Financial Analysis

Note 4 - Business combinations Reverse Merger On April 24, 2025, SRx Canada entered into an arrangement agreement (the Arrangement Agreement, or the Reverse Merger) with Better Choice Company, Inc. (Better Choice), a publicly listed company on the NYSE American, along with 1000994476 Ontario Inc. (AcquireCo), an indirect wholly-owned subsidiary of Better Choice, and 1000994085 Ontario Inc. (CallCo), a direct wholly-owned subsidiary of Better Choice, both existing under the laws of the Province of Ontario. Pursuant to the Arrangement Agreement, AcquireCo amalgamated with SRx Canada, with SRx Canada continuing as the surviving entity. As part of the reverse merger, Better Choice changed its name to SRx Health Solutions, Inc., and adopted the operations of SRx Canada as its primary business. As consideration, Better Choice issued 8,898,069 shares of its common stock, and AcquireCo issued 19,701,935 exchangeable shares (convertible into Better Choice common stock on a 1:1 basis). Better Choice shareholders prior to the transaction retained 3,281,295 shares. Upon closing, former shareholders of SRx Canada held approximately 91 % of the total combined voting power of the Companys equity, and Better Choice shareholders retained approximately 9 %. The transaction has been accounted for as a reverse acquisition under ASC 805, with SRx Canada identified as the accounting acquirer. The consolidated financial statements reflect the historical operations of the accounting acquirer, with t …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 10 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 September 30, 2025 or 2024. 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 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 13 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 participants eligible compensation. The Company made contributions related to the plan and recognized expense of less than $0.1 million during the years ended September 30, 2025. …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

