UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒ x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022


☐ o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-37788

WAITR HOLDINGS INC.

(Exact name of Registrant as specified in its Charter)

Registrant’s telephone number, including area code: 1-337-534-6881

______________________

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $0.0001 Per Share

WTRH

The Nasdaq Stock Market LLC

______________________

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ~~Yes~~x☒ NO Noo

☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ~~Yes~~x☒ NO Noo☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~Yes~~YES ☐No NO ☒x

~~Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:~~


~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each exchange on which registered~~
~~Common Stock, Par Value $0.0001 Per Share~~	~~WTRH~~	~~The Nasdaq Stock Market LLC~~

TABLE_CONTENTS

The number of shares of Registrant’s Common Stock outstanding as of ~~August 5, 2021~~May 4, 2022 was ~~117,080,264.~~

158,435,522.

TABLE_CONTENTS

Table of Contents

	~~Page~~
~~PART I~~		~~Financial Information~~	1 Page
PART I		Financial Information	1
Item 1.		Condensed Consolidated Financial Statements (unaudited)	1
		Condensed Consolidated Balance Sheets as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~202 1	1
		Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30, 2021~~March 31,2022 and ~~2020~~202 1	2
		Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31 , 2022 and 2021 ~~and 2020~~	3
		Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30, 2021~~March 3 1 , 202 2 and ~~2020~~202 1	4
		Notes to Condensed Consolidated Financial Statements	6 5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	22 23
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	30 34
Item 4.		Controls and Procedures	30 34

PART II		Other Information	31 36
Item 1.		Legal Proceedings	31 36
Item 1A.		Risk Factors	31 37
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	32 37
Item 3.		Defaults Upon Senior Securities	32 37
Item 4.		Mine Safety Disclosures	32 38
Item 5.		Other Information	32 38
Item 6.		Exhibits	34 38

		Signatures	35 39

TABLE_CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	June 30,			December 31,
	2021			2020				March 31, 2022		December 31, 2021
	Unaudited							Unaudited
ASSETS							ASSETS
CURRENT ASSETS							CURRENT ASSETS
Cash	$	60,548		$	84,706		Cash	$	54,877	$	60,111
Accounts receivable, net		3,883			2,954		Accounts receivable, net	3,875		3,027
Capitalized contract costs, current		1,015			737		Capitalized contract costs, current	1,285		1,170
Prepaid expenses and other current assets		7,842			6,657		Prepaid expenses and other current assets	5,293		8,706
TOTAL CURRENT ASSETS		73,288			95,054		TOTAL CURRENT ASSETS	65,330		73,014
Property and equipment, net		4,964			3,503		Property and equipment, net	3,137		3,763
Capitalized contract costs, noncurrent		3,117			2,429		Capitalized contract costs, noncurrent	3,346		3,183
Goodwill		121,077			106,734		Goodwill	63,434		130,624
Intangible assets, net		33,363			23,924		Intangible assets, net	43,000		43,126
Operating lease right-of-use assets		4,903			—		Operating lease right-of-use assets	3,901		4,327
Other noncurrent assets		1,160			588		Other noncurrent assets	999		1,070
TOTAL ASSETS	$	241,872		$	232,232		TOTAL ASSETS	$	183,147	$	259,107
LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:							LIABILITIES:
CURRENT LIABILITIES							CURRENT LIABILITIES
Accounts payable	$	6,642		$	4,382		Accounts payable	$	5,985	$	7,018
Restaurant food liability		4,215			4,301		Restaurant food liability	2,591		3,327
Accrued payroll		3,633			4,851		Accrued payroll	1,446		2,988
Short-term loans for insurance financing		5,465			2,726		Short-term loans for insurance financing	1,293		3,142
Income tax payable		179			122		Income tax payable	90		74
Operating lease liabilities		1,603			—		Operating lease liabilities	1,420		1,581
Other current liabilities		24,242			13,922		Other current liabilities	20,055		19,309
TOTAL CURRENT LIABILITIES		45,979			30,304		TOTAL CURRENT LIABILITIES	32,880		37,439
Long term debt - related party		81,214			94,218		Long term debt - related party	82,284		81,977
Accrued medical contingency		16,728			16,987		Accrued medical contingency	—		53
Operating lease liabilities		3,622			—
Operating lease liabilities, net of current portion							Operating lease liabilities, net of current portion	2,745		3,034
Other noncurrent liabilities		1,385			2,627		Other noncurrent liabilities	59		2,115
TOTAL LIABILITIES		148,928			144,136		TOTAL LIABILITIES	117,968		124,618
Commitments and contingent liabilities (Note 10)							Commitments and contingent liabilities (Note 10)	0		0
STOCKHOLDERS’ EQUITY:							STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value; 249,000,000 shares authorized and 116,701,277 and 111,259,037 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		11			11
Common stock, $0.0001 par value; 249,000,000 shares authorized and 155,705,647 and 146,094,300 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively							Common stock, $0.0001 par value; 249,000,000 shares authorized and 155,705,647 and 146,094,300 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	15		15
Additional paid in capital		466,192			451,991		Additional paid in capital	511,515		503,609
Accumulated deficit		(373,259	)		(363,906	)	Accumulated deficit	(446,351)		(369,135)
TOTAL STOCKHOLDERS’ EQUITY		92,944			88,096		TOTAL STOCKHOLDERS’ EQUITY	65,179		134,489
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	241,872		$	232,232		TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	183,147	$	259,107

