Wag! Group Co.

Item 1A. Risk Factors

We are supplementing the risk factors previously disclosed in Part I, Item 1A, Risk Factors, of our 2024 10-K to include the following risk factors, which should be read in conjunction with the other risk factors presented in our 2024 10-K.

A definitive financing agreement with Blue Torch Finance LLC, which has been assumed by Retriever LLC,RISKS RELATED TO THE RESTRUCTURING

We filed for reorganization under Chapter 11 on July 21, 2025 and we are subject to the risks and uncertainties associated with the Chapter 11 Cases. If the Plan is secured by substantially aapproved, all existing equity interests in the Company will of our assetsbe cancelled, and the assets ofinvestors in our subsidiaries, and in ecurities will lose the occurrence of an evententire amounts of default, Retriever LLC may be able to foreclose on all or some of these assets which would matheir investments.

We are currently operating as debtors-in-possession under Chapterially harm 11 and our business, financial condicontinuation and results of operations.

We entered into a definitive financing agreement with Blue Torch Finance, LLC (Blue Torch) for a senior secured los a going concern is contingent upon, among other things, the Bankruptcy Courts approval of our Plan in the amount of $32.2 million (and our ability to consummate the FinanciPlan. So long Agreement) in connecas our Chapter 11 Cases continue, our operation with the closs, including of the merger by and among Wag Labs, Inc. (Legacy Wag!), CHW Acquisition Corp., and CHW Merger Sub Inc., on August 9, 2022 (Business Combination). See Note 3, Business Combinationur ability to execute our business plan, are subject to the risks and uncertainties associated with CHW, to the consolidated financial statements included in our Annual Report on Form 10-K forbankruptcy. Subject to approval by the Bankruptcy Court, Retriever will be issued 100% of the year ended December 31, 2024, filed with the SEC on March 24, 2025 for a further description of shares of common stock of the Company and $5.0 million principal amount of term notes, and all othe Business Combinr equity interests (including, without limitation. In April 2025, Blue Torch assign, warrants, shares of common stock, restricted its righstock units and obligaptions under the Financing Agreement to Retriever LLC.

The Finto purchase common stock) of the Company will be cancing Agreement is eled and investors in our secured by substantially all of our assets and thities will lose the entire assemounts of our subsidiaritheir investments.

Risks and uncertainties (collectively, the Credit Parties),associated with our Chapter 11 Cases includinge the Credit Parties intellectual property andfollowing:

the Plan contemplates the cancellation of all existing equity interests in the Credit Parties subsidiaries, subject to cuompany, including without limitation, common stomary exceptions. Additionally,ck and warrants to pursuant to chase common stock of the Financing Agreement, if the Credit PartiCompany; recent trading prices default on their payment or performance obligations infor our securities do not respflect of the loan or fail to maintain certain levels pending cancellation of minimum revenue and minimum liquidity, Retriever LLC will these securities pursuant to the Chapter 11 Cases;

we may not be able to foreclose on allconsummate the Plan or some of the Credit Pmay be delayed in doing so;

third parties assets that are collateral formay take actions or make decisions the Financing Agreement, which would materially harmat are inconsistent with and detrimental to the Credit Parties business, financial condition and results of operations and plans we believe to be in the best interests of the Company;

we may be unable to obtain cour securities could be rendered worthless. In addition, t approval with respect to certain matters in the Chapter 11 Cases;

the Financing Agreement includes cross-default or cross-acceleraBankruptcy Court may not agree with our objection provisis to positions that could result in the loanaken by other parties;

we may being accelerated and/or termin unable to generated if an eve sufficient of defaultcash flows or acceleration of maturity occurs obtain sufficient financing to funder our Paycheck Protec both operation Program loan (s and the PPP Loan). Ocosts of our obligations under the PPP LoaChapter 11 Cases;

we may not be able to obtain and the Financing Agreement, in the amount of $0.2 million and $19.9 million, respectively, maturemaintain normal credit terms with vendors, strategic partners and are due in full on Auguservice providers;

we may not be able to continue to invest 5, 2025 in our products and August 9, 2025, respectively.

Because substantially all of the Credit Parties asseservices, which could hurt our competitiveness; and

we may not be able to enter into or maintain contracts have been pledgedthat are critical to secure the Financing Agreement, the Credit Partiour operations at competitive rates and terms, if at all.

