PETMED EXPRESS INC

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. 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. 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.

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. 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. 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. We continuously monitor and update our regulatory licenses in every state, including the U.S. Virgin Islands. 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. 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.

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 wellness for dogs, cats, and horses. 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. 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. 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 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. 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. 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. 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. 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. 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. 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.

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. From shampoos and flea collars to joint enhancers, vitachews, and soft toys, our proprietary line provides high-quality, cost-effective solutions for pet care.

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. 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.

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. This membership includes a variety of exclusive perks, discounts, and valuable services that significantly enhance the well-being of pets.

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. 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. 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. 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. 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.

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. 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. 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. 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. This strategic alliance provides pet owners in the United States with seamless online access to veterinary services through Vetster’s innovative platform. Customers have the option to purchase any prescriptions or OTC products that have been uploaded from the PetMeds catalog.

We invested approximately $5.0 million in Vetster as part of their Series B financing round in April 2022, followed by a $0.3 million investment in a Series B extension round in September 2023. These investments underscore our commitment to complementing the vet/patient relationship with telehealth and expanding access to high-quality care for pets as part of our holistic wellness ecosystem.

STRATEGY AND KEY BUSINESS PRIORITIES

PetMeds is committed to a long-term vision of becoming a leading digital-first pet wellness company. The Company is incorporating new leadership and new strategic opportunities to make progress against initiatives that support this vision, while balancing the near-term challenges and business headwinds.

Short-Term Strategy Fiscal 2025

●Consolidate our brands: We believe that our primary brands, namely “PetMeds,” and "PetCareRx" are known as being credible experts among pet owners and are synonymous with pet health and well-being.The consolidation of our brands into a single united company is driven by our commitment to streamline operations, enhance efficiency, and provide a more cohesive customer experience. By bringing together brands that have the same mission and value proposition, we can leverage our combined strengths, reduce redundancies, and offer a unified, stronger presence in the market. This strategic move allows us to unite our resources and expertise, better serve our customers with an expanded product range, improve service quality, and add greater value, ultimately fostering growth and innovation within our sector. The consolidation allows us to capitalize on the distinct strengths of each brand, ensuring that our customers benefit from enhanced capabilities and a superior overall experience.This approach not only strengthens our position in the market but also drives growth and sets new industry standards for excellence. This strategic move also enables us to integrate the best practices and unique attributes of each organization, fostering innovation and excellence.

●Preserve Cash While Preserving Key Partnerships and Investing in Growth: The Company entered fiscal 2025 with a healthy liquidity position and will continue to monitor and manage cash flow as we right-size our operations through the consolidation of our two brands. To preserve liquidity and maximize cash flows during fiscal 2025, we will undertake the following actions:

•Partnering with key suppliers to optimize supply chain availability with corresponding discounts and co-op/rebates, along with payment terms thus improving gross margin.

•Manage future inventory through properly forecasting supply with expected demand for improved product availability, ensuring that customers can find the products they need when they need them.

•Reduce expenses to better align operating costs with sales through elimination of duplicative resources including agency and vendor consolidation.

•Focusing on operational efficiency and reducing order processing time through our warehouse fulfillment centers, pharmacy, and call centers through tech enablement and automation.

●Focus on Customer Retention, Loyalty, and Frequency of Visits:

At the heart of our marketing strategy is a commitment to reinvigorate our growth and deepen our engagement with customers. In today’s competitive market, a multi-faceted approach is essential in order to thrive. This includes:

•Enhancing the technology supporting our Auto-ship program that drives ease and repeat purchases.

•Personalizing the customer journey through customer segmentation optimization.

•Bundling and cross-selling opportunities across merchandise categories.

•Enrichment of our digital content library.

●Investment in Modern Technology: To enhance our customer experience and drive growth, we are making technology investments to consolidate our two websites into a single, integrated platform and improve our veterinary portal experience. This new tech stack is designed to increase engagement, improve conversion rates, and provide a seamless customer journey. Investments and initiatives include:

•Integration of PetMeds and PCRx as one destination.

•Enhancement of Pharmacy Software for increased digitization.

•Fulfillment logic to optimize operations across enterprise.

•Digital analytics/Business Intelligence tools revamp to enable faster decision making that drive growth and profitability.

•Consolidation of in-house customer health specialist phone, chat, email systems within our customer call center for seamless communication with our customers and veterinary partners.