Note 8 Debt Convertible notes On July 7, 2025, the Company issued senior secured convertible notes with an aggregate principal amount of $ 7.65 million (the Notes). The Notes bear interest at 8 % per annum, payable quarterly in cash, and mature on July 8, 2027 , subject to acceleration upon certain events of default. The Notes were issued at an original issue discount and are secured by substantially all of the Companys U.S. assets, as well as certain equity interests in its subsidiaries, pursuant to a Security and Pledge Agreement. The primary conversion feature within the Notes provides the holders the right to convert the principal amount into the Companys common stock at a fixed conversion price of $ 0.6274 per share, subject to customary anti-dilution adjustments. The Company evaluated this conversion feature under ASC 815-40 and concluded that it meets the criteria for equity classification. Accordingly, the conversion feature was not bifurcated from the host debt instrument and no derivative liability was recognized. In addition, because the Notes were not issued at a substantial premium, no beneficial conversion feature was recorded under ASC 470-20. Certain other provisions contained within the Notes allow the holder, upon the occurrence of defined triggering events, to convert the debt into common stock at 120 - 125% of the outstanding debt value through maturity. These contingent conversion features do not meet the criteria for equity classification and were theref …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Information about the Companys net sales by revenue channel is as follows (in thousands): Schedule of Information about Revenue Channels Year Ended September 30, 2025 2024 Digital (1) $ 5,038 77 % $ % International (2) $ 1,009 15 % $ % Brick & Mortar (3) $ 487 8 % $ % Net Sales (4) $ 6,534 100 % $ % (1) The Companys Digital channel includes two wholesale customers that amounted to greater than 10 % of the Companys total net sales for the year ended September 30, 2025. (2) One of the Companys International customers amounted to greater than 10 % of the Companys total net sales and represented $ 0.8 million of net sales for the year ended September 30, 2025. (3) None of the Companys Brick & Mortar customers represented greater than 10 % of net sales for the year ended September 30, 2025. (4) Prior period amounts have not been presented, as the Companys prior year operations primarily related to SRX Canada, which has since been deconsolidated and is presented as discontinued operations. Accordingly, the results for the year ended September 30, 2025, reflect only the continuing operations of BTTR and Halo and are not comparable to prior periods. …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 12 Share-based compensation In connection with the Merger completed on April 24, 2025, the Company has adopted the Legal Acquirers Amended and Restated 2019 Incentive Award Plan (the Amended 2019 Plan). As of September 30, 2025, the maximum number of shares authorized for issuance under the Amended 2019 Plan was 1,928,023 . Not more than 34,091 shares may be issued pursuant to Incentive Stock Options under the Amended 2019 Plan, which is included within the total authorized shares described above. Refer to Managements Discussion and Analysis for more information. Awards are measured at grant date fair value in accordance with ASC 718, and compensation expense is recognized over the vesting period on a grade vesting basis. During the year ended September 30, 2025, the Company recognized $ 3.2 million of share-based compensation expense related to awards granted subsequent to the Merger. During the pre-merger period in the year ended September 30, 2025, the Company issued an aggregate of 290,611 restricted stock units (RSUs) to certain directors, officers, and employees, which auto vested upon the Merger closing, and as such, the Company recorded share-based compensation expense of $ 0.4 million upon issuance. The weighted average grant-date fair value of these RSUs was $ 1.94 per share. Additionally, the Company recognized an additional $ 2.0 million of share-based compensation expense related to the auto-vesting and settlement of RSUs prior to the Merger. In April 2025, …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 9 Fair value measurements Fair value hierarchy Levels 1 to 3 are based on the degree to which the fair value is observable: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 fair value measurement are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Company has assessed that the fair value of cash, trade and other receivables, and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments. The carrying amount of the Companys borrowings are considered to be the same as their fair values, as the terms of the Companys borrowings are considered to be consistent with the commercial terms prevalent for similar loans. The Company has classified its derivative liability as a Level 3 financial instrument due to the use of unobservable inputs in its valuation. The Company has no financial instruments classified as Level 2. Financial risk management The Companys activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (primarily interest rate …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 6 Goodwill and intangible assets Intangible assets The Companys intangible assets (in thousands) and related useful lives (in years) relate to the discontinued operations and are as follows: Schedule of Intangible Assets September 30, 2024 Estimated Useful Life (in years) Gross Carrying Amount Accumulated Amortization Impairment Loss Net Carrying Amount Computer software 3 years $ 288 $ (238 ) $ $ 50 Domain/website 3 years 2 (1 ) 1 Customer list 5 years 10,816 (3,021 ) (1,585 ) 6,210 Charter license 10 years 930 (190 ) 740 Total intangible assets $ 12,036 $ (3,450 ) $ (1,585 ) $ 7,001 The Company did not have any intangible assets as of September 30, 2025, nor did it record amortization expense for the year ended September 30, 2025. The Company recognized an impairment loss of $ 1.6 million during the year ended September 30, 2024, related to customer list intangible assets acquired through prior business combinations. The customer lists were tested for impairment prior to goodwill testing using the income approach, specifically a discounted cash flow (DCF) method. The impairment was the result of a decline in the estimated fair value of the customer lists below their carrying amount, based on updated projections of future cash flows attributable to customer relationships and the application of a discount rate reflecting current market conditions and entity-specific risks. The impairment charge is included in the consolidated statement of operations and relates to the Ph …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 15 Income taxes For the year ended September 30, 2025, the Company recorded income tax expense of less than $ 0.1 million and the effective tax rate was 0 %. The Companys effective tax rate differs from the U.S. federal statutory rate of 21 % primarily because the Companys losses have been fully offset by a valuation allowance due to uncertainty of realizing the tax benefit of NOLs for the year ended September 30, 2025. The following table is a reconciliation of the components that caused the Companys 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 Year ended September 30, 2025 Statutory U.S. Federal income tax $ (2,034 ) 21.0 % State income taxes, net (110 ) 1.1 % Meals and entertainment (2 ) % Bargain purchase (275 ) 2.8 % Warrant valuation % Tax effect of non-deductible equity instruments % Change in valuation allowance 2,419 (25.0 )% Other 2 % Total provision $ (0.1 )% 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 Companys deferred tax assets and liabilities are as follows (in thousands): Schedule of deferred tax assets and liabilities September 30, 2025 Deferred income tax assets: Fixed assets $ (15 ) Intangibles Inventory 38 Stock options 5,266 P …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 7 Leases The Company leases its corporate headquarters office space under an operating lease that expires in January 2026. The Company does not intend to renew this lease. As of September 30, 2025, the operating lease liability related to continuing operations was less than $ 0.1 million, all of which is classified as current. The related right-of-use asset was not material. Lease expense for continuing operations for the year ended September 30, 2025 was less than $ 0.1 million. The following table presents the undiscounted maturity of the Companys remaining operating lease payments as of September 30, 2025 (in thousands): Schedule of aggregate annual lease payments Year 2025 2026 $ 21 Total $ 21 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

New Accounting Standards Recently adopted There were no new standards that would have an impact on the consolidated financial statements for the year ended September 30, 2025.