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE_CONTENTS

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
	2021			2020			2021			2020					2022		2021
REVENUE	$	49,167		$	60,506		$	100,097		$	104,749		REVENUE		$	35,040	$	50,930
COSTS AND EXPENSES:													COSTS AND EXPENSES:
Operations and support		31,273			30,547			61,611			56,912		Operations and support		20,279		30,338
Sales and marketing		4,500			2,740			8,516			5,566		Sales and marketing		6,253		4,016
Research and development		854			1,167			1,853			2,637		Research and development		1,311		999
General and administrative		12,505			10,094			22,691			20,872		General and administrative		11,545		10,186
Depreciation and amortization		2,965			2,075			5,882			4,139		Depreciation and amortization		3,065		2,917
Intangible and other asset impairments		—			29			—			29
Loss on disposal of assets		162			3			159			11
Goodwill impairment													Goodwill impairment		67,190		—

Gain on disposal of assets													Gain on disposal of assets		(17)		(3)
TOTAL COSTS AND EXPENSES		52,259			46,655			100,712			90,166		TOTAL COSTS AND EXPENSES		109,626		48,453
INCOME (LOSS) FROM OPERATIONS		(3,092	)		13,851			(615	)		14,583
OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET
(LOSS) INCOME FROM OPERATIONS													(LOSS) INCOME FROM OPERATIONS		(74,586)		2,477
OTHER EXPENSES AND LOSSES, NET													OTHER EXPENSES AND LOSSES, NET
Interest expense		1,681			2,490			3,582			5,404		Interest expense		1,704		1,901
Interest income		—			(21	)		—			(81	)

Other expense		835			712			5,099			675		Other expense		910		4,264
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(5,608	)		10,670			(9,296	)		8,585
NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES													NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(77,200)		(3,688)
Income tax expense		33			17			57			34		Income tax expense		16		24
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	$	(5,641	)	$	10,653		$	(9,353	)	$	8,551
INCOME (LOSS) PER SHARE:
NET LOSS FROM CONTINUING OPERATIONS													NET LOSS FROM CONTINUING OPERATIONS		$	(77,216)	$	(3,712)
LOSS PER SHARE:													LOSS PER SHARE:
Basic	$	(0.05	)	$	0.11		$	(0.08	)	$	0.10		Basic		$	(0.50)	$	(0.03)
Diluted	$	(0.05	)	$	0.10		$	(0.08	)	$	0.09		Diluted		$	(0.50)	$	(0.03)
Weighted average shares used to compute net income (loss) per share:
Weighted average shares used to compute net loss per share:													Weighted average shares used to compute net loss per share:
Weighted average common shares outstanding – basic		115,644,790			95,053,207			113,998,589			85,968,962		Weighted average common shares outstanding – basic		153,629,968		112,334,094
Weighted average common shares outstanding – diluted		115,644,790			105,951,232			113,998,589			91,769,460		Weighted average common shares outstanding – diluted		153,629,968		112,334,094

