofunit ~~goodwill~~ to ~~this~~the ~~reporting~~fair value of the unit. If ~~the~~An ~~carrying~~impairment ~~value~~loss ofis anrecognized ~~indefinite-lived~~by ~~intangible~~the ~~asset~~amount that the carrying amount exceeds ~~its~~the fair value, anlimited ~~impairment~~to ~~loss~~the isamount ~~recognized~~of ingoodwill. anThe ~~amount~~Company ~~equal~~has toconcluded that ~~excess~~it has one reporting unit and has assigned the entire balance of goodwill to this reporting unit.

~~The~~For the three months ended June 30, 2025, the Company’s ~~other~~identified ~~indefinite-lived~~potential ~~intangible~~impairment ~~assets~~triggering ~~are~~events ~~primarily~~indicating ~~made~~that upthe offair avalue ~~trade~~of ~~name~~its ~~which~~reporting unit was ~~evaluated~~more ~~for~~likely ~~impairment~~than ~~using~~not less than its carrying value. These triggering events included a ~~qualitative~~downward ~~assessment~~revision ~~and~~to the Company’s ~~concluded~~forecast ~~that~~due itto ~~was~~continued ~~not~~revenue ~~more~~declines ~~likely~~and ~~than~~a ~~not~~decrease in the Company’s stock price and market capitalization that was sustained in the ~~other~~first ~~indefinite~~quarter of fiscal 2026. In accordance with Accounting Standards Codification (“ASC”) 350, Intangibles -~~lived~~ ~~assets~~Goodwill ~~were~~and ~~impaired~~Other, the Company performed a quantitative goodwill impairment test as of ~~December~~June 3130, ~~2024~~2025.

The fair value of the single reporting unit was estimated using an income approach, employing a discounted cash flow model. As part of the discounted cash flow model, the Company developed estimates, assumptions and judgments about future results. The discounted cash flow projections were based on estimates made by management of current and future strategic and operational plans and future financial performance. Valuation assumptions used in the Company's discounted cash flow valuation also include projected capital expenditures, earnings before interest expense, income taxes, depreciation and amortization expense (EBITDA), working capital, discount rates, tax rates and terminal growth rates. The Company applied a terminal growth rate of 3%, income tax rate of 25.3% and discount rate of 14.0% based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the single reporting unit. As a result of this impairment test, the Company determined the carrying value of the reporting unit exceeded its fair value, resulting in a goodwill impairment charge of $26.7 million during the three months ended June 30, 2025, which represented the entirety of the goodwill balance previously recorded. There was no tax impact to the impairment as goodwill is not tax deductible.

Economic Conditions, Challenges, and Risk

Macroeconomic factors, including inflation, increased interest rates, significant capital market and supply chain volatility, and political, global economic and geopolitical developments, have direct and indirect impacts on our results of operations that are difficult to isolate and quantify. In addition, rising fuel, utility, and food costs, rising interest rates, and recessionary fears may impact customer demand and our ability to forecast consumer spending patterns. We also expect the current macroeconomic environment and enterprise customer cost optimization efforts to impact our revenue growth rates. We expect some or all of these factors to continue to impact our operations for the remainder of fiscal ~~2025~~2026.

Results of Operations

The following should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes thereto included elsewhere herein. The following table sets forth, as a percentage of sales, certain operating data appearing in our unaudited Condensed Consolidated Statements of (Loss) Income:

	Three Months EndedDecember 31,				Nine Months EndedDecember 31,
	Three Months EndedSeptember 30,				Six Months EndedSeptember 30,
	2024		2023		2024		2023
	2025		2024As Restated		2025		2024As Restated
Sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	7172.90		7267.67		7271.29		7169.86
Gross profit	28.10		2732.43		2728.81		2830.24
Operating expenses:
General and administrative	2032.40		2018.60		1428.54		1912.24
Advertising	59.68		810.85		810.19		811.64
Depreciation and amortization	35.01		2.79		24.8		2.47
Total operating expenses	29.0		32.1		25.3		30.2
Impairment of goodwill and intangible assets	—		—		28.5		—
(Loss) income from operations	(0.9)		(4.7)		2.5		(2.0)
Total operating expenses	46.9		31.4		72.6		26.5
Total other income	0.4		0.7		0.5		0.7
(Loss) income from operations	(18.9)		1.1		(44.5)		3.9
(Loss) income before provision (benefit) for income taxes	(0.5)		(4.0)		3.0		(1.3)
Total other (loss) income	(0.3)		0.6		(0.1)		0.6
Provision (benefit) for income taxes	0.9		(0.9)		—		(0.2)
(Loss) income before provision (benefit) for income taxes	(19.2)		1.7		(44.6)		4.5
Net (loss) income	(1.4)	%	(3.1)	%	3.0	%	(1.1)	%
Provision (benefit) for income taxes	—		(2.4)		—		(0.4)
Net (loss) income	(19.2)	%	4.1	%	(44.6)	%	4.9	%

Non-GAAP Financial Measures

Adjusted EBITDA

To provide investors and the market with additional information regarding our financial results, we have disclosed (see below) adjusted EBITDA, a non-GAAP financial measure that we calculate as net income excluding share-based compensation expense (benefit), depreciation and amortization, income tax provision, interest income (expense), and other non-operational expenses. We have provided reconciliations below of net income to adjusted EBITDA, the most directly comparable GAAP financial measures.