NewAccountingPronouncementsPolicyPolicyTextBlock

Note 14 Related party transactions Related Party Loans and Balances As of September 30, 2025, the Company had outstanding convertible promissory notes held by certain members of the Board of Directors totaling $ 0.5 million. The notes bear interest at 8 % per annum and are convertible into the Companys common stock at the holders option subject to the terms of the agreements or upon the occurrence of defined triggering events. Refer to Note 8 Debt for more information. All terms of the notes are consistent with those offered to other investors. For the fiscal year ended September 30, 2025, the Companys continuing operations incurred approximately $ 0.7 million in director fees, $ 0.5 million of which were settled in exchange of the convertible notes described above. Directors fees are included in general and administrative expenses in the consolidated statements of operations. These fees were paid to members of the Board of Directors in their capacity as directors and constitute related-party transactions. During the year ended September 30, 2025, the Company issued to its directors and executive officers an aggregate of $ 3.2 million in share based compensation. During the year ended September 30, 2025, the Company paid its executive officers an aggregate of $ 1.0 million in compensation pursuant to their signed employment arrangements. Other than this compensation, the Company had no related-party transactions with executive officers. During the fiscal year ended September …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

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. 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 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). Information about the Companys net sales by revenue channel is as follows (in thousands): Schedule of Information about Revenue Channels Year Ended September 30, 2025 2024 Digital (1) $ 5,038 77 % $ % International (2) $ 1,009 15 % $ % Brick & Mortar (3) $ 487 8 % $ % Net Sales (4) $ 6,534 100 % $ % (1) The Companys Digital channel includes two wholesale customers that amounted to greater than 10 % of the Companys total net sales for the year ended September 30, 2025. (2) One of the Companys International customers amounted to greater than 10 % of the Companys total net sales and represented $ 0.8 million of net sales for the year ended September 30, 2025. (3) None of the Companys Brick & Mortar customers represented greater …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 16 Segment information As of September 30, 2025, the Company reports one continuing operating segment, Consumer Products, following the classification of its previously reportable Health Solutions segment as discontinued operations. The Consumer Products segment includes the legacy Halo pet food business, consisting of premium pet products such as dry kibble, wet food, freeze-dried raw food, treats, and toppers for dogs and cats. This segment operates across various sales channels and represents the Companys ongoing business. The Health Solutions segment, which encompassed the Companys pharmacy network operations in Canada, has been classified as discontinued operations as of September 30, 2025, and accordingly, its results and related assets and liabilities are reported separately in the financial statements. Prior to discontinuation, the Companys Chief Operating Decision Maker (CODM), the Board of Directors, evaluated the Companys financial performance based on two segments: Health Solutions and Consumer Products. Following the classification of Health Solutions as discontinued, segment reporting focuses exclusively on the Consumer Products business. For the year ended September 30, 2025, segment financial information for continuing operations relates solely to the Consumer Products segment, which was acquired through business combination on April 25, 2025. There are no comparative results for 2024, as all operations that existed in 2024 relate to the Health Solutions …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 11 Warrants and other equity related instruments Convertible Note and Warrant Financing On July 7, 2025, in connection with a financing transaction described in Note 8 Debt, the Company issued senior secured convertible notes with an aggregate principal amount of $ 7.65 million and, in conjunction with that issuance, granted investors warrants to purchase 21,338,062 common shares. The notes are convertible at the option of the holders into common stock at a conversion price of $ 0.6274 per share, subject to customary anti-dilution adjustments. The warrants issued as part of the financing are exercisable for 21,338,062 common shares at an exercise price of $ 0.6274 per share and expire three years from the issuance date. The Company evaluated the warrants under ASC 815 and ASC 480 and determined that they are equity-classified, and they were initially measured at their relative fair value of $ 0.4 million using the Black-Scholes option pricing model based on appropriate valuation assumptions. In connection with the financing, the Company also entered into a registration rights agreement requiring it to register for resale the common shares issuable upon conversion of the notes and exercise of the warrants. Equity warrants The fair value of warrants issued is based on the market price of the Companys common shares on the issue date. All unexercised warrants outstanding at SRx Canada expired prior to the Merger. The following table summarizes the continuity of the Companys …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Note 20 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. Election and Departure of Directors On October 1, 2025, the Board of Directors appointed Joshua A. Epstein, as a director of the Company, effective immediately, to serve in such capacity until a successor has been elected and qualified, or until his resignation or removal. On October31, 2025, the Company accepted the voluntary resignation of directors Lionel F. Conacher and David Allen White. Following these resignations, Michael Young, Simon Conway, and Joshua A. Epstein serve on each of the Audit, Compensation, and Nominating & Governance Committees, with each serving as chairman of one committee. On November 10, 2025, the Board of Directors appointed Sammy Dorf, Esq. as a director of the Company, effective immediately, to serve in such capacity until a successor has been elected and qualified, or until his resignation or removal. Submission of Matters to a Vote of Security Holders On October 8, 2025, stockholders holding a majority of the voting power of the Company entitled to vote as of the record date of October 7, 2025 approved a number of corporate matters. These actions inc …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

