PetMeds Announces Selected Preliminary Third Quarter Financial Results - Seite 2

Restatement of Certain Historical Financial Results

As reported in the Company's Form 8-K filed today, at the recommendation of the Company’s management, the Audit Committee of the Board of Directors of the Company (the “Audit Committee”), has concluded that the Company’s previously issued audited consolidated financial statements as of March 31, 2023 and 2022 and for the years ended March 31, 2023, 2022, and 2021 included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2023 (the “2023 Annual Report”), and the Company’s unaudited condensed consolidated financial statements included in the Quarterly Reports on Form 10-Q for the quarterly periods within those years (the “Historical Quarterly Reports”), as well as the unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2023 (the “Q1 2024 Quarterly Report”) and the three months ended September 30, 2023 (the “Q2 2024 Quarterly Report” and together with the Q1 2024 Quarterly Report, the 2023 Annual Report and the Historical Quarterly Reports, the “Reports” and all financial statements included in the Reports, collectively the “Affected Financials”), should no longer be relied upon. As a result of the foregoing, related press releases, shareholder communications, investor presentations or other communications describing relevant portions of the Affected Financials should no longer be relied upon.

In preparing our 2023 Annual Report, we determined that an accrual for sales tax contingencies was required. As such, we recorded a sales tax accrual in the second and fourth quarters of fiscal year 2023 based on a determination that the sales tax liability was probable and estimable, and that such treatment was in accordance with what we believed to be the appropriate guidance from generally accepted accounting principles (GAAP). In the third quarter of fiscal year 2024, the Company reviewed, in conjunction with its auditors, RSM US LLP, the accounting treatment related to its previously reported sales tax accruals as well as the accounting treatment related to the deferred tax asset associated with the Company’s acquisition of PetCareRx in April 2023. As a result of this review, the Audit Committee concluded, based on management’s determination, that the Company incorrectly applied GAAP as it relates to the sales tax liability included in the periods contained in the Affected Financials, and that it improperly valued the deferred tax asset and goodwill reported in the first and second quarter of fiscal year 2024.