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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 (Amendment No. 1)
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission File Number 1-3473
 PET DRX CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)215 Centerview Drive, Suite 360
    
    56-2517815(I.R.S. Employer
Identification No.)Brentwood, Tennessee
    
    37027(Address of principal executive offices)
    
    (Zip Code)
 (615) 369-1914
  Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $.0001 per share
    
    Nasdaq Capital Market
 None
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE: None




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EXPLANATORY NOTE
   ii




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##### 



INDEX
TO FORM 10-K
 PagePART IIIItem 10. Directors, Executive Officers, and Corporate Governance
    
    
    1Item 11. Executive Compensation
    
    
    7Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    12Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    15Item 14. Principal Accountant Fees and Services
    
    
    15PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    17EX-31.1EX-31.2
  iii




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PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  Name
    
    Age
    
    Current Position with Pet DRxGene E. Burleson
    
    
    69
    
    
    Chairman of the Board and Chief Executive OfficerJoel Kanter
    
    
    53
    
    
    DirectorChristopher W. Kersey
    
    
    40
    
    
    DirectorRichard O. Martin
    
    
    70
    
    
    DirectorJ. David Reed, DVM
    
    
    61
    
    
    Director and Senior Vice President of OperationsZubeen Shroff
    
    
    45
    
    
    Director
 BOARD VOTING AGREEMENT




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OUR BOARD OF DIRECTORS
 GENE E. BURLESON,
 JOEL KANTER,
 2




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CHRISTOPHER W. KERSEY,
 RICHARD O. MARTIN, PHD
 3




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J. DAVID REED, DVM,
 ZUBEEN SHROFF,
 Board Leadership Structure and Risk Oversight
  4




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Board Diversity
  Audit Committee
  Code of Ethics
  SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
   5




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6




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Item 11. Executive Compensation
 Executive Compensation
 Summary Compensation Table for Fiscal Year 2009
  Non-EquityIncentive
    
    NonqualifiedStock
    
    
    
    
    
    Plan
    
    Deferred
    
    All OtherName and
    
    
    
    Salary
    
    
    
    
    Awards
    
    Option
    
    
    Compensation
    
    Compensation
    
    Compensation ($)Principal Position
    
    Year
    
    ($)
    
    
    Bonus ($)
    
    ($)
    
    Awards ($)(1)
    
    
    ($)
    
    Earnings ($)
    
    (2)
    
    
    Total ($)Gene E. Burleson
    
    2009
    
    $
    360,000
    
    
    
    
    
    
    $
    18,000
    
    
    
    
    
    
    
    
    
    
    $
    378,000Chairman and Chief Executive Officer(3)
    
    2008
    
    $
    94,091
    
    
    
    
    
    
    $
    115,140
    (4)
    
    
    
    
    
    
    
    
    
    $
    209,231Harry L. Zimmerman
Executive Vice President and
    
    2009
    
    $
    300,000
    
    
    
    
    
    
    $
    16,000
    
    
    
    
    
    
    $
    10,147
    (6)
    
    $
    326,147Chief Financial Officer(5)
    
    2008
    
    $
    70,750
    
    
    
    
    
    
    $
    97,500
    
    
    
    
    
    
    
    
    
    
    $
    168,250George A. Villasana
Executive Vice President,
    
    2009
    
    $
    240,000
    
    
    
    
    
    
    $
    8,000
    
    
    
    
    
    
    $
    13,589
    (8)
    
    $
    261,589General Counsel and Secretary (7)
    
    2008
    
    $
    240,000
    
    
    
    
    
    
    $
    169,083
    
    
    
    
    
    
    $
    21,859
    
    
    $
    430,942
 
 (1)
    
    The amounts reported reflect the aggregate grant date fair value of each award computed
in accordance with FASB ASC Topic 718. For a description of the assumptions used in the
calculation of these amounts, see Note 13 of the Notes to the Consolidated Financial
Statements in our Annual Report on Form 10-K for the year ended December 31, 2009.(2)
    