We have included adjusted EBITDA herein because it is a key measure used by our management and Board of Directors to evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and other expenses. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

We believe it is useful to exclude non-cash charges, such as net stock-based compensation expense (benefit), depreciation and amortization from our adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude income tax provision and interest income (expense), as neither are components of our core business operations. We also believe that it is useful to exclude other non-operational expenses, including acquisition costs related to PetCareRx, employee severance and estimated state sales tax accruals and settlements as these items are not indicative of our ongoing operations. Adjusted EBITDA has limitations as a financial measure, and these non-GAAP measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

that it is useful to exclude other non-operational expenses, including acquisition costs related to PetCareRx, employee severance and estimated state sales tax accruals and settlements as these items are not indicative of our ongoing operations. Adjusted EBITDA has limitations as a financial measure, and these non-GAAP measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and adjusted EBITDA does not reflect capital expenditure requirements for such replacements or for new capital expenditures;

•Adjusted EBITDA does not reflect net share-based compensation. Share-based compensation has been, and will continue to be for the foreseeable future, a material recurring expense in our business and an important part of our compensation strategy;

•Adjusted EBITDA does not reflect interest income (expense), net; or changes in, or cash requirements for, our working capital;

•Adjusted EBITDA does not reflect transaction related costs and other items which are either not representative of our underlying operations or are incremental costs that result from an actual or planned transaction and include litigation matters, integration consulting fees, internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and converging IT systems;

•Adjusted EBITDA does not reflect certain non-operating expenses including the employee severance which reduces cash available to us;

•Adjusted EBITDA does not reflect certain non-operating expenses (income) including sales tax expense (income) relating to recording a liability for sales tax we did not collect from our customers.

•Other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces the measure’s usefulness as comparative measures.

Because of these and other limitations, adjusted EBITDA should only be considered as supplemental to, and alongside with other GAAP based financial performance measures, including various cash flow metrics, net income, net margin, and our other GAAP results.

2025

The following tables present a reconciliation of net (loss) income , the most directly comparable GAAP measure, to adjusted EBITDA for each of the periods indicated:

	Three Months Ended				Increase (Decrease)
($ in thousands, except percentages)	~~December~~September 3130,~~2024~~2025		~~December~~September 3130,~~2023~~2024		$		%
Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA:
Net loss	$	(707)	$	(2,027)	$	1,320	(65)	%
Net loss (income)	$	(8,520)	$	2,326	$	(10,846)	(466)	%
Add (subtract):
Stock-based Compensation	~~452~~248		~~1,708~~573		(~~1,256~~326)		(7457)	%
Income Taxes	~~465~~9		(~~618~~1,401)		1,~~083~~410		(~~175~~101)	%
Depreciation and Amortization	12,~~586~~278		1,~~770~~658		~~(184)~~620		~~(10)~~37	%
Interest Income, Net (1)	(28)		(136)		108		(79)	%
Interest Income, Net	326		(185)		511		(276)	%
Acquisition/Partnership Transactions and Other Items	25		—		25		n/m
Employee Severance	1,223		305		918		301	%
Employee Severance	209		—		209		n/m
Sales Tax Expense (Income)	—		(1,178)		1,178		(100)	%
Sales Tax Expense	—		228		(228)		(100)	%
Professional Fees (1)	2,120		—		2,120		n/m
Adjusted EBITDA	$	(2,~~002~~316)	$	~~925~~2,098	$	1(4,~~077~~415)	~~116~~(210)	%

(1) ~~Included~~Related ~~in interest income, net is $0.4 million of interest expense related~~ to the ~~sales~~whistleblower ~~tax liability and $0~~investigation.5 million of interest income for the three months ended December 31, 2024. This compares to $0.4 million of interest expense related to the sales tax liability and $0.6 million of interest income for the three months ended December 31, 2023.


	Six Months Ended				Increase (Decrease)
($ in thousands, except percentages)	September 30, 2025		September 30, 2024		$		%

Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA:

Net (loss) income	$	(42,672)	$	6,080	$	(48,752)	n/m

Add (subtract):
Stock-based Compensation	839		(7,631)		8,469		n/m
Income Taxes	18		(443)		461		n/m
Depreciation and Amortization	4,561		3,379		1,182		35	%
Interest Income, Net	524		(280)		804		n/m
Acquisition/Partnership Transactions and Other Items	—		180		(180)		(100)	%
Employee Severance	1,319		454		865		190	%
Sales Tax Expense (Income)	—		(1,178)		1,178		n/m
Professional Fees (1)	3,141		—		3,141		n/m
Impairment of goodwill and intangible assets	27,258		—		27,258		n/m

Adjusted EBITDA	$	(5,013)	$	561	$	(5,574)	(993)	%

	Nine Months Ended				Increase (Decrease)
($ in thousands, except percentages)	December 31,2024		December 31,2023		$		%
Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA:
Net income (loss)	$	5,373	$	(2,448)	$	7,821	n/m
Add (subtract):
Stock-based Compensation	$	(7,179)	$	5,196	$	(12,375)	n/m
Income Taxes	$	22	$	(345)	367		n/m
Depreciation and Amortization	$	4,965	$	5,161	(196)		(4)	%
Interest Income, Net (1)	$	(308)	$	(481)	173		(36)	%
Acquisition/Partnership Transactions and Other Items	$	205	$	1,294	(1,089)		(84)	%
Employee Severance	$	663	$	408	255		63	%
Sales Tax (Income)	$	(1,178)	$	(1,088)	(90)		8	%
Adjusted EBITDA	$	2,563	$	7,697	$	(5,134)	(67)	%

(1) Related to the whistleblower investigation.

(1) Included in interest income, net is $1.2 million of interest expense related to the sales tax liability and $1.5 million of interest income for the nine months ended December 31, 2024. This compares to $1.3 million of interest expense related to the sales tax liability and $1.7 million of interest income for the nine months ended December 31, 2023.26

Three Months Ended ~~December~~September 3130, ~~2024~~2025 Compared With Three Months Ended ~~December~~September 3130, ~~2023~~2024 and ~~Nine~~Six Months Ended ~~December~~September 3130, ~~2024~~2025 Compared With ~~Nine Months Ended December 31~~September 30, ~~2023~~2024

Net Sales

Sales decreased by approximately $1213.37 million, or 1823.96%, to approximately $5344.04 million for the quarter ended ~~December~~September 3130, ~~2024~~2025, compared to approximately $6558.30 million for the quarter ended ~~December~~September 3130, ~~2023~~2024. Sales decreased by approximately $3428.17 million, or 1523.91%, to approximately $~~180~~95.5 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, compared to approximately $~~214~~124.63 million for the ~~nine~~six months ended ~~December~~ September 3130, ~~2023~~2024. The decrease in sales for the quarter ended ~~December~~and six months ended September 3130, ~~2024~~2025 was primarily driven by ana ~~strategic~~ reduction in gross advertising, ashigher weconsumer ~~reset~~promotional ~~our marketing foundation for sustainable profitability. The decrease in sales for the nine months ended December 31~~usage, ~~2024~~and ~~reflects~~ a ~~strategic~~decline ~~reduction~~ in ~~advertising,~~prescription ~~broader~~medication ~~macroeconomic factors, and higher consumer promotional usage~~sales.

