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United States securities and exchange commission logo
May 25, 2022
Jonah Raskas
Co-Chief Executive Officer and Director
CHW Acquisition Corp
2 Manhattanville Road, Suite 403
Purchase, NY 10577
Re: CHW Acquisition
Corp
Amendment No. 1 to
Registration Statement on Form S-4
Filed May 10, 2022
File No. 333-263418
Dear Mr. Raskas:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our April
7, 2022 letter.
Amendment No. 1 to Registration Statement on Form S-4 Filed May 10, 2022
Q: WHAT EQUITY STAKE WILL CHW CURRENT SHAREHOLDERS, THE SPONSOR,
THE PIPE AND BACKSTOP INVESTOR AND CONTINUING WAG! STOCKHOLDERS
HOLD..., page 10
1. We note your revised
disclosure in response to comment 2. Please ensure your
presentation of
ownership of the post-combination company includes all dilutive securities
at each redemption
level. In this regard, we note that only the scenario presented on page
11 includes all
dilutive securities. Please make conforming edits throughout your filing. In
addition, please revise
the tables on pages 18 and 119 to include all dilutive securities. In
this regard, we note
your disclosure that the table assumes no CHW or New Wag!
warrants are exercised
and does not reference the Lender Warrants.
Jonah Raskas
CHW Acquisition Corp
May 25, 2022
Page 2
Q: WHAT HAPPENS IF A SUBSTANTIAL NUMBER OF PUBLIC SHAREHOLDERS
VOTE IN FAVOR OF THE BUSINESS COMBINATION..., page 17
2. We note your revised disclosure in response to comment 3. Please
further revise the table
on page 18 to show the impact of certain equity issuances on the per
share value of the
shares, including the exercises of public and private warrants, the
issuance of earnout
shares, the issuance of the Series P Investment, and exercise of the
Lender Warrants under
each redemption scenario.
Background of the Business Combination, page 120
3. We note your revised disclosure in response to comment 11. Please
further revise your
disclosure to provide a detailed description of the negotiations
regarding the term sheet
that was executed on October 19, 2021 by CHW and Wag!, including the
terms of the
initial draft, the terms included in the final executed version, and
how the terms evolved
over the course of the negotiation. In this regard, it appears you
have only discussed the
terms that were included in the executed version and the valuation
that was included in
prior drafts. Please also elaborate further what revisions were made
to the Business
Combination Agreement and other transaction documents as a result of
the December 28,
2021 discussions referenced on page 125.
4. We note your revised disclosure in response to comment 12. Please
further revise your
disclosure to provide a detailed description of how the terms of the
Business Combination
Agreement evolved throughout the exchange of drafts from the initial
draft of the
Business Combination Agreement on November 16, 2021 until it was
executed on
February 2, 2022, and if applicable, please describe how the terms
differed from the term
sheet. Please include disclosure of the specific terms and how those
terms were
negotiated.
5. We note your response to comment 13. Please substantially revise your
disclosure in this
section to include a chronological description of the negotiations
relating to material terms
of the transaction and ancillary agreements, including, but not limited
to, the
Domestication, the type of consideration to be paid to Wag!
stockholders, the earnout
shares and trigger events and allocation between Wag! stockholders and
management, the
financial projections and any discussions relating to the assumptions
underlying such
projections, the control of the post-combination company, director
designation rights and
organizational documents, the CHW founders stock letter, and the lock up
agreements. In
your revised disclosure, please explain the issues and specific terms
discussed at the
meetings, each party's position on such issues, and how you reached
agreement on the
final terms.
FirstName LastNameJonah Raskas
6. We note your response to comment 16. Please quantify the compensation
payable to
Comapany NameCHW
Chardan, Acquisition
including Corp
fees payable upon consummation of the Business
Combination and the
May 25,value
2022ofPage
the Representative
2 Shares issued to Chardan in connection
with CHW's IPO.
FirstName LastName
Jonah Raskas
FirstName LastNameJonah Raskas
CHW Acquisition Corp
Comapany
May NameCHW Acquisition Corp
25, 2022
May 25,
Page 3 2022 Page 3
FirstName LastName
7. We note your response to comment 17. We further note that Item 4(b) of
Form S-4
requires that the information required by Item 1015(b) of Regulation
M-A be
provided with respect to a report, opinion, or appraisal that is (i)
materially related to the
transaction and (ii) referred to in the prospectus. Accordingly,
please include the
information required by Item 1015(b) of Regulation M-A with respect to
the report
delivered by Ernst and Young and the study delivered by the Wag!
financial analyst, or
provide us with a detailed legal analysis as to why you continue to
believe you are not
required to do so.
