Content analysis
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H.S. sophomore Avg
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New words:
borrowing, chain, conference, confidence, conflict, currency, denied, East, eroding, high, higher, instability, lease, lessor, Middle, military, monetary, Organization, owner, perspective, political, refinancing, remeasured, return, royalty, Russia, scheduling, Ukraine
Removed:
administration, carryout, deliver, impacting, magnitude, misclassification, presidential, reclassified, targeted, unionization
Financial report summary
?Risks
- As required by ASC 205-40, Going Concern, our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern and management’s plans to alleviate this condition may be unsuccessful.
- The Company has had recurring net losses, a trend of negative cash flow from operations and a lack of liquidity. We may not experience improvements in our results of operations or liquidity position to the extent we anticipate, or at all.
- We are implementing a shift in our business strategy, and our efforts may not result in a successful growth strategy. The expansion of operations of our Third Party Payment Processing Referral Services Segment, while reducing operations in the Delivery Services Segment, could have an adverse impact on our results of operations and financial condition.
- If we fail to retain existing diners or add new diners, or if our diners continue to decrease in number and number of orders or order sizes decrease on the Platform, our revenue, financial results, and business may be adversely affected.
- If our delivery service levels decline or if restaurants do not see increases in business, restaurants could leave the Platform, reducing revenue and significantly harming our business.
- We generate a substantial amount of our revenue from restaurants viewed positively by diners. The loss of restaurants to other platforms could seriously harm our business.
- The Company has recently exited certain markets and had employee reductions, which could have an adverse impact on our business and results of operations.
- Our revenues have decreased year-over-year, and we may never achieve profitability.
- If we become a payment processor at some point in the future, we would be required to comply with applicable laws and standards. Inability to comply with applicable laws or standards could result in harm to our business.
- Our operations are affected by macroeconomic factors that are largely beyond our control.
- If we are not able to maintain and enhance our brands, or if events occur that damage our reputation and brands, our ability to expand our base of diners and restaurants may be impaired, and our business and financial results may be harmed. Unfavorable media coverage could seriously harm our business.
- Seasonality and the impact of inclement weather could adversely affect our operations and profitability.
- Our inability to manage operations and meet demand could harm our operations and brands.
- Our efforts to improve the experience of restaurants and diners may not be successful and the related investment may impact our profitability.
- Our operations depend on mobile operating systems, hardware, networks and standards that we do not control. Changes in our products or to those operating systems, hardware, networks or standards may seriously harm our Active Diner retention and engagement.
- Our business is dependent on our ability to maintain and scale our technical infrastructure, and any significant disruption in our service could damage our reputation, result in a potential loss of diners and engagement, or adversely affect our financial results.
- Personal data, internet security breaches or loss of data provided by diners or restaurants on our Platform could violate applicable law and contracts with key service providers and could result in liability to us, damage to our reputation and brands and harm to our business.
- We have limited operational history and are subject to developmental risks associated with the development of any new business.
- We are subject to a number of risks related to the credit card and debit card payments we accept.
- We rely on third-party vendors to provide products and services, and we could be adversely impacted if they fail to fulfill their obligations.
- We may not be able to successfully compete in technology innovation and distribution. If we are unable to continue to innovate and provide technology desirable to diners, restaurants and merchants, our business operations could materially suffer.
- The terms of the agreements governing our debt contain operating and financial covenants that may restrict our business and financing activities. Our failure to comply with these covenants could result in the acceleration of our outstanding indebtedness.
- Additional impairments of the carrying amounts of goodwill or other indefinite-lived assets could negatively affect our financial condition and results of operations.
- Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.
- We depend on search engines, display advertising, social media, email, content-based online advertising and other online sources to attract diners to the Platform. If we are unable to attract diners and convert them into Active Diners making orders in a cost-effective manner, our business and financial results may be harmed.
- The loss of senior management or key operating personnel could adversely affect our operations. We depend on skilled personnel to operate our business, and our failure to hire, retain or attract key personnel could adversely affect our business.
- Major hurricanes, tropical cyclones, major snow and/or ice storms in areas not accustomed to them and other instances of severe weather and other natural phenomena could cause significant losses.
- Acquisitions could disrupt our business, dilute our stockholders and harm our business and results of operations.
- If we cannot protect our intellectual property, the value of our brands and other intangible assets may be diminished, and our business may be adversely affected.
- While we recently settled an intellectual property rights claim, we face the risk of future lawsuits and intellectual property claims that are expensive and time consuming, and, if resolved adversely, could have a significant impact on our business, financial condition and results of operations.