Reorder sales decreased by approximately $911.03 million, or 1623.62%, to approximately $4537.14 million for the quarter ended ~~December~~September 3130, ~~2024~~2025, compared to approximately $5448.17 million for the quarter ended ~~December~~September 3130, ~~2023~~2024. Reorder sales decreased by approximately $2422.98 million, or 1422.35%, to approximately $~~149~~78.47 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, compared to approximately $~~174~~101.35 million for the ~~nine~~six months ended ~~December~~ September 3130, ~~2023~~2024. The decrease in reorder sales for the three and ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 is primarily due to a decline in prescription medication sales.

New order sales decreased by approximately $21.79 million or 3126.05%, to approximately $65.13 million for the quarter ended ~~December~~September 3130, ~~2024~~2025, compared to $87.83 million for the quarter ended ~~December~~September 3130, ~~2023~~2024. New order sales decreased by approximately $84.18 million or 2426.60%, to approximately $2413.96 million for the ~~nine~~six months ended ~~December~~ September 3130, ~~2024~~2025, compared to $3318.13 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024. The decrease for the ~~quarter~~three and six months ended ~~December~~September 3130, ~~2024~~2025 in new order sales is primarily due to adecreased ~~strategic~~and ~~reduction~~less inefficient ~~advertising~~variable marketing spend.

We acquired approximately 6358,000 new customers for the quarter ended ~~December~~September 3130, ~~2024~~2025 compared to approximately 9777,000 new customers for the quarter ended ~~December~~September 3130, ~~2023~~2024. We acquired approximately ~~260~~143,000 new customers for the six months ended September 30, 2025 compared to approximately 197,000 new customers for six months ended the September 30, 2024. The following tables illustrates revenue by various revenue classifications:


	Three Months Ended September 30,								Increase (Decrease)
Net Sales (in thousands)	2025		%		2024 As Restated		%		$		%

Reorder sales	$	37,408	84.3	%	$	48,724	83.9	%	$	(11,316)	(23.2)	%
New order sales	5,332		12.0	%	7,251		12.5	%	(1,919)		(26.5)	%
Membership fees	1,624		3.7	%	2,069		3.6	%	(445)		(21.5)	%

Total net sales	$	44,364	100.0	%	$	58,044	100.0	%	$	(13,680)	(23.6)	%

customers for the nine months ended December 31, 2024 compared to approximately 347,000 new customers for the nine months ended December 31, 2023. The following tables illustrates revenue by various revenue classifications:


	Six Months Ended September 30,								Increase (Decrease)
Net Sales (in thousands)	2025		%		2024 As Restated		%		$		%

Reorder sales	$	78,713	82.4	%	$	101,520	81.7	%	$	(22,807)	(22.5)	%
New order sales	13,577		14.2	%	18,338		14.8	%	(4,761)		(26.0)	%
Membership fees	3,254		3.4	%	4,393		3.5	%	(1,139)		(25.9)	%

Total net sales	$	95,544	100.0	%	$	124,251	100.0	%	$	(28,707)	(23.1)	%

	Three Months Ended December 31,								Increase (Decrease)
Net Sales (in thousands)	2024		%		2023		%		$		%
Reorder sales	$	45,076	85.1	%	$	54,067	82.8	%	$	(8,991)	(16.6)	%
New order sales	6,075		11.5	%	8,803		13.5	%	(2,728)		(31.0)	%
Membership fees	1,833		3.5	%	2,447		3.7	%	(614)		(25.1)	%
Total net sales	$	52,984	100.0	%	$	65,317	100.0	%	$	(12,333)	(18.9)	%

The Company changed the definition of a new order sale on July 1, 2024, to include sales from customers who have not previously ordered from the Company over the past twelve months compared to the prior definition which was thirty-six months. The reorder and new order sales amounts for the three and six months ended September 30, 2025, and the reorder and new order sales amounts for the three and six months ended September 30, 2024 reflect this new definition.

	Nine Months Ended December 31,								Increase (Decrease)
Net Sales (in thousands)	2024		%		2023		%		$		%
Reorder sales	$	149,367	82.7	%	$	174,250	81.3	%	$	(24,883)	(14.3)	%
New order sales	24,913		13.8	%	33,054		15.4	%	(8,141)		(24.6)	%
Membership fees	6,226		3.4	%	7,256		3.4	%	(1,030)		(14.2)	%
Total net sales	$	180,506	100.0	%	$	214,560	100.0	%	$	(34,054)	(15.9)	%

~~The~~Under ~~Company changed~~ the previous definition of a new ~~order sale on July 1~~customer, ~~2024,~~reorder toand ~~include~~new order sales ~~from~~were ~~customers~~$52.7 ~~who~~million ~~have not~~and ~~previously~~$3.3 ~~ordered~~million, ~~from~~respectively, for the ~~Company~~three ~~over~~months ~~the~~ended ~~past~~September ~~twelve~~30, ~~months~~2024. ~~compared~~Under to the ~~prior~~previous definition ~~which~~of ~~was~~a ~~thirty-six~~new ~~months.~~customer, ~~The~~ reorder and new order sales ~~amounts~~were ~~for~~$111.1 ~~the~~million ~~three~~ and ~~nine~~$8.7 ~~months ended December 31~~million, ~~2024~~respectively, ~~and the reorder and new order sales amounts~~ for the ~~three~~six ~~and nine~~ months ended ~~December 31~~September 30, ~~2023 reflect this new definition~~2024.

