convenience. For diners, Waitr optimizes the journey from restaurant and food discovery through delivery, while providing superiora diverse restaurant selection and a great customer experience.
Company drivers are brand ambassadors for Waitr and an extension of its Restaurant Partners’ brands and the primary point of contact with Waitr’s diners. As a result, Waitr invests significant resources in its drivers, including background checks, in-person interviews, training, uniforms, peer reviews and scheduled working hours. This allows Waitr to better manage a consistent delivery experience for both restaurants and diners, provides drivers with steady income and predictable hours and ensures efficient utilization of the driver workforce. At March 1, 2019, Waitr (including Bite Squad) had approximately 21,000 delivery drivers.
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The Company generatestargeted industries.
Similar to Waitr, Bite Squad also engages a third-party payment processor to collect the total amount of the order from the diner, who must use a credit or debit card to pay for their meal. Bite Squad, however, collects the entire transaction amount from the payment processor, which includes food, beverages, catering supplies, delivery and other fees, sales taxes and gratuities, retains the portion of the receipts representing its fees (determined as a percentage commission on the food price of the order processed via the Bite Squad Platform plus the diner fee charged to the diner), gratuities and sales taxes and distributes the remainder to the restaurant. Bite Squad recognizes as revenue only itsnet fees received from restaurants and diners. Gratuities, sales taxes, and food costs are not included in revenue because they are passed through to employees, tax authorities, and restaurants, respectively.
Waitr generally presents relevant restaurants on its application in order of proximity to the diner and does not allow restaurants to pay to promote themselves within the Waitr Platform. Bite Squad generally presents relevant restaurants on its application in order of proximity to the diner, but does allow restaurants to promote themselves within the Bite Squad Platform by contributing towardsnet diner fees to make the overall transaction less expensive for the diner,generated on these orders. Additionally, in connection with the savings being passed-throughCape Payment Acquisition, the Company generates revenue by facilitating merchant access to third-party payment processing solution providers and receiving a residual payment from the diners as a lower fee.
payment processing solution provider.
The Waitr Solution
Waitr hasForm 10-K.
other transactional environments.
•Exposure. Our Platforms provide restaurants with access to incremental users and the opportunity to grow their consumer base.
•Incremental channels. Our Platforms provide restaurants with additional channels through which they can receive more orders, while building brand awareness, as they are discovered by more diners.
•Deep integration and customization. Waitr provides professional photography for nearly all menu items,We provide menu onboarding and real-time menu customization that restaurants can manage themselves through its menu manager online portal, Menu Managr.
•Restaurant Software Platforms. For Restaurant Partners, the The Platforms provide the restaurants with actionable data on diners’ order history and trends, allowing restaurants to offer more tailored dishes and suggest more add-on items, which increases order values.
Flexibility Around Price Point. •Reliable Delivery.We provideconnect restaurants with flexibility around price point, charging restaurants under two fee models: (1) with an initial setup and integration fee and partnership level pricing (on the Waitr Platform), and (2) with a higher fee rate and no upfront setup and integration fee (on both the Waitr and Bite Squad Platforms).
Reliable Delivery. We provide restaurants and diners with accurate and timely deliveries by connecting them with our dedicated network of employee drivers.
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•Selection. The restaurants on our Platforms include a mix of local independent restaurants and national chains that represent a wide breadtharray of cuisines, price points and local favorites in each market to best serve the diverse tastes of its diners.
Quick, •Quality Service. We strive to deliver the right order, quickly and professionally, and have livea dedicated customer support team to assist diners, helping to ensure diner successquick and consistent quality service when ordering on the Platforms.
•Discovery. The Platforms are designed to showcase the variety of restaurants inclusive of menus with professional photography, giving diners a rich understanding of restaurants’ offerings; resulting in diners discovering restaurants they would like to visit in person, not just to order on the Platforms, further expanding the potential pool of dine-in customers for restaurants.
•Personalized Experience. We allow diners to tailor their orders to various layers of customization through easy-to-use Platforms. Diners can add frequent restaurants as favorites and keep track of past orders and split the cost of an order with friends.
High Impact Local Partnerships. We focus on attracting local favorites to the Platforms and strive to create the right balance of cuisine and price points in all markets. Waitr’s specific focus on local favorites allows it to strive to achieve its “Local Everywhere” mantra across the United States.
•Convenience. We provide diners with intuitive Platforms that make ordering and delivery simple from any connected device. Diners can track their order and know exactly when to expect their food.
Steady employment. Waitr offers its employee drivers regular, scheduled employment.
Pay and Benefits. We pay our drivers by the hour at an attractive wage. Benefits are offered to qualifying employee drivers. We also believe that our pay rates to independent drivers are attractive.
Flexibility. Employee drivers are offered the ability to drive part time or full-time, day or night. Further, Waitr offers its drivers the opportunity to exchange shiftswork when and how they want, based upon their individual needs. Our streamlined onboarding process allows drivers to quickly start earning on their own schedule.
The Company has
Platforms and our business:
Continueincreasing our presence in the local communities.
We have identified a substantial number of market opportunities surrounding or adjacent to our current geographic footprint as well as new market opportunities outside of our current footprint. We intend to continue to expand into new citiesboth size and geographies and plan to continue to enter and expand upon our product offerings across our marketplace. We contemplate expanding or rolling out additional product offerings, such as grocery, alcohol (where permitted) and dry goods delivery, all of which will continue to enhance the experience of users of the Platforms.
offerings.
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market positions.
restaurant partners
Pursue Strategic Acquisitions
We intend In particular, we view the facilitating access to selectively evaluatethird-party payment processing services as a complimentary offering to both expand and pursue expansion opportunities in existing and new markets in both core and adjacent categories through strategic acquisitions.
Identify and Launch Markets
Our market strategy is predicated on leveraging best practices from the launch of prior markets. Our “playbook” is continuously refined and includes strategies around onboarding new restaurants, deploying adequate resources to new markets, sales and marketing and ongoing business development.
Identifying New Markets
We currently operate in approximately 31 states across the United States with plans to expand into new markets in the future. We identify market opportunities based on several criteria, including proximity tostrengthen our current market footprint and major interstate connectivity between our current and potential markets, which allows us to leverage our brands.
Launching New Markets
Waitr’s market launch process occurs over four phases; pre-launch, then phases one, two and three:
Pre-Launch: During pre-launch, Waitr identifies markets and key Restaurant Partners. When Waitr begins operations in a new market, Waitr first signs up new restaurants with in-person sales calls. Waitr’s emphasis is on signing the key influencers in a market and leveraging its relationships with multi-location partners and national and regional chains.
Phase One: Waitr measures the progress of a new market mainly by the number of orders per day it generates. During phase one, Waitr is building awareness in the community and growing its mobile application installation base, experiencing rapid growth in restaurants and users.
Phase Two: During phase two of market launch, Waitr experiences rapid growth in diner engagement and continues onboarding restaurants. Waitr becomes viral and word of mouth increasesour restaurant diner and driver interest.
Phase Three: Finally, in phase three, Waitr reaches sustained profitability and is optimizing operations. Waitr scales its in-market operations and support teams to handle increased order volumes, which drives margin increases.
Challenges
The Company faces several key challenges in continuing to grow its business and maintaining profitability, including the following:
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Waitr’sand other promotional items. Our remaining sales and marketing initiatives are through paid digital marketing, which includes: digitalsocial media influencer sponsorships, traditional ads,strategies and public relations. Waitrlocal sponsorships. Our restaurant relationships also reaches new diners through early adopters, who enjoyed the Waitr experience,allow us to market third-party payment processing services and who recommend the Waitr Platform to friends and family. Waitr also leverages its partnerships to expand geographic reach.
The Bite Squad Platform will be an important extension of the Company’s restaurant branding, with similar marketing efforts as the Waitr Platform.
solutions.
Waitr’s
understand their needs and offer additional services and products as appropriate, such as facilitating access to third-party payment processing services.
Waitr provides restaurants with a high level of service with deep technology integration, a high-growth, enhanced marketing platform, trained employee drivers, and customer support all at very attractive and aligned pricing.
Pricing Plans. Historically, Waitr has offered restaurants two pricing plans: (1) an upfront setup and integration fee and lower fee rate and (2) no upfront setup and integration fee with a higher fee rate. Given the value created by Waitr’s initial setup process and the lower fee rate, the majority of our Restaurant Partners have elected the upfront setup and integration fee and lower fee rate option.
management and restaurant support team.
Customer We also provide integration with certain online ordering and point-of-sale vendors in order to further enhance our restaurant partners’ efficiency when fulfilling orders generated on our Platforms. The Platforms are also able to provide featured placement of certain restaurants within both the mobile and web applications.
experience.
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We also provide delivery services for restaurants and other retailers who have ordering platforms without delivery.
Properties. For diners, the Platforms serve as a personalized service that provides discovery, convenience and transparency. Our Platforms feature food ordering and delivery, group ordering capabilities and the ability to create favorites for recurring orders.
Driver Products
The majority of our driversweb applications to assist with any inquiries and to ensure a high-quality diner experience.
avoid unnecessary disruption in services.
The Company’s
Traditional offline processes, including phone orders, paper menus distributed by restaurants, local advertising and the yellow pages;
Local delivery services that typically do not employ mobile or internet technology to power their service (for example, taking orders by phone only); and
Other online delivery platforms.
The principal competitive factors in the Company’s markets include scale, cost, delivery network, technology, convenience, customer service and integration. Management believes the Company competes favorably basedwith the traditional ordering process by aggregating restaurant and menu information on these factorsthe Platforms, making it more convenient for diners to locate restaurants by proximity, cuisine type and/or price point, and efficiently placing a customized order or a repeat order for delivery or carryout, without ever having to interact directly with the restaurant. For restaurants, we offer a more targeted marketing opportunity than traditional, offline, local advertising channels, providing exposure to our network of diners, who routinely access our Platforms.
These groups may be negatively impacted by these economic conditions, which in turn could impact our financial position and results of operations. There is uncertainty of the duration of these recent macroeconomic conditions.
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utility interruptions to our restaurant partners. The COVID-19 pandemic, as well as the federal government’s responses thereto, have had an impact on our typical seasonality trends and could impact these trends in future periods.
The Waitr Platform uses
Waitr protects itscost effectiveness.
cost effective. In June 2021, the Company entered into a License, Release and Settlement Agreement to settle all claims related to a lawsuit related to alleged trademark infringement based on the Company’s use of the “Waitr” trademark and logo. In connection therewith, the Company agreed to adopt a new trademark or tradename to replace the Waitr trademark by June 22, 2022, unless extended by eight additional months in exchange for a one-time payment of $800,000. See Item 3, Legal Proceedings for additional details.
Waitr holds several registrations to domain names relating to its business, including waitrapp.com and others.
Waitr’s non-drivercost effective.
Employees
Additionally, we enter into confidentiality agreements with consultants and contractors who are given access to confidential information about the Company.
provided with a streamlined onboarding process and educational opportunities that help to maximize their earnings potential. Maintaining a diverse network of independent contractor drivers is important to us. We are committed to our independent contractor drivers having the tools and resources needed to ensure they provide exceptional customer service.
Originally formed on December 5, 2013 as a Louisiana corporation,
On November 15, 2018 (the “Closing Date”“Landcadia Business Combination”), Waitr Holdings Inc. (formerly known as Landcadia Holdings, Inc.), provided a Delaware corporation, completed the acquisition ofplatform for Waitr Incorporated pursuantto gain access to the Agreement and Plan of Merger, dated as of May 16, 2018 (the “ Landcadia Merger Agreement”), by and among the Company, Waitr Inc. (f/k/a Landcadia Merger Sub, Inc.), a Delaware corporation and wholly-owned indirect subsidiary of the Company (“Merger Sub”), and Waitr Incorporated. The transactions contemplated by the Landcadia Merger Agreement are referred to herein as the “Landcadia Business Combination.” Upon the consummation of the Landcadia Business Combination, Waitr Incorporated merged with and into Merger Sub, with Merger Sub surviving the merger in accordance with the Delaware General Corporation Law as a wholly-owned, indirect subsidiary of the Company. In connection with the closing of the Landcadia Business Combination (the “Closing”), the Company changed its name from Landcadia Holdings, Inc. to Waitr Holdings Inc.
U.S. public markets. Prior to the consummation of the Landcadia Business Combination, the common equity of the CompanySPAC was traded on the Nasdaq Stock Market (the “Nasdaq”) under the symbol “LCA”. Effective November 16, 2018, the Company’s common equity began trading on Nasdaq under the ticker symbol “WTRH”. One of the primary purposes of the Landcadia Business Combination was to provide a platform for Waitr Incorporated to gain access to the U.S. public markets.
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On
(the “Bite Squad Merger”) expanded the Company’s scale and footprint across the United States. In March 2021, Waitr completed the acquisition of Delivery Dudes, a third-party delivery business primarily serving the South Florida market (the “Delivery Dudes Acquisition”). In August 2021, Waitr completed the acquisition of the Cape Payment Companies, which are in the business of facilitating merchant access to third-party payment processing solution providers (the “Cape Payment Acquisition”).
The Bite Squad Merger was considered a business combination, in accordance with GAAP, and will be accounted for using the acquisition method. Under the acquisition method of accounting, total purchasemerger consideration, is allocated to the acquired assets and assumed liabilities are recorded based on their estimated fair values on the acquisition date. AnyThe excess of the fair value of purchasemerger consideration over the fair value of the assets less liabilities acquired will behas been recorded as goodwill. The results of operations of Bite Squad will bethe acquired companies are included in our consolidated financial statements beginning on thesince their respective acquisition date, January 17, 2019.
dates.
You may read and copy any documents filed by the Company with the SEC at the SEC Public Reference Room located at 100 F Street, N.E., Room 1580, Washington, D.C., 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain copies of the materials described above at prescribed rates by writing to the SEC, Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at
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Operations •diners increasingly order through competing products or services; •we fail to introduce new and improved services or •we are unable to successfully maintain our efforts to provide a satisfactory delivery and ordering experience; •we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance; •there are changes in diner sentiment about the quality or usefulness of the •we are unable to manage and prioritize information to ensure diners are presented with menu items that are interesting, useful, and relevant to them; •there are adverse changes in the •technical or other problems prevent us from delivering food in a rapid and reliable manner or otherwise affect the user experience or enjoyment of food or beverages delivered; •we adopt policies or procedures related to delivery, ordering or user data that are perceived negatively by our diners or the general public; •we fail to provide adequate customer service to restaurants, diners, independent contractor drivers, or advertisers; •we, •restaurants develop their own direct-to-consumer applications or online ordering and delivery services; business. extreme, including as a result of factors outside of our control. The COVID-19 pandemic, as well as the federal government’s responses thereto, have had an impact on our typical seasonality trends and could impact future periods. 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 restaurants. Moreover, such failure could subject us to legal exposure and the expenditure of capital resources to defend ourselves. providers to liability for violations of various laws, rules or regulations, civil liability, government-imposed fines, orders requiring that we or these third parties change our or their practices, or criminal charges, which could adversely affect our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices, systems and compliance procedures in a manner adverse to our business. While we are currently PCI compliant on our Platforms, there can be no assurance that we will remain compliant. business and results of operations. See Item 3, Legal Proceedings, for a discussion of June 2021 trademark infringement settlement. The market price of our common stock may be volatile and could decline. •industry or general market conditions; •domestic and international political and economic factors unrelated to our performance; •actual or anticipated fluctuations in our quarterly operating results; •changes in or failure to meet publicly disclosed expectations as to our future financial performance; •changes in securities analysts’ estimates of our financial performance or lack of research and reports by industry analysts; •action by institutional stockholders or other large stockholders, including sales of large blocks of common stock; •speculation in the press or investment community; •changes in investor perception of us and our industry; •changes in market valuations or earnings of similar companies; •announcements by us or our competitors of significant products, contracts, acquisitions or strategic partnerships; •changes in our capital structure, such as future sales of our common stock or other securities; •changes in applicable laws, rules or regulations, regulatory actions affecting us and other dynamics; and •additions or departures of key personnel. 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. •a staggered board providing for three classes of directors, which limits the ability of a stockholder or group to gain control of our •the ability of our Board to issue preferred stock, which could contain features that delay or prevent a change of control; •no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; •the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board; •a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; •a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; •the requirement that the removal of directors by the stockholders be approved by the affirmative vote of holders of at least •the requirement that the adoption, amendment, alteration or repeal of the bylaws by stockholders be approved by the affirmative vote of at least •advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company. •derivative action or proceeding brought on the Company’s behalf; •action asserting a claim of breach of a fiduciary duty owed by any of the Company’s directors, officers or other employees to the Company or its stockholders; •action asserting a claim against the Company arising pursuant to any provision of the •other action asserting a claim against the Company that is governed by the internal affairs doctrine. The Debt Warrants, Notes and other Derivative Securities are The $0.41 per share. its credit agreements. Years ended December 31, $ in thousands, except per share data 2018 2017 2016 2015 REVENUE $ 69,273 $ 22,911 $ 5,650 $ 340 COSTS AND EXPENSES: Operations and support 51,428 20,970 4,785 186 Sales and marketing 15,695 5,661 1,359 137 Research and development 3,913 1,586 395 180 General and administrative 31,148 9,437 4,161 674 Depreciation and amortization 1,223 723 267 26 Impairment of intangible assets — 584 5 — Loss on disposal of assets 9 33 3 — TOTAL COSTS AND EXPENSES 103,416 38,994 10,975 1,203 LOSS FROM OPERATIONS (34,143 ) (16,083 ) (5,325 ) (863 ) OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET Interest expense, net 1,416 281 4,467 91 (Gain) loss on derivatives (337 ) 52 (484 ) (144 ) (Gain) loss on debt extinguishment (486 ) 10,537 (599 ) — Other expenses (income) 2 (52 ) 8 5 NET LOSS BEFORE INCOME TAX EXPENSE (BENEFIT) (34,738 ) (26,901 ) (8,717 ) (815 ) Income tax expense (benefit) (427 ) 6 5 — NET LOSS $ (34,311 ) $ (26,907 ) $ (8,722 ) $ (815 ) LOSS PER SHARE: Basic and diluted $ (2.18 ) $ (2.69 ) $ (1.02 ) $ (0.10 ) CASH FLOW DATA: Net cash used in operating activities $ (15,842 ) $ (12,411 ) $ (4,497 ) $ (663 ) Net cash used in investing activities (3,761 ) (1,874 ) (826 ) (203 ) Net cash provided by financing activities 224,996 14,947 8,334 1,115 BALANCE SHEET DATA (at end of period): Total cash $ 209,340 $ 3,947 $ 3,285 N/A Total assets 226,552 11,407 7,815 N/A Total liabilities 97,061 12,917 1,432 N/A Total stockholders' equity (deficit) 129,491 (1,510 ) 6,383 N/A The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Form 10-K. Company. risk factors in the Company’s 2021 Form 10-K. Management continues to monitor the impact of the COVID-19 outbreak and the possible effects on its financial position, liquidity, operations, industry and workforce. For a description of our significant accounting policies, see Part II, Item 8, Significant accounting policies including critical accounting estimates and judgements relied upon in preparing these consolidated financial statements include the following: our internal control over financial reporting (see Item 9A). 2019, March 11, 2021 and August 25, 2021, respectively. Squad. from period to period. restaurant partners. The COVID-19 pandemic, as well as the federal government’s responses thereto, have had an impact on our typical seasonality trends and could impact future periods. may be adversely affected. and consider Active Diners an important metric because the number of diners using our Platforms is a key revenue driver and a valuable measure of the size of our engaged diner base. Gross Food Sales is an important metric for us because the total volume of food sales transacted through our Platforms is a key revenue driver. Years ended December 31, 2018 2017 2016 Active Diners (as of period end) 989,000 419,430 117,887 Average Daily Orders 21,860 9,315 2,395 Gross Food Sales (dollars in thousands) $ 278,833 $ 121,081 $ 31,430 Average Order Size $ 34.95 $ 35.61 $ 35.96 third-party payment processing solution providers. Expenses: diners, restaurants and drivers. This expense also includes such items as software subscriptions that are necessary for the upkeep and maintenance of the Platforms. legal settlements and contingencies and the change in estimate for the Medical Contingency. Years ended December 31, (in thousands, except percentages (1)) 2018 % of Revenue 2017 % of Revenue 2016 % of Revenue Revenue $ 69,273 100 % $ 22,911 100 % $ 5,650 100 % Costs and expenses: Operations and support (2) 51,428 74 % 20,970 92 % 4,785 85 % Sales and marketing (2) 15,695 23 % 5,661 25 % 1,359 24 % Research and development 3,913 6 % 1,586 7 % 395 7 % General and administrative (2) 31,148 45 % 9,437 41 % 4,161 74 % Depreciation and amortization 1,223 2 % 723 3 % 267 5 % Impairment of intangible assets — 0 % 584 3 % 5 0 % Loss on disposal of assets 9 0 % 33 0 % 3 0 % Total costs and expenses 103,416 149 % 38,994 170 % 10,975 194 % Loss from operations (34,143 ) (49 %) (16,083 ) (70 %) (5,325 ) (94 %) Other expenses (income) and losses (gains), net: Interest expense, net 1,416 2 % 281 1 % 4,467 79 % (Gain) loss on derivatives (337 ) 0 % 52 0 % (484 ) (9 %) (Gain) loss on debt extinguishment (486 ) (1 %) 10,537 46 % (599 ) (11 %) Other expenses (income) 2 0 % (52 ) 0 % 8 0 % Net loss before income tax expense (benefit) (34,738 ) (50 %) (26,901 ) (117 %) (8,717 ) (154 %) Income tax expense (benefit) (427 ) (1 %) 6 0 % 5 0 % Net loss $ (34,311 ) (50 %) $ (26,907 ) (117 %) $ (8,722 ) (154 %) asset impairments for previously capitalized software development costs. Term Loan and Notes. Other expenses (income) and losses (gains), net assets. predict. Years ended December 31, (in thousands) 2018 2017 2016 Net cash used in operating activities $ (15,842 ) $ (12,411 ) $ (4,497 ) Net cash used in investing activities (3,761 ) (1,874 ) (826 ) Net cash provided by financing activities 224,996 14,947 8,334 $6,956. $1,805 of costs for internally developed software. insurance financing. For the year ended December 31, financing. Payments Due by Period (in thousands) Less than 1 Year 1 to 3 Years 3 to 5 Years Thereafter Total Debt (1) $ — $ — $ 85,000 $ — $ 85,000 Interest due on debt (2) 2,383 4,772 2,082 — 9,237 Operating lease obligations 727 1,860 1,187 1,336 5,110 Workers’ compensation liability (3) 409 197 34 677 1,317 Loan agreement (4) 662 — — — 662 Total $ 4,181 $ 6,829 $ 88,303 $ 2,013 $ 101,326 quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. this Form 10-K. 2020 2021 2021 2021 Description Description Description 101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE /s/ Chief Financial Officer (Principal Financial Officer) March Signature /s/ Director /s/ Director /s/ Pouyan Salehi Director Steven L. Scheinthal Director William Gray Stream Our audits included performing procedures to assess the risks of material misstatement of the consolidated 11, 2022 As of December 31, 2018 2017 ASSETS CURRENT ASSETS: Cash $ 209,340 $ 3,947 Accounts receivable, net of allowance for doubtful accounts of $175 and $50 as of December 31, 2018 and 2017, respectively 3,687 2,124 Capitalized contract costs, current 1,869 947 Prepaid expenses and other current assets 4,548 363 TOTAL CURRENT ASSETS 219,444 7,381 Property and equipment, net 4,551 1,874 Capitalized contract costs, noncurrent 827 477 Goodwill 1,408 1,408 Intangible assets, net 261 243 Other noncurrent assets 61 24 TOTAL ASSETS $ 226,552 $ 11,407 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) LIABILITIES CURRENT LIABILITIES: Accounts payable $ 1,827 $ 247 Gratuities payable 790 372 Accrued payroll 2,265 578 Short-term loan 658 — Deferred revenue, current 3,314 1,630 Income tax payable 25 6 Accrued interest — 156 Other current liabilities 4,716 177 TOTAL CURRENT LIABILITIES 13,595 3,166 Long-term debt 80,985 7,484 Bifurcated embedded derivatives on convertible notes — 250 Accrued workers’ compensation liability 908 1,250 Deferred revenue, noncurrent 1,356 728 Other noncurrent liabilities 217 39 TOTAL LIABILITIES 97,061 12,917 Commitment and contingencies (Note 13) STOCKHOLDERS’ EQUITY (DEFICIT): Convertible preferred stock: Seed I, $0.00001 par value; no shares authorized at December 31, 2018 and 3,413,235 shares authorized, issued, and outstanding at December 31, 2017 — — Convertible preferred stock: Seed II, $0.00001 par value; no shares authorized at December 31, 2018 and 3,301,326 shares authorized, issued, and outstanding at December 31, 2017 — — Convertible preferred stock: Seed AA, $0.00001 par value; no shares authorized at December 31, 2018 and 7,330,290 shares authorized and 7,264,489 shares issued and outstanding at December 31, 2017 — — Common stock, $0.00001 par value; no shares authorized at December 31, 2018 and 30,752,543 shares authorized and 10,050,180 shares issued and outstanding at December 31, 2017 — — Common stock, $0.0001 par value; 249,000,000 shares authorized and 54,035,538 shares issued and outstanding at December 31, 2018 and no shares authorized at December 31, 2017 5 — Additional paid in capital 200,417 35,110 Accumulated deficit (70,931 ) (36,620 ) TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) 129,491 (1,510 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 226,552 $ 11,407 For the years ended December 31, 2018 2017 2016 REVENUE $ 69,273 $ 22,911 $ 5,650 COSTS AND EXPENSES: Operations and support 51,428 20,970 4,785 Sales and marketing 15,695 5,661 1,359 Research and development 3,913 1,586 395 General and administrative 31,148 9,437 4,161 Depreciation and amortization 1,223 723 267 Impairment of intangible assets — 584 5 Loss on disposal of assets 9 33 3 TOTAL COSTS AND EXPENSES 103,416 38,994 10,975 LOSS FROM OPERATIONS (34,143 ) (16,083 ) (5,325 ) OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET Interest expense, net 1,416 281 4,467 (Gain) loss on derivatives (337 ) 52 (484 ) (Gain) loss on debt extinguishment (486 ) 10,537 (599 ) Other expenses (income) 2 (52 ) 8 NET LOSS BEFORE INCOME TAX EXPENSE (BENEFIT) (34,738 ) (26,901 ) (8,717 ) Income tax expense (benefit) (427 ) 6 5 NET LOSS $ (34,311 ) $ (26,907 ) $ (8,722 ) LOSS PER SHARE: Basic and diluted $ (2.18 ) $ (2.69 ) $ (1.02 ) Weighted average common shares outstanding – basic and diluted 15,745,065 9,995,031 8,578,198 Preferred Seed I Preferred Seed II Preferred Seed AA Common stock Additional paid in capital Accumulated deficit Total stockholders’ equity (deficit) Shares Amount Shares Amount Shares Amount Shares Amount Balances at December 31, 2015 (as previously reported) 3,804,763 $ — 481,021 $ — — $ — 9,000,000 $ — $ 704 $ (991 ) $ (287 ) Conversion of shares (391,528 ) — (49,500 ) — — — (926,142 ) — — — — Balances at December 31, 2015, effect of reverse acquisition (see Note 3) 3,413,235 $ — 431,521 $ — — $ — 8,073,858 $ — $ 704 $ (991 ) $ (287 ) Net loss — — — — — — — — — (8,722 ) (8,722 ) Stock-based compensation — — — — — — — — 144 — 144 Equity issued in exchange for services — — — — — — — — 452 — 452 Issuance of stock — — 1,497,483 — 904,994 — — — 4,246 — 4,246 Conversion of convertible notes to Preferred Seed II stock — — 1,372,322 — — — — — 1,040 — 1,040 Conversion of convertible notes to Preferred Seed AA stock — — — — 4,226,962 — — — 4,384 — 4,384 Discount on convertible notes due to beneficial conversion feature — — — — — — — — 2,930 — 2,930 Stock issued as consideration for the acquisition of Requested, Inc. — — — — — — 1,614,772 — 2,196 — 2,196 Balances at December 31, 2016 3,413,235 $ — 3,301,326 $ — 5,131,956 $ — 9,688,630 $ — $ 16,096 $ (9,713 ) $ 6,383 Net loss — — — — — — — — — (26,907 ) (26,907 ) Stock-based compensation — — — — — — — — 1,199 — 1,199 Equity issued in exchange for services — — — — — — 262,964 — 120 — 120 Exercise of stock options — — — — — — 98,586 — 5 — 5 Issuance of stock — — — — 2,100,528 — — — 7,224 — 7,224 Debt premium recorded to equity — — — — — — — — 10,444 — 10,444 Conversion of convertible notes to Preferred Seed AA stock — — — — 32,005 — — — 22 — 22 Balances at December 31, 2017 3,413,235 $ — 3,301,326 $ — 7,264,489 $ — 10,050,180 $ — $ 35,110 $ (36,620 ) $ (1,510 ) Net loss — — — — — — — — — (34,311 ) (34,311 ) Exercise of stock options — — — — — — 562,028 — 97 — 97 Vested Waitr options exchanged for common stock — — — — — — 3,018,553 — — — — Line of Credit Warrant exercises — — — — — — 37,735 — 380 — 380 2014 Warrants exchanged for common stock — — — — — — 405,884 — — — — Conversion of preferred stock to common stock (3,413,235 ) — (3,301,326 ) — (7,264,489 ) — 13,979,050 — — — — Debt Warrants issued in connection with Luxor term loan — — — — — — — — 1,569 — 1,569 Conversion of convertible notes to common stock — — — — — — 2,062,354 — 5,360 — 5,360 Waitr shares redeemed for cash — — — — — — (7,168,303 ) — (71,683 ) — (71,683 ) Merger recapitalization (see Note 3) — — — — — — 31,203,841 5 214,853 — 214,858 Stock-based compensation — — — — — — — — 9,580 — 9,580 Stock issued as consideration in GoGoGrocer asset acquisition — — — — — — 16,311 — 142 — 142 Cancellation of stock — — — — — — (132,095 ) — — — — Equity compensation on Requested Amendment — — — — — — — — 3,359 — 3,359 Equity issued in exchange for services — — — — — — — — 120 — 120 Discount on convertible notes due to beneficial conversion feature — — — — — — — — 1,530 — 1,530 Balances at December 31, 2018 — $ — — $ — — $ — 54,035,538 $ 5 $ 200,417 $ (70,931 ) $ 129,491 The accompanying notes are an integral part of these consolidated financial statements. For the years ended December 31, 2018 2017 2016 Cash flows from operating activities: Net loss $ (34,311 ) $ (26,907 ) $ (8,722 ) Adjustments to reconcile net loss to net cash used in operating activities: Non-cash interest expense 1,206 125 4,467 Non-cash advertising expense 603 — — Stock-based compensation 9,580 1,199 144 Equity issued in exchange for services 120 120 452 Equity compensation on Requested Amendment 3,359 — — Loss on disposal of assets 9 33 3 Depreciation and amortization 1,223 723 267 Impairment of intangible assets — 584 5 Amortization of capitalized contract costs 1,513 589 132 (Gain) loss on derivatives (337 ) 52 (484 ) (Gain) loss on debt extinguishment (486 ) 10,537 (599 ) Other non-cash expense 75 — — Changes in assets and liabilities: Accounts receivable (1,563 ) (1,362 ) (727 ) Capitalized contract costs (2,785 ) (1,498 ) (576 ) Prepaid expenses and other current assets (3,789 ) (324 ) (33 ) Payments for lease deposits (37 ) — (24 ) Accounts payable 1,580 188 16 Gratuities payable 418 187 180 Deferred revenue 2,312 1,449 801 Income taxes payable (427 ) 1 5 Accrued payroll 1,687 451 92 Accrued interest (156 ) 156 — Accrued workers’ compensation liability (342 ) 1,250 — Other current liabilities 4,539 36 104 Other noncurrent liabilities 167 — — Net cash used in operating activities (15,842 ) (12,411 ) (4,497 ) Cash flows from investing activities: Purchases of property and equipment (3,750 ) (1,769 ) (596 ) Acquisition of Requested, net of cash acquired — — (22 ) Internally developed software — (105 ) (208 ) Consideration paid for IndiePlate asset acquisition (11 ) — — Net cash used in investing activities (3,761 ) (1,874 ) (826 ) Cash flows from financing activities: Proceeds from line of credit 5,000 — — Payments on line of credit (5,000 ) — — Proceeds from convertible notes issuance 1,470 7,684 4,091 Repayment of Series 2017 and Series 2018 notes (3,207 ) — — Cash received from Landcadia Holdings 215,331 — — Waitr shares redeemed for cash (71,683 ) — — Proceeds from Notes and Term Loan 85,000 — — Debt issuance costs (3,050 ) — — Proceeds from warrant exercises 380 — — Proceeds from short-term loan 2,172 — — Payments on short-term loan (1,514 ) — — Payments on financing arrangement — (6 ) (3 ) Proceeds from government grant — 40 — Proceeds from exercise of stock options 97 5 — Proceeds from issuance of stock — 7,224 4,246 Net cash provided by financing activities 224,996 14,947 8,334 Net change in cash 205,393 662 3,011 Cash, beginning of year 3,947 3,285 274 Cash, end of year $ 209,340 $ 3,947 $ 3,285 Supplemental disclosures of cash flow information: Cash paid during the year for state income taxes $ (31 ) $ (5 ) $ — Cash paid during the year for interest (201 ) — — Supplemental disclosures of non-cash investing and financing activities: Stock issued as consideration for the acquisition of Requested, Inc. — — 2,196 Stock issued as consideration in GoGoGrocer asset acquisition 142 — — Debt assumed in IndiePlate asset acquisition 60 — — Bifurcated embedded derivatives 87 — — Discount on convertible notes due to beneficial conversion feature 1,530 — 2,930 Warrants issued 1,612 — — Premium on convertible notes — 10,444 — Conversion of convertible notes to preferred stock 8,681 22 5,424 The accompanying notes are an integral part of these consolidated financial statements. the Cape Payment Companies (as defined below) on August 25, 2021 (see References to the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) included hereafter refer to the ASC and ASUs established by the Financial Accounting Standards Board (the “FASB”) as the source of authoritative GAAP. Year ended December 31, 2017 As Previously Reported Reclassification As Reclassified Operations and support expenses $ 17,668 $ 3,302 $ 20,970 Sales and marketing expenses 5,617 44 5,661 General and administrative expenses 12,601 (3,164 ) 9,437 Related party expenses 182 (182 ) — Use of Estimates Significant estimates and judgments relied upon in preparing these consolidated financial statements affect the following items: and Chargebacks residual commissions receivable in connection with the acquisition of the Cape Payment Companies on August 25, 2021 (see Furniture 7 years year ended December 31, 2021. The resulting expense is recorded either in operations and support, sales and marketing, research and development, or general and administrative expense, depending on the department of the recipient. The Company recognizes forfeitures of stock-based awards as they occur. In the case of an award pursuant to which a performance condition must be met for the award to vest, no stock-based compensation cost is recognized until such time as the performance condition is considered probable of being met, if at all. If the assessment of probability of the performance condition changes, the impact of the change in estimate would be recognized in the period of change. Because of the non-cash nature of share-based compensation, it is added back to net income in arriving at net cash provided by operating activities in our statement of cash flows. are as follows: norm. Years ended December 31, 2018 2017 2016 Transaction fees $ 65,930 $ 21,406 $ 5,165 Setup and integration fees 2,882 1,214 361 Other 461 291 124 $ 69,273 $ 22,911 $ 5,650 policy. book income as a source of taxable income when assessing if a portion of the deferred tax assets is more likely than not to be realized. However, scheduling the reversal of existing deferred tax liabilities indicated that a portion of the deferred tax assets are not likely to be realized. Therefore, the Company recorded a full valuation Act of 1934, as amended. Effective January 1, 2021, the Company is no longer an emerging growth company. (in thousands, except per share amount) Shares transferred at Closing 22,832 Value per share (1) $ 10.00 Total Share Consideration $ 228,320 Plus: Cash Transferred to Waitr Stockholders 71,680 Total Cash and Share Consideration - at Closing $ 300,000 Assets acquired: Cash and cash equivalents $ 38 Accounts receivable 3 Other current assets 1 Property and equipment 34 Identifiable intangible assets 810 Total identifiable assets acquired $ 886 Liabilities assumed: Other current liabilities (29 ) Other long-term liabilities (9 ) Total liabilities assumed (38 ) Net assets acquired 848 Goodwill 1,408 Total consideration paid $ 2,256 Amortizable Life (in years) Value Technology 2 $ 810 Total $ 810 acquisitions. In connection with the year ended December 31, 2020. (Unaudited) December 31, 2016 Net Revenue $ 5,643 Net Loss (9,403 ) As of December 31, 2018 2017 Credit card receivables $ 1,871 $ 1,043 Receivables from restaurant partners 1,991 1,131 Accounts receivable $ 3,862 $ 2,174 Less allowance for doubtful accounts (175 ) (50 ) Accounts receivable, net $ 3,687 $ 2,124 Years Ended December 31, 2018 2017 Balance, beginning of the year $ 50 $ 58 Additions to expense 128 7 Write-offs, net of recoveries and other adjustments (3 ) (15 ) Balance, end of the year $ 175 $ 50 As of December 31, 2018 2017 Prepaid insurance expense $ 3,618 $ 254 Other current assets 930 109 Prepaid expenses and other current assets $ 4,548 $ 363 As of December 31, 2018 2017 Computer equipment $ 4,818 $ 1,962 Furniture and fixtures 668 466 Leasehold improvements 184 34 Construction in process 556 — $ 6,226 $ 2,462 Less: Accumulated depreciation (1,675 ) (588 ) Property and equipment, net $ 4,551 $ 1,874 The Bite Squad, Delivery Dudes and Cape Payment Companies trade name intangible assets, however, are being amortized over their estimated useful lives. As of December 31, 2018 Gross Carrying Amount Accumulated Amortization Accumulated Impairment Intangible Assets, Net Software $ 1,239 $ (536 ) $ (589 ) $ 114 Trademarks/Patents 5 — — 5 Customer Relationships 142 — — 142 Total $ 1,386 $ (536 ) $ (589 ) $ 261 As of December 31, 2017 Gross Carrying Amount Accumulated Amortization Accumulated Impairment Intangible Assets, Net Software $ 1,236 $ (409 ) $ (589 ) $ 238 Trademarks/Patents 5 — — 5 Total $ 1,241 $ (409 ) $ (589 ) $ 243 2021, the Company capitalized approximately $8,599 of software costs related to the development of the Platforms. Estimated future amortization expense of intangible assets as of December 31, 2021 is as follows (in thousands): Year ended December 31, Amortization 2019 $ 88 2020 26 2021 — Thereafter — Total future amortization $ 114 As of December 31, 2018 2017 Balance, beginning of the year $ 1,408 $ 1,408 Acquisitions during the year — — Balance, end of the year $ 1,408 $ 1,408 As of December 31, 2018 2017 Accrued insurance expenses $ 703 $ 50 Accrued estimated workers compensation expenses 769 — Accrued advertising expenses 887 — Accrued legal and professional fees 762 — Accrued machinery and equipment charges 479 — Other current liabilities 1,116 127 Other current liabilities $ 4,716 $ 177 As of December 31, 2018 2017 Series 2017 Convertible Promissory Notes, par $ — $ 7,484 Term Loans 25,000 — Notes 60,000 — $ 85,000 $ 7,484 Less: unamortized debt issuance costs on Term Loans (2,268 ) — Less: unamortized debt issuance costs on Notes (1,747 ) — Total long-term debt $ 80,985 $ 7,484 Short-term loan 658 — Total outstanding debt $ 81,643 $ 7,484 Debt Maturity 2019 $ 658 2020 — 2021 — 2022 80,985 Total debt $ 81,643 balance. The Credit Agreement to incur additional debt, incur liens on assets, engage in mergers or consolidations, dispose of assets, pay dividends repay certain junior share. As of December 31, 2018 2017 Bifurcated embedded derivatives on convertible notes $ — $ 250 Years ended December 31, 2018 2017 2016 (Gain) loss on derivatives $ (337 ) $ 52 $ (484 ) 11. Years ended December 31, 2018 2017 2016 Current Federal $ (477 ) $ — $ — State 50 6 5 Deferred Federal — — — State — — — Income tax expense (benefit) $ (427 ) $ 6 $ 5 Years ended December 31, 2018 2017 2016 Tax at statutory rate $ (7,295 ) $ (9,120 ) $ (2,964 ) State income taxes (897 ) (442 ) (284 ) Stock-based compensation 366 396 46 Non-deductible expenses 125 56 12 Interest expense 48 3,606 (160 ) Tax credits — (15 ) — Change in U.S. tax rates — 2,663 — Change in valuation allowance 7,226 2,862 3,355 Income tax expense (benefit) $ (427 ) $ 6 $ 5 As of December 31, 2018 2017 Deferred tax assets: Stock-based compensation $ 8 $ 144 Bad debt reserve 43 12 Charitable contribution carryover 22 4 Unearned revenue 1,154 583 Workers’ compensation reserve 277 309 Net operating losses 12,117 4,922 Work opportunity tax credit 15 15 Interest expense carryforward 169 — Total deferred tax assets 13,805 5,989 Valuation allowance (12,538 ) (5,312 ) Net deferred tax assets 1,267 677 Deferred tax liabilities: Fixed assets (576 ) (361 ) Capitalized contract costs (666 ) (352 ) Prepaid sponsorship (25 ) (26 ) Convertible debt — 62 Total deferred tax liabilities $ (1,267 ) $ (677 ) Net deferred tax asset (liability) $ — $ — As of December 31, Beginning Year of Expiration 2018 2017 Federal net operating losses $ 49,119 $ 19,915 2034 State net operating losses 41,545 16,539 2034 Tax credit carryforwards 15 15 2037 Total carryforwards $ 90,679 $ 36,469 is immaterial. Year ended December 31, Amount 2019 $ 727 2020 908 2021 952 2022 677 2023 510 Thereafter 1,336 Total minimum lease payments $ 5,110 As of December 31, 2017 Carrying Amount Fair Value Level 1 Level 2 Level 3 Bifurcated embedded derivatives on convertible notes $ (250 ) $ — $ — $ (250 ) $ (250 ) $ — $ — $ (250 ) As December 31, 2018 2017 Balance, beginning of the year $ 250 $ — Increases/additions 87 250 Reductions/settlements (337 ) — Balance, end of the year $ — $ 250 As of December 31, 2021, there were 5,119,807 shares of common stock available for future grants pursuant to the 2018 Incentive Plan. On January 1, 2022, the number of shares available for future grants increased by 7,861,458 pursuant to the evergreen provision of the 2018 Incentive Plan. The evergreen provision is determined based on 5% of the total number of outstanding shares of the Company’s common stock (taking into account for this purpose such common stock issuable upon the exercise of options or warrants and the conversion of convertible debt) on December 31 “Amended 2014 Plan”). Total compensation expense related to awards under the terms. Years ended December 31, 2018 2017 2016 Weighted-average fair value at grant $ 5.06 $ 3.69 $ 0.67 Risk free interest rates 2.1% – 3.1% 1.1% – 1.8% 1.0% – 1.4% Expected volatility 44.6% – 47.0% 40.3% – 48.9% 51.2% – 64.4% Expected option life (years) 0.75 – 6.0 0.5 – 3.0 4.0 – 5.0 Number of Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value Balance, January 1, 2016 698,912 $ 0.00 $ 0.02 Granted 1,558,000 0.09 0.67 Exercised — — — Forfeited (35,000 ) — — Balance, December 31, 2016 2,221,912 $ 0.06 $ 0.48 Granted 2,650,354 0.86 3.69 Exercised (109,895 ) 0.03 0.19 Forfeited (272,355 ) 0.21 1.07 Balance, December 31, 2017 4,490,016 $ 0.53 $ 2.35 Granted 947,966 5.19 5.06 Modified (64,329 ) 1.90 4.06 Exercised (4,224,983 ) 0.52 2.39 Forfeited (267,837 ) 0.35 1.74 Balance, December 31, 2018 880,833 $ 5.53 $ 5.12 As of December 31, 2018 2017 Options Fully Vested and Expected to Vest Options Exercisable Options Fully Vested and Expected to Vest Options Exercisable Number of Options Number of Options 880,833 56,429 4,490,016 1,755,687 Weighted-average remaining contractual term (years) Weighted-average remaining contractual term (years) 5.60 8.61 9.60 8.05 Weighted-average exercise price Weighted-average exercise price $ 5.53 $ 0.77 $ 0.53 $ 0.29 Aggregate Intrinsic Value (in thousands) Aggregate Intrinsic Value (in thousands) $ 8,905 $ 586 $ 22,063 $ 9,013 The Number of Shares Weighted Average Grant Date Fair Value Weighted Average Contractual Remaining Term Nonvested at January 1, 2016 542,308 $ 0.02 1.92 Shares vested (281,538 ) 0.02 Nonvested at December 31, 2016 260,770 $ 0.02 0.92 Shares vested (260,770 ) 0.02 Nonvested at December 31, 2017 — — — Granted 550,000 11.94 1.78 Shares vested — — Nonvested at December 31, 2018 550,000 $ 11.94 1.78 Stock Years ended December 31, 2018 2017 2016 Numerator: Net loss – basic and diluted $ (34,311 ) $ (26,907 ) $ (8,722 ) Net loss attributable to participating securities – basic and diluted — — — Net loss attributable to common stockholders – basic and diluted $ (34,311 ) $ (26,907 ) $ (8,722 ) Denominator: Weighted-average number of shares outstanding – basic and diluted 15,745,065 9,995,031 8,578,198 Loss per share – basic and diluted $ (2.18 ) $ (2.69 ) $ (1.02 ) As of December 31, 2018 2017 2016 Potentially dilutive securities: Convertible Preferred Stock: Seed I — 3,413,235 3,413,235 Seed II — 3,301,326 3,301,326 Series AA — 7,264,489 5,131,956 Stock Options 880,833 4,027,972 1,993,267 Warrants (1) 25,384,615 406,337 406,337 Potentially dilutive securities at period end 26,265,448 18,413,359 14,246,121 time. In connection with our ATM Program in 2020, Jefferies received approximately $740 of fees for such services. Jefferies did not own more than 5% of our common stock during 2021. national partner agreements. ATM Program.orand operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment. As used in the risks described in this subsection, references to “we,” “us” and “our” are intended to refer to the Company unless the context clearly indicates otherwise.Toto Our Businessindustry is affected by Industrycontrol.Our industry is highly cyclical, andcontrol;is dependent on a numberfinancial condition and results of factors, manyoperations;which are beyondfee caps by jurisdictions in areas where we operate;control. We believe that some of the most significant of these factors are economic changes that affect supply and demand in dining out in general, such as:networks to maintain their service levels;changes in diners’ dining habits and•slower than anticipated growth in the availability of disposable income for ordering food from restaurants;excess restaurant capacity in comparison with food order demand;downturns in restaurants’ business cycles; andrecessionary economic cycles.The risks associated with these factors are heightened when the U.S. and/or global economy is weakened. Some of the principal risks during such times are as follows:we may experience low overall food and beverage order levels, which may impair our driver utilization, because our diners’ demand for our services generally correlate with the strength of the U.S. and, to a lesser extent, global economy;certain of our restaurants may face credit issues and cash flow problems, particularly if they encounter increased financing costs or decreased access to capital, which may decrease diner demand for restaurant prepared food, and such issues and problems may affect the number of orders that occur through the Platforms;food ordering and dining out patterns may change as food supply chains are redesigned and customer tastes change, resulting in an imbalance between our restaurants’ available menu items and Active Diners’ demands; anddiners may select competitors that offer lower delivery charges, commission rates or other charges from among existing choices in an attempt to lower their costs, and we might be forced to lower our rates or lose restaurants offering food or diners ordering food through the Platforms.We are also subject to cost increases outside of our control that could materially reduce our profitability if we are unable to increase our rates sufficiently. Such cost increases include, but are not limited to, increases in fuel prices, driver wages, independent contractor driver rates, interest rates, taxes, tolls, license and registration fees, insurance, payment processing fees, and healthcare for our employees.Our restaurants’ business levels also may be negatively affected by adverse economic conditions or financial constraints, which could lead to disruptions in the availability of popular order items, reducing use of the Platforms. A significant interruption inInternet via websites, mobile devices and other platforms;normal order levels could disruptbusiness;operations, increase our costs and negatively impact our ability to serve our diners.In addition, events outside our control, such as strikes or other work stoppages at our facilities, among our drivers or at our restaurant diners’ locations, or actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against a foreign state or group located in a foreign state, or heightened security requirements could lead to reduced economic demand, reduced availability of credit or ordering capabilities of the Platforms. Such events or enhanced security measures in connection with such events could impair our operations and result in higher operating costs.9We have limited operational history; we are subject to developmental risks associatedrelationships with the developmentindependent contractor drivers, including shortages of any new business.We lack significant operational history by which future performance may be judged or compared. Any future success that we may enjoy will depend upon many factors, severalavailable drivers and possible increases in driver compensation;which may be beyond our control, or which cannot be predicted at this time, andcommon stock from Nasdaq, which could have a material adverse effect upon our financial condition, business prospects and operations andadversely affect the value of an investment in the Company. As a result, our past quarterly financial results do not necessarily indicate future performance. Investors should take into account the risks and uncertainties frequently encountered by companies in rapidly evolving markets. Investors should not rely upon our past quarterly financial results as indicators of future performance. The numerous factors, which we are unable to predict or are outsidemarket liquidity of our control, includecommon stock, the following:We may not be ableability for us to accurately forecast revenuesraise capital, and plan operating expenses;We may be unable to fund our working capital requirements or maintain compliance with our debt covenants, particularly if our forecast regardingcould decrease the sufficiencymarket price of our liquidity is inaccurate or our expenses exceed our expectations;We may be unable•risks related to scale our technological and operational infrastructure to accommodate rapid growth in diners, orders or customer support needs;Our management team has had limited experience operating a public company and could be unable to transition from a developmental stage business to a larger organization;Our growth may depend on acquisitions, and our management team does not have significant experience managing acquisitions of other businesses;The relatively quick transition to a public company could pose operational, financial and quality risks that we are unable to manage effectively;The development and introduction of new products or services by us or our competitors is uncertain;Competing with traditional ordering methods or delivery services provided directly by restaurants (or third parties) to consumers over the phone or through their own websites or other means could pose a risk to our growth and financial performance;Our ability to maintain and grow our number of Active Diners, Average Daily Orders, Gross Food Sales and order frequency is not guaranteed;Our ability to attract and retain restaurants over long periods of time has not been tested in several markets;Our ability to attract and retain key employees and personnel to support growth and revenue has not been tested in several markets;Seasonal and weather-related fluctuations in spending by consumers relating to food delivery can be unpredictable;The acceptable pricing of our onboarding and services fees to restaurants and diner fees to consumers and restaurants has not been tested widely;Our ability to increase onboarding, services, diner fees and other revenue does not enjoy long historical data trends;The diversification and growth of revenue sources beyond current onboarding, services and diner fees has not been demonstrated;Increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive are unpredictable;Our ability to maintain gross margins and operating margins can be difficult to predict and impacted by numerous factors beyond our control (for example, due to transaction charge increases, technology cost increases, and other items);We may experience system failures or breaches of security and privacy that could pose a harm on their own and could affect consumers’ confidence in our services;We may not be able to adequately manage key third party service providers;We may experience changes in diner or restaurant behavior or preferences;Payment processing costs could increase, or we could fail to implement our own payment processing solution;10Internal controls, especially in light of the accelerated processcannabis industry with respect to the Landcadia Business Combination and Bite Squad Merger, may not keep pace with necessary requirements frombusiness operations of referring merchants to third-party payment processing solution providers.business, accounting or legal pointsubstantial number of view; andWe may experience casualties or safety hazards or issues with our drivers or third parties that come into contact with our drivers, all ofshares by existing stockholders which could be difficultin turn cause our share price to predict and which could impact our operating costs and diner or Restaurant Partnerdecline;Platforms.net proceeds from, or the continuation of, our at-the-market offering program (the “ATM Program”) does not increase the value of a stockholder's investment;theirin number and number of orders or order sizes decrease on the Platforms, our revenue, financial results, and business may be adversely affected.The number of our Active Diners and total Gross Food Sales are critical to our success. and will continue to be significantly determined by our success in adding, retaining, and engaging Active Diners who make orders for delivery, dine-in or carryout using the Platforms. We anticipateOver the last two years, the number of Active Diners has declined. To the extent that our Active Diner growth rate will decline over time as the sizenumber of our Active Diner base increases, and as we achieve higher market penetration rates. To the extent our Active Diner growth rate slows,Diners continues to trend down, our business performance willcould become increasingly dependent on our ability to increase sizes and frequenciesthe size of orders in current markets and theour orders. A decrease in diner retention, growth, or order frequency (oror overall order price) couldprice will likely render the Platforms less attractive to restaurants, which may have a material and adverse impact on our revenue, business, financial condition, and results of operations. Any number of factors could potentially negatively affect diner retention, growth, and engagement, thereby adversely affecting our revenue, financial results, and future growth potential, including if:menu items or if we introduce new services that are not favorably received;Waitr Platform or the Bite Squad Platform,Platforms, delivery quality, food quality or other products or concerns related to privacy and sharing, safety, security, or other factors;Waitr Platform or the Bite Squad Platform,Platforms, delivery services or restaurant services or products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees;our drivers, Restaurant Partners,restaurants on the Platforms, or other companies in the mobile food delivery or ordering industry are the subject of adverse media reports, adverse litigation, or long-term governmental regulation such as fee caps, or other negative publicity;we experience significant losses associated with litigation or claims for which insurance is inadequate;we are affected by changes to generally accepted accounting principles;we experience fluctuations based on macroeconomic conditions; orwe are unable to maintain and increase•further degradation of our Active Diner base and order frequency or our Average Daily Orders and Gross Food Sales.11the Platformsother platforms could seriously harm our business.Restaurant Partnersrestaurants to diners on the Platforms. The number of Active Diners, Average Daily Orders and Gross Food Sales depends on the availability of quality items available on the Platforms from restaurants viewed positively by diners. In addition, we generate a significant portion of revenue from onboarding fees and sales commissions from having Restaurant Partners actively participating on the Platforms. As is typical in our industry, Restaurant Partnersrestaurants do not agree to long-term contracts with us, and they are generally free to leave the Platforms with minimal notice.notice or to participate on competing platforms. While no single Restaurant Partnerrestaurant accounts for more than 10% of our revenue, most of the restaurants on our Platforms participate on competing platforms, many of the restaurants on our Restaurant PartnersPlatforms only recently started providing menu items on the Platforms, and theymany restaurants spend a relatively small portion of their overall budget with us. In addition, some Restaurant PartnersRestaurants may view the Waitr Platform or the Bite Squad Platform as experimental and unproven. Restaurants will not continue to do business with us if we do not increase revenues for them or provide delivery, dine-in or takeoutcarryout ordering for diners in an effective manner, or if they do not believe that their investment in onboarding forthe use of the Platforms will generate a competitive return relative to other alternatives, especially including from our competitors.Moreover, we rely heavilyour ability to collect and disclose data and metrics to and for Restaurant Partners to attract new restaurants and retain existing restaurants. For example, we present historical data about sales to demonstrate our value to attract new Restaurant Partners to the Platforms. Any restriction, whether by law, regulation, policy, or other reason, on our ability to collect and disclose data that Restaurant Partners find useful would impede our ability to attract and retain restaurants.We cannot assure that growth of Restaurant Partner acquisitions willPlatforms may not continue at historical rates, and the addition of new restaurants to the Platforms and retention of existing restaurants on the Platforms could decline due to a number of factors. First, the cost of acquiringadding new Restaurant Partnersrestaurants or retaining existing Restaurant Partnersrestaurants on the Platforms could increase substantially. Competition to advertise our services to restaurants will likelyhas been increasing and could continue to increase as a result of increasing competition among similar companies for a finite pool of restaurants. In addition, the number of options available to restaurants may result in downward pressure on the prices that restaurants are willing to pay for our services. As more choices become available for diners to order delivery, dine-in or takeoutcarryout from restaurants, the number and frequency of our word-of-mouth and/or organic referrals may decline. Our efforts to attract and retain new restaurants in new geographical areas as a result of our current expansion efforts are unproven and may not be successful.delivery service levelsgrowth rates decline, investors’ perceptions of our business may be adversely affected and the market price of our common stock could decline. There can be no assurance of any future profitable results of operations for various reasons, including insufficient growth, declining numbers of Active Diners or if restaurants do not seeorders, increasing competition, costs to scale our business and technology and other risks described elsewhere in this Form 10-K.business, restaurants could leavedriver compensation.Platforms, reducing revenueyear ended December 31, 2020, we terminated our employee drivers and significantly harmingoutsourced our business.Restaurants will not continuedriver function to do businessDelivery Logistics, who provides us with us or will be unwilling to pay onboarding or other services fees ifindependent contractor drivers. While we do not deliver food and beveragesimplemented this change in a timely, professionalway intended to ensure that the drivers are indeed independent contractors under applicable law and friendly mannerregulation, certain state and local governmental authorities have initiated efforts to classify independent contractors performing driver jobs as employees. In January 2020, California State Assembly Bill 5 (“AB5”) went into effect, which codifies an employee-friendly test to determine whether a worker is an employee or if they doindependent contractor under California law. However, in November 2020, California voters passed Proposition 22, the App-Based Drivers as Contractors and Labor Policies Initiative. Proposition 22 classifies app-based transportation and delivery drivers as independent contractors and adopts various labor and wage policies specific to this class of workers, which policies will likely increase operating costs. Many legal experts have stated that the passage of Proposition 22 effectively exempts this class of workers from the reach of AB5. While the Company does not believe that their investmentoperate in California, the Waitr Platform or the Bite Squad Platform, as applicable, will produceCompany has received misclassification claims and may see an increase in revenueclaims from other states that have adopted or may adopt classification tests similar to AB5 (without any similar Proposition 22 carve-out for app-based delivery drivers) and there can be no assurance that any claim will not be combined into a collective or takeoutclass action. These regulatory actions and/or increased scrutiny could result in increased costs and burdens for the Company.Our service feeIn these circumstances, we must be able to timely deliver food orders to maintain relationships with diners and commission revenue and the availability of restaurants on the PlatformsPlatforms. The unwillingness of independent contractor drivers to perform their services when and where they are needed could adversely harm our financial performance and operating results.followingrecent inflationary pressures and increased gasoline prices, which could require us to spend more to procure independent contractor driver services. These macroeconomic factors among others:Decreases inare largely beyond our control and there is uncertainty as to the numberduration of Active Diners or Average Daily Orders on the Platforms;Loss of online or mobile food delivery market share to competitors;Inability to professionally and accurately display menu items to consumers on the Platforms;Adverse media reports or other negative publicity involving the Company, our drivers, our restaurants or other companies in our industry; andThe impact ofthese recent macroeconomic conditions and conditions in the restaurant industry in general. also believe that maintaining and enhancing our brands is critical to expanding our base of diners and restaurants. Many of our new diners are referred by existing diners, and, therefore, we strive to ensure that our diners remain favorably inclined towards the Platforms and theour online ordering service. Maintaining and enhancing our brands willcould depend largely on our ability to continue to provide useful, reliable, trustworthy, and innovative services, which we may not do successfully. We may introduce new services, products or terms of service that diners do not like, which may negatively affect our brands.12Restaurant PartnersPlatforms (or quality and safety of their food quality or safety)food), delivery driver employees and independent contractorscontractor drivers and others may negatively affect our brands if consumers do not have a positive experience interacting with those parties after using the Platforms. We may experience media, legislative, or regulatory scrutiny of our delivery and food safety record, our delivery experience, privacy matters or other issues, which may adversely affect our reputation and brands. We may also fail to provide adequate customer service, which could erode confidence in our brands. Our brands may also be negatively affected by the actions of Restaurant Partners that are deemed to be negative, such as providing food that is of low quality or unsafe. Maintaining and enhancing our brands may require us to make substantial investments and these investments may not be successful. We face the potential loss of our trade name due to certain litigation (see Item 3. Legal Proceedings below). If we fail to successfully promote and maintain our brands, or if we incur excessive expenses in this effort, our business and financial results may be adversely affected.rely on restaurantscould be required to devote significant resources to advertising and marketing in our networkorder to increase awareness of the new brand and for many aspectsthe successful integration of our business,rebranding process. Furthermore, our rebranding initiative may negatively impact our name recognition with customers and their failure to maintain their service levels could harm our business.Diners demand quality food at reasonable prices. Diners’ ability to obtain such quality food from restaurants they like on a timely basis through the Platforms drives the primary value of the Platforms. Our ability to provide diners with a high-quality and compelling food ordering experience depends, in part, on diners’ receiving competitive prices, convenience, customer service and responsiveness from restaurants from whom they order. If these restaurants do not meet or exceed diner expectations with competitive levels of convenience, customer service, price and responsiveness, the value of our brand may be harmed, our ability to attract new diners to the Platforms may be limited and the number of diners placing orders through the Platforms may decline,partners, which could have a materialan adverse effectimpact on our business, financial condition and results of operations. Likewise, if restaurants face challenges or difficulties set forth elsewhere in these risk factors, the number of restaurants on the Platforms could decline, the price of food could increase or customer service levels could suffer, all of which could harm our business and results of operations.year. Orderyear on our Platforms. For example, order frequency and Gross Food Sales tendtends to increase from September to May and we generally experience a relative decrease in diner activity from June to Augustvary, primarily as a result of weather patterns, university summer breaks and other vacation periods. In addition, orders in cities or towns with college campuses tend to fluctuate with the start and end of the school year, which can comprise a large part of our overall revenue in certain locations. Our revenues fluctuate according to these patterns and due to the timing of certain holidays within each quarter and result in quarterly fluctuations. As a result, diner activity and demand for our services has historically been stronger in our first and fourth fiscal quarters as compared to our second and third fiscal quarters. In addition, other seasonality trends may develop and the existing seasonality and diner behavior that we experience may change or become more extreme.cases.cases and may continue to provide disruption in future periods in certain markets. In such events, the availability of independent contractor drivers could be limited due to unsafe driving conditions or the refusal or unwillingness of drivers to work during such weather events. This can result in substantially delayed delivery times and diner frustration with our services, reducing the willingness of consumers to order using the Platforms in the future. We have in the past experienced increased order volume during certain holidays, while facing a simultaneous shortage in drivers, which can also result in substantial delivery delays and diner frustration.dissatisfaction. In addition, the likelihood of accidents may increase during inclement weather events, thereby increasing the costs to us of each delivery, exposing us to potential litigation or accident claims and reducing overall driver efficiency.claims. Any of these events could substantially impact our revenue and results of operations and our ability to grow and operate our business.We may not continue to grow at historical growth rates or achieve profitability in the future.Our revenue has grown substantially in recent periods, and this growth rate may not be sustainable. We believe that our growth rates of Active Diners and Gross Food Sales will decline over time. Historically, our diner growth has been a primary driver of growth in our revenue. We expect that our diner growth, new Restaurant Partner growth and revenue growth rates will decline as the size of our Active Diner base increases and as we achieve higher market penetration rates. As our growth rates decline, investors’ perceptions of our business may be adversely affected and the market price of our common stock could decline. We may not realize sufficient revenue to achieve profitability and may incur losses in the future for several reasons, including insufficient growth in new menu items, declining Active Diners or orders, increasing competition, costs to scale our business and technology and other risks described elsewhere in this Form 10-K.Although we have added additional employees and resources to manage growth, most of these employees have been with the company only a very short period of time. We have and intend to continuemay be required to make substantial investments in the future in technology, customer service, sales and marketing infrastructure.infrastructure in order to adequately handle growth, surges in orders and consumer demands. As we continue to grow, we must be able to effectively integrate, develop and motivate a large number of new employees, while maintaining the beneficial aspects of our company culture. We may not be able to manage growth effectively. If we do not manage thebrand,brands, business and results of operations.13business depends on discretionary spending patterns in the areas in which our Restaurant Partners’ food and beverage operations are located and in the economy at large, and economic downturns could materially adversely affect our results of operations.Purchases at restaurants and food and beverage hospitality services locations are discretionary for consumers and we are therefore susceptibleefforts to changes in discretionary patterns or economic slowdowns in the geographic areas in which Restaurant Partners are located and in the economy at large. We believe that consumers generally are more willing to make discretionary purchases, including delivery or takeout of restaurant meals, during favorable economic conditions. Disruptions in the overall economy, including high unemployment, financial market volatility and unpredictability, and the related reduction in consumer confidence could negatively affect food and beverage sales throughout the restaurant industry, including orders through the Platforms. In addition, we believe that a proportion of our weekday revenues, particularly during the lunch hour, are derived from business customers using expense accounts. Our business therefore may be affected by reduced expense account or other business-related dining by business clientele. There is also a risk that if uncertain economic conditions persist for an extended period of time or worsen, consumers might make long-lasting changes to their discretionary spending behavior, including ordering food or takeout less frequently. The ability of the U.S. economy to handle this uncertainty is likely to be affected by many national and international factors that are beyond our control. These factors, including national, regional and local politics and economic conditions, disposable consumer income and consumer confidence, also affect discretionary consumer spending. If any of these factors cause restaurants to cease operations or cease using the Platforms, it could also significantly harm our financial results, for the reasons set forth elsewhere in these risk factors. Continued uncertainty in or a worsening of the economy, generally or in a number of our markets, and diners’ reactions to these trends could adversely affect our business and cause us to, among other things, reduce the number and frequency of new market openings or cease operations in existing markets.We prioritizeimprove the experience of restaurants and diners over short-term profitability at times, which may cause us to forego short-term opportunitiesnot be successful and couldthe related investment may impact our profitability.its long-terman excellent diner and Restaurant Partnerrestaurant experience and loyalty over short-term financial condition or results of operations. We frequently make decisions that may reduce our short-term revenue or profitability if we believe that the decisions benefit the aggregateloyalty. Our efforts in achieving improved diner and Restaurant Partnerrestaurant experience and will thereby improve our financial performance over the long term. For example, we monitor how restaurant responsiveness to orders affects diners’ experiences to ensure long delivery times are not perceived as a problem for hungry diners, and we may decide to remove certain restaurant offerings on the Platforms to ensure our diners’ satisfaction in the overall delivery experience. In addition, we may make changes to the Platforms or offerings on the Platforms based on feedback provided by our diners and Restaurant Partners. These decisionsloyalty may not produce the short-term or long-term benefits that we expect, in which case our growth and engagement, our relationships with diners and Restaurant Partners,restaurants, and our business could be materially adversely affected.If use of the Internet via websites, mobile devices and other platforms, particularly with respect to online food ordering, does not continue to increase as rapidly as we anticipate, our business and growth prospects will be harmed.Our business and growth prospects substantially depend upon the continued and increasing use of the Internet and mobile telecommunications as an effective medium of transactions by diners. Orders on the Platforms are conducted using the Internet and/or mobile networks. Historical rate of growth and adoption in Internet and mobile wireless communications may not predict future rates of growth or adoption. Diners or our Restaurant Partners may not continue to use the Internet or mobile networking services to order their food at current or increased growth rates or at all. Consumers in our industry (and in others) may reject the use of the Internet and mobile applications as a viable platform or resource for a number of reasons in the future, including:actual or perceived lack of security of information or privacy protection;possible disruptions, computer viruses or other damage to Internet servers, users’ computers or mobile applications;excessive governmental regulation; andunacceptable delays due to actual or perceived limitations of wireless networks.14growth, retention and engagement.the Waitr App and the Bite Squad App (collectively, theapplications for our ordering technology (the “Apps”). Because the Apps are used primarily on mobile devices, the Apps must remain interoperable with popular mobile operating systems, Android and iOS, and related hardware, including but not limited to mobile devices. We have no control over these operating systems or hardware, and any changes to these systems or hardware that degrade the functionality of our products’ functionality,products, or give preferential treatment to competitive products, could seriously harm the usage of the Apps on mobile devices. Our competitors could attempt to make arrangements with Apple or Google to make interoperability of our products with those mobile operating systems more difficult or display their competitive offerings more prominently than ours. Similarly, our competitors could enter into other arrangements with mobile device manufacturers, wireless network carriers or Internet service providers that diminish the functionality of the Apps. We plan to continue to introduce new products regularly and have experienced that it takes time to optimize such products to function with these operating systems and hardware, impacting the popularity of such products, and we expect this trend tocould continue.The majority of our diner engagement is on smartphones with iOS operating systems. As a result, although our products work with Android mobile devices, we have prioritized development of the Apps to operate with iOS operating systems rather than smartphones with Android operating systems. To continue growth in user engagement, we will need to prioritize development of our products to operate on smartphones with Android operating systems. If we are unable to improve operability of our products on smartphones with Android operating systems, and those smartphones become more popular and fewer people use smartphones with iOS operating systems, our business could be adversely affected.The nature of our business and content on the Platforms exposes us to potential liability and expenses for legal claims that could materially affect our results of operations and business.We face potential liability, expenses for legal claims and harm to our business relating to the nature of the takeout food business, including potential claims related to food offerings, delivery and quality. For example, third parties could assert legal claims against us in connection with personal injuries related to food poisoning or tampering or accidents caused by the delivery drivers in our network. Alternatively, we could be subject to legal claims relating to the sale of alcoholic beverages by our restaurants to underage diners.Reports of food-borne illnesses, whether true or not, could adversely impact the results of our operations regardless of whether our diners actually suffer such illnesses from orders on the Platforms. Food-borne illnesses and other food safety issues have occurred in the food industry in the past, and could occur in the future. In addition, consumer preferences could be affected by health concerns about the consumption of foods provided on the Platforms, even if those concerns do not directly relate to food items available on the Platforms. A negative report or negative publicity, whether related to one of our Restaurant Partners or to a competitor in the industry, may have an adverse impact on demand for our Restaurant Partners’ food and could result in decreased diner orders on the Platforms. A decrease in orders or Active Diners as a result of these health concerns or negative publicity could materially harm our brands, business, financial condition and results of operations.Furthermore, our reliance on third-party food suppliers and distributors increases the risk that food-borne illness incidents could be caused by factors outside of our control and that multiple markets for our services would be affected rather than a single market. We cannot assure that all food items will be properly maintained during delivery to diners or that our employees or contractors will identify food that is problematic upon pickup. If diners become ill from food-borne illnesses, we and/or our Restaurant Partners could be forced to temporarily suspend service. Furthermore, any instances of food contamination, whether or not they are related to us, could subject us or our Restaurant Partners to regulation by applicable governmental authorities.We face the prospect of liabilities and expenses relating to the content and other information that we publish on the Platforms, third party sites and/or relating to our marketing efforts. We could face claims based on the violation of intellectual property rights, such as copyright infringement claims based on the unauthorized use of menu content or other items. Although we typically obtain our Restaurant Partners’ consent to publish their menu items prior to posting them on the Platforms, we may not always be successful in obtaining such consent. We could incur significant costs investigating and defending such claims and, if we are found liable, significant damages. If any of these events occur, our business and financial results could be adversely affected.Most of our drivers are employees, and the remainder are independent contractors. Almost all of our orders are delivered by drivers of motor vehicles. Some of our drivers have been involved in motor vehicle accidents, and it is almost certain that some of our drivers will be in motor vehicle accidents in the future. Although we maintain insurance policies in an attempt to cover the risks associated with a motor vehicle delivery business, we make no assurances that we will be able to maintain sufficient coverage of all claims relating to such injuries or accidents that foreseeably arise in this line of business. Furthermore, we have in the past and could in the future receive denial of coverage for particular insurance claims relating to injuries, accidents or violations.15We have incurred and expect to continue to incur expenses relating to legal claims. The frequency of such claims could increase proportionally to growth in the number of restaurants and diners on the Platforms and the number of drivers on the road. We have experienced diversion of attention by management to address these claims, and such claims can result in significant costs to investigate and defend, regardless of the merits of such claims. The potentially significant number and amount of claims could materially affect our results of operations and harm our business.our diners drivers and restaurants dependsdepend upon the reliable performance of the Platforms and their underlying technical infrastructure. We have experienced service disruptions, and may experience future disruptions, outages or other performance problems due to a variety of factors. As the Platforms grow more complex, store more information and service higher numbers of diners, their technical infrastructure could suffer. We may not be able to identify causes of performance issues or service disruptions. our