- We are subject to claims, lawsuits, investigations, and various proceedings, and face potential liability and expenses for legal claims from the normal course of business activities.
- Our use of open source software could expose us to “copyleft” claims or otherwise subject us to business or legal risk.
- We may require additional capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances. Insufficient capital can harm our operating, business and financial results.
- If our employees were to unionize, our operating costs could increase and our ability to compete could be impaired.
- Failure to maintain an effective system of disclosure controls and internal control over financial reporting could have an adverse effect on our business and results of operations.
- Failure to remediate a material weakness in, or inherent limitations associated with, internal accounting controls could result in material misstatements in our financial statements.
- Our industry is highly competitive and fragmented, and our business and results of operations may suffer if we are unable to adequately address downward pricing and other competitive pressures.
- Our business depends on discretionary spending patterns in the areas in which the restaurants on our Platform operate and in the economy at large. Economic downturns or other events (like coronavirus variants or similar widespread health/pandemic outbreaks) impacting the United States and global economy could materially adversely affect our results of operations.
- Our industry is affected by general economic and business risks that are largely beyond our control.
- We face risks related to health epidemics and other outbreaks, which could significantly disrupt our operations.
- In response to the COVID-19 pandemic, several jurisdictions have implemented or are considering implementing fee caps, fee disclosure requirements and similar measures that could negatively impact the Company’s financial results.
- We may face misclassification claims against the Company.
- We rely on restaurants in our network for many aspects of our business, and their failure to maintain their service levels could harm our business.
- The nature of our business and content on the Platform exposes us to potential liability and expenses for legal claims that could materially affect our results of operations and business.
- Our storage, processing and use of data, some of which contains personal information, subjects us to complex and evolving federal and state laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm our business.
- In connection with the Cape Payment Acquisition, we receive certain revenue from financial institutions that provide services to customers operating in the cannabis industry, which may expose us to changes related to the enforcement of federal law on cannabis.
- Our operations as a result of the Cape Payment Acquisition may expose us to risk under state money transmitter laws and regulations.
- If we fail to comply with the applicable requirements of the Visa and Mastercard payment networks, those payment networks could seek to fine us, suspend us or terminate our registrations through our bank sponsors.
- Consolidation in the banking and financial services industry could adversely affect our business, results of operations and financial condition.
- We are subject to economic and political risk, the business cycles of third parties and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations.
- A decline in the use of cards as payment mechanisms for consumers and businesses or adverse developments in the electronic payment industry in general could adversely affect our business, financial condition and operating results.
- We were delisted from the Nasdaq Capital Market in 2023, and the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease significantly.
- The effective increase in the number of shares of our common stock available for issuance as a result of our Reverse Stock Split could result in further dilution to our existing stockholders.
- The market price of our common stock may be volatile and could decline.
- The market for our common stock may become limited, sporadic and volatile. Any failure to develop or maintain an active trading market could negatively affect the value of our shares and make it difficult or impossible for you to sell your shares.
- A low market price may severely limit the potential market for our common stock.
- We do not currently intend to pay cash dividends.
- Future sales of a substantial number of shares by existing stockholders could cause our share price to decline.
- Future offerings of debt or equity securities that rank senior to our common stock may adversely affect the market price of our common stock.
- Anti-takeover provisions in our third amended and restated certificate of incorporation as currently in effect (the “Charter”) discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.
- The Charter designates the Court of Chancery of the State of Delaware and federal court within the State of Delaware as the exclusive forum for certain types of actions and proceedings that the Company’s stockholders may initiate, which could limit a stockholder’s ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees.
- The Notes and other Derivative Securities are exercisable/convertible into shares of our common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
- We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.
Management Discussion
- (1)Percentages may not foot due to rounding.
- See Part I, Item 1, Note 4 – Revenue for details of revenue by operating segment. Revenue decreased for the three and nine months ended September 30, 2023, compared to the three and nine months ended September 30, 2022, primarily as a result of decreased order volumes in our Online Ordering Services Segment. Partially offsetting the impact of decreased order volumes was an increase in the Average Order Size in the three and nine months ended September 30, 2023, compared to the three and nine months ended September 30, 2022. The Average Order Size was $61.41 for the three months ended September 30, 2023, compared to $54.33 for the three months ended September 30, 2022, an improvement of 13%. The Average Order Size was $58.70 for the nine months ended September 30, 2023, compared to $51.54 for the nine months ended September 30, 2022, an improvement of 14%.
- Revenue for our Third-Party Payment Processing Referral Services Segment increased slightly during the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022.