~~Under~~Recurring ~~the~~net ~~previous definition of a new customer~~sales, ~~reorder~~which ~~and~~includes ~~new~~AutoShip ~~order~~& ~~sales~~Save ~~were~~subscriptions, ~~$57.7 million~~ and ~~$5.2~~membership ~~million~~revenue, ~~respectively,~~as ~~for~~a ~~the~~percentage ~~three~~of ~~months~~total ~~ended~~gross ~~December~~sales ~~31,~~was ~~2023~~60.8% ~~Under~~for the ~~previous~~most ~~definition~~recent ofquarter aended ~~new~~September 30, ~~customer~~2025, ~~reorder~~up ~~and~~from ~~new order sales were $188~~53.14% ~~million and $19.2 million, respectively,~~ for the ~~nine~~same ~~months~~period ~~ended~~last ~~December 31, 2023~~year.

Recurring net sales, which includes AutoShip & Save subscriptions, and membership revenue, as a percentage of total gross sales was 56.2% for the most recent quarter ended December 31, 2024, up from 52.2% for the same period last year.

Going forward, sales may be adversely affected due to increased competition and consumers giving more consideration to price. The changes in consumer behavior due to macroeconomic factors makes future sales somewhat challenging to predict. No guarantees can be made that sales will grow in the future.

Cost of ~~sales~~Sales

Cost of sales decreased by approximately $97.43 million, or 1918.76%, to approximately $3831.19 million for the quarter ended ~~December~~September 3130, ~~2024~~2025, from approximately $4739.43 million for the quarter ended ~~December~~September 3130, ~~2023~~2024. Cost of sales decreased by approximately $2317.87 million, or 1520.45%, to approximately $~~130~~68.37 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, from approximately $~~154~~86.14 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024. Cost of sales, as a percentage of sales, was 7172.90% for the quarter ended ~~December~~September 3130, ~~2024~~2025, compared to 7267.67% for the quarter ended ~~December~~September 3130, ~~2023~~2024. Cost of sales, as a percentage of sales, was 7271.29% for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, compared to 7169.86% for the ~~nine~~six months ended ~~December~~ September 3130, ~~2023~~2024. The year over year ~~decline~~increase for cost of sales, as a percentage of sales for the ~~quarter~~three ~~ended~~and ~~December 31,~~six ~~2024~~months ~~compared to the quarter~~ ended ~~December~~September 3130, ~~2023~~2025 ~~was~~compared ~~primarily due~~ to ~~lower~~the ~~discount~~three ~~activity~~ and ~~favorable~~six ~~sales mix. The increase in cost of sales, as a percentage of sales, for the nine~~ months ended ~~December~~September 3130, 2024 ~~compared to the nine months ended December 31, 2023~~ was primarily due to anhigher ~~increase in~~ discount activity ~~during~~and ~~the~~higher ~~first~~freight ~~six months of the fiscal year~~costs.

23Gross Profit

Gross profit decreased by approximately $6.4 million, or 33.9%, to approximately $12.4 million for the quarter ended September 30, 2025, from approximately $18.8 million for the quarter ended September 30, 2024. Gross profit decreased by approximately $11.0 million, or 29.1%, to approximately $26.8 million for the six months ended September 30, 2025, from approximately $37.8 million for the six months ended September 30, 2024. The gross profit decreases for the quarter and six months ended September 30, 2025 compared to the quarter ended and six months ended September 30, 2024 were primarily due to lower sales and higher cost of sales. The gross margin percentage decreased by approximately 4.4%, to approximately 28.0% for the quarter ended September 30, 2025, from approximately 32.3% for the quarter ended September 30, 2024, primarily due to higher freight costs and higher consumer promotional usage. The gross margin percentage decreased by approximately 2.4%, to approximately 28.1% for the six months ended September 30, 2025, from approximately 30.4% for the six months ended September 30, 2024, primarily due to higher consumer promotional usage and higher freight cost.

~~Gross~~General profit decreased by approximately $3.0 million, or 16.6%, to approximately $14.9 million for the quarter ended December 31, 2024, from approximately $17.9 million for the quarter ended December 31, 2023. Gross profit decreased by approximately $10.3 million, or 17.0%, to approximately $50.2 million for the nine months ended December 31, 2024, from approximately $60.5 million for the nine months ended December 31, 2023. The gross profit decreases for the quarter and ~~nine~~Administrative ~~months~~Expenses ended December 31, 2024 compared to the quarter ended and nine months ended December 31, 2023 were primarily due to lower sales. The gross margin percentage increased by approximately 0.8%, to approximately 28.1% for the quarter ended December 31, 2024, from approximately 27.4% for the quarter ended December 31, 2023, primarily due to favorable sales mix and lower consumer promotional usage.

General and administrative expenses increased by approximately $3.7 million, or 35.1%, to approximately $14.2 million for the quarter ended September 30, 2025, from approximately $10.5 million for the quarter ended September 30, 2024. General and administrative expenses increased by approximately $11.8 million, or 76.5%, to approximately $27.1 million for the six months ended September 30, 2025, from approximately $15.4 million for the six months ended September 30, 2024.The increase to general and administrative expenses for the quarter ended September 30, 2025 was mainly due to a $2.3 million increase in professional fees, of which $2.1 million were related to the whistleblower investigation, a $0.4 million decrease in payroll and payroll related expenses, offset by $0.9 million increase from payroll severance , $1.2 million increase in other general and administrative expenses related to Illinois sales tax settlement gain in the quarter ended September 30, 2024, offset by a $0.3 million decrease in bank service fees.