These risks and uncertainties ability to incur addicould affect our business and operational secured s in various ways. For unsecured indebtednessexample, negative events or to sell or dispose of assets to raise capital requires the consent of Retriever LLCpublicity associated with our Chapter 11 Cases could adversely affect our ability to compete and our relationship with our customers, as well as with our business partners, vendors and employees, which in turn could have an aadverse ely affect on the Credit Parties ur operations and financial flexibility. For mocondition, particularly if the Chapter 11 Cases are information about protracted. Because of these risks and other financing arrangementuncertainties associated with our Chapter 11 Cases, see Part I, Item 2, Managemthe ultimate impact that the events Discussion and Analysis of Fthat occur during these proceedings will have on our business, financial Ccondition and Rresults of OoperationsLiquidity and Capital Resources, of this Quarterly Report on Form 10-K.

We will need to renegotiate cannot be predicted or quantified. If any one or more of the existing terms of the Financing Agreement, consummate strategic alternatives such as potential investments, strategic partnerships, sale, merger, or other strategic transactionsse risks materializes, it could affect our ability to continue as a going concern.

As a result of the Chapter 11 Cases, our historical financial involving our Company or our assets,formation may be volatile and/or obtain altern not be indicative financing prior to the maturity of the PPP Loan and the Fof our future financing Agreal performance.

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Wement in August 2025, and we will not be able expect our financial results to continue as a going concern ifto be volatile until we are unable to do so. Our ability toemerge from Chapter 11, as asset impairments, asset dispositions, renegotiate thestructuring activities and existingpenses, contract terms of the Financing Agreeinations and rejections, and claims assessment, consummate a strs may significantly impact our consolidategic transaction, and/or obtain alternatid financial statements. As a result, our historical financial performance may not be indicative fof our future financing is limited by al performance.

Subject to approval by the Bankruptcy Court, outstanding debt obligations, thr capital structure will be significant decline in our market capitalization, andly altered under the Plan. To th extent fresh-start accounting rules apply to us, upon the pending delistingeffective date of the plan, our securiassets and liabilities from the Nasdaq Stock Market.

As of Marwould be adjusted to fair value, which 31, 2025, we had cash and cash equivalecould have a significant impact on our financial statements of approximately $6.1 million and. Accordingly, if fresh-start accounts receivable of $5.5 million,ing rules apply, our financial condition and the amount outstandresults of operations following under our debt obligatour emergence from Chapter 11 protections was $19.7 million, of which $19.5 milli would not be comparable to the financial condition and $0.2 millionresults of operations relaflected to the Fin our historical financing Agreeal statement and PPP Loan, respes. In connectively. As a result of on with the April 2025 amendment to tChapter 11 Cases and the Financing Agreedevelopment,  of the outstanding balance ofPlan, it is also possible the term loan increasat additional restructuring and related from approximately $19.5 million to approximately $19.9 million, whicharges may be identified and recorded in future periods. Such is due on August 9, 2025. Additionally, for the three months endcharges could be material to our consolidated March 31, 2025, net loss was $4.9 millfinancial position , liquidity and net cash provided by results of operating activities was $1.4 million. Due to our ons.

Our cash flows may not projected cash needs (which includes amountsvide sufficient liquidity due undring or after the Financing Agreement) combined with our currentChapter 11 Cases.

We face uncertainty regarding the adequacy of our liquidity level and history of net losscapital resources and cash used to fund operating activiti, during our Chapter 11 Cases, there is substantihave extremely limited access to additional doubt regardfinancing our ability. In addition to continue as a going concern for a periothe cash requirements necessary to fund of at least one year from the date of issuance of the financial statemenngoing operations, we have incurred significant professional fees and other costs included in this Quarterly Report  connection with preparation Form 10-Q.

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Tfor the Companys ability to hapter 11 Cases and expect that we will continue as a going concern is dependent on ito incur significant professional fees and costs ability to generate significanthroughout our Chapter 11 Cases. There are no assurances that cash flows, obtain sufficient proceedson hand, cash flow from any future offerings of securities, renegotiate theoperations and cash from our existing terms of the Fdebtor-in-possession financing Agreement, will be sufficient to consummate strategic alterntinue to fund our operations and allow us to satives such as potential investments, strategic partnerships, sale, sfy our obligations related to the Chapter 11 Cases until we are able to emerger, or oth from Chapter strategic transact11 protections involv.

Our liquidity, including our Company or our assets, and/oability to meet our obtain alternngoing operative financing prior to onal obligations, is dependent upon, among othe maturity of the Financing Agreement in August 2025. Our things: (i) our ability to renegotiatecomply with the existing termterms and conditions of the Financforthcoming Agreement, consummate a strategic transaction, and/or obtain alternativeorder approving our debtor-in-possession financing is limiteentered by our outstanding debt obligations, the significant decline inthe Bankruptcy Court in connection with the Chapter 11 Cases, (ii) our market capitalization, and the pending delisting of oability to maintain adequate cash on hand, (iii) our securities from the Nasdaq Stock Market (Nasdaq). As previously announced, ability to generate cash flow from operations, (iv) our Board of Directors is ability to conducting a review of strategicsummate the Plan or other alternatives, including potential inv plans of reorganization or restments, sructuring trategic partnerships, sale, merger, or onsactions, and (v) ther strategic transac cost, durations involving and our Company or our assets. The negatitcome of the Chapter 11 Cases.

