[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Wag! Group Co.'s Q1 2023 financials show revenue growth driven by Wellness and acquisitions, despite widening net losses and negative operating cash flow Condensed Consolidated Balance Sheet Summary (Unaudited) | (in thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $24,502 | $38,966 | | Total current assets | $34,746 | $47,423 | | Goodwill | $4,501 | $1,451 | | Intangible assets, net | $8,173 | $2,590 | | **Total assets** | **$49,650** | **$52,311** | | **Liabilities & Equity** | | | | Total current liabilities | $16,146 | $16,491 | | Notes payable – non-current portion, net | $25,270 | $24,970 | | **Total liabilities** | **$42,119** | **$42,389** | | **Total stockholders' equity** | **$7,531** | **$9,922** | Condensed Consolidated Statements of Operations (Unaudited) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenues | $20,623 | $9,666 | | Total costs and expenses | $22,836 | $11,984 | | Loss before income taxes | $(3,787) | $(2,350) | | **Net loss** | **$(3,787)** | **$(2,350)** | | Net loss per share (basic and diluted) | $(0.10) | $(0.38) | Condensed Consolidated Statement of Cash Flows Summary (Unaudited) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,580) | $(2,245) | | Net cash used in investing activities | $(10,661) | $(6,720) | | Net cash (used in) provided by financing activities | $(223) | $9,664 | | **Net change in cash and cash equivalents** | **$(14,464)** | **$699** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, acquisitions like Dog Food Advisor, revenue streams, debt, and identified material weaknesses in internal controls - On January 5, 2023, the Company acquired Dog Food Advisor for **$9.0 million** in cash, adding **$5.95 million** in intangible assets and **$3.05 million** in goodwill[92](index=92&type=chunk)[93](index=93&type=chunk) Revenue by Offering (in thousands) | | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Service revenue | $5,397 | $4,432 | | Wellness revenue | $13,855 | $5,234 | | Pet food & treats revenue | $1,371 | — | | **Total revenues** | **$20,623** | **$9,666** | - The company secured a **$32.2 million** senior secured term loan credit facility with Blue Torch Finance, bearing a floating interest rate and maturing in three years from August 9, 2022[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Subsequent to quarter end, on April 6, 2023, the company acquired Maxbone to expand into the Pet Supplies market[146](index=146&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic expansion and 113% Q1 2023 revenue growth to $20.6 million, offset by increased net loss from higher operating expenses - The company's strategy involves expanding into high-growth areas like pet wellness and the **$50 billion** Pet Food & Treats market, notably through the Dog Food Advisor acquisition[150](index=150&type=chunk)[153](index=153&type=chunk) - Key operational trends include increased pet adoption, return-to-office policies driving service demand, and pet humanization boosting interest in wellness products[158](index=158&type=chunk) Non-GAAP Financial Metrics (in thousands) | | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenues | $20,623 | $9,666 | | Net loss | $(3,787) | $(2,350) | | **Adjusted EBITDA** | **$(397)** | **$(2,112)** | | Adjusted EBITDA Margin | (1.9)% | (21.8)% | [Comparison of the Three Months ended March 31, 2023 and 2022](index=37&type=section&id=Comparison%20of%20the%20Three%20Months%20ended%20March%2031%2C%202023%20and%202022) Q1 2023 revenues grew 113% to $20.6 million, driven by Wellness and Pet Food & Treats, but rising expenses led to a 61% wider net loss of $3.8 million Results of Operations Comparison (in thousands) | | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $20,623 | $9,666 | $10,957 | 113% | | Total costs and expenses | $22,836 | $11,984 | $10,852 | 91% | | Net loss | $(3,787) | $(2,350) | $(1,437) | 61% | - The **$10.9 million** revenue increase was primarily due to an **$8.6 million** rise in Wellness revenue and **$1.4 million** in new Pet Food & Treats revenue from the Dog Food Advisor acquisition[189](index=189&type=chunk) - Sales and marketing expenses increased by **$7.2 million** (**118%**), mainly from a **$5.2 million** increase in partnership-related costs[192](index=192&type=chunk)[193](index=193&type=chunk) - General and administrative expenses grew by **$2.6 million** (**111%**), driven by a **$1.4 million** increase in personnel costs and **$1.1 million** in other administrative expenses to support public company activities[194](index=194&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company continues to incur operating losses and negative cash flows, with Q1 2023 net cash used in operations at $3.6 million, but expects current liquidity to suffice for 12 months - The company expects continued operating losses and negative operating cash flows as it invests in growth[197](index=197&type=chunk) Cash Flow Summary (in thousands) | | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,580) | $(2,245) | | Net cash used in investing activities | $(10,661) | $(6,720) | | Net cash (used in) provided by financing activities | $(223) | $9,664 | [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate fluctuations on its Blue Torch Credit Facility and equity price sensitivity of contingent Earnout Shares - The company's primary market risks relate to interest rates on its Blue Torch Credit Facility and equity price sensitivity of its Earnout Shares[228](index=228&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2023, due to identified material weaknesses in internal control over financial reporting - As of March 31, 2023, the company's disclosure controls and procedures were deemed ineffective by management[231](index=231&type=chunk) - Material weaknesses were identified related to insufficient resources for risk assessment and technical accounting, plus deficiencies in IT general controls, logical access, and segregation of duties[232](index=232&type=chunk) [Part II - Other Information](index=45&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, primarily regarding pet caregiver classification, with no expected material adverse financial impact - The company is involved in legal proceedings regarding pet caregiver classification, including a challenged **$1.3 million** California EDD assessment for unemployment insurance contributions[107](index=107&type=chunk)[110](index=110&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for fiscal year 2022 - No material changes have occurred from the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022[237](index=237&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period [Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period [Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No other information is reported for the period [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents and Sarbanes-Oxley certifications

Part I [Item 1 Business](index=4&type=section&id=Item%201%20Business) Wag! Group Co. operates a holistic pet care platform, expanding through acquisitions and technology, achieving significant revenue growth while focusing on market acceleration and subscription expansion in a competitive industry - Wag! Group Co., founded in 2014, expanded into pet wellness through acquisitions of Compare Pet Insurance Services, Inc. (August 2021) and Furmacy, Inc. (Q4 2022), and into pet food/treats with Dog Food Advisor (Q1 2023)[15](index=15&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - The company experienced strong growth, increasing annual revenue by over **170% from 2021 to 2022**[17](index=17&type=chunk) - Wag! derived 2022 revenue from service fees, Wag! Premium subscription fees, Pet Caregiver registration fees, and wellness revenue (affiliate fees, prescription/OTC sales), with additional revenue from pet food/treat affiliate fees expected in 2023[23](index=23&type=chunk) - Key strategies include accelerating growth in existing markets (95% U.S. population access, **434,234 transacting participants in Q4 2022**), expanding Wag! Premium subscriptions, platform expansion (Petted.com, Furmacy), and opportunistic M&A (Dog Food Advisor)[28](index=28&type=chunk)[29](index=29&type=chunk) - The total U.S. pet spending market