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What changed in PETMED EXPRESS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PETMED EXPRESS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+267 added−266 removedSource: 10-K (2025-10-14) vs 10-K (2024-06-14)

Top changes in PETMED EXPRESS INC's 2025 10-K

267 paragraphs added · 266 removed · 169 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeKey features of our websites include AutoShip subscriptions (Approximately 54% of our sales were generated via our AutoShip program in our fourth quarter ended March 31, 2024), "ask-the-vet" services, VetLive consultations, live web chat, easy refill medication reminders, a local veterinarian finder, and express checkout options.
Biggest changeKey features of our websites include AutoShip subscriptions (approximately 56.1% of our sales were generated via our AutoShip and membership program in our 4th quarter ended March 31, 2025), "ask-the-vet" services, VetLive consultations, live web chat, easy refill medication reminders, a local veterinarian finder, and express checkout options. 2 Customer Contact Center – We operate a dedicated toll-free customer service center staffed by trained Pet Health Specialists who provide personalized support and assist with product inquiries, prescription processing, and order placement. 3 PetAssure Broker Network – Through PetAssure, we also distribute products and wellness services via a brokered benefits model, primarily targeting employers offering pet health benefits as part of their employee wellness programs.
We have also applied for trademark protection for "VetLive TM ." GOVERNMENT REGULATION We are subject to a broad range of federal, state, and local laws and regulations that relate to our business. Dispensing prescription medications is governed at the state level by Boards of Pharmacy, or similar regulatory agencies, of each state where prescription medications are dispensed.
We have also applied for trademark protection for "VetLive TM ." 7 GOVERNMENT REGULATION We are subject to a broad range of federal, state, and local laws and regulations that relate to our business. Dispensing prescription medications is governed at the state level by Boards of Pharmacy, or similar regulatory agencies, of each state where prescription medications are dispensed.
Pet Health Specialists - Customer Support Center We believe that a high level of customer care and support is critical in retaining and expanding our customer base.
Pet Health Customer Care Specialists - Customer Contact Center We believe that a high level of customer care and support is critical in retaining and expanding our customer base.
Our campaigns strive to convey our dedicated focus on the well-being of pets and our commitment to accompanying our customers on their pet's wellness journey, which includes both preventative and chronic solutions for cats, dogs and equines across diverse breeds, sizes, ages and conditions.
Our campaigns strive to convey our dedicated focus on the well-being of pets and our commitment to accompanying our customers on their pet's wellness journey, which includes both preventative and chronic solutions for cats, dogs and horses across diverse breeds, sizes, ages and conditions.
The Company's executive headquarters offices are currently located at 420 South Congress Avenue, Delray Beach, Florida 33445, and our telephone number is (561) 526-4444. The Company has a March 31 fiscal year. 1 OUR INDUSTRY Our business focuses on a specific segment of the pet industry: pet wellness for dogs, cats, and horses.
The Company's executive headquarters offices are currently located at 420 South Congress Avenue, Delray Beach, Florida 33445, and our telephone number is (561) 526-4444. The Company has a March 31 fiscal year. OUR INDUSTRY Our business focuses on a specific segment of the pet industry: pet health for dogs, cats, and horses.
Our distribution of pet insurance products under our strategic partnership with Pumpkin also subjects us to state laws and regulations relating to the sale of insurance products, including registering as an insurance distributor in states in which we offer and sell the Pumpkin co-branded pet insurance products and otherwise complying with state and federal laws relating to the sale and distribution of insurance products.
Our distribution of pet insurance products under our strategic partnerships also subjects us to state laws and regulations relating to the sale of insurance products, including registering as an insurance distributor in states in which we offer and sell co-branded pet insurance products and otherwise complying with state and federal laws relating to the sale and distribution of insurance products.
To ensure adherence to these standards, we have implemented a whistleblower policy and an anonymous hotline for confidential reporting of any suspected policy violations or unethical conduct. Furthermore, all staff members are required to complete anti-harassment training.
To ensure adherence to these standards, we maintain a whistleblower policy and an anonymous hotline for confidential reporting of any suspected policy violations or unethical conduct. Furthermore, all staff members are required to complete anti-harassment training.
Our pharmacy practices are also licensed and/or regulated by 49 other state pharmacy boards, the District of Columbia Board of Pharmacy, the U.S.
Our pharmacy practices are also licensed and/or regulated by 48 other state pharmacy boards, the District of Columbia Board of Pharmacy, the U.S.
We offer our employees a wide array and highly competitive benefits such as life and health (medical, dental, and vision) insurance, medical and dependent care flexible spending accounts, legal services provider network, paid time off (including gender neutral parental leave) and retirement benefits, as well as emotional well-being services through our health insurance program.
We offer our employees a wide array and highly competitive benefits such as life and health (medical, dental, and vision) insurance, medical and dependent care flexible spending accounts, supplemental insurance coverage, pet insurance, parking and commuter benefits, legal services provider network, paid time off (including gender neutral parental leave) and retirement benefits, as well as emotional well-being services through our health insurance program.
Within this segment, our merchandise categories include prescription medications, over-the-counter (OTC) medications, supplements, prescription food, non-prescription food, and a comprehensive assortment of pet supplies. The total addressable market for pet medications, foods, and health products and services is vast and continuously expanding.
Within this segment, our merchandise categories include prescription medications, generic medications, over-the-counter (OTC) solutions, vitamins and supplements, prescription food, non-prescription food, and a comprehensive assortment of pet supplies including treats. The total addressable market for pet medications, foods, and health products and services is vast and continuously expanding.
The increasing demand for pet wellness products presents significant potential for us to expand our footprint and capture a larger share of this thriving market.
The increasing demand for pet wellness products presents significant potential for us to expand our footprint and capture a larger share of this thriving market through our private label programs.
By fostering a supportive and inclusive environment, we empower our employees to thrive both professionally and personally, driving our company forward and making a meaningful impact in our communities. As of June 14, 2024 we had 287 full time employees. None of our employees are represented by a labor union or governed by any collective bargaining agreements.
By fostering a supportive and inclusive environment, we empower our employees to thrive both professionally and personally, driving our company forward and making a meaningful impact in our communities. As of September 30, 2025, we had 173 full-time employees. None of our employees are represented by a labor union or governed by any collective bargaining agreements.
Our distinct advantage lies in our commitment to high-quality products and our team of highly qualified pharmacists and technicians with specialized training in veterinary pharmacology that are licensed across all fifty states. Our teams execute a rigorous 5-point verification process and are compliant with all federal regulations set by the FDA and DEA.
Our distinct advantage lies in our 29 years of expertise, delivered through our team of highly qualified pharmacists and technicians with specialized training in veterinary pharmacology that are licensed across all fifty states. These teams execute a rigorous 5-point verification process and are compliant with all federal regulations set by the FDA and DEA.
If we fail to maintain our licenses with the Florida Board of Pharmacy, or if we do not maintain the licenses/registrations/permits from other state pharmacy boards (including our home state pharmacy license in New York for PetCareRx), or if we face actions from the DEA, FDA EPA, or other enforcement regulators, our ability to dispense prescription medications to pet owners could be halted, which could have a material adverse effect on our financial condition and operations. 7 In addition to the foregoing, the FDA regulates animal feed, including pet food, under the Federal Food, Drug, and Cosmetic Act (the “FFDCA”) and its implementing regulations.
If we fail to maintain our licenses with the Florida Board of Pharmacy, or if we do not maintain the licenses/registrations/permits from other state pharmacy boards (including our home state pharmacy license in New York for PetCareRx), or if we face actions from the DEA, FDA EPA, or other enforcement regulators, our ability to dispense prescription medications to pet owners could be halted, which could have a material adverse effect on our financial condition and operations.
According to the American Pet Products Association, pet spending in the United States increased by 7% to $147.0 billion in 2023, with veterinary care and prescription medications accounting for $38.3 billion or 26% of that total.
According to the American Pet Products Association, pet spending in the United States increased by 3% to $152 billion in 2024, with veterinary care and prescription medications accounting for $39.8 billion or 26% of that total.
PetMeds and PetCareRx's pharmacies are accredited by the National Association of Boards of Pharmacy and LegitScripts. This combination of quality, expertise, and efficiency sets us apart in the marketplace. INTELLECTUAL PROPERTY We conduct our business under the trade names “PetMeds” and "PetCareRx" and use a family of trade names all containing the terms “PetMeds”, “PetMed” or "PetCareRx" in some form.
This combination of quality, expertise, passion and efficiency sets us apart in the marketplace. INTELLECTUAL PROPERTY We conduct our business under the trade names “PetMeds” and "PetCareRx" and use a family of trade names all containing the terms “PetMeds”, “PetMed” or "PetCareRx" in some form.
HUMAN CAPITAL The Company is committed to fostering a culture that not only advances strategic and key business priorities but also empowers employees to make a positive impact in their communities. We believe that attracting, retaining, and managing a diverse and talented workforce is crucial to our success.
HUMAN CAPITAL The Company is committed to fostering a culture that not only advances strategic and key business priorities but also empowers employees to make a positive impact in their communities.
Pet owners have the ability to contact our agents and pharmacists for assistance with their animals' wellness needs via telephone, chat, and email. We offer extended services, including pet insurance, telehealth, and employee benefits programs, through our core partners.
As a core service to our customers, pet owners have the ability to contact our customer support agents and pharmacists at 1-800-petmeds for assistance with their animals' wellness needs via telephone, chat, and email. Additionally, we offer extended services, including telehealth, pet insurance, and employee benefits programs, through our core partners Dutch, Vetster, and Pet Synergy Group.
Additionally, consumers' discretionary spending on pets extends to categories like apparel, grooming, boarding, and dog-walking. Operating in a highly competitive industry environment can cause the Company to engage in greater than expected promotional activity at times, which would result in pressure on average unit retail and gross profit.
Operating in a highly competitive industry environment can cause the Company to engage in greater than expected promotional activity at times, which would result in pressure on average unit retail pricing and gross profit.
Our employees have access to a wide range of resources to enhance their skills and advance their careers, including internal leadership development classes, online development resources, mentorship programs, individual development opportunities, and key projects. Additionally, we offer functional management training, learning management systems-based educational opportunities, certification programs, and educational assistance to support our future leaders in their professional growth.
This includes access to a variety of resources to enhance their skills and advance their careers, including mentorship programs, individual development opportunities, and exposure to cross-functional projects that provide diverse experiences. Additionally, we offer functional management training, educational opportunities, certification programs, and educational assistance to support our future leaders in their professional growth.
The order processing system checks for the verification for prescription medication orders and a valid payment method for all orders. Verified orders are then sent to our fulfillment centers, where items are picked, and then shipped via the United States Postal Service, United Parcel Service, and Federal Ex.
This information is entered into our order processing system, which checks for the verification for prescription medication orders and a valid payment method for all orders. Verified orders are then sent to our fulfillment centers, where items are picked, and then shipped via one of our several shipping carriers.
Our in-house pharmacy, fulfillment and distribution operations oversee the entire supply chain—from order placement and processing to fulfillment and shipping. Our pharmacists oversee the processing of every order and follow a regimented 5-step verification process which is the cornerstone of our credibility. For prescription medications, we strive to ship immediately upon authorization by the customer’s veterinarian.
Our in-house pharmacy, fulfillment and distribution operations oversee the entire supply chain—from order placement and processing to fulfillment and shipping. For prescription medications, we strive to ship immediately upon authorization by the customer’s veterinarian. INFORMATION SYSTEMS We utilize a combination of Company-owned and third-party-operated information systems to support our core business functions.
We provide ongoing training programs under the supervision of our training managers that include a variety of topics such as product knowledge, computer usage, customer service tips, and the relationship between our Company and veterinarians. Our customer support center agents respond to customers’ e-mails, calls, and live web chats that are related to products, order status, prices, and shipping.
We provide our employees with ongoing training programs under the supervision of our training managers that include a variety of topics such as product knowledge, technology usage, customer service tips, and the relationship between our Company and veterinarians.
We attracted approximately 302,000 and 274,000 new customers in fiscal 2024 and 2023, respectively. Our customers are located throughout the United States, with approximately 49% of customers residing in California, Florida, Texas, New York, Pennsylvania, North Carolina, Georgia, and Virginia.
Our customers are located throughout the United States, with approximately 50% of customers residing in California, Florida, Texas, New York, Pennsylvania, North Carolina, Georgia, and Virginia. The average order value increased slightly year over year and was approximately $97 for fiscal 2025 and $94 for fiscal 2024.
This includes establishing and building brand recognition to increase customer traffic, better align with current customer needs and wants, add new customers, build strong lifetime customer loyalty, that ultimately will maximize reorders, and develop incremental revenue opportunities. We have built, and will deliver, an integrated marketing campaign that includes digital marketing and direct mail/print and e-mail.
This 5 includes establishing and building brand recognition to increase customer website traffic, better align with current customer needs, deploy targeted segmentation strategies to reach the right audiences, scale effective campaigns, add new customers, and build strong lifetime customer loyalty that, ultimately, will increase reorders, and develop incremental revenue opportunities.
Together, our brands are dedicated to delivering exceptional quality wellness products from innovative suppliers, making it easier for families to address preventive and chronic health needs in order to support the longevity of their companion animals. We are deeply committed to the mission and purpose that has driven our business from the start.
Since this acquisition, we provide a more extensive selection of premium food, supplements, treats, and other pet supplies. Together, our brands are dedicated to delivering exceptional science-backed, veterinarian approved products from quality suppliers, making it easier for families to address preventive and chronic health needs in order to support the longevity of their companion animals.
As part of our growth strategy, we prioritize maintaining direct relationships with leading pharmaceutical manufacturers, providing both popular prescription and non-prescription medications. These direct relationships not only help us secure an adequate volume of products but also enable us to offer the latest and most trusted pet health solutions.
These direct relationships not only help us secure an adequate volume of products but also enable us to offer the latest and most trusted pet health solutions. Our continued partnerships with these major manufacturers are a testament to our commitment to quality and reliability in serving our customers.
Many of our personnel are currently working remotely or in a hybrid work model with the exception of essential on-site workers. Similar to many companies, we are exploring the benefits of bringing teams back into the office.
