0001842356-23-000014 | 10-Q | XBRL Viewer

Description of the Business - Narrative (Details) $ in Millions	Jan. 05, 2023 USD ($)
Dog Food Advisor
Variable Interest Entity [Line Items]
Cash consideration	$ 9.0

Condensed Consolidated Statements of Mezzanine Equity and Stockholders' Deficit - USD ($) $ in Thousands	Total	Previously Reported	Revision of Prior Period, Adjustment	Common Stock	Common Stock Previously Reported	Common Stock Revision of Prior Period, Adjustment	Additional Paid-in Capital	Additional Paid-in Capital Previously Reported	Accumulated Deficit	Accumulated Deficit Previously Reported
Redeemable Preferred Stock - Mezzanine Equity beginning balance (in shares) at Dec. 31, 2021	23,858,824	24,545,386	(686,562)
Redeemable Preferred Stock - Mezzanine Equity beginning balance at Dec. 31, 2021	$ 110,265	$ 110,265
Redeemable Preferred Stock - Mezzanine Equity ending balance (in shares) at Mar. 31, 2022	24,958,824
Redeemable Preferred Stock - Mezzanine Equity ending balance at Mar. 31, 2022	$ 121,190
Beginning balance (in shares) at Dec. 31, 2021				6,121,253	6,297,398	(176,145)
Beginning balance at Dec. 31, 2021	(106,113)	$ (106,113)		$ 1	$ 1		$ 3,736	$ 3,736	$ (109,850)	$ (109,850)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	54						54
Net income (loss)	(2,350)								(2,350)
Balance at the end (in shares) at Mar. 31, 2022				6,121,253
Ending balance at Mar. 31, 2022	$ (108,409)			$ 1			3,790		(112,200)
Redeemable Preferred Stock - Mezzanine Equity beginning balance (in shares) at Dec. 31, 2022	0
Redeemable Preferred Stock - Mezzanine Equity beginning balance at Dec. 31, 2022	$ 0
Redeemable Preferred Stock - Mezzanine Equity ending balance (in shares) at Mar. 31, 2023	0
Redeemable Preferred Stock - Mezzanine Equity ending balance at Mar. 31, 2023	$ 0
Beginning balance (in shares) at Dec. 31, 2022				36,849,076
Beginning balance at Dec. 31, 2022	9,922			$ 4			158,335		(148,417)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised (in shares)				580,175
Shares issued upon exercise of stock options and RSU vesting	54						54
Stock-based compensation	1,342						1,342
Net income (loss)	(3,787)								(3,787)
Balance at the end (in shares) at Mar. 31, 2023				37,429,251
Ending balance at Mar. 31, 2023	$ 7,531			$ 4			$ 159,731		$ (152,204)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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- Definition

Carrying amount, attributable to parent, of an entity's issued and outstanding stock which is not included within permanent equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. Includes stock with a put option held by an ESOP and stock redeemable by a holder only in the event of a change in control of the issuer.

+ References + Details

Commitments and Contingencies (Details) - USD ($) $ in Thousands	1 Months Ended
	Nov. 30, 2019	Mar. 31, 2023	May 13, 2022	Aug. 31, 2018
Loss Contingencies [Line Items]
Claims paid	$ 1,200
Refund of previous deposit			$ 1,200
Unemployment Insurance Contributions, Independent Contractors
Loss Contingencies [Line Items]
Unemployment insurance contributions	$ 1,700	$ 1,300		$ 248

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination And Reverse Recapitalization [Abstract]

Schedule of Reverse Recapitalization

The following table reconciles the elements of the CHW Business Combination, accounted for as a reverse recapitalization, to the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders' Deficit for the year ended December 31, 2022 (in thousands):


	Reverse Recapitalization
Cash – CHW’s trust (net of redemptions)	$	28,330
Cash – PIPE and Backstop Investor	5,202


Payment of transaction costs and other related expenses	(12,488)
Payment of deferred transaction costs	(9,318)

Proceeds from merger with CHW, net of issuance costs as of the Merger Date	$	11,726
Reversal of APIC impact recorded upon issuance of Forward Share Purchase Agreements ("FPAs") in August 2022	(23,203)
Cash received from FPA at Put Date	9,837
APIC impact of FPA at Put Date, net of cash received	4,229
Proceeds from merger with CHW, net of issuance costs as of December 31, 2022	$	2,589


			Number of Shares


CHW public shares, prior to redemptions¹			12,500,000
Less redemption of CHW shares			(9,593,970)
CHW public shares, net of redemptions			2,906,030
Sponsor Shares			3,117,500
PIPE and Backstop Shares			500,000


CHW Business Combination and Financing Shares			6,523,530
Other share activity (Analyst Shares², Warrant Exercises)			122,434
CHW Business Combination, Financing Shares and Other Related Shares			6,645,964
Legacy Wag! Shares³			31,100,000
Total shares of common stock immediately after CHW Business Combination			37,745,964

¹ Includes 2,393,378 shares of common stock of the Company subject to the Forward Share Purchase Agreements.

² 50,000 shares were issued to Craig-Hallum Capital Group LLC at a price of $4.83 per share.

³ The number of Legacy Wag! shares was determined from the shares of Legacy Wag! common and preferred stock outstanding immediately prior to the closing of the CHW Business Combination of 30,863,283, which are presented net of the common and preferred stock redeemed, converted at the exchange ratio of approximately 0.97 shares of the Company’s common stock for each share of Legacy Wag! common and preferred stock with the exception of 1,100,000 Legacy Wag! Series P Shares which converted into the Company’s common stock on a one-for-one basis.

Schedule of Purchase Consideration

The purchase consideration allocation was as follows (in thousands):


	As of January 5, 2023
Intangible assets	$	5,950
Goodwill	3,050

Total purchase consideration	$	9,000

Schedule of Estimated Useful Lives of Acquired Intangible Assets

The table below summarizes the fair value and the estimated useful lives of the acquired intangible assets (in thousands):


	Fair Value		Estimated Useful Life (years)
Developed technology and website content	$	1,950	5
Strategic customer relationships and subscriber lists	3,600		8
Trademarks	400		10
Total intangible assets	$	5,950

Summary of Earnout Inputs and Valuation Techniques

The following table provides a range of assumptions used to determine fair value:


	Stock Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
Earnout Shares	$	8.28	—	%	44.00	%	3.20	%	3

Revenues (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by offering (in thousands):


	Three Months Ended March 31,
		2023		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

Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details)	3 Months Ended
	Mar. 31, 2023
Equipment
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Capitalized software
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years

Business Combinations - Acquisition of Dog Food Advisor (Details) - USD ($)	Jan. 05, 2023	Aug. 03, 2021	Mar. 31, 2023	Dec. 31, 2022
CPI
Business Acquisition [Line Items]
Cash consideration		$ 3,500,000
Common stock consideration		$ 200,000
Common stock consideration (in shares)		639,000
Cash consideration purchase price		$ 1,500,000
Deferred purchase consideration		$ 2,000,000
Payment period		3 years
Liabilities accrued			$ 1,400,000	$ 1,900,000
DFA
Business Acquisition [Line Items]
Cash consideration	$ 9,000,000
Cash consideration purchase price	8,100,000
Amount deposited into an escrow account	900,000
Working capital	$ 0

Business Combinations - Reverse Recapitalization Shares (Details)	Nov. 01, 2022 shares	Aug. 09, 2022 $ / shares shares	Aug. 05, 2022 shares	Mar. 31, 2023 shares	Dec. 31, 2022 shares	Aug. 08, 2022 shares
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)		37,745,964		37,429,251	36,849,076
Business Combination (in shares)		6,523,530
Other share activity (Analyst Shares, Warrant Exercises) (in shares)		122,434
Business Combination, Financing Shares and Other Related Shares (in shares)		6,645,964
Legacy Wag! Shares (in shares)		31,100,000
Derivative instrument, contingent consideration, liability, shares (in shares)	955,000		2,393,378
Common and preferred stock outstanding prior to the Business Combination (in shares)						30,863,283
Exchange ratio		0.97		0.97	0.97
Private placement
Schedule Of Reverse Recapitalization [Line Items]
PIPE and Backstop Shares (in shares)		500,000
Price per share (in dollars per share) \| $ / shares		$ 10.00
Community Share Issuance
Schedule Of Reverse Recapitalization [Line Items]
PIPE and Backstop Shares (in shares)		300,000
Series P convertible preferred shares
Schedule Of Reverse Recapitalization [Line Items]
Number of shares converted (in shares)		1,100,000
Public Shareholders
Schedule Of Reverse Recapitalization [Line Items]
Shares issued upon acquisition (in shares)		2,906,030
Sponsor Members
Schedule Of Reverse Recapitalization [Line Items]
Shares issued upon acquisition (in shares)		3,117,500
Craig-Hallum Capital Group LLC
Schedule Of Reverse Recapitalization [Line Items]
Other share activity (Analyst Shares, Warrant Exercises) (in shares)		50,000
Price per share (in dollars per share) \| $ / shares		$ 4.83
CHW Acquisition Corporation
Schedule Of Reverse Recapitalization [Line Items]
Common stock, outstanding (in shares)						12,500,000
Less redemption of CHW shares (in shares)		(9,593,970)

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Future Minimum Payments

Future minimum payments of the principal on the Company’s outstanding obligations as of March 31, 2023 were as follows (in thousands):


	Amounts
2023 (remaining 9 months)	$	988
2024	1,751
2025	30,227

Total principal amount	$	32,966

Fair Value Measurement Inputs and Valuation Techniques


	Carrying Value as of March 31, 2023 (in thousands)		Exercise Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
Lender Warrants	$	6,104	$	11.50	—	%	33.00	%	2.97	%	10

The following table provides quantitative information regarding fair value measurements at issuance on September 1, 2021:


Share Price (in whole dollars)		Exercise Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
$	10.00	$	11.50	—	%	22.00	%	1.31	%	5

Debt - PPP Loan (Details) - USD ($) $ in Thousands	1 Months Ended
Debt - PPP Loan (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Mar. 31, 2023
Debt Instrument [Line Items]
Principal and interest payments balance		$ 32,966
PPP Loan
Debt Instrument [Line Items]
Loan proceeds	$ 5,100
Applied loan forgiveness amount	$ 3,500
Term of loan (in years)	5 years
Fixed annual interest rate	1.00%
Principal and interest payments balance		$ 1,100

Summary of Significant Accounting Policies - Narrative (Details)	2 Months Ended	3 Months Ended
	Mar. 07, 2023 USD ($)	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Aug. 09, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Exchange ratio		0.97		0.97	0.97
Number of operating segment \| segment		1
Accumulated deficit		$ 152,204,000		$ 148,417,000
Initial investment	$ 1,500,000
Impairment of definite-lived intangible and long-lived assets		$ 0	$ 0
Expected dividend yield		0.00%
Advertising expense		$ 2,100,000	$ 1,900,000
Capitalized software
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Estimated useful life		3 years
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Ratable basis over contractual period		1 month
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Ratable basis over contractual period		1 year

Leases - Narrative (Details) - USD ($)		1 Months Ended		3 Months Ended
Leases - Narrative (Details) - USD ($)	Oct. 28, 2022	Nov. 30, 2021	Feb. 29, 2020	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Oct. 24, 2022	Jan. 01, 2022	Apr. 30, 2019
Operating Leased Assets [Line Items]
Remaining term				2 years 2 months 12 days
Monthly base rent	$ 20,400
Lessee, Operating Lease, Renewal Term	30 months
Monthly rent increase	3.00%
Remaining lease term							13 months
Operating lease, right of use assets, net				$ 612,000		$ 695,000
Rent expense				$ 100,000
Discount rate				8.40%
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2016-02
Operating Leased Assets [Line Items]
Operating lease, right of use assets, net								$ 500,000
Operating lease liability								$ 500,000
Mountain View, CA Office Space
Operating Leased Assets [Line Items]
Operating lease term									2 years
Base lease payments			$ 2,000,000
Sublease income				$ 0	$ 200,000
Phoenix, AZ Office Space
Operating Leased Assets [Line Items]
Operating lease term		21 months
Monthly base rent		$ 10,400
Monthly rent increase		1.90%

Business Combinations - Summary of Earnout Inputs and Valuation Techniques (Details)	Mar. 31, 2023
Stock Price (in whole dollars)
Business Acquisition [Line Items]
Earnout Shares Measurement Input	8.28
Dividend Yield
Business Acquisition [Line Items]
Earnout Shares Measurement Input	0
Volatility
Business Acquisition [Line Items]
Earnout Shares Measurement Input	0.4400
Risk-Free Interest Rate
Business Acquisition [Line Items]
Earnout Shares Measurement Input	0.0320
Expected Term (in years)
Business Acquisition [Line Items]
Earnout Shares Measurement Input	3

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On April 6, 2023, we closed the acquisition of Maxbone, a top-tier digital platform for modern pet essentials. The acquisition expanded Wag!’s reach into the Pet Supplies market, while remaining committed to the needs and standards of the premium Pet Parent. The amount paid for this acquisition was not material.