was **$123.6 billion in 2021**, a **19% increase** from the prior year, with Wag! operating in three of four main categories (Pet Food & Treats, Supplies/OTC Medicine, Vet Care/Product Sales, Other Services)[30](index=30&type=chunk) - The platform offers dog walking, drop-in visits, boarding, sitting, and training, with 24/7 customer service and up to **$1 million property damage protection**, approving over **450,000 Pet Caregivers** through 2022 and receiving over **96% five-star reviews** from 11 million Pet Parent reviews[19](index=19&type=chunk)[20](index=20&type=chunk)[34](index=34&type=chunk) - Wag! Wellness includes Vet Chat (24/7 licensed pet expert advice), wellness plans, pet insurance comparison (Petted.com), and prescription Rx delivery (Furmacy)[37](index=37&type=chunk) - As of December 31, 2022, the company had **82 employees** operating with a remote-first hybrid workplace strategy, emphasizing DEI values through donations and diversity events[58](index=58&type=chunk)[59](index=59&type=chunk) - Wag! is subject to evolving laws and regulations concerning worker classification (e.g., California AB-5, DOL proposed rule), insurance producer licensing, consumer protection, and data privacy (e.g., CPRA)[73](index=73&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[80](index=80&type=chunk) - The company relies on trademarks and trade secrets for intellectual property protection, holding **7 registered U.S. trademarks** as of December 31, 2022, and is involved in an ongoing trademark infringement lawsuit with Wag Hotels, Inc[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) Wag! faces diverse risks including pandemic impacts, sustained net losses, intense competition, operational challenges, regulatory compliance, financial obligations, cybersecurity threats, and public company complexities - The COVID-19 pandemic has materially adversely impacted and will continue to impact Wag!'s business, operating results, and financial condition, leading to a hybrid workplace setup[95](index=95&type=chunk)[96](index=96&type=chunk) Net Losses (2020-2022) | Year | Net Loss (in millions) | | :--- | :--------------------- | | 2020 | $18.8 | | 2021 | $6.3 | | 2022 | $39.0 | - Wag! is substantially dependent on revenues from a small number of customers utilizing Wag! Wellness services and products; in 2022, two customers accounted for an aggregate of **27% of total consolidated revenues**[103](index=103&type=chunk) - The company faces increasing competition from family/friends/neighbors, local independent professionals, large commercial providers (kennels, daycares), online aggregators (Google, Yelp), and other digital marketplaces (Rover, Care.com)[118](index=118&type=chunk) - There is a risk that Pet Caregivers could be reclassified as employees under applicable law, which would materially adversely affect the business through monetary exposure, claims for benefits, and significant alterations to the business model[151](index=151&type=chunk)[153](index=153&type=chunk) - Wag! operates in regulated industries (e.g., insurance, pharmacy) requiring licenses, and revocation or suspension of these licenses could materially adversely affect the business[154](index=154&type=chunk)[156](index=156&type=chunk) - The company is exposed to cybersecurity risks, including cyberattacks, data breaches, and unauthorized access to personal information, which could interrupt operations, harm its brand, and result in significant legal and financial exposure[194](index=194&type=chunk)[197](index=197&type=chunk) - Wag! relies on third-party payment service providers and any disruption or increased fees from these providers could materially adversely affect its business[211](index=211&type=chunk) - The company identified material weaknesses in its internal control over financial reporting related to insufficient resources for risk assessment, technical accounting, and IT general controls, which may result in material misstatements[269](index=269&type=chunk)[274](index=274&type=chunk) - As an 'emerging growth company,' Wag! may choose reduced reporting and disclosure requirements, potentially making its common stock less attractive to investors[277](index=277&type=chunk)[280](index=280&type=chunk) [Item 1B. Unresolved Staff Comments](index=67&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report [Item 2. Properties](index=67&type=section&id=Item%202.%20Properties) Wag! Group Co. leases its corporate headquarters in San Francisco until 2026 and additional office/warehouse spaces in Phoenix and El Dorado Hills until 2023, owning no real property - Wag! does not own real property; it leases its corporate headquarters in San Francisco (lease expires **2026**) and additional office/warehouse space in Phoenix and El Dorado Hills (leases expire **2023**)[325](index=325&type=chunk) [Item 3. Legal Proceedings](index=68&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding the Company's legal proceedings is detailed in Note 9 – Commitments and Contingencies of the Notes to consolidated financial statements - Legal proceedings are discussed in Note 9 - Commitments and Contingencies of the Notes to consolidated financial statements[326](index=326&type=chunk) [Item 4. Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Wag! Group Co Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=69&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Wag! Group Co.'s common stock and public warrants trade on Nasdaq, with the company repurchasing **1.4 million shares** in November 2022, and it plans to retain future earnings without paying dividends - Wag!'s common stock (PET) and public warrants (PETWW) began trading on The Nasdaq Global Market on **August 10, 2022**[330](index=330&type=chunk) Share Repurchases (Q4 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :----------------------------- | :----------------------------- | :--------------------------- | | November 1, 2022 - November 30, 2022 | 1,438,378 | $10.30 | - As of March 24, 2023, there were **153 holders of common stock** and **6 holders of record of Public Warrants**[331](index=331&type=chunk) - Wag! has never declared or paid any dividends on its common stock and anticipates retaining all future earnings for operations and expansion[332](index=332&type=chunk) - In December 2022, Wag! filed a registration statement for shares under the 2022 Omnibus Incentive Plan, and in October 2022, approximately **90,000 shares** were issued for the acquisition of Furmacy, Inc. prior to the registration statement's effective date[333](index=333&type=chunk)[334](index=334&type=chunk) [Item 6. [Reserved]](index=69&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=70&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Wag! Group Co. achieved significant revenue growth in 2022, driven by Wellness and services, while incurring net losses due to increased operating expenses and public company costs, though maintaining sufficient liquidity - Wag! Group Co. was founded in 2015 and became a public company through a reverse recapitalization with CHW Acquisition Corporation on **August 9, 2022**[340](index=340&type=chunk)[365](index=365&type=chunk) - The company's mission is to be the 1 partner to busy Pet Parents, offering a holistic pet care platform including services, wellness options, and pet food/treats[339](index=339&type=chunk) - Wag! achieved its highest quarterly revenues in **Q4 2022**, exceeding **$17 million**, and saw significant outperformance in Pet Parent activity for cohorts joining since 2020 compared to earlier cohorts[344](index=344&type=chunk) - Key strategies include accelerating growth in existing markets (e.g., Wag! Neighborhood Network), expanding subscription offerings (Wag! Premium accounts for over **50% of monthly active users**), platform expansion (Petted.com, Furmacy), and investing in new markets and M&A (e.g., Dog Food Advisor acquisition in 2023)[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[351](index=351&type=chunk) - Pet ownership trends, including increased adoptions during the pandemic and return-to-office policies, are driving demand for high-quality, personalized pet care and pet insurance, with **97% of U.S. pets** remaining uninsured[352](index=352&type=chunk)[353](index=353&type=chunk) Consolidated Operations Data (Years Ended December 31, 2022 vs. 