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE_CONTENTS

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,							Three Months Ended March 31,
	2021			2020				2022		2021
Cash flows from operating activities:							Cash flows from operating activities:
Net income (loss)	$	(9,353	)	$	8,551
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net loss							Net loss	$	(77,216)	$	(3,712)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:							Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Non-cash interest expense		1,485			4,453		Non-cash interest expense	310		772
Amortization of operating lease assets		696			0
Stock-based compensation		4,465			1,450		Stock-based compensation	1,671		2,078
Loss on disposal of assets		159			11
Gain on disposal of assets							Gain on disposal of assets	(17)		(3)
Depreciation and amortization		5,882			4,139		Depreciation and amortization	3,065		2,917
Intangible and other asset impairments		0			29
Goodwill impairment							Goodwill impairment	67,190		—

Amortization of capitalized contract costs		423			183		Amortization of capitalized contract costs	302		194
Other non-cash income		0			(22	)

Change in fair value of contingent consideration liability							Change in fair value of contingent consideration liability	81		—

Other							Other	(24)		(66)
Changes in assets and liabilities:							Changes in assets and liabilities:
Accounts receivable		(614	)		(2,849	)	Accounts receivable	(848)		(1,624)
Capitalized contract costs		(1,389	)		(1,736	)	Capitalized contract costs	(580)		(655)
Prepaid expenses and other current assets		(1,008	)		2,823		Prepaid expenses and other current assets	3,413		1,899
Other noncurrent assets		(386	)		0		Other noncurrent assets	93		27
Accounts payable		1,623			951		Accounts payable	(1,033)		20
Restaurant food liability		(86	)		(84	)	Restaurant food liability	(736)		1,589
Income tax payable		57			34		Income tax payable	16		24
Operating lease liabilities		(780	)		0
Accrued payroll		(1,368	)		(265	)	Accrued payroll	(1,542)		1,479
Accrued medical contingency		(258	)		(112	)	Accrued medical contingency	(53)		(143)
Accrued workers’ compensation liability		0			(1	)

Other current liabilities		6,452			1,232		Other current liabilities	(940)		8,051
Other noncurrent liabilities		(64	)		174		Other noncurrent liabilities	(387)		(38)
Net cash provided by operating activities		5,936			18,961
Net cash (used in) provided by operating activities							Net cash (used in) provided by operating activities	(7,235)		12,809
Cash flows from investing activities:							Cash flows from investing activities:
Purchases of property and equipment		(589	)		(381	)	Purchases of property and equipment	(26)		(165)
Internally developed software		(4,137	)		(1,335	)	Internally developed software	(2,347)		(1,722)
Purchase of domain names							Purchase of domain names	(12)		—
Acquisitions, net of cash acquired		(12,706	)		(290	)	Acquisitions, net of cash acquired	—		(10,927)
Collections on notes receivable		0			36

Proceeds from sale of property and equipment		13			7		Proceeds from sale of property and equipment	—		9
Net cash used in investing activities		(17,419	)		(1,963	)	Net cash used in investing activities	(2,385)		(12,805)
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from issuance of stock		0			22,944		Proceeds from issuance of stock	6,235		—
Equity issuance costs		0			(359	)
Payments on long-term loan		(14,472	)		0		Payments on long-term loan	—		(14,472)
Borrowings under short-term loans for insurance financing		5,209			1,906

Payments on short-term loans for insurance financing		(2,471	)		(3,415	)	Payments on short-term loans for insurance financing	(1,849)		(1,583)
Payments on acquisition loans		(132	)		0		Payments on acquisition loans	—		(66)

Proceeds from exercise of stock options		8			39		Proceeds from exercise of stock options	—		6
Taxes paid related to net settlement on stock-based compensation		(817	)		(728	)	Taxes paid related to net settlement on stock-based compensation	—		(732)
Net cash (used in) provided by financing activities		(12,675	)		20,387
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	4,386		(16,847)
Net change in cash		(24,158	)		37,385		Net change in cash	(5,234)		(16,843)
Cash, beginning of period		84,706			29,317		Cash, beginning of period	60,111		84,706
Cash, end of period	$	60,548		$	66,702		Cash, end of period	$	54,877	$	67,863
Supplemental disclosures of cash flow information:							Supplemental disclosures of cash flow information:

Cash paid during the period for interest	$	2,097		$	951		Cash paid during the period for interest	$	1,394	$	1,129
Supplemental disclosures of non-cash investing and financing activities:							Supplemental disclosures of non-cash investing and financing activities:
Conversion of convertible notes to stock	$	0		$	11,888

