SRXH

Business Context and Reporting Period

Company: SRx Health Solutions, Inc. (formerly Better Choice Company, Inc.)
Filing Type: Form 10-K
Period: Fiscal Year Ended September 30, 2025
Business Overview: The Company underwent a significant transformation during the reporting period. Following a reverse merger completed on April 24, 2025, the Company discontinued its legacy specialty pharmacy and healthcare operations (SRx Canada), which are now reported as discontinued operations. The continuing operations consist solely of the Halo pet health and wellness business, focusing on premium pet food, treats, and supplements sold primarily through e-commerce channels (Amazon, Chewy) and select retail partners.

Key Financial Metrics

Note: Prior year results for continuing operations are not presented as the Halo business only became the reporting entity following the reverse merger in April 2025. Prior year results reflected the discontinued SRx Canada operations.

Material Changes and Operational Shifts

• Discontinued Operations: The Company's legacy SRx Canada pharmacy business was classified as discontinued operations following a filing for creditor protection under the Companies' Creditors Arrangement Act (CCAA) in August 2025. This segment generated a net loss of $36.4 million for the year ended September 30, 2025.
• Reverse Merger: Completed on April 24, 2025, the Company changed its name to SRx Health Solutions, Inc. and adopted the Halo pet food business as its primary continuing operation.
• Revenue Concentration: Continuing operations revenue is heavily concentrated in the Digital channel (77% of sales), with two wholesale customers accounting for over 10% of total net sales each.
• One-Time Gains/Losses: The financial results include a $4.1 million bargain purchase gain from the reverse merger and a $0.7 million loss on extinguishment of debt.

Guidance, Outlook, and Risks

Outlook and Liquidity: Management expects to require additional financing to fully implement its business plan and growth strategy. While cash on hand is sufficient for short-term needs into the fourth quarter of 2025, the Company does not expect positive cash flow until the end of 2025 or later. The Company has secured significant financing, including a July 2025 PIPE offering ($7.65 million in convertible notes) and an October 2025 PIPE offering ($15.23 million in Series A Preferred Stock).

Key Risks:

• Listing Compliance: The Company received notice from NYSE American regarding compliance with stockholders' equity requirements due to reported losses. A plan to regain compliance by July 14, 2026, has been submitted.
• Supply Chain: The Company relies on a limited number of co-manufacturers (85% of inventory from three vendors). Disruptions or price increases in raw materials could materially impact operations.
• Regulatory: Operations are subject to extensive regulation by the FDA, FTC, and USDA regarding pet food safety, labeling, and marketing claims.
• Capital Constraints: The Company has a history of losses and may need to raise additional capital, which could be dilutive to existing shareholders.

Investor Verification Checklist

• Capital Structure: Verify the terms and dilution impact of the recent Series A Preferred Stock and convertible notes issued in July and October 2025.
• Listing Status: Monitor the Company's progress in meeting NYSE American continued listing standards to avoid delisting.
• Discontinued Operations: Confirm the final settlement of liabilities and the extent of any remaining exposure from the SRx Canada CCAA proceedings.
• Customer Concentration: Assess the risk associated with reliance on two major e-commerce partners for the majority of revenue.
• Cash Burn: Review the burn rate of the continuing operations against the $1.3 million cash balance to determine the runway before additional financing is required.