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | $ Change (in thousands) | % Change | | :-------------------- | :-------- | :-------- | :-------- | :------- | | Revenues | $54,865 | $20,082 | $34,783 | 173% | | Cost of revenues | $4,024 | $2,777 | $1,247 | 45% | | Platform operations & support | $13,825 | $10,265 | $3,560 | 35% | | Sales and marketing | $35,156 | $10,221 | $24,935 | 244% | | General and administrative | $32,415 | $6,956 | $25,459 | 366% | | Depreciation & amortization | $571 | $388 | $183 | 47% | | Total costs & expenses | $85,991 | $30,607 | $55,384 | 181% | | Change in fair value of derivatives | $(4,958) | — | $(4,958) | NM | | Gain on PPP loan forgiveness | — | $3,482 | $(3,482) | NM | | Interest expense, net | $(2,470) | $(61) | $(2,409) | 3949% | | Loss before income taxes | $(38,554) | $(7,104) | $(31,450) | 443% | | Income tax benefit (expense) | $(13) | $793 | $(806) | NM | | Net income (loss) | $(38,567) | $(6,311) | $(32,256) | 511% | - Revenue increased by **$34.8 million (173%)** in 2022, primarily due to a **$27.9 million increase** in Wellness revenue and a **$6.9 million increase** in Service revenue[381](index=381&type=chunk) - Sales and marketing expenses surged by **$24.9 million (245%)** in 2022, driven by increased partnerships, advertising, and personnel costs[384](index=384&type=chunk)[385](index=385&type=chunk) - General and administrative expenses increased by **$25.5 million (366%)**, largely due to **$19.2 million** in stock compensation expense related to Earnout Shares and public company operating costs[386](index=386&type=chunk) Cash Flows (Years Ended December 31, 2022 vs. 2021) | Cash Flow Type | 2022 (in thousands) | 2021 (in thousands) | | :---------------------------- | :-------- | :-------- | | Net cash flows used in operating activities | $(2,803) | $(12,256) | | Net cash flows (used in) provided by investing activities | $1,835 | $8,087 | | Net cash flows provided by financing activities | $37,089 | $(51) | | Net change in cash, cash equivalents, and restricted cash | $36,121 | $(4,220) | - Net cash used in operating activities decreased by **$9.5 million** in 2022, primarily due to increased accounts payable and improved net loss (excluding non-cash items)[397](index=397&type=chunk)[398](index=398&type=chunk) - Net cash provided by financing activities increased by **$37 million** in 2022, driven by proceeds from Forward Share Purchase Agreement expiration, Trust Account release, PIPE and Backstop Investors, and the Blue Torch Credit Facility[401](index=401&type=chunk) Adjusted EBITDA (Years Ended December 31, 2022 vs. 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :-------------------- | :-------- | :-------- | | Net income (loss) | $(38,567) | $(6,311) | | Adjusted EBITDA | $(3,872) | $(9,915) | | Adjusted EBITDA Margin | (7.1)% | (49.4)% | - Adjusted EBITDA improved from **$(9.9) million in 2021** to **$(3.9) million in 2022**, reflecting better operating performance when excluding non-cash and non-recurring items[409](index=409&type=chunk)[410](index=410&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=83&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Wag! is exposed to market risks primarily related to interest rates and market price sensitivity on financial obligations, specifically the Blue Torch Credit Facility, Earnout Shares, and Management Earnout Shares, which bear variable interest rates or are subject to equity price fluctuations - Wag! is exposed to market risks from interest rates and market price sensitivity on financial obligations, including the Blue Torch Credit Facility, Earnout Shares, and Management Earnout Shares[425](index=425&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=84&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Wag! Group Co.'s audited consolidated financial statements for 2022 and 2021, including balance sheets, statements of operations, cash flows, and comprehensive notes on accounting policies, business combinations, and debt - The consolidated financial statements for Wag! Group Co. as of and for the years ended December 31, 2022 and 2021 are presented, audited by BDO USA, LLP[427](index=427&type=chunk) Consolidated Balance Sheets (as of December 31, in thousands) | Asset/Liability Category | 2022 (in thousands) | 2021 (in thousands) | | :----------------------- | :-------- | :-------- | | **Assets:** | | | | Cash and cash equivalents | $38,966 | $2,845 | | Total current assets | $47,423 | $12,010 | | Total assets | $52,311 | $16,462 | | **Liabilities:** | | | | Total current liabilities | $16,491 | $9,980 | | Notes Payable – non-current portion | $24,970 | $1,200 | | Total liabilities | $42,389 | $12,310 | | **Equity:** | | | | Total stockholders' equity (deficit) | $9,922 | $(106,113) | Consolidated Statements of Operations (Years Ended December 31, in thousands) | Item | 2022 (in thousands) | 2021 (in thousands) | | :---------------------- | :-------- | :-------- | | Revenues | $54,865 | $20,082 | | Total costs and expenses | $85,991 | $30,607 | | Net income (loss) | $(38,567) | $(6,311) | | Net loss per share, basic and diluted | $(2.07) | $(1.10) | Consolidated Statements of Cash Flows (Years Ended December 31, in thousands) | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | | :---------------------- | :-------- | :-------- | | Net cash flows used in operating activities | $(2,803) | $(12,256) | | Net cash provided by investing activities | $1,835 | $8,087 | | Net cash provided by financing activities | $37,089 | $(51) | | Net change in cash, cash equivalents, and restricted cash | $36,121 | $(4,220) | - The Business Combination with CHW Acquisition Corporation on **August 9, 2022**, was accounted for as a reverse recapitalization, with Wag! Labs, Inc. as the accounting acquirer[445](index=445&type=chunk)[516](index=516&type=chunk) - Wag! acquired Furmacy, Inc. in **October 2022** for **$283 thousand in stock** and Dog Food Advisor assets in **January 2023** for **$9.0 million in cash**, expanding its wellness and pet food offerings[334](index=334&type=chunk)[447](index=447&type=chunk)[538](index=538&type=chunk)[625](index=625&type=chunk) Revenue Disaggregation by Offering (Years Ended December 31, in thousands) | Offering | 2022 (in thousands) | 2021 (in thousands) | | :-------------- | :-------- | :-------- | | Services revenue | $21,823 | $14,951 | | Wellness revenue | $33,042 | $5,131 | | Total revenues | $54,865 | $20,082 | - The company's contract liabilities (unredeemed gift cards, Wag! Premium prepayments, consumer credits) were **$2.2 million in 2022** and **$1.9 million in 2021**[540](index=540&type=chunk) - Wag! settled its Forward Share Purchase Agreements (FPAs) derivative liability in **November 2022**, repurchasing **1.4 million shares** for **$14.8 million** and recognizing a **$7.8 million gain** on the unexercised portion[544](index=544&type=chunk)[545](index=545&type=chunk)[546](index=546&type=chunk) Goodwill (in thousands) | Date | Amount (in thousands) | | :--------------- | :----- | | December 31, 2020 | $0 | | CPI Acquisition | $1,427 | | December 31, 2021 | $1,427 | | Furmacy Acquisition | $24 | | December 31, 2022 | $1,451 | Intangible Assets, Net (as of December 31, 2022, in thousands) | Category | Gross Book Value (in thousands) | Accumulated Amortization (in thousands) | Net Book Value (in thousands) | | :--------------------------- | :--------------- | :----------------------- | :------------- | | Developed technology | $783 | $(226) | $557 | | Customer relationships and licenses | $2,166 | $(422) | $1,744 | | Trademarks | $291 | $(56) | $235 | | Pharmacy board licenses | $5 | — | $5 | | Total Finite Life Intangibles | $3,245 | $(704) | $2,541 | | Total Indefinite Life Intangible Assets | $49 | — | $49 | - Wag! is involved in legal proceedings related to Pet Caregiver classification, including a **$248 thousand liability** for unemployment insurance contributions in New York and a challenged **$1.3 million assessment** in California[566](index=566&type=chunk)[569](index=569&type=chunk)[570](index=570&type=chunk) - The company received a **$5.1 million PPP Loan** in **August 2020**, with **$3.5 million forgiven** in **September 2021**, leaving an outstanding principal