false FY 0001471727 Better Choice Co Inc. P1Y

 2024-06-30

 2025-03-25

 2024-03-08
 2024-03-08

 BTTR:PreFundedWarrantsMember

 BTTR:PreFundedWarrantMember

 BTTR:PreFundedWarrantsMember

 2024-08-02
 2024-08-02

 2024-08-02

 2024-04-30

 us-gaap: ShippingAndHandlingMember

 us-gaap: ShippingAndHandlingMember

 2024-06-01
 2024-06-01

 BTTR:TwoWholesaleCustomersMember

 BTTR:TwoWholesaleCustomersMember

 BTTR:TwoWholesaleCustomersMember
 BTTR:DirectToConsumerMember

 BTTR:OneCustomerMember

 BTTR:OneCustomerMember

 BTTR:OneCustomerMember

 BTTR:OneCustomerMember

 BTTR:DefinitiveAgreementMember

 2024-08-15

 BTTR:DefinitiveAgreementMember

 2024-08-15
 2024-08-15

 BTTR:DefinitiveAgreementMember

 BTTR:ServicesAgreementMember

 us-gaap: ConvertibleDebtMember
 BTTR:ServicesAgreementMember

 us-gaap: RevolvingCreditFacilityMember

 2024-09-20

 us-gaap: RevolvingCreditFacilityMember

 2024-09-20
 2024-09-20

 us-gaap: RevolvingCreditFacilityMember

 us-gaap: PrepaidExpensesAndOtherCurrentAssetsMember

 us-gaap: EquipmentMember

 us-gaap: EquipmentMember

 us-gaap: EquipmentMember

 us-gaap: EquipmentMember

 us-gaap: FurnitureAndFixturesMember

 us-gaap: FurnitureAndFixturesMember

 us-gaap: FurnitureAndFixturesMember

 us-gaap: FurnitureAndFixturesMember

 us-gaap: ComputerSoftwareIntangibleAssetMember

 us-gaap: ComputerSoftwareIntangibleAssetMember

 us-gaap: ComputerSoftwareIntangibleAssetMember

 us-gaap: ComputerSoftwareIntangibleAssetMember

 us-gaap: ComputerEquipmentMember

 us-gaap: ComputerEquipmentMember

 us-gaap: ComputerEquipmentMember

 us-gaap: ComputerEquipmentMember

 us-gaap: CustomerRelationshipsMember

 us-gaap: CustomerRelationshipsMember

 us-gaap: TradeNamesMember

 us-gaap: TradeNamesMember

 BTTR:FederalFundsRateMember

 BTTR:FederalFundsRateMember

 BTTR:WintrustReceivablesCreditFacilityMember

 BTTR:WintrustReceivablesCreditFacilityMember

 BTTR:WintrustReceivablesCreditFacilityMember

 BTTR:WintrustReceivablesCreditFacilityMember

 2024-03-25

 2024-03-25
 2024-03-25

 BTTR:OldPlankTrailCommunityBankNAMember

 BTTR:OldPlankTrailCommunityBankNAMember

 BTTR:OldPlankTrailCommunityBankNAMember

 BTTR:WintrustCreditFacilityMember

 BTTR:WintrustCreditFacilityMember

 BTTR:AimiaPetHealthcoIncMember

 2024-03-20

 BTTR:AimiaPetHealthcoIncMember

 BTTR:AimiaPetHealthcoIncMember

 2023-11-01
 2023-11-30

 BTTR:AimiaPetHealthcoIncMember

 us-gaap: CarryingReportedAmountFairValueDisclosureMember

 us-gaap: EstimateOfFairValueFairValueDisclosureMember

 us-gaap: CarryingReportedAmountFairValueDisclosureMember

 us-gaap: EstimateOfFairValueFairValueDisclosureMember

 us-gaap: SecuredDebtMember

 us-gaap: SecuredDebtMember

 us-gaap: SecuredDebtMember

 us-gaap: CarryingReportedAmountFairValueDisclosureMember

 BTTR:AlphiaLoanFacilityMember

 2024-03-25

 BTTR:PreFundedWarrantsMember

 BTTR:RepresentativeWarrantsMember

 BTTR:PreFundedWarrantMember

 us-gaap: MeasurementInputExercisePriceMember

 us-gaap: MeasurementInputExercisePriceMember

 us-gaap: MeasurementInputSharePriceMember

 us-gaap: MeasurementInputSharePriceMember

 us-gaap: MeasurementInputPriceVolatilityMember

 us-gaap: MeasurementInputPriceVolatilityMember

 us-gaap: MeasurementInputExpectedTermMember

 us-gaap: MeasurementInputExpectedTermMember

 us-gaap: MeasurementInputRiskFreeInterestRateMember

 us-gaap: MeasurementInputRiskFreeInterestRateMember

 us-gaap: MeasurementInputExpectedDividendRateMember

 us-gaap: MeasurementInputExpectedDividendRateMember

 2021-07-16

 2021-07-16
 2021-07-16

 2022-01-01

 BTTR:DirectorsofficersAndEmployeesMember

 2024-06-26
 2024-06-26

 BTTR:DirectorsofficersAndEmployeesMember

 2023-01-30

 BTTR:ExecutivesAndEmployeesMember

 2023-01-31

 2023-03-31

 BTTR:ExecutivesAndEmployeesMember

 2023-04-01
 2023-06-30

 BTTR:TwoMemberOfBoardOfDirectorsMember

 2023-10-01

 2024-02-01
 2024-02-28

 2024-06-30
 2024-06-30

 BTTR:BelievecoMember

 BTTR:BelievecoMember

 BTTR:BelievecoMember

 BTTR:BelievecoMember

 us-gaap: DomesticCountryMember

 us-gaap: StateAndLocalJurisdictionMember

 BTTR:DirectMember

 BTTR:DirectMember

 BTTR:IndirectMember

 BTTR:IndirectMember

 country: US

 country: US

 country: CN

 country: CN

 BTTR:OtherMember

 BTTR:OtherMember

 us-gaap: InventoriesMember
 us-gaap: SupplierConcentrationRiskMember
 BTTR:ThreeVendorsMember

 us-gaap: InventoriesMember
 us-gaap: SupplierConcentrationRiskMember
 BTTR:TwoVendorsMember

 us-gaap: InventoriesMember
 us-gaap: SupplierConcentrationRiskMember

 us-gaap: InventoriesMember
 us-gaap: SupplierConcentrationRiskMember

 us-gaap: AccountsReceivableMember
 BTTR:TwoCustomersMember

 us-gaap: AccountsReceivableMember
 BTTR:TwoCustomersMember

 us-gaap: SalesRevenueNetMember
 BTTR:ThreeCustomersMember

 us-gaap: SalesRevenueNetMember
 BTTR:ThreeCustomersMember

 BTTR:WarrantLiabilitiesMember

 us-gaap: EmployeeStockMember

 us-gaap: EmployeeStockMember

 2025-02-06

 2025-02-06
 2025-02-06

 2025-02-19
 2025-02-19

 2025-02-20
 2025-02-20

 2025-02-28
 2025-02-28

 2025-02-28

 BTTR:SpecialtyPharmacyGroupMember

 2025-03-11

 BTTR:SpecialtyPharmacyGroupMember

 2025-03-11
 2025-03-11

 2025-03-21

 2024-10-01

 BTTR:Integer

 BTTR:Segment

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 (Mark
One)

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the Fiscal Year Ended December 31, 2024

 Or

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from to

 Commission
File Number: 001-40477

 (Exact
name of registrant as specified in its charter)

 Delaware

 83-4284557

 (State or other jurisdiction

 of incorporation or organization)

 (I.R.S. Employer

 Identification No.)

 12400
 Race Track Road

 (212) 896-1254

 Tampa,
 Florida 33626

 (Address
 of Principal Executive Offices) (Zip Code)

 (Registrant's
 Telephone Number, Including Area Code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of Each Class

 Trading
 Symbol(s)

 Name
 of Each Exchange on which Registered

 Common
 Stock, $0.001 par value share

 BTTR

 NYSE
 American

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files.) Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of " large accelerated filer," " accelerated filer,"
" smaller reporting company" and " emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, as of the last business day
of the registrant's most recently completed second fiscal quarter, based on the closing sale price of $3.90 as reported on the NYSE
American was: $ 3,573,683.

 The
number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date was: 2,422,005
shares of $ 0.001 par value common stock outstanding as of March 25, 2025.

 DOCUMENTS
INCORPORATED BY REFERENCE:

 The
information required by Items 10, 11, 12, 13, and 14 will be furnished (and are hereby incorporated) by an amendment hereto or pursuant
to a definitive proxy statement pursuant to Regulation 14A that will contain such information.

 Annual
Report on Form 10-K for the Fiscal Year Ended December 31, 2024

 TABLE
OF CONTENTS

 1.

 Business

 1A.

 Risk Factors

 1B.

 Unresolved Staff Comments

 1C.

 Cybersecurity

 2.

 Properties

 3.

 Legal Proceedings

 4.

 Mine Safety Disclosures

 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 6.

 [Reserved]

 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 8.

 Financial Statements and Supplementary Data

 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 9A.

 Controls and Procedures

 9B.

 Other Information

 10.

 Directors, Executive Officers and Corporate Governance

 11.

 Executive Compensation

 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 13.

 Certain Relationships and Related Transactions, and Director Independence

 14.

 Principal Accountant Fees and Services

 15.

 Exhibits and Financial Statement Schedules

 16.

 Form 10-K Summary

 Signatures

 FORWARD-LOOKING
STATEMENTS

 This
report contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical
fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections
relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking
statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "
aim," " anticipate," " believe," " can," " could," " estimate," "
expect," " forecast," " intend," " likely," " may," " outlook," "
plan," " potential," " project," " projection," " seek," " should,"
" will," " would," the negatives thereof and other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial performance or other events. They appear in a number of places throughout
this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results
of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. All forward-looking
statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including,
but not limited to, those summarized below:

 our
 ability to continue as a going concern;

 the impact of damage to or interruption of our information technology systems due to cyber-attacks or other circumstances beyond our control;

 business interruptions resulting from geopolitical actions, including war and terrorism;

 our ability to successfully implement our growth strategy;

 failure
 to achieve growth or manage anticipated growth;

 our ability to achieve or maintain profitability;

 the loss of key members of our senior management team;

 our ability to generate sufficient cash flow or raise capital on acceptable terms to run our operations, service our debt and make necessary capital expenditures;

 our
 dependence on our subsidiaries for payments, advances and transfers of funds due to our holding company status;

 our ability to successfully develop additional products and services or successfully market and commercialize such products and services;

 competition in our market;

 our ability to attract new and retain existing customers, suppliers, distributors or retail partners;

 allegations that our products cause injury or illness or fail to comply with government regulations;

 our ability to manage our supply chain effectively;

 our or our co-manufacturers' and suppliers' ability to comply with legal and regulatory requirements;

 the effect of potential price increases and shortages on the inputs, commodities and ingredients that we require, whether as a result of the continued actual or perceived effects of broader geopolitical and macroeconomic conditions, including the military conflict between Russia and Ukraine;

 our ability to develop and maintain our brand and brand reputation;

 compliance with data privacy rules;

 our compliance with applicable regulations issued by the U.S. Food and Drug Administration (" FDA"), the U.S. Federal Trade Commission (" FTC"), the U.S. Department of Agriculture (" USDA"), and other federal, state and local regulatory authorities, including those regarding marketing pet food, products and supplements;

 risk of our products being recalled for a variety of reasons, including product defects, packaging safety and inadequate or inaccurate labeling disclosure;

 risk of shifting customer demand in relation to raw pet foods, premium kibble and canned pet food products, and failure to respond to such changes in customer taste quickly and effectively; and

 other
 factors discussed under the headings " Risk Factors," " Business," and " Management's Discussion
 and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K.

 While
we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is
impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to
differ materially from our expectations, or cautionary statements, are disclosed under " Risk Factors" and " Management's
Discussion and Analysis of Financial Condition and Results of Operations" in this report. All forward-looking statements are expressly
qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this report in
the context of these risks and uncertainties.

 NOTE
REGARDING TRADEMARKS

 We
own or have rights to use the trademarks and trade names that we use in conjunction with the operation of our business. Each trademark
or trade name of any other company appearing in this Annual Report on Form 10-K is, to our knowledge, owned by such other company. Solely
for convenience, our trademarks and trade names referred to in this Annual Report on Form 10-K may appear without the or
symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable
law, our rights or the right of the applicable licensor to these trademarks and trade names.

 PART
I

 ITEM
1. BUSINESS

 Our
History

 On
December 17, 2018, Better Choice Company, Inc. (the " Company", or " Better Choice") made a $2.2 million investment
in TruPet LLC (" TruPet"), an online seller of pet foods, pet nutritional products and related pet supplies. On February
2, 2019, the Company entered into a definitive agreement to acquire the remainder of TruPet and closed the acquisition on May 6, 2019.

 On
February 28, 2019, Better Choice entered into a definitive agreement to acquire all of the outstanding shares of Bona Vida, Inc. ("
Bona Vida") and closed the acquisition on May 6, 2019.

 On
October 15, 2019, Better Choice entered into a Stock Purchase Agreement (as amended, the " Halo Agreement") with Halo, Thriving
Paws, LLC, a Delaware limited liability company (" Thriving Paws"), HH-Halo LP, a Delaware limited partnership ("
HH-Halo" and, together with Thriving Paws, the " Sellers") and HH-Halo, in the capacity of the representative of the
Sellers. Pursuant to the terms and subject to the conditions of the Halo Agreement, among other things, the Company agreed to purchase
from the Sellers 100% of the issued and outstanding capital stock of Halo, Purely for Pets, Inc. (" Halo") (the "
Halo Acquisition"). The Company closed the Halo Acquisition on December 19, 2019.

 Overview
of Our Business

Choice Company Inc. is a pet health and wellness company focused on providing pet products and services that help dogs and cats live
healthier, happier and longer lives. We offer a broad portfolio of pet health and wellness products for dogs and cats sold under our
Halo brand across multiple forms, including foods, treats, toppers, and chews. We have a demonstrated, multi-decade track record of
success and are well positioned to benefit from the mainstream trends of growing pet humanization and consumer focus on health and
wellness. Our products consist of kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan dog food and
treats, oral care products and supplements. Halo's core products are made with high-quality, thoughtfully sourced ingredients
for natural, science-based nutrition. Each innovative recipe is formulated with leading veterinary and nutrition experts to deliver
optimal health.

 We
sell our premium and super-premium products (which we believe generally includes products with a retail price greater than $0.20 per
ounce) under the Halo brand umbrella, including Halo Holistic, Halo Elevate and the former TruDog brand, which was rebranded
and successfully integrated under the Halo brand umbrella during the third quarter of 2022. Our core products sold under the Halo brand
are made with high-quality, thoughtfully sourced ingredients for natural, science based nutrition. Each innovative recipe is formulated
with leading veterinary and nutrition experts to deliver optimal health. Our diverse and established customer base has enabled us to
penetrate multiple channels of trade, which we believe enables us to deliver on core consumer needs and serve pet parents wherever they
shop. We group these channels of trade into four distinct categories: E-commerce, which includes the sale of product to online retailers
such as Amazon and Chewy; Brick & Mortar, which primarily includes the sale of product to Pet Specialty retailers such as Petco,
Pet Supplies Plus and neighborhood pet stores, as well as to select grocery chains; Direct to Consumer ("DTC") which includes
the sale of product through our website halopets.com; and International, which includes the sale of product to foreign distribution partners
and to select international retailers. In December 2023, the Company made a strategic exit out of Petco stores (while remaining on Petco.com),
and Pet Supplies Plus. On June 1, 2024, the Company exited its DTC channel in an effort to improve profitability, and now directs consumers
on halopets.com to Amazon and Chewy.

 A
concerted effort to drive brand awareness behind distinctive positioning and messaging is the cornerstone of our growth plan, supported
by innovation. Halo's future growth is driven through an extensive brand positioning workstream executed over the last year. New
consumer messaging will build awareness with pet parents, persuade them that Halo is the right choice for their pet, and move the consumer
towards purchase. The creative campaign will be brought to life on Amazon and Chewy platforms as well as outside those platforms. By
shifting media investment from bottom-of-funnel-driven DTC activities to full funnel activation across the Amazon and Chewy platforms,
Halo will see improvements in both media effectiveness, efficiency, and reach.

 In
addition to incremental consumer media activation, innovation plays a key role in Halo's growth plans, supported by our own research
and development, and acquisitions. Our established supply and distribution infrastructure allows us to bring new products to market in
less than a year. Our outsourced manufacturing model is flexible, scalable and encourages innovation allowing us to offer a breadth of
assortment in dog and cat food main meal as well as pet treat products under the Halo brand, serving a wide variety of consumer needs,
dayparts, and occasions.

 The
Halo portfolio offers a variety of platforms through which to innovate. Halo Holistic is designed for the pet parent seeking complete
digestive health with prebiotics, probiotics and postbiotics. Additionally, it's one of the only brands made with only whole animal
proteins and no meat meals. Halo Elevate, features leading nutrient levels supporting the top five pet parent health concerns including
digestive health, heart and immunity support, healthy skin and coat, hip and joint support and strength and energy. Halo Freeze Dried
Raw recipes preserve the natural flavor and nutrition of raw food with 100% protein from natural sources.

 Our
Products and Brands

 We
have a broad portfolio of over 100 active premium and super premium animal health and wellness products for dogs and cats, which includes
products sold under the Halo brand across multiple forms, including foods, treats, toppers, dental products, chews, and supplements.
Our products consist of naturally formulated premium kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan
dog food and treats, oral care products and supplements. Our products are sustainably sourced, derived from real whole meat and no rendered
meat meal and include non-GMO fruits and vegetables.

 Our
products are manufactured by an established network of co-manufacturers in partnership with Better Choice. We have maintained each of
our key co-manufacturing relationships for more than four years, with certain relationships in place for more than ten years and with
the launch of Halo Elevate, we expanded and engaged two new co-manufacturing partners in 2022.

 Our
Customers and Channels

 In
2024, we generated $42.4 million of gross sales and $35.0 million of net sales. By channel in 2024, Digital generated approximately $23.2
million of gross sales and $16.5 million of net sales, Brick & Mortar generated approximately $2.8 million of gross sales and $2.3
million of net sales and International generated approximately $16.4 million of gross sales and $16.2 million of net sales. The following
chart provides a breakdown of our net sales by channel for the year ended December 31, 2024:

 In
2024, approximately 47% of our net sales were made online, through a combination of E-commerce partner websites, such as Amazon, Chewy,
Petflow, Thrive Market and Vitacost, and our DTC website, hosted on Shopify. A majority of our online sales are driven by repeat purchases
from existing customers. In Packaged Facts' Surveys of Pet Owners, pet products and services are at the bottom of the list of household
spending cutbacks, second only to human medicine and healthcare. Reflecting both the higher prices and Americans' deep commitments
to their pets, pet parents remain tenacious when it comes to pet care. We anticipate our ability to reach a growing base of diverse customers
online will continue to improve as E-commerce penetration increases.

 The
Halo brand's international sales increased 18% in 2024, resulting primarily from an underperformance in 2023 related to production
delays in 2022 as we transitioned suppliers. With increasing levels of economic financial status in the Asian markets and demand for
premium and super-premium, western manufactured products, with China representing the largest market opportunity for growth and 79% of
Better Choice's $16.2 million of international sales in 2024.

 Supply
Chain, Manufacturing and Logistics

 Halo
partners with a number of co-manufacturing partners to produce its products. Products sold today under the Halo brand are made strictly
from naturally raised animals on sustainable farms and are manufactured in the U.S and use healthy, natural ingredients, with all purchases
transacted in U.S. dollars. By sourcing cage-free poultry, pasture-raised beef, and wild-caught fish from certified sustainable fisheries
and not including meat meals or other animal byproducts in its formulations, our Halo brand is able to provide pets and pet parents with
a nutritious and highly digestible suite of food and treats. Some products are preserved using either freeze drying or gentle air dehydration
to eliminate the need for artificial preservatives and added chemicals. Our treats and chews are oven-baked, using natural ingredients
for maximum nutrition and protein content. Halo's dog and cat foods meet The Association of American Feed Control Officials ("
AAFCO") guidelines and are small-batch tested for common contaminants prior to leaving the manufacturer.

 We
utilize logistics service providers as a part of our supply chain, primarily for shipping and logistics support. Fulfillment of orders
is managed by a third-party warehousing and logistics partner, Fidelitone. Our warehouse is located in Wauconda, Illinois. Our products
are shipped by trusted carriers for expeditious and reliable delivery.

 Raw
Materials and Principal Suppliers

 We
rely upon the supply of raw materials that meet our high-quality specifications and sourcing requirements. We source Global Animal Partnership
(" GAP") certified cage-free chicken, GAP certified cage-free turkey, Marine Stewardship Council (" MSC") certified
wild-caught salmon and whitefish and select non-GMO fruits and vegetables, such as peas, sweet potatoes and lentils. If any raw material
is adulterated and does not meet our specifications, it could significantly impact our ability to source manufactured products and could
materially and adversely impact our business, financial condition and results of operations.

 For
the supply and co-manufacturing of our products, we have relied on: Alphia, Inc. (" Alphia" f/k/a " C.J. Foods") for dry kibble which transitioned to Barrett Petfood Innovations during 2022, then back to Alphia during 2023; Simmons Pet Food, Inc.
(" Simmons") and Thai Union Manufacturing Co., LTD. for canned wet food; BrightPet Nutrition Group, LLC (" BrightPet") for vegan kibble and freeze dried treats; Carnivore Meat Company, LLC (" Carnivore") for the supply and co-manufacturing
of freeze-dried food and treats. We sourced approximately 79% of inventory purchases from three vendors for the year ended December 31,
2024 and approximately 64% from two vendors for the year ended December 31, 2023.

 Sales
and Marketing

 Our
marketing strategies are designed to clearly communicate to consumers about the benefits of our products and to build awareness of our
brands. We deploy a broad set of marketing tools across various forms of media to reach consumers through multiple touch points and engage
with a number of marketing agencies to develop content and product packaging. Our marketing initiatives include the use of social and
digital marketing, Search Engine Optimization, email and SMS marketing, and paid media (Facebook, Instagram & YouTube), among other
proven strategies to generate and convert sales prospects into loyal, satisfied customers. In addition to directly targeting and educating
consumers of our products, we partner with a number of retailers such as Amazon, Chewy and Petco to develop joint sales and marketing
initiatives to increase sales and acquire new customers.

 In
recent years, consumer purchasing behaviors have shifted dramatically and E-Commerce penetration has significantly increased. In the
fourth quarter of 2023, management shifted from a Brick & Mortar channel focus to a digital first strategy as a result of its annual
operating plan process and has strategically reallocated marketing investments to work more effectively and efficiently in its larger
e-commerce platforms to drive growth and brand awareness.

 Competition

 The
pet health and wellness industry is highly competitive. Competitive factors include product quality, ingredients, brand awareness and
loyalty, product variety, product packaging and design, reputation, price, advertising, promotion, and nutritional claims. We believe
that we compete effectively with respect to each of these factors. We compete with manufacturers of conventional pet food such as Mars,
Nestl and Big Heart Pet Brands (part of the J.M. Smucker Company), and manufacturers of specialty and natural pet food such as
Blue Buffalo (part of General Mills), Wellness, Fromm, Orijen, Merrick (part of Nestl), Stella and Chewy, Open Farm and Freshpet.
In addition, we compete with many regional niche brands in individual geographic markets.

 Employees
and Human Capital Resources

 As
of December 31, 2024, we had 20 full time employees and one part time employee. Our human capital resource objectives include, as applicable,
identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our
equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based
compensation awards. Our employees are not represented by any labor union or any collective bargaining arrangement with respect to their
employment with us. We have never experienced any work stoppages or strikes as a result of labor disputes and we believe our overall
relationships with our employees are positive and the strength of our team is a critical success factor in becoming the most innovative
premium pet food company in the world. Our employees share an entrepreneurial spirit, a passion for excellence and the inspiration to
drive the future of the pet health and wellness industry.

 Our
core values are Integrity, Respect, Working Smarter and Faster and Building Lasting Relationships in all that we do. We continually focus
on employee engagement and a diverse, inclusive culture in order to ensure the continued strength and well-being of our workforce. We
strive to create a workplace where employees feel engaged, believe in our mission, understand their role in our strategy and are passionate
about the work they do. We conduct employee engagement surveys to provide us with valuable insights into employee perspectives and experiences.
We also hold frequent virtual town-hall meetings and team building events to provide updates, celebrate milestones in the business, communicate
initiatives, recognize significant individual accomplishments and provide a forum for employees to communicate and engage with our entire
employee base. We value and embrace diversity by fostering a culture that encompasses the unique attributes, ideas, perspectives, and
experiences of our employees, customers, suppliers and communities. We believe a more inclusive and diverse work environment allows us
to achieve better results and makes us a stronger business.

 We
operate under a " Win From Anywhere" culture, which is our approach to creating a flexible and entrepreneurial working environment
built for long term success. Winning from anywhere means our employees can work from anywhere in the country. We believe this culture
provides the ability for us to attract the best talent and we now have employees all over the U.S. that are winning from anywhere.

 Government
Regulation

 The
regulation of animal food products is complex, multi-faceted, and continually changing. The U.S. Food and Drug Administration ("
FDA"), the U.S. Federal Trade Commission (" FTC"), the U.S. Department of Agriculture (" USDA") and
other regulatory authorities at the federal, state and local levels, as well as authorities in foreign countries, extensively regulate,
among other things, the research, development, testing, composition, manufacture, import, export, labeling, storage, distribution, promotion,
marketing, and post-market reporting of animal foods. We are required to navigate a complex regulatory framework in the locations in
which we wish to manufacture, test, import, export, or sell our products.

 FDA
Regulation of Animal Foods

 The
FDA regulates foods, including foods intended for animals, under the Federal Food, Drug and Cosmetic Act (" FDCA") and its
implementing regulations. The FDCA defines " food" as articles used for food or drink for man or other animals, which includes
products that are intended primarily for nutritional use, taste, or aroma and the components of such products. For animal foods in particular,
this definition applies based on their intended use regardless of labelling as animal food, treats, or supplements. The FDA also imposes
certain requirements on animal foods relating to their composition, manufacturing, labeling, and marketing. Among other things, the facilities
in which our products and ingredients are manufactured must register with the FDA, comply with current good manufacturing practices ("
cGMPs") and comply with a range of food safety requirements.

 Although
pet foods are not required to obtain premarket approval from the FDA, any substance that is added to or is expected to become a component
of a pet food must be used in accordance with a food additive regulation, unless it is generally recognized as safe (" GRAS") under the conditions of its intended use or if it appears on an FDA-recognized list of acceptable animal food ingredients in the Official
Publication of AAFCO. A food may be adulterated if it uses an ingredient that is neither GRAS nor an approved food additive, and that
food may not be legally marketed in the U.S.

 The
labeling of pet foods is regulated by both the FDA and 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. The FDA also considers certain specific claims on pet food labels to be medical
claims and therefore subject to prior review and approval by the FDA. The FDA has a list of specific factors it will consider in determining
whether to initiate enforcement action against such products if they do not comply with the regulatory requirements applicable to drugs,
including, among other things, whether the product is only made available through or under the direction of a veterinarian and does not
present a known safety risk when used as labeled. The FDA may classify some of our products differently than we do and may impose more
stringent regulations which could lead to possible enforcement action.

 Under
the FDCA, the FDA may require the recall of an animal food product if there is a reasonable probability that the product is adulterated
or misbranded, and the use of or exposure to the product will cause serious adverse health consequences or death. In addition, pet food
manufacturers may voluntarily recall or withdraw their products from the market. If the FDA believes that our products are adulterated,
misbranded or otherwise marketed in violation of the FDCA, the agency make take further enforcement action, including: restrictions on
the marketing or manufacturing of a product; required modification of promotional materials or issuance of corrective marketing information;
issuance of safety alerts, press releases, or other communications containing warnings or other safety information about a product; warning
or untitled letters; product seizure or detention; refusal to permit the import or export of products; fines, injunctions, or consent
decrees; and/or imposition of civil or criminal penalties.

 Chinese
Regulations

 General
Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China (" AQSIQ") is responsible
for the unified inspection and quarantine of imported pet food (also referred to in the regulations as " Feed"). Only registered
pet food manufacturers from AQSIQ approved countries (which includes the U.S.) can import pet food to China, and may do so only if they
have first received an import registration certificate from the Ministry of Agriculture (" MOA"). In order to obtain an
import registration certificate, a manufacturer must submit standardized application materials (in both English and Chinese) along with
product samples to the MOA for approval, and if approved, such import registration certificate shall be valid for five years. Overseas
companies are also prohibited from engaging in the direct sale of imported pet food within the territory of China and should establish
a sales organization or appoint a sales agent within the territory of China and file a record with the MOA within six months from the
date the manufacturer obtains its import registration certificate. All imported pet food must be packaged, and the packaging must comply
with China's safety and hygiene regulation and must have Chinese labels that are in conformity with the relevant regulations.

 We
are also subject to labor and employment laws, laws governing advertising, privacy laws, safety regulations and other laws, including
consumer protection regulations that regulate retailers or govern the promotion and sale of merchandise. Our operations, and those of
our distributors and suppliers, are subject to various laws and regulations relating to environmental protection and worker health and
safety matters. We monitor changes in these laws and believe that we are in material compliance with applicable laws. See additional
information under the heading " Risks Related to the Regulation of our Business and Products" in this Annual Report on Form
10-K for a discussion of risks relating to federal, state, local and international regulation of our business.

 Our
Trademarks and Other Intellectual Property

 We
believe that our intellectual property has substantial value and has contributed significantly to the success of our business. Our trademarks
are valuable assets that reinforce our brand, our sub-brands and our consumers' perception of our products. The current registrations
of these trademarks in the U.S. and foreign countries are effective for varying periods of time and may be renewed periodically, provided
that we, as the registered owner, or our licensees where applicable, comply with all applicable renewal requirements including, where
necessary, the continued use of the trademarks in connection with the goods or services identified in the applicable registrations. In
addition to trademark protection, we have registered more than 100 domain names, including www.betterchoicecompany.com, www.halopets.com,
www.trupet.com, www.trudog.com and www.rawgo.com, that are important to the successful implementation of our marketing and advertising
strategy. We rely on and carefully protect unpatented proprietary expertise, recipes and formulations, continuing innovation and other
trade secrets to develop and maintain our competitive position.

 Corporate

 We
were incorporated in the State of Nevada in 2001 under the name Cayenne Construction, Inc., and in 2009, changed our name to Sports Endurance,
Inc. Effective March 11, 2019, we changed our name to Better Choice Company Inc. after reincorporating in Delaware. We have five subsidiaries
- Halo, Purely for Pets, Inc., Bona Vida, Inc., Aimia Pet Healthco Inc, 1000994476 Ontario Inc., and 1000994085 Ontario Inc. Our principal executive offices are located at 12400 Race
Track Road, Tampa, FL 33626. Our website is available at  Our website and the information
contained on or connected to that site are not, and should not be deemed to be part of or incorporated into this Annual Report on Form
10-K.

 Available

 We
file annual, quarterly and current reports and other information with the SEC that are publicly available at www.sec.gov. Our
SEC filings are also available under the Investor Relations section of our website at www.betterchoicecompany.com as soon as reasonably
practicable after they are filed with or furnished to the SEC. Information contained on or connected to our website are not incorporated
into this Annual Report on Form 10-K.

 ITEM
 1A.

 RISK
 FACTORS

 As
a smaller reporting company, we are not required to provide a statement of risk factors. Nonetheless, we are voluntarily providing risk
factors herein. You should consider carefully the following risk factors, together with all the other information in this Annual Report
on Form 10-K, and in our other public filings with the SEC. The occurrence of any of the following risks could harm our business, financial
condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking
statements we have made in this report and those we may make from time to time. You should consider all of the risk factors described
when evaluating our business.

 Risks
Related to Our Business and Industry

 Increases
in sourcing, manufacturing, freight and/or warehousing costs, supply shortages, interruption in our sourcing operations and/or supply
changes could have an adverse effect on our business, financial condition, and operating results.