Active Diners and restaurants and the amount and types of information shared on the Platforms continue to grow, we will need an increasing amount of technical infrastructure, including network capacity, and computing power, to continue to satisfy the needs of our diners, driversrestaurants on the Platforms and Restaurant Partners.the independent contractor delivery drivers. It is possible that we may fail to effectively scale and grow our technical infrastructure to accommodate these increased demands. In addition, our business is subject to interruptions, delays, or failures resulting from natural disasters, terrorism, or other catastrophic events.diners, drivers or Restaurant PartnersPlatforms could violate applicable law and contracts with key service providers and could result in liability to us, damage to our reputation and brandbrands and harm to our business.Restaurant Partners, driversrestaurants or diners may seriously harm our reputation and our ability to retain and attract new Active Diners, driversdiners and Restaurant Partners.legally-protectedlegally protected personal information. Examples include diner order payment processing third parties who process diner orders, payroll and service payment processing third partiesother payments, and other payment and other service providers who collect and store diner, restaurant or employee information. We may also process and store and use additional third-partiesthird parties to process and store sensitive intellectual property and other proprietary business information, including that of the restaurants on our Restaurant Partners.Platforms. While we intend to maintain data privacy and security measures that are compliant with applicable privacy laws and regulations, future security breaches could subject us and/or these third-party service16and maywe would be unablerequired to comply with applicable lawlaws and standards. Inability to comply with applicable laws or standards resultingcould result in harm to our business.our Restaurant Partnersthe restaurants accept, or if payment-related data are compromised due to a breach of data, we may be liable for significant costs incurred by payment card issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs. If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures, and significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.17Our 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. compete with many traditional and online and mobile app food ordering and general delivery companies of varying sizes, including some that may have greater access to restaurants, a wider range of services, a wider range of menu or delivery items, greater capital resources, or other competitive advantages. Traditional food ordering techniques involve advertising by restaurants in low cost paper publications, through traditional online and offline media channels, with consumers simply calling restaurants or delivery services to place orders. Traditional takeout or delivery services are often lower cost than the Platforms and are difficult to disrupt. We also compete with smaller, regional and local companies that cover specific locations with specific restaurants or that offer niche services. We also compete, to a lesser extent, with restaurants that hire their own delivery drivers for online, mobile application or telephone orders. Numerous competitive factors could impair our ability to maintain or improve our profitability. These factors include the following:Many of our competitors’ periodically reduce or eliminate their delivery charges to consumers or commissions that they charge to restaurants to gain business, especially during times of increased competition or reduced growth in the economy, which may limit our ability to maintain or increase our order commissions and delivery charges, may require us to reduce our order commissions and delivery charges or may limit our ability to maintain or expand our business;Some restaurants have reduced or may reduce the number of mobile app or online ordering and delivery services and technologies that they use by selecting a single core company or a limited number of providers as approved service providers, and in some instances, we may not be selected;Restaurants could solicit bids from multiple service providers for their mobile application or online food ordering and delivery needs, which may depress onboarding fees, service fees, take rates or result in a loss of businessable to competitors;The continuing trend toward consolidation in the online and mobile app ordering and delivery industry may result in larger companies with greater financial resources and other competitive advantages, and we may have difficulty competing with them;Advances in technology may require us to increase investments in order to remain competitive, and our restaurant diners and consumers may not be willing to accept higher onboarding fees, service fees, take rates or delivery charges to cover the cost of these investments;Higher fuel prices and, in turn, higher fuel surcharges to our drivers may cause some of our drivers to demand higher wages or otherwise result in additional expense to us for reimbursement of mileage to drivers;Competition from “gig economy” companies in general may negatively impact our driver, restaurant customer and/or consumer relationships and service rates;We may have higher exposure to litigation risks as compared to other providers of delivery services; andRestaurants could develop their own online or mobile app food ordering and delivery technology and hire their own drivers to make their own deliveries, which could reduce demand for our services to restaurants and limit choices for consumers, reducing the number and frequency of orders using our technology.18We face substantial competitionsuccessfully compete in technology innovation and distribution. If we are unable to continue to innovate and provide technology desirable to diners, restaurants and restaurants,merchants, our business operations could materially suffer.We face significant competition in almost every aspect of our business. internet enabledinternet-enabled technology and online e-commerce are constantly changing. We face competition from larger and more established companies, such as Uber, GrubHub, Door Dash and others. Smallersmaller companies also provide similar services and technology. Furthermore, larger companies such as Facebook, Google, Apple and others could choose to offer similar services or technology at comparatively little additional costs to themselves. Our competitors may also develop products, features, or services that are similar to ours or that achieve greater market acceptance. These products, features, and services may undertake more far-reaching and successful product development efforts or marketing campaigns or may adopt more aggressive pricing policies.Usefulness,•usefulness, ease of use, performance and reliability of our products compared to those of our competitors;Size•size and composition of base of Active Diners;Engagement•engagement of Active Diners with the Platforms;The•the timing and market acceptance of products, including developments and enhancements to the Platforms or our competitors’ products;Customer•customer service and support efforts;Acquisitions•acquisitions or consolidation within our industry, which may result in more formidable competitors; andOur•our ability to attract, retain, and motivate talented employees, particularly software engineers.Platforms, and ifPlatforms. 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.19Our success to date has depended, and will continue tolargely on the skills, efforts and motivation of our executive officers, and our senior management team who generally have significant experience with the Company and within our industry. We also depend on the continued service ofother key operating and technology personnel. We also anticipate growth in diners and restaurants dueAs we continue to havinggrow, we cannot guarantee that we will continue to attract the benefit of a relationship withpersonnel we need to maintain our directors Tilman J. Fertitta and Steven L. Scheinthal and Fertitta Entertainment, Inc., Landry’s and other entities or businesses associated with Messrs. Fertitta or Scheinthal. Although we anticipate a great deal of support and benefit from relationships with these individuals or entities, our results of operations could suffer if contractual relationships fail to materialize from these associations, such relationships are terminated or we lose either individual as a director.competitive advantage. If for any reason the services of our key personnel were to become unavailable, there could be a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.As While we continuehave entered into an employment agreement with our chief executive officer until January 2025, the rest of our executive team has entered into at-will employment arrangements. We believe that equity inducements issued to grow, we cannot guarantee that we will continue to attract the personnel we needour executive team in connection with employment properly incentivizes our team to maintain our competitive position. In particular, we intend to hire a significant number of engineering, customer support, driver and sales personnel in the coming year. employment.expect tocould face significant competition from other companies in hiring such personnel, particularly in larger markets tointo which we expand. As we mature, the incentives to attract, retain, and motivate employees provided by equity awards or by future arrangements, such as through cash bonuses, may not be as effective as in the past. Additionally, we have a number of current employees whose equity ownership in the Company gives them a substantial amount of personal wealth. As a result, it may be difficult for us to continue to retain and motivate these employees, and this wealth could affect their decisions about whether or not they continue to work for us.expand. If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow effectively.We plan to continue to base a substantial amount of our operations in Lake Charles and Lafayette, Louisiana. It could become difficult to continue to attract or retain to these locations key engineering, sales and other talent required to compete with larger competitors whose operations are based in larger cities, where such talent historically may be easier to find. In addition, demographic trends favoring population growth in larger cities and away from smaller cities may make this increasingly difficult. Retaining and attracting key talent is extremely competitive in the high technology industry, particularly in the areas of mobile applications and Internet technology. If we are unable to retain or attract key talent or personnel, our operations could suffer, thereby materially adversely affecting our business.Driver shortages and increases in driver compensation could adversely affect our profitability and ability to maintain or grow our business.Driver shortages could require us to spend more to attract and retain employee and independent contractor drivers. We could face a challenge with attracting and retaining qualified drivers primarily due to intense market competition, which may subject us to increased payments for driver compensation and independent contractor driver rates. Also, because of the intense competition for drivers, we may face difficulty maintaining or increasing our number of employee and independent contractor drivers. Further, with respect to independent contractor drivers, shortages can result from contractual terms or company policies that make contracting with us less desirable to certain independent contractor drivers. In addition, the “on-call” or “on-demand” nature of the way that we ask independent contractor drivers to pick up shifts during busy times may result in difficulties procuring such independent contractor drivers when we need that labor most. Such a shortage could result in material harm to our business or reputation. Due to the absence of long-term contracts, independent contractors can quickly terminate their relationships with us. If we are unable to continue to attract and retain a sufficient number of employee and independent contractor drivers, we could face difficulty meeting consumer order demands or be forced to forego business that would otherwise be available to us, which could adversely affect our profitability and ability to maintain or grow our business.orand other natural phenomena wouldcould cause significant losses.20our delivery capabilities of independent contractor drivers, thus severely decreasing our revenue and increasing costs. Further, in the event of any such weather occurrence, our insurance may not be sufficient to cover the costs of repairing or replacing damaged equipment and we may suffer a significant decline in revenues if any of the restaurants on the Platforms are closed for an extended period of time or these events result in significant disruption to telecommunications systems, including the Internet or mobile phone services. Any such events could materially and adversely affect our business and the results of our operations.Increases in food, labor, fuel and other costs adversely affect our business.Changes in food and supply costs are a part of our Restaurant Partners’ business. The prices of food, labor, fuel or energy could continue to increase in the near future. Our Restaurant Partners may be unable to absorb higher costs without raising prices or ceasing operations. Restaurant profitability is dependent on, among other things, a restaurant’s ability to anticipate and react to changes in the costs of key operating resources, including food and other raw materials, labor, energy and other supplies and services. Substantial increases in costs and expenses could impact operating results of Restaurant Partners to the extent that such increases cannot be passed along to diners using the Platforms (or otherwise). The impact of inflation on food, labor, and energy costs can significantly affect our profitability if such inflation results in fewer Restaurant Partners, diners or orders that occur on the Platforms.Any significant increase in energy costs could adversely affect our business through higher rates and the imposition of fuel surcharges, which could affect our drivers’ costs and the amount that we must reimburse such drivers for services. Because most of the restaurants on the Platforms sell moderately priced food, we may choose not to, or be unable to, pass along commodity price increases to diners on the Platforms. Additionally, significant increases in gasoline prices could result in a decrease of deliveries or the available driver labor pool. If delivery time slows as a result, our reputation could be harmed, and the number of diners or orders could decline, harming our business.The restaurant business is affected by changes in international, national, regional, and local economic conditions, consumer preferences and spending patterns, demographic trends, energy costs, consumer perceptions of food safety, weather, traffic patterns, the type, number and location of competing restaurants, and the effects of war or terrorist activities and any governmental responses thereto. Factors such as inflation, higher costs for each of food, labor, benefits and utilities, the availability and cost of suitable sites, fluctuating insurance rates, state and local regulations and licensing requirements, legal claims, and the availability of an adequate number of qualified management and hourly employees also affect restaurant operations and administrative expenses. If our Restaurant Partners cannot adequately pass costs along to diners or otherwise finance or pay for these higher costs, they may cease operations, reduce offerings on the Platforms or otherwise demand lower commissions or diner fees from us, thereby reducing revenue and harming our business.We plan to continue to make acquisitions, which could require significant management attention, disrupt our business, dilute our stockholders and seriously harm our business.madeeffected, and intendmay continue to makeeffect, acquisitions to add specialized employees and complementary companies, products, and technologies. Our ability to acquire and successfully integrate larger or more complex companies, products, and technologies is unproven. In the future, we may not be able to find other suitable acquisition candidates, and we may not be able to complete acquisitions on favorable terms, if at all. Our competitors have large cash reserves and aggressive acquisition strategies, and we may not be able to successfully attract acquisition targets to the same degree as our competitors. Our previous and future acquisitions may not achieve our goals, and any future acquisitions we complete could be viewed negatively by diners, Restaurant Partners, driversrestaurants, or investors. In addition, if we fail to successfully close transactions successfully or integrate new teams, or integrate the products and technologies associated with these acquisitions into our company and culture, our business could be seriously harmed. Any integration process may require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or use the acquired products, technology, and personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may also incur unanticipated liabilities that we assume as a result of acquiring companies. We may have to pay cash, incur debt, or issue equity securities to pay for any acquisition, any of which could seriously harm our business. Selling equity to finance any such acquisitions would also dilute our stockholders. Incurring debt would increase our fixed obligations and could also include covenants or other restrictions that would impede our operations.21Our storage, processing and use of data, some of which contains personal information, subjects us to complex and evolving federal, state, and foreign 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.We are subject to a variety of laws and regulations in the United States and other countries that involve matters central to our business, including user privacy, sweepstakes, rewards or coupons, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other communications, e-commerce, competition, protection of minors, consumer protection, taxation, libel, defamation, internet or data usage, and online-payment services. Both in the United States and abroad, these laws and regulations constantly evolve and remain subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate. Because we store, process, and use data, some of which contains personal information, we are subject to complex and evolving federal, state, and foreign 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 diner and restaurant growth, orders, retention, or engagement, any of which could adversely affect our business.We have registeredtrademark “Waitr,” along with its stylized logo, with the U.S. Patent & Trademark Office. We have also registered the trademark “Waigo.” Waiter.com, Inc. sued Waitr Incorporated in 2016 in the United States District Court for the Western Districtrisk of Louisiana alleging, among other things, trademark infringement based on the use of the name “Waitr.” Although we believe that Waiter.com, Inc.’s lawsuit is baseless, there is a risk that the court could find that our use of the name “Waitr” infringes the rights of Waiter.com, Inc. In such event, the court could award Waiter.com, Inc. significant damages and/or order that we discontinue our use of the name “Waitr.” Any such adverse ruling or finding could materially adversely affect our financial results and operations. Having to use a different name could confuse Restaurant Partners and/or diners, resulting in fewer orders.We are currently, and expect to be in the future party to patent lawsuits and other intellectual property rights claims that are expensive and time consuming, and, if resolved adversely, could have a significant impact on our business, financial condition orand results of operations. For example, a ruling in the lawsuit filed by Waiter.com, Inc. could require that we stop using the name Waitr. We may decide to settle such lawsuits and disputes on terms that are unfavorable to us. Similarly, if any litigation to which we are a party is resolved adversely, we may be subject to an unfavorable judgment that may not be reversed upon appeal. The terms of such a settlement or judgment may require us to cease some or all of our operations or pay substantial amounts to the other party. In addition, we may have to seek a license to continue practices found to be in violation of a third party’s rights, which may not be available on reasonable terms, or at all, and22orand results of operations could be adversely affected as a result of an unfavorable resolution of the disputes and litigation referred to above.agreement; however,agreement. However, we always face the risk that our employees willmay try to unionize, and if our independent contractors were ever re-classifiedreclassified as employees, the magnitude of this risk would increase. Further, Congress or one or more states could approve legislation and/or the National Labor Relations Board (the “NLRB”) could render decisions or implement rule changes that could significantly affect our business and our relationship with employees and independent contractors, including actions that could substantially liberalize the procedures for union organization. For example, in December 2014, the NLRB implemented a final rule amending the agency’s representation-case proceedings that govern the procedures for union representation. Pursuant to this amendment, union elections can now be held within 10 to 21 days after the union requests a vote, which makes it easier for unions to successfully organize all employers, in all industries. In addition, we can offer no assurance that the Department ofNational Labor Relations Board will not adopt new regulations or interpret existing regulations in a manner that would favor the agenda of unions.restrictive•Restrictive work rules could hamper our efforts to improve and sustain operating efficiency and could impair our service reputation and limit our ability to provide next-dayour services;a•A strike or work stoppage could negatively impact our profitability and could damage customer and employee relationships,relationships; and some shippers may limit their use of unionized trucking companies because of the threat of strikes and other work stoppages; andan•An election and bargaining process could divert management’s time and attention from our overall objectives and impose significant expenses.23If our independent contractor drivers failmeet our contractual obligations or otherwise fail to perform in a manner consistent with our requirements, we may be required to utilize alternative service providers at potentially higher prices or with some degreemaintain an effective system of disruption of the services that we provide to diners. If we fail to deliver on time, if our delivery obligations are not otherwise met, or if the costs of our services increase, then our profitabilitydisclosure controls and restaurant relationshipsinternal control over financial reporting could be harmed.We currently rely upon a small portion of independent contractor drivers to perform the services for which we contract with our Restaurant Partners. Our reliance on independent contractor drivers, even if small by comparison to our use of employee drivers, creates numerous risks for our business. This increases the risk of driver shortages at critical times, such as peak order times.The financial condition and operating costs of our independent contractor drivers are affected by conditions and events that are beyond our control and may also be beyond their control. Adverse changes in the financial condition of our independent contractor drivers or increases in their car ownership or operating costs could cause them to seek higher revenues or to cease their business relationships with us. The prices that we charge our diners could be impacted by such issues, which may in turn limit pricing flexibility with diners, resulting in fewer delivery orders and decreasing our revenues.Independent contractor drivers typically utilize shirts and food carrier equipment bearing our trade names and trademarks. If one of our independent contractor drivers is subject to negative publicity, it could negatively reflect on us and have a material andan adverse effect on our business brand and results of operations.performance. Under certain laws,reporting. In addition, commencing with the fiscal year ended December 31, 2021, our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting. If we fail to adequately establish and maintain effective internal controls over financial reporting, or if our independent registered public accounting firm determines we have one or more material weaknesses in our internal control over financial reporting, we could also be subject to allegations of liability forlose investor confidence in the activitiesaccuracy and completeness of our independent contractor drivers.Independent contractor drivers are third-party service providers, as compared to company drivers who are employed by us. As independentfinancial statements, which could have an adverse effect on our business, owners, our independent contractor drivers may make business or personal decisions that conflict with our best interests. For example, if an order is unprofitable, route distance is further than desired or personal scheduling conflicts arise, an independent contractor driver may deny orders from time to time. In these circumstances, we must be able to timely deliver food orders to maintain relationships with diners and Restaurant Partners. The unwillingness of independent contractor drivers to perform their services when and where they are needed could adversely harm our financial performancecondition, and operating results.Ifthe trading price of our independent contractors are deemed by regulators or judicial processcommon stock.be our employees, thenOur Industrycould be adversely affected.Taxmay suffer if we are unable to adequately address downward pricing and other regulatory authoritiescompetitive pressures.past soughteconomy, which may limit our ability to assertmaintain or increase our order commissions and delivery charges, may require us to reduce our order commissions and delivery charges or may limit our ability to maintain or expand our business;certain typesfuture periods.driving positions are employeesglobal economy is weakened. Some of the companyprincipal risks during such times are as follows:theymay decrease diner demand for restaurant prepared food, and such issues and problems may affect the number of orders that occur through the Platforms;deliveringredesigned and customer tastes change, resulting in an imbalance between restaurants’ available menu items and the demands of Active Diners;driving, rather than independent contractors. Taxingother charges from among existing choices in an attempt to lower their costs, and otherwe might be forced to lower our rates or lose restaurants offering food or diners ordering food through the Platforms; andauthorities and courts apply a variety of standardsresponse in their determinationconnection therewith, may have significant, negative economic effects on the geographic areas in which we operate, which may include impacts to ordering, carryout, dine-in or delivery habits, availability of independent contractor status. Ifdelivery drivers, and restaurants’ ability to receive and prepare food. Additionally, many of our markets include colleges or universities whose populations fluctuate between semesters. Temporary closures or suspension of semesters by colleges and universities in response to the COVID-19 pandemic or other health events may have a material adverse effect upon our operations and financial results.are determinedinterest rates, taxes, license and registration fees, insurance, payment processing and other technology related fees, and the costs of healthcare for our employees.be our employees, we would incur additional exposure under federal and state tax, workers’ compensation, unemployment benefits, labor, employment, and tort laws, including for prior periods, as well as potential liability for employee benefits and tax withholdings.The requirementsdisruptions in the availability of being a public company, including compliance with the reporting requirementspopular order items, reducing use of the Exchange Act and the requirements of the Sarbanes-Oxley Act, may strainPlatforms. A significant interruption in our resources,normal order levels could disrupt our operations, increase our costs and distract management.Asnegatively impact our ability to serve our diners.public company, we needforeign state or groupcomply with new laws, regulations and requirements, certain corporate governance provisionsreduced economic demand, reduced availability of credit or ordering capabilities of the Sarbanes-Oxley ActPlatforms. Such events or enhanced security measures in connection with such events could impair our operations and result in higher operating costs.2002, related regulationscertain COVID variants and cases rising in areas with low vaccination rates provide continued uncertainty as to the potential short and long-term impacts of the SECpandemic on the global economy and on the Company’s business, in particular. There remains uncertainty as to whether or not the pandemic will continue to impact diner behavior, and if so, in what manner. To the extent that the COVID-19 pandemic, or a similar public health threat, adversely impacts the Company’s business, results of operations, liquidity or financial condition, it may also have the effect of heightening many of the other risks described in the risk factors in this Form 10-K.requirementsnumber of Nasdaq company. For example, we will need to:institute a more comprehensive compliance function;comply with rules promulgated by Nasdaq;prepare and distribute periodic public reports in compliance with obligations underdiners placing orders through the federal securities laws;establish new internal policies, such as those relating to insider trading; andinvolve and retain to a greater degree outside counsel and accountants in the above activities.Complying with statutes, regulations and requirements relating to public companies will occupy a significant amount of time of management and will significantly increase our costs and expenses,Platforms may decline, which could have a material adverse effect on our business, financial condition and results of operations. Likewise, if restaurants face challenges or difficulties set forth elsewhere in these risk factors, the number of restaurants on the Platforms could decline, the price of food could increase or customer service levels could suffer, all of which could harm our business and results of operations.cash flows. business.managementreliance on third-party food suppliers and distributors increases the risk that food-borne illness incidents could be caused by factors outside of our control and that multiple markets for our services would be affected rather than a single market. We cannot assure that all food items will be properly maintained during delivery to diners or that the independent contractor drivers will identify food that is problematic upon pickup. If diners become ill from food-borne illnesses, we and/or restaurants on our Platforms could be forced to temporarily suspend service. Furthermore, any instances of food contamination, whether or not they are related to us, could subject us or restaurants to litigation and/or regulation by applicable governmental authorities.implement programsoffer more attractive third-party solutions. They also may be able to offer and policiesprovide third-party products and services that we do not offer. Additionally, larger financial institutions may decide to complyperform in-house some or all of the services we provide or could provide, which may afford them with such statutes, regulations and requirementsa competitive advantage in an effective and timely manner.24Changes to the Fair Labor Standards Actmarket. One or more of 1938 and state minimum wage laws raising minimum wages or eliminating tip credit in calculating wages paidthese factors could have a material adverse effect on our profitability.Mostbusiness, financial condition and results of operations.driversvendors and customers as they adjust to the competitive marketplace. Because our standing arrangements and agreements with third-party payment processing solution providers typically contain no purchase or sale obligations and are paid the local minimum wage,terminable by either party upon no or relatively short notice, we are subject to tipsignificant risks associated with the loss or change at any time in the business habits and financial condition of key vendors as they adapt to changes in the market.laws. Either an increasecard issuers may reduce credit limits and become more selective in local minimum wagetheir card issuance practices. Any of these developments could have a material adverse impact on our financial position and results of operations.eliminationelectronic payment industry in general could adversely affect our business, financial condition and operating results.tip credit will increase labor costs, whichpayments among the types of cards changes in a way that is adverse to us, it could have a material adverse effect on our financial results.Thecondition and results of operations. Regulatory changes may also result in the charging of additional fees for use of credit or debit cards, thereby impacting use of electronic payments. Additionally, in recent years, increased incidents of security breaches have caused some consumers to lose confidence in the ability of businesses to protect their information, causing certain consumers to discontinue use of electronic payment methods. Security breaches could result in financial institutions canceling large numbers of credit and debit cards, or consumers or businesses electing to cancel their cards following are risks relatedsuch an incident.Bite Squad Merger:Combining the two companies may prove to be more difficult, costly and time consuming than expected, which could cause us not to realize some or all of the anticipated benefits and synergies of the Bite Squad Merger.In connection with the Bite Squad Merger, we have incurred additional debt, whichdelisting could adversely affect us, including by lowering our credit ratings, increasing our interest expense and decreasing our business flexibility, particularly if we are not able to realize some or all of the anticipated benefits and synergies of the Bite Squad Merger.In connection with the Bite Squad Merger, we have issued additional shares of common stock of the Company to the lenders under the certain credit and guaranty agreement, dated as of November 15, 2018, as amended on January 17, 2019, by and among Merger Sub, as borrower, Waitr Intermediate Holdings, LLC, a Delaware limited liability company (“Intermediate Holdings”) and wholly-owned subsidiary of Waitr Holdings Inc., certain subsidiaries of Merger Sub, as guarantors, various lenders and Luxor Capital (as defined in Part II, Item 7, MD&A), as administrative agent, collateral agent and lead arranger.The Bite Squad Merger will involve substantial non-recurring costs, including significant transaction costs, regulatory costs and integration costs, such as facilities, systems and employment-related costs, and we may incur unanticipated costs or unknown liabilities which may be significant. Although we expect the elimination of duplicative costs and other cost synergies from operational and functional efficiencies following the integration of the two companies to exceed integration costs over time, we may not be able to achieve this result as quickly as anticipated or at all, particularly if we are not able to realize some or all of the anticipated benefits and cost savings from the acquisition.Salesmarket liquidity of our common stock by shareholders of Bite Squad who receive shares of our common stock as part of the Bite Squad Merger consideration may result in a decline inand the market price of our common stock.Uncertainties associatedNasdaq listing requirements include the maintenance of a minimum average closing price of at least $1.00 per share during a consecutive 30 trading-day period. On January 26, 2022, we received written notice from Nasdaq indicating that the minimum bid price of our common stock had closed at less than $1.00 per share over the previous 30 consecutive business days, and as a result, did not comply with Listing Rule 5550(a)(2) (the “Bid Price Rule”). In accordance with Listing Rule 5810(c)(3)(A), we are being provided 180 calendar days, or until July 25, 2022, to regain compliance with the Bite Squad Merger mayBid Price Rule. If at any time before July 25, 2022, the bid price of our common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will provide us with written confirmation of compliance with the Bid Price Rule and the matter will be closed.Bite Squad’s respective abilitieshaving an adverse effect on our business, financialmanagementqualified employees, to raise capital, and other key employees during the integration period, which could adversely affect our and Bite Squad’s respective businesses and operations, which could cause us not to realize some or all of the anticipated benefits of the Bite Squad Merger.execute on a strategic alternative.The Bite Squad Merger may disrupt our or Bite Squad’s businesses, which may harm our respective businesses and impact our respective abilities to retain customers.Uncertainties associated with the manner in which the combined company following the Bite Squad Merger will fare in the global economic environment may adversely affect the combined company’s business and operations.The Bite Squad Merger and the operation of its business can lead us to incur unknown or new types of costs and liabilities, subject us to new regulatory and compliance frameworks, new market risks, involve operations in new geographies and challenging labor, regulatory and tax regimes as well as the execution and compliance costs and risks associated with such activities.An anticipated benefit of the Bite Squad Merger lies in the acquisition of Bite Squad’s intellectual property rights. If we are unable to protect such intellectual property rights or if our protection efforts are unsuccessful, we may not be able to realize some or all of the anticipated benefits from the acquisition.25Risks Related to Our SecuritiesIn addition, if the benefits of the Landcadia Business Combination and/or Bite Squad Merger do not meet the expectations of investors or securities analysts, the market price of our securities may decline. Prior to the Landcadia Business Combination, trading in our common stock was not active. Accordingly, the valuation ascribed to our common stock in the Landcadia Business Combination may not be indicative of the price that will prevail in the trading market following the business combination. If an active market for our securities develops and continues, the trading price of our securities following the business combination could be volatile and subject to wide fluctuations in response to the various factors, including those listed above.AsSubstantially all of March 7, 2019, we had 69,881,062our outstanding shares of common stock outstanding. Once the registration statement registering our securities issued in connection with the Landcadia Business Combination and Bite Squad Merger becomes effective, all such securities registered thereby, except for shares of common stock subject to transfer restrictions, will beare eligible to be sold into the public market without restrictions, subject to compliance by employees and directors with the Company’s insider trading policy for such parties that are covered thereby. Significant sales of our common stock could cause our share price to decline.26If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. We are currently covered by one or more securities analysts, but there is no guarantee such coverage will continue. If one or more of the analysts covering our common stock downgrades our common stock or publishes misleading or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price or trading volume to decline.Fulfilling our obligations incident to being a public company, including with respect to the requirements of and related rules under the Sarbanes-Oxley Act of 2002, is expensive and time-consuming, and any delays or difficulties in satisfying these obligations could have a material adverse effect on our future results of operations and our stock price.We are required to file annual, quarterly and other reports with the SEC. We are required to prepare and timely file financial statements that comply with SEC reporting requirements. We are also subject to other reporting and corporate governance requirements under the listing standards of Nasdaq and the Sarbanes-Oxley Act of 2002, which impose significant compliance costs and obligations upon us. Being a public company requires a significant commitment of resources and management oversight which increases our operating costs. These requirements also continue to place significant demands on our finance and accounting staff, which may not have prior public company experience or experience working for a newly public company, and on our financial accounting and information systems. We have hired and in the future may hire additional accounting and financial staff with public company reporting experience and technical accounting knowledge. Other expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses. As a public company, we are required, among other things, to:prepare and file periodic reports, and distribute other stockholder communications, in compliance with the federal securities laws and Nasdaq listing standards;define and expand the roles and the duties of our board of directors (the “Board”) and its committees;institute more comprehensive compliance, investor relations and internal audit functions; andevaluate and maintain our system of internal control over financial reporting, and report on management’s assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting Oversight Board.In particular, the Sarbanes-Oxley Act of 2002 requires us to document and test the effectiveness of our internal control over financial reporting in accordance with an established internal control framework, and to report on our conclusions as to the effectiveness of our internal controls. In addition, we are required under the Exchange Act to maintain disclosure controls and procedures and internal control over financial reporting. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. If we are unable to conclude that we have effective internal control over financial reporting, investors could lose confidence in the reliability of our financial statements. This could result in a decrease in the value of our common stock. Failure to comply with the Sarbanes-Oxley Act of 2002 could potentially subject us to sanctions or investigations by the SEC, Nasdaq, or other regulatory authorities.27Board;seventy-five percent (75%)75% of the voting power of all then outstanding shares of capital stock entitled to vote generally in the election of directors, which limits the ability of stockholders to remove directors;seventy-five percent (75%)75% of the voting power of all then outstanding shares of capital stock entitled to vote generally in the election of directors and the requirement that the amendment or repeal of certain provisions of our certificate of incorporation be approved by theseventy-five percent (75%)75% of the outstanding shares entitled to vote thereon, which limit the ability of stockholders to effect corporate governance changes; andDGCL,Delaware General Corporation Law, our Charter or our Bylaws; or28charterCharter described above. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees, which may discourage such lawsuits against the Company and its directors, officers and employees. Alternatively, if a court were to find these provisions of the Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, the Company may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect the Company’s business and financial condition.The recently passed comprehensive tax reform bill could adversely affect our business, financial condition and holders of our common stock.On December 22, 2017, President Trump signed into law the final version of the tax reform bill commonly known as the “Tax Cuts and Jobs Act” (the “Tax Act”), that significantly reforms the Internal Revenue Code of 1986, as amended (the “Code”). The Tax Act, among other things, contains significant changes to corporate taxation, including a permanent reduction of the corporate income tax rate, a partial limitation on the deductibility of business interest expense, a limitation of the deduction for net operating loss carryforwards to 80% of current year taxable income, and the modification or repeal of many business deductions and credits. We continue to examine the impact this tax reform legislation may have on our business. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the Tax Act is uncertain and our business and financial condition could be adversely affected. The impact of this tax reform on holders of our common stock is also uncertain and could be adverse.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 are subject to income taxes in the United States, and our domestic tax liabilities are subject to the allocation of expenses in differing jurisdictions. Our effective tax rates could be subject to volatility or adversely affected by a number of factors, including:changes in the valuation of our deferred tax assets and liabilities;expected timing and amount of the release of any tax valuation allowances;tax effects of stock-based compensation;costs related to intercompany restructurings;changes in tax laws, regulations or interpretations thereof; andlower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.exercisable for shares of our common stock and the Notes 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.Wethe Luxor Parties to purchase an aggregate of 384,615Capital. The Debt Warrants are currently exercisable for 574,704 shares of our common stock at $13.00with an exercise price of $8.70 per share at the Closing.share. In addition, the Notes are convertible into up to 4,615,3865,690,129 shares of common stock. In 2020, we issued our chief executive officer an option to purchase 9,572,397 shares of common stock at an exercise price of $0.37 per share, and in 2021 we issued him 3,134,325 performance-based restricted stock units and 3,500,000 time-based vesting restricted stock units. The shares of common stock issued upon exercise of the Debt Warrants andthese derivative securities (and restricted stock grants) and/or conversion of the Notes will result in dilution to the then existing holders of common stock of the Company and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock. Other equity-based awards were issued in 2021 that also could result in dilution and increased shares also eligible for resale in the public market. See Part II, Item 7, MD&A8, Note 10 - Debt, for the definitions of Notes Debt Warrants and Luxor Parties.29are an emerging growth company withinmay issue shares of preferred stock in the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, thisfuture, which could make our securities less attractiveit difficult for another company to investors and may make it more difficult to compare our performance with other public companies.We are an “emerging growth company” within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. Weacquire us or could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including but not limited to, if the market valueotherwise adversely affect holders of our common stock, held by non-affiliates exceeds $700,000,000 aswhich could depress the price of any June 30 before that time, in which case we would no longer be an emerging growth company asour common stock.following December 31. We cannot predict whether investors will findshares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a resultshareholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our reliance on these exemptions,common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discourage bids for our common stock at a premium to the trading pricesmarket price, and materially and adversely affect the market price and the voting and other rights of the holders of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.common stock.Waitr’sOur corporate headquarters are located in a multi-tenant office buildingLafayette, Louisiana. We consider our current facilities suitable for their purpose and adequate to support our business. Additional information relative to lease obligations is included in Lake Charles, Louisiana at 844 Ryan Street, where Waitr leases 10,554 square feet. AsPart II, Item 8, of December 31, 2018, Waitr also leased approximately 22,168 square feet of office space in Lafayette, Louisiana and 4,042 square feet of office space in Baton Rouge, Louisiana. Waitr has entered into a lease agreement for approximately 27,509 square feet of additional office space in Lafayette, effective September 1, 2019. In addition to the Louisiana offices, Waitr leases space for smaller offices throughout the Southeastern United States in certain markets in which it operates.Bite Squad has corporate offices in Minneapolis, Minnesota, as well as smaller offices across most markets in which it operates across the United States. Bite Squad rents office space and parking from KSM Real Estate, LLC, an entity jointly owned by a board member of the Company and a current shareholder. As of December 31, 2018, Waitr had operations in more than 250 cities across 10 states. On January 17, 2019, in connection with the Bite Squad Merger, Waitr’s operations expanded to more than 600 cities in 31 states. Waitr believes that substantially all of its property and equipment is in good condition and its buildings and improvements have sufficient capacity to meet current needs. From time to time, Waitr leases additional facilities to meet the needs of its business as it pursues additional growth.On 14, 2016, Waiter.com, Inc. “Waiter.com” filed a lawsuit against Waitr IncorporatedInc. in the United States District Court for the Western District of Louisiana, alleging trademark infringement based on Waitr’s use of the “Waitr” trademark and logo, Civil Action No.: 2:16-CV-01041. Plaintiff seeksThe plaintiff sought injunctive relief and damages relating to Waitr’s use of the “Waitr” name and logo. NoDuring the third quarter of 2020, the trial date was rescheduled to June 2021. On June 22, 2021, the Company entered into a License, Release and Settlement Agreement (the “Settlement”) to settle all claims related to this lawsuit. Pursuant to the Settlement, the Company paid the plaintiff $4.7 million in cash on July 1, 2021. The Settlement payment is included in other expense in the consolidated statement of operations for the year ended December 31, 2021. In connection with the Settlement, we agreed to adopt a new trademark or tradename to replace the Waitr trademark and to discontinue use of the Waitr trademark in connection with the marketing, sale or provision of any web-based or mobile app-based delivery, pick-up, carry-out or dine-in services using the Waitr trademark by June 22, 2022, unless extended by eight additional months in exchange for a one-time payment of $800,000.been set for this case.heard oral argument on that motion, and has taken the motion under advisement. No discovery has commenced as of the date hereof. Waitr believes that this caselawsuit lacks merit and that it has strong defenses to all of the infringement claims alleged. Waitr intendscontinues to vigorously defend the suit.lawsuitlawsuits described above, Waitr is involved in other litigation arising from the normal course of business activities. Waitr is involvedactivities, including, without limitation, vehicle accidents involving employees and independent contractor drivers resulting in various lawsuits involving claims foralleging personal injuries physical damage and workersmedical expenses, labor and employment claims, allegations of intellectual property infringement, and workers’ compensation benefits sufferedbenefit claims as a result of alleged Waitrconduct involving its employees, independent contractor drivers, independent contractors, and third-party negligence. Although Waitr believes that it maintains insurance with standard deductibles that generally covers its liability for potential damages if any,in many of these matters where coverage is available on acceptable terms (it is not maintained for claims involving intellectual property), insurance coverage is not guaranteed, there are limits to insurance coverage and Waitrin certain instances claims are met with denial of coverage positions by the carriers; accordingly, we could suffer material losses as a result of these claims, or the denial of coverage for such claims.claims, or damages awarded for any such claim that exceeds coverage. Litigation is unpredictable and we may determine in the future that certain existing claims have greater exposure or liability than previously understood. See Risk Factors – “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.”30Prior to November 15, 2018, the Company had two classes of common stock: Class A common stock, par value $0.0001 per share (“Class A common stock”), and Class F common stock, par value $0.0001 per share (“Class F common stock”). On November 15, 2018, in connection with the Landcadia Business Combination, all of the Class F common stock converted into Class A common stock on a one-for-one basis and the Company’s second amended and restated certificate of incorporation was amended and restated to, among other things, effect the reclassification and conversion of all of the Class A common stock and Class F common stock into a single class of common stock. Prior to the consummation of the Landcadia Business Combination, the common equity of the Company was traded on Nasdaq under the symbols “LCA,” “LCAHU” and “LCAHW”.March 1, 2019,February 10, 2022, there were approximately 4869,607 stockholders of record of the Company’s common stock. The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities in security position listings maintained by depositories.Company’s warrants trade on the over-the-counter markets operated by OTC Markets Group. On February 25, 2019, the Company completed an offer to exchange and consent solicitation pursuant to which the Company exchanged 24,769,192 of its 25,000,000 outstanding public warrants (“Public Warrants”)market for an aggregate of 4,458,438 shares ofour common stock is volatile and amendedsubject to fluctuations, as the warrant agreement governing its Public Warrantsclosing bid price between January 1, 2021 through March 3, 2022 has ranged from a high of $4.14 per share to provide for the exchangea low of the remaining Public Warrants on March 12, 2019. The remaining 230,808 Public Warrants were exchanged on March 12, 2019 for an aggregate of 37,391 shares of common stock.stock to date.stock. The payment of cash dividends in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash or stock dividends will be within the discretion of the Board at such time. The Board is not currently contemplating and does not anticipate paying any cash dividends or declaring any stock dividends in the foreseeable future. Further, if the Company incurs any indebtedness, itsCompany’s ability to declare dividends may beis limited by restrictive covenants that may be agreed to in connection therewith.Unregistered Sales of Equity SecuritiesThere were no sales of unregistered equity securities during the three months and year ended December 31, 2018.Issuer Purchases of Equity Securities2018,2021, the Company did not repurchase any of its common stock.31
August 2021 ATM Program November 2021 ATM Program Total Maximum aggregate offering price (in thousands) $ 30,000 $ 50,000 Total shares sold 24,322,975 1,679,631 26,002,606 Average sales price per share $ 1.23 $ 0.83 $ 1.21 Gross proceeds (in thousands) $ 30,000 $ 1,398 $ 31,398 Net proceeds (in thousands) $ 29,535 $ 1,359 $ 30,894 Selected Financial DataThe following table sets forth, as of the dates and for the periods indicated, selected financial data which is derived from the Company’s audited consolidated financial statements for the respective periods (in thousands, except per share amounts). Reported amounts from operations included herein prior to the Landcadia Business Combination are those of Waitr Incorporated. The following table does not include the results of operations of Bite Squad.The following selected financial data is not necessarily indicative of the results of future operations and should be read in conjunction with Part II, [Reserved]7, “ 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes thereto included in Part II, Item 8, “ Financial Statements and Supplementary Data” of this Form 10-K to fully understand factors that may affect the comparability of the information presented below. Certain 2017 expenses have been reclassified to conform to current period presentation. See Note 2, Basis of Presentation and Summary of Significant Accounting Policies, for further details.32Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Dollar amounts in this discussion are expressed in thousands, except as otherwise noted. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed elsewhere in this Form 10-K, particularly in Part I, Item 1A, “Risk Factors”.Risk Factors. Waitr does not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.November 15, 2018, the Company (f/k/a Landcadia Holdings, Inc.) completed the acquisition of Waitr Incorporated, pursuant to the Landcadia Merger Agreement. In connection with the Closing, the Company changed its name from Landcadia Holdings, Inc. to Waitr Holdings Inc. Originally formed on December 5, 2013 as a Louisiana corporation, Waitr Incorporated began operations in 2014 as a restaurant platform for online food ordering and delivery services, and grew quickly, connecting restaurants, diners and delivery drivers in various markets. Landcadia Holdings, Inc. was a special purpose acquisition company whose business was to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination. One of the primary purposes of the Landcadia Business Combination was to provide a platform for Waitr Incorporated to gain access to the U.S. public markets.The aggregate consideration for the Landcadia Business Combination was $300,000, consisting of $71,680 in cash and 22,831,697 shares of the Company’s common stock valued at $10.00 per share. In addition, an aggregate of 559,507 of the Company’s stock options were issued to holders of options to purchase Waitr Incorporated shares that were unvested, outstanding and unexercised as of immediately prior to the effective time of the Landcadia Business Combination.On January 17, 2019,March 11, 2021, we completed the acquisition of Bite Squad, an online restaurant foodDelivery Dudes, a third-party delivery service that operates a three-sided marketplace consistent with Waitr’s business model, expanding our scaleprimarily serving the South Florida market. Our technology platform provides delivery, carryout and footprintdine-in options, connecting restaurants, drivers and diners in cities across the United StatesStates. Our strategy is to more than 600bring in the logistics infrastructure to underserved populations of restaurants, grocery stores and other merchants and establish strong market presence or leadership positions in the markets in which we operate. Our business has been built with a merchant-first philosophy by providing differentiated and brand additive services to merchants on the Platforms. These merchants benefit from the online Platforms through increased exposure to consumers for expanded business in the delivery market and carryout sales. Our Platforms allow consumers to browse local restaurants and menus, track order and delivery status, and securely store previous orders for ease of use and convenience.adding more than 11,800 restaurants.towns in and around our core markets and added a variety of national brands to the Platforms. While we continued to strengthen our market presence in the on-demand delivery sector during the second half of 2021, we also focused our efforts on further supplementing our offerings and diversifying the Company beyond third-party food delivery. Our acquisition of the Cape Payment Companies in August 2021 was an important step in pursuing our overall growth strategy, positioning the Company to offer a full suite of third-party payment processing solutions to its current base of merchants and expanding this offering to future merchants.believeexpect that “ASAP” will serve as the acquisition will help us drive additional growthfoundation of our brand moving forward, as we leverage our respective strengths, withbelieve it better embodies the opportunity to realize cost synergies. The aggregate consideration for the Bite Squad Merger consisted of $192,949 payable in cash (subject to adjustments) and 10,591,968 sharesfuture direction of our common stock.We operate an online food ordering and delivery platform that enables consumers to discover and order meals from local restaurants, powered by our team of delivery drivers. We facilitate ordering of food and beverages by diners from restaurants for takeout and delivery through the Waitr Platform and, as of January 17, 2019, also the Bite Squad Platform. We market our proprietary application and digital platforms to restaurants and diners mainly across small and medium sized markets, which we define as geographic city and town clusters within the top 51-500 markets in the United States, based on population. These markets are home to approximately 35% of restaurants in the United States and an addressable population of 105 million. Like larger U.S. cities, these markets have growing demand for online and application-driven food takeout and delivery and have historically been underserved by our competitors. We believe that our focus on small and medium sized markets, established market launch playbook, and differentiated operating model provide us with a competitive advantage in our target markets.2018,2021, we operatedhad over 26,000 restaurants, in more than 250approximately 1,000 cities, and had approximately 8,500 Restaurant Partners on the Waitr Platform.Platforms. Average Daily Orders for the years ended December 31, 2018, 20172021, 2020 and 20162019 were approximately 21,860, 9,31532,859, 39,071 and 2,395,51,156, respectively, and revenue was $182,194, $204,328 and $191,675, respectively. Our revenues grew$69,273the position of Chief Accounting Officer of the Company, in January 2022, Timothy Newton was appointed Chief Technology Officer and in February 2022, Matthew Coy was appointed Chief Information Officer.year ended December 31, 2018 from $22,911first quarter of 2021 which we believe had a positive impact on order volumes during such period. However, we also believe the stimulus payments resulted in increased driver labor costs as we were faced with challenges in maintaining an appropriate level of driver supply. In addition, early in the year ended December 31, 2017COVID-19 pandemic, we experienced an increase in revenue and $5,650orders due to increased consumer demand for delivery and more restaurants using our platform to facilitate both delivery and take-out. During the second and third quarters of 2021, we believe the impact of the stimulus payments on our order volumes began to decrease.year ended December 31, 2016.Significant estimates and judgements relied upon in preparing these consolidated financial statements affect the following items:Determination of the nature and timing of satisfaction of revenue-generating performance obligations and the standalone selling price of performance obligationsVariable consideration33Other obligations such as product returns and refundsAllowance for doubtful accountsIncurred loss estimates under our insurance policies with large deductibles or retention levelsIncome taxesUseful lives of tangible and intangible assetsDepreciation and amortizationEquity compensationContingenciesGoodwill and other intangible assetsFair value of assets acquired and liabilities assumed as part of a business combination2018,2021, see Part II, Item 8, Note 2 – Basis of Presentation and Summary of Significant Accounting Policies, to our consolidated financial statements in this Form 10-K. Also described in Note 2 are pending standards and their estimated effect on our consolidated financial statements.We qualifyFor as long asAs an emerging growth company, we are an “emerging growth company,” we maywere able to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,”companies”, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, reduced disclosure obligations relating to the presentation of financial statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations, exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and stockholder advisory votes on golden parachute compensation. We have availed ourselves of the reduced reporting obligations and executive compensation disclosures in this Form 10-K, and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings. We could be an “emerging growth company” until the end of our 2019 fiscal year. In addition,Act. Effective January 1, 2021, we are no longer an emerging growth company can delay its adoption of certain accounting standards until those standards would otherwise apply to private companies. Although we have the ability to “opt out” of this extended transition period,company. Accordingly, for fiscal year 2021, we are choosing notrequired to do so. Section 107include an opinion from our independent registered public accounting firm on the effectiveness of the JOBS Act provides that a decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.The Landcadia Business Combination, Convertible Notes, and Public Company Costs. The Landcadia Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Landcadia Holdings, Inc. was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Landcadia Business Combination was treated as the equivalent of Waitr Incorporated issuing stock for the net assets of Landcadia Holdings, Inc., accompanied by a recapitalization. The net assets of Landcadia Holdings, Inc. were stated at historical cost, with no goodwill or other intangible assets recorded. Reported amounts from operations included herein prior to the business combination are those of Waitr Incorporated. The shares and earnings per share available to holders of the Company’s common stock, prior to the Landcadia Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Landcadia Business Combination (0.8970953 Waitr Holdings Inc. shares to 1.0 Waitr Incorporated share).In connection with the closing of the Landcadia Business Combination, Waitr Incorporated’s convertible promissory notes (the “Waitr Convertible Notes”), the total outstanding principal par amount of which was approximately $9,954 (carrying value of $8,594) as of November 16, 2018, were either converted into shares of Waitr’s Series AA preferred stock (“Series AA Preferred Stock”), and such new Series AA Preferred Stock were, in turn, exchanged for an aggregate 2,062,354 shares of our post-combination common stock, or redeemed for an amount equal to 1.5 times the amount of principal outstanding and accrued interest thereunder, resulting in an aggregate cash payment of $3,321. The redemption of the Waitr Convertible Notes for cash resulted in a gain on debt extinguishment of $952, representing the carrying value of the redeemed Waitr Convertible Notes as of the redemption date. In addition, immediately after the consummation of the Landcadia Business Combination, we repaid our line of credit, plus origination fees and accrued interest, for a cash amount of approximately $5,575, resulting in a loss on debt extinguishment of $466, representing the balance of the unamortized debt issuance costs on the date of repayment. See “Liquidity and Capital Resources” below.In 2017, we recorded a non-cash loss on debt extinguishment of $10,537 as a result of a Waitr Convertible Notes amendment that modified the conversion ratio, resulting in the application of extinguishment accounting and representing the difference between the fair value of the amended Waitr Convertible Notes of $18,308 and their carrying amount of $7,771. The conversion and cash redemption of the Waitr Convertible Notes and the exercise of warrants by the lenders under the aforementioned line of credit impacted our statements of operations and stockholders’ equity (deficit) in reporting periods that include the Landcadia Business Combination.34 Waitr Incorporated is Landcadia Holdings, Inc.’s accounting predecessor and the Landcadia Business Combination required us to hire additional staff and implement procedures and processes to address regulatory and customary requirements applicable to public companies. We expect to incur additional annual expenses for additional internal and external accounting, legal and administrative resources, increased audit and legal fees, directors’ and officers’ liability insurance and director fees. We estimate that these incremental costs will amount to between approximately $1,500 and $2,500 per year, resulting in materially higher general and administrative expenses in future periods.Bite Squad Merger. wasDelivery Dudes Acquisition and Cape Payment Acquisition were considered a business combinationcombinations in accordance with GAAP,ASC 805, and will behave been accounted for using the acquisition method. Under the acquisition method of accounting, total purchase consideration, is allocated to the acquired assets, and assumed liabilities and contingent consideration are recorded based on their estimated fair values on the acquisition date. AnyFor each of thesewill be(and contingent consideration when applicable) has been recorded as goodwill.goodwill on our consolidated balance sheet as of December 31, 2021. The results of operations of Bite Squad, will beDelivery Dudes and Cape Payment Companies are included in our consolidated financial statements beginning on the acquisition date,dates, January 17, 2019.Bite Squad Merger, weDelivery Dudes Acquisition and Cape Payment Acquisition, the Company incurred direct and incremental costs throughof $1,614 during the year ended December 31, 2018, of approximately $477,2021, consisting of legal and professional fees, which are included in general and administrative expenses in the consolidated statement of operations in 2018. We will continuesuch period. During the year ended December 31, 2019, the Company incurred direct and incremental costs of $6,956, including debt modification expense of $375, related to incur costs in connection with the acquisition of Bite Squad Merger including significant non-recurring transaction costs, regulatory costs and integration costs, such as facilities, systems and employment-related costs. Although we expect the elimination of duplicative costs and other cost synergies over time, we may not achieve this result as quickly as anticipated, resulting in materially higher general and administrative expenses in future periods. have made several modificationscontinue to review and update our current rate structure, as necessary, as we look to offer new and enhanced value-adding services to our restaurant partners. Any changes to our fee structure during the fiscal periods presented in this Form 10-K. Since 2017, our fee structure evolved gradually from a per transaction fee plus a percentage of the food sale amount(whether externally to one based exclusively on a percentage of the food sale amount, which applied to substantially all Restaurant Partners in most markets since November 2017. In early 2018, we also established a new multi-tier fee structure, allowing new Restaurant Partners to elect a higher fee rate in lieu of paying the one-time set-up and integration fee. Ascomply with governmental imposed caps or as a result of these changes,internal decision-making) could affect the comparability of our results of operations from period to period.progressively resultedconcluded that the fair value of the reporting unit at such time (the Company) was less than its carrying amount. Determining the fair value of a reporting unit and intangible assets requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates used could change in modestly higher fees, our revenue and operating margins mayfuture periods. There can be no assurance that additional goodwill or intangible assets will not be comparable between periods,impaired in future periods. Significant goodwill and future changes in fee structure couldintangible asset impairments may impact the comparability of our results with future periods.patterns.patterns with respect to demand of our service offering. In many of our markets, we generally experiencehave historically experienced variations in order frequency as a relative increase in diner activity from September to May and a relative decrease in diner activity from June to August due to schoolresult of weather patterns, university summer breaks and other vacation periods. In addition, a significant number of restaurants tend to close on certain major holidays, including Thanksgiving, Christmas Eve and Christmas Eve-Day, in our key markets.Day, among others. Further, diner activity may be impacted by unusually cold, rainy, or warm weather. Cold weather and rain typically drive increases in order volume, while unusually warm or sunny weather typically drives decreases in orders. Consequently,Furthermore, severe weather-related events such as snowstorms, ice storms, hurricanes and tropical storms have adverse effects on order volume, particularly if they cause property damage or utility interruptions to our results between quarters, or between periods that include prolonged periods of unusually cold, warm, inclement, or otherwise unexpected weather, may vary.activelycontinue to maintain and evaluate aan active pipeline of potential acquisitionsacquisition targets and expect to be acquisitivemay pursue acquisitions in the future. Potentially significant future, both in the restaurant delivery space as well as other verticals, such as payments and other complimentary businesses. These potential business acquisitions may impact the comparability of our results in future periods with those forrelative to prior periods.Expansion.Expansion and Penetration. Our continued revenue growth and path to improved cash flow and profitability is dependent on successful restaurant, diner and driver penetration of our target markets and achieving our targeted scale in current and future markets. Once a target market is identified, our market launch playbook calls for hiring a city/market manager to interview, hire, and onboard new drivers, while our corporate and business development team is simultaneously deployed in-market to onboard an appropriate selection of strategically located and diverse restaurants. A local awareness and marketing campaign is typically commenced ahead of launch and temporarily ramped up simultaneously with operational launch, which is driven by the acquisition of a targeted number of Restaurant Partners and drivers. Delay or failureFailure in achieving positive market-level margins (exclusive of indirect and corporate overhead costs)our targeted scale could adversely affect our working capital, which in turn, could slow our growth plans.We typically target markets that we estimate could achieve sustainable, positive market-level margins that support market operating cash flows and profits, improve efficiency, and appropriately leverage the scale of our advertising, marketing, research and development, and other corporate resources. Historically, we estimate that we have reached positive market-level margins (exclusive of indirect and corporate overhead costs) approximately six months, on average, following market launch. Our financial condition, cash flows, and results of operations depend, in significant part, on our ability to achieve and sustain our target profitability thresholds in our markets.35DinerDriver Network. Our continued growth is driven inA significant part byof our growth is our ability to successfully expand our network of Restaurant Partnersrestaurants, diners and dinersindependent contractor drivers using the Platforms. We believe thatIf we fail to retain existing restaurants, diners and independent contractor drivers using the Platforms, or to add new restaurants, diners and independent contractor drivers to the Platforms, our Restaurant Partner retention strategy, combining a modest Restaurant Partner set-uprevenue, financial results and integration fee investment with our differentiated, value-added services fosters Restaurant Partner loyalty and incentivizes Restaurant Partners to drive business toward the Platforms. We also believe that our brand recognition, driven by our strong regional presence and employee delivery drivers, accessible customer service, and flat diner fee further contributes to diner loyalty. We had approximately 8,500, 3,600 and 1,000 Restaurant Partners on the Waitr Platform at December 31, 2018, 2017 and 2016, respectively. The acquisition of Bite Squad on January 17, 2019 added more than 11,800 restaurants to our operations. The We count Active Diners as the number of unique diner accounts from which an order has been placed through the Waitr PlatformPlatforms during the past twelve months (as of the end of the relevant period). The We calculate Average Daily Orders as the number of completed orders during the period divided by the number of days in that period, including holidays. Average Daily Orders is an important metric for us because the number of orders processed on our Platforms is a key revenue driver and, in conjunction with the number of Active Diners, a valuable measure of diner activity on our Platforms for a given period. The We calculate Gross Food Sales as the total food and beverage sales, sales taxes, prepaid gratuities, and diner fees processed through the Waitr PlatformPlatforms during a given period. Gross Food Sales are different than the order value upon which we charge our fee to Restaurant Partners,restaurants, which excludes gratuities and diner fees. We currently also charge a diner fee of $5 per delivery order in most of our markets, which is included in our revenue. Prepaid gratuities, which are not included in our revenue, are determined by diners and may differ from order to order. Gratuities other than prepaid gratuities, such as cash tips, are not included in Gross Food Sales.Year Ended December 31, 2021 2020 2019 Active Diners (as of period end) 1,671,437 1,865,194 2,352,007 Average Daily Orders 32,859 39,071 51,156 Gross Food Sales (dollars in thousands) $ 542,447 $ 598,616 $ 663,919 Average Order Size (in dollars) Average Order Size (in dollars) $ 45.23 $ 41.86 $ 36.15 our Platforms. Under the Waitr Platform, we engage a third-party payment processor to collect the total amountone of the order from the diner, who must use a credit or debit card to pay for their meal, and remit the net proceeds, less our fee, the diner fee and any gratuity amount, to the Restaurant Partner on a daily basis. Because we are acting as an agent of the Restaurant Partner in the transaction, wePlatforms. We recognize as revenue only our fees (which are assessed as a percentage of the total food sales and related sales taxes, exclusive of diner fees and gratuities for delivery orders, net of any diner promotions or refunds to diners) and diner fees. Gratuities are not included in revenue because they are passed through to delivery drivers. Revenues from diner orders are recognized when orders are delivered. We alsoOur revenue consists primarily of net Delivery Transaction Fees. Additionally, effective August 25, 2021, we generate revenue from setup and integration fees collected from Restaurant Partnersby facilitating access to onboard them onto the Waitr Platform (these are recognized on a straight-line basis over the anticipated period of benefit, currently determined to be two years) and subscription fees from Restaurant Partners that opt to pay a monthly fee in lieu of a lump sum setup and integration fee. Revenue also includes, to a significantly lesser extent, grocery diner fees (since the launch of this service in select markets in March 2017), and fees for restaurant marketing and data services. Waitr generally presents relevant restaurants on its applications in order of proximity to the diner and does not allow restaurants to pay to promote themselves within the Waitr Platform.Expensesexpenses consistexpense consists primarily of salaries, benefits, stock-based compensation, and bonuses for employees and contractors engaged in operations and customer service, including drivers, who are mainly full-time and part-time employees and comprise a substantial majority of our employee base, as well as city/territory managers, market managers,success associates, restaurant onboarding, photography, and driver logistics personnel, and payments to independent contractor drivers for delivery services. Operations and support expense also includes payment processing costs incurred on customer orders and the cost of software and related services providing support for customer orders.36expenses consistexpense consists primarily of salaries, commissions, benefits, stock-based compensation and bonuses for personnel supporting sales and sales support personnel,marketing efforts, including restaurant business development managers, marketing employees and contractors, and third-party marketing expenses such as social media and search engine marketing, online display teamadvertisements, sponsorships (the costs of which are recognized on a straight line basis over the useful period of the contract) and print marketing.expenses consistexpense consists primarily of salaries, benefits, stock-based compensation and bonuses for employees and contractors engaged in the design, development, maintenance and testing of the Platforms, net of costs capitalized for the development of the Platforms.expenses consistexpense consists primarily of salaries, benefits, stock-based compensation and bonuses for executive, finance and accounting, human resources and other administrative employees as well as third-party legal, accounting, and other professional services, insurance (including workers’ compensation, auto liability and general liability), travel, facilities rent, and other corporate overhead costs.expenses consistexpense consists primarily of amortization of capitalized costs for software development, trademarks and customer relationships and depreciation of leasehold improvements furniture, and equipment, primarily tablets deployed in restaurants. We do not allocate depreciation and amortization expense to other line items.Impairment of Intangible Assets. Impairment of intangible assets consists primarily of write-downs of intangible assets, which relate primarily to technology acquired as a result of our acquisition of Requested, Inc., resulting from a shift in our strategy that impacted the expected usage of the acquired technology, as well as minor impairments related to the replacement of internally developed software code.primarily includes interest expense on outstanding debt, whichas well as any other items not considered to be incurred in relevant periods consisted principallythe normal operations of the business, including accrued interest from convertible promissory notes.resultsconsolidated statements of operations for the periods indicated, with line items presented in thousands of dollars and as a percentage of our revenue:(1)Percentages may not foot due to rounding Year Ended December 31, 2021 2020 2019 Revenue $ 182,194 100 % $ 204,328 100 % $ 191,675 100 % Costs and expenses: Operations and support 108,599 60 % 109,240 53 % 147,759 77 % Sales and marketing 19,198 11 % 12,242 6 % 52,370 27 % Research and development 4,156 2 % 4,262 2 % 7,718 4 % General and administrative 45,042 25 % 42,982 21 % 56,862 30 % Depreciation and amortization 12,429 7 % 8,377 4 % 15,774 8 % Goodwill impairment — — % — — % 119,212 62 % Intangible and other asset impairments 186 — % 30 — % 73,251 38 % Loss on disposal of assets 158 — % 20 — % 36 — % Total costs and expenses 189,768 104 % 177,153 87 % 472,982 247 % Income (loss) from operations (7,574) (4 %) 27,175 13 % (281,307) (147 %) Other expenses (income) and losses (gains), net: Interest expense 7,074 4 % 9,458 5 % 9,408 5 % Interest income — — % (102) — % (1,037) (1 %) Other (income) expense (9,443) (5 %) 1,861 1 % 1,547 1 % Net income (loss) before income taxes (5,205) (3 %) 15,958 8 % (291,225) (152 %) Income tax expense 24 — % 122 — % 81 — % Net income (loss) $ (5,229) (3 %) $ 15,836 8 % $ (291,306) (152 %) (2)Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no impact on our reported total costs and expenses, loss from_______________ or net loss for the period. See Note 2 – Basis of Presentation and Summary of Significant Policies to our consolidated financial statements in this Form 10-K for further details.37Revenue2018 compared to 2017Revenue increased by $46,362, or 202%, to $69,273 in the year ended December 31, 2018 from $22,9112019 can be found under Part II, Item 7,Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Revenue $ 182,194 $ 204,328 $ 191,675 (11 %) 7 % 2017, due primarily to increased transaction volume, reflecting continued adoption in existing markets, our expanded footprint into new markets as well as a modestly higher fee structure. We opened 24 markets during 2018,2021 compared to opening 10 markets during 2017, while Average Daily Orders and Gross Food Sales increased in 2018 to 21,860 and $278,833, respectively, from 9,315 and $121,081, respectively, in 2017. Average Order Size remained relatively consistent between periods.2017 compared to 2016Revenue increased by $17,261, or 306%, to $22,911 in the year ended December 31, 20172020, primarily as a result of decreased order volumes. Partially offsetting the impact of decreased order volumes was an increase in the Average Order Size in such period as well as revenue from $5,650 inthe Cape Payment Companies and Delivery Dudes acquisitions, beginning on their respective acquisition dates. The Average Order Size was $45.23 for the year ended December 31, 2016. We opened 10 markets during 2017,2021, compared to opening 12 markets in 2016, while Average Daily Orders and Gross Food Sales increased to 9,315 and $121,081, respectively, in 2017 from 2,395 and $31,430, respectively, in 2016. Average Order Size remained relatively consistent between periods, while 2017 reflected two months of our new, higher restaurant fee structure.Operations and Support2018 compared to 2017Operations and support expenses increased by $30,458, or 145%, to $51,428 in$41.86 for the year ended December 31, 2018 from $20,970 in the year ended December 31, 2017, due to increased business volume. 2020, an improvement of 8%.Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Operations and support $ 108,599 $ 109,240 $ 147,759 (1 %) (26 %) As a percentage of revenue 60 % 53 % 77 % decreased to 74% in 2018 from 92% in 2017, primarily due to improved scale, as customer service and certain in-market support costs tend to increase more slowly than the increase in revenue growth in growing markets.2017 compared to 2016Operations and support expenses increased by $16,185, or 338%, to $20,970were higher in the year ended December 31, 2017 from $4,7852021 compared to the year ended December 31, 2020 as we strategically invested in our customer, driver and restaurant support operations.Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Sales and marketing $ 19,198 $ 12,242 $ 52,370 57 % (77 %) As a percentage of revenue 11 % 6 % 27 % 2016, primarily due2021 compared to the year ended December 31, 2020, primarily attributable to increased scope and scale of operations, including ramp-up expensesdigital advertising as we further invested in anticipation of continued volume increasesmarket expansion as well as solidifying our presence in existing markets combined with planned geographical expansion. As a percentage of revenue, operations and support expenses increased to 92% in 2017 from 85% in 2016.Sales and Marketing2018 compared to 2017Salesterritories. Additionally, sales and marketing expense increased by $10,034, or 177%,during the year ended December 31, 2021 includes referral agent commission expense related to $15,695the Cape Payment Companies acquisition.Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Research and development $ 4,156 $ 4,262 $ 7,718 (2 %) (45 %) As a percentage of revenue 2 % 2 % 4 % 2018 from $5,6612021 compared to the year ended December 31, 2020, primarily due to the capitalization of increased software development costs as further product features and functionality were incorporated into the Platforms. Partially offsetting the decrease were expenses related to the hiring of product and engineering personnel to further refine our Platforms. Research and development expense as a percentage of revenue remained flat for the year ended December 31, 2021 in relation to the comparable 2020 period.Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) General and administrative $ 45,042 $ 42,982 $ 56,862 5 % (24 %) As a percentage of revenue 25 % 21 % 30 % 2017,2021 compared to December 31, 2020, primarily due to increased digital marketing spend of approximately $3,153, increased stock-based compensation of $1,665expense and recruiting costs primarily associated with hiring software development personnel, partially offset by decreased insurance expense.Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Depreciation and amortization $ 12,429 $ 8,377 $ 15,774 48 % (47 %) As a percentage of revenue 7 % 4 % 8 % headcountin dollar terms and sales commissions for business development managers attributable to our entry into new markets. Asas a percentage of revenue sales and marketing expense decreased to 23% in 2018 from 25% in 2017, due to improved scale.2017 compared to 2016Sales and marketing expense increased by $4,302, or 317%, to $5,661 in the year ended December 31, 2017 from $1,359 in2021 compared to the year ended December 31, 2016, primarily due2020, driven by an increase in depreciation expense related to market expansioncomputer tablets for restaurants on the Platforms and entry into new sponsorship contracts. As a percentage of revenue, sales and marketingamortization expense remained relatively consistent, at 25% in 2017 and 24% in 2016.Research and Development2018 compared to 2017Research and development expense increased by $2,327, or 147%, to $3,913on intangible assets acquired in the yearDelivery Dudes Acquisition and Cape Payment Acquisition.Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Intangible and other asset impairments $ 186 $ 30 $ 73,251 520 % (100 %) As a percentage of revenue — % — % 38 % 2018 from $1,586 in2021 and 2020, the year ended December 31, 2017, primarily due to the addition of personnel focused on research and development activities and increased stock-based compensation.382017 compared to 2016Research and development expense increased by $1,191, or 302%, to $1,586 in the year ended December 31, 2017 from $395 in the year ended December 31, 2016, reflecting efforts to improve application functionality and an increase in stock-based compensation expense for research and development employees.General and Administrative2018 compared to 2017General and administrative expense increased by $21,711, or 230%, to $31,148 in the year ended December 31, 2018 from $9,437 in the year ended December 31, 2017, due primarily to business combination-related professionalCompany recognized intangible and other costs of $6,245, increased auto liability and workers’ compensation insurance premiums related to increased headcount and business volume. Additionally, stock-based compensation increased by $8,593, the majority of which was attributable to the accelerated vesting of certain management stock-based awards upon the consummation of the Landcadia Business Combination. As a percentage of revenue, general and administrative expense increased to 45% in 2018 compared to 41% in 2017. Without transaction costs and stock-based compensation incurred in 2018, general and administrative expense would have been $15,613, or 23% of revenue.2017 compared to 2016General and administrative expense increased by $5,276, or 127%, to $9,437 in the year ended December 31, 2017 from $4,161 in the year ended December 31, 2016, driven primarily by the significant increase in our transaction volume and operational scale, as described above. As a percentage of revenue, general and administrative expense decreased to 41% in 2017 from 74% in 2016, primarily due to scale, reflecting the significant increase in revenue described above. General and administrative expense tends to be scalable and thus, generally increases at a slower pace than revenue (excluding non-recurring transaction and similar costs), as a significant portion of these costs is fixed.Depreciation and Amortization2018 compared to 2017Depreciation and amortization expenses increased by $500, or 69%, to $1,223 in the year ended December 31, 2018 compared to $723 in the year ended December 31, 2017, reflecting the increase in Restaurant Partners and corresponding increase in depreciable property and equipment (namely, tablets). As a percentage of revenue, depreciation and amortization expenses decreased to 2% in 2018 from 3% in 2017.2017 compared to 2016Depreciation and amortization expenses increased by $456, or 171%, to $723 in the year ended December 31, 2017 compared to $267 in the year ended December 31, 2016, reflecting the increase in Restaurant Partners and corresponding increase in depreciable property and equipment (namely, tablets). As a percentage of revenue, depreciation and amortization expenses decreased to 3% in 2017 from 5% in 2016.2018 compared to 2017Year Ended December 31, Percentage change 2021 2020 2019 2020 to 2021 2019 to 2020 (dollars in thousands) Other expenses (income) and losses (gains), net $ (2,369) $ 11,217 $ 9,918 (121 %) 13 % As a percentage of revenue (1) % 5 % 5 % totaled $595for the year ended December 31, 2021 primarily consisted of $16,715 of income from the change in 2018estimate of the Medical Contingency, $4,700 of other expense for a legal settlement,$10,818 in 2017, reflecting mainly, for 2017, a $10,537 debt extinguishment loss related to$6,917 of interest expense associated with the Waitr Convertible Notes amendment, as described above.2017 compared to 2016were $10,818 in 2017for the year ended December 31, 2020 primarily consisted of $9,318 of interest expense associated with the Term Loan and $3,392 in 2016, reflecting mainly, for 2017,Notes and a $10,537 debt extinguishment loss$1,023 stock-based compensation expense accrual related to the Waitr Convertiblesettlement of a lawsuit. See Part II, Item 8amendment, as described above, and interestNote 12 - Commitments and Contingent Liabilities for additional details on the Medical Contingency and accrued legal contingency.of $281for the years ended December 31, 2021 and for 2016, interest expense of $4,4672020 was $24 and $122, respectively, entirely related to then-outstanding convertible promissory notes (which were issuedstate taxes in late 2015 and 2016 and subsequently converted into equity, as described in Note 9 – Debt to our consolidated financial statements in this Form 10-K) and was partially offset by gains on derivatives and from debt extinguishment totaling $1,083 in 2016. A substantial majority of the 2016 interest expense amount was attributable to the derecognition of unamortized debt discount at the time of the convertible promissory notes conversion, which was booked as an increase in interest expense (with a corresponding increase in paid in capital).39Income Tax Expense (Benefit)2018 compared to 2017Income tax benefit was $(427) in 2018 and income tax expense was $6 in 2017. The income tax benefit in 2018 was largely due to the reversal of Landcadia Holdings, Inc.’s previously estimated income tax payable, which upon consummation of the Landcadia Business Combination, the Company succeeded to Waitr Incorporated’svarious jurisdictions. We have historically generated net operating loss carryforwards, portions of which can be utilized against current and future taxable income. A partiallosses; therefore, a valuation allowance has been recorded as of December 31, 2018 and 2017 as the Company has historically generatedon our net operating losses, and the Company did not consider future book income as a source of taxable income when assessing if a portion of the deferred tax assets is more likely than not to be realized.2017 compared to 2016Income tax expense was $6 in 2017 and $5 in 2016.Net Loss2018 compared to 2017Net loss increased by $7,404, or 28%, to $34,311 in the year ended December 31, 2018 from $26,907 in the year ended December 31, 2017, for the reasons discussed above.2017 compared to 2016Net loss increased by $18,185, or 208%, to $26,907 in the year ended December 31, 2017 from $8,722 in the year ended December 31, 2016, for the reasons discussed above.2018,2021, we had cash on hand of approximately $209,340, consisting primarily of cash and money market deposits.$60,111. Our primary sources of liquidity to date have been cash flow from operations and proceeds from the issuance of stock long-term convertible debt, term loans, proceeds from the unsecured line of creditin fiscal 2021 and 2020.assumedsubject to certain purchase price adjustments, and 3,562,577 shares of the Company’s common stock. The Cape Payment Acquisition included $12,000 in cash, subject to certain purchase price adjustments, 2,564,103 shares of the Company’s common stock and an earnout provision valued at $1,686 as of the acquisition date.Landcadia Business Combination.ATM Program.2018, we had total outstanding long-term debt of $85,000, consisting of $25,000 of Term Loans and $60,000 of Notes (as defined below), and $658 outstanding under a short-term loan. On January 17, 2019, we completed the acquisition of Bite Squad, using approximately $198,671 in cash to fund a portion of the acquisition. Additionally, on January 17, 2019, Intermediate Holdings and the Company’s wholly-owned indirect subsidiary Waitr Inc., entered into that certain Amendment No. 1 to Credit and Guaranty Agreement (the “Credit Agreement Amendment”) with the various lenders party thereto and Luxor Capital Group, LP (“Luxor Capital”), as administrative agent and collateral agent, which amended the Credit Agreement in order to provide to2021, the Company additional senior secured first priority termhad $3,142 of outstanding short-term loans under the Debt Facility in the aggregate principal amount of $42,080 (the “Additional Term Loans,” together with the Existing Term Loans, the “Term Loans”), the proceeds of which were used to finance a portion of the consideration for the Bite Squad Merger.As of March 13, 2019, we hadinsurance premium financing.of approximately $49,000, total outstanding long-term debt of $127,080, consisting of $67,080 of Term Loans and $60,000 of Notes, and $219 outstanding under the short-term loan. We believe that our existingestimated cash flow from operations will be sufficient to meet our working capital requirementsneeds for at least the next twelve months. Our liquidity assumptionsmonths; however, there can be no assurance that we will generate cash flow at the levels we anticipate. We may however, proveuse cash on hand to be incorrect,repay additional debt or to acquire or invest in complementary businesses, products, services and we may decide to utilize available financial resources sooner than currently expected in ordertechnologies. We continually evaluate additional opportunities to strengthen our liquidity position, fund additional growth initiatives and/or acquirecombine with other businesses pursuant to which we may incur additional debt and/or issue additional debt,by issuing equity or equity-linked securities (in both public or private offerings). and/or incurring additional debt. However, market conditions, our future financial performance or other factors may make it difficult or impossible for us to access sources of capital, on favorable terms or at all, should we determine in the future to raise additional funds through these methods. See “— Indebtedness” below for definitions of Credit Agreement, Debt Facilityfunds.Existing Term Loans and for additional detailsanticipated working capital needs, particularly in light of the Company’s indebtedness.40IndebtednessDebt FacilityOn November 15, 2018, in connection withuncertainty created by the Closing, Merger Sub (now Waitr Inc.), as borrower, entered into a CreditCOVID-19 pandemic. Thus far, we have been able to operate effectively during the pandemic, however, the potential impacts and Guaranty Agreement (the “Credit Agreement”) with Luxor Capital, as administrative agent, collateral agent and lead arranger, the various lenders party thereto, Intermediate Holdings, and certain subsidiaries of Waitr Inc., as guarantors. The Credit Agreement provides for a senior secured first priority term loan facility (the “Debt Facility”) to Waitr Inc. in the aggregate principal amount of $25,000 (the “Existing Term Loans”). In addition to a number of customary covenants, the Credit Agreement and Credit Agreement Amendment (described below) require Intermediate Holdings to maintain minimum consolidated liquidity of $15,000 asduration of the last day of each fiscal quarter. For additional detailsCOVID-19 pandemic (including those related to variants) on the Existing Term Loanseconomy and the Debt Facility, see Part II, Item 8, Note 9 – Debt,on our business, in particular, is difficult to our consolidated financial statements in this Form 10-K.On January 17, 2019, Intermediate Holdings and the Company’s wholly-owned indirect subsidiary Waitr Inc. entered into the Credit Agreement Amendment with the various lenders party thereto and Luxor Capital, as administrative agent and collateral agent, which amends the Credit Agreement in order to provide to the Company additional senior secured first priority term loans under the Debt Facility in the aggregate principal amount of $42,080, the proceeds of which were used to finance a portion of the consideration for the Bite Squad Merger. For additional details on the Additional Term Loans, see Part II, Item 8, Note 19 – Subsequent Events, to our consolidated financial statements in this Form 10-K.NotesOn November 15, 2018, in connection with the Closing, the Company entered into a convertible notes credit agreement, pursuant to which the Company issued unsecured convertible promissory notes to Luxor Capital Partners, LP, Luxor Capital Partners Offshore Master Fund, LP, Luxor Wavefront, LP and Lugard Road Capital Master Fund, LP in the aggregate principal amount of $60,000 (the “Notes”). For additional details on the Notes, see Part II, Item 8, Note 9 – Debt, to our consolidated financial statements in this Form 10-K.Line of CreditOn July 2, 2018, Waitr Incorporated entered into a loan agreement with a group of lenders for an unsecured line of credit. The group of lenders consisted of certain board members, stockholders and affiliates of stockholders of Waitr Incorporated. The loan’s maximum principal amount was $5,000 and it carried an annual simple interest rate of 12.5% due at maturity, with interest paid quarterly on September 30, December 31, March 31 and June 30 of each year. In connection with advances made under the loan agreement, Waitr Incorporated was required to issue warrants to the lenders (the “Line of Credit Warrants”), providing the lenders the right to purchase a number of common shares of Waitr Incorporated equal to the principal amount multiplied by 6.75% and divided by the Exercise Price. The Exercise Price of the Line of Credit Warrants, as defined by the loan agreement, was either (1) $8.022, in the event that the Closing took place under the Landcadia Merger Agreement, or (2) the price that was eighty percent of the price per share of the Company’s equity securities issued in the next preferred equity financing of at least $10,000.Up to the consummation of the Landcadia Business Combination, the Company borrowed the maximum $5,000 principal amount available under the line of credit. On November 16, 2018, immediately after the consummation of the Landcadia Business Combination, we repaid the line of credit in full for a cash amount of $5,575, which included the payment of a $500 origination fee and accrued interest of $75. In addition, the lenders exercised their Line of Credit Warrants, receiving 37,735 shares of the Company’s common stock, for which we received $337 in cash, pursuant to the terms of the warrants.Short-term LoanOn June 4, 2018, the Company entered into a loan agreement with First Insurance Funding to finance a portion of its annual insurance premium obligation. The principal amount of the loan is $2,172, payable in monthly installments, until maturity. The loan matures on March 21, 2019 and carries an annual interest rate of 3.39%. As of December 31, 2018, $658 was outstanding under such loan.Restaurant Partners,restaurants on the Platforms and investments in the development of the Platforms, which are expected to increase as we continue to grow our business. Our future capital“Risk Factors”Part I, Item 1A, Risk Factors in this Form 10-K. If we are unable to obtain needed additional funds, we will have to reduce our operating costs, which would impair our growth prospects and could otherwise negatively impact our business.41 Year Ended December 31, (in thousands) 2021 2020 2019 Net cash provided by (used in) operating activities Net cash provided by (used in) operating activities $ (2,341) $ 38,445 $ (73,477) Net cash used in investing activities (37,939) (6,125) (196,576) Net cash provided by financing activities 15,685 23,069 90,030 Used InProvided By (Used In) Operating Activities2018,2021, net cash used in operating activities was $15,842,$2,341, compared to $12,411net cash provided by operating activities of $38,445 for the sameyear ended December 31, 2020. The decrease in cash flows from operating activities in the year ended December 31, 2021 from the comparable 2020 period was primarily driven by a decrease in 2017,revenue and increased sales and marketing expenses, partially offset by changes in operating assets and liabilities. During the year ended December 31, 2021, the net change in operating assets and liabilities decreased net cash provided by operating activities by $4,508, primarily reflectingconsisting of a decrease in accrued payroll of $2,062 and an increase in capitalized contract costs of $2,151. During the year ended December 31, 2020, the net change in operating assets and liabilities increased net cash provided by operating activities by $2,220.$5,768 in 2018.2017,2021, net cash used in operatinginvesting activities was $12,411 compared to $4,497consisted primarily of $25,435 for the acquisitions of Delivery Dudes and Cape Payment Companies and related intangible assets, $8,752 of costs for internally developed software and $3,006 for the acquisition of domain names during the fourth quarter of 2021 in connection with our proposed rebranding. Net cash used in investing activities for the year ended December 31, 2016,2020 consisted primarily reflecting increasedof $3,982 of costs for internally developed software. Net cash operating expenses attributable to market growthused in investing activities for the year ended December 31, 2019 consisted primarily of $192,568 for the acquisition of Bite Squad and new market expansion efforts.Used In InvestingProvided By Financing ActivitiesOur primary investing activities during all of the periods presented was the purchase of property and equipment, comprised primarily of computer tablets for our Restaurant Partners. The tablets remain our property. We control software applications and updates on the tablets, and the tablets are devoted exclusively to the Waitr Platform. We also periodically purchase office furniture, equipment, computers and software and leasehold improvements.2018,2021, net cash used in investingprovided by financing activities was $3,761 compared to $1,874included $30,895 of net proceeds from the sales of common stock under the Company’s ATM Program and $8,671 of proceeds from short-term loans for insurance financing, less a $14,472 principal prepayment on the year ended December 31, 2017Term Loan and $826$8,256 of payments on short-term loans for the year ended December 31, 2016.Cash Flows Provided By Financing Activities2018,2020, net cash provided by financing activities was $224,996, primarily reflectingincluded $47,574 of net proceeds from the sales of common stock under the Company’s ATM Program and $4,753 of proceeds from short-term loans for insurance financing, less $22,594 of payments on the Term Loan and $5,632 of payments on short-term loans for insurance financing. For the year ended December 31, 2019, net cash assumedprovided by financing activities included net proceeds from the Landcadia Business Combinationissuance of $143,648 andcommon stock of $45,823, proceeds from the issuance of the Term LoansLoan of $42,080 and Notes$7,875 of $85,000, less $3,050 of related debt issuance costs. During the year ended December 31, 2018, we borrowed $5,000 under our unsecured line of credit and repaid in full the $5,000 of borrowings. Additionally, we borrowed $2,172 underproceeds from a short-term loan to finance a portionfor insurance financing, less $4,931 of ourpayments on short-term loans for insurance premium obligations and made repayments of $1,514 on such loan during the year ended December 31, 2018. Also included in net cash provided by financing activities for the year ended December 31, 2018 was $1,470 of proceeds related to the issuance of the Waitr Convertible Notes in the first quarter of 2018 and payments of $3,207 for the redemption of certain of the Waitr Convertible Notes in connection with the Landcadia Business Combination.Net cash provided by financing activities totaled $14,947 for the year ended December 31, 2017, which primarily reflected proceeds from issuances of 2,341,477 shares of Series AA preferred stock in the first quarter of 2017 of $7,224 and proceeds from the issuance of Waitr Convertible Notes of $7,684.For the year ended December 31, 2016, cash provided by financing activities was $8,334, consisting of proceeds from debt and equity issuances in approximately equal proportions.2018,2021, our long-term debt obligations totaled $84,511, with a maturity date of November 2023, and short-term loans for insurance financing totaled $3,142. See Part I, Item 8, Note 10 - Debt for additional detailscorporate officesoperating lease agreements for office facilities in Lake Charles and Lafayette, Louisiana, as well as smaller offices acrossvarious locations in the Southeastern United States. Our office leasesStates, which expire on various dates through August 2026. We recognize rent expense on a straight-line basis over the relevant lease period.42Our debt2026 (see Part I, Item 8, interest payments and future minimum payments under non-cancellable operating leases for equipment and office facilities, workers’ compensation obligation and monthly loan payments were as follows as of December 31, 2018:
Contingent Liabilities).(1)Debt includes amounts due under the Debt Facility and Notes as of December 31, 2018. On January 17, 2019, in connection with the Bite Squad Merger, the Credit Agreement Amendment provided an additional $42,080 under the Debt Facility, due on November 15, 2022.(2)Interest due on debt assumes no prepayments under the Debt Facility and assumes all interest payments are paid in cash. Interest on the Notes assumes no conversion prior to the maturity of the Notes.(3)On November 27, 2017, Guarantee Insurance Company (“GIC”), our former workers’ compensation insurer, was ordered into the receivership for purposes of liquidation by the Second Judicial Circuit Court in Leon County, Florida. At the time of the court order, GIC was administering our outstanding workers’ compensation claims. Upon entering receivership, the guaranty associations of the states where GIC operated began reviewing outstanding claims administered by GIC for continued claim coverage eligibility based on guaranty associations’ eligibility criteria. Our net worth exceeded the threshold of $25,000 established by the Louisiana Insurance Guaranty Association (“LIGA”) when determining eligibility for claims coverage. As such, LIGA assessed our outstanding claim as ineligible for coverage and we executed a promissory note in January 2019 for the repayment of the $588 paid by LIGA with respect to our claim. The terms of the promissory note provide for equal monthly payments of $32 over 17 months. As of December 31, 2018, we estimate that we have $761 in additional workers’ compensation liabilities outstanding with respect to the GIC claims, excluding the LIGA promissory note, which we expect will be recognized ratably over approximately 40 years.(4)On June 4, 2018, we entered into a loan agreement with First Insurance Funding to finance our commercial insurance premiums. The loan is payable in monthly installment payments, until maturity. The loan matures on March 21, 2019 and carries an annual interest rate of 3.39%.Contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding, while obligations under other contracts that we can cancel without a significant penalty are not included.We are also a party to certain ordinary course multi-year sponsorship agreements, but have no material long-term purchase obligations outstanding with any vendors or other third parties.Off-Balance Sheet ArrangementsWe did not have any off-balance sheet arrangements as of December 31, 2018.2018,2021, we had outstanding interest-bearing long-term debt totaling $85,000,$84,511, consisting of $25,000the Term Loan in the amount of Term Loans$35,007 and $60,000the Notes of Notes, all$49,504, both of which bear interest at fixed rates. As a result, we were not exposed to interest rate risk on our outstanding debt at December 31, 2018.2021. If we enter into variable-rate debt in the future, we may be subject to increased sensitivity to interest rate movements.432018 at2021.reasonable assurance level.principles.This Form 10-K does notprinciples and include those policies and procedures that:reportmaterial effect on the financial statements.management’s assessment regardingits inherent limitations, internal control over financial reporting duemay not prevent or detect errors or misstatements in our financial statements. Projections of any evaluation of effectiveness to future periods are subject to the timingrisk that controls may become inadequate because of changes in conditions, or that the transaction by whichdegree of compliance with the Company, previously a private operating company, becamepolicies or procedures may deteriorate. Management assessed the surviving issuer in a reverse acquisition. See Part I, Item 1. Business – Corporate History for details on the Landcadia Business Combination. Management will useeffectiveness of our internal control over financial reporting at December 31, 2021 using the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 framework) to assess internal control over financial reporting. Changes in Internal Controls Over Financial ReportingThere has not been any change in. Based on our assessments and those criteria, management determined that we maintained effective internal control over financial reporting that occurred during the quarter endedas of December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our2021.reporting.reporting as of and for the year ended December 31, 2021, the operations of the Cape Payment Companies and Delivery Dudes acquired during 2021 (collectively, the “acquired business”), which are described in Part II, Item 8, Note 4 - Business Combinations, to the consolidated financial statements. The acquired businesses represented 1% of the Company’s consolidated total assets (excluding $39.2 million of goodwill and intangible assets, which were integrated into the Company’s control environment) and 7% of consolidated revenues as of and for the year ended December 31, 2021. This exclusion is in accordance with the SEC’s guidance, which permits companies to omit an acquired business’s internal control over financial reporting from management’s assessment for up to one year after the date of acquisition.TheItem 10 will be included in our definitive proxy statement to be filed with the SEC in connection with our 2019 Annual Meeting of Stockholders (the “2019 Proxy Statement”), which is expected to be filedthis item not later than 120 days after the end of ourthe fiscal year ended December 31, 2018, and is incorporated hereincovered by reference.TheItem 11 will be included in our 2019 Proxy Statement and is incorporated hereinthis item not later than 120 days after the end of the fiscal year covered by reference.this Form 10-K.TheItem 12 will be included in our 2019 Proxy Statement and is incorporated hereinthis item not later than 120 days after the end of the fiscal year covered by reference.this Form 10-K.TheItem 13 will be included in our 2019 Proxy Statement and is incorporated hereinthis item not later than 120 days after the end of the fiscal year covered by reference.this Form 10-K.Item 14 will be included in our 2019 Proxy Statement and is incorporated hereinthis item not later than 120 days after the end of the fiscal year covered by reference.45(a) 20182021 and 201720182018Changes in Stockholders’ Equity (Deficit) for the three years in the period ended December 31, 2018 the Consolidated Financial Statements46ExhibitNo.Description2.1 2.2 2.3 2.4 3.2 4.1 4.2 Description 4.3 4.4 4.5 4.6 10.1 10.2 4710.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20* 10.21* 10.22* 10.23* 10.24* 48ExhibitNo.Description10.26* 10.28* 10.30* Separation and Transition Agreement, dated February 11, 2019,April 23, 2020, by and between Waitr Holdings Inc. and David PringleCarl A. Grimstad (incorporated by referencereferenced to Exhibit 10.1 of the Current Report on Form 8-K (File No. 001-37788) filed by the Company on February 11, 2019)April 28, 2020).10.31* 10.32* 10.33 10.34 49ExhibitNo.DescriptionDocumentDocument.(1)DocumentDocument.(1)DocumentDocument.(1)DocumentDocument.(1)DocumentDocument.(1)104 50 By: By:David PringleDavid Pringle14, 2019and on the dates indicated on March 14, 2019.11, 2022.SignatureTitleTitle /s/ Christopher MeauxCarl A. GrimstadChristopher MeauxCarl A. Grimstad /s/ David PringleLeo BogdanovDavid PringleLeo Bogdanov /s/ Karl D. MecheArmen YeghyazariansKarl D. MecheArmen Yeghyazarians /s/ Tilman J. FertittaDirectorTilman J. FertittaScott FletcherScott FletcherCharles Holzer /s/ Jonathan GreenDirectorJonathan GreenJoseph LeBlancJoseph LeBlancBuford H. Ortale /s/ Kian SalehiDirectorKian SalehiDirector Pouyan Salehi /s/ Steven L. Scheinthal /s/ William Gray Stream 51FINANCIALFINANCIAL STATEMENTSPagePage F-1F-2F-3F-4F-6F-852RegisteredRegistered Public Accounting Firm20182021 and 2017, and2020, the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2018,2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 20182021 and 2017,2020, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.Public Company Accounting Oversight Board (PCAOB)PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.14, 2019F-1December 31,
2021December 31,
2020ASSETS CURRENT ASSETS Cash $ 60,111 $ 84,706 Accounts receivable, net 3,027 2,954 Capitalized contract costs, current 1,170 737 Prepaid expenses and other current assets 8,706 6,657 TOTAL CURRENT ASSETS 73,014 95,054 Property and equipment, net 3,763 3,503 Capitalized contract costs, noncurrent 3,183 2,429 Goodwill 130,624 106,734 Intangible assets, net 43,126 23,924 Operating lease right-of-use assets 4,327 — Other noncurrent assets 1,070 588 TOTAL ASSETS $ 259,107 $ 232,232 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES: CURRENT LIABILITIES Accounts payable $ 7,018 $ 4,382 Restaurant food liability 3,327 4,301 Accrued payroll 2,988 4,851 Short-term loans for insurance financing 3,142 2,726 Income tax payable 74 122 Operating lease liabilities 1,581 — Other current liabilities 19,309 13,922 TOTAL CURRENT LIABILITIES 37,439 30,304 Long term debt - related party 81,977 94,218 Accrued medical contingency 53 16,987 Operating lease liabilities, net of current portion 3,034 — Other noncurrent liabilities 2,115 2,627 TOTAL LIABILITIES 124,618 144,136 Commitments and contingent liabilities (Note 12) 0 0 STOCKHOLDERS’ EQUITY: Common stock, $0.0001 par value; 249,000,000 shares authorized and 146,094,300 and 111,259,037 shares issued and outstanding at December 31, 2021 and 2020, respectively 15 11 Additional paid in capital 503,609 451,991 Accumulated deficit (369,135) (363,906) TOTAL STOCKHOLDERS’ EQUITY 134,489 88,096 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 259,107 $ 232,232 F-2Year Ended December 31, 2021 2020 2019 REVENUE $ 182,194 $ 204,328 $ 191,675 COSTS AND EXPENSES: Operations and support 108,599 109,240 147,759 Sales and marketing 19,198 12,242 52,370 Research and development 4,156 4,262 7,718 General and administrative 45,042 42,982 56,862 Depreciation and amortization 12,429 8,377 15,774 Goodwill impairment — — 119,212 Intangible and other asset impairments 186 30 73,251 Loss on disposal of assets 158 20 36 TOTAL COSTS AND EXPENSES 189,768 177,153 472,982 INCOME (LOSS) FROM OPERATIONS (7,574) 27,175 (281,307) OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET Interest expense 7,074 9,458 9,408 Interest income — (102) (1,037) Other (income) expense (9,443) 1,861 1,547 NET INCOME (LOSS) BEFORE INCOME TAXES (5,205) 15,958 (291,225) Income tax expense 24 122 81 NET INCOME (LOSS) $ (5,229) $ 15,836 $ (291,306) INCOME (LOSS) PER SHARE: Basic $ (0.04) $ 0.16 $ (4.00) Diluted $ (0.04) $ 0.15 $ (4.00) Weighted average shares used to compute net income (loss) per share: Weighted average common shares outstanding – basic 120,593,501 98,095,081 72,404,020 Weighted average common shares outstanding – diluted 120,593,501 108,175,022 72,404,020 F-3 (DEFICIT)Common stock Shares Amount Balances at December 31, 2018 54,035,538 $ 5 $ 200,417 $ (88,436) $ 111,986 Net loss — — — (291,306) (291,306) Gain on debt extinguishment — — 1,897 — 1,897 Exercise of stock options and vesting of restricted stock units 496,654 — 4 — 4 Taxes paid related to net settlement on stock-based compensation (121,874) — (811) — (811) Stock-based compensation — — 7,238 — 7,238 Equity issued in exchange for services — — 120 — 120 Issuance of common stock in connection with Term Loan 325,000 — 3,884 — 3,884 Public warrants exchanged for common stock 4,494,889 1 (610) — (609) Stock issued as consideration in Bite Squad Merger 10,591,968 1 126,573 — 126,574 Issuance of common stock 6,757,000 1 46,425 — 46,426 Balances at December 31, 2019 76,579,175 8 385,137 (379,742) 5,403 Net income — — — 15,836 15,836 Exercise of stock options and vesting of restricted stock units 779,060 — 45 — 45 Taxes paid related to net settlement on stock-based compensation — — (1,077) — (1,077) Stock-based compensation — — 5,166 — 5,166 Stock issued for conversion of Notes 9,328,362 1 12,025 — 12,026 Stock issued for settlement of legal contingency 873,720 — 3,023 — 3,023 Equity issued for asset acquisition — — 100 — 100 Issuance of common stock 23,698,720 2 47,572 — 47,574 Balances at December 31, 2020 111,259,037 11 451,991 (363,906) 88,096 Net loss — — — (5,229) (5,229) Exercise of stock options and vesting of restricted stock units 2,677,887 1 13 — 14 Taxes paid related to net settlement on stock-based compensation — — (985) — (985) Stock-based compensation — — 7,974 — 7,974 Equity issued for asset acquisitions 6,154,770 — 13,724 — 13,724 Issuance of common stock 26,002,606 3 30,892 — 30,895 Balances at December 31, 2021 146,094,300 $ 15 $ 503,609 $ (369,135) $ 134,489 F-4Year Ended December 31, 2021 2020 2019 Cash flows from operating activities: Net income (loss) $ (5,229) $ 15,836 $ (291,306) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Non-cash interest expense 2,258 5,925 5,674 Non-cash advertising expense — — 397 Stock-based compensation 7,974 5,166 7,238 Equity issued in exchange for services — — 120 Loss on disposal of assets 158 20 36 Depreciation and amortization 12,429 8,377 15,774 Goodwill impairment — — 119,212 Intangible and other asset impairments 186 30 73,251 Amortization of capitalized contract costs 964 495 1,637 Change in estimate of accrued medical contingency (16,715) — — Change in fair value of contingent consideration liability 253 — — Write-off of notes receivable — 388 — Other (111) (12) (68) Changes in assets and liabilities: Accounts receivable 1,503 232 2,143 Capitalized contract costs (2,151) (2,690) (4,579) Prepaid expenses and other current assets (1,865) 1,355 (2,676) Other noncurrent assets (243) (142) — Accounts payable 1,307 (2) 1,604 Restaurant food liability (974) (1,311) 4,475 Income tax payable (48) 71 26 Accrued payroll (2,062) (434) 1,104 Accrued medical contingency (218) (216) (680) Accrued workers’ compensation liability — (102) (161) Other current liabilities 1,039 3,312 (6,827) Other noncurrent liabilities (796) 2,147 129 Net cash provided by (used in) operating activities (2,341) 38,445 (73,477) Cash flows from investing activities: Purchases of property and equipment (767) (1,555) (1,636) Internally developed software (8,752) (3,982) (1,805) Purchase of domain names (3,006) — — Acquisition of Bite Squad, net of cash acquired — — (192,568) Acquisitions, net of cash acquired (25,435) (628) (695) Collections on notes receivable — 21 94 Proceeds from sale of property and equipment 21 19 34 Net cash used in investing activities (37,939) (6,125) (196,576) Cash flows from financing activities: Net proceeds from issuance of stock 30,895 47,574 45,823 Payments on long-term loan (14,472) (22,594) — Borrowings under short-term loans for insurance financing 8,671 4,753 7,875 Payments on short-term loans for insurance financing (8,256) (5,632) (4,931) Payments on acquisition loans (182) — — Proceeds from exercise of stock options 14 45 4 Taxes paid related to net settlement on stock-based compensation (985) (1,077) (811) Proceeds from long-term loan — — 42,080 Waitr shares redeemed for cash — — (10) Net cash provided by financing activities 15,685 23,069 90,030 Net change in cash (24,595) 55,389 (180,023) Cash, beginning of period 84,706 29,317 209,340 Cash, end of period $ 60,111 $ 84,706 $ 29,317 Supplemental disclosures of cash flow information: Cash paid during the period for state income taxes $ — $ 64 $ 74 Cash paid during the period for interest 4,816 3,533 3,734 Supplemental disclosures of non-cash investing and financing activities: Conversion of convertible notes to stock $ — $ 12,026 $ — Stock issued in connection with legal settlement — 3,023 — Accrued consideration for acquisitions — 225 — Stock issued as consideration in acquisitions 13,724 100 868 Seller-financed payables related to other acquisitions — — 868 Stock issued as consideration in Bite Squad Merger — — 126,574 Stock issued in connection with Term Loan — — 3,884 Non-cash gain on debt extinguishment — — 1,897 F-6F-7 THE CONSOLIDATED FINANCIAL STATEMENTS (the “Company,” formerly known as Landcadia Holdings, Inc.), a Delaware corporation, completed the acquisition of Waitr Incorporated, pursuant to the Agreementtogether with its wholly owned subsidiaries (the “Company,” “Waitr,” “we,” “us” and Plan of Merger, dated as of May 16, 2018 (the “ Landcadia Merger Agreement”“our”), byoperates an online ordering technology platform, providing delivery, carryout and among the Company, Waitr Inc. (f/k/a Landcadia Merger Sub, Inc.), a Delaware corporation and wholly-owned indirect subsidiary of the Company (“Merger Sub”), and Waitr Incorporated. The transactions contemplated by the Landcadia Merger Agreement are referred to herein as the “Landcadia Business Combination.” Upon the consummation of the Landcadia Business Combination, Waitr Incorporated merged with and into Merger Sub, with Merger Sub surviving the merger in accordance with the Delaware General Corporation Law as a wholly-owned, indirect subsidiary of the Company. In connection with the closing of the Landcadia Business Combination (the “Closing”), the Company changed its name from Landcadia Holdings, Inc. to Waitr Holdings Inc. The Landcadia Business Combination was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Under this method of accounting, Landcadia Holdings, Inc. was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Landcadia Business Combination was treated as the equivalent of Waitr Incorporated issuing stock for the net assets of Landcadia Holdings, Inc., accompanied by a recapitalization.Originally formed on December 5, 2013 as a Louisiana corporation, Waitr Incorporated began operations in 2014 as a restaurant platform for online food ordering and delivery services, and grew quickly,dine-in options, connecting restaurants, drivers and diners and delivery drivers in various markets. Landcadia Holdings, Inc. was a special purpose acquisition company whose business was to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination. It was incorporated in Delaware on November 19, 2008 as Leucadia Development Corporation and changed its name to Landcadia Holdings, Inc. on September 15, 2015.Prior to the consummation of the Landcadia Business Combination, the common equity of the Company was traded on the Nasdaq Stock Market (the “Nasdaq”) under the symbols “LCA,” “LCAHU” and “LCAHW”. Effective November 16, 2018, the common equity of the Company began trading on Nasdaq under the ticker symbol “WTRH”. The Company’s warrants trade on the over-the-counter markets operated by the OTC Markets Group under the ticker symbol “WTRHW”. One of the primary purposes of the Landcadia Business Combination was to provide a platform for Waitr Incorporated to gain access to the U.S. public markets. See Note 3 – Business Combinations for additional details on the Landcadia Business Combination.Waitr is a leading restaurant platform for online food ordering and delivery servicescities across the United States. The Company partners with independent local restaurantsCompany’s technology platform includes the Waitr, Bite Squad and regional and national chains in small and mid-size markets (hereinDelivery Dudes mobile applications, collectively referred to as “Restaurant Partners”)the “Platforms”. The Company provides an online platform forPlatforms allow consumers to order food from Restaurant Partners for pick-up and delivery through a network of drivers. Use of the Company’s