~~General~~The increase to general and administrative expenses ~~decreased~~for bythe ~~approximately~~six ~~$2.6~~months ~~million~~ended September 30, or2025 ~~19.7%,~~was primarily due to ~~approximately~~a $~~10.~~8.5 million ~~for~~increase ~~the~~in ~~quarter~~stock-based ~~ended~~compensation ~~December 31~~expense, ~~2024,~~primarily ~~from~~related ~~approximately~~to ~~$13.4~~reduced ~~million~~stock compensation associated with an executive departure for the six ~~quarter~~months ended ~~December~~September 3130, ~~2023.~~2024 ~~The~~, ~~decrease~~a to$3.2 ~~general~~million ~~and~~increase ~~administrative~~in ~~expenses~~professional ~~for~~fees, ~~the~~of ~~quarter~~which ~~ended~~$3.1 ~~December 31,~~million ~~2024~~were ~~was due~~related to the whistleblower investigation, a $1.37 million decrease in ~~stock-based~~payroll ~~compensation~~and ~~expense, primarily~~payroll related toexpenses, ~~reduced~~offset ~~stock~~by ~~compensation~~$0.9 ~~associated~~million ~~with~~increase anfrom ~~executive~~payroll ~~departure~~severance, a $1.12 million ~~decrease~~increase in ~~payroll~~other general and ~~payroll~~administrative expenses related ~~expense~~to Illinois sales tax settlement gain in the six months ended September 30, ~~and~~2024, offset by a $0.43 million decrease in ~~credit~~other ~~card~~general ~~processing~~and ~~fees~~administrative ~~driven by lower sales~~expenses.

General and administrative expenses decreased by approximately $14.9 million, or 36.4%, to approximately $26.2 million for the nine months ended December 31, 2024, from approximately $41.1 million for the nine months ended December 31, 2023. The decrease to general and administrative expenses for the nine months ended December 31, 2024 was due to a $12.4 million decrease in stock-based compensation expense, of which $8.7 million was from the stock compensation reversal associated with an executive departure, a $1.6 million decrease in payroll and payroll related expense, and a $0.9 million decrease in credit card processing fees which were driven by lower sales.28

Advertising ~~expenses~~Expenses

Advertising expenses decreased by approximately $21.87 million, or 4828.25%, to approximately $34.03 million for the quarter ended ~~December~~September 3130, ~~2024~~2025, from approximately $56.81 million for the quarter ended ~~December~~September 3130, ~~2023~~2024. Advertising expenses decreased by approximately $3.7 million, or 26.5%, to approximately $10.4 million for the six months ended September 30, 2025, from approximately $14.1 million for the six months ended September 30, 2024 The decrease for the quarter ended and six months ended September 30, 2025 can be mainly attributed to lower gross media spend. ~~and~~As a ~~higher~~percentage ~~proportion~~ of ~~spending~~sales, ~~funded~~advertising byexpense ~~third~~was ~~party partners~~9.8% Weand ~~strategically~~10.5% ~~reduced~~for ~~gross~~the ~~advertising~~quarters asended weSeptember 30, ~~reset~~2025 ~~our~~and ~~marketing~~2024, ~~foundation for sustainable profitability~~respectively. As a percentage of sales, advertising expense was 510.69% and 811.84% for ~~the~~six ~~quarters~~months ended ~~December~~ September 3130, ~~2024~~2025 and ~~2023~~2024, respectively. The advertising percentage may fluctuate quarter to quarter due to seasonality and advertising availability.

The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $4775 for the quarter ended ~~December~~September 3130, ~~2024~~2025 compared to $5979 for the quarter ended ~~December~~September 3130, ~~2023~~2024. The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $73 for the six months ended September 30, 2025 compared to $72 for the six months ended September 30, 2024. The decrease to customer acquisition costs for the quarter ended ~~December~~September 3130, ~~2024~~2025, was due to a more efficient variable marketing spend and a higher proportion of spending funded by third party partners. The increase to customer acquisition costs for the six months ended September 30, 2025, was due to a less efficient variable marketing spend. The advertising cost of acquiring a new customer can be impacted by the advertising environment, the effectiveness of our advertising creative, spending, and price competition. Historically, the advertising environment fluctuates due to supply and demand. A more favorable advertising environment may positively impact future sales, whereas a less favorable advertising environment may negatively impact future sales.

~~Advertising~~Depreciation expenses decreased by approximately $4.0 million, or 21.3%, to approximately $14.6 million for the nine months ended December 31, 2024, from approximately $18.5 million for the nine months ended December 31, 2023. The decrease can be mainly attributed to lower gross media spend, partially offset by lower marketing funded by manufacturers and advertising partners. The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $56 for the nine months ended December 31, 2024 compared to $53 for the nine months ended December 31, 2023. As a percentage of sales, advertising expense was 8.1% and 8.6% for the nine months ended December 31, 2024 and 2023, respectively.Amortization

Depreciation and amortization expense was $2.3 million and $1.7 million for the quarters ended September 30, 2025 and September 30, 2024, respectively. Depreciation and amortization expense was $4.6 million and $3.4 million for the six months ended September 30, 2025 and September 30, 2024, respectively.

~~Depreciation~~Other ~~and~~(Expense) ~~amortization expense was $1.6 million and $1.8 million for the quarters ended December 31~~Income, ~~2024 and December 31, 2023, respectively. Depreciation and amortization expense was $5.0 million and $5.2 million for the nine months ended December 31, 2024 and December 31, 2023, respectively.~~Net

24Other income, net decreased to approximately $(0.1) million for the quarter ended September 30, 2025 compared to approximately $0.4 million for the quarter ended September 30, 2024. Other income, net decreased to approximately $(0.1) million for the six months ended September 30, 2025 compared to approximately $0.7 million for the six months ended September 30, 2024.The decrease to other income for the quarter and the six months ended September 30, 2025 was due to lower invested balances, and higher interests expense accrual on sales tax liabilities. Interest income may decrease in the future based on several factors, including utilization of our cash balances on future investments or partnerships, or on our operating activities. Additionally, interest income could increase or decrease if the current interest rate environment changes.

