Petmed Express Inc – ‘S-1/A’ on 8/22/03

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Pre-Effective Amendment to Registration Statement (General Form)   —   Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement     83    469K 
                          (General Form)                                         
 2: EX-5.1      Opinion re: Legality                                   2±     9K 
 3: EX-23.2     Consent of Experts or Counsel                          1      5K 

S-1/A   —   Pre-Effective Amendment to Registration Statement (General Form)
Document Table of Contents

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AS FILED    
WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2003    

Registration No. 333-_______  

SECURITIES AND EXCHANGE COMMISSION      
WASHINGTON, DC 20549      

POST-EFFECTIVE AMENDMENT NO. 1      
TO FORM SB-2 ON     
FORM S-1      
REGISTRATION STATEMENT      
UNDER THE     
SECURITIES ACT OF 1933      

PETMED EXPRESS, INC.      
------------------------------------------------------      
(Exact Name of Registrant as Specified in Its Charter)      

Florida                         5190                65-0680967      
-----------------------------  ----------------------  -------------------      
(State or Other Jurisdiction   (Primary Standard        (I.R.S. Employer        
Incorporation or Organization) Classification Number)  Identification No.)      

1441 SW 29th Avenue     
Pompano Beach, Florida  33069     
(954) 979-5995      
-------------------------------------------------------------           
(Address, Including Zip Code, and Telephone Number, Including           
Area Code, of Registrant's Principal Executive Offices)         

________________________      

Menderes Akdag      
Chief Executive Officer     
1441 SW 29th Avenue     
Pompano Beach, Florida  33069     
(954) 979-5995      
-------------------------------------------------------------         
(Address, Including Zip Code, and Telephone Number, Including         
Area Code, of Agent For Service)      
______________________________      

Copies of all communications to:      

Roxanne K. Beilly, Esq.     
Katz, Barron, Squitero, Faust & Boyd, P.A.          
100 NE Third Avenue, Suite 280        
Fort Lauderdale, Florida 33301        
Telephone:  (954) 522-3636      
Facsimile No. (954) 522-5119      

Approximate Date of Proposed Sale to the Public: As soon as practicable after   
the effective date of this Registration Statement.                              

If any of the securities being registered on this Form are to be offered on     
a delayed or continuous basis pursuant to Rule 415 under the Securities Act     
of 1933, check the following box.  [ X ]                                        

If this Form is filed to register additional securities for an offering         
pursuant to Rule 462(b) under the Securities Act, please check the following    
box and list the Securities Act registration statement number of the earlier    
effective registration statement for the same offering.  [  ]                   

If this Form is a post-effective amendment filed pursuant to Rule 462(c)        
under the Securities Act, check the following box and list the Securities       
Act registration statement number of the earlier effective registration         
statement for the same offering.  [  ]                                          

If this Form is a post-effective amendment filed pursuant to Rule 462(d)        
under the Securities Act, check the following box and list the Securities       
Act registration number of the earlier effective registration statement for     
the same offering.   [  ]                                                       

If delivery of the prospectus is expected to be made pursuant to Rule 434,      
please check the following box.  [  ]                                           

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CALCULATION OF REGISTRATION FEE               

                                                        [Enlarge/Download Table]

                                                Proposed       Proposed         Proposed     
   Title of Each                                Maximum        Maximum          Maximum      
Class of Securities            Amount to be  Offering Price    Aggregate        Amount of    
  to be Registered              Registered    Per Security   Offering Price  Registration Fee
                                                                                             

Common stock, par value $.001                                                                
per share(1)..................  14,346,932        $2.00        $28,693,864      $2,639.84  * 

Common stock, par value $.001                                                                
per share(2)..................      75,000        $3.50           $262,500         $24.15  * 

Common stock, par value $.001                                                                
per share(2)..................      20,000        $3.13            $62,600          $5.75  * 
                                                                                ---------    
Total Registration Fee*.......                                                  $2,669.74  * 


(1)    Estimated   solely   for  purposes  of   calculating   the               
registration  fee pursuant to  Rule 457.   Based  upon the        
average of the closing bid and asked prices for the common        
stock on July 31, 2002.                                           

(2)    Shares  issuable  upon exercise of  common stock  purchase               
warrants.   Estimated solely for purposes  calculating the        
registration  fee  pursuant  to  Rule 457(g).  Based  upon        
exercise price  of the  shares  of common stock underlying        
convertible securities which is higher than the average of        
the closing  bid and  asked prices for the common stock on        
July 31, 2002.                                                    

------------------                                                              
*  Previously paid                                                              

Explanatory Paragraph                                                           

This  post-effective amendment to the registration  statement  is               
being  filed  for the purpose of bringing current the information               
which appeared in the registrant's registration statement on Form               
SB-2, SEC file number 333-97565, and as declared effective by the               
SEC  on  August  12, 2002 and which is currently  effective  (the               
"earlier   registration  statement").  The  earlier  registration               
statement is hereby incorporated by reference. The post-effective               
amendment  is being filed on a Form S-1 as the registrant  is  no               
longer eligible to use a Form SB-2 registration statement.                      

The  registrant hereby amends this registration statement on such               
date  or  dates  as may be necessary to delay its effective  date               
until  the  registrant  shall  file  a  further  amendment  which               
specifically  states  that  this  registration  statement   shall               
thereafter  become effective in accordance with section  8(a)  of               
the Securities Act of 1933, as amended, or until the registration               
statement  shall become effective on such date as the Commission,               
acting pursuant to said section 8(a), may determine.                            

ii                

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Information   contained  herein  is  subject  to  completion   or               
amendment.  A registration statement relating to these securities               
has  been  filed  with  the Securities and  Exchange  Commission.               
These  securities  may  not be sold nor  may  offers  to  buy  be               
accepted  prior  to  the time the registration statement  becomes               
effective.  This prospectus shall not constitute an offer to sell               
or  the  solicitation of an offer to buy nor shall there  be  any               
sale  of  these  securities in any state  in  which  such  offer,               
solicitation  or sale would be unlawful prior to registration  or               
qualification under the securities laws of any such state.                      

Subject to Completion August 22, 2003               

PROSPECTUS                

PETMED EXPRESS, INC.                

12,590,985 Shares of Common stock               

Since  the effective date of the registration statement  relating               
to the resale of 14,441,932 shares of our common stock, 1,652,633               
shares  of our common stock covered by the registration statement               
have  been  sold and warrants convertible into 198,314 shares  of               
our  common  stock  have  expired. Accordingly,  this  prospectus               
relates  to  the resale of the remaining shares up to  12,590,985               
shares of our common stock that may be offered and sold from time               
to time by selling shareholders, consisting of:                                 

*   9,845,985 shares; and                                               

*   2,745,000 shares  issuable  upon exercise of warrants and           
non-plan stock options.                                         

We  will not receive any of the proceeds for shares sold  by  the               
selling shareholders.                                                           

Our  common stock is traded on the OTCBB under the trading symbol               
"PETS".  The closing sales price for our common stock  on  August               
12, 2003 was $7.83 per share.                                                   

The securities offered hereby involve a high degree of risk.                
See "RISK FACTORS" beginning on page 3.               

These  securities  have not been approved or disapproved  by  the               
Securities  and  Exchange  Commission  or  any  state  securities               
commission nor has the Securities and Exchange Commission or  any               
state  securities commission passed upon the accuracy or adequacy               
of  this  prospectus.  Any representation to the  contrary  is  a               
criminal offense.                                                               

The original date of this prospectus was August 12, 2002                
The date of this prospectus is ____________, 2003               

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PROSPECTUS SUMMARY                

The Company                                                                     

PetMed   Express,  Inc.,  d/b/a  1-800-PetMeds,  is   a   leading               
nationwide  pet  pharmacy.  We  market  prescription   and   non-               
prescription  pet medications along with health  and  nutritional               
supplements  for dogs and cats direct to the consumer.  We  offer               
consumers an attractive alternative for obtaining pet medications               
in  terms of convenience, price, and speed of delivery. We market               
our products through national television, on-line and direct mail               
advertising  campaigns, which aim to increase the recognition  of               
the  "1-800-PetMeds" brand name, increase traffic on our web site               
at  www.1800PetMeds.com,  acquire  new  customers,  and  maximize               
repeat purchases.                                                               

Our  fiscal  year end is March 31, and our executive offices  are               
located  at 1441 S.W. 29th Avenue, Pompano Beach, Florida  33069.               
Our  telephone number is (954) 979-5995; our facsimile number  is               
(954) 971-0544.                                                                 

Unless otherwise indicated, references throughout this prospectus               
to  "PetMed Express," "1-800-PetMeds," "PetMed Express.com,"  "1-               
888-PetMeds," "the Company," "we," "us" and "our" refer to PetMed               
Express, Inc., a Florida corporation and its subsidiaries.                      

The Offering and Our Securities                                                 

This prospectus covers the resale of a total of 12,590,985 shares               
of  common stock by the selling shareholders identified  in  this               
prospectus.   The  shares of common stock are underlying  certain               
warrants and options not issued under our 1998 Stock Option Plan.               

Prior  to  this  offering, there were 19,349,458  shares  of  our               
common stock issued and outstanding. If all of the shares covered               
by  this prospectus are sold, there will be 22,094,458 shares  of               
our  common  stock issued and outstanding.  In  addition  to  the               
shares  covered by this prospectus, we have reserved a  total  of               
2,077,603  shares  in  the  event of  conversion  of  outstanding               
preferred  stock and exercise of options under our  stock  option               
plan and outstanding warrants.                                                  

Summary Financial Data                                                          

The  following  summary  of our financial  information  has  been               
derived from our financial statements that are included elsewhere               
in  this  prospectus.  The information for the years ended  March               
31,  2003,  2002  and 2001 is derived from our audited  financial               
statements. The information for the three months ended  June  30,               
2003  and 2002 is derived from our unaudited financial statements               
and  is  not  necessarily indicative of the results that  may  be               
expected  for the entire fiscal year ending March 31, 2004.   The               
data  set  forth  below  should be read in conjunction  with  the               
financial statements and notes thereto included elsewhere in this               
prospectus and "Management's Discussion and Analysis of Financial               
Condition   and  Results  of  Operations."   Note  that   current               
financial condition is not indicative of future results.                        

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STATEMENTS OF OPERATIONS                

                                                        [Enlarge/Download Table]

                                       Year Ended March 31,              Three Months Ended June 30,
                            ------------------------------------------   ---------------------------
                                 2003           2002           2001           2003           2002   
                            ------------   ------------   ------------   ------------   ------------
                                                                                                    

Sales                       $ 54,974,916   $ 32,025,931   $ 10,006,285   $ 30,387,563   $ 14,830,755
Cost of sales                 31,517,639     18,894,493      6,367,604     18,582,680      8,568,253
Gross profit                  23,457,277     13,131,438      3,638,681     11,804,883      6,262,502
Operating expenses            19,974,270     12,383,498      6,277,779      9,657,595      4,971,267
Net income (loss)              3,257,565        825,413     (2,826,707)     1,432,584        902,329
Net income (loss) per                                                                               
  common share:                                                                                     
    Basic                           0.19           0.05          (0.28)          0.08           0.05
    Diluted                         0.16           0.04          (0.28)          0.06           0.04
Weighted average number of                                                                          
  common shares outstanding:                                                                        
    Basic                     17,300,130     16,360,010      9,943,625     19,010,438     16,590,779
    Diluted                   20,749,515     19,739,493      9,943,625     23,012,611     20,092,544

BALANCE SHEET DATA        

                                                        [Enlarge/Download Table]


                                             March 31,                            June 30,         
                           ------------------------------------------   ---------------------------
                                2003           2002           2001           2003           2002   
                           ------------   ------------   ------------   ------------   ------------
                                                                                                   

Working capital (deficit)  $  3,017,641   $    690,588   $ (2,473,349)  $  5,564,699   $  1,503,010
Total assets                  9,025,796      4,654,236      4,504,757     12,831,377      6,429,750
Total liabilities             3,433,108      3,071,536      3,747,470      4,620,302      3,785,721
Shareholders' equity          5,592,688      1,582,700        757,287      8,211,075      2,644,029

RISK FACTORS                

An  investment  in  our common stock is highly  speculative.  You               
should  be  aware  you  could  lose the  entire  amount  of  your               
investment.  Prior to making an investment decision,  you  should               
carefully  read this entire prospectus and consider the following               
risk factors. The risks and uncertainties described below are not               
the  only  ones  we  face.  There may  be  additional  risks  and               
uncertainties that are not known to us or that we do not consider               
to  be  material at this time. If the events described  in  these               
risks  occur,  our business, financial condition and  results  of               
operations could be adversely affected. This prospectus  contains               
forward-looking statements that involve risks and  uncertainties.               
Our  actual  results may differ significantly  from  the  results               
discussed   in  the  forward-looking  statements.  This   section               
discusses  the  business  risk factors  that  might  cause  those               
differences.                                                                    

We  have  only recently attained profitability and there  are  no               
assurances  that we can sustain profitable operations  in  future               
periods.                                                                        
-----------------------------------------------------------------               

While  we  reported  net income of approximately  $3,258,000  and               
$825,000   for  the  years  ended  March  31,  2003   and   2002,               
respectively, and $1,433,000 for the three months ended June  30,               
2003, we reported a net loss of approximately $2,827,000 for  the               
year ended March 31, 2001 and have an accumulated deficit at June               
30,  2003  of  approximately $281,000.  Our profitability  during               
fiscal  2003  is  due in part to an increase in our  revenues  of               
approximately  $22,949,000,  or approximately  72%,  from  fiscal               
2002.   There  are  no  assurances we will continue  to  generate               
revenues  at  this  increased  level,  or  that  we  will  remain               
profitable during fiscal 2004 and beyond.                                       

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We may fail to comply with various state regulations covering the               
dispensing  of prescription pet medications. We could be  subject               
to  reprimands, sanctions, probations, fines, suspensions or  the               
loss of one or more of our pharmacy licenses.                                   
-----------------------------------------------------------------               

The  sale  and  delivery  of  prescription  pet  medications   is               
generally governed by state laws and state regulations. Since our               
pharmacy  is located in the state of Florida, we are governed  by               
the   laws  and  regulations  of  the  state  of  Florida.   Each               
prescription pet medication sale we make is likely to be  covered               
by the laws of the state where the customer is located.  The laws               
and regulations relating to the sale and delivery of prescription               
pet  medications vary from state to state, but generally  require               
that   prescription  pet  medications  be  dispensed   with   the               
authorization   from  a  prescribing  veterinarian.    Sales   of               
prescription medications represented approximately 29% and 34% of               
our  sales  for the fiscal years ended March 31, 2003  and  2002,               
respectively.  To the extent that we are unable to  maintain  our               
license  with  the  Florida  Board of  Pharmacy  as  a  community               
pharmacy, or if we do not maintain the licenses granted by  other               
state  boards, or if we become subject to actions by the FDA,  or               
other  enforcement regulators, our distribution  of  prescription               
medications  to  pet owners could cease. If  we  were  unable  to               
distribute prescription pet medications our sales would  decrease               
and  our  financial  condition and results of operations  may  be               
materially adversely impacted, however we would focus more on the               
sale   of  non-prescription  pet  medication  which  historically               
represented approximately 70% of our sales.                                     

While  we  make every effort to fully comply with the  applicable               
state  rules and regulations, from time to time we have been  the               
subject  of administrative complaints regarding the authorization               
of  prescriptions prior to shipment. In connection  with  various               
complaints  filed against us with the Florida Board of  Pharmacy,               
in  April  2002 we entered into a settlement agreement  with  the               
Florida  Board of Pharmacy and, among other terms,  our  pharmacy               
license was placed on probation for a period of three years.   We               
cannot assure you that we will not continue to be the subject  of               
administrative complaints in the future.  We cannot guarantee you               
that  we will not be subject to reprimand, sanctions, probations,               
or to fines, or that one or more of our pharmacy licenses may not               
be suspended or revoked.                                                        

Our alternate veterinarian program was discontinued and was under               
investigation by the Florida Board of Pharmacy and Florida Agency               
for  Health  Care  Administration, and by various  other  state's               
pharmacy  boards, which could reduce or eliminate our ability  to               
verify certain prescriptions outside the state of Florida.                      
-----------------------------------------------------------------               

We  utilized  the services of alternate veterinarians  to  verify               
certain  prescriptions for animals residing outside the state  of               
Florida.  The alternate veterinarian was not the veterinarian who               
had actually seen the animal and may reside in another state from               
the  animal.  In February 2002, we voluntarily ceased the use  of               
the  alternate veterinarian program, and in March 2002 a business               
decision  was made to enter into a settlement agreement with  the               
Florida  Board  of  Pharmacy.  Many of the  complaints  were  for               
prescriptions   verified   through  our  alternate   veterinarian               
program.   The alternate veterinarian program used a veterinarian               
outside  the  state  of  Florida to verify the  prescription  for               
certain  pets outside the state of Florida.  The program was  not               
used   for  pets  residing  in  the  State  of  Florida.   Future               
complaints  may  be brought against us by states  in  which  this               
program  was  utilized.  We are unable to  assess  the  potential               
impact  on  our  business or any future  penalties  that  may  be               
assessed from these or other complaints.                                        

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We  currently  purchase  our  prescription  and  non-prescription               
medications  from  third party distributors and  we  are  not  an               
authorized  distributor of those products.  We do  not  have  any               
guaranteed  supply  of these medications at  any  pre-established               
prices.                                                                         
-----------------------------------------------------------------               

For the fiscal years ended March 31, 2003 and 2002, approximately               
93%  and  92%,  respectively, of our sales were  attributable  to               
sales   of   prescription   and   non-prescription   medications.               
Historically,   substantially  all   the   major   pharmaceutical               
manufacturers  have  declined  to  sell  prescription  and   non-               
prescription pet medications directly to us.  In order to  assure               
a  supply of these products, we purchase medications from various               
secondary  sources, including a variety of domestic distributors.               
Our  business  strategy  includes  seeking  to  establish  direct               
purchasing    arrangements   with   major   pet    pharmaceutical               
manufacturing companies.  If we were not successful in  achieving               
this goal, we would continue to rely upon distributors.                         

We  cannot guarantee that if we continue to purchase prescription               
and  non-prescription pet medications from secondary sources that               
we  will  be  able  to purchase an adequate supply  to  meet  our               
customers'  demands, or that we will be able  to  purchase  these               
products  at  competitive prices.  As these products represent  a               
significant  portion of our sales, our failure to  fill  customer               
orders  for these products could adversely impact our sales.   If               
we  should  be forced to pay higher prices for these products  to               
ensure  an adequate supply, we cannot guarantee that we  will  be               
able  to pass along to our customers any increases in the  prices               
we  pay  for  these medications.  This inability  to  pass  along               
increased  prices  would reduce our gross  profit  margins  which               
could materially adversely affect our results of operations.                    

Our  failure  to  properly  manage our inventory  may  result  in               
excessive   inventory  carrying  costs,  which  could  materially               
adversely   affect  our  financial  condition  and   results   of               
operations.                                                                     
-----------------------------------------------------------------               

Our  current product line contains approximately 600 SKUs in  the               
fiscal  year ended March 31, 2003.  A significant portion of  our               
sales  is attributable to products representing approximately  90               
SKUs.   We  need to properly manage our inventory to  provide  an               
adequate  supply of these products and avoid excessive  inventory               
of  the  products  representing the  balance  of  the  SKUs.   We               
generally place orders for products with our suppliers based upon               
our  internal estimates of the amounts of inventory we will  need               
to  fill  future  orders.  These estimates may  be  significantly               
different  from the actual orders we receive.  In the event  that               
subsequent  orders fall short of original estimates,  we  may  be               
left  with excess inventory.  Significant excess inventory  could               
result in price discounts and increased inventory carrying costs.               
Similarly, if we fail to have an adequate supply of some SKUs, we               
may  lose sales opportunities.  We cannot guarantee that we  will               
maintain  appropriate inventory levels.  Any failure on our  part               
to  maintain  appropriate inventory levels may  have  a  material               
adverse  effect  on  our  financial  condition  and  results   of               
operations.                                                                     

Resistance  from  veterinarians to authorize prescriptions  could               
cause our sales to decrease and could materially adversely affect               
our financial condition and results of operations.                              
-----------------------------------------------------------------               

Since   we  began  our  operations,  from  time  to  time,   some               
veterinarians have resisted providing our customers with  a  copy               
of  their  pet's prescription or authorizing the prescription  to               
our  pharmacy  staff,  thereby  effectively  preventing  us  from               
filling   such   prescriptions  under  state   law.    Sales   of               
prescription medications represented approximately 29% and 34% of               
our  sales  for the fiscal years ended March 31, 2003  and  2002,               
respectively.  Although veterinarians in some states are required               
by   law   to  provide  the  pet  owner  with  this  prescription               
information,  if  the  number  of  veterinarians  who  refuse  to               
authorize   prescriptions  should  increase,  our   sales   could               
decrease,  our  liquidity  could be adversely  affected  and  our               
financial  condition and results of operations may be  materially               
adversely impacted.                                                             

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In  the  past  we  have purchased medications from  international               
distributors and we did not always know if those distributors had               
the  authority  of the manufacturer to sell the products  in  the               
United States.  As a result, we may be subject to future civil or               
administrative actions regarding those products.                                
-----------------------------------------------------------------               

During  fiscal 2002, a business decision was made to  discontinue               
purchasing any product from international distributors.  We  have               
purchased  a  portion  of our prescription  and  non-prescription               
medications  from international distributors in the past.   These               
medications  may  be  trademarked  and/or  copyrighted   products               
manufactured  in  foreign countries or in the United  States  and               
sold  by the manufacturer to foreign distributors.  Some  of  the               
prescription  and  non-prescription  medications  may  have  been               
manufactured by entities, particularly foreign licensees, who are               
not  the licensors or owners of the trademarks or copyrights  for               
the  medications.  From time to time, United States trademark and               
copyright  holders, their licensees, trade associations  and  the               
United  States  Customs Service have brought forth litigation  or               
administrative  agency  proceedings in an  attempt  to  halt  the               
importation  or sale of trademarked and/or copyrighted  products.               
The  courts  remain  divided on the extent  to  which  trademark,               
copyright  or  other laws, rules, regulations  or  decisions  may               
restrict the importation or sales of this merchandise without the               
consent of the trademark or copyright owner.                                    

There  can  be no assurance that future judicial, legislative  or               
administrative agency action, including possible import,  export,               
tariff  or other trade restrictions, will not be brought  against               
us  because of some of the secondary sources of supply used by us               
in  the  past. Moreover, there can be no assurance that our  past               
business  activities or merchandise sold to us in the  past  will               
not become the subject of legal or administrative actions brought               
by manufacturers, distributors, the United States Customs Service               
or  others.  Any  such judicial, legislative,  administrative  or               
legal actions could result in substantial costs and diversion  of               
resources,  and may adversely affect our business  and  operating               
results by reducing our working capital available to operate  our               
business.                                                                       

Significant portions of our sales are made to residents of  seven               
states.  If we should lose our pharmacy license in one or more of               
these  states, our financial condition and results of  operations               
would be materially adversely affected.                                         
-----------------------------------------------------------------               

While  we  ship  pet medications to customers in  almost  all  50               
states, approximately 53% of our sales for the fiscal year  ended               
March  31,  2003 were made to customers located in the states  of               
California, Florida, Texas, New York, Georgia, Virginia  and  New               
Jersey.  Since we are dependent on sales in these states,  if for               
any  reason our license to operate a pharmacy in one or  more  of               
those  states  should be suspended or revoked, or if  it  is  not               
renewed, our financial condition and results of operations may be               
materially adversely affected.                                                  

We   face   significant   competition  from   veterinarians   and               
traditional  and  online  retailers  and  may  not  be  able   to               
profitably compete with them.                                                   
-----------------------------------------------------------------               

We compete directly and indirectly with veterinarians in the sale               
of  pet  medications  and  health  and  nutritional  supplements.               
Veterinarians hold a competitive advantage over us  because  many               
pet  owners may find it more convenient or preferable to purchase               
these  products directly from their veterinarians at the time  of               
an  office  visit.  We also compete directly and indirectly  with               
both  online  and  traditional retailers of pet  medications  and               
health  and nutritional supplements.  Both online and traditional               
retailers  may  hold a competitive advantage over us  because  of               
longer  operating  histories, established  brand  names,  greater               
resources   and   an  established  customer  base.    Traditional               
retailers  may hold a competitive advantage over us  because  pet               
owners may prefer to purchase these products from a store instead               
of  online or through traditional catalog/telephone methods.   In               
order to effectively compete in the future, we may be required to               
offer  promotions and other incentives, which may result in lower               
operating margins or increased operating losses.                                

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The  content of our web site could expose us to various kinds  of               
liability,  which, if prosecuted successfully,  could  negatively               
impact our business.                                                            
-----------------------------------------------------------------               

Because we post product information and other content on our  web               
site,  we  face  potential  liability for  negligence,  copyright               
infringement,   patent   infringement,  trademark   infringement,               
defamation  and other claims based on the nature and  content  of               
the  materials  we post.  Various claims have been  brought,  and               
sometimes  successfully  prosecuted,  against  Internet   content               
distributors.  We could be exposed to liability with  respect  to               
the  unauthorized  duplication of content. Although  we  maintain               
general   liability  insurance,  our  insurance  may  not   cover               
potential  claims  of  this  type, or  may  not  be  adequate  to               
indemnify  us  for  all  liability  that  may  be  imposed.   Any               
imposition of liability that is not covered by insurance,  or  is               
in  excess  of  insurance  coverage, could  materially  adversely               
affect our financial condition and results of operations.                       

We  may  not be able to protect our intellectual property rights,               
and  we  may  be  found to infringe on the proprietary rights  of               
others.                                                                         
-----------------------------------------------------------------               

We  rely  on a combination of trademark, trade secret,  copyright               
laws  and  contractual restrictions to protect  our  intellectual               
property.   These  afford  only limited protection.  Despite  our               
efforts  to protect our proprietary rights, unauthorized  parties               
may  attempt  to copy our non-prescription private label  generic               
equivalents,  when and if developed, as well as  aspects  of  our               
sales formats, or to obtain and use information that we regard as               
proprietary,  including the technology used to  operate  our  web               
site, our content and our trademarks.                                           

Litigation  or  proceedings before the United States  Patent  and               
Trademark  Office may be necessary in the future to  enforce  our               
intellectual  property rights, to protect our trade  secrets  and               
domain  names,  and to determine the validity and  scope  of  the               
proprietary rights of others.  Any litigation or adverse priority               
proceeding  could  result in substantial costs and  diversion  of               
resources,  and may adversely affect our business  and  operating               
results by reducing our working capital available to operate  our               
business.                                                                       

We  expect  that participants in our markets will be increasingly               
involved  in  infringement claims as the number of  services  and               
competitors  in  our industry segment grows.  Any claim,  whether               
meritorious  or  not, could be time consuming, result  in  costly               
litigation, cause service upgrade delays or require us  to  enter               
into royalty or licensing agreements.  These royalty or licensing               
agreements might not be available on terms acceptable to us or at               
all.                                                                            

If  we  are  unable  to protect our Internet domain  name  or  to               
prevent others from using names that are confusingly similar, our               
business may be adversely impacted.                                             
-----------------------------------------------------------------               

Our      Internet      domain     names,     www.1800PetMeds.com,               
www.1888PetMeds.com, www.petmedexpress.com,  and  www.petmeds.com               
are  critical  to our brand recognition and our overall  success.               
If  we  are unable to protect these domain names, our competitors               
could  capitalize  on our brand recognition.   We  are  aware  of               
substantially  similar  domain names,  including  www.petmed.com,               
used  by  competitors.  Governmental agencies and their designees               
generally  regulate  the acquisition and  maintenance  of  domain               
names.   The regulation of domain names in the United States  and               
in  foreign countries has changed, and may undergo further change               
in  the  near  future.   Furthermore,  the  relationship  between               
regulations governing domain names and laws protecting trademarks               
and similar proprietary rights is unclear.  Therefore, we may not               
be able to protect our own domain names, or prevent third parties               
from  acquiring  domain  names that are confusingly  similar  to,               
infringe  upon  or  otherwise decrease the value  of  our  domain               
names.  In the event that we are unable to protect our own domain               
names, or prevent third parties from acquiring domain names  that               
are  confusingly similar to, infringe upon or otherwise  decrease               
the  value of our domain names, we could lose customers and sales               
which may adversely effect our results of operation.                            

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Since  all of our operations are housed in a single location,  we               
are  more  susceptible to business interruption in the  event  of               
damage to or disruptions in our facility.                                       
-----------------------------------------------------------------               

Our  headquarters and distribution center are located in the same               
building  in South Florida, and all of our shipments of  products               
to our customers are made from this sole distribution center.  We               
have  no  present plans to establish any additional  distribution               
centers or offices.  Because we consolidate our operations in one               
location,   we  are  more  susceptible  to  power  and  equipment               
failures,  and  business interruptions in  the  event  of  fires,               
floods  and  other  natural disasters than if we  had  additional               
locations.  Furthermore, because we are located in South Florida,               
which   is   a  hurricane-sensitive  area,  we  are  particularly               
susceptible  to  the risk of damage to, or total destruction  of,               
our   headquarters  and  distribution  center   and   surrounding               
transportation infrastructure caused by a hurricane.   We  cannot               
assure you that we are adequately insured to cover the amount  of               
any  losses  relating to any of these potential events,  business               
interruptions  resulting from damage to  or  destruction  of  our               
headquarters   and  distribution  center;  or  interruptions   or               
disruptions  to  major  transportation  infrastructure  or  other               
events that do not occur on our premises.  The occurrence of  any               
of  these  events,  depending upon  how  serious,  could  have  a               
material  adverse  effect on our business,  financial  condition,               
results of operations and prospects.                                            

The  majority of our sales are seasonal and our operating results               
are difficult to predict and may fluctuate.                                     
-----------------------------------------------------------------               

Because  our  operating  results are  difficult  to  predict,  we               
believe  that  quarter-to-quarter comparisons  of  our  operating               
results are not a good indication of our future performance.  The               
majority of our product sales is affected by the seasons, due  to               
the   seasonality  of  mainly  heartworm  and   flea   and   tick               
medications.  Industry seasonality trends, according to  Fountain               
Agricounsel  LLC,  Management Consultants  to  Agribusiness,  are               
divided  into percentage of industry sales by quarter.   For  the               
quarters  ended March 31, June 30, September 30, and December  31               
industry sales are 19%, 37%, 28%, and 16%, respectively.                        

In  addition  to  the seasonality of our sales,  our  annual  and               
quarterly operating results have fluctuated in the past  and  may               
fluctuate  significantly  in  the future  due  to  a  variety  of               
factors, many of which are out of our control.  Factors that  may               
cause our operating results to fluctuate include:                               

*   Our inability to obtain new customers at a reasonable cost,             
retain existing customers, or encourage reorders;                   
*   Our inability to increase the number of visitors to our web             
site, or  our inability to convert visitors to our web site         
into customers;                                                     
*   The mix of medications and other pet products sold by us;               
*   Our inability to manage inventory levels;                               
*   Our  inability to  adequately maintain, upgrade and develop             
our web site, the  systems that we use to  process customer         
orders and payments, or our computer network;                       
*   Increased competition within our market niche;                          
*   Price competition;                                                      
*   Increases in the cost of advertising;                                   
*   The amount  and  timing  of  operating  costs  and  capital             
expenditures  relating  to expansion of our product line or         
operations; and                                                     
*   Disruption  of our  toll-free  telephone service, technical             
difficulties, systems and Internet outages or slowdowns.            