restaurant platform benefits the consumer by providing a single location to browse local restaurants and menus, track order and delivery status, and securely store previous orders and payment information for ease of use and convenience. Restaurant PartnersRestaurants benefit from the online platformPlatforms through increased exposure to consumers for carryout sales and expanded business in the delivery market. The Company also provides Restaurant Partners with high-quality, professional photographsmarket and carryout sales.their menu offerings as part of its overall services.GAAPgenerally accepted accounting principles in the United States of America (“GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”).wholly-ownedwholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.ReclassificationCertain prior period amounts included in the consolidated statements of operations have been reclassified to conform to the current period’s presentation. The Company has revised the classification of certain employee-related wages and payroll taxes associated with such wages for the year ended December 31, 2017 to better align the statement of operations line items with departmental responsibilities and management of operations. These reclassifications had no effect on the Company’s reported total costs and expenses, loss from operations, net loss or loss per share for the year ended December 31, 2017. There was no reclassification necessary for the year ended December 31, 2016.F-8The table below summarizes the financial statement line items impacted by these reclassifications (in thousands): determination of the nature and timing of satisfaction of revenue-generating performance obligations and the standalone selling price of performance obligations, variable consideration, other obligations such as product returns and refunds, allowance for doubtful accounts, levels, levels;taxes, taxes;assets, depreciation and amortization, assets;compensation, contingencies, compensation;and liabilities assumed and contingent consideration as part of a business combination.purchasemerger consideration over the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The Company uses management estimates based on historically similar transactions to assist in establishing the acquisition date fair values of assets acquired, liabilities assumed, and contingent consideration granted, if any. These estimates and valuations require the Company to make significant assumptions, including projections of future events and operating performance.Restaurant Partners. Certain Restaurant Partnersrestaurants on the platform electPlatforms. The Company has a compensating balance arrangement with its financial institution related to a letter of credit. As of December 31, 2021, cash supporting the outstanding letter of credit was $3,191.platformPlatforms less frequently than daily. Upon receipt of the Restaurant Partners’restaurants’ cash, the Company records an offsetting liability. As of December 31, 2018,2021 and 2020, our restaurant liability was $207. $3,327 and $4,301, respectively. setup and integration fees due from Restaurant Partners and credit card receivables due from the credit card processor. Credit card payments on orders made through the restaurant platformPlatforms are generally remitted to the Company three businessin one to six days after the transaction resulting from the sale and deliverydate revenue is generated. Additionally, accounts receivable is also comprised of food.F-9Equipment3 yearsFurniture53 years5 years Leasehold improvements expenses.expenses associated with these improvements. Additionally, the Company may periodically incurincurs third-party development and programming costs.platformplatforms in accordance with ASC Topic 985-20, Software — Costs of Software to Be Sold, Leased, or Marketed. Internal and external costs incurred after technological feasibility has been established are capitalized. Technological feasibility is established upon completion of planning, designing, coding, and testing activities necessary to establish that the product can be produced to meet its design specifications, including functions, features, and technical performance requirements. The Company’s software products generally reach technical feasibility shortly before the products are released to production. Capitalized software costs are amortized on a product-by-product basis. The Company amortizes capitalized software costs using the straight-line method over the estimated economic life of the product, which is generally 3 years.Additionally, the Company acquired technology as part of the acquisition of Requested, Inc. (“Requested”) in 2016. The Company amortizes capitalized software costs on a straight-line basis over the estimated useful term, which is 3 years.inas of October 1, or more frequently if indicators of impairment exist. When performing the annual impairment test, the Company has the option of performing a qualitative or quantitative assessmentmay elect to determine if an impairment has occurred. Ifutilize a qualitative assessment indicates thatto evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount,amount. If the qualitative assessment indicates that goodwill impairment is more likely than not, the Company would be required to performperforms a quantitative impairment two-step testtest. The Company would recognize an impairment charge for goodwill.F-10In the first step, the fair value of each reporting unit is determined and compared toamount by which the reporting unit’s carrying value, including goodwill. If theamount exceeds its fair value, if any, not to exceed the carrying amount of a reporting unit is less than its carrying value, the second step of thegoodwill. The Company has determined there was no goodwill impairment test is performed to measureduring the amount of impairment, if any. In the second step, the fair value of the reporting unit is allocated to the assets and liabilities of the reporting unit as if it had been acquired in a business combination and the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. If the implied fair value of goodwill at the reporting unit level is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of goodwill at the reporting unit is less than its carrying value.accounts for leases under the provisions ofadopted ASC 842, Leases on January 1, 2021. ASC Topic 840, Leases, which842 requires that leases be evaluated and classified as operating or capital leases for financial reporting purposes. The terms usedlessees to recognize a right-of-use asset representing its right to use the underlying asset for the evaluation include renewal option periods in instances in whichlease term and a corresponding lease liability on the exercise of the renewal option can be reasonably assured and failure to exercise such option would result in an economic penalty. Leases are classified as capitalbalance sheet for all leases whenever thewith terms of the lease transfer substantially all of the risks and rewards of ownership to the lessee. All other leases are recorded as operating leases. As of December 31, 2018, 2017, and 2016, all ofgreater than twelve months. See Recently Adopted Accounting Standards below for additional details on the Company’s material leases were operatingaccounting policy for leases.The Company’s lease agreements provide for rental payments that increase on an annual basis. The Company recognizes rent expense on operating leases on a straight-line basis over the non-cancellable lease term. Operating leases with landlord-funded leasehold improvements are considered tenant allowances and are amortized as a reduction of rent expense over the non-cancellable lease term. Deferred rent liability, which is calculated as the difference between contractual lease payments and the rent expense, is recorded in other noncurrent liabilities in the consolidated balance sheets. on a straight-line basis for awards expected to vest.stock-based awardsstock options at the grant date requires judgment. The determination of the grant date fair value of options using an option-pricing model is affected by the Company’s estimated common stock value, as well as assumptions regarding a number of other complex and subjective variables. These assumptions include:publishedthe historical volatilitiesvolatility of the Company’s stock price and the historical and implied volatility of comparable publicly traded companies.Forfeiture rate: Effective January 1, 2016, the Company elected to recognize actual forfeitures of stock-based awards as they occur in accordance with Accounting Standards Update (“ASU”) No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The expense resulting from stock-based payments is recorded as expense in the accompanying consolidated statements of operations based on the relevant headcount.910 – Debt for additional details.F-11Embedded DerivativesASC Topic 815-15 — Embedded Derivatives requires each contract that is not a derivative in its entirety be assessed to determine whether it contains embedded derivatives that are required to be bifurcated and accounted for as a derivative financial instrument. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if the combined instrument is not accounted for, in its entirety, at estimated fair value, with changes in estimated fair value recorded in earnings, the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and if the same terms on a separate instrument would qualify that instrument as a derivative instrument. Embedded derivatives are measured at fair value and re-measured at each subsequent reporting period.Equity-Based Payments to Non-EmployeesUnder the provisions of ASC Topic 505-50, Equity-Based Payments to Non-Employees, the Company measures stock-based compensation to a non-employee on the earlier of the date at which a commitment is reached for performance by the counterparty and the date at which the counterparty’s performance is complete (“Measurement Date”). A commitment for performance is deemed to have been reached when performance by the counterparty to earn the equity instruments is probable. The value of the award is measured based on an estimate of the fair value of the equity instruments to be issued or the fair value of the goods or services received, whichever can be measured more reliably. The estimated fair value is recognized as expense over the contractual term of the arrangement with the non-employee. If the Measurement Date is not established, the Company measures the cost of the award in each reporting period at the then-current lowest aggregate fair value until the performance condition is met.The fair value should be calculated basedBased on assumptions that market participants would usethe guidance in pricing the asset or liability, not on assumptions specific to the entity.In addition to defining fair value, ASC 820, expands the disclosure requirements around fair value and establishesCompany uses a three-tier fair value hierarchy, for valuation inputs. The hierarchy prioritizesprioritizing and defining the types of inputs into three levels basedused to measure fair value depending on the extentdegree to which inputs used in measuring fair valuethey are observable in the market.observable. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. TheseThe levels are:F-12Restaurant Partners.restaurants on the Platforms. Credit risk on accounts receivable is minimized through use of a reputable payment processing service provider as well as a diverse group of Restaurant Partnersrestaurants dispersed across several geographic areas. The Company has not experienced material losses related to receivables from individual restaurants or groups of restaurants and is not expecting a change from this historical norm, as current economic conditions are relatively stable.Substantially all of the Company’sis comprised of revenue from contractsin accordance with its Restaurant Partners and end user diner fees (“Transaction fees”). Revenue is as follows (in thousands):Transaction fees represent the revenue recognized from the Company’s obligation to process orders on the platform. The performance obligation is satisfied when the Company successfully processes an order placed on the platform and the restaurant receives the order at their location. The obligation to process orders on the platform represent a series of distinct performance obligations satisfied over time that the Company combines into a single performance obligation. Consistent with the recognition objective in ASC Topic 606, Customers, the variable consideration due to the CompanyCustomers. See Note 3 - Revenue for processing orders is recognized on a daily basis. As an agent of the restaurant in the transaction, the Company recognizes transaction fees earned from the restaurantadditional details on the platform on a net basis. Transaction fees are collected by a third-party payment processor and remitted to the Company shortly after the order is processed, which is typically three days. Transaction fees also include a fee charged to the end user customer when they request the order be delivered to their location. Revenue is recognized for diner fees once the delivery service is completed. The contract period for substantially all restaurant contracts is one month as both the Company and the Restaurant Partners have the ability to unilaterally terminate the contract by providing notice of termination.The Company also receives non-refundable upfront setup and integration fees for onboarding new restaurants onto the platform. Setup and integration activities primarily represent administrative activities that allow the Company to fulfill future performance obligations for its Restaurant Partners and do not represent services transferred to the customer. However, the non-refundable upfront setup and integration fees charged to Restaurant Partners results in a performance obligation in the form of a material right related to the restaurant partner’s option to renew the contract each day rather than provide a notice of termination. Upfront non-refundable fees are generally due shortly after the contract is executed; however, the Company may provide installment payment options for up to six months. Revenue is recognized ratably over a two-year period, at which point Restaurant Partners must make another non-refundable payment to renew the contract.F-13Other revenues consist primarily of subscription revenues from customers who have opted to pay an ongoing monthly fee to remain on the platform instead of a lump sum setup fee.Significant JudgmentMost of the Company’s contracts with Restaurant Partners contain multiple performance obligations as described above. For these contracts, the Company accounts for individual performance obligations separately if they are both capable of being distinct, and distinct in the context of the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgment.Judgment is also required to determine the standalone selling price for each distinct performance obligation. The Company uses the alternative approach in ASC 606 to allocate the upfront fee between the material right obligation and the transaction fee obligation, which results in all of the upfront non-refundable payment at inception of the contract being allocated to the material right obligation. When contracts with customers include other performance obligations, such as ancillary equipment, the Company establishes a single amount to estimate the standalone selling price for the goods or services. In instances where the standalone selling price is not directly observable, it is determined using observable inputs.Contract BalancesThe timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when it has an unconditional right to the consideration. Setup and integration fees are due at inception of the contract; in certain cases, extended payment terms may be provided for up to six months and are included in accounts receivable. The opening balance of accounts receivable, net was $2,124 and $762 as of January 1, 2018 and 2017, respectively.Payment terms and conditions on setup and integration fees vary by contract type, although terms typically include a requirement of payment within six months. The Company records a contract liability in deferred revenue for the unearned portion of the upfront non-refundable fee. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts do not include a significant financing component.Assets Recognized from Costs to Obtain and Costs to Fulfill a Contract with a CustomerThe Company recognizes an asset for the incremental costs of obtaining a contract with a customer and recognizes the expense over the course of the period when the Company expects to recover those costs. The Company has determined that certain internal sales incentives earned at the time when an initial contract is executed meet these requirements. Capitalized sales incentives are amortized to sales and marketing expense on a straight-line basis over the period of benefit, which the Company has determined to be two years. Deferred costs related to obtaining a contract with a customer were $986 and $479 as of December 31, 2018 and 2017, respectively, out of which $679 and $324, respectively, were classified as current. Amortization of expense for the costs to obtain a contract were $541, $211, and $45 for the years ended December 31, 2018, 2017, and 2016, respectively.The Company also recognizes an asset for the costs to fulfill a contract with a customer when they are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. The Company has determined that certain costs related to setup and integration activities meet the capitalization criteria under ASC Topic 340-40, Other Assets and Deferred Costs. Costs related to these implementation activities are deferred and then amortized to operations and support expense on a straight-line basis over a period of benefit, which the Company has determined to be two years. Deferred costs related to fulfilling a contract with a customer were $1,710 and $945 as of December 31, 2018 and 2017, respectively, out of which $1,190 and $623, respectively, were classified as current. Amortization of expense for the costs to fulfill a contract were $972, $378, and $87 for the years ended December 31, 2018, 2017, and 2016, respectively.The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.There was no impairment loss in relation to capitalized costs for the years presented. Requested filed a separate income tax return for the year ended December 31, 2016 and was included in the Company’s consolidated federal income tax return beginning with the year ended December 31, 2017. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement and income tax bases of assets and liabilities using the enacted tax rates applicable in a given year. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized. The Company did not consider futureF-14allowances were establishedallowance against some, but not all, of the Company’snet deferred tax assets.assets as of December 31, 2021 and 2020. In the event the Company determines that it would be able to realize deferred tax assets that have valuation allowances established, an adjustment to the deferred tax assets would be recognized as a component of income tax expense through continuing operations.20182021 and December 31, 2017.The Tax Cuts and Jobs Act (the “Tax Act”) was signed into law on December 22, 2017. In accordance with the Tax Act, the Company revalued its deferred tax assets and liabilities as of December 31, 2017 using the new corporate income tax rate of 21% instead of the prior statutory rate of 34%. The change in tax rate is effective for taxable income earned beginning on January 1, 2018.Recently Adopted2020.Changes to GAAP are established by the FASB, in the form of ASUs, to the FASB’s ASCs.In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), providing amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118. The ASU became effective upon issuance and included guidance and clarification of income tax accounting to address uncertainty or diversity of views in practice regarding the application of ASC 2018-05 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under the Tax Cuts and Jobs Act of 2017 (“Tax Act”), for the reporting period in which the Tax Act was enacted. The adoption did not have an immediate impact on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification of disproportionate tax effects in accumulated other comprehensive income caused by the Tax Act to retained earnings. ASU 2018-02 will become effective for interim and annual reporting periods beginning on January 1, 2019. Early adoption of the ASU is permitted. The Company has elected to early adopt the ASU effective January 1, 2018 and will prospectively classify the income tax effects of the Tax Act to retained earnings. As the Company does not have accumulated other comprehensive income, the adoption has no immediate impact on the consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides guidance about which changes to the terms or conditions of a stock-based payment award require an entity to apply modification accounting. ASU 2017-09 is effective for all entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance. The Company has adopted ASU 2017-09 as of January 1, 2018 and the Company will apply the guidance to any awards modified on or after the adoption date. The adoption did not have an immediate impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business (Topic 805). ASU 2017-01 clarifies the definition of a business and provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or as business combinations. The definition clarification outlined in this ASU affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for public business entities for periods beginning after December 15, 2017, including interim periods within those periods. For all other entities, the standard is effective for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The Company has elected to early adopt ASU 2017-01 as of January 1, 2018 and will apply the standard for business combinations consummated subsequent to the date of adoption. The adoption did not have an immediate impact on the consolidated financial statements.F-15In January 2017, the FASB issued ASU No. 2017-04, Intangibles, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for public business entities that are SEC filers for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. For a public business entity that is not an SEC filer, the standard is effective in fiscal years beginning after December 15, 2020. For all other entities, the standard is effective in fiscal years beginning after December 15, 2021. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted this standard on January 1, 2018. The adoption of this standard did not have an immediate impact on the consolidated financial statements.Recently Issued Accounting Pronouncementsthethese consolidated financial statements. Throughout fiscal year 2020, the Company qualified as an “emerging growth company” pursuant to the provisions of the JOBS Act. As an emerging growth company, the Company has elected to use the extended transition period for complying with certain new or revised financial accounting standards provided pursuant to Section 13 (a)13(a) of the Securities Exchange Act. June 2018,December 2019, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation2019-12, Income Taxes (Topic 718)740): Simplifying the Accounting for Income Taxes, to simplify which simplifies the accounting for share-based paymentsincome taxes by removing certain exceptions to non-employeesthe general principles for income taxes and also improves consistent application by aligning it with the accounting for share-based payments to employees, with certain exceptions. Under the new standard, equity-classified non-employee awards will be initially measured on the grant dateclarifying and re-measured only upon modification, rather than at each reporting period. Measurement will be based on an estimate of the fair value of the equity instruments to be issued.amending existing guidance. ASU 2018-07 is2019-12 was effective for public business entities in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the standard is effective in fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including in an interim period for which financial statements have not been issued or made available for issuance but not before an entity adopts ASC 606. As an emerging growth company,adopted by the Company will not be subject to the requirementson January 1, 2021. The adoption of ASU 2018-07 until fiscal year 2020. The Company’s adoption of this ASU will2019-12 did not have a material impact on the Company’s disclosures or consolidated financial statements.iswas effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. As an emerging growth company,adopted by the Company will not be subject to the requirementson January 1, 2021. The adoption of ASU 2017-11 until fiscal year 2020. The Company is currently evaluating thedid not have a material impact that adopting this ASU will have on the Company’s disclosures or consolidated financial statements.The Company will be required to useASU 2016-13 uses a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments.instruments and expands disclosure requirements. ASU 2016-13 iswas effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2020, including interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. As an emerging growth company,and adopted by the Company will not be subject to the requirementson January 1, 2021. The adoption of ASU 2017-11 until fiscal year 2020. The Company is currently evaluating the2016-13 did not have a material impact that adopting this ASU will have on the Company’s disclosures or consolidated financial statements.F-16February 2016,August 2020, the FASB issued ASU No. 2016-02, Leases (Topic 842).2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt, resulting in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-022020-06 is effective for public business entitiesthe Company on January 1, 2022. The Company does not believe the adoption of ASU 2020-06 will have a material impact on its consolidated financial statements and related disclosures.fiscal years beginning after December 15, 2018, including interimthe periods within those fiscal years. For all other entities,indicated (in thousands):Year Ended December 31, 2021 2020 2019 Delivery transaction fees $ 175,607 $ 203,471 $ 186,189 Payment processing referral fees 3,311 — — Setup and integration fees 7 453 5,270 Other 3,269 404 216 Total Revenue $ 182,194 $ 204,328 $ 191,675 standardPlatforms. In the case of diner subscription fees relating to our diner subscription program, revenue is effectiverecognized for fiscal years beginning after December 15, 2019the receipt of the monthly fee in the applicable month for which the delivery service applies to. Delivery Transaction Fees represent the revenue recognized from the Company’s obligation to process orders on the Platforms. The performance obligation is satisfied when the Company successfully processes an order placed on one of the Platforms and interim periods beginning after December 15, 2020. Early adoptionthe restaurant receives the order at their location. The obligation to process orders on the Platforms represents a series of distinct performance obligations satisfied over time that the Company combines into a single performance obligation. Consistent with the recognition objective in ASC Topic 606, Revenue from Contracts with Customers, the variable consideration due to the Company for processing orders is permitted.recognized on a daily basis. As an emerging growth company,agent of the restaurant in the transaction, the Company will not be subjectrecognizes Delivery Transaction Fees earned from the restaurant on the Platform on a net basis. Delivery Transaction Fees also include a fee charged to the requirementsend user customer when they request the order be delivered to their location. Revenue is recognized for diner fees once the delivery service is completed. The contract period for substantially all restaurant contracts is one month as both the Company and the restaurant have the ability to unilaterally terminate the contract by providing notice of ASU 2016-02 until fiscaltermination.2020.ended December 31, 2019, the Company received non-refundable upfront setup and integration fees for onboarding certain restaurants, representing administrative activities that allowed the Company to fulfill future performance obligations for these restaurants. In connection with modifications to the Company’s fee structure in July 2019, the Company discontinued offering fee arrangements with upfront setup and integration fees, resulting in accelerated recognition of deferred revenue related to the modified contracts. Included in revenue during the year ended December 31, 2019 is a cumulative adjustment to setup and integration fee revenue of $3,005, which was previously included in deferred revenue as of August 1, 2019.currently evaluating the impact that adopting this ASU will haveagent in these arrangements as it establishes the relationship between the third-party payment processor and merchant, and thus, recognizes revenue on a net basis. The third-party payment processor is considered the customer of the Company as no direct contract exists with between the merchant and the Company.consolidated financial statements.3.Company’s accounts receivable.Landcadia Business CombinationNovember 15, 2018,August 25, 2021, the Company (f/k/a Landcadia Holdings, Inc.) completed the acquisition of Waitr Incorporated. Waitr Incorporated began operations in 2014 as a restaurant platform for online food orderingcertain assets and delivery services. Landcadia Holdings, Inc. was a special purpose acquisition company whose business wasproperties of ProMerchant LLC, Cape Cod Merchant Services LLC and Flow Payments LLC (collectively referred to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination. The Landcadia Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Landcadia Holdings, Inc. was treatedherein as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Landcadia Business Combination was treated“Cape Payment Companies”), pursuant to three substantially identical asset purchase agreements (collectively referred to herein as the equivalent of Waitr Incorporated issuing stock“Cape Payment Agreements”). The Cape Payment Companies facilitate access to third-party payment processing solution providers and receive residual payments from the third-party payment providers. The purchase price for the net assetsCape Payment Companies consisted of Landcadia Holdings, Inc., accompanied by a recapitalization. The net assets of Landcadia Holdings, Inc. were stated at historical cost, with no goodwill or other intangible assets recorded. Reported amounts from operations included herein prior to the Landcadia Business Combination are those of Waitr Incorporated. The shares and earnings per share available to holders of the Company’s common stock, prior to the Landcadia Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Landcadia Business Combination (0.8970953 Waitr Holdings Inc. shares to 1.0 Waitr Incorporated share).The aggregate consideration for the Landcadia Business Combination was $300,000, consisting of $71,680$12,000 in cash, subject to certain purchase price adjustments, and 22,831,6972,564,103 shares of the Company’s common stock valued at $10.00$1.24 per share. In addition, 559,507 options to purchase Waitr Incorporated shares that were unvested, outstanding and unexercised as of immediately prior to the effective time of the Landcadia Business Combination, were assumed by the Company. For additional details, see Note 1 – Organization. The following represents the aggregate consideration for the Landcadia Business Combination:(1)Value represents the Reference Price per the Landcadia Merger Agreement. Theshare (the closing price per share on the date of the consummation of the transaction was $11.31. As the Landcadia Business Combination was accounted for as a reverse recapitalization, the value per share is disclosed for informational purposes only in order to indicate the fair value of shares transferred.See Note 16 – Stockholders’ Equity for details of the Company’s common stock prior to and subsequenton August 24, 2021). In December 2021, the Company finalized the adjustments contemplated by the Cape Payment Agreements, resulting in the payment of an additional $32 of cash consideration to the Landcadia Business Combination. In connectionCape Payment Companies, recorded as additional goodwill. Additionally, the Cape Payment Agreements include an earnout provision which provided for a one-time payment to the sellers if the Cape Payment Companies exceed certain future revenue targets. The earnout provision, if any, is payable no later than March 30, 2023, and was valued at $1,686 as of the acquisition date. As of December 31, 2021, the earnout provision was valued at $1,939 (see (in thousands, except per share amount) Shares transferred at closing 2,564 Value per share $ 1.24 Total share consideration $ 3,179 Plus: cash transferred to Cape Payment Companies 12,032 Total estimated consideration at closing 15,211 Contingent consideration 1,686 Total consideration $ 16,897 Landcadia Business Combination,excess of the consideration transferred in the acquisition over the fair value of the assets and liabilities acquired recorded as goodwill. The fair value of assets acquired and liabilities assumed consists of the following (in thousands):Cash and cash equivalents $ 42 Accounts receivable 1,180 Prepaid expenses and other current assets 7 Intangible assets 6,850 Other noncurrent assets 17 Accrued expenses and other current liabilities (746) Total assets acquired, net of liabilities assumed 7,350 Goodwill 9,547 Total consideration $ 16,897 incurredand the Cape Payment Companies, including future growth in the payment processing arena, future customer relationships and the workforce in place. All of the goodwill is expected to be deductible for U.S. federal tax purposes. Value (in thousands) Customer relationships 7.5 $ 6,500 Trade name 3.0 350 Total $ 6,850 (in thousands, except per share amount) Shares transferred at closing 3,562 Value per share $ 2.96 Total share consideration $ 10,545 Plus: cash transferred to Delivery Dudes members 11,500 Total consideration $ 22,045 Cash and cash equivalents $ 573 Accounts receivable 330 Prepaid expenses and other current assets 130 Intangible assets 7,700 Other noncurrent assets 33 Accrued expenses and other current liabilities (1,035) Other noncurrent liabilities (29) Total assets acquired, net of liabilities assumed 7,702 Goodwill 14,343 Total consideration $ 22,045 Value (in thousands) Customer relationships 7.5 $ 4,700 Franchise relationships 1.0 250 Trade name 3.0 800 Developed technology 2.0 1,900 In-process research and development 2.0 50 Total $ 7,700 incrementalopportunity costs associated with the underlying technology, and in-process research and development assets were valued using the replacement cost method. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. These inputs required significant judgments and estimates at the time of the valuation.$5,768,$2,464, including $2,431 in cash. The asset acquisitions were accounted for under the acquisition method with the purchase consideration allocated to customer relationships. The customer relationship assets are amortized on a straight-line basis over 7.5 years. The results of operations of the acquired franchisees are included in our consolidated financial statements beginning on their acquisition dates and were immaterial. Pro forma results were deemed immaterial to the Company.legal$197,404 paid in cash, the pay down of $11,880 of indebtedness of Bite Squad and professional fees, whichan aggregate of 10,591,968 shares of the Company’s common stock valued at $11.95 per share. The results of operations of Bite Squad are included in our consolidated financial statements beginning on the acquisition date, January 17, 2019. Revenue and net loss attributable to Bite Squad for the year ended December 31, 2019 totaled approximately $95,079 and $213,497, respectively.2018.F-17Requested AcquisitionOn September 8, 2016, the Company acquired 100%certain periods are direct and incremental costs, consisting of the equity interests of Requested, pursuant to the Contract for Exchange of Stock dated September 8, 2016 (the “Requested Acquisition”), by transferring $60 of cashlegal and issuing 1,614,772 shares of common stock of Waitr Incorporated to the stockholders of Requested. The total consideration for the transaction was $2,256. Requested was a Sacramento, California based mobile platform company that offered consumers a way to discover new restaurants, reserve tables, pay through dynamic pricing, and leave a tip within their platform. The Company has included the results of operations of Requested in its consolidated statements of operations from the date of acquisition through December 31, 2017. In 2017, the Company ceased the operations of Requested due to a change in corporate strategy. The closure of the operations of Requested did not meet the criteria to be reported as discontinued operations in accordance with ASC Topic 205-20, Presentation of Financial Statements — Discontinued Operations. The Company recorded a loss of $551 due to impairment of the technology acquired as part of the Requested Acquisition upon implementing the change in strategy. As of December 31, 2018, the Company had no remaining assets or liabilities, other than goodwill,professional fees, related to Requested on the consolidated balance sheet. The legal entity was dissolved in January 2019.The Company accounted for the Requested Acquisition under the acquisition method of accounting in accordance with ASC 805,business combinations and accordingly, the total purchase price was allocated to the acquired tangible assets and identifiable intangible assets and assumed liabilities based on their estimated fair values on the acquisition date. The Company recorded the excess of the purchase price over the aggregate fair value as goodwill. The Company engaged a third-party to assist the Company in the Company’s analyses of the fair value of the assets and liabilities. Of the purchase price, the Company allocated $810 to identifiable intangible assets and $1,408 to goodwill. The goodwill recorded in the Requested Acquisition represented future enhancements to the consolidated Company’s mobile platforms, future customer relationships and markets, and workforce in place. The goodwill recorded in the Requested Acquisition was not expected to be tax deductible for U.S. federal income tax purposes.The purchase price allocation for the Requested Acquisition consisted of the following (in thousands):Identifiable intangible assets acquired from Requested consisted of the following (in thousands):The acquired identifiable intangible assets were amortized on a straight-line basis to reflect the pattern in which the economic benefits of the intangible assets were consumed.The acquired technology asset was valued under two different replacement cost approaches: actual costs to develop the technology plus opportunity costs and market-based hourly rates plus opportunity costs.The intangible asset acquired represented a Level 3 measurement as it was based on unobservable inputs reflecting the Company’s assumptions used in pricing the asset at fair value.RequestedDelivery Dudes Acquisition and the Cape Payment Acquisition, the Company incurred direct and incremental costs of $10 consisting$1,614 during the year ended December 31, 2021. During the year ended December 31, 2019, the Company incurred direct and incremental costs of legal$6,956, including debt modification expense of $375, related to the acquisition of Bite Squad. There were no direct and professional fees, which are included in general and administrative expenses inincremental transaction costs incurred during the consolidated statement of operations in 2016.F-18RequestedDelivery Dudes Acquisition had been consummated on January 1, 20162020 are as followsincluded in the table below (in thousands)thousand):Twelve Months Ended
December 31, 2021Twelve Months Ended
December 31, 2020Net revenue $ 184,670 $ 214,967 Net income (loss) (4,865) 16,653 yearsperiods presented and are not indicative of consolidated results of operations in future periods. The pro forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other nonrecurringnon-recurring charges incurred are included in the periodperiods presented.4.December 31,
2021December 31,
2020Credit card receivables $ 1,354 $ 3,013 Residual commissions receivable Residual commissions receivable 1,342 — Receivables from restaurants and customers Receivables from restaurants and customers 660 334 Accounts receivable $ 3,356 $ 3,347 Less: allowance for doubtful accounts and chargebacks Less: allowance for doubtful accounts and chargebacks (329) (393) Accounts receivable, net $ 3,027 $ 2,954 Additionally, theDecember 31,
2021December 31,
2020Balance, beginning of the year $ 393 $ 481 Additions to expense 715 591 Write-offs, net of recoveries and other adjustments (779) (679) Balance, end of the year $ 329 $ 393 5.December 31,
2021December 31,
2020Prepaid insurance expense $ 6,703 $ 4,291 Other current assets 2,003 2,366 Prepaid expenses and other current assets $ 8,706 $ 6,657 F-196.December 31,
2021December 31,
2020Computer equipment $ 10,671 $ 7,254 Furniture and fixtures 1,280 1,280 Leasehold improvements 353 350 $ 12,304 $ 8,884 Less: Accumulated depreciation (8,541) (5,381) Property and equipment, net $ 3,763 $ 3,503 On March 14, 2018, the Company entered into an asset purchase agreement with IndiePlate LLC, a Louisiana limited liability company, to acquire inventory, furniture and fixtures, and certain other equipment in exchange for $71 of consideration. Consideration consisted of net cash paid of $11 and $60 of Series 2018 Notes (as defined in Note 9 – Debt). Acquired assets have been recorded in property and equipment, net.2018, 2017,2021, 2020, and 20162019 of $1,096, $499,$3,200, $2,086, and $96,$2,048, respectively.7.marketed. These intangible assets are reviewed for impairment whenever events or circumstances indicate that they may not be recoverable.marketed, and trademarks/trade name/patents and customer relationships. The Company has determined that itsthe trademark intangible asset is anand domain names related to the rebranding initiative are indefinite-lived assetassets and therefore is not subject to amortization but isare evaluatedAs of December 31, 2021 Intangible assets subject to amortization: Software $ 35,686 $ (9,632) $ (11,779) $ 14,275 Trademarks/Trade name/Patents 6,549 (5,585) — 964 Customer Relationships 96,510 (14,256) (57,378) 24,876 Total intangible assets subject to amortization 138,745 (29,473) (69,157) 40,115 Trademarks, not subject to amortization 3,011 — — 3,011 Total $ 141,756 $ (29,473) $ (69,157) $ 43,126 As of December 31, 2020 Intangible assets subject to amortization: Software $ 25,167 $ (6,099) $ (11,788) $ 7,280 Trademarks/Trade name/Patents 5,400 (3,526) — 1,874 Customer Relationships 82,845 (10,702) (57,378) 14,765 Total intangible assets subject to amortization 113,412 (20,327) (69,166) 23,919 Trademarks, not subject to amortization 5 — — 5 Total $ 113,417 $ (20,327) $ (69,166) $ 23,924 On May 16, 2018,Company entered into an asset purchase agreement with GoGoGrocer LLC, to acquire a customer relationship intangible asset in exchange for 16,311 shares, valued at $142, of the Company’s common stock.An impairment loss was recorded for the portion of the previously capitalized software that was replaced of $33 and $5 and in the yearsyear ended December 31, 2017 and 2016, respectively, due to the release of new software developed in 2016.F-20In 2017,2021, the Company ceasedacquired intangible assets in connection with the operationsDelivery Dudes Acquisition and the Cape Payment Acquisition, totaling $14,550 (Requested due to a changedomain names in corporate strategy. The closure of the operations of Requested did not meet the criteria to be reported as discontinued operations in accordanceconnection with ASC Topic 205-20, Presentation of Financial Statements - Discontinued Operations. The Company concluded that the carrying value of the acquired software technology was not recoverable and recognized a $551 impairment charge in the consolidated statement of operationsits comprehensive rebranding initiative. Additionally, during the year ended December 31, 2017. 2018, 2017,2021, 2020, and 20162019 of $127, $224,$9,229, $6,291, and $171,$13,726, respectively.Amortization 2022 $ 10,742 2023 9,893 2024 7,915 2025 4,437 2026 3,437 Thereafter 3,691 Total future amortization $ 40,115 The Company recorded $1,408 of goodwill as a result of the allocation of the purchase price over assets acquired and liabilities assumed in the Requested Acquisition. No impairment losses were recorded for the years ended December 31, 2018 and 2017. December 31,