balance of **$1.2 million** as of December 31, 2022[572](index=572&type=chunk)[573](index=573&type=chunk) - On **August 9, 2022**, Legacy Wag! entered into a **$32.17 million senior secured term loan Credit Facility** with Blue Torch Finance, LLC, secured by substantially all company assets, with an outstanding principal balance of **$26.2 million** as of December 31, 2022[574](index=574&type=chunk)[579](index=579&type=chunk) - Blue Torch also received **1,896,177 Lender Warrants** to acquire common stock at **$11.50 per share**, classified as equity[580](index=580&type=chunk)[583](index=583&type=chunk) Future Minimum Debt Payments (as of December 31, 2022, in thousands) | Year | Amounts (in thousands) | | :--- | :------ | | 2023 | $1,264 | | 2024 | $1,751 | | 2025 | $30,227 | | Total principal amount | $33,242 | - Wag! had U.S. federal and state net operating loss carryforwards of approximately **$209 million** and **$178 million**, respectively, as of December 31, 2022, with a full valuation allowance recorded[619](index=619&type=chunk) Anti-Dilutive Securities Excluded from EPS (Years Ended December 31) | Security Type | 2022 (Number of Shares) | 2021 (Number of Shares) | | :---------------------------- | :----------- | :----------- | | Series Seed convertible preferred shares | — | 4,376,930 | | Series A convertible preferred shares | — | 5,902,952 | | Series B convertible preferred shares | — | 6,506,794 | | Series C convertible preferred shares | — | 7,072,149 | | Series P convertible preferred shares | — | — | | Earnout Shares | 15,000,000 | — | | Options and RSUs issued and outstanding | 11,388,842 | 7,537,744 | | Warrants issued and outstanding | 18,291,741 | 88,756 | | Total | 44,680,583 | 31,485,325 | - The Lock-Up Period for certain stockholders, related to the Business Combination, expired on **February 5, 2023**, removing transfer restrictions[628](index=628&type=chunk)[629](index=629&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=118&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) There is no information to report regarding changes in or disagreements with accountants on accounting and financial disclosures, as previously reported in the Current Report on Form 8-K filed on August 9, 2022 - No information to report regarding changes in or disagreements with accountants, as previously reported on Form 8-K filed **August 9, 2022**[631](index=631&type=chunk) [Item 9A. Controls and Procedures](index=118&type=section&id=Item%209A.%20Controls%20and%20Procedures) Wag! Group Co.'s disclosure controls and procedures were ineffective as of December 31, 2022, due to material weaknesses in internal control over financial reporting, which the company is actively remediating - As of December 31, 2022, Wag!'s disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[633](index=633&type=chunk) - Material weaknesses identified include insufficient resources for internal control risk assessment, evaluation of technical accounting for material transactions, and effective design/implementation of process-level controls[634](index=634&type=chunk) - Additional material weaknesses relate to the risk assessment process for IT general controls, logical access, segregation of duties, program change controls, and process-level controls impacting financial reporting[634](index=634&type=chunk) - The company is implementing remedial measures, including technology, hiring personnel, and engaging external resources, to address these material weaknesses[635](index=635&type=chunk) - Post-Business Combination, the design of internal controls over financial reporting requires significant time and resources, as the predecessor's controls are no longer applicable[636](index=636&type=chunk) [Item 9B. Other Information](index=120&type=section&id=Item%209B.%20Other%20Information) This item contains no additional information [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections](index=120&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevents%20Inspections) This item is not applicable to Wag! Group Co Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=121&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance, including the Code of Ethics and Business Conduct, will be incorporated by reference from the definitive proxy statement for the 2023 annual meeting of stockholders - Information on directors, executive officers, and corporate governance will be incorporated by reference from the **2023 annual meeting proxy statement**[641](index=641&type=chunk) - Wag! has adopted a Code of Ethics for Senior Financial Officers, Corporate Governance Guidelines, and a Code of Business Conduct, available on its investor relations website[642](index=642&type=chunk) [Item 11. Executive Compensation](index=121&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be incorporated by reference from the definitive proxy statement for the 2023 annual meeting of shareholders - Executive compensation information will be incorporated by reference from the **2023 annual meeting proxy statement**[644](index=644&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=121&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, will be incorporated by reference from the definitive proxy statement for the 2023 annual meeting of shareholders - Security ownership information will be incorporated by reference from the **2023 annual meeting proxy statement**[645](index=645&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=121&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence will be incorporated by reference from the definitive proxy statement for the 2023 annual meeting of shareholders - Information on related transactions and director independence will be incorporated by reference from the **2023 annual meeting proxy statement**[646](index=646&type=chunk) [Item 14. Principal Accounting Fees and Services](index=121&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services will be incorporated by reference from the definitive proxy statement for the 2023 annual meeting of shareholders - Principal accounting fees and services information will be incorporated by reference from the **2023 annual meeting proxy statement**[647](index=647&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=120&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed, including key agreements such as the Business Combination Agreement, Certificate of Incorporation, and Financing Agreement - The section lists various exhibits filed, including the Business Combination Agreement, Certificate of Incorporation, Bylaws, Warrant Agreement, Lock-Up Agreement, and Financing Agreement[650](index=650&type=chunk)[651](index=651&type=chunk) [Item 16. Form 10-K Summary](index=124&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided [Signatures](index=125&type=section&id=Signatures) This section contains the signatures of Wag! Group Co.'s Chief Executive Officer, Chief Financial Officer, General Counsel, and Directors, affirming the filing of the registration statement on March 30, 2023 - The registration statement was signed on behalf of Wag! Group Co. by its Chief Executive Officer, Garrett Smallwood, and other key officers and directors on **March 30, 2023**[657](index=657&type=chunk)[662](index=662&type=chunk)

Financial Highlights FY 2022 Revenue of $54.9 million exceeded expectations – Raising FY 2023 guidance for Revenue and Adjusted EBITDA Wag! Adj. EBITDA Revenue Waq! ● A continued trend in return-to-office, as measured by the Kastle back-to-work barometer. * "Original Forecast" provided in April 2022 Investor Deck on the Company's Investor Relations website **Reflecting values at the midpoint of the range Wellness ● 10% Off All Services ● Exclusive Benefits Center 5 7 Platform Participant is defined as a Pet ...

Wag! Group Co. (NASDAQ:PET) Q4 2022 Results Conference Call February 21, 2023 4:30 PM ET Company Participants Dawn Frankfort - Managing Director at ICR Garrett Smallwood - Chief Executive Officer and Chairman Adam Storm - President and Chief Product Officer Alec Davidian - Chief Financial Officer Conference Call Participants Tom White - D.A Davidson & Company Matt Koranda - ROTH MKM Jeremy Hamlin - Craig Hallum Jason Helfstein - Oppenheimer Brian Dobson - Chardan Capital Markets Operator Good day and thank ...

