[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis, detailing the company's financial condition, results of operations, and the impact of its Chapter 11 bankruptcy filing [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Wag! Group Co.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, highlighting the Chapter 11 bankruptcy filing and going concern uncertainties [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, reflects a significant decline in cash and a substantial increase in total stockholders' deficit, with liabilities exceeding assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,669 | $5,630 | | Total assets | $24,402 | $29,438 | | Total liabilities | $32,410 | $29,927 | | Total stockholders' deficit | $(8,008) | $(489) | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Revenues declined and net losses widened significantly for both the three and six-month periods ended June 30, 2025, indicating worsening operational performance Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $16,720 | $18,651 | $31,885 | $41,870 | | Net loss | $(6,145) | $(2,251) | $(11,035) | $(6,492) | | Loss per share, basic and diluted | $(0.12) | $(0.06) | $(0.22) | $(0.16) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company experienced cash usage across all activities, resulting in a sharp decrease in its ending cash balance Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,254) | $(2,021) | | Net cash used in investing activities | $(603) | $(988) | | Net cash used in financing activities | $(1,104) | $(6,080) | | **Net change in cash and cash equivalents** | **$(2,961)** | **$(9,089)** | | **Cash and cash equivalents, end of period** | **$2,669** | **$9,234** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's Chapter 11 bankruptcy filing, going concern uncertainties, debt obligations, legal contingencies, and significant subsequent events - On July 21, 2025, the company and its subsidiaries filed for **Chapter 11 bankruptcy protection**, operating as "debtors-in-possession"[26](index=26&type=chunk) - Management concluded **substantial doubt exists about the company's ability to continue as a going concern** due to operating losses, outstanding debt, and Chapter 11 uncertainties[24](index=24&type=chunk)[31](index=31&type=chunk) - A **Debtor-in-Possession (DIP) loan agreement for up to $6.5 million** was secured to fund operations during bankruptcy proceedings[28](index=28&type=chunk) - The proposed reorganization plan will result in the **cancellation of all existing equity interests**, with the lender, Retriever LLC, receiving 100% of the new common stock[30](index=30&type=chunk) - Subsequent to quarter end, the company **sold its Furscription software for $5.0 million** and was **delisted from Nasdaq** on July 30, 2025[99](index=99&type=chunk)[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's deteriorating financial performance, including a significant revenue decline and the liquidity crisis that led to its Chapter 11 bankruptcy filing and proposed equity cancellation Key Operating Metrics Comparison | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Platform Participants | 430,000 | 467,000 | (7.9)% | | Revenues | $31,885,000 | $41,870,000 | (23.8)% | | Net loss | $(11,035,000) | $(6,492,000) | 70.0% | - The **revenue decrease** for the first six months of 2025 was attributed to declines in Services ($1.2 million), Wellness ($7.1 million), and Pet Food & Treats ($1.7 million) revenues, driven by fewer Platform Participants and lower conversion[122](index=122&type=chunk) - The company filed for **Chapter 11 bankruptcy on July 21, 2025**, due to its inability to repay outstanding debt, now operating as a "debtor-in-possession"[138](index=138&type=chunk) - The restructuring includes a **Debtor-in-Possession (DIP) term loan facility of up to $6.5 million** and a planned **Exit Facility of up to $18.3 million**, with all existing equity to be canceled and 100% of new stock issued to Retriever LLC[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is omitted as the company qualifies as a smaller reporting company - As a smaller reporting company, Wag! Group Co. is **not required to provide this information**[158](index=158&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting - The CEO and CFO concluded that **disclosure controls and procedures were not effective** as of June 30, 2025[160](index=160&type=chunk) - Ineffectiveness stems from **material weaknesses** in internal control risk assessment resources, technical accounting evaluation, and IT general controls, including logical access, segregation of duties, and program change controls[161](index=161&type=chunk) - A **remediation plan** is underway, involving hiring experienced personnel, redesigning IT controls, and engaging third-party consultants to enhance internal controls[163](index=163&type=chunk)[166](index=166&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, critical new risk factors related to the Chapter 11 bankruptcy, and other required disclosures [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal disputes in California and New York regarding the classification of pet caregivers as independent contractors, with potential significant liabilities - The company is involved in legal proceedings concerning the **alleged misclassification of pet caregivers** as independent contractors in California and New York[76](index=76&type=chunk)[78](index=78&type=chunk)[80](index=80&type=chunk) - California has assessed **potential unemployment insurance contributions of $1.7 million** and an additional $1.3 million, while New York has assessed approximately **$1.8 million**, all of which the company is contesting without a recorded reserve[78](index=78&type=chunk)[80](index=80&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section outlines critical new risks, primarily the total loss for existing equity holders due to the Chapter 11 reorganization plan, along with delisting and foreclosure risks - **Total Loss for Equity Holders:** The Chapter 11 reorganization plan, if approved, will **cancel all existing equity interests**, resulting in a complete loss for current stockholders and warrant holders[170](index=170&type=chunk)[171](index=171&type=chunk) - **Delisting from Nasdaq:** The company's securities were **delisted from Nasdaq on July 30, 2025**, now trading on the less liquid Pink Open Market, potentially depressing prices and limiting investor flexibility[184](index=184&type=chunk)[186](index=186&type=chunk) - **Risk of Foreclosure:** The senior secured loan is in default due to bankruptcy, allowing the lender, Retriever LLC, to potentially **foreclose on substantially all company assets**, which would materially harm the business[181](index=181&type=chunk)[182](index=182&type=chunk) - **Operational and Financial Uncertainty:** Significant risks during Chapter 11 include inability to generate sufficient cash flow, maintain vendor credit terms, and retain customers and employees[172](index=172&type=chunk)[174](index=174&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - There were **no unregistered sales of equity securities**[187](index=187&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Chapter 11 bankruptcy filing on July 21, 2025, constituted an event of default on the company's material debt agreements, accelerating approximately $16.3 million in obligations - The **Chapter 11 filing triggered an event of default** on the company's senior debt[187](index=187&type=chunk) Debt in Default | Debt Instrument | Amount in Default (approx.) | | :--- | :--- | | Financing Agreement | $16.3 million | | PPP Loan | $40,000 | - As a result of the default, principal and interest on these debts are **immediately due and payable**, though collection efforts are automatically stayed by the Chapter 11 filing[188](index=188&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's business operations - **Not applicable**[189](index=189&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) The company reported no other material information required to be disclosed under this item - No officers or directors adopted or terminated a **Rule 10b5-1 trading arrangement** during the last fiscal quarter[190](index=190&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications - Lists exhibits filed with the report, including the Restated Certificate of Incorporation, financing agreements, and CEO/CFO certifications[191](index=191&type=chunk)