~~Other~~Provision ~~income~~for Income Taxes

~~Other~~For ~~income~~the ~~decreased~~quarters toended ~~approximately~~September 30, ~~$0.2~~2025 ~~million~~and ~~for~~2024, the ~~quarter~~Company ~~ended~~recorded ~~December 31,~~an ~~2024~~income ~~compared~~tax toprovision of approximately $0.40 million and a tax benefit of approximately $1.4 million, ~~for~~respectively. For the ~~quarter~~six months ended ~~December~~September 3130, ~~2023.~~2025 ~~Other~~and 2024, the Company recorded an income ~~decreased~~tax toprovision of approximately — and a tax benefit of approximately $0.9 4 million, respectively The increase in the tax provision for the ~~nine~~three and six months ended ~~December~~September 3130, ~~2024~~2025 ~~compared~~is related to ~~approximately~~the ~~$1.5~~cancellation ~~million~~of ~~for~~ the ~~nine~~former ~~months~~CEO’s ~~ended December 31,~~performance ~~2023.The~~stock ~~decrease~~units toresulting ~~other~~in additional $8.7 million of income ~~for~~during the quarter. ~~and~~The ~~the~~effective ~~nine~~tax ~~months~~rate for the quarter ended ~~December~~September 3130, ~~2024~~ 2025 was ~~due~~approximately to(0.1)%, ~~slightly~~compared ~~lower~~to ~~invested~~approximately ~~balances,~~(151.5)% ~~and~~for the ~~loss~~quarter ofended ~~subleasing~~September 30, ~~rental revenue~~2024. ~~Interest~~The ~~income~~effective ~~may~~tax ~~decrease~~rate infor the ~~future~~three ~~based~~months onended ~~several factors~~September 30, ~~including~~2025 ~~utilization~~differs offrom ~~our~~the ~~cash~~statutory ~~balances~~rate onprimarily ~~future~~as ~~investments~~a orresult ~~partnerships,~~of orthe ongoodwill ~~our~~impairment ~~operating~~and ~~activities. Additionally,~~the ~~interest~~Company ~~income~~maintaining ~~could~~a ~~increase~~valuation orallowance ~~decrease~~against if the ~~current~~majority ~~interest~~of ~~rate~~our ~~environment~~deferred ~~changes~~tax assets.

Provision for income taxes

For the quarters ended December 31, 2024 and 2023, the Company recorded an income tax provision of approximately $0.5 million and a tax benefit of approximately $0.6 million, respectively. For the nine months ended December 31, 2024 and 2023, the Company recorded an income tax provision of approximately $0.0 million and a tax benefit of approximately $0.3 million, respectively. The increase in the tax provision for the three and nine months ended December 31, 2024 is related to the cancellation of the former CEO’s performance stock units resulting in additional $8.7 million of income during the quarter. The effective tax rate for the quarter ended December 31, 2024 was approximately (192.1)%, compared to approximately 23.4% for the quarter ended December 31, 2023.

Liquidity and Capital Resources

Overview

We believe that our cash and cash equivalents currently on hand and expected cash flows from future operations will be sufficient to continue operations for at least the next twelve months. WeOver ~~continue~~the tolonger ~~monitor~~term, ~~evaluate, and manage~~ our ~~operating plans, forecasts, and~~ liquidity ~~considering~~will ~~the~~depend ~~most~~primarily ~~recent~~on ~~developments~~our ~~driven~~ability byto ~~macroeconomic~~generate ~~conditions,~~cash ~~such~~from ~~as supply chain challenges~~operations, ~~inflation, rising interest rates,~~ and ~~geopolitical~~we ~~events.~~continue ~~We proactively seek opportunities~~ to ~~improve the efficiency of our operations~~monitor, ~~take steps to realize internal cost savings~~evaluate, ~~including~~and ~~aligning~~manage our ~~staffing~~operating ~~needs, creating a more variable cost structure to better support our current and expected future levels of operations and process streamlining.~~

plans, forecasts, and liquidity considering the most recent developments driven by macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, and geopolitical events. We proactively seek opportunities to improve the efficiency of our operations, take steps to realize internal cost savings, including aligning our staffing needs, creating a more variable cost structure to better support our current and expected future levels of operations and process streamlining.

Current Sources of Liquidity

Our working capital at ~~December~~September 3130, ~~2024~~2025 and March 31, ~~2024~~2025 was $202.48 million and $2116.51 million, respectively. The $113.13 million decrease in working capital was attributable to the $2519.34 million decrease in current assets, primarily ~~inventory and prepaid expenses~~cash, which were partially offset by the $246.21 million decrease in current liabilities, primarily accounts payable. ~~The inventory decline was attributable to the Company’s strategy to operate with fewer weeks of supply on hand,~~ and todeferred ~~a lesser extent, timing of inventory receipts moving into the fourth quarter~~revenue.. Net cash used in operating activities was $214.34 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, compared to cash used in operating activities of $21.81 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024. The $013.53 million ~~increase~~decrease in cash provided by operating activities is due to the $748.8 million ~~increase~~decrease in net income reduced by $1210.12 million of non-cash operating adjustments and partially offset by the $42.80 million ~~increase~~decrease in current liabilities net of current assets excluding cash. Net cash used in investing activities was $23.79 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025, compared to $391.49 million used in investing activities for the ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024. ~~The change in net cash used in investing activities is primarily related to the PetCareRx acquisition and an additional investment in Vetster in the prior year.~~ Net cash used in financing activities was $~~0.2~~261 ~~million~~thousand and $120.42 million for the ~~nine~~six months ended ~~December~~September 3130, ~~2024~~2025 and the ~~nine~~six months ended ~~December~~September 3130, ~~2023~~2024, respectively~~, due to the payment of an aggregate $0~~.60 ~~per share dividend for the nine months ended December 31, 2023.~~

The Board of Directors reviews and discusses the capital allocation needs of the Company on a quarterly basis, and as part of that review, on October 26, 2023, our Board of Directors elected to suspend the quarterly dividend indefinitely. This action was intended to focus use of the Company’s existing cash and cash flow on growth initiatives and other, higher return initiatives. The declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors.