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 24,502	$ 38,966
Accounts receivable, net	8,223	5,872
Prepaid expenses and other current assets	2,021	2,585
Total current assets	34,746	47,423
Property and equipment, net	89	88
Operating lease, right of use assets, net	612	695
Intangible assets, net	8,173	2,590
Goodwill	4,501	1,451
Other assets	1,529	64
Total assets	49,650	52,311
Current liabilities:
Accounts payable	6,715	7,174
Accrued expenses and other current liabilities	4,515	4,765
Deferred revenue	2,554	2,232
Deferred purchase consideration – current portion	750	750
Operating lease liabilities	268	306
Notes payable – current portion	1,344	1,264
Total current liabilities	16,146	16,491
Operating lease liabilities – non-current portion	385	435
Notes payable – non-current portion, net of debt discount and warrant allocation of $6.4 million and $7.0 million as of March 31,2023 and December 31,2022, respectively	25,270	24,970
Deferred purchase consideration – non-current portion	318	493
Total liabilities	42,119	42,389
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock, $0.0001 par value, 110,000,000 and 110,000,000 shares authorized, 37,429,251 and 36,849,076 outstanding at March 31, 2023 and December 31, 2022, respectively	4	4
Additional paid-in capital	159,731	158,335
Accumulated deficit	(152,204)	(148,417)
Total stockholders’ equity	7,531	9,922
Total liabilities and stockholders’ equity	$ 49,650	$ 52,311

Earnings (loss) per share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings per Share

The following table shows the computation of basic and diluted earnings per share for March 31, 2023 and March 31, 2022 (in thousands, except share data):


	Three months ended March 31,
		2023		2022
Numerator:
Net loss attributable to common stockholders		$	(3,787)	$	(2,350)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders - basic and diluted		37,065,450		6,121,253

Net loss per share attributable to common stockholders, basic and diluted		$	(0.10)	$	(0.38)

Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive are as follows:


	Three months ended March 31,
	2023	2022
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	—	4,750,000

Earnout Shares	15,000,000	—
Options and RSUs issued and outstanding	10,860,951	7,450,894
Warrants issued and outstanding	18,291,741	88,756
Total	44,152,692	36,148,475

Unaudited Consolidated Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (3,787)	$ (2,350)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,342	54
Amortization of debt discount on debt financing	657	0
Depreciation and amortization	381	152
Noncash interest – deferred purchase consideration	28	30
Changes in operating assets and liabilities:
Accounts receivable	(2,351)	(861)
Prepaid expenses and other current assets	537	117
Accounts payable	(459)	1,719
Operating lease liabilities	0	47
Accrued expenses and other current liabilities	(250)	(1,288)
Deferred revenue	322	135
Net cash used in operating activities	(3,580)	(2,245)
Cash flows from investing activities
Purchases of short-term investments	0	(10,079)
Proceeds from sale and maturity of short-term investments	0	3,551
Payment of deferred purchase consideration	(175)	(187)
Cash paid for acquisition	(9,000)	0
Cash paid for equity method investment	(1,470)	0
Purchase of property and equipment	(16)	(5)
Net cash used in investing activities	(10,661)	(6,720)
Cash flows from financing activities
Proceeds from exercises of stock options	54	0
Payments on PPP loan and Blue Torch Financing Agreement	(277)	(110)
Proceeds from the issuance of Series P preferred stock, net of issuance costs	0	10,925
Payment of offering costs	0	(1,151)
Net cash (used in) provided by financing activities	(223)	9,664
Net change in cash and cash equivalents	(14,464)	699
Cash and cash equivalents at beginning of period	38,966	2,628
Cash and cash equivalents at end of period	24,502	3,327
Supplemental disclosures of cash flow information:
Cash paid for interest	1,203	4
Cash paid for income taxes	$ 0	$ 0

Revenues

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenues

The following table presents the Company’s revenues disaggregated by offering (in thousands):


	Three Months Ended March 31,
		2023		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

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

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+ Details

Earnings (loss) per share - Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	44,152,692	36,148,475
Series Seed convertible preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	4,376,930
Series A convertible preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	5,902,952
Series B convertible preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	6,506,794
Series C convertible preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	7,072,149
Series P convertible preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	4,750,000
Earnout Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	15,000,000	0
Options and RSUs issued and outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	10,860,951	7,450,894
Warrants issued and outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	18,291,741	88,756

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes expense (benefit)	$ 0	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 20,623	$ 9,666
Service revenue
Disaggregation of Revenue [Line Items]
Total revenues	5,397	4,432
Wellness revenue
Disaggregation of Revenue [Line Items]
Total revenues	13,855	5,234
Pet food & treats revenue
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,371	$ 0

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 10, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-40764
Entity Registrant Name	WAG! GROUP CO.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-2546501
Entity Address, Address Line One	55
Entity Address, Address Line Two	Francisco Street,
Entity Address, Address Line Three	Suite 360
Entity Address, City or Town	San Francisco,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94133
City Area Code	707
Local Phone Number	324-4219
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		37,488,892
Entity Central Index Key	0001842356
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Common Stock, par value $0.0001 per share
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	PET
Security Exchange Name	NASDAQ
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
Document Information [Line Items]
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
Trading Symbol	PETWW
Security Exchange Name	NASDAQ

Debt - Warrants Measurement Inputs (Details) - Lender Warrants $ in Thousands	Mar. 31, 2023 USD ($) $ / shares year
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Estimated Fair Value of Warrants \| $	$ 6,104
Measurement Input, Exercise Price [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input \| $ / shares	11.50
Dividend Yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input	0
Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input	0.3300
Risk-Free Interest Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input	0.0297
Expected Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, measurement input \| year	10

Stockholders' Equity (Deficit) and Mezzanine Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity (Deficit) and Mezzanine Equity

Stockholders’ Equity (Deficit) and Mezzanine Equity

Accumulated Other Comprehensive Income (Loss)

Changes to accumulated other comprehensive income (loss) for the three months ended March 31, 2023 and 2022 were immaterial.

Preferred Stock

On January 28, 2022, the Company issued 1.1 million convertible preferred shares (“Series P”) in exchange for $11 million of cash. Series P was issued on substantially similar terms to the Company’s other convertible preferred share issuances, except for the Series P convertible share agreement contained an adjustment provision that provided for additional shares to be issued based on a formula if the proposed Merger was not completed, as defined in the Company’s Amended and Restated Certificate of Incorporation. Upon consummation of the Merger, the Series P Shares converted into the Company’s common stock on a one-for-one basis.

In connection with the Merger, all redeemable convertible preferred stock had been converted to common stock of the Company. As such, all outstanding shares of Legacy Wag!’s preferred stock, except for Legacy Wag! Series P Shares (as described above), were converted into shares of the Company’s common stock, par value $0.0001 per share, at the then-effective conversion rate of approximately 0.97.

Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 1,000,000 shares of preferred stock having a par value of $0.0001 per share. The Company’s board of directors has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights, of those shares. As of March 31, 2023, no shares of preferred stock were issued and outstanding.

Common Stock

As of March 31, 2023 and December 31, 2022, the Company had authorized 110,000,000 and 110,000,000 shares of common stock at a par value of $0.0001 per share, respectively. As of March 31, 2023 and December 31, 2022, 37,429,251 and 36,849,076 shares of the Company’s common stock were issued and outstanding, respectively. For periods prior to the Merger, the reported share and per share amounts have been retroactively converted by the applicable exchange ratio of approximately 0.97 with the exception of the authorized shares and shares reserved for issuance.

Stock Option Plan

Under the Company’s 2014 Stock Option Plan (the “2014 Plan”), options may be granted at fair value, generally vest over four years, and expire in ten years. The Stock Option Plan was not modified as a result of the Merger; however as of the Merger closing, the Company no longer grants options under the 2014 Plan.

A summary of the Company’s option activity under the 2014 Plan is as follows:


	Number of Options	Weighted-average exercise price
Outstanding, December 31, 2022	7,194,067	$	0.40
Granted	—	—
Exercised	(569,595)	0.09
Cancelled/forfeited	—	—
Outstanding, March 31, 2023	6,624,472	$	0.42

Restricted Stock Units ("RSUs")

Under the Company’s 2022 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), The Company issues RSUs and accounts for them issued to employees at fair value, based on the market price of stock on the date of grant, net of estimated forfeitures and revised, if necessary, in subsequent periods if actual forfeitures differ from such estimates. The fair value of RSUs awarded are measured at the grant date. All RSUs were issued to directors or employees of the Company.

A summary of restricted stock activity for the three months ended March 31, 2023 is as follows:


	RSUs
	Number of Shares	Weighted Average Grant Date Fair Value ($ per share)
Unvested at December 31, 2022	4,194,774	$	2.44
Grants	95,000	2.13
Vested	(10,580)	0.22
Forfeited	(42,715)	2.34
Unvested at March 31, 2023	4,236,479	$	2.44

The following table summarizes the total stock-based compensation expense by function for the three months ended March 31, 2023 and 2022 (in thousands).


	Three months ended March 31,
	2023		2022
Operations and support	$	337	$	9
Sales and marketing	196		3
General and administrative	809		42
Total	$	1,342	$	54

As of March 31, 2023, there was $8.5 million of unrecognized expense related to unvested RSUs. The Company recognizes RSU compensation over a straight-line basis over the service period of the entire award, subject to the application of an estimate for forfeitures.

Common Stock Warrants

Legacy Wag! Common Warrants

Prior to January 2019, the Company granted 91,310 warrants to purchase common stock. The weighted average exercise price for the warrants were $1.54, and the term of the warrants were 10 years. The warrants were valued on the date of grant using the Black-Scholes Merton ("Black-Scholes") option pricing model. Upon consummation of the Merger, these warrants were unexercised at the date of the Merger and, as a result, were adjusted using an exchange ratio of 0.97 for Legacy Wag! Common Warrants. In the quarter ended September 30, 2022, the two Legacy Wag! holders net exercised their warrants on a cashless basis for 72,434 shares.

