Wag! (US:PET)2024-11-13 12:11Revenue Performance - Revenues decreased by $8.6 million, or approximately 39.4%, from $21.8 million for the three months ended September 30, 2023, to $13.2 million for the three months ended September 30, 2024[132]. - Revenues decreased by $7.2 million, or approximately 11.5%, from $62.2 million for the nine months ended September 30, 2023 to $55.1 million for the nine months ended September 30, 2024[133]. - The decrease in revenues was attributed to a $1.1 million decrease in Services revenue, a $7.1 million decrease in Wellness revenue, and a $0.4 million decrease in Pet Food & Treats revenue[132]. - Services revenue decreased by $1.8 million and Wellness revenue decreased by $5.6 million, attributed to a 42% decrease in Platform Participants year-over-year[133]. - Platform Participants decreased by 42% year-over-year, contributing to the decline in revenue[132]. Financial Losses - Net loss for the three months ended September 30, 2024, was $6.262 million, compared to a net loss of $2.196 million for the same period in 2023, representing an increase of 185.2%[131]. - Adjusted EBITDA loss for the three months ended September 30, 2024, was $(1.943) million, compared to a positive $1.007 million for the same period in 2023[127]. - The company expects operating losses to continue in the foreseeable future as it continues to invest in growing its business[150]. Expenses and Cost Management - Total costs and expenses for the three months ended September 30, 2024, were $17.620 million, a decrease of 20.8% from $22.260 million in the same period in 2023[131]. - Sales and marketing expenses decreased by $3.893 million, or 30.5%, from $12.755 million for the three months ended September 30, 2023, to $8.862 million for the same period in 2024[131]. - General and administrative expenses decreased by $2.2 million, or approximately 15.2%, from $14.5 million for the nine months ended September 30, 2023 to $12.3 million for the nine months ended September 30, 2024[142]. - Interest expense, net decreased by $0.3 million, or approximately 17.3%, from $1.7 million for the three months ended September 30, 2023 to $1.4 million for the three months ended September 30, 2024[145]. Cash Flow and Financing - The company reported a net cash used in operating activities of $(3.253) million for the three months ended September 30, 2024, compared to $(2.297) million for the same period in 2023, an increase of 41.6%[123]. - Net cash used in operating activities for the nine months ended September 30, 2024 was $5.3 million, an increase of $0.7 million from $4.6 million for the nine months ended September 30, 2023[157]. - Net cash used in investing activities for the nine months ended September 30, 2024 was $1.4 million, a decrease of $9.3 million from $10.7 million for the nine months ended September 30, 2023[158]. - As of September 30, 2024, the amount outstanding under debt obligations was $20.7 million, with $20.3 million related to the Financing Agreement[152]. - The Company entered into a financing agreement with Blue Torch for a senior secured term loan of approximately $32.2 million[162]. - The Financing Agreement is secured by a first priority security interest in substantially all assets of the Company and its subsidiaries[162]. - The Company received approximately $5.1 million from the Paycheck Protection Program, with $3.5 million subsequently forgiven[160]. - As of September 30, 2024, the outstanding amount under the PPP Loan was $0.4 million[160]. Accounting and Reporting - The Company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay adopting new accounting standards[167]. - The Company has not made material changes to its critical accounting policies since the 2023 10-K[166]. - Actual results may differ from estimates and assumptions used in financial reporting, impacting asset values and revenue recognition[165]. - The Company has elected to use an extended transition period for new accounting standards until it is no longer classified as an emerging growth company[167]. - As a smaller reporting company, the Company is not required to provide certain market risk disclosures[169]. Strategic Initiatives - The company expanded its market presence by acquiring Dog Food Advisor and maxbone in 2023, enhancing its offerings in the Pet Food & Treats and Pet Supplies markets[113]. - The company aims to be the go-to platform for modern U.S. pet households, offering a range of services and products through its various platforms[112].