Any  change  in one or more of these factors could make  it  more               
costly  or difficult to conduct our business, which could have  a               
material  adverse  affect  on  our  results  of  operations   and               
financial condition.                                                            

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Our  shares  of  common stock currently have  a  limited  trading               
market.                                                                         
-----------------------------------------------------------------               

Our  shares  of  common stock are currently  quoted  on  the  OTC               
Bulletin Board. Our shares of common stock currently have only  a               
limited  trading market.  As a result, you may find it  difficult               
to  dispose  of shares of our common stock and you may  suffer  a               
loss  of all or a substantial portion of your investment  in  our               
common stock.                                                                   

Our  stock price fluctuates from time to time and may fall  below               
expectations  of  securities analysts and  investors,  and  could               
subject  us to litigation, which may result in you suffering  the               
loss of your investment.                                                        
-----------------------------------------------------------------               

The  market price of our common stock may fluctuate significantly               
in  response to a number of factors, some of which are beyond our               
control.  These factors include:                                                

*   quarterly variations in operating results;                              
*   changes in accounting treatments or principles;                         
*   announcements  by us or our competitors of new products and             
services offerings,  significant contracts, acquisitions or         
strategic relationships;                                            
*   additions or departures of key personnel;                               
*   any future sales of our common stock or other securities;               
*   stock m arket price  and volume  fluctuations of  publicly-             
traded companies; and                                               
*   general political, economic and market conditions.                      

It  is  likely that in some future quarter our operating  results               
may  fall  below  the  expectations of  securities  analysts  and               
investors, which could result in a decrease in the trading  price               
of  our  common  stock.   In  the past, securities  class  action               
litigation  has  often been brought against a  company  following               
periods of volatility in the market price of its securities.   We               
may   be  the  targets  of  similar  litigation  in  the  future.               
Securities  litigation  could result  in  substantial  costs  and               
divert   management's  attention  and  resources,   which   could               
seriously harm our business and operating results.                              

The interests of our controlling shareholders could conflict with               
those of our other shareholders.                                                
-----------------------------------------------------------------               

Tricon Holdings, LLC, ("Tricon") our principal shareholder,  owns               
and  controls  approximately 38.2% of our voting  securities  and               
together  with  the  exercise  of  2,160,000  warrants,  if  such               
warrants  were  exercised which there can be no assurance,  would               
own  and  control 44.4% of our voting securities.   Our  officers               
and directors, together with our principal shareholder (excluding               
the exercise of the warrants or options), own or control 49.6% of               
our  voting securities.  These shareholders are able to influence               
the outcome of shareholder votes, including votes concerning:                   

*   the election of directors;                                              
*   amendments to our charter and by-laws; and                              
*   the approval  of significant corporate transactions such as             
a merger or sale of our assets.                                     

This  controlling influence could have the effect of delaying  or               
preventing  a change in control, even if many of our shareholders               
believe it is in their best interest.                                           

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If the selling security holders all elect to sell their shares of               
common stock at the same time, the market price of our shares may               
decrease.                                                                       
-----------------------------------------------------------------               

It is possible that the selling securities holders will offer all               
of  the shares for sale.  Further, because it is possible that  a               
significant  number  of shares could be sold  at  the  same  time               
hereunder,  the  sale, or the possibility  thereof,  may  have  a               
depressive effect on the market price of our stock.                             

We  may  issue  additional shares of preferred stock  that  could               
defer  a change of control or dilute the interests of our  common               
shareholders.   Our  charter documents  could  defer  a  takeover               
effort,   which  could  inhibit  your  ability  to   receive   an               
acquisition premium for your shares.                                            
-----------------------------------------------------------------               

Our  charter  permits  our  board of directors  to  issue  up  to               
5,000,000 shares of preferred stock without shareholder approval.               
Currently  there  are  2,500 shares of our Convertible  Preferred               
Stock  issued and outstanding.  This leaves 4,997,500  shares  of               
preferred stock available for issuance at the discretion  of  our               
board  of  directors.   These shares, if  issued,  could  contain               
dividend,  liquidation, conversion, voting or other rights  which               
could adversely affect the rights of our common shareholders  and               
which  could  also  be utilized, under some circumstances,  as  a               
method  of  discouraging, delaying or preventing  our  change  in               
control.  Provisions of our articles of incorporation, bylaws and               
Florida  law  could make it more difficult for a third  party  to               
acquire  us, even if many of our shareholders believe  it  is  in               
their best interest.                                                            

FORWARD-LOOKING STATEMENTS                                                      

This  prospectus  contains  "forward-looking  statements,"  which               
include  information relating to future events, future  financial               
performance,  strategies, expectations, competitive  environment,               
regulation  and  availability of resources. These forward-looking               
statements  include,  without limitation,  statements  regarding:               
expectations  as  to  operations  and  operational  improvements;               
expectations as to cost savings, revenue growth and earnings; the               
time  by which certain objectives will be achieved; estimates  of               
costs;   expectations   that   claims,   lawsuits,   commitments,               
contingent liabilities, or other matters will not have a material               
adverse effect on our consolidated financial position, results of               
operations   or  liquidity;  statements  concerning  projections,               
predictions,  expectations, estimates  or  forecasts  as  to  our               
business,  financial and operational results and future  economic               
performance; and statements of management's goals and  objectives               
and  other  similar expressions concerning matters that  are  not               
historical facts. Words such as "may," "will," "should," "could,"               
"would,"    "predicts,"   "potential,"   "continue,"   "expects,"               
"anticipates,"   "future,"   "intends,"   "plans,"    "believes,"               
"estimates"  and  similar expressions, as well as  statements  in               
future tense, identify forward-looking statements.                              

Forward-looking statements should not be read as a  guarantee  of               
future  performance  or  results, and  will  not  necessarily  be               
accurate  indications  of  the  times  at,  or  by  which,   such               
performance   or   results  will  be  achieved.   Forward-looking               
information is based on information available at the time  and/or               
management's good faith belief with respect to future events, and               
is  subject  to risks and uncertainties that could  cause  actual               
performance or results to differ materially from those  expressed               
in  the  statements.  Important factors  that  could  cause  such               
differences include, but are not limited to: whether we are fully               
successful   in   implementing  our  financial  and   operational               
initiatives;  industry competition, conditions,  performance  and               
consolidation;  legislative and/or regulatory  developments;  the               
effects  of adverse general economic conditions, both within  the               
United  States and globally; any adverse economic or  operational               
repercussions  from recent terrorist activities,  any  government               
response  thereto  and any future terrorist  activities,  war  or               
other  armed  conflicts;  the outcome of claims  and  litigation;               
natural events such as severe weather, floods and hurricanes; and               
other factors described under "Risk Factors."                                   

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Forward-looking  statements  speak  only  as  of  the  date   the               
statements  are made. We assume no obligation to update  forward-               
looking   statements  to  reflect  actual  results,  changes   in               
assumptions or changes in other factors affecting forward-looking               
information   except  to  the  extent  required   by   applicable               
securities  laws.  If  we do update one or  more  forward-looking               
statements,  no  inference should be  drawn  that  we  will  make               
additional updates with respect thereto or with respect to  other               
forward-looking statements.   For any forward-looking  statements               
contained  in this prospectus, we claim protection  of  the  safe               
harbor  for  forward-looking statements contained in the  Private               
Securities Litigation Reform Act of 1995.                                       

CAPITALIZATION                

The  following table sets forth our capitalization as of June 30,               
2003.   The  table  should  be  read  in  conjunction  with   our               
consolidated  financial  statements and  related  notes  included               
elsewhere in this prospectus.  The table does not give effect to:               

*   the  issuance of 208,581 shares subsequent to June 30, 2003             
through August 12, 2003;                                            
*   the  issuance  of up  to  2,214,101  shares  in  the  event             
outstanding  options that have  been granted are exercised;         
or                                                                  
*   the  issuance of  up to 2,775,000 shares  in the event that             
outstanding common stock purchase warrants are exercised.           

                                    June 30,
                                  2003
                                  ----------

Long-term debt                                   $   51,332               
Shareholders' equity:                                                     
Common stock, $.001 par value, 40,000,000                           
shares authorized, 19,140,877 shares                            
issued and outstanding                          19,141          
Preferred stock, $.001 par value, 5,000,000                         
shares authorized, 2,500 shares issued and                        
outstanding                                       8,898           
Additional paid-in capital                      8,464,330             
Accumulated deficit                              (281,294)            
                                  ----------
Total shareholders' equity                      8,211,075             

Total capitalization                            8,262,407             
                                  ==========

USE OF PROCEEDS               

We  will not receive any proceeds from the sale of the shares  of               
common  stock  by  the selling shareholders. If,  and  when,  the               
warrants  and  non-plan  options are  exercised  by  the  selling               
shareholders, the proceeds of $950,850 from the exercise shall be               
used by us for general corporate purposes.                                      

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PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY               

Our  common shares are traded on the OTC Bulletin Board under the               
symbol  "PETS".  The prices set forth below reflect the range  of               
high and low closing prices per share in each of the quarters  of               
fiscal  2003  and 2002, and the first quarter of fiscal  2004  as               
reported by the OTCBB.                                                          

                                                                [Download Table]


                                                  
Fiscal 2004:                 High             Low 
------------                 ----             --- 
First Quarter                $5.00           $2.27

Fiscal 2003:                 High             Low 
------------                 ----             --- 
First Quarter                $1.75           $0.76
Second Quarter               $2.53           $1.75
Third Quarter                $2.30           $1.57
Fourth Quarter               $2.36           $1.78

Fiscal 2002:                 High             Low 
------------                 ----             --- 
First Quarter                $2.11           $0.88
Second Quarter               $1.45           $0.64
Third Quarter                $1.15           $0.65
Fourth Quarter               $1.25           $0.76

As  of  August 12, 2003, we had approximately 75 shareholders  of               
record,  and we estimate there were approximately 950  beneficial               
shareholders on that date. On August 12, 2003, the closing  sales               
price of the common stock as reported on the OTCBB was $7.83  per               
share.                                                                          

Holders of our common stock are entitled to cash dividends  when,               
and  as may be declared by the board of directors. We have  never               
paid cash dividends on our common stock.  We do not intend to pay               
any  dividends in the foreseeable future and investors should not               
rely  on an investment in us if they require dividend income.  We               
intend  to  retain earnings, if any, to finance the expansion  of               
our  business.  Future dividend policy will  be  subject  to  the               
discretion  of  our  board of directors and will  be  based  upon               
future   earnings,  if  any,  our  financial  condition,  capital               
requirements,  general  business conditions  and  other  factors.               
There  can  be no assurance that cash dividends of any kind  will               
ever be paid.                                                                   

A special note about penny stock rules                                          
--------------------------------------                                          

Our  common  stock  may be covered by an SEC  rule  that  imposes               
additional sales practice requirements on broker-dealers who sell               
such  securities to persons other than established customers  and               
accredited  investors,  which  are  generally  institutions  with               
assets in excess of $5,000,000, or individuals with net worth  in               
excess  of  $1,000,000  or annual income  exceeding  $200,000  or               
$300,000 jointly with their spouse.  For transactions covered  by               
the  rule,  the  broker-dealer must make  a  special  suitability               
determination  for  the purchaser and transaction  prior  to  the               
sale.   Consequently, the rule may affect the ability of  broker-               
dealers  to sell our securities, and also may affect the  ability               
of  purchasers of our stock to sell their shares in the secondary               
market.  It may also cause fewer broker-dealers to be willing  to               
make a market in our common stock, and it may affect the level of               
news coverage we receive.                                                       

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SELECTED FINANCIAL DATA               

The  following  selected financial data should be  read  together               
with "Management's Discussion and Analysis of Financial Condition               
and Results of Operations," the consolidated financial statements               
and  notes  thereto  and  other  financial  information  included               
elsewhere in this prospectus.                                                   

The  consolidated statements of operations data set  forth  below               
for  the fiscal years ended March 31, 2003, 2002 and 2001 and the               
consolidated  balance sheet data as of March 31,  2003  and  2002               
have   been  derived  from  our  audited  consolidated  financial               
statements  which are included elsewhere in this prospectus.  The               
consolidated  statements of operations data set forth  below  for               
the   three  months  ended  June  30,  2003  and  2002  and   the               
consolidated  balance sheet data as of June  30,  2003  has  been               
derived  from  our  unaudited  condensed  consolidated  financial               
statements which are included elsewhere in this prospectus.                     

The consolidated statement of operations data set forth below for               
the  fiscal  years  ended   March  31,  2000  and  1999  and  the               
consolidated  balance sheet data as of March 31, 2001,  2000  and               
1999  have  been derived from our audited consolidated  financial               
statements  which  are  not  included  in  this  prospectus.  The               
consolidated  balance sheet data as of June  30,  2002  has  been               
derived  from  our  unaudited  condensed  consolidated  financial               
statements which are not included in this prospectus.                           

STATEMENTS OF OPERATIONS                

                                                        [Enlarge/Download Table]

                                                       Year Ended March 31,                           Three Months Ended June 30,
                           ------------------------------------------------------------------------   ---------------------------
                                2003           2002           2001          2000           1999           2003           2002    
                           ------------   ------------   ------------   ------------   ------------   ------------   ------------
                                                                                                                                 

Sales                      $ 54,974,916   $ 32,025,931   $ 10,006,285   $14,667,146    $  10,224,178  $ 30,387,563   $ 14,830,755
Cost of sales                31,517,639     18,894,493      6,367,604     8,496,316        6,120,584    18,582,680      8,568,253
Gross profit                 23,457,277     13,131,438      3,638,681     6,180,830        4,103,594    11,804,883      6,262,502
Operating expenses           19,974,270     12,383,498      6,277,779     7,766,385        3,876,183     9,657,595      4,971,267
Net income (loss)             3,257,565        825,413     (2,826,707)   (1,794,237)        (468,389)    1,432,584        902,329
Net income (loss) per                                                                                                            
  common share:                                                                                                                  
     Basic                         0.19           0.05          (0.28)        (0.28)           (0.09)         0.08           0.05
     Diluted                       0.16           0.04          (0.28)        (0.28)           (0.09)         0.06           0.04
Weighted average number of                                                                                                       
  common shares outstanding:                                                                                                     
     Basic                   17,300,130     16,360,010      9,943,625     6,369,822        5,333,355     19,010,438    16,590,779
     Diluted                 20,749,515     19,739,493      9,943,625     6,369,822        5,333,355     23,012,611    20,092,544

BALANCE SHEET DATA                  

                                                        [Enlarge/Download Table]

                                            March 31,                                                         June 30,          
                           ------------------------------------------------------------------------  ---------------------------
                                2003          2002           2001           2000           1999          2003           2002    
                           ------------   ------------   ------------   ------------   ------------  ------------   ------------
                                                                                                                                

Working capital (deficit)  $  3,017,641   $    690,588   $ (2,473,349)  $    398,218   $  2,037,732  $  5,564,699   $  1,503,010
Total assets                  9,025,796      4,654,236      4,504,757      6,326,435      5,628,871    12,831,377      6,429,750
Total liabilities             3,433,108      3,071,536      3,747,470      4,695,583      2,917,930     4,620,302      3,785,721
Shareholders' equity          5,592,688      1,582,700        757,287      1,630,852      2,710,941     8,211,075      2,644,029

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                 
RESULTS OF OPERATION                                                            

Overview                                                                        

PetMed  Express  was  incorporated in the  state  of  Florida  in               
January  1996. We began selling pet medications and  products  in               
September  1996,  and  in the fall of 1997 we  issued  our  first               
catalog.   This  catalog  displayed  approximately  1,200  items,               
including prescription and non-prescription pet medications,  pet               
health  and  nutritional  supplements and  pet  accessories.   In               
fiscal 2001, we focused our product line to approximately 600  of               
the  most  popular  pet  medications and health  and  nutritional               
supplements for dogs and cats. We also market products on our web               
site, where we currently generate approximately 50% of all sales,               
over the previous 12 months we generated 44% of all sales.  Since               
October  1997,  we  have  advertised  our  products  on  national               
television, on-line, and direct mail advertising.                               

Our sales consist of products sold to mainly retail consumers and               
minimal wholesale customers.  Typically, our retail customers pay               
by  credit  card  or check at the time the order is  shipped.  We               
usually receive cash settlement in one to three banking days  for               
sales  paid  for  by credit cards, which minimizes  the  accounts               
receivable  balances  relative to our sales.   Certain  wholesale               
customers  are  extended  credit  terms,  which  usually  require               
payment  within 30 days of delivery.  For the three months  ended               
June   30,   2003  and  2002,  our  sales  returns  average   was               
approximately  1.3%  and  2.0% of sales,  respectively,  and  the               
twelve month average purchase was approximately $71.                            
The following should be read in conjunction with our Consolidated               
Financial  Statements  and  the related  notes  thereto  included               
elsewhere herein.                                                               

Cautionary Factors That May Affect Future Results                               

This document and other documents we may file with the Securities               
and Exchange Commission contain forward-looking statements. Also,               
our  management  may  make forward-looking statements  orally  to               
investors, analysts, the media and others.                                      

Forward-looking   statements   express   our   expectations    or               
predictions of future events or results. They are not  guarantees               
and  are  subject to many risks and uncertainties.  There  are  a               
number  of  factors,  many beyond our control  that  could  cause               
actual events or results to be significantly different from those               
described  in the forward-looking statement. Any or  all  of  our               
forward-looking  statements in this prospectus or  in  any  other               
report or public statements we make may turn out to be wrong.                   

Forward-looking  statements can be identified by  the  fact  that               
they  do not relate strictly to historical or current facts. They               
use  words such as "anticipate", "estimate", "expect", "project",               
"intend", "plan", "believe" or words of similar meaning. They may               
also  use  words  such as "will", "would", "should",  "could"  or               
"may."                                                                          

Factors  that  may  cause  actual results  to  differ  materially               
include the risks discussed below, as well as the risks discussed               
elsewhere in this prospectus under the caption "Risk Factors."                  

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Critical Accounting Policies                                                    

Our  discussion and analysis of our financial condition  and  the               
results   of   our  operations  are  based  upon  our   condensed               
consolidated  financial statements and the data used  to  prepare               
them.  Our condensed consolidated financial statements have  been               
prepared  in  accordance  with  accounting  principles  generally               
accepted in the United States of America.  On an ongoing basis we               
re-evaluate  our judgments and estimates including those  related               
to  product  returns, bad debts, inventories, long-lived  assets,               
income   taxes,  litigation  and  contingencies.   We  base   our               
estimates  and judgments on our historical experience,  knowledge               
of  current conditions and our beliefs of what could occur in the               
future  considering  available information.  Actual  results  may               
differ  from  these  estimates  under  different  assumptions  or               
conditions.  Our estimates are guided by observing the  following               
critical accounting policies.                                                   

Revenue recognition                                                             

We  generate revenue by selling pet medication products primarily               
to  retail  consumers and minimally to wholesale  customers.  Our               
policy  is to recognize revenue from product sales upon shipment,               
when the rights of ownership and risk of loss have passed to  the               
consumer.   Outbound shipping and handling fees are  included  in               
sales  and  are  billed  upon shipment.   Shipping  and  handling               
expenses are included in cost of sales.                                         

The majority of our sales are paid by credit cards and we usually               
receive the cash settlement in one to three banking days.  Credit               
card sales minimize our accounts receivable balances relative  to               
our  sales.   We maintain an allowance for doubtful accounts  for               
losses  that we estimate will arise from the customers' inability               
to make required payments, arising from either credit card charge-              
backs or insufficient fund checks.  We determine our estimates of               
the   uncollectibility  of  accounts  receivable   by   analyzing               
historical  bad debts and current economic trends.  At  June  30,               
2003  the  allowance  for  doubtful  accounts  was  approximately               
$26,000.                                                                        

Valuation of inventory                                                          

Inventories  consist  of  prescription and  non-prescription  pet               
medications  that are available for sale and are  priced  at  the               
lower  of  cost  or  market value using a weighted  average  cost               
method.   We write down our inventory for estimated obsolescence.               
At   June  30,  2003  the  inventory  reserve  was  approximately               
$141,000.                                                                       

Property and equipment                                                          

Property  and equipment are stated at cost and depreciated  using               
the  straight-line method over the estimated useful lives of  the               
assets.  The furniture, fixtures, equipment and computer software               
are  depreciated over periods ranging from three  to  ten  years.               
Leasehold  improvements and assets under capital lease agreements               
are  amortized over the shorter of the underlying lease agreement               
or the useful life of the asset.                                                

Long-lived assets                                                               

Long-lived assets are reviewed for impairment whenever events  or               
changes  in  circumstances indicate that the carrying amount  may               
not  be  recoverable.  Recoverability of assets  is  measured  by               
comparison of the carrying amount of the asset to net future cash               
flows expected to be generated from the asset.                                  

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Advertising                                                                     

Our   advertising  expense  consists  primarily   of   television               
advertising,  internet  marketing, and direct  mail  advertising.               
Television costs are expensed as the advertisements are televised               
and  direct  mail  costs  are expensed  when  the  related  print               
materials are produced, distributed or superseded.                              

Accounting for income taxes                                                     

We account for income taxes under the provisions of SFAS No. 109,               
Accounting for Income Taxes, which generally requires recognition               
of  deferred  tax assets and liabilities for the expected  future               
tax benefits or consequences of events that have been included in               
the  condensed consolidated financial statements or tax  returns.               
Under  this  method,  deferred tax  assets  and  liabilities  are               
determined  based on differences between the financial  reporting               
carrying values and the tax bases of assets and liabilities,  and               
are  measured  by  applying enacted tax rates and  laws  for  the               
taxable years in which those differences are expected to reverse.               

Results of Operations                                                           

Three  Months Ended June 30, 2003 Compared to Three Months  Ended               
June 30, 2002                                                                   
-----------------------------------------------------------------               

The  following  should be read in conjunction with our  condensed               
consolidated  financial statements and the related notes  thereto               
included elsewhere herein.  The following table sets forth, as  a               
percentage  of  sales, certain items appearing in  our  condensed               
consolidated statements of income.                                              

                                                                [Download Table]

                                    Three Months Ended June 30,   
                                        2003            2002      
                                    -----------     -----------   
                                                                  
Sales                                     100.0  %        100.0  %
Cost of sales                              61.1            57.8   
                                    -----------     -----------   
Gross profit                               38.9            42.2   
                                    -----------     -----------   

Operating expenses:                                               
     General and administrative             9.9            14.0   
     Advertising                           21.4            18.9   
     Depreciation and amortization          0.5             0.6   
                                    -----------     -----------   
Total operating expenses                   31.8            33.5   
                                    -----------     -----------   

Income from operations                      7.1             8.7   
                                    -----------     -----------   

Provision for income taxes                  2.4             2.6   
                                    -----------     -----------   

Net income                                  4.7             6.1   
                                    ===========     ===========   

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Sales                                                                           
-----                                                                           

Sales  increased  by  approximately $15,557,000,  or  104.9%,  to               
approximately  $30,388,000 for the quarter ended June  30,  2003,               
from  approximately $14,831,000 for the quarter  ended  June  30,               
2002.   The increase in sales was primarily attributable  to  the               
positive  effects  of increased advertising and increased  retail               
reorders.   The increase to sales can also be attributed  to  the               
free  shipping  promotion,  which was initiated  in  March  2003.               
Advertising as a percentage of sales increased to 21.4%  for  the               
first quarter of fiscal 2004 from 18.9% for the first quarter  of               
fiscal 2003.                                                                    

We have committed certain amounts specifically designated towards               
television and direct mail advertising to stimulate sales, create               
brand  awareness,  and acquire new customers.  Retail  new  order               
sales  have increased by approximately $8,768,000, or  97.5%,  to               
approximately  $17,765,000 for the quarter ended June  30,  2003,               
from  approximately  $8,997,000 for the quarter  ended  June  30,               
2002.   Retail  reorder  sales  have increased  by  approximately               
$6,738,000,  or  116.8%,  to approximately  $12,508,000  for  the               
quarter  ended  June 30, 2003, from approximately $5,770,000  for               
the  quarter  ended  June  30, 2002.  We  acquired  approximately               
234,000  new  customers  for the quarter  ended  June  30,  2003,               
compared  to  approximately 121,000 new customers  for  the  same               
period prior year.                                                              

The  majority  of our product sales are affected by the  seasons,               
due  to  the  seasonality of mainly heartworm and flea  and  tick               
medications.  Industry seasonality trends, according to  Fountain               
Agricounsel  LLC,  Management Consultants  to  Agribusiness,  are               
divided  into percentage of industry sales by quarter.   For  the               
quarters  ended March 31, June 30, September 30, and December  31               
industry  sales  are  19%, 37%, 28%, and 16%,  respectively.   We               
cannot accurately predict future sales; however, based on current               
circumstances we do not expect a significant variance compared to               
the industry trends in the second quarter of fiscal 2004.                       

Cost of sales                                                                   
-------------                                                                   

Cost  of sales increased by approximately $10,015,000, or 116.9%,               
to approximately $18,583,000 for the quarter ended June 30, 2003,               
from  approximately  $8,568,000 for the quarter  ended  June  30,               
2002.   The increase in cost of sales is directly related to  the               
increase in retail sales in the first quarter of fiscal  2004  as               
compared  to 2003.  As a percent of sales, the cost of sales  was               
61.1%  for  the three months ended June 30, 2003, as compared  to               
57.8%  for the three months ended June 30, 2002.  This percentage               
increase   can  be  directly  attributed  to  the  free  shipping               
promotion.                                                                      

Gross profit                                                                    
------------                                                                    

Gross profit increased by approximately $5,542,000, or 88.5%,  to               
approximately  $11,805,000 for the quarter ended June  30,  2003,               
from  approximately  $6,263,000 for the quarter  ended  June  30,               
2002.  Gross profit as a percentage of sales for first quarter of               
fiscal  2004  and  2003 was 38.9% and 42.2%, respectively.   This               
percentage  decrease  can  be attributed  to  our  free  shipping               
promotion on all orders exceeding $40.                                          

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General and administrative expenses                                             
-----------------------------------                                             

General  and  administrative expense increased  by  approximately               
$938,000,  or 45.0%, to approximately $3,021,000 for the  quarter               
ended  June  30,  2003,  from approximately  $2,083,000  for  the               
quarter  ended June 30, 2002.  General and administrative expense               
as a percentage of sales was 9.9% and 14.0% for the quarter ended               
June  30,  2003 and 2002, respectively.  The increase in  general               
and  administrative expense for the quarter  June  30,  2003  was               
primarily  due to the following: a $406,000 increase  to  payroll               
expenses which can be attributed to the addition of new employees               
in our customer service and pharmacy departments which enabled us               
to  sustain  our  continued growth; a $306,000 increase  to  bank               
service and credit card fees and a $121,000 increase to telephone               
expenses  which  is  directly related  to  the  increase  in  the               
quarterly sales; and a $105,000 increase in other expenses  which               
includes insurance, property, and office expenses.                              

Advertising expenses                                                            
--------------------                                                            

Advertising  expenses increased by approximately  $3,702,000,  or               
131.9%,  to  approximately $6,509,000 for the quarter ended  June               
30,  2003,  from approximately $2,807,000 for the  quarter  ended               
June  30,  2002. The significant increase in advertising  expense               
for the quarter ended June 30, 2003 was due to our plan to commit               
certain  amounts specifically designated towards  television  and               
direct   mail  advertising  to  stimulate  sales,  create   brand               
awareness,  and acquire new customers.  We expect this  trend  of               
increased  advertising  spending  to  continue  into  the  second               
quarter of fiscal 2004.                                                         

Depreciation and amortization expenses                                          
--------------------------------------                                          

Depreciation and amortization increased by approximately $47,000,               
or  57.9%,  to approximately $127,000 for the quarter ended  June               
30,  2003, from approximately $80,000 for the quarter ended  June               
30, 2002.  This increase to depreciation and amortization expense               
for  first  quarter of fiscal 2004 can be attributed to increased               
property  and equipment additions mainly related to the warehouse               
expansion, since the first quarter of fiscal 2003.                              

Interest expense                                                                
----------------                                                                

Interest expense decreased by approximately $3,000, or 52.0%,  to               
approximately  $3,000 for the quarter ended June 30,  2003,  from               
approximately  $6,000  for  the  quarter  ended  June  30,  2002.               
Interest expense may increase slightly in future quarters, due to               
utilizing  our  $2,000,000 line of credit to  increase  inventory               
levels.                                                                         

Provision for income taxes                                                      
--------------------------                                                      

We  have  incurred significant net losses since our inception  in               
1996, through the quarter ended June 30, 2001. These losses  have               
resulted  in  net operating loss carryforwards, which  have  been               
used  by  us to offset our tax liabilities.  For the fiscal  year               
ended  March  31,  2002, we recorded a full  valuation  allowance               
against  the deferred income tax assets, created by net operating               
losses,  since future utilization of these assets was subject  to               
our  ability  to  generate taxable income.  For the  fiscal  year               
ended  March 31, 2003, we recognized a deferred income tax  asset               
of   approximately  $581,000,  due  to  the  fact  that  we   had               
demonstrated the ability to generate taxable income.   There  are               
no  guarantees  that we will be able to utilize  all  future  net               
operating  loss carryforwards unless we generate taxable  income.               
For  the  quarters ended June 30, 2003 and 2002, we  recorded  an               
income  tax  provision for approximately $715,000  and  $390,000,               
respectively; to provide for taxable income as the utilization of               
net operating loss carryforwards are limited.                                   

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Fiscal Year 2003 Compared to Fiscal Year 2002                                   
---------------------------------------------                                   
The following table sets forth, as a percentage of sales, certain               
items appearing in our statements of income.                                    

                                                                [Download Table]

                                              Fiscal Year              
                                    ---------------------------------  
                                    March 31, 2003     March 31, 2002  
                                    --------------     --------------  
                                                                       
Net sales                                    100.0 %            100.0 %
Cost of sales                                 57.3               59.0  
                                    --------------     --------------  
Gross profit                                  42.7               41.0  
                                    --------------     --------------  

Operating expenses:                                                    
     General and administrative               14.5               19.0  
     Advertising                              21.2               17.9  
     Severance charges                          -                 0.6  
     Depreciation and amortization             0.7                1.2  
                                    --------------     --------------  
Total operating expenses                      36.4               38.7  
                                    --------------     --------------  

Income from operations                         6.3                2.3  
                                    --------------     --------------  

Other income (expense):                                                
     Adjustment of estimate for                                        
       legal settlement                         -                 1.1  
     Gain (loss) on disposal of                                        
       property and equipment                  0.1               (1.0) 
     Interest expense                         (0.1)              (0.1) 
     Interest income                            -                 0.1  
     Other, net                                 -                 0.2  
                                    --------------     --------------  
Total other income (expense):                   -                 0.3  
                                    --------------     --------------  

Income before provision for                                            
  income taxes                                 6.3                2.6  

Provision for income taxes                     0.4                 -   
                                    --------------     --------------  
Net income                                     5.9                2.6  
                                    ==============     ==============  

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Sales                                                                           
-----                                                                           

Sales  increased  by  approximately  $22,949,000,  or  71.7%,  to               
approximately  $54,975,000 for the fiscal year  ended  March  31,               
2003,  from  approximately $32,026,000 for the fiscal year  ended               
March 31, 2002.  The increase in sales was primarily attributable               
to  the  positive effects of increased advertising and  increased               
retail  reorders,  partially offset by a  decrease  in  wholesale               
sales.   Advertising as a percentage of sales increased to  21.2%               
in  fiscal  2003  from 17.9% in fiscal 2002.  We  have  committed               
certain   amounts  specifically  designated  towards   television               
advertising  to  stimulate  sales, create  brand  awareness,  and               
acquire new customers.  Retail new order sales have increased  by               
approximately $10,143,000, or 54.0%, to approximately $28,915,000               
for  the  fiscal  year ended March 31, 2003,  from  approximately               
$18,772,000  for  the fiscal year ended March 31,  2002.   Retail               
reorder  sales  have increased by approximately  $15,575,000,  or               
151.9%,  to  approximately $25,827,000 for the fiscal year  ended               
March  31,  2003, from approximately $10,252,000 for  the  fiscal               
year  ended  March 31, 2002.  Wholesale sales have  decreased  by               
approximately $2,769,000, or 92.3%, to approximately $233,000 for               
the   fiscal  year  ended  March  31,  2003,  from  approximately               
$3,002,000  for  the fiscal year ended March 31,  2002.  We  have               
discontinued  our wholesale operations to concentrate  on  retail               
sales.                                                                          

The  majority  of our product sales are affected by the  seasons,               
due  to  the  seasonality of mainly heartworm and flea  and  tick               
medications.  Industry seasonality trends, according to  Fountain               
Agricounsel  LLC,  Management Consultants  to  Agribusiness,  are               
divided  into percentage of industry sales by quarter.   For  the               
quarters  ended March 31, June 30, September 30, and December  31               
industry  sales  are  19%, 37%, 28%, and  16%,  respectively.  We               
cannot accurately predict future sales, however, based on current               
circumstances we do not expect a significant variance compared to               
the industry trends in the first quarter of fiscal 2004.                        