We consider relations with our employees to be good. The majority of our employees are connected to our Delray Beach, Florida headquarters and distribution center. Many of our personnel are currently working remotely or in a hybrid work model with the exception of essential on-site workers.
PetMeds and PetCareRx market and sell directly to consumers through their websites, toll-free numbers, and employer benefits partnerships. Through thousands of veterinary partners and a loyal customer base who rely on our services, our in-house pharmacies and extended pet healthcare partnerships seek to offer unparalleled value and convenience to families at every stage of their pets' lives.
Through partnerships with 75,000 2 veterinarians and a loyal customer base who rely on our services, our in-house pharmacies and extended pet healthcare partnerships seek to offer unparalleled value and convenience to families at every stage of their pets' lives. We are deeply committed to the mission and purpose that has driven our business from the start.
SOURCING OF MERCHANDISE INVENTORY We source our products from a diverse array of vendors, including manufacturers and domestic distributors. In fiscal 2024, approximately 78.1% of all products were purchased from seven key suppliers. We believe that deepening our relationships with manufacturers and distributors is crucial to ensuring a reliable supply of the products our customers need.
SOURCING OF MERCHANDISE INVENTORY We source our inventory from a diverse array of vendors that specialize in prescription, food, and health and wellness-related products that include manufacturers and domestic distributors. Of the thousands of SKUs we offered our customers in fiscal 2025, approximately 81% of all products were purchased from six key suppliers.
The support of millions of customers nationwide has been the cornerstone of our success. Honoring our combined legacy, we bring our core values to every role we undertake. Our primary goal is to empower pet families, ensuring they can provide the best possible care for their dogs, cats, and horses and help them lead long, healthy lives.
Honoring our combined legacy, we bring our core values to every role we undertake as we empower pet families, ensuring they have access to products and services that can provide the best possible care for their dogs, cats, and horses. Since 1996, PetMeds has been serving as a trusted source for pet health across North America.
Managing over 100,000 calls per month, our team of 150 in-house agents consistently delivers outstanding assistance to our valued customers. 5 Marketing The goal of our fiscal 2025 marketing strategy aims to integrate our two brands (Petmeds and PetCareRX) into a customer centric relevant brand which resonates with our mission and provides direct value to our customers.
Marketing and Lifecycle Engagement As part of our fiscal 2026 marketing strategy we intend to integrate our two brands (PetMeds and PetCareRX) into a customer-centric relevant brand which resonates with our mission and provides direct value to our customers.
Teller and her fellow VAB colleagues bring a wealth of knowledge and experience to our company. RECENT DEVELOPMENTS AND STRATEGIC TRANSACTIONS ACQUISITION OF PetCareRx In April 2023, we acquired PetCareRx, Inc. (“PetCareRx”), an online supplier of pet medications, foods, and supplies based in New York.
In April 2023, we acquired PetCareRx, Inc. (“PetCareRx”), an online supplier of pet medications, foods, and supplies based in New York. This acquisition added a catalog of Rx and non-Rx food and supplies, allowing us to expand beyond our core offering of pet prescriptions.
We currently utilize digital marketing through performance and acquisition marketing strategies, deliver content via streaming channels, direct mail, and email. The Company aims to create a best-in-class marketing operation through a continuous test-and-learn approach as we progress into fiscal 2025. This will be visible across all customer touchpoints.
Additionally, Pethealthmd.com, our blog and pet health library, serves as an SEO traffic hub, continuously updated with articles covering pet behavior, nutrition, pharmaceutical and natural remedies. The Company aims to create a best-in-class marketing operation through a continuous test-and-learn approach as we progress into fiscal 2026. This will be visible across all customer touchpoints.
Our commitment to diversity, equity, and inclusion encompasses individuals of different ages, colors, disabilities, ethnicities, family or marital statuses, gender identities or expressions, languages, national origins, physical and mental abilities, political affiliations, races, religions, sexual orientations, socio-economic statuses, veteran statuses, and other characteristics.
We believe that attracting, retaining, and managing a diverse and talented workforce is crucial to our success and our workforce includes individuals of different ages, colors, disabilities, ethnicities, family or marital statuses, gender, or expressions, languages, national origins, physical and mental abilities, political affiliations, races, religions, sexual orientations, socio-economic statuses, veteran statuses, and other characteristics. 8 To ensure our employees have the opportunity to develop and excel, human capital management is a top priority for our executives and Board of Directors, as evidenced by the expansion of the Compensation Committee to the Compensation and Human Capital Committee.
Over the years, our organization has made significant investments in our pharmacies to ensure compliance. By employing licensed pharmacists who specialize in veterinary medicine, it allows us to provide focused and specialized care. Additionally, we have implemented a rigorous 5-point verification process from order to shipment to ensure quality control.
Over the years, our organization has made investments in our pharmacies to ensure regulatory compliance, accreditations, and operational excellence which include implementing a rigorous verification process from order to shipment to ensure top quality control.
OVERVIEW OF PHARMACY OPERATIONS The following information is needed to process prescription orders: pet information, prescription information, and the veterinarian’s name and phone number. This information is entered into our order processing system. Then our pharmacists and pharmacy technicians verify all prescriptions.
OVERVIEW OF PHARMACY OPERATIONS Our pharmacists and pharmacy technicians oversee the processing of every order and follow a regimented 5-point verification process to ensure our customers receive an order that addresses their pet's needs. We request the following information to process prescription orders: pet information, prescription information, and the veterinarian’s name and phone number.
We continuously monitor and update our regulatory licenses in every state, including the U.S. Virgin Islands.
Employing licensed pharmacists and a 50-state licensed Pharmacist-in-Charge for each of our two pharmacy locations, allows us to provide focused and specialized care backed by expertise. We continuously monitor and update our regulatory licenses in every state, including the U.S. Virgin Islands.
This esteemed board currently consists of five expert veterinarians across the country, each with decades of experience in private practice and academia, shaping the future of veterinary medicine. Dr.
This esteemed board consisted of five expert veterinarians across the country throughout FY2025, with decades of experience in private practice and academia, helping shape the future of veterinary medicine. STRATEGY The Company is committed to evolving from a leading digital-only model to a true omnichannel business, offering consumers a range of products and services.
OUR EXPERT VETERINARY ADVISORY BOARD To further our commitment to connecting with customers through education and professional credibility, the Company recently launched its Veterinary Advisory Board (VAB) with the goal of ensuring that all of our initiatives result in improved patient care.
These membership programs include a variety of exclusive PetPlus perks which includes discounts for more than 700,000 partners, and valuable telehealth, pet training, and delivery services that streamline educational content for pet parents OUR EXPERT VETERINARY ADVISORY BOARD To further our commitment to connecting with customers through education and professional credibility, the Company's Veterinary Advisory Board (VAB) provides insights to help ensure that all of our initiatives result in improved patient care.
Our ongoing efforts will focus on unifying talent, technology frameworks, and business operations in order to drive growth and profitability. COMPETITION The Company operates in a rapidly evolving, highly competitive, and fragmented business environment. Our competitors include veterinarians, local and national chain specialty retailers, and vendors' own e-commerce stores.
COMPETITION We operate in a rapidly evolving, highly competitive, and fragmented business environment. Our competitors include veterinarians, local and national chain specialty retailers, and vendors' own e-commerce stores. Several large retailers have announced entrance into the pet pharmacy space this year. Additionally, consumers' discretionary spending on pets extends to categories like apparel, grooming, boarding, and dog-walking.
Non-Prescription Medications (OTC) and supplies : Flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and household pet supplies. Pet Foods: Premium and non Premium Pet Foods, including Veterinary Prescription Rx Diets Private Label : Our exclusive range of private label products offers exceptional value and affordability.
In addition, we stock a variety of OTC medications as alternatives to prescriptions that include bone and joint care products, vitamins, treats, nutritional supplements, hygiene products and other health-related supplies. PetMeds also offers the best-named brands in premium pet foods and treats including veterinary prescription Rx diets.
Consolidating our two branded teams and incorporating the best-in-class tech provider, our specialists will be fully equipped with advanced telephone systems so that we can maximize our representatives’ time, ensuring top-tier customer care, service, and support.
Our customer contact center agents respond to customers’ e-mails, calls, and live web chats that are related to products, order status, prices, and shipping. Having consolidated our two branded teams and incorporating a best-in-class technology provider, our customer care agents ensure that we can maximize our representatives’ time, ensuring top-tier customer care, service, and support.
From shampoos and flea collars to joint enhancers, vitachews, and soft toys, our proprietary line provides high-quality, cost-effective solutions for pet care. 2 Holistic Wellness Services: Pet Telemedicine: Our VetLive service, powered by Vetster, provides pet owners with the convenience of consultations, diagnoses, and in some states, prescriptions from board-certified veterinarians— all from the comfort of their homes.
Holistic Wellness Services: Pet Telemedicine : Since 2022, the Company has engaged in partnerships to provide telemedicine services, with the convenience of consultations, diagnoses and in certain states, prescriptions from board-certified veterinarians all from the comfort of their homes. In May 2025, we announced our strategic partnership with Dutch Pet, Inc.
Our pharmacies are accredited by the NABP.Com and LegitScript and are focused on excelling in meeting all federal and state regulatory requirements As a premier service to our customers, our in-house pet health specialists in our call center support over 100,000 pet parents each month.
Our pharmacies are accredited by the NABP.Com and LegitScript and are focused on exceeding all federal and state regulatory requirements.This specialized expertise creates a defensible moat that is further supported by the nearly thirty years of pet health data, and partnerships with over 75,000 veterinarians.
Through robust partnerships with our vendors, our current products include: Prescription Medications (Rx) : Heartworm and flea and tick preventatives, arthritis, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes.
We address the most common conditions - allergies, arthritis, and anxiety and offer prescriptions for more chronic conditions such as heartworm, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, other specialty medications. A large percentage of our business is selling flea and tick preventatives through Rx, non-Rx, and OTC supplements and sprays.
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ITEM 1. BUSINESS GENERAL Since 1996, PetMeds has been a pioneer in digital retail, serving as a trusted source for pet medicines across North America. Similarly, since 1998, PetCareRx has been providing pet healthcare products directly to consumers.
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ITEM 1. BUSINESS GENERAL PetMed Express, Inc. and subsidiaries, d/b/a PetMeds®, and as parent company of PetCareRx®, is a pioneer in pet healthcare, building a consumer-first digital platform in 1996 that transformed the way customers fulfill pet medications.
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PetMed Express, Inc. and subsidiaries, d/b/a PetMeds®, and as parent company of PetCareRx®, is a leading nationwide direct-to-consumer pet pharmacy and online provider of prescription and non-prescription medications, food, supplements, and supplies and has veterinary and pet insurance service partnerships for dogs, cats, and horses.
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Nearly thirty years later, as a leading nationwide direct-to-consumer pet health and wellness retailer, the Company markets and sells directly to consumers through its websites (Petmeds.com and PetCareRx.com), customer contact center (1-800-PetMeds), and mobile applications (iOS and Android). The Company provides access to top branded pharmaceuticals, generic medications, compounded prescription medications, pharmacy fulfillment, and personalized autoship capabilities.
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THE PET CONSUMER According to a Mintel Services report in 2023: • Eighty-six percent of the total pet customers prefer maintaining a routine pet care regimen. ◦ To support this, we offer auto-ship options for our core products, ensuring convenient and consistent care for their pets. • Eighty-one percent of customers believe that investing more in pet products and services is worthwhile for their pet's well-being. ◦ Our core products address the most common preventive and acute pet care needs.
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Our digital platform offers pet healthcare solutions for a broad range of chronic conditions, including those related to allergy, arthritis, anxiety, kidney, hyperthyroidism, and others for cat, dog, and horses. We also offer access to a range of non-prescription health and wellness products and Rx food, non-Rx food, and treats.
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To cater to a diverse range of budgets, we offer a tiered pricing strategy ensuring that every customer can find products that meet their needs and preferences. • Thirty-five percent of pet owners rely on social media to guide their choices in pet products and services. ◦ Ensuring we effectively engage our pet families through social platforms, we have a wellness guide which will be further developed utilizing an integrated marketing approach through our five social media channels inclusive of Instagram, TikTok, Facebook, YouTube and X, More than 2.0 million customers have purchased from us within the last three fiscal years, including customers acquired in April 2023 as a part of our PetCareRx acquisition.
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PetMeds and PetCareRx receive the pet’s prescription through our websites and connects to the customer's licensed veterinarian for approval. Through our content website, pethealthmd.com, consumers can access educational articles for any health-related questions regarding their pets.
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The average order value increased slightly year over year and was approximately $94 for fiscal 2024 and $93 for fiscal 2023. PRODUCTS AND SERVICES We offer a broad selection of products and services for dogs, cats, and horses. Our current product line contains more than 15,000 SKUs of popular pet medications, health products, foods, and supplies.
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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.
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This includes a majority of well-known brands of pet medications. With our April 2023 acquisition of PetCareRx, we have expanded our product catalog beyond medications to include a wider assortment of pet products. Additionally, we offer various pet supplies on our websites, some of which are drop-shipped to customers by third parties.
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Since our founding, we have fulfilled orders for almost twenty-million pet parents in all 50 states and have been instrumental in providing products that help pets live longer, healthier lives. The support of our customers nationwide has been the cornerstone of our success.
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These supplies include beds, crates, stairs, and other popular items. We periodically assess and adjust our merchandise categories based on seasonal and industry trends. Designed for flexibility, our websites allow us to change featured products or promotions. This approach provides customers with a wide variety of selections across the most popular health categories for dogs, cats, and horses.
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THE PET CONSUMER According to the April 2025 Cleveland Research Pet Retail and Animal Health Report: • Approximately 40% of consumers expect to significantly or slightly decrease their purchases due to anticipated tariffs and stock market volatility. • The outlook across the pet landscape headed into 2025 shows muted pet household adoptions coupled with pricing pressure – overall resulting in pressured vet visits and spend at pet retail Based on the items from the above report: • We are executing a series of strategic initiatives that enhance customer experience, optimize operational efficiency, and leverage innovation to drive long-term shareholder value. 3 • We believe that a high level of customer care and support is critical in retaining and expanding our customer base.