As of ~~December~~September 3130, ~~2024~~2025, we had $10.18 million in outstanding lease commitments assumed as part of the PetCareRx acquisition for the leases on two buildings. Other than the foregoing leases, we are not currently bound by any material long-term or short-term commitments for the purchase or lease of capital expenditures. Any material amounts expended for capital expenditures would be the result of an increase in the capacity needed to adequately provide for any future increase in our business. To date we have paid for any needed additions to our capital equipment infrastructure from working capital funds and anticipate this being the case in the future. Our primary source of working capital is cash from operations. We presently have no alternative sources of working capital and have no commitments.

capital expenditures would be the result of an increase in the capacity needed to adequately provide for any future increase in our business. To date we have paid for any needed additions to our capital equipment infrastructure from working capital funds and anticipate this being the case in the future. Our primary source of working capital is cash from operations. We presently have no alternative sources of working capital and have no commitments.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk generally represents the risk that losses may occur in the value of financial instruments as a result of movements in interest rates, foreign currency exchange rates, and commodity prices. Our financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The book values of cash equivalents, accounts receivable, and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. Interest rates affect our return on excess cash and cash equivalents. At ~~December~~September 3130, ~~2024~~2025, we had $5036.1 million in cash and cash equivalents, and the majority of our cash and cash equivalents generate interest income based on prevailing interest rates. A significant change in interest rates would impact the amount of interest income generated from our excess cash and cash equivalents. It would also impact the market value of our cash and cash equivalents. Our cash and cash equivalents are subject to market risk, primarily interest rate and credit risk. Our cash and cash equivalents are managed by a limited number of outside professional managers within investment guidelines set by our Board of Directors. Such guidelines include security type, credit quality, and maturity, and are intended to limit market risk by maintaining cash in federally-insured bank deposit accounts and restricting cash equivalents to highly-liquid investments with maturities of three months or less. We do not hold any derivative financial instruments that could expose us to significant market risk. At ~~December~~September 3130, ~~2024~~2025, we had no debt obligations.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

~~Our~~Management ~~management,~~maintains ~~including~~a ~~our~~set ~~Chief Executive Officer and Chief Financial Officer, conducted an evaluation~~ of ~~the effectiveness of the design and operation of our~~ disclosure controls and procedures (as defined in ~~Rule~~Rules 13a‑-15(e) and 15d-15(e) ~~promulgated~~ under the Exchange Act) asdesigned ofto ~~December 31,~~ensure ~~2024,~~that ~~the~~information ~~end~~required ofto ~~the~~be ~~period~~disclosed ~~covered~~ by ~~this~~us ~~report~~in ~~(the~~reports ~~"Evaluation~~that ~~Date").~~we ~~Based~~file ~~upon~~or ~~that~~submit ~~evaluation,~~under ~~our~~the ~~Chief~~Exchange ~~Executive~~Act ~~Officer~~is recorded, processed, summarized, and ~~Chief~~reported ~~Financial~~within ~~Officer~~the ~~concluded~~time asperiods ofspecified in the ~~Evaluation~~SEC’s ~~Date~~rules and forms, and that ~~our~~such ~~disclosure~~information ~~controls~~is accumulated and ~~procedures~~communicated ~~were~~to ~~not~~management, ~~effective~~including asour ofprincipal ~~December 31,~~executive ~~2024,~~officer ~~due~~and principal financial officer, to ~~material~~allow ~~weaknesses~~for ~~described~~timely ~~below~~decisions regarding required disclosure.

~~Material Weaknesses~~30

A ~~material~~An ~~weakness~~evaluation isof athe ~~deficiency,~~effectiveness orof athe ~~combination~~design and operation of ~~deficiencies~~our disclosure controls and procedures as of June 30, in2025, ~~internal~~the ~~control~~end ~~over~~of ~~financial~~the ~~reporting~~period covered by this report (the “Evaluation Date”) was performed under the supervision and with participation of management, ~~such~~including ~~that~~our ~~there~~Interim isChief aExecutive ~~reasonable~~Officer ~~possibility~~and Interim Principal Financial Officer. Based upon that aevaluation, ~~material~~our ~~misstatement~~Interim Chief Executive Officer and Interim Principal Financial Officer concluded as of the Evaluation Date, that our ~~annual~~disclosure orcontrols ~~interim~~and procedures were not effective as of June 30, 2025 because of certain material weaknesses in internal control over financial ~~statements~~reporting, ~~will~~as ~~not~~described bein ~~prevented~~Item or9A, ~~detected~~“Controls onand aProcedures” ~~timely~~of ~~basis~~our Fiscal 2025 Form 10-K.

As identified in our 2024 Form 10-K, we identified the following material weaknesses:

1.A material weakness in the design of our controls over the review of appropriate application of GAAP relating to our sales tax liability as well as an additional tax error relating the misapplication of Internal Revenue Code Section162(m) which limits the deductibility of executive compensation in our consolidated financial statements. We also identified a material weakness in the design of our controls over accurate valuation of our deferred tax asset and goodwill relating to our acquisition of PetCareRx .

2.A material weakness in internal controls relating to our information technology general controls (“ITGCs”) in the areas of user access, change management, and service organizations over information technology (“IT”) systems that support the Company’s financial reporting processes. This material weakness may impact revenue and other business process controls and automated controls reliant upon these ITGCs. We believe these control deficiencies have been influenced by insufficient documentation to support management's procedures. The individual deficiencies identified in preventative and detective controls resulted in an aggregate material weakness related to ITGCs. This material weakness did not result in any identified misstatements to the financial statements or any change in previously released financial results.

Management is taking steps to remediate these material weaknesses (see “Remediation of Material Weaknesses” for details).

Remediation of Material Weaknesses

In response to the material weakness due to the tax calculations, we have developed and are in the process of implementing a remediation plan. The key elements of the plan include:

1.Enhancing the oversight and review of tax-related accounting estimates and calculations to ensure they are complete and accurate.

2.Providing additional training to personnel involved in tax accounting and financial reporting to enhance their understanding of the relevant accounting standards and requirements.

3.Enhancing the documentation of tax positions and related accounting judgments to ensure they are adequately supported and can withstand external scrutiny.