CHW Public and Private Placement Warrants

Prior to the Merger, CHW issued 12,500,000 of Public Warrants and 4,238,636 of Private Warrants together the Warrants, (together “Warrants”), respectively, in connection with its initial public offering to CHW Acquisition Sponsor, LLC the sponsor of CHW. After consummation of the Merger on August 9, 2022, the 4,238,636 Private Warrants held by the Sponsor were exchanged for 3,895,564 warrants to purchase shares of common stock of the Company issuable upon the exercise of Private Placement Warrants originally issued to CHW and the 12,500,000 shares of common stock that are issuable upon the exercise of Public Warrants remained outstanding. Each whole warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment, at any time commencing on September 8, 2022, which was the later of 30 days after the completion of the CHW Business Combination or 12 months from CHW's IPO closing date. The Warrants will expire on the fifth anniversary of the CHW Business Combination, or earlier upon redemption or liquidation.

Management has concluded that the Warrants issued pursuant to the CHW's IPO qualify for equity accounting treatment. The Warrants were not subject to revaluation at the Merger Date, and as such, the original valuation performed by CHW in connection with its IPO in September 2021 still applies. The following table provides quantitative information regarding fair value measurements at issuance on September 1, 2021:


Share Price (in whole dollars)		Exercise Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
$	10.00	$	11.50	—	%	22.00	%	1.31	%	5

The fair value as of September 1, 2021 was $1.32 per share. As of March 31, 2023, the Company had $12,500,000 of Public Warrants and 3,895,564 of Private Warrants outstanding respectively.

The Company may call the Warrants for redemption:

•in whole or in part;

•at a price of $0.01 per warrant;

•upon a minimum of 20 days’ prior written notice of redemption; and

•if, and only if, the reported last sale price of the Public Shares equals or exceeds $16.50 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

If the Company calls the Warrants for redemption, management will have the option to require all holders that wish to exercise the public warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of common stock issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe Company recorded $0 for income taxes for both the three months ended March 31, 2023 and 2022. At the end of each interim period, the Company estimates its annual effective tax rate and applies that rate to the interim earnings. The tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates, are recorded in the interim period in which they occur. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes. As of March 31, 2023 and 2022, and consistent with all prior periods, the Company continued to maintain a full valuation allowance against all of it deferred tax assets in light of its history of cumulative net losses.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Debt discount	$ 6.4	$ 7.0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	110,000,000	110,000,000
Common stock, outstanding (in shares)	37,429,251	36,849,076

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company’s financial assets that are measured at fair value on a recurring basis, by level within the fair value hierarchy, are as follows (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	21,004	$	—	$	—	$	21,004


Total financial assets	$	21,004	$	—	$	—	$	21,004


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	31,690	$	—	$	—	$	31,690



Total financial assets	$	31,690	$	—	$	—	$	31,690

Unrealized gains and losses for the three months ended March 31, 2023 and 2022 are immaterial.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Future minimum payments of the principal on the Company’s outstanding obligations as of March 31, 2023 were as follows (in thousands):


	Amounts
2023 (remaining 9 months)	$	988
2024	1,751
2025	30,227

Total principal amount	$	32,966

PPP Loan

In August 2020, the Company received loan proceeds of $5.1 million from a financial institution pursuant to the Paycheck Protection Program (the “PPP Loan”) as administered by the U.S. Small Business Administration (the “SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), of which $3.5 million was subsequently forgiven. The term of the PPP Loan is five years with a maturity date of August 2025 and contains a fixed annual interest rate of 1.00%. Principal and interest payments are payable monthly and the balance as of March 31, 2023 is $1.1 million.

Blue Torch Financing and Warrant Agreement

On August 9, 2022, Legacy Wag! entered into a financing agreement and warrant agreement with Blue Torch Finance, LLC (together with its affiliated funds and any other parties providing a commitment thereunder, including any additional lenders, agents, arrangers or other parties joined thereto after the date thereof, collectively, the “Debt Financing Sources”), pursuant to which, among other things, the Debt Financing Sources agreed to extend an approximately $32.2 million senior secured term loan credit facility (the “Credit Facility”). Legacy Wag! is the primary borrower under the Credit Facility, the Company is a parent guarantor and substantially all of the Company’s existing and future subsidiaries are subsidiary guarantors. The Credit Facility is secured by a first priority security interest in substantially all assets of the Company and the guarantors.

The Credit Facility bears interest at a floating rate of interest equal to, at Legacy Wag’s option, Secured Overnight Financing Rate ("SOFR") plus 10.00% per annum or the reference rate plus 9.00% per annum, with the reference rate defined as the greatest of:

•2.00% per annum;

•the federal funds effective rate plus 0.50% per annum;

•one-month SOFR plus 1.00% per annum; and

•the prime rate announced by the Wall Street Journal from time to time.

SOFR will be subject to a floor of 1.00% per annum, and the reference rate will be subject to a floor of 2.00% per annum. Interest will be payable in arrears at the end of each SOFR interest period (but at least every three months) for SOFR borrowings and quarterly in arrears for reference rate borrowings.

The Credit Facility matures in three years after the Closing Date, and will be subject to quarterly amortization payments of principal, in an aggregate amount equal to 2.00% of the principal amount of the Credit Facility in the first year after closing, 3.00% of the principal amount of the Credit Facility in the second year after closing and 5.00% of the principal amount of the Credit Facility in the third year after closing. The remaining outstanding principal balance of the Credit Facility will be due and payable in full on the maturity date. In addition to scheduled amortization payments, the Credit Facility contains customary mandatory prepayment provisions that require principal prepayments of the Credit Facility upon certain triggering events, including receipt of asset sale proceeds outside of the ordinary course of business, receipt of certain insurance proceeds and receipt of proceeds of non-permitted debt. The Credit Facility may also be voluntarily prepaid at any time, subject to the payment of a prepayment premium. The prepayment premium is payable for voluntary payments and certain mandatory prepayments, and is equal to an interest make-whole payment plus 3.00% of the principal amount of such prepayment in the first year after closing, 2.00% of the principal amount of such prepayment in the second year after closing, and 0% thereafter.

The Credit Facility contains customary representations and warranties, affirmative covenants, financial reporting requirements, negative covenants and events of default. The negative covenants included in the Financing Agreement impose restrictions on the ability of Legacy Wag, the guarantors and their subsidiaries to incur indebtedness, grant liens, make investments, make acquisitions, declare and pay restricted payments, prepay junior or subordinated debt, sell assets and enter into transactions with affiliates, in each case, subject to certain customary exceptions. In addition, the Credit Facility requires compliance with certain financial covenants, specifically a monthly minimum revenue covenant and a minimum liquidity covenant.

Legacy Wag’s obligations under the Blue Torch Financing Agreement are guaranteed by certain of its subsidiaries meeting materiality thresholds set forth in the Blue Torch Financing Agreement (the "Financing Agreement"). Such obligations, including the guarantees, are secured by substantially all of the personal property of the Company and its subsidiary guarantors, including pursuant to a Security Agreement entered into on August 9, 2022. The Blue Torch Financing Agreement establishes the following financial covenants: (i) Legacy Wag's trailing annual aggregate revenue shall exceed certain thresholds as of the end of each monthly computation period as defined therein; and (ii) Liquidity shall not be less than $5 million at any time. The Company was in compliance with these covenants as of March 31, 2023. The Company received a waiver regarding covenants for timely reporting and execution of agreements with respect the creation of a new wholly owned subsidiary to hold the Dog Food Advisor assets. The facility was fully drawn upon as of March 31, 2023. In the three months ended March 31, 2023, the Company incurred $1.2 million in interest expense at an annual interest rate of 14.84%.

On the closing of the Credit Facility, Legacy Wag! also entered into the Lender Warrant Agreement with Vstock Transfer, LLC as warrant agent, pursuant to which affiliates of Blue Torch Capital LP (“Blue Torch”) received 1,896,177 warrants to acquire common stock of the Company, par value $0.0001 per share (“Common Stock”), for $11.50 per whole share (such warrants, the “Lender Warrants”). The Lender Warrants were issued pursuant to the SPAC Warrant Agreement (as defined in the CHW Business Combination Agreement) and are subject to the terms and conditions thereof, as modified (whether reflected in the terms of the Lender Warrants issued on the Merger Date, or in an amendment to or exchange for the Lender Warrants consummated after the Merger Date) to provide that (i) the exercise period of the Lender Warrants will terminate on the earliest to occur of (x) the date that is ten years after completion of the CHW Business Combination, (y) liquidation of the Company, and (z) redemption of the Lender Warrants as provided in the SPAC Warrant Agreement (the “Lender Warrant Expiration Date”), (ii) Blue Torch has the ability to net exercise the Lender Warrants (based on the fair value of the stock at the time of net exercise, fair value being equal to the public trading price at the time of exercise) on a cashless basis, (iii) Blue Torch received the benefit of certain customary representations and warranties from the Company, and (iv) the Lender Warrants are not required to be registered under the Securities Act.

We classify the Lender Warrants as equity on our consolidated balance sheet as of March 31, 2023. As the Warrants are classified as equity warrants, the Company will not remeasure the Warrants each accounting period. The Company estimated the fair value of warrants exercisable for common stock using the Black-Scholes option valuation model. The Black-Scholes option valuation model inputs are based on the estimated fair value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, the risk-free interest rates, the expected dividends, and the expected volatility of the price of the Company’s underlying stock. These estimates, especially the expected volatility, are highly judgmental and could differ materially in the future.


	Carrying Value as of March 31, 2023 (in thousands)		Exercise Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
Lender Warrants	$	6,104	$	11.50	—	%	33.00	%	2.97	%	10

As the Lender Warrants are not liability classified instruments, the proceeds were allocated based on the relative fair values of the financial instruments issued as a whole.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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+ Details

Debt - Schedule of Future Minimum Payments (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2023 (remaining 9 months)	$ 988
2024	1,751
2025	30,227
Total principal amount	$ 32,966

Stockholders' Equity (Deficit) and Mezzanine Equity - Stock Option Plan (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Weighted-average exercise price
Total stock-based compensation expense	$ 1,342	$ 54
Operations and support
Weighted-average exercise price
Total stock-based compensation expense	337	9
Sales and marketing
Weighted-average exercise price
Total stock-based compensation expense	196	3
General and administrative
Weighted-average exercise price
Total stock-based compensation expense	$ 809	$ 42
2014 Plan
Number of Options
Outstanding beginning (in shares)	7,194,067
Granted (in shares)	0
Exercised (in shares)	(569,595)
Cancelled/forfeited (in shares)	0
Outstanding ending (in shares)	6,624,472
Weighted-average exercise price
Outstanding, beginning (in dollars per share)	$ 0.40
Granted (in dollars per share)	0
Exercised (in dollars per share)	0.09
Cancelled/forfeited (in dollars per share)	0
Outstanding, ending (in dollars per share)	$ 0.42
2014 Plan \| Options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period (in years)	4 years
Expiration period (in years)	10 years

Business Combinations - Schedule of Estimated Useful Lives of Acquired Intangible Assets (Details) - DFA $ in Thousands	Jan. 05, 2023 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 5,950
Developed technology and website content
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 1,950
Estimated Useful Life (years)	5 years
Strategic customer relationships and subscriber lists
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 3,600
Estimated Useful Life (years)	8 years
Trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 400
Estimated Useful Life (years)	10 years

