Document

424B3 1 pet-20220930x10q424b3.htm 424B3 Document

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-267405

PROSPECTUS SUPPLEMENT NO. 1

(To the Prospectus dated November 7, 2022)

Up to 13,801,993 Shares of Common Stock
Up to 16,395,564 Shares of Common Stock
Issuable Upon Exercise of Warrants
Up to 3,895,564 Warrants to Purchase Common Stock

This prospectus supplement supplements the prospectus, dated November 7, 2022 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-267405). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 10, 2022 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to the issuance by us of an aggregate of (i) up to 16,395,564 shares of our common stock, $0.0001 par value per share (the “common stock”), which consists of (a) up to 3,895,564 shares of common stock issuable upon the exercise of warrants (the “Private Placement Warrants”) originally issued in a private placement to CHW Acquisition Sponsor, LLC (the “Sponsor”) in connection with the initial public offering of CHW Acquisition Corporation (“CHW”) and (b) up to 12,500,000 shares of common stock issuable upon the exercise of warrants (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”) originally issued in the initial public offering of CHW. We will receive the proceeds from any exercise of any Warrants for cash.

The Prospectus and this prospectus supplement also relate to the offer and sale from time to time by the selling securityholders named in this prospectus or their permitted transferees (the “selling securityholders”) of (i) up to 13,801,993 shares of common stock consisting of (a) up to 500,000 shares of common stock issued in a private placement pursuant to subscription agreements entered into on February 2, 2022 (the “PIPE and Backstop Shares”), (b) up to 3,895,564 shares of common stock issuable upon exercise of the Private Placement Warrants, (c) up to 72,434 shares of common stock pursuant to the net exercise of the warrants (the “Wag! Common Warrants”) issued to two lenders in 2017, (d) up to 3,117,500 shares of common stock (including shares issuable upon the exercise of convertible securities) pursuant to that certain Amended and Restated Registration Rights Agreement, dated August 9, 2022, between us and the selling securityholders granting such holders registration rights with respect to such shares (the “Registration Rights Agreement”), (e) up to 6,166,495 shares of common stock issuable upon the exercise of options and restricted stock units originally issued to officers and directors of Wag Labs, Inc. (“Legacy Wag!”) and (f) 50,000 shares of common stock pursuant to that certain Engagement Letter, dated August 12, 2022, between us and Craig-Hallum Capital Group LLC (the “Craig-Hallum Engagement Letter”) and (ii) up to 3,895,564 Private Placement Warrants. We will not receive any proceeds from the sale of shares of common stock or Warrants by the selling securityholders pursuant to this prospectus.

The common stock and Public Warrants are listed The Nasdaq Global Market (“Nasdaq”) under the symbols “PET” and “PETWW,” respectively. On November 11, 2022, the last reported sales price of our common stock was $2.95 per share and the last reported sales price of our Warrants was $0.18 per warrant.

This prospectus supplement should be read in conjunction with the Prospectus, including any amendments or supplements thereto, which is to be delivered with this prospectus supplement. This prospectus supplement is qualified by reference to the Prospectus, including any amendments or supplements thereto, except to the extent that the information in this prospectus supplement updates and supersedes the information contained therein.

This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any amendments or supplements thereto.

We are an “emerging growth company” as defined under U.S. federal securities laws and, as such, have elected to comply with reduced public company reporting requirements. The Prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described in the section titled “Risk Factors” beginning on page 11 of the Prospectus and under similar headings in any amendments or supplements to the Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the accuracy or adequacy of this prospectus supplement or the Prospectus. Any representation to the contrary is a criminal offense.

Prospectus Supplement dated November 14, 2022

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


o			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

_______________________

WAG! GROUP CO.

(Exact name of registrant as specified in its charter)

_______________________


Delaware			45-2546501
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

55 Francisco Street, Suite 360 San Francisco, California			94133
(Address of Principal Executive Offices)			(Zip Code)

(707) 324-4219

Registrant's telephone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	PET	The Nasdaq Global Market
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	PETWW	The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the

registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of November 9, 2022, there were approximately 36,782,888 shares of the registrant’s common stock outstanding.