    The aggregate amount of perquisites and other personal benefits was less than $10,000
for Mr. Burleson in 2009 and 2008. Mr. Burleson did not participate in the Companys
medical and dental insurance plans, 401-k plan and health savings account plan during 2008
and 2009. The aggregate amount of perquisites and other personal benefits was less than
$10,000 for Mr. Zimmerman in 2008.(3)
    
    Mr. Burleson joined the Company in September 2008.(4)
    
    The amount reflects 101,000 stock options awarded for his service as a non-employee
director and 315,472 stock options awarded for his service as Chief Executive Officer.(5)
    
    Mr. Zimmerman joined the Company in September 2008.(6)
    
    Consists of disability insurance premiums of $1,058, medical insurance premiums of
$7,551, dental insurance premiums of $347, and life insurance premiums of $1,191. Mr.
Zimmerman did not participate in the Companys 401-k plan and health savings account plan
during 2008 and 2009.(7)
    
    Mr. Villasana joined the Company in June 2007.(8)
    
    Consists of disability insurance premiums of $1,103, medical insurance premiums of
$2,606, contribution payments to an HSA account in the amount of $2,138, dental insurance
premiums of $386, life insurance premiums of $864, 401-k matching contribution of $273 and
relocation expense reimbursements of $6,215. 7




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Employment Agreements
  Gene E. Burleson
 Harry L. Zimmerman
 George A. Villasana
 8




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9




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Outstanding Equity Awards At 2009 Fiscal Year-End
  Option Awards(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)EquityIncentivePlanNumber of
    
    
    Awards:Number of
    
    
    Securities
    
    
    Number ofSecurities
    
    
    Underlying
    
    
    SecuritiesUnderlying
    
    
    Unexercised
    
    
    Underlying
    
    
    OptionUnexercised
    
    
    Options (#)
    
    
    Unexercised
    
    
    Exercise
    
    
    OptionOptions (#)
    
    
    Unexercisable
    
    
    Unearned
    
    
    Price
    
    
    ExpirationName
    
    Exercisable (1)
    
    
    (1)
    
    
    Options (#)
    
    
    ($)(2)
    
    
    DateGene E. Burleson
    
    
    131,234
    
    
    
    93,376
    (3)
    
    
    
    
    
    $
    .20
    
    
    
    03/18/201936,000
    (4)
    
    
    0
    
    
    
    
    
    
    $
    6.50
    
    
    
    03/14/201865,000
    (5)
    
    
    0
    
    
    
    
    
    
    $
    6.50
    
    
    
    03/14/2018210,315
    (6)
    
    
    105,157
    
    
    
    
    
    
    $
    1.00
    
    
    
    11/18/2018Harry L. Zimmerman
    
    
    116,655
    
    
    
    83,345
    (3)
    
    
    
    
    
    $
    .20
    
    
    
    03/18/2019166,667
    
    
    
    83,333
    (6)
    
    
    
    
    
    $
    1.00
    
    
    
    11/18/2018George A. Villasana
    
    
    58,323
    
    
    
    41,667
    (3)
    
    
    
    
    
    $
    .20
    
    
    
    03/18/201977,100
    (7)
    
    
    0
    
    
    
    
    
    
    $
    6.16
    
    
    
    07/05/201724,766
    
    
    
    12,382
    (8)
    
    
    
    
    
    $
    6.16
    
    
    
    11/28/201742,055
    
    
    
    21,026
    (8)
    
    
    
    
    
    $
    3.18
    
    
    
    11/28/201719,302
    
    
    
    38,603
    (9)
    
    
    
    
    
    $
    6.70
    
    
    
    01/10/2018
 
 (1)
    
    The amounts listed in this column reflect the number of shares of Pet DRx common stock
issuable upon exercise of the option. To the extent any of these options previously
represented the right to receive shares of PVGI common stock, as a result of the Merger,
these options now represent the right to receive Pet DRxs common stock, with the number of
shares underlying the options adjusted by multiplying the number of PVGI common stock by the
exchange ratio in the Merger.(2)
    