While our remediation plan related to the material weakness in internal controls relating to our information technology general controls (“ITGCs”) may evolve and expand, management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated such that these controls are designed, implemented, and operating effectively. The remediation actions include: (i) developing and maintaining documentation underlying ITGCs; (ii) implementing an IT management review, bringing in new management and revising the testing plan to monitor ITGCs with a specific focus on systems supporting our financial reporting processes; and (iii) enhanced quarterly reporting on the remediation measures to the Audit Committee of the Board of Directors.

We will need to allow the updated controls to operate for an adequate period of time, and we have commenced thorough testing to ensure the new and improved controls are operating effectively. We will continue to test and monitor the new and improved controls to ensure they are operating as intended. It's possible that we may find additional steps, including adding more resources, are needed to fully address the material weaknesses in our internal control over financial reporting. This could require more time for evaluation and implementation. Additionally, we might make adjustments to the remediation efforts as we proceed.

Changes in Internal Control Over Financial Reporting

Under Exchange Act Rules 13a-15(d) and 15d-15(d), management is required to evaluate, with the participation of our principal executive officer and principal financial officer, any changes in internal control over financial reporting that occurred during each fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As discussed “Management’s Report on Internal Control Over Financial Reporting” in Item 9A, “Controls and Procedures” of our 2025 Form 10-K, we identified unremediated material weaknesses as of March 31, 2025 and subsequent thereto that had not been remediated as of September 30, 2025. Other than as ~~described~~disclosed ~~above~~in the “Remediation Plan and Status” under Item 9A. Controls and Procedures in the 2025 Form 10-K, there were no changes in our internal control over financial reporting during ~~our~~the ~~most~~fiscal ~~recently~~quarter ~~completed~~ended ~~fiscal~~September 30, ~~quarter~~2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design and disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its ~~judgement~~judgment in evaluating the benefits of possible controls and procedures relative to ~~the~~ their cost.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

For a description of our legal proceedings, see “Note 79: Commitments and Contingencies — Legal Matters and Routine Proceedings” to our condensed consolidated financial statements, which is incorporated by reference.

ITEM 1A. RISK FACTORS.

Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition, results of operations, and trading price of our common stock. Please refer to our ~~2024~~2025 Form 10-K for additional information concerning these and other uncertainties that could negatively impact the Company. ~~There~~With ~~have~~the ~~been~~exception noof ~~material~~the ~~changes~~risk tofactor noted below, which updates the risk factors ~~disclosed~~ in our ~~2024~~Annual Report filed on Form 10-K for the year ended March 31, 2025, there have been no material changes from the risk factors previously disclosed therein.

GENERAL RISK FACTORS

Unsolicited acquisition proposals and attempts to acquire control of the Company could cause us to incur significant expense, disrupt our business and impact our stock price.

We have been, and may continue to be, subject to unsolicited acquisition proposals, tender offers, or proxy contests, which could result in substantial costs to the Company and divert management’s and Board’s attention and resources from our business. Such events could give rise to perceived uncertainties and could adversely affect relationships with our employees, customers or suppliers. We may incur significant expenses in responding to these events, including for required regulatory responses and third-party advisors. We also may be subjected to stockholder litigation in connection with these events. Our stock price could be subject to significant fluctuations or otherwise be adversely affected by speculative market perceptions about these events, risks, and uncertainties.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

(a) and (b)

Not applicable.

(c)

During the three months ended ~~December~~September 3130, ~~2024~~2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

2832

ITEM 6. EXHIBITS.

3.1			Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Registration Statement on Form 10-SB, File No. 000-28827, filed January 10, 2000).
3.2			Articles of Amendment to the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.2 to our Form 10-K for the year ended March 31, 2015, filed May 22, 2015).
3.3			Articles of Amendment to the Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of our Form 8-K/A filed December 18, 2024).
3.4 *			Third Amended and Restated Bylaws of PetMed Express, Inc. (incorporated by reference to Exhibit 3.3 to our Form 10-Q for the quarter ended September 30, 2024, filed November 7, 2024).
3.4			Third Amended and Restated Bylaws of PetMed Express, Inc. (incorporated by reference to Exhibit 3.3 to our Form 10-Q for the quarter ended September 30, 2024, filed November 7, 2024).
4.1			Rights Agreement, dated December 3, 2024, by and between the Company and Continental Stock Transfer & Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to our Form 8-K/A filed December 18, 2024).
4.2			Amendment No. 1 to Rights Agreement, dated November 26, 2025, by and between the Company and Continental Stock Transfer & Trust Company, as rights agent (incorporated by reference to Exhibit 4.2 to our Form 8-K filed November 26, 2025)
10.1			Separation Agreement, dated August 11, 2025, between the Company and Sandra Campos (incorporated by reference to Exhibit 10.1 to our Form 8-K filed August 12, 2025).
10.2			Separation Agreement, dated August 11, 2025, between the Company and Robyn D’Elia (incorporated by reference to Exhibit 10.2 to our Form 8-K filed August 12, 2025).
31.1 *			Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).
31.2 *			Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002).
32.1 **			Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*			Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*			Inline XBRL Taxonomy Extension Schema Document
101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Filed herewith.

** Furnished herewith.

2933

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PETMED EXPRESS, INC.

Date: ~~February~~December 1019, 2025

By: /s/ ~~Sandra~~Leslie Y.Campbell ~~Campos~~Leslie ~~Sandra~~Campbell Y.Interim ~~Campos~~ Chief Executive Officer and President (Principal Executive Officer) By: /s/ ~~Robyn~~Doug ~~D’Elia~~Krulik ~~Robyn~~Doug ~~D’Elia~~Krulik Chief ~~Financial~~Accounting Officer (and Principal Financial Officer) ~~By:~~and ~~/s/~~Treasurer ~~Douglas Krulik Douglas Krulik Chief Accounting Officer~~ (Principal ~~Accounting~~Financial Officer)

3034

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

PETMED EXPRESS, INC

________________________

FORM 10-Q

FOR THE QUARTER ENDED:

~~DECEMBER~~SEPTEMBER 3130, ~~2024~~2025

________________________

EXHIBITS

________________________

Filing Compare · PETMED EXPRESS INC