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This service saves time and ensures expert care without the need to visit a clinic. Additionally, AI-assisted remote veterinary technicians, through our partnership with AskVet, provide a wide range of telehealth services, from dietary advice to training.
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Our goal is to create a concierge customer experience through modern technology that incorporates AI, automation, and product management that drives personalized journeys across all touchpoints. • To cater to a diverse range of budgets, we sell products at multiple price points and offer promotions to ensure that every customer can find products that meet their needs and preferences. • We offer auto-ship options for many of our products, ensuring convenient and consistent compliance for pets. • Looking ahead, we are evolving from a digital-only model to a true omnichannel business offering consumers a range of products and services.
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Pet Insurance: We partner with Pumpkin Insurance, a premium provider owned by JAB Holding Company, to offer our customers discounted premium pet insurance options. Employee Pet Benefits: Our partnership with PetAssure (Synergy Pet Group) allows us to be part of their employer bundled service, offering discounted pet care solutions that provide employees with access to our PetPlus membership.
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That means meeting pet parents where they are, however they choose to shop. More than 1.7 million customers have purchased from us within the last three fiscal years, including customers acquired in April 2023 as a part of our PetCareRx acquisition. We attracted approximately 351,000 and 457,000 new customers in fiscal 2025 and 2024, respectively.
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This membership includes a variety of exclusive perks, discounts, and valuable services that significantly enhance the well-being of pets.
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PRODUCTS AND SERVICES PetMeds offers a wide array of products and services dedicated to pet health and wellness. As a licensed online pharmacy, we provide medications for dogs, cats, and horses, ensuring that pets receive the necessary treatments prescribed by their veterinarians.
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Lori Teller, DMV, DABVP (Canine/Feline), CVJ, and Clinical Professor in the Department of Small Animal Clinical Sciences at Texas A&M University’s School of Veterinary Medicine and Biomedical Sciences, serves as the Chair of the VAB and the liaison between the Company and the VAB. We believe that Dr.
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Our exclusive range of private label products, including joint enhancers, vitachews, shampoos and flea and tick prevention offers exceptional value to our customers at a high margin. Our private label assortment is launching on Amazon in early FY2026 and is expected to launch across multi channels in the latter part of the fiscal year.
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This acquisition added a catalog of food and supplies and approximately 286,000 new and renewal customers to our company, allowing us to rapidly expand beyond our core offering of pet prescriptions. We now provide a more extensive selection of premium food, supplements, treats, and other pet supplies as a result of this acquisition.
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To obtain prescription medications, we have a three step process: customers place the order and provide their veterinarian's details, and PetMeds handles the entire end-to-end verification process before shipping. Additionally, PetMeds has veterinary pharmacists and technicians on staff to answer pet owners' medication-related questions, aiming to be a trusted resource for pet health needs.
Removed
PetCareRx boasts a thriving membership program, which constitutes two-thirds of their customer base, enhancing customer loyalty and engagement. The collaboration between PetCareRx and PetAssure is being expanded across both brands in fiscal 2025, significantly increasing the number of members within our platform.
Added
("Dutch"), a virtual veterinary care provider, to expand our health services ecosystem with affordable, accessible pet healthcare options. This new partnership enables pet parents to leverage Dutch’s convenient technology and veterinary team to secure prescriptions for PetMeds’ broad selection of medications in a timely manner.
Removed
Their telehealth services,, powered by AI-driven AskVet, are being expanded across the organization, further enriching our member service offerings. PET INSURANCE PARTNERSHIP In February 2023, we announced a strategic partnership with Pumpkin Insurance Services, Inc. (“Pumpkin”), a leading provider of premium pet insurance plans.
Added
Under the partnership, pet parents are able to sign up for a monthly Dutch membership and be connected virtually with veterinarians for 24/7 appointments in 34 states. 4 Employee Pet Benefits : We continue to develop partnerships that allow us to be part of employer bundled services, offering discounted pet care solutions that provide participating companies' employees with access to our membership programs through their respective company employee benefits offerings.
Removed
Through this collaboration, we offer our customers access to high-quality health and wellness pet insurance benefits as part of our holistic wellness ecosystem. This partnership enables our customers to purchase co-branded insurance plans, developed in conjunction with Pumpkin and their underwriters, and offered by our subsidiary, PetMeds Insurance Services, LLC.
Added
As part of this transformation, we are executing a series of strategic initiatives that expand into multi channels, the first of which is Amazon. We have added compound pharmacy partnerships, a key area of growth within the animal health industry, including top pharmacy Mixlab, which has five labs located across the country.
Removed
These innovative insurance products became available for purchase in October 2023, providing pet owners with peace of mind as they navigate all stages of their pets' lives. PET TELEHEALTH PARTNERSHIP In April 2022, we announced a multi-year exclusive partnership with Vetster Inc., a veterinary telehealth startup based in Canada.
Added
We are also adding a global licensing agreement for non-consumable pet products set to launch in retail channels in early calendar year 2026.
Removed
This strategic alliance provides pet owners in the United States with seamless online access to veterinary services through Vetster’s innovative platform.
Added
And lastly, we are introducing private label functional health products in the latter half of FY2026 - veterinary formulated and exclusive to PetMeds - into both DTC and wholesale channels enhancing margins, differentiating the company, and building brand loyalty At the same time, we are investing in modernizing our technology, including our e-commerce infrastructure and cloud environments, and in our customer experience, including speed to customer.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of these potential factors include: • market adoption and ongoing usage of pet telehealth and telemedicine services and solutions; • awareness and adoption of technology in healthcare generally; • availability of products and services that compete with ours; • ability to maintain and expand a network of qualified providers; • ease of adoption and use; • features and platform experience; • performance; • brand; • security and privacy; and • pricing. 17 Our success will depend to a substantial extent on the willingness of our customers to use, and to increase the frequency and extent of their utilization of, our solution being offered in conjunction with Vetster, as well as on our ability to demonstrate the value of pet telehealth and telemedicine to veterinarians and pet owners.
Biggest changeSome of these potential factors include: • market adoption and ongoing usage of pet telehealth and telemedicine services and solutions; • awareness and adoption of technology in healthcare generally; • availability of products and services that compete with ours; • ability to maintain and expand a network of qualified providers; • ease of adoption and use; • features and platform experience; • performance; • brand; • security and privacy; and • pricing.
In addition, our ability to receive inbound inventory efficiently and ship merchandise to customers may be negatively affected by factors beyond our and these providers’ control, including inclement weather, fire, flood, power loss, earthquakes, acts of war or terrorism or other events, such as labor shortages and disputes, financial difficulties, volatility in the prices of fuel, gasoline and commodities such as paper and packing supplies, system failures and other disruptions to the operations of the shipping companies on which we rely.
In addition, our ability to receive inbound inventory efficiently and ship merchandise to customers may be negatively affected by factors beyond our and these providers’ control, including inclement weather, fire, flood, power loss, earthquakes, acts of war or terrorism or other events, such as labor shortages and disputes, financial difficulties, volatility in the prices of fuel, gasoline and commodities 11 such as paper and packing supplies, system failures and other disruptions to the operations of the shipping companies on which we rely.
In addition, we also collect, store, and transmit employees’ health information for certain reasons, such as administering employee benefits; accommodating disabilities and injuries; complying with public health requirements; and maintaining employee safety in the workplace. 14 Laws and regulations relating to privacy, data protection, cybersecurity, marketing and advertising, and consumer protection are evolving and subject to potentially differing interpretations.
In addition, we also collect, store, and transmit employees’ health information for certain reasons, such as administering employee benefits; accommodating disabilities and injuries; complying with public health requirements; and maintaining employee safety in the workplace. Laws and regulations relating to privacy, data protection, cybersecurity, marketing and advertising, and consumer protection are evolving and subject to potentially differing interpretations.
Wayfair, Inc. et al, or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state. In response to Wayfair, or otherwise, states or local governments may adopt, or begin to enforce, laws requiring us to register, calculate, collect, and remit taxes on sales in their jurisdictions.
Wayfair, Inc. et al, or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state. In response to Wayfair, or otherwise, states or local governments may adopt, or begin to enforce, laws 19 requiring us to register, calculate, collect, and remit taxes on sales in their jurisdictions.
These relationships may enable both their online and retail stores to negotiate better pricing and better terms from suppliers by aggregating the demand for products and negotiating volume discounts, which could be a competitive disadvantage to us. Product recalls and concerns regarding the safety and quality of the pet products we sell could affect our business.
These relationships may enable both their online and retail stores to negotiate better pricing and better terms from suppliers by aggregating the demand for products and negotiating volume discounts, which could be a competitive disadvantage to us. 20 Product recalls and concerns regarding the safety and quality of the pet products we sell could affect our business.
These factors include: changes in accounting treatments or principles; announcements by our competitors of new products and services offerings; significant contracts, acquisitions, or strategic relationships; additions or departures of key personnel; any future sales of our common stock or other securities; stock market price and volume 21 fluctuations of publicly traded companies; and general political, economic, and market conditions.
These factors include: changes in accounting treatments or principles; announcements by our competitors of new products and services offerings; significant contracts, acquisitions, or strategic relationships; additions or departures of key personnel; any future sales of our common stock or other securities; stock market price and volume fluctuations of publicly traded companies; and general political, economic, and market conditions.
As a result, our business and operating results could be adversely affected. We have identified material weaknesses in our internal controls over financial reporting, and management has determined that our disclosure controls and procedures were not effective as of the end of the period covered by this Annual Report on Form 10-K.
As a result, our business and operating results could be adversely affected. We have identified material weaknesses in our internal controls over financial reporting, and management has determined that our disclosure controls and procedures were not effective as of the end of the period covered by this Annual Report on 18 Form 10-K.
In order to effectively compete in the future, we may be required to offer promotions and other incentives, which may result in lower operating margins and adversely affect the results of operations. We also face a 20 significant challenge from our competitors forming alliances with each other, such as those between online and traditional retailers.
In order to effectively compete in the future, we may be required to offer promotions and other incentives, which may result in lower operating margins and adversely affect the results of operations. We also face a significant challenge from our competitors forming alliances with each other, such as those between online and traditional retailers.
We have grown, and continue to seek to grow our business through acquisitions of, or investments in, new or complementary businesses, facilities, technologies, offerings, or products, or through strategic alliances, and the failure to 16 manage these acquisitions, investments, or other strategic alliances, or to integrate them with our existing business, could have a material adverse effect on us.
We have grown, and continue to seek to grow our business through acquisitions of, or investments in, new or complementary businesses, facilities, technologies, offerings, or products, or through strategic alliances, and the failure to manage these acquisitions, investments, or other strategic alliances, or to integrate them with our existing business, could have a material adverse effect on us.
Acquisitions, investments and other strategic alliances, including our acquisition of PetCareRx, involve numerous risks, including: • problems integrating the acquired business, facilities, technologies or products, including issues maintaining uniform standards, procedures, controls and policies; • unanticipated costs associated with acquisitions, investments or strategic alliances; • losses we may incur as a result of declines in the value of an investment or as a result of incorporating an investee’s financial performance into our financial results; • diversion of management’s attention from our existing business; • risks associated with entering new markets in which we may have limited or no experience; • the risks associated with businesses we acquire or invest in, which may differ from or be more significant than the risks our other businesses face; • potential unknown liabilities associated with a business we acquire or in which we invest; and • increased legal and accounting compliance costs.
Acquisitions, investments and other strategic alliances, involve numerous risks, including: • problems integrating the acquired business, facilities, technologies or products, including issues maintaining uniform standards, procedures, controls and policies; • unanticipated costs associated with acquisitions, investments or strategic alliances; • losses we may incur as a result of declines in the value of an investment or as a result of incorporating an investee’s financial performance into our financial results; • diversion of management’s attention from our existing business; • risks associated with entering new markets in which we may have limited or no experience; • the risks associated with businesses we acquire or invest in, which may differ from or be more significant than the risks our other businesses face; • potential unknown liabilities associated with a business we acquire or in which we invest; and • increased legal and accounting compliance costs.
Because of the inherent limitations in a cost-effective control system, misstatements in our financial statements due to error or fraud may occur and require restatement, such as those errors that resulted in the restatement of our previously issued audited consolidated financial statements described in Amendment No.1 on Form 10-K/A to our Annual Report on Form 10-K for the year ended March 31, 2023 (the “2023 Form 10-K/A”), and the restatement of our previously issued unaudited condensed consolidated financial statements described in Amendment No.1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the “2024 Q1 Form 10-Q/A”) and Amendment No.1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the “2024 Q2 Form 10-Q/A”, and together with the 2024 Q1 Form 10-Q/A and 2023 Form 10-K/A, the “Amended Reports”) as well as fiscal 2023 amounts restated in our Quarterly Report on Form 10-Q for the three and nine months ended December 31, 2023.
Because of the inherent limitations in a cost-effective control system, misstatements in our financial statements due to error or fraud may occur and require restatement, such as those errors that resulted in the restatement of our previously issued audited consolidated financial statements described in this Comprehensive Form 10-K, Amendment No.1 on Form 10-K/A to our Annual Report on Form 10-K for the year ended March 31, 2023 (the “2023 Form 10-K/A”), and the restatement of our previously issued unaudited condensed consolidated financial statements described in Amendment No.1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the “2024 Q1 Form 10-Q/A”) and Amendment No.1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the “2024 Q2 Form 10-Q/A”, and together with the 2024 Q1 Form 10-Q/A and 2023 Form 10-K/A, the “Amended Reports”) as well as fiscal 2023 amounts restated in our Quarterly Report on Form 10-Q for the three and nine months ended December 31, 2023.
In addition, if the Company fails to meet expectations related to future growth, profitability, dividends, or other market expectations, the price of the Company’s common stock may decline significantly, which could have a material adverse impact on investor confidence and employee retention.
In addition, if the Company fails to meet expectations related to future growth, profitability, dividends, or other market expectations, the price of the Company’s common stock may decline significantly, 21 which could have a material adverse impact on investor confidence and employee retention.
If customers perceive that our customer care and support does not compare favorably to our competitors, then we may lose customers to such competitors. 11 The content of our websites could expose us to various kinds of liability, which, if prosecuted successfully, could negatively impact our business.