Cost of sales                                                                   
-------------                                                                   

Cost  of sales increased by approximately $12,623,000, or  66.8%,               
to  approximately $31,518,000 for the fiscal year ended March 31,               
2003,  from  approximately $18,895,000 for the fiscal year  ended               
March 31, 2002. The increase in cost of sales is directly related               
to  the  increase in retail sales in fiscal 2003 as  compared  to               
2002. However, as a percent of sales, the cost of sales was 57.3%               
in  fiscal  2003,  as  compared to 59.0%  in  fiscal  2002.  This               
percentage  reduction can be attributed to our continued  efforts               
to  purchase medications in larger quantities, by bulk,  to  take               
advantage of any and all purchasing discounts available.                        

Gross profit                                                                    
------------                                                                    

Gross profit increased by approximately $10,326,000, or 78.6%, to               
approximately  $23,457,000 for the fiscal year  ended  March  31,               
2003  from  approximately $13,131,000 for the fiscal  year  ended               
March 31, 2002.  Gross profit as a percentage of sales for fiscal               
2003  and 2002 was 42.7% and 41.0%, respectively, reflecting  the               
positive  impact of purchasing medications in larger  quantities,               
receiving purchasing discounts.  In February 2003, we initiated a               
free shipping program on all orders exceeding $40.                              

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General and administrative expenses                                             
-----------------------------------                                             

General  and  administrative expense increased  by  approximately               
$1,862,000, or 30.6%, to approximately $7,957,000 for the  fiscal               
year  ended March 31, 2003 from approximately $6,095,000 for  the               
fiscal  year  ended  March 31, 2002.  General and  administrative               
expense  as  a  percentage of sales was 14.5% and 19.0%  for  the               
fiscal  years  ended March 31, 2003 and 2002, respectively.   The               
increase in general and administrative expense for the year ended               
March  31,  2003 is primarily due to the following: a  $1,428,000               
increase  to  payroll  expenses which can be  attributed  to  the               
addition  of  new employees in the customer service and  pharmacy               
departments,  which  enabled  PetMed  to  sustain  its  continued               
growth, a $493,000 increase to bank service and credit card  fees               
which is directly related to the increase in fiscal 2003 sales, a               
$250,000  increase  in  property and  insurance  expenses,  which               
includes  utilities and rental expenses, which can be  attributed               
to  leasing additional space to support our expansion  in  fiscal               
2003, offset with a $285,000 decrease to professional fees, and a               
$24,000 decrease to various other expenses.                                     

Advertising expenses                                                            
--------------------                                                            

Advertising  expenses increased by approximately  $5,933,000,  or               
approximately 103.8%, to approximately $11,650,000 for the fiscal               
year  ended March 31, 2003 from approximately $5,717,000 for  the               
fiscal  year  ended March 31, 2002.  The significant increase  in               
advertising expense for the fiscal year ended March 31, 2003  was               
due to our plan to commit certain amounts specifically designated               
towards  television advertising to stimulate sales, create  brand               
awareness,  and acquire new customers. We expect  this  trend  in               
advertising  to  continue into the first and second  quarters  of               
2004.                                                                           

Severance charges                                                               
-----------------                                                               

Severance  charges for the fiscal year ended March  31,  2002  of               
$195,000  relate to severance due to two of our former  executive               
officers,  the CFO and COO.  No comparable charges were  made  in               
fiscal 2003.                                                                    

Depreciation and amortization                                                   
-----------------------------                                                   

Depreciation and amortization decreased by approximately  $9,000,               
or  2.4%,  to  approximately $368,000 for the fiscal  year  ended               
March  31,  2003 from approximately $377,000 for the fiscal  year               
ended  March  31,  2002. The slight decrease to depreciation  and               
amortization  expense  for fiscal 2003 can  be  attributed  to  a               
depreciation  expense  reduction  related  to  the  sale  of  our               
facilities  in  fiscal  2002, offset by an increase  to  property               
additions in fiscal 2003.                                                       

Adjustment of estimate for legal settlement                                     
-------------------------------------------                                     

In fiscal 2002, we recognized income of $345,000 on a reversal of               
a  legal assessment estimate, which was originally booked in  the               
fiscal  year ended March 31, 2001.  On September 28, 2001, PetMed               
and  the  EPA  entered into a Consent Agreement and Final  Order.               
The  settlement agreement required us to pay a civil  penalty  of               
$100,000  plus  interest, a reduction from the original  $445,000               
fine.                                                                           

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Gain or loss on disposal of property and equipment                              
--------------------------------------------------                              

In  fiscal  2003,  we  recorded a gain on  disposal  of  computer               
equipment  of $15,000.  The fully depreciated computer  equipment               
was  sold  to  an  unrelated third party and  we  received  gross               
proceeds of $15,000.  During fiscal 2002, we recorded a  loss  on               
disposal  of land and building of $314,000.  A $185,000 loss  was               
the  result  of the sale of the corporate office building,  which               
includes  the  principal executive offices and warehouse,  to  an               
unrelated  third party. We received gross proceeds of $2,150,000,               
of  which  approximately  $1,561,000 was  used  to  pay  off  the               
mortgage.   The remaining $129,000 loss relates to the impairment               
of outdated computer equipment, which we no longer utilized.                    

Interest expense                                                                
----------------                                                                

Interest expense decreased by approximately $18,000, or 37.2%, to               
approximately  $31,000 for the fiscal year ended March  31,  2003               
from  approximately $49,000 for the fiscal year ended  March  31,               
2002.   The $18,000 decrease can be attributed to a reduction  in               
interest expense relating to the mortgage payoff of our principal               
executive offices in the first quarter of fiscal 2002.   Interest               
expense may increase further in future quarters, due to our  plan               
to utilize $2,000,000 of our line of credit to increase inventory               
levels during promotion periods.                                                

Provision for income taxes                                                      
--------------------------                                                      

We  incurred significant net losses since our inception in  1996,               
through  the  quarter  ended June 30,  2001.  These  losses  have               
resulted in net operating loss carryforwards, which we have  used               
to  offset  our tax liabilities. For the fiscal year ended  March               
31,  2002,  we  recorded a full valuation allowance  against  the               
deferred  income  tax  assets, created by net  operating  losses,               
since  future  utilization of these assets  was  subject  to  our               
ability  to  generate taxable income.  For the fiscal year  ended               
March  31,  2003, we recognized a deferred income  tax  asset  of               
approximately $581,000, due to the fact that we had  demonstrated               
the  ability to generate taxable income.  There are no guarantees               
that  we  will  be able to utilize all future net operating  loss               
carryforwards, unless we generate taxable income.  For the fiscal               
years  ended March 31, 2003 and 2002, we recorded an  income  tax               
provision for approximately $223,000 and $0, respectively.  There               
was  no  income  tax  provision  for  fiscal  2002,  due  to  the               
utilization  of  prior net operating losses which offset  taxable               
income for the period.  The effective tax rate for fiscal 2003 of               
6.4% is lower than the federal tax rate of 34%; this is primarily               
due   to  the  recognition  of  the  deferred  tax  asset.   Upon               
recognition of the $581,000 deferred income tax asset, we reduced               
our  income  tax provision by the same amount.  This  income  tax               
provision  reduction  was  a  tax benefit,  which  increased  net               
income.                                                                         

Net income                                                                      
----------                                                                      

Net  income increased by approximately $2,433,000, or 294.7%,  to               
$3,258,000  net income for the fiscal year ended March  31,  2003               
from  $825,000  net income for the fiscal year  ended  March  31,               
2002.   The significant increase was mainly attributable  to  our               
profitable operations and the recognition of a deferred tax asset               
of $581,000.                                                                    

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Fiscal Year 2002 Compared to Fiscal Year 2001                                   
---------------------------------------------                                   

The following table sets forth, as a percentage of sales, certain               
items appearing in our statements of operations.                                

                                                                [Download Table]

                                            Fiscal Year               
                                    --------------------------------  
                                    March 31, 2002    March 31, 2001  
                                    --------------    --------------  
                                                                      
Net sales                                    100.0 %           100.0 %
Cost of sales                                 59.0              63.6  
                                    --------------    --------------  
Gross profit                                  41.0              36.4  
                                    --------------    --------------  

Operating expenses:                                                   
     General and administrative               19.0              45.0  
     Advertising                              17.9              14.0  
     Severence charges                         0.6                -   
     Depreciation and amortization             1.2               3.7  
                                    --------------    --------------  
Total operating expenses                      38.7              62.7  
                                    --------------    --------------  

Income (loss) from operations                  2.3             (26.3) 
                                    --------------    --------------  

Other income (expense):                                               
     Adjustment of estimate for                                       
       legal settlement                        1.1                -   
     Loss on disposal of property                                     
       and equipment                          (1.0)               -   
     Interest expense                         (0.1)             (2.3) 
     Interest income                           0.1               0.5  
     Other, net                                0.2              (0.1) 
                                    --------------    --------------  
Total other income (expense):                  0.3              (1.9) 
                                    --------------    --------------  

Income (loss) before provision                                        
  for income taxes                             2.6             (28.2) 

Provision for income taxes                      -                 -   
                                    --------------    --------------  
Net income (loss)                              2.6             (28.2) 
                                    ==============    ==============  

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Sales                                                                           
-----                                                                           

Sales  increased  by  approximately $22,020,000,  or  220.1%,  to               
approximately  $32,026,000 for the fiscal year  ended  March  31,               
2002,  from  approximately $10,006,000 for the fiscal year  ended               
March 31, 2001.  The increase in sales was primarily attributable               
to the positive effects of increased advertising.  Advertising as               
a  percentage  of  sales increased to 17.9% in fiscal  2002  from               
14.0%   in  fiscal  2001.  We  have  committed  certain   amounts               
specifically   designated  towards  television   advertising   to               
stimulate sales and create brand awareness.  Historically,  sales               
have  a  tendency  to  increase in the first  and  second  fiscal               
quarters due to the seasonality of certain pet medications.                     

Cost of sales                                                                   
-------------                                                                   

Cost  of sales increased by approximately $12,527,000, or 196.7%,               
to  approximately $18,895,000 for the fiscal year ended March 31,               
2002,  from  approximately $6,368,000 for the fiscal  year  ended               
March 31, 2001. The increase in cost of sales is directly related               
to  the  increase in retail sales in fiscal 2002 as  compared  to               
2001.   However,  as a percent of sales, the cost  of  sales  was               
59.0%  in  fiscal  2002,  as compared to  63.6%  in  2001.   This               
percentage  reduction can be attributed to our continued  efforts               
to  purchase medications in larger quantities, by bulk,  to  take               
advantage  of  any  and all purchasing discounts  and  promotions               
available.                                                                      

Gross profit                                                                    
------------                                                                    

Gross profit increased by approximately $9,493,000, or 260.9%, to               
approximately  $13,132,000 for the fiscal year  ended  March  31,               
2002  from  approximately $3,639,000 for the  fiscal  year  ended               
March 31, 2001.  Gross profit as a percentage of sales for fiscal               
2002  and 2001 was 41.0% and 36.4%, respectively, reflecting  the               
positive impact of purchasing medications in larger quantities.                 

General and administrative expenses                                             
-----------------------------------                                             

General  and  administrative expense increased  by  approximately               
$1,588,000, or 35.2%, to approximately $6,095,000 for the  fiscal               
year  ended March 31, 2002 from approximately $4,507,000 for  the               
fiscal  year  ended  March 31, 2001.  General and  administrative               
expense  as  a  percentage of sales was 19.0% and 45.0%  for  the               
fiscal  years  ended March 31, 2002 and 2001, respectively.   The               
increase in general and administrative expense for the year ended               
March  31,  2002 is primarily due to the following: a  $1,159,000               
increase to payroll expenses can be attributed to the addition of               
new  employees in the customer service and pharmacy  departments,               
which enabled us to sustain continued growth, a $599,000 increase               
to  bank service and credit card fees is directly related to  the               
increase  in  fiscal 2002 sales, a $268,000 increase in  property               
and   office  expenses,  which  includes  utilities  and   rental               
expenses,  which can be attributed to leasing our facilities  for               
the  majority of fiscal 2002, while owning the same  facility  in               
fiscal  2001, a $37,000 increase in telephone and other expenses,               
offset  with  a  $424,000 decrease to professional  fees,  and  a               
$51,000 reduction in travel and entertainment expenses.                         

Advertising expenses                                                            
--------------------                                                            

Advertising  expenses increased by approximately  $4,320,000,  or               
approximately 309.1%, to approximately $5,717,000 for the  fiscal               
year  ended March 31, 2002 from approximately $1,397,000 for  the               
fiscal  year  ended March 31, 2001.  The significant increase  in               
advertising expense for the fiscal year ended March 31, 2002  was               
due to our plan to commit certain amounts specifically designated               
towards  television  advertising to stimulate  sales  and  create               
brand awareness.                                                                

Severance charges                                                               
-----------------                                                               

Severance  charges for the fiscal year ended March  31,  2002  of               
$195,000  relate to severance due to two of our former  executive               
officers,  the CFO and COO.  No comparable charges were  made  in               
fiscal 2001.                                                                    

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Depreciation and amortization expenses                                          
--------------------------------------                                          

Depreciation and amortization expenses increased by approximately               
$3,000,  or  .8%, to approximately $377,000 for the  fiscal  year               
ended  March 31, 2002 from approximately $374,000 for the  fiscal               
year  ended  March 31, 2001.  The slight increase to depreciation               
and  amortization expense for fiscal 2002 can be attributed to  a               
significant  increase  in  property additions,  offset  with  the               
depreciation  expense  reduction  related  to  the  sale  of  our               
facilities in fiscal 2002.                                                      

Adjustment of estimate for legal settlement                                     
-------------------------------------------                                     

In fiscal 2002, we recognized income of $345,000 on a reversal of               
a  legal  assessment  estimate, which was  originally  booked  in               
fiscal  year ended March 31, 2001.  On September 28, 2001, PetMed               
and  the  EPA  entered into a Consent Agreement and  Final  Order               
("CAFO").   The settlement agreement requires us to pay  a  civil               
penalty  of $100,000 plus interest, a reduction from the original               
$445,000 fine.  For the purpose of this CAFO, we admitted to  the               
jurisdictional  allegations set forth, and neither  admitted  nor               
denied the alleged violations.                                                  

Loss on disposal of property and equipment                                      
------------------------------------------                                      

During  fiscal 2002, we recorded a loss on disposal of  land  and               
building  of  $314,000.  A $185,000 loss  was the result  of  the               
sale  of  the  corporate  office  building,  which  includes  the               
principal executive offices and warehouse, to an unrelated  third               
party.  We  received  gross  proceeds  of  $2,150,000,  of  which               
approximately  $1,561,000 was used to pay off the mortgage.   The               
remaining  $129,000  loss relates to the impairment  of  outdated               
computer equipment, which we no longer utilized.                                

Other income and expenses                                                       
-------------------------                                                       

Other income and expenses decreased by approximately $234,000, or               
124.5%,  to approximately $47,000 of other income for the  fiscal               
year  ended March 31, 2002 from approximately $188,000  of  other               
expense  for the fiscal year ended March 31, 2001.  The  $234,000               
decrease  can  be  attributed to a reduction in interest  expense               
relating  to  the  mortgage  payoff of  our  principal  executive               
offices.                                                                        

Provision for income taxes                                                      
--------------------------                                                      

We  incurred significant net losses since our inception in  1996.               
These  losses  have resulted in net operating loss  carryforwards               
and  deferred  tax  assets, which we  have  used  to  offset  tax               
liabilities,  which may have been incurred in prior  periods.  We               
recorded  a  valuation allowance against the deferred income  tax               
assets,  since future utilization of these assets is  subject  to               
our  ability to generate taxable income.  There was no income tax               
accrual for the fiscal years ended March 31, 2002 and 2001 due to               
the  utilization of prior net operating losses to offset  taxable               
income for the period.                                                          

Net income (loss)                                                               
-----------------                                                               

Net  income  (loss)  increased  by approximately  $3,652,000,  or               
129.2%,  to  $825,000 net income for the fiscal year ended  March               
31, 2002 from $2,827,000 net loss for the fiscal year ended March               
31, 2001.  The increase was attributable to the aforementioned.                 

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Liquidity and Capital Resources                                                 
-------------------------------                                                 

Our working capital at March 31, 2003 was $3,018,000, as compared               
to  the  $691,000 at March 31, 2002, an increase of approximately               
$2,327,000.   The  increase  in  working  capital  was  primarily               
attributable to our profitable operations which resulted  in  net               
cash  provided by operating activities of $970,000  and  $476,000               
for  the years ended March 31, 2003 and 2002, respectively.   Net               
cash  used  in investing activities was $1,095,000 for  the  year               
ended  March  31,  2003  as  compared to  net  cash  provided  by               
investing  activities of $1,461,000 for the year ended March  31,               
2002,  primarily as a result of increased property and intangible               
asset additions in fiscal 2003, compared to the proceeds received               
from the sale of the corporate office building and land in fiscal               
2002.   Net  cash provided by financing activities  increased  to               
$371,000  for the year ended March 31, 2003, as compared  to  net               
cash  used  in  financing activities of $1,609,000 for  the  year               
ended March 31, 2002.  This increase relates directly to proceeds               
received  upon the exercise of stock options and warrants  offset               
by repayment of the line of credit in fiscal 2003, as compared to               
the satisfaction of the mortgage in fiscal 2002.                                

Since  our inception, we have primarily funded our growth through               
the private placement of securities.  In April 1998, we raised an               
additional $888,000 of net proceeds from the private placement of               
250,000 shares of Convertible Preferred Stock.  In February 1999,               
we raised approximately $819,000 of net proceeds from the sale of               
330,333  shares  of  common stock.  In November  2000  we  raised               
$2,000,000  from  the private placement of 10,000,000  shares  of               
equity securities.                                                              

On  May 31, 2001, we sold our 50,000 square foot office building,               
which houses our principal executive offices and warehouse, to an               
unrelated  third party. We received gross proceeds of $2,150,000,               
of  which  approximately  $1,561,000 was  used  to  pay  off  the               
mortgage,  and  we recognized a loss on the sale of approximately               
$185,000.  We then entered into a five-year term lease  agreement               
for  20,000  of  the  50,000  square foot  Pompano  Beach  office               
building.  On February 22, 2002, we entered into a lease addendum               
which  added approximately 12,000 square feet, effective June  1,               
2002,  to accommodate our warehouse expansion.  On July 25,  2003               
we  signed an amendment to our current lease agreement to  obtain               
an  additional 8,000 square feet, with an option to  add  another               
3,600  square  feet, to our current 32,000 square foot  facility,               
which  will be available October 1, 2003.  This addition  to  the               
warehouse  was  necessary  to  increase  our  capacity  to  store               
additional inventory during our peak season.                                    

We  maintain a $2,000,000 line of credit, effective through  July               
22,  2004.   The  interest rate is at the  published  thirty  day               
London  Interbank Offered Rates ("LIBOR") plus  2.65%  (3.75%  at               
June  30,  2003),  and contains various financial  and  operating               
covenants.   At  June 30, 2003, there was no outstanding  balance               
under the line of credit agreement.                                             

As of June 30, 2003 we had no outstanding lease commitments.  Our               
sources of working capital include the line of credit, cash  from               
operations, and the exercise of stock options and warrants.   For               
the  remainder  of  fiscal 2004, we have  approximately  $440,000               
planned  for  capital  expenditure  commitments  to  further  our               
growth  to  add  backup computer equipment  to  sustain  business               
during  an  outage.  These capital expenditures  will  be  funded               
through cash from operations.                                                   

On  March  12, 2002, we entered into a $205,000, three year  term               
loan agreement with a bank, with interest accruing at the lending               
institution's  base rate plus 1% (5.25% at May  31,  2003).   The               
loan  proceeds were used to purchase a $250,000 computer  server.               
The  aggregate  loan maturities are $68,000 per  year  for  three               
years.  The  line  of  credit and the term loan  are  secured  by               
substantially all of our assets.                                                

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For  the  year ended March 31, 2001, we had incurred  significant               
operating  losses and cash flow deficiencies.  However,  for  the               
year  ended  March 31, 2003 and 2002 we have had  net  income  of               
$3,258,000  and  $825,000, and have sustained  profitability  for               
seven  consecutive  quarters. We may  seek  to  raise  additional               
capital through the sale of equity securities.  No assurances can               
be  given  that  we  will be successful in  obtaining  additional               
capital,  or  that  such  capital  will  be  available  in  terms               
acceptable to us.  At this time, we have no commitments or  plans               
to   obtain  additional  capital.   Further,  there  can  be   no               
assurances that even if such additional capital is obtained  that               
we will sustain profitability or positive cash flow.                            

Recent Accounting Pronouncements                                                
--------------------------------                                                

We  do  not  believe  that  any  recently  issued,  but  not  yet               
effective, accounting standards, if currently adopted, will  have               
a material effect on our consolidated financial position, results               
of operations or cash flows.                                                    

Quarterly Results of Operations                                                 
-------------------------------                                                 

The  following  table  presents selected  consolidated  financial               
information  for each of the eight fiscal quarters through  March               
31,  2003 and the first fiscal quarter for the fiscal year ending               
March  31,  2004.  The  information has  been  derived  from  our               
unaudited  consolidated  financial  statements  which,   in   our               
opinion,  reflect all adjustments, consisting of normal recurring               
adjustments,  necessary for a fair presentation of the  quarterly               
information.                                                                    

Quarter Ended:               June 30, 2003                                      
-------------                -------------                                      

Sales                        $  30,387,563                                      
Income from operations       $   2,147,288                                      
Net income                   $   1,432,584                                      
Diluted net income per                                                          
share                      $        0.06                                    

                                                        [Enlarge/Download Table]

Quarter Ended:               June 30, 2002  September 30, 2002  December 31, 2002  March 31, 2003 (a)
-------------                -------------  ------------------  -----------------  --------------    
                                                                                                     
Sales                        $  14,830,755    $  14,229,702       $  11,050,124     $ 14,864,335     
Income from operations       $   1,291,235    $     307,754       $     693,269     $  1,190,749     
Net income                   $     902,329    $     204,887       $     434,710     $  1,715,639     
Diluted net income per share $        0.04    $        0.01       $        0.02     $       0.09     

                                                        [Enlarge/Download Table]

Quarter Ended:             June 30, 2001  September 30, 2001  December 31, 2001  March 31, 2002
-------------              -------------  ------------------  -----------------  --------------
                                                                                               
Sales                      $   5,363,650    $   7,762,825       $   8,248,904     $ 10,650,552 
(Loss) income from                                                                             
  operations               $    (880,765)   $      56,246       $     368,433     $  1,204,026 
Net (loss) income          $  (1,090,684)   $     393,378       $     353,348     $  1,169,371 
Diluted net (loss) income                                                                      
  per share                $       (0.07)   $        0.02       $        0.02     $       0.07 

                                                        [Enlarge/Download Table]

Quarter Ended:              June 30, 2000  September 30, 2000  December 31, 2000  March 31, 2001
-------------               -------------  ------------------  -----------------  --------------
                                                                                                
Sales                       $   2,636,715    $   2,667,336       $   1,795,439     $  2,906,795 
Loss from operations        $    (960,837)   $    (248,212)      $    (326,564)    $ (1,103,485)
Net loss                    $  (1,037,944)   $    (298,602)      $    (364,202)    $ (1,125,959)
Diluted net loss per share  $       (0.16)   $       (0.05)      $       (0.03)    $      (0.04)

(a)  We recorded  a deferred tax asset of approximately $581,000,               
during  the quarter  ended  March 31, 2003,  resulting in an          
increase of diluted net income of $.03 per share.                     

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Quantitative and Qualitative Disclosures About Market Risk                      
----------------------------------------------------------                      

Market  risk generally represents the risk that losses may  occur               
in the value of financial instruments as a result of movements in               
interest  rates,  foreign currency exchange rates  and  commodity               
prices.   Our  financial  instruments  include  cash   and   cash               
equivalents,  accounts  receivable,  accounts  payable,  line  of               
credit,   and   debt  obligations.   The  book  value   of   cash               
equivalents,  accounts  receivable,  and  accounts  payable   are               
considered  to  be representative of fair value  because  of  the               
short  maturity of these instruments.  We estimate that the  fair               
value  of all of our debt obligations approximate $120,000 as  of               
June 30, 2003.                                                                  

We  do not utilize financial instruments for trading purposes and               
we  do  not hold any derivative financial instruments that  could               
expose  us  to significant market risk.  Our exposure  to  market               
risk  for  changes  in interest rates relates  primarily  to  our               
obligations  under our line of credit.  As of  August  12,  2003,               
there  was  no  outstanding  balance under  the  line  of  credit               
agreement.   A ten percent increase in short-term interest  rates               
on  the  variable  rate debts outstanding as of August  12,  2003               
would  not  have  a  material impact on  our  quarterly  interest               
expense,   assuming  the  amount  of  debt  outstanding   remains               
constant.                                                                       

The  above  sensitivity analysis for interest rate risk  excludes               
accounts  receivable,  accounts payable and  accrued  liabilities               
because  of  the  short-term maturity of such  instruments.   The               
analysis does not consider the effect this movement may  have  on               
other  variables including changes in revenue volumes that  could               
be  indirectly  attributed to changes  in  interest  rates.   The               
actions  that management would take in response to such a  change               
are  also  not considered.  If it were possible to quantify  this               
impact,  the results could well be different than the sensitivity               
effects shown above.                                                            

BUSINESS                

General                                                                         
-------                                                                         

PetMed Express, Inc. and subsidiaries, d/b/a 1-800-PetMeds, is  a               
leading nationwide pet pharmacy.  We market prescription and non-               
prescription  pet medications along with health  and  nutritional               
supplements  for dogs and cats direct to the consumer.  We  offer               
consumers an attractive alternative for obtaining pet medications               
in terms of convenience, price, and speed of delivery.                          

We  market our products through national television, on-line  and               
direct  mail  advertising campaigns, which aim  to  increase  the               
recognition  of the "1-800-PetMeds" brand name, increase  traffic               
on  our  web  site at www.1800PetMeds.com, acquire new customers,               
and  maximize  repeat  purchases.  We are a  Florida  corporation               
organized in January 1996.                                                      

Our Products                                                                    
------------                                                                    

We  offer a broad selection of products for dogs and cats.  These               
products   include  a  majority  of  the  well-known  brands   of               
medication, such  as  Frontline[R],  Advantage[R],  Heartgard[R],               
Sentinel[R],  Interceptor[R],   Program[R],  Revolution[R],   and               
Rimadyl[R].  Generally, our prices are discounted up to 25%, from               
the prices for medications charged by veterinarians.                            

We  regularly  select  new products or the latest  generation  of               
existing  products to become part of our product  selection.   In               
addition,  we  also  refine our current products  to  respond  to               
changing consumer-purchasing habits. Our web site is designed  to               
give   us   the  flexibility  to  change  featured  products   or               
promotions.   Our  product line provides customers  with  a  wide               
variety  of  selections across the most popular health categories               
for dogs and cats.  Our current products include:                               

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Prescription  Medications:   Heartworm medications,  antibiotics,               
anti-inflammatory   medications  and  medications   for   chronic               
diseases,  such as arthritis and thyroid conditions, as  well  as               
several generic substitutes;                                                    

Non-Prescription Medications:  A majority of the well-known  flea               
and   tick   control   products;  and  health   and   nutritional               
supplements.                                                                    

Sales                                                                           
-----                                                                           

The following table provides a breakdown of the percentage of our               
total sales, by each category during the indicated periods:                     

                                                                [Download Table]

                                        Fiscal Year Ended       
                                 March 31, 2003   March 31, 2002
                                 --------------   --------------
                                                                
Prescription medications               29%              34%     
Non-prescription medications           64%              58%     
Shipping and handling charges                                   
  and other                             7%               8%     
                                 --------------   --------------
Total                                 100%             100%     
                                 ==============   ==============

During  March 2001, we discontinued the sales of all accessories.               
Additionally, we discontinued the PetMed Express, Inc. membership               
plan.   It  was  determined by management  to  concentrate  sales               
efforts  on the prescription and non-prescription pet medications               
and the health and nutritional pet supplements.                                 

We   offer  our  products  through  three  main  sales  channels,               
including  the  PetMed  Express catalog and  postcards,  customer               
service representatives and the Internet, through our web site at               
www.1800PetMeds.com. We have designed both our  catalog  and  web               
site  to  provide  a convenient, cost-effective  and  informative               
shopping   experience  that  encourages  consumers  to   purchase               
products  important for a pet's health and quality of  life.   We               
believe  that  these multiple channels allow us to  increase  the               
visibility of our brand name and provide customers with increased               
shopping flexibility and service.                                               

The PetMed Express Catalog                                                      

The  PetMed Express catalog is a full-color catalog that features               
approximately  300  products.   The  catalog  is  produced  by  a               
combination   of   in-house  writers,  production   artists   and               
independent  contractors.   We mail  catalogs  and  postcards  in               
response  to requests generated from our advertising  and  direct               
mail campaigns.                                                                 

Contact Center                                                                  

We  currently employ 100 customer service representatives in  our               
contact center.  Our customer service representatives receive and               
process inbound customer calls, facilitate our outbound campaigns               
around  maximizing  customers' reorders on  a  consistent  basis,               
facilitate  our live web chat and process customer  e-mails.  Our               
telephone system is equipped with certain features including pop-               
up  screens  and  call blending capabilities  that  give  us  the               
ability    to   efficiently   utilize   our   customer    service               
representatives'  time, providing quality  customer  service  and               
support.   Our  customer service representatives receive  a  base               
salary  and are rewarded with commissions for achieving  targeted               
sales.                                                                          

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Our Web Site                                                                    

We   seek  to  combine  our  product  selection  and  pet  health               
information with the shopping ease of the Internet to  deliver  a               
convenient and personalized shopping experience.  We believe that               
our web site offers health and nutritional product selections for               
dogs  and  cats,  supported  by  relevant  editorial  and  easily               
obtainable  or retrievable resource information.  From  our  home               
page,  customers can search our web site for products and  access               
resources  on  a  variety  of  information  on  cats  and   dogs.               
Customers can shop at our web site by category, product  line  or               
individual  product.   We  attracted  approximately  3.8  million               
visitors to our website over the past 12 months (June 2002 to May               
2003), of which 12% of those visitors resulted in a sale, and our               
website  generated  44%  of our total sales  for  the  same  time               
period.                                                                         

Our Customers                                                                   
-------------                                                                   

As   of  May  31,  2003,  approximately  830,000  customers  have               
purchased from us within the last eighteen months.  During fiscal               
2003,  we  attracted  approximately 414,000 new  customers.   Our               
customers  are  located throughout the United  States,  with  the               
largest   concentration  of  customers  residing  in  California,               
Florida, Texas, New York, Georgia, Virginia and New Jersey.   The               
average retail purchase was approximately $71.                                  