Earnings (loss) per share - Schedule of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net loss attributable to common stockholders	$ (3,787)	$ (2,350)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares)	37,065,450	6,121,253
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares)	37,065,450	6,121,253
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.10)	$ (0.38)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.10)	$ (0.38)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Description of the Business	3 Months Ended
Description of the Business	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business Wag! Group Co. (“Wag!,” "Wag," the “Company,” “we” or “our”) formerly known as CHW Acquisition Corporation is incorporated in Delaware with headquarters in San Francisco, California. The Company develops and supports proprietary marketplace technologies available as a website and mobile app (“platform” or “marketplace”) that enables independent pet caregivers (“PCG”) to connect with Pet Parents (“Services”) and third party service partners to provide a suite of pet wellness services and products (“Wag! Wellness” or "Wellness"), including pet expert advice, pet wellness plans, and a pet insurance comparison tool. The platform allows Pet Parents (also referred to as “end-user(s)”), who require specific pet care services, to make service requests in the platform, which are then fulfilled by PCGs. The Company operates in the United States. On August 9, 2022 (the “Closing Date” or "Merger Date"), Wag! Labs, Inc. ("Legacy Wag!"), CHW Acquisition Corporation (“CHW”), and CHW Merger Sub, Inc. (“Merger Sub”) pursuant to the terms of the Business Combination Agreement and Plan of Merger (the “CHW Business Combination Agreement”) dated February 2, 2022, completed the business combination of Legacy Wag! and CHW which was effected by the merger of Merger Sub with and into Legacy Wag!, with Legacy Wag! surviving the Merger as a wholly owned subsidiary of CHW (the “Merger,” and, together with the other transactions contemplated by the CHW Business Combination Agreement, the “CHW Business Combination”). Upon completion of the Merger on August 9, 2022, the Company changed its name to Wag! Group Co. and effectively assumed all of CHW’s material operations. Refer to Note 3 - Business Combinations for more information regarding the Merger. On December 27, 2022 Wag! entered into an Asset Purchase Agreement with Clicks and Traffic LLC (“Dog Food Advisor”) to purchase its Dog Food Advisor ("DFA") assets for cash consideration of $9.0 million (the"DFA Business Combination"). The transaction closed on January 5, 2023, upon satisfaction of the closing conditions. Dog Food Advisor provides access to dog and cat food advice and resources to Pet Parents and others, helping them make informed decisions about their pets. For additional information, refer to Note 3 - Business Combinations.

Fair Value Measurements - Schedule of Financial Assets (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets:
Total financial assets	$ 21,004	$ 31,690
Level 1
Assets:
Total financial assets	21,004	31,690
Level 2
Assets:
Total financial assets	0	0
Level 3
Assets:
Total financial assets	0	0
Money market funds
Assets:
Cash equivalents	21,004	31,690
Money market funds \| Level 1
Assets:
Cash equivalents	21,004	31,690
Money market funds \| Level 2
Assets:
Cash equivalents	0	0
Money market funds \| Level 3
Assets:
Cash equivalents	$ 0	$ 0

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal and other contingencies From time to time, the Company may be a party to litigation and subject to claims, including non-income tax audits, in the ordinary course of business. The Company accrues a liability when management believes information available to it prior to the issuance of the consolidated financial statements indicates it is probable a loss has been incurred as of the date of the consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred. Although the results of litigation and claims cannot be predicted with certainty, management concluded that there was not a reasonable probability that it had incurred a material loss during the periods presented related to such loss contingencies. Therefore, the Company has not recorded a reserve for any such contingencies. Given the inherent uncertainties and unpredictability of litigation, the ultimate outcome of ongoing matters cannot be predicted with certainty but the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the consolidated financial statements could be materially adversely affected in a particular period by the resolution of one or more of these contingencies. Regardless of the outcome, litigation can have an adverse impact on the Company because of judgment, defense, and settlement costs, diversion of management resources, and other factors. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances changes, or contingencies are resolved; such changes are recorded in the accompanying statements of operations during the period of the change and reflected in accrued and other current liabilities on the accompanying consolidated balance sheets. The Company has been and continues to be involved in numerous legal proceedings related to PCG classification. In California, Assembly Bill No. 5 (AB-5) implemented a presumption that workers are employees. However, AB-2257 exempts agencies providing referrals for certain animal services, including dog walking, from AB-5. The Company believes that it falls within this exemption. Nevertheless, the interpretation or enforcement of the exemption could change. The United States Department of Labor announced on October 11, 2022 that it would publish a Notice of Proposed Rulemaking regarding the classification of workers as independent contractors or employees. We are monitoring the development of the proposed rule and will evaluate any potential impact of the final rule on our operations. The Company is subject to audits by taxing authorities and other forms of investigation, audit, or inquiry conducted by federal, state, or local governmental agencies. Due to the inherent uncertainties in the final outcome of such matters, the Company can give no assurance that it will prevail in such matters, which could have an adverse effect on the Company’s business. In addition, the Company may be subject to greater risk of legal claims or regulatory actions as it increases and continues its operations in jurisdictions where the laws and regulations governing online marketplaces or the employment classification of service providers who use online marketplaces are uncertain or unfavorable. In November 2019, California issued an assessment alleging various violations and penalties related to alleged misclassification of pet caregivers who use the Company’s platform as independent contractors. The Company has challenged both the legal basis and the amount of the assessment, of $1.7 million in unemployment insurance contributions for our independent contractors. In April 2022, the California Employment Development Department ("CA EED") initiated a routine employment tax audit of the Company. We are engaged in ongoing discussions with the CA EDD, including providing additional data that has been requested, in order to determine what, if any, additional assessments are warranted. CA EDD alleges the Company owes approximately $1.3 million in unemployment insurance contributions for our independent contractors. In response we submitted a Petition for Reassessment and intend to defend ourselves vigorously in this pending matter. The Company believes given the inherent uncertainties of litigation, the outcome of this matter is not considered probable nor estimable and, therefore, the Company has not recorded a reserve. On May 13, 2022, Legacy Wag! settled a claim with a Texas state tax authority related to the collection of sales and use taxes in Texas. Legacy Wag! was required to pay $1.2 million to the state of Texas, the amount of the claim, as a prerequisite to the court challenge, however under the settlement agreement the Company was refunded the $1.2 million remitted. In August 2018, the New York State Department of Labor (“DOL”) issued an Investigation Report assessing the Company with approximately $248,000 in unemployment insurance contributions for our independent contractors. In May 2021, the Unemployment Insurance Appeal Board affirmed its decision sustaining the Department’s assessment. Interest continues to accrue on this assessment. As of March 31, 2023, management did not believe that the outcome of pending matters would have a material effect on the Company’s financial position, results of operations, or cash flows.

Stockholders' Equity (Deficit) and Mezzanine Equity - Restricted Stock (Details) - Restricted Stock	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Number of Shares
Unvested at beginning (in shares) \| shares	4,194,774
Grants (in shares) \| shares	95,000
Vested (in shares) \| shares	(10,580)
Forfeited (in shares) \| shares	(42,715)
Unvested at ending (in shares) \| shares	4,236,479
Weighted Average Grant Date Fair Value ($ per share)
Unvested at beginning (in dollars per share) \| $ / shares	$ 2.44
Grants (in dollars per share) \| $ / shares	2.13
Vested (in dollars per share) \| $ / shares	0.22
Forfeited (in dollars per share) \| $ / shares	2.34
Unvested at ending (in dollars per share) \| $ / shares	$ 2.44
Unrecognized expense related to unvested restricted stock \| $	$ 8,500,000

Stockholders' Equity (Deficit) and Mezzanine Equity (Tables)

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Schedule of Option Activity

A summary of the Company’s option activity under the 2014 Plan is as follows:


	Number of Options	Weighted-average exercise price
Outstanding, December 31, 2022	7,194,067	$	0.40
Granted	—	—
Exercised	(569,595)	0.09
Cancelled/forfeited	—	—
Outstanding, March 31, 2023	6,624,472	$	0.42

Schedule of Restricted Stock Activity

A summary of restricted stock activity for the three months ended March 31, 2023 is as follows:


	RSUs
	Number of Shares	Weighted Average Grant Date Fair Value ($ per share)
Unvested at December 31, 2022	4,194,774	$	2.44
Grants	95,000	2.13
Vested	(10,580)	0.22
Forfeited	(42,715)	2.34
Unvested at March 31, 2023	4,236,479	$	2.44

Schedule of Total Stock-Based Compensation Expense by Function

The following table summarizes the total stock-based compensation expense by function for the three months ended March 31, 2023 and 2022 (in thousands).


	Three months ended March 31,
	2023		2022
Operations and support	$	337	$	9
Sales and marketing	196		3
General and administrative	809		42
Total	$	1,342	$	54

Fair Value Measurement Inputs and Valuation Techniques


	Carrying Value as of March 31, 2023 (in thousands)		Exercise Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
Lender Warrants	$	6,104	$	11.50	—	%	33.00	%	2.97	%	10

The following table provides quantitative information regarding fair value measurements at issuance on September 1, 2021:


Share Price (in whole dollars)		Exercise Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
$	10.00	$	11.50	—	%	22.00	%	1.31	%	5

Stockholders' Equity (Deficit) and Mezzanine Equity - Preferred Stock (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 28, 2022 USD ($) shares	Mar. 31, 2022 USD ($) shares	Mar. 31, 2023 $ / shares shares
Redeemable Preferred Stock - Mezzanine Equity
Preferred Series P issuance, net of issuance costs (in shares)		1,100,000
Preferred Series P Issuance, net of issuance costs \| $		$ 10,925
Preferred stock, par value, (in dollars per share) \| $ / shares			$ 0.0001
Preferred stock, shares authorized (in shares)			1,000,000
Preferred stock, shares issued (in shares)			0
Preferred stock, shares outstanding (in shares)			0
Series P convertible preferred shares
Redeemable Preferred Stock - Mezzanine Equity
Preferred Series P issuance, net of issuance costs (in shares)	1,100,000
Preferred Series P Issuance, net of issuance costs \| $	$ 11,000
Preferred stock, par value, (in dollars per share) \| $ / shares			$ 0.0001
Conversion ratio			0.97

Contract Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
Contract Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Contract with Customer, Liability [Abstract]
Contract liabilities	$ 2.6		$ 2.2
Amount of revenue included in contract with customer liability	$ 0.4	$ 0.1

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenues	$ 20,623	$ 9,666
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)	1,026	806
Platform operations and support	3,170	2,577
Sales and marketing	13,275	6,082
General and administrative	4,984	2,367
Depreciation and amortization	381	152
Total costs and expenses	22,836	11,984
Other income	56	0
Interest expense, net	(1,630)	(32)
Loss before income taxes	(3,787)	(2,350)
Income taxes	0	0
Net loss	$ (3,787)	$ (2,350)
Net loss per share
Net loss per share, basic (in dollars per share)	$ (0.10)	$ (0.38)
Net loss per share, diluted (in dollars per share)	$ (0.10)	$ (0.38)
Weighted-average shares used to compute net loss per share, basic (in shares)	37,065,450	6,121,253
Weighted-average shares used to compute net loss per share, diluted (in shares)	37,065,450	6,121,253