 Our
products are sourced from a limited number of independent third-party suppliers, which we depend upon for the manufacture of all our
products. Some of the ingredients, packaging materials, and other products we purchase may only be available from a single supplier or
a limited group of suppliers. While alternate sources of supply are generally available, the supply and price are subject to market conditions
and are influenced by other factors beyond our control. We do not have long-term contracts with many of our suppliers, and therefore
they could increase prices or cease doing business with us. As a result, we may be subject to price fluctuations or demand disruptions.

 The
prices of raw materials, packaging materials and freight are subject to fluctuations in price attributable to, among other things, global
competition for resources, weather conditions, changes in supply and demand of raw materials, or other commodities, fuel prices and government-sponsored
agricultural programs. Volatility in the prices of raw materials and other supplies we purchase could increase our cost of sales and
reduce our profitability, and we have no guarantees that prices will not rise. Our ability to pass along higher costs through price increases
to our customers is dependent upon competitive conditions and pricing methodologies employed in the various sales channels in which we
compete, and we may not be successful in implementing price increases. In addition, any price increases we do implement may result in
lower sales volumes. Customers and consumers may choose to shift purchases to lower-priced private label or other value offerings which
may adversely affect our results of operations.

 We
cannot control all of the various factors that might affect our ability to ship orders of our products to customers in a timely manner
or to meet our quality standards. Such factors include, among other things, natural disasters or adverse weather and climate conditions;
political and financial instability; strikes; unforeseen public health crises, including pandemics and epidemics such as the COVID-19
pandemic; acts of war or terrorism and other catastrophic events, whether occurring in the U.S. or internationally (including, without
limitation, the conflict in Ukraine). From time to time, a co-manufacturer may experience financial difficulties, bankruptcy or other
business disruptions, which could disrupt our supply of products or require that we incur additional expense by providing financial accommodations
to the co-manufacturer or taking other steps to seek to minimize or avoid supply disruption, such as establishing a new co-manufacturing
arrangement with another provider. Further, we may be unable to locate an additional or alternate co-manufacturing arrangement in a timely
manner or on commercially reasonable terms, if at all. Any delay, interruption or increased cost in the proprietary value-branded products
that might occur for any reason could affect our ability to meet customer demand, adversely affect our net sales, increase our cost of
sales and hurt our results of operations, which in turn may injure our reputation and customer relationships, thereby harming our business.

 Our
ability to meet increases in demand may be impacted by our reliance on our suppliers and we are subject to the risk of shortages and
long lead times. We may not be able to develop alternate sources in a timely manner. Therefore, we may not be able to source sufficient
product on terms that are acceptable to us, or at all, which may undermine our ability to fill our orders in a timely manner. The occurrence
of any of the foregoing could increase our costs, disrupt our operations, or could have a materially adverse impact on our business,
financial condition, results of operations or prospects.

 If
we fail to maintain and expand our brand, or the quality of our products that customers have come to expect, our business could suffer.

 The
continued development and maintenance of our brand and the quality of our products is critical to our success. We seek to maintain, extend,
and expand our brand image through marketing investments, including advertising and consumer promotions, and product innovation. Maintaining,
promoting and positioning our brand and reputation will depend on, among other factors, the success of preserving the quality of our
products, the availability of our products, marketing and merchandising efforts, the nutritional benefits provided to pets and our ability
to provide a consistent, high-quality customer experience.

 The
success of our brand may suffer if our marketing plans or product initiatives do not have the desired impact on our brand's image
or its ability to attract customers. Brand value is based on perceptions of subjective qualities, and any incident that erodes the loyalty
of our customers, suppliers or co-manufacturers, including adverse publicity or a governmental investigation or litigation, could significantly
reduce the value of our brand and significantly damage our business. Further, our brand value could diminish significantly due to a number
of factors, including consumer perception that we have acted in an irresponsible manner, adverse publicity about our products (whether
or not valid), our failure to maintain the quality of our products, product contamination, the failure of our products to deliver consistently
positive consumer experiences, inadequate labor conditions, health or safety issues at our co-manufacturers, or the products becoming
unavailable to consumers.

 If
we are unable to build and sustain brand equity by offering recognizably superior products, we may be unable to maintain premium pricing
over private label products. The growing use of social and digital media by consumers increases the speed and extent that information
and opinions can be shared. Negative posts or comments about us or our brands or products on social or digital media could damage our
brands and reputation. If we fail to maintain the favorable perception of our brands, our business, financial condition and results of
operations could be negatively impacted.

 We
may not be able to successfully implement and/or manage our growth strategy on a timely basis or we may not grow at all.

 Our
future success depends on our ability to implement our growth strategy of introducing new products and expanding into new markets and
attracting new consumers to our brand and sub-brands. Our ability to implement this growth strategy depends, among other things, on our
ability to: establish our brands and reputation as a well-managed enterprise committed to delivering premium quality products to the
pet health and wellness industry; partner with retailers and other potential distributors of our products; continue to effectively compete
in specialty channels and respond to competitive developments; continue to market and sell our products through a multi-channel distribution
strategy and achieve joint growth targets with our distribution partners; expand and maintain brand loyalty; develop new proprietary
value-branded products and product line extensions that appeal to consumers; maintain and, to the extent necessary, improve our high
standards for product quality, safety and integrity; maintain sources from suppliers that comply with all federal, state and local laws
for the required supply of quality ingredients to meet our growing demand; identify and successfully enter and market our products in
new geographic markets and market segments; execute value-focused pricing strategies; and attract, integrate, retain and motivate qualified
personnel. We may not be able to successfully implement our growth strategy and may need to change our strategy in order to maintain
our growth. If we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful,
our business, financial condition and results of operations may be materially adversely affected.

 If
we succeed in growing our business, such growth could strain our management team and capital resources. Our ability to manage operations
and control growth will be dependent on our ability to raise and spend capital to successfully attract, train, motivate, retain and manage
new members of senior management and other key personnel and continue to update and improve our management and operational systems, infrastructure
and other resources, financial and management controls, and reporting systems and procedures. Failure to manage our growth effectively
could cause us to misallocate management or financial resources, and result in additional expenditures and inefficient use of existing
human and capital resources. Such slower than expected growth may require us to restrict or cease our operations and go out of business.
Additionally, our anticipated growth will increase the demands placed on our suppliers, resulting in an increased need for us to manage
our suppliers and monitor for quality assurance and comply with all applicable laws. Any failure by us to manage our growth effectively
could impair our ability to achieve our business objectives.

 Our
recurring losses and significant accumulated deficit have raised substantial doubt regarding our ability to continue as a going concern.

 We
have experienced recurring operating losses, have a significant accumulated deficit, and we expect to continue to generate operating
losses and consume cash resources in the near term. Without generating sufficient cash flow from operations or additional debt or equity
financing, these conditions raise substantial doubt about our ability to continue as a going concern, meaning that we may be unable to
continue operations for the foreseeable future or realize assets and discharge liabilities in the ordinary course of operations. If we
need to seek additional financing to fund our business activities in the future and there remains doubt about our ability to continue
as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms
or at all. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will
be materially and adversely affected and we may be unable to continue as a going concern. If we are unable to continue as a going concern,
we may have to liquidate our assets and may receive less than the value at which those assets are carried on our consolidated financial
statements, and it is likely that investors will lose all or a part of their investment.

 If
we do not successfully develop additional products and services, or if such products and services are developed but not successfully
commercialized, our business will be adversely affected.

 Our
success will depend, in part, on our ability to develop and market new products and improvements to our existing products. The process
of identifying and commercializing new products is complex, uncertain and may involve considerable costs, and if we fail to accurately
predict customers' changing needs and preferences, our business could be harmed. The success of our innovation and product development
efforts is affected by, among other things, the technical capability of our team; our ability to establish new supplier relationships
and third-party consultants in developing and testing new products, and complying with governmental regulations; our attractiveness as
a partner for outside research and development scientists and entrepreneurs; and the success of our management and sales team in introducing
and marketing new products.

 We
have already and may have to continue to commit significant resources to commercializing new products before knowing whether our investments
will result in products the market will accept. Substantial promotional expenditures may be required to introduce new products to the
market, or improve our market position. To remain competitive and expand and keep shelf placement for our products, we may need to increase
our advertising spending to maintain and increase consumer awareness, protect and grow our existing market share or promote new products,
which could affect our operating results. We may not always be able to respond quickly and effectively to changes in customer taste and
demand due to the amount of time and financial resources that may be required to bring new products to market, which could result in
our competitors taking advantage of changes in customer trends before we are able to and harm our brand and reputation.

 Furthermore,
developing and commercializing new products may divert management's attention from other aspects of our business and place a strain
on management, operational and financial resources, as well as our information systems. We may not execute successfully on commercializing
those products because of errors in product planning or timing, technical hurdles that we fail to overcome in a timely fashion, or a
lack of appropriate resources. Launching new products or updating existing products may also leave us with obsolete inventory that we
may not be able to sell or we may sell at significantly discounted prices. If we are unable to successfully develop or otherwise acquire
new products, our business, financial condition and results of operations may be materially adversely affected.

 Because
we are engaged in a highly competitive business, if we are unable to compete effectively, our results of operations could be adversely
affected.

 The
pet health and wellness industry is highly competitive. We compete on the basis of product and ingredient quality, product availability,
palatability, brand awareness, loyalty and trust, product variety and innovation, product packaging and design, reputation, price and
convenience and promotional efforts. The pet products and services retail industry has become increasingly competitive due to the expansion
of pet-related product offerings by certain supermarkets, warehouse clubs, and other mass and general retail and online merchandisers
and the entrance of other specialty retailers into the pet food and pet supply market, which makes it more difficult for us to compete
for brand recognition and differentiation of our products and services. We face direct competition from companies that sell various pet
health and wellness products at a lower price point and distribute such products to traditional retailers, which are larger than we are
and have greater financial resources. Price gaps between products may result in market share erosion and harm our business. Our current
and potential competitors may also establish cooperative or strategic relationships amongst themselves or with third parties that may
further enhance their resources and offerings. Further, it is possible that domestic or foreign companies, some with greater experience
in the pet health and wellness industry or greater financial resources than we possess, will seek to provide products or services that
compete directly or indirectly with ours in the future.

 Many
of our competitors may have longer operating histories, greater brand recognition, larger fulfillment infrastructures, greater technical
capabilities, significantly greater financial, marketing and other resources and larger customer bases than we do. These factors may
allow our competitors to derive greater net sales and profits from their existing customer base, acquire customers at lower costs or
respond more quickly than we can to new or emerging technologies and changes in consumer preferences or habits. These competitors may
engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive
pricing policies, which may allow them to build larger customer bases or generate net sales from their customer bases more effectively
than we do.

 Our
competitors may be able to identify and adapt to changes in consumer preferences more quickly than us due to their resources and scale.
They may also be more successful in marketing and selling their products, better able to increase prices to reflect cost pressures and
better able to increase their promotional activity, which may impact us and the entire pet health and wellness industry. Increased competition
as to any of our products could result in price reduction, increased costs, reduced margins and loss of market share, which could negatively
affect our profitability. While we believe we are better equipped to customize products for the pet health and wellness market generally
as compared to other companies in the industry, there can be no assurance that we will be able to successfully compete against these
other companies. Expansion into markets served by our competitors and entry of new competitors or expansion of existing competitors into
our markets could materially adversely affect our business, financial condition and results of operations.

 If
we fail to attract new customers, or retain existing customers, or fail to do either in a cost-effective manner, we may not be able to
increase sales.

 We
are highly dependent on the effectiveness of our marketing messages and the efficiency of our advertising expenditures in generating
consumer awareness and sales of our products. We may not always be successful in developing effective messages and new marketing channels,
as consumer preferences and competition change, and in achieving efficiency in our advertising expenditures. We depend heavily on internet-based
advertising to market our products through internet-based media and e-commerce platforms. If we are unable to continue utilizing such
platforms, if those media and platforms diminish in importance or size, or if we are unable to direct our advertising to our target consumer
groups, our advertising efforts may be ineffective, and our business could be adversely affected. The costs of advertising through these
platforms have increased significantly, which could in decreased efficiency in the use of our advertising expenditures, and we expect
these costs may continue to increase in the future.

 Consumers
are increasingly using digital tools as a part of their shopping experience. As a result, our future growth and profitability will depend
in part on:

 the
 effectiveness and efficiency of our online experience for disparate worldwide audiences, including advertising and search optimization
 programs in generating consumer awareness and sales of our products;

 our
 ability to prevent confusion among consumers that can result from search engines that allow competitors to use or bid on our trademarks
 to direct consumers to competitors' websites;

 our
 ability to prevent Internet publication or television broadcast of false or misleading information regarding our products or our
 competitors' products;

 the
 nature and tone of consumer sentiment published on various social media sites; and

 the
 stability of our website and other e-commerce platforms we sell our products on. In recent years, a number of DTC, Internet-based
 retailers have emerged and have driven up the cost of basic search terms, which has and may continue to increase the cost of our
 Internet-based marketing programs.

 If
our marketing messages are ineffective or our advertising expenditures, geographic price-points, and other marketing programs, including
digital programs, are inefficient in creating awareness and consideration of our products and brand name and in driving consumer traffic
to our website or to our other sales channels, our sales, profitability, cash flows and financial condition may be adversely impacted.
In addition, if we are not effective in preventing the publication of confusing, false or misleading information regarding our brand
or our products, or if there arises significant negative consumer sentiment on social media regarding our brand or our products, our
sales, profitability, cash flows and financial condition may be adversely impacted.

 Food
safety and food-borne illness incidents may materially adversely affect our business by exposing us to lawsuits, product recalls or regulatory
enforcement actions, increasing our operating costs and reducing demand for our product offerings.

 Selling
food for consumption involves inherent legal and other risks, and there is increasing governmental scrutiny of and public awareness regarding
food safety. Unexpected side effects, illness, injury or death related to allergens, food-borne illnesses or other food safety incidents
caused by products we sell, or involving our suppliers or co-manufacturers, could result in the discontinuance of sales of these products
or our relationships with such suppliers or co-manufacturers, or otherwise result in increased operating costs, regulatory enforcement
actions or harm to our reputation. Shipment of adulterated or misbranded products, even if inadvertent, can result in criminal or civil
liability. Such incidents could also expose us to product liability, negligence or other lawsuits, including consumer class action lawsuits.
Any claims brought against us may exceed or be outside the scope of our existing or future insurance policy coverage or limits. Any judgment
against us that is more than our policy limits or not covered by our policies or not subject to insurance would have to be paid from
our cash reserves, which would reduce our capital resources.

 The
occurrence of food-borne illnesses or other food safety incidents could also adversely affect the price and availability of affected
ingredients, resulting in higher costs, disruptions in supply and a reduction in our sales. Furthermore, any instances of food contamination
or regulatory noncompliance, whether or not caused by our actions, could compel us, our suppliers, our distributors or our customers,
depending on the circumstances, to conduct a recall in accordance with FDA regulations, comparable state laws or foreign laws in jurisdictions
in which we operate. Food recalls could result in significant losses due to their costs, the destruction of product inventory, lost sales
due to the unavailability of the product for a period of time and potential loss of existing distributors or customers and a potential
negative impact on our ability to attract new customers due to negative consumer experiences or because of an adverse impact on our brand
and reputation. The costs of a recall could exceed or be outside the scope of our existing or future insurance policy coverage or limits.

 In
addition, food companies have been subject to targeted, large-scale tampering as well as to opportunistic, individual product tampering,
and we, like any food company, could be a target for product tampering. Forms of tampering could include the introduction of foreign
material, chemical contaminants and pathological organisms into consumer products as well as product substitution. FDA regulations require
companies like us to analyze, prepare and implement mitigation strategies specifically to address tampering (i.e., intentional adulteration)
designed to inflict widespread public health harm. If we do not adequately address the possibility, or any actual instance, of intentional
adulteration, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions, which could
materially adversely affect our business, financial condition and operating results.

 We
may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operations.

 We
must accurately forecast demand for all of our products in order to ensure that we have enough products available to meet the needs of
our customers. Our forecasts are based on multiple assumptions that may cause our estimates to be inaccurate and affect our ability to
obtain adequate co-manufacturing capacity in order to meet the demand for our products. If we do not accurately align our manufacturing
capabilities with demand, our business, financial condition and results of operations may be materially adversely affected.

 In
addition, we must continuously monitor our inventory and product mix against forecasted demand. If we underestimate demand, we risk having
inadequate supplies. We also face the risk of having too much inventory on hand that may reach its expiration date and become unsalable,
and we may be forced to rely on markdowns or promotional sales to dispose of excess or slow-moving inventory. If we are unable to manage
our supply chain effectively, our operating costs could increase and our profit margins could decrease.

 If
any of our independent shipping providers experience delays or disruptions, our business could be adversely affected.

 We
rely on independent shipping service providers to ship raw materials and products from our third-party suppliers and to ship products
from our manufacturing and distribution warehouses to our customers. Our utilization of any shipping companies that we may elect to use,
is subject to risks, including increases in fuel prices, employee strikes, organized labor activities and inclement weather, which may
impact the shipping company's ability to provide delivery services sufficient to meet our shipping needs. If we are not able to
negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact
our operating results and customer experience.

 Our
intellectual property rights may be inadequate to protect our business.

 We
attempt to protect our intellectual property rights, both in the U.S. and in foreign countries, through a combination of patent, trademark,
copyright and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements. Because of
the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive
the same degree of protection in foreign countries as they would in the U.S. Our failure to obtain or maintain adequate protection of
our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial
condition.

 We
also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology
or otherwise obtain access to our unpatented technology. To protect our trade secrets and other proprietary information, we require employees,
consultants, advisors and collaborators to enter into confidentiality agreements. We cannot assure you that these agreements will provide
meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation
or disclosure of such trade secrets, know-how or other proprietary information. If we are unable to maintain the proprietary nature of
our technologies, we could be materially adversely affected.

 We
rely on our trademarks, trade names, and brand names to distinguish our products from the products of our competitors, and have registered
or applied to register many of these trademarks. We cannot assure you that our trademark applications will be approved. Third parties
may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully
challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote
significant additional resources to advertising and marketing new brands. Further, we cannot assure you that competitors will not infringe
our trademarks, or that we will have adequate resources to enforce our trademarks.

 We
depend on the knowledge and skills of our senior management and other key employees, and if we are unable to retain and motivate them
or recruit additional qualified personnel, our business may suffer.

 We
have benefited substantially from the leadership and performance of our senior management, as well as other key employees. Our success
will depend on our ability to retain our current management and key employees, and to attract and retain qualified personnel in the future,
and we cannot guarantee that we will be able to retain our personnel or attract new, qualified personnel. In addition, we do not maintain
any " key person" life insurance policies. The loss of the services of members of our senior management or key employees
could prevent or delay the implementation and completion of our strategic objectives, or divert management's attention to seeking
qualified replacements.

 A
failure of one or more key information technology systems, networks or processes may materially adversely affect our ability to conduct
our business.

 The
efficient operation of our business depends on our information technology systems. We rely on our information technology systems to effectively
manage our sales and marketing, accounting and financial and legal and compliance functions, engineering and product development tasks,
research and development data, communications, supply chain, order entry and fulfillment and other business processes. We also rely on
third parties and virtualized infrastructure to operate and support our information technology systems. The failure of our information
technology systems, or those of our third-party service providers, to perform as we anticipate could disrupt our business and could result
in transaction errors, processing inefficiencies and the loss of sales and customers, causing our business and results of operations
to suffer.

 In
addition, our information technology systems may be vulnerable to damage or interruption from circumstances beyond our control, including
fire, natural disasters, power outages, systems failures, security breaches, cyber-attacks and computer viruses. The failure of our information
technology systems to perform as a result of any of these factors or our failure to effectively restore our systems or implement new
systems could disrupt our entire operation and could result in decreased sales, increased overhead costs, excess inventory and product
shortages and a loss of important information.

 Further,
it is critically important for us to maintain the confidentiality and integrity of our information technology systems. To the extent
that we have information in our databases that our customers consider confidential or sensitive, any unauthorized disclosure of, or access
to, such information could result in a violation of applicable data privacy and security, data protection, and consumer protection laws
and regulations, legal and financial exposure, damage to our reputation, a loss of confidence of our customers, suppliers and manufacturers
and lost sales. Despite the implementation of certain security measures, our systems may still be vulnerable to physical break-ins, computer
viruses, programming errors, attacks by third parties or similar disruptive problems. If any of these risks materialize, our reputation
and our ability to conduct our business may be materially adversely affected.

 We
rely heavily on third-party commerce platforms to conduct our businesses. If one of those platforms is compromised, our business, financial
condition and results of operations could be harmed.

 We
rely upon third-party commerce platforms, including Shopify. The use of Shopify was discontinued when we exited our DTC channel in June
2024. We also rely on e-mail service providers, bandwidth providers, Internet service providers and mobile networks to deliver e-mail
and " push" communications to customers and to allow customers to access our website. Any damage to, or failure of, our systems
or the systems of our third-party commerce platform providers could result in interruptions to the availability or functionality of our
website and mobile applications. As a result, we could lose customer data and miss order fulfillment deadlines, which could result in
decreased sales, increased overhead costs, excess inventory and product shortages.

 In
the future, the loss of access to these third-party platforms, or any significant cost increases from operating on the marketplaces,
could significantly reduce our revenues, and the success of our business depends partly on continued access to these third-party platforms.
Our relationships with our third-party commerce platform providers could deteriorate as a result of a variety of factors, such as if
they become concerned about our ability to deliver quality products on a timely basis or to protect a third-party's intellectual
property. In addition, third-party marketplace providers could prohibit our access to these marketplaces if we are not able to meet the
applicable required terms of use. If for any reason our arrangements with our third-party commerce platform providers are terminated
or interrupted, such termination or interruption could adversely affect our business, financial condition, and results of operations.

 In
addition, we exercise little control over these providers, which increases our vulnerability to problems with the services they provide.
We could experience additional expense in arranging for new facilities, technology, services and support. The failure of our third-party
commerce platform providers to meet our capacity requirements could result in interruption in the availability or functionality of our
website and mobile applications, which could adversely affect our business and results of operations.

 We
may face difficulties as we expand our business and operations into jurisdictions in which we have no prior operating experience.

 We
plan in the future to expand our operations and business into jurisdictions outside of the jurisdictions where we currently carry on
business, including internationally. There can be no assurance that any market for our products will develop in any such foreign jurisdiction.
We may face new or unexpected risks or significantly increase our exposure to one or more existing risk factors, including economic instability,
new competition, changes in laws and regulations, including the possibility that we could be in violation of these laws and regulations
as a result of such changes, and the effects of competition.

 In
addition, it may be difficult for us to understand and accurately predict taste preferences and purchasing habits of consumers in new
markets. It is costly to establish, develop and maintain operations and develop and promote our brands in new jurisdictions. As we expand
our business into other jurisdictions, we may encounter regulatory, legal, personnel, technological and other difficulties that increase
our expenses and/or delay our ability to become profitable in such countries, which may have a material adverse effect on our business
and brand. These factors may limit our capability to successfully expand our operations in, or export our products to, those other jurisdictions.

 There
may be decreased spending on pets in a challenging economic climate.

 A
challenging economic climate, including adverse changes in interest rates, volatile commodity markets and inflation, contraction in the
availability of credit in the market and reductions in consumer spending, or a slow-down in the general economy or a shift in consumer
preferences to less expensive products may result in reduced demand for our products which may affect our profitability. Pet ownership
and the purchase of pet-related products may constitute discretionary spending for some consumers and any material decline in consumer
discretionary spending may reduce overall levels of spending on pets. As a result, a challenging economic climate may cause a decline
in demand for our products which could be disproportionate as compared to competing pet food brands since our products command a price
premium.

 Since
a significant portion of our revenue has been derived from China, a slowdown in economic growth in China could
adversely impact the sales of our products in China, which could have a material adverse effect on our results of operations and financial
condition. In addition, a deterioration in trade relations between the U.S. and China or other countries, or the negative perception
of U.S. brands by Chinese or other international consumers, could have a material adverse effect on our results of operations and financial
condition.

 If
economic conditions result in decreased spending on pets and have a negative impact on our suppliers or distributors, our business, financial
condition and results of operations may be materially adversely affected.

 Significant
merchandise returns or refunds could harm our business.

 We
allow our customers to return products or obtain refunds, subject to our return and refunds policy. If merchandise returns or refunds
are significant or higher than anticipated and forecasted, our business, financial condition, and results of operations could be adversely
affected. Further, we modify our policies relating to returns or refunds from time to time, and may do so in the future, which may result
in customer dissatisfaction and harm to our reputation or brand, or an increase in the number of product returns or the amount of refunds
we make.

 We
may seek to grow our company and business through acquisitions, investments or through strategic alliances and our failure to identify
and successfully integrate and manage these assets could have a material adverse effect on the anticipated benefits of the acquisition
and our business, financial condition or results of operations.

 We
expect to consider opportunities to acquire or make investments in new or complementary businesses, facilities, technologies or products,
or enter into strategic alliances, which may enhance our capabilities, expand our network, complement our current products or expand
the breadth of our markets. In 2019, we completed three significant acquisitions that involved the combination of three businesses that
historically have operated as independent companies. The success of these completed acquisitions and any future acquisitions will depend
in large part on the success of our management team in integrating the operations, strategies, technologies and personnel. Potential
and completed acquisitions, investments and other strategic alliances involve numerous risks, including: problems integrating the purchased
business, facilities, technologies or products; issues maintaining uniform standards, procedures, controls and policies; assumed liabilities;
unanticipated costs associated with acquisitions, investments or strategic alliances; diversion of management's attention from
our existing business; adverse effects on existing business relationships with suppliers, manufacturers, and retail customers; risks
associated with entering new markets in which we have limited or no experience; potential write-offs of acquired assets and/or an impairment
of any goodwill recorded as a result of an acquisition; potential loss of key employees of acquired businesses; and increased legal and
accounting compliance costs.

 We
may fail to realize some or all of the anticipated benefits of the acquisitions if the integration process takes longer than expected
or is more costly than expected. Our failure to meet the challenges involved in successfully integrating acquisitions, including the
operations of Halo, or to otherwise realize any of the anticipated benefits of the acquisitions could impair our financial condition
and results of operations. Furthermore, we do not know if we will be able to identify additional acquisitions or strategic relationships
we deem suitable or whether we will be able to successfully complete any such transactions on favorable terms or at all. Our ability
to successfully grow through strategic transactions depends upon our ability to identify, negotiate, complete and integrate suitable
target businesses, facilities, technologies and products and to obtain any necessary financing. These efforts could be expensive and
time-consuming and may disrupt our ongoing business.

 Premiums
for our insurance coverage may not continue to be commercially justifiable, and our insurance coverage may have limitations and other
exclusions and may not be sufficient to cover our potential liabilities.

 We
have insurance to protect our assets, operations and employees. While we believe our insurance coverage addresses all material risks
to which we are exposed and is adequate and customary in our current state of operations, such insurance is subject to coverage limits
and exclusions and may not be available for the risks and hazards to which we are exposed. No assurance can be given that such insurance
will be adequate to cover our liabilities or will be generally available in the future or, if available, that premiums will be commercially
justifiable. If we are unable to obtain such insurances or if we were to incur substantial liability and such damages were not covered
by insurance or were in excess of policy limits, we may be prevented from entering into certain business sectors, our growth may be inhibited,
and we may be exposed to additional risk and financial liabilities, which could have a material adverse effect on our business, results
of operations and financial condition could be materially adversely affected.

 Adverse
litigation judgments or settlements resulting from legal proceedings relating to our business operations could materially adversely affect
our business, financial condition and results of operations.

 From
time to time, we are subject to allegations, and may be party to legal claims and regulatory proceedings, relating to our business operations.
Such allegations, claims and proceedings may be brought by third parties, including our customers, employees, governmental or regulatory
bodies or competitors. Defending against such claims and proceedings, regardless of their merits or outcomes, is costly and time consuming
and may divert management's attention and personnel resources from our normal business operations, and the outcome of many of these
claims and proceedings cannot be predicted. If any of these claims or proceedings were to be determined adversely to us, a judgment,
a fine or a settlement involving a payment of a material sum of money were to occur, or injunctive relief were issued against us, our
reputation could be affected and our business, financial condition and results of operations could be materially adversely affected.

 If
third parties claim that we infringe upon their intellectual property rights, our business and results of operations could be adversely
affected.

 Any
claims of intellectual property infringement, even those without merit, could be expensive and time consuming to defend; could require
us to cease selling the products that incorporate the challenged intellectual property; could require us to redesign, reengineer, or
rebrand the product, if feasible; could divert management's attention and resources; or could require us to enter into royalty
or licensing agreements in order to obtain the right to use a third party's intellectual property. Any royalty or licensing agreements,
if required, may not be available to us on acceptable terms or at all.

 A
successful claim of infringement against us could result in our being required to pay significant damages, enter into costly license
or royalty agreements, or stop the sale of certain products, any of which could have a negative impact on our business, financial condition,
results of operations and our future prospects.

 Failure
to comply with the U.S. Foreign Corrupt Practices Act, other applicable anti-corruption and anti-bribery laws, and applicable trade control
laws could subject us to penalties and other adverse consequences.

 We
operate our business in part outside of the U.S. and our operations are subject to the U.S. Foreign Corrupt Practices Act (the "
FCPA"), as well as the anti-corruption and anti-bribery laws in the countries where we do business. In addition, we are subject
to U.S. and other applicable trade control regulations that restrict with whom we may transact business, including the trade sanctions
enforced by the U.S. Treasury, Office of Foreign Assets Control (" OFAC"). We also plan to expand our operations outside
of the U.S. in the future and our risks related to the FCPA will increase as we grow our international presence. Any violations of these
anti-corruption or trade controls laws, or even allegations of such violations, can lead to an investigation and/or enforcement action,
which could disrupt our operations, involve significant management distraction, and lead to significant costs and expenses, including
legal fees. In addition, our brand and reputation, our sales activities or our stock price could be adversely affected if we become the
subject of any negative publicity related to actual or potential violations of anti-corruption, anti-bribery or trade control laws and
regulations.

 Our
ability to utilize our net operating loss carryforwards may be limited.

 Our
ability to utilize our federal net operating loss carryforwards and federal tax credit may be limited under Section 382 of the Code as
amended by the Tax Cut and Jobs Act (the " TCJA"). The limitations apply if we experience an " ownership change". Similar provisions of state tax law may also apply. If we have experienced an ownership change at any time since our formation, we
may already be subject to limitations on our ability to utilize our existing net operating losses to offset taxable income. In addition,
future changes in our stock ownership, which may be outside of our control, may trigger an ownership change and, consequently, the limitations
under Section 382. As a result, if or when we earn net taxable income, our ability to use our pre-change net operating loss carryforwards
to offset such taxable income may be subject to limitations, which could adversely affect our future cash flows.

 Risks
Related to the Regulation of our Business and Products

 We
and our co-manufacturers and suppliers are subject to extensive governmental regulation and may be subject to enforcement if we are not
in compliance with applicable requirements.

 We
and our third-party suppliers are subject to a broad range of foreign, federal, state and local laws and regulations governing, among
other things, the testing, development, manufacture, distribution, marketing and post-market reporting of animal foods. These include
laws administered by the FDA, the FTC, the USDA, and other federal, state and local regulatory authorities. Because we market food, supplements
and other products that are regulated as food and cosmetic care products for animals, we and the companies that manufacture our products
are subject to the requirements of the FDCA and regulations promulgated thereunder by the FDA. The FDCA and related regulations govern,
among other things, the manufacturing, composition, ingredients, packaging, labeling and safety of food for animals. The FDA requires
that facilities that manufacture animal food products comply with a range of requirements. If our third-party suppliers cannot successfully
manufacture products that conform to our specifications and the strict regulatory requirements, they may be subject to adverse inspectional
findings or enforcement actions, which could materially impact our ability to market our products, could result in their inability to
continue manufacturing for us or could result in a recall of our products that have already been distributed.