While  our  primary focus has been on retail customers,  we  have               
also  sold  various non-prescription medications wholesale  to  a               
variety  of  businesses,  including  pet  stores,  groomers   and               
traditional  brick and mortar stores in the United  States.   For               
the  fiscal year ended March 31, 2003, the majority of our  sales               
were made to retail customers with less than 1% of our sales made               
to   wholesale  customers.   Our  focus  remains  on  the  retail               
customers,  and we anticipate that the percentage  of  our  total               
sales  attributable to wholesale sales will continue to  decrease               
in the future.                                                                  

Marketing                                                                       
---------                                                                       

The goal of our marketing strategy is to build brand recognition,               
increase  customer  traffic,  add  new  customers,  build  strong               
customer  loyalty,  maximize  reorders  and  develop  incremental               
revenue  opportunities. We have an integrated marketing  campaign               
that  includes  television advertising,  direct  mailing  and  e-               
mailing and online marketing.                                                   

Television Advertising                                                          

Our  television  advertising is designed to build  brand  equity,               
create awareness, and generate initial purchases of products  via               
phone, mail, fax and the Internet.  We have used 30 second and 15               
second  television  commercials to attract new  customer  orders,               
with this tagline "your pet's same exact medications delivered to               
your   home,   saving  you  time  and  money".   Our   television               
commercials typically focus on our ability to rapidly deliver  to               
customers the same medications offered by veterinarians,  but  at               
reduced  prices.  We generally purchase advertising  on  national               
cable  channels to target our key demographic groups.  We believe               
that   television  advertising  is  particularly  effective   and               
instrumental in building brand awareness.                                       

Direct Mailing and E-mailing                                                    

We  use  direct mailing and e-mailing, for our customers with  e-               
mail  accounts, to advertise our products to selected  groups  of               
customers.  We utilize potential customers from the responses  to               
our television advertising and our customer database to encourage               
and remind our customers to reorder.                                            

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Online Marketing                                                                

We supplement our traditional advertising with online advertising               
and  marketing efforts.  We are members of the LinkShare Network,               
which is an affiliate program with merchant clients and affiliate               
web sites.  This network is designed to develop and build a long-               
term, branded affiliate program in order to increase online sales               
and  establish  an  Internet  presence.   The  LinkShare  Network               
enables  us to establish link arrangements with other web  sites,               
as  well  as portals and search engines.  We also make our  brand               
available  to internet consumers by publishing targeted  keywords               
and  achieving prominent placement on the top search engines  and               
search  engine  networks,  including Google,  Microsoft  Network,               
Yahoo, and Overture.                                                            

Operations                                                                      
----------                                                                      

Purchasing                                                                      

We  purchase  our  products from a variety of sources,  including               
certain  manufacturers, domestic distributors,  and  wholesalers.               
We  have multiple suppliers for each of our products.  We  source               
prescription and non-prescription medications from a  variety  of               
national  distributors in order to obtain  the  lowest  cost.  We               
purchase  the majority of our health and nutritional  supplements               
directly  from  manufacturers.  Having strong relationships  with               
product  manufacturers will ensure the availability  of  adequate               
volume  of  products ordered by our customers, and enable  us  to               
provide   more  and  better  product  information.  Historically,               
substantially  all the  major  manufacturers  of prescription and               
non-prescription medications have declined to sell these products               
to   direct   marketing   companies,   including  us.   Sales  of               
prescription and  non-prescription  medication products accounted               
for  93%  and 92%  of our total  sales for the fiscal years ended               
March 31, 2003  and  2002,  respectively.   As part of our growth               
strategy,  we will  seek  to  develop direct  relationships  with               
leading   pharmaceutical  manufacturers   of  t he  more  popular               
prescription  and non-prescription medications.                                 

Order Processing                                                                

We  provide our customers with toll-free telephone access to  our               
customer  service  representatives.  Our  call  center  generally               
operates  from 8:00 AM to 11:00 PM Monday through Thursday,  8:00               
AM  to  9:00  PM  on Friday, 9:00 AM to 6:00 PM on Saturday,  and               
10:00  AM  to  5:00  PM on Sunday, Eastern  Standard  Time.   The               
process of customers purchasing products  through  us consists of               
a few simple steps.  A customer first places a  call to our  toll               
free  phone  number  or  visits  our  web  site.   The  following               
information  is needed  to process  prescription  orders: general               
pet  information, prescription, and  the  veterinarian's name and               
phone  number.  This information  is  entered  into  our computer               
system.  Then  our  pharmacists  and pharmacy  technicians verify               
all  prescriptions.    The  order   process  system  checks   for               
prescription  verification  for medication  orders  and  a  valid               
payment  method  for  all orders.  An invoice  is  generated  and               
printed  in  our fulfillment center, where items are  picked  for               
shipping.   The  customer's  order  is  then  selected  from  our               
inventory and shipped via priority mail or United Parcel Service.               
Our  customers enjoy the convenience of rapid home delivery, with               
approximately  69%  of all  orders  shipped within 24  hours  via               
priority  mail  or United Parcel Service.  Our  web  site  allows               
customers to easily browse and purchase substantially all of  our               
products and services on line.  Our site is designed to be  fast,               
secure  and  easy  to use with order and shipping  confirmations,               
with on-line order tracking capabilities.                                       

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Warehousing and Shipping                                                        

We  inventory our products and fill all customer orders from  our               
32,000  square foot facility in Pompano Beach, Florida.  We  have               
an in-house fulfillment and distribution operation, which is used               
to  manage  the entire supply chain, beginning with the placement               
of  the  order,  continuing through order  processing,  and  then               
fulfillment  and  shipment of the product to  the  customer.   We               
offer a variety of shipping options, including next day delivery.               
We  ship  to  anywhere in the United States served by the  United               
Parcel  Service  or  the United States Postal Service.   Priority               
orders are expedited in our fulfillment process.  Our goal is  to               
ship  the products the same day that the order is received.   For               
prescription  medications,  our  goal  is  to  ship  the  product               
immediately after the prescription has been authorized.                         

Customer Service and Support                                                    

We  believe that a high level of customer service and support  is               
critical  in retaining and expanding our customer base.  Customer               
service  representatives participate in ongoing training programs               
under  the  supervision of our training manager.  These  training               
sessions  include a variety of topics such as product  knowledge,               
computer  usage,  customer  service  tips  and  the  relationship               
between   veterinarians   and   us.     Our   customer    service               
representatives process customer calls, and respond to  customers               
via   e-mails  and  live  web  chat.   If  our  customer  service               
representatives are unable to respond to a customer's inquiry  at               
the  time  of the call, we strive to provide an answer within  24               
hours.   We  believe our customer service representatives  are  a               
valuable source of feedback regarding customer satisfaction.  For               
the last twelve months ended June 30, 2003, customer returns and                
credits averaged approximately 1.5% of total sales.                             

Technology                                                                      
----------                                                                      

We  utilize the latest integrated technologies in call center, e-               
commerce,   order   entry,   and  inventory   control/fulfillment               
operations.  The systems are custom configured by us to  optimize               
our  computer  telephone integration and mail  order  processing.               
The   system  is  designed  to  maintain  a  large  database   of               
specialized  information and process a  large  volume  of  orders               
efficiently and effectively.  Our systems provide our agents with               
real  time product availability information and updated  customer               
information  to enhance our customer service.  We  also  have  an               
integrated  direct  connection for  processing  credit  cards  to               
ensure  that  a  valid credit card number and authorization  have               
been  received at the same time our agents are on the phone  with               
the customers.  Our  information systems provide our agents  with               
records  of  all  prior contact  with a customer,  including  the               
customer's address,   phone number,  e-mail address,  fax number,               
prescription  information,  order history,  payment  history  and               
notes.                                                                          

Competition                                                                     
-----------                                                                     

The pet medications and health and nutritional supplements market               
is  competitive  and  highly fragmented. Our competitors  can  be               
divided into several groups including: veterinarians, other mail-               
order  suppliers  of pet medications and health  and  nutritional               
supplements,  and  web or online stores that  specialize  in  pet               
medications  and health and nutritional supplements.  We  believe               
that  the  following  are principal competitive  factors  in  our               
market:                                                                         

*   Product selection and availability, including the                       
availability of prescription and non-prescription                   
medications;                                                        
*   Brand recognition;                                                      
*   Reliability and speed of delivery;                                      
*   Personalized service and convenience;                                   
*   Price; and                                                              
*   Quality of web site content.                                            

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We  compete with  veterinarians in the  sale of  prescription and               
non-prescription  pet   medications and  health  and  nutritional               
supplements.   Many  pet  owners may prefer  the  convenience  of               
purchasing   the  pet  medications  or  health  and   nutritional               
supplements  at  the time of the veterinarian visit,  or  may  be               
hesitant  to  offend their veterinarian, by not purchasing  these               
products from the veterinarian.  In order to effectively  compete               
with  veterinarians, we must continue to educate pet owners about               
the service, convenience and savings offered by us.                             

We also  compete with brick  and mortar and  online  retailers of               
non-prescription   medications  and   health   and    nutritional               
supplements.   Many of these  competitors  have longer  operating               
histories, larger customer  or  user  bases,  a more  established               
online  presence, greater   brand  recognition  and significantly               
greater  financial,  marketing  and other  resources  than we do.               
Many  of  these  current  and  potential  competitors can  devote               
substantially  more resources to web site and systems development               
than we can.                                                                    

The  pet  medication market size is estimated to be approximately               
$3  billion, with veterinarians having the majority of the market               
share.   The cat and dog population is approximately 141 million,               
with approximately 62% of all households owning a pet.                          

We  believe that the following are the main competitive strengths               
which differentiate 1-800-PetMeds from the competition:                         

*   Experienced management team;                                            
*   Consumer benefit structure of savings and convenience;                  
*   Licensed pharmacy to conduct business in 49 states;                     
*   Operating / technology infrastructure in place;                         
*   Multiple sources of supply for pet medications; and                     
*   Quality customer service support.                                       

Intellectual Property                                                           
---------------------                                                           

We conduct our business under the trade name "1-800-PetMeds".  We               
believe this name, which is also our toll-free phone number,  has               
added  significant  value  and is  an  important  factor  in  the               
marketing  of our products.  We have also obtained the  right  to               
the  Internet addresses www.1800PetMeds.com, www.1888PetMeds.com,               
www.petmedexpress.com,  along  with  www.petmeds.com.    As  with               
phone  numbers,  we do not have and cannot acquire  any  property               
rights  in  an Internet address.  We do not expect  to  lose  the               
ability to use the Internet addresses; however, there can  be  no               
assurance in this regard and the loss of these addresses may have               
a  material adverse effect on our financial position and  results               
of operations.  We hold the  trade name  "Petmed Express[R]"  and               
"1-888-Petmeds[R]", which are our registered trademarks.                        

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Government Regulation                                                           
---------------------                                                           

Dispensing prescription medicines is governed at the state  level               
by the board of pharmacy, or similar regulatory agencies, of each               
state  where  prescription medications  are  dispensed.   We  are               
subject to regulation by the State of Florida and, in particular,               
are  licensed by the Florida Board of Pharmacy.  Our  license  is               
valid  until  February  28, 2004.  We are  also  licensed  and/or               
regulated  by 48 other state pharmacy boards and other regulatory               
authorities including, but not necessarily limited to,  the  Food               
and   Drug   Administration  ("FDA")  and   the   United   States               
Environmental Protection Agency ("EPA").  As a licensed  pharmacy               
in  the  State of Florida, we are subject to the Florida Pharmacy               
Act and regulations promulgated hereunder.  To the extent that we               
are  unable  to  maintain our license with the Florida  Board  of               
Pharmacy  as  a community pharmacy, or if we do not maintain  the               
licenses  granted by other state boards, or if we become  subject               
to  actions  by  the  FDA, or other enforcement  regulators,  our               
distribution  of  prescription medications to  pet  owners  could               
cease,  which  could  have  a  material  adverse  effect  on  our               
operations. See Legal Proceedings.                                              

Employees                                                                       
---------                                                                       

We  currently  have  164 full time employees, including:  100  in               
marketing and customer service; 16 in fulfillment and purchasing;               
37   in  our  pharmacy;  2  in  information  technologies;  5  in               
administrative  positions;  and 4 in  management.   None  of  our               
employees are represented by a labor union, nor governed  by  any               
collective bargaining agreements. We consider relations with  our               
employees as satisfactory.                                                      

Properties                                                                      
----------                                                                      

Our  facilities, including our principal executive  offices,  are               
located  at  1441  SW 29th Avenue, Pompano Beach,  FL  33069.  We               
purchased  this  building,  a 50,000  square  foot  building,  in               
February  1999, and financed it with a seven year, 7.75% mortgage               
with  a  commercial  bank  in the original  principal  amount  of               
$1,680,000. On May 31, 2001, we sold this building, which  houses               
our  principal executive offices and warehouse, to  an  unrelated               
third  party. We received gross proceeds of $2,150,000, of  which               
approximately $1,561,000 was used to pay off the mortgage, and we               
recognized a loss on the sale of approximately $185,000. We  then               
entered into a five-year term lease agreement for 20,000  of  the               
50,000  square foot Pompano Beach office building.   On  February               
22,   2002,  we  entered  into  a  lease  addendum  which   added               
approximately  12,000 square feet, effective  June  1,  2002,  to               
accommodate our warehouse expansion. On July 25, 2003  we  signed               
an  amendment  to  its  current  lease  agreement  to  obtain  an               
additional 8,000 square feet, with an option to add another 3,600               
square  feet,  to its current 32,000 square foot facility,  which               
will  be  available  October  1,  2003.   This  addition  to  the               
warehouse  was  necessary  to  increase  our  capacity  to  store               
additional inventory during our peak season.  The future  minimum               
annual  lease  payments  as of March 31, 2003,  are  as  follows:               
$313,000 for fiscal 2004, $361,000 for fiscal 2005, $376,000  for               
fiscal 2006, and $63,000 for fiscal 2007.                                       

We  believe our properties are in good condition, well-maintained               
and generally suitable and adequate to carry on our business.  We               
also  believe that we maintain sufficient insurance  coverage  on               
all of our real and personal property.                                          

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Legal Proceedings                                                               
-----------------                                                               

Various  complaints  had been filed with  the  Florida  Board  of               
Pharmacy.  These complaints, the majority of which were filed  by               
veterinarians who are in competition with us for the sale of  pet               
prescription-required  products,  alleged   violations   of   the               
Pharmacy  Practice Act and regulations promulgated  there  under.               
The  vast majority of the complaints alleged that we, through our               
pharmacists,     improperly    dispensed    prescription-required               
veterinary medication based on prescriptions verified through our               
discontinued  alternate  veterinarian  program.   The   alternate               
veterinarian  program used a veterinarian outside  the  state  of               
Florida  to  verify prescriptions for certain  pets  outside  the               
state  of  Florida.   While the program was  not  used  for  pets               
residing  in  the state of Florida, the complaints had,  for  the               
most  part, been filed with the Florida Board of Pharmacy.  Other               
complaints alleged the dispensing of medication without  a  valid               
prescription, the sale of non-conforming products  and  that  our               
pharmacy  was operating at the same location as another pharmacy,               
with  which it had a contractual relationship.  We contested  all               
allegations and continued discussions in an attempt  to  reach  a               
resolution of these matters.                                                    

In  February 2002, we voluntarily ceased the use of the alternate               
veterinarian  program, and in March 2002 a business decision  was               
made  to enter into a settlement agreement with the Florida Board               
of  Pharmacy,  rather  than to proceed with  costly  and  lengthy               
litigation.   In  April  2002,  the  Florida  Board  of  Pharmacy               
approved the settlement agreement.  The Florida Board of Pharmacy               
did  not  reach any finding of fact or conclusion of law that  we               
committed  any wrongdoing or violated any rules or laws governing               
the practice of pharmacy.  According to the settlement agreement,               
our  pharmacy  license was placed on probation for  a  period  of               
three  years and we, our pharmacists and contracted pharmacy  and               
pharmacist,   paid   approximately   $120,000   in   fines    and               
investigative costs, in July 2002.  We remain licensed  with  the               
State  of  Florida and continue to operate our principal business               
in Florida.                                                                     

Additional complaints have been filed with other states' Pharmacy               
Boards.   These complaints, the majority of which were  filed  by               
veterinarians who are in competition with us for the sale of  pet               
prescription-required products, allege violations of the Pharmacy               
Practice  Act and regulations promulgated there under.  The  vast               
majority   of   the  complaints  allege  that  we,  through   our               
pharmacists,     improperly    dispensed    prescription-required               
veterinary medication based on prescriptions verified through our               
alternate veterinarian program.  We contested all allegations and               
continued  discussions  in an attempt to reach  a  resolution  of               
these matters.                                                                  

In  fiscal  2003,  we  reached  settlement  agreements  with  the               
Louisiana, Missouri, New Mexico, and Ohio State Pharmacy  Boards.               
According  to  the  settlement agreements, we  were  required  to               
terminate the alternate veterinarian program in the state and our               
permit  was  placed on probation.  As of March 31, 2003,  we  had               
paid  all  fines  in full to cover any or all administrative  and               
investigative costs associated with these settlements.  There can               
be  no assurances made that other states will not attempt to take               
similar actions against us in the future.                                       

In  February  2000,  the  United States Environmental  Protection               
Agency  ("EPA") issued a Stop Sale, Use or Removal  Order  to  us               
regarding   the  alleged  distribution  or  sale  of   misbranded               
Advantage  products  in  violation of  the  Federal  Insecticide,               
Fungicide, and Rodenticide Act ("FIFRA"), as amended.  The  order               
provides  that we shall not distribute, sell, use or  remove  the               
products  listed  in  the order, which are allegedly  misbranded.               
The order further provides that we shall not commence any sale or               
distribution of those products without the prior written approval               
from  the  EPA.   The Stop Sale, Use or Removal  Order  does  not               
assert  any  claim for monetary damages; rather,  it  is  in  the               
nature  of  a  cease  and desist order.  We  denied  any  alleged               
violations.   On  February  16,  2000,  we  submitted  a  written               
response to the order.  The EPA assessed a fine in the amount  of               
$445,000.  In fiscal 2001 we accrued $445,000 of legal settlement               
expense.                                                                        

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In  September  2001,  we  and  the EPA  entered  into  a  Consent               
Agreement  and  Final  Order ("CAFO").  The settlement  agreement               
required  us  to  pay a civil penalty of $100,000 plus  interest,               
requiring a payment of $56,000, which was paid in September 2002,               
and  $53,000  due  on  September 30, 2003, a reduction  from  the               
previously  assessed fine of $445,000.  For the purpose  of  this               
CAFO,  we  admitted to the jurisdictional allegations set  forth,               
and  neither  admitted  nor denied the  alleged  violations.   On               
September  28,  2001, the CAFO was approved and  ordered  by  the               
regional  judicial officer.  Accordingly, a gain of $345,000  was               
reflected in the statement of income for the year ended March 31,               
2002, to reflect the adjustment to this settlement.                             

On March 19, 2002, Novartis Animal Health U.S., Inc. ("Novartis")               
filed  a  complaint against us and two other defendants  in  U.S.               
District  Court  for the Southern District of Florida.   Novartis               
purports  to assert seven claims related to our alleged  sale  of               
pet   medications  produced  for  a  Novartis  Australian  sister               
company:  Count  I:  Infringement of Registered  Trademark  Under               
Section  32  of  the  Lanham  Act, 15  U.S.C.   1114;  Count  II:               
Infringement  of Unregistered Trademarks Under Section  43(a)  of               
the  Lanham Act, 15 U.S.C.  1125(a); Count III: False Advertising               
Under  Section 43(a) of the Lanham act, 15 U.S.C.  1125(a); Count               
IV: Misleading Advertising Under Florida Statutory Law; Count  V:               
Deceptive and Unfair Trade Practices Under Florida Statutory Law;               
Count  VI:  Injury to Business Reputation Under Florida Statutory               
Law; Count VII: Common Law Unfair Competition.  Subsequent to the               
year  ended  March  31,  2003,  we  reached  a  final  settlement               
agreement   with   Novartis.   According  to   the   confidential               
settlement  agreement dated April 7, 2003, we had  satisfactorily               
resolved  the  contested issues raised by the complaint  and  the               
confidential  settlement  terms had no  material  impact  on  our               
operations and financial results.                                               

We  are  a  defendant in a lawsuit in Texas state district  court               
seeking  injunctive and monetary relief styled Texas State  Board               
of  Pharmacy  and State Board of Veterinary Medical Examiners  v.               
PetMed  Express, Inc. Cause No.GN-202514, in the  201st  Judicial               
District Court, Travis County, Texas.  In our initial pleading we               
denied  the  allegations contained therein.  We  will  vigorously               
defend, are confident of our compliance with the applicable  law,               
and finds wrong-on-the-facts the vast majority of the allegations               
contained in the Plaintiffs' supporting documentation attached to               
the  lawsuit.  Discovery has recently commenced.  At  this  early               
stage  of  the litigation it is difficult to assess any  possible               
outcome or estimate any potential loss in the event of an adverse               
outcome.                                                                        

Routine Proceedings                                                             
-------------------                                                             

We  are a party to routine litigation incidental to our business.               
Management does not believe that the resolution of any or all  of               
such  routine  litigation is likely to have  a  material  adverse               
effect on our financial condition or results of operations.                     

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MANAGEMENT                

Directors and Executive Officers                                                

Set  forth  below is information regarding the board of directors               
and executive officers of the Company:                                          

                                                                [Download Table]


       Name                         Office             Age 
---------------------       -----------------------   -----
                                                           
Marc A. Puleo, M.D.         Chairman of the Board          
                            and President               40 
Menderes Akdag              Chief Executive Officer        
                            and Director                42 
Bruce S. Rosenbloom         Chief Financial Officer        
                            and Treasurer               34 
Robert C. Schweitzer        Director                    56 
Ronald J. Korn              Director                    63 
Gian Fulgoni                Director                    55 
Frank J. Formica            Director                    59 

MARC PULEO, M.D., age 40, has served as Chairman of our Board  of               
Directors since our inception in January 1996.  From January 1996               
until  March  2000, Dr. Puleo also served as our President,  from               
January  1996  until March 2001, Dr. Puleo served  as  our  Chief               
Executive  Officer, from January 1996 until  May  2000,  and  Dr.               
Puleo served as our Treasurer from January 1996 to May 2001.  Dr.               
Puleo  has  also  been the President of South Florida  Anesthesia               
Professionals,  an  entity located in Fort  Lauderdale,  Florida,               
since founding that company in January 1996.  Dr. Puleo was  Vice               
President  of Dynamic Press, Inc., an offset printing and  direct               
marketing company, from June 1997 until June 1998.  Dr. Puleo, an               
anesthesiologist,  was  employed  with  Anesthesia   Professional               
Association,   North  Ridge  Medical  Center  and   North   Ridge               
Outpatient  Surgery  Center from December 1994  through  December               
1995.   Dr.  Puleo was an anesthesia resident with the University               
of  Illinois  Hospitals and Clinics, the Michael Reese  Hospital,               
the Westside Veteran's Administration Hospital, the University of               
Illinois  Eye and Ear Infirmary, the Nathan Cummings Surgicenter,               
and  the University of Illinois Pain Clinic, all located  in  the               
Chicago,  Illinois  area,  from  July  1991  through  June  1994.               
Dr.  Puleo  received his medical degree from  the  University  of               
Illinois College of Medicine, Chicago, Illinois.                                

MENDERES AKDAG, age 42, was appointed Chief Executive Officer  on               
March  16, 2001.  Prior to joining PetMed Express, from  November               
2000  until  March  2001,  Mr. Akdag served  as  Chief  Executive               
Officer  of  International Cosmetics Marketing Co. d/b/a  Beverly               
Sassoon & Co., a publicly held (OTCBB: ICMK) direct sales company               
distributing skin care and nutritional products.  From  May  1991               
until  August 2000, Mr. Akdag was employed by Lens Express, Inc.,               
a  direct sales company distributing replacement contact  lenses,               
serving  as its President from May 1996 until August 2000,  Chief               
Executive  Officer  and a member of the Board of  Directors  from               
August  1992  until May 1996, and Chief Financial Officer  and  a               
member of the Board of Directors from May 1991 until August 1992.               
On  December  14, 1998, Netel Inc., a corporation  in  which  Mr.               
Akdag  served  as  a  member of the Board of Directors,  filed  a               
Petition   for  Chapter  11  bankruptcy  in  the  United   States               
Bankruptcy  Court Southern District of Florida.   The  proceeding               
was styled IN RE: NETEL, INC., CASE NO. 98-28929-BKC-PGH. On July               
19,  1999,  the  Bankruptcy Court entered an Order Confirming  an               
Amended  Chapter  11 Plan. On December 21, 1999,  the  Bankruptcy               
Court  entered a Final Decree, Discharge of Trustee,  and  closed               
the  case.  Mr.  Akdag  holds a Bachelor  of  Science  degree  in               
Business  Administration  with  a  major  in  finance  from   the               
University of Florida where he graduated with high honors.                      

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BRUCE  ROSENBLOOM, age 34, was appointed Chief Financial  Officer               
on May 30, 2001.  Mr. Rosenbloom served as the Manager of Finance               
and  Financial Reporting of Cooker Restaurant Corporation, a $147               
million, 65 location, publicly held (OTCBB: CGRT) restaurant,  in               
West Palm Beach, Florida, from December 2000 until May 2001.  Mr.               
Rosenbloom's duties included all internal and external  reporting               
including all SEC filings and Annual Report to Shareholders.  Mr.               
Rosenbloom  was a senior audit accountant for Deloitte  &  Touche               
LLP,  an international accounting firm, West Palm Beach, Florida,               
from  January  1996  until  December 2000.   Mr.  Rosenbloom  was               
responsible  for  planning and conducting all  aspects  of  audit               
engagements  for clients in various industries, including  direct               
marketing, healthcare, manufacturing, financial institutions, and               
professional service firms.  From August of 1992 to May of  1995,               
Mr.    Rosenbloom    was   an   Account   Executive    for    MCI               
Telecommunications.    Mr.   Rosenbloom,   a   certified   public               
accountant,  received a Bachelor of Science degree in  Accounting               
from Florida Atlantic University, Boca Raton, Florida in 1996 and               
a  Bachelor  of  Arts degree in Economics from the University  of               
Texas, Austin, Texas in 1992.                                                   

ROBERT C. SCHWEITZER, age 56, was the Regional President of Union               
Planters  Bank for Broward and Palm Beach County Florida  markets               
from  April  1999  to  December 2002.   Prior  to  joining  Union               
Planters, Mr. Schweitzer served as the Executive VP and  Head  of               
Commercial  Banking for Barnett Bank/NationsBank in Jacksonville,               
Florida from 1993 to 1999.  Other positions held include Director               
and  Head  of  Real Estate Consulting for Coopers  &  Lybrand  in               
Washington, D.C.; Senior VP and Manager of Central North  America               
Real  Estate for the First National Bank of Chicago, and  Manager               
of Domestic Credit Process Review; Senior VP & Manager of Central               
North  American Banking for Wachovia Bank.  Mr. Schweitzer  holds               
an  MBA from the University of North Carolina, and a Bachelor  of               
Science degree from the United States Naval Academy.                            

RONALD  J.  KORN, age 63, has been the President of  Ronald  Korn               
Consulting, a business consulting firm, since 1991.  He served as               
the  Managing  Partner of KPMG, LLP's Miami office from  1985  to               
1991.   Mr.  Korn held various positions including  Partner  with               
KPMG, an international accounting firm, from 1961 until 1991.  He               
has  served  as  a Director of TOUSA Homes, Inc. (formerly  Engle               
Homes,  Inc.) since 1992, and a Director, Chairman of  the  Audit               
Committee, and member of the Loan Committee of Horizon Bank,  FSB               
since  1999.  He  was appointed to serve as a Director  of  Ocwen               
Financial  Corporation (NYSE:OCN) on July  31,  2003.   Mr.  Korn               
previously  served  as  a  Director and  Chairman  of  the  Audit               
Committee   of   Vacation  Break  U.S.A.,  Inc.  and   Magicworks               
Entertainment Corporation, and Non-Executive Chairman  of  Carole               
Korn Interiors, Inc.    Mr. Korn holds a Juris Doctor degree from               
the  New  York  University Law School and a Bachelor  of  Science               
degree  in Economics from the University of Pennsylvania, Wharton               
School.                                                                         

GIAN FULGONI, age 55, has been the Executive Chairman of ComScore               
Networks,  Inc.  since 1999.  From 1981 until 1998,  Mr.  Fulgoni               
served  as  president and chief executive officer of  Information               
Resources, Inc. (IRIC: NASDAQ).  He was a member of our Board  of               
Directors  from August 1999 through November 2000.   Mr.  Fulgoni               
currently serves as a member of the Board of Directors of  Easter               
Seals, Chicago.  Mr. Fulgoni served on the Board of Directors  of               
Platinum Technology, Inc. from 1990 to 1999, U.S. Robotics,  Inc.               
from  1991  to 1994, and Yesmail.com, Inc. in 1999.  Educated  in               
the  U.K.,  Mr. Fulgoni holds a Masters degree in Marketing  from               
the  University of Lancaster and a Bachelor of Science degree  in               
Physics from the University of Manchester.                                      

FRANK J. FORMICA, age 59, has served as a member of our Board  of               
Directors  since August 11, 2003.  Mr. Formica has  served  as  a               
legal   consultant  and  expert  in  corporate   securities   and               
securities industry litigation and arbitration cases since  1999.               
From 1969 until 1999, Mr. Formica held various positions with the               
National  Association of Securities Dealers  ("NASD"),  including               
Director   of   the  NASD's  Congressional  and   State   Liaison               
Department,  Director  of the Corporate Finance  Department,  and               
Vice  President and Deputy General Counsel.  Mr. Formica received               
his  J.D.  degree from the Washington College of Law at  American               
University  and an undergraduate degree from Ohio University.  He               
is a member of the New York State Bar.                                          

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There  are no familial relationships between any of the executive               
officers and directors.                                                         

On   November  13,  2002,  Messrs.  Kenneth  Jacobi  and  Huseyin               
Kizanlikli  resigned as members of our Board of  Directors.   The               
resignations were not related to a disagreement with  us  on  any               
matter  related  to our operations, policies  or  practices.   On               
November  14,  2002 through November 19, 2002, we appointed  four               
new  board members to our Board of Directors.  Joining our  Board               
of Directors were Messrs. Robert C. Schweitzer, Ronald  J.  Korn,               
Gian  Fulgoni,  and our Chief Executive Officer, Menderes  Akdag.               
On  August 11,  2003, Guven Kivilcim resigned from  our  Board of               
Directors and, on the same date, we appointed Frank J. Formica as               
a  new  member of our Board. The resignation of Mr. Kivilcim  was               
not  related to a disagreement with us on any matter  related  to               
our operations, policies or practices.                                          

Board of Directors                                                              
------------------                                                              

Each  director  is elected at our annual meeting of  shareholders               
and  holds  office until the next annual meeting of shareholders,               
or  until  the successors are elected and qualified. At  present,               
our bylaws provide for not less than one director. Currently,  we               
have  six directors. The bylaws permit the Board of Directors  to               
fill  any  vacancy  and such director may serve  until  the  next               
annual  meeting of shareholders or until his successor is elected               
and qualified. Officers are elected by the Board of Directors and               
their  terms  of  office are, except to the  extent  governed  by               
employment contracts, at the discretion of the Board.                           