If customers perceive that our customer care and support does not compare favorably to our competitors, then we may lose customers to such competitors. The content of our websites could expose us to various kinds of liability, which, if prosecuted successfully, could negatively impact our business.
As we increase our reliance on our systems, our exposure to damage from service interruptions may increase. Further, our transition could involve significant time and expense and could negatively impact our ability to deliver our products and services, which could harm our financial condition and results of operations.
As we increase our reliance on our systems, our exposure to damage from service 14 interruptions may increase. Further, our transition could involve significant time and expense and could negatively impact our ability to deliver our products and services, which could harm our financial condition and results of operations.
We have also been informed by customers and consumers that veterinarians have tried to discourage pet owners from purchasing from internet mail-order pharmacies. The laws and regulations relating to the sale and delivery of prescription pet medications vary from state to state.
We have also been informed by customers and consumers that veterinarians have tried to discourage pet owners from purchasing from internet mail-order pharmacies. 10 The laws and regulations relating to the sale and delivery of prescription pet medications vary from state to state.
Therefore, we may not be able to protect our own Internet addresses or prevent third parties from acquiring Internet addresses that are confusingly similar to, infringe upon, or otherwise decrease the value of our Internet addresses.
Therefore, we may not be able to protect our own Internet 12 addresses or prevent third parties from acquiring Internet addresses that are confusingly similar to, infringe upon, or otherwise decrease the value of our Internet addresses.
In 13 addition, cybersecurity incidents can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships.
In addition, cybersecurity incidents can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships.
Additionally, the Federal Trade Commission (the “FTC”) and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination and security of data.
Additionally, the Federal Trade Commission (the “FTC”) and many state attorneys general are interpreting federal and state consumer protection laws to impose 15 standards for the online collection, use, dissemination and security of data.
In such case, we may be unable to maintain compliance with securities law 18 requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements.
In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements.
Business Risks Our failure to properly manage our inventory may result in excessive inventory carrying costs, or inadequate supply of products, which could materially adversely affect our financial condition and results of operations. Our current product line contains approximately 15,000 SKUs including the SKUs acquired in our acquisition of PetCareRx.
Business Risks Our failure to properly manage our inventory may result in excessive inventory carrying costs, or inadequate supply of products, which could materially adversely affect our financial condition and results of operations. Our current product line contains approximately 10,000 SKUs including the SKUs acquired in our acquisition of PetCareRx.
The material weaknesses identified in our internal control over financial reporting as of March 31, 2024, as well as our remediation plans, are described in Part II, Item 9A, “Controls and Procedures.” While we believe these efforts will be sufficient to remediate the material weaknesses, we cannot provide assurance that we will be able to complete our evaluation, testing or any required remediation in a timely fashion, or at all.
The material weakness identified in our internal control over financial reporting as of March 31, 2025, as well as our remediation plans, are described in Part II, Item 9A, “Controls and Procedures.” While we believe these efforts will be sufficient to remediate the material weakness, we cannot provide assurance that we will be able to complete our evaluation, testing or any required remediation in a timely fashion, or at all.
While we ship pet medications to customers in all 50 states, approximately 49% of our sales for the fiscal year ended March 31, 2024, were made to customers located in the states of California, Florida, Texas, New York, Pennsylvania, North Carolina, Georgia, and Virginia.
While we ship pet medications to customers in all 50 states, approximately 50% of our sales for the fiscal year ended March 31, 2025, were made to customers located in the states of Florida, California, Texas, New York, Pennsylvania, North Carolina, Virginia and Georgia.
Our current home-state license with the Florida Board of Pharmacy is valid until February 28, 2025, and PetCareRx’s home-state license in the State of New York is valid until April 30, 2025, and there is no guarantee that we will be able to renew such licenses when required.
Our current home-state license with the Florida Board of Pharmacy is valid until February 28, 2027, and PetCareRx’s home-state license in the State of New York is valid until April 30, 2028, however, there is no guarantee that we will be able to renew such licenses when required.
Our business and share price may be adversely affected if we fail to implement and maintain effective disclosure controls and procedures and internal control over financial reporting. For the periods ending March 31, 2023 and 2024, our management identified material weaknesses in our internal control over financial reporting.
Our business and share price may be adversely affected if we fail to implement and maintain effective disclosure controls and procedures and internal control over financial reporting. For the periods ended March 31, 2024 and 2025, our management identified material weaknesses in our internal control over financial reporting.
Factors that may cause our operating results to fluctuate include: • Our ability to obtain new customers at a reasonable cost, retain existing customers, or encourage reorders; • Our ability to increase the number of visitors to our websites, or our ability to convert visitors to our websites into customers; • The mix of medications and other pet products sold by us; • Our ability to manage inventory levels or obtain an adequate supply of products; • Our ability to adequately maintain, upgrade, and develop our websites, the systems that we use to process customers’ orders and payments, or our computer network; • Increased competition within our market niche; • Price competition; • New products introduced to the market, including generics; • Increases in the cost of advertising; • The amount and timing of operating costs and capital expenditures relating to expansion of our product line or operations; • Potential disruption to the distribution network; • Disruption of our toll-free telephone service, technical difficulties, or systems and Internet outages or slowdowns; • The impact of further outbreaks of COVID-19, and any future similar outbreak, on our business operations and generally on the economy, including the measures taken by governmental authorities to address it; and • Unfavorable general economic trends.
Factors that may cause our operating results to fluctuate include: • Our ability to obtain new customers at a reasonable cost, retain existing customers, or encourage reorders; • Our ability to increase the number of visitors to our websites, or our ability to convert visitors to our websites into customers; • The mix of medications and other pet products sold by us; • Our ability to manage inventory levels or obtain an adequate supply of products; • Our ability to adequately maintain, upgrade, and develop our websites, the systems that we use to process customers’ orders and payments, or our computer network; • Increased competition within our market niche; • Price competition; • New products introduced to the market, including generics; • Increases in the cost of advertising; • The amount and timing of operating costs and capital expenditures relating to expansion of our product line or operations; • Potential disruption to the distribution network; • Disruption of our toll-free telephone service, technical difficulties, or systems and Internet outages or slowdowns; • The impact of further outbreaks of COVID-19, and any future similar outbreak, on our business operations and generally on the economy, including the measures taken by governmental authorities to address it; • Unfavorable general economic trends; and • Tariffs 16 Our annual and quarterly operating results have fluctuated in the past and may fluctuate significantly in the future due to a variety of factors, including weather, many of which are out of our control.
Management does not believe that the resolution of any or all of such routine litigation and administrative complaints is likely to have a material adverse effect on the Company’s financial condition or results of operations.
The Company is a party to routine litigation and administrative complaints incidental to its business. Management does not believe that the resolution of any or all of such routine litigation and administrative complaints is likely to have a material adverse effect on the Company’s financial condition or results of operations.
The pet telehealth market is, in general, immature and uncertain. It is uncertain whether the telemedicine market and our approach to pet telehealth with Vetster will achieve and sustain high levels of demand, consumer acceptance and market adoption. The COVID-19 pandemic increased acceptance and utilization of telemedicine services, but it is uncertain whether such increase in demand will continue.
It is uncertain whether the telemedicine market and our approach to pet telehealth with our partners in that industry will achieve and sustain high levels of demand, consumer acceptance and market adoption. The COVID-19 pandemic 17 increased acceptance and utilization of telemedicine services, but it is uncertain whether such increase in demand will continue.
During the past two years, we acquired one company (PetCareRx) and entered into two strategic partnerships to enable us to offer telehealth services and pet insurance to our customers.
During the past two years, we acquired one company (PetCareRx) and entered into a strategic partnership to enable us to offer telehealth services to our customers.
Any material decline in the amount of consumer spending or other adverse economic changes could reduce our sales, and a decrease in the sales of higher-margin products could reduce profitability and, in each case, harm our business, financial condition, and results of operations.
We may experience declines in sales or changes in the types of products sold during economic downturns. Any material decline in the amount of consumer spending or other adverse economic changes could reduce our sales, and a decrease in the sales of higher-margin products could reduce profitability and, in each case, harm our business, financial condition, and results of operations.
The expansion of our business into the offer and sale of pet insurance products also subjects us to additional laws and regulations regarding those activities, including as a registered insurance distributor in states in which we offer and sell the Pumpkin co-branded pet insurance products and otherwise complying with state and federal laws relating to the sale and distribution of insurance products. 9 The Company is a party to routine litigation and administrative complaints incidental to its business.
The expansion of our business into the offer and sale of pet insurance products also subjects us to additional laws and regulations regarding those activities, including as a registered insurance distributor in states in which we offer and sell co-branded pet insurance products and otherwise complying with state and federal laws relating to the sale and distribution of insurance products.
We have identified material weaknesses in our internal control over financial reporting, including in connection with the restatements described in the Amended Reports.
We have identified material weaknesses in our internal control over financial reporting, including in connection with the restatements described in this Comprehensive Form 10-K and the Amended Reports.
We recognize that the frequency and intensity of extreme weather events, sea-level rise, and other climatic changes may continue to increase and, as a result, our exposure to these events may increase. 12 We cannot assure you that we are adequately insured to cover the amount of any losses relating to any of these potential events, including business interruptions resulting from damage to or destruction of our headquarters and distribution centers, or power and equipment failures relating to our call center or websites, or interruptions or disruptions to major transportation infrastructure, or other events that do not occur on our premises.
We cannot assure you that we are adequately insured to cover the amount of any losses relating to any of these potential events, including business interruptions resulting from damage to or destruction of our headquarters and distribution centers, or power and equipment failures relating to our call center or websites, or interruptions or disruptions to major transportation infrastructure, or other events that do not occur on our premises.
We face the risk of litigation resulting from unauthorized text messages sent in violation of the Telephone Consumer Protection Act. 15 We send short message service, or SMS, text messages to customers and job candidates. The actual or perceived improper sending of text messages may subject us to potential risks, including liabilities or claims relating to consumer protection laws.
We send short message service, or SMS, text messages to customers and job candidates. The actual or perceived improper sending of text messages may subject us to potential risks, including liabilities or claims relating to consumer protection laws.
Regulatory Risks Any failure to comply with various state or federal regulations covering our pet health business, including the dispensing of prescription pet medications may subject us to reprimands, sanctions, probations, fines, suspensions, or the loss of one or more of our pharmacy licenses .
Regulatory Risks Any failure to comply with various state or federal regulations covering our pet health business, including the dispensing of prescription pet medications may subject us to reprimands, sanctions, probations, fines, suspensions, or the loss of one or more of our pharmacy licenses . 9 Our pet health business, which includes the sale and delivery of prescription pet medications is generally governed by state laws and state regulations, and with respect to controlled substances, also by federal law.
The Company maintains direct purchasing relationships with all the major pet medication manufacturers. These relationships entitle the Company to buy directly from the manufacturer under the terms and conditions of a purchasing agreement which dictates purchase pricing of inventory and criteria to obtain additional discounts and rebates.
These relationships entitle the Company to buy directly from the manufacturer under the terms and conditions of a purchasing agreement which dictates purchase pricing of inventory and criteria to obtain additional discounts and rebates. The terms of these agreements also require the Company to comply with the manufacturers’ MAPP.
If we are not able to realize the anticipated benefits of our migration to this new infrastructure, our business could be harmed. There may be unforeseen issues as a result of these migrations that may cause disruptions to the availability of our products due to service outages, downtime or other similar issues that could harm our business.
There may be unforeseen issues as a result of these migrations that may cause disruptions to the availability of our products due to service outages, downtime or other similar issues that could harm our business.
The laws and regulations relating to the sale and delivery of prescription pet medications vary from state to state, but generally require that prescription pet medications be dispensed with the authorization from a prescribing veterinarian.
Each prescription pet medication sale we make is likely also to be covered by the laws of the state where the customer is located. The laws and regulations relating to the sale and delivery of prescription pet medications vary from state to state, but generally require that prescription pet medications be dispensed with the authorization from a prescribing veterinarian.
The terms of these agreements also require the Company to comply with the manufacturers’ MAPP. Each advertisement and/or promotion of a product below the MAPP price, should they occur, would be a violation of the policy.
Each advertisement and/or promotion of a product below the MAPP price, should they occur, would be a violation of the policy.
Any such changes could compromise our ability to develop an adequate marketing strategy and pursue our growth strategy effectively, which, in turn, could adversely affect our business, financial condition, and results of operations.
Any such changes could compromise our ability to develop an adequate marketing strategy and pursue our growth strategy effectively, which, in turn, could adversely affect our business, financial condition, and results of operations. We face the risk of litigation resulting from unauthorized text messages sent in violation of the Telephone Consumer Protection Act.
The loss of any of our key suppliers of pet medications offered by us would have a negative impact on our business, financial condition, and results of operations. Shipping is a critical part of our business and any changes in, or disruptions to, our shipping arrangements could adversely affect our business, financial condition, and results of operations.
The loss of any of our key suppliers of pet medications offered by us, or the loss of vendor cooperative payments, would have a negative impact on our business, financial condition, and results of operations.
Some of the factors that may affect consumer spending on pet products and services include consumer confidence, levels of unemployment, inflation, interest rates, tax rates and general uncertainty regarding the overall future economic environment. We may experience declines in sales or changes in the types of products sold during economic downturns.
Our results of operations are sensitive to changes in certain macro-economic conditions that impact consumer spending on pet products and services. Some of the factors that may affect consumer spending on pet products and services include consumer confidence, levels of unemployment, inflation, interest rates, tax rates and general uncertainty regarding the overall future economic environment.
If for any reason our license to operate a pharmacy in one or more of those states should be suspended or revoked, or if it is not renewed, our ability to sell prescription medications to residents of those states would cease and our financial condition and results of operations in future periods would be materially adversely affected. 10 We have direct buying relationships with all the major pet medication manufacturers and each contractual relationship depends on our compliance with each respective manufacturer’s minimum advertised pricing policies (MAPP).
If for any reason our license to operate a pharmacy in one or more of those states should be suspended or revoked, or if it is not renewed, our ability to sell prescription medications to residents of those states would cease and our financial condition and results of operations in future periods would be materially adversely affected.