 If
the FDA or other regulatory authority determines that we or they have not complied with the applicable regulatory requirements, our business,
financial condition and results of operations may be materially adversely impacted. If we do not comply with labeling requirements, including
making unlawful claims about our products, we could be subject to public warning letters and possible further enforcement. Failure by
us or our co-manufacturers and suppliers to comply with applicable laws and regulations or to obtain and maintain necessary permits,
licenses and registrations relating to our or our partners' operations could subject us to administrative and civil penalties,
including fines, injunctions, recalls or seizures, warning letters, restrictions on the marketing or manufacturing of our products, or
refusals to permit the import or export of products, as well as potential criminal sanctions, which could result in increased operating
costs resulting in a material effect on our operating results and business. For further detail, refer to the information under "
Item 1. Business– Government Regulation" in this Annual Report on Form 10-K.

 International
expansion of our business could expose us to substantial business, regulatory, political, financial and economic risks.

 We
currently conduct business and market products in the U.S., Canada and select Asian markets, including China. The expansion of our business
outside of the U.S. could expose us to substantial risks, which may include, but are not limited to, the following:

 political,
 social and economic instability;

 higher
 levels of credit risk, corruption and payment fraud;

 regulations
 that might add difficulties in repatriating cash earned outside the U.S. and otherwise prevent us from freely moving cash;

 import
 and export controls and restrictions and changes in trade regulations

 compliance
 with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws in other jurisdictions;

 multiple,
 conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, trade regulations, economic
 sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payor regimes and other
 governmental approvals, permits and licenses;

 failure
 by us, our collaborators or our distributors to obtain regulatory clearance, authorization or approval for the use of our products
 in various countries;

 additional
 potentially relevant third-party patent rights;

 complexities
 and difficulties in obtaining intellectual property protection and enforcing our intellectual property;

 logistics
 and regulations associated with shipping samples and customer orders, including infrastructure conditions and transportation delays;

 the
 impact of local and regional financial crises;

 natural
 disasters, political and economic instability, including wars, terrorism and political unrest, and outbreak of disease;

 breakdowns
 in infrastructure, utilities and other services;

 boycotts,
 curtailment of trade and other business restrictions; and

 the
 other risks and uncertainties described in this Form 10K

 Any
of these factors could significantly harm our future international expansion and operations and, consequently, our revenue and results
of operations.

 Changes
in government regulations and trade policies may materially and adversely affect our sales and results of operations.

 The
U.S. or foreign governments may take administrative, legislative, or regulatory action that could materially interfere with our ability
to sell products in certain countries and/or to certain customers, particularly in China. As part of our attempt to broaden its customer
base, we have begun offering our products to Chinese consumers. Our decision to export products to China requires us to comply with Chinese
rules, laws, and regulations, as well as certain domestic and international laws relating to the import and export of goods to foreign
countries. These laws are often changing, and the costs associated with complying with these laws and regulations may adversely affect
us. Additionally, changes in the current laws may make importing products to China more difficult, which may also negatively affect our
business. Furthermore, changes in U.S. trade policy more generally could trigger retaliatory actions by affected countries, which could
impose restrictions on our ability to do business in or with affected countries or prohibit, reduce or discourage purchases of our products
by foreign customers. Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products, cause our sales
to decline and adversely impact our ability to compete, which could materially and adversely impact our business, financial condition
and results of operations.

 There
is significant uncertainty about the future relationship between the U.S. and China with respect to trade policies, treaties, government
regulations and tariffs. An escalation of recent trade tensions between the U.S. and China has resulted in trade restrictions that could
harm our ability to participate in Chinese markets and numerous additional such restrictions have been threatened by both countries.
The U.S. and China have imposed a number of tariffs and other restrictions on items imported or exported between the U.S. and China.
We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and China or other
countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. The institution
of trade tariffs both globally and between the U.S. and China specifically carries the risk of negatively impacting China's overall
economic condition, which could have negative repercussions for our business. Our products are and may continue to be subject to export
license requirements or restrictions, particularly in respect of China.

 Our
products may be subject to recalls for a variety of reasons, which could require us to expend significant management and capital resources.

 Manufacturers
and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product
defects, such as contamination, adulteration, unintended harmful side effects or interactions with other substances, packaging safety
and inadequate or inaccurate labeling disclosure. Although we have detailed procedures in place for testing finished products, there
can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls,
regulatory action or lawsuits, whether frivolous or otherwise. If any of the animal food or care products produced by us are recalled
due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any
legal proceedings that might arise in connection with the recall. We had to issue a recall in 2018 for one of our products after a single
retail sample collected by the Michigan Department of Agriculture tested positive for Salmonella. Although customers reported no incidents
of injury or illness in association with this product, the recall negatively affected our results. As a result of any such recall, customers
may be hesitant to purchase our products in the future and we may lose a significant amount of sales and may not be able to replace those
sales at an acceptable margin or at all. In addition, a product recall may require significant management attention or damage our reputation
and goodwill or that of our products or brands. Additionally, product recalls may lead to increased scrutiny of our operations by the
FDA or other state or federal regulatory agencies, requiring further management attention, increased compliance costs and potential legal
fees, fines, penalties and other expenses.

 Changes
in existing laws or regulations, including how such existing laws or regulations are enforced by federal, state, and local authorities,
or the adoption of new laws or regulations may increase our costs and otherwise adversely affect our business, financial condition and
results of operations.

 The
manufacture and marketing of animal food products is highly regulated, and we and our co-manufacturers and suppliers are subject to a
variety of federal and state laws and regulations applicable to pet food and treats. These laws and regulations apply to many aspects
of our business, including the manufacture, packaging, labeling, distribution, advertising, sale, quality and safety of our products.
We could incur costs, including fines, penalties, and third-party claims, in the event of any violations of, or liabilities under, such
requirements, including any competitor or consumer challenges relating to compliance with such requirements. For example, in connection
with the marketing and advertisement of our products, we could be the target of claims relating to false or deceptive advertising, including
under the auspices of the FTC and state consumer protection statutes. The regulatory environment in which we operate could change significantly
and adversely in the future. The laws and regulations that apply to our products and business may change in the future and we may incur
(directly or indirectly) material costs to comply with current or future laws and regulations or any required product recalls. New or
revised government laws and regulations could significantly limit our ability to run our business as it is currently conducted, result
in additional compliance costs and, in the event of noncompliance, lead to administrative or civil remedies, including fines, injunctions,
withdrawals, recalls or seizures and confiscations, as well as potential criminal sanctions. Any such changes or actions by the FDA or
other regulatory agencies could have a material adverse effect on our co-manufacturers, our suppliers or our business, financial condition
and results of operations.

 Risks
Related to Our Capital Structure

 We
are a holding company and rely on payments, advances and transfers of funds from our subsidiaries to meet our obligations and pay any
dividends.

 We
have limited direct operations and significant assets other than ownership of 100% of the capital stock of our subsidiaries. Because
we primarily conduct our operations through our subsidiaries, we depend on those entities for payments to generate the funds necessary
to meet our financial obligations, and to pay any dividends with respect to our common stock. Legal and contractual restrictions in our
term loan and revolving line of credit agreement and other agreements that may govern future indebtedness of our subsidiaries, as well
as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries.
The earnings from, or other available assets of, our subsidiaries might not be sufficient to make distributions or obtain loans to enable
us to meet certain of our obligations. Any of the foregoing could materially and adversely affect our business, financial condition,
results of operations and cash flows.

 Our
level of indebtedness and related covenants could limit our operational and financial flexibility and could significantly adversely affect
our business if we breach such covenants and default on such indebtedness.

 Our
ability to meet our debt service obligations depends upon our operating and financial performance, which is subject to general economic
and competitive conditions and to financial, business and other factors affecting our operations, many of which are beyond our control.
If we are unable to service our debt, we may need to sell inventory and other material assets, restructure or refinance our debt, or
seek additional equity capital. If our inability to meet our debt service obligations results in an event of default as defined under
our Wintrust receivables credit facility, the lenders thereunder may be able to take possession of substantially all of our assets. Prevailing
economic conditions and global credit markets could adversely impact our ability to do so.

 In
addition, our debt agreements contain limits on our ability to, among other things, incur additional debt, grant liens, undergo certain
fundamental changes, make investments, and dispose of inventory. These restrictions may prevent us from taking actions that we believe
would be in the best interests of the business and may make it difficult for us to successfully execute our business strategy or effectively
compete with companies that are not similarly restricted. If we determine that we need to take any action that is restricted under our
debt agreements, we will need to first obtain a waiver from the related lenders. Obtaining such waivers, if needed, may impose additional
costs or we may be unable to obtain such waivers. Our ability to comply with these restrictive covenants in future periods will largely
depend on our ability to successfully implement our overall business strategy. The breach of any of these covenants or restrictions could
result in a default, which could result in the acceleration of our outstanding debt. In the event of an acceleration of such debt, we
could be forced to apply all available cash flows to repay such debt, which could also force us into bankruptcy or liquidation.

 For
information regarding our outstanding debt, refer to " Note 9 - Debt" in the Notes to Consolidated Financial Statements included
in Item 8. Financial Statements and Supplementary Data of this report, which is incorporated into this Item 1A by reference.

 Our
common stock may be deemed to be a " penny stock" and the " penny stock" rules could adversely affect the market
price of our common stock.

 The
SEC has adopted Rule 3a51-1, which establishes the definition of a " penny stock" as any equity security that has a market
price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Our common
stock may be deemed to be a penny stock. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires that a broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser's
written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks;
and (iii) a signed and dated copy of a written suitability statement. Generally, brokers may be less willing to execute transactions
in securities subject to the " penny stock" rules. This may make it more difficult for investors to dispose of our common
stock and cause a decline in the market value of our stock.

 Our
failure to meet the applicable listing requirements of NYSE American could result in a delisting of our common stock and could make it
more difficult to raise capital in the future.

 NYSE
American has listing requirements for inclusion of securities for trading on the NYSE American, including minimum levels of stockholders'
equity, market value of publicly held shares, number of public stockholders and stock price. There can be no assurance that we will be
successful in maintaining the listing of NYSE American as it is possible we may fail to satisfy the continued listing requirements, such
as the corporate governance requirements or the minimum stock price requirement. On April 24, 2024, the Company received a notice of
noncompliance from the NYSE American. On May 24, 2024, we submitted a plan of compliance to NYSE American addressing how we intend to
regain compliance, which plan has been accepted by the NYSE American. However, if we are not in compliance with the continued listing
standards before the end of the cure period, or if we do not make progress consistent with the plan, the NYSE American may take steps
to delist our common stock. Further, we received correspondence from the NYSE American on July 9, 2024, indicating noncompliance under
a different requirement of the listing standards, since we reported stockholders' equity of $1.1 million as of March 31, 2024,
and had losses from continuing operations and/or net losses in three out of its four most recent fiscal years ended December 31, 2023,
and that which requires us to maintain a minimum stockholders' equity of $4.0 million. We will need to take additional steps to
regain compliance under this requirement as well, or the NYSE American may take steps to delist our common stock. Such a delisting or
the announcement of such delisting will have a negative effect on the price of our common stock and would impair your ability to sell
or purchase our common stock when you wish to do so. In the event of a delisting, we may attempt to take actions to restore our compliance
with the NYSE American listing requirements, but we can provide no assurance that any such action taken by us would allow our common
stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from
dropping below the NYSE American minimum listing requirements or prevent future non-compliance with the NYSE American listing requirements.
If we do not maintain the listing of our common stock on NYSE American, it could make it harder for us to raise additional capital in
the long-term. If we are unable to raise capital when needed in the future, we may have to cease or reduce operations.

 Moreover,
as a result of the Amalgamation (as defined below), the Combined Company (as defined below) will be deemed a "reverse merger company"
by NYSE and, as such, the Combined Company would be required by NYSE to meet the NYSE Initial Listing Standards at such time. If the
Combined Company does not meet such Initial Listing Standards, the Combined Company could be subject to immediate suspension and delisting
proceedings from NYSE. We and SRx are taking appropriate actions to allow the Combined Company to meet such standards as of immediately
following the consummation of the Amalgamation. We cannot make any assurances that our actions and efforts will be successful or that
the Combined Company will meet the Initial Listing Standards as of immediately following the consummation of the Amalgamation. If the
Combined Company does not meet the Initial Listing Standards, the Combined Company will be subject to immediate suspension of trading
in the common stock of the Combined Company and/or delisting proceedings following the consummation of the Amalgamation.

 If
the Combined Company does not meet the Initial Listing Standards, we may nevertheless decide to consummate the Amalgamation. If this
should occur, the Combined Company will likely be delisted from NYSE and then may seek to list on another national exchange or in the
OTC Market. In the event that the Combined Company lists in the OTC Market rather than a national exchange, stockholders of the Combined
Company may face material adverse consequences, including, but not limited to, a lack of trading market for the Combined Company's
common stock, reduced liquidity and market price of the Combined Company's common stock, decreased analyst coverage of Combined
Company's common stock, and an inability for the Combined Company to obtain any additional financing that it may need to fund its
operations.

 See
"Management's Discussion and Analysis of Financial Condition and Results of Operations – Arrangement Agreement."

 Our
common stock prices may be volatile.

 The
market price of our common stock has been and may continue to be highly volatile and subject to wide fluctuations. Our financial performance,
government regulatory action, tax laws, interest rates and market conditions in general could have a significant impact on the future
market price of our common stock.

 The
public price of our common stock could also be subject to wide fluctuations in response to the risk factors described in this report
and others beyond our control, including: the number of shares of our common stock publicly owned and available for trading actual
or anticipated quarterly variations in our results of operations or those of our competitors; our actual or anticipated operating performance
and the operating performance of similar companies in our industry our announcements or our competitors' announcements regarding
significant contracts, acquisitions, or strategic investments general economic conditions and their impact on the pet food markets
the overall performance of the equity markets threatened or actual litigation changes in laws or regulations relating to
our industry any major change in our board of directors or management publication of research reports about us or our industry
or changes in recommendations or withdrawal of research coverage by securities analysts and sales or expected sales of shares of
our common stock by us, and our officers, directors, and significant stockholders. From time to time, our affiliates may sell stock for
reasons due to their personal financial circumstances. These sales may be interpreted by other stockholders as an indication of our performance
and result in subsequent sales of our stock that have the effect of creating downward pressure on the market price of our common stock.

 The
volatility of the market price of our common stock may adversely affect the ability of investors to purchase or sell shares of our common
stock. Investors may also experience losses on their investments in our stock due to price fluctuations. In addition, the stock market
in general has experienced extreme price and volume fluctuations that often have been unrelated or disproportionate to the operating
performance of those companies. Securities class action litigation has often been instituted against companies following periods of volatility
in the overall market and in the market price of a company's securities. Such litigation, if instituted against us, could result
in very substantial costs, divert our management's attention and resources and harm our business, operating results, and financial
condition.

 We
do not expect to pay any cash dividends to the holders of the common stock in the foreseeable future and the availability and timing
of future cash dividends, if any, is uncertain.

 We
expect to use cash flow from future operations to repay debt and support the growth of our business and do not expect to declare or pay
any cash dividends on our common stock in the foreseeable future. Our Wintrust receivables credit facility places certain restrictions
on the ability of us and our subsidiaries to pay cash dividends. We may amend our current credit facility or enter into new debt arrangements
that also prohibit or restrict our ability to pay cash dividends on our common stock.

 Subject
to such restrictions, our board of directors will determine the amount and timing of stockholder dividends, if any, that we may pay in
future periods. In making this determination, our directors will consider all relevant factors, including the amount of cash available
for dividends, capital expenditures, covenants, prohibitions or limitations with respect to dividends, applicable law, general operational
requirements and other variables. We cannot predict the amount or timing of any future dividends you may receive, and if we do commence
the payment of dividends, we may be unable to pay, maintain or increase dividends over time. Therefore, you may not be able to realize
any return on your investment in our common stock for an extended period of time, if at all.

 Future
sales of our common stock, or the perception that such sales may occur, may depress our share price, and any additional capital through
the sale of equity or convertible securities may dilute your ownership in us.

 In
the future, we may issue our previously authorized and unissued securities. We are authorized to issue 200,000,000 shares of common stock
and 4,000,000 shares of preferred stock with such designations, preferences and rights as determined by our board of directors. The potential
issuance of such additional shares of common stock will result in the dilution of the ownership interests of the holders of our common
stock and may create downward pressure on the trading price, if any, of our common stock. The sales of substantial amounts of our common
stock pursuant to our effective registration statements, or the perception that these sales may occur, could cause the market price of
our common stock to decline and impair our ability to raise capital. These shares also may be sold pursuant to Rule 144 under the Securities
Act, depending on their holding period and subject to restrictions in the case of shares held by persons deemed to be our affiliates.
We also may grant additional registration rights in connection with any future issuance of our capital stock.

 For
information regarding our outstanding stockholders' equity and potentially dilutive securities, refer to " Note 9 - Debt", " Note 12 - Commitments and contingencies", " Note 13 - Warrants" and " Note 14 - Share-based compensation"
in the Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report
on Form 10-K, which is incorporated into this Item 1A by reference.

 The
market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing
requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

 There
can be no assurance that the share price of our stock will attract new investors, including institutional investors. In addition, there
can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors. As a result,
the trading liquidity of our common stock may not necessarily improve.

 We
may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

 Our
certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred
stock having such designations, preferences, limitations and relative rights, including preferences over our common stock with respect
to dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock
could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right
to elect some number of our directors in all events or on the happening of specified events, or the right to veto specified transactions.
Similarly, the repurchase or redemption rights or liquidation preferences we might grant to holders of preferred stock could affect the
value of the common stock. The issuance of such preferred stock could also be used as a method of discouraging, delaying or preventing
a change of control.

 The
administrative and regulatory costs of public company compliance could consume a significant amount of our resources.

 The
rules and regulations related to being a public company require us to incur significant legal, accounting and other expenses. The legal
and financial compliance make some activities more time-consuming and costly, particularly after we are no longer a smaller reporting
company. Moreover, if we are not able to comply with the requirements or regulations as a public reporting company in any regard, we
could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial
and management resources.

 In
addition, the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the SEC impose various requirements on public companies,
including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management
and other personnel devote a substantial amount of time to these compliance initiatives. To achieve compliance with Section 404 within
the prescribed period, we will be engaged in a costly and challenging process to document and evaluate our internal control over financial
reporting. In this regard, we will need to continue to dedicate internal resources and potentially engage outside consultants or hire
an internal audit resource to assess and document the adequacy of internal control over financial reporting, validate through testing
that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial
reporting. Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm will be able to
conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404.
This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

 We
are a smaller reporting company which could make our securities less attractive to investors and may make it more difficult to compare
our performance with other public companies.

 We
are a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K, and we may take advantage of certain reduced disclosure
obligations. To the extent we take advantage of such reduced disclosure obligations while we continue to qualify as a smaller reporting
company, it may make comparison of our financial statements with other public companies difficult or impossible. Some investors may find
our common stock less attractive because we may rely on these exemptions, which could result in a less active trading market for our
common stock, and our stock price may be more volatile.

 Our
bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings
that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for
disputes with us or our directors, officers, employees or agents.

 Our
bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware
will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding
brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer (or affiliate
of any of the foregoing) of us to us or the our shareholders, (iii) any action asserting a claim arising pursuant to any provision of
the DGCL or our certificate of incorporation or bylaws, or (iv) any other action asserting a claim arising under, in connection with,
and governed by the internal affairs doctrine; provided that these exclusive forum provisions will not apply to suits brought to enforce
any liability or duty created by the Securities Act or the Exchange Act, or to any claim for which the federal courts have exclusive
jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have
notice of, and consented to, the provisions of our bylaws described in the preceding sentence. This choice of forum provision may limit
a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers,
employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions
of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur
additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial
condition or results of operations.

 Provisions
in our certificate of incorporation and bylaws and Delaware law may discourage a takeover attempt even if a takeover might be beneficial
to our stockholders.

 Provisions
contained in our certificate of incorporation and bylaws could make it more difficult for a third party to acquire us after we have become
a publicly traded company. Provisions in our certificate of incorporation and bylaws impose various procedural and other requirements,
which could make it more difficult for stockholders to effect certain corporate actions. For example, our certificate of incorporation
authorizes our board of directors to determine the rights, preferences, privileges and restrictions of unissued series of preferred stock
without any vote or action by our stockholders. Thus, our board of directors can authorize and issue shares of preferred stock with voting
or conversion rights that could dilute the voting power of holders of our other series of capital stock. These rights may have the effect
of delaying or deterring a change of control of our company. Additionally, our certificate of incorporation and/or bylaws establish limitations
on the removal of directors and on the ability of our stockholders to call special meetings and include advance notice requirements for
nominations for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings.

 Moreover,
because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State
of Delaware (the " DGCL"), which prohibits an " interested stockholder" owning in excess of 15% of our outstanding
voting stock from merging or combining with us for a period of three years after the date of the transaction in which such stockholder
acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. These
provisions could limit the price that certain investors might be willing to pay in the future for shares of our common stock.

 Claims
for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us
and may reduce the amount of money available to us.

 Our
certificate of incorporation provides that we will indemnify our directors and officers, in each case to the fullest extent permitted
by Delaware law. In addition, as permitted by Section 145 of the Delaware General Corporation Law, our certificate of incorporation and
our indemnification agreements that we have entered into with our directors and officers provide that:

 We
 will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request,
 to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person
 acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation
 and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful.

 We
 may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.

 We
 are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that
 such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled
 to indemnification.

 We
 will not be obligated pursuant to the indemnification agreements entered into with our directors and executive officers to indemnify
 a person with respect to proceedings initiated by that person, except with respect to proceedings to enforce an indemnitees right
 to indemnification or advancement of expenses, proceedings authorized by our board of directors and if offered by us in our sole
 discretion.

 The
 rights conferred in our certificate of incorporation are not exclusive, and we are authorized to enter into indemnification agreements
 with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.

 We
 may not retroactively amend our certificate of incorporation or indemnification agreement provisions to reduce our indemnification
 obligations to directors, officers, employees and agents.

 As
a result of these provisions, if an investor were able to enforce an action against our directors or officers, in all likelihood, we
would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required
to pay. Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial
condition, results of operations and cash flows, and adversely affect the value of our business.

 Risks
Related to the Amalgamation

 See
"Management's Discussion and Analysis of Financial Condition and Results of Operations – Arrangement Agreement."

 The
Amalgamation may not be completed due to failure to obtain the necessary court and/or regulatory approvals.

 To
complete the Amalgamation, both we and SRx must make certain filings with and obtain certain consents and approvals from various governmental
and regulatory authorities including the Court, and the approval of NYSE of the listing of the shares of our common stock to be issued
pursuant to the Amalgamation. We and SRx have not yet obtained these approvals, all of which are required to complete the Amalgamation.
The regulatory approval processes may take a lengthy period of time to complete which could delay completion of the Amalgamation. The
approval processes, including the undertakings and conditions that may be required for approval or whether the court and regulatory approvals,
may not be obtained.

 Uncertainty
surrounding the Amalgamation could adversely affect our retention of strategic partners and personnel and could negatively impact our
future business and operations.

 Because
the Amalgamation is dependent upon satisfaction of certain conditions, its completion is subject to uncertainty. In response to this
uncertainty, our strategic partners may delay or defer decisions concerning us. Any delay or deferral of those decisions by strategic
partners could have a material adverse effect on our business and operations, regardless of whether the Amalgamation is ultimately completed.

 The
parties could fail to complete the Amalgamation or the Amalgamation may be completed on different terms.

 The
Amalgamation may not be completed as there are certain conditions that are outside our and SRx's control, or if completed, that
the Amalgamation will be completed on the same or similar terms to those set out in the Amalgamation Agreement. The completion of the
Amalgamation is subject to the satisfaction of a number of conditions which include, among others, performance by us and SRx of our respective
obligations and covenants in the Arrangement Agreement. There can be no assurance that these conditions will be satisfied or, if satisfied,
when they will be satisfied.

 In
addition, both we and SRx have the right to terminate the Arrangement Agreement in certain circumstances. Accordingly, there is no certainty
that the Arrangement Agreement will not be terminated by either us or SRx before the completion of the Amalgamation. For example, we
have the right, in certain circumstances, to terminate the Arrangement Agreement if changes occur that, in the aggregate, have a SRx
Material Adverse Effect (as such term is defined in the Arrangement Agreement). Although a SRx Material Adverse Effect excludes certain
events that are beyond the control of us and SRx, there is no assurance that a change having a SRx Material Adverse Effect on SRx will
not occur before the Effective Date, in which case we could elect to terminate the Arrangement Agreement and the Amalgamation would not
proceed. In addition, if the Amalgamation is not completed by April 15, 2025, we or SRx may choose to terminate the Arrangement Agreement
in accordance with its terms.

 If
the Amalgamation is not completed, our ongoing business may be adversely affected as a result of the costs (including opportunity costs)
incurred in respect of pursuing the Amalgamation, and we could experience negative reactions from the financial markets, which could
cause a decrease in the market price of our common stock, particularly if the market price reflects market assumptions that the Amalgamation
will be completed or completed on certain terms. We may also experience negative reactions from our partners and there could be a negative
impact on our ability to attract future acquisition opportunities. Failure to complete the Amalgamation or a change in the terms of the
Amalgamation could each have a material adverse effect on our business, financial condition and results of operations.

 If
the Amalgamation is not completed and our board of directors decides to seek another merger or business combination, it may not be able
to find a party willing to engage in a transaction that is equivalent to, or more attractive than, the Amalgamation. In addition, in
certain circumstances, we may be required to pay a termination payment to SRx.

 The
termination payment, if triggered, may discourage other parties from attempting to acquire us.

 Under
the Arrangement Agreement, we are required to pay a termination payment of $3.2 million to SRx in the event the Arrangement Agreement
is terminated in certain circumstances. The termination payment may discourage other parties from attempting to acquire the engage in
a transaction with us or otherwise making an Acquisition Proposal, even if those parties would otherwise be willing to offer greater
value to our stockholders than that offered by SRx under the Amalgamation.

 We
will incur substantial transaction-related costs in connection with the Amalgamation even if the Amalgamation is not completed.

 Certain
costs related to the Amalgamation, such as legal, accounting and certain financial advisor fees must be paid by us even if the Amalgamation
is not completed. Also, if the Amalgamation is not completed, we may be required to pay a termination payment to SRx in certain circumstances.
Such costs may offset any expected cost savings and other synergies from the Amalgamation.

 While
the Amalgamation is pending, we are restricted from taking certain actions.

 The
Arrangement Agreement restricts us from taking specified actions until the Amalgamation is completed without the consent of SRx, which
may adversely affect our ability to execute certain business strategies including, but not limited to, the ability in certain cases to
enter into or amend contracts, acquire or dispose of assets, incur indebtedness or incur capital expenditures. These restrictions may
prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Amalgamation.

 The
pending Arrangement may divert the attention of our management.

 The
pending Arrangement could cause the attention of our management to be diverted from the day-to-day operations. These disruptions could
be exacerbated by a delay in the completion of the Amalgamation and could have an adverse effect on our business, operating results or
prospects regardless of whether the Amalgamation is ultimately completed.

 Following
the completion of the Amalgamation, the Combined Company may issue additional securities.

 Following
the completion of the Amalgamation, the Combined Company may issue additional securities (including equity securities) to finance its
activities, including in order to finance acquisitions. If the Combined Company were to issue additional equity securities, the ownership
interest of our existing stockholders may be diluted and some or all of the Combined Company's financial measures on a per share
basis could be reduced. Moreover, as the Combined Company's intention to issue additional equity securities becomes publicly known,
the Combined Company's share price may be materially adversely affected.

 ITEM
 1B.

 UNRESOLVED
 STAFF COMMENTS

 None.

 ITEM
 1C.

 CYBERSECURITY

 Cybersecurity
risk management is an important part of the Company's overall risk management efforts. We maintain a comprehensive enterprise-wide
information security program that comprises policies and controls designed to identify, safeguard against, detect, respond to, mitigate
and manage reasonably foreseeable cybersecurity risks and threats. Our approach utilizes diverse security tools to prevent, identify,
investigate, resolve and recover from vulnerabilities and security incidents. These include, but are not limited to, internal reporting,
monitoring and detection tools. We use a collaborative, enterprise-wide strategy to address cybersecurity risks and allocate significant
resources to our cybersecurity and risk management processes, which efforts are intended to adapt to the evolving cybersecurity landscape
and promptly address emerging threats. Our cybersecurity risk management program aligns with the National Institute of Standards and
Technology (NIST) framework and is organized into five key functions: identification, protection, detection, response and recovery. We
regularly assess the threat landscape and employ a layered cybersecurity strategy to prevent, detect and mitigate threats.

 All
employees undergo security awareness training, with regular testing through simulated phishing emails. Certain employee positions require
additional role-based, specialized security awareness or other cybersecurity training, as applicable. Simulations, drills and assessments
are conducted to test our defenses from both a technical and an operational perspective.

plays a key role in assessing and managing material risks related to cybersecurity threats, including evaluating potential vulnerabilities,
monitoring the effectiveness of controls, and ensuring timely remediation of any identified gaps. This ongoing effort includes the coordination
of internal and external resources to respond to emerging cybersecurity threats and ensure our systems are resilient against attacks.

 We
assess risks associated with third-party providers as part of our overall cybersecurity risk management framework by reviewing system
and organization controls reports, when available, and other independent reports. We also generally require third parties to, among other
things, maintain security controls to protect our confidential information and to promptly notify us of material breaches that may impact
our data.

 Our
Board of Directors has oversight of our enterprise risk assessment and risk management processes, as well as the steps taken to mitigate
these risks, including for cybersecurity matters. The Audit Committee of our Board of Directors has oversight of cybersecurity risk assessment
and risk management policies as part of its risk management oversight responsibilities, and is responsible for ensuring that the Company
has processes in place to identify, evaluate and manage cybersecurity risks, as well as appropriate processes and programs to mitigate
cybersecurity incidents if they occur. Significant cybersecurity matters, including those related to incidents, are escalated to the
Board of Directors.

 We
face cybersecurity threats in the ordinary course of our business and have faced cybersecurity threats and breach attempts in the past.
Such threats and breach attempts have not materially affected our business, strategy, results of operations or financial condition. At
any given time, however, we may face known or unknown cybersecurity risks and threats that cannot be fully prevented or mitigated, and
we may discover vulnerabilities in our cybersecurity programs. Therefore, we may not be successful in preventing or mitigating a cybersecurity
incident that could have a material adverse effect on us. For more information on the cybersecurity risks we face, please refer to "
A failure of one or more key information technology systems, networks or processes may materially adversely affect our ability to conduct
our business." in Item 1A. " Risk Factors."

 ITEM
 2.

 PROPERTIES

 Our
principal place of business is located at 12400 Race Track Road, Tampa, FL 33626, which consists of approximately 5,000 square feet of
office space which we lease. Our lease for this location is scheduled to expire on January 31, 2026.

 We
do not own any properties or land.

 We
believe our facilities are adequate and suitable for our current needs and that suitable additional or alternative space will be available
if the need arises in the future.

 ITEM
 3.

 LEGAL
 PROCEEDINGS

 From
time to time, we are subject to litigation and other proceedings that arise in the ordinary course of our business. Subject to the inherent
uncertainties of litigation and although no assurances are possible, we believe that there are no pending lawsuits or claims that, individually
or in the aggregate, will have a material adverse effect on our business, financial condition or our yearly results of operations.

 ITEM
 4.

 MINE
 SAFETY DISCLOSURES

 Not
applicable.

 PART
II

 ITEM
 5.

 MARKET
 FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market

 Our
common stock is currently listed on the NYSE American marketplace under the symbol " BTTR" after the consummation of our
IPO on July 1, 2021 and was previously listed on the OTC Market Group Inc.'s OTCQX market after being upgraded from the OTCQB on
December 28, 2020 where it had been trading since June 2010. The following table sets forth, for the periods indicated and as reported
on the NYSE American and OTC Markets, the high and low bid prices for our common stock. Such over-the-counter market quotations reflect
inter-dealer prices, without retail mark-up, mark-downs or commissions, and may not necessarily represent actual transactions:

 High

 Low

 2023

 First Quarter (1)

 $
 33.20

 $
 13.00

 Second Quarter (1)

 $
 22.60

 $
 7.76

 Third Quarter (1)

 $
 11.20

 $
 4.44

 Fourth Quarter (1)

 $
 23.20

 $
 4.88

 2024

 First Quarter (1)

 $
 12.76

 $
 5.20

 Second Quarter (1)

 $
 7.74

 $
 3.13

 Third Quarter (1)

 $
 4.03

 $
 1.97

 Fourth Quarter (1)

 $
 2.61

 $
 1.63

 (1)
 The
 high and low bid prices for this quarter were reported by the NYSE American marketplace.