Compensation of Independent Directors                                           
-------------------------------------                                           

Each  independent Director will be compensated $10,000  annually,               
and receive stock options to purchase 30,000 shares of our common               
stock,  which will vest equally over a three year period,  at  an               
exercise  price per share equal to the fair market value  on  the               
day of grant.                                                                   

Committees of the Board of Directors                                            
------------------------------------                                            

The  Board of Directors has established an audit committee and  a               
compensation  committee,  both of which  are  comprised  of  non-               
employee   independent  directors.   The  compensation  committee               
establishes   guidelines   and   standards   relating   to    the               
determination   of  executive  compensation,  reviews   executive               
compensation  policies and recommends to our board  of  directors               
compensation for our executive officers and other employees.  Our               
compensation committee also administers our stock incentive  plan               
and  determines the number of shares covered by,  and  terms  of,               
options  to be granted to executive officers and other  employees               
under this plan.                                                                

The  audit  committee  recommends independent  auditors,  reviews               
internal   financial  information,  reviews  audit  reports   and               
management  letters,  participates in the  determination  of  the               
adequacy  of the internal accounting control system, reviews  the               
results  of audits with independent auditors, oversees  quarterly               
and   yearly   reporting,  and  is  responsible   for   policies,               
procedures,  and  other matters relating to  business  integrity,               
ethics   and  conflicts  of  interests.   The  members   of   the               
compensation  and audit committees are Messrs. Schweitzer,  Korn,               
and Fulgoni.                                                                    

Compensation Committee Interlocks and Insider Participation                     
-----------------------------------------------------------                     

No member of our compensation committee serves or in the past has               
served  as  a  member of another entity's board of  directors  or               
compensation  committee, which entity has one or  more  executive               
officers  serving  as  a  member of our  board  of  directors  or               
compensation committee.                                                         

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EXECUTIVE COMPENSATION                

The   following  table  sets  forth  the  annual  and   long-term               
compensation paid by us for services performed on our behalf  for               
the  last three completed fiscal years ended March 31, 2003, 2002               
and  2001, with respect to our chief executive officer and  other               
executive  officers  serving  as  such  who  earned  compensation               
greater than $100,000 in these fiscal years:                                    

Summary Compensation Table                

                                                        [Enlarge/Download Table]


-------------------------------------------------------------------------------------------------------------
                                 Annual Compensation                             Long-Term Compensation      
                          ---------------------------------            --------------------------------------
                                                                           Awards     Payouts                
                                                                       --------------------------------------
                                                                        Securities                           
Name and                                                    Other       Underlying     LTIP      All Other   
Principal                                                   Annual        Options/    Payouts   Compensation 
Position                   Year      Salary     Bonus   Compensation($)   SARs (#)      ($)         ($)      
------------------------------------------------------------------------------------------------------------ 
                                                                                                             
Marc Puleo, M.D.,          2003      $100,000   50,000        -            240,000       -           -       
 Chairman of the Board     2002        88,462     -           -               -          -           -       
 and President             2001        85,000   15,000        -            200,000       -           -       

Menderes Akdag,            2003       200,000     -           -               -          -           -       
 Chief Executive Officer   2002       176,923     -           -               -          -           -       
 and Director              2001         6,000     -           -            750,000       -           -       

Bruce S. Rosenbloom,       2003       100,000      500        -               -          -           -       
 Chief Financial Officer   2002        77,962     -           -             75,000       -           -       
                           2001          -        -           -               -          -           -       

Employment Agreements                                                           
---------------------                                                           

On  March 16, 2001, we entered into an employment agreement  with               
Menderes  Akdag  to serve as our Chief Executive Officer.   Under               
the  terms of this three-year agreement we will pay Mr. Akdag  an               
annual  salary  of  $150,000 for the  first  six  months  of  the               
agreement, and thereafter his annual salary will be increased  to               
$200,000.  We  can terminate the employment of Mr.  Akdag  either               
upon  mutual  consent or for cause.  If we should  terminate  Mr.               
Akdag  for  cause, or if Mr. Akdag should terminate the agreement               
without  "good reason" as described in the employment  agreement,               
no  severance benefits shall be paid.  If we should terminate Mr.               
Akdag  without cause, we must give Mr. Akdag three months  notice               
and continue to compensate him under the terms of this employment               
agreement  during those three months.  At the end of  the  three-               
month period, we  must pay Mr. Akdag severance benefits equal  to               
the  annual  base  salary of the executive,  and  any  previously               
granted  but  unvested  options  shall  immediately  vest.    The               
agreement  can  be  terminated upon the  mutual  consent  of  the               
parties, or upon 90 days notice by us during which time we  shall               
continue  to  compensate him under the terms  of  his  employment               
agreement. We also granted Mr. Akdag options to purchase  750,000               
shares of our common stock under our 1998 Stock Option Plan at an               
exercise  price  of $.32 per share, which vest  at  the  rate  of               
187,500  options on each of March 16, 2001, 2002, 2003 and  2004,               
exercisable for a period of three years from the date of vesting.               
The   employment   agreement  contains  customary  non-disclosure               
provisions, as well as a non-competition restriction for a period               
of 18 months following the termination of the agreement.                        

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On  May  1, 2000, we entered into a two-year employment agreement               
with Marc Puleo, M.D., as Chief Executive Officer, which provided               
for annual cash compensation to him of $150,000.  On November  8,               
2000,  Dr.  Puleo's employment agreement dated May  1,  2000  was               
amended to reflect a salary of $75,000 annually. Under the  terms               
of  the  employment agreement Dr. Puleo received an annual salary               
of  $75,000, subject to increase no less frequent than an  annual               
review  by  our  board  of  directors.  Dr.  Puleo's  salary  was               
increased  to  $100,000 in  fiscal 2002, and  then  increased  to               
$150,000  in  May 2003.  We can terminate the employment  of  Dr.               
Puleo  either  upon mutual consent or for cause.   If  we  should               
terminate  Dr. Puleo for cause, or if Dr. Puleo should  terminate               
the   agreement  without  "good  reason"  as  described  in   the               
employment agreement, no severance benefits shall be paid.  If we               
should terminate Dr. Puleo without cause, we must give Dr.  Puleo               
three  months  notice and continue to compensate  him  under  the               
terms of this employment agreement during those three months.  At               
the  end  of  the  three-month period,  we  must  pay  Dr.  Puleo               
severance  benefits  equal  to the  annual  base  salary  of  the               
executive, and any previously granted but unvested options  shall               
immediately vest.  If we should terminate Dr. Puleo for cause, as               
defined  in employment agreement, no severance benefits shall  be               
paid.  The agreement can be terminated upon the mutual consent of               
the  parties, or upon 90 days notice by us during which  time  we               
shall  continue  to  compensate  him  under  the  terms  of   his               
employment agreement, or his contract will renew annually.                      

Option/SAR Grants in Last Fiscal Year                                           
-------------------------------------                                           

The  following  table includes information as  to  the  grant  of               
options to purchase shares of common stock during the fiscal year               
ended  March  31,  2003  to  each person  named  in  the  Summary               
Compensation Table:                                                             

                                                        [Enlarge/Download Table]

                                       Individual Grants                                                 
                      ------------------------------------------------------------   Potential Realized  
                      Number of        Percent of                                     Value at Assumed   
                      Securities       Total Options/                               Annual Rates of Stock
                      Underlying       SARs granted     Exercise or                   Price Appreciation 
                      Options/SARS     to Employees     Base Price    Expiration        for Option Term  
       Name           Granted (#)      in Fiscal Year    ($/share)        Date          5%        10%    
---------------------------------------------------------------------------------------------------------
                                                                                                         
Marc Puleo, M.D.          240,000 (a)      100%         $    1.05     05/20/06        306,308     368,953

Menderes Akdag               -              -                -           -               -           -   

Bruce S. Rosenbloom          -              -                -           -               -           -   

(a)  We  granted Dr. Puleo options to purchase 240,000 shares  of               
our  common stock  on May 20,  2002,  under  the  1998 Stock          
Option Plan:  240,000 options  at an exercise price of $1.05          
per share which  vest at the  rate of 80,000 options on each          
of May 20, 2003 2004, and 2005.                                       

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Option Exercises and Holdings                                                   
-----------------------------                                                   

The  following table sets forth, as of March 31, 2003, the number               
of  stock options and the value of unexercised stock options held               
by  the  Named  Executive  Officers and the  exercises  of  stock               
options  during  the  year ended March  31,  2003  by  the  Named               
Executive Officers:                                                             

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END               
STOCK OPTION VALUES               

                                                        [Enlarge/Download Table]

                                                        Number of Securities            Value of Unexercised    
                       Shares                          Underlying Unexercised           In-the-Money Options    
                    Acquired on       Value        Options at Fiscal Year End (#)     at Fiscal Year End ($) (1)
Name                Exercise (#)    Realized ($)   Exercisable      Unexercisable   Exercisable    Unexercisable
----------------------------------------------------------------------------------------------------------------
                                                                                                                

Marc Puleo, M.D.        300,000     $   207,000      1,400,000          240,000     $ 1,734,000    $     314,400

Menderes Akdag          375,000         648,750        187,500          187,500         382,500          382,500

Bruce S. Rosenbloom        -               -            25,000           50,000          24,333           48,667

(1)   Represents  the  difference  between the  closing  price of               
($2.36)  of our  Common stock on  March 31, 2003,  the last         
trading  day of  our 2003 fiscal year,  and the exercise of         
the options.                                                        

EQUITY COMPENSATION PLAN INFORMATION                

The following table reflects certain information about our common               
stock  that may be issued upon the exercise of options under  our               
existing 1998 stock option plan as of August 12, 2003:                          

                                                        [Enlarge/Download Table]

                                             (a)                      (b)                          (c)              
                                                                                      Number of securities remaining
                                  Number of securities to      Weighted average       available for future issuance 
                                to be issued upon exercise     exercise price of        under equity compensation   
                                  of outstanding options,     outstanding options,     plans (excluding securities  
Plan category                       warrants, and rights      warrants and rights        reflected in column (a))   
--------------------------------------------------------------------------------------------------------------------
                                                                                                                    
Equity compensation plans                                                                                           
approved by security holders              2,075,103                  $ 1.38                     2,924,897           

Equity compensation plans not                                                                                       
approved by security holders                 45,000                  $ 1.33                         -               
                                          ---------                                             ---------           
Total                                     2,120,103                                             2,924,897           
                                          =========                                             =========           

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1998 Stock Option Plan                                                          
----------------------                                                          

Our  1998 Stock Option Plan, adopted July 1998, provides for  the               
grant  of  options  to  purchase up to 5 million  shares  to  key               
employees, including officers, and to non-employee directors  and               
consultants.  The purpose of this plan is to attract  and  retain               
persons   eligible   to  participate  in   the   plan,   motivate               
participants  to achieve our long-term goals by further  aligning               
the  interests  of  participants with those of  our  shareholders               
through compensation that is directly linked to the profitability               
of our business and increases in shareholder value. These options               
are  intended to qualify either as incentive stock options within               
the  meaning of Section 422 of the Internal Revenue Code,  or  as               
non-statutory  stock  options, which are  options  that  are  not               
intended to meet the requirements of that section of the Internal               
Revenue Code.                                                                   
The plan is administered by the compensation committee. Under the               
plan,  our compensation committee has the authority to determine:               
the persons to whom options will be granted, the number of shares               
to  be  covered  by each option, exercise price of  each  option,               
whether  the  options granted are intended to be incentive  stock               
options, the manner of exercise, and the time, manner and form of               
payment upon exercise of an option.                                             
Incentive stock options granted under the plan may not be granted               
at a price less than the fair market value of our common stock on               
the date of grant (or less than 110% of the fair market value  in               
the  case of employees holding 10% or more of our voting  stock).               
Non-statutory  options  may  be  granted  at  an  exercise  price               
established  by our board of directors, but cannot be  less  than               
par  value per share ($.001) of our common stock. Incentive stock               
options granted under the plan must expire not more than 10 years               
from  the  date of grant, and not more than five years  from  the               
date  of  grant  in the case of incentive options granted  to  an               
employee who holds 10% or more of our voting stock.                             
As  of  August 12, 2003, options to purchase 2,075,103 shares  of               
our  common stock, at exercise prices ranging from $.32 to  $8.00               
per share, were outstanding under the Plan.                                     

CERTAIN TRANSACTIONS                

Guven  Kivilcim, a member of our board of directors from November               
2000 to August 11, 2003, has an interest in Intelligent Switching               
&  Software LLC, and Numind Software Systems, Inc., with which we               
conducted  business with during the fiscal years ended March  31,               
2003 and 2002.  Intelligent Switching & Software LLC provided  us               
with   long  distance  telecommunication  services,  and   Numind               
Software  Systems,  Inc. provided us with  Internet  and  website               
design  and  hosting services. We paid $154,000  and  $64,000  to               
Intelligent  Switching  & Software LLC, and  $45,000  and  $0  to               
Numind  Software  Systems, Inc., for services during  the  fiscal               
years ended March 31, 2003 and 2002, respectively. We owed $5,000               
and  $64,000 to Intelligent Switching & Software LLC, and $14,000               
and $37,000 to Numind Software Systems, Inc., which were included               
in  our  accounts payable balance as of March 31, 2003 and  2002,               
respectively.   As  of approximately December  31,  2002,  we  no               
longer conduct business with these companies.                                   

We  believe  that transactions with our officers,  directors  and               
principal  shareholders, and companies they are affiliated  with,               
have  been made upon terms no less favorable to us than we  might               
receive from unaffiliated third parties. We have adopted a policy               
whereby  all  transactions between us and  one  or  more  of  our               
affiliates  must  be approved in advance by  a  majority  of  our               
disinterested directors.                                                        

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PRINCIPAL SHAREHOLDERS                

The  following  table  shows  certain  information  known  to  us               
regarding our common stock beneficially owned at August 12, 2003,               
by:                                                                             

*       each  person who is known by us to own beneficially  or             
exercise voting or dispositive control over 5% or  more     
of our common stock,                                        
*       each our executive officers and directors, and                      
*       all executive officers and directors as a group.                    

Under  securities law, a person is considered a beneficial  owner               
of  any  securities  that the person has  the  right  to  acquire               
beneficial  ownership  of within 60 days.   Except  as  otherwise               
indicated,  we have been informed that the persons identified  in               
the table have sole voting and dispositive power with respect  to               
their shares.                                                                   

This  table  is  based  upon 19,349,458 shares  of  common  stock               
outstanding at August 12, 2003, and does not give effect to:                    

*      the  issuance of  up to  4,822,603 shares that would be            
issued in the  event outstanding  options and  warrants     
are  exercised  and upon the  conversion of convertible     
preferred  stock,  except  with  respect to  beneficial     
ownership of shares attributed to the named person.         

Unless otherwise indicated below, the address for each person  is               
1441 SW 29 Avenue, Pompano Beach, Florida 33069.                                

                                                                [Download Table]

        Name                   Number of Shares      Percent of Shares
of Beneficial Owner           Beneficially Owned        Outstanding   
-------------------           ------------------     -----------------
                                                                      

Tricon Holdings, LLC              9,542,500     (a)        44.4%      
Marc Puleo, M.D.                  2,743,450     (b)        13.6%      
Guven Kivilcim                    2,167,200     (c)        10.9%      
International Consultants, LLC    1,111,000     (d)         5.7%      
Menderes Akdag                      537,500     (e)         2.8%      
Bruce S. Rosenbloom                  40,267     (f)          *        
Robert C. Schweitzer                  2,000     (g)          *        
Ronald J. Korn                         -        (g)          -        
Gian Fulgoni                           -        (g)          -        
Frank J. Formica                       -        (h)          -        

All executive officers                                                
  and directors as a group                                            
  (seven persons)                 3,323,217     (i)        16.2%      


-------------                                                                   

* Less than 1% of the issued and outstanding shares.                            

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(a)  Tricon   Holdings,  LLC,   ("Tricon")   holdings   include             
2,160,000  shares issuable upon exercise  of  warrants  at        
$.33  per  share, until November 2005. Emel Yesil  is  the        
sole  manager  of Tricon.  Creslin Limited ("Creslin")  is        
the  sole  member (shareholder) of Tricon.  Mr. Robert  G.        
Guest  is  the  officer, and Mr. Guest and Christopher  J.        
Pitaluga  are  the directors of Creslin.  Creslin  Limited        
Trust  owns  99% of Creslin.  Abacus Trustees  (Gibraltar)        
Limited   is  the  trustee  and  Mustafa  Yesil   is   the        
beneficiary of the Creslin Limited Trust.  Emel  Yesil  is        
the daughter of Mustafa Yesil.  The address for Tricon  is        
1020 N.W. 163rd Drive, Miami, FL 33169.                           

(b)  Dr. Puleo's  holdings  include  1,863,450  shares  of  our             
common stock held by Marpul Trust, a trust established  by        
Dr.  Puleo under an agreement dated September 3, 1999  and        
of   which   he   is  the  beneficiary.   Southpac   Trust        
International,  Inc. is a trustee of  Marpul  Trust.   Dr.        
Puleo's holdings also include vested options held  by  him        
to  purchase 600,000 shares of common stock at  $1.25  per        
share  until May 2008, 200,000 shares of common  stock  at        
$.35  per  share  until March 2006, and 80,000  shares  of        
common  stock  at  $1.05 per share  until  May  2006,  but        
exclude  options to purchase an additional 160,000  shares        
of common stock at $1.05, which have not vested yet.              

(c) Mr.  Kivilcim  holdings  include  540,000  shares  of  our            
common  stock  issuable upon the exercise of  warrants  at        
$.33 per share, until November 2005.  The address for  Mr.        
Kivilcim is 436 Alamanda Drive, Hallandale, FL  33009.            

(d) As  reflected  on  the Schedule 13G, which was filed  with            
the  Securities and Exchange Commission on  September  25,        
2002.   The address for International Consultants, LLC  is        
45 Grand Bay Drive, Key Biscayne, FL 33149.                       

(e) Mr.  Akdag's  holdings include  vested options to purchase            
187,500 shares of our common stock at $.32 per share until        
March 2006,  but exclude options to purchase an additional        
187,500 shares  of our  common  stock at  $.32  per share,        
which have not yet vested.                                        

(f) Mr. Rosenbloom's  holdings  include   options to  purchase            
16,667 shares  of  our  common  stock at  $1.65 per  share        
until May 2005, 16,667 shares of our common stock at $1.65        
per share until  May 2006,  and 833 shares  of our  common        
stock  at $.86  per share until  March 2006,  but  exclude        
options to  purchase  an additional  16,666 shares  of our        
common stock  at $1.65  per  share, 16,667 shares  of  our        
common  stock at $.86 per share,  and 15,000 shares of our        
common stock at $3.45 per share which have not yet vested.        

(g) Each  of Mr. Schweitzer's,  Mr. Korn's, and  Mr. Fulgoni's            
holdings exclude options to purchase an additional  30,000        
shares of our common stock at $1.90 per share,  which have        
not yet vested.                                                   

(h) Mr. Formica's  holdings exclude options to purchase 30,000            
shares  of our common stock at $7.90 per share, which have        
not yet vested.                                                   

(i) Incorporates (a) through (h) above.                                   

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DESCRIPTION OF SECURITIES               

As of August 12, 2003, we had authorized 40,000,000 shares of par               
value  $0.001  common stock, with 19,349,458  shares  issued  and               
outstanding. Additionally, we have authorized 5,000,000 shares of               
preferred stock, with 2,500 shares issued and outstanding.                      

Common stock                                                                    
------------                                                                    

The  holders  of Common stock are entitled to one vote  for  each               
share  held  of  record  on  all  matters  to  be  voted  on   by               
shareholders. There is no cumulative voting with respect  to  the               
election of directors, with the result that the holders  of  more               
than  50%  of the shares voted for the election of directors  can               
elect  all  of  the  directors. The holders of Common  stock  are               
entitled  to  receive dividends when, as and if declared  by  the               
Board  of  Directors out of funds legally available therefor.  In               
the  event  of  our liquidation, dissolution or winding  up,  the               
holders  of  Common stock are entitled to share  ratably  in  all               
assets remaining available for distribution to them after payment               
of  liabilities and after provision has been made for each  class               
of  stock,  if  any,  having preference over  the  Common  stock.               
Holders  of  shares of Common stock, as such, have no conversion,               
preemptive  or  other  subscription  rights,  and  there  are  no               
redemption  provisions applicable to Common  stock.  All  of  the               
outstanding shares of Common stock are, and the shares of  Common               
stock  offered  hereby, will be duly authorized, validly  issued,               
fully paid and nonassessable.                                                   

Preferred Stock                                                                 
---------------                                                                 

We  are  authorized to issue 5,000,000 shares of Preferred  Stock               
with   such  designation,  rights  and  preferences  as  may   be               
determined   from  time  to  time  by  the  Board  of  Directors.               
Accordingly,  the  Board  of  Directors  is  empowered,   without               
shareholder  approval, to issue Preferred  Stock  with  dividend,               
liquidation,  conversion,  voting  or  other  rights  that  could               
adversely affect the voting power or other rights of the  holders               
of  the  Common  stock. In the event of issuance,  the  Preferred               
Stock could be utilized, under certain circumstances, as a method               
of discouraging, delaying or preventing a change in control.                    

In  April  1998, we designated 250,000 shares of  our  $.001  par               
value  preferred stock as "Convertible Preferred Stock".  On  the               
same  date, we issued all 250,000 shares at a price of $4.00  per               
share.                                                                          

The  designations,  rights  and  preference  of  the  Convertible               
Preferred Stock provide that:                                                   

*  each share may pay dividends at our sole discretion; we have             
not paid, and do not anticipate paying in the foreseeable             
future, dividends on the Convertible Preferred Stock;                 
*  in the event  of the  liquidation or  winding up of  PetMed,             
each share has a liquidation value of $4.00 plus all accrued          
but  unpaid dividends,  if any,  are entitled  to receive  a          
liquidating distribution before any distribution may be made          
to holders  of our  common stock  and other  Series  of  our          
preferred stock;                                                      
*  the holders of the shares of Convertible Preferred Stock are             
entitled to one vote per share on all matters submitted to a          
vote of our shareholders;                                             
*  the shares are not redeemable;                                           
*  each  share is convertible into approximately 4.05 shares of             
our  common stock at  any time at the  option of the holder;          
and                                                                   
*  the shares have certain anti-dilution protections.                       

As  of August 12, 2003, 2,500 shares of the Convertible Preferred               
Stock remained unconverted and outstanding.                                     

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Common Stock Purchase Warrants                                                  
------------------------------                                                  

In  connection with our sale and issuance of our shares of common               
stock  on  November  22,  2000, we issued common  stock  purchase               
warrants  to  Tricon Holdings, LLC to purchase  an  aggregate  of               
3,000,000  shares of our common stock.  Resale of the  shares  of               
our  common  stock  issuable upon exercise of these  warrants  is               
covered by this prospectus.  The warrants are exercisable:                      

*  at a price of $.33 per share; and                                        
*  during the five year period terminating November 22, 2005.               

The  number of shares issuable upon exercise of the warrants, and               
the exercise price, is subject to adjustment in the event of:                   

*  subdivisions, combinations, stock dividends, mergers  and/or             
reclassifications of our common stock;                                
*  mergers;                                                                 
*  certain distributions on account of our common stock; and/or             
*  our  issuance of  additional  common stock  at less than the             
exercise price  of the warrants  on the date of  issuance or          
less than the closing price per share of our common stock on          
the date of issuance.                                                 

Transfer Agent                                                                  
--------------                                                                  

The  Transfer  Agent for our shares of common  stock  is  Florida               
Atlantic  Stock  Transfer, Inc. ("FAST"),  7130  Nob  Hill  Road,               
Tamarac,  Florida 33321. The telephone number for FAST  is  (954)               
726-4954.                                                                       

SELLING SHAREHOLDERS                

Overview                                                                        
--------                                                                        

This prospectus relates to the periodic offers and sales of up to               
12,590,985 shares of common stock by the selling security holders               
listed  below and their pledgees, donees and other successors  in               
interest.   Common  shares  registered  for  resale  under   this               
prospectus  constitute 57% of our issued and  outstanding  common               
shares  as  of  August  12, 2003, assuming the  exercise  of  the               
warrants and options by the selling shareholders, which includes:               

*  9,845,985 shares of our common stock; and                                

*  2,745,000 shares of  our  common  stock  issuable  upon  the             
exercise of outstanding warrants, including:                          
*  2,700,000 shares  at  an  exercise price  of  $.33  per        
share.  In November, 2000  we  sold  10,000,000  shares     
of  common stock  and  five  year warrants  to purchase     
3,000,000 shares of  our  common stock  at an  exercise     
price  of  $.33 per share  to  an accredited  investors     
in  a  private   placement  exempt  from   registration     
under   the   Securities  Act  of  1933,   as   amended     
("Securities   Act")  in    reliance   on    exemptions     
provided  in Section 4(2) and Regulation D  promulgated     
thereunder.  We received gross  proceeds of  $2,000,000     
from this transaction.                                      

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*  45,000 shares at an exercise  price of $1.33 per share.        
In April 1998, we issued non-plan options to purchase a     
total of 91,500  shares of  our common stock,  of which     
46,500 have  been exercised,  at an  exercise price  of     
$1.33 per share to an employee in a private transaction     
exempt from  registration  under the  Securities Act in     
reliance on exemptions provided in Section 4(2).            

The following table sets forth:                                                 

*  the name of each selling security holder;                                
*  the  amount  of common  stock  owned  beneficially  by  each             
selling  security   holder  (which  includes   those  shares          
underlying options and warrants);                                     
*  the  number of  shares that  may be offered  by each selling             
shareholder pursuant to this prospectus;                              
*  the number of shares to be owned by each selling shareholder             
following sale of the shares covered by this prospectus; and          
*  the  percentage  of our  common stock  to be owned  by  each             
selling security holder following sale of the shares covered          
by this prospectus (based on 19,349,458 shares of our common          
stock  outstanding  as  of the  date of this prospectus), as          
adjusted to give effect  to the issuance of shares  upon the          
exercise of the named selling shareholder's warrants, but no          
other person's warrants.                                              

If, and when, the warrants and non-plan options are exercised  by               
the  selling  shareholders, the proceeds  of  $950,850  from  the               
exercise shall be used by us for general corporate purposes.  The               
costs   of   registering  the  shares  offered  by  the   selling               
shareholders are being paid by us. The selling shareholders  will               
pay all other costs of the sale of the shares offered by them.                  

Beneficial ownership is determined in accordance with  the  rules               
of the SEC and generally includes voting or investment power with               
respect  to outstanding voting securities, as well as any  voting               
securities  which the person has the right to acquire  within  60               
days, through the conversion or exercise of any security or other               
right.   The information as to the number of shares of our common               
stock  owned  by each selling security holder is based  upon  our               
books  and  records and the information provided by our  transfer               
agent.                                                                          

We may amend or supplement this prospectus, from time to time, to               
update  the disclosure set forth in the table. All of the  shares               
being registered for resale under this prospectus for the selling               
security  holders  may be offered hereby.   Because  the  selling               
security holders identified in the table may sell some or all  of               
the  shares  owned by them which are included in this prospectus,               
and  because  there are currently no agreements, arrangements  or               
understandings with respect to the sale of any of the shares,  no               
estimate  can  be given as to the number of shares available  for               
resale  hereby that will be held by the selling security  holders               
upon  termination of this offering.  We have, therefore,  assumed               
for  the  purposes  of  the  following table,  that  the  selling               
security  holders will sell all of the shares owned  beneficially               
by  them, which are covered by this prospectus, but will not sell               
any other shares of our common stock that they presently own.                   

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                                                        [Enlarge/Download Table]

                     Number of Shares         Number of          Number of         Percent  
Name of Selling      Beneficially Owned       Shares to be       Shares Owned      After    
Security Holder      and to be Owned          Offered            After Offering    Offering 
--------------------------------------------------------------------------------------------
                                                                                            
Adam Terris                      93,167 (1)         73,167 (1)           20,000        *    
Wayne Horne                     535,500            335,293              200,207       1.03% 
Nico Pronk                      583,153            335,293              247,860       1.28% 
Mike Cerisano                    98,949             98,949                 -           *    
J.W. Genesis Capital                                                                        
  Markets, Inc.                  59,583 (2)         59,583 (2)             -           *    
Tricon Holdings, LLC          9,542,500 (3)      9,542,500 (3)             -           *    
Guven Kivilcim                2,167,200 (4)      2,146,200 (4)           21,000        *    

------------------                                                                          

* less than 1%                                                                  

(1)  Includes 45,000  shares of common stock underlying an option               
exercisable at $1.33 per share.  The option expires on April          
7, 2004.                                                              

(2)  In August 2003, J.W. Genesis Capital Markets, Inc. exercised               
75,000  warrants under a  cashless  exercisable formula into          
59,583 shares of our common stock.                                    

(3)  Includes  2,160,000  shares  of common  stock  underlying  a               
warrant  exercisable at $.33 per share.  The warrant expires          
on November 22, 2005.                                                 

(4)  Mr.  Kivilcim  was  a member of our board of directors  from               
November  2000 to August 11, 2003.  Includes  540,000 shares          
of common stock underlying a warrant exercisable at $.33 per          
share.  The warrant expires on November 22, 2005.                     

PLAN OF DISTRIBUTION                

The shares offered hereby by the selling security holders may  be               
sold  from  time to time by the selling security holders,  or  by               
pledgees,  donees, transferees or other successors  in  interest.               
These  sales  may  be  made on one or more exchanges  or  in  the               
over-the-counter market, or otherwise at prices and at terms then               
prevailing or at prices related to the then current market price,               
or  in negotiated transactions. The shares may be sold by one  or               
more of the following methods, including, without limitation:                   

*  a  block trade in  which the broker-dealer  so  engaged will             
attempt to sell the  shares as agent,  but may  position and          
resell a  portion  of  the  block as principal to facilitate          
the transaction;                                                      

*  purchases by a broker or dealer as principal and resale by a             
broker or dealer for its account under this prospectus;               

*  ordinary brokerage  transactions and  transactions in  which             
the broker solicits purchasers;                                       

*  face-to-face  or  other  direct  transactions  between   the             
selling security  holders and  purchasers  without a broker-          
dealer or other intermediary; and                                     

*  ordinary  brokerage  transactions and  transactions in which             
the broker solicits purchasers.                                       

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In  effecting  sales, brokers or dealers engaged by  the  selling               
security  holders  may arrange for other brokers  or  dealers  to               
participate  in  the  resales. Brokers,  dealers  or  agents  may               
receive  compensation  in the form of commissions,  discounts  or               
concessions  from  selling  security holders  in  amounts  to  be               
negotiated  in  connection with the sale.  The  selling  security               
holders  and  these  broker-dealers  and  agents  and  any  other               
participating  broker-dealers, or agents  may  be  deemed  to  be               
"underwriters"  within  the meaning of  the  Securities  Act,  in               
connection with the sales. In addition, any securities covered by               
this  prospectus that qualify for sale under Rule  144  might  be               
sold under Rule 144 rather than under this prospectus.                          

In  connection with distributions of the shares or otherwise, the               
selling security holders may enter into hedging transactions with               
broker-dealers.    In   connection   with    the    transactions,               
broker-dealers may engage in short sales of the shares registered               
hereunder in the course of hedging the positions they assume with               
selling  security holders. The selling security holders may  also               
sell  shares  short  and  deliver the shares  to  close  out  the               
positions.  We have been advised by each of the selling  security               
holders  that  they do not have any open short positions  in  our               
common  stock  as  of the date of this prospectus.   The  selling               
security holders may enter into option or other transactions with               
broker-dealers which require the delivery to the broker-dealer of               
the  shares  registered  hereunder, which the  broker-dealer  may               
resell  under this prospectus. The selling security  holders  may               
also pledge the shares registered hereunder to a broker or dealer               
and  upon a default, the broker or dealer may affect sales of the               
pledged shares under this prospectus.                                           

Information  as to whether an underwriter(s) who may be  selected               
by  the selling security holders, or any other broker-dealer,  is               
acting  as  principal or agent for the selling security  holders,               
the  compensation  to  be  received by underwriters  who  may  be               
selected  by  the selling security holders, or any broker-dealer,               
acting as principal or agent for the selling security holders and               
the  compensation to be received by other broker-dealers, in  the               
event  the  compensation of other broker-dealers is in excess  of               
usual and customary commissions, will, to the extent required, be               
set  forth  in  a supplement to this prospectus.  Any  dealer  or               
broker  participating in any distribution of the  shares  may  be               
required  to  deliver  a copy of this prospectus,  including  the               
supplement, if any, to any person who purchases any of the shares               
from or through a dealer or broker.                                             

We have advised the selling security holders that during the time               
as  they  may be engaged in a distribution of the shares included               
herein  they  are  required to comply with Regulation  M  of  the               
Securities Exchange Act of 1934, as amended (the "Exchange Act").               
With  certain  exceptions, Regulation  M  precludes  any  selling               
security holders, any affiliated purchasers and any broker-dealer               
or other person who participates in the distribution from bidding               
for  or purchasing, or attempting to induce any person to bid for               
or purchase any security which is the subject of the distribution               
until  the  entire  distribution is complete. Regulation  M  also               
prohibits  any  bids or purchase made in order to  stabilize  the               
price  of a security in connection with an at the market offering               
such  as  this  offering.  All of the foregoing  may  affect  the               
marketability of our common stock.                                              

SHARES ELIGIBLE FOR FUTURE SALE               

As  of August 12, 2003, we have 19,349,458 shares of common stock               
issued and outstanding. This does not include shares that may  be               
issued  upon  exercise of options or warrants. We cannot  predict               
the  effect,  if any, that market sales of common  stock  or  the               
availability  of these shares for sale will have  on  the  market               
price  of  our  shares  from  time  to  time.  Nevertheless,  the               
possibility that substantial amounts of common stock may be  sold               
in  the  public market could negatively damage and affect  market               
prices for our common stock and could damage our ability to raise               
capital through the sale of our equity securities.                              