Long Term Strategy

Our ultimate goal is to position our company as the go-to resource for high quality pet health and wellness products, services, and experiences through our 360 ecosystem, ensuring sustained growth and a thriving customer community.To achieve this, we will focus on the following strategic initiatives:

•Create best-in-class customer experiences across channels through modern technology that incorporates AI, automation, and product management that drives personalized journeys across all touchpoints.

•Improve the speed and efficiency from order to customer's doorstep.

•Develop mission-first, purposeful marketing campaigns that are authentic in order to improve customer engagement while increasing brand awareness.

•Leverage data analytics to gain timely customer insights that will accelerate responsiveness to customer demands.

•Innovate product offerings, increasing high-margin private label assortments.

•Enhance and curate strategic partnerships that further promote the health and wellness during all life stages for dogs, cats, and horses.

DISTRIBUTION CHANNELS

We offer our products through three main sales channels: (1) the Internet, through our websites, (2) our health specialist customer support center through our toll-free numbers and (3) through PetAssure's broker network for employer benefits. We have a roadmap for fiscal 2025 that will optimize our websites, and provide a convenient and personalized shopping experience. Our customer service pet health specialists support more than 100,000 calls per month, a testament to the pet owner's need for, and our ability to deliver, a personalized experience.

Internet

The Company’s digital operations across various brands have consistently catered to our customers on multiple platforms. To create a more seamless shopping experience, we will continue to invest in our digital infrastructure. Currently, each brand operates separate desktop and mobile websites, but we plan to integrate these into a unified environment in fiscal 2025. Additionally, we are revitalizing our mobile applications in fiscal 2025 to offer improved features and enhanced quality, further developing our mobile capabilities as mobile engagement continues to grow.

In fiscal 2024, we attracted approximately 36 million visits to our websites, with about 5% of these visits converting to orders. Through our websites, pet owners have access to comprehensive health information covering pet behavior, illnesses, and both natural and pharmaceutical remedies tailored to their pets’ needs. Our PetMeds.com website's pet education content is periodically updated with the latest research for pet owners.

As part of our multichannel strategy, we offer mobile versions of our websites (www.petmeds.com and www.petcarerx.com) and will have an optimized mobile application compatible with mobile phones, tablets, and other devices in fiscal 2025. Key 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.

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. 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. 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. Managing over 100,000 calls per month, our team of 150 in-house agents consistently delivers outstanding assistance to our valued customers.

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. 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. 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.

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.

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. 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.

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.

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. Our continued partnerships with these major manufacturers are a testament to our commitment to quality and reliability in serving our customers.

DISTRIBUTION OF MERCHANDISE INVENTORY

The Company implements rigorous quality control measures to guarantee the authenticity and safety of all medications. We efficiently manage our inventory and fulfill customer orders from our corporate headquarters in Delray Beach, Florida, and our Northeast warehouse location in Lynbrook, New York while conducting thorough checks on every order received for veterinary approval and prescription labeling accuracy. 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. During fiscal 2025, we will be adding third party logistics locations that allow us closer proximity to our customers, which should result in lower shipping costs and higher product margins.

INFORMATION SYSTEMS

Our Company-owned and third-party-operated management information systems consist of a full range of retail, merchandising, human resource and financial systems. These systems include applications related to digital operations, inventory management, supply chain, planning, sourcing, merchandising, payroll, scheduling and financial reporting. The Company continues to invest in technology to upgrade its core systems to create efficiencies and to support its digital operations, pharmacy operations, fulfillment center effectiveness, customer relationship management tools and loyalty programs.

DIGITAL TECHNOLOGY SYSTEMS

During fiscal 2025, we will invest in our digital technology platforms in order to seamlessly integrate advanced technologies across various facets of our operations. Our call centers, e-commerce, order entry systems, order management system (OMS) and inventory control/fulfillment processes will benefit from simplified, custom-configured solutions. 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. 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.

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. 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. We believe the “PetMeds” and "PetCareRx" family of trademarks, have added significant value and are important factors in the marketing of our products. We have also obtained the right to use and control the Internet addresses which include but are not limited towww.1800petmeds.com, www.1888petmeds.com, www.petmedexpress.com, www.petmed.com, www.petmeds.com, andwww.petcarerx.com.