Financial Data and Key Metrics Changes - The company reported record revenue of approximately $15.4 million for Q3 2022, an increase of 161% compared to $5.9 million in Q3 2021 [6][10] - Adjusted EBITDA loss improved to $461,000 from a loss of $2.6 million in the same period last year [10][29] - The take rate improved to 61% from 43% in Q3 2021, driven by diversification of the platform [10][25] - The company ended the quarter with over $28 million in cash and cash equivalents, maintaining a strong balance sheet [29] Business Line Data and Key Metrics Changes - Wellness services contributed to 62% of revenue in Q3 2022, indicating strong demand for pet wellness products [25] - Wag! Premium penetration reached 53%, up from 50% in the previous quarter, achieving the long-term target two and a half years ahead of schedule [11][25] - Platform participants grew to 473,000, a 22% increase from the previous quarter [10] Market Data and Key Metrics Changes - The company noted a 47% return to office trend, which is expected to drive growth in existing markets [17] - The average price for pet caregivers to join the platform increased from approximately $29.95 in Q2 to around $41.50 in Q3 [12] Company Strategy and Development Direction - The company aims to accelerate growth in existing markets, expand premium subscription offerings, and prioritize opportunistic M&A [17][20] - The acquisition of Furmacy is expected to enhance the company's reach in the pet wellness category [20][30] - The company is focused on maintaining a balance of growth, margin, and profit, emphasizing operational efficiency [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable growth, raising the 2022 revenue guidance to a range of $51 million to $52 million, reflecting a year-over-year increase of 155% to 160% [32] - The management acknowledged potential seasonality effects and consumer behavior changes during the holiday season, which may impact Q4 performance [41] Other Important Information - The company is actively testing pricing and benefits for Wag! Premium to enhance customer value [11][18] - The company is committed to managing gross margin and profit while pursuing strategic growth opportunities [22] Q&A Session Summary Question: Details on the wellness platform growth - Management noted that wellness products, including insurance and expert care, are driving significant growth, with pet insurance being a key catalyst [35][36] Question: Consideration of a recurring fee for pet caregivers - Management indicated that while dynamic pricing is being tested, a subscription model for caregivers is not out of the question [38][39] Question: Q4 guidance and seasonality considerations - Management acknowledged conservatism in Q4 guidance due to potential shifts in consumer spending priorities during the holiday season [41] Question: Breakdown of services revenue growth - Management refrained from separating wellness revenue streams but expressed confidence in sustaining long-term growth rates above 40% [44][45] Question: Premium subscription penetration and future growth - Management plans to focus on pricing and bundling strategies to maintain premium penetration and enhance monetization [60] Question: Impact of strategic partnerships on customer acquisition costs - Management highlighted the importance of partnerships with brands like Tractor Supply and Kimpton in enhancing customer acquisition [62] Question: Customer usage of multiple services - Management reported that long-term rebooking rates remain high, with premium pet parents using services more frequently [66]

[Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for September 30, 2022, reflect the company's financial position, operations, and cash flows, following a reverse recapitalization business combination in August 2022 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$66,985** | **$16,462** | | Cash and cash equivalents | $28,024 | $2,845 | | Restricted cash | $24,719 | $0 | | **Total Liabilities** | **$59,748** | **$12,310** | | Forward share purchase agreements derivative liability | $19,668 | $0 | | Notes Payable – non-current portion | $24,494 | $1,200 | | **Total Stockholders' Equity (Deficit)** | **$7,237** | **($106,113)** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric (in thousands, except per share data) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Revenues | $37,829 | $12,036 | | Total costs and expenses | $67,695 | $19,893 | | Net loss | ($44,371) | ($3,587) | | Net loss per share (Basic & Diluted) | ($3.60) | ($0.64) | Condensed Consolidated Statement of Cash Flows Highlights (Unaudited) | Metric (in thousands) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,578) | ($10,350) | | Net cash provided by investing activities | $1,952 | $4,956 | | Net cash provided by financing activities | $51,524 | $2 | | Net change in cash, cash equivalents, and restricted cash | $49,898 | ($5,392) | - On August 9, 2022, the company completed its business combination with CHW Acquisition Corporation, a SPAC, accounted for as a reverse recapitalization, with Legacy Wag! being the accounting acquirer[25](index=25&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant revenue growth driven by Wellness and pet services recovery, alongside substantial increases in operating expenses due to business combination costs, with liquidity strengthened by merger proceeds and new financing - The company's mission is to be the 1 partner to busy pet parents, offering a mobile-first marketplace for services like dog walking, pet sitting, expert advice, and wellness plans through a community of 400,000 caregivers across 5,300 cities[165](index=165&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk) Key Performance Indicators and Non-GAAP Measures | Metric (in thousands, except percentages) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Revenues | $37,829 | $12,036 | | Net loss | ($44,371) | ($3,587) | | Adjusted EBITDA | ($3,448) | ($7,443) | | Bookings | $64,804 | $30,764 | | Take Rate | 58% | 39% | - The business combination in August 2022 resulted in a significant increase in cash, including **$29.3 million** (of which **$24.7 million** is in escrow for Forward Purchase Agreements), **$5.0 million** from a PIPE investment, and **$29.4 million** from a new financing arrangement[190](index=190&type=chunk) - The company's liquidity was significantly improved post-merger, and management believes existing cash and investments are sufficient to fund operations for at least the next 12 months[230](index=230&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Revenues surged 214% to $37.8 million, primarily from Wellness, while total costs and expenses grew 240% to $67.7 million, driven by one-time business combination expenses, widening the net loss to $44.4 million Revenue Breakdown (Nine Months Ended Sep 30) | Revenue Type (in thousands) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Service revenue | $15,973 | $10,512 | +52% | | Wellness revenue | $21,856 | $1,524 | +1334% | | **Total revenues** | **$37,829** | **$12,036** | **+214%** | - General and Administrative expenses for Q3 2022 increased by **$21.8 million** (1090%) YoY, primarily due to one-time, non-cash expenses related to the business combination: **$19.0 million** for Earnout Shares and **$1.8 million** for Community Shares[224](index=224&type=chunk) - Sales and Marketing expenses for the nine months ended Sep 30, 2022, increased by **$19.7 million** (394%) YoY, driven by a **$10.6 million** increase in partnership investments, a **$2.9 million** increase in advertising, and a **$2.1 million** stock compensation charge for Earnout Shares[223](index=223&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Historically incurring losses, the company's liquidity significantly improved post-business combination, with $51.5 million in net cash from financing activities, including merger proceeds and a new credit facility, deemed sufficient for the next 12 months - Net cash provided by financing activities was **$51.5 million** for the nine months ended Sep 30, 2022, a significant increase from just **$2 thousand** in the same period of 2021, primarily due to the business combination and related financing[236](index=236&type=chunk)[240](index=240&type=chunk) - In August 2022, the company entered into a **$32.17 million** senior secured term loan credit facility with Blue Torch Finance, LLC, which matures in three years and bears a floating interest rate[243](index=243&type=chunk)[128](index=128&type=chunk) - The company placed **$24.7 million** in escrow to secure obligations under Forward Purchase Agreements (FPAs), which allow certain investors to sell shares back to the company, and this escrowed amount is recorded as restricted cash[231](index=231&type=chunk)[90](index=90&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks primarily from its variable-rate Blue Torch Credit Facility and equity price sensitivity on financial obligations like Forward Purchase Agreements and Earnout Shares - The company's primary market risks stem from its variable interest rate debt (Blue Torch Credit Facility) and equity price sensitivity on obligations like the Forward Purchase Agreement and Earnout Shares[262](index=262&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during the quarter - As of September 30, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[263](index=263&type=chunk) - No material changes were made to the company's internal control over financial reporting during the third quarter of 2022[264](index=264&type=chunk) [Part II - Other Information](index=51&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, which management believes will not materially adversely affect its financial condition, results of operations, or cash flows - Management does not expect current legal proceedings to have a material adverse effect on the company's financial results[265](index=265&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of net losses, intense competition, potential reclassification of Pet Caregivers, cybersecurity threats, and challenges as a newly public company post-SPAC merger - A primary risk is the potential reclassification of Pet Caregivers from independent contractors to employees, which would significantly increase costs and adversely affect the business model[268](index=268&type=chunk)[325](index=325&type=chunk) - The company has a history of net losses, incurring **$44 million** in the first nine months of 2022, and its ability to achieve profitability is uncertain[274](index=274&type=chunk) - The business is highly competitive, facing challenges from personal networks (friends/family), local operators, other digital marketplaces like Rover, and online directories[291](index=291&type=chunk)[292](index=292&type=chunk) - The company's debt facility with Blue Torch is secured by substantially all of its assets, and a default could lead to foreclosure, which would materially harm the business[363](index=363&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is not applicable for the reporting period - The report indicates this item is not applicable[498](index=498&type=chunk) [Defaults Upon Senior Securities](index=99&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - The company reported no defaults upon senior securities[498](index=498&type=chunk) [Mine Safety Disclosures](index=99&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - The report indicates this item is not applicable[498](index=498&type=chunk) [Other Information](index=99&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this period - The company reported no other information[498](index=498&type=chunk) [Exhibits](index=100&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, officer certifications, and XBRL data files

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40764 Table of Contents Wag! Group Co. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpora ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40764 CHW ACQUISITION CORPORATION (Exact name of registrant as specified in its charter) Cayman Islands N/A (State o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-40764 CHW ACQUISITION CORPORATION (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | - ...