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LEGAL MATTERS               

The validity of the securities offered by this prospectus will be               
passed upon for us by Katz, Barron, Squitero, Faust & Boyd, P.A.,               
100 N.E. Third Avenue, Suite 280, Fort Lauderdale, Florida 33301.               

EXPERTS               

The consolidated financial statements of PetMed Express, Inc.  as               
of  March  31, 2003, and for each of the three years then  ended,               
appearing in this prospectus and registration statement have been               
audited by Goldstein Golub Kessler LLP, independent auditors,  as               
set  forth  in their report thereon appearing elsewhere  in  this               
prospectus,  and are included in reliance upon this report  given               
on  the  authority  of  such  firm as  experts  in  auditing  and               
accounting.                                                                     

ADDITIONAL INFORMATION                

We have filed with the SEC the registration statement on Form S-1               
under  the  Securities Act for the common stock offered  by  this               
prospectus.  This prospectus, which is a part of the registration               
statement,  does  not  contain all  of  the  information  in  the               
registration  statement and the exhibits filed with it,  portions               
of  which  have  been  omitted  as permitted  by  SEC  rules  and               
regulations.   For  further information  concerning  us  and  the               
securities   offered  by  this  prospectus,  we  refer   to   the               
registration  statement  and  to  the  exhibits  filed  with  it.               
Statements contained in this prospectus as to the content of  any               
contract  or  other  document referred  to  are  not  necessarily               
complete.   In  each instance, we refer you to the  copy  of  the               
contracts  and/or  other  documents  filed  as  exhibits  to  the               
registration  statement, and these statements  are  qualified  in               
their entirety by reference to the contract or document.                        

The  registration  statement,  including  all  exhibits,  may  be               
inspected  without charge at the SEC's Public Reference  Room  at               
450  Fifth Street, N.W. Washington, D.C. 20549, and at the  SEC's               
regional  offices  located at New York,  New  York  and  Chicago,               
Illinois.   You may request copies of these documents by  writing               
to the Securities and Exchange Commission and paying the required               
fee   for  copying.  Please  call  the  Securities  and  Exchange               
Commission  at  1-800-SEC-0330 for  more  information  about  the               
operation of their public reference rooms. Copies of our  filings               
are also available at the SEC website at http://www.sec.gov.                    

The  registration statement, including all exhibits and schedules               
and   amendments,  has  been  filed  with  the  SEC  through  the               
Electronic   Data  Gathering,  Analysis  and  Retrieval   system.               
Following  the  effective  date  of  the  registration  statement               
relating  to this prospectus, we will continue to be  subject  to               
the  reporting requirements of the Exchange Act and in accordance               
with  these requirements, will continue to file annual, quarterly               
and special reports, and other information with the SEC.  We also               
intend to furnish our shareholders with annual reports containing               
audited  financial statements and other periodic  reports  as  we               
think appropriate or as may be required by law.                                 

Copies of our SEC filings and other information about us are also               
available  on our website at www.1800PetMeds.com. The information               
on  our website is neither incorporated into, nor a part of, this               
prospectus.                                                                     

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PETMED EXPRESS, INC. AND SUBSIDIARIES               

INDEX TO FINANCIAL STATEMENTS               

Fiscal Years Ended 2003, 2002 and 2001                                          
--------------------------------------                                          

Independent Auditor's Report................................  F-2               

Consolidated Balance Sheets as of March 31, 2003 and 2002...  F-3               

Consolidated Statements of Operations for the three years                       
ended March 31, 2003......................................  F-4             

Consolidated Statements of Changes in Shareholders'                             
Equity for each of the three years in the period ended                      
March 31, 2003............................................  F-5             

Consolidated Statements of Cash Flows for the three years                       
ended March 31, 2003......................................  F-6             

Notes to Consolidated Financial Statements..................F-7-F-17            

Three months ended June 30, 2003 and 2002                                       
-----------------------------------------                                       

Condensed Consolidated Balance Sheets as of June 30, 2003                       
and March 31, 2003........................................  F-18            

Condensed Consolidated Statements of Income for the three                       
months ended June 30, 2003 and 2002.......................  F-19            

Condensed Consolidated Statements of Cash Flows for the                         
three months ended June 30, 2003 and 2002.................  F-20            

Notes to Condensed Consolidated Financial Statements                            
for the three months ended June 30 2003 and 2002..........F-21-F-24         

F-1               

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INDEPENDENT AUDITOR'S REPORT                

To the Board of Directors and Shareholders                                      
PetMed Express, Inc. and Subsidiaries:                                          

We have audited the accompanying consolidated balance sheets of                 
PetMed Express, Inc. and Subsidiaries (the "Company") as of March               
31, 2003 and 2002, and the related consolidated statements of                   
income, changes in stockholders' equity and cash flows for each                 
of the three years in the period ended March 31, 2003.  These                   
consolidated financial statements are the responsibility of the                 
Company's management. Our responsibility is to express an opinion               
on these consolidated financial statements based on our audits.                 

We conducted our audits in accordance with auditing standards                   
generally accepted in the United States of America.  Those                      
standards require that we plan and perform the audit to obtain                  
reasonable assurance about whether the financial statements are                 
free of material misstatement.  An audit includes examining, on a               
test basis, evidence supporting the amounts and disclosures in                  
the financial statements.  An audit also includes assessing the                 
accounting principles used and significant estimates made by                    
management, as well as evaluating the overall financial statement               
presentation.  We believe that our audits provide a reasonable                  
basis for our opinion.                                                          

In our opinion, the consolidated financial statements referred to               
above present fairly, in all material respects, the consolidated                
financial position of PetMed Express, Inc. and Subsidiaries as of               
March 31, 2003 and 2002, and the results of their operations and                
their cash flows for each of the three years in the period ended                
March 31, 2003, in conformity with accounting principles                        
generally accepted in the United States of America.                             

May 10, 2003                     /s/Goldstein Golub Kessler LLP                 
New York, New York              -------------------------------                 
                   Goldstein Golub Kessler LLP

F-2               

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PETMED EXPRESS, INC. AND SUBISIDIARIES            
CONSOLIDATED BALANCE SHEETS               

                                                                [Download Table]


                                                           March 31,         
                                                      2003          2002     
                                                   -----------  ------------ 
                                                                             
                          ASSETS                                             
                          ------                                             

Current assets:                                                              
   Cash and cash equivalents                       $   984,169  $    737,284 
   Accounts receivable, less allowance for                                   
      doubtful accounts of $16,644 and $7,475,                               
      respectively                                     651,883       291,513 
   Inventories                                       4,268,146     2,306,620 
   Prepaid expenses and other current assets           478,108       148,608 
                                                   -----------  ------------ 
          Total current assets                       6,382,306     3,484,025 

   Property and equipment, net                       1,496,979     1,120,056 
   Deferred income taxes                               581,356          -    
   Intangible asset                                    365,000          -    
   Other assets                                        200,155        50,155 
                                                   -----------  ------------ 
Total assets                                       $ 9,025,796  $  4,654,236 
                                                   ===========  ============ 

           LIABILITIES AND SHAREHOLDERS' EQUITY                              
           ------------------------------------                              

Current liabilities:                                                         
   Accounts payable and accrued expenses             3,296,223     2,724,995 
   Current portion of loan obligation                   68,442        68,442 
                                                   -----------  ------------ 
          Total current liabilities                  3,364,665     2,793,437 

Line of credit                                            -          141,214 
Loan obligation, less current portion                   68,443       136,885 
                                                   -----------  ------------ 
Total liabilities                                    3,433,108     3,071,536 

Commitments and contingencies                                                

Shareholders' equity:                                                        
   Preferred stock, $.001 par value, 5,000,000                               
     shares authorized; 2,500 convertible shares                             
     issued and outstanding with a liquidation                               
     preference of $4 per share                          8,898         8,898 
   Common stock, $.001 par value, 40,000,000                                 
     shares authorized; 18,460,878 and 16,360,010                            
     shares issued and outstanding, respectively        18,461        16,360 
   Additional paid-in capital                        7,279,207     6,528,885 
   Accumulated deficit                              (1,713,878)   (4,971,443)
                                                   -----------  ------------ 

          Total shareholders' equity                 5,592,688     1,582,700 
                                                   -----------  ------------ 

Total liabilities and shareholders' equity           9,025,796     4,654,236 
                                                   ===========  ============ 

See accompanying notes to consolidated financial statements.                    

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PETMED EXPRESS, INC. AND SUBISIDIARIES      
CONSOLIDATED STATEMENTS OF OPERATIONS       

                                                                [Download Table]

                                                Year Ended March 31,            
                                       ---------------------------------------- 
                                            2003          2002          2001    
                                       ------------  ------------  ------------ 
                                                                                
Sales                                  $ 54,974,916  $ 32,025,931  $ 10,006,285 
Cost of sales                            31,517,639    18,894,493     6,367,604 
                                       ------------  ------------  ------------ 
Gross profit                             23,457,277    13,131,438     3,638,681 

Operating expenses:                                                             
  General and administrative              7,956,786     6,094,493     4,506,509 
  Advertising                            11,649,811     5,717,242     1,397,418 
  Severance charges                            -          195,000          -    
  Depreciation and amortization             367,673       376,763       373,852 
                                       ------------  ------------  ------------ 
Total operating expenses                 19,974,270    12,383,498     6,277,779 
                                       ------------  ------------  ------------ 

Income (loss) from operations             3,483,007       747,940    (2,639,098)
                                       ------------  ------------  ------------ 

Other income (expense):                                                         
  Adjustment of estimate for legal                                              
    settlement                                 -          345,000          -    
  Gain (loss) on disposal of property                                           
    and equipment                            15,000      (314,332)         -    
  Interest expense                          (30,658)      (48,835)     (231,414)
  Interest income                             6,973        18,582        52,922 
  Other, net                                  6,084        77,058        (9,117)
                                       ------------  ------------  ------------ 
Total other income (expense)                 (2,601)       77,473      (187,609)
                                       ------------  ------------  ------------ 

Income (loss) before provision for                                              
  income taxes                            3,480,406       825,413    (2,826,707)

Provision for income taxes                  222,841          -             -    
                                       ------------  ------------  ------------ 
Net income (loss)                      $  3,257,565  $    825,413  $ (2,826,707)
                                       ============  ============  ============ 

Net income (loss) per common share:                                             
  Basic                                $       0.19  $       0.05  $      (0.28)
                                       ============  ============  ============ 
  Diluted                              $       0.16  $       0.04  $      (0.28)
                                       ============  ============  ============ 

Weighted average number of common                                               
  shares outstanding:                                                           
  Basic                                  17,300,130    16,360,010     9,943,625 
                                       ============  ============  ============ 
  Diluted                                20,749,515    19,739,493     9,943,625 
                                       ============  ============  ============ 

See accompanying notes to consolidated financial statements.                    

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PETMED EXPRESS, INC. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

Years ended March 31, 2001, 2002 and 2003   

                                                        [Enlarge/Download Table]

                                Convertible                                                                             
                              Preferred Stock        Common Stock            Additional                                 
                             ------------------  ------------------------     Paid-In        Accumulated                
                             Shares    Amounts     Shares        Amounts      Capital          Deficit        Total     
                             ------    --------  ----------     ---------   ------------   -------------   ------------ 
                                                                                                                        

Balance, March 31, 2000       6,250    $ 22,246   6,369,822     $   6,370   $  4,572,385      (2,970,149)  $  1,630,852 

  Conversion of convertible                                                                                             
    preferred stock into                                                                                                
    common stock             (3,750)    (13,348)     15,188            15         13,333           -             -      
  Sale of common stock, net                                                                                             
    of issuance costs          -           -     10,000,000        10,000      1,944,142           -          1,954,142 
  Purchase and Retirement                                                                                               
    of treasury stock          -           -        (25,000)          (25)          (975)          -             (1,000)
  Net loss                     -           -           -             -              -         (2,826,707)    (2,826,707)
                             ------    --------  ----------     ---------   ------------   -------------   ------------ 

Balance, March 31, 2001       2,500       8,898  16,360,010        16,360      6,528,885      (5,796,856)       757,287 

  Net income                   -           -           -             -              -            825,413        825,413 
                             ------    --------  ----------     ---------   ------------   -------------   ------------ 

Balance, March 31, 2002       2,500       8,898  16,360,010        16,360      6,528,885      (4,971,443)     1,582,700 

  Issuance of common                                                                                                    
    stock from exercise of                                                                                              
    stock options              -           -      1,018,833         1,019        304,360           -            305,379 
  Issuance of common                                                                                                    
    stock from exercise of                                                                                              
    warrants                   -           -      1,082,035         1,082        274,375           -            275,457 
  Tax benefit related to                                                                                                
    stock options exercised    -           -           -             -           171,587           -            171,587 
  Net income                   -           -           -             -              -          3,257,565      3,257,565 
                             ------    --------  ----------     ---------   ------------   -------------   ------------ 
Balance, March 31, 2003       2,500    $  8,898  18,460,878     $  18,461   $  7,279,207   $  (1,713,878)  $  5,592,688 
                             ======    ========  ==========     =========   ============   =============   ============ 

See accompanying notes to consolidated financial statements.                    

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PETMED EXPRESS, INC. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF CASH FLOWS   

                                                        [Enlarge/Download Table]

                                                       Year Ended March 31,            
                                              ---------------------------------------- 
                                                   2003          2002          2001    
                                              ------------  ------------  ------------ 
                                                                                       
Cash flows from operating activities:                                                  
  Net income (loss)                           $  3,257,565  $    825,413  $ (2,826,707)
  Adjustments to reconcile net income                                                  
    loss) to net cash provided by (used in)                                            
    operating activities:                                                              
      Depreciation and amortization                367,673       376,763       373,852 
      Tax benefit related to stock options                                             
        exercised                                  171,587          -             -    
      Amortization of deferred membership                                              
        fee revenue                                   -         (140,048)     (462,139)
      (Gain) loss on disposal of property                                              
        and equipment                              (15,000)      314,332          -    
      Bad debt expense                              15,027         6,862       (19,007)
      Deferred income taxes                       (581,356)         -             -    
      (Increase) decrease in operating                                                 
        assets and liabilities:                                                        
          Accounts receivable                     (375,397)     (135,907)       44,412 
          Inventories                           (1,961,526)   (1,675,226)    1,121,302 
          Prepaid expenses and other                                                   
            current assets                        (329,500)     (126,494)      328,430 
          Other assets                            (150,000)      (42,500)       11,429 
          Accounts payable and accrued                                                 
            expenses                               571,228     1,072,829        64,485 
          Deferred membership fee revenue             -             -          328,789 
                                              ------------  ------------  ------------ 
Net cash provided by (used in)                                                         
operating activities                               970,301       476,024    (1,035,154)
                                              ------------  ------------  ------------ 

Cash flows from investing activities:                                                  
    Net proceeds from the sale of propert                                              
       and equipment                                15,000     2,016,921          -    
    Purchases of property and equipment           (744,596)     (555,645)     (241,888)
    Certificate of deposit                            -             -          300,000 
    Purchase of intangible asset                  (365,000)         -             -    
                                              ------------  ------------  ------------ 
Net cash (used in) provided by                                                         
investing activities                            (1,094,596)    1,461,276        58,112 
                                              ------------  ------------  ------------ 

Cash flows from financing activities:                                                  
    Payments on mortgage payable                      -       (1,566,833)      (65,079)
    Payments on capital lease obligations             -         (247,209)     (179,183)
    (Payments) borrowings on loan agreement        (68,442)      205,327          -    
    Payments on line of credit agreement          (141,214)         -         (634,985)
    Net proceeds from sale of common stock            -             -        1,954,142 
    Purchase and retirement of treasury stock         -             -           (1,000)
    Proceeds from the exercise of stock                                                
      options and warrants                         580,836          -             -    
                                              ------------  ------------  ------------ 
Net cash provided by (used in)                                                         
   financing activities                            371,180    (1,608,715)    1,073,895 
                                              ------------  ------------  ------------ 

Net increase in cash and cash equivalents          246,885       328,585        96,853 
Cash and cash equivalents, at beginning                                                
  of year                                          737,284       408,699       311,846 
                                              ------------  ------------  ------------ 
 Cash and cash equivalents, at end of year    $    984,169  $    737,284  $    408,699 
                                              ============  ============  ============ 

Supplemental disclosure of cash flow                                                   
information:                                                                           

    Cash paid for interest                    $     30,675  $     29,150  $    239,007 
                                              ============  ============  ============ 
    Cash paid for income taxes                $    508,000  $       -     $       -    
                                              ============  ============  ============ 

See accompanying notes to consolidated financial statements.                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                

(1)  Summary of Significant Accounting Policies                                 

Organization                                                          

PetMed Express, Inc. and its subsidiaries, d/b/a 1-800-               
PetMeds, (the "Company") is a leading nationwide pet                  
pharmacy.  The Company markets prescription and non-                  
prescription pet medications, along with health and                   
nutritional supplements, for cats and dogs direct to the              
consumer.                                                             

The Company markets its products through national                     
television, on-line and direct mail advertising campaigns,            
which aim to increase the recognition of the "1-800-PetMeds"          
brand name, increase traffic on its web site at                       
www.1800PetMeds.com , acquire new customers, and maximize             
repeat purchases. The majority of all of the Company's sales          
are to residents of the United States.  The Company's                 
executive offices are located in Pompano Beach, Florida.              

During the fiscal year ended March 31, 2001, the Company              
formed two wholly owned subsidiaries.  One company was                
formed to assist in the purchasing of products and the other          
for advertising.  The Company's fiscal year end is March 31.          
References herein to fiscal 2003, 2002, or 2001 refer to the          
Company's fiscal years ended March 31, 2003, 2002, and 2001,          
respectively.                                                         

Principles of Consolidation                                           

The consolidated financial statements include the accounts            
of the Company and its wholly owned subsidiaries.  All                
significant intercompany transactions have been eliminated            
in consolidation.                                                     

Revenue Recognition                                                   

The Company generates revenue by selling pet medication               
products primarily to retail consumers and minimally to               
wholesale customers.  The Company's policy is to recognize            
revenue from product sales upon shipment, when the rights of          
ownership and risk of loss have passed to the consumer.               
Deferred membership revenue consists of cash collected on             
the sale of one and three-year memberships.  Membership fees          
are amortized to income ratably over the membership period.           
During fiscal year 2001 the Company discontinued the PetMed           
Express, Inc. membership plan.  Outbound shipping and                 
handling fees are included in sales and are billed upon               
shipment.  Shipping and handling expenses are included in             
cost of sales.                                                        

The majority of the Company's sales are paid by credit cards          
and the Company usually receives the cash settlement in one           
to three banking days.  Credit card sales minimize our                
accounts receivable balances relative to our sales.  The              
Company maintains an allowance for doubtful accounts for              
losses that the Company estimates will arise from the                 
customers' inability to make required payments, arising from          
either credit card charge-backs or insufficient fund checks.          
The Company determines its estimates of the uncollectibility          
of accounts receivable by analyzing historical bad debts and          
current economic trends.  At March 31, 2003 and 2002 the              
allowance for doubtful accounts was approximately $17,000             
and $7,000, respectively.                                             

Cash and Cash Equivalents                                             

The Company considers all highly liquid investments with              
maturity of three months or less when purchased to be cash            
equivalents.  Cash and cash equivalents at March 31, 2003             
and 2002, consist of the Company's cash accounts, overnight           
repurchase agreements, and short-term investments with a              
maturity of three months or less.  The carrying amount of             
cash equivalents approximates fair value.                             

The Company maintains its cash in bank deposit accounts               
which, at times, may exceed federally insured limits.  The            
Company has not experienced any losses in such accounts.              

Use of Estimates                                                      

The preparation of consolidated financial statements in               
conformity with generally accepted accounting principles in           
the United States of America requires management to make              
estimates and assumptions that affect the reported amounts            
of assets and liabilities and disclosure of contingent                
assets and liabilities at the date of the consolidated                
financial statements and the reported amounts of revenues             
and expenses during the reporting period. Actual results              
could differ from those estimates.                                    

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(1) Summary of Significant Accounting Policies (Continued)                    

Inventories                                                           

Inventories consist of prescription and non-prescription pet          
medications that are available for sale and are priced at             
the lower of cost or market value using a weighted average            
cost method.  The Company writes down its inventory for               
estimated obsolescence.  At March 31, 2003 and 2002 the               
inventory reserve was approximately $87,000 and $75,000,              
respectively.                                                         

Property and Equipment                                                

Property and equipment are stated at cost and depreciated             
using the straight-line method over the estimated useful              
lives of the assets.  The furniture, fixtures, equipment and          
computer software are depreciated over periods ranging from           
three to seven years.  Leasehold improvements and assets              
under capital lease agreements are amortized over the                 
shorter of the underlying lease agreement or the useful life          
of the asset.                                                         

Long-lived Assets                                                     

Long-lived assets are reviewed for impairment whenever                
events or changes in circumstances indicate that the                  
carrying amount may not be recoverable.  Recoverability of            
assets is measured by a comparison of the carrying amount of          
the asset to net future cash flows expected to be generated           
from the asset.                                                       

Intangible Asset                                                      

The intangible asset consists of a toll free telephone                
number, which the Company obtained in the quarter ended               
September 30, 2002.  The Company paid $365,000, to reimburse          
previously expended advertising costs relating to obtaining           
the rights to the toll free number.  In accordance with the           
Statement of Financial Accounting Standards ("SFAS") No.              
142, Goodwill and Other Intangible Assets, the intangible             
asset is not being amortized, and is subject to an annual             
review for impairment.                                                

Advertising                                                           

The Company's advertising expense consists primarily of               
television advertising, internet marketing, catalog and               
postcard production, and mailing costs.  Television costs             
are expensed as the ads are televised and catalog and                 
postcard costs are expensed when the related catalog and              
postcards are produced, distributed or superseded.                    

Accounting for Stock-Based Compensation                               

The Company accounts for employee stock options using the             
intrinsic value method as prescribed by Accounting                    
Principles Board Opinion ("APB") No. 25, Accounting for               
Stock Issued to Employees.  The Company follows the                   
disclosure provisions of SFAS No. 123, Accounting for Stock-          
Based Compensation, for employee stock options.  Had the              
Company determined employee compensation cost based on the            
fair value at the grant date for its stock options under              
SFAS No. 123, the Company's net income would have been                
decreased to the pro forma amounts indicated below:                   

                                                                [Download Table]


Year Ended March 31,                    2003           2002           2001     
--------------------                ------------   ------------   ------------ 
                                                                               
Reported net income (loss):         $  3,257,565   $    825,413   $ (2,826,707)

Deduct: total stock-based employee                                             
  compensation expense determined                                              
  under fair-value based method                                                
  for all awards, net of related                                               
  tax effects                            285,258        129,465        424,556 

Proforma net income (loss):         $  2,972,307   $    695,948   $ (3,251,263)
                                    ============   ============   ============ 

Reported basic net income (loss)                                               
  per share:                        $       0.19   $       0.05   $      (0.28)
                                    ============   ============   ============ 

Proforma basic net income (loss)                                               
  per share:                        $       0.17   $       0.04   $      (0.33)
                                    ============   ============   ============ 

Reported diluted net income (loss)                                             
  per share:                        $       0.16   $       0.04   $      (0.28)
                                    ============   ============   ============ 

Proforma diluted net income (loss)                                             
  per share:                        $       0.14   $       0.04   $      (0.33)
                                    ============   ============   ============ 

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(1)  Summary of Significant Accounting Policies (Continued)                     

The per share weighted-average fair value of stock options            
granted during fiscal 2003, 2002, and 2001 was $1.28, $.70            
and $.23, respectively, on the date of grant using the Black          
Scholes option-pricing model, as prescribed by SFAS No. 123,          
with the following weighted-average assumptions: no dividend          
yield; risk-free interest rates ranging from 4 to 6 percent;          
expected lives of 3-5 years, and expected volatility of 62            
percent, 60 percent, and 91 percent, respectively.                    

Fair Value of Financial Instruments                                   

The carrying amounts of the Company's cash and cash                   
equivalents, accounts receivable and accounts payable                 
approximate fair value due to the short-term nature of these          
instruments. The carrying amount of the loan payable                  
approximates fair value as their interest rates approximate           
current market rates.                                                 

Comprehensive Income                                                  

The Company has adopted SFAS No. 130, Reporting                       
Comprehensive Income, which requires that all items that are          
recognized under accounting standards as components of                
comprehensive income be reported in a financial statement             
that is displayed with the same prominence as other                   
financial statements. The items of other comprehensive                
income that are typically required to be displayed are                
foreign currency items, minimum pension liability                     
adjustments and unrealized gains and losses on certain                
investments in debt and equity securities. There were no              
items of other comprehensive income for any periods                   
presented herein.                                                     

Income Taxes                                                          

The Company accounts for income taxes under the provisions            
of SFAS No. 109, Accounting for Income Taxes, which                   
generally requires recognition of deferred tax assets and             
liabilities for the expected future tax benefits or                   
consequences of events that have been included in the                 
consolidated financial statements or tax returns. Under this          
method, deferred tax assets and liabilities are determined            
based on differences between the financial reporting                  
carrying values and the tax bases of assets and liabilities,          
and are measured by applying enacted tax rates and laws for           
the taxable years in which those differences are expected to          
reverse.                                                              

Recent Accounting Pronouncements                                      

The Company does not believe that any recently issued, but            
not yet effective, accounting standard, if currently                  
adopted, will have a material effect on the Company's                 
consolidated financial position, results of operations or             
cash flows.                                                           

(2) Property and Equipment                                                    

Major classifications of property and equipment consist of            
the following:                                                        

                                                                [Download Table]


                                             March 31,        
                                         2003          2002   
                                      ---------     --------- 
                                                              
Leasehold improvements                  289,901        42,891 
Computer software                       327,197       302,537 
Furniture, fixtures and equipment     1,606,484     1,325,635 
Equipment and software under                                  
  capital lease                         113,398       280,849 
                                      ---------     --------- 
                                      2,336,980     1,951,912 
Less: accumulated depreciation                                
  and amortization                     (840,001)     (831,856)
                                      ---------     --------- 
  Property and equipment, net      $  1,496,979     1,120,056 
                                      =========     ========= 

Amortization expense for equipment and software under                 
capital leases was $24,123, $93,169, and $114,881 for fiscal          
2003, 2002, and 2001, respectively.                                   

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(3)  Accounts Payable and Accrued Expenses                                      

Major classifications of accounts payable and accrued                 
expenses consist of the following:                                    

                                                                [Download Table]

                                             March 31,       
                                         2003          2002  
                                      ---------     ---------
                                                             
Accounts payable                      2,570,459     1,873,925
Accrued salaries                        237,165       180,315
Other accrued liabilities               488,599       670,755
                                      ---------     ---------
      Accounts payable and                                   
      accrued expenses             $  3,296,223     2,724,995
                                      =========     =========

(4)  Mortgage Payable, Line of Credit Agreement and Loan                        
Obligation                                                            

On May 31, 2001, the Company sold their 50,000 square foot            
office building, which houses the Company's principal                 
executive offices and warehouse, to an unrelated third                
party.  The Company received gross proceeds of $2,150,000,            
of which approximately $1,561,000 was used to pay off the             
mortgage, and the Company recognized a loss on the sale of            
approximately $185,000.  The Company then entered into a              
five-year term lease agreement for 20,000 of the 50,000               
square foot Pompano Beach office building.  On February 22,           
2002, the Company entered into a lease addendum which added           
approximately 12,000 square feet, effective June 1, 2002, to          
accommodate the Company's warehouse expansion.                        

On July 22, 2002, the Company executed an agreement which             
increased the line of credit from $150,000 to $1,000,000.             
On March 18, 2003, the Company increased the line of credit           
agreement from $1,000,000 to $2,000,000, effective through            
July 22, 2004.  The interest rate is at the published thirty          
day London Interbank Offered Rates ("LIBOR") plus 2.65%               
(3.92% and 5.75% at March 31, 2003 and 2002, respectively),           
and contains various financial and operating covenants.  At           
March 31, 2003 and 2002, there was $0 and $141,000,                   
respectively, outstanding under the line of credit                    
agreement.                                                            

On March 12, 2002, the Company entered into a $205,000,               
three year term loan agreement with a bank, with interest             
accruing at the lending institution's base rate plus 1%               
(5.25% and 5.75% at March 31, 2003 and 2002, respectively).           
The loan proceeds were used to purchase a $250,000 computer           
server.  The aggregate loan maturities are $68,000 per year           
for three years.                                                      

The line of credit and the term loan are secured by                   
substantially all of the Company's assets.                            

(5)  Shareholders' Equity                                                       

On November 22, 2000, Tricon Holdings, LLC, a Florida                 
limited liability corporation ("Tricon") a related party              
(see Note 8), acquired 10,000,000 shares of the Company's             
authorized and unissued shares of common stock and warrants           
to purchase 3,000,000 shares of the Company's authorized and          
unissued shares of common stock.  The warrants are                    
exercisable at $.33 per share and expire on November 22,              
2005.  Tricon acquired the Company's shares and warrants in           
exchange for $2,000,000, which was paid in fiscal year 2001.          

On May 31, 2001, the Company's Board of Directors adopted an          
amendment to the Corporation's Articles of Incorporation to           
provide for the increase in the authorized amount of shares           
of common stock from 20,000,000 to 40,000,000 and adopt an            
amendment to the Company's 1998 Stock Option Plan (the                
"Plan") to increase the number of shares of common stock              
issuable under the Plan from 3,000,000 to 5,000,000 shares.           