Note 4 Business Combinations Reverse Merger On April 24, 2025, SRx Canada entered into an arrangement agreement (the Arrangement Agreement, or the Reverse Merger) with Better Choice Company, Inc. (Better Choice), a publicly listed company on the NYSE American, along with 1000994476 Ontario Inc. (AcquireCo), an indirect wholly-owned subsidiary of Better Choice, and 1000994085 Ontario Inc. (CallCo), a direct wholly-owned subsidiary of Better Choice, both existing under the laws of the Province of Ontario. Pursuant to the Arrangement Agreement, AcquireCo amalgamated with SRx Canada, with SRx Canada continuing as the surviving entity. As part of the reverse merger, Better Choice changed its name to SRx Health Solutions, Inc., and adopted the operations of SRx Canada as its primary business. As consideration, Better Choice issued 8,898,069 shares of its common stock at $ 2.09 per share, and AcquireCo issued 19,701,935 exchangeable shares (convertible into Better Choice common stock on a 1:1 basis). Better Choice shareholders prior to the transaction retained 4,277,297 shares. Upon closing, former shareholders of SRx Canada held approximately 88 % of the total combined voting power of the Companys equity, and Better Choice shareholders retained approximately 12 %. The transaction has been accounted for as a reverse acquisition under ASC 805, with SRx Canada identified as the accounting acquirer. The condensed consolidated financial statements reflect the historical operations of th …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 22 Commitments and contingencies 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 selling, general, and administrative (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 if estimable. Loss contingencies considered remote are generally not disclosed. No assets are pledged as security for these loans. 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 Companys condensed consolidated financial condition, results of operations and cash flows. Management is not aware of any c …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 11 Debt Short-term borrowings Schedule of short-term borrowings As at June 30, 2025 As at September 30, 2024 Revolving line of credit $ 3,523 $ 3,555 Short-term loan 550 - Bank indebtedness 4 160 Total $ 4,077 $ 3,715 Revolving line of credit Separately, in September 2023, the Company entered into a revolving line of credit agreement with Canadian Western Bank (CWB) that permits borrowings up to $ 3.7 million at a variable interest rate equal to the banks prime rate plus 1.5 % per annum. The interest rate was 6.45 % and 7.95 % at June 30, 2025 and September 30,2024, respectively. Interest is payable monthly, and the Company may repay and reborrow amounts at its discretion, subject to the terms of the facility. As of June 30, 2025 and September 30, 2024, $ 3.5 million was outstanding under the CWB line of credit. Accrued interest was not material as of June 30, 2025 and September 30, 2024. The facility is unsecured and contains no financial covenants. Revolving Loan Better Choice On September 20, 2024, the Company entered into a revolving credit facility (the Promissory Note) with Better Choice Company Inc. (BTTR), under which the Company could borrow, repay, and reborrow up to $ 750,000 at an interest rate of 12 % per annum. On December 31, 2024, the Promissory Note was amended to permit additional borrowing of $ 720,000 at a revised interest rate of 11 % per annum. In January 2025, the Promissory Note was further amended to include a provision whereby the outstanding ba …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The Companys disaggregated revenue is as follows: Schedule of disaggregated revenue 2025 2024 2025 2024 Three months ended June 30, Nine months ended June 30, 2025 2024 2025 2024 Revenue recorded at point in time Services provided by pharmacy Retail pharmacy $ 6,790 $ 41,438 $ 33,598 $ 113,921 Infusion services 207 428 724 948 Specialty clinics 142 111 411 417 Wholesale distribution of drugs and other medications 1 245 31 612 Patient support program 193 262 731 744 Clinical trial 213 7 792 8 Consumer packaged goods 2,673 - 2,673 - Other service revenue 1,228 179 2,122 472 Total revenue $ 11,447 $ 42,670 $ 41,082 $ 117,122 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 19 Share-based compensation In connection with the Merger completed on April 24, 2025, the Company has adopted the Legal Acquirers Amended and Restated 2019 Incentive Award Plan (the Amended 2019 Plan). As of June 30, 2025, the maximum number of shares authorized for issuance under the Amended 2019 Plan was 1,928,023 . Not more than 34,091 shares may be issued pursuant to Incentive