Additionally, states and some local tax jurisdictions have differing rules and regulations governing sales and use taxes, which are subject to varying interpretations that may change over time. 19 One or more taxing authorities could seek to impose additional sales and use, value added, or similar taxes on us or may determine that such taxes should have, but have not been, paid by us.
One or more taxing authorities could seek to impose additional sales and use, value added, or similar taxes on us or may determine that such taxes should have, but have not been, paid by us.
We have direct purchasing relationships with all of the major pet medication manufacturers, from the majority of which we purchase significant quantities of pet medication products.. We do maintain annual purchasing contracts with these major manufacturers. While we believe that our supplier relationships are good, a supplier could discontinue selling to us at any time.
We have direct purchasing relationships with all of the major pet medication manufacturers, from the majority of which we purchase significant quantities of pet medication products.. We do maintain annual purchasing contracts with these major manufacturers.
We accept payments using a variety of methods, including credit and debit cards, PayPal, and Apple Pay, and we may offer new payment options over time. Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers.
Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers. These requirements may change over time or be reinterpreted, making compliance more difficult or costly.
We cannot assure you that the remediation measures we have taken to date, or any measures that we may take in the future, will be sufficient to avoid future material weaknesses. We may face litigation and other risks as a result of the restatements described in the Amended Reports and material weaknesses in our internal control over financial reporting.
We cannot assure you that the remediation measures we have taken to date, or any measures that we may take in the future, will be sufficient to avoid future material weaknesses.
As a result of our services being web based, we collect, process, transmit and store large amounts of data about our customers, employees, suppliers and others, including credit card information and personally identifiable information, as well as other confidential and proprietary information.
Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or otherwise to protect our confidential information, could damage our reputation and brands and substantially harm our business, financial condition, and results of operations. 13 As a result of our services being web based, we collect, process, transmit and store large amounts of data about our customers, employees, suppliers and others, including credit card information and personally identifiable information, as well as other confidential and proprietary information.
We rely on third parties to provide payment processing services, including the processing of credit cards, debit cards, and other forms of electronic payment. If these companies become unable to provide these services to us, or if their systems are compromised, it could potentially disrupt our business.
If these companies become unable to provide these services to us, or if their systems are compromised, it could potentially disrupt our business.
Our pet health business, which includes the sale and delivery of prescription pet medications is generally governed by state laws and state regulations, and with respect to controlled substances, also by federal law. Governmental authorities that regulate our business have broad latitude to make, interpret, and enforce the laws and regulations that govern us.
Governmental authorities that regulate our business have broad latitude to make, interpret, and enforce the laws and regulations that govern us. Since our pharmacy is located in the State of Florida, the Company is governed by the laws and regulations of the State of Florida.
As an established web-based seller of pet products, we rely on a combination of legacy public-facing websites, internal applications and services, and back-end business intelligence systems. We are in the process of migrating and upgrading many of our platforms and applications to more modular, web-based and SaaS systems.
We currently carry cyber insurance, which may mitigate certain potential losses. Our migration of data and systems to a new information technology platform may disrupt our operations. As an established web-based seller of pet products, we rely on a combination of legacy public-facing websites, internal applications and services, and back-end business intelligence systems.
These requirements may change over time or be reinterpreted, making compliance more difficult or costly. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs.
For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs. We rely on third parties to provide payment processing services, including the processing of credit cards, debit cards, and other forms of electronic payment.
Uncertainties in economic conditions and their impact on consumer spending patterns could adversely impact our business, financial condition, and results of operations. Our results of operations are sensitive to changes in certain macro-economic conditions that impact consumer spending on pet products and services.
Any change in one or more of these factors could materially adversely affect our financial condition and results of operations in future periods. Uncertainties in economic conditions and their impact on consumer spending patterns could adversely impact our business, financial condition, and results of operations.
We currently rely on third-party national, regional, and local logistics providers to deliver the products we offer on our websites.
Shipping is a critical part of our business and any changes in, or disruptions to, our shipping arrangements could adversely affect our business, financial condition, and results of operations. We currently rely on third-party national, regional, and local logistics providers to deliver the products we offer on our websites.
Negative publicity concerning the pet telehealth and telemedicine market could limit market acceptance of our solutions and services. Financial Risks We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business.
Financial Risks We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business. We accept payments using a variety of methods, including credit and debit cards, PayPal and Apple Pay, and we may offer new payment options over time.
Additionally, intense weather conditions may cause property insurance premiums to significantly increase in the future.
Additionally, intense weather conditions may cause property insurance premiums to significantly increase in the future. We recognize that the frequency and intensity of extreme weather events, sea-level rise, and other climatic changes may continue to increase and, as a result, our exposure to these events may increase.
Removed
Since our pharmacy is located in the State of Florida, the Company is governed by the laws and regulations of the State of Florida. Each prescription pet medication sale we make is likely also to be covered by the laws of the state where the customer is located.
Added
We have direct buying relationships with all the major pet medication manufacturers and each contractual relationship depends on our compliance with each respective manufacturer’s minimum advertised pricing policies (MAPP). The Company maintains direct purchasing relationships with all the major pet medication manufacturers.
Removed
Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or otherwise to protect our confidential information, could damage our reputation and brands and substantially harm our business, financial condition, and results of operations.
Added
While we believe that our supplier relationships are good, a supplier could discontinue selling to us at any time, or stop paying cooperative fees to us at any time .
Removed
We do not currently carry cyber insurance, which may expose us to certain potential losses for damages or result in penalization with fines in an amount exceeding our resources.However, we are actively working to obtain coverage. Our migration of data and systems to a new information technology platform may disrupt our operations.
Added
We are in the process of migrating and upgrading many of our platforms and applications to more modular, web-based and SaaS systems. If we are not able to realize the anticipated benefits of our migration to this new infrastructure, our business could be harmed.
Removed
Our annual and quarterly operating results have fluctuated in the past and may fluctuate significantly in the future due to a variety of factors, including weather, many of which are out of our control. Any change in one or more of these factors could materially adversely affect our financial condition and results of operations in future periods.
Added
Our success will depend to a substantial extent on the willingness of our customers to use, and to increase the frequency and extent of their utilization of, our solution being offered in conjunction with our telehealth partners as well as on our ability to demonstrate the value of pet telehealth and telemedicine to veterinarians and pet owners.
Removed
As a result of our failure to timely file our Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, we are currently ineligible to file new short form registration statements on Form S-3, which may impair our ability to raise capital on terms favorable to us, in a timely manner or at all.
Added
Negative publicity concerning the pet telehealth and telemedicine market could limit market acceptance of our solutions and services. Evolving foreign trade policy by the United States or other countries or the imposition of tariffs on imported goods may affect our business.
Removed
Form S-3 permits eligible issuers to conduct registered offerings using a short form registration statement that allows the issuer to incorporate by reference its past and future filings and reports made under the Exchange Act. In addition, Form S-3 enables eligible issuers to conduct primary offerings “off the shelf” under Rule 415 of the Securities Act.
Added
Some of the products that we offer are purchased from vendors located outside of the United States and other vendors that we purchase from depend on other vendors located outside of the United States.
Removed
The shelf registration process, combined with the ability to forward incorporate information, allows issuers to avoid delays and interruptions in the offering process and to access the capital markets in a more expeditious and efficient manner than raising capital in a standard registered offering pursuant to a Registration Statement on Form S-1.
Added
These threatened or imposed tariffs and any retaliatory actions taken by other countries could result in us incurring additional costs to procure some of the merchandise we offer and may require us to raise prices on certain products.
Removed
The ability to register securities for resale may also be limited as a result of the loss of Form S-3 eligibility. As a result of our failure to timely file our Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, we are currently ineligible to file new short form registration statements on Form S-3 until March 2025.
Added
While the scope and duration of any current or future tariffs remain uncertain, tariffs imposed by the U.S. or other governments could negatively impact our financial condition and results of operations.
Removed
Our inability to use Form S-3 may impair our ability to raise necessary capital to fund our operations and execute our strategy.
Added
We may face litigation and other risks as a result of the restatements described in this Comprehensive Form 10-K and the Amended Reports and material weaknesses in our internal control over financial reporting.
Removed
If we seek to access the capital markets through a registered offering during the period of time that we are unable to use Form S-3, we may be required to publicly disclose the proposed offering and the material terms thereof before the offering commences, we may experience delays in the offering process due to SEC review of a Form S-1 registration statement and we may incur increased offering and transaction costs and other considerations.
Added
Additionally, states and some local tax jurisdictions have differing rules and regulations governing sales and use taxes, which are subject to varying interpretations that may change over time.
Removed
Disclosing a public offering prior to the formal commencement of an offering may result in downward pressure on our share price.
Added
Actions of activist stockholders could be disruptive and costly and could adversely affect our results of operations, financial condition, and/or share price While we strive to maintain constructive communications with our stockholders, we may, from time to time, be subject to demands from activist stockholders.
Removed
If we are unable to raise capital through a registered offering, we would be required to conduct our equity financing transactions on a private placement basis, which may be subject to pricing, size and other limitations imposed under the Nasdaq rules, or seek other sources of capital.
Added
Any activist campaign against the Company that contests, conflicts with, or seeks to change, our board composition, leadership, strategic direction, or business mix could have an adverse effect on us because: (i) responding to actions by activist stockholders could disrupt our operations, be costly or time-consuming, or divert the attention of our board of directors and senior management from their regular duties, which could adversely affect our results of operations or financial condition; (ii) perceived uncertainties as to our future direction, including as a result of possible changes to the composition of our board, may lead to the perception of a change in the direction of the business or lack of continuity, any of which may be exploited by our competitors, cause concern to our customers, employees, and/or business partners and result in the loss of potential business opportunities, or make it more difficult to attract and retain qualified personnel and business partners, and may adversely affect our relationships with vendors, customers, business partners, and other third parties; (iii) these types of actions could cause significant fluctuations in our share price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business; and (iv) if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our stockholders.
Removed
The foregoing limitations on our financing approaches could have a material adverse effect on our results of operations, liquidity, and financial position.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+11 added−13 removed0 unchanged
Biggest changeFor more cybersecurity risks, see “Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or otherwise to protect our confidential information, could damage our reputation and brands and substantially harm our business, financial condition, and results of operations” under Item 1A “Risk Factors.” The Company’s Board of Directors, as a whole, has oversight responsibility for our strategic and operational risks.
Biggest changeFor more information on cybersecurity-related risks, see Item 1A, “Risk Factors”, including the risk titled: “Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or otherwise to protect our confidential information, could damage our reputation and brands and substantially harm our business, financial condition, and results of operations.”
Removed
ITEM 1C. CYBERSECURITY We have an enterprise-wide information security program designed to assess, identify, and manage the Company’s information security risks and identify, evaluate, respond to and resolve information security incidents. To protect our information systems from information security incidents, we use various processes and tools to identify, prevent, detect, escalate, investigate, resolve and recover from identified vulnerabilities and threats.
Added
ITEM 1C. CYBERSECURITY PetMed Express, Inc. (“PetMeds”) and PetCareRx maintains an enterprise-wide cybersecurity program designed to identify, assess, manage, and mitigate information security risks across the organization. Our program encompasses 22 governance, policy, prevention, detection, incident response, and recovery mechanisms in alignment with industry standards.
Removed
These include, but are not limited to, reporting, monitoring and detection tools that are widely used in the industry, and internal solutions. We have an enterprise-wide Incident Response Policy and Incident Response Procedure, which outlines the various points and detailed processes and procedures to be followed when a suspected incident is identified. The overall Incident Response Objectives are to: a.
Added
Cybersecurity Risk Management and Oversight Our cybersecurity risk management program is built to protect our systems, data, and customers from a wide range of cyber threats. This includes internal protocols and controls, as well as third-party oversight.
Removed
Accurately investigate and validate the incident b. Minimize damage or loss of data and services for the Company, our clients, users,employees, and other potentially affected individual data subjects, as appropriate c. Preserve and/or collect evidence pursuant to the incident in a legally sound manner d. Quickly restore data and services e.
Added
Our cybersecurity practices are guided by the National Institute of Standards and Technology (NIST) CSF (Cyber Security Framework), and categorizes cybersecurity tasks into five key functions: identify, protect, detect, respond, and recover. This functional orientation helps organizations make informed decisions about reducing cyberattacks. Oversight of cybersecurity risk is formally overseen by the Audit Committee of our Board of Directors.
Removed
Review evidence to determine next steps, including notifications where necessary or advisable 22 f.
Added
The Audit Committee receives regular briefings from management on cybersecurity topics, including strategy, threats, incident trends, remediation activities, and updates on material developments, as appropriate. Incident Detection and Response We have implemented an Incident Response Policy and detailed procedures that govern how potential cybersecurity events are identified, escalated, investigated, contained, and remediated.
Removed
Document and implement post incident actionable recommendations to prevent incident reoccurrence and improve the incident response process We assess our cybersecurity maturity and readiness utilizing the CIS (Center for Internet Security) Critical Security Controls, and measure our ongoing progress against this framework to identify areas of opportunity for improvement to our overall cybersecurity readiness.
Added
The objectives of our incident response program include: • Timely investigation and validation of incidents • Minimization of data loss or service disruption • Evidence preservation in accordance with legal and regulatory requirements • Restoration of affected systems and services • Post-incident review and implementation of corrective actions • Notification to affected parties and regulators, where appropriate These procedures are tested and exercised periodically to ensure preparedness and adaptability.
Removed
We continually evaluate cybersecurity threats and our ability to monitor for or mitigate against these threats based on information from our vendors, partners, and our own internal research and exposures.
Added
Security Measures and Monitoring We deploy a layered defense model using widely adopted technologies and internal solutions for threat monitoring, detection, and response.
Removed
As we are undergoing multiple system upgrades and digital transformation efforts, we will be further evaluating and implementing security measures and best practices in our new systems as we phase out legacy systems.
Added
Our efforts include: • Regular system scans, vulnerability assessments, and penetration testing • Ongoing compliance with the Payment Card Industry Data Security Standard (PCI DSS) • Deployment of endpoint detection and response (EDR) tools and real-time monitoring solutions • Secure development practices and controls embedded within our digital transformation initiatives As we modernize our digital platforms and phase out legacy systems, we are embedding advanced security practices into our infrastructure.