Core Viewpoint - Pet Valu Holdings Ltd. has raised its 2025 financial outlook and announced a succession plan for its CEO, indicating strong business performance and strategic leadership transition [1][3][4]. Financial Performance - For Q2 2025, Pet Valu reported system-wide sales of $369.9 million, a 4.6% increase compared to Q2 2024, with same-store sales growth of 2.6% [7][11]. - Revenue reached $280.6 million, up 5.8% from $265.2 million in Q2 2024, driven by growth in franchise and retail sales [10]. - Adjusted EBITDA was $60.2 million, a 4.2% increase from $57.7 million in Q2 2024, representing 21.4% of revenue [14]. - Net income increased to $21.8 million from $17.8 million in Q2 2024, attributed to higher operating income and lower net interest expense [16]. - Adjusted Net Income per Diluted Share rose to $0.38, compared to $0.36 in Q2 2024 [18]. 2025 Outlook - The company expects revenue between $1.18 billion and $1.21 billion for 2025, with Adjusted EBITDA projected between $257 million and $262 million [3][23]. - Same-store sales growth is anticipated to be between 1% and 4%, supported by approximately 40 new store openings [23]. - Net Capital Expenditures are estimated at approximately $45 million for the year [24]. CEO Succession Plan - Richard Maltsbarger will transition from CEO to Senior Advisor effective September 21, 2025, with Greg Ramier, the current President and COO, succeeding him [4][5]. - Maltsbarger has led the company since 2018, overseeing significant growth and transformation initiatives [6][8]. Shareholder Returns - The Board declared a dividend of $0.12 per common share, payable on September 15, 2025 [22]. - The company repurchased 2.3 million common shares for a total consideration of $65.5 million [7]. Operational Highlights - Pet Valu completed a multi-year distribution center network transformation, enhancing its omnichannel supply chain capabilities [3]. - The company opened 3 new stores, bringing the total to 833 across its network [7]. Cash Flow and Capital Expenditures - Free Cash Flow for Q2 2025 was $27.1 million, significantly up from $7.7 million in Q2 2024, driven by increased cash from operating activities [20]. - Net Capital Expenditures were $11.9 million in Q2 2025, a slight decrease from $12.5 million in Q2 2024 [19]. Inventory Management - Inventory at the end of Q2 2025 was $140.6 million, an increase from $124.6 million at the end of Q4 2024, supporting store network growth [21].