We may not have covenants sufficient cash to funder the Financing Agreement impose restrictions on o our operations and our emergence costs.

Our ability to incur indebtedness, grant liens,cash flows from operations make investmy not provide sufficients, make ac liquisitions, declaredity during the Chapter 11 Cases and pay restricted payments, prepay junior orexit financing or capital may not be subordinated debt, sell assets, and enter into transacfficient to support our operations with affiliates, in each case, subjafter emergence from Chapter 11 protect to certain customaryion. Our operating cash flows and exceptions. Thereit financing or canpital may not be no assurance that any transactisufficient to pay our debt as it comes due, interest on or other strategic alternur debt, emergence costs and other operative will be available to us, approveng expenses.

Our ability to maintain adequate liquidity through and byeyond the Board of DirectorsChapter 11 Cases depends on the successful operation of our business and/or Retriever LLC (if requir appropriate management of operating expenses and capital spending. Our anticipated under the Financing Agreement), or otherwiliquidity needs will remain highly sensitive to changes in these consummated before the maturity of the Ffactors after emergence from Chapter 11 protection.

A definitive financing Aagreement in August 2025, or at all, in with Blue Torch Finance LLC, which case has been assumed by Retriever LLC may, is seize or take possession of cured by substantially all of our assets and the assets of our subsidiaries to satisfy our obligations under the Financing Agreement.

In addition, if we ar, and an event of default has occurred. Retriever LLC may ultimately be able to continuforeclose on all or some operations, to growf these assets which would materially harm our business and to effectively compete, we must ha, financial condition and results of operations.

We entered into a definitive sufficiefinancing agreement capital to continwith Blue Torch Finance, LLC (Blue to make significantTorch) for a senior secured loan investments in our platform. We w the amount of $32.2 mill require additional funds to respond to business challenges, includion (the Financing Agreement) in connection with the closing of the need to develop new platform features and services or enhance our existing platform, improve our operating infrastructure, or acquire complementary bmerger by and among Wag Labs, Inc. (Legacy Wag!), CHW Acquisition Corp., and CHW Merger Sub Inc., on August 9, 2022 (Business Combination). See Note 3, Businesses and technologies. We evalu Combination with CHW, to the consolidated financial state financing oppments included in our Annual Reportunities from time to time and our ability to obtain financing will depend, among o on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 24, 2025 for a further things, description our development efforts, bf the Business plans, and operating performance and the condiCombination. In April 2025, Blue Torch assigned its rights and obligation ofs under the capital markets at the time we sFinancing Agreement to Retriever LLC.

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Theek f Financing. We cannot provide any assurance that we will be able to raise additional capital. If we are able to raise additional capital, we may not be able to obtain such financing on terms favorable Agreement is secured by substantially all of our assets and the assets of our subsidiaries (collectively, the Credit Parties), including the Credit Parties intellectual property and equity interests in the Credit Parties subsidiaries, subject to us. If we raise acustomary exceptions. Additional funds through future issuly, pursuant to the Finances of equity, equity-linked securities, or convertibleing Agreement, if the Credit Parties debt securities, our existing stockholders could suffer significant dilution and any new securities we issue could have rights, preferences,fault on their payment or performance obligations in respect of the loan or fail to maintain certain levels of minimum revenue and privileges superior minimum liquidity, Retriever LLC will be able to thoforeclose of current equity investors. If we raise additionn all or some of the Credit Parties assets that are collateral funds throughor the incurrence of indebtedness, then weFinancing Agreement, which would may be subject to increasedterially harm the Credit Parties business, fixed payment obliganancial conditions and could be subject to restrictive covenants, such as limitations on our ability to incurresults of operations and our securities could be rendered worthless. In additional debt and other ope, the Financing Agreement includes cross-default or cross-accelerating restriction provisions that could adversely impact our ability to conduct our business. Any additional future indebtedness weresult in the loan being accelerated and/or terminated if an event of default or acceleration of may incur may result in terms that could be unfavorable to our equity investors. Iturity occurs under our Paycheck Protection Program loan (the PPP Loan). Our obligations under the PPP Loan addition, our independnd the Financing Agreement registered public acc, in the amounting firm has included of $0.1 million and $19.5 million, respectively, mature and are due in its report an explanatory paragraph expfull on August 5, 2025 and August 9, 2025, ressing spectively.