    Reflects the adjustment of the option exercise price in the Merger by dividing the PVGI
exercise price by the exchange ratio in the Merger. The exercise prices listed in this
column represent the exercise price paid upon the exercise of the option to receive shares
of Pet DRx common stock.(3)
    
    33.33% of these options vest on date of grant and 2.78% vest ratably each month
thereafter.(4)
    
    These options immediately vested on 03/14/2008.(5)
    
    These options vested in full on 01/04/2009.(6)
    
    33.33% of these options vest on 12/31/2008, 33.33% vest on 12/31/2009 and 33.33% vest on
12/31/2010.(7)
    
    These options fully vested on the date of the Merger.(8)
    
    33.33% of these options vest on 6/12/2008, 33.33% vest on 6/12/2009, and 33.33% vest on
6/12/2010.(9)
    
    33.33% of these options vest on 01/10/09, 33.33% vest on 01/10/2010 and 33.33% vest on
01/10/2011. 10




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NON-EMPLOYEE DIRECTOR COMPENSATION IN FISCAL YEAR 2009
     FeesEarned
    
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    
    Nonqualifiedor Paid
    
    
    Stock
    
    
    Option
    
    
    Incentive Plan
    
    
    Deferred
    
    
    All Otherin Cash
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Compensation
    
    
    CompensationName
    
    ($)
    
    
    ($)
    
    
    ($)(1)
    
    
    ($)
    
    
    Earnings ($)
    
    
    ($)
    
    
    Total ($)Richard Johnston(2)
    
    
    
    
    
    
    
    
    
    $
    3,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,120Joel Kanter
    
    
    
    
    
    
    
    
    
    $
    3,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,120Christopher Kersey(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Richard Martin
    
    
    
    
    
    
    
    
    
    $
    3,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,120Zubeen Shroff
    
    
    
    
    
    
    
    
    
    $
    1,920
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    111,837
 
 (1)
    
    The amounts reported reflect the aggregate grant date fair value of each award computed in
accordance with FASB ASC Topic 718. For a description of the assumptions used in the
calculation of these amounts, see Note 13 of the Notes to the Consolidated Financial
Statements in our Annual Report on Form 10-K for the year ended December 31, 2009. As of
December 31, 2009, each non-employee director held the following aggregate number of stock
options: Richard Johnston  147,756 options; Joel Kanter  159,756 options; Richard Martin
 128,000 options; and Zubeen Shroff 24,000 options.(2)
    
    Mr. Johnston resigned from the Board on January 7, 2010.(3)
    
    Mr. Kersey was appointed to the Board on January 7, 2010. 11




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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
 STOCK OWNERSHIP INFORMATION
  
    
    each person known by us to be the beneficial owner of more than 5% of Pet DRxs
outstanding 23,714,459 shares of common stock; and
    
    each of the named executive officers (as identified in Executive Compensation
above) and directors of Pet DRx; and all of the executive officers and directors of Pet
DRx as a group.
   Percent ofNumber of
    
    OutstandingName and Address of Beneficial Owners (1)
    
    Shares
    
    Common StockGene E. Burleson (2)
    
    
    2,312,434
    
    
    
    8.89
    %Harry L. Zimmerman (3)
    
    
    432,386
    
    
    
    1.79
    %George Villasana (4)
    
    
    216,224
    
    
    
    *Joel Kanter (5)
    
    
    601,465
    
    
    
    3.85
    %Richard Martin (6)
    
    
    379,220
    
    
    
    1.59
    %Zubeen Shroff (7)
    
    
    9,051,230
    
    
    
    27.26
    %Richard Johnston (8)
    
    
    4,590,255
    
    
    
    16.68
    %J. David Reed (9)
    
    
    677,801
    
    
    
    2.83
    %Gary Brukardt (10)
    
    
    146,473
    
    
    
    *Christopher W. Kersey (11)
    