Core Viewpoint - Wag! Group Co. is pursuing a comprehensive balance sheet restructuring through a voluntary, pre-packaged Chapter 11 process to reduce debt and transition ownership to its primary secured lender, Retriever LLC, aiming for long-term success under private ownership [1][2][3] Group 1: Chapter 11 Process - The pre-packaged plan of reorganization is designed to be implemented on an accelerated basis, with Wag! expecting to emerge from Chapter 11 within approximately 40 days [2] - The plan requires approval from the U.S. Bankruptcy Court for the District of Delaware, and Wag! believes it has a clear path toward confirmation and emergence [4] Group 2: Financial Support and Operations - The company has secured debtor-in-possession (DIP) financing from Retriever LLC, which, along with cash generated from ongoing operations, is expected to provide liquidity during the court-supervised process [3] - Retriever LLC has committed to provide exit financing as part of the reorganization plan, reinforcing the company's path to a stable and well-capitalized emergence [3] Group 3: Company Overview - Wag! Group Co. aims to be the leading platform for the service, product, and wellness needs of modern U.S. pet households, having pioneered on-demand dog walking in 2015 [6] - The company operates several platforms, including Petted, Dog Food Advisor, WoofWoofTV, and maxbone, catering to various pet-related services and products [6]

Core Viewpoint - Wag! Group Co. has sold its Furscription business to MWI Veterinary Supply Co. to strengthen its financial position and focus on core offerings, reflecting ongoing efforts to maximize shareholder value [1][2][3] Group 1: Transaction Details - The Furscription business was sold for cash considerations, including the brand, e-prescribing technology, and related assets [2] - The transaction closed on July 14, 2025, and involved the transfer of four Wag! employees to MWI [2] Group 2: Strategic Implications - The CEO of Wag! expressed confidence in MWI's ability to enhance Furscription's market potential and emphasized the importance of this transaction in streamlining Wag!'s focus on services and wellness [3] - The sale is part of Wag!'s strategic review aimed at enhancing shareholder value and optimizing capital structure [3] Group 3: Company Background - Wag! Group Co. aims to be the leading platform for pet service, product, and wellness needs in the U.S., having pioneered on-demand dog walking in 2015 [4] - The company operates various platforms, including Petted, Dog Food Advisor, WoofWoofTV, and maxbone, catering to a wide range of pet-related services [4] Group 4: Furscription Overview - Furscription is a digital tool designed to streamline the prescription process for veterinarians, offering features like e-prescribing and prescription management [5] Group 5: MWI Veterinary Supply Co. - MWI is a global provider of veterinary products and services, focusing on innovative solutions that support veterinarians and animal healthcare [6]

Core Viewpoint - Pet Valu Holdings Ltd. is set to release its financial results for the second quarter of fiscal 2025 on August 5, 2025, at 6:30am ET, followed by a conference call at 8:30am ET [1] Company Overview - Pet Valu is the leading Canadian specialty retailer of pet food and pet-related supplies, operating over 800 corporate-owned or franchised locations across Canada [4] - The company has been in operation for over 45 years, building trust and loyalty among pet parents through knowledgeable customer service and a wide range of products [4] - Pet Valu offers more than 10,000 competitively-priced products, including exclusive, holistic, and award-winning proprietary brands [4] - The company is headquartered in Markham, Ontario, with distribution centers located in Brampton, Ontario, Surrey, British Columbia, and Calgary, Alberta [4] - Pet Valu's shares are traded on the Toronto Stock Exchange under the ticker symbol PET [4]