PART I – FINANCIAL INFORMATION [Item 1. Condensed Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Financial%20Statements) The company's unaudited condensed financial statements detail its financial position, operations, and cash flows [Condensed Balance Sheet (Unaudited)](index=4&type=section&id=Condensed%20Balance%20Sheet%20as%20of%20September%2030%2C%202021%20(Unaudited)) | Item | September 30, 2021 | | :--- | :--- | | **ASSETS** | | | Cash | $897,818 | | Due from related party | $68,591 | | Prepaid expenses and other current assets | $287,500 | | Total current assets | $1,253,909 | | Prepaid expense – non-current portion | $263,542 | | Investments held in trust account | $125,000,000 | | **TOTAL ASSETS** | **$126,517,451** | | **LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)** | | | Accounts payable | $111,054 | | Promissory note – related party | $43,000 | | Total current liabilities | $154,054 | | Deferred underwriting fee payable | $4,375,000 | | Total long-term liabilities | $4,375,000 | | **Total liabilities** | **$4,529,054** | | Ordinary shares subject to possible redemption | $125,000,000 | | Ordinary Shares | $318 | | Additional paid-in capital | $— | | Accumulated deficit | $(3,011,921) | | **Total shareholders' equity (deficit)** | **$(3,011,603)** | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)** | **$126,517,451** | [Condensed Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202021%20and%20the%20period%20January%2012%2C%202021%20(inception)%20through%20September%2030%2C%202021%20(Unaudited)) | Item | For the three months ended September 30, 2021 | For the period January 12, 2021 (inception) through September 30, 2021 | | :--- | :--- | :--- | | General and administrative expenses | $104,249 | $120,121 | | Total operating expenses | $104,249 | $120,121 | | **NET LOSS** | **$(104,249)** | **$(120,121)** | | Weighted average shares outstanding of redeemable ordinary shares | 3,983,516 | 1,388,889 | | Basic and diluted net income per share, redeemable ordinary shares | $(0.01) | $(0.03) | | Weighted average shares outstanding of non-redeemable ordinary shares | 3,170,467 | 3,165,278 | | Basic and diluted net income per share, non-redeemable ordinary shares | $(0.01) | $(0.03) | [Condensed Statements of Changes in Shareholders' Equity (Unaudited)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202021%20and%20period%20January%2012%2C%202021%20(inception)%20through%20September%2030%2C%202021%20(Unaudited)) **For the period January 12, 2021 (inception) through September 30, 2021:** | Item | Ordinary Shares (Shares) | Ordinary Shares (Amount) | Additional paid-in capital | Accumulated deficit | Total shareholders' equity (deficit) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance, January 12, 2021 (inception) | — | $— | $— | $— | $— | | Issuance of Ordinary shares to Sponsor | 3,162,500 | $316 | $24,684 | — | $25,000 | | Sale of private placement warrants | — | $— | $4,238,636 | — | $4,238,636 | | Issuance of representative shares | 62,500 | $6 | $460,119 | — | $460,125 | | Accretion to Redeemable Ordinary shares to redemption value | — | $— | $(4,723,443) | $(2,891,800) | $(7,615,243) | | Net loss | — | $— | — | $(120,121) | $(120,121) | | Forfeiture of founder shares | (37,500) | $(4) | $4 | — | $— | | Balance, September 30, 2021 | 3,187,500 | $318 | $— | $(3,011,921) | $(3,011,603) | **For the three months ended September 30, 2021:** | Item | Ordinary shares (Shares) | Ordinary shares (Amount) | Additional paid-in capital | Accumulated deficit | Total shareholders' equity (deficit) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance, July 1, 2021 | 3,162,500 | $316 | $24,684 | $(15,872) | $9,128 | | Sale of private warrants under fair value | — | $— | $4,238,636 | — | $4,238,636 | | Issuance of representative shares | 62,500 | $6 | $460,119 | — | $460,125 | | Accretion to Redeemable Ordinary shares to redemption value | — | $— | $(4,723,443) | $(2,891,800) | $(7,615,243) | | Forfeiture of founder shares | (37,500) | $(4) | $4 | — | $— | | Net loss | — | $— | — | $(104,249) | $(104,249) | | Balance, September 30, 2021 | 3,187,500 | $318 | $— | $(3,011,921) | $(3,011,603) | [Condensed Statement of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Statement%20of%20Cash%20Flows%20for%20the%20period%20January%2012%2C%202021%20(inception)%20through%20September%2030%2C%202021%20(Unaudited)) | Item | For the period January 12, 2021 (inception) through September 30, 2021 | | :--- | :--- | | **CASH FLOWS FROM OPERATING ACTIVITIES** | | | Net loss | $(120,121) | | Due from related party | $(68,591) | | Prepaid expenses and other assets-current and non current | $(551,042) | | Accounts payable | $111,054 | | Net cash flows used in operating activities | $(628,700) | | **CASH FLOWS FROM INVESTING ACTIVITIES** | | | Cash deposited to Trust Account | $(125,000,000) | | Net cash flows used in investing activities | $(125,000,000) | | **CASH FLOWS FROM FINANCING ACTIVITIES** | | | Proceeds from sale of private placement warrants | $4,238,636 | | Sale of Units, net of underwriting discounts paid | $122,812,500 | | Proceeds from issuance of ordinary shares to Sponsor | $25,000 | | Payment of offering costs | $(592,618) | | Proceeds from note payable – related party | $132,296 | | Repayment of note payable – related party | $(89,296) | | Net cash flows provided by financing activities | $126,526,518 | | **NET INCREASE (DECREASE) IN CASH** | **$897,818** | | CASH, BEGINNING OF PERIOD | $— | | **CASH, END OF PERIOD** | **$897,818** | | Initial classification of Ordinary shares subject to redemption | $125,000,000 | | Deferred underwriting fee payable | $4,375,000 | Notes to Unaudited Condensed Financial Statements [Note 1 — Description of Organization and Business Operations](index=8&type=section&id=Note%201%20%E2%80%94%20Description%20of%20Organization%20and%20Business%20Operations) - CHW Acquisition Corporation was incorporated on **January 12, 2021**, in the Cayman Islands[16](index=16&type=chunk) - The Company's purpose is to effect a **Business Combination** (merger, acquisition, etc) with one or more businesses[16](index=16&type=chunk) - As of September 30, 2021, the Company had **not commenced any operations**, focusing on its formation, Initial Public Offering (IPO), and the search for a prospective Business Combination[18](index=18&type=chunk) - The Company consummated its IPO on **September 1, 2021**, selling **11,000,000 units at $10.00 per unit**, generating gross proceeds of **$110,000,000**[18](index=18&type=chunk) - An additional **1,500,000 units** were sold on September 1, 2021, due to a partial exercise of the over-allotment option, generating **$15,000,000**[20](index=20&type=chunk) - Simultaneously with the IPO closing, **4,000,000 Private Placement Warrants** were sold at $1.00 each, generating **$4,000,000**, with an additional **238,686 Private Placement Warrants** sold for **$238,686**[19](index=19&type=chunk)[20](index=20&type=chunk) - Offering costs for the IPO and over-allotment option totaled **$13,130,743**, including **$2,187,500 in underwriting fees** and **$4,375,000 in deferred underwriting fees**[21](index=21&type=chunk) - Following the IPO, **$125,000,000 was placed in a Trust Account**, to be invested in U.S. government securities or money market funds until a Business Combination or distribution[22](index=22&type=chunk) - The Company must complete a Business Combination by **November 1, 2022** (15 months from IPO closing)[31](index=31&type=chunk) - Public Shareholders have **redemption rights** for their shares upon completion of a Business Combination or liquidation, for a pro rata portion of the