Stock Options under the Amended 2019 Plan, which is included within the total authorized shares described above. Refer to Managements Discussion and Analysis for more information. Awards are measured at grant date fair value in accordance with ASC 718, and compensation expense is recognized over the vesting period on a grade vesting basis. During the three months ended June 30, 2025 and 2024, the Company recognized $ 2.9 million and $ 0.8 million, respectively, of share-based compensation expense. During the nine months ended June 30, 2025 and 2024, the Company recognized $ 4.5 million and $ 2.6 million, respectively, of share-based compensation expense. During the pre-merger period in the nine months ended June 30, 2025, the Company issued an aggregate of 290,611 restricted stock units (RSUs) to certain directors, officers, and employees, which auto vested upon the Merger closing, and as such, the Company recorded share-based compensation expense of $ 0.5 million upon issuance . The weighted average grant-date fair value of these RSUs was $ 1.67 per share. In April 2025, the Company granted 8 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 20 Financial instruments (a) Fair value of financial instruments Fair value hierarchy Levels 1 to 3 are based on the degree to which the fair value is observable: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 fair value measurement are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Company has assessed that the fair value of cash, trade and other receivables, and related party receivables, trade and other payables and related party payables approximate their carrying amounts largely due to the short-term maturities of these instruments. The carrying amount of the Companys borrowings are considered to be the same as their fair values, as the terms of the Companys borrowings are considered to be consistent with the commercial terms prevalent for similar loans. The Company has classified its convertible debt as a Level 3 financial instrument due to the use of unobservable inputs in its valuation. The Company has no financial instruments classified as Level 2. (b) Financial risk management The Companys activities expose it to a vari …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 15 Income taxes For the three and nine months ended June 30, 2025, the Company recorded an income tax provision of $ 0.1 million and $ 0.8 million, respectively. The Company recorded an income tax provision of $ 0.3 million and $ 0.2 million for the three and nine months ended June 30, 2024, respectively. For the three and nine months ended June 30, 2025, the Company recorded deferred tax income of $ 1.7 million and $ 1.5 million, respectively. The Company recorded deferred tax expense of $ 0.4 million for the three months ended June 30, 2024 and deferred tax income of $ 0.6 million for the nine months ended June 30, 2024. For the three and nine months ended June 30, 2025 and 2024, the Federal and Provincial tax rates were 15.0 % and 11.5 %, respectively. The Companys U.S. operations are subject to a federal statutory tax rate of 21 %, but due to a full valuation allowance against deferred tax assets related to net operating losses, the effective tax rate was less than 1 % for the three and nine months ended June 30, 2025 and 2024, resulting in a minimal income tax provision. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 10 Leases The Company has lease contracts for various buildings used in its operations. Leases of buildings generally have lease terms between 3 and 10 years. The Company applied incremental borrowing rates that ranged from 2.46 % to 8.58 % for respective leases. The Companys obligations under its leases are secured by the lessors title to the leased assets. The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Companys business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. ROU assets and lease liabilities consist of the following: Schedule of ROU assets and lease liabilities June 30, 2025 September 30, 2024 Operating lease assets $ 4,717 $ 6,490 Current operating lease liabilities $ 1,190 $ 1,469 Non-current operating lease liabilities 3,854 5,623 Total Operating lease liabilities $ 5,044 $ 7,092 Total lease costs for the three and nine months ended June 30, 2024 and 2025 were: Schedule of lease costs 2025 2024 2025 2024 Three Months ended June 30, Nine Months ended June 30, 2025 2024 2025 2024 Operating lease cost $ 547 $ 666 $ 1,707 $ 1,816 Variable lease cost - - - - Total lease cost $ 547 $ 666 $ 1,707 $ 1,816 Approximate aggregate annual lease payments as of June 30, 2025: Schedule of aggregate annual lea …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