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Explanatory Note

On August 9, 2022 (the “Closing Date” or "Merger Date"), CHW Acquisition Corporation, our predecessor company and a special purpose acquisition company (“CHW”) sponsored by CHW Acquisition Sponsor, LLC ("the Sponsor"), consummated the previously announced merger (the “Merger”) with Wag Labs, Inc., a Delaware corporation and an American pet services marketplace company powering a mobile-first technology platform that enables on-demand and scheduled dog walking, overnight care, training, and other pet care services (“Legacy Wag!”), and CHW Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a direct, wholly owned subsidiary of CHW. Pursuant to the Merger, Merger Sub merged with and into Legacy Wag!, with Legacy Wag! surviving the Merger as a wholly owned subsidiary of CHW. The Merger was approved by CHW’s stockholders at a meeting held on July 28, 2022.

Immediately following the closing of the business combination, our name was changed to Wag! Group Co. (“New Wag!” or "Wag!") and our common stock and warrants to purchase common stock trade on Nasdaq under the symbols “PET” and “PETWW”, respectively.

For more information about the Merger, see Note 1 - Description of the Business to the unaudited condensed consolidated financial statements below.

Unless otherwise stated or unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to (1) “Legacy Wag!” refers to Wag Labs, Inc., a Delaware corporation, prior to the Merger, (2) “CHW” refers to CHW Acquisition Corporation, a Cayman Islands entity and our legal predecessor, prior to the Merger, and (3) “Wag!,” "New Wag!", the “Company,” “Registrant,” “we,” “us” and “our” refers to Wag! Group Co., a Delaware corporation formerly known as CHW Acquisition Corporation, and where appropriate, our wholly owned subsidiaries.

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		Page
Part I - Financial Information		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2

	Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Deficit	3
	Condensed Consolidated Statement of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
Part II - Other Information		46
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	94
Item 3.	Defaults Upon Senior Securities	94
Item 4.	Mine Safety Disclosures	94
Item 5.	Other Information	94
Item 6.	Exhibits	95
Signatures		96

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including, without limitation, statements under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words. Statements that are not historical in nature, including the words “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast” and other similar expressions are intended to identify forward-looking statements. These statements include those related to the Company’s ability to further develop and advance its pet service offerings and achieve scale; ability to attract personnel; market opportunity, anticipated growth, and future financial performance, including management’s financial outlook for the future. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: management’s financial outlook for 2022; market adoption of the Company’s pet service offerings and solutions; the ability of the Company to protect its intellectual property; changes in the competitive industries in which the Company operates; changes in laws and regulations affecting the Company’s business; the Company’s ability to implement its business plans, forecasts and other expectations, and identify and realize additional partnerships and opportunities; and the risk of downturns in the market and the technology industry. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties, including information described under Part II, Item 1A: “Risk Factors of this Quarterly Report on Form 10-Q and other documents filed by the Company from time to time with the Securities and Exchange Commission. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company does not give any assurance that it will achieve its expectations.

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Part I. Financial Information

Item 1. Financial Statements

Wag! Group Co.

(f/k/a CHW Acquisition Corporation)

Condensed Consolidated Balance Sheets

(in thousands, except for share amounts and per share data)


	September 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	28,024	$	2,845
Restricted cash	24,719		—
Short-term investments available for sale	—		2,554
Accounts receivable, net	6,336		2,638
Prepaid expenses and other current assets	3,554		3,043
Deferred offering costs	—		930
Total current assets	$	62,633	$	12,010
Property and equipment, net	67		90
Operating lease, right of use assets, net	263		—
Intangible assets, net	2,517		2,888
Goodwill	1,427		1,427
Other assets	78		47
Total assets	$	66,985	$	16,462
Liabilities, mezzanine equity and stockholders’ equity
Current liabilities:
Accounts payable	$	4,961	$	2,299
Accrued expenses and other current liabilities	5,556		4,601
Deferred revenue	2,186		1,888
Deferred purchase consideration – current portion	750		750
Operating lease liabilities	313		—
Notes Payable – current portion	1,169		442
Forward share purchase agreements derivative liability	19,668		—
Total current liabilities	34,603		9,980

Notes Payable – non-current portion, net of debt discount and warrant allocation of $7.8 million	24,494		1,200
Deferred purchase consideration – non-current portion	651		1,130
Total liabilities	$	59,748	$	12,310
Commitments and contingencies (Note 8)
Mezzanine equity:





Redeemable convertible preferred stock par value $0.0001, 1,000,000 shares and 24,545,386 shares authorized and nil and 23,858,824 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively; aggregate liquidation preference of $67,417 as of December 31, 2021	—		110,265
Total mezzanine equity	$	—	$	110,265
Stockholders’ deficit:
Common stock, $0.0001 par value, 110,000,000 and 43,763,126 shares authorized, 38,095,337 and 6,121,253 outstanding at September 30, 2022 and December 31, 2021, respectively	$	4	$	1
Additional paid-in capital	161,454		3,736
Accumulated deficit	(154,221)		(109,850)
Total stockholders’ equity (deficit)	7,237		(106,113)
Total liabilities, mezzanine equity and stockholders’ deficit	$	66,985	$	16,462

See accompanying notes to unaudited condensed consolidated financial statements.

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Wag! Group Co.

(f/k/a CHW Acquisition Corporation)

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands except for share amounts and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues	$	15,379	$	5,880	$	37,829	$	12,036
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)	1,021		861		3,027		1,934
Platform operations and support	5,641		2,508		11,035		7,768
Sales and marketing	11,290		3,151		24,656		4,991
General and administrative	23,781		1,972		28,546		4,968
Depreciation and amortization	134		122		431		232
Total costs and expenses	41,867		8,614		67,695		19,893
Change in fair value of derivative liability	(13,708)		—		(13,708)		—
Gain on forgiveness of PPP loan	—		3,482		—		3,482
Interest (expense) income, net	(735)		9		(784)		(5)
Income (loss) before income taxes	(40,931)		757		(44,358)		(4,380)
Income tax benefit (expense)	—		797		(13)		793
Net income (loss)	$	(40,931)	$	1,554	$	(44,371)	$	(3,587)
Net earnings (loss) per share
Basic	$	(1.67)	$	0.26	$	(3.60)	$	(0.64)
Diluted	$	(1.67)	$	0.04	$	(3.60)	$	(0.64)
Weighted average common shares outstanding (basic)	24,534,325		5,885,755		12,322,230		5,616,077
Weighted average common shares outstanding and dilutive potential common shares (diluted)	24,534,325		37,473,059		12,322,230		5,616,077

See accompanying notes to unaudited condensed consolidated financial statements.

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Wag! Group Co.

(f/k/a CHW Acquisition Corporation)

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Deficit

(Unaudited)

(in thousands, except share data)


	Redeemable Preferred Stock – Mezzanine Equity			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Deficit
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	24,545,386	$	110,265	6,297,398	$	1	$	3,736	$	(109,850)	$	—	$	(106,113)
Reverse recapitalization	(686,562)	—		(176,145)	—		—		—		—		—
As adjusted, beginning of period	23,858,824	$	110,265	6,121,253	$	1	$	3,736	$	(109,850)	$	—	$	(106,113)
Shares issued upon exercise of stock options	—	—		19,926	—		—		—		—		—
Preferred Series P Issuance, net of issuance costs	1,100,000	10,925		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		94		—		—		94

Net loss	—	—		—	—		—		(3,440)		—		(3,440)
Balance at June 30, 2022	24,958,824	$	121,190	6,141,179	$	1	$	3,830	$	(113,290)	$	—	$	(109,459)
Shares issued upon exercise of stock options	—	—		1,761	—		—		—		—		—
Conversion of Series P preferred stock to common	(1,100,000)	(10,925)		1,100,000	—		10,925		—		—		10,925
Conversion of preferred to common stock	(23,858,824)	(110,265)		23,858,824	2		110,263		—		—		110,265

Stock-based compensation	—	—		47,609	—		55		—		—		55
Stock-based compensation due to Earnout Shares	—	—		—	—		23,867		—		—		23,867

Issuance of Community Shares	—	—		300,000	—		1,971		—		—		1,971
Business Combination with CHW, net of transaction costs and other related shares	—	—		6,645,964	1		10,543		—		—		10,544
Net loss	—	—		—	—		—		(40,931)		—		(40,931)
Balance at September 30, 2022	—	$	—	38,095,337	$	4	$	161,454	$	(154,221)	$	—	$	7,237

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	Redeemable Preferred Stock – Mezzanine Equity			Common Stock, net of Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Deficit
	Shares	Amount		Shares	Amount
Balance at December 31, 2020	24,545,386	$	110,265	5,629,095	$	1	$	3,345	$	(103,539)	$	1	$	(100,192)
Reverse recapitalization	(686,562)	—		(157,452)	—		—		—		—		—