Because substantial doubt about our ability to continuely all of the Credit Parties as a going concern. The inclusion of this going concern explanatory paragraph may make it more difficult fsets have been pledged to secure the Financing Agreement, the Credit Parties ability to incur additional secured or us to snsecure financing on terms acceptable to us, if at all, and likely mayd indebtedness or to sell or dispose of assets to raise capital requires the consent of Retriever LLC, which could have an adversely a effect on the terms of any financing that we may obtain. If we are unable to obtaiCredit Parties financial flexibility. For more information about these and other financing arrangements, see Part I, Item 2, Managements Discussion and Analysis of Financial Condition adequate cand Results of OperationsLiquidity and Capital rResources to fund our operations and/or refinance our existing indebtedness, we may be requir, of this Quarterly Report on Form 10-K.

Our securities have been delisted to delay, scale back or eliminate some or all of our plan offrom trading on Nasdaq and have commenced trading on the Pink Open Market operationsed by the OTC Markets Group, Inc., which would materiallmay adversely affect our business, financial condition, and operating results.

We have failed the flexibility of investors to comply with the continued listing requirements of Nasdaq, our sresell their securities may be delisted andin the price of our common stocksecondary market and our ability to access the capital markets could be negatively impacted.

On March 25July 23, 2025, we received a written notice from the staff (the Staff) of the Listing Qualifications Department of the Nasdaq notifying us that 180 calendar days had elapsed from when we were notified that the closin accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq determined that our common stock and warrants would be delisted from the Nasdaq Capital Market. According bid price forly, trading of our common stock listed onwas be suspended from the Nasdaq GlobaCapital Market (tat the Global Market) was below $1.00 and no longer metopening of business on July 30, 2025. Nasdaq indicated that and a Form 25-NSE would be filed with the minimum bid price requiSecurities and Exchange Commission, which would rement for continued ove our securities from listing and registration on the Global Nasdaq Stock Market under . Nasdaq Listing Rule 5450(a)(1), which requires a minimum bids determination was based on: (i) our filing for price of $1.00 potection under share (Chapter 11 of the Minimum Bid Price Requirement). TU.S. Bankruptcy Code on July 21, 2025 and the Staff also notifiassociated us that 180 calendar days had elappublic interest concerns raised from when we were notifiedby it; (ii) concerns regarding that our Market Value e residual equity interest of Lthe existing listed Ssecurities (MVLS) was below the $50,000,000 required for holders; and (iii) concerns about our ability to maintain compliance with Nasdaqs continued listing on the Global Market (requirements, including in particular our noncompliance with: (a) the MVLS Reminimum $1 bid price requirement) under Nasdaq Listing Rule 5450(b)(2)(A). Ta)(1); (b) the notification letter disclosed that we had not regained compliance with the Minimum Bid Price Rminimum $50 million Market Value of Listed Securities requirement and the MVLSunder Listing Rule 5450(b)(2)(A); and our securities are now subject to delisting.

The notification letter stated that unless we (c) the minimum Market Value of Publicly Held Shares of $15,000,000 requested an appeal ofirement under Listing Rule 5450(b)(2)(C).

Following the determinationsuspension of trading on Nasdaq, our securities will be scheduled for delisticommenced trading aton the opening of business on April 3, 2025, and a Form 25-NSE will be filed with Pink Open Market operated by the OTC Markets Group, Inc. (commonly referred to as the Securities and Exchange Commission (the SEC), which will remove our securities from listing apink sheets).

The Pink Open Market is significantly more limited than Nasdaq, and registrquotation on Nasdaq. On April 1, 2025, we appealed the Staffs determination to a Hearings Panel (the Panel). The filing of the appeal stayedthe Pink Open Market will likely result in a less liquid market for existing and potential holders of our common stock and warrants to trade the suspension of our securitiecommon stock and warrants and the filing of could furthe Form 25-NSE pendingr depress the Panels decision. The Panel hearing fortrading price of the Company took place on May 8, 2025.

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Thcommon stock and warrants. Were can bprovide no assurance that the Company wcommon stock and warrants will be successful in its appealcontinue to trade on this market or be granted further timwhether broker-dealers will continue to regain or maintain compliance with the applicable continued listprovide public quotes of our common stock and warrants on this market. Recent trading prices for our securities may not reflect the pending standardscancellation of these set forth incurities pursuant to the Nasdaq Listing RulChapter 11 Cases.