 Holders
of Common Stock

 As
of March 25, 2025, we had 2,422,005 shares of our common stock issued and outstanding. As of March 25, 2025, there were 147 record holders
of our common stock. Certain shares are held in " street" name and accordingly, the number of beneficial owners of such shares
is not known or included in the foregoing number. This number of holders of record also does not include stockholders whose shares may
be held in trust by other entities.

 Dividend
Policy

 We
do not currently anticipate declaring or paying cash dividends on our common stock in the foreseeable future. We currently intend to
retain our future earnings, if any, to finance the development and expansion of our business. Any future determination to pay dividends
will be at the discretion of our board of directors and will depend upon then-existing conditions, including our results of operations
and financial condition, capital requirements, business prospects, statutory and contractual restrictions on our ability to pay cash
dividends, including restrictions contained in our credit agreements, and other factors our board of directors may deem relevant. Accordingly,
you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares
at or above the price you paid for them.

 Securities
Authorized for Issuance under Equity Compensation Plans

about our equity compensation plans is included in Item 12 of Part III of this Annual Report on Form 10-K.

 Recent
Sales of Unregistered Securities

 Since
January 1, 2022, the registrant made the following issuances and purchases of its unregistered securities as described below. All share
amounts have been retroactively adjusted to give effect to a reverse stock split of 1-for-44 effective March 20, 2024.

 (1)
On February 1, 2022, the registrant issued 4,962 shares of common stock to five non-employee directors in return for services provided
in their capacity as directors.

 (2)
On November 2, 2022, the registrant issued 927 shares of common stock to a member of its board of directors for service as interim CEO.

 (3)
On December 30, 2022, the registrant issued 562 shares of common stock to a member of its board of directors for service as interim CEO.

 (4)
On January 4, 2023, the registrant issued 20,292 shares of common stock to its board of directors in return for services provided in
their capacity as directors.

 (5)
On January 11, 2023, the registrant issued 4,545 shares of common stock to its key executives as part of their compensation packages.

 (6)
On January 31, 2023, the registrant issued 409 shares of common stock to a member of its board of directors for service as interim CEO.

 (7)
On April 30, 2023, the registrant issued 909 shares of common stock to a member of its executive management as part of their compensation
package.

 (8)
On September 5, 2023, the registrant issued 34,090 shares of common stock to two members of its board of directors in return for services
provided in their capacity as directors.

 (9)
On February 1, 2024, the registrant issued 42,088 shares of common stock to five non-employee directors in return for services provided
in their capacity as directors.

 (10)
On June 26, 2024, the registrant issued 22,727 shares of common stock to a member of its executive management as part of their compensation
package.

 Unless
otherwise stated above, the issuances of the above securities were deemed to be exempt from registration under the Securities Act in
reliance upon Section 4(a)(2) of the Securities Act, or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b)
of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating
to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions
to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate
legends were placed upon the stock certificates issued in these transactions.

 Purchases
of Equity Securities by the Issuer

 The
following table presents information with respect to our repurchases of Better Choice Company common stock during the year ended December
31, 2024:

 Period (1)

 Total Number of Shares Purchased

 Average Price Paid per Share

 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

 Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

 July 1, 2024 to September 30, 2024

 $
 2.71

 $
 5,000,000

 October 1, 2024 to December 31, 2024

 102,405

 $
 1.99

 102,405

 $
 –

 Total

 102,597

 $
 –

 102,597

 (1)

 In May 2022, our Board of Directors approved a share repurchase program that authorized the repurchase of up to $5.0 million of the Company's
outstanding common stock in the open market through December 31, 2024.

 ITEM
 6.

 [RESERVED]

 ITEM
 7.

 MANAGEMENT'S
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 The
following discussion includes forward-looking statements about our business, financial condition and results of operations, including
discussions about management's expectations for our business. The financial condition, results of operations and cash flows discussed
in this Management's Discussion and Analysis of Financial Condition and Results of Operations are those of Better Choice Company
Inc. and its consolidated subsidiaries, collectively, the "Company," "Better Choice Company," "we,"
"our," or "us". These statements represent projections, beliefs and expectations based on current circumstances
and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance
or as promises of a given course of action. Instead, various known and unknown factors are likely to cause our actual performance and
management's actions to vary, and the results of these variances may be both material and adverse. A description of material factors
known to us that may cause our results to vary or may cause management to deviate from its current plans and expectations, is set forth
under "Risk Factors." See "Cautionary Note Regarding Forward-Looking Statements." The following discussion should
also be read in conjunction with our audited consolidated financial statements including the notes thereto appearing elsewhere in this
filing. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. We undertake no obligation to publicly release the results of any revision to these forward-looking
statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 Overview
and Outlook

Choice is a pet health and wellness company committed to leading the industry shift toward pet products and services that help dogs and
cats live healthier, happier and longer lives. Our mission is to become the most innovative premium pet food company in the world, and
we are motivated by our commitment to making products with integrity and treating pets and their parents with respect. We believe that
our broad portfolio of pet health and wellness products are well positioned to benefit from the trends of growing pet humanization and
an increased consumer focus on health and wellness, and have adopted a laser focused, channel specific approach to growth that is driven
by new product innovation.

 We
sell our premium and super-premium products (which we believe generally includes products with a retail price greater than $0.20 per
ounce) under the Halo brand umbrella, including Halo Holistic, Halo Elevate and the former TruDog brand, which was rebranded
and successfully integrated under the Halo brand umbrella during the third quarter of 2022. Our core products sold under the Halo brand
are made with high-quality, thoughtfully sourced ingredients for natural, science based nutrition. Each innovative recipe is formulated
with leading veterinary and nutrition experts to deliver optimal health. Our diverse and established customer base has enabled us to
penetrate multiple channels of trade, which we believe enables us to deliver on core consumer needs and serve pet parents wherever they
shop. We group these channels of trade into three distinct categories: Digital, which includes the sale of product to online retailers
such as Amazon and Chewy, as well as DTC which included the sale of product through the Company's website, halopets.com, through
June 1, 2024; International, which includes the sale of product to foreign distribution partners and to select international retailers;
and Brick & Mortar, which primarily includes the sale of product to pet specialty retailers, independent pet stores, and regional
distributors.

 A
concerted effort to drive brand awareness behind distinctive positioning and messaging is the cornerstone of our growth plan, supported
by innovation. Halo's future growth is driven through an extensive brand positioning workstream executed over the last year. New
consumer messaging will build awareness with pet parents, persuade them that Halo is the right choice for their pet, and move the consumer
towards purchase. The creative campaign will be brought to life on Amazon and Chewy platforms as well as outside those platforms. By
shifting media investment from bottom-of-funnel-driven DTC activities to full funnel activation across the Amazon and Chewy platforms,
Halo will see improvements in both media effectiveness, efficiency, and reach.

 In
addition to incremental consumer media activation, innovation plays a key role in Halo's growth plans, supported by our own research
and development, and acquisitions. Our established supply and distribution infrastructure allows us to bring new products to market in
less than a year. Our outsourced manufacturing model is flexible, scalable and encourages innovation allowing us to offer a breadth of
assortment in dog and cat food main meal as well as pet treat products under the Halo brand, serving a wide variety of consumer needs,
dayparts, and occasions.

 The
Halo portfolio offers a variety of platforms through which to innovate. Halo Holistic is designed for the pet parent seeking complete
digestive health with prebiotics, probiotics and postbiotics. Additionally, it's one of the only brands made with only whole animal
proteins and no meat meals. Halo Elevate, features leading nutrient levels supporting the top five pet parent health concerns including
digestive health, heart and immunity support, healthy skin and coat, hip and joint support and strength and energy. Halo Freeze Dried
Raw recipes preserve the natural flavor and nutrition of raw food with 100% protein from natural sources.

 The
Global Pet Food and Treat Market

 The
U.S. represents the largest and most developed market for pet food globally, with food and treats accounting for approximately $64 billion
of total spend in the pet care market in 2023. According to the American Pet Product Association ("APPA"), approximately
63% of all households in the U.S. own a pet, equating to a 180 million adult consumers living in a household with a pet. Pet spending
represents a significant portion of household spend on consumer products, as this translates to an average annual spend on pet products
of more than $738 in 2023, which represents a 7.4% increase over the previous year.

 The
most recent data available from an October 2024 Packaged Facts report estimates that US retail sales of dog and cat food will top $54
billion in 2024, up 4.5% over 2023. This increase represents a significant slow-down in pet food growth, following four consecutive years
of double-digit increases and a 2018-2023 compound annual growth rate (CAGR) of 13.0%. While much of the pre-pandemic growth in the pet
food market can be attributed to continued premiumization and pet population growth among higher-income households, price inflation was
almost entirely behind more recent growth, specifically in 2022 and early 2023. These gains were especially impressive given a simultaneous
decline in the dog population. Pet food has proven itself to be amazingly resilient in both this and previous economic crises, and pet
food's position as a non-discretionary item has spared it many of the cutbacks seen in the non-food pet supplies sector.

 Due
to its ready access and "contactless" advantages, e-commerce saw a huge boost from the pandemic and continued to make inroads
into brick-and-mortar's share of the market in the following years. Packaged Facts expects the channel to continue bleeding share
away from others at a somewhat slower pace in the years to come, with the ongoing, intensive, competitive pushes of Amazon.com driving
the momentum. Appeals continue to be the convenience of having large bags of pet food home delivered, the "endless aisles"
and product comparison benefits of online shopping, the movement toward fresh pet food sold online, and online shopping in general.

 In
Packaged Facts' January 2024 survey, pet food was cited as an important pet health and wellness product by the largest share of
pet owners– 80% of dog owners and 82% of cat owners. By comparison, 50% and 49%, respectively, view pet treats as an important pet
health product. Pet parents are on the lookout for products that improve their pet's health and wellness, with 79% liking the idea
of healthier pet snacks and treats and 73% viewing high-quality pet foods as effective for preventive healthcare. Pet owners are also
willing to spend more on pet foods with extra health and wellness benefits, and this attitude appears to be growing, with 74% agreeing
with this sentiment in Packaged Facts July-August 2024 survey, up from 66% in the September-October 2023 survey.

 Packaged
Facts projects moderate (in relation to the past four years) but steady pet food performance through 2028, with the sales to experience
a compound annual growth rate (CAGR) of 4.4% for the 2023-2028 period. This increase reflects a 4.3% increase for dog food and 4.6% increase
in cat food. Although the days of double-digit increases will likely remain in the past, given the mature nature of the pet food market,
should the dog population rebound more quickly than anticipated, this growth could reach beyond 5% or even 6%.

 From
a demographic perspective, younger pet owners are more likely to spend a higher percentage of their income on pets, treat their pet as
an important member of the family and to purchase products from pet specialty and online retailers rather than from grocery stores. Along
these lines, women are more interested in purchasing pet food than men, and are more likely to engage with search ads than men. Taken
holistically, these traits suggest a preference to purchase more premium and super-premium pet food and treats from brands like Halo,
with a tendency to purchase products in the channels where we compete.

 Globally,
Asia is the second largest market for pet products, with China representing the largest market opportunity for growth. Like the U.S.,
growth in the Asian pet care industry has been driven by dramatic increases in household pet ownership. The global plant-based pet food
market is set to expand its roots in the global market at a promising CAGR of 9.2%, while the market is anticipated to hold a revenue
of USD $57.43 billion in 2032. We believe that growth in Asia is fueled by increasing levels of economic financial status and demand
for premium, western manufactured products as a result of product quality concerns. This demand has been supported by a rapidly growing
middle class in China, where a McKinsey report estimated that in 2018 roughly 730 million people in urban areas fell into the income
categories of "aspirants" and "affluents," with the Brookings group estimating that approximately 60 million
people are added to these income categories each year. We believe that this growth drove the increase in the number of dog-owning Chinese
households as measured by Euromonitor, which increased from 12% in 2015 to 22% in 2023, according to one 2024 study. According to Euromonitor,
the Chinese market for premium dry dog and cat food is anticipated to grow at a 20% CAGR and 28% CAGR, respectively, from 2015 through
2025, suggesting that the Chinese pet market has significant room for growth in the foreseeable future.

 Our
Growth Strategy

 Build the Halo Brand
 with sharpened positioning, improved storytelling, increased share-of-voice, and a defined innovation strategy and platform-based
 approach to consumer qualified new products.

 Capture Fair Share Online
 via increased and efficient investment, full funnel activation, enhanced discoverability, and maximizing tent-pole events.

 Omnichannel
 Expansion strategy development while maximizing current distribution relationships, expanding independent distributor network,
 and introducing innovation across core product lines.

 Win
 Globally with scalable go-to-market strategy and long-term partnerships to accelerate growth, including actively pursuing new Latin American markets.

 Create
 Fuel for Growth via continuous supply chain improvements, pursuing global formula harmonization for cost savings and improving
 portfolio efficiency through more effective portfolio managements.

 Maximize
 Operating Leverage to optimize overhead infrastructure for scale efficiency, driving greater governance through financial visibility
 and KPI tracking with a ruthless focus on working capital.

 Recent
Corporate Developments

 On
March 2, 2023, we announced that Robert Sauermann was resigning from his role as Chief Operating Officer ("COO"), effective
March 17, 2023. On March 21, 2023, we announced that Sharla Cook was resigning from her role as Chief Financial Officer ("CFO"),
effective April 3, 2023. Also on March 21, 2023, we announced that Carolina Martinez was appointed as Interim CFO, effective April 3,
2023.

 On
May 11, 2023, we announced that Lionel F. Conacher was resigning from his role as Interim CEO of the Company, effective May 22, 2023.
Mr. Conacher will still continue to serve on the Board as a Director. On May 11, 2023, we announced that Kent Cunningham was appointed
as Chief Executive Officer of the Company, effective May 22, 2023.

 On
August 2, 2023, we announced that Carolina Martinez was appointed as Chief Financial Officer, Treasurer and Secretary of the Company,
effective August 7, 2023. On August 28, 2023, we announced that Donald Young, was resigning from his role as Chief Sales Officer of the
Company, effective September 8, 2023.

 In
December 2023, the Company made a strategic exit out of Petco stores (while remaining on Petco.com), and Pet Supplies Plus. As of June
1, 2024, the Company has exited its DTC channel, in an effort to improve profitability. On March 25, 2024, Better Choice Company, Inc.
("BTTR") initiated a legal action to enforce a right of first refusal ("ROFR") option exercised by Alphia, Inc.
("Alphia"), which is controlled by a Paris-based private equity firm, PAI Partners. On June 20, 2024, the Company agreed
to settlement terms of the lawsuit. The agreement dismisses the Company's ongoing litigation with Alphia and provides for the forgiveness
of the Company's term loan, including $5.0 million in principal and $0.5 million of payable-in-kind ("PIK") accrued
interest, the termination of 335,640 warrants with a strike price of $11.44 per share that were set to expire in 2028, and the forgiveness
of up to $2.6 million in accounts payable due to Alphia, provided the remaining outstanding accounts payable balance is paid within 90
days of the settlement date. These accounts payable were paid and settled prior to December 31, 2024, resulting in a gain of $2.6 million.

 The
Company was not in compliance with certain covenants related to the Alphia Term Loan Facility as of December 31, 2023 and the debt was
callable by the lender. In connection with the Alphia settlement noted above, the Company was no longer subject to Alphia-related covenants
as of December 31, 2024.

 On
April 15, 2024, the Company's board of directors authorized and approved a stock repurchase plan (the "Repurchase Plan")
for up to $5 million of the currently outstanding shares of the Company's common stock through December 31, 2024. Under the Repurchase
Plan, the Company is authorized to repurchase shares through open market purchases, privately negotiated transactions, block purchases
or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act. The Board also authorized
the Company to enter into written trading plans under Rule 10b5-1 of the Exchange Act. Adopting a trading plan that satisfies the conditions
of Rule 10b5-1 would allow a company to repurchase its shares at times when it might otherwise be prevented from doing so due to self-imposed
trading blackout periods or pursuant to insider trading laws. Under any Rule 10b5-1 trading plan, the Company's third-party broker,
subject to Securities and Exchange Commission regulations regarding certain price, market, volume and timing constraints, would have
authority to purchase the Company's common stock in accordance with the terms of the plan. The Company may from time to time enter
into Rule 10b5-1 trading plans to facilitate the repurchase of its common stock pursuant to its Repurchase Plan. The Company has purchased
102,597 shares of common stock under the Repurchase Plan, during the year ended December 31, 2024.

 On
April 24, 2024, the Company received a notice of noncompliance from the NYSE American. On May 24, 2024, we submitted a plan of compliance
to NYSE American addressing how we intend to regain compliance. The plan has been accepted by the NYSE American. However, if we are not
in compliance with the continued listing standards before the cure period ends on October 24, 2025, or if we do not make progress consistent
with the plan, the NYSE American may take steps to delist our common stock. Further, we received correspondence from the NYSE American
on July 9, 2024, indicating noncompliance under a different requirement of the listing standards, since we reported stockholders'
equity of $1.1 million as of March 31, 2024, and had losses from continuing operations and/or net losses in three out of its four most
recent fiscal years ended December 31, 2023, and that which requires us to maintain a minimum stockholders' equity of $4.0 million.
We will need to take additional steps to regain compliance under this requirement as well, or the NYSE American may take steps to delist
our common stock.

 Arrangement
Agreement

 On
September 3, 2024, the Company announced it entered into an Arrangement Agreement (the "Arrangement Agreement") with SRx
Health Solutions, Inc., a corporation organized under the laws of the Province of Ontario ("SRx" or "SRx Health"),
1000994476 Ontario Inc., an indirect wholly-owned subsidiary of the Company and a corporation existing under the laws of the Province
of Ontario ("AcquireCo"), and 1000994085 Ontario Inc., a direct wholly-owned subsidiary of the Company and corporation existing
under the laws of the Province of Ontario ("CallCo"). Pursuant to the Arrangement Agreement, and the Plan of Arrangement
adopted in connection therewith, the Company will acquire SRx in an all-stock transaction pursuant to a statutory amalgamation of SRx
and AcquireCo under Canadian law (the "Amalgamation"). As a result of the Amalgamation, all of the property, rights, interests
and obligations of SRx shall become the property, rights, interests and obligations of the resulting entity ("Amalco"), and
Amalco will be an indirect wholly-owned subsidiary of the Company. The Arrangement Agreement was amended on December 6, 2024, and the Arrangement Agreement and Plan of Arrangement
were each amended on January 24, 2025 and February 25, 2025.

 In
the Amalgamation, each issued and outstanding common share of SRx will be converted based on the Exchange Ratio (as defined below) into
shares of common stock of the Company ("BTTR Common Stock") or, at the option of the holder thereof, exchangeable shares
of Amalco that will be exchangeable at the option of the holder (or under certain other circumstances) on a one-for-one basis for shares
of BTTR Common Stock. The Exchange Ratio will be determined five business days prior to the consummation of the Amalgamation (the "Closing")
and will be based on the trailing 30-day volume weighed average price of the Better Choice Common Stock on the NYSE America, subject
to an aggregate share collar of 19,750,000 shares and 30,000,000 shares, with any resulting fractional shares to be rounded to the nearest
whole share (the "Exchange Ratio"). The Amalgamation assigns an equity value of SRx of U.S. $80 million, assuming net debt
at Closing of U.S. $43 million (which will be subject to a two-way adjustment prior to the Closing). All outstanding warrants and restricted
stock units of SRx will be converted into common shares of SRx or terminated prior to the Closing.

 The
transaction has been unanimously approved by the boards of directors of the Company and SRx. The transaction was approved by the stockholders of the Company at a special meeting on March 21, 2025 and by the
SRx shareholders at a shareholder meeting on February 26, 2025.

 SRx
Health operates one of the largest specialty pharmacy networks in Canada with specialty pharmacies, specialty health/infusion clinics,
clinical trial sites and wholesale distribution facilities spanning the region. SRx Health is only one of a few specialty pharma operators
in Canada with a network that extends across Canada, making it one of the most accessible providers of specialty healthcare in the country.
Better Choice will continue to operate its portfolio of established premium and super-premium pet products under the Halo brand. Upon
closing, Better Choice will emerge as a leading global health and wellness company by providing products and solutions for families to
make better choices. The definitive agreement and announcement of plans for a business combination indicates the intentions of management
but does not alter the independent operation status of the entities until the transaction is fully executed and approved.

 The
consummation of the Amalgamation is subject to certain closing conditions, including, among others, requisite approval of the Ontario
Superior Court of Justice (Commercial List) and the approval of NYSE for initial listing of the post-Amalgamation combined company (the
"Combined Company"). As a result of the Amalgamation, the Combined Company will be deemed a "reverse merger company"
by NYSE and, as such, the Combined Company would be required by NYSE to meet the NYSE Initial Listing Standards at such time. If the
Combined Company does not meet such Initial Listing Standards, the Combined Company could be subject to immediate suspension and delisting
proceedings from NYSE. Better Choice and SRx are taking appropriate actions to allow the Combined Company to meet such standards as of
immediately following the consummation of the Amalgamation. Better Choice and SRx cannot make any assurances that its actions and efforts
will be successful or that the Combined Company will meet the Initial Listing Standards as of immediately following the consummation
of the Amalgamation. If the Combined Company does not meet the Initial Listing Standards, the Combined Company will be subject to immediate
suspension of trading in the common stock of the Combined Company and/or delisting proceedings following the consummation of the Amalgamation.

 If the Combined Company does not meet
the Initial Listing Standards, Better Choice and SRx may nevertheless decide to consummate the Amalgamation. If this should occur, the
Combined Company will likely be delisted from NYSE and then may seek to list on another national exchange or in the OTC Market. In the
event that the Combined Company lists in the OTC Market rather than a national exchange, stockholders of the Combined Company may face
material adverse consequences, including, but not limited to, a lack of trading market for the Combined Company's common stock,
reduced liquidity and market price of the Combined Company's common stock, decreased analyst coverage of Combined Company's
common stock, and an inability for the Combined Company to obtain any additional financing that it may need to fund its operations. See
"Risk Factors — Risks Relating to the Amalgamation."

 Results
of Operations for the Years Ended December 31, 2024 and 2023

 The
following table sets forth our consolidated results for the periods presented (in thousands):

 Years Ended December 31,

 Change

 2024

 2023

 $

 %

 Net sales

 $

 $

 $
 (3,617
)

 (9
)%

 Cost of goods sold

 21,986

 26,795

 (4,809
)

 (18
)%

 Gross profit

 12,989

 11,797

 1,192

 %

 Operating expenses:

 Selling, general and administrative

 24,444

 (5,488
)

 (22
)%

 Impairment of intangible assets

 –

 8,532

 (8,532
)

 (100
)%

 Total operating expenses

 32,976

 (14,020
)

 (43
)%

 Loss from operations

 (5,967
)

 (21,179
)

 15,212

 (72
)%

 Other income (expense):

 Interest expense

 (467
)

 (1,353
)

 (65
)%

 –

 (236
)

 (100
)%

 6,206

 –

 6,206

 –
 %

 Other income

 –

 –
 %

 Total other income (expense)

 5,808

 (1,589
)

 7,397

 (466
)%

 Net loss before income taxes

 (159
)

 (22,768
)

 22,609

 (99
)%

 Income tax expense

 (9
)

 (2
)

 (7
)

 %

 Net loss available to common stockholders

 $
 (168
)

 $
 (22,770
)

 $
 22,602

 (99
)%

 Net
sales

 We
sell our products through online retailers, pet specialty retailers, our online portal directly to our consumers and internationally
to foreign distribution partners (transacted in U.S. dollars). Our DTC channel was discontinued in June 2024. Generally, our sales transactions
are single performance obligations that are recorded at the time the product is shipped from our distribution centers and when control
transfers. We offer a variety of trade promotions, discounts and incentives to our customers, which impacts the transaction price of
our products and our net sales accordingly. DTC net sales include revenue derived from shipping fees and are net of loyalty points earned
(a portion of revenue is deferred at the time of the sale as points are earned and not recognized until the redemption of the points,
estimated based on historical experience). We record a revenue reserve based on historical return rates to account for customer returns.

about our revenue channels is as follows (in thousands):

 2024

 2023

 Digital (1)

 $
 16,482

 %

 $
 19,002

 %

 International (2)

 $
 16,210

 %

 $
 13,720

 %

 Brick & Mortar (3)

 $
 2,283

 %

 $
 5,870

 %

 Net Sales

 $

 %

 $

 %

 (1)

 The
 Company's Digital channel includes two wholesale customers that amounted to greater than 10% of the Company's total net
 sales for the years ended December 31, 2024 and 2023, respectively. Additionally, DTC sales within the Digital channel amounted to
 greater than 10% of the Company's total net sales for the year ended December 31, 2023. DTC sales within the Digital channel
 were approximately $5.6 million for the year ended December 31, 2023. As of June 1, 2024, the Company has exited its DTC channel
 in an effort to improve profitability. The Company historically reported the sales in this channel as E-commerce and DTC separately
 and has been consolidated into one revenue stream as of December 31, 2024.

 (2)

 One
 of the Company's International customers amounted to greater than 10% of the Company's total net sales and represented
 $12.8 million and $11.0 million of net sales for the years ended December 31, 2024 and 2023, respectively.

 (3)

 None
 of the Company's Brick & Mortar customers represented greater than 10% of net sales for the years ended December 31, 2024
 and 2023. For the year ended December 31, 2023, Petco was included within the Brick & Mortar channel. Beginning in Q1 2024, Petco
 is presented within Digital as a result of the strategic exit out of Petco stores, while remaining on Petco.com.

 Net
sales decreased $(3.6) million, or (9)%, to $35.0 million for the year ended December 31, 2024 compared to $38.6 million for the year
ended December 31, 2023. The decrease in net sales for the year ended December 31, 2024 is primarily attributable to strategically exiting
unprofitable customers in the Brick & Mortar channel at the end of 2023 and the shutdown of the DTC revenue stream in the second
quarter of 2024.

 Key
factors that we expect to affect our future sales growth include new product innovation and launches, our expansion strategy in each
of the sales channels and our key supplier relationships.

 Gross
profit

 Cost
of goods sold consists primarily of the cost of product obtained from co-manufacturers, packaging materials, freight costs for shipping
inventory to the warehouse, as well as third-party warehouse and order fulfillment costs. We review inventory on hand periodically to
identify damaged, slow moving inventory, and/or aged inventory. Based on this analysis, we record inventories at the lower of cost or
net realizable value, with any reduction in value expensed as cost of goods sold.

 Our
products are manufactured to our specifications by our co-manufacturers using raw materials. We work with our co-manufacturers to secure
a supply of raw materials that meet our specifications. In addition to procuring raw materials that meet our formulation requirements,
our co-manufacturers manufacture, test and package our products. We design our packaging for our co-manufacturers and the packaging is
shipped directly to them.

 Our
gross profit has been and will continue to be affected by a variety of factors, primarily product sales mix, volumes sold, discounts
offered to newly acquired and recurring customers, the cost of our manufactured products, and the cost of freight from the manufacturer
to the warehouse.

the year ended December 31, 2024, gross profit increased $1.2 million, or 10%, to $13.0 million compared to $11.8 million during the
year ended December 31, 2023. Gross profit margin increased 6% to 37% for the year ended December 31, 2024 compared to 31% for the year
ended December 31, 2023. The increase in gross profit is primarily attributable to improved pricing from our manufacturers, and a shift
in product sales mix due to efficient portfolio rationalization.

 We
continue to actively work with our co-manufacturing and freight partners to generate future cost savings and realize improved gross margins
in future periods. We could see continued margin variability due to the current economic environment and pricing pressures of inflationary
costs for both transportation and raw materials. We will continue to refine and optimize our overall pricing strategy as we evaluate
the future impact of inflation and align ourselves with the market.

 Operating
expenses

 Our
Selling, general and administrative ("SG&A") expenses consist of the following:

 Sales
 and marketing costs, for specific customer promotional programs, paid media, content creation expenses and our DTC selling platform.
 Marketing costs are geared towards customer acquisition and retention and building brand awareness. During the year ended December
 31, 2024, sales and marketing costs decreased approximately $(1.0) million or (14)%, to $6.6 million from $7.6 million during the
 year ended December 31, 2023. The decrease was driven primarily by lower marketing and advertising agency fees related to the Halo
 brand renovation and migration from the former TruDog brand, as well as decreased marketing spend in our International sales channel.

 Employee
 compensation and benefits decreased approximately $(1.8) million or (28)% during the year ended December 31, 2024 to $4.6 million
 from $6.4 million during the year ended December 31, 2023. The decrease was primarily related to a reduction in employee headcount,
 partially offset by higher severance costs during the first half of 2024.

 compensation includes expenses related to equity awards issued to employees and non-employee directors. During the year ended
 December 31, 2024, Share-based compensation decreased $(1.0) million or (53)% to $0.8 million compared to $1.8 million for the year
 ended December 31, 2023. The decrease is driven by January 2023 grants which became fully vested in January 2024, resulting in a
 decrease to share-based compensation, partially offset by common stock issued for board service.

 Freight,
 which is primarily related to the shipping of DTC orders to customers, decreased $(0.8) million or (61)% during the year ended December
 31, 2024 to $0.5 million from $1.3 million during the year ended December 31, 2023. Freight costs had generally been decreasing due
 to lower DTC sales as described above. The DTC channel was shut down as of June 1, 2024, which contributed to the decrease in freight
 costs for the year ended December 31, 2024.

 Non-cash
 charges including depreciation, amortization, disposal or sale of assets and bad debt expense decreased $(1.4) million or (84)%
 to $0.3 million during the year ended December 31, 2024 from $1.7 million during the year ended December 31, 2023. The decrease was
 driven by no amortization expense during 2024 as a result of the full impairment of intangible assets as of December 31, 2023.

 Other
 general and administrative costs for various general corporate expenses, including professional services, information technology,
 insurance, travel, costs related to merchant credit card fees, product development costs, rent, and certain tax costs. During the
 year ended December 31, 2024, other general and administrative costs increased $0.5 million, or 9% to $6.1 million compared to $5.6
 million in the year ended December 31, 2023. The increase was driven by an increase in transaction-related and litigation-related
 legal fees.

 Impairment
of long-lived intangible assets resulted in an impairment charge of $8.5 million for the year ended December 31, 2023, with no corresponding
activity for the year ended December 31, 2024. See "Note 7 - Goodwill and intangible assets" for additional information.

 Interest
expense, net

the year ended December 31, 2024, interest expense decreased $0.9 million, or 65% to $0.5 million from $1.4 million for the fiscal year
ended December 31, 2023. Interest expense for the year ended December 31, 2024 and 2023 is comprised of interest on our Wintrust Receivables
Credit Facility, Alphia Term Loan, the amortization of debt issuance costs, and interest accretion on the Alphia Term Loan. The decrease
in interest expense for the year ended December 31, 2024 is related to the forgiveness of the Alphia Term Loan, as discussed in Note
9 – Debt.

 Income
taxes

 Our
income tax expense (benefit) provision consists of an estimate of federal and state income taxes based on enacted federal and state tax
rates, as adjusted for any allowable credits, deductions and uncertain tax positions as they arise. During the year ended December 31,
2024, we recorded income tax expense of less than $0.1 million, which relates to the change in valuation allowance. During the year ended
December 31, 2023, we recorded income tax expense of less than $0.1 million, which relates to indefinite-lived assets. The effective
tax rate for the years ended December 31, 2024 and 2023 was (6.1)% and 0%, respectively, which differs from the U.S. Federal statutory rate of 21% due to permanent
differences attributable to the impairment of goodwill in 2022 and because our losses have been fully offset by a valuation allowance
due to uncertainty of realizing the tax benefit of net operating losses ("NOLs") for the years ended December 31, 2024 and
2023.

