Wag! (PET) - 2021 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Condensed Financial Statements The company's unaudited condensed financial statements detail its financial position, operations, and cash flows Condensed Balance Sheet (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) | 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) 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) | 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 - CHW Acquisition Corporation was incorporated on January 12, 2021, in the Cayman Islands[16] - The Company's purpose is to effect a Business Combination (merger, acquisition, etc) with one or more businesses[16] - 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] - 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] - 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] - 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][20] - 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] - 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] - The Company must complete a Business Combination by November 1, 2022 (15 months from IPO closing)[31] - 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][25] - 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][34] Note 2 — Restatement of Prior Period Financial Statements - The Company restated its previously issued balance sheet as of July 20, 2020, to reclassify ordinary shares subject to redemption[37] - 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] 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 - The unaudited condensed financial statements are prepared in conformity with U.S. GAAP and SEC rules for interim financial reporting[39][41] - Investments held in the Trust Account are classified as trading securities and presented at fair value, primarily consisting of U.S. Treasury securities[44] - 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] - The Company recognizes changes in the redemption value of redeemable ordinary shares immediately as they occur[46] - 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][49] - The Company applies the two-class method for calculating basic and diluted net income (loss) per share[52] - The Company adopted ASU 2020-06 effective January 1, 2021, which did not have a material impact on its financial statements[58] Note 4 — Initial Public Offering - On September 1, 2021, the Company sold 11,000,000 units at $10.00 per unit, generating gross proceeds of $110,000,000[60] - 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] - Each unit consists of one Ordinary share and one redeemable Public Warrant[60] Note 5 — Private Placement - 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] - 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] - The proceeds from the Private Placement Warrants are held in the Trust Account[63] - If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless[63] Note 6 — Related Party Transactions - 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] - On September 1, 2021, the Sponsor forfeited 37,500 ordinary shares due to the underwriters' partial exercise of the over-allotment option[67] - 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] - 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] - 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] Note 7 — Commitments and Contingencies - Holders of Founder Shares, Private Placement Warrants, and potential working capital loan warrants are entitled to registration rights[75] - 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] - 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][80] Note 8 - Shareholders' Equity - 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] - The Company is authorized to issue 110,000,000 Class B Ordinary shares ($0.0001 par value)[84] - As of September 30, 2021, there were 3,187,500 Ordinary shares outstanding (excluding 12,500,000 shares subject to redemption)[84] Note 9 - Warrants - 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] - 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] - 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] Note 10 — Fair Value Measurements - The Company uses a fair value hierarchy (Level 1, Level 2, Level 3) to classify assets and liabilities[96] - 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][99] Note 11 — Subsequent Events - No events requiring adjustments or disclosures were identified between the balance sheet date and the issuance of the unaudited condensed financial statements[100] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, and liquidity strategy as a blank check company Overview - CHW Acquisition Corporation is a blank check company incorporated on January 12, 2021, to effect a Business Combination[104] - The Company has not yet selected a target business and expects to incur significant costs in its acquisition plans[104][105] Results of Operations - The Company's activities through September 30, 2021, were limited to IPO preparation and searching for a Business Combination, generating no operating revenues[106] 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 - The Company consummated its IPO on September 1, 2021, raising $125,000,000, which was placed in a Trust Account[110] - Net cash used in operating activities from inception through September 30, 2021, was $628,700[111] - As of September 30, 2021, the Company had $897,818 in cash held outside the Trust Account for operational expenses[113] - The Company intends to use substantially all funds in the Trust Account for its initial Business Combination[112] - 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] Related Party Transactions - The Sponsor initially acquired 2,875,000 Founder Shares for $25,000, with 37,500 shares forfeited on September 1, 2021[117] - The Sponsor purchased 4,238,686 Private Placement Warrants for $4,238,686 concurrently with the IPO[119] - As of September 30, 2021, $43,000 was outstanding under an unsecured promissory note from the Sponsor[120] - The Company pays a monthly fee of $10,000 to an affiliate of the Sponsor for administrative services[122] Deferred Underwriting Fees - 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] Off-Balance Sheet Arrangements - As of September 30, 2021, the Company did not have any off-balance sheet arrangements[125] Critical Accounting Policies - The Company classifies warrants as either equity- or liability-classified instruments based on ASC 480 and ASC 815[127] - Ordinary shares subject to possible redemption are classified as temporary equity under ASC Topic 480[128] - The two-class method is applied for calculating earnings per share[129] Recently Adopted Accounting Standards - The Company adopted ASU 2020-06 effective January 1, 2021, which simplifies accounting for certain financial instruments[130] - The adoption of ASU 2020-06 did not have a material impact on the Company's financial statements[130] - Management does not believe any other recently issued, but not yet effective, accounting pronouncements would have a material effect[131] Contractual Obligations - The Company has no long-term debt, capital lease obligations, or operating lease obligations[132] - 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][133] - The Company has registration rights agreements for holders of Founder Shares, Private Placement Warrants, and potential Working Capital Loans[134] JOBS Act - The Company qualifies as an 'emerging growth company' under the JOBS Act[135] - The Company has elected to delay the adoption of new or revised accounting pronouncements to align with private company effective dates[135] - This election may make comparison of the Company's financial statements with other public companies difficult[135] Item 3. Quantitative and Qualitative Disclosures about Market Risk 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] - Funds in the Trust Account are invested in short-term U.S. government obligations or money market funds, limiting interest rate risk[137] Item 4. Controls and Procedures 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] - Management plans to enhance its system for evaluating and implementing accounting standards, including through enhanced analyses by personnel and third-party professionals[140] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings as of the report date - No legal proceedings were reported[143] Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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][147] - Concurrently, 4,238,686 Private Placement Warrants were sold at $1.00 per warrant, generating gross proceeds of $4,238,686[146][147] - Total offering costs amounted to $13,130,743, including underwriting fees and deferred underwriting fees[148] - $125,000,000 from the net proceeds of the IPO and Private Placement Warrants was placed in a Trust Account[149] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities - No defaults upon senior securities were reported[151] Item 4. Mine Safety Disclosures This item is not applicable to CHW Acquisition Corporation - This item is not applicable to the Company[153] Item 5. Other Information No other information was reported in this section - No other information was reported[154] Item 6. Exhibits 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] SIGNATURES - The report was signed on November 23, 2021, by Jonah Raskas, Co-Chief Executive Officer, and Steve Katchur, Chief Financial Officer[163][164]