2021December 31,
2020Balance, beginning of period $ 106,734 $ 106,734 Acquisitions during the period 23,890 — Impairments during the period — — Balance, end of period $ 130,624 $ 106,734 8.December 31,
2021December 31,
2020Accrued insurance expenses $ 3,932 $ 3,392 Accrued estimated workers’ compensation expenses 644 1,725 Accrued medical contingency 370 448 Accrued legal contingency 1,250 — Accrued sales tax payable 175 418 Accrued cash incentives 3,130 60 Other accrued expenses 3,685 4,001 Unclaimed property 2,372 1,679 Other current liabilities 3,751 2,199 Total other current liabilities $ 19,309 $ 13,922 F-21Coupon Rate Range in 2021 Effective Interest Rate at December 31, 2021 Maturity December 31,
2021December 31,
2020Term Loan 5.125% - 7.125% 10.62% November 2023 $ 35,007 $ 49,479 Notes 4.0% - 6.0% 6.49% November 2023 49,504 49,504 $ 84,511 $ 98,983 Less: unamortized debt issuance costs on Term Loan (2,099) (3,541) Less: unamortized debt issuance costs on Notes (435) (1,224) Long term debt - related party $ 81,977 $ 94,218 Short-term loans for insurance financing 3.49% - 3.99% n/a March 2022 - October 2022 3,142 2,726 Total outstanding debt $ 85,119 $ 96,944 MaturitiesDebt Maturity 2022 $ 3,142 2023 81,977 Total debt $ 85,119 The following discussion includes a description of the Company’s outstanding debt at December 31, 2018 and 2017. $1,823, $283$7,075, $9,458 and $4,467$9,408 for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. Interest expense includes interest on outstanding borrowings and amortization of debt issuance costs.Debt FacilityCredit Agreement. On November 15, 2018, in connection withcosts and debt discount. See Closing, Merger Sub (now Waitr Inc.), as borrower,Company’s related party long-term debt.Credit$15,000 prepayment on the Term Loan on March 16, 2021. See Term Loan and Guaranty Agreement (the “Credit Agreement”)Notes below for definitions of certain capitalized terms included above., as administrative agent, collateral agent and lead arranger, (as amended or otherwise modified from time to time, the various lenders party thereto, Waitr Intermediate Holdings, LLC, a Delaware limited liability company (“Intermediate Holdings”“Credit Agreement”) and wholly-owned subsidiary of Waitr Holdings Inc., and certain subsidiaries of Waitr Inc., as guarantors.. The Credit Agreement providesprovided for a senior secured first priority term loan facility (the “Debt Facility”“Term Loan”) to Waitr Inc. in the aggregate principal amount of $25,000 (the “Existing Term Loans,” and together with the Additional Term Loans related to the Bite Squad Merger (see Note 19 – Subsequent Events), the “Term Loans”).Loans advanced under the Debt Facility will mature and be due and payable in full four years after the Closing Date, with no principal amortization payments required prior thereto. During the first 12 months following the Closing Date, Waitr Inc.which is required to pay a prepayment premium of 5.0%guaranteed by certain subsidiaries of the principal amount to be prepaid in connection with (i) any prepayments (whether before or after an event of default), (ii) any payment, repayment or redemption of the obligations following an acceleration or (iii) certain bankruptcy events. Thereafter, the Debt Facility may be prepaid without penalty or premium.Interest on borrowings under the Debt Facility initially accrued at a rate of 7.0% per annum. Effective January 17, 2019, inCompany. In connection with the Credit Agreement Amendment relatedTerm Loan, the Company issued to Luxor Capital warrants which are currently exercisable for 574,704 shares of the Bite Squad MergerCompany’s common stock (see 1914 – Subsequent EventsStockholders’ Equity), interest.borrowings under the Debt Facility accrues at a rate of 7.125% per annum,Term Loan is payable quarterly, in cash or, at the election of the borrower,Company, as a payment-in-kind. Any amounts paid in kind will bepayment-in-kind, with interest paid-in-kind being added to the aggregate principal amount of the Debt Facility on such interest payment date (increasing the principal amount thereof) and will thereafter bear interest at the rate set forth above. The effective interest rate for borrowings on the Debt Facility, after considering the allocated discount, is approximately 9.78%.F-22The Debt Facility is guaranteed by Intermediate Holdings and secured by (i) a first priority pledge of the equity interests of Waitr Inc. and (ii) a first priority lien on substantially all other assets of Waitr Inc. and Intermediate Holdings (subject to customary exceptions). and Credit Agreement Amendment require Intermediate Holdings to maintain minimum consolidated liquidity of $15,000 as of the last day of each fiscal quarter. The Credit Agreement also includes a number of customary covenants. Such covenants that, among other things, limit or restrict the ability of each of Intermediate Holdings, Waitr Inc.the Company and its subsidiaries to:indebtedness and make guarantees;assets;or fundamental changes;assets; and distributions or repurchase capital stock;make investments, loansstock and advances, including acquisitions;amend organizational documents and other material contracts;enter into certain agreements that would restrict the ability to incur liens on assets;indebtedness;enter into certain transactions with affiliates;enter into sale leaseback transactions; andchange the conduct of its business.The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, dividends and distributions, and prepayments of junior indebtedness subject, in each case, to compliance with certain financial metrics and/or certain other conditions and (ii) a number of other traditional exceptions that grant Waitr Inc. continued flexibility to operate and develop its business.indebtedness. The Credit Agreement also includes customary affirmative covenants, representations and warranties and events of default. We believe that we were in compliance with all covenants under the Credit Agreement as of December 31, 2018.Debt Warrants. In connection with the Debt Facility, the Company issued to Luxor Capital warrants exercisable for 384,615 shares of the Company’s common stock (the “Debt Warrants”), which had a fair value on the grant date of $1,569. The Debt Warrants became exercisable after the consummation of the Landcadia Business Combination and (i) will expire four years from the Closing Date, (ii) have an exercise price of $13.00 per share, and (iii) include customary anti-dilution protection, including broad-based weighted average adjustments for issuances of additional shares. Holders of the Debt Warrants have customary registration rights with respect to the shares underlying the Debt Warrants. In addition, the Company is required to repay the Debt Facility in full in the event that either (i) the registration statement for the resale of the shares of the Company’s common stock (“common stock”) underlying the (as defined below) and Debt Warrants has not been filed within 30 days after the Closing Date, or (ii) such registration statement is not effective within 180 days after the Closing Date. Such repayment shall be payable within nine months after the Debt Facility becomes due.NotesOn November 15, 2018, in connection with the Closing, the Company entered into a convertible notes credit agreement (the “Convertible Notes Agreement”), pursuant to whichamount of $60,000 (the “Notes,” and together withbalance. Interest expense related to the Debt Facility, the “Debt Financings”). The Notes bear interest at 1.0% per annum, paid quarterly in cash, and will mature four years from the datewas comprised of the Closing, unless earlier converted at the electionfollowing (in thousands):Year Ended December 31, 2021 2020 2019 Contractual interest expense $ 2,389 $ 2,718 $ 2,497 Amortization of debt discount 856 891 671 $ 3,245 $ 3,609 $ 3,168 the holder.additional shares. Upon maturity, the outstanding Notes (and any accrued but unpaid interest) will be repaid in cash or converted into shares of common stock, at the holder’s election. The effective interest rate for borrowings on the Notes after considering the allocated discount, is approximately 1.77%.At any timeare convertible at the holder’s election each Note may be converted in whole or in part into shares of the Company’s common stock at a rate of $13.00$8.70 per share (subject to a 9.9% conversion cap). The Notes include customary anti-dilution protection, including broad-based weighted average adjustments for issuances of additional shares, and the shares issuable upon their conversion have certain registration rights. The Company may only prepay the Notes with the consent of the holders of at least a majority-in-interest of the outstanding Notes.F-23and applicable to Waitr Inc. and Intermediate Holdings (except those that relate to collateral and related security interests, which are not contained in the Convertible Notes Agreement or otherwise applicable to the Notes).Line creditOn July 2, 2018, the Company entered into a loan agreement with a group of lenders for an unsecured line of credit. The group of lenders consisted of certain stockholders and affiliates of stockholders of Waitr Incorporated. The loan’s maximum principal amount was $5,000 and it carried an annual simple interest rate of 12.5% due at maturity, with interest paid quarterly on September 30, December 31, March 31 and June 302021 for the purpose of each year. In connection with advances made under the loan agreement, Waitr Incorporated was required to issue warrants to the lenders (the “Line of Credit Warrants”), providing the lenders the right to purchase a number of common shares of Waitr Incorporated equal to the principal amount multiplied by 6.75% and divided by the Exercise Price. The Exercise Price of the Line of Credit Warrants, as defined by the loan agreement, was either (1) $ 8.022 per Waitr Incorporated share, in the event that the Closing took place under the Landcadia Merger Agreement, or (2) the price that was eighty percent of the price per share of the Company’s equity securities issued in the next preferred equity financing of at least $ 10,000 if the Closing under the Landcadia Merger Agreement did not take place. The loan agreement carried certain covenants, among which was the inability of the Company to pay dividends or distributions of any kind to its stockholders or incur additional debt, beyond payables and liabilities incurred in the ordinary course of business and $ 200 of credit card debt. The loan was set to mature upon the earlier of the sale of Waitr Incorporated or July 1, 2020.Up to the consummation of the Landcadia Business Combination, the Company borrowed the maximum $5,000 principal amount available under the line of credit. As a result of entering into and borrowing upon the line of credit, the Company incurred an origination fee of $500, payable upon maturity. On November 16, 2018, immediately after the consummation of the Landcadia Business Combination, we repaid the line of credit in full for a cash amount of $5,575, which included the payment of the $500 origination fee and accrued interest of $75. In addition, the lenders exercised their Line of Credit Warrants, receiving 37,735 shares of the Company’s common stock, for which we received $337 in cash, pursuant to the terms of the warrants.Short-term loan On June 4, 2018, the Company entered into a loan agreement with First Insurance Funding to finance a portionportions of its annual insurance premium obligation.obligations. The principal amount of the loan is $ 2,172,loans are payable in monthly installments until maturity. The loan matures on March 21, 2019 and carries an annual interest rate of 3.39%.Convertible Promissory NotesDuring 2017 and 2018, Waitr Incorporated issued a series of convertible promissory notes, the Series 2017 Notes and Series 2018 Notes (as defined below and together, the “Waitr Convertible Notes”) to various investors. In connection with the closing of the Landcadia Business Combination, the Waitr Convertible Notes, the total outstanding principal par amount of which was $9,954 (carrying value of $8,594) as of November 16, 2018, were either converted into shares of Waitr’s Series AA preferred stock (“Series AA Preferred Stock”), and such new Series AA Preferred Stock were, in turn, exchanged for an aggregate 2,062,354 shares of our post-combination common stock, or redeemed for an amount equal to 1.5 times the amount of principal outstanding and accrued interest thereunder, resulting in an aggregate cash payment by us of $3,321.Series 2018 Convertible Promissory NotesBetween March 2, 2018 and March 15, 2018, the Company issued a series of convertible promissory notes (“Series 2018 Notes”) to various investors with a maturity date of 24 months from the date of issuance with an aggregate principal amount of $2,470, of which $1,410 was received in cash, $1,000 in advertising services receivable, and $60 was debt assumed in the IndiePlate LLC asset acquisition (see Note 6 – Property and Equipment, Net). The Series 2018 Notes accrued interest at a rate of 8% per annum that was due and payable at maturity, unless otherwise converted prior to maturity. The terms of the Series 2018 Notes provided for the principal and accrued interest to automatically convert into the class of stock issued in the next financing with proceeds in excess of $2,000 at a per share conversion price equal to the lesser of (i) 80% of the price paid by investors in the next qualified financing and (ii) $125,000 divided by the number of common shares outstanding, on a fully diluted basis. As the conversion price was subject to variability, the number of shares the Company may have been required to deliver upon conversion in a subsequent financing was indeterminable at the date of issuance of the Series 2018 Notes. F-24Upon the occurrence of a sale of Waitr Incorporated, each holder may have elected to either redeem their Series 2018 Notes at a price equal to 1.5 multiplied by par plus accrued interest, or may have converted par plus accrued interest into Series AA Preferred Stock at a per share conversion price equal to $125,000 divided by the number of common shares outstanding, on a fully diluted basis. If not previously converted or redeemed upon the occurrence of a Company sale, each holder was entitled to convert par plus accrued interest on the maturity date of their notes into Series AA Preferred Stock at a per share conversion price equal to $125,000 divided by the number of common shares outstanding, on a fully diluted basis.The Company determined that the feature providing for conversion into shares sold in the next financing at a stated discount, and the ability for holders to redeem their notes at a substantial premium, represented an embedded derivative requiring separate accounting recognition in accordance with subtopic ASC 815-15. The fair value on the date of issuance was recorded as bifurcated embedded derivatives on convertible notes, with an offset to the discount on the convertible note payable.Series 2017 Convertible Promissory NotesBetween August 24, 2017 and December 14, 2017, the Company issued a series of convertible promissory notes (“Series 2017 Notes”) to various investors with a maturity date of 24 months from the date of issuance with an aggregate principal amount of $7,484. The Series 2017 Notes accrued interest at a rate of 8% per annum that was due and payable at maturity, unless otherwise converted prior to maturity. The terms of the Series 2017 Notes provided for the principal and accrued interest to automatically convert into the type of stock issued in the next financing with proceeds in excess of $2,000, at a per share conversion price equal to the lesser of (i) 80% of the price paid by investors in the next qualified financing and (ii) $125,000 divided by the number of common shares outstanding, on a fully diluted basis. As the conversion price was subject to variability, the number of shares the Company may have been required to deliver upon conversion in a subsequent financing was indeterminable at the date of issuance of the Series 2017 Notes.Upon the occurrence of a sale of Waitr Incorporated, each holder may have elected to redeem their Series 2017 Notes at a price equal to 1.5 multiplied by par plus accrued interest. The Company determined that the feature providing for conversion into stock issued in the next financing at a stated discount and the ability for holders to redeem their notes at a substantial premium represented an embedded derivative, which required separate accounting recognition in accordance with subtopic ASC 815-15. The fair value on the date of issuance was recorded as bifurcated embedded derivatives on convertible notes with an offset to the discount on the convertible note payable.On December 15, 2017, the Company amended the Series 2017 Notes to add a substantive conversion, allowing the holders the right to convert par plus accrued interest into Series AA Preferred Stock, at a per share conversion price equal to $125,000 divided by the number of common shares outstanding, on a fully diluted basis at maturity. The amendments were deemed substantial, resulting in the application of extinguishment accounting. The Company recorded a loss on debt extinguishment of $10,537 based on the difference between the fair value of the amended convertible promissory notes of $18,308, and the carrying amount of the original Series 2017 Notes of $7,771. In accordance with ASC 470-20, the Company recorded the premium in excess of the fair value of the amended notes over the sum of (i) par, (ii) accrued interest, and (iii) the bifurcated embedded derivatives on convertible notes, or $10,444, to additional paid in capital.Series 2016-II Convertible Promissory NotesBetween October 20, 2016 and December 22, 2016, the Company issued a series of convertible promissory notes (“Series 2016-II Notes”) to various investors with a maturity date of 24 months from the date of issuance with an aggregate principal amount of $2,248. The Series 2016-II Notes accrued interest at a rate of 9% per annum that was due and payable at maturity, unless otherwise converted prior to maturity. The terms of the Series 2016-II Notes provided for the principal and accrued interest to automatically convert into the type of stock issued in the next financing with proceeds in excess of $1,000, at a per share conversion price equal to the lesser of (i) 80% of the price paid by investors in the next qualified financing and (ii) $50,000 divided by the number of common shares outstanding, on a fully diluted basis. In the event the next financing had proceeds of less than $1,000, an aggregate $2,048 par of the Series 2016-II Notes would be convertible at a conversion price equal to the lesser of (i) 70% of the price paid by investors in the financing and (ii) $50,000 divided by the number of common shares outstanding, on a fully diluted basis, for the remainder of the Series 2016-II Notes; the remaining $200 principal would instead be convertible at a per share conversion price equal to $1.69 per share.Upon the occurrence of a sale of the Company, each holder may have elected to redeem their Series 2016-II Notes at a price equal to 1.5 multiplied by par plus accrued interest. The Company determined that the feature providing for conversion into stock sold in the next financing at a stated discount and the ability for holders to redeem their notes at a substantial premium represented an embedded derivative, requiring separate accounting recognition, in accordance with subtopic ASC 815-15. The fair value on the date of issuance was recorded as bifurcated embedded derivatives on convertible notes with an offset to the discount on the convertible note payable. If the notes had not previously converted or redeemed upon the occurrence of a Company sale, each holder would have been entitled to convert par plus accrued interest on the maturity date of their notes into Series Seed Preferred Stock at a per share conversion price equal to the lesser of (i) $2.25 and (ii) $50,000 divided by the number of common shares outstanding, on a fully diluted basis.F-25On December 30, 2016, the Series 2016-II Notes were converted into 1,198,867 shares of Series AA Preferred Stock at a per share price equal to $1.70, for a total value of approximately $2,278. Upon conversion, the Company recognized a beneficial conversion feature of $1,836 as additional paid in capital with an offset to the discount on the convertible note payable in accordance with ASC 470-20. Additionally, the debt was extinguished by derecognizing the unamortized discount, inclusive of the discount resulting from the recognition of the beneficial conversion feature, resulting in the recognition of $2,208 of interest expense.On December 22, 2016, the Company entered into a convertible note agreement with a noteholder for a principal amount of $200 of Series 2016-II Notes. The issued note was funded on January 5, 2017. As the note was legally outstanding on conversion date, it converted to Series AA Preferred Stock along with other Series 2016-II Notes, on December 30, 2016.Series 2016-I Convertible Promissory NotesBetween June 17, 2016 and October 29, 2016, the Company issued a series of convertible promissory notes (“Series 2016-I Notes”) to various investors with a maturity date of 24 months from the date of issuance with an aggregate principal amount of $2,043. The Series 2016-I Notes accrued interest at a rate of 9% per annum that was due and payable at maturity, unless otherwise converted prior to maturity. The terms of the Series 2016-I Notes provided for the principal and accrued interest to automatically convert into the type of stock issued in the next financing with proceeds in excess of $2,000, at a per share conversion price equal to the lesser of (i) 80% of the price paid by investors in the next qualified financing and (ii) $15,000 divided by the number of common shares outstanding, on a fully diluted basis. In the event the next financing had proceeds of less than $2,000, the per share conversion price would have been equal to the lesser of (i) 70% of the price paid by investors in the next qualified financing and (ii) $15,000 divided by the number of common shares outstanding, on a fully diluted basis. As the conversion price was subject to variability, the number of shares the Company may have been required to deliver upon conversion in a subsequent financing was indeterminable at the date of issuance of the Series 2016-I Notes.Upon the occurrence of a sale of the Company, each holder may have elected to redeem their Series 2016-I Notes at a price equal to 1.5 multiplied by par plus accrued interest. The Company determined that the features providing for conversion into stock sold in the next financing at stated discounts and the ability for holders to redeem their notes at a substantial premium represented an embedded derivative requiring separate accounting recognition, in accordance with subtopic ASC 815-15. The fair value on the date of issuance was recorded as bifurcated embedded derivatives on convertible notes, with an offset to the discount on the convertible note payable.If not previously converted or redeemed upon the occurrence of a Company sale, each holder was entitled to convert par plus accrued interest, on the maturity date, of their notes into Series Seed III Preferred Stock, at a per share conversion price equal to the lesser of (i) $0.68 and (ii) $15,000 divided by the number of common shares outstanding, on a fully diluted basis. Based on the $0.68 per share conversion price, the Series 2016-I Notes would have been convertible into approximately 2,694,874 shares of Series Seed Preferred Stock. As the per share fair value of the Series Seed Preferred Stock was estimated to be $1.90 as of the date of issuance, the Company recognized a beneficial conversion feature of $2,043 on the date of issuance as additional paid in capital with an offset to the discount on the convertible note payable, in accordance with ASC 470-20.On December 30, 2016, the Series 2016-I Notes plus accrued interest were converted into 3,028,096 shares of Series AA Preferred Stock at a per share price equal to $0.62, for a total value of approximately $2,106. The Company extinguished the debt by first derecognizing the unamortized discount of $2,106 as interest expense. During 2017, the remaining convertible debt plus accrued interest of approximately $22 was converted into 32,005 shares of Series AA Preferred Stock.Series 2015 Convertible Promissory NotesBetween January 2, 2015 and September 23, 2015, the Company issued a series of convertible promissory notes (“Series 2015 Notes”) to various investors with maturity dates ranging between 18 and 24 months from the date of issuance with an aggregate principal amount of $788. The Series 2015 Notes accrued interest at a rate of 9% per annum that was due and payable at maturity, unless otherwise converted prior to maturity. The terms of the Series 2015 Notes provided for the principal and accrued interest to automatically convert into the type of stock issued in the next financing with proceeds in excess of $1,800 at a per share conversion price equal to the lesser of (i) 80% of the price paid by investors in the next qualified financing and (ii) $ 8,000 divided by the number of common shares outstanding on a fully diluted basis. In the event the next financing had proceeds of less than $1,800, the per share conversion price would have been equal to the lesser of (i) 70% of the price paid by investors in the next qualified financing and (ii) $8,000 divided by the number of common shares outstanding, on a fully diluted basis. As the conversion price was subject to variability, the number of shares the Company may have been required to deliver upon conversion in a subsequent financing was indeterminable at the date of issuance of the Series 2015 Notes.F-26Upon the occurrence of a sale of the Company, each holder may have elected to redeem their Series 2015 Notes at a price equal to 2.0 multiplied by par plus accrued interest. The Company determined that the features providing for conversion into stock sold in the next financing at stated discounts (e.g., 70% and 80%), and the ability for holders to redeem their notes at a substantial premium, represented an embedded derivative, which required separate accounting recognition in accordance with subtopic ASC 815-15. The fair value of the embedded derivative on the date of issuance was recorded as bifurcated embedded derivatives on convertible notes in the accompanying consolidated balance sheets, with an offset recorded as a discount on the convertible note payable.If not previously converted or redeemed upon the occurrence of a Company sale, each holder was entitled to convert par plus accrued interest on the maturity date of their notes into Series Seed Preferred Stock at a per share conversion price equal to the lesser of (i) $0.15 and (ii) $8,000 divided by the number of common shares outstanding, on a fully diluted basis. Based on the $0.15 per share conversion price, the Series 2015 Notes would have been convertible into approximately 4,709,750 shares of Series Seed Preferred Stock. As the per share fair value of the Series Seed Preferred Stock was estimated to be $0.16 as of the date of issuance, the Company recognized a beneficial conversion feature of $53 on the date of issuance as additional paid in capital, with an offset to the discount on convertible note payable, in accordance with ASC 470-20.On January 25, 2016, the Series 2015 Notes, plus accrued interest, were converted into 1,372,322 shares of Series Seed II Preferred Stock, at a per share price equal to $0.68, for a total value of approximately $1,040. At the time of extinguishment, the Company derecognized the Series 2015 Notes by first allocating a portion of the fair value reacquisition price to the repurchase of the beneficial conversion feature, based on the intrinsic value of the conversion feature at the date of derecognition. After this allocation, the Company recorded a loss on extinguishment of $599 in the year ended December 31, 2016 in the consolidated statement of operations.10. DerivativesAs described in Note 9 — Debt, the Company identified certain embedded derivatives related to contingent requirements to repay certain of its indebtedness at a substantial premium to par. These embedded derivatives are carried on the accompanying consolidated balance sheets as bifurcated embedded derivatives on the Waitr Convertible Notes at estimated fair value. Changes in the estimated fair value of the derivatives are reported as gain/loss on derivatives in the accompanying consolidated statements of operations. The embedded derivatives are not designated as hedging instruments. In connection with the Landcadia Business Combination, the Waitr Convertible Notes were either ultimately converted into common stock of the post-combination company or redeemed for cash.The amounts recorded in the consolidated balance sheets for derivatives not designated as hedging instruments are as follows (in thousands):The amount of (gain) loss recognized in the consolidated statements of operations on derivatives not designated as hedging instruments are as follows (in thousands): Deferred RevenueDeferred revenue is comprised of unearned setup and integration fees. The Company’s opening deferred revenue balance was $2,358 and $909 as of January 1, 2018 and January 1, 2017, respectively. During the years ended December 31, 2018 and 2017, the Company recognized $1,627 and $580 of setup and integration revenues, which was included in the deferred revenue balances at the beginning of the respective years.Transaction Price Allocated to the Remaining Performance ObligationsAs of December 31, 2018, $4,670 of revenue is expected to be recognized from remaining performance obligations for setup and integration fees. The Company expects to recognize revenue of approximately $3,314 on these remaining performance obligations over the next 12 months, with the balance recognized in the subsequent 12 months.F-2712. Income TaxesYear Ended December 31, 2021 2020 2019 Current Federal $ — $ — $ — State 24 122 81 Deferred Federal — — — State — — — Income tax expense Income tax expense $ 24 $ 122 $ 81 (34% with respect to 2017 and 2016) and the amount of income taxes provided for are as follows (in thousands):Year Ended December 31, 2021 2020 2019 Tax at statutory rate $ (1,093) $ 3,351 $ (61,077) State income taxes (281) 378 (7,863) Stock-based compensation (62) (204) 1,418 Non-deductible expenses 286 (376) 481 Interest expense 674 1,451 — Work opportunity tax credit Work opportunity tax credit 516 (6,625) (2,410) Goodwill and acquired intangibles Goodwill and acquired intangibles — (4,168) 8,434 Other Other (15) 566 (1,060) Deferred tax asset revisions Deferred tax asset revisions (689) 4,271 — Change in valuation allowance 688 1,478 62,158 Income tax expense Income tax expense $ 24 $ 122 $ 81 On December 22, 2017, the Tax Act was signed into law, resulting in significant modifications to existing tax law. The Company recognized the income tax effects of the Tax Act in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740 – Income Taxes in the reporting period in which the Tax Act was signed into law. As such, the Company’s financial results reflect the income tax effects of the Tax Act for which the accounting under ASC Topic 740 is complete and provisional amounts for those specific income tax effects of the Tax Act for which the accounting under ASC Topic 740 is incomplete, but a reasonable estimate could be determined.The Tax Act reduced the corporate statutory income tax rate from 34% to 21%, among other changes. As a result of the Tax Act, the Company revalued its deferred tax assets and liabilities at the 21% corporate income tax rate, which resulted in a tax benefit of $2,663. The Company included provisional estimates of the income tax effects of the Tax Act in its 2017 financial statements. However, due to the valuation allowance on the Company’s net deferred tax assets, there was no impact on the Company’s income tax expense.F-28As of December 31, 2021 2020 Deferred tax assets: Stock-based compensation $ 1,467 $ 1,110 Incentive compensation Incentive compensation 773 368 Medical contingency Medical contingency 105 4,306 Bad debt reserve 81 97 Charitable contribution carryover 35 34 Unearned revenue 118 2 Workers’ compensation reserve 159 426 Deferred rent Deferred rent — 69 Lease obligation Lease obligation 1,187 — Legal reserve Legal reserve 309 — Non-deductible goodwill Non-deductible goodwill 14,894 18,210 Non-deductible other intangibles Non-deductible other intangibles 16,034 14,799 Net operating losses 40,824 32,603 Work opportunity tax credit 11,551 12,204 Interest expense carryforward 955 — Total deferred tax assets 88,492 84,228 Valuation allowance (81,895) (81,207) Net deferred tax assets 6,597 3,021 Deferred tax liabilities: Fixed assets (4,383) (2,237) Capitalized contract costs (1,075) (782) Right-of-use asset Right-of-use asset (1,069) — Prepaids Prepaids (70) (2) Total deferred tax liabilities $ (6,597) $ (3,021) Net deferred tax asset (liability) $ — $ — partialfull valuation allowance of $12,538$81,895 and $5,312$81,207 has been recorded against net deferred tax assets as of December 31, 20182021 and 2017, 2020, respectively, as the Company has historically generated net operating losses prior to the second quarter of 2020 and in the first, second and fourth quarters of 2021, and the Company did not consider future book income as a source of taxable income when assessing if a portion of the deferred tax assets is more likely than not to be realized.carryforwardcarryforwards and tax credit carryforwards (in thousands):As of December 31, 2021 2020 Federal net operating losses $ 167,362 $ 134,494 2034 State net operating losses 149,206 110,573 2034 Tax credit carryforwards 11,551 12,204 2037 Total carryforwards $ 328,119 $ 257,271 and its wholly-owned subsidiary, Requested, havehas net operating losses carrying forward, all of the Company’s and Requested’s federal and state income tax returns, which were filed beginning with the 2014 tax year, are subject to examination by the respective taxing authorities. Additionally, Internal Revenue Code (IRC) Section 382 provides an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. The Landcadia Business Combination resulted in a change in ownership for purposes of IRC Section 382. Accordingly, we estimate382, however, the Company has determined that a majoritythe amount of our net operating loss carryforwards will be subject to the annuallimitation under IRC Section 382 limitation.F-2913. Commitments and ContingenciesLease Commitments2018,2021, the Company recognized $667 in employer payroll tax deferrals under the Coronavirus Aid, Relief and Economic Security (CARES) Act, all of which will be paid in 2022. This amount is reflected in other current liabilities in the accompanying audited consolidated balance sheet.leases officeshad operating lease agreements for office facilities in Lake Charles and Lafayette, Louisiana as well as smaller offices throughoutvarious locations in the Southeastern United States. The office leasesStates, which expire on various dates through August 2026. The terms of the lease agreements provide for rental payments that periodically increase.generally increase on an annual basis. The Company does not have any finance leases. The Company recognizes rent expense for leases on a straight-line basis over the lease term. Forterm, which the majorityCompany generally expects to be the non-cancellable period of the Company’s lease agreements,lease. As of December 31, 2021, the Company may renewrecognized on its leases at fair value afterconsolidated balance sheet operating right-of-use assets of $4,327 and current and noncurrent operating lease liabilities of $1,581 and $3,034, respectively. Operating lease costs recognized in the initial lease term. The rent expensesconsolidated statement of operations for the year ended December 31, 2021 totaled $1,797.Twelve Months Ended December 31, 2021 Cash paid for operating lease liabilities (in thousands) $ 1,617 Weighted-average remaining lease term (years) 3.8 years Weighted-average discount rate 5 % Amount 2022 $ 1,769 2023 1,129 2024 828 2025 803 2026 535 Total future lease payments $ 5,064 Less: imputed interest (449) Present value of operating lease liabilities $ 4,615 2017, and 2016 were $423, $440, and $84, respectively. Future minimum lease payments are as follows (in thousands):Workers’ Compensation ClaimOn November 27, 2017, Guarantee Insurance Company (“GIC”), the Company’s former workers’ compensation insurer, was ordered into receivership for purposes of liquidation by the Second Judicial Circuit Court in Leon County, Florida. At the time of the court order, GIC was administering the Company’s outstanding workers’ compensation claims. Upon entering receivership, the guaranty associations of the states where GIC operated began reviewing outstanding claims administered by GIC for continued claim coverage eligibility based on guaranty associations’ eligibility criteria. The Company’s net worth exceeded the threshold of $25,000 established by the Louisiana Insurance Guaranty Association (“LIGA”) when determining eligibility for claims coverage. As such, LIGA assessed the Company’s outstanding claim as ineligible for coverage.