    
    4,452,906
    
    
    
    15.68
    %Camden entities (12)
    
    
    4,452,906
    
    
    
    15.68
    %Galen entities (13)
    
    
    9,005,768
    
    
    
    27.14
    %Knott entities (14)
    
    
    3,565,236
    
    
    
    13.38
    %Wynnefield entities (15)
    
    
    5,133,869
    
    
    
    18.58
    %All directors and executive officers as a group
(10 individuals) (16)
    
    
    13,636,193
    
    
    
    36.23
    %
 
 *
    
    Less than 1%.(1)
    
    Unless otherwise indicated, the business address of each of the individuals is 215 Centerview
Drive, Suite 360, Brentwood, Tennessee 37027. The persons and entities named in the table
have sole voting and investment power with respect to all shares beneficially owned by them,
except as noted below. 12




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(2)
    
    Includes (i) 1,554,765 shares of common stock issuable upon exercise of warrants and options
and the conversion of convertible promissory notes within 60 days of March 31, 2010 and (ii)
178,954 shares subject to the IPO Escrow Agreement.(3)
    
    Consists entirely of shares of common stock issuable upon exercise of warrants and options
and the conversion of convertible promissory notes within 60 days of March 31, 2010.(4)
    
    Consists entirely of shares of common stock issuable upon exercise of options within 60 days
of March 31, 2010.(5)
    
    Includes (i) 149,349 shares of common stock issuable to Mr. Kanter upon exercise of options
within 60 days of March 31, 2010, (ii) 30,427 shares of common stock and 25,837 shares of
common stock issuable upon exercise of warrants within 60 days of March 31, 2010 by Windy
City, Inc., a Delaware corporation (WCI), over which Mr. Kanter, as WCIs President, is
deemed to have sole investment and voting control, and (iii) 63,607 shares of common stock
and 151,458 shares of common stock issuable upon exercise of warrants and the conversion of
convertible promissory notes within 60 days of March 31, 2010 by Kanter Family Foundation, an
Illinois not-for-profit corporation (KFF), over which Mr. Kanter, as KFFs President, is
deemed to have sole investment and voting control. Mr. Kanter disclaims beneficial ownership
of the shares of common stock held by WCI and KFF, except to the extent of his pecuniary
interest therein.(6)
    
    Includes (i) 210,047 shares of common stock issuable upon exercise of warrants and options
within 60 days of March 31, 2010 and (ii) 84,587 shares subject to the IPO Escrow Agreement.(7)
    
    The business address is 680 Washington Boulevard, 11th Floor, Stamford, Connecticut 06901.
Galen Partners IV, L.P. has shared voting and investment power over 3,819,015 shares of common
stock and 4,486,423 shares of common stock issuable upon exercise of warrants and options and
the conversion of convertible promissory notes within 60 days of March 31, 2010. Galen
Partners International IV, L.P. has shared voting and investment
power over 303,418 shares of
common stock and 356,398 shares of common stock issuable upon exercise of warrants and options
and the conversion of convertible promissory notes within 60 days of March 31, 2010. Includes
85,976 shares of common stock issuable to Mr. Shroff upon exercise of warrants and options
within 60 days of March 31, 2010. Mr. Shroff is a managing member of Claudius IV, L.L.C.
which serves as general partner of Galen Partners IV, L.P. and Galen Partners International
IV, L.P. Mr. Shroff disclaims beneficial ownership of the shares of common stock held by
Galen Partners IV, L.P. and Galen Partners International IV, L.P. except to the extent of his
pecuniary interest therein.(8)
    