Material U.S. Federal Income Tax Considerations, page 193
8. We note your response to comment 25. Please provide disclosure as to
the tax
consequences of the Acquisition Merger in this section and file an
opinion, as necessary.
In this regard, we note that if the tax consequences are material to
the transaction as a
whole, which we believe to be the case with respect to the Acquisition
Merger, then
disclosure and appropriate tax opinions are required with respect to
the transaction as a
whole. Please refer to Item 4(a)(6) of Form S-4. Further, as counsel
is issuing at least one
"should" opinion, please include risk factor disclosure regarding the
uncertainty of this
opinion(s).
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 2. Adjustments to Unaudited Pro Forma Condensed Combined Financial
Information
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 218
9. In note (E) or other appropriate note, please state the interest rate
assumed in calculating
the pro forma interest expense. We note disclosure on page 208 that
for purposes of
information presented in the pro forma condensed combined financial
statements the
assumed rate is based on Libor plus a margin of 10%.
10. In the adjustments in note (K) for "Issuance of shares to Pet
Caregivers and charity" and
"RSU grant stock compensation," the respective references to note (J)
do not appear to
correspond to the applicable adjustments in note (J). Please revise as
appropriate.
Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
For the Three Months Ended March 31, 2022, page 220
11. In adjustment (AA) the expense is disclosed as being $0.3M ($300,000).
However, on the
face of the pro forma income statement (in thousands) the adjustment
is reflected as $3
($3,000). Please revise as appropriate or explain.
For the Year Ended December 31, 2021, page 221
12. Reference is made to adjustment (AC), which states it represents the
issuance of 300
thousand shares that may be distributed to the pet wellness and
welfare community.
Please explain to us why the amount of the adjustment is not the same
as the $3.0 million
Jonah Raskas
CHW Acquisition Corp
May 25, 2022
Page 4
recorded in equity for this issuance.
Annual Financial Statements of Wag Labs, Inc.
Wag Labs, Inc. Notes to Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-48
13. We note your response to comment 44 and your conclusion to provide
disclosure of
disaggregate revenues by Service revenue and Wellness revenue in your
consolidated
financial statements as of and for the period ended March 31, 2022.
Please explain why
you also did not provide the disclosure for fiscal year ended December
31, 2021.
14. We note your response to comment 45. Please clarify for us why you
recognize wellness
revenue on a gross basis as a principal when it appears this revenue
is generated on the
same basis as your other revenue streams that you record on a net
basis as an agent. In
both cases, it appears revenue is a fee paid by a third party, with
the fee based on the type
or dollar level of the associated service or product. In connection
with this, explain to us
why your marketing of the insurance comparison tool in a wellness
transaction is a factor
in your determination that you are the principal in these transactions
when you do not sell
the associated insurance. Additionally, explain to us how your
presentation of incentives,
discounts and promotions are impacted by your principal vs. agent
determination.
15. Refer to your response to comment 46. Please clarify for us and in
your disclosure why
some of the arrangements with third party service providers the
transaction price is
considered variable; that is, what causes the variability. Also,
clarify for us the basis for
why you believe the adjustment to estimated transaction consideration
is immaterial.
Cost of Revenues (exclusive of depreciation and amortization), page F-49
16. We note your response to comment 47 that the Company revised the
disclosure on pages
F-51 and F-74, however, we were not able to locate any revised
disclosure. Please explain
or address the comment.
Note 3. Business Combinations, page F-51
17. We note your response to comment 48 indicates Compare Pet Insurance
Services, Inc.
(CPI) impact to revenue was $1.9M representing 9.6% of your total
revenues for the year
ended December 31, 2021 and CPI s pro forma impact to net loss was
$0.1M
representing 2.1% of your net loss for the year ended December 31, 2021.
Your
FirstName LastNameJonah Raskas
disclosure indicates CPI contributed $5.1M in revenue and $0.9M in net
income for fiscal
Comapany
2021.NameCHW Acquisition
Please reconcile Corp disclosed to those provided in your
response and
the amounts
May 25,advise
2022 of the 4materiality of the transaction after doing so.
Page
FirstName LastName
Jonah Raskas
FirstName LastNameJonah Raskas
CHW Acquisition Corp
Comapany
May NameCHW Acquisition Corp
25, 2022
May 25,
Page 5 2022 Page 5
FirstName LastName
You may contact Scott Stringer at 202-551-3272 or Doug Jones at
202-551-3309 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Taylor Beech at 202-551-4515 or Dietrich King at 202-551-8071 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Ari Edelman, Esq.