PetMed Express to restate previously issued financial statements

“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 . In the third quarter of fiscal year 2024, the Company reviewed, in conjunction with its auditors, RSM 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.The Company expects the impact of the restatement to affect multiple periods. The most significant impact to the income statement is expected to be a decrease to general and administrative expense for fiscal year 2023 in the range of $6M to $8 M and a corresponding increase in net income for the same period. This amount was originally recorded as a sales tax liability based on a probable and estimable approach, in fiscal year 2023, rather than the correct, legal liability approach, under which the sales tax liability would have been recorded for periods included in the Affected Financials. The restatement is expected to require the Company to revise and record a sales tax liability of approximately $14 to $20M as of March 31, 2020…”