    The business address is 500 East Pratt Street, Suite 1200, Baltimore, Maryland 21202.
Richard Johnston has shared voting and investment power over 2,028,037 shares of common stock.
Camden Partners Strategic Fund III, L.P. has shared voting and investment power over
1,947,119 shares of common stock and 2,328,118 shares of common stock issuable upon exercise
of warrants and the conversion of convertible promissory notes within 60 days of March 31,
2010. Camden Partners Strategic Fund III-A, L.P. has shared voting and investment power over
80,918 shares of common stock and 96,752 shares of common stock issuable upon exercise of
warrants and the conversion of convertible promissory notes within 60 days of March 31, 2010.
Includes 137,349 shares of common stock issuable to Mr. Johnston upon exercise of options
within 60 days of March 31, 2010. Richard M. Johnston is a managing member of Camden Partners
Strategic Manager, LLC, the managing member of Camden Partners Strategic III, LLC, the general
partner of the Camden Funds. The other managing members of Camden Partners Strategic Manager,
LLC, are David L. Warnock, Richard M. Berkeley, and Donald W. Hughes. Mr. Johnston disclaims
beneficial ownership of the shares of common stock held by Camden Partners Strategic Fund III,
L.P. and Camden Partners Strategic Fund III-A, L.P. except to the extent of his pecuniary
interest therein. Mr. Johnston resigned from the board of directors of the Company effective
as of January 7, 2010.(9)
    
    Includes 168,941 shares of common stock issuable upon exercise of warrants and options and
the conversion of convertible promissory notes within 60 days of March 31, 2010.(10)
    
    Includes (i) 23,024 shares of common stock issuable upon exercise of warrants within 60 days
of March 31, 2010 and (ii) 61,725 shares subject to the IPO Escrow Agreement. Mr. Brukardt
resigned from the board of directors of the Company effective as of July 28, 2009.(11)
    
    The business address is 500 East Pratt Street, Suite 1200, Baltimore, Maryland 21202.
Christopher Kersey has shared voting and investment power over 2,028,037 shares of common
stock. Camden Partners Strategic Fund III, L.P. has shared voting and investment power over
1,947,119 shares of common stock and 2,328,118 shares of common stock issuable upon exercise
of warrants and the conversion of convertible promissory notes within 60 days of March 31,
2010. Camden Partners Strategic Fund III-A, L.P. has shared voting and investment power over
80,918 shares of common stock and 96,752 shares of common stock issuable upon exercise of
warrants and the conversion of convertible promissory notes within 60 days of March 31, 2010.
Christopher W. Kersey is a managing member of Camden Partners Holdings, LLC. Mr. Kersey
disclaims beneficial ownership of the shares of common stock held by Camden Partners Strategic
Fund III, L.P. and Camden Partners Strategic Fund III-A, L.P. except to the extent of his
pecuniary interest therein.(12)
    
    The business address is 500 East Pratt Street, Suite 1200, Baltimore, Maryland 21202. Each
of Richard Johnston, David L. Warnock, Richard M. Berkeley, and Donald W. Hughes has shared
voting and investment power over 2,028,037 shares of common stock. Camden Partners Strategic
Fund III, L.P. has shared voting and investment power over 1,947,119 shares of common stock
and 2,328,118 shares of common stock issuable upon exercise of warrants and the conversion of
convertible promissory notes within 60 days of March 31, 2010. Camden Partners Strategic Fund
III-A, L.P. has shared voting and investment power over 80,918 shares of common stock and
96,752 shares of common stock issuable upon exercise of warrants and the conversion of
convertible promissory notes within 60 days of March 31, 2010. Each of Richard M. Johnston,
David L. Warnock, Richard M. Berkeley, and Donald W. Hughes is a managing member of Camden
Partners Strategic Manager, LLC, the managing member of Camden Partners Strategic III, LLC,
the general partner of the Camden Funds. 13




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(13)
    