Removed
We conduct regular scans, penetration, and vulnerability testing as part of our overall security practice, and as part of our Payment Card Industry Digital Security Standard (PCI-DSS) compliance. Our auditors perform an independent analysis on parts of our information security practices, predominantly in their assessment of our PCI compliance.
Added
This includes improving controls around identity management, access, encryption, and software development life cycles. Third-Party and Vendor Risk Management Our vendor and partner management processes include security due diligence, contractually required safeguards, and—in relevant cases—direct review of their cybersecurity practices.
Removed
We regularly conduct cybersecurity training for our employees, including training for some of the most common breach vectors seen in the industry. For our key partners who help develop or key vendors who provide information systems or have access to our information systems, we require security training or review their information security practices.
Added
We require certain vendors with access to sensitive systems or data to undergo security training or meet specific security certification requirements. Training and Awareness Cybersecurity awareness is a foundational element of our risk management approach. We conduct recurring cybersecurity training for employees across the company, with tailored modules that address evolving threat vectors such as phishing, ransomware, and social engineering.
Removed
We from time to time use our Incident Response Procedures to respond to potential cybersecurity incidents and threats, as our systems and users identify areas of potential incidents during the course of normal operations, none of which to date we believe have been material.
Added
Additional targeted training is provided to users in high-risk roles. Cybersecurity Incidents We maintain an active process to detect and respond to cybersecurity incidents.
Removed
We cannot provide assurance that there will not be future incidents that may materially impact us, our financials, our strategy, or our operations.
Added
While we have experienced routine threats and minor incidents in the normal course of operations, to date, we have not identified any cybersecurity incidents that have materially impacted our business, operations, or financial results. 23 Nevertheless, we recognize that cybersecurity risks are dynamic and continually evolving. We cannot guarantee that future events will not have a material impact.
Removed
The Audit Committee of the Board of Directors is responsible for board-level oversight of cybersecurity risk, and the Audit Committee regularly reports risks and compliance actions to the Board. As part of its’ oversight role, the Audit Committee receives reporting about the Company’s strategy, programs, incidents and threats, and other developments and action items.
Removed
These action items include receiving updates on the status of remediation efforts for any non-compliance or risk items related to cybersecurity regularly throughout the year, including through periodic updates from management.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed3 unchanged
Biggest changeThe leases expire in April 2027 and include the option to renew for an additional five years. We also assumed a PetCareRx lease for office space in Brooklyn, NY that PetCareRx did not occupy and was subleased. This lease expired in April 2024.
Biggest changeThe leases expire in April 2027 and include the option to renew for an additional five years.
As of March 31, 2024, 48% of the Delray Beach Property was leased to two tenants with a remaining weighted average lease term of 1 year, and we are currently in the process of renegotiating both leases. We believe that our facilities are sufficient for our current needs and are in good condition in all material respects.
As of March 31, 2025, 48% of the Delray Beach Property was leased to two tenants with a remaining weighted average lease term of 5.2 years. We believe that our facilities are sufficient for our current needs and are in good condition in all material respects.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+5 added−1 removed3 unchanged
Biggest changePlaintiff 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.
Biggest changePlaintiff 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 denies liability in this matter and intends to defend the action accordingly, and 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 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.
In the opinion of management, none of the claims and suits, either individually or in the 23 aggregate, are reasonably likely to have a material adverse effect on our operations or consolidated financial statements. Legal costs related to the above matters are expensed as incurred.
In the opinion of management, none of the claims and suits, either individually or in the aggregate, are reasonably likely to have a material adverse effect on our operations or consolidated financial statements. Legal costs related to the above matters are expensed as incurred.
On April 18, 2024, Plaintiff Timothy Fitchett (“Plaintiff”) filed an action 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.
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 on behalf of a class of others similarly situated.
Removed
District Court for the Western District of Pennsylvania in Pittsburgh, and Plaintiff moved to remand the case back to state court on June 11, 2024. The Company's deadline to respond to the motion to remand is June 25, 2024.
Added
The Company successfully opposed the Plaintiff's motion to remand the case back to the Court of Common Pleas.
Added
On February 14, 2025, Plaintiffs Ashley Bird, Tyler Dvornski, and Tiffany Hughes (“Plaintiffs”) filed an action in the Northern District of New York on behalf of themselves and a class of others similarly situated alleging that the Company misrepresented that its products were on sale by showing a “regular” strikethrough price, when the products were never sold for the strikethrough price.
Added
Plaintiffs allege that by using this “false reference price” or “false discount,” the Company artificially inflated its prices and charged consumers more than it otherwise could. Plaintiffs allege that these purported practices violate New York General Business Law §§ 349 and 350 as well as California’s Unfair Competition Law and California’s False Advertising Law.
Added
After the Company made a motion to dismiss the complaint, Plaintiffs filed an amended complaint. The Company notified the court that it intends to file a motion to dismiss the amended complaint. The Company denies liability in this matter and intends to defend the action accordingly.
Added
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. 24

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

7 edited+2 added−2 removed2 unchanged
Biggest changeFor the fiscal years ended March 31, 2024 and 2023, we declared and paid cash dividends totaling $12.7 million (an aggregate of $0.60 per share for the year ended March 31, 2024) and $25.3 million (an aggregate of $1.20 per share for the year ended March 31, 2023), respectively.
Biggest changeDividend Policy We paid cash dividends on a quarterly basis from August 2009 to August 2023. For the fiscal years ended March 31, 2025 and 2024, we declared and paid cash dividends totaling zero and $12.7 million (an aggregate of $0.60 per share for the year ended March 31, 2024), respectively.
On October 26, 2023, our Board of Directors elected to suspend the quarterly dividend for the second quarter of fiscal year 2024, and on February 1, 2024, our Board of Directors elected to suspend the quarterly dividend indefinitely. This move is intended to focus use of the Company’s existing cash flow on growth initiatives and other higher return initiatives.
On October 26, 2023, our Board of Directors elected to suspend the quarterly dividend for the second quarter of fiscal year 2024, and on February 1, 2024, our Board of Directors elected to suspend the quarterly dividend indefinitely. This move is intended to focus use of the Company’s existing cash flow on growth and other higher return initiatives.
The performance graph and related information below shall not be deemed “filed” with the SEC, nor shall such 25 information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
The performance graph and related information below shall not be deemed “filed” with the SEC, nor shall such 26 information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
The graph assumes that $100 was invested on March 31, 2019, in each of our Common Stock, the NASDAQ Composite, the Russell 2000, and the S&P 500. Because we have historically paid dividends on a quarterly basis, the graph assumes that dividends were reinvested.
The graph assumes that $100 was invested on March 31, 2020, in each of our Common Stock, the NASDAQ Composite, the Russell 2000, and the S&P 500. Because we have historically paid dividends on a quarterly basis, the graph assumes that dividends were reinvested.
Performance Graph Set forth below is a line graph comparing the five-year cumulative performance of our common stock with the NASDAQ Composite, the Russell 2000, and S&P 500 from March 31, 2019 to March 31, 2024.
Performance Graph Set forth below is a line graph comparing the five-year cumulative performance of our common stock with the NASDAQ Composite, the Russell 2000, and S&P 500 from March 31, 2020 to March 31, 2025.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 24 PART II ITEM 5.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 PART II ITEM 5.
MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “PETS.” Holders There were 109 holders of record of our common stock on June 12, 2024.
MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “PETS.” Holders There w ere 75 active holders of record of our common stock on September 30, 2025.
Removed
Dividend Policy We have paid cash dividends on a quarterly basis from August 2009 to August 2023.
Added
Performance graph data: Fiscal Year Ended March 31, 2020 2021 2022 2023 2024 2025 PetMed Express, Inc. 100.00 126.49 96.87 64.66 19.92 17.42 NASDAQ Composite 100.00 172.04 184.68 158.72 212.72 224.97 S&P 500 100.00 153.71 175.29 158.99 203.30 215.93 Russell 2000 100.00 192.57 179.53 156.32 184.25 175.46 Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth securities authorized for issuance under equity compensation plans, including individual compensation arrangements, by us under our 2015 Outside Director Equity Compensation Plan, 2016 Employee Equity Compensation Restricted Stock Plan, 2022 Employee Equity Compensation Plan, 2024 Omnibus Incentive Plan and 2024 Inducement Incentive Plan as of March 31, 2025: 27 Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for further issuance under equity compensation plans Equity Compensation Plans Approved by Equity Holders 2015 Outside Director Equity Compensation Plan 22,316 (2) — — 2016 Employee Equity Compensation Restricted Stock Plan — — — 2022 Employee Equity Compensation Plan 568,416 — — 2024 Omnibus Incentive Plan 467,794 (3) — 1,233,410 (1) Total 1,058,526 1,233,410 Equity Compensation Plans Not Approved by Equity Holders 2024 Inducement Incentive Plan 290,000 — 60,000 Total for All Plans 1,348,526 — 1,293,410 (1) On the August 8, 2024 adoption date of the 2024 Omnibus Incentive plan, the shares then available for future grant under 2015 Outside Director Equity Compensation Plan and 2022 Employee Equity Compensation Plan were added to the initial reserve under the 2024 Omnibus Incentive Plan.
Removed
Performance graph data: Fiscal Year Ended March 31, 2019 2020 2021 2022 2023 2024 PetMed Express, Inc. 100.00 133.16 168.44 128.99 86.10 26.52 NASDAQ Composite 100.00 99.62 171.38 183.98 158.12 211.91 S&P 500 100.00 91.19 140.17 159.84 144.98 185.38 Russell 2000 100.00 74.89 144.21 134.45 117.06 137.98 ITEM 6. [RESERVED] 26
Added
(2) Consists of restricted stock units. (3) Consists of 321,022 restricted stock units and 146,772 performance stock units. ITEM 6. [RESERVED] 28

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+36 added−23 removed22 unchanged
Biggest changeThree Months Ended ($ in thousands, except percentages) March 31, 2024 March 31, 2023 $ Change % Change Consolidated Reconciliation of GAAP Net Loss to Adjusted EBITDA: Net loss $ (5,016) $ (216) $ (4,800) 2222 % Add (subtract): Share-based Compensation 1,674 1,630 44 3 % Income Taxes 1,536 669 867 130 % Depreciation and amortization 1,895 994 901 91 % Interest Income (30) (439) 409 (93) % Acquisition/Partnership Transactions and Other Items 385 1,010 (625) (62) % Employee Severance 104 — 104 n/m Adjusted EBITDA $ 548 $ 3,648 $ (3,100) (85) % Year Ended ($ in thousands, except percentages) March 31, 2024 March 31, 2023 $ Change % Change Consolidated Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA: Net (loss) income $ (7,464) $ 5,140 $ (12,604) n/m Add (subtract): Share-based Compensation 6,870 6,617 253 4 % Income Taxes 1,191 2,305 (1,114) (48) % Depreciation and amortization 7,056 3,546 3,510 99 % Interest Income (511) (450) (61) 14 % Acquisition/Partnership Transactions and Other Items 1,679 1,904 (225) (12) % Employee Severance 512 364 148 41 % Sales Tax Expense (Income) (1,088) 344 (1,432) -416 % Adjusted EBITDA $ 8,245 $ 19,770 $ (11,525) (58) % 32 Fiscal 2024 Compared to Fiscal 2023 Sales Sales increased by approximately $24.5 million, or 9.5%, to $281.1 million for the fiscal year ended March 31, 2024, from approximately $256.6 million for the fiscal year ended March 31, 2023.
Biggest changeThree Months Ended ($ in thousands, except percentages) March 31, 2025 March 31, 2024 As Restated $ Change % Change Consolidated Reconciliation of GAAP Net Loss to Adjusted EBITDA: Net loss $ (11,644) $ (5,016) $ (6,628) 132 % Add (subtract): Share-based compensation expense 593 1,674 (1,081) (65) % Income taxes 5,662 1,536 4,126 269 % Depreciation and amortization 2,074 1,895 179 9 % Interest expense (income), net 123 (30) 153 (510) % Acquisition/Partnership transactions and other items 26 385 (359) (93) % Employee severance 75 104 (29) (28) % Impairment loss $ 1,200 $ — $ 1,200 n/m Adjusted EBITDA $ (1,891) $ 548 $ (2,439) (445) % Year Ended ($ in thousands, except percentages) March 31, 2025 March 31, 2024 As Restated $ Change % Change Consolidated Reconciliation of GAAP Net Loss to Adjusted EBITDA: Net loss $ (6,271) $ (7,464) $ 1,193 (16) % Add (subtract): Share-based compensation expense (reversal) (6,586) 6,870 (13,456) (196) % Income taxes 5,684 1,191 4,493 377 % Depreciation and amortization 7,039 7,056 (17) — % Interest (income), net (185) (511) 326 (64) % Acquisition/Partnership transactions and other items 231 1,679 (1,448) (86) % Employee severance 738 512 226 44 % Sales tax expense (reversal) (1,178) (1,088) (90) 8 % Impairment loss 1,200 $ — 1,200 n/m Adjusted EBITDA $ 672 $ 8,245 $ (7,573) (92) % 35 Fiscal 2025 Compared to Fiscal 2024 (refer to our 10-K for the fiscal year ended March 31, 2024 for Fiscal 2024 Compared to Fiscal 2023) Sales (As Restated) Sales decreased by approximately $47.1 million or 17.2%, to approximately $227.0 million for the fiscal year ended March 31, 2025, compared to approximately $274.1 million for the fiscal year ended March 31, 2024.
Recent Accounting Pronouncements Other than disclosures included in Note 1 of the Consolidated Financial Statements, which are incorporated by reference as if fully set forth herein, we do not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on our consolidated financial position, results of operations, or cash flows.
Recent Accounting Pronouncements Other than disclosures included in Note 1 of the Consolidated Financial Statements, which are incorporated by reference as if fully set forth herein, we do not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on our consolidated financial position, results of operations, or cash flows. 38
We have provided reconciliations below of adjusted EBITDA to net (loss) income, the most directly comparable GAAP financial measures. 30 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.
We have provided reconciliations below of adjusted EBITDA to net (loss) income, 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.