 Non-GAAP
Measures

 Adjusted
EBITDA

 We
define Adjusted EBITDA to supplement the financial measures prepared in accordance with GAAP. Adjusted EBITDA adjusts EBITDA to
eliminate the impact of certain items that we do not consider indicative of our core operations. Adjusted EBITDA is determined by
adding the following items to net loss: interest expense, tax expense (benefit), depreciation and amortization, share-based
compensation, gain on extinguishment of debt and accounts payable, loss on disposal of assets, transaction-related expenses, and other non-recurring
expenses.

 We
present Adjusted EBITDA as 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 believe that
the disclosure of Adjusted EBITDA is useful to investors as this non-GAAP measure forms the basis of how our
management team reviews and considers our operating results. By disclosing this non-GAAP measure, we believe that we create for investors
a greater understanding of and an enhanced level of transparency into the means by which our management team operates our company. We
also believe this measure can assist investors in comparing our performance to that of other companies on a consistent basis without
regard to certain items that do not directly affect our ongoing operating performance or cash flows.

 Adjusted
EBITDA does not represent cash flows from operations as defined by GAAP. Adjusted EBITDA has limitations as a financial measure and you
should not consider it in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Because
of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow
metrics, net loss, gross margin, and our other GAAP results.

 The
following table presents a reconciliation of net loss, the closest GAAP financial measure, to EBITDA and Adjusted EBITDA for each of
the periods indicated (in thousands):

 Three Months Ended December 31,

 2024

 2023

 2024

 2023

 Net loss

 $
 (1,518
)

 $
 (14,701
)

 $
 (168
)

 $
 (22,770
)

 Interest expense, net

 (69
)

 1,353

 Income tax expense

 Depreciation and amortization

 1,678

 EBITDA

 (1,551
)

 (13,849
)

 (19,737
)

 Share-based compensation

 1,775

 Impairment of intangible assets

 —

 8,532

 —

 8,532

 —

 1,575

 —

 Loss on disposal of assets

 —

 —

 —

 —

 (6,206
)

 —

 Transaction-related expenses (a)

 1,356

 Strategic branding initiatives (b)

 Co-manufacturing partner transition (c)

 Other single occurrence expenses (d)

 (112
)

 —

 1,155

 (357
)

 Adjusted EBITDA

 $
 (673
)

 $
 (3,359
)

 $
 (1,888
)

 $
 (8,424
)

 (a)
Legal fees, professional fees, and other expenses for transaction-related business matters

 (b)
One-time costs related to marketing agency and design, strategic re-branding initiatives, Elevate launch, product innovation and
reformulations

 (c)
Single occurrence expenses related to the transition of our largest dry kibble co-manufacturing supplier

 (d)
One-time items related to employee severance, executive recruitment, other non-recurring professional fees, and insurance claim reimbursements

 Liquidity
and capital resources

 Historically,
we have financed our operations primarily through the sales of shares of our common stock, warrants, preferred stock, and loans. In connection
with our July 2024 public offering, we issued and sold 739,000 shares of common stock at a public offering price of $3.00 per share and
pre-funded warrants to issue 1,028,000 shares of Common Stock at a public offering price of $2.99 per Pre-Funded Warrant. On December
31, 2024 and December 31, 2023, we had cash and cash equivalents of $3.1 million and $4.5 million, respectively.

 We
are subject to risks common in the pet wellness consumer market including, but not limited to, dependence on key personnel, competitive
forces, successful marketing and sale of our products, the successful protection of our proprietary technologies, ability to grow into
new markets, and compliance with government regulations. As of December 31, 2024, we have not experienced a significant adverse impact
to our business, financial condition or cash flows resulting from geopolitical actions or threat of cyber-attacks. However, we have seen
adverse impacts to our gross margin from time to time due to inflationary pressures in the current economic environment. Uncertainties
regarding the continued economic impact of inflationary pressures, geopolitical actions and threat of cyber-attacks are likely to result
in sustained market turmoil, which could negatively impact our business, financial condition, and cash flows in the future.

 We
have historically incurred losses and expect to continue to generate operating losses and consume cash resources in the near term. These
conditions raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the date these
consolidated financial statements are issued, meaning that we may be unable to generate sufficient operating cash flows to pay our short-term
obligations. We have implemented and continue to implement plans to achieve operating profitability, including various margin improvement
initiatives, the consolidation of and introduction of new co-manufacturers, the optimization of our pricing strategy and ingredient profiles,
and new product innovation.

 Our
ability to raise additional capital may be adversely impacted by the potential worsening of global economic conditions, including inflationary
pressures, the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting
from geopolitical tensions. If we seek additional financing to fund our business activities in the future and there remains doubt about
our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially
reasonable terms or at all. If we are unable to raise the necessary funds when needed or achieve planned cost savings, or other strategic
objectives are not achieved, we may not be able to continue our operations, or we could be required to modify our operations that could
slow future growth.

 A
summary of our cash flows is as follows (in thousands):

 2024

 2023

 Cash flows (used in) provided by:

 Operating activities

 $
 (4,357
)

 $

 Investing activities

 (2,252
)

 (18
)

 Financing activities

 5,220

 (5,097
)

 Net decrease in cash and cash equivalents

 $
 (1,389
)

 $
 (5,018
)

 Cash
flows from operating activities

 Cash
used in operating activities increased $4.5 million, or 4592%, during the year ended December 31, 2024 compared to cash provided by operating
activities of $0.1 million during the year ended December 31, 2023. The increase in cash used in operating activities was primarily driven
by the $6.2 million gain recognized on extinguishment of the Alphia term loan, partially offset by significant fluctuations in our working
capital, including a comparative decrease in our inventory balance of $2.7 million.

 Cash
flows from investing activities

 Cash
used in investing activities was $2.3 million during the year ended December 31, 2024 and less than $0.1 million during the year ended
December 31, 2023. The cash used in investing activities related to the issuance of $2.2 million of notes receivable, there were also
capital expenditures of less than $0.1 million. Cash used in investing activities was less than $0.1 million during the year ended December
31, 2023, which related to capital expenditures.

 Cash
flows from financing activities

 Cash
provided by financing activities was $5.2 million, during the year ended December 31, 2024 and cash used in financing activities was
$5.1 million during the year ended December 31, 2023. The cash provided by financing activities for the year ended December 31, 2024
was related to net proceeds from the Equity Offering of $4.8 million and proceeds from the Wintrust facility of $12.4 million, offset
by payments on the Wintrust facility of $11.8 million. The cash used in financing activities for the year ended December 31, 2023 was
related to the pay down of the revolving line of credit of $13.5 million and payments on the Wintrust facility of $6.1 million, offset
by proceeds from revolving lines of credit of $1.9 million and $5.0 million from the Alphia term loan and proceeds of $7.8 million from
the Wintrust facility.

 Wintrust
Receivables Credit Facility

 On
June 21, 2023, the Company entered into an account purchase agreement ("AP Agreement") with Wintrust Receivables Finance,
a division of Wintrust Bank N.A. ("Wintrust") pursuant to which Wintrust will purchase, at its discretion, eligible customer
invoices and advance up to 70% of the face amount of all purchased amounts up to $4,750,000. Each advance under the AP Agreement will
bear interest at the U.S. prime rate, plus 2.5%. The AP Agreement has an initial term of two years and will automatically renew annually
unless terminated by the Company on at least 60 days' notice. The Wintrust Receivables Credit Facility is secured by a general
security interest in the assets of the Company. The Wintrust Receivables Credit Facility is guaranteed secured by the Company pursuant
to that certain Unlimited Continuing Guaranty Agreement dated as of June 21, 2023.

 As
of December 31, 2024, the balance outstanding on the Wintrust Receivables Credit Facility amounted to $2.4 million.

 Alphia
Term Loan

 On
June 21, 2023, the Company entered into a term loan credit agreement with Alphia Inc., a leading custom manufacturer of super-premium
pet food in the U.S. Pursuant to the Term Loan Agreement, Alphia made a term loan to the Company in the original principal amount of
$5,000,000 (the "Term Loan"). The Term Loan is also evidenced by that certain Term Note dated as of June 21, 2023 issued
by the Company to Alphia (the "Term Note"). The proceeds of the Term Loan, together with a portion of the Company's
cash on hand, were used to retire all of the outstanding obligations of Halo, Purely for Pets, Inc. ("Halo"), a wholly-owned
subsidiary of the Company, under Halo's long-term credit facility with Old Plank Trail Community Bank, N.A., an affiliate of Wintrust
Bank, N.A.

 As
described in Note 9 - Debt, on March 25, 2024, the Company initiated a legal action to enforce a right of first refusal option exercised
by Alphia pursuant to the terms of a written agreement between Alphia and the Company whereby Alphia was to acquire the assets of Halo.
On June 20, 2024, the Company agreed to settlement terms of the lawsuit. The agreement dismisses the Company's ongoing litigation
with Alphia and provides for the forgiveness of the Company's term loan, including $5.0 million in principal and $0.5 million of
payable-in-kind ("PIK") accrued interest, the termination of 335,640 warrants with a strike price of $11.44 per share that
were set to expire in 2028, and the forgiveness of up to $2.6 million in accounts payable due to Alphia, provided the remaining outstanding
accounts payable balance is paid within 90 days of the settlement date. These accounts payable were paid and settled prior to December
31, 2024, resulting in a gain of $2.6 million.

 As
a result of the settlement terms described above, we are not indebted to Alphia as it relates to the Term Loan Facility as of December
31, 2024.

 Contractual
Commitments and Obligations

 We
are contractually obligated to make future cash payments for various items, including debt arrangements, certain purchase obligations,
as well as the lease arrangement for our office. See "Note 9 - Debt" to our audited consolidated financial statements included
in this Annual Report on Form 10-K for more information about our debt obligations. Our purchase obligations include certain ongoing
marketing projects, software subscriptions as well as in-transit or in-production purchase orders with our suppliers, for which amounts
vary depending on the purchasing cycle. The majority of our software subscriptions are not under long-term contracts, and we do not have
long-term contracts or commitments with any of our suppliers beyond active purchase orders. These purchase obligations were not material
as of the date of this Annual Report on Form 10-K.

 Off-Balance
Sheet Arrangements

 We
do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that are reasonably likely to have a
current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

 Critical
Accounting Estimates

 Our
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which
have been prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires
us to make estimates, assumptions and judgements that affect the reported amounts of assets, liabilities, net sales, costs and expenses
and related disclosures. We believe that the estimates, assumptions and judgments involved in the accounting policies described below
have the greatest potential impact on our financial statements and, therefore, we consider these to be our critical accounting estimates.
Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under
different assumptions and conditions. See "Note 1 - Nature of business and summary of significant accounting policies" to
our audited consolidated financial statements included in this Annual Report on Form 10-K for a description of our significant accounting
policies.

 Share-Based
Compensation

compensation expense is measured based on the estimated fair value of awards granted to employees, directors, officers and consultants
on the grant date. Forfeitures are accounted for as they occur, therefore there are no forfeiture related estimates required.

 The
fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model, which requires
the development of input assumptions, as described in "Note 14 - Share-based compensation". Determining the appropriate fair
value model and calculating the fair value of share-based payment awards requires the input of the subjective assumptions described in
"Note 14 - Share-based compensation". The assumptions used in calculating the fair value of share-based payment awards represent
management's best estimates, which involve inherent uncertainties and the application of management's judgment. See "Note
14 - Share-based compensation" to our audited consolidated financial statements included in this Annual Report on Form 10-K for
more information.

 Notes
Receivable

 Notes
receivable represent amounts owed to the Company by other parties under formal written agreements that stipulate the repayment terms,
including interest rates, repayment schedule, and maturity date. Notes receivable are initially recognized at the amount due under the
terms of the agreement. The Company records any related interest income over the life of the note using the effective interest rate method.
Notes receivable are classified as either current or non-current, based on their respective due dates. Notes receivable classified and
accounted for as available-for-sale have unrealized gains and losses recognized in other comprehensive income/(loss) ("OCI").
See "Note 4 - Notes receivable" to our audited consolidated financial statements included in this Annual Report on Form 10-K
for more information.

 ITEM
 7A.

 QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this
Item.

 ITEM
 8.

 FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA

to Consolidated Financial Statements

 Page

 Report of Independent Registered Public Accounting Firm (Marcum LLP; Tampa, Florida; PCAOB ID #688)

 Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Tampa, Florida; PCAOB ID # 243)

 Consolidated Statements of Operations for the years ended December 31, 2024 and 2023

 Consolidated Balance Sheets as of December 31, 2024 and 2023

 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024 and 2023

 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023

 Notes to the Consolidated Financial Statements

 All
financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient
to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying
notes.

 Report
of Independent Registered Public Accounting Firm

 To
the Shareholders and the Board of Directors of

 Opinion on the Financial Statements

 We
have audited the accompanying consolidated balance sheet of Better Choice Company Inc. (the "Company") as of December 31,
2024, the related consolidated statements of operations, stockholders' equity and cash flows for the year ended December 31,
2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results
of its operations and its cash flows the year ended December 31, 2024, in conformity with accounting principles generally accepted
in the United States of America.

 Explanatory
Paragraph – Going Concern

 The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred significant losses and has an
accumulated deficit and may need to raise additional funds to meet its obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described
in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis
for Opinion

 These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

 We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.

 Critical
Audit Matters

 Critical audit matters are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material
to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 /s/
Marcum LLP

 Marcum
LLP

 We
have served as the Company's auditor since 2024.

 Tampa,
FL

 March 31, 2025

 Report
of Independent Registered Public Accounting Firm

 Shareholders
and Board of Directors

 Tampa,
Florida

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying consolidated balance sheet of Better Choice Company Inc. (the "Company") as of December 31,
2023, the related consolidated statements of operations, stockholders' equity, and cash flows for year then ended, and the related
notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company at December 31, 2023, and the results of its operations
and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 Going
Concern Uncertainty

 The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, the Company has continually incurred operating losses, and has an accumulated deficit.
The Company also failed to meet certain financial covenants as of December 31, 2023. These matters create substantial doubt about the
Company's ability to continue as a going concern for a period of twelve months from the date these consolidated financial statements
are issued. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this uncertainty.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

 We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express
no such opinion.

 Our
audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our opinion.

 /s/
 BDO USA, P.C.

 We served as the Company's auditor from 2021 to 2024.

 Tampa,
Florida

 April 12, 2024

 Consolidated
Statements of Operations

 (Dollars
in thousands, except share and per share amounts)

 2024

 2023

 Year ended December 31,

 2024

 2023

 Net sales

 $

 $

 Cost of goods sold

 21,986

 26,795

 Gross profit

 12,989

 11,797

 Operating expenses:

 Selling, general and administrative

 24,444

 Impairment of intangible assets

 –

 8,532

 Total operating expenses

 32,976

 Loss from operations

 ( 5,967
)

 ( 21,179
)

 Other income (expense):

 Interest expense

 ( 467
)

 ( 1,353
)

 –

 ( 236
)

 6,206

 –

 Other income

 –

 Total other income (expense)

 5,808

 ( 1,589
)

 Net loss before income taxes

 ( 159
)

 ( 22,768
)

 Income tax expense

 ( 9
)

 ( 2
)

 Net loss available to common stockholders

 $
 ( 168
)

 $
)

 Weighted average number of shares outstanding, basic

 1,615,487

 705,185

 Weighted average number of shares outstanding, diluted

 1,615,487

 705,185

 Net loss per share available to common stockholders, basic

 $
 ( 0.10
)

 $
 ( 32.29
)

 Net loss per share available to common stockholders, diluted

 $
 ( 0.10
)

 $
 ( 32.29
)

 The
accompanying notes are an integral part of these consolidated financial statements.

 Consolidated
Balance Sheets

 (Dollars
in thousands, except share and per share amounts)

 Assets

 Cash and cash equivalents

 $
 3,066

 $
 4,455

 Accounts receivable, net

 5,371

 4,354

 Notes receivable

 2,211

 –

 Inventories

 3,869

 6,611

 Prepaid expenses and other current assets

 Total Current Assets

 15,001

 16,232

 Fixed assets, net

 Right-of-use assets, operating leases

 Goodwill

 –

 Other assets

 Total Assets

 $
 15,801

 $
 16,737

 Liabilities & Stockholders' Equity

 Current Liabilities

 Accounts payable

 $
 3,137

 $
 6,928

 Accrued and other liabilities

 1,535

 2,085

 Line of credit

 2,414

 1,741

 Term loan, net

 –

 2,881

 Operating lease liability

 Total Current Liabilities

 7,148

 13,692

 Non-current Liabilities

 Operating lease liability

 Total Non-current Liabilities

 Total Liabilities

 7,153

 13,759

 Stockholders' Equity

 Common Stock, $ 0.001 par value, 200,000,000 shares authorized, 1,830,097 & 729,026 shares issued and outstanding as of December 31, 2024 and 2023, respectively

 Additional paid-in capital

 330,156

 324,288

 Accumulated deficit

 ( 321,510
)

 ( 321,342
)

 Total Stockholders' Equity

 8,648

 2,978

 Total Liabilities and Stockholders' Equity

 $
 15,801

 $
 16,737

 The
accompanying notes are an integral part of these consolidated financial statements.

 Consolidated
Statements of Stockholders' Equity

 (Dollars
in thousands, except shares)

 Shares

 Capital

 Deficit

 Equity

 Common
 Stock

 Additional
 Paid-In

 Accumulated

 Total
 Stockholders'

 Shares

 Capital

 Deficit

 Equity

 as of December 31, 2022

 668,869

 $

 $
 320,071

 $
 ( 298,572
)

 $
 21,528

 compensation

 60,157

 1,773

 –

 1,776

 Reclassification
 of Alphia Warrants

 –

 –

 2,444

 –

 2,444

 Net
 loss

 –

 –

 –

)

)

 as of December 31, 2023

 729,026

 $

 $
 324,288

 $
 ( 321,342
)

 $
 2,978

 729,026

 $

 $
 324,288

 $
 ( 321,342
)

 $
 2,978

 compensation

 64,815

 –

 –

 Share
 issuance

 6,185

 –

 –

 Equity
 issued in business combinations

 45,629

 –

 –

 Reverse stock split, see Note 1

 70,039

 ( 31
)

 –

 –

 Share
 and warrant issuance, net of offering costs of $ 0.5 million

 739,000

 4,751

 –

 4,752

 Warrant
 exercises

 278,000

 –

 –

 –

 –

 Share
 repurchases

 ( 102,597
)

 –

 ( 206
)

 –

 ( 206
)

 Net
 loss

 –

 –

 –

 ( 168
)

 ( 168
)

 as of December 31, 2024

 1,830,097

 $

 $
 330,156

 $
 ( 321,510
)

 $
 8,648

 1,830,097

 $

 $
 330,156

 $
 ( 321,510
)

 $
 8,648

 The
accompanying notes are an integral part of these consolidated financial statements.

 Consolidated
Statements of Cash Flows

 (Dollars
in thousands)

 2024

 2023

 2024

 2023

 Cash Flow from Operating Activities:

 Net loss

 $
 ( 168
)

 $
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Loss of disposal of assets

 –

 Depreciation and amortization

 1,678

 Amortization of debt issuance costs and discounts

 ( 6,206
)

 –

 Intangible asset impairment

 –

 8,532

 Share-based compensation

 1,773

 –

 Bad debt expense

 PIK interest expense on term loan

 Accreted interest expense on term loan

 Income tax provision

 ( 2
)

 Other

 ( 7
)

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 1,148
)

 2,387

 Inventories

 2,742

 3,646

 Prepaid expenses and other assets

 Accounts payable

 ( 1,155
)

 3,996

 Accrued and other liabilities

 ( 304
)

 ( 760
)

 Cash Provided by (Used in) Operating Activities

 $
 ( 4,357
)

 $

 Cash Flow from Investing Activities:

 Capital expenditures

 $
 ( 41
)

 $
 ( 18
)

 Notes receivable

 ( 2,211
)

 –

 Cash Used in Investing Activities

 $
 ( 2,252
)

 $
 ( 18
)

 Cash Flow from Financing Activities:

 Proceeds from equity offering

 $
 4,752

 $
 –

 Proceeds from revolving lines of credit

 –

 1,906

 Payments on revolving lines of credit

 –

 ( 13,500
)

 Proceeds from term loan

 –

 5,000

 Proceeds from Wintrust facility

 12,431

 7,841

 Payments on Wintrust facility

 ( 11,757
)

 ( 6,100
)

 Share repurchases

 ( 206
)

 –

 Payment of loan issuance costs

 –

 ( 244
)

 Cash (Used in) Provided by Financing Activities

 $
 5,220

 $
 ( 5,097
)

 Net decrease in cash and cash equivalents

 $
 ( 1,389
)

 $
 ( 5,018
)

 Total cash and cash equivalents, beginning of period

 4,455

 9,473

 Total cash and cash equivalents, end of period

 $
 3,066

 $
 4,455

 Supplemental schedule of cash flow information:

 Cash paid for interest during the period

 $

 $

 Disclosure of non-cash financing activities:

 Reclassification of warrants to equity

 –

 2,444

 Alphia term loan forgiveness, see Note 9 - Debt

 3,235

 –

 Forgiveness of PIK interest on Alphia term loan, see Note 9 - Debt

 –

 Write off of debt issuance costs

 –

 The
accompanying notes are an integral part of these consolidated financial statements.

 Notes
to the Consolidated Financial Statements

 Note
1 – Nature of business and summary of significant accounting policies

 Nature
of the business

Choice Company Inc. (the "Company") is a pet health and wellness company focused on providing pet products and services that
help dogs and cats live healthier, happier and longer lives. The Company has a broad portfolio of pet health and wellness products for
dogs and cats sold under its Halo brand across multiple forms, including foods, treats, toppers, dental products, chews and supplements.
The products consist of kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan dog food and treats, oral care
products and supplements.

 Reverse
stock split

 On
March 8, 2024, the Company's Board of Directors approved a reverse stock split of the Company's issued and outstanding
shares of common stock at a ratio of 1-for-44,
effective March 20, 2024 (the "Reverse Stock Split"). In addition, the exercise prices of the Company's underlying
common stock purchase warrants and stock options were proportionately adjusted at the applicable reverse stock split ratio in
accordance with the terms of such instruments. Proportionate voting rights and other rights of common stockholders were not affected
by the Reverse Stock Split, other than as a result of the rounding up of fractional shares. In April 2024, in connection with the
Reverse Stock Split, 70,039
shares of common stock were issued in lieu of fractional shares.

 Accordingly,
all share and per share amounts related to the Company's common stock for all periods presented in the accompanying consolidated
financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the Reverse Stock Split. The number
of authorized shares and the par values of the common stock and convertible preferred stock were not adjusted as a result of the Reverse
Stock Split.

 July
2024 public offering

 On
July 29, 2024, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with ThinkEquity LLC (the
"Underwriter"), for an underwritten public offering (the "Offering") of 639,000 shares (the "Shares")
of the Company's common stock, par value $ 0.001 per share (the "Common Stock") at a public offering price of $ 3.00
per share and pre-funded warrants to purchase 1,028,000 shares of Common Stock (the "Pre-Funded Warrants" and together with
the Shares, the "Securities") at a public offering price of $ 2.99 per Pre-Funded Warrant, for aggregate gross proceeds of
approximately $ 5.0 million prior to deducting approximately $ 0.5 million of underwriting discounts, commissions, and other offering expenses.
In addition, the Company granted the Underwriter a 45-day option to purchase an additional 100,000 shares of Common Stock, at the public
offering price per share, less the underwriting discounts and commissions, to cover over-allotments (the "Over-allotment Option").
The Company also issued representative warrants to purchase 83,350 shares of common stock (equal to 5 % of the total number of shares
sold in the public offering). The representative warrants will be exercisable at $ 3.75 per share, a per share exercise price equal to
 125 % of the public offering price per share of common stock sold in the offering. The Company has determined these warrants are equity
classified in accordance with Topic 480. Refer to Note 13 - Warrants for more information. The Securities were offered and sold to the
public pursuant to the Company's registration statement on Form S-1 (File No. 333-280714), filed by the Company with the Securities
and Exchange Commission on July 8, 2024, as amended, which became effective on July 29, 2024. The sale of the Securities in connection
with the Offering closed on July 31, 2024.

 On
August 2, 2024, pursuant to and in compliance with the terms and conditions of the Underwriting Agreement and the Offering, the Underwriters
provided notice that they would exercise the Over-allotment Option to purchase 100,000 shares of Common Stock at $ 3.00 per share. The
sale of 100,000 shares of Common Stock in connection with the exercise of the Over-Allotment Option closed on August 2, 2024. The Company
has received gross proceeds of approximately $ 5.3 million for the Offering to date, including in connection with the exercise of the
Over-Allotment Option, prior to deducting $ 0.5 million of underwriting discounts and commissions and offering expenses payable by the
Company.

 Basis
of presentation

 The
Company's consolidated financial statements are prepared in accordance with the rules and regulations of the U.S. Securities and
Exchange Commission ("SEC") for annual financial reports and accounting principles generally accepted in the U.S. ("GAAP").

 Consolidation

 The
financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly owned subsidiaries.
All intercompany transactions and balances have been eliminated in consolidation.

 Use
of estimates

 The
preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenue and expenses during the reporting periods. The Company bases its estimates on historical experience
and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company
evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates.

 In
the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results
of operations for the years ended December 31, 2024 and 2023, the financial position as of December 31, 2024 and 2023 and the cash flows
for the years ended December 31, 2024 and 2023.

 Going
concern considerations

 The
Company is subject to risks common in the pet wellness consumer market including, but not limited to, dependence on key personnel, competitive
forces, successful marketing and sale of its products, the successful protection of its proprietary technologies, ability to grow into
new markets, and compliance with government regulations. The Company has historically incurred losses, has an accumulated deficit, and expects to continue to generate
operating losses and consume cash resources in the near term. These conditions raise substantial doubt about the Company's ability
to continue as a going concern for a period of twelve months from the date these consolidated financial statements are issued, meaning
that we may be unable to generate sufficient operating cash flows to pay our short-term obligations. The Company will need to either
raise additional capital or obtain additional financing to maintain sufficient liquidity. There can be no assurance that the Company
will be successful in raising additional capital, renewing or refinancing its existing debt or securing new financing. If the Company
is unsuccessful in doing so, it may need to reduce the scope of its operations or sell certain assets.

 The
Company has implemented and continues to implement plans to achieve operating profitability, including various margin improvement initiatives,
the consolidation of and introduction of new co-manufacturers, the optimization of pricing strategy and ingredient profiles, and new
product innovation. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going
concern, which contemplates the realization of assets and payments of liabilities in the ordinary course of business. Accordingly, the
consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying
amounts or the amount of and classification of liabilities that may result should the Company be unable to continue as a going concern.

 Summary
of significant accounting policies

 Cash
and cash equivalents

 Cash
and cash equivalents include demand deposits held with banks and highly liquid investments with original maturities of ninety days or
less at acquisition date. Cash and cash equivalents are stated at cost, which approximates fair value because of the short-term nature
of these instruments.

 Accounts
receivable and allowance for credit losses

 Accounts
receivable consist of unpaid buyer invoices from the Company's customers and credit card payments receivable from third-party credit
card processing companies. Accounts receivable is stated at the amount billed to customers, net of point of sale and cash discounts.
The Company assesses the collectability of all receivables on an ongoing basis by considering its historical credit loss experience,
current economic conditions, and other relevant factors. Based on this analysis, an allowance for credit losses is recorded, and the
provision is included within SG&A expense. The Company recorded approximately $ 0.1 million allowance for credit losses for the years
ended December 31, 2024 and 2023.

 Inventories

 Inventories,
consisting of finished goods available for sale as well as packaging materials, are valued using the first-in first-out ("FIFO")
method and are recorded at the lower of cost or net realizable value. Cost is determined on a standard cost basis and includes the purchase
price, as well as inbound freight costs and packaging costs.

 The
Company periodically reviews its inventory and identifies that which is excess, slow moving and obsolete by considering factors such
as inventory levels, expiration dates and forecasted sales demand. Any identified excess, slow moving and obsolete inventory is written
down to its net realizable value through a charge to cost of goods sold.

 Fixed
Assets

 Fixed
assets are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, and depreciation
expense is included within SG&A expense. Expenditures for normal repairs and maintenance are charged to operations as incurred. The
cost of fixed assets that are retired or otherwise disposed of and the related accumulated depreciation are removed from the fixed asset
accounts in the year of disposal and the resulting gain or loss is included in SG&A expense.

 The
Company assesses potential impairments of its fixed assets whenever events or changes in circumstances indicate that the asset's
carrying value may not be recoverable. An impairment charge would be recognized when the carrying amount of the identified asset grouping
exceeds its fair value and is not recoverable, which would occur if the carrying amount exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the identified asset grouping.

 Goodwill

 Goodwill
is evaluated for impairment either through a qualitative or quantitative approach at least annually, or more frequently if an event occurs
or circumstances change that indicate the carrying value of a reporting unit may not be recoverable. If a quantitative assessment is
performed that indicates the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized to reduce
the carrying amount to its fair value. The fair value is determined based on a weighting of the present value of projected
future cash flows (the "income approach") and the use of comparative market approaches ("market approach"). Factors
requiring significant judgment include, among others, the assumptions related to discount rates, forecasted operating results, long-term
growth rates, the determination of comparable companies and market multiples. Fair value measurements used in the impairment review of
goodwill are Level 3 measurements. See further information about the Company's policy for fair value measurements within this section
below. See "Note 7 - Goodwill and intangible assets" for additional information regarding the goodwill impairment test.

 Intangible
assets

 Finite-lived
Intangible assets acquired are carried at cost, less accumulated amortization. Amortization expense is included in selling, general and
administrative expenses on the consolidated statements of operations. The Company assesses long lived assets, including finite-lived
intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of the asset group may not
be recoverable. The Company operates as a single reporting unit and as such, is the asset group when assessing finite-lived intangible
assets for impairment. If impairment indicators are present, the Company performs a recoverability test by comparing the sum of the estimated
undiscounted future cash flows attributable to its long-lived asset group to its carrying value. The assumptions used in estimating the
undiscounted future cash flows are based on currently available data and management's best estimates of revenues, EBITDA margins,
and working capital and, accordingly, a change in market conditions or other factors could have a material effect on the estimated values.
There are inherent uncertainties related to the assumptions used and to management's application of these assumptions. If the carrying
amount of an asset group is not recoverable, an impairment loss is recognized based on the excess of the carrying value of the impaired
asset group over its fair value. An impairment loss for an asset group is allocated to the long-lived assets of the group on a pro rata
basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group
shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and
effort.

 Share
repurchases

 In
April 2024, the Company's board of directors authorized and approved a stock repurchase plan (the "Repurchase Plan")
for up to $ 5.0 million of the currently outstanding shares of the Company's common stock through December 31, 2024. Repurchased
shares are immediately retired and returned to unissued status. During the year ended December 31, 2024, 102,597 shares were repurchased.

 Warrants

 The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in ASC 480 and ASC Topic 815, Derivatives and Hedging ("ASC 815"). The
assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company's own common stock, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period
end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification,
the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair
value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized
as a non-cash gain or loss on the statement of operations. The Pre-Funded and Representative Warrants (as defined in Note 13) are equity
classified.

 Income
taxes

 Income
taxes are recorded in accordance with FASB ASC Topic 740, "Income Taxes (ASC 740)", which provides for deferred taxes using
an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences
of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined
based on the difference between the consolidated financial statements and tax bases of assets and liabilities and for loss and credit
carryforwards using enacted tax rates anticipated to be in effect for the year in which the differences are expected to reverse. Valuation
allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all the deferred tax
assets will not be realized.

 The
Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company
recognizes the tax benefit of tax positions to the extent that some or all the benefit will more likely than not be realized. The determination
as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as
consideration of the available facts and circumstances. As of December 31, 2024 and 2023, the Company does not have any significant uncertain
income tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense.

 The
Company was incorporated on May 6, 2019. Prior to this date, the Company operated as a flow through entity for state and U.S. federal
tax purposes. The Company files a U.S. federal and state income tax return, including for its wholly owned subsidiaries.

 Revenue

 Generally,
the Company's customer contracts have a single performance obligation, and revenue is recognized when the product is shipped as
this is when it has been determined that control has been transferred. Amounts billed and due from customers are classified as receivables
and require payment on a short-term basis and therefore do not have any significant financing components.