New accounting standards Recently adopted There were no new standards that would have an impact on the condensed consolidated financial statements for the nine months ended June 30, 2025.

NewAccountingPronouncementsPolicyPolicyTextBlock

Note 16 Related party transactions Related Party Loans and Balances During the fiscal year ended September 30, 2024, and the nine month period ended June 30, 2025 prior to the Merger, SRx Canada, while privately held, engaged in non-interest-bearing working capital advances with its largest shareholder and entities under common control, intended to provide short-term liquidity. These advances were non-interest-bearing, not governed by formal written agreements, and SRx Canada did not incur or recognize interest expense in connection with these transactions. As previously disclosed, for the fiscal year ended September 30, 2024, and the interim periods ended March 31, 2025, all material related party loans were forgiven and the Company recorded a capital contribution. No amounts remained outstanding prior to the merger. During the pre-merger period in the three months ended June 30, 2025, as a result of historical clean-ups, the net related party balances transitioned into a payable position. This included a $ 1.4 million balance due to Adesh Vora, the Companys former Chief Executive Officer. The recognition of this payable was recorded as an increase to beginning accumulated deficit and reflected as a non-cash capital distribution in the condensed consolidated statement of changes in shareholders equity for the period. As of June 30, 2025 and September 30, 2024 there were no other related party loans or receivables outstanding for any shareholder with greater than 10% ownershi …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Note 13 Revenue The Companys disaggregated revenue is as follows: Schedule of disaggregated revenue 2025 2024 2025 2024 Three months ended June 30, Nine months ended June 30, 2025 2024 2025 2024 Revenue recorded at point in time Services provided by pharmacy Retail pharmacy $ 6,790 $ 41,438 $ 33,598 $ 113,921 Infusion services 207 428 724 948 Specialty clinics 142 111 411 417 Wholesale distribution of drugs and other medications 1 245 31 612 Patient support program 193 262 731 744 Clinical trial 213 7 792 8 Consumer packaged goods 2,673 - 2,673 - Other service revenue 1,228 179 2,122 472 Total revenue $ 11,447 $ 42,670 $ 41,082 $ 117,122 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 14 Segment information The Company evaluated its operating segments in accordance with ASC 280, Segment Reporting, and determined that it operates with two reportable segments: Health Solutions and Consumer Products. The Health Solutions segment encompasses the Companys network of pharmacies across Canada, representing the core business. The Legacy Consumer Products segment consists of the legacy Halo pet food business, which includes a range of premium pet products such as dry kibble, wet food, freeze-dried raw food, treats, and toppers for dogs and cats. While the Consumer Products segment operates across various sales channels, it remains a distinct and immaterial component of the overall business. The two segments are evaluated separately by the Chief Operating Decision Maker, reflecting differences in their operational dynamics, customer bases, and economic characteristics. This segmentation provides a clear view of the Companys financial performance aligned with how management oversees and allocates resources across its distinct lines of business. The Companys Board of Directors, designated as the Chief Operating Decision Maker (CODM), evaluates performance and makes decisions based on financial information presented for the Companys two reportable segments: Health Solutions and Consumer Products. The CODM reviews financial results separately for each segment, including revenues, gross margin, and Adjusted EBITDA, to assess performance and allocate resources accord …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 3 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. Segment information Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Companys Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assess performance. The Company has determined that its Board of Directors functions as the CODM. Following the reverse merger completed on April 24, 2025, the Company began reporting two reportable segments: Health Solutions and Consumer Products. The Health Solutions segment consists of the Companys pharmacy operations across Canada, which represent the Companys core business. The Consumer Products segment includes the legacy Halo pet food business, which operates primarily in the United States and includes dry food, wet food, treats, and other premium pet products. These segments reflect the Companys internal management structure and are evaluated separately by the CODM based on differences in their operational models, customer bases, and economic characteristics. The accounting policies of the segments are consistent with those described in the accompanyin …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 23 Subsequent events The Company has evaluated subsequent events and transactions that occurred after the condensed consolidated statement of financial position 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 condensed consolidated financial statements. On July 11, 2025, the Company sold the assets of 3788602 Manitoba Ltd. for a total sale price of $ 1.8 million inclusive of inventory, resulting in a gain of $ 1,066 , which will be recognized on the condensed consolidated statement of operations. Equity Line of Credit (ELOC) On July7, 2025, the Company entered into a Common Share Purchase Agreement with a Lead Investor, granting the Company the right to sell up to $ 50 million of common shares, capped at 19.99 % of outstanding shares unless stockholder approval is obtained or issuance meets at market exceptions under NYSEAmerican rules. As commitment consideration, the Company issued $ 1 million in Commitment Shares (valued at the VWAP price) and agreed to reimburse up to $ 35,000 of investor expenses. A related Registration Rights Agreement obligates the Company to file a resale registration statement. The ELOC remains unutilized as of the date of this report. Convertible Note and Warrant Financing Also on July 7, 2025, the Company entered into a Securities Purchase Agreement with inv …

SubsequentEventsTextBlock · excerpt; the full note is in the filing