Trust Account[24](index=24&type=chunk)[25](index=25&type=chunk) - The Company is an **emerging growth company** and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 2 — Restatement of Prior Period Financial Statements](index=13&type=section&id=Note%202%20%E2%80%94%20Restatement%20of%20Prior%20Period%20Financial%20Statements) - The Company restated its previously issued balance sheet as of **July 20, 2020**, to reclassify ordinary shares subject to redemption[37](index=37&type=chunk) - The reclassification was due to redemption provisions not solely within the Company's control, requiring ordinary shares subject to redemption to be classified **outside of permanent equity** under ASC 480-10-S99[36](index=36&type=chunk) Effect of Restatement on Balance Sheet (as of July 20, 2020) | Item | As Reported | Adjustment | As Restated | | :--- | :--- | :--- | :--- | | Ordinary shares subject to redemption | $117,092,620 | $7,907,380 | $125,000,000 | | Ordinary shares, $0.0001 par value | 397 | (85) | 312 | | Additional paid-in-capital | 5,015,501 | (5,015,501) | — | | Retained earnings | (15,897) | (2,891,794) | (2,907,691) | | Total liabilities and shareholders' equity | $122,092,621 | $— | $122,092,621 | [Note 3 — Summary of Significant Accounting Policies](index=13&type=section&id=Note%203%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed financial statements are prepared in conformity with **U.S. GAAP** and SEC rules for interim financial reporting[39](index=39&type=chunk)[41](index=41&type=chunk) - Investments held in the Trust Account are classified as **trading securities** and presented at fair value, primarily consisting of U.S. Treasury securities[44](index=44&type=chunk) - Ordinary shares subject to possible redemption are classified as **temporary equity**, as redemption rights are outside the Company's control, in accordance with ASC Topic 480[45](index=45&type=chunk) - The Company recognizes changes in the redemption value of redeemable ordinary shares **immediately as they occur**[46](index=46&type=chunk) - Warrants are accounted for as either equity- or liability-classified based on specific terms and ASC 480/815; Public and Private Placement Warrants qualify for **equity accounting treatment**[47](index=47&type=chunk)[49](index=49&type=chunk) - The Company applies the **two-class method** for calculating basic and diluted net income (loss) per share[52](index=52&type=chunk) - The Company adopted **ASU 2020-06** effective January 1, 2021, which did not have a material impact on its financial statements[58](index=58&type=chunk) [Note 4 — Initial Public Offering](index=19&type=section&id=Note%204%20%E2%80%94%20Initial%20Public%20Offering) - On September 1, 2021, the Company sold **11,000,000 units at $10.00 per unit**, generating gross proceeds of **$110,000,000**[60](index=60&type=chunk) - An additional **1,500,000 units** were sold on September 1, 2021, due to the underwriters' partial exercise of their over-allotment option, for an aggregate purchase price of **$15,000,000**[62](index=62&type=chunk) - Each unit consists of **one Ordinary share and one redeemable Public Warrant**[60](index=60&type=chunk) [Note 5 — Private Placement](index=19&type=section&id=Note%205%20%E2%80%94%20Private%20Placement) - Concurrently with the IPO closing, the Sponsor and underwriter purchased **4,000,000 Private Placement Warrants at $1.00 per warrant**, totaling **$4,000,000**[63](index=63&type=chunk) - An additional **238,686 Private Placement Warrants** were sold on September 1, 2021, for **$238,686**, following the partial exercise of the over-allotment option[65](index=65&type=chunk) - The proceeds from the Private Placement Warrants are **held in the Trust Account**[63](index=63&type=chunk) - If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will **expire worthless**[63](index=63&type=chunk) [Note 6 — Related Party Transactions](index=21&type=section&id=Note%206%20%E2%80%94%20Related%20Party%20Transactions) - On January 18, 2021, the Sponsor paid **$25,000 for 2,875,000 Founder Shares**, which were adjusted to 3,162,500 shares after a 1.1-for-1 split[66](index=66&type=chunk) - On September 1, 2021, the Sponsor **forfeited 37,500 ordinary shares** due to the underwriters' partial exercise of the over-allotment option[67](index=67&type=chunk) - The Sponsor has agreed to a **lock-up period for Founder Shares** until six months after a Business Combination or certain share price/liquidation events[68](index=68&type=chunk) - As of September 30, 2021, there was **$43,000 outstanding** under an unsecured promissory note issued to the Sponsor, with a maximum principal amount of $300,000[70](index=70&type=chunk) - The Company pays a monthly fee of **$10,000** to an affiliate of the Sponsor for administrative services, with **$10,000 paid** as of September 30, 2021[74](index=74&type=chunk) [Note 7 — Commitments and Contingencies](index=23&type=section&id=Note%207%20%E2%80%94%20Commitments%20and%20Contingencies) - Holders of Founder Shares, Private Placement Warrants, and potential working capital loan warrants are entitled to **registration rights**[75](index=75&type=chunk) - The underwriters were paid a cash underwriting discount of **$2,187,500** and are entitled to a deferred underwriting commission of **$4,375,000**, payable upon completion of a Business Combination[78](index=78&type=chunk) - The Company issued **62,500 Representative Shares** to the underwriter's designees, valued at **$460,125**, which are subject to a 180-day lock-up period[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 8 - Shareholders' Equity](index=25&type=section&id=Note%208%20-%20Shareholders'%20Equity) - The Company is authorized to issue **1,000,000 preference shares** ($0.0001 par value), with none issued or outstanding as of September 30, 2021[83](index=83&type=chunk) - The Company is authorized to issue **110,000,000 Class B Ordinary shares** ($0.0001 par value)[84](index=84&type=chunk) - As of September 30, 2021, there were **3,187,500 Ordinary shares outstanding** (excluding 12,500,000 shares subject to redemption)[84](index=84&type=chunk) [Note 9 - Warrants](index=25&type=section&id=Note%209%20-%20Warrants) - Public Warrants become exercisable on the later of the completion of a Business Combination or **12 months from the IPO closing**, and expire five years from the Business Combination completion[85](index=85&type=chunk) - The Company may redeem Public Warrants if the Public Shares' reported last sale price equals or exceeds **$16.50 per share** for any 20 trading days within a 30-trading day period[88](index=88&type=chunk) - Private Placement Warrants are identical to Public Warrants but are **non-transferable, assignable, or saleable** until 30 days after a Business Combination, subject to limited exceptions[93](index=93&type=chunk) [Note 10 — Fair Value Measurements](index=27&type=section&id=Note%2010%20%E2%80%94%20Fair%20Value%20Measurements) - The Company uses a **fair value hierarchy (Level 1, Level 2, Level 3)** to classify assets and liabilities[96](index=96&type=chunk) - As of September 30, 2021, investments held in the Trust Account, totaling **$125,000,000** in U.S. Treasury Securities mutual funds, are classified as **Level 1**[95](index=95&type=chunk)[99](index=99&type=chunk) [Note 11 — Subsequent Events](index=29&type=section&id=Note%2011%20%E2%80%94%20Subsequent%20Events) - **No events requiring adjustments or disclosures** were identified between the balance sheet date and the issuance of the unaudited condensed financial statements[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and liquidity strategy as a blank check company [Overview](index=30&type=section&id=Overview) - CHW Acquisition Corporation is a **blank check company** incorporated on January 12, 2021, to effect a Business Combination[104](index=104&type=chunk) - The Company has **not yet selected a target business** and expects to incur significant costs in its acquisition plans[104](index=104&type=chunk)[105](index=105&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) - The Company's activities through September 30, 2021, were limited to IPO preparation and searching for a Business Combination, generating **no operating revenues**[106](index=106&type=chunk) Net Loss Summary | Period | Net Loss | | :--- | :--- | | Three months ended September 30, 2021 | $(104,249) | | Inception (Jan 12, 2021) through Sept 30, 2021 | $(120,121) | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company consummated its IPO on September 1, 2021, raising **$125,000,000**, which was placed in a Trust Account[110](index=110&type=chunk) - Net cash used in operating activities from inception through September 30, 2021, was **$628,700**[111](index=111&type=chunk) - As of September 30, 2021, the Company had **$897,818 in cash** held outside the Trust Account for operational expenses[113](index=113&type=chunk) - The Company intends to use **substantially all funds in the Trust Account** for its initial Business Combination[112](index=112&type=chunk) - The Company may obtain loans from its Sponsor, affiliates, or management team for working capital deficiencies or transaction costs, which may be **convertible into warrants**[114](index=114&type=chunk) [Related Party Transactions](index=34&type=section&id=Related%20Party%20Transactions) - The Sponsor initially acquired **2,875,000 Founder Shares for $25,000**, with 37,500 shares forfeited on September 1, 2021[117](index=117&type=chunk) - The Sponsor purchased **4,238,686 Private Placement Warrants for $4,238,686** concurrently with the IPO[119](index=119&type=chunk) - As of September 30, 2021, **$43,000 was outstanding** under an unsecured promissory note from the Sponsor[120](index=120&type=chunk) - The Company pays a monthly fee of **$10,000** to an affiliate of the Sponsor for administrative services[122](index=122&type=chunk) [Deferred Underwriting Fees](index=36&type=section&id=Deferred%20Underwriting%20Fees) - The underwriter is entitled to a deferred fee of **$4,375,000**, payable from the Trust Account only upon the completion of a Business Combination[124](index=124&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of September 30, 2021, the Company did not have any **off-balance sheet arrangements**[125](index=125&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) - The Company classifies warrants as either **equity- or liability-classified instruments** based on ASC 480 and ASC 815[127](index=127&type=chunk) - Ordinary shares subject to possible redemption are classified as **temporary equity** under ASC Topic 480[128](index=128&type=chunk) - The **two-class method** is applied for calculating earnings per share[129](index=129&type=chunk) [Recently Adopted Accounting Standards](index=38&type=section&id=Recently%20Adopted%20Accounting%20Standards) - The Company adopted **ASU 2020-06** effective January 1, 2021, which simplifies accounting for certain financial instruments[130](index=130&type=chunk) - The adoption of ASU 2020-06 **did not have a material impact** on the Company's financial statements[130](index=130&type=chunk) - Management does not believe any other recently issued, but not yet effective, accounting pronouncements would have a **material effect**[131](index=131&type=chunk) [Contractual Obligations](index=38&type=section&id=Contractual%20Obligations) - The Company has **no long-term debt, capital lease obligations, or operating lease obligations**[132](index=132&type=chunk) - Contractual obligations include a **$10,000 monthly administrative fee** to an affiliate of the Sponsor and a **$4,375,000 deferred underwriting fee** contingent on a Business Combination[132](index=132&type=chunk)[133](index=133&type=chunk) - The Company has **registration rights agreements** for holders of Founder Shares, Private Placement Warrants, and potential Working Capital Loans[134](index=134&type=chunk) [JOBS Act](index=39&type=section&id=JOBS%20Act) - The Company qualifies as an **'emerging growth company'** under the JOBS Act[135](index=135&type=chunk) - The Company has elected to **delay the adoption of new or revised accounting pronouncements** to align with private company effective dates[135](index=135&type=chunk) - This election may make **comparison of the Company's financial statements** with other public companies difficult[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material market or interest rate risk due to its investment strategy for IPO proceeds - As of September 30, 2021, the Company was **not subject to any material market or interest rate risk**[137](index=137&type=chunk) - Funds in the Trust Account are invested in **short-term U.S. government obligations** or money market funds, limiting interest rate risk[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were deemed ineffective due to a material weakness in accounting for complex financial instruments - As of September 30, 2021, disclosure controls and procedures were **not effective** due to a material weakness in accounting for complex financial instruments[139](index=139&type=chunk) - Management plans to **enhance its system for evaluating and implementing accounting standards**, including through enhanced analyses by personnel and third-party professionals[140](index=140&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings as of the report date - **No legal proceedings** were reported[143](index=143&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the IPO prospectus are reported - **No material changes** to risk factors disclosed in the final prospectus for the Initial Public Offering[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the use of proceeds from the Initial Public Offering and concurrent private placement - The Company consummated its IPO on September 1, 2021, selling **12,500,000 units at $10.00 per unit**, generating gross proceeds of **$125,000,000**[145](index=145&type=chunk)[147](index=147&type=chunk) - Concurrently, **4,238,686 Private Placement Warrants** were sold at $1.00 per warrant, generating gross proceeds of **$4,238,686**[146](index=146&type=chunk)[147](index=147&type=chunk) - Total offering costs amounted to **$13,130,743**, including underwriting fees and deferred underwriting fees[148](index=148&type=chunk) - **$125,000,000** from the net proceeds of the IPO and Private Placement Warrants was placed in a Trust Account[149](index=149&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - **No defaults upon senior securities** were reported[151](index=151&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to CHW Acquisition Corporation - This item is **not applicable** to the Company[153](index=153&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No other information was reported in this section - **No other information** was reported[154](index=154&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of or incorporated by reference into the Quarterly Report - Exhibits include **certifications** (31.1, 31.2, 32.1, 32.2) and **XBRL Taxonomy Extension documents** (101.INS, 101.CAL, 101.SCH, 101.DEF, 101.LAB, 101.PRE, 104)[157](index=157&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) - The report was signed on **November 23, 2021**, by Jonah Raskas, Co-Chief Executive Officer, and Steve Katchur, Chief Financial Officer[163](index=163&type=chunk)[164](index=164&type=chunk)