 Revenue
is measured as the amount of consideration the Company expects in exchange for transferring goods, which varies with changes in trade
incentives the Company offers to its customers. Trade incentives consist primarily of customer pricing allowances and merchandising funds,
and point of sale discounts. Estimates of trade promotion expense and coupon redemption costs are based upon programs offered, timing
of those offers, estimated redemption/usage rates from historical performance, management's experience and current economic trends.

 Cost
of goods sold

 Cost
of goods sold consists primarily of the cost of product obtained from co-manufacturers, packaging materials, freight costs for shipping
inventory to the warehouse, as well as third-party warehouse and order fulfillment costs.

 Advertising

 The
Company charges advertising costs to expense as incurred and such charges are included in selling, general and administrative ("SG&A")
expense. The Company's advertising expenses consist primarily of online advertising, search costs, email advertising and radio
advertising. In addition, the Company reimburses its customers and third parties for in store activities and records these costs as advertising
expenses. Advertising costs were $ 6.0 million and $ 6.8 million for the years ended December 31, 2024 and 2023, respectively.

 Freight
Out

 Costs
incurred for shipping and handling, including moving finished product to customers are included in SG&A expense. Shipping costs associated
with moving finished products to customers were $ 0.5 million and $ 1.3 million for the years ended December 31, 2024 and 2023, respectively.

 Research
and development

 Research
and development costs related to developing and testing new products are expensed as incurred and included in SG&A expense. Research
and development costs were less than $ 0.1 million and $ 0.1 million for the years ended December 31, 2024 and 2023, respectively.

compensation

compensation awards are measured at their estimated fair value on each respective grant date. The Company recognizes share-based payment
expenses over the requisite service period. The Company's share-based compensation awards are subject only to service based vesting
conditions. Pursuant to ASC 718-10-35-8, the Company recognizes compensation cost for stock awards with only service conditions that
have a graded vesting schedule on a straight-line basis over the service period for each separately vesting portion of the award as if
the award was, in-substance, multiple awards. Forfeitures are recognized as they occur.

 Operating
leases

 The
Company determines if a contract or arrangement meets the definition of a lease at inception. The Company has elected to make the accounting
policy election for short-term leases. For leases with terms greater than 12 months, the Company records the related asset and obligation
at the present value of lease payments over the term. Lease renewal options are only included in the measurement if the Company is reasonably
certain to exercise the optional renewals. Any variable lease costs, other than those dependent upon an index or rate, are expensed as
incurred. If a lease does not provide a readily available implicit rate, the Company estimates the incremental borrowing discount rate
based on information available at lease commencement.

 The
Company's only remaining operating lease as of December 31, 2024 relates to office space. There are no material residual value
guarantees or material restrictive covenants.

 Fair
value of financial instruments

 Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.
The fair value hierarchy uses a framework which requires categorizing assets and liabilities into one of three levels based on the inputs
used in valuing the asset or liability.

 Level
1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities.

 Level
2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities
in active markets or quoted prices for identical assets or liabilities in inactive markets.

 Level
3 inputs include unobservable inputs that are supported by little, infrequent or no market activity and reflect management's own
assumptions about inputs used in pricing the asset or liability.

 Level
1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. Assets and liabilities
are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's
financial instruments recognized on the Consolidated Balance Sheets consist of cash and cash equivalents, trade accounts receivable,
notes receivable, accounts payable, term loan, line of credit, accrued liabilities and other liabilities.

 Fair
value measurements of non-financial assets and non-financial liabilities reflect Level 3 inputs and are primarily used to measure the
estimated fair values of goodwill, other intangible assets and long-lived assets impairment analyses.

 Basic
and diluted loss per share

 Basic
and diluted loss per share has been determined by dividing the net loss available to common stockholders for the applicable period by
the basic and diluted weighted average number of shares outstanding, respectively. Common stock equivalents are excluded from the computation
of diluted weighted average shares outstanding when their effect is anti-dilutive.

 Segment
information

 Operating
segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by
the chief operating decision-maker ("CODM") in making decisions regarding resource allocation and assessing performance.
The Company has viewed its operations and manages its business as one segment. The Company's CODM reviews operating results and
makes decisions based on consolidated financial information. All the assets and operations of the Company are in the U.S. See Note 18
- Segment information for additional disclosures on segment reporting.

 New
Accounting Standards

 Recently
adopted

 In
November 2023, FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting, establishing improvements to reportable segments
disclosures to enhance segment reporting under Topic 280. This ASU aims to change how public entities identify and aggregate operating
segments and apply quantitative thresholds to determine their reportable segments. This ASU also requires public entities that operate
as a single reportable segment to provide all segment disclosures in Topic 280, not just entity level disclosures. The guidance is effective
for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and the
amendments should be applied retrospectively to all periods presented in the financial statements. The new standard did not have a material
impact on the consolidated financial statements for the year ended December 31, 2024. See Note 18 - Segment information for additional
disclosures on segment reporting.

 Note
2 – Revenue

 The
Company records revenue net of discounts, which primarily consist of trade promotions, certain customer allowances and early pay discounts.

 The
Company excludes sales taxes collected from revenues. Retail-partner based customers are not subject to sales tax.

 The
Company's DTC loyalty program enables customers to accumulate points based on their spending. A portion of revenue is deferred
at the time of sale when points are earned and recognized when the loyalty points are redeemed. The Company closed its DTC channel
effective June 1, 2024 and expired the loyalty program as of June 30, 2024. Deferred revenue related to the loyalty program as of
the closing of the DTC channel was immaterial. Net sales for the period ended June 1, 2024 was $ 2.0
million.

 Revenue
channels

 The
Company groups its revenue channels into three categories: Digital, which includes the sale of product to online retailers such as Amazon
and Chewy, as well as DTC sales, which included the sale of product through the Company's website through June 1, 2024; Brick &
Mortar, which primarily includes the sale of product to Pet Specialty retailers, independent pet stores, and regional distributors; and
International, which includes the sale of product to foreign distribution partners and to select international retailers (transacted
in U.S. dollars).

about the Company's net sales by revenue channel is as follows (in thousands):

of Information about Revenue Channels

 2024

 2023

 Digital (1)

 $
 16,482

 %

 $
 19,002

 %

 International (2)

 $
 16,210

 %

 $
 13,720

 %

 Brick & Mortar (3)

 $
 2,283

 %

 $
 5,870

 %

 Net Sales

 $

 %

 $

 %

 (1)

 The
 Company's Digital channel includes two wholesale customers that amounted to greater than 10 % of the Company's total net
 sales for the years ended December 31, 2024 and 2023, respectively. Additionally, DTC sales within the Digital channel amounted to
 greater than 10 % of the Company's total net sales for the year ended December 31, 2023. DTC sales within the Digital channel
 were approximately $ 5.6 million for the year ended December 31, 2023. As of June 1, 2024, the Company has exited its DTC channel
 in an effort to improve profitability. The Company historically reported the sales in this channel as E-commerce and DTC separately
 and has been consolidated into one revenue stream as of December 31, 2024.

 (2)

 One
 of the Company's International customers amounted to greater than 10 % of the Company's total net sales and represented
 $ 12.8 million and $ 11.0 million of net sales for the years ended December 31, 2024 and 2023, respectively.

 (3)

 None
 of the Company's Brick & Mortar customers represented greater than 10 % of net sales for the years ended December 31, 2024
 and 2023. For the year ended December 31, 2023, Petco was included within the Brick & Mortar channel. Beginning in Q1 2024, Petco
 is presented within Digital as a result of the strategic exit out of Petco stores, while remaining on Petco.com.

 Note
3 - Inventories

 Inventories
are summarized as follows (in thousands):

 Schedule of Inventories

 2024

 2023

 Food, treats and supplements

 $
 3,104

 $
 5,498

 Inventory packaging and supplies

 1,113

 Total

 $
 3,869

 $
 6,611

 Note
4 – Notes receivable

 On
September 3, 2024, the Company entered into a definitive agreement to acquire SRx Health Solutions Inc. ("SRx" or the "Borrower")
in an all-stock transaction, subject to customary closing conditions. On August 15, 2024, the Company entered into a Convertible Promissory
Note (the "Convertible Note") with SRx, whereby SRx promises to repay the principal amount of $ 1.5 million with an interest
rate of 25 % per annum. As the Holder of this Convertible Note, the Company can convert the total amount owed, including unpaid interest
and fees, into shares of SRx stock. The Company can elect to convert the principal of the Convertible Note plus accrued and unpaid interest
into shares of the Company's common stock upon an Event of Default, given the Event of Default is not cured within the applicable
cure period. The Convertible Note matures two days after the Business Combination between SRx and the Company is consummated or upon
termination of the business combination. The issuance price reflects the perceived value of both the note receivable component and the
embedded conversion option, which is initially determined based on market expectations. As there have not been drastic changes in market
conditions or the Borrower's financial standing, the transaction price at issuance approximates the fair value of the note receivable
on December 31, 2024. Accrued interest on the Convertible Note was less than $ 0.1 million and is recorded in prepaid expenses and other
current assets on December 31, 2024.

 The
Convertible Note has been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as
either short-term or long-term based on each instrument's underlying maturity date. Unrealized gains and losses on marketable debt
securities classified as available-for-sale are recognized in other comprehensive income/(loss) ("OCI").

 In
conjunction with the Convertible Note, the Company entered into a Services Agreement whereby the Company is to provide financial planning,
reporting and analysis services, utilizing the Company's in-house financial organization. In exchange for such services, the Company
shall receive $ 0.02 million per month, payable on the last day of the month in which services are provided, commencing on September 30,
2024. Income related to the Services Agreement was $ 0.1 million at December 31, 2024 and is accrued for within prepaid expenses and other
current assets on the consolidated balance sheets, and as other income in the consolidated statements of operations. The Company does
not have a variable nor controlling financial interest in SRx as it does not have the power to direct significant activities of SRx that
most significantly impact SRx's economic performance. Additionally, the Company does not have an obligation to absorb the losses
of, or the right to receive benefits from, SRx that could potentially be significant to SRx. Therefore, SRx is not consolidated as of
December 31, 2024.

 On
September 20, 2024, the Company entered into a revolving credit facility ("Promissory Note") with SRx whereby SRx may borrow,
repay, and reborrow in accordance with the terms set out in the Promissory Loan Agreement, not to exceed $ 750,000 (USD) at any time outstanding
with an interest rate of 12 % per annum. The Promissory Note was subsequently amended on December 31, 2024 to allow for the borrowing
of an additional $ 720,000 at a new interest rate of 11 % per annum.

 The
Borrower shall make payments of principal in accordance with the Repayment Schedule set forth in the agreement. Interest under the Promissory
Note shall be due and payable in monthly installments until the Promissory Note matures on March 20, 2025.

 The
outstanding principal as of December 31, 2024 was $ 0.8 million and accrued interest of less than $ 0.01 million is included within prepaid
expenses and other current assets as of December 31, 2024.

 Note
5 – Prepaid expenses and other current assets

 Prepaid
expenses and other current assets are summarized as follows (in thousands):

 Schedule of Prepaid Expenses and Other Current Assets

 2024

 2023

 Prepaid marketing expenses

 $
 –

 $

 SRx interest receivable

 –

 Other prepaid expenses and other current assets

 Total Prepaid expenses and other current assets

 $

 $

 Note
6 - Fixed assets

 Fixed
assets consist of the following (in thousands):

 Schedule of Fixed Assets

 Estimated Useful Life

 Equipment

 2 - 5 years

 $

 $

 Furniture and fixtures

 2 - 5 years

 Computer software, including website development

 2 - 3 years

 Computer equipment

 1 - 2 years

 Total fixed assets

 Accumulated depreciation

 ( 394
)

 ( 304
)

 Fixed assets, net

 $

 $

 Depreciation
expense was $ 0.1 million and $ 0.2 million for the years ended December 31, 2024 and 2023, respectively.

 Note
7 – Goodwill and intangible assets

 Intangible
assets

 The
Company's intangible assets include the trade name and customer relationships. As of December 31, 2023, impairment indicators were
present which required a recoverability test to be performed. As a result of the recoverability test, the carrying value of the asset
group exceeded its fair value and the Company recorded an impairment charge of $ 8.5 million for the year ended December 31, 2023, which
resulted in a full impairment to the carrying value of the trade name and customer relationships. This non-cash charge was recorded to
intangible asset impairment expenses on the consolidated statements of operations. The Company did not record any impairment loss on
long-lived assets for the year ended December 31, 2024.

 The
assumptions used in estimating the undiscounted future cash flows are based on currently available data and management's best estimates
of future income statement and working capital elements. A change in market conditions or other factors could have a material effect
on the estimated values. Fair value was determined based on discounted cash flows requiring judgement. These factors include, among others,
the assumptions related to discount rates, forecasted operating results, long-term growth rates, the determination of comparable companies
and market multiples. The measurements used in the impairment review of finite-lived intangible assets are Level 3 measurements. There
are inherent uncertainties related to the assumptions used and to management's application of these assumptions.

 The
Company's intangible assets (in thousands) and related useful lives (in years) are as follows:

 Schedule of Intangible Assets

 Estimated Useful Life (in years)

 Gross Carrying Amount

 Accumulated Amortization

 Impairment Loss

 Net Carrying

 Customer relationships

 –

 $
 7,190

 $
 ( 4,142
)

 $
 ( 3,048
)

 $
 –

 Trade name

 –

 7,500

 ( 2,016
)

 ( 5,484
)

 –

 Total intangible assets

 $
 14,690

 $
 ( 6,158
)

 $
 ( 8,532
)

 $
 –

 The
Company did not record amortization expense for the year ended December 31, 2024. Amortization expense was $ 1.5 million for the year
ended December 31, 2023.

 The
Company assesses intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset or asset group may not be fully recoverable. If impairment indicators are present, the Company performs a recoverability test by
comparing the sum of the estimated undiscounted future cash flows attributable to these long-lived assets to their carrying value. The
assumptions used in estimating the undiscounted future cash flows are based on currently available data and management's best estimates
of revenues, EBITDA margins, and working capital and, accordingly, a change in market conditions or other factors could have a material
effect on the estimated values. There are inherent uncertainties related to the assumptions used and to management's application
of these assumptions. As a result of the recoverability test performed, the carrying value of the asset group exceeded its fair value,
therefore a quantitative impairment test was performed to compare the fair value of the trade name and customer relationships assets
with their carrying value. As a result, the Company recorded an impairment charge of $ 8.5 million during the year ended December 31,
2023, resulting in full impairment to the carrying value of the trade name and customer relationships intangible assets.

 Note
8 – Accrued and other liabilities

 Accrued
and other liabilities consist of the following (in thousands):

 Schedule of Accrued and Other Liabilities

 Accrued taxes

 Accrued payroll and benefits

 Accrued trade promotions and advertising

 Accrued interest

 –

 Accrued commissions

 Deferred revenue

 Short-term financing

 –

 Other

 Total accrued and other liabilities

 $
 1,535

 $
 2,085

 Note
9 – Debt

 The
components of the Company's debt consist of the following (in thousands):

 Schedule of Components of Debt

 Rate

 Maturity
 date

 Rate

 Maturity
 date

 Term loan, net

 $
 –

 (1)

 N/A

 $
 2,881

 (1)

 6/21/2026

 Line of credit, net

 2,414

 (2)

 6/21/2025

 1,741

 (2)

 6/21/2025

 Total debt

 2,414

 4,622

 Less current portion

 2,414

 4,622

 Total long-term debt

 $
 –

 $
 –

 (1)
 Interest at a fixed
rate of 10.00 % per annum.

 (2)
 Interest at a variable
rate of the daily U.S. Federal Funds Rate plus 250 basis points with an interest rate floor of 5.50 % per annum.

 Wintrust
Receivables Credit Facility

 On
June 21, 2023, the Company entered into an AP Agreement with Wintrust Receivables Finance, a division of Wintrust Bank N.A. ("Wintrust")
pursuant to which Wintrust will purchase, at its discretion, eligible customer invoices and advance up to 70 % of the face amount of all
purchased invoices. The maximum outstanding balance can be $ 4.8 million. Each advance under the Advance Purchase Agreement will bear
a variable interest rate at the prime rate plus 2.5 % percentage per annum. The interest rate at December 31, 2024 was 10.0 % per annum.
The AP Agreement has an initial term of two years and will automatically renew annually unless terminated by the Company on at least
 60 days ' notice. The Wintrust Receivables Credit Facility is guaranteed and secured by a general security interest in the assets
of the Company. The Company continues to service the receivables, the transfers are at full recourse and the eligible customer invoices
are not legally isolated from the Company. As such, the Wintrust Receivables Credit Facility was accounted for as a secured borrowing
under ASC 860.

 The
Wintrust Receivables Credit Facility limits or restricts the ability of the Company to incur additional indebtedness; incur additional
liens; make dividends and other restricted payments; make investments; sell, assign, transfer or dispose of certain assets; make optional
prepayments of other indebtedness; engage in transactions with affiliates; and enter into restrictive agreements. The Wintrust Receivables
Credit Facility does not include any financial covenants and if an event of default occurs, Wintrust is entitled to accelerate the advances
made thereunder and exercise rights against the collateral. As of December 31, 2024, the Company was in compliance with its restrictive
covenants.

 Borrowing
under the Wintrust Receivables Credit Facility are classified as current debt as a result of a required lockbox arrangement and a subjective
acceleration clause. During the year ended December 31, 2024, the Company sold receivables having an aggregate face value of $ 17.0 million,
in exchange for cash proceeds of $ 12.4 million. As of December 31, 2024, the balance outstanding on the Wintrust Receivables Credit Facility
amounted to $ 2.4 million.

 Alphia
Term Loan Facility

 On
June 21, 2023, the Company entered into a term loan credit agreement (the "Term Loan Agreement") with Alphia Inc. ("Alphia"),
a custom manufacturer of super-premium pet food in the U.S. Pursuant to the Term Loan Agreement, Alphia made a term loan to the Company
in the original principal amount of $ 5.0 million (the "Term Loan"). In conjunction with the Term Loan Agreement, the Company
issued warrants to Alphia (see Note 13 – Warrants for further discussion). The proceeds of the Term Loan, together with a portion
of the Company's cash on hand, were used to retire all of the outstanding obligations of Halo, Purely for Pets, Inc. ("Halo"),
a wholly-owned subsidiary of the Company, under Halo's long-term credit facility with Old Plank Trail Community Bank, N.A., an
affiliate of Wintrust Bank, N.A described above.

 As
of December 31, 2023, the Company's indebtedness on the Alphia Term Loan Facility is $ 5.0 million and $ 0.3 million of payable-in-kind
("PIK") interest. As discussed below, the total value of the consideration received in connection with the Term Loan Agreement
was first allocated to the Warrants (as defined in "Note 13 - Warrants") at fair value, with the remainder allocated to debt.
Accordingly, the Company recorded a debt discount of $ 2.2 million on the Alphia Term Loan Agreement (see "Note 13 - Warrants"
for further discussion). Furthermore, the Company incurred debt issuance costs of $ 0.2 million. The discount and debt issuance costs
associated with the Term Loan Agreement are amortized using the effective interest method. The Company was not in compliance with these
covenants as of December 31, 2023. As of December 31, 2023, the Company was not in compliance with certain covenants related to the Alphia
Term Loan Facility and the debt was callable by the lender. As such, the outstanding amount as of December 31, 2023 was included in current
liabilities in the Consolidated Balance Sheets.

 On
March 25, 2024, the Company initiated a legal action to enforce a right of first refusal option exercised by Alphia pursuant to the terms
of a written agreement between Alphia and the Company whereby Alphia was to acquire the assets of Halo. On June 20, 2024, the Company
agreed to settlement terms of the lawsuit. The agreement dismisses the Company's ongoing litigation with Alphia and provides for
the forgiveness of the Company's term loan, including $ 5.0 million in principal and $ 0.5 million of payable-in-kind ("PIK")
accrued interest, the termination of 335,640 warrants with a strike price of $ 11.44 per share that were set to expire in 2028, and the
forgiveness of up to $ 2.6 million in accounts payable due to Alphia, provided the remaining outstanding accounts payable balance is paid
within 90 days of the settlement date. The accounts payable were paid prior to December 31, 2024, resulting in a gain of $ 2.6 million.
The book value of the Alphia term loan and the unamortized debt issuance costs were $ 3.2 million and $ 0.2 million, respectively, on the
date of forgiveness.

 As
a result of the settlement terms described above, the Company is not indebted to Alphia as it relates to the Term Loan Facility as of
December 31, 2024.

 Wintrust
term loan and lines of credit

 The
Company previously held a credit facility, as amended, with Old Plank Trail Community Bank, N.A., an affiliate of Wintrust Bank, N.A.
("Wintrust") consisting of a $ 6.0 million term loan and a $ 13.5 million revolving line (the "Wintrust Credit Facility").
As amended, the Wintrust Credit Facility bore interest at a variable rate equal to the U.S. Federal Funds Rate plus 375 basis points,
with an interest rate floor of 3.75 % and matured October 31, 2024. Accrued interest on the Wintrust Credit Facility was payable monthly
and principal payments were required to be made monthly on the term loan with a balloon payment upon the original maturity date.

 On
June 21, 2023, the Company paid off the entire balance in the sum of $ 13.5 million of the Wintrust Credit Facility. As of December 31,
2023, there was no outstanding balance related to the Wintrust Credit Facility.

 Note
10 – Business combinations

 On
February 9, 2024, the Company completed the acquisition of Aimia Pet Healthco, Inc. ("Aimia") to develop treats and toppers
that safely combat pet obesity.

 The
Aimia acquisition is considered a business combination with a purchase price of $ 0.4 million with common shares issued as consideration,
which have been adjusted herein to reflect the Reverse Stock Split effective March 20, 2024. In accordance with ASC Topic 805, Business
Combinations ("Topic 805"), total consideration was first allocated to the fair value of assets acquired, including liabilities
assumed, with the excess being recorded as goodwill. For financial statement purposes, goodwill is not amortized but rather is evaluated
for impairment at least annually or more frequently if an event or change in circumstances occurs that indicates goodwill may be impaired.
Goodwill is deductible for tax purposes and will be amortized over a period of 15 years.

 The
recorded purchase price for the business combination includes an estimation of the fair value of equity interests, which is calculated
based on the value of the Company's common stock on the closing date.

 Under
ASC 805, a business combination involves the acquisition of a business, defined as an integrated set of activities and assets capable
of being conducted and managed for the purpose of providing a return to investors. The Company assessed whether the acquired entity constituted
a business by evaluating its assets, processes, and outputs and determined the acquired set to be a business based on the inputs and
substantive processes that together significantly contribute to the ability to create outputs.

 Aimia
is a pre-revenue business and there were no operating results related to this business combination to include in the consolidated statements
of operations for the year ended December 31, 2024 since the acquisition date.

 Acquisition-related
costs incurred in connection with business combinations are recorded in selling, general and administrative expenses in the consolidated
statements of operations. The Company incurred acquisition-related costs from this business combination of less than $ 0.1 million for
the year ended December 31, 2024.

 In
November 2023, Aimia entered into a memorandum of understanding ("MOU") which establishes a research and development ("R&D")
partnership with doctors and a lab which would facilitate the development of a GLP-1 supplement for pets. In connection with the MOU,
the Company issued 6,818 shares to the R&D partners and the Company incurred $ 0.1 million of acquisition-related costs, which are
recorded in selling, general, and administrative expenses in the consolidated statement of operations for the year ended December 31,
2024.

 The
table below provides a summary of the total consideration and the purchase price allocation made for the business combination that became
effective during the year ended December 31, 2024.

of Estimated Purchase Price Allocation Made for Business Combination

 Aimia

 Common stock

 $
 399,713

 Total consideration

 $
 399,713

 Subscription receipts receivable

 $
 1,100

 HST Receivable

 Goodwill

 405,194

 Total assets acquired

 $
 407,150

 AP and accruals

 $
 7,437

 Total liabilities acquired

 $
 7,437

 Net assets acquired

 $
 399,713

 The
factors contributing to the recognition of the amount of goodwill are based on expanding research and development to develop dog treats
that mirror the weight loss benefits of brands including Slentrol, Wegovy, Ozempic, and Mounjaro with added protein and nutrients from
the Company's Halo products to promote lean muscle and overall pet health.

 Note
11 – Fair value measurements

 The
carrying amounts of cash and cash equivalents, trade accounts receivable, notes receivable and other current assets,
accounts payable and accrued expenses approximate fair value because of the short-term nature of these financial instruments. The carrying
amounts of borrowings under credit facilities approximates fair value because of the short-term nature and variable interest rates on these instruments approximates current
market rates.

 The
Company estimates the fair value of the term loan based on a discounted cash flow method. The carrying value of the term loan was based
on an accounting entry where proceeds from the loan were first allocated to the warrants liabilities. The following table presents the
carrying amount and fair value of the Company's term note and line of credit by hierarchy level:

 Schedule of Carrying Amount and Fair Value

 Fair Value Hierarchy

 Carrying Amount

 Fair Value

 Carrying Amount

 Fair Value

 Term loan, net

 Level 3

 (1)

 $
 –

 $
 –

 $
 2,881

 $
 3,314

 (1)
 the fair value
estimates are based on unobservable inputs reflecting management's assumptions about inputs used in pricing the asset or liability

 Note
12 – Commitments and contingencies

 The
Company has manufacturing agreements with its vendors that provides for the company to make its commercial best efforts to purchase minimum
quantities in the ordinary course of business. The Company had no material purchase obligations as of December 31, 2024 or 2023.

 The
Company may be involved in legal proceedings, claims, and regulatory, tax, or government inquiries and investigations that arise in the
ordinary course of business resulting in loss contingencies. The Company accrues for loss contingencies when losses become probable and
are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the
minimum amount of the range is recorded as a liability. Legal costs such as outside counsel fees and expenses are charged to expense
in the period incurred and are recorded in SG&A expenses. The Company does not accrue for contingent losses that are considered to
be reasonably possible, but not probable; however, the Company discloses the range of such reasonably possible losses. Loss contingencies
considered remote are generally not disclosed.

 Litigation
is subject to numerous uncertainties and the outcome of individual claims and contingencies is not predictable. It is possible that some
legal matters for which reserves have or have not been established could result in an unfavorable outcome for the Company and any such
unfavorable outcome could be of a material nature or have a material adverse effect on the Company's consolidated financial condition,
results of operations and cash flows. Management is not aware of any claims or lawsuits that may have a material adverse effect on the
consolidated financial position or results of operations of the Company.

 Note
13 – Warrants

 The
following summarizes the Company's outstanding warrants to purchase shares of the Company's common stock as of and for the
years ended December 31, 2024 and 2023:

of Outstanding Warrants

 Warrants

 Weighted Average

Exercise Price

 Warrants outstanding as of December 31, 2022

 214,400

 $
 260.48

 Issued

 335,639

 $
 11.44

 Exercised

 —

 $
 –

 Terminated/Expired

 —

 $
 –

 Warrants outstanding as of December 31, 2023

 550,039

 $
 108.51

 Issued

 1,111,350

 $
 0.29

 Exercised

 ( 278,000
)

 $
 0.01

 Terminated/Expired

 ( 364,044
)

 $
 54.83

 Warrants outstanding as of December 31, 2024

 1,019,345

 $
 39.28

 The
outstanding warrants had an intrinsic value of $ 1.8
million as of December 31, 2024. There was no intrinsic
value of outstanding warrants as of December 31, 2023.

 In
conjunction with the Alphia Term Loan Facility mentioned in "Note 9 - Debt", the Company issued to Alphia (i) a warrant (the
"First Tranche Warrant") to purchase 148,758 shares of the Company's common stock, par value $ 0.001 per share ("Common
Stock") at a price of $ 11.44 per share, and (ii) a warrant (the "Second Tranche Warrant" and together with the First
Tranche Warrant, the "Warrants" or the "Alphia Warrants") to purchase 186,882 shares of Common Stock at a price
of $ 11.44 per share. Unless exercised, the Warrants expire on June 21, 2028. Alphia's exercise of the Second Tranche Warrant was
subject to the approval of the Company's stockholders and was approved on November 15, 2023. The Warrants contained certain anti-dilution
provisions in favor of Alphia in connection with any equity offering consummated by the Company prior to December 21, 2023 and equity
issuances below the exercise price of the Warrants. The Warrants also contain a cashless exercise option at the election of Alphia.

 Additionally,
in conjunction with the Term Loan, the Company entered into a Side Letter Agreement with Alphia (the "Side Letter") pursuant
to which Alphia was granted a right of first refusal on any of the following relating to the Company or any of its subsidiaries and to
the extent such transactions constitute a change of control: (i) any transfer, sale, lease or encumbrance of all or any portion of the
capital stock or assets (other than the sale of inventory in the ordinary course of business), (ii) any merger, consolidation or other
business combination, (iii) any recapitalization, reorganization or any other extraordinary business transaction, (iv) or any equity
issuance or debt incurrence. Alphia's right of first refusal is effective so long as the Term Loan remains outstanding and for
a period of 12 months thereafter. The Side Letter also provides Alphia with certain Board observer rights.

 The
Company evaluated the Alphia Warrants under ASC 815-40, Derivatives and Hedging-Contracts in Entity's Own Equity ("ASC 815-40")
and concluded they did not initially meet the criteria to be classified in shareholders' equity. Specifically, there were contingent
exercise provisions and settlement provisions that existed, including provisions where the number of shares available under the warrants
may be adjusted based on a percentage of equity. Because the number of outstanding common shares was not a fair value input to a fixed-for-fixed
model, this provision violated indexation guidance. Therefore, the warrants were not indexed to the Company's stock. The Alphia
warrant liabilities were remeasured at fair value each reporting period until provisions precluding equity classification lapsed and
the Company reassessed the warrants classification on December 21, 2023. The total value of the consideration received in connection
with the Alphia Term Loan Agreement was first allocated to warrants liabilities at fair value, with the remainder allocated to the Alphia
Term Loan Agreement. Accordingly, the Company recorded a discount of $ 2.2 million on the Alphia Term Loan Agreement (see "Note
9 - Debt" for further discussion).

 The
Alphia warrant liabilities were determined using a risk-neutral Monte Carlo simulation based approach, a Level 3 valuation. The significant
inputs to the warrant liabilities were as follows:

 Schedule of Significant Inputs to Warrants Liabilities

 December 21, 2023

 First Tranche Warrant

 Second Tranche Warrant

 Exercise price

 $
 11.44

 $
 11.44

 Stock price

 $
 12.00

 $
 12.00

 Volatility

 62.0
 %

 62.0
 %

 Time to maturity

 5 years

 5 years

 Risk-free rate

 3.92
 %

 3.92
 %

 Dividend yield

 —
 %

 —
 %

 The
following table summarizes the Alphia warrant liability activity for twelve months ended December 31, 2023:

 Schedule of Warrant Liability Activity

 Balance as of December 31, 2022

 $
 —

 Warrant liabilities issued

 2,208

 Reclassification of warrants liabilities to equity

 ( 2,444
)

 Balance as of December 31, 2023

 $
 —

 The
change in fair value related to the Alphia warrant liabilities was $ 0.2 million for the twelve months ended December 31, 2023. There
were no transfers to/from levels 1, 2 and 3 during the twelve months ended December 31, 2023.

 The
anti-dilution provisions which previously precluded equity treatment of the Alphia warrants, expired on December 21, 2023, and thus the
Alphia warrants were reclassified to additional paid in capital and presented in equity as of December 31, 2023. The settlement terms
discussed in Note 8 - Debt provide for the termination of 335,640 Alphia warrants, which resulted in a net zero impact on equity. As
a result, there are no Alphia warrants outstanding as of December 31, 2024.

 In
connection with the Offering discussed in Note 1, the Company issued pre-funded warrants to purchase 1,028,000 shares of Common Stock
(the "Pre-Funded Warrants" and together with the Shares, the "Securities") at a public offering price of $ 2.99
per Pre-Funded Warrant. The Pre-Funded Warrants do not expire until conversion and the warrant shares fully vest upon issuance. The aggregate
exercise price of the Pre-Funded Warrant, except for a nominal exercise price of $ 0.01 per Warrant Share, was pre-funded to the Company
on or prior to the Initial Exercise Date of July 31, 2024. Consequently, no additional consideration (other than the nominal exercise
price of $ 0.01 per Warrant Share) shall be required to be paid by the Holder to effect the exercise of the Pre-Funded Warrant. The Pre-Funded
Warrants are transferable, in whole or in part, upon surrender of the Warrant. The Pre-Funded Warrants do not entitle the Holder to any
voting rights, dividends, or other rights as a stockholder of the Company prior to exercise. In no event shall the Company be required
to net cash settle an exercise of the Pre-Funded Warrant.