Stockholders' Equity (Deficit) and Mezzanine Equity - CHW Public and Private Placement Warrants (Details)		3 Months Ended
	Aug. 09, 2022 $ / shares shares	Mar. 31, 2023 day $ / shares shares	Aug. 08, 2022 shares	Sep. 01, 2021 $ / shares year
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants outstanding (in shares)	91,130
Fair value (in dollars per share) \| $ / shares				$ 1.32
Stock price trigger for redemption of public warrants (in dollars per share) \| $ / shares		$ 16.50
Threshold trading days for redemption of public warrants \| day		20
Number of trading days over which the reported sale price is measured when determining the redemption price \| day		30
Public Warrants
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants outstanding (in shares)		12,500,000	12,500,000
Number of warrants to purchase common stock (in shares)	12,500,000
Number of shares issuable per warrant (in shares)	1
Weighted average exercise price for the warrants (in dollars per share) \| $ / shares	$ 11.50
Redemption price per public warrant (in dollars per share) \| $ / shares		$ 0.01
Redemption period		20 days
Private Warrants
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants outstanding (in shares)		3,895,564	4,238,636
Class of warrant or right, cancelled (in shares)	4,238,636
Number of warrants to purchase common stock (in shares)	3,895,564
CHW Warrants \| Measurement Input, Exercise Price [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, measurement input \| $ / shares				11.50
CHW Warrants \| Dividend Yield
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, measurement input				0
CHW Warrants \| Volatility
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, measurement input				0.2200
CHW Warrants \| Risk-Free Interest Rate
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, measurement input				0.0131
CHW Warrants \| Expected Term (in years)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, measurement input \| year				5
CHW Warrants \| Stock Price (in whole dollars)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants, measurement input \| $ / shares				10.00

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Financial Assets

The Company’s financial assets that are measured at fair value on a recurring basis, by level within the fair value hierarchy, are as follows (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	21,004	$	—	$	—	$	21,004


Total financial assets	$	21,004	$	—	$	—	$	21,004


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	31,690	$	—	$	—	$	31,690



Total financial assets	$	31,690	$	—	$	—	$	31,690

Stockholders' Equity (Deficit) and Mezzanine Equity - Common Stock (Details)	Mar. 31, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares	Aug. 09, 2022 $ / shares shares
Stockholders' Equity Note [Abstract]
Common stock, authorized (in shares)	110,000,000	110,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, issued (in shares)	37,429,251	36,849,076
Common stock, outstanding (in shares)	37,429,251	36,849,076	37,745,964
Exchange ratio	0.97

Contract Liabilities	3 Months Ended
Contract Liabilities	Mar. 31, 2023
Contract with Customer, Liability [Abstract]
Contract Liabilities	Contract LiabilitiesThe timing of services revenue recognition may differ from the timing of invoicing to or collections from customers. The Company’s contract liabilities balance, which is included in gift card and subscription liabilities on the balance sheets is primarily comprised of unredeemed gift cards, prepayments received from consumers for Wag! Premium subscriptions, and certain consumer credits for which the revenue is recognized over time as they are used for services on our platform. The contract liabilities balance was $2.6 million and $2.2 million as of the three months ended March 31, 2023 and the year ended December 31, 2022, respectively. Revenues recognized for the three months ended March 31, 2023 and 2022 related to the Company’s contract liabilities as of the beginning of the year was $0.4 million and $0.1 million, respectively.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Accordingly, certain information related to our significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2022 and the related notes which provide a more complete discussion of the Company’s accounting policies and certain other information. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited financial statements.

These unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position as of March 31, 2023 and its results of operations, changes in stockholders’ deficit and cash flows for the three months ended March 31, 2023 and 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period.

The shares and per share amounts, prior to the Merger, have been retroactively restated as shares reflecting conversion at the exchange ratio of 0.97 established in the CHW Business Combination Agreement. See Note 3 - Bu siness Combinations.

Segments

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance of the Company. As such, the Company has determined that it operates as one operating segment.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosures as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on various factors, including historical experience, and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources.

Significant items subject to estimates and assumptions include, but are not limited to, fair values of financial instruments, assumptions used in the valuation of common and preferred stock, valuation of stock-based compensation and warrants, and the valuation allowance for deferred income taxes. Actual results may differ from these estimates.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to the valuation of intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are reflected in the consolidated statements of operations. Acquisition costs, such as legal and consulting fees, are expensed as incurred.

Certain Significant Risks and Uncertainties

The Company has experienced negative cash flows since inception and had an accumulated deficit of $152.2 million and $148.4 million as of March 31, 2023 and December 31, 2022, respectively. Historically, the Company has primarily financed its operations through equity financings. The Company believes that its existing cash and investments, together with cash generated from operations, will be sufficient to meet its operating needs for at least the next 12 months. However, these forecasts involve risks and uncertainties, and actual results could vary materially. The Company based this estimate on assumptions that may prove to be wrong, and could deplete its capital resources earlier than expected.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash on deposit as well as investments in money market funds that are readily convertible into cash and purchased with original maturities of three months or less.

Equity Level Investment

In November 2022, the Company via its wholly owned subsidiary, Compare Pet Insurance Services, Inc. ("CPI"), entered into an agreement to invest in a new limited liability company for an investment of $1.5 million.

The Company funded this investment in the first quarter of 2023 and the investment is reflected in other long-term assets in the accompanying consolidated balance sheets. There was no material activity in the three months ended March 31, 2023. We do not control the entity.

The Company accounts for equity method investments at cost, adjusted for the Company’s share of the investee’s earnings or losses, which will be reflected in the consolidated statements of operations. The Company periodically reviews the investments for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. As of March 31, 2023, Management believes the carrying value of its equity method investments were recoverable in all material respects.

Accounts Receivable

Accounts receivable primarily represent amounts charged by payment processors on behalf of the Company that are in the process of clearing. These amounts are generally cleared in one to three business days. Additionally, the Company records accounts receivable for commission fees earned but not yet received from third parties in connection with Wag! Wellness and Pet Food & Treats services. Substantially all accounts receivable are collected and bad debt expense or the allowance for doubtful accounts were not material as of the three months ended March 31, 2023 and 2022.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives are as follows:


			Estimated useful life
Equipment			3 years
Capitalized software			3 years
Leasehold improvements			Shorter of estimated useful life or lease term

Maintenance and repair costs are charged to expense as incurred.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. Our annual impairment test is performed in the fourth quarter of each year and the Company’s impairment tests are based on a single operating segment and reporting unit structure. Prior to performing a quantitative evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of the reporting unit exceeds its carrying value. If the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized for the excess of the carrying value of the reporting unit over its fair value.

Intangible Assets, Net

Intangible assets are recorded at fair value as of the date of acquisition and amortized on a straight-line basis over their estimated useful lives.

Impairment of Intangible Assets

Impairment of Intangible AssetsThe Company reviews its definite-lived intangibles and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the carrying value of the asset or asset group.

Software Development Costs

The Company incurs costs related to the development of its technology platform. The Company will begin to capitalize costs related to technology development when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the technology will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, which is generally three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for significant enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades. Capitalized development costs are included in property and equipment, net, in the balance sheets, and amortization expense is included in depreciation and amortization in the statements of operations.

Stock-Based Compensation

The Company has an equity incentive plan under which it grants equity awards, including stock options and restricted stock units ("RSUs"). The Company determines compensation expense associated with stock options based on the estimated grant date fair value method using the Black-Scholes valuation model. The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected stock price volatility over the expected term, and expected annual dividend yield.

For all stock options granted, the Company calculates the expected term using the simplified method as it has limited historical exercise data to provide a reasonable basis upon which to otherwise estimate expected term, and the options have characteristics of “plain-vanilla” options. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the stock-based award. Due to the limited trading history of the Company’s common stock, the expected volatility assumption is generally based on volatilities of a peer group of similar companies whose share prices are publicly available. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own common stock price becomes available. The Company utilizes a dividend yield of zero, as it has no history or plan of declaring dividends on its common stock.

The Company generally recognizes compensation expense using a straight-line amortization method over the respective service period for awards that are ultimately expected to vest. Stock-based compensation expense for the three months ended March 31, 2023 and 2022 has been reduced for actual forfeitures.

Income Taxes

The Company accounts for income taxes using an asset and liability approach, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial or tax returns. The measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting basis and the tax basis of assets and liabilities result in a deferred tax asset, the Company evaluates the probability of being able to realize the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that either some portion or the entire deferred tax asset will not be realized. The Company records a valuation allowance to reduce the deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. We regularly review the deferred tax assets for recoverability based on historical taxable income or loss, projected future taxable income or loss, the expected timing of the reversals of existing temporary differences and tax planning strategies. Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our income tax provision would increase or decrease in the period in which the assessment is changed.

The Company recognizes a tax benefit from uncertain tax positions only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authorities’ administrative practices and precedents. The tax benefits recognized from such positions are measured based

on the largest benefit that has a greater than 50% likelihood of being recognized upon settlement. The Company did not recognize any tax benefits from uncertain tax positions during the three months ended March 31, 2023 and 2022.

Fair Value

The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value.

Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets or liabilities.

The carrying amounts of financial instruments, including cash equivalents, investments, accounts receivable, accounts payable, and accrued liabilities approximate their respective fair value due to their short period of maturities.

Concentration of Credit Risk

Cash, cash equivalents, investments, and amounts at payment processors are potentially subject to concentration of credit risk. Such balances are maintained at financial institutions that management determines to be of high-credit quality. Cash accounts at each institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to certain limits. At times, such deposits may be in excess of the FDIC insurance limit. The Company has not experienced any losses on its deposits.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with its Customers. Through its Services offerings, the Company principally generates Service revenue from service fees charged to PCGs for use of the platform to discover pet service opportunities and to successfully complete a pet care service to a Pet Parent. The Company also generates revenue from subscription fees paid by Pet Parents for Wag! Premium, and fees paid by PCGs to join the platform. Additionally, through its Wellness and Pet Food & Treat offerings, the Company generates revenue through commission fees paid by third party service partners in the form of ‘revenue-per-action’ or conversion activity defined in our agreements with the third party service partner. For some of the Company’s arrangements with third party service partners, the transaction price is considered variable, and an estimate of the transaction price is recorded when the action occurs. The estimated transaction price used in the variable consideration is based on historical data with the respective third-party service partner and the consideration is measured and settled monthly.

The Company enters into terms of service with PCGs and Pet Parents to use the platform (“Terms of Service Agreements”), as well as an Independent Contractor Agreement (“ICA”) with PCGs (the ICA, together with the Terms of Service Agreements, the “Agreements”). The Agreements govern the fees the Company charges the PCGs for each transaction. Upon acceptance of a transaction, PCGs agree to perform the services that are requested by a Pet Parent. The acceptance of a transaction request combined with the Agreements establishes enforceable rights and obligations for each transaction. A contract exists between the Company and the PCGs after both the PCGs and Pet Parent accept a transaction request and the PCGs ability to cancel the transaction lapses. For Wag! Wellness and Pet Food & Treat revenues, the Company enters into agreements with third party service partners which define the action by a Pet Parent that results in the Company earning and receiving a commission fee from the third-party service partner.