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(5)  Shareholders' Equity (Continued)                                           

Preferred Stock                                                       

In April 1998, the Company issued 250,000 shares of its               
$.001 par value preferred stock at a price of $4.00 per               
share, less issuance costs of $112,187. Each share of the             
preferred stock is convertible into approximately 4.05                
shares of common stock at the election of the shareholder.            
The preferred stock was recorded at $887,813, net of the              
value of the beneficial conversion feature of $771,525. The           
value of the beneficial conversion feature was computed as            
the difference between the closing market price of the                
Company's common stock ($1.75 per share) and the conversion           
price of the preferred stock ($.988 per share) on the date            
the preferred stock was sold. This amount was immediately             
recognized as a reduction to net income available to common           
stockholders. The shares have a liquidation value of $4.00            
per share and may pay dividends at the sole discretion of             
the Company. The Company does not anticipate paying                   
dividends to the preferred shareholders in the foreseeable            
future. Each share of preferred stock is entitled to one              
vote on all matters submitted to a vote of shareholders of            
the Company. As of March 31, 2003 and 2002, 2,500 shares of           
the convertible preferred stock remained unconverted and              
outstanding.                                                          

(6)  Income Taxes                                                               

Deferred income taxes reflect the net tax effects of                  
temporary differences between the carrying amount of assets           
and liabilities for financial reporting purposes and the              
amounts used for income tax purposes.  The tax effects of             
temporary differences that give rise to significant portions          
of deferred tax assets and deferred tax liabilities are as            
follows:                                                              

                                                                [Download Table]

                                                 March 31,        
                                             2003         2002    
                                          ---------     --------- 
                                                                  
Deferred tax assets:                                              
  Bad debt and inventory reserves            39,041        30,946 
  Deferred compensation (stock options)      59,814       231,400 
  Intangible assets                            -            7,410 
  Accrued expenses                           58,033       155,087 
  Net operating loss carryforward         1,439,932     1,856,732 
                                          ---------     --------- 

Deferred tax assets                       1,596,820     2,281,575 
Less: valuation allowance                  (938,766)   (2,204,877)
                                          ---------     --------- 

Total deferred tax assets                   658,054        76,698 

 Deferred tax liabilities:                                        
    Depreciation                            (76,698)      (76,698)
                                          ---------     --------- 
Total net deferred taxes                $   581,356          -    
                                          =========     ========= 

The change in the valuation allowance for the year ended              
March 31, 2003 and 2002, is approximately $1,266,000 and              
$349,204, respectively.  At March 31, 2003, the Company had           
net operating loss carryforwards of approximately                     
$3,800,000, of which $159,000 relate to the exercise of               
stock options that will result in an adjustment to equity             
when the benefit is realized.  The net operating loss                 
carryforwards expire in the years 2013 through 2020.  The             
use of such net operating loss carryforwards is limited to            
approximately $266,000 annually; due to the November 22,              
2000 change of control.                                               

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(6)  Income Taxes (Continued)                                                   

The reconciliation of income tax provision computed at the            
U.S. federal statutory tax rates to income tax expense is as          
follows:                                                              

                                                                [Download Table]

                                              Year Ended March 31,           
                                         2003         2002          2001     
                                     -----------   -----------   ----------- 
                                                                             
Income taxes (tax benefit) at U.S.                                           
  statutory rates                    $ 1,183,338   $   280,640   $  (961,080)
State income taxes (tax benefit),                                            
  net of federal tax benefit             126,339        29,962      (102,609)
Permanent differences                      1,512           877         3,946 
Other                                    177,763          -           33,647 
Change in valuation allowance         (1,266,111)         -        1,026,096 
Utilization of net operating losses         -         (311,479)         -    
                                     -----------   ------------  ----------- 
                                     $   222,841   $      -      $      -    
                                     ===========   ============  =========== 

(7)  Stock Options and Warrants                                                 

Stock Options Granted to Employees                                    

The Company established the 1998 Stock Option Plan (the               
"Plan") effective July 31, 1998, which provides for the               
issuance of qualified options to officers, directors and key          
employees, and nonqualified options to consultants and other          
service providers.  The Company has reserved 5,000,000                
shares of common stock for issuance under the Plan.  The              
exercise prices of options issued under the Plan must be              
equal to or greater than the market price of the Company's            
common stock as of the date of issuance.  The Company had             
2,743,600 and 3,039,700 options outstanding under the Plan            
at March 31, 2003 and 2002, respectively.  Options issued             
prior to July 31, 1998 are not included in the Plan.                  

A summary of the status of stock options and certain                  
warrants issued by the Company, together with changes during          
the periods indicated, is presented in the following table:           

                                                                [Download Table]

                                                        Weighted-   
                                                         average    
                                           Options    exercise price
                                       -------------  --------------
                                                                    

Balance at March 31, 2000                  3,705,500  $         1.84
          Options Granted                  1,175,000            0.35
          Options Canceled                  (335,800)           4.73
                                       -------------  --------------

Balance at March 31, 2001                  4,544,700  $         1.24
          Options Granted                    387,500            1.26
          Options Canceled                  (695,100)           2.81
                                       -------------  --------------

Balance at March 31, 2002                  4,237,100            0.98
          Options Granted                    910,432            0.75
          Options and Warrants                                      
            Exercised                     (1,800,868)           0.36
          Options Canceled                  (603,064)           1.45
                                       -------------  --------------
Balance at March 31, 2003                  2,743,600  $         1.06
                                       =============  ==============

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(7)  Stock Options and Warrants (Continued)                                     

The following table summarizes information for options                
currently outstanding and exercisable at March 31, 2003:              

                                                                [Download Table]


                            Options Outstanding          Options Exercisable 
                  ------------------------------------  ---------------------
                                Weighted-    Weighted-              Weighted-
                                average      average                 average 
    Exercise                   Remaining     Exercise               Exercise 
  Price Range       Number        Life        Price       Number     Price   
--------------    ------------------------------------  ---------------------
                                                                             
$ 0.20 - $0.86      862,500    4.35 years     $0.44       539,164    $0.40   
  1.05 -  1.76    1,756,500    4.74 years      1.28     1,503,200     1.28   
  1.90 -  4.50      124,600    4.07 years      2.43        34,600     3.80   
--------------    ------------------------------------  ---------------------
$ 0.20 - $4.50    2,743,600    4.58 years     $1.06     2,076,964    $1.09   
==============    ====================================  =====================


At March 31, 2003 and March 31, 2002, the number of options           
exercisable was 2,076,964 and 2,752,803, respectively, and            
the weighted-average exercise price of those options was              
$1.09 and $.96, respectively.  Adjustments are made for               
options forfeited prior to vesting.                                   

Warrants                                                              

On November 22, 2000, Tricon Holdings, LLC, a Florida                 
limited liability corporation ("Tricon"), acquired                    
10,000,000 shares of the Company's authorized and unissued            
shares of common stock and warrants to purchase 3,000,000             
shares of the Company's authorized and unissued shares of             
common stock.  The warrants are exercisable at $.33 per               
share and expire on November 22, 2005, and were assigned a            
value of $601,260 using the Black Scholes option-pricing              
model, as prescribed by SFAS No. 123, with the following              
weighted-average assumptions: dividend yield 0.0 percent;             
risk-free interest rates of 6.00 percent; expected lives of           
3-5 years, and expected volatility of 91 percent.  On                 
September 30, 2002, Tricon exercised 300,000 warrants at the          
exercise price of $.33 per share, and the Company received            
proceeds of $99,000.                                                  

(8)  Related Party Transactions                                                 

Guven  Kivilcim,  a  member of Tricon Holdings,  LLC  and  a          
member  of the Company's board of directors, has an interest          
in Intelligent Switching & Software LLC, and Numind Software          
Systems,  Inc.,  with which the Company  conducted  business          
with  during the fiscal years ended March 31, 2003 and 2002.          
Intelligent  Switching & Software LLC provided  the  Company          
with  long  distance telecommunication services, and  Numind          
Software  Systems, Inc. provided the Company  with  Internet          
and  website design and hosting services.  The Company  paid          
$154,000  and  $64,000 to Intelligent Switching  &  Software          
LLC,  and  $45,000 and $0 to Numind Software Systems,  Inc.,          
for  services during the fiscal years ended March  31,  2003          
and 2002, respectively.  The Company owed $5,000 and $64,000          
to  Intelligent  Switching & Software LLC, and  $14,000  and          
$37,000  to  Numind  Software  Systems,  Inc.,  which   were          
included  in  the Company's accounts payable balance  as  of          
March 31, 2003 and 2002, respectively.                                

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(9)  Net Income Per Share                                                       

In accordance with the provisions of SFAS No. 128, "Earnings          
Per Share," basic net income per share is computed by                 
dividing net income available to common shareholders by the           
weighted average number of common shares outstanding during           
the period.  Diluted net income per share includes the                
dilutive effect of potential stock options exercises,                 
calculated using the treasury stock method.  Outstanding              
stock options, warrants, and convertible preferred shares             
issued by the Company represent the only dilutive effect              
reflected in diluted weighted average shares outstanding.             
For the year ended March 31, 2001, potential common shares            
have not been included in the computation of diluted                  
earnings per share, since the effect would be antidilutive.           
The following is a reconciliation of the numerators and               
denominators of the basic and diluted net income (loss) per           
share computations for the periods presented:                         

                                                                [Download Table]

                                                   Year Ended March 31,           
                                              2003         2002          2001     
                                          -----------   -----------   ----------- 
                                                                                  
Net income (loss) (numerator):                                                    

  Net income (loss)                       $ 3,257,565   $   825,413   $(2,826,707)
                                          ===========   ===========   =========== 
Shares (denominator)                                                              

  Weighted average number of common                                               
    shares outstanding used in basic                                              
    computation                            17,300,130    16,360,010     9,943,625 
  Common shares issuable upon exercise                                            
    of stock options and warrants           3,439,260     3,369,358          -    
  Common shares issuable upon conversion                                          
    of preferred shares                        10,125        10,125          -    
                                          -----------   -----------   ----------- 
  Shares used in diluted computation       20,749,515    19,739,493     9,943,625 
                                          ===========   ===========   =========== 

Net income per common share:                                                      
  Basic                                   $      0.19   $      0.05   $     (0.28)
                                          ===========   ===========   =========== 
  Diluted                                 $      0.16   $      0.04   $     (0.28)
                                          ===========   ===========   =========== 

At March 31, 2003 and 2002, 124,600 and 2,124,600 shares,             
respectively, of common stock options and warrants, with a            
weighted average exercise price of $2.43 and $1.53,                   
respectively, were excluded from the diluted net income per           
share computation as their exercise prices were greater than          
the average market price of the common shares for the                 
period.                                                               

(10) Valuation and Qualifying Accounts                                          

Activity in the Company's valuation and qualifying accounts           
consists of the following:                                            

                                                                [Download Table]


                                                 Year Ended March 31,           
                                            2003         2002          2001     
                                        -----------   -----------   ----------- 
                                                                                
Allowance for doubtful accounts:                                                
   Balance at beginning of period       $     7,475   $     9,740   $    28,747 
   Provision for doubtful accounts           14,759          (319)      (19,007)
   Write-off of uncollectible accounts                                          
     receivable                              (5,590)       (1,946)         -    
                                        -----------   -----------   ----------- 
   Balance at end of period             $    16,644   $     7,475   $     9,740 
                                        ===========   ===========   =========== 

Valuation allowance for deferred tax                                            
assets:                                                                         
   Balance at beginning of period       $ 2,204,877   $ 2,554,081   $ 1,527,985 
   (Deletions) / additions               (1,266,111)     (349,204)    1,026,096 
                                        -----------   -----------   ----------- 
   Balance at end of period             $   938,766   $ 2,204,877   $ 2,554,081 
                                        ===========   ===========   =========== 

F-14                

(11) Commitments and Contingencies                                              

Legal Matters                                                         

Various complaints had been filed with the Florida Board of           
Pharmacy.  These complaints, the majority of which were               
filed by veterinarians who are in competition with the                
Company for the sale of pet prescription-required products,           
alleged violations of the Pharmacy Practice Act and                   
regulations promulgated thereunder.  The vast majority of             
the complaints alleged that the Company, through its                  
pharmacists, improperly dispensed prescription-required               
veterinary medication based on prescriptions verified                 
through the Company's discontinued alternate veterinarian             
program.  The alternate veterinarian program used a                   
veterinarian outside the state of Florida to verify                   
prescriptions for certain pets outside the state of Florida.          
While the program was not used for pets residing in the               
state of Florida, the complaints had, for the most part,              
been filed with the Florida Board of Pharmacy.  Other                 
complaints alleged the dispensing of medication without a             
valid prescription, the sale of non-conforming products and           
that the Company's pharmacy was operating at the same                 
location as another pharmacy, with which it had a                     
contractual relationship.  The Company contested all                  
allegations and continued discussions in an attempt to reach          
a resolution of these matters.                                        

In February 2002, the Company voluntarily ceased the use of           
its alternate veterinarian program, and in March 2002 a               
business decision was made to enter into a settlement                 
agreement with the Florida Board of Pharmacy, rather than to          
proceed with costly and lengthy litigation.  In April 2002,           
the Florida Board of Pharmacy approved the settlement                 
agreement.  The Florida Board of Pharmacy did not reach any           
finding of fact or conclusion of law that the Company                 
committed any wrongdoing or violated any rules or laws                
governing the practice of pharmacy.  According to the                 
settlement agreement, the Company's pharmacy license was              
placed on probation for a period of three years and the               
Company, the Company's pharmacists and contracted pharmacy            
and pharmacist, paid approximately $120,000 in fines and              
investigative costs, in July 2002.  The Company remains               
licensed with the State of Florida and continues to operate           
its principal business in Florida.                                    

Additional complaints have been filed with other states'              
Pharmacy Boards.  These complaints, the majority of which             
were filed by veterinarians who are in competition with the           
Company for the sale of pet prescription-required products,           
allege violations of the Pharmacy Practice Act and                    
regulations promulgated thereunder.  The vast majority of             
the complaints allege that the Company, through its                   
pharmacists, improperly dispensed prescription-required               
veterinary medication based on prescriptions verified                 
through the Company's alternate veterinarian program.  The            
Company contested all allegations and continued discussions           
in an attempt to reach a resolution of these matters.                 

In fiscal 2003, the Company reached settlement agreements             
with the Louisiana, Missouri, New Mexico, and Ohio State              
Pharmacy Boards.  According to the settlement agreements,             
the Company was required to terminate the alternate                   
veterinarian program in the state and the Company's permit            
was placed on probation.  As of March 31, 2003, the Company           
had paid all fines in full to cover any or all                        
administrative and investigative costs associated with these          
settlements.  At March 31, 2003, there was no accrual                 
relating to these settlements.  There can be no assurances            
made that other states will not attempt to take similar               
actions against the Company in the future.                            

In February 2000, the United States Environmental Protection          
Agency ("EPA") issued a Stop Sale, Use or Removal Order to            
the Company regarding the alleged distribution or sale of             
misbranded Advantage products in violation of the Federal             
Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), as             
amended.  The order provides that the company shall not               
distribute, sell, use or remove the products listed in the            
order, which are allegedly misbranded.  The order further             
provides that the Company shall not commence any sale or              
distribution of those products without the prior written              
approval from the EPA.  The Stop Sale, Use or Removal Order           
does not assert any claim for monetary damages; rather, it            
is in the nature of a cease and desist order.  The Company            
denied any alleged violations.  On February 16, 2000, the             
Company submitted a written response to the order.  The EPA           
assessed a fine in the amount of $445,000.  In fiscal 2001            
the Company accrued $445,000 of legal settlement expense.             

In September 2001, the Company and the EPA entered into a             
Consent Agreement and Final Order ("CAFO").  The settlement           
agreement required the Company to pay a civil penalty of              
$100,000 plus interest, requiring a payment of $56,000,               
which was paid in September 2002, and $53,000 due on                  
September 30, 2003, a reduction from the previously assessed          
fine of $445,000.  For the purpose of this CAFO, the Company          
admitted to the jurisdictional allegations set forth, and             
neither admitted nor denied the alleged violations.  On               
September 28, 2001, the CAFO was approved and ordered by the          
regional judicial officer.  Accordingly, a gain of $345,000           
was reflected in the statement of income for the year ended           
March 31, 2002, to reflect the adjustment to this                     
settlement.                                                           

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(11) Commitments and Contingencies (Continued)                                  

On March 19, 2002, Novartis Animal Health U.S., Inc.                  
("Novartis") filed a complaint against the Company and two            
other defendants in U.S. District Court for the Southern              
District of Florida.  Novartis purports to assert seven               
claims related to the Company's alleged sale of pet                   
medications produced for a Novartis Australian sister                 
company: Count I: Infringement of Registered Trademark Under          
Section 32 of the Lanham Act, 15 U.S.C.  1114; Count II:              
Infringement of Unregistered Trademarks Under Section 43(a)           
of the Lanham Act, 15 U.S.C.  1125(a); Count III: False               
Advertising Under Section 43(a) of the Lanham act, 15 U.S.C.          
1125(a); Count IV: Misleading Advertising Under Florida             
Statutory Law; Count V: Deceptive and Unfair Trade Practices          
Under Florida Statutory Law; Count VI: Injury to Business             
Reputation Under Florida Statutory Law; Count VII: Common             
Law Unfair Competition.  Subsequent to the year ended March           
31, 2003, the Company reached a final settlement agreement            
with Novartis.  According to the confidential settlement              
agreement dated April 7, 2003, the Company has                        
satisfactorily resolved the contested issues raised by the            
complaint and the confidential settlement terms will not              
have a material impact on the Company's operations and                
financial results.                                                    

The Company is a defendant in a lawsuit in Texas state                
district court seeking injunctive and monetary relief styled          
Texas State Board of Pharmacy and State Board of Veterinary           
Medical Examiners v. PetMed Express, Inc. Cause No.GN-                
202514, in the 201st Judicial District Court, Travis County,          
Texas.  The Company in its initial pleading denied the                
allegations contained therein.  The Company will vigorously           
defend, is confident of its compliance with the applicable            
law, and finds wrong-on-the-facts the vast majority of the            
allegations contained in the Plaintiffs' supporting                   
documentation attached to the lawsuit.  Discovery has                 
recently commenced.  At this early stage of the litigation            
it is difficult to assess any possible outcome or estimate            
any potential loss in the event of an adverse outcome.                

On May 1, 2001, the former Chief Financial Officer ("CFO")            
of the Company, provided notice of termination of his                 
Executive Employment Agreement with the Company dated March           
7, 2000, as amended.  In the notice, the former CFO also              
demanded payment of certain benefits allegedly due under the          
Executive Employment Agreement.  The Company continued                
discussions in an effort to resolve this matter, and in               
accordance with the CFO's Executive Employment Agreement,             
the Company accrued a severance charge for the amount of              
$120,000 in fiscal 2002.  On October 31, 2001, the Company            
entered into a Release and Termination agreement with its             
former CFO.  The former CFO's termination date was effective          
as of May 31, 2001.  The agreement entitles the former CFO            
to receive an amount of $120,000, which was paid in fiscal            
2002.  The former CFO had a right to exercise any stock               
options granted to him by the Company (the "vested                    
options"), for a period of 30 days from the termination               
date.  Additionally, the former CFO agreed to provide                 
consulting services to the Company on financial matters               
until March 31, 2002, for which he was separately                     
compensated.                                                          

On June 13, 2001, the Company entered into a Release and              
Termination agreement with its former Chief Operating                 
Officer ("COO").  The former COO's termination date was               
effective as of May 18, 2001.  The agreement entitles the             
former COO to receive an amount of $75,000, which was paid            
in fiscal 2002.  The former COO had a right to exercise any           
stock options granted to him by the Company (the "vested              
options"), for a period of 30 days from the termination               
date.  Additionally, the former COO agreed to provide                 
consulting services to the Company on regulatory and legal            
matters until December 31, 2001, for which he was separately          
compensated.                                                          

Routine Proceedings                                                   

The Company is a party to routine litigation incidental to            
its business.  The Company's management does not believe              
that the resolution of any or all of such routine litigation          
is likely to have a material adverse effect on the Company's          
financial condition or results of operations.                         

Employment Agreement                                                  

On March 16, 2001, the Company entered into an employment             
agreement with its Chief Executive Officer ("CEO").  Under            
the terms of this three-year agreement the Company will pay           
the CEO an annual salary of $150,000 for the first six                
months of the agreement, and thereafter his annual salary             
will be increased to $200,000.  The Company also granted the          
CEO options to purchase 750,000 shares of its common stock            
under the Company's 1998 Stock Option Plan at an exercise             
price of $.32 per share, which vest at the rate of 187,500            
options on each of March 16, 2001, 2002, 2003 and 2004.               

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(11) Commitments and Contingencies (Continued)                                  

Operating Lease                                                       

The Company leases their 32,000 square foot principal                 
executive offices and warehouse, which expires in fiscal              
2007.   The Company is responsible for certain maintenance            
costs, taxes and insurance under this lease.  The future              
minimum annual lease payments as of March 31, 2003, are as            
follows:                                                              

Years Ending March 31,                                                
----------------------                                                

2004                   $   277,000                                    
2005                       288,000                                    
2006                       300,000                                    
2007                        50,000                                    
-----------             
Total lease payments   $   915,000                                    
===========             

Rent expense was $253,000 and $149,000 for the year ended             
March 31, 2003 and 2002, respectively.                                

(12) Subsequent Events                                                          

Subsequent to fiscal 2003, the Company received net proceeds          
of $766,000 upon the exercise and issuance of 644,166 shares          
of common stock, of which 600,000 shares were exercised by            
the Company's president.                                              

(13) Quarterly Financial Data (unaudited)                                       

Summarized unaudited quarterly financial data for fiscal              
2003 and 2002 is as follows:                                          

                                                        [Enlarge/Download Table]

Quarter Ended:                June 30, 2002  September 30, 2002  December 31, 2002  March 31, 2003 (a)
--------------                -------------  ------------------  -----------------  --------------    
                                                                                                      
Sales                         $ 14,830,755      $ 14,229,702       $  11,050,124     $ 14,864,335     
Income from operations        $  1,291,235      $    307,754       $     693,269     $  1,190,749     
Net income                    $    902,329      $    204,887       $     434,710     $  1,715,639     
Diluted net income per share  $       0.04      $       0.01       $        0.02     $       0.09     

                                                        [Enlarge/Download Table]

Quarter Ended:                June 30, 2001   September 30, 2001  December 31, 2001  March 31, 2002
--------------                -------------   ------------------  -----------------  --------------
                                                                                                   
Sales                         $   5,363,650      $ 7,762,825        $   8,248,904     $ 10,650,552 
(Loss) income from operations $    (880,765)     $    56,246        $     368,433     $  1,204,026 
Net (loss) income             $  (1,090,684)     $   393,378        $     353,348     $  1,169,371 
Diluted net (loss) income                                                                          
  per share                   $       (0.07)     $      0.02        $        0.02     $       0.07 

(a)  The Company recorded a deferred tax asset of approximately                 
$581,000,   during  the  quarter  ended   March 31,  2003,            
resulting in an increase of diluted net income of $.03 per            
share.                                                                

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PETMED EXPRESS, INC. AND SUBSIDIARIES               
CONDENSED CONSOLIDATED BALANCE SHEETS               

                                                                [Download Table]


                                                    June 30,     March 31,   
                                                      2003         2003      
                                                   -----------  ------------ 
                                                   (Unaudited)               
                                                                             
                         ASSETS                                              
                         ------                                              
Current assets:                                                              
   Cash and cash equivalents                       $ 1,492,504  $    984,169 
   Accounts receivable, less allowance                                       
     for doubtful accounts of $26,071 and                                    
     $16,644, respectively                           1,297,609       651,883 
   Inventories                                       6,885,161     4,268,146 
   Prepaid expenses and other current assets           458,395       478,108 
                                                   -----------  ------------ 
          Total current assets                      10,133,669     6,382,306 

   Property and equipment, net                       1,579,530     1,496,979 
   Deferred income taxes                               581,356       581,356 
   Intangible asset                                    365,000       365,000 
   Other assets                                        171,822       200,155 
                                                   -----------  ------------ 
Total assets                                       $12,831,377  $  9,025,796 
                                                   ===========  ============ 

          LIABILITIES AND SHAREHOLDERS' EQUITY                               
          ------------------------------------                               

Current liabilities:                                                         
   Accounts payable                                $ 3,503,423  $  2,570,459 
   Accrued expenses and other current liabilities      997,105       725,764 
   Current portion of loan obligation                   68,442        68,442 
                                                   -----------  ------------ 
          Total current liabilities                  4,568,970     3,364,665 

Loan obligation, less current portion                   51,332        68,443 
                                                   -----------  ------------ 

Total liabilities                                    4,620,302     3,433,108 
                                                   -----------  ------------ 

Commitments and contingencies                                                

Shareholders' equity:                                                        
   Preferred stock, $.001 par value, 5,000,000                               
     shares authorized; 2,500 convertible shares                             
     issued and outstanding with a liquidation                               
     preference of $4 per share                          8,898         8,898 
   Common stock, $.001 par value, 40,000,000                                 
     shares authorized; 19,140,877 and 18,460,878                            
     shares issued and outstanding, respectively        19,141        18,461 
   Additional paid-in capital                        8,464,330     7,279,207 
   Accumulated deficit                                (281,294)   (1,713,878)
                                                   -----------  ------------ 
          Total shareholders' equity                 8,211,075     5,592,688 
                                                   -----------  ------------ 

Total liabilities and shareholders' equity         $12,831,377  $  9,025,796 
                                                   ===========  ============ 

See accompanying notes to condensed consolidated financial statements.          

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PETMED EXPRESS, INC. AND SUBSIDIARIES               
CONDENSED CONSOLIDATED STATEMENTS OF INCOME               
(UNAUDITED)               

                                                                [Download Table]

                                                  Three Months Ended June 30, 

                                                       2003         2002      
                                                  ------------  ------------- 
                                                                              

Sales                                             $ 30,387,563  $  14,830,755 
Cost of sales                                       18,582,680      8,568,253 
                                                  ------------  ------------- 
Gross profit                                        11,804,883      6,262,502 
                                                  ------------  ------------- 

Operating expenses:                                                           
      General and administrative                     3,021,254      2,083,423 
      Advertising                                    6,508,990      2,807,180 
      Depreciation and amortization                    127,351         80,664 
                                                  ------------  ------------- 
 Total operating expenses                            9,657,595      4,971,267 
                                                  ------------  ------------- 

 Income from operations                              2,147,288      1,291,235 
                                                  ------------  ------------- 

 Other income (expense):                                                      
      Interest expense                                  (2,681)        (5,590)
      Interest income                                    2,149          4,133 
      Other, net                                           608          2,335 
                                                  ------------  ------------- 
 Total other income (expense)                               76            878 
                                                  ------------  ------------- 

 Income before provision for income taxes            2,147,364      1,292,113 

 Provision for income taxes                            714,780        389,784 
                                                  ------------  ------------- 
 Net income                                       $  1,432,584  $     902,329 
                                                  ============  ============= 

 Net income per common share:                                                 
       Basic                                      $       0.08  $        0.05 
                                                  ============  ============= 
       Diluted                                    $       0.06  $        0.04 
                                                  ============  ============= 

 Weighted average number of common                                            
 shares outstanding:                                                          
       Basic                                        19,010,438     16,590,779 
                                                  ============  ============= 
       Diluted                                      23,012,611     20,092,544 
                                                  ============  ============= 

See accompanying notes to condensed consolidated financial statements.          

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PETMED EXPRESS, INC. AND SUBSIDIARIES               
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
(UNAUDITED)               

                                                                [Download Table]


                                                 Three Months Ended June 30, 

                                                     2003          2002      
                                                 ------------  ------------- 
                                                                             
Cash flows from operating activities:                                        
   Net income                                    $  1,432,584  $     902,329 
   Adjustments to reconcile net income                                       
     to net cash used in operating activities:                               
       Depreciation and amortization                  127,351         80,664 
       Tax benefit related to stock options                                  
         exercised                                    387,600           -    
       Bad debt expense                                 9,588          1,728 
       (Increase) decrease in operating assets                               
         and liabilities:                                                    
            Accounts receivable                      (655,314)       (50,850)
            Inventory                              (2,617,015)    (1,992,435)
            Prepaid expenses and other current                               
              assets                                   19,713        (10,441)
            Other assets                               28,333           -    
            Accounts payable                          932,964        448,248 
            Accrued expenses and other current                               
              liabilities                             271,341        283,047 
                                                 ------------  ------------- 
Net cash used in operating activities                 (62,855)      (337,710)
                                                 ------------  ------------- 

Cash flows from investing activities:                                        
   Purchases of property and equipment               (209,902)      (312,461)
                                                 ------------  ------------- 
Net cash used in investing activities                (209,902)      (312,461)
                                                 ------------  ------------- 

Cash flows from financing activities:                                        
   Proceeds from the exercise of stock options        798,203        159,000 
   Payments on loan obligation                        (17,111)       (17,110)
                                                 ------------  ------------- 
Net cash provided by financing activities             781,092        141,890 
                                                 ------------  ------------- 

Net increase (decrease) in cash and cash                                     
  equivalents                                         508,335       (508,281)
Cash and cash equivalents, at beginning                                      
  of period                                           984,169        737,284 
                                                 ------------  ------------- 
Cash and cash equivalents, at end of period      $  1,492,504  $     229,003 
                                                 ============  ============= 

Supplemental disclosure of cash flow information:                            

   Cash paid for interest                        $      2,404  $       5,634 
                                                 ============  ============= 
   Cash paid for income taxes                    $     32,500  $      -      
                                                 ============  ============= 

See accompanying notes to condensed consolidated financial statements.          

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PETMED EXPRESS, INC. AND SUBSIDIARIES               
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                
(UNAUDITED)               

Note 1:  Summary of Significant Accounting Policies                             

Organization                                                                    

PetMed Express, Inc. and subsidiaries is a leading nationwide               
pet pharmacy.  The Company markets prescription and non-                        
prescription pet medications along with health and nutritional                  
supplements for cats and dogs direct to the consumer.  The                      
Company offers consumers an attractive alternative for obtaining                
pet medications in terms of convenience, price, and speed of                    
delivery.                                                                       

The Company markets its products through national television,               
on-line and direct mail advertising campaigns, which aim to                     
increase the recognition of the "1-800-PetMeds" brand name,                     
increase traffic on its web site at www.1800PetMeds.com , acquire               
new customers, and maximize repeat purchases.  The Company's                    
executive offices are located in Pompano Beach, Florida.                        

The Company's fiscal year end is March 31, and references                   
herein to fiscal 2004 or 2003 refer to the Company's fiscal years               
ending March 31, 2004 and 2003, respectively.                                   