Core Insights - GE HealthCare (GEHC) introduced Flyrcado, an FDA-approved PET imaging agent for myocardial perfusion imaging, at the 2025 SNMMI annual meeting, highlighting its importance in precision cardiac care as cardiovascular disease rates rise globally [1][8] - Flyrcado aims to enhance early disease detection, personalize treatment strategies, and monitor therapy responses, reinforcing GEHC's commitment to improving outcomes for patients at risk of cardiovascular disease [2][6] Product Details - Flyrcado (flurpiridaz F 18) is designed for patients with known or suspected coronary artery disease, featuring a half-life of approximately 110 minutes, which facilitates centralized production and distribution [3] - The agent integrates exercise stress testing with cardiac PET imaging and is compatible with GEHC's Omni Legend PET/CT and other systems, enabling detailed assessments of myocardial perfusion and related conditions [3] Market Position and Coverage - Flyrcado has recently launched in select U.S. markets, receiving CMS pass-through status and a specific HCPCS billing code, with coverage from all seven Medicare Administrative Contractors and over 50% of commercial insurers [4][8] - The expansion of coverage beyond hospital outpatient settings and the establishment of a Flyrcado Support Center for providers indicate a strategic move to enhance accessibility and support for the new imaging agent [4] Financial Performance and Stock Trends - Following the announcement, GEHC shares closed flat at $71.16, with a year-to-date decline of 9%, contrasting with the industry's 4% growth and the S&P 500's 0.8% increase [5][7] - GEHC's market capitalization stands at $32.64 billion, and the company reported a 10.9% earnings surprise in the last quarter, indicating potential for future growth despite current stock performance [7] Strategic Implications - Flyrcado positions GEHC for long-term growth in the high-value molecular imaging market, addressing the rising demand for precision cardiac diagnostics [6] - With broad payer coverage and compatibility with existing systems, Flyrcado is expected to facilitate a shift from SPECT to PET imaging, generating recurring revenue from both radiopharmaceutical sales and imaging hardware [6]

Core Viewpoint - Pet Valu Holdings Ltd. has successfully closed a secondary bought deal offering of approximately 19,969,450 common shares at a price of C$28.85 per share, resulting in total gross proceeds of about C$576 million to the selling shareholders [1][2]. Group 1: Offering Details - The offering was led by RBC Capital Markets and CIBC Capital Markets as joint bookrunners [2]. - The company did not receive any proceeds from the offering, as all net proceeds were paid directly to the selling shareholders [2]. - The common shares were sold via a prospectus supplement dated June 5, 2025, under the company's short form base shelf prospectus filed on August 15, 2024 [3]. Group 2: Shareholder Changes - Following the offering, the selling shareholders have no remaining equity interest in the company, leading to the termination of the Investor Rights Agreement [4]. - Clayton Harmon, a nominee of the selling shareholders, has resigned from the board of directors effective June 9, 2025, while Patrick Hillegass and Kevin Hofmann will remain as directors until suitable replacements are identified [5]. Group 3: Shareholder Ownership - Prior to the offering, Roark Capital Partners II AIV AG, L.P. and RCPS Equity Cayman LP owned approximately 14.8% and 10.5% of the outstanding common shares, respectively [8]. - Post-offering, these shareholders no longer own or control any common shares [8]. Group 4: Company Overview - Pet Valu is Canada's leading retailer of pet food and related supplies, operating over 800 corporate-owned or franchised locations [11]. - The company has been in operation for over 45 years, providing a wide range of products and services to pet owners [11].