 The
Company also issued representative warrants to purchase 83,350 shares of common stock which are exercisable at $ 3.75 per share. The representative
warrants expire on July 29, 2029 and have an exercise price of $ 3.75 per share of Common Stock. The representative warrant shares fully
vest upon issuance. The representative warrants are non-transferable until the initial exercise date of January 25, 2025, unless transferred
to ThinkEquity LLC or an underwriter. After the exercise date, the warrants are fully transferable. The representative warrants do not
entitle the Holder to any voting rights, dividends, or other rights as a stockholder of the Company prior to exercise.

 In
2024, 278,000 pre-funded warrants were exercised. As of December 31, 2024, 750,000 Pre-Funded and 83,350 representative warrants remain
outstanding.

 Note
14 – Share-based compensation

 The
Company recognized $ 0.8 million and $ 1.8 million of share-based compensation expense for the years ended December 31, 2024 and 2023,
respectively.

 On
November 11, 2019, the Company received shareholder approval for the Amended and Restated 2019 Incentive Award Plan (the "Amended
2019 Plan"). The Amended 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards,
restricted stock units, other stock or cash-based awards or a dividend equivalent award. On July 16, 2021, the Company registered 61,364
shares of its common stock issuable under the Amended 2019 Plan in a registration statement on Form S-8. The Amended 2019 Plan provides
for an annual increase on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2029,
equal to the lesser of (A) 10 % of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately
preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board; provided, however, not more than
 204,546 shares of common stock shall be authorized for issuance. The number of shares eligible for issuance increased to 127,606 on January
1, 2022, increased to 194,493 on January 1, 2023, and increased to the maximum allowable of 204,546 on January 1, 2024.

 Stock
options

 The
following table provides detail of the options granted and outstanding:

of Options Granted and Outstanding

 Options

 Weighted Average

 Exercise Price

 Weighted Average Remaining Contractual Life (Years)

 Aggregate Intrinsic Value

 Options outstanding as of December 31, 2023

 53,342

 $
 221.40

 5.7

 $
 –

 Granted

 52,785

 4.78

 Forfeited/Expired

 ( 6,687
)

 235.38

 Options outstanding as of December 31, 2024

 99,440

 $
 105.51

 7.3

 $
 –

 Options exercisable as of December 31, 2024

 44,903

 $
 226.89

 4.7

 $
 –

 Fully vested options as of December 31, 2024

 44,903

 $
 226.89

 4.7

 $
 –

 Options expected to vest as of December 31, 2024

 54,603

 $
 5.69

 9.4

 $
 –

 Options
granted under the Amended 2019 Plan vest over a period of one to three years. All vested options are exercisable and may be exercised
through the ten-year anniversary of the grant date (or such earlier date described in the applicable award agreement).

 On
June 26, 2024, the Company granted 47,285 options to acquire common stock to certain of its directors, officers and employees, at a weighted-average
grant date fair value of $ 3.93 per share. The stock options were granted with a one-year vesting period and the Company recognized $ 0.1 million
of share-based compensation expense in its consolidated statements of operations for the year ended December 31, 2024. As of December
31, 2024, unrecognized share-based compensation related to these options was $ 0.1 million, which is expected to be recognized over a
weighted average period of one year.

 In
addition to the June 2024 grants discussed above, the Company granted 5,500 stock options to new employees under the Amended 2019 Plan
during the year ended December 31, 2024; all of which were still outstanding at December 31, 2024.

the years ended December 31, 2024 and 2023, $ 0.3 million and $ 1.0 million, respectively, of share-based compensation expense was recognized
related to options issued. As of December 31, 2024, unrecognized share-based compensation related to options was $ 0.1 million, which
is expected to be recognized over a weighted average period of 0.5 years.

 The
fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model, using the following
assumptions primarily based on historical data:

of Fair Value Assumptions

 Years Ended December 31,

 2024

 2023

 Risk-free interest rate

 0.3 - 4.3
 %

 0.3 - 4.0
 %

 Expected volatility (1)

 0.0 % - 161.7
 %

 0.0 % - 72.5
 %

 Expected dividend yield

 –
 %

 –
 %

 Expected life (years) (2)

 0 - 7.6

 0 - 7.6

 (1)
 Expected volatility
was determined using historical volatility.

 (2)
 For certain options,
the simplified method is utilized to determine the expected life due to the lack of historical data.

 Restricted
Stock Awards

 In
January 2023, the Company granted 20,292 shares of restricted common stock to members of its board of directors under the Amended 2019
Plan as compensation for annual board service. These restricted stock awards were immediately vested and, as such, the Company recorded
share-based compensation expense of $ 0.5 million upon issuance.

 In
January 2023, the Company granted 4,545 shares of restricted common stock to certain executives and employees under the Amended 2019
Plan as performance bonus compensation totaling $ 0.1 million. These restricted stock awards were issued on the grant date with a one
year cliff vesting condition and the Company will recognize the expense over the vesting period.

the first quarter of 2023, the Company granted 409 shares of restricted common stock to a member of its board of directors for service
as interim CEO. These restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation expense
of less than $ 0.1 million upon issuance.

the second quarter of 2023, the Company granted 909 shares of restricted common stock to certain executives and employees under the Amended
2019 Plan as performance bonus compensation totaling less than $ 0.1 million. These restricted stock awards were issued on the grant date
with a one year cliff vesting condition and the Company will recognize the expense over the vesting period.

the third quarter of 2023, the Company granted 34,090 shares of restricted common stock to two members of its board of directors. These
restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation expense of less than $ 0.3
million upon issuance.

 In
February 2024, the Company granted 42,088 shares of restricted common stock to members of its Board of Directors as part of their equity
compensation pursuant to the Amended and Restated 2019 Incentive Award Plan. These restricted stock awards were immediately vested and,
as such, the Company recorded share-based compensation expense of $ 0.4 million upon issuance.

 In
June 2024, the Company granted 22,727 shares of restricted common stock to certain executives under the Amended 2019 Plan as performance
bonus compensation. These restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation
expense of $ 0.1 million upon issuance.

 Note
15 – Employee benefit plans

 The
Company has a qualified defined contribution 401(k) plan, which covers substantially all of its employees. Participants are entitled
to make pre-tax and/or Roth post-tax contributions up to the annual maximums established by the IRS. The Company matches participant
contributions pursuant to the terms of the plan, which contributions are limited to a percentage of the participant's eligible
compensation. The Company made contributions related to the plan and recognized expense of $ 0.1 million during the years ended December
31, 2024 and 2023.

 Note
16 – Related party transactions

Fees

 The
Company pays quarterly board of director fees. Board of director fees totaled $ 0.3 million during the years ended December 31, 2024 and
2023. As of December 31, 2024 and 2023, $ 0.1 million of these director fees were in accrued other expenses on the Consolidated Balance
Sheets, respectively.

 Marketing
Support Services

 On
March 7, 2023, the Company entered into an agreement with Believeco to provide marketing support services for an interim period. A
previous member of the Company's board of directors, whose resignation was effective April 1, 2024, is a partner at Believeco. As of December 31, 2024, Believeco is no longer
considered a related party. Marketing expenses related to Believeco for the year ended December 31, 2024 was less than $ 0.01
million, none
of which is included within Accounts Payable as of December 31, 2024. As of December 31, 2023 marketing expense related to Believeco
totaled $ 0.4
million, of which $ 0.1
million is included within Accounts Payable.

 Note
17 – Income taxes

 For
the year ended December 31, 2024, the Company recorded income tax expense of less than $ 0.1 million. For the year ended December 31,
2023, the Company recorded income tax expense of less than $ 0.1 million. For the years ended December 31, 2024 and 2023, the Company's
effective tax rate was ( 6.1)% and 0 %, respectively. The Company's effective tax rate differs from the U.S. federal statutory rate of 21 % primarily
because the Company's losses have been fully offset by a valuation allowance due to uncertainty of realizing the tax benefit of
NOLs for the years ended December 31, 2024 and 2023.

 The
following table is a reconciliation of the components that caused the Company's provision for income taxes to differ from amounts
computed by applying the U.S. federal statutory rate of 21% (in thousands):

 Schedule of Effective Income Tax Rate Reconciliation

 Years Ended December 31,

 2024

 2023

 Statutory U.S. Federal income tax

 $
 ( 34
)

 21.0
 %

 $
 ( 4,782
)

 21.0
 %

 State income taxes, net

 ( 177.0
)%

 ( 309
)

 1.3
 %

 Meals and entertainment

 ( 3.1
)%

 – %

 Change in valuation allowance

 ( 243
)

 153.4
 %

 5,031

 ( 22.1
)%

 Warrant valuation

 –

 –
 %

 ( 0.2
)%

 Tax effect of non-deductible equity instruments

 –

 –
 %

 –

 –
 %

 Return to provision adjustment

 –

 –
 %

 –
 %

 Other

 ( 0.4
)%

 –
 %

 Total provision

 $

 ( 6.1
)%

 $

 0.0
 %

 Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.

 Significant
components of the Company's deferred tax assets and liabilities are as follows (in thousands):

 Schedule of Deferred Tax Assets and Liabilities

 December 31,

 2024

 2023

 Deferred income tax assets:

 Net operating loss carryforwards

 $
 21,460

 $
 21,662

 ROU assets

 Share-based compensation

 5,240

 5,320

 Inventory

 Other assets

 2,529

 2,508

 Gross deferred tax assets

 29,309

 29,586

 Valuation allowance

 ( 29,268
)

 ( 29,509
)

 Net deferred tax assets

 $

 $

 Deferred income tax liabilities:

 Fixed assets

 ( 27
)

 ( 50
)

 Operating lease liabilities

 ( 14
)

 ( 27
)

 Intangibles

 –

 –

 Total deferred tax liabilities

 $
 ( 41
)

 $
 ( 77
)

 Deferred tax liabilities, net of valuation allowance

 $
 –

 $
 –

 As
of December 31, 2024, the Company had a deferred tax asset (before valuation allowance) recorded on gross federal and state net operating
loss carryforwards of approximately $ 88.6 million and $ 58.1 million, respectively. The net operating losses will begin to expire in 2027.

 The
Internal Revenue Code, as amended ("IRC"), imposes restrictions on the utilization of NOLs and other tax attributes in the
event of an "ownership change" of a corporation. Accordingly, a company's ability to use pre-change NOLs may be limited
as prescribed under IRC Section 382. Events which may cause limitation in the amount of the NOLs and credits that can be utilized annually
include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period.

assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing
deferred tax assets in the future. A significant piece of objective negative evidence evaluated was the cumulative loss incurred through
the years ended December 31, 2024 and 2023. Such objective evidence limits the ability to consider other subjective positive evidence
such as current year taxable income and future income projections. On the basis of this evaluation, as of December 31, 2024, a valuation
allowance of $ ( 29.3) million was recorded since it is more likely than not that the deferred tax assets will not be realized.

 Changes
in valuation allowance are as follows (in thousands):

 Schedule of Valuation Allowance

 Years Ended December 31,

 2024

 2023

 Valuation allowance, at beginning of year

 $
 29,509

 $
 24,479

 Change in valuation allowance

 ( 241
)

 5,030

 Valuation allowance, at end of year

 $
 29,268

 $
 29,509

 As
of December 31, 2024 and 2023, the Company does not have any significant uncertain tax positions and as of December 31, 2024 and 2023,
the Company had no accrued interest and penalties related to uncertain income tax positions. The Company does not anticipate that the
amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months. If incurred, the Company would
classify interest and penalties on uncertain tax positions as income tax expense.

 The
Company is subject to taxation in the U.S. federal and various state jurisdictions. The Company is not currently under audit by any taxing
authorities. The Company remains open to examination by tax jurisdictions for tax years beginning with the 2021 tax year for federal
and 2020 for states. Federal and state net operating losses are subject to review by taxing authorities in the year utilized and future
years.

 Note
18 – Segment information

 The Company evaluated its operating segments in accordance with ASC 280,
"Segment Reporting" and determined it operates as one reportable segment, pet food products. The Company provides a comprehensive
range of premium pet products, including dry kibble, wet food, freeze dried raw food, treats, and toppers for dogs and cats. In 2024,
these products were sold through the three different revenue channels described in "Note 2 - Revenue" - Digital, Brick-and-Mortar
and International. The Company has concluded each of the three different channels met the three characteristics of an operating segment.
While the company's products are offered across three operating segments, they are aggregated into a single reporting segment, as
there are no material differences in the nature of the products and services, the nature of the production processes, the type or class
of customer for their products and services, the methods of distribution, and the regulatory environment in which they operate.

 The
Company's Chief Executive Officer, who is the designated chief operating decision maker ("CODM"), evaluates performance
and makes decisions based on consolidated financial information. The CODM does not separately evaluate distinct groups of products or
services, nor are resources allocated differently based on individual product lines or geographic regions. Rather, performance is assessed
on an overall basis, considering consolidated metrics such as total revenues, gross margin, and net loss of the Company as a whole,
and resources are allocated to support the Company's overall business plan.

 The
CODM of Better Choice Company does not review total assets when evaluating the results of the pet food products segment, as the Company
operates with an asset-light business model. As the Company utilizes a third-party logistics (3PL) provider and does not manage its own
manufacturing, asset-related information is not considered in performance assessments and is therefore not presented.

 Consolidated sales, gross margin, and net loss of premium pet food products generate the Company's revenues and are reflected in the consolidated statement of
operations. The CODM also evaluates significant segment expenses, which consist of the following (in thousands):

of Segment information

 Twelve months Ended December 31,

 2024

 2023

 Net sales

 $

 $

 Cost of goods sold:

 Direct

 20,998

 25,274

 Indirect

 1,521

 Total cost of goods sold

 21,986

 26,795

 Gross profit

 12,989

 11,797

 Segment expenses:

 Discretionary marketing

 5,885

 6,233

 Outbound freight

 1,318

 Other segment expenses (a)

 12,560

 25,425

 Total segment expenses

 32,976

 Loss from operations

 ( 5,967
)

 ( 21,179
)

 Other income (expense):

 Interest expense

 ( 467
)

 ( 1,353
)

 —

 ( 236
)

 6,206

 —

 Other income

 —

 Total other income (expense)

 5,808

 ( 1,589
)

 Net loss before income taxes

 ( 159
)

 ( 22,768
)

 Income tax expense

 ( 9
)

 ( 2
)

 Net loss

 $
 ( 168
)

 $
)

 (a)
 Other segment expenses
include employee compensation and benefits, share based compensation, non-cash charges, other sales and marketing costs, professional
fees, broker commissions, and other general expenses

 The accounting policies of the segment are consistent with
those described in Note 1 - Summary of Significant Accounting Policies.

 Geographic

 Revenue
by geography is based on where the customer is based. Summary financial data attributable to various geographic regions for the periods
indicated is as follows:

of Revenue By Geography

 2024

 2023

 2024

 2023

 United States

 $
 17,795

 $
 23,568

 China

 12,808

 11,000

 Other

 4,372

 4,024

 Total

 $

 $

 Note
19 – Concentrations

 Major
suppliers

 The
Company sourced approximately 79 % of its inventory purchases from three vendors for the year ended December 31, 2024. The Company sourced
approximately 64 % of its inventory purchases from two vendors for the year ended December 31, 2023. There were $ 1.0 million and $ 5.0
million of inventory purchases from major suppliers in accounts payable on the Consolidated Balance Sheets, as of December 31, 2024 and
2023, respectively.

 Major
customers

 Accounts
receivable from two customers represented 86 % of accounts receivable as of December 31, 2024. Accounts receivable from two customers
represented 79 % of accounts receivable as of December 31, 2023. Three customers represented 78 % and 62 % of gross sales for the year ended
December 31, 2024 and 2023, respectively.

 Credit
risk

 As
of December 31, 2024 and 2023, the Company's cash and cash equivalents were deposited in accounts at several financial institutions
and may maintain some balances in excess of federally insured limits. The Company maintains its cash and cash equivalents with high-quality,
accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company has not experienced any
losses historically in these accounts and believes it is not exposed to significant credit risk in its cash and cash equivalents.

 Note
20 – Loss per share

 The
Company presents net loss per share on a basic and diluted basis for the years ended December 31, 2024 and 2023. Basic loss per share
is computed by dividing net loss by the weighted average number of common shares outstanding ("WASO") during the period.
For the years ended December 31, 2024 and 2023, the Company's basic and diluted net loss per share attributable to common stockholders
are the same as the Company generated a net loss.

 For
the year ended December 31, 2024, the Company's basic and diluted net loss per share attributable to common stockholders are the
same as the Company generated a net loss and common stock equivalents are excluded from diluted net loss per share as they have an anti-dilutive
impact.

 For
the year ended December 31, 2023, potentially dilutive securities not included in the calculation of diluted net loss per share, because
to do so would be anti-dilutive, are as follows: 335,640 of Alphia Warrants ( 148,758 First Tranche Warrant and 186,882 Second Tranche
Warrant); 214,400 of stock equivalent warrants; and 53,285 of stock equivalent employee stock options.

 For
the year ended December 31, 2024, potentially dilutive securities not included in the calculation of diluted net loss per share, because
to do so would be anti-dilutive, are as follows: 269,345 of stock equivalent warrants; and 99,525 of stock equivalent employee stock
options.

 The
following table sets forth basic and diluted net (loss) earnings per share attributable to common stockholders for the years ended December
31, 2024 and 2023 (in thousands, except share and per share amounts):

of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders

 Year ended December 31,

 2024

 2023

 Numerator:

 Net loss

 $
 ( 168
)

 $
)

 Adjusted net loss available to common stockholders

 $
 ( 168
)

 $
)

 Denominator:

 Basic WASO

 1,615,487

 705,185

 Diluted WASO

 1,615,487

 705,185

 Net loss per share attributable to common stockholders, basic

 $
 ( 0.10
)

 $
 ( 32.29
)

 Net loss per share attributable to common stockholders, diluted

 $
 ( 0.10
)

 $
 ( 32.29
)

 Note
21 – Subsequent events

 The
Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial
statements were issued for potential recognition or disclosure. Other than the following, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the consolidated financial statements.

 On
February 6, 2025, the Promissory Note described in "Note 4 - Notes receivable" was amended for a second time to allow for
the borrowing of an additional $ 0.4 million. The interest rate remains at 11 % per annum.

 On
February 19, 2025, the Company announced the sale of its Halo business in Asia for total gross proceeds of $ 8.1 million including $ 6.5
million in cash at closing, along with a 3 % royalty on sales over the next five years, guaranteed by a minimum royalty payment of $ 0.3
million per year or $ 1.7 million in total. The Company will retain ownership of its North American and rest-of-world ex-Asia operations.
Both parties expect to close the sale in April 2025.

 On
February 20, 2025, in connection with the sale of the Halo business in Asia discussed above, the Company announced that it agreed in
principle to a 5.5 % royalty agreement on all sales of the Halo Elevate brand in the Asian region.

 On
February 28, 2025, the Company announced that SRx was granted the final Order pursuant to the Business Corporations Act by the
Ontario Superior Court of Justice to proceed with the acquisition previously announced on September 3, 2024, where the Company would
acquire SRx in an all-stock transaction valued at an estimated $ 80 million, assuming SRx's net debt of $ 43 million at close.
As consideration for the transaction, the company expects to issue a maximum of 30.0 million shares to SRx shareholders and is
expected to close in 2025. The Company hosted a Special Meeting of shareholders on March 21, 2025 where the Company's stockholders
voted in favor of the proposal to approve the arrangement transaction with SRx. The Company is unable to predict the outcome or
impact on its business and financial results.

 On
March 11, 2025, the Company announced the signing of a binding Letter of Intent (LOI) to acquire 100 % of Choice Specialty Pharmacy Group,
a fully licensed and prominent provider of specialized pharmacy services in the U.S., through an option purchase agreement. This acquisition
is expected to further strengthen Better Choice's specialty pharmacy presence in the U.S. and the purchase price is estimated at
approximately USD $ 4.7 million, and consideration will be comprised of stock and cash at closing.

 On
March 17, 2025, the Company announced the approval of a royalty distribution plan for shareholders. Under this new initiative, up to
55% of the annual royalties generated by the Company's flagship Halo brand will be distributed annually to stockholders of record
as of December 31 of the given year. The aggregate amount and other details of each such distribution shall be determined by the Company's
Board of Directors on an annual basis, and the declaration of each such distribution will be effected by appropriate Board action at
such time.

 On
March 21, 2025, the Company announced that the Company's shareholders authorized the following proposals: (i) issuance of up to 30,000,000
shares of Better Choice common stock in connection with the Arrangement Agreement with SRx, pursuant to which Better Choice will acquire
SRx; (ii) changing of the legal name of Better Choice from "Better Choice Company, Inc." to "SRX Health Solutions,
Inc." and of the NYSE American ticker symbol from "BTTR" to "SRXH"; and (iii) an increase in the number
of securities subject to the Company's 2019 Incentive Award Plan. Each of the Proposals are more fully described in the Company's
definitive proxy statement filed with the SEC on January 28, 2025, as supplement by the Company's Supplemental Proxy Materials
filed with the SEC on March 7, 2025.

 ITEM
 9.

 CHANGES
 IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A.

 CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 Our
management, with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our
principal financial officer) evaluated the effectiveness of our disclosure controls and procedures as of the year ended December 31,
2024. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31,
2024, our disclosure controls and procedures were not effective due to the material weaknesses discussed below. Notwithstanding the material
weaknesses in our internal control over financial reporting, we have concluded that the consolidated financial statements included in
this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods
presented in conformity with accounting principles generally accepted in the United States of America.

 Management's
Annual Report on Internal Control Over Financial Reporting

is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f)
under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control –
Integrated Framework (2013 Framework). Based on this assessment, management concluded that, as of December 31, 2024, the Company's
internal control over financial reporting was not effective due to the material weaknesses described below.

 Material
Weaknesses

has determined that we did not design and maintain effective controls to support proper revenue recognition. Specifically, management
did not have effective controls (i) to ensure the accuracy of data input for price and quantity and (ii) to ensure that there was effective
testing of period end sales cutoff, including a proper review and comparison of invoices.

assessed the design and operating effectiveness of our General IT Controls (GITCs) for the fiscal year ended December 31, 2024. Based
on this assessment, we identified certain control deficiencies within our IT systems and processes. While each individual deficiency
was considered to be small in nature, their aggregate impact on the overall control environment has resulted in a material weakness.
Specifically, the identified deficiencies relate to the access controls, change management, and cybersecurity.

 Remediation
Plan

 To
address the material weakness associated with failure to maintain controls over the operating effectiveness of IT general controls, we
transitioned to a new outsourced managed IT service provider with an appropriate level of knowledge and technical experience to design
and maintain IT general controls. We have also planned to (i) establish policies and procedures for the design and operation of IT general
controls, (ii) implement an IT general controls framework, and (iii) where necessary, we have identified, implemented, and documented
IT general controls. We continue to evaluate the appropriate controls to design and maintain effective controls supporting financial
systems relevant to our financial reporting processes. We continue to evaluate staffing requirements and technology improvement opportunities
to further address and achieve remediation.

 To
address the material weakness in internal controls related to the revenue recognition, we continue to evaluate the appropriate controls
to design and maintain effective controls supporting revenue recognition and are in the process of enhancing certain controls over revenue,
including adding resources and training programs addressing the design, implementation, and documentary evidence requirement of control
procedures over revenue recognition for appropriate personnel.

 Although
we implemented measures and plan to implement additional measures to remedy our internal control deficiencies, there can be no assurance
that our efforts will be successful. In addition, until the remediation steps have been completed and operated for a sufficient period
of time, and subsequent evaluation of their effectiveness is completed, the material weaknesses identified and described above will continue
to exist.

 Changes
in Internal Control Over Financial Reporting

 Other
than the changes described above, there has not been any change in our internal controls over financial reporting identified
in connection with the evaluation that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably
likely to materially affect, those controls.

 Attestation
Report of Independent Registered Public Accounting Firm

 This
Annual Report on Form 10-K does not include an attestation report of the Company's registered public accounting firm, as non-accelerated
filers are exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

 ITEM 9B.

 OTHER INFORMATION

 10b5-1
Plans

the quarter ended December 31, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted
or terminated a "Rule 10b5-1 trading arrangement" as such term is defined in Item 408(a) of Regulation S-K. As of December
31, 2024, the Company did not have a "Rule 10b5-1 trading arrangement" in effect with respect to its securities.

 Insider
Trading Policy

 The
Company has adopted insider trading policies and procedures governing the purchase, sale, and other disposition of its securities, which
has been included as an exhibit to this report and has been posted to the governance documents section of the Company's corporate
website (www.betterchoicecompany.com).

 PART
III

 ITEM 10.

 DIRECTORS, EXECUTIVE OFFICERS AND
 CORPORATE GOVERNANCE

 The
following table sets forth the names and positions of our executive officers and directors serving as of such date of filing of this
annual report on Form 10-K. Directors will be elected at our annual meeting of stockholders and serve for one year or until their successors
are elected and qualify. Officers are elected by the Board and their terms of office are, except to the extent governed by employment
contract, at the discretion of the Board.

 Name

 Age

 Position

 Since

 Kent
 Cunningham (1)

 Chief
 Executive Officer

 2024

 Martinez

 Chief
 Financial Officer, Secretary and Treasurer

 n/a

 Lionel
 F. Conacher

 2021

 Gil
 Fronzaglia

 2021

 John
 M. Word III

 2019

 Michael
 Young

 Chairman
 of the Board of Directors

 2019

 (1)
 Mr. Cunningham was appointed as a member of the Board, effective April
1, 2024, to fill the vacancy resulting from Ms. Arlene Dickinson's resignation.

 Kent
Cunningham. Mr. Cunningham was appointed as Chief Executive Officer of the Company effective as of May 22, 2023. Prior to joining
the Company, Mr. Cunningham was a Principal with Catapult Consulting where he provided management and M&A advisory consulting services
from February 2022 to May 2023. Prior to consulting, Mr. Cunningham served as the Chief Executive Officer of 1440 Foods, a sports and
active nutrition company, between August 2021 and January 2022. Prior to 1440 Foods, he was a General Manager at The Bountiful Company,
an American dietary supplements company, from May 2019 to August 2021. Prior to The Bountiful Company, Mr. Cunningham was Chief Marketing
Officer for Whole Earth Brands, a global food company providing plant-based sweeteners and flavor enhancers, between April 2018 and May
2019. From 2013 to April 2018, Mr. Cunningham held various marketing positions at Glanbia Performance Nutrition, a global nutrition company.
From 2006 to 2013, Mr. Cunningham held various Marketing positions at MARS Petcare, owner of several health and nutrition pet food brands.
Mr. Cunningham is a passionate brand builder and business leader with over 25 years of CPG and Health & Wellness marketing and sales
experience across a range of corporate environments and categories including accelerating growth within multinationals, brand turnarounds
and high value exits in the private equity business for the likes of KKR & Co. Inc. Mr. Cunningham holds an MBA in Marketing from
Vanderbilt University and a BA in Communications from the University of Michigan. Mr. Cunningham was appointed as a member of the Board,
effective April 1, 2024.

(Nina) Martinez. Mrs. Martinez was appointed as Chief Financial Officer, effective August 2, 2023. Mrs. Martinez was previously
appointed and served as the Interim Chief Financial Officer, Secretary and Treasurer of the Company effective as of April 3, 2023,
and will continue to serve as the Secretary and Treasurer of the Company. Prior to joining the Company, Mrs. Martinez was a Director
of CFO Partnership Solutions at ONE10 Advisors, LLC, ("ONE10 Advisors") a strategic finance and accounting advisory firm
in Tampa, FL. Prior to joining ONE10 Advisors in January 2022, Mrs. Martinez spent nine years at PricewaterhouseCoopers, LLP where
she served as a Manager in the National Quality Organization office from March through December 2021, and in various assurance roles
from January 2013 through March 2021 where she primarily served publicly traded companies. Mrs. Martinez is a Certified Public
Accountant in the State of Florida and holds a Master of Science in Accounting from The University of Tampa and a Bachelor of
Science in Business Administration, Accounting from the University of Central Florida.

 Lionel
F. Conacher. Mr. Conacher has served as a director since September 2021. He has over thirty years of financial experience, spanning
senior positions in public companies in both Canada and the US, investment banking, private equity and venture capital. Mr. Conacher
currently serves as Chairman of DXL Group (NASDAQ: DXLG), where he has successfully guided the retail chain through the COVID-19 pandemic.
In 2018, Mr. Conacher co-founded a San Francisco based venture capital fund, Next Ventures, after serving as a Senior Advisor and Operating
Partner at Altamont Capital Partners, a Palo Alto based Private Equity Firm, for over seven years. Prior to his experience at Altamont
Partners, he co-founded and served as the CEO of Westwind Partners Inc., a specialized Canadian institutional investment bank that was
ultimately sold to Thomas Weisel Partners for $170 million in 2007 before being acquired by Steifel in 2010. Mr. Conacher holds an A.B.
in Economics & Art History from Dartmouth College and is also actively involved in a variety of non-profits.

 Gil
Fronzaglia. Mr. Fronzaglia has served as a director since April 2021. He has had a successful career serving as both a board and
management team member for large consumer products companies, natural food and beverage startups and most notably as a founding member
and VP of Operations for Blue Buffalo. In addition to joining the board of Better Choice in 2021, Gil has served as a Board Member of
Quinn Snacks since 2016, where he was the Interim COO from December 2018 through July 2019. Mr. Fronzaglia has also served as a member
of the board of Grillo's Pickles, the premium pet care brand I And Love And You and Spindrift Beverage Co. Mr. Fronzaglia is based
in York, Maine and holds a Bachelor of Science from Northeastern University, and a Masters of Business Administration from Barry
University.

 John
M. Word III. Mr. Word has served as a director since January 2020. Mr. Word founded the Word & Brown General Agency in 1984 to
market and distribute health plans through California's huge brokerage community by 1986, the company was recognized as the largest
independent small group health distributor in the nation. That same year, the company launched the nation's first COBRA administration
operation, sensing that employers needed assistance and qualified support with federal COBRA laws. CaliforniaChoice, a groundbreaking
enterprise empowering small business employees to select from multiple health plans within one program, was launched in 1996. Mr. Word's
professional credentials include Chartered Life Underwriter (CLU), Registered Health Underwriter (RHU), and Registered Employee Benefits
Consultant (REBC). He has served as President of the California Association of Health Underwriters (CAHU), President of the Orange County
Association of Health Underwriters (OCAHU), and Chairman of the National Association of Health Underwriters (NAHU) Leading Producers
Roundtable program. Mr. Word holds a Bachelor of Science in Marketing and Finance from William Jewell College in Liberty, MO. We believe
Mr. Word's qualifications to serve as a director of our Company include his background in running successful organizations, understanding
of consumer needs and marketing to those needs. Mr. Word holds a Bachelor of Science in Marketing and Finance from William Jewel College
in Liberty, MO.

 Michael
Young. Mr. Young has served as our Chairman since December 2019. Mr. Young is a founding partner of Cottingham Capital, an investment
company focused on real estate and technology investment, where he has served as Managing Partner since its inception in January 2017.
Prior to January 2017, Mr. Young served as the Managing Director and Co-Head of Trading of GMP Securities, L.P., a Canadian investment
bank. Mr. Young currently serves on the boards of Aerues Inc., an anti-microbial copper coating technology company, and XIB I Capital
Corp., a capital pool company, and was previously on the boards of Nuuvera Corp. and ICC Labs. Mr. Young holds a diploma in Finance from
George Brown College. We believe Mr. Young's qualifications to serve as a director of our Company include his extensive senior
level executive management and trading experience in the Canadian and U.S. capital markets and his experience on other public company
boards of directors.

 Board
of Directors

 The
number of members of our Board of Directors will be determined from time to time by resolution of the Board of Directors. Currently,
our Board of Directors consists of five persons. Our Directors hold office until the earlier of their death, resignation, retirement,
disqualification or removal or until their successors have been duly elected and qualified.