Wag!’s service obligations are performed, and revenue is recognized for fees earned from PCGs related to the facilitation and completion of a pet service transaction between the Pet Parent and the PCG through the use of our platform. Revenue generated from the Company’s Wag! Premium subscription is recognized on a ratable basis over the contractual period, which is generally one month to one year depending on the type of subscription purchased by the Pet Parent. Unused subscription amounts are recorded as gift card and subscription liabilities on the condensed consolidated balance sheet. Revenue related to the fees paid by the PCG to join the platform are recognized upon processing of the applications. Wag! Wellness and Pet Food & Treat revenue performance obligation is completed, and revenue is recognized when an end-user completes an action or conversion activity.

Principal vs. Agent Considerations

Judgment is required in determining whether the Company is the principal or agent in transactions with PCGs and Pet Parents. The Company evaluated the presentation of revenues on a gross or net basis based on whether the Company controls the service provided to the Pet Parent and is the principal (i.e., “gross”), or whether the Company arranges for other parties to provide the service to the Pet Parent and is an agent (i.e. “net”). This determination also impacts the presentation of incentives provided to both PCGs and Pet Parents, as well as discounts and promotions offered to Pet Parents to the extent they are not customers.

The Company’s role in a transaction on the platform is to facilitate PCGs finding, applying, and completing a successful pet care service for a Pet Parent. The Company has concluded it is the agent in transactions with PCGs and Pet Parents because, among other factors, the Company’s role is to facilitate pet service opportunities to PCGs and it is not responsible for nor controls the delivery of pet services provided by the PCGs to the Pet Parents.

Gift Cards

The Company sells gift cards that can be redeemed by Pet Parents through the platform. Proceeds from the sale of gift cards are deferred and recorded as contract liabilities in gift card and subscription liabilities on the balance sheet until Pet Parents use the card to place orders on our platform. When gift cards are redeemed, revenue is recognized on a net basis as the difference between the amounts collected from the purchaser less amounts remitted to PCGs. Unused gift cards are recorded as gift card and subscription liabilities on the consolidated balance sheet.

Incentives

The Company offers discounts and promotions to encourage use of the Company’s platform. These are offered in various forms of discounts and promotions and include:

Targeted Pet Parent discounts and promotions: These discounts and promotions are offered to a limited number of Pet Parents in a specific market to acquire, re-engage, or generally increase Pet Parents’ use of the platform, and are akin to a coupon. The Company records the cost of these discounts and promotions as sales and marketing expenses at the time they are redeemed by the Pet Parent.

Market-wide promotions: These promotions are pricing actions in the form of discounts that reduce the price Pet Parents pay PCGs for services. These promotions result in a lower fee earned by the Company from the PCG. Accordingly, the Company records the cost of these promotions as a reduction of revenues at the time the PCG service is completed. Discounts on services offered through our subscription program are also recorded as a reduction of revenues.

Cost of Revenues (exclusive of depreciation and amortization)

Cost of revenues consists of costs directly related to revenue generating transactions, which primarily includes fees paid to payment processors for payment processing fees, hosting and platform-related infrastructure costs, third-party costs for background checks for PCGs, and other costs arising as a result of revenue transactions that take place on our platform, excluding depreciation and amortization.

Platform Operations and Support

Platform operations and support expenses include personnel-related compensation costs of technology and operations teams, and third-party operations support costs.

Sales and Marketing

Sales and MarketingSales and marketing expenses include personnel-related compensation costs of the marketing team, advertising expenses, and Pet Parent incentives. Sales and marketing expenses are expensed as incurred.

General and Administrative

General and administrative expenses include personnel-related compensation costs for corporate employees, such as management, accounting, and legal as well as insurance and other expenses used to operate the business.

Depreciation and Amortization

Depreciation and amortization expenses primarily consist of depreciation and amortization expenses associated with the Company’s property and equipment. Amortization includes expenses associated with the Company’s capitalized software and website development, as well as acquired intangible assets.

Earnings Per Share

Earnings (Loss) Per Share

The Company computes net income (loss) per common share following the two-class method required for multiple classes of common stock and participating securities. The Company had redeemable preferred stock as of March 31, 2022 and considers the redeemable preferred stock to be participating securities. The two-class method requires income (loss) available to common stockholders for the period to be allocated between multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed. The holders of the Company’s redeemable preferred stock would be entitled to dividends in preference to common stockholders, at specified rates, if declared. Such dividends are not cumulative. Any remaining earnings would be distributed among the holders of redeemable preferred stock and common stock pro rata. In connection with the Merger, all of the Company's redeemable preferred stock was converted to common stock (refer to Note 3 - Business Combinations for more information regarding the Merger). Holders of the Company’s redeemable preferred stock are not contractually obligated to participate in the Company’s losses. As such, the Company’s net losses for the three months ended March 31, 2022 were not allocated to these participating securities.

Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. The diluted net income (loss) per share is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which the Company reports net losses, diluted net loss per common share is the same as basic net loss per common share, because all potentially dilutive securities are anti-dilutive.

Accounting for Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are free standing financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent period end date while the instruments are outstanding. Management has concluded that the Public Warrants and Private Placement Warrants issued

pursuant to the CHW Business Combination qualify for equity accounting treatment. Additionally, the Company considers its warrants ("Lender Warrants") issued in conjunction with the Blue Torch Financing Arrangement (see Note 9 - Debt for additional detail) to be equity classified since they do not meet the liability classification criteria.

Recent Accounting Pronouncements Adopted and Accounting Standards Issued but Not Yet Adopted

Recent Accounting Pronouncements Adopted

In June 2016, the FASB issued ASU No. 2016-13, (Topic 326), Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans, and other instruments. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies ("SRCs") as defined by the SEC. ASU No. 2016-13 is effective for SRCs for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this standard on January 1, 2023, and the adoption did not have an impact on our consolidated results of operations and financial condition.

Accounting Standards Issued but Not Yet Adopted

In August 2020, the FASB issued Accounting Standards Update No. with Conversion and Other Options (Subtopic and “Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.The Company is currently in the process of evaluating the impact of ASU 2020-06 but does not anticipate ASU 2020-06 will have a material impact on its consolidated financial statements and related disclosures.

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Operating Leases

The Company leases its facilities under non-cancellable lease agreements which expire between 2022 and 2026. Certain of these arrangements have free rent, escalating rent payment provisions, lease renewal options, and tenant allowances. Rent expense is recognized on a straight-line basis over the noncancellable lease term.

In April 2019, the Company entered into a non-cancellable agreement to lease office space in Mountain View, California. The lease is a two-year operating lease, which includes scheduled rent escalations during the lease term. The Company had an option to extend the lease through 2025, although the Company did not exercise the option and the lease expired in the third quarter of 2022.

In February 2020, the Company entered into a non-cancellable sublease agreement for its Mountain View office space. The sublease agreement commenced on April 1, 2020. Under the term of the sublease agreement, the Company received $2.0 million in base lease payments plus reimbursement of certain operating expenses over the term of the sublease, which ended in July 2022. During the three months ended March 31, 2023, there was no sublease income under this agreement and for the three months ended March 31, 2022, the Company recognized $0.2 million of sublease income under this agreement.

In November 2021, the Company entered into a non-cancellable agreement to lease office space in Phoenix, Arizona for a 21-month period. The lease contains an escalation clause and free rent. The monthly base rent is $10.4 thousand for months two through thirteen and will increase by approximately 1.9% over the initial term. There is no option to extend the lease.

The Company's corporate headquarters are located in San Francisco, California, pursuant to an operating lease that was to expire in August 2023. On October 28, 2022, the lease agreement was amended to extend for a period of 30 months through February 28, 2026. The monthly base rent is $20.4 thousand for the first year and will increase by 3.0% per year over the initial term.

As a result of the Furmacy acquisition on October 24, 2022, the Company assumed two real-estate operating leases for their headquarter location in El Dorado Hills, California. The leases are separate and distinct for office space and warehouse use. The remaining lease term as of the acquisition date was 13 months for each lease. The Company measured the lease liabilities at the present value of the remaining lease payments, as if each acquired lease was a new lease of the Company at the acquisition date. There is no option to extend the leases further.

Non-cash activities involving Right of Use ("ROU") assets, including the impact of adopting the new lease standard on January 1, 2022, were $0.5 million in assets and $0.5 million in liabilities. Operating lease expense under ASC 842 for leased facilities was $0.1 million for the three months ended March 31, 2023.

As of March 31, 2023, the future minimum lease payments required under operating leases were as follows (in thousands):


2023 (remaining nine months)	$	187
2024	248
2025	255
2026	43

Total minimum lease payments	$	733

The weighted average remaining lease term and the weighted average discount rate of the Company’s operating leases is 2.2 years and 8.4% at March 31, 2023. The discount rates are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined.

Business Combinations - Schedule of Reverse Recapitalization (Details) - USD ($) $ in Thousands				1 Months Ended
	Dec. 31, 2022	Nov. 09, 2022	Aug. 09, 2022	Aug. 31, 2022
Business Combination And Reverse Recapitalization [Abstract]
Cash – CHW’s trust (net of redemptions)			$ 28,330
Cash – PIPE and Backstop Investor			5,202
Payment of transaction costs and other related expenses			(12,488)
Payment of deferred transaction costs			(9,318)
Reversal of APIC impact recorded upon issuance of Forward Share Purchase Agreements ("FPAs") in August 2022				$ (23,203)
Cash received from FPA at Put Date		$ 9,837
APIC impact of FPA at Put Date, net of cash received		$ 4,229
Proceeds from merger with CHW, net of issuance costs	$ 2,589		$ 11,726

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

Segments

Use of Estimates

Business Combinations

Certain Significant Risks and Uncertainties

Cash and Cash Equivalents

Equity Level Investment

Accounts Receivable

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives are as follows:


			Estimated useful life
Equipment			3 years
Capitalized software			3 years
Leasehold improvements			Shorter of estimated useful life or lease term

Maintenance and repair costs are charged to expense as incurred.

Goodwill

Intangible Assets, Net

Intangible assets are recorded at fair value as of the date of acquisition and amortized on a straight-line basis over their estimated useful lives.

Impairment of Intangible Assets

The Company reviews its definite-lived intangibles and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the carrying value of the asset or asset group. If impairment exists, the assets are written down to their estimated fair value. No impairment of definite-lived intangible and long-lived assets was recorded for the three months ended March 31, 2023 and 2022.

Software Development Costs

Stock-Based Compensation

Income Taxes

Fair Value

Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities.

Level 3 — Unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets or liabilities.

Concentration of Credit Risk

Revenue Recognition

Principal vs. Agent Considerations

Gift Cards

Incentives

The Company offers discounts and promotions to encourage use of the Company’s platform. These are offered in various forms of discounts and promotions and include:

Cost of Revenues (exclusive of depreciation and amortization)

Platform Operations and Support

Platform operations and support expenses include personnel-related compensation costs of technology and operations teams, and third-party operations support costs.

Sales and Marketing

Sales and marketing expenses include personnel-related compensation costs of the marketing team, advertising expenses, and Pet Parent incentives. Sales and marketing expenses are expensed as incurred. Advertising expenses, excluding the impact of partnership investment costs, $2.1 million and $1.9 million during the three months ended March 31, 2023 and 2022, respectively.

