Better Choice pany (BTTR) - 2025 Q1 - Quarterly Report

EXPLANATORY NOTE This section clarifies that SRx Health Solutions, Inc. (formerly Better Choice Company, Inc.) completed a business combination with SRx Health Solutions, Inc. (Ontario) on April 24, 2025, with the report reflecting prior operations - SRx Health Solutions, Inc. (formerly Better Choice Company, Inc.) consummated a business combination with SRx Health Solutions, Inc. (Ontario) on April 24, 2025[5] - As a result of the Business Combination, BCC acquired the business of SRx Health and will continue its existing business operations as a wholly-owned subsidiary[5] - BCC changed its corporate name from "Better Choice Company Inc." to "SRx Health Solutions, Inc." on April 24, 2025[5] FORWARD-LOOKING STATEMENTS This section serves as a cautionary note, indicating that the report contains forward-looking statements about the company's future financial condition, operations, and business plans, subject to various risks and uncertainties that could cause actual results to differ materially from expectations - All statements in the report, other than historical facts, are forward-looking and discuss current expectations and projections related to financial condition, results of operations, plans, and future performance[11] - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the company's ability to continue as a going concern, impact of cyber-attacks, and ability to implement growth strategy[11] - Other risks include failure to achieve or manage growth, loss of key management, ability to generate sufficient cash flow, competition, regulatory compliance (FDA, FTC, USDA), and inflationary pressures[11][12] NOTE REGARDING TRADEMARKS This section clarifies that the company owns or has rights to use the trademarks and trade names mentioned in the report for its business operations, and the omission of symbols does not waive its legal rights - The company owns or has rights to use the trademarks and trade names in conjunction with its business operations[14] - References to trademarks and trade names without ® or ™ symbols are for convenience and do not indicate a waiver of rights[14] PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents SRx Health Solutions Inc.'s unaudited condensed consolidated financial statements, highlighting reduced net loss, decreased assets and equity, and positive operating cash flow despite an overall cash decrease Unaudited Condensed Consolidated Statements of Operations The company reported a significant reduction in net loss for Q1 2025, driven by decreased operating expenses and a shift to net interest income, despite slight declines in net sales and gross profit | Metric | 3 Months Ended Mar 31, 2025 (in thousands) | 3 Months Ended Mar 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | :--------- | | Net sales | $7,159 | $7,903 | $(744) | (9)% | | Cost of goods sold | $4,776 | $5,289 | $(513) | (10)% | | Gross profit | $2,383 | $2,614 | $(231) | (9)% | | Total operating expenses | $3,471 | $5,080 | $(1,609) | (32)% | | Loss from operations | $(1,088) | $(2,466) | $1,378 | (56)% | | Total other income (expense), net | $126 | $(362) | $488 | 135% | | Loss before income taxes | $(962) | $(2,828) | $1,866 | 66% | | Net loss | $(964) | $(2,830) | $1,866 | 66% | | Net loss per share, basic | $(0.37) | $(3.60) | | | | Net loss per share, diluted | $(0.37) | $(3.60) | | | Unaudited Condensed Consolidated Balance Sheets As of March 31, 2025, the company's total assets and stockholders' equity decreased compared to December 31, 2024, while total liabilities slightly increased, with key changes in cash, credit facility, notes receivable, and accounts payable | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :---------------------------- | :----------------------------- | :--------- | :--------- | | Cash and cash equivalents | $1,137 | $3,066 | $(1,929) | (62.9)% | | Accounts receivable, net | $4,770 | $5,371 | $(601) | (11.2)% | | Notes receivable | $3,331 | $2,211 | $1,120 | 50.6% | | Inventories | $4,512 | $3,869 | $643 | 16.6% | | Total Current Assets | $14,529 | $15,001 | $(472) | (3.1)% | | Total Assets | $15,288 | $15,801 | $(513) | (3.2)% | | Accounts payable | $4,440 | $3,137 | $1,303 | 41.5% | | Credit facility, net | $1,228 | $2,414 | $(1,186) | (49.1)% | | Total Current Liabilities | $7,319 | $7,148 | $171 | 2.4% | | Total Liabilities | $7,324 | $7,153 | $171 | 2.4% | | Total Stockholders' Equity | $7,964 | $8,648 | $(684) | (7.9)% | | Total Liabilities and Stockholders' Equity | $15,288 | $15,801 | $(513) | (3.2)% | Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit) The company's total stockholders' equity decreased from $8.6 million at December 31, 2024, to $8.0 million at March 31, 2025, primarily due to a net loss of $964 thousand, partially offset by share-based compensation | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :---------------------------- | :--------- | :--------- | | Balance as of December 31, 2024 | $8,648 | | | | | Share-based compensation | | $280 | $280 | | | Warrant exercise | | $0 | $0 | | | Net loss | | $(964) | $(964) | | | Balance as of March 31, 2025 | | $7,964 | $(684) | (7.9)% | - The decrease in stockholders' equity was primarily driven by a net loss of $(964) thousand for the three months ended March 31, 2025[21] - Share-based compensation contributed $280 thousand to additional paid-in capital during the period[21] Unaudited Condensed Consolidated Statements of Cash Flows The company experienced a net decrease in cash and cash equivalents of $1.9 million for the three months ended March 31, 2025, primarily driven by cash used in investing and financing activities, despite positive cash flow from operating activities | Cash Flow Activity | 3 Months Ended Mar 31, 2025 (in thousands) | 3 Months Ended Mar 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | :--------- | | Operating activities | $384 | $(1,006) | $1,390 | 138.2% | | Investing activities | $(1,127) | $(3) | $(1,124) | 37466.7% | | Financing activities | $(1,186) | $430 | $(1,616) | (375.8)% | | Net decrease in cash and cash equivalents | $(1,929