The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are estimated based on historical patterns, however this is not considered a key judgment. There are no amounts excluded from the variable 27 consideration.
The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are estimated based on historical patterns, however this is not considered a key judgment. There are no amounts excluded from the variable consideration.
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. 31 The following table presents a reconciliation of net (loss) income, the most directly comparable GAAP measure to Adjusted EBITDA for each of the periods indicated: Reconciliation of Non-GAAP Measures PetMed Express, Inc.
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. 34 The following table presents a reconciliation of net loss, the most directly comparable GAAP measure to Adjusted EBITDA for each of the periods indicated: Reconciliation of Non-GAAP Measures PetMed Express, Inc.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary PetMed Express, Inc. and subsidiaries, d/b/a PetMeds® (the "Company") 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.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary PetMed Express, Inc. and subsidiaries, d/b/a PetMeds® (the "Company", "we", "us", or "our") 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.
For tax positions meeting the more-likely-than-not threshold, the amount recognized in the Consolidated Financial Statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies “Accounting for Uncertainty in Income Taxes” guidance to all tax positions for which the statute of limitations remains open.
For tax positions meeting the more-likely-than-not threshold, the amount recognized in the Consolidated Financial Statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We apply “Accounting for Uncertainty in Income Taxes” guidance to all tax positions for which the statute of limitations remains open.
We also believe that it is useful to exclude other expenses, including the investment banking fee related to the Vetster partnership, acquisition costs related to PetCareRx, employee severance and an estimated unremitted prior period state sales tax accrual as these items are not indicative of our ongoing operations.
We also believe that it is useful to exclude 33 other expenses, including the investment banking fee related to the Vetster partnership, acquisition costs related to PetCareRx, employee severance and interest expense relating to an estimated unremitted prior period state sales tax accrual as these items are not indicative of our ongoing operations.
As required by “Accounting for Uncertainty in Income Taxes” guidance, which clarifies ASC Topic 740, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.
As required by “Accounting for Uncertainty in Income Taxes” guidance, which clarifies ASC Topic 740, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.
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.
Adjusted EBITDA has limitations as a financial measure, and these non-GAAP measures should not be consider ed in isolation or as a substitute for analysis of our results as reported under GAAP.
PetMeds markets and sells directly to consumers through its websites, toll-free numbers, 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.
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.
The Company had no liabilities for uncertain tax positions for either fiscal 2024 or fiscal 2023. The Company files tax returns in the U.S. federal jurisdiction and Florida, Arizona, California, Connecticut, Idaho, Maryland, Michigan, Oklahoma, South Carolina, Virginia, Wisconsin, New Jersey, Georgia, Indiana, New York and the District of Columbia.
We had no liabilities for uncertain tax positions for either fiscal 2025 or fiscal 2024. We file tax returns in the U.S. federal jurisdiction and Florida, Arizona, California, Connecticut, Idaho, Maryland, Michigan, Oklahoma, South Carolina, Virginia, Wisconsin, New Jersey, Georgia, Indiana, New York and the District of Columbia.
The following table sets forth, as a percentage of sales, certain operating data appearing in our consolidated statements of income: Fiscal Year Ended March 31, 2024 2023 2022 Sales 100.0 % 100.0 % 100.0 % Cost of sales 72.0 72.4 71.7 Gross profit 28.0 27.6 28.3 Operating expenses: General and administrative 19.7 16.3 11.4 Advertising 8.7 7.6 6.9 Depreciation 2.5 1.4 1.0 Total operating expenses 30.9 25.2 19.3 (Loss) income from operations (2.9) 2.4 8.9 Total other income 0.7 0.5 — Income (loss) before provision for income taxes (2.2) 2.9 8.9 Provision for income taxes 0.4 0.9 2.0 Net (loss) income (2.6) % 2.0 % 6.9 % 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; depreciation; income tax provision; interest income (expense); and other non-operational expenses.
The following table sets forth, as a percentage of sales, certain operating data appearing in our consolidated statements of income: Fiscal Year Ended March 31, 2025 2024 As Restated 2023 As Restated Sales 100.0 % 100.0 % 100.0 % Cost of sales 69.5 69.1 69.1 Gross profit 30.5 30.9 30.9 Operating expenses: General and administrative 17.0 20.2 16.7 Advertising 10.5 11.2 10.2 Depreciation 3.1 2.6 1.4 Impairment loss 0.5 — — Total operating expenses 31.1 34.0 28.3 (Loss) income from operations (0.6) (3.1) 2.6 Total other income 0.4 0.7 0.6 (Loss) income before provision for income taxes (0.2) (2.4) 3.2 Provision for income taxes 2.5 0.4 0.9 Net (loss) income (2.7) % (2.8) % 2.3 % 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; depreciation; income tax provision; interest income (expense); and other non-operational expenses.
Founded in 1996, the Company's executive headquarters offices are currently located at 420 South Congress Avenue, Delray Beach, Florida 33445, and our telephone number is (561) 526-4444. The Company has a March 31 fiscal year. Presently, our product line includes approximately 15,000 of the most popular pet medications, health products, and supplies for dogs, cats, and horses.
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 10,000 of the most popular pet medications, health products, and supplies for dogs, cats, and horses.
With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax 29 examinations by tax authorities for years ending March 31, 2020, or earlier. Any interest and penalties related to income taxes will be recorded to other income (expenses).
With few exceptions, we are no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years ending March 31, 2020, or earlier. Any interest and penalties related to income taxes will be recorded to other income (expenses).
Interest income may decrease in the future as we utilize our cash balances on future investments or partnerships, on our operating activities, enter a credit facility or if the current interest rate environment changes.
The decrease was primarily due to lower invested balances . Interest income, net may decrease in the future as we utilize our cash balances on future investments or partnerships, on our operating activities, enter a credit facility or if the current interest rate environment changes.
This limits deductions for compensation of covered executives to $1 million per individual. Net income Net (loss) income decreased by approximately $12.6 million, to a loss of approximately $7.5 million for the fiscal year ended March 31, 2024, from income of approximately $5.1 million for the fiscal year ended March 31, 2023.
This limits deductions for compensation of covered executives to $1.0 million per individual. 37 Net loss Net loss decreased by approximately $1.2 million, to a loss of approximately $6.3 million for the fiscal year ended March 31, 2025, from a loss of approximately $7.5 million for the fiscal year ended March 31, 2024.
The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $81 for the fiscal year ended March 31, 2024, compared to $71 for the fiscal year ended March 31, 2023, per the new definition of new customers.
The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, were $68 for the fiscal year ended March 31, 2025, compared to $67 for the fiscal year ended March 31, 2024, per the new definition of new customers.
Net cash used in financing activities was $12.4 million and $24.5 million for the fiscal years ended March 31, 2024 and 2023, respectively, due to the payment of an aggregate $0.60 per share dividend in fiscal year 2024 and an aggregate $1.20 per share dividend in fiscal year 2023.
Net cash used in financing activities was $0.2 million and $12.4 million for the fiscal years ended March 31, 2025 and 2024, respectively, due to the payment of an aggregate $0.60 per share dividend in fiscal year 2024. We paid cash dividends quarterly from August 2009 to August 2023.
The twelve-month average purchase remained at approximately $94 and $93 per order for the fiscal years ended March 31, 2024, and March 31, 2023, respectively. Restatement As described in the Note 1 of “Notes to Condensed Consolidated Financial Statements,” we have restated our consolidated financial statements and Item 7.
The twelve-month average purchase increased slightly at approximately $97 and $94 per order for the fiscal years ended March 31, 2025, and March 31, 2024, respectively. Restatement As described in the Explanatory Note above and in Note 18 to our consolidated financial statements, we have restated our consolidated financial statements and Item 7.
Net cash provided by operating activities was $4.3 million and $27.8 million for the fiscal years ended March 31, 2024 and 2023, respectively.
Net cash provided by operating activities remained essentially unchanged at $4.7 million and $4.3 million for the fiscal years ended March 31, 2025 and 2024, respectively.
On April 3, 2023, we closed on our acquisition of PetCareRx for aggregate cash consideration of approximately $36.0 million. At March 31, 2024 we had no material outstanding purchase or lease commitments. We are not currently bound by any long- or short-term agreements for the purchase or lease of property and equipment.
On April 3, 2023, we closed on our acquisition of PetCareRx for aggregate cash consideration of approximately $36.0 million. At March 31, 2025 we had no material outstanding purchase or lease commitments.
We have paid cash dividends quarterly from August 2009 to August 2023. On February 1, 2024, our Board of Directors elected to suspend the quarterly dividend indefinitely. This move is intended to focus use of the Company’s cash flow on growth initiatives and other higher return initiatives.
On February 1, 2024, our Board of Directors elected to suspend the quarterly dividend indefinitely. This move is intended to focus use of the Company’s cash flow on growth initiatives and other higher return initiatives. The Board of Directors reviews and discusses the capital allocation needs of the Company, at a minimum, on a quarterly basis.
The Board of Directors reviews and discusses the capital allocation needs of the Company, at a minimum, on a quarterly basis. The declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors.
The declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors.
Cost of sales Cost of sales increased by approximately $16.6 million, or 8.9% to $202.4 million for the fiscal year ended March 31, 2024, from $185.8 million for the fiscal year ended March 31, 2023. The cost of sales increase can be directly related to the increase in sales during fiscal year 2024.
Cost of sales (As Restated) Cost of sales decreased by approximately $31.5 million, or 16.6% to $157.8 million for the fiscal year ended March 31, 2025, from $189.3 million for the fiscal year ended March 31, 2024. The cost of sales decrease can be directly related to the decrease in sales during fiscal year 2025.
We continue to monitor the effects of the pandemic and macroeconomic environment and take appropriate steps to mitigate the impact on our business, employees and financial condition; however, the nature and extent of this impact in future periods remains difficult to predict due to numerous uncertainties outside our control.
Macroeconomic Factors We monitor the effects of the macroeconomic environment and take appropriate steps to mitigate the impact on our business, employees and financial condition; however, the nature and extent of this impact in future periods remains difficult to predict due to numerous uncertainties outside our control. 32 Results of Operations (As Restated) The following should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere herein.
When testing goodwill for impairment, we have the option to choose whether we will apply a qualitative assessment first and then a quantitative assessment, if necessary, or to apply the quantitative assessment directly. We have concluded that we have one reporting unit and have assigned the entire balance of goodwill to this reporting unit.
When testing goodwill for impairment by determining whether the carrying value of each reporting unit exceeds its estimated fair value. we have the option to choose whether it will apply a qualitative assessment first and then a quantitative assessment, if necessary, or to apply the 31 quantitative assessment directly.
The effective tax rate for the fiscal year ended March 31, 2024 was approximately (19.0)%, compared to approximately 31.0% for the fiscal year ended March 31, 2023. The pre-tax loss in fiscal 2024 caused unfavorable items to decrease the rate instead of increase it. The primary driver is related to the non-deductible executive compensation under Sec. 162(m).
Our effective tax rate for the fiscal year ended March 31, 2025 was approximately (968.3)%, compared to approximately (19.0)% for the fiscal year ended March 31, 2024. The pre-tax loss in fiscal 2024 caused unfavorable items to decrease the rate instead of increasing it.
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 We disaggregate sales in the following two categories: reorder sales vs new order sales vs membership sales.
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. Virtually all of our sales are paid by credit cards and we usually receive the cash settlement in two to three banking days.
For example, our quarterly AutoShip percentage was 53.5% of net sales for the most recent quarter ended March 31, 2024, up from 44.4% of net sales for the same period last year and up from 52.2% of net sales sequentially in the prior quarter.
Recurring sales, which includes AutoShip and membership revenue, as a percentage of total gross sales was 56.1% for the most recent quarter ended March 31, 2025, up from 53.5% for the same period last year and up from 56.2% sequentially in the prior quarter.
The increase to customer acquisition costs for the fiscal year ended March 31, 2024, 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.
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.
Depreciation and amortization Depreciation and amortization expense for the fiscal year ended March 31, 2024, increased to approximately $7.1 million from $3.5 million for the fiscal year ended March 31, 2023.
Depreciation and amortization Depreciation and amortization expense was approximately $7.0 million and $7.1 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively. Other income Other income decreased by approximately $0.9 million, to $0.9 million for the fiscal year ended March 31, 2025, from $1.9 million for the fiscal year ended March 31, 2024.
Net cash used in investing activities was $40.7 million and $10.3 million for the fiscal years ended March 31, 2024 and 2023, respectively. This change in investing activities is related to the acquisition of PetCareRx, partially offset by lower investments in the Vetster partnership year-over-year.
Net cash used in investing activities was $5.1 million and $40.7 million for the fiscal years ended March 31, 2025 and 2024, respectively. This change in investing activities reflects the PetCareRx acquisition in the prior year.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended March 31, 2023 and March 31, 2022. Critical Accounting Policies Our discussion and analysis of our financial condition and the results of our operations contained herein are based upon our consolidated financial statements and the data used to prepare them.
Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and the results of our operations contained herein are based upon our consolidated financial statements and the data used to prepare them. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
We acquired approximately 302,000 new customers for the fiscal year ended March 31, 2024, compared to approximately 274,000 new customers for the same period in the prior year.
The decrease for the fiscal year ended March 31, 2025 in new order sales is primarily due to a strategic reduction in advertising. We acquired approximately 351,000 new customers for the fiscal year ended March 31, 2025, compared to approximately 457,000 new customers for the same period in the prior year.
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.
Actual results may differ from these estimates under different assumptions or conditions. Our estimates are guided by observing the following critical accounting policies.
AutoShip is a convenient way for our loyal customer base to have future pet medication orders delivered directly to them without the need to place an order each time. During the quarter ended June 30, 2022 we made a change to the methodology on how we calculate the percentage of our revenue that was generated by our AutoShip program.
AutoShip is a convenient way for our loyal customer base to have future pet medication orders delivered directly to them without the need to place an order each time. We are encouraged by the adoption of our AutoShip program and have seen an increasingly positive trend since we launched this program.
Provision for income taxes For the fiscal years ended March 31, 2024 and 2023, we recorded an income tax provision of approximately $1.2 million and $2.3 million, respectively. The decrease to the income tax provision for fiscal 2024 is related to a decrease in operating income compared to fiscal 2023.