$17,505. As of December 31, 2018 and 2017,2020, the Company had $1,317 and $1,250, respectively, in workers’ compensation liabilities associated with the GIC claims. The Company recorded a general and administrative expense of $157 and $1,250 related to these liabilities during the years ended December 31, 2018 and 2017, respectively.Legal MattersFrom time to time, the Company may be involved in certain legal proceedings, inquiries, claims, and disputes that arise in the ordinary course of business. Although the Company cannot predict the outcomes of these matters, the Company does not believe these actions will have a material adverse effect on the Company’s consolidated financial statements.14. Fair Value MeasurementCertain financial instruments are required to be recorded at fair value. Other financial instruments, including cash, are recorded at cost, which approximates fair value. Additionally, accounts receivable, accounts payable and accrued expenses approximate fair value becauselong-term portion of the short-term nature of these financial instruments.During 2017estimated Medical Contingency claim totaled $16,987 and 2018, the Company held certain financial instruments which were required to be measured at fair value on a recurring basisis included in the consolidated balance sheets, includingsheet as accrued medical contingency. The current portion of the LineMedical Contingency totaled $448 as of Credit WarrantsDecember 31, 2020 and embedded derivatives on convertible notes. is included in other current liabilities.fair valueestimated Medical Contingency totaled $53 and is included in the consolidated balance sheet as accrued medical contingency. The current portion of bifurcated embedded derivatives on convertible notesthe Medical Contingency totaled $370 as of December 31, 2021 and is included in other current liabilities. Included in other income in the Lineconsolidated statement of Credit Warrants using Level 3 inputs, including expected maturity or conversion date, discount rate,operations for the year ended December 31, 2021 is $16,715 related to the change in estimate of the Medical Contingency.exercise or strike price. Strike price onAuto Policy Claimsbifurcated embedded derivatives wasconsolidated balance sheet.the estimated next financing round price asWaitr’s use of the respective valuation date“Waitr” trademark and the contractual termslogo, Civil Action No.: 2:16-CV-01041. The plaintiff sought injunctive relief and damages relating to Waitr’s use of the notes, whereby“Waitr” name and logo. During the conversion pricethird quarter of 2020, the trial date was rescheduled to June 2021. On June 22, 2021, the lower of (i) 80.0% ofCompany entered into a License, Release and Settlement Agreement (the “Settlement”) to settle all claims related to this lawsuit. Pursuant to the next financing round price or (ii) a value basedSettlement, the Company paid the plaintiff $4,700 in cash on a contractually-specified value divided by fully diluted stock. Exercise price on the Line of Credit Warrants was based on the contractual terms of the warrants, whereby the exercise price was either (1) $8.022,July 1, 2021. The Settlement payment is included in other expense in the event thatconsolidated statement of operations for the Closing took place under the Landcadia Merger Agreement, or (2) the price that was eighty percent of the price per share of the Company’s equity securities issued in the next preferred equity financing of at least $10,000.year ended December 31, 2021. In connection with the Landcadia Business Combination,Settlement, we agreed to adopt a new trademark or tradename to replace the Waitr trademark and to discontinue use of the Waitr trademark in connection with the marketing, sale or provision of any web-based or mobile app-based delivery, pick-up, carry-out or dine-in services using the Waitr trademark by June 22, 2022, unless extended by eight additional months in exchange for a one-time payment of $800.repaidwas named as a defendant in a class action complaint filed by certain current and former restaurant partners, captioned Bobby’s Country Cookin’, LLC, et al v. Waitr Holdings Inc., which is currently pending in the lineUnited States District Court for the Western District of credit in full, and the Waitr Convertible Notes were either ultimately converted into sharesLouisiana. Plaintiffs assert claims for breach of post-combination company common stock or redeemed for cash.F-30Significant increases (decreases) in the discount rate or the forecasted financial information would have resulted in different fair value measurements for the embedded features. For all significant unobservable inputs used in the fair value measurementLevel 3 liabilities, a change in oneduty of good faith and fair dealing, and they seek recovery on behalf of themselves and two separate classes. Based on the current class definitions, as many as 10,000 restaurant partners could be members of the inputs would not necessarily resulttwo separate classes at issue. In February 2022, the parties reached a proposed settlement in a directionally similar changeprinciple to resolve the litigation in another.As of December 31, 2018, the Company held no financial instruments requiredits entirety. While subject to be measured at fair value on a recurring basis. The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments measured on a recurring basis as of December 31, 2017 (in thousands):There have been no transfers between levels during the years presented in the accompanying consolidated financial statements. The beginning and ending balances of net assets and liabilities classified as Level 3, for which a reconciliation is required, are as follows (in thousands):In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company is required to record certain assets and liabilities at fair value on a nonrecurring basis.On November 15, 2018, the Company estimated the fair value of the Debt Warrants to be approximately $1,569 using the Black-Scholes Model. The inputs used in the calculation primarily represent Level 3 inputs, including a 46% volatility assumption. See Note 9 – Debt and Note 16 – Stockholders’ Equity, for further discussion of the Debt Warrants.The Company generally applies fair value concepts in recording assets and liabilities acquired in acquisitions. See Note 3 – Business Combinations, for further discussion of the fair value of assets and liabilities associated with acquisitions.15. Stock-Based CompensationEffective June 2017, theCourt approval, key terms of the 2014 Stock Plan were amended (the “Amended 2014 Plan”). The Amended 2014 Plan providedproposed settlement include a maximum aggregate amounttotal potential settlement fund of 5,870,000$2,500 of Company shares of common stock (“Gross Settlement Amount”), which will resolve the claims of the class members, attorneys’ fees, costs, and incentive awards to the named plaintiffs. Plaintiffs’ counsel will seek Court approval for attorneys’ fees of 1/3 of the total amount of the settlement fund and an additional $40 in expenses, with respectthe balance of the Gross Settlement Amount available for distribution to which options may be granted and provided for grantsmembers of incentive stock options and non-qualified stock options.On November 16, 2018,the settlement classes that file valid claims. The Company accrued a $1,250 reserve in connection with this lawsuit during the fourth quarter of 2021. The accrued legal contingency is included in other current liabilities in the consolidated balance sheet at December 31, 2021 and in other expenses in the consolidated statement of operations for the year ended December 31, 2021.Business Combination,Holdings Inc., Jefferies Financial Group, Inc. and Jefferies, LLC were named as defendants in a putative class action lawsuit entitled Walter Welch, Individually and on Behalf of all Others Similarly Situated vs. Christopher Meaux, David Pringle, Jeff Yurecko, Tilman J. Fertitta, Richard Handler, Waitr Holdings Inc. f/k/a Landcadia Holdings Inc., Jefferies Financial Group, Inc. and Jefferies, LLC. The case was filed in the Western District of Louisiana, Lake Charles Division. In the lawsuit, the plaintiff asserts putative class action claims alleging, inter alia, that various defendants made false and misleading statements in securities filings, engaged in fraud, and violated accounting and securities rules, seeking damages based upon these allegations. A similar putative class action lawsuit, entitled Kelly Bates, Individually and on Behalf of all Others Similarly Situated vs. Christopher Meaux, David Pringle, Jeff Yurecko, Tilman J. Fertitta, Richard Handler, Waitr Holdings Inc. f/k/a Landcadia Holdings Inc., Jefferies Financial Group, Inc. and Jefferies, LLC, was filed in that same court in November 2019. These two cases were consolidated, and an amended complaint was filed in October 2020. The Company filed a motion to dismiss in February 2021. The Court has heard oral argument on that motion, and has taken the motion under advisement. No discovery has commenced as of the date hereof. Waitr believes that this lawsuit lacks merit and that it has strong defenses to all of the claims alleged. Waitr continues to vigorously defend the suit.voted to approveapproved the Waitr Holdings Inc. Amended and Restated 2018 Omnibus Incentive Plan (the “2018 Incentive Plan”), including the authorization of the initial share reserve under the 2018 Incentive Plan and also for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986, as amended. A maximum aggregate amount of 5,400,000 shares of the common stock of the Company are reserved for issuance under the 2018 Incentive Plan. The 2018 Incentive Planwhich permits the granting of awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock-based or cash-based awards.records stock-based compensation expense for stock-based compensationalso has outstanding equity awards based onunder the fair value on2014 Stock Plan (as amended in 2017, the date of grant. The stock-based compensation expense is recognized in our statement of operations ratably over the course of the requisite service period and is recorded in either operations and support, sales and marketing, research and development, or general and administrative expense, depending on the department of the recipient. Because of the non-cash nature of share-based compensation, it is added back to net income in arriving at net cash provided by operating activities in our statement of cash flows.Amended 2014 PlanCompany’s incentive plans was $7,974, $5,166, and the 2018 Incentive Plan (the “Incentive Plans”) was $9,580, $1,199, and $144$7,238 for the years ended December 31, 2018, 2017,2021, 2020, and 2016,2019, respectively.F-31TheAmended 20142018 Incentive Plan, with an aggregate grant date fair value of $1,095 and a weighted average exercise price of $2.78. Such stock options were subsequently forfeited during the three months ended September 30, 2021. On January 3, 2020, 9,572,397 stock options were granted under the 2018 Incentive Plan to the Company’s chief executive officer (the “Grimstad Option”), with an aggregate grant date fair value of $2,297. The exercise price of the options is $0.37, and the options vested 50% on each of the first two anniversaries of the grant date. The options have a five year exercise term. Stock option grants during the year ended 2019 generally vest over a period of approximately three to four years and have a ten-year exercise term. The options granted under the 2018 Incentive Plan generally vest over a period of three years and have a ten-year exercise term. The options are subject to graded vesting whereby twenty-five to thirty-three percent of the options vest on the first anniversary of the issuance start date, and subsequently, the remaining vest ratably each month until 100% of the options are vested. Once vested, the recipients are allowed to purchase the Company’s common stock at a fixed and specified exercise price that varies depending on the stock options’ strike price.In connection with the Landcadia Business Combination, all vested, outstanding stock options to purchase Waitr Incorporated common stock under the Amended 2014 Plan, immediately prior to closing, were converted to shares of post-combination company common stock and are included as option exercises in the table of stock option activity below. As a result, all unrecognized compensation cost related to such stock options was recognized. Holders of unvested, outstanding and unexercised stock options to purchase Waitr Incorporated common stock were issued stock options of the Company.The Company recognized compensation expense for stock options of $9,008, $1,193, and $138 for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, there was $4,345 of unrecognized compensation cost related to nonvested stock options under the Incentive Plans, with a current weighted average remaining vesting period of approximately 2.9 years.There were 947,966, 2,650,354, and 1,558,000 options granted during the years ended December 31, 2018, 2017, and 2016, respectively, under the Incentive Plans.followingassumptions or ranges of assumptions, as applicable, included in the table below. Expected volatility for stock options is estimated based on a combination of the historical volatility of the Company’s stock price and resulting weighted-average fair value per sharethe historical and implied volatility of comparable publicly traded companies.2021 2020 2019 Weighted-average fair value at grant $2.19 $0.24 $5.08 Risk free interest rate 0.46% 1.54% 2.5% - 2.6% Expected volatility 131.4% 100.6% 50.5% - 51.30% Expected option life (years) 3.59 3.25 6.0 2018, 20172021, 2020, and 2016:2019, respectively. Unrecognized compensation cost related to unvested stock options as of December 31, 2021 totaled $13, with a weighted average remaining vesting period of approximately one month.Incentive PlansCompany’s incentive plans during the years ended December 31, 2018, 20172021, 2020 and 20162019 is as follows:Balance, December 31, 2018 880,833 $ 5.53 $ 5.20 Granted 301,419 10.13 5.08 Exercised (12,040) 0.36 2.95 Forfeited (650,963) 9.10 5.37 Expired (73,528) 4.82 4.61 Balance, December 31, 2019 445,721 $ 3.66 $ 5.04 Granted 9,572,397 0.37 0.24 Exercised (62,119) 0.71 3.73 Forfeited (100,739) 5.65 5.72 Expired (102,003) 3.33 5.40 Balance, December 31, 2020 9,753,257 $ 0.43 $ 0.33 Granted 500,000 2.78 2.19 Exercised (14,063) 0.93 4.56 Forfeited (525,454) 2.95 2.32 Expired (56,812) 5.28 5.18 Balance, December 31, 2021 9,656,928 $ 0.39 $ 0.28 The 64,329 of options modified in the above table represent the share conversion to reflect the exchange ratio established in the Landcadia Business Combination (see Note 3 – Business Combinations).F-32The outstandingOutstanding stock options, which were fully vested and expected to vest and exercisable are as follows:As of December 31, 2021 As of December 31, 2020 Number of Options 9,656,928 4,870,026 9,753,257 132,846 Weighted-average remaining contractual term (years) 3.03 3.06 4.07 6.82 Weighted-average exercise price $ 0.39 $ 0.40 $ 0.43 $ 3.20 Aggregate Intrinsic Value (in thousands) $ 3,543 $ 1,773 $ 23,285 $ 178 2018 (excluding option exercises related to the Landcadia Business Combination)2021, 2020 and 20172019 was $5,250$22, $61 and $593,$52, respectively. Upon exercise, the Company issued new common stock. Thereno options exercised during3,159,325 performance-based RSUs outstanding under the Company’s 2018 Incentive Plan, including 3,134,325 RSUs granted to the Company’s chief executive officer in April 2020 (the “Grimstad RSU Grant”) The Grimstad RSU Grant has an aggregate grant date fair value of $3,542 and vests in full in the event of a2016.Restricted Stock Awards (“RSAs”)Under the Amended 2014 Plan, RSAs2021, a total of 7,995,960 RSUs with time-based vesting were granted under agreements entered into with certain employees in 2014. The RSAs were subjectpursuant to a continuous employment clause and had an initial vesting period of approximately four years.As of December 31, 2017, there were no remaining nonvested RSAs or related unrecognized compensation cost for RSAs under the Amended 2014 Plan. The Company recorded compensation expense for the RSAs under the Amended 2014 Plan of $6 during the years ended December 31, 2017 and 2016.In connection with the Landcadia Business Combination, RSAs were granted under theCompany’s 2018 Incentive Plan (with an aggregate fair value of $16,780). Included in such grants were 600,960 RSUs granted to certain employeesnon-employee directors vesting upon the earlier of June 15, 2022 and the date of the Company2022 annual meeting of the Company’s stockholders and non-employee3,895,000 RSUs granted to employees and consultants from Landcadia Holdings, Inc. These RSAsvesting primarily over 3 years. The RSU grants vest in some cases,various manners in three equal installments overaccordance with the terms specified in the applicable award agreements, all of which accelerate and vest upon a three-year period following the grant date andchange of control. Also included in other cases, the RSAs vest one year from datesuch grants was an award of grant. A total of 550,000 RSAs were3,500,000 RSUs granted during the year ended December 31, 2018(the “Grimstad 2021 RSU Grant”) to Mr. Grimstad, with an aggregate grant date fair value of $6,567, based$8,960, in connection with an extension of his employment agreement through January 2025. The Grimstad 2021 RSU Grant will vest in three equal installments on the first, second and third anniversaries of January 3, 2022, subject to Mr. Grimstad’s continued employment through the applicable vesting date, and shall fully vest upon the consummation of a per share grant date fair valuechange of $11.94. control, subject to Mr.Grimstad’s continued employment through the closing of such change of control or in the event that Mr. Grimstad terminates his employment for good reason or he is terminated by the Company for reason other than misconduct.RSAsrestricted stock of $572$6,726, $3,717 and $5,983 during the yearyears ended December 31, 2018. As of December 31, 2018, there was $5,995 of unrecognized2021, 2020 and 2019, respectively. Unrecognized compensation cost related to nonvested RSAs under the 2018 Incentive Plan,unvested time-based RSUs as of December 31, 2021, was $14,854, with a current weighted average remaining vesting period of approximately 1.82.5 years.restricted stock award activity under the Incentive Plans is as follows:16. Stockholders’ EquityLandcadia Holdings, Inc.At December 31, 2017, Landcadia Holdings, Inc. had two classes of common stock: Class A common stock, par value $0.0001 per share (“Class A common stock”), and Class F common stock, par value $0.0001 per share (“Class F common stock”). There were 200,000,000 Class A common shares authorized at December 31, 2017, with 1,348,457 shares issued and outstanding (excludingF-3323,651,543 shares subject to possible redemption). There were 20,000,000 Class F common shares authorized at December 31, 2017, with 6,250,000 issued and outstanding. At December 31, 2017, Landcadia Holdings, Inc. was authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share. There were no issued or outstanding shares of preferred stock as of December 31, 2017.Waitr IncorporatedAs of December 31, 2017, there were 30,752,543 shares of Waitr Incorporated common stock authorized, and 10,050,180 shares issued and outstanding, with a partotal fair value of $0.00001.At December 31, 2017, Waitr Incorporated had authorizedrestricted shares for three series of preferred stock: 3,413,235 shares of Seed I, 3,301,326 shares of Seed II, and 7,330,290 shares of Series AA. All series of preferred stock were authorized with a par value of $0.00001. At December 31, 2017,that vested during the following shares were issued and outstanding: 3,413,235 shares of Seed I, 3,301,326 shares of Seed II, and 7,264,489 shares of Series AA. For the yearyears ended December 31, 2017, Waitr Incorporated raised $7,224 through issuance of Preferred Series AA stock. 2021, 2020 and 2019 was $6,812, $2,591 and $207, respectively.preferredactivity for restricted stock was convertible atwith time-based vesting under the option ofCompany’s incentive plans is as follows for the preferred stockholder into common stock on a 1:1 basis, subject to certain adjustments. In connection with the Landcadia Business Combination, the Preferred Seed I, Preferred Seed IIyears ended December 31, 2021, 2020 and Preferred Seed AA shares and common shares of Waitr Incorporated were converted to common stock of the post-combination company.Effective January 2, 2017,2019:Nonvested at December 31, 2018 550,000 $ 11.94 1.78 Granted 5,004,664 2.29 Shares vested (484,614) 11.75 Forfeitures (1,887,411) 4.13 Nonvested at December 31, 2019 3,182,639 $ 1.42 1.78 Granted 4,267,501 2.28 Shares vested (946,387) 1.36 Forfeitures (1,945,150) 1.44 Nonvested at December 31, 2020 4,558,603 $ 2.23 1.71 Granted 7,995,960 2.10 Shares vested (3,051,225) 2.10 Forfeitures (888,592) 2.27 Nonvested at December 31, 2021 8,614,746 $ 2.15 2.50 ana performance bonus agreement with Mr. Grimstad, which was extended through January 3, 2025 in connection with the extension of his employment agreement. Pursuant to the performance bonus agreement, upon the occurrence of a vendor for specified promotional serviceschange of control in exchange for 262,964 shareswhich the holders of the Company’s common stock. The services commenced on grantstock receive per share consideration that is equal to or greater than $2.00, subject to adjustment in accordance with the 2018 Incentive Plan, the Company shall pay Mr. Grimstad an amount equal to $5,000 (the “Bonus”). In order to receive the Bonus, Mr. Grimstad must remain continuously employed with the Company through the date and are expected to be completed over a period of three years. As Waitr Incorporated issued the shares upon execution of the agreement,change of control; provided, however, that in the event Mr. Grimstad terminates his employment for good reason or the Company recorded a stockholder receivableterminates his employment other than for misconduct, Mr. Grimstad will be entitled to receive the fair valueBonus provided the change of the stock exchanged of approximately $361, as a contra-equity account. The Company recognized the earned amount of the non-cash consideration as additional paid in capital in the accompanying consolidated balance sheets and advertisingcontrol occurs on or before January 3, 2025. Compensation expense of $120 as sales and marketing expense in the accompanying consolidated statements of operations for the year ended December 31, 2017.On May 16, 2018, the Company entered into an asset purchase agreement with GoGoGrocer LLC, to acquire a customer relationship intangible asset in exchange for 16,311 shares of the Company’s common stock.Post-Landcadia Business CombinationImmediately priorrelated to the Closing ofbonus agreement will not be recognized until such time that is probable that the Landcadia Business Combination, there were 31,203,841 shares of Landcadia Holdings, Inc. common stock issued and outstanding, consisting of (i) 24,953,841 public shares (Class A) and (ii) 6,250,000 founder shares (Class F) held by the Sponsors (defined below). On November 15, 2018, in connection with the Landcadia Business Combination, all of the Class F common stock converted into Class A common stock of the post-combination company on a one-for-one basis and the Company’s second amended and restated certificate of incorporation was amended and restated to, among other things, effect the reclassification and conversion of all of the Class A common stock and Class F common stock into a single class of common stock. No stockholders elected to have their shares redeemed in connection with the Landcadia Business Combination.In connection with the Debt Financings, Landcadia Holdings, Inc.’s co-sponsors, Fertitta Entertainment, Inc. (“FEI”) and Jefferies Financial Group Inc. (“JFG” and together with FEI, the “Sponsors”), exchanged the 14,000,000 warrants purchased by them in connection with Landcadia Holdings, Inc.’s initial public offering for 1,600,000 shares of Class A common stock. In addition, the Company repaid $1,250 in cash and issued to FEI 75,000 shares of Class A common stock at Closing in full satisfaction of FEI’s prior $1,500 convertible loan to the Company.A portion of the consideration for the Landcadia Business Combination was paid in the form of common shares of the Company. performance goal will be achieved.shares transferred at Closing totaled 22,831,697.2018,2021 and 2020, there were 249,000,000 shares of common stock authorized and 54,035,538146,094,300 and 111,259,037 shares of common stock issued and outstanding, respectively, with a par value of $0.0001. The Company did not hold any shares as treasury shares as of December 31, 20182021 or December 31, 2017. The common stock of the post-combination company has identical rights, powers, preferences and privileges as the Class A common stock that existed prior to the business combination.2020. The Company’s common stockholders are entitled to one vote per share.F-342018,2021 and 2020, the Company hadwas authorized to issue 1,000,000 shares of preferred stock ($0.0001 par value per share) authorized.. There were no issued or outstanding preferred shares as of December 31, 2018.WarrantsAt2021 or December 31, 2017, Landcadia Holdings, Inc. had 25,000,000 public warrants outstanding (the “Public Warrants”). On January 25, 2019, we commenced an exchange offer2020.consent solicitation relating to the Public Warrants. The exchange offer and consent solicitation expired on February 22, 2019. See Note 19 – Subsequent Events for additional details.On July 2, 2018,November 2021, the Company entered into a loan agreementopen market sale agreements with a grouprespect to an at-the-market offering program (the “ATM Program”) under which the Company could offer and sell, from time to time at its sole discretion, shares lenders for an unsecured line of credit (see Note 9 – Debt). In connection with advances madeshares by the Company under the loan agreement, Waitr Incorporated was required to issue the Line of Credit Warrants to the lenders, providing the lenders the right to purchase 37,735 shares of the Company’s common stock. In November of 2018, the lenders exercised their Line of Credit Warrants, receiving 37,735 shares of common stock, for which we received $337 in cash,agreements were made pursuant to the termsCompany’s effective registration statement on Form S-3 which was filed on April 4, 2019. Details of the warrants.In connection with the Debt Facility, the Company issued Debt Warrantssales through December 31, 2021 pursuant to the lendersATM Program are included in the table below. As of December 31, 2021, approximately $48,602 remained unsold under the Debt Facility, exercisableNovember 2021 ATM Program. See 384,615details regarding sales pursuant to the ATM Program in January 2022.August 2021 ATM Program November 2021 ATM Program Total Maximum aggregate offering price (in thousands) $ 30,000 $ 50,000 Total shares sold 24,322,975 1,679,631 26,002,606 Average sales price per share $ 1.23 $ 0.83 $ 1.21 Gross proceeds (in thousands) $ 30,000 $ 1,398 $ 31,398 Net proceeds (in thousands) $ 29,535 $ 1,359 $ 30,894 (see at a rate of $8.70 per share. See Note 910 – Debt for additional information regarding the Notes.became exercisable after the consummation of the Landcadia Business Combinationexpire on November 15, 2022 and (i) expire four years from the Closing Date, (ii) have an exercise price of $13.00 per share, and (iii) include customary anti-dilution protection, including broad-based weighted average adjustments for issuances of additional shares. HoldersAdditionally, the holders of the Debt Warrants have customary registration rights with respect to the shares underlying the Debt Warrants. AsDebt Warrants were issuedCompany had an outstanding medical contingency claim which was measured at fair value on a recurring basis (see Note 12 – Commitments and Contingent Liabilities). The long-term portion of the liability for such claim is included in connectionthe consolidated balance sheet under accrued medical contingency, with the Debt Facility, theshort-term portion included within other current liabilities. The medical contingency claim was measured at fair value using a method that incorporated life-expectancy assumptions, along with projected annual medical costs for each future year, adjusted for inflation. An average annual inflation rate of 3.5% was used in the development of the proceedsactuarial estimate for medical costs, based on historical medical cost inflation trends as published by the U.S. Bureau of Labor Statistics. Additionally, the measurement included factors to derive a probability-weighted average of future payments in order to reflect variations from the Debt Facilitylife-expectancy assumptions, using CDC National Vital Statistics Reports as a tool in the analysis. Projected cash flows were allocated between the Debt Facility and the Debt Warrants,discounted using an interest rate consistent with the $1,569 fair value allocable toU.S. 30-year treasury yield curve rates.Debt Warrants being recorded to additional paid in capital.On May 14, 2014, the Company granted warrants (the “2014 Warrants”) to non-employees (“Holders”) to purchase 406,337 shares of common stock at an exercise price of $0.01 per share. The 2014 Warrants were subject tothree months ended September 30, 2021, as a vesting schedule at a rate of 12.5%result of the granted share amount per quarter over two years of service. The Company records equity instruments issued to non-employees as expense, based on the fair valuedeath of the Company’s common stock. The 2014 Warrants were exercised in connectionindividual associated with the Landcadia Business CombinationMedical Contingency, there was a change in accounting estimate of the total outstanding liability. The estimated loss exposure was updated to reflect the liability for remaining unpaid medical expenses and the Holders received 405,884 sharesdependent death benefits. As of common stock, representing the 406,337 warrants exercised, net of 453 shares used to cover the warrant cost. For the year ended December 31, 2016,2021, the Companyestimated loss exposure totaled $423. The change in estimate of the Medical Contingency was recognized expense related to the 2014 Warrants of $452 in general and administrative expenseas other income in the accompanying consolidated statement of operations. The Company did not recognize any expenseoperations and totaled $16,715 for the year ended December 31, 20172021.2014 WarrantsCompany’s assumptions used in developing the fair value estimate. The inputs used in the measurement, particularly life expectancy and projected medical costs, were fully vested.Requested AmendmentOn May 14, 2018,sensitive inputs to the measurement and changes to either could have resulted in significantly higher or lower fair value measurements. The Company entered intoengaged third-party actuaries to assist in estimating the First Amendment to Contract for Exchange of Stock (the “Requested Amendment”), modifyingfair value, including future comprehensive medical care costs by utilizing historical transactional data regarding the termsclaim. These inputs required significant judgments and estimates at the time of the original acquisition agreement.valuation. The Requested Amendment establishedanalysis used in the measurement of the remaining reserve for the medical contingency at December 31, 2021 reflects the Company’s assumptions regarding unpaid medical expenses and estimated death benefits used in developing the fair value estimate and is a repurchase feature (“Repurchase Right”) for Company common stock previously granted as consideration. The Requested Amendment established a two-year service period over the Repurchase Right lapse. In accordance with GAAP, the Company considered the Repurchase Right to be compensatory in nature dueLevel 3 measurement.service requirementearnout provision in the Company’s acquisition of the Cape Payment Companies in August 2021 and began recognizing compensation expense over the required service termfuture contingent payment based on the achievement of certain revenue targets (see Note 4 – Business Combinations). The fair value of contingent consideration is measured at acquisition date, and at the end of each reporting period through the term of the stockarrangement, using the Black Scholes option-pricing model with assumptions for volatility and risk-free rate. Expected volatility is based on a blended weighted average of the volatility rates for a number of similar publicly-traded companies. The risk-free rates are based on U.S. Treasury securities with similar maturities as the expected term of the earnout provision at the date of valuation. The fair value of the earnout provision was $1,686 as of the acquisition date and was included in the consideration for the Cape Payment Acquisition. At December 31, 2021, the fair value of the earnout provision was $1,939.As of December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities Accrued medical contingency $ — $ — $ 423 $ 423 Contingent consideration — — 1,939 1,939 Total liabilities measured and recorded at fair value $ — $ — $ 2,362 $ 2,362 As of December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Accrued medical contingency $ — $ — $ 17,435 $ 17,435 Total liabilities measured and recorded at fair value $ — $ — $ 17,435 $ 17,435 grant date. Upon closeconsolidated statement of operations. The following table presents a reconciliation of the Landcadia Business Combination,accrued medical contingency liability classified as a Level 3 financial instruments for the Repurchase Right lapsed, resulting inperiods indicated (in thousands):Medical Contingency Year Ended December 31, 2021 2020 2019 Balance, beginning of the period $ 17,435 $ 17,883 $ 18,167 Increases/additions 84 19 — Reductions/settlements (17,096) (467) (284) Balance, end of the period $ 423 $ 17,435 $ 17,883 recognitionfair value of the entire fair value associated withcontingent consideration liability at the Repurchase Rightend of $3,359, duringeach reporting period are recognized in income (loss) from operations on the consolidated statement of operations. The following table presents a2018. Compensation expense2021 (in thousands):Contingent Consideration Balance, beginning of the period $ — Additions 1,686 Increase in fair value 253 Reductions/settlements — Balance, end of the period $ 1,939 recorded as personnelrequired to record certain assets and related costs within generalliabilities at fair value on a non-recurring basis. The Company generally applies fair value concepts in recording assets and administrative expense. 17. Lossliabilities acquired in business combinations and acquisitions (see Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration for common stock equivalents. Diluted loss per share attributable to common stockholders is computed by dividing net loss by the weighted-average number of common stock outstanding during the period and potentially dilutive common stock equivalents, including stock options, restricted stock awards, and warrants, except in cases where the effect of the common stock equivalent would be antidilutive.The Landcadia Business Combination was accounted for as a reverse recapitalization in accordance with GAAP (see Note 3 – Business Combinations). Accordingly, weighted average shares outstanding for purposes of the earnings per share calculation have been retroactively restated as shares reflecting the exchange ratio established in the Landcadia Business Combination (0.8970953 Waitr Holdings Inc. shares to 1.0 Waitr Incorporated share).F-35lossearnings (loss) per share attributable to common stockholders for the years ended December 31, 2018, 20172021, 2020 and 20162019 is as follows (in thousands, except share and per share data):Year Ended December 31, 2021 2020 2019 Basic Earnings (Loss) per Share: Net income (loss) $ (5,229) $ 15,836 $ (291,306) Gain on debt extinguishment recorded as a capital contribution — — 1,897 Net income (loss) attributable to common stockholders - basic $ (5,229) $ 15,836 $ (289,409) Weighted average number of shares outstanding 120,593,501 98,095,081 72,404,020 Basic earnings (loss) per common share $ (0.04) $ 0.16 $ (4.00) Diluted Earnings (Loss) per Share: Net income (loss) $ (5,229) $ 15,836 $ (291,306) Gain on debt extinguishment recorded as a capital contribution — — 1,897 Net income (loss) attributable to common stockholders - diluted $ (5,229) $ 15,836 $ (289,409) Weighted average number of shares outstanding 120,593,501 98,095,081 72,404,020 Effect of dilutive securities: Stock options — 5,875,950 — Restricted stock units — 4,203,991 — Warrants — — — Weighted average diluted shares 120,593,501 108,175,022 72,404,020 Diluted earnings (loss) per common share $ (0.04) $ 0.15 $ (4.00) Excluded fromcalculationyear ended December 31, 2019, the Company calculated basic and diluted earnings (loss) per share using the two-class method. Participating securities during 2019 consisted of weighted-average number of diluted shares outstanding isRSAs which contained rights to receive non-forfeitable dividends. The Company had a net loss for the effectyear ended December 31, 2019, and accordingly, pursuant to the guidance under ASC 260, a portion of the Waitr Convertible Notes, which have historically convertednet loss was not allocated to preferred shares. In connection withsuch securities under the Landcadia Business Combination, we issuedtwo-class method. During the years ended December 31, 2021 and 2020, there were no remaining RSAs and no other securities classified as participating securities.910 – Debt for additional details on the Notes.The following table includes potentially dilutive common stock equivalents Based on the conversion price in effect at each year end. The Company generated a net loss attributable tothe end of December 31, 2021, 2020 and 2019, the Notes were convertible into 5,690,129, 3,957,164 and 4,886,625 shares, respectively, of the Company’s common stockholdersstock. During such years, the Company’s weighted average common stock price was below the Notes conversion price for each of the years ended December 31, 2018, 2017, and 2016.such periods. Accordingly, the effect of dilutive securities isshares were not considered in the lossdilutive earnings per share for suchcalculation.theirthe effect on net earnings (loss) per common share would be antidilutive on the net loss.Year Ended December 31, 2021 2020 2019 Antidilutive shares underlying stock-based awards: Stock options 9,656,928 63,295 445,721 Restricted stock units 11,774,071 267,974 3,182,639 Warrants (1) 574,704 399,726 399,726 (1)(1) 384,615the Debt Warrants and 25,000,000 Public Warrants as of December 31, 2018. Warrants as of December 31, 2017 and 2016 include the 2014 Warrants.each year-end. See Note 9 – Debt and Note 1614 – Stockholders’ Equity for additional details on warrants.details.18.As of December 31, 2017, certain board members of Waitr Incorporated participated in the Company’s issuance of Series 2017 Notes. Out of $7,484 principal amount issued as Series 2017approximately $694 was funded by the board members. Additionally, certain board members of Waitr Incorporated were lenders under the Company’s line of credit. Out of $5,000 borrowed under the line of credit, $3,030 was funded by the board members. Interest expense for the year ended December 31,Agreement included $401 of amounts paid to the board members.On November 15, 2018, in connection with the Landcadia Business Combination, the Company entered into the Credit Agreement, and onin January 17, 2019, in connection with the Bite Squad Merger, the Company entered into an amendment to the Credit Agreement, Amendment, with Luxor Capital (see Noteand an amendment to the Convertible Notes Agreement with the Luxor Entities. In addition, on each of May 21, 2019, July 15, 2020 and March 9, – Debt2021, the Company entered into amendments to the Credit Agreement with Luxor Capital and Note 19 – Subsequent Events for additional details).amendments to the Convertible Notes Agreement with the Luxor Entities. Additionally, on May 1, 2020, the Company entered into a Limited Waiver and Conversion Agreement with respect to the Credit Agreement and Convertible Notes Agreement. Jonathan Green, a board member of the Company, is a partner at Luxor Capital.F-3619. Subsequent EventsBite Squad MergerOn January 17, 2019,Company completed the acquisitionyear ended December 31, 2020, Jefferies beneficially owned more than 5% of BiteSquad.com, LLC (“Bite Squad”), a Minnesota limited liability company, pursuant to the Agreement and Plan of Merger, dated as of December 11, 2018 (the “Bite Squad Merger Agreement”), by and among the Company, Bite Squad and Wingtip Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company. The transactions contemplated by the Bite Squad Merger Agreement are referred to herein as the “Bite Squad Merger.” Upon consummation of the Bite Squad Merger, Wingtip Merger Sub, Inc. merged with and into Bite Squad, with Bite Squad surviving the merger in accordance with the Minnesota Revised Uniform Limited Liability Act as a wholly-owned, indirect subsidiary of the Company. Founded in 2012 and based in Minneapolis, Bite Squad operates a three-sided marketplace, consistent with Waitr’s business model, through the Bite Squad Platform. The consideration for the Bite Squad Merger consisted of $192,949 payable in cash (subject to adjustments) and an aggregate of 10,591,968 shares of the Company’sour common stock valued at $10.00 per share.The Bite Squad Merger was considered a business combination in accordance with GAAP, and will be accounted for using the acquisition method, with total purchase consideration allocated to acquired assets and assumed liabilities based on their estimated fair values on the acquisition date. The excesscertain points of the fair value of purchase consideration over the fair value of the assets less liabilities acquired, if any, will be recorded as goodwill. The fair value analysis of Bite Squad assets acquired, liabilities assumed and the allocation of the total purchase consideration has not yet been completed. The results of operations of Bite Squad will be included in our consolidated financial statements beginning on the acquisition date, January 17, 2019.Bite Squad Merger,period from January 1, 2020 through July 31, 2020, the Company incurred directreimbursed C Grimstad and incremental costs through December 31, 2018,Associates, a company owned by our Chief Executive Officer (“CGA”), $262 for certain of approximately $477, consisting of legal and professional fees, which are included in general and administrative expense in the consolidated statement of operations in 2018.In connection with and as part of the Bite Squad Merger, on January 17, 2019, the Company purchased from Bregal Sagemount II L.P., Bregal Sagemount II-A L.P. and Bregal Sagemount II-B L.P. (collectively, the “Selling Stockholders”) all of the issued and outstanding shares of BSI2 Hold Daisy Inc., which held an aggregate of 1,092,034 Series C Preferred Units of Bite Squad, pursuant toits consultants that certain Stock Purchase Agreement, dated as of December 11, 2018 (the “Blocker Agreement”), by and among the Company, the Selling Stockholders, and, solely for purposes of Sections 1.1, 5 and 8 thereof, Bite Squad. The aggregate consideration for all of the issued and outstanding shares of BSI2 Hold Daisy Inc. was approximately $60,000 in cash and is included in the $192,949 cash amount above.Also on January 17, 2019, Intermediate Holdings and the Company’s wholly-owned indirect subsidiary Waitr Inc., entered into Amendment No. 1 to Credit and Guaranty Agreement (the “Credit Agreement Amendment”) with the various lenders party thereto and Luxor Capital, as administrative agent and collateral agent, which amends the Credit Agreement in order to provideprovided consulting services to the Company additional senior secured first priority term loans underduring this period. CGA has not provided consulting services to the Debt Facility in the aggregate principal amountCompany since July 31, 2020. CGA did not mark-up or profit from these reimbursement transactions.$42,080 the (“Additional Term Loans”), the proceedsDecember 31, 2021, we had over 26,000 restaurants on our Platforms, some of which were used to consummateare affiliated with members of our Board. We estimate that we generated total revenue, inclusive of diner fees, of approximately $700 and $1,500 during the Bite Squad Merger.The Additional Term Loansyears ended December 31, 2021 and 2020, respectively, from affiliates of members of our Board. Such affiliates enter into customary restaurant master service agreements with the Company, which are guaranteed by Intermediate Holdings, Bite Squad and its subsidiaries andgenerally consistent with the other guarantors party to the Credit Agreement and secured by a lien on substantially all assets of Waitr Inc., Intermediate Holdings, Bite Squad and its subsidiaries and the other guarantors under the Credit Agreement. The Additional Term Loans, along with the Existing Term Loans, will mature on November 15, 2022. Interest on the Term Loans will accrue at a rate of 7.125% per annum, payable quarterly, in cash or, at the election of the borrower, as a payment-in-kind. Any amounts paid in kind will be added to the principal amount of the Term Loans on such interest payment date (increasing the principal amount thereof) and will thereafter bear interest at the rate set forth above.the closing date of the Additional Term LoansJanuary 1, 2022 through November 15, 2019, Waitr will be required to pay a prepayment premium of 5.0% of the principal amount of any Term Loans to be prepaid during such period in connection with (i) any prepayments (whether before or after an event of default), (ii) any payment, repayment or redemption of the obligations following an acceleration, (iii) certain bankruptcy events, or (iv) acceleration upon the termination for any reason of the definitive agreements documenting the convertible promissory notes issued under the Convertible Notes Agreement. Thereafter, the Term Loans may be prepaid without penalty or premium.In connection with the Additional Term Loans, the Company issued to the lenders under the Credit Agreement Amendment 325,000January 7, 2022, we sold 7,907,933 shares of common stock for gross proceeds of the Company in a private placement. The lenders$5,691. As of March 11, 2022, we have approximately $42,911 available under the Credit Agreement Amendment have customary registration rights with respect to such shares.Warrant Exchange OfferOn January 25, 2019, the Company commenced an exchange offer (the “Offer”) and consent solicitation (the “Consent Solicitation”) relating to its Public Warrants to purchase shares of the Company’s common stock. The purpose of the Offer and Consent Solicitation was to simplify the Company’s capital structure and reduce the potential dilutive impact of the Public Warrants.The Company offered to all holders of its Public Warrants the opportunity to receive 0.18 shares of common stock in exchange for each of the outstanding Public Warrants tendered by the holder and exchanged pursuant to the Offer. Concurrently with the Offer, the Company also solicited consents from holders of the Public Warrants to amend (the “Warrant Amendment”) the warrant agreement that governs all of the Public Warrants to permit the Company to require that each Public Warrant outstanding upon the closing of the Offer be converted into 0.162 shares of common stock, which is a ratio 10% less than the exchange ratio applicable to the Offer. The Consent Solicitation was conditioned upon receiving the consent of holders of at least 65% of the outstanding Public Warrants.The Offer expired at 11:59 p.m. Eastern Standard Time on February 22, 2019. A total of 24,769,192 Public Warrants, or approximately 99.1% of the 25,000,000 outstanding Public Warrants, were validly tendered and not withdrawn in the Offer, and were therefore deemed to have consented to the Warrant Amendment. Pursuant to the terms of the Offer, the Company issued an aggregate of 4,458,438 shares of common stock in exchange for such Public Warrants. Because consents were received from holders of more than 65% of the Public Warrants, the Warrant Amendment was approved. The Company exchanged all remaining untendered Public Warrants in accordance with the terms of the Warrant Agreement, as amended, on March 12, 2019, for an aggregate of 37,391 shares of the Company’s common stock.F-38