General and Administrative

Depreciation and Amortization

Earnings (Loss) Per Share

Accounting for Warrants

Recent Accounting Pronouncements Adopted

Accounting Standards Issued but Not Yet Adopted

Business Combinations - CHW Narrative (Details) $ / shares in Units, holder in Millions					3 Months Ended
	Nov. 09, 2022 USD ($)	Nov. 01, 2022 shares	Aug. 09, 2022 USD ($) Lender tradingDay $ / shares shares	Aug. 05, 2022 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) lender $ / shares	May 10, 2023 holder	Dec. 31, 2022 $ / shares
Schedule Of Reverse Recapitalization [Line Items]
Exchange ratio			0.97		0.97		0.97
Common stock, par value (in dollars per share) \| $ / shares			$ 0.0001		$ 0.0001		$ 0.0001
Net proceeds \| $			$ 29,100,000
Restricted cash \| $			23,900,000
Proceeds from PIPE \| $			$ 5,202,000
Warrants outstanding (in shares)			91,130
Number of lenders			2		2
Restricted cash \| $				$ 24,700,000
Derivative instrument, contingent consideration, liability, shares (in shares)		955,000		2,393,378
Shares purchase price (in dollars per share) \| $ / shares				$ 10.30
Stock repurchased \| $	$ 14,800,000
Reverse recapitalization, contingent consideration, equity, triggering event period			3 years
Stock-based compensation due to Earnout Shares \| $			$ 23,900,000
Payments of reverse recapitalization transaction costs \| $					$ 39,500,000
Subsequent Event [Member]
Schedule Of Reverse Recapitalization [Line Items]
Holders repurchasing shares \| holder						1.4
Private placement
Schedule Of Reverse Recapitalization [Line Items]
Number of shares issued (in shares)			500,000
Price per share (in dollars per share) \| $ / shares			$ 10.00
Total proceeds \| $			$ 5,000,000
Issuance of ordinary shares to Sponsor (in shares)			500,000
Community Share Issuance
Schedule Of Reverse Recapitalization [Line Items]
Issuance of ordinary shares to Sponsor (in shares)			300,000
CHW Acquisition Corporation
Schedule Of Reverse Recapitalization [Line Items]
Number of shares redeemed (in shares)			9,593,970
Common stock, par value (in dollars per share) \| $ / shares			$ 0.0001
Redemption price (in dollars per share) \| $ / shares			$ 10.00
Value of shares forfeited \| $			$ 95,939,700
Earnout Shares
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, shares (in shares)			10,000,000
Reverse recapitalization, contingent consideration, equity, triggering event period			3 years
Management Earnout Shares
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, shares (in shares)			5,000,000
Earnout Consideration Triggering Event, One
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, stock price trigger (in dollars per share) \| $ / shares			$ 12.50
Earnout Consideration Triggering Event, One \| Earnout Shares
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, shares (in shares)			5,000,000
Reverse recapitalization, contingent consideration, equity, stock price trigger (in dollars per share) \| $ / shares			$ 12.50
Reverse recapitalization, contingent consideration, equity, threshold trading days \| tradingDay			20
Reverse recapitalization, contingent consideration, equity, threshold trading day period \| tradingDay			30
Earnout Consideration Triggering Event, Two
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, stock price trigger (in dollars per share) \| $ / shares			$ 15.00
Earnout Consideration Triggering Event, Two \| Earnout Shares
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, shares (in shares)			5,000,000
Reverse recapitalization, contingent consideration, equity, stock price trigger (in dollars per share) \| $ / shares			$ 15.00
Reverse recapitalization, contingent consideration, equity, threshold trading days \| tradingDay			20
Reverse recapitalization, contingent consideration, equity, threshold trading day period \| tradingDay			30
Earnout Consideration Triggering Event, Three
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, stock price trigger (in dollars per share) \| $ / shares			$ 18.00
Earnout Consideration Triggering Event, Three \| Earnout Shares
Schedule Of Reverse Recapitalization [Line Items]
Reverse recapitalization, contingent consideration, equity, shares (in shares)			5,000,000
Reverse recapitalization, contingent consideration, equity, stock price trigger (in dollars per share) \| $ / shares			$ 18.00
Reverse recapitalization, contingent consideration, equity, threshold trading days \| tradingDay			20
Reverse recapitalization, contingent consideration, equity, threshold trading day period \| tradingDay			30
Series P convertible preferred shares \| Common Stock
Schedule Of Reverse Recapitalization [Line Items]
Conversion of preferred stock to common stock (in shares)			1,100,000
Secured Debt \| The Credit Facility
Schedule Of Reverse Recapitalization [Line Items]
Proceeds from Blue Torch Financing Agreement \| $			$ 29,400,000
Founder Shares
Schedule Of Reverse Recapitalization [Line Items]
Number of shares cancelled in maximum redemption scenario (in shares)			13,327
Number of shares cancelled in connection with Business Combination (in shares)			20,000

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Property and Equipment, Net

The estimated useful lives are as follows:


			Estimated useful life
Equipment			3 years
Capitalized software			3 years
Leasehold improvements			Shorter of estimated useful life or lease term

Business Combinations

3 Months Ended

Mar. 31, 2023

Business Combination And Reverse Recapitalization [Abstract]

Business Combinations

Business Combination with CHW

As described in Note 1, the Merger with CHW was consummated on August 9, 2022. The CHW Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America. Under this method of accounting, CHW was treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the CHW Business Combination was treated as the equivalent of Wag! issuing shares for the net assets of CHW, accompanied by a recapitalization. The shares and net earnings (loss) per common share prior to the Merger have been retroactively restated as shares reflecting the exchange ratio established in the Merger (0.97 shares of the Company’s common stock for each share of Legacy Wag! common stock). The net assets of CHW have been recognized at carrying value, with no goodwill or other intangible assets recorded. Wag! accounted for the acquisition of CHW based on the amount of net assets acquired upon consummation.

Wag! has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•Wag!’s shareholders have a majority of the voting power of the Post-Combination Company;

•Wag! appointed the majority of the board of directors of the Post-Combination Company;

•Wag!’s existing management comprises the management of the Post-Combination Company;

•Wag! comprises the ongoing operations of the Post-Combination Company; and

•Wag! is the larger entity based on historical revenue and has the larger employee base.

In connection with the Special Meeting and the CHW Business Combination, the holders of 9,593,970 shares of CHW’s ordinary shares, par value $0.0001 per share, exercised their right to redeem their shares for cash at a redemption price of approximately $10.00 per share, for an aggregate redemption amount of $95,939,700. As a result, the Company received approximately $29.1 million, of which $23.9 million was placed in escrow (and classified as Restricted Cash) in accordance with the Forward Share Purchase Agreements (see section below entitled "Forward Share Purchase Agreements" for additional information). As of the date of the Merger, the Company also entered into a financing arrangement Blue Torch Finance, LLC and received net proceeds of $29.4 million from a Secured Note (see Note 9 - Debt for additional information). Additionally, the Company received $5 million from the PIPE and Backstop Investor as a result of the agreement entered into by CHW with the PIPE and Backstop Investor party on February 2, 2022 that closed immediately prior to the Merger.

Upon the consummation of the Merger, the following transactions occurred (the “Conversion”):

i.all outstanding shares of Legacy Wag!’s preferred stock, except for Legacy Wag! Series P Shares (as described in part (vi) below), were converted into shares of the Company’s common stock, par value $0.0001 per share, at the then-effective conversion rate as calculated pursuant to the CHW Business Combination Agreement;

ii.the cancellation of each issued and outstanding share of Legacy Wag!’s common stock and the conversion into the right to receive a number of shares of the Company’s common stock equal to the exchange ratio of 0.97 shares of the Company’s common stock for each share of Legacy Wag! common stock;

iii.the conversion of 91,130 warrants issued and outstanding by Legacy Wag! in 2017 to two lenders (the “Legacy Wag! Common Warrants”) into warrants exercisable for shares of the Company’s common stock with the same terms except for the number of shares exercisable and the exercise price, each of which were adjusted using an exchange ratio of 0.97 for Legacy Wag! Common Warrants (further described in Note 10 - Stockholders’ Deficit and Mezzanine Equity);

iv.the conversion of all outstanding vested and unvested options to purchase shares of Legacy Wag! common stock (the “Legacy Wag! Options”) into options exercisable for shares of the Company’s common stock with the same terms and conditions as were applicable to the Legacy Wag! Options immediately prior to the Conversion, except for the number of shares exercisable and the exercise price, each of which were adjusted using the exchange ratio of 0.97 for Legacy Wag! Options;

v.the conversion of the outstanding restricted stock unit award covering shares of Legacy Wag! common stock (each, a “Legacy Wag! RSU Award”) into awards covering a number of shares of Wag! common stock (rounded down to the nearest whole number) with the same terms and conditions as were applicable to the Legacy Wag! RSU Awards immediately prior to the Conversion, except for the number of shares subject to the award, which was adjusted using the exchange ratio of 0.97 for Legacy Wag! RSU Awards;

vi.the conversion of 1,100,000 shares of Legacy Wag! Series P Shares into the Company’s common stock on a one-for-one basis;

vii.the issuance and sale of 500,000 CHW ordinary shares for a purchase price of $10.00 per share and an aggregate purchase price of $5,000,000 immediately prior to or substantially concurrently with the Merger Date;

viii.immediately prior to the Effective Time, each CHW ordinary share (including any Sponsor Shares (as defined below) not forfeited) was converted into shares of the Company’s common stock;

ix.the cancellation of 13,327 founder shares held by the Sponsor in accordance with the terms of the CHW Founders Stock Letter (as defined below) and the CHW Business Combination Agreement;

x.the issuance of 300,000 Wag! Community Shares ("Community Shares") that the Company may distribute to members of the pet wellness and welfare community as identified by our officers and directors; and

xi.the cancellation of 20,000 founder shares held by Sponsor in connection with the CHW Business Combination and in accordance with the CHW Founders Stock Letter and the CHW Business Combination Agreement.

Forward Share Purchase Agreements

Simultaneously with the closing of the CHW Business Combination, the Company deposited $24.7 million into an escrow account pursuant to Forward Share Purchase Agreements ("FPAs") entered into by CHW on August 5, 2022. In accordance with the FPAs, on the Put Date, the date of the purchase by the Company of the Investor Shares ("Put Date"), the participating investors may elect to sell and transfer to the Company, and the Company will purchase, in the aggregate, up to 2,393,378 shares of common stock of the Company, consisting of shares of common stock then held by the Investors and not sold and repurchased by the Investor since the Merger Date. In conjunction with the sale of the Investor Shares to the Company, each Investor shall notify the Company and the Escrow Agent in writing five business days prior to the Put Date whether or not such Investor is exercising its right to sell the Investor Shares that such Investor holds to the Company pursuant to the FPAs (each, a “Shares Sale Notice”). If a Shares Sale Notice is timely delivered by an Investor to the Company and the Escrow Agent, the Company will purchase from such Investor the Investor Shares held by such Investor on the Put Date. If the Investor sells any Investor Shares in the open market after the Merger Date and prior to Put Date (such sale, the “Early Sale” and such shares, the “Early Sale Shares”), the Escrow Agent shall release from the Escrow Account to the Company an amount equal to $10.30 per Early Sale Share sold in such Early Sale.

The Company’s purchase of the Investor Shares will be made with funds from the escrow account attributed to the Investor Shares. In the event that an Investor sells any Investor Shares in an Early Sale, it shall provide notice to the Company and the Escrow Agent within three business days of such sale, and the Escrow Agent shall release from the escrow account for the Company’s use without restriction an amount equal to the pro rata portion of the escrow attributed to the Investor Shares which the Investor has sold. In the event that the Investor chooses not to sell to the Company any Investor Shares that the Investor owns as of the three-month anniversary of the Merger Date, the Escrow Agent shall release all remaining funds from the escrow account for the Company’s use without restriction. The Company accounts for the FPAs as a derivative liability, remeasured to fair value on a recurring basis, with changes in fair value recorded to earnings. For more information, see Note 6 - Fair Value Measurements.