    The business address is 680 Washington Boulevard, 11th Floor, Stamford, Connecticut 06901.
Galen Partners IV, L.P. has shared voting and investment power over 3,819,015 shares of common
stock and 4,486,423 shares of common stock issuable upon exercise of warrants and options and
the conversion of convertible promissory notes within 60 days of March 31, 2010. Galen
Partners International IV, L.P. has shared voting and investment
power over 303,418 shares of
common stock and 356,398 shares of common stock issuable upon exercise of warrants and options
and the conversion of convertible promissory notes within 60 days of March 31, 2010. Galen
Employee Fund IV, L.P has shared voting and investment power over 5,885 shares of common
stock, and 92,411 shares of common stock issuable upon exercise of warrants and options and
the conversion of convertible promissory notes within 60 days of March 31, 2010. Galen
Associates serves as investment advisor to Galen Partners IV, L.P., Galen Partners
International IV, L.P. and Galen Employee Fund IV, L.P. Claudius IV, L.L.C. serves as general
partner of Galen Partners IV, L.P. and Galen Partners International IV, L.P. The managing
members of Claudius IV, LLC are Zubeen Shroff, Bruce Wesson, L. John Wilkerson and David
Jahns. Wesson Enterprises, Inc., which is controlled by Mr. Wesson, is the general partner of
Galen Employee Fund IV, L.P.(14)
    
    Based on a Schedule 13G/A and Forms 3/A and 4 filed by Mr. Knott on January 16, 2008 and
April 21, 2010, respectively, and the participation by the Knott entities in the private
placement of the Senior Notes and Warrants. The business address is 485 Underhill Boulevard,
Suite 205, Syosset, New York 11791. Each of David M. Knott and Dorset Management Corporation
has sole voting power over 2,201,103 shares of common stock, shared voting power over 124,971
shares of common stock, sole investment power over 2,353,035 shares of common stock and sole
voting and investment power over 1,000 shares of common stock issuable upon the conversion of
convertible promissory notes within 60 days of March 31, 2010, Knott Partners, L.P.
has sole voting and investment power over 512,779 shares of common stock and 250,400 shares of
common stock issuable upon the exercise of warrants and the conversion of convertible
promissory notes within 60 days of March 31, 2010, Knott Partners Offshore Master Fund, L.P.
has sole voting and investment power over 746,686 shares of common stock and 259,900 shares of
common stock issuable upon the exercise of warrants and the conversion of convertible
promissory notes within 60 days of March 31, 2010, Shoshone Partners, L.P. has sole voting and
investment power over 352,026 shares of common stock and 117,000 shares of common stock
issuable upon the exercise of warrants and the conversion of convertible promissory notes
within 60 days of March 31, 2010, Mulsanne Partners, L.P. has sole voting and investment power
over 372,212 shares of common stock and 4,000 shares of common stock issuable upon the
exercise of warrants and the conversion of convertible promissory notes within 60 days of
March 31, 2010, and Knott Partners Offshore (SRI) Fund Limited has sole voting and investment
power over 21,061 shares of common stock and 6,900 shares of common stock issuable upon the
exercise of warrants and the conversion of convertible promissory notes within 60 days of
March 31, 2010. Mr. Knott is the managing member of Knott Partners Management, LLC, a New
York limited liability company, that is the sole General Partner of Shoshone Partners, L.P., a
Delaware limited partnership (Shoshone), Mulsanne Partners, L.P., a Delaware limited
partnership (Mulsanne) and Knott Partners Offshore Master Fund, L.P., a Cayman Islands
Exempted Limited Partnership (Offshore) and managing general partner of Knott Partners,
L.P., a New Jersey limited partnership (Knott Partners and together with Shoshone, Mulsanne
and Offshore, the Partnerships). Mr. Knott is also the sole stockholder, Director and
President of Dorset Management Corporation, a Delaware corporation, which provides investment
management services to the Partnerships, Knott Partners Offshore (SRI) Fund Limited and a
limited number of institutional managed accounts. Except with respect to Knott Partners,
L.P., Knott Partners Offshore Master Fund, L.P., and Shoshone Partners, L.P., in which Mr.
Knott owns a beneficial interest, Mr. Knott disclaims beneficial ownership therein except to
the extent ultimately realized. Each of Knott Partners, L.P., Knott Partners Offshore Master
Fund, L.P., Shoshone Painters, L.P., Mulsanne Partners, L.P., Knott Partners Offshore (SRI)
Fund Limited and the institutional managed accounts for which Dorset Management Corporation
provides investment management services disclaims beneficial ownership of securities reported
as owned by any other party.(15)
    