Core Points - Pet Valu Holdings Ltd. announced the closing of a secondary bought deal offering of 5,200,000 common shares at a price of C$28.85 per share, with an additional 780,000 shares purchased through the over-allotment option, resulting in gross proceeds of approximately C$172.5 million for the selling shareholders [1][2] Group 1: Offering Details - The offering was led by RBC Capital Markets and CIBC Capital Markets, along with a syndicate of underwriters including Barclays Capital Canada, Desjardins Securities Inc., Jefferies Securities, Inc., National Bank Financial Inc., Raymond James Ltd., TD Securities Inc., UBS Securities Canada Inc., and ATB Securities Inc [3] - All net proceeds from the offering have been paid directly to the selling shareholders, with the company not receiving any proceeds from the offering or the over-allotment option [2] Group 2: Shareholder Information - Following the offering, the selling shareholders beneficially own a total of 19,969,450 common shares, representing approximately 29% of the outstanding common shares [2] Group 3: Company Overview - Pet Valu is Canada's leading retailer of pet food and pet-related supplies, operating over 800 corporate-owned or franchised locations across the country [6] - The company offers more than 10,000 competitively-priced products, including exclusive, holistic, and award-winning proprietary brands [6]

Core Viewpoint - Pet Valu Holdings Ltd. has successfully closed a secondary bought deal offering of 5,200,000 common shares at a price of $28.85 per share, generating approximately C$150 million in gross proceeds for the selling shareholders [1][2]. Group 1: Offering Details - The offering was led by RBC Capital Markets and CIBC Capital Markets, along with a syndicate of underwriters including Barclays Capital Canada, Desjardins Securities Inc., Jefferies Securities, Inc., National Bank Financial Inc., Raymond James Ltd., TD Securities Inc., UBS Securities Canada Inc., and ATB Securities Inc. [4] - The company did not receive any proceeds from the offering, as all net proceeds were paid directly to the selling shareholders [2]. Group 2: Share Repurchase - On May 12, 2025, the company purchased 2,079,000 common shares from the selling shareholders for cancellation [3]. - Following the offering and the share repurchase, the selling shareholders collectively own 20,749,450 common shares, representing approximately 30% of the outstanding common shares [3]. Group 3: Shareholder Ownership Changes - Prior to the offering and share repurchase, Roark Capital Partners II AIV AG, L.P. and RCPS Equity Cayman LP owned 14,206,983 common shares (20.2%) and 10,064,456 common shares (14.3%), respectively [8]. - After the transactions, Roark Capital Partners II AIV AG, L.P. holds 10,517,421 common shares (15.4%) and RCPS Equity Cayman LP holds 7,450,713 common shares (10.9%) [8]. Group 4: Company Overview - Pet Valu is Canada's leading retailer of pet food and pet-related supplies, operating over 800 corporate-owned or franchised locations [11]. - The company offers more than 10,000 competitively-priced products, including exclusive, holistic, and award-winning proprietary brands [11].

Core Points - The Pet Valu Walk for Dog Guides will take place on May 25, 2025, in 200 communities across Canada, aiming to raise $1.6 million for providing dog guides to Canadians with disabilities at no cost [3][4] - The event marks the 40th anniversary of the Walk, which started as a small community event and has grown significantly, now supporting seven different programs with over 800 working dog guides [4][5] - Each dog guide costs approximately $35,000 to breed, raise, train, and place, highlighting the financial need for fundraising events like the Pet Valu Walk [4] Company Overview - Pet Valu is Canada's leading retailer of pet food and supplies, with over 800 locations and a strong commitment to community involvement through sponsorship and participation in events like the Pet Valu Walk [8] - The company has been a national sponsor of the Walk since 2017 and has contributed significantly to the Dog Guides organization, including financial support for over 220 dog guide teams [6][8] - Pet Valu is also investing in a new $50 million training facility to enhance its support for Dog Guides and increase the number of teams graduated annually [5][6] Industry Impact - The Lions Foundation of Canada Dog Guides provides essential services to Canadians with disabilities, empowering them to live independently by offering dog guides at no cost [9] - The organization has evolved over the past four decades, expanding its programs and increasing its operational capacity, which is supported by community fundraising events like the Pet Valu Walk [4][5] - The collaboration between Pet Valu and Dog Guides exemplifies the positive impact of corporate sponsorship in the non-profit sector, enhancing the quality of life for individuals with disabilities [7][9]