On November 1, 2022, the Company entered into an amendment to the Forward Purchase Agreement (the “Amended Agreement”) for approximately 955 thousand shares. The Amended Agreement modified the date by which such holders may elect to have the Company repurchase their shares to November 23, 2022. No other terms were modified. Effective November 9, 2022, holders of 1.4 million shares subject to Forward Share

Purchase Agreements, elected to have the Company repurchase their remaining shares for an aggregate repurchase price of $14.8 million. The remaining investor and holder of 955 thousand shares did not elect to sell its shares to the Company as of the extension date per the Amended Agreement and, as such, the Escrow Agent released the corresponding funds from the escrow account for the Company’s use without restriction in total of $9.8 million.

Financing Agreement

On the Merger Date, the Company entered into a financing agreement with Blue Torch Finance, LLC. See Note 9 - Debt for additional information.

Reverse Recapitalization


	Reverse Recapitalization
Cash – CHW’s trust (net of redemptions)	$	28,330
Cash – PIPE and Backstop Investor	5,202


Payment of transaction costs and other related expenses	(12,488)
Payment of deferred transaction costs	(9,318)

Proceeds from merger with CHW, net of issuance costs as of the Merger Date	$	11,726
Reversal of APIC impact recorded upon issuance of Forward Share Purchase Agreements ("FPAs") in August 2022	(23,203)
Cash received from FPA at Put Date	9,837
APIC impact of FPA at Put Date, net of cash received	4,229
Proceeds from merger with CHW, net of issuance costs as of December 31, 2022	$	2,589


			Number of Shares


CHW public shares, prior to redemptions¹			12,500,000
Less redemption of CHW shares			(9,593,970)
CHW public shares, net of redemptions			2,906,030
Sponsor Shares			3,117,500
PIPE and Backstop Shares			500,000


CHW Business Combination and Financing Shares			6,523,530
Other share activity (Analyst Shares², Warrant Exercises)			122,434
CHW Business Combination, Financing Shares and Other Related Shares			6,645,964
Legacy Wag! Shares³			31,100,000
Total shares of common stock immediately after CHW Business Combination			37,745,964

¹ Includes 2,393,378 shares of common stock of the Company subject to the Forward Share Purchase Agreements.

² 50,000 shares were issued to Craig-Hallum Capital Group LLC at a price of $4.83 per share.

Earnout Compensation

In connection with the CHW Business Combination, Legacy Wag! stockholders and certain members of management and employees of Legacy Wag! that held either a share of common stock, a Legacy Wag! option or a Legacy Wag! RSU Award (collectively "Eligible Company Equityholders") at the date of the Merger, have the contingent right to Earnout Shares. The aggregate number of Earnout Shares and Management Earnout Shares is 10,000,000, and 5,000,000, shares of Wag! common stock, respectively. The Earnout Shares will be issued following the CHW Business Combination, only if certain Wag! share price conditions are met over a three-year period from the effective Merger Date. The Earnout Shares are subject to the occurrence of certain triggering events based on a three year period from the Merger Date as defined in the CHW Business Combination Agreement as:

1.5,000,000 shares are earned if the stock price of the Company is or exceeds $12.50 for 20 out of any 30 consecutive trading days (“Triggering Event I”)

2.5,000,000 shares earned if the stock price of the Company is or exceeds $15.00 for 20 out of any 30 consecutive trading days (“Triggering Event II”); and

3.5,000,000 shares earned if the stock price of the Company is or exceeds $18.00 for 20 out of any 30 consecutive trading days (“Triggering Event III”) (collectively, the “Triggering Events”).

Additionally, if there is a change of control transaction, the agreed upon selling price of the Company on a per share basis, would be the fair value of the shares inclusive of the resulting triggered Earnout Shares upon consummation of the proposed transaction. The per share price in a change in control would be used to determine whether the Triggering Events have been met, and depending on the per share price, a certain number of shares will be issued.

The Earnout Shares and Management Earnout Shares are classified as equity transactions at initial issuance and at settlement when and if the triggering conditions are met. The Earnout shares are equity classified since they do not meet the liability classification criteria outlined in ASC 480, Distinguishing Liabilities from Equity and are both (i) indexed to the Company’s own shares and (ii) meet the criteria for equity classification. Until the shares are issued upon a Triggering Event, the Earnout shares are not included in shares outstanding. As of the date of the CHW Business Combination, the Earnout share awards had a total fair value of $23.9 million determined using a Monte Carlo fair value methodology in each of the $12.50, $15.00, and $18.00 Earnout tranches multiplied by the number of Earnout Shares allocated to each individual pursuant to the calculation defined in the CHW Business Combination Agreement. The following table provides a range of assumptions used to determine fair value:


	Stock Price (in whole dollars)		Dividend Yield		Volatility		Risk-Free Interest Rate		Expected Term (in years)
Earnout Shares	$	8.28	—	%	44.00	%	3.20	%	3

As a result of the issuance of Community Shares, stock compensation expense incurred in connection with the Earnout Shares, and fair value measurement of the FPAs the Company incurred $39.5 million in transaction related charges in the year ended December 31, 2022 within General and administrative, Sales and marketing and Platform operations and support, and Change in fair value of derivative liability on the Condensed Consolidated Statements of Operations.

Acquisition of Compare Pet Insurance

On August 3, 2021, the Company acquired Compare Pet Insurance, Inc. ("CPI") for $3.5 million in cash consideration, and $0.2 million in common stock consideration, consisting of a total of 639,000 units of common stock. Of the cash consideration purchase price, $1.5 million was paid on the acquisition date and the remaining $2.0 million paid pro-rata quarterly over the next three years starting in the fourth quarter of 2022. The deferred purchase consideration, which was recorded at its fair value on the acquisition date, is presented in accrued expenses and other current liabilities, as well as other non-current liabilities on the consolidated balance sheet. As of March 31, 2023 and December 31, 2022, the amounts included in accrued expenses and other current

liabilities, as well as other non-current liabilities on the condensed consolidated balance sheet, were $1.4 million and $1.9 million, respectively.

Acquisition of Dog Food Advisor

On January 5, 2023, the Company acquired Dog Food Advisor for $9.0 million in cash consideration. Of the cash consideration purchase price, $8.1 million was paid on the acquisition date and the remaining $0.9 million was deposited into an escrow account as an indemnification hold back for a period of 12 months. No working capital was acquired from Dog Food Advisor.

The purchase consideration allocation was as follows (in thousands):


	As of January 5, 2023
Intangible assets	$	5,950
Goodwill	3,050

Total purchase consideration	$	9,000

The table below summarizes the fair value and the estimated useful lives of the acquired intangible assets (in thousands):


	Fair Value		Estimated Useful Life (years)
Developed technology and website content	$	1,950	5
Strategic customer relationships and subscriber lists	3,600		8
Trademarks	400		10
Total intangible assets	$	5,950

As of March 31, 2023, the purchase price allocated to the fair value of assets acquired, including intangibles, recorded in conjunction with the DFA acquisition remains preliminary as the Company is in the process of obtaining necessary information from its valuation specialist and assessing the acquired net assets in order to finalize the accounting for the business combination. The preliminary purchase price allocation has been developed based on estimates with assumptions made by management. Although the Company does not expect the final allocation to vary significantly, there may be adjustments made to the preliminary purchase price allocation that could result in changes to the preliminary fair values allocated, assigned useful lives and associated amortization recorded.

Stockholders' Equity (Deficit) and Mezzanine Equity - Common Stock Warrants (Details)		3 Months Ended
	Aug. 09, 2022 Lender shares	Mar. 31, 2023 lender shares	Dec. 31, 2022	Dec. 31, 2018 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants outstanding (in shares)	91,130
Number of lenders	2	2
Exchange ratio	0.97	0.97	0.97
Common Stock Warrants
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants outstanding (in shares)				91,310
Weighted average exercise price for the warrants (in dollars per share) \| $ / shares				$ 1.54
Warrants and rights outstanding, term				10 years
Exchange ratio				0.97
Number of warrants to purchase common stock (in shares)		72,434

Debt - Blue Torch Financing and Warrant Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Aug. 09, 2022	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001	$ 0.0001
Warrants outstanding (in shares)	91,130
Liquidity	$ 5,000
Lender Warrants
Debt Instrument [Line Items]
Weighted average exercise price for the warrants (in dollars per share)	$ 11.50
Warrants outstanding (in shares)	1,896,177
The Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Loan proceeds	$ 32,170
Interest expense, debt		$ 1,200
Debt instrument, interest rate during period		14.84%
The Credit Facility \| Secured Debt \| Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Fixed annual interest rate	2.00%
Prepayment amounts	3.00%
Term of loan (in years)	3 years
The Credit Facility \| Secured Debt \| Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Fixed annual interest rate	3.00%
Prepayment amounts	2.00%
The Credit Facility \| Secured Debt \| Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Fixed annual interest rate	5.00%
Prepayment amounts	0.00%
The Credit Facility \| Secured Debt \| Variable Rate Component One
Debt Instrument [Line Items]
Basis rates	2.00%
The Credit Facility \| Secured Debt \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis rates	10.00%
SOFR floor rate	1.00%
The Credit Facility \| Secured Debt \| Secured Overnight Financing Rate (SOFR) \| Variable Rate Component Three
Debt Instrument [Line Items]
Basis rates	1.00%
The Credit Facility \| Secured Debt \| Reference Rate
Debt Instrument [Line Items]
Basis rates	9.00%
SOFR floor rate	2.00%
The Credit Facility \| Secured Debt \| Federal Funds Effective Rate \| Variable Rate Component Two
Debt Instrument [Line Items]
Basis rates	0.50%

Earnings (loss) per share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings (loss) per share

The following table shows the computation of basic and diluted earnings per share for March 31, 2023 and March 31, 2022 (in thousands, except share data):


	Three months ended March 31,
		2023		2022
Numerator:
Net loss attributable to common stockholders		$	(3,787)	$	(2,350)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders - basic and diluted		37,065,450		6,121,253

Net loss per share attributable to common stockholders, basic and diluted		$	(0.10)	$	(0.38)


	Three months ended March 31,
	2023	2022
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	—	4,750,000

Earnout Shares	15,000,000	—
Options and RSUs issued and outstanding	10,860,951	7,450,894
Warrants issued and outstanding	18,291,741	88,756
Total	44,152,692	36,148,475

All unvested Earnout Shares are excluded from basic and diluted net loss per share as such shares are contingently issuable until the share price of the Company’s common stock exceeds specified thresholds that have not been achieved as of March 31, 2023.

Business Combinations - Schedule of Purchase Consideration (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Jan. 05, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 4,501		$ 1,451
DFA
Business Acquisition [Line Items]
Intangible assets		$ 5,950
Goodwill		3,050
Total purchase consideration		$ 9,000

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Future Minimum Lease Payments

As of March 31, 2023, the future minimum lease payments required under operating leases were as follows (in thousands):


2023 (remaining nine months)	$	187
2024	248
2025	255
2026	43

Total minimum lease payments	$	733

Leases - Schedule of Future Minimum Lease Payments (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Leases [Abstract]
2023 (remaining nine months)	$ 187
2024	248
2025	255
2026	43
Total minimum lease payments	$ 733