    Based solely upon information set forth in a Form 4 and a Schedule 13D/A filed with the SEC
on April 7, 2009 and April 8, 2009, respectively. The business address is 450 Seventh Avenue,
Suite 509, New York, New York 10123. Wynnefield Partners Small Cap Value, L.P. has sole
voting and investment power over 279,615 shares of common stock and 606,100 shares of common
stock issuable upon exercise of warrants and the conversion of convertible promissory notes
within 60 days of March 31, 2010, Wynnefield Partners Small Cap Value, L.P. I has sole voting
and investment power over 386,300 shares of common stock and 607,100 shares of common stock
issuable upon exercise of warrants within 60 days of March 31, 2010, Wynnefield Small Cap
Value Offshore Fund, Ltd. has sole voting and investment power over 1,657,254 shares of common
stock and 1,542,500 shares of common stock issuable upon exercise of warrants within 60 days
of March 31, 2010, Wynnefield Capital Management, LLC has sole voting and investment power
over 665,915 shares of common stock and 56,000 shares of common stock issuable upon exercise
of warrants within 60 days of March 31, 2010, Wynnefield Capital, Inc. has sole voting and
investment power over 1,657,254 shares of common stock and 1,542,500 shares of common stock
issuable upon exercise of warrants within 60 days of March 31, 2010, and each of Nelson Obus
and Joshua Landes has sole voting and investment power over 2,323,169 shares of common stock
and 1,598,588 shares of common stock issuable upon exercise of warrants within 60 days of
March 31, 2010, but as to which each disclaims beneficial ownership except to the extent of
his pecuniary interest therein. Wynnefield Capital Management, LLC is the sole general
partner of Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value,
L.P. I. Wynnefield Capital, Inc. is the sole investment manager of Wynnefield Small Cap Value
Offshore Fund, Ltd. Each of Nelson Obus and Joshua Landes is a co-managing member of
Wynnefield Capital Management, LLC and a principal executive officer of Wynnefield Capital,
Inc.(16)
    
    Includes 12,847,898 shares of common stock issuable upon exercise of options and warrants and
the conversion of convertible promissory notes within 60 days of March 31, 2010. 14




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence.
 Certain Relationships and Related Transactions
  Director Independence
  
 Item 14. Principal Accountant Fees and Services
  Fiscal
    
    
    Fiscal2009
    
    
    2008Audit Fees(1)
    
    $
    267,000
    
    
    $
    372,000Audit Related Fees
    
    $
    
    
    
    $
    Tax Fees
    
    $
    
    
    
    $
    All Other Fees
    
    $
    15,000
    
    
    $
    Total Fees
    
    $
    282,000
    
    
    $
    372,000
 15




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##### Table of Contents



(1)
    
    For the fiscal years ended
December 31, 2009 and 2008,
SingerLewak, our principal accountant,
billed fees of $267,000 and $372,000,
respectively, for the audits of our
year-end financial statements for 2009
and 2008 included in our Form 10-Ks and
for review of our financial statements
included in our Form 10-Qs during 2009
and 2008.In 2009, SingerLewak billed us 15,000
for review of our financial statements
included in the Registration Statement
on Form S-3, as amended, filed on
September 4, 2009. PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
  16




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules.
 31.1
    
    Section 302 Certification from Gene E. Burleson31.2
    
    Section 302 Certification from Harry L. Zimmerman
 17




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##### Table of Contents



SIGNATURES
   PET DRX CORPORATIONDate: April 30, 2010By:
    /s/ Gene E. BurlesonGene E. BurlesonChairman of the Board and Chief Executive
Officer 18




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.
    
    Description31.1*
    
    Section 302 Certification from Gene E. Burleson31.2*
    
    Section 302 Certification from Harry L. Zimmerman
 19