We also obtained the right to use and control the Internet addresseswww.petmeds.pharmacy, www.petmed.pharmacy, www.1800petmeds.pharmacy, petcare.pharmacy, andpetcarerx.pharmacy, through a National Association of Boards of Pharmacy® initiative to ensure high standards for online pharmacies. We do not expect to lose the ability to use the Internet addresses; however, there can be no assurance in this regard and the loss of these addresses may have a material adverse effect on our financial position and results of operations. We are the exclusive owners of United States trademark registrations for “America’s Largest Pet Pharmacy®,” “America’s Most Trusted Pet Pharmacy®,” “Trusted Pet Medication Experts®,” “PetMed Express, Inc.®,”1-800-PetMeds and Design®,” 1-800-PetMeds®,” “PetMeds®,” “Your Trusted Pet Health Expert®," "PetPlus®," "PetCareRx®," "Nose to Tail®," "Nose to Tail Health®," and "Nose to Tail Savings®," among numerous others. 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. PetMeds is subject to regulation by the State of Florida and is licensed as a community pharmacy by the Florida Board of Pharmacy, and PetCareRx is subject to regulation by the State of New York and is licensed as a community pharmacy by the New York Pharmacy Board.

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. Virgin Islands Board of Pharmacy, and the United States Drug Enforcement Administration ("DEA"), and with respect to our products, by other regulatory authorities including, but not necessarily limited to, the United States Food and Drug Administration (“FDA”) and the United States Environmental Protection Agency ("EPA"). Our registration with the DEA, and state registrations/permits as required, permit us to dispense Schedule IV and Schedule V controlled substances. As a licensed pharmacy in the State of Florida, we are subject to the Florida Pharmacy Act and regulations promulgated thereunder. 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.

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. Although pet foods are not required to obtain premarket approval from the FDA, the FFDCA requires that all animal foods are safe for consumption, produced under sanitary conditions, contain no harmful substances, and are truthfully labeled. Most states also require that pet foods distributed in the state be registered or licensed with the appropriate state regulatory agency. In addition, most facilities that manufacture, process, pack, or hold foods, including pet foods, must register with the FDA and renew their registration every two years, and are subject to periodic FDA inspection. This includes most foreign, as well as domestic facilities. Registration must occur before the facility begins its pet food manufacturing, processing, packing, or holding operations.

The labeling of pet foods is regulated by both the FDA and some state regulatory authorities. FDA regulations require proper identification of the product, a net quantity statement, a statement of the name and place of business of the manufacturer or distributor, and proper listing of all the ingredients in order of predominance by weight. Most states also enforce their own labeling regulations. The degree of oversight of the implementation of these regulations varies by state, but typically includes a state review and approval of each product label as a condition of sale in that state. The FDA also regulates the inclusion of specific claims in pet food labeling. For example, pet food products that are labeled or marketed with claims that may suggest that they are intended to treat or prevent disease in pets would potentially meet the statutory definitions of both a food and a drug.

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.

We rely on legal and operational compliance programs, as well as outside counsel, to guide our business in complying with applicable laws and regulations in the areas in which we do business. In addition, regulatory regime changes may add cost and complexity to our compliance efforts. It is difficult to predict with certainty the potential impact of future regulatory compliance efforts and future costs associated with such matters. Our failure to comply with such laws and regulations may result in adverse actions that could disrupt our operations and adversely affect our financial results.

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. 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.

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 recent expansion of the Compensation Committee to the Compensation and Human Capital Committee. We are dedicated to identifying and nurturing the talent necessary for our long-term success. 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.

We pride ourselves on maintaining a strong corporate culture that upholds high standards of ethics and compliance. Our Code of Business Conduct and Ethics outlines the principles that guide the behavior of our employees, officers, directors, and vendors. 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.

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. 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, and approximately 78 employees work at the office and distribution center and are connected to our New York location that we acquired as a part of the PetCareRx acquisition. 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 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.

Available Information

Our website addresses arewww.petmeds.com andwww.petcarerx.com. The information on our websites is not, and shall not be deemed to be, a part of or incorporated into this Annual Report on Form 10-K or any other filings we make with the Securities and Exchange Commission ("SEC"). We file annual, quarterly, and current reports, proxy statements, and other information with the SEC. Our SEC filings, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to the Exchange Act are available free of charge over the Internet on our website atwww.petmeds.com or at the SEC's website atwww.sec.gov. Our SEC filings will be available through our website atwww.petmeds.com as soon as reasonably practicable after we have electronically filed or furnished them to the SEC.