Provision for income taxes For the fiscal years ended March 31, 2025 and 2024, we recorded an income tax provision of approximately $5.7 million and $1.2 million, respectively. The increase to the income tax provision for fiscal 2025 is primarily due to the Company establishing a full valuation allowance against its net deferred tax assets.
Advertising expenses Advertising expenses, which is net of manufacturer funded advertising COOP, increased by approximately $5.1 million to $24.5 million for the fiscal year ended March 31, 2024, from $19.4 million for the fiscal year ended March 31, 2023.
Advertising expenses (As Restated) Advertising expenses, which is net of manufacturer funded advertising, decreased by approximately $6.8 million to $23.8 million for the fiscal year ended March 31, 2025, fr om $30.6 million for the fiscal year ended March 31, 2024.
The reorder and new order sales amounts for the years ended March 31, 2022 reflect this revised customer definition. Under the previous definition of a new customer, reorder and new order sales were $249.4 million and $22.9 million, respectively, for year ended March 31, 2022.
The reorder and new order sales amounts for the years ended March 31, 2025 reflect this new customer definition change. Under the previous definition of a new customer, reorder and new order sales were $241 million and $23.7 million, respectively, for the year ended March 31, 2024. The Company offers an AutoShip & Save subscription program (“AutoShip”) on our website.
We maintain an allowance for credit losses that we estimate will arise from customers’ inability to make required payments, arising from either credit card chargebacks or insufficient funds checks. We determine our estimates of the uncollectability of accounts receivable by analyzing historical bad debts and current economic trends.
Credit card sales minimize accounts receivable balances relative to sales. We had no material contract asset or contract liability balances as of March 31, 2025, or March 31, 2024. We maintain an allowance for credit losses that we estimate will arise from customers’ inability to make required payments, arising from either credit card chargebacks or insufficient funds checks.
The gross profit and gross profit percentage increased for the fiscal year ended March 31, 2024 compared to the previous fiscal year. 33 General and administrative expenses General and administrative expenses increased by approximately $13.5 million, or 32.4%, to $55.2 million for the fiscal year ended March 31, 2024, from $41.7 million for the fiscal year ended March 31, 2023.
General and administrative expenses (As Restated) General and administrative expenses decreased by approximately $16.6 million, or 30.0%, to $38.6 million for the fiscal year ended March 31, 2025, from $55.2 million for the fiscal year ended March 31, 2024.
The Company considered the decrease in its stock price to be indicative of a risk that the carrying amount of goodwill may not be recoverable. Therefore, the Company performed a quantitative impairment assessment as of March 31, 2024.
Since January 1, 2025, our stock price decreased from $4.82 at December 31, 2024 to $4.19 at March 31, 2025. We considered the decrease in its stock price in FY 2025 to be indicative of potential risks that the carrying amount of goodwill may not be recoverable.
Our 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.
On an ongoing 30 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.
The expense increases were partially attributed to the combination of PetCareRx. These increases were offset by $1.4 million related to sales tax settlements with states.. General and administrative expenses as a percentage of sales was 19.7% for the fiscal year ended March 31, 2024, compared to 16.3% for the fiscal year ended March 31, 2023.
General and administrative expenses as a percentage of sales was 17.0% for the fiscal year ended March 31, 2025, compared to 20.2% for the fiscal year ended March 31, 2024.
Based on the assessment, the Company concluded that goodwill was not impaired because the estimated fair value of the reporting unit exceeded its carrying value by approximately 27%. We estimated fair value using discounted cash flow and public company market approaches with a 70% and 30% weighting, respectively.
We performed a quantitative assessment as of March 31, 2025, and concluded that goodwill was not impaired because the market capitalization, i.e. fair value determined based on our stock price (without including a control premium), of the single reporting unit exceeded its carrying value as of March 31, 2025.
The Company performed its annual goodwill impairment testing as of January 1, 2024 using a quantitative ass essment and at that time concluded there was no impairment. Since then, the Company’s stock price decreased from $7.56 at December 31, 2023 to $4.79 at March 31, 2024.
We have concluded that we have one reporting unit and has assigned the entire balance of goodwill to this reporting unit. We have performed our annual goodwill impairment testing as of January 1, 2025 using a quantitative assessment and at that time concluded there was no impairment.
Gross profit as a percentage of sales for fiscal 2024 was 28.0% compared to 27.6% for fiscal 2023.
As a percentage of sales, cost of sales was 69.5% in fiscal year 2025, as compared to 69.1% in fiscal 2024.
Other income Other income increased by approximately $0.5 million, to $1.9 million for the fiscal year ended March 31, 2024, from $1.4 million for the fiscal year ended March 31, 2023. The increase was primarily related to additional interest income as a result of higher interest rates.
The increase in cost of sales, as a percentage of sales, for the fiscal year ended March 31, 2025 compared to the fiscal year ended March 31, 2024 was primarily due to an increase in discount activity. 36 Gross profit (As Restated) Gross profit decreased by approximately $15.6 million, or 18.4%, to $69.1 million for the fiscal year ended March 31, 2025, from $84.8 million for the fiscal year ended March 31, 2024.
The following table illustrates sales by various classifications: Year Ended March 31, Increase (Decrease) Net Sales (In thousands) 2024 % 2023 % $ % Reorder sales $ 246,977 87.9 % $ 232,380 90.6 % $ 14,597 6.3 % New order sales 24,304 8.6 % 24,199 9.4 % 105 0.4 % Membership fees 9,783 3.5 % — — % 9,783 n/m Total net sales $ 281,064 100.0 % $ 256,579 100.0 % $ 24,485 9.5 % Year Ended March 31, Increase (Decrease) Net Sales (In thousands) 2023 % 2022 % $ % Reorder sales $ 232,380 90.6 % $ 243,490 89.4 % $ (11,110) (4.6) % New order sales 24,199 9.4 % 28,792 10.6 % (4,593) (16.0) % Total net sales $ 256,579 100.0 % $ 272,282 100.0 % $ (15,703) (5.8) % On April 1, 2022, we changed the definition of a new customer to include anyone who has not ordered over the past thirty-six months.
The following chart illustrates sales by various sales classifications: Year Ended March 31, Increase (Decrease) Net Sales (In thousands) 2025 % 2024 As Restated % $ % Reorder sales $ 188,017 82.8 % $ 222,578 81.2 % $ (34,561) -15.5 % New order sales 31,097 13.7 % 41,734 15.2 % (10,637) -25.5 % Membership fees 7,858 3.5 % 9,783 3.6 % (1,925) -19.7 % Total net sales $ 226,972 100.0 % $ 274,095 100.0 % $ (47,123) -17.2 % 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 decrease 34 to net income was primarily related to increases in general and administrative expenses, and increased advertising expenses, partially offset by higher gross profit margins during the fiscal year. Liquidity and Capital Resources Our working capital at March 31, 2024 and 2023 was approximately $21.5 million and approximately $72.9 million, respectively.
The decrease to net loss was primarily related to a decrease in general and administrative expenses, including the above-mentioned $8.7 million non-cash stock compensation reversal and advertising expenses, partially offset by a decrease in sales and gross profit, and an increase in the provision for income taxes during the fiscal year.
Gross profit Gross profit increased by approximately $7.9 million, or 11.2%, to $78.6 million for the fiscal year ended March 31, 2024, from $70.7 million for the fiscal year ended March 31, 2023. The increase in gross profit can be directly related to the increase in sales and and higher profit margins during fiscal 2024.
The decrease in gross profit can be directly related to the decrease in sales and lower profit margins during fiscal 2025. Gross profit as a percentage of sales for fiscal 2025 was 30.5% compared to 30.9% for fiscal 2024.
Removed
Virtually all of our sales are paid by credit cards and we usually receive the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to sales. We had no material contract asset or contract liability balances as of March 31, 2024, or March 31, 2023.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Affected Periods. Completion of Audit Committee Investigation On October 7, 2025, the Company publicly reported the conclusion of the previously disclosed investigation by the Audit Committee of the Company’s Board of Directors (the “Audit Committee”).
Removed
The allowance for credit losses was approximately $273 thousand and $35 thousand at March 31, 2024 and 2023, respectively. 28 Business Combination We account for our business combinations using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") Topic 805 ( "Business Combinations" ).
Added
As previously reported, the Company was unable to file, within the prescribed time period, its Annual Report on Form 10-K for the fiscal year ended March 31, 2025, following the commencement of an investigation by the Audit Committee that was originally disclosed in the Company’s Current Report on Form 8-K filed on July 1, 2025.
Removed
The purchase price is allocated to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date.
Added
The Audit Committee, assisted by outside legal counsel, Foley & Lardner LLP, and forensic accountants, BDO USA, P.C., conducted during June through August 2025 an investigation into allegations raised by two separate reports submitted anonymously through the Company’s third-party-administered whistleblower hotline on April 15 and 16, 2025 regarding (i) the timing of revenue recognition with respect to certain AutoShip orders in the fiscal fourth quarter of 2025, some of which resulted in customer complaints; (ii) a fiscal fourth quarter 2025 $50 coupon promotion to customers and whether it was motivated to any extent by its potential impact on Company KPIs regarding new customers; and (iii) the Company’s culture and control environment.
Removed
The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in our unaudited condensed consolidated financial statements from the date of acquisition.
Added
The investigation’s scope also ultimately included additional matters identified during the course of the investigation.
Removed
Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies.
Added
The Audit Committee’s primary investigative findings in the investigation included the following: (i) The Company accelerated shipment of products to AutoShip customers from the fourth quarter of fiscal year 2025 (i.e., the quarter ending March 31, 2025) to the third quarter of fiscal year 2025 (i.e., the quarter ending December 31, 2024) (the “December Accelerated Shipments”) and again from the first quarter of fiscal year 2026 (i.e., the quarter ending June 30, 2025) to the fourth quarter of fiscal year 2025 (i.e., the quarter ending March 31, 2025) (the “March Accelerated Shipments”).
Removed
The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition.
Added
The acceleration of shipments did not comply with certain provisions of the Company’s AutoShip Terms & Conditions with their customers.
Removed
In connection with the determination of fair values, we may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain obligations assumed.
Added
As a result, the Company erroneously recorded $133,189 in revenue associated with the December Accelerated Shipments in the quarter ending December 31, 2024 of fiscal year 2025 and $1,101,151 in revenue associated with the March Accelerated Shipments in its financial statements for the quarter ending March 31, 2025.
Removed
Acquisition-related transaction costs incurred by us are not included as a component of consideration transferred but are accounted for as an operating expense in the period in which the costs are incurred. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination.
Added
Management has corrected the March Accelerated Shipments error prior to the filing this Annual Report on Form 10-K. (ii) On March 21, 2025, the Company issued a $50 coupon with the objective of attracting new customers to its website and encouraging previous customers who had not recently placed an order to do so.
Removed
A key assumption under the cash flow approach was a 27% weighted average cost of capital. A key assumption under the public company market approach was a 10% control premium.
Added
When initially launched, the coupon did not contain a minimum purchase requirement, but a $100 minimum was later added after management noted excessive use of the coupon. The coupon was utilized in the placement of approximately 30,000 total orders, only 29 approximately 74 of which had a net sale amount (sale amount less coupon value) of $0.
Removed
COVID-19 and Other Macroeconomic Factors The COVID-19 pandemic had a significant impact around the world and has created significant volatility, uncertainty, and economic disruption. It prompted governments and businesses to take unprecedented measures in response.
Added
Prior to the investigation, management had erroneously recorded in its financial statements for the quarter ending March 31, 2025, $2,451 in expenses for the 74 orders with no net sales amount to cost of goods sold rather than to marketing expense.
Removed
While economies of various countries have rebounded from the global COVID-19 economic shutdown that began in the late first quarter and early second quarter 2020, the impact of the COVID-19 pandemic continued, to varying degrees, in 2022 and 2023, and continues, to varying degrees, in 2024 due to mounting inflationary cost pressures and potential recession indicators that have now negatively impacted the global economy.
Added
The Audit Committee found that the inclusion of customers with zero net sales did not have a material impact on the Company’s new customer KPI.
Removed
Results of Operations The following should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere herein.
Added
(iii) The Company’s former Chief Executive Officer, Sandra Campos, hired her nephew for a mid-level position and did not follow the Company’s employee handbook as a result of her failing to inform the Company of the family relationship at the time of her nephew’s hiring and in having the nephew report directly to her for a period of time.
Removed
The increase in sales for the fiscal year ended March 31, 2024 was due to incremental sales and membership fees from the acquisition of PetCareRx, partially offset by declines in PetMeds new customer and reorder sales.
Added
(iv) Although the Audit Committee did not find that the Company’s culture fostered an environment that discouraged employees from raising concerns, the Audit Committee did find that certain members of management were concerned about the speed with which business decisions were made and the lack of adequate time to evaluate them.
Removed
The following chart illustrates sales by various sales classifications: Year Ended March 31, Increase (Decrease) Net Sales (In thousands) 2024 % 2023 % $ % Reorder sales $ 246,977 87.9 % $ 232,380 90.6 % $ 14,597 6.3 % New order sales 24,304 8.6 % 24,199 9.4 % 105 0.4 % Membership fees 9,783 3.5 % — — % 9,783 n/m Total net sales $ 281,064 100.0 % $ 256,579 100.0 % $ 24,485 9.5 % In July 2021 we launched AutoShip & Save subscription program (“AutoShip”) on our website.
Added
(v) The former Audit Committee Chair (Diana Purcel) and the former Chief Financial Officer (Robyn D’Elia) did not report the whistleblower complaints (referenced above) to the Company’s external auditors on a timely basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeAt March 31, 2024, we had $55.3 million in cash and cash equivalents, and the majority of our cash and cash equivalents generate interest income based on 35 prevailing interest rates. A significant change in interest rates would impact the amount of interest income generated from our excess cash and cash equivalents.
Biggest changeAt March 31, 2025, we had $54.7 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.
At March 31, 2024, we had no debt obligations. 36
At March 31, 2025, we had no debt obligations. 39

Other PETS 10-K year-over-year comparisons