Basis of Presentation and Consolidation                                         

The Company is no longer eligible as a small business filer,                
as of April 1, 2003 the Company holds the status of a regular                   
Securities Exchange Act filer.  The accompanying unaudited                      
condensed consolidated financial statements have been prepared in               
accordance with the instructions to Form 10-Q and, therefore, do                
not include all of the information and footnotes required by                    
accounting principles generally accepted in the United States of                
America for complete financial statements.  In the opinion of                   
management, the accompanying condensed consolidated financial                   
statements contain all adjustments, consisting of normal                        
recurring accruals, necessary to present fairly the financial                   
position of the Company, after elimination of intercompany                      
accounts and transactions, at June 30, 2003 and the statements of               
income for the three months ended June 30, 2003 and 2002 and cash               
flows for the three months ended June 30, 2003 and 2002.  The                   
results of operations for the three months ended June 30, 2003,                 
are not necessarily indicative of the operating results expected                
for the fiscal year ending March 31, 2004.  These financial                     
statements should be read in conjunction with the financial                     
statements and notes thereto contained in the Company's annual                  
report on Form 10-KSB for the fiscal year ended March 31, 2003.                 
The condensed consolidated financial statements include the                     
accounts of PetMed Express, Inc. and its wholly owned                           
subsidiaries.  All significant intercompany transaction has been                
eliminated upon consolidation.                                                  

Use of Estimates                                                                

The preparation of condensed consolidated financial statements              
in conformity with generally accepted accounting principles in                  
the United States of America requires management to make                        
estimates and assumptions that affect the reported amounts of                   
assets and liabilities and disclosure of contingent assets and                  
liabilities at the date of the condensed consolidated financial                 
statements and the reported amounts of revenues and expenses                    
during the reporting period.  Actual results could differ from                  
those estimates.                                                                

Note 2:  Net Income Per Share                                                   

In accordance with the provisions of SFAS No. 128, "Earnings                
Per Share," basic net income per share is computed by dividing                  
net income available to common shareholders by the weighted                     
average number of common shares outstanding during the period.                  
Diluted net income per share includes the dilutive effect of                    
potential stock options exercises, calculated using the treasury                
stock method.  Outstanding stock options, warrants, and                         
convertible preferred shares issued by the Company represent the                
only dilutive effect reflected in diluted weighted average shares               
outstanding.                                                                    

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The following is a reconciliation of the numerators and                     
denominators of the basic and diluted net income per share                      
computations for the periods presented:                                         

                                                                [Download Table]

                                           Three Months Ended June 30,
                                               2003           2002    
                                           ------------   ------------
                                                                      
Net income (numerator):                                               

  Net income                               $  1,432,584   $    902,329

Shares (denominator)                                                  

  Weighted average number of common                                   
    shares outstanding used in basic                                  
    computation                              19,010,438     16,590,779
  Common shares issuable upon exercise                                
    of stock options and warrants             3,992,048      3,491,640
  Common shares issuable upon conversion                              
    of preferred shares                          10,125         10,125
                                           ------------   ------------
  Shares used in diluted computation         23,012,611     20,092,544
                                           ============   ============

Net income per common share:                                          

  Basic                                    $       0.08   $       0.05
                                           ============   ============
  Diluted                                  $       0.06   $       0.04
                                           ============   ============

For the periods ended June 30, 2003 and 2002, 24,600 and                    
1,224,600 shares of common stock options and warrants, with a                   
weighted average exercise price of $4.12 and $1.60, respectively,               
were excluded from the diluted net income per share computation                 
as their exercise prices were greater than the average market                   
price of the common shares for the period.                                      

Note 3:  Accounting for Stock-Based Compensation                                

The Company accounts for employee stock options using the                   
intrinsic value method as prescribed by Accounting Principles                   
Board Opinion ("APB") No. 25, Accounting for Stock Issued to                    
Employees.  The Company follows the disclosure provisions of SFAS               
No. 123, Accounting for Stock-Based Compensation, for employee                  
stock options.  Had the Company determined employee compensation                
cost based on the fair value at the grant date for its stock                    
options under SFAS No. 123, the Company's net income would have                 
been decreased to the pro forma amounts indicated below:                        

                                                                [Download Table]

                                           Three Months Ended June 30,
                                               2003          2002     
                                           ------------   ------------
                                                                      

Reported net income:                       $  1,432,584   $    902,329

Deduct: total stock-based employee                                    
  compensation expense determined                                     
  under fair-value based method for                                   
  all awards, net of related tax effects         44,859         91,290
                                           ------------   ------------

Proforma net income:                       $  1,387,725   $    811,039
                                           ============   ============

Reported basic net income per share:       $       0.08   $       0.05
                                           ============   ============

Proforma basic net income per share:       $       0.07   $       0.05
                                           ============   ============

Reported diluted net income per share:     $       0.06   $       0.04
                                           ============   ============

Proforma diluted net income per share:     $       0.06   $       0.04
                                           ============   ============


Note 4:  Line of Credit                                                         

The Company maintains a $2,000,000 line of credit, effective                
through July 22, 2004.  The interest rate is at the published                   
thirty day London Interbank Offered Rates ("LIBOR") plus 2.65%                  
(3.75% at June 30, 2003), and contains various financial and                    
operating covenants.  At June 30, 2003, there was no outstanding                
balance under the line of credit agreement.                                     

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Note 5:  Commitments and Contingencies                                          

Various complaints had been filed with the Florida Board of                 
Pharmacy.  These complaints, the majority of which were filed by                
veterinarians who are in competition with the Company for the                   
sale of pet prescription-required products, alleged violations of               
the Pharmacy Practice Act and regulations promulgated there                     
under.  The vast majority of the complaints alleged that the                    
Company, through its pharmacists, improperly dispensed                          
prescription-required veterinary medication based on                            
prescriptions verified through the Company's discontinued                       
alternate veterinarian program.  The alternate veterinarian                     
program used a veterinarian outside the state of Florida to                     
verify prescriptions for certain pets outside the state of                      
Florida.  While the program was not used for pets residing in the               
state of Florida, the complaints had, for the most part, been                   
filed with the Florida Board of Pharmacy.  Other complaints                     
alleged the dispensing of medication without a valid                            
prescription, the sale of non-conforming products and that the                  
Company's pharmacy was operating at the same location as another                
pharmacy, with which it had a contractual relationship.  The                    
Company contested all allegations and continued discussions in an               
attempt to reach a resolution of these matters.                                 

In February 2002, the Company voluntarily ceased the use of its             
alternate veterinarian program, and in March 2002 a business                    
decision was made to enter into a settlement agreement with the                 
Florida Board of Pharmacy, rather than to proceed with costly and               
lengthy litigation.  In April 2002, the Florida Board of Pharmacy               
approved the settlement agreement.  The Florida Board of Pharmacy               
did not reach any finding of fact or conclusion of law that the                 
Company committed any wrongdoing or violated any rules or laws                  
governing the practice of pharmacy.  According to the settlement                
agreement, the Company's pharmacy license was placed on probation               
for a period of three years and the Company, the Company's                      
pharmacists and contracted pharmacy and pharmacist, paid                        
approximately $120,000 in fines and investigative costs, in July                
2002.  The Company remains licensed with the State of Florida and               
continues to operate its principal business in Florida.                         

Additional complaints have been filed with other states'                    
Pharmacy Boards.  These complaints, the majority of which were                  
filed by veterinarians who are in competition with the Company                  
for the sale of pet prescription-required products, allege                      
violations of the Pharmacy Practice Act and regulations                         
promulgated there under.  The vast majority of the complaints                   
allege that the Company, through its pharmacists, improperly                    
dispensed prescription-required veterinary medication based on                  
prescriptions verified through the Company's alternate                          
veterinarian program.  The Company contested all allegations and                
continued discussions in an attempt to reach a resolution of                    
these matters.                                                                  

In fiscal 2003, the Company reached settlement agreements with              
the Louisiana, Missouri, New Mexico, and Ohio State Pharmacy                    
Boards.  According to the settlement agreements, the Company was                
required to terminate the alternate veterinarian program in the                 
state and the Company's permit was placed on probation.  As of                  
March 31, 2003, the Company had paid all fines in full to cover                 
any or all administrative and investigative costs associated with               
these settlements.  There can be no assurances made that other                  
states will not attempt to take similar actions against the                     
Company in the future.                                                          

In February 2000, the United States Environmental Protection                
Agency ("EPA") issued a Stop Sale, Use or Removal Order to the                  
Company regarding the alleged distribution or sale of misbranded                
Advantage products in violation of the Federal Insecticide,                     
Fungicide, and Rodenticide Act ("FIFRA"), as amended.  The order                
provides that the company shall not distribute, sell, use or                    
remove the products listed in the order, which are allegedly                    
misbranded.  The order further provides that the Company shall                  
not commence any sale or distribution of those products without                 
the prior written approval from the EPA.  The Stop Sale, Use or                 
Removal Order does not assert any claim for monetary damages;                   
rather, it is in the nature of a cease and desist order.  The                   
Company denied any alleged violations.  On February 16, 2000, the               
Company submitted a written response to the order.  The EPA                     
assessed a fine in the amount of $445,000.  In fiscal 2001 the                  
Company accrued $445,000 of legal settlement expense.                           

In September 2001, the Company and the EPA entered into a                   
Consent Agreement and Final Order ("CAFO").  The settlement                     
agreement required the Company to pay a civil penalty of $100,000               
plus interest, requiring a payment of $56,000, which was paid in                
September 2002, and $53,000 due on September 30, 2003, a                        
reduction from the previously assessed fine of $445,000.  For the               
purpose of this CAFO, the Company admitted to the jurisdictional                
allegations set forth, and neither admitted nor denied the                      
alleged violations.  On September 28, 2001, the CAFO was approved               
and ordered by the regional judicial officer.  Accordingly, a                   
gain of $345,000 was reflected in the statement of income for the               
year ended March 31, 2002, to reflect the adjustment to this                    
settlement.                                                                     

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On March 19, 2002, Novartis Animal Health U.S., Inc.                        
("Novartis") filed a complaint against the Company and two other                
defendants in U.S. District Court for the Southern District of                  
Florida.  Novartis purports to assert seven claims related to the               
Company's alleged sale of pet medications produced for a Novartis               
Australian sister company: Count I: Infringement of Registered                  
Trademark Under Section 32 of the Lanham Act, 15 U.S.C.  1114;                  
Count II: Infringement of Unregistered Trademarks Under Section                 
43(a) of the Lanham Act, 15 U.S.C.  1125(a); Count III: False                   
Advertising Under Section 43(a) of the Lanham act, 15 U.S.C.                    
1125(a); Count IV: Misleading Advertising Under Florida Statutory               
Law; Count V: Deceptive and Unfair Trade Practices Under Florida                
Statutory Law; Count VI: Injury to Business Reputation Under                    
Florida Statutory Law; Count VII: Common Law Unfair Competition.                
Subsequent to the year ended March 31, 2003, the Company reached                
a final settlement agreement with Novartis.  According to the                   
confidential settlement agreement dated April 7, 2003, the                      
Company had satisfactorily resolved the contested issues raised                 
by the complaint and the confidential settlement terms had no                   
material impact on the Company's operations and financial                       
results.                                                                        

The Company is a defendant in a lawsuit in Texas state                      
district court seeking injunctive and monetary relief styled                    
Texas State Board of Pharmacy and State Board of Veterinary                     
Medical Examiners v. PetMed Express, Inc. Cause No.GN-202514, in                
the 201st Judicial District Court, Travis County, Texas.  The                   
Company in its initial pleading denied the allegations contained                
therein.  The Company will vigorously defend, is confident of its               
compliance with the applicable law, and finds wrong-on-the-facts                
the vast majority of the allegations contained in the Plaintiffs'               
supporting documentation attached to the lawsuit.  Discovery has                
recently commenced.  At this early stage of the litigation it is                
difficult to assess any possible outcome or estimate any                        
potential loss in the event of an adverse outcome.                              

Routine Proceedings                                                             

The Company is a party to routine litigation incidental to its              
business.  The Company's management does not believe that the                   
resolution of any or all of such routine litigation is likely to                
have a material adverse effect on the Company's financial                       
condition or results of operations.                                             

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No dealer, sales representative or any other person has been                    
authorized   to  give  any  information  or  to   make   any                    
representations   other  than  those   contained   in   this                    
prospectus  and,  if  given  or made,  such  information  or                    
representation  must  not  be relied  upon  as  having  been                    
authorized  by the company or any of the underwriters.  This                    
prospectus  does not constitute an offer of  any  securities                    
other than those to which it relates or an offer to sell, or                    
a  solicitation of any offer to buy, to any  person  in  any                    
jurisdiction  where such an offer or solicitation  would  be                    
unlawful.  Neither the delivery of this prospectus  nor  any                    
sale  made hereunder shall, under any circumstances,  create                    
an  implication  that the information set  forth  herein  is                    
correct as of any time subsequent to the date hereof.                           

TABLE OF CONTENTS                       

Page                                                      
----                            12,590,985 SHARES         

Prospectus Summary.........                                           
Risk Factors...............        PETMED EXPRESS, INC.               
Forward-Looking                                                       
Statements...............                                         
Capitalization.............                  PROSPECTUS               
Use of Proceeds............                  ----------               
Price Range of                                                        
Common Stock                                                      
and Dividend.............                                         
Policy.....................                                           
Selected Financial                                                    
Data.....................                                         
Management's Discussion                                               
and Analysis or Plan                                              
of Operation.............                                         
Business...................                                           
Management.................                                           
Executive Compensation.....                                           
Certain Transactions.......                                           
Principal Shareholders.....                                           
Description of                                                        
Securities...............                                         
Selling Shareholders.......                                           
Plan of Distribution.......                                           
Legal Matters..............                                           
Experts....................                                           
Additional Information.....                                           
Financial Statements ......                                           

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PART TWO                        

INFORMATION NOT REQUIRED IN PROSPECTUS                      

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.                          

The estimated expenses payable by us in connection with the                     
distribution of the securities being registered are as follows:                 

SEC Registration and Filing Fee...........   $  2,670                           
Legal Fees and Expenses*..................     10,000                           
Accounting Fees and Expenses*.............     10,000                           
Financial Printing*.......................      2,000                           
Transfer Agent Fees*......................        500                           
Blue Sky Fees and Expenses*...............        -0-                           
Miscellaneous*............................      1,000                           
                  --------
TOTAL                                   $ 26,170                      
                  ========
* Estimated                                                                     

None of the foregoing expenses are being paid by the selling                    
shareholders.                                                                   

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.                            

The  Florida  Business  Corporation Act (the  "Corporation  Act")               
permits the indemnification of directors, employees, officers and               
agents  of  Florida corporations. Our Articles  of  Incorporation               
(the  "Articles") and Bylaws provide that we shall indemnify  our               
directors  and  officers to the fullest extent permitted  by  the               
Corporation  Act.  The  provisions of the  Corporation  Act  that               
authorize indemnification do not eliminate the duty of care of  a               
director,  and  in  appropriate circumstances equitable  remedies               
such  as  injunctive or other forms of non-monetary  relief  will               
remain  available under Florida law. In addition,  each  director               
will  continue  to be subject to liability for (a) violations  of               
criminal  laws,  unless  the director  had  reasonable  cause  to               
believe  his  conduct  was lawful or had no reasonable  cause  to               
believe  his  conduct  was  unlawful, (b)  deriving  an  improper               
personal  benefit from a transaction, (c) voting for or assenting               
to  an  unlawful  distribution  and  (d)  willful  misconduct  or               
conscious disregard for our best interests in a proceeding by  or               
in  the  right  of a shareholder. The statute does not  affect  a               
director's  responsibilities under any other  law,  such  as  the               
Federal  securities  laws. The effect  of  the  foregoing  is  to               
require us to indemnify our officers and directors for any  claim               
arising against such persons in their official capacities if such               
person  acted  in good faith and in a manner that  he  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 his  conduct  was               
unlawful.                                                                       

Insofar  as  indemnification for liabilities  arising  under  the               
Securities Act may be permitted to directors, officers or persons               
controlling PetMed pursuant to the foregoing provisions, we  have               
been  informed that in the opinion of the Securities and Exchange               
Commission, indemnification is against public policy as expressed               
in  the  Securities Act and is, therefore, unenforceable. In  the               
event that a claim for indemnification against these liabilities,               
other than the payment by PetMed in the successful defense of any               
action, suit or proceeding, is asserted, we will, unless  in  the               
opinion of our counsel the matter has been settled by controlling               
precedent,  submit  to  a court of appropriate  jurisdiction  the               
question  whether  indemnification by us  against public  policy.               
We will be governed by the final adjudication of this issue.                    

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ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES                               

In  May 2003, we issued 12,500 shares of our common stock to  one               
individual upon the exercise of options at an exercise  price  of               
$.20  per share. The share issuance was exempt under Section 4(2)               
of  the  Securities  Act.    The  option  holder  had  access  to               
information   about  us  and  the  shares  issued   contain   the               
appropriate  restrictive legend restricting their transferability               
absent registration or an available exemption.                                  

In  July 2002, we issued 12,500 shares of our common stock to two               
individuals upon the exercise of options at an exercise price  of               
$.20  per share. The share issuance was exempt under Section 4(2)               
of  the  Securities  Act.   The  option  holders  had  access  to               
information   about  us  and  the  shares  issued   contain   the               
appropriate  restrictive legend restricting their transferability               
absent registration or an available exemption.                                  

In  June  2002 we issued 10,500 shares of our common stock  to  a               
former  employee. These shares were issued upon the  exercise  of               
options held by the former employee at $1.25 per share. The share               
issuance was exempt under Section 4(2) of the Securities Act. The               
option  holder had access to information about us and the  shares               
issued  contain  the  appropriate restrictive legend  restricting               
their   transferability  absent  registration  or  an   available               
exemption.                                                                      

In  April  2002,  upon  the exercise of outstanding  options,  we               
issued  600,000 shares of common stock to two option  holders  in               
consideration of $159,000. Options to purchase 300,000 shares  of               
common  stock  were  exercised by our  president.  The  remaining               
options were exercised by a consulting firm. The  share issuances               
were  exempt from registration by Section 4(2) of the  Securities               
Act. The security holders had access to information about us  and               
had  the opportunity to ask questions about us. The shares issued               
contain   a  legend  restricting  their  transferability   absent               
registration or an available exemption.                                         

On  November 22, 2000, we issued Tricon Holdings, LLC, a  Florida               
limited liability corporation, 10,000,000 shares of common  stock               
and  warrants to purchase 3,000,000 shares of common  stock.  The               
warrants are exercisable at $.33 per share and expire on November               
22, 2005. The shares of common stock and warrants were issued  to               
Tricon   Holdings  in  exchange  for  $2,000,000.  The   security               
issuances  were exempt from registration by Section 4(2)  of  the               
Securities  Act  and  Regulation D  promulgated  thereunder.  The               
security  holder had access to information about us and  had  the               
opportunity  to  ask  questions about us. The  securities  issued               
contain   a  legend  restricting  their  transferability   absent               
registration or an available exemption.                                         

In  March  2000, we gave $50,000 and granted warrants to purchase               
20,000  shares of our common stock to Nico Pronk and Wayne Horne,               
principals  of  Noble  Financial  Group,  in  exchange  for   the               
termination  of  a  consulting agreement  between  us  and  Noble               
Financial  Group,  an investment banking firm. The  warrants  are               
exercisable at $3.125 per share and expired on March 7, 2003. The               
warrant issuance was exempt from registration by Section 4(2)  of               
the Securities Act. The security holder had access to information               
about  us and had the opportunity to ask questions about us.  The               
warrant  issued contains a legend restricting its transferability               
absent registration or an available exemption.                                  

In  November 1999, we granted warrants to purchase 75,000  shares               
of  our common stock to JW Genesis Capital Markets, an investment               
advisory   firm  in  exchange  for  investment  banking   related               
services. The warrants are exercisable at $1.48 per share at  any               
time  prior to November 12, 2004. The warrant issuance was exempt               
from  registration  by Section 4(2) of the  Securities  Act.  The               
security  holder had access to information about us and  had  the               
opportunity  to  ask  questions  about  us.  The  warrant  issued               
contains   a   legend  restricting  its  transferability   absent               
registration or an available exemption.                                         

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In November 1999, we issued warrants to purchase 75,000 shares of               
our  common  stock a former shareholder, pursuant to a settlement               
of litigation. The warrants are exercisable at $3.50 per share at               
any  time  prior  to November 1, 2002. The warrant  issuance  was               
exempt  from registration by Section 4(2) of the Securities  Act.               
The  security holder had access to information about us  and  had               
the  opportunity  to ask questions about us. The  warrant  issued               
contains   a   legend  restricting  its  transferability   absent               
registration or an available exemption.                                         

We  established  the  1998 Stock Option Plan effective  July  31,               
1998,  which  provides for the issuance of qualified  options  to               
officers,  directors and key employees, and nonqualified  options               
to  consultants and other service providers. Through  August  12,               
2003,   we   had  issued  and  outstanding  options  to  purchase               
approximately  2,075,103 shares of common stock  under  the  Plan               
with  exercise  prices  ranging from $.32 to  $8.00  and  various               
expiration  dates.  The options were issued to  approximately  30               
officers, directors, key employees, consultants and other service               
providers.  The security issuances were exempt from  registration               
by  Section  4(2) of the Securities Act. The option  holders  had               
access  to  information about us and had the opportunity  to  ask               
questions  about  us.  The  options  issued  contain   a   legend               
restricting  their  transferability  absent  registration  or  an               
available exemption.                                                            

With respect to each of the foregoing transactions, each                        

*     had access to business and financial information concerning               
us,                                                                 
*     was  afforded  the  opportunity to  ask  questions  of  our               
management concerning our operations and  the terms of  the         
offering,                                                           
*     represented that he, she or it was acquiring the securities               
for investment  purposes only and not  with a  view towards         
distribution or resale except in compliance with applicable         
securities laws and                                                 
*     had such knowledge and experience in business and financial               
matters  that he,  she or it was able to evaluate the risks         
and merits of an investment.                                        

In addition, the certificates evidencing the securities that were               
issued  contained  a  legend  restricting  their  transferability               
absent  registration under the Securities Act or the availability               
of  an  applicable exemption therefrom. Each of the  transactions               
was  exempt  from the registration requirements of the Securities               
Act  by  reason of Sections 4(2) and/or 4(6) thereof  and/or  the               
rules   and  regulations  thereunder,  including  Rule   506   of               
Regulation D.                                                                   

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                            

(a)    Exhibits.                                                                

Exhibit                                                                         
Number                    Description                                           
-------                   -----------                                           

(3)     Articles of Incorporation and Bylaws.                                   

3.1     Amended   and   Restated   Articles   of   Incorporation            
(incorporated by reference to the Registration Statement    
on Form 10-SB, as amended, File No. 000-28827).             
3.2     Bylaws of the  Corporation (incorporated by reference to            
the  Registration  Statement on  Form 10-SB, as amended,    
File No. 000-28827).                                        

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(4)     Instruments Defining the Rights of Security Holders.                    

4.1     Form    of   Warrant   issued   to  Noble  International            
Investments, Inc.  (incorporated by  reference  to   the    
Registration  Statement on Form 10-SB, as  amended, File    
No. 000-28827).                                             

4.2     Specimen   common  stock  certificate  (incorporated  by            
reference to  the Registration  Statement on Form 10-SB,    
as amended, File No. 000-28827).                            

4.3     Form  of Non-Plan  Option (incorporated  by reference to            
the Registration  Statement  on Form SB-2,  as  amended,    
File No. 333-97565).                                        

4.4     Form  of Warrant  (incorporated  by  reference  to   the            
Registration  Statement  on  Form SB-2, as amended, File    
No. 333-97565).                                             

4.5     Tricon  Holdings, LLC Warrant (incorporated by reference            
to the Registration  Statement on Form SB-2, as amended,    
File No. 333-97565).                                        

(5)    Opinion of Counsel                                                     

5.1     Form of Opinion of Katz, Barron, Squitero, Faust & Boyd,            
P.A.*                                                       

(10)  Material Contracts                                                      

10.1    Second  Amended and Restated Employment  Agreement  with            
Marc A. Puleo  (incorporated  by  reference  to  Exhibit    
10.1  of the  Registrant's Annual  Report on Form 10-KSB    
for the  fiscal year  ended  March 31, 2000,  Commission    
File No. 000-28827).                                        
10.2    1998 Stock Option Plan (incorporated by reference to the            
Registration  Statement  on  Form  10-SB,  File No. 000-    
28827).                                                     
10.3    Line  of  Credit  Agreement  with SouthTrust  Bank, N.A.            
(incorporated by reference to the Registration Statement    
on Form 10-SB, File No. 000-28827).                         
10.4    Employment  Agreement with  Menderes Akdag (incorporated            
by reference to Exhibit 10 of the Registrant's  Form 8-K    
on March 16, 2001, Commission File No. 000-28827).          
10.5    Agreement  for the  Sale  and  Leaseback of the Land and            
Building.  (incorporated by reference to Exhibit 99.1 of    
the Registrant's Form 8-K on June 14, 2001,  Commission     
File No. 000-28827).                                        
10.6    Line of  Credit Renewal  Agreement with SouthTrust Bank,            
N.A. (incorporated by  reference to Exhibit 10.6 of  the    
Registrant's Annual Report on Form 10-KSB for the fiscal    
year  ended  March 31, 2002,  Commission  File No.  000-    
28827).                                                     
10.7    Loan Agreement  with SouthTrust Bank, N.A. (incorporated            
by reference to Exhibit 10.7 of the Registrant's  Annual    
Report on  Form 10-KSB for  the fiscal  year ended March    
31, 2002, Commission File No. 000-28827).                   
10.8    Second  Line  of  Credit  ($1,000,000)   Agreement  with            
SouthTrust  Bank, N.A.  (incorporated  by  reference  to    
Exhibit 99.3 of  the  Registrant's  Quarterly  Report on    
Form 10- QSB for  the three  months ended June 30, 2002,    
Commission File No. 000-28827).                             
10.9    Third Line of Credit ($2,000,000) Agreement with                    
SouthTrust  Bank, N.A.  (incorporated  by  reference  to    
Exhibit 10.9 of the Registrant's Annual  Report on  Form    
10-KSB   for  the  fiscal  year  ended  March 31,  2003,    
Commission File No. 000-28827).                             

(16)  Letter regarding Change in Certifying Accountant.                       

16.1    Letter  from  Lopez, Levi, &  Associates LLC,  regarding            
change  in  certifying   accountants.  (incorporated  by    
reference to Exhibit 16 of  the Registrant's Form 8-K on    
April 24, 2001, Commission File No. 000-28827).             

(21)  Subsidiaries of Registrant.                                             

21.1    Subsidiaries  of  Registrant  (incorporated by reference            
to the Registration  Statement on Form SB-2, as amended,    
File No. 333-97565).                                        

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(23)  Consents.                                                               

23.1    Consent of Counsel (see Exhibit 5).                                 
23.2    Consent  of  Independent  Certified Public Accountants.*            

*  Filed herewith                                                               

ITEM 17.  UNDERTAKINGS                                                          

The undersigned Registrant also undertakes:                                     

(1)   To  file,  during any  period in which  offers or sales  are              
being    made,    a   post-effective   amendment   to   this        
registration statement:                                             

(i)   To  include  any prospectus required by section 10(a)(3)  of              
the Securities Act of 1933;                                         

(ii)  To  reflect  in  the prospectus any facts or events  arising              
after  the effective date of the registration statement  (or        
the  most  recent  post-effective amendment thereof)  which,        
individually  or in the aggregate, represent  a  fundamental        
change  in  the  information set forth in  the  registration        
statement;                                                          

(iii) To include any material information with respect to the plan              
of   distribution    not   previously   disclosed   in   the        
registration  statement  or  any  material  change  to  such        
information in the registration statement;                          

Provided,  however, that paragraphs (a)(1)(i) and  (a)(1)(ii)  do               
not apply if the registration statement is on Form S-3 or Form S-               
8,  and  the  information  required to be  included  in  a  post-               
effective amendment by those paragraphs is contained in  periodic               
reports filed by the registrant pursuant to section 13 or section               
15(d)   of   the  Securities  Exchange  Act  of  1934  that   are               
incorporated by reference in the registration statement.                        

(2)   That,  for the  purpose of determining any liability  under               
the  Securities  Act  of  1933,  each  such  post-effective         
amendment  shall  be  deemed  to  be  a   new  registration         
statement relating  to  the   securities  offered  therein,         
and  the  offering  of  such securities  at that time shall         
be deemed to be the initial bona fide offering thereof.             

(3)   To  remove  from  registration by means of a post-effective               
amendment  any  of  the securities  being registered  which         
remain unsold at the termination of the offering.                   

Insofar  as  indemnification for liabilities  arising  under  the               
Securities  Act  of 1933 may be permitted to directors,  officers               
and  controlling  persons  of  the  registrant  pursuant  to  the               
foregoing  provisions,  or otherwise,  the  Registrant  has  been               
advised  that  in  the  opinion of the  Securities  and  Exchange               
Commission  (the  "Commission") such indemnification  is  against               
public  policy  as  expressed  in  the  Securities  Act  and  is,               
therefore,  unenforceable.  In  the  event  that  a   claim   for               
indemnification against such liabilities (other than the  payment               
by  the  Registrant of expenses incurred or paid by  a  director,               
officer or controlling person of the Registrant in the successful               
defense  of  any action, suit or preceding) is asserted  by  such               
director,  officer or controlling person in connection  with  the               
securities being registered, the Registrant will, unless  in  the               
opinion of its counsel the matter has been settled by controlling               
precedent,  submit  to  a court of appropriate  jurisdiction  the               
question  whether  such indemnification by it is  against  public               
policy as expressed in the Securities Act and will be governed by               
the final adjudication of such issue.                                           

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SIGNATURES                

Pursuant to the requirements of the Securities  Act  of 1933,  as               
amended,   the  registrant  has duly caused  this  Post-Effective               
Amendment No. 1  to Form SB-2 on Form S-1 registration  statement               
to be signed on its  behalf   by the  undersigned, thereunto duly               
authorized,  in  the city of  Pompano Beach,  State of Florida on               
August 19, 2003.                                                                

PETMED EXPRESS, INC.    

By: /s/ Menderes Akdag  
         ---------------------------
Menderes Akdag    
         Chief Executive Officer and
         Principal Executive Officer

Pursuant to  the  requirements  of the Securities Act of 1933, as               
amended, this Post-Effective Amendment No. 1 to Form SB-2 on Form               
S-1 registration  statement  has  been signed  by  the  following               
persons in the capacities and on the dates indicated.                           

                                                        [Enlarge/Download Table]

SIGNATURE                     TITLE                                           DATE       
-----------------------------------------------------------------------------------------
                                                                                         

/s/ Menderes Akdag           Chief Executive Officer                    August 19, 2003  
------------------------     (Principal Executive Officer)                               
Menderes Akdag               and Director                                                

/s/ Marc Puleo, M.D.         Chairman of the Board,                     August 19, 2003  
------------------------     President and Director                                      
Marc Puleo, M.D.                                                                         

/s/ Bruce S. Rosenbloom      Chief Financial Officer and                                 
------------------------     Treasurer (Principal Financial             August 19, 2003  
Bruce S. Rosenbloom          and Accounting Officer)                                     

/s/ Robert C. Schweitzer     Director                                   August 19, 2003  
------------------------                                                                 
Robert C. Schweitzer                                                                     

/s/ Ronald Korn              Director                                   August 19, 2003  
------------------------                                                                 
Ronald Korn                                                                              

/s/ Gian Fulgoni             Director                                   August 19, 2003  
------------------------                                                                 

Gian Fulgoni                                                                             

------------------------     Director                                                    
Frank J. Formica                                                                         


II-6                

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-1/A’ Filing		Date		First		Last			Other Filings
		11/22/05		49		79
		11/12/04		79
		7/22/04		28		74
		4/7/04		51
		3/31/04		4		73			10-K
		3/16/04		42		68			4,  8-K
		2/28/04		36
		10/1/03		28		36
		9/30/03		38		75			10-Q,  4
Filed on:		8/22/03		1		3
		8/19/03		83
		8/12/03		3		80			8-K
		8/11/03		40		51			10-Q,  3,  4
		7/31/03		40					4
		7/25/03		28		36
		6/30/03		4		74			10-Q,  4
		5/31/03		28		32
		5/10/03		55
		4/7/03		38		76
		4/1/03		73
		3/31/03		4		81			10KSB
		3/18/03		63
		3/16/03		42		68
		3/7/03		79
		12/31/02		29		69			10QSB
		11/19/02		41
		11/14/02		41					10QSB/A
		11/13/02		41
		11/1/02		80
		9/30/02		29		69			10QSB,  10QSB/A
		9/25/02		47
		8/12/02		2		3			424B3
		7/31/02		2
		7/22/02		63
		6/30/02		4		81			10QSB
		6/1/02		28		63
		5/20/02		43
		3/31/02		4		81			10KSB
		3/19/02		38		76
		3/16/02		42		68
		3/12/02		28		63
		2/22/02		28		63
		12/31/01		29		69			10QSB
		10/31/01		68
		9/30/01		29		69			10QSB
		9/28/01		23		75
		6/30/01		20		69			10QSB,  NT 10-Q
		6/14/01		81					8-K
		6/13/01		68
		5/31/01		28		68
		5/30/01		40
		5/18/01		68
		5/1/01		68					8-K
		4/24/01		81					8-K
		3/31/01		4		67			10KSB,  NT 10-K
		3/16/01		39		81			8-K
		12/31/00		29					10QSB
		11/22/00		49		79			3,  8-K
		11/8/00		43
		9/30/00		29					10QSB
		6/30/00		29					10QSB,  NT 10-Q
		5/1/00		43
		3/31/00		15		81			10KSB,  NT 10-K
		3/7/00		68
		2/16/00		37		75
		12/21/99		39
		9/3/99		47
		7/19/99		39
		3/31/99		15
		12/14/98		39
		7/31/98		65		80
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