 Committees
of the Board

 We
have an Audit Committee, a Compensation Committee, a Nominating and Governance Committee, and a Strategic Advisory Committee. Each such
committee of the Board of Directors has or will have the composition and responsibilities described below. Each committee is governed
by a written charter. In 2024, each director attended all of the meetings of the Board and the committees on which such director serves.
Each committee charter is posted on our website at  From time to time, our Board
may also establish other, special committees when necessary to address specific issues.

 Audit
Committee

 Our
Audit Committee's responsibilities include, among other matters: appointing, approving the compensation of, and assessing the independence
of our registered public accounting firm; overseeing the work of our registered public accounting firm, including through the receipt
and consideration of reports from such firm; reviewing and discussing with management and the registered public accounting firm our annual
and quarterly financial statements and related disclosures; coordinating our Board of Directors' oversight of our internal control
over financial reporting, disclosure controls and procedures; discussing our risk management policies; meeting independently with our
internal auditing staff, if any, registered public accounting firm and management; reviewing and approving or ratifying any related person
transactions; and preparing the audit committee report required by the SEC.

 The
members of our Audit Committee are Messrs. Conacher, Fronzaglia and Young. Mr. Fronzaglia has been appointed as chairperson of this committee
beginning in 2022. Our Board has determined that each of Messrs. Conacher, Fronzaglia and Young is independent under the applicable independence
standards of Rule 10A-3 under the Exchange Act applicable to audit committee members. In addition, our Board has determined that Messrs.
Conacher, Fronzaglia and Young each qualifies as an "audit committee financial expert" as defined by Item 407(d)(5)(ii) of
Regulation S-K. Our Audit Committee met three times during 2024.

 Compensation
Committee

 Our
Compensation Committee's responsibilities include, among other matters: reviewing and approving, or recommending for approval by
the board of directors, the compensation of our Chief Executive Officer and our other executive officers; overseeing and administering
our cash and equity incentive plans; reviewing and making recommendations to our board of directors with respect to director compensation;
reviewing and discussing annually with management our "Compensation Discussion and Analysis," to the extent required; reviewing
and discussing the voting recommendations of our stockholders on matters involving executive compensation, to the extent required; and
preparing the annual compensation committee report required by SEC rules, to the extent required. No compensation consultant was engaged
to provide advice or recommendations on our executive or director compensation for 2024.

 The
members of our Compensation Committee are Messrs. Conacher, Fronzaglia and Young, and Mr. Young serves as chairman of this committee.
Our Compensation Committee met twice during 2024.

 Nominating
and Governance Committee

 Our
Nominating and Corporate Governance Committee's responsibilities include, among other matters: identifying individuals qualified
to become board of directors members; recommending to our board of directors the persons to be nominated for election as directors and
to each board committee; developing and recommending to our board of directors corporate governance guidelines, and reviewing and recommending
to our board of directors proposed changes to our corporate governance guidelines from time to time; and overseeing a periodic evaluation
of our board of directors.

 The
members of our Nominating and Corporate Governance Committee are Messrs. Fronzaglia and Young. Mr. Conacher was appointed as
chairperson of this committee beginning April 1, 2024, upon the departure of Arlene Dickinson. Our Nominating and Corporate Governance Committee did not meet during
2024.

 Strategic
Advisory Committee

 Our
Strategic Advisory Committee's responsibilities include, among other matters: assessing the progress and performance of our development
programs and projects, and identifying, assessing, implementing, and monitoring corporate opportunities that may offer meaningful strategic
or commercial benefit to the Company. The members of our Strategic Advisory Committee are Messrs. Fronzaglia, Young and Word, and Messrs.
Young and Word serve as co-chairs of this committee. Our Strategic Advisory Committee did not meet during 2024.

Compensation Table

 The
table below sets forth compensation information for the fiscal year ended December 31, 2024 for our non-employee directors:

 Name

 Fees Earned or Paid in Cash

 Stock Awards

 Option Awards

 Non-equity Incentive Plan Compensation

 Total Compensation

 Lionel F. Conacher

 $
 65,000

 $

 $

 $
 —

 $
 172,481

 Gil Fronzaglia

 $
 65,000

 $

 $

 $
 —

 $
 172,481

 John M. Word III

 $
 60,000

 $

 $

 $
 —

 $
 167,481

 Michael Young

 $
 65,000

 $

 $

 $
 —

 $
 172,481

 The
table below shows the aggregate number of option awards (exercisable and unexercisable) held as of December 31, 2024 by each
non-employee director who was serving as of December 31, 2024:

 Name

 Options Outstanding at Fiscal Year End

 Lionel F. Conacher

 5,815

 Gil Fronzaglia

 5,959

 John M. Word III

 6,034

 Michael Young

 10,428

 Code
of Ethics and Code of Conduct

 Our
Board of Directors has adopted a Code of Ethics and Business Conduct that is applicable to all of our employees, executive officers,
and directors of the Company (the "Code of Conduct"). The Code of Conduct is available on our website at
The Nominating and Governance Committee of our Board of Directors is responsible for overseeing the Code of Conduct and must approve
any waivers of the Code of Conduct for employees, executive officers, and directors. We expect that any amendments to the Code of Conduct,
or any waivers of its requirements, will be disclosed on our website.

 Risk
Oversight

 The
Audit Committee of our Board of Directors is responsible for overseeing our risk management process. Our Audit Committee focuses on our
general risk management policies and strategy, the most significant risks facing us, and oversees the implementation of risk mitigation
strategies by management. Our Board of Directors is also apprised of particular risk management matters in connection with its general
oversight and approval of corporate matters and significant transactions.

 Compensation
Committee Interlocks and Insider Participation

 None
of our executive officers serve as a member of the Compensation Committee of our Board of Directors (or other committee performing equivalent
functions) of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

 Communications
 with Directors

 Interested
parties may communicate with our Board or with an individual director by writing to our Board or to the particular director and mailing
the correspondence to: 12400 Race Track Road, Tampa, Florida 33626, Attention: Corporate Secretary. The Corporate Secretary will promptly
relay to the addressee all communications that require prompt attention and will regularly provide our Board with a summary of all substantive
communications.

 Board
Qualifications

 Our
Board has delegated to our Nominating and Governance Committee the responsibility for recommending to our Board the nominees for election
as directors at the annual meeting of stockholders and for recommending persons to fill any vacancy on our Board. Our Nominating and
Governance Committee selects individuals for nomination to our Board based on the following criteria. Nominees for director must:

Possess unquestionable moral and ethical character and core values.

 Have a genuine interest in Better Choice and recognition that as a member of our Board, each director is accountable to all of our shareholders,
not to any particular interest group.

 Have a background that demonstrates experience, expertise and education in areas such as consumer product marketing, corporate strategy,
technology, cybersecurity, financial and regulatory affairs, international sales and distribution and general management.

 Have no conflict of interest or legal impediment that would interfere with the duty of loyalty owed to Better Choice and our stockholders.

 Have the ability and willingness to make the personal commitment to invest the time, schedule and workload to be an active, participatory
member of our Board and the Board's responsibilities and commitment to corporate best practices.

 Be compatible and able to work well with other directors, executives and other employees in a team effort with a view to a long-term
relationship with Better Choice as a director.

 Have independent opinions and be willing to state them in a constructive manner.

 Directors
are selected on the basis of talent and experience. Diversity of background, including diversity of gender, race, ethnic or geographic
origin and age, and education and experience in business, the consumer product market, the pet specialty sector, product marketing, product
distribution and manufacturing and other areas relevant to our activities are factors in the selection process. As a majority of our
Board must consist of individuals who are independent, a nominee's ability to meet the independence criteria established by the
NYSE American is also a factor in the nominee selection process. For a better understanding of the qualifications of each of our directors,
we encourage you to read their biographies set forth in this report.

Nominations

 The
Nominating and Governance Committee will consider candidates for director recommended by stockholders so long as the recommendations
comply with our Certificate of Incorporation and Bylaws and applicable laws, rules and regulations, including those promulgated by the
SEC. The Nominating and Governance Committee will evaluate such recommendations in accordance with its charter, our Bylaws, our corporate
governance guidelines, and the regular nominee criteria described above.

 Attendance
at Annual Meeting

 Directors
are expected to attend our annual meetings of stockholders. Our last annual meeting of shareholders was held on November 5, 2024.

 ITEM
 11.

 EXECUTIVE
 COMPENSATION

 The
following is a discussion and analysis of the compensation arrangements for our named executive officers, or NEOs. We are currently considered
a "smaller reporting company" for purposes of the SEC's executive compensation disclosure rules. In accordance with
such rules, we are providing a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year-End Table as well as narrative
disclosures regarding our executive compensation program. Our NEOs for 2024 consist of the following individuals:

 Kent
 Cunningham, Chief Executive Officer appointed May 2023

 Martinez, Chief Financial Officer appointed August 2023

 Executive
Compensation Components

 Base
Salaries

 The
NEOs receive a base salary to provide a fixed component of compensation reflecting the executive's skill set, experience, role
and responsibilities. Our Compensation Committee adjusts NEO base salaries based on the committee's review of available market
information. Our board of directors established an annual base salary for each of our NEOs as follows:

 Annual Base Salary

 Name

 2022

 2023

 2024

 Kent Cunningham (1)

 n/a

 350,000

 360,000

 Carolina Martinez (2)

 n/a

 254,400

 Lionel F. Conacher (3)

 160,000

 160,000

 n/a

 Scott Lerner

 350,000

 n/a

 n/a

 Sharla A. Cook

 225,000

 n/a

 n/a

 Donald Young

 275,000

 275,000

 n/a

 Robert Sauermann

 n/a

 (1)
 Mr. Cunningham was appointed as Chief Executive Officer of the Company effective as of May 22, 2023.

 (2)
 Mrs. Martinez was appointed as Chief Financial Officer of the Company effective as of August 2, 2023. Mrs. Martinez was previously
appointed and served as the Interim Chief Financial Officer of the Company effective as of April 3, 2023.

 (3)
 Includes Mr. Conacher's compensation in his role as Interim Chief Executive Officer in 2022 and 2023. Compensation in 2024
was related to fees in his capacity as a director.

 Annual
Incentive

 The
purpose of our annual incentive bonus program is to incent all individuals in the organization to meet or exceed both our annual budget
goals as well as individual responsibilities. Our annual incentive program requires minimum performance thresholds for any payout to
occur for specific performance measures and objectives. We believe the annual incentive effectively motivates our NEOs to drive operational
performance without encouraging unreasonable risk. The Committee believes the achievement of year-over-year gross revenue, gross margin
and Adjusted EBITDA growth goals will result in sustainable long-term stockholder value creation. Our 2024 annual incentive potential
was based on achievement levels of these financial metrics, measured against our annual plan as approved by our Board. Overall, the NEOs'
annual incentive bonus was weighted as follows: 50% Adjusted EBITDA, and 50% individual performance and achievement
of goals. The CEO was eligible for a payout of 50% of base salary while the other NEOs were eligible for a payout ranging from 25-40%
of base salary based on these metrics. In 2024, the NEOs were eligible for an up to 150% payout of their respective bonus targets.

 Equity
Compensation

 The
goals of our long-term, equity-based incentive awards are to align the interests of our NEOs and other employees, non-employee directors
and consultants with the interests of our stockholders. Because vesting is based on continued employment, our equity-based incentives
also encourage the retention of our NEOs through the vesting period of the awards.

 To
reward and retain our NEOs in a manner that best aligns employees' interests with stockholders' interests, we use stock options
as the primary incentive vehicles for long-term compensation. We believe that stock options are an effective tool for meeting our compensation
goal of increasing long-term stockholder value by tying the value of the stock options to our future performance. The exercise price
of each stock option grant is the fair value of our common stock on the grant date.

 Repricing
of Stock Options

 Effective
October 1, 2020, all outstanding stock option awards under the Amended and Restated 2019 Equity Incentive Plan held by current employees
as of October 1, 2020 were repriced concurrent with the closing of the Company's Series F Private Placement. In total, 1,012,956
stock options were repriced. The exercise price was set at a 20% premium to the Series F conversion price, or $3.60 per share. No other
terms of the stock options were changed.

 The
board of directors effectuated the repricing to realign the value of the stock options with their intended purpose, which is to retain
and motivate the holders of the stock options to continue to work in the best interests of the Company. Prior to the repricing, many
of the stock options had exercise prices well above the then recent market prices of our common stock. The stock options were repriced
unilaterally and the consent of holders was neither necessary nor obtained.

 Other
Elements of Compensation

 Retirement
Plans. We currently maintain a 401(k) retirement savings plan that allows eligible employees to contribute a portion of their
compensation, within limits prescribed by the Internal Revenue Code, on a pre-tax basis through contributions to the plan. Our NEOs
are eligible to participate in the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings through our
401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our NEOs in accordance
with our compensation policies. In 2023 and 2024, the Company provided an employer matching contribution of 50% up to the first 10%
of employees' eligible compensation under our 401(k) plan.

 Employee
Benefits and Perquisites. All of our full-time employees, including our NEOs, are eligible to participate in our employee benefit
plans and programs, including medical, dental, and vision benefits, health spending accounts, short and long-term disability and life
insurance, subject to the terms and eligibility requirements of those plans.

 Termination
and Change in Control Benefits. Our NEOs may become entitled to certain benefits or enhanced benefits in connection with certain
qualifying terminations of employment and/or a change in control of our Company. Each of our NEOs' employment agreements entitles
them to severance in the event of their termination without cause or their resignation for good reason and upon termination by reason
of death or disability.

 Summary
Compensation Table

 The
table below sets forth the compensation earned by our NEOs for the years ended December 31, 2024, 2023 and 2022.

 Name and Principal Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock Awards
 ($)

 Option Awards (1)
 ($)

 Non-Equity Incentive Plan Compensation
 ($)

 All Other Compensation (2)

 ($)

 Total
 ($)

 Kent Cunningham (3)

 2024

 360,000

 270,000

 —

 40,000

 —

 11,262

 681,262

 Chief Executive Officer

 2023

 350,000

 53,459

 362,727

 —

 —

 8,785

 774,971

 2022

 —

 —

 —

 —

 —

 —

 —

 Lionel F. Conacher (4)

 2024

 —

 —

 —

 60,000

 167,481

 Interim Chief Executive Officer

 2023

 160,000

 —

 13,334

 —

 —

 —

 173,334

 2022

 160,000

 —

 153,336

 18,573

 —

 —

 331,909

 2021

 —

 —

 —

 —

 —

 —

 —

 Carolina Martinez (5)

 2024

 254,400

 171,720

 —

 31,000

 —

 6,375

 463,495

 Chief Financial Officer

 2023

 19,200

 —

 70,000

 —

 1,106

 330,306

 2022

 —

 —

 —

 —

 —

 —

 —

 Scott Lerner (6)

 2024

 —

 —

 —

 —

 —

 —

 —

 Chief Executive Officer

 2023

 —

 —

 —

 —

 —

 —

 —

 2022

 350,000

 —

 —

 472,118

 —

 —

 822,118

 Sharla A. Cook (7)

 2024

 —

 —

 —

 —

 —

 —

 —

 Chief Financial Officer

 2023

 250,000

 —

 28,000

 —

 —

 3,206

 281,206

 2022

 250,000

 100,000

 —

 153,596

 —

 9,801

 513,397

 Donald Young (8)

 2024

 —

 —

 —

 —

 —

 —

 —

 Chief Sales Officer

 2023

 275,000

 —

 14,000

 —

 —

 43,744

 332,744

 2022

 275,000

 110,000

 —

 492,174

 —

 9,425

 886,599

 Robert Sauermann (9)

 2024

 —

 —

 —

 —

 —

 —

 —

 Executive Vice President, Strategy

 2023

 —

 28,000

 —

 —

 1,811

 269,811

 2022

 96,000

 —

 367,435

 —

 10,250

 713,685

 (1)
The amounts reported reflect the grant date fair value of the stock options granted, as computed in accordance with ASC 718. The fair
value of each option grant is estimated based on the fair value on the date of grant using the Black-Scholes option pricing model.
The assumptions that we used to calculate these amounts are discussed in Note 14 to our financial statements included in this Annual
Report.

 (2)
The amounts reported reflect matching 401(k) payments and accrued PTO payout.

 (3)
Mr. Cunningham was appointed Chief Executive Officer effective May 22, 2023.

 (4)
Mr. Conacher was employed with us as interim Chief Financial Officer from September 14, 2022 until May 22, 2023. Compensation in 2024 was related solely to fees in his capacity as a director.

 (5)
Mrs. Martinez was appointed as Chief Financial Officer effective August 2, 2023. Mrs. Martinez was previously appointed and served
as the Interim Chief Financial Officer of the Company effective as of April 3, 2023.

 (6)
 Mr. Lerner resigned effective September 14, 2022.

 (7) Ms.
Cook commenced employment with us in April 2020 and was appointed as our Chief Financial Officer in October 2020. Ms. Cook resigned
effective as of April 3, 2023.

 (8)
Mr. Young resigned effective as of September 8, 2023.

 (9)
Mr. Sauermann resigned effective as of March 17, 2023.

 Outstanding
Equity Awards at Fiscal Year-End

 The
table below sets forth the outstanding stock option awards held by the NEOs as of December 31, 2024.

 Option Awards

 Name

 Option Award Grant

 Number of Securities Underlying Unexercised Options (#) Exercisable

 Number of Securities Underlying Unexercised Options (#) Unexercisable

 Option Exercise Price ($)

 Option Expiration Date

 Kent Cunningham

 6/26/2024

 (1)

 –

 8,000

 $
 5.00

 6/26/2034

 Carolina Martinez

 6/26/2024

 (1)

 –

 6,200

 $
 5.00

 6/26/2034

 8/7/2023

 (2)

 1,515

 3,030

 $
 15.40

 8/7/2033

 (1) Options vest as follows: 100% on first anniversary of the grant date

 (2)
Options vest as follows: 1/3 on each annual anniversary of the grant date

 Employment
Agreements and Potential Payments Upon Termination

 The Company entered into an Employment Agreement with Kent Cunningham,
dated as of May 22, 2023 (the "Cunningham Employment Agreement") in connection with Mr. Cunningham's appointment as
Chief Executive Officer of the Company as of May 22, 2023. Pursuant to the Cunningham Employment Agreement, Mr. Cunningham's compensation
will be an initial annual base salary of $350,000 and an annual discretionary performance bonus target of 50% of base salary, payable
50% in cash and 50% in shares of common stock of the Company. Pursuant to the Cunningham Employment Agreement, Mr. Cunningham will be
entitled to six weeks' paid vacation and will be eligible to participate in certain employee benefit plans offered by the Company.
Further, Mr. Cunningham will receive an initial grant of 22,727 Restricted Stock Units of Common Stock ("RSUs"), subject to
Board approval. The RSUs will vest over a period of three years subject to continued employment with the Company as follows: (a) 33.3%
of the options will on the first anniversary of the date of the grant date provided the stock price is at least one dollar ($44.00); (b)
an additional 33.3% of such RSUs shall vest on the second anniversary of the grant date provided the stock price is at least two dollars
($88.00); and (c) the remaining 33.4% of the RSUs shall vest on the third anniversary of the grant date provided that the stock price
on such date is at least two dollars and fifty cents ($110.00). In the event Mr. Cunningham does not meet the time-based and performance-based
vesting requirements, the applicable portion of the RSUs that were due to vest shall be forfeited. Should Mr. Cunningham's employment
be terminated, in any way or for any reason, prior to any of the aforementioned anniversary dates, the RSUs shall vest in proportion to
the time remaining to the next anniversary date. In June 2024, the Company fully accelerated the vesting of all 22,727 shares of restricted common stock owned by
Mr. Cunningham.

 The
Company entered into an Employment Agreement with Carolina Martinez, dated as of August 2, 2023 (the "Martinez Employment Agreement")
in connection with Mrs. Martinez's appointment as Chief Financial Officer of the Company as of August 2, 2023. Pursuant to the
Martinez Employment Agreement, Mrs. Martinez's compensation will be an initial annual base salary of $240,000 and an annual discretionary
performance bonus target of 40% of base salary, payable 50% in cash and 50% in shares of common stock of the Company. Pursuant to the
Martinez Employment Agreement, Mrs. Martinez will be entitled to six weeks' paid vacation and will be eligible to participate in
certain employee benefit plans offered by the Company. Further, Mrs. Martinez will receive an initial grant to purchase 4,545 shares
of Common Stock at an exercise price of $15.40 per share, subject to Board approval. The options will vest in equal installments over
a period of three years.

 Pursuant
to the Cunningham Employment Agreement and the Martinez Employment Agreement (together, the NEO Employment Agreements"), each of
Mr. Cunningham and Mrs. Martinez is employed on an at-will basis. Pursuant to the NEO Employment Agreements, in the event the executive's
employment is terminated for any reason, the Company shall pay the executive any amounts due to such executive under the Company's
benefit plans and any unreimbursed expenses properly incurred prior to the date of termination (the "Accrued Obligations").
In the event the executive's employment is terminated for by the Company without Cause (as defined in the NEO Employment Agreements)
or by the executive for Good Reason or for Good Reason Upon Change in Control (as such terms are defined in the NEO Employment Agreements),
in addition to the Accrued Obligations, the executive shall also receive, subject to the execution of a release of claims in the form
delivered by the Company, severance pay in an amount equal to the executive's base salary then in effect for six (6) months, less
applicable payroll deductions and tax withholdings, payable in accordance with normal payroll policies of the Company over a six (6)
month period, with the first such payment being paid to the executive on the Company's first regular pay date on or after the sixtieth
(60th) day following the executive's employment termination date.

 The
NEO Employment Agreements also contain standard confidentiality, intellectual property assignment, non-competition and non-solicitation
covenants.

 ITEM 12.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
 MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table sets forth information about the beneficial ownership of our capital stock by (i) each of our current directors, (ii)
each of our named executive officers (iii) all our current directors and executive officers as a group, and (iv) each person or group
known by us to own more than 5% of our common stock. The percentages reflect beneficial ownership, as determined in accordance with the
SEC's rules, as of March 25, 2025, and are based on 2,422,005 shares of common stock outstanding. Except as noted below, the address
for all beneficial owners in the table below is 12400 Race Track Road, Tampa, FL 33626:

 Shares Beneficially Owned

 Name of Beneficial Owner

 Number (1)

 %

 Named Executive Officers and Directors:

 Kent Cunningham

 107,633

 4.4
 %

 Carolina Martinez

 55,515

 2.3
 %

 Lionel F. Conacher

 37,212

 1.5
 %

 Gil Fronzaglia

 14,342

 0.6
 %

 John M. Word III

 130,981

 5.4
 %

 Michael Young

 52,795

 2.2
 %

 All executive officers and directors as a group (6 persons)

 398,478

 16.5
 %

 5% Shareholders (2)

 (1)
In calculating the number of shares beneficially owned by an individual or entity and the percentage ownership of that individual or
entity, shares underlying options, warrants or restricted stock units held by that individual or entity that are either currently exercisable
or exercisable within 60 days from the date hereof are deemed outstanding. These shares, however, are not deemed outstanding for the
purpose of computing the percentage ownership of any other individual or entity. Unless otherwise indicated and subject to community
property laws where applicable, the individuals and entities named in the table above have sole voting and investment power with respect
to all shares of our common stock shown as beneficially owned by them.

 (2) As of December 31, 2024, no shareholders owned more than 5% of our common stock.

 ITEM
 13.

 CERTAIN
 RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Related
Party Transaction Policy

 A
"Related Party Transaction" is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is
or will be a participant, the amount of which involved exceeds $50,000 in any one fiscal year, and in which any related person had, has
or will have a direct or indirect material interest. A "Related Person" means:

 any
 person who is, or at any time during the applicable period was, one of our executive officers, one of our directors, or a nominee
 to become one of our directors;

 any
 person who is known by us to be the beneficial owner of more than 5.0% of any class of our voting securities;

 any
 immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,
 father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner
 of more than 5.0% of any class of our voting securities, and any person (other than a tenant or employee) sharing the household of
 such director, executive officer or beneficial owner of more than 5.0% of any class of our voting securities; and

 any
 firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a
 similar position or in which such person has a 5.0% or greater beneficial ownership interest in any class of the Company's
 voting securities.

 Our
Related Party Transaction policy subjects these transactions to review and either approval or disapproval of entry into the Related Party
Transaction, subject to certain limited exceptions, by our Nominating and Governance Committee. In determining whether to approve or
disapprove entry into a Related Party Transaction, our Nominating and Governance Committee shall take into account, among other factors,
the following: (i) whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated
third-party under the same or similar circumstances and (ii) the extent of the Related Person's interest in the transaction. Further,
the policy requires that all Related Party Transactions required to be disclosed in our filings with the SEC be so disclosed in accordance
with applicable laws, rules and regulations. Refer to Note 16 within this report.

 Family
Relationships

 There
are no family relationships amongst any of our executive officers or directors.

Independence

 Each
of our directors standing for election meets the definition of "independence" per Rule 803 of the NYSE American Company Guide.

 ITEM 14.

 PRINCIPAL ACCOUNTING FEES AND SERVICES

 The
following table shows the fees paid or accrued for the audit and other services provided by Marcum, LLP, our independent auditors for
the fiscal year ended December 31, 2024:

 Year ended December 31,

 2024

 2023

 Audit fees

 —

 Tax fees

 —

 —

 Total

 —

 (1)
Audit fees consist of fees billed for services rendered for the audit of our financial statements included in our annual reports on Form
10-K and review of our financial statements included in our quarterly reports on Form 10–Q, and other fees, including fees related
to our registration statements.

 (2)
Tax fees consist of fees billed for professional services related to the preparation of our U.S. federal and state income tax returns
and tax advice.

 PART
IV

 ITEM 15.

 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 The
following documents are filed as part of this report:

 (1)

 Financial
 Statements - See Index to Consolidated Financial Statements appearing on page 36.

 (2)

 Financial
 Statement Schedules - None.

 (3)

 Exhibits
 - The exhibits listed on the accompanying index are filed as part of, or incorporated by reference into, this Annual Report on Form
 10-K.

 EXHIBIT

 Description

 Form

 File
 No.

 Filing
 date

 2.1

 Agreement and Plan of Merger, dated February 28, 2019, by and among the Company, BBC Merger Sub, Inc. and Bona Vida, Inc.

 2.1

 05/10/2019

 2.2

 First Amendment to Agreement and Plan of Merger, dated February 28, 2019, by and among the Company, BBC Merger Sub, Inc., and Bona Vida, Inc., dated May 3, 2019

 2.2

 05/10/2019

 2.3

 Securities Exchange Agreement, dated February 2, 2019, by and among the Company, TruPet LLC and the members of TruPet LLC

 2.3

 05/10/2019

 2.4

 First Amendment to Securities Exchange Agreement, dated February 2, 2019, by and among the Company, TruPet LLC and the members of TruPet LLC, dated May 6, 2019

 2.4

 05/10/2019

 2.5

 Amended and Restated Stock Purchase Agreement, dated December 18, 2019, by and among the Company, Halo, Purely For Pets, Inc., Thriving Paws, LLC and HH-Halo LP

 2.1

 12/26/2019

 2.6

 Agreement and Plan of Merger, dated July 28, 2022, by and among TruPet LLC and Halo, Purely for Pets, Inc.

 2.6

 08/11/2022

 3.1

 Certificate of Incorporation, dated January 1, 2019

 3.1

 04/15/2019

 3.2

 Certificate of Amendment to Certificate of Incorporation, dated February 1, 2019

 3.2

 04/15/2019

 3.3

 Certificate of Amendment to Certificate of Incorporation, dated March 13, 2019

 3.1

 03/20/2019

 3.4

 Certificate of Amendment to Certificate of Incorporation, dated April 18, 2019

 10-KT

 3.5

 07/25/2019

 3.5

 Certificate of Amendment to Certificate of Incorporation, dated July 30, 2020

 99.1

 07/30/2020

 3.6

 Certificate of Merger of Sport Endurance, Inc. with and into the Company

 3.4

 04/15/2019

 3.7

 Bylaws

 3.5

 04/15/2019

 3.8

 Certificate of Designation for Series F Convertible Preferred Stock

 3.1

 10/02/2020

 3.9

 Certificate of Cancellation of Series F Preferred Stock of Better Choice

 3.10

 08/11/2022

 3.10

 Certificate of Merger of TruPet LLC with and into Halo, Purely for Pets, Inc.

 3.10

 08/11/2022

 4.7

 Better Choice Company Inc. Amended and Restated 2019 Incentive Award Plan

 10.19

 05/04/2020

 4.8

 Form of 2019 Incentive Award Plan Stock Option Agreement

 S-1

 333-234349

 10.7

 10/28/2019

 10.1

 Form of Indemnification Agreement by and among the Company and its officers and directors

 S-1

 333-234349

 10.8

 10/28/2019

 Description

 Form

 File
 No.

 Filing
 date

 10.18
 #

 Separation Agreement, dated as of September 14, 2022, by and between the Company and Scott Lerner

 10.18

 11/10/2022

 10.19
 #

 Advisory Consulting Agreement, dated as of November 2, 2022, by and between the Company and Lionel F. Conacher

 10.19

 11/10/2022

 10.21

 Interim Officer Agreement, dated as of March 20, 2023, by and between Carolina Martinez and Better Choice Company, Inc.

 10.1

 03/21/2023

 10.22

 Employment Agreement, dated as of May 22, 2023, by and between Kent Cunningham and Better Choice Company, Inc.

 10.2

 05/16/2023

 10.24

 Account Purchase Agreement, dated as of June 21, 2023, by and between Wintrust Receivables Finance, a division of Wintrust Bank N.A., and Halo, Purely for Pets, Inc.

 10.9

 06/21/2023

 10.28

 Arrangement Agreement, dated September 3, 2024, between Better Choice Company Inc., and SRx Health Solutions, Inc., as amended December 6, 2024, January 24, 2025 and February 25, 2025

 10.1

 09/09/2024

 19*

 Insider Trading Policy

 21.1
 *

 Subsidiaries of the Company

 23.1
 *

 Consent of BDO USA, P.C.

 24.1
 *

 Power of Attorney (included on the signature page to this report)

 31.1
 *

 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2
 *

 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1
 *

 Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 *

 The
 following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2023 formatted in Inline
 Balance Sheets, (iii) the Consolidated Statements of Stockholders' Equity, (iv) the Consolidated Statements of Cash Flows and
 (v) related notes, tagged as blocks of text and including detailed tags.

 *

 Cover
 101).

 Indicates a management contract or any compensatory plan, contract or arrangement.

 *

Filed or furnished herewith.

 #

 Certain schedules and similar attachments to this agreement have been omitted in accordance with Item 601(b)(5) of Regulation S-K. The
Company will furnish copies of any schedules or similar attachments to the SEC upon request.

 ***

 Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not
material and would likely cause competitive harm to the registrant if publicly disclosed.

 ITEM 16.

 FORM 10-K SUMMARY

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

 BETTER
 CHOICE COMPANY INC.

 Date:
 March 31, 2025

 By:

 /S/
 KENT CUNNINGHAM

 Kent
 Cunningham

 Chief
Executive Officer

 (Principal
 Executive Officer)

 Date:
 March 31, 2025

 By:

 /S/
 CAROLINA MARTINEZ

 Martinez

 Chief
 Financial Officer

 (Principal
 Financial and Accounting Officer)

 POWER
OF ATTORNEY

 KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Carolina Martinez his/her true and lawful
attorney-in-fact, with full power of substitution and resubstitution for him/her and in his/her name, place and stead, in any and all
capacities to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact or
his/her substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.

 Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /S/
 KENT CUNNINGHAM

 Chief
 Executive Officer

 March

 Kent
 Cunningham

 (Principal
 Executive Officer)

 /S/
 CAROLINA MARTINEZ

 Chief
Financial Officer

 March

 Martinez

 (Principal
 Financial and Accounting Officer)

 /S/
 LIONEL F. CONACHER

 March

 Lionel
 F. Conacher

 /s/
 GIL FRONZAGLIA

 March

 Gil
 Fronzaglia

 /s/
 JOHN M. WORD III

 March

 John
 M. Word III

 /s/
 MICHAEL YOUNG

 March

 Michael
 Young