Stock issued as consideration in acquisition		10,545			0		Stock issued as consideration in acquisition	$	—	$	11,500
Noncash impact of operating lease assets		5,600			0
Noncash impact of operating lease liabilities		6,005			0
Noncash impact of operating lease assets upon adoption							Noncash impact of operating lease assets upon adoption	—		5,387
Noncash impact of operating lease liabilities upon adoption							Noncash impact of operating lease liabilities upon adoption	—		5,792

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE_CONTENTS

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

~~THREE AND SIX MONTHS ENDED JUNE 30, 2021~~

(in thousands, except share data)

(unaudited)

Three Months Ended June 30, 2021

Common stock

Additional
paid in
capital

Accumulated
deficit

Total
stockholders’
equity

Shares

Amount

Balances at March 31, 2021

115,387,140

$
11

$
464,843

$
(367,618
)

$
97,236

Net loss

—

—

—

(5,641
)

(5,641
)
Exercise of stock options and vesting of restricted stock units

1,314,137

—

2

—

2

Taxes paid related to net settlement on stock-based compensation

—

—

(85
)

—

(85
)
Stock-based compensation

—

—

2,387

—

2,387

Adjustment of consideration for acquisition

—

—

(955
)

—

(955
)
Balances at June 30, 2021

116,701,277

$
11

$
466,192

$
(373,259
)

$
92,944


Three Months Ended March 31, 2022
	Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balances at December 31, 2021	146,094,300	$	15	$	503,609	$	(369,135)	$	134,489
Net loss	—	—		—		(77,216)		(77,216)
Exercise of stock options and vesting of restricted stock units	152,692	—		—		—		—

Stock-based compensation	—	—		1,671		—		1,671

Issuance of common stock, net	9,458,655	—		6,235		—		6,235
Balances at March 31, 2022	155,705,647	$	15	$	511,515	$	(446,351)	$	65,179

Six Months Ended June 30, 2021

Common stock

Additional
paid in
capital

Accumulated
deficit

Total
stockholders’
equity

Shares

Amount

Balances at December 31, 2020

111,259,037

$
11

$
451,991

$
(363,906
)

$
88,096

Net loss

—

—

—

(9,353
)

(9,353
)
Exercise of stock options and vesting of restricted stock units

1,851,573

—

8

—

8

Taxes paid related to net settlement on stock-based compensation

—

—

(817
)

—

(817
)
Stock-based compensation

—

—

4,465

—

4,465

Equity issued for acquisitions

3,590,667

—

10,545

—

10,545

Balances at June 30, 2021

116,701,277

$
11

$
466,192

$
(373,259
)

$
92,944


Three Months Ended March 31, 2021
	Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balances at December 31, 2020	111,259,037	$	11	$	451,991	$	(363,906)	$	88,096
Net loss	—	—		—		(3,712)		(3,712)
Exercise of stock options and vesting of restricted stock units	537,436	—		6		—		6
Taxes paid related to net settlement on stock-based compensation	—	—		(732)		—		(732)
Stock-based compensation	—	—		2,078		—		2,078

Equity issued for asset acquisitions	3,590,667	—		11,500		—		11,500

Balances at March 31, 2021	115,387,140	$	11	$	464,843	$	(367,618)	$	97,236

The accompanying notes are an integral part of these condensed consolidated financial statements.

TABLE_CONTENTS

WAITR HOLDINGS INC.

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~THREE AND SIX MONTHS ENDED JUNE 30, 2020~~

~~(in thousands, except share data)~~

~~(unaudited)~~

Three Months Ended June 30, 2020

Common stock

Additional
paid in
capital

Accumulated
deficit

Total
stockholders’
equity

Shares

Amount

Balances at March 31, 2020

80,807,908

$
8

$
392,004

$
(381,844
)

$
10,168

Net income

—

—

—

10,653

10,653

Exercise of stock options and vesting of restricted stock units

433,303

—

57

—

57

Taxes paid related to net settlement on stock-based compensation

—

—

(296
)

—

(296
)
Stock-based compensation

—

—

602

—

602

Stock issued for conversion of Notes

9,222,978

1

11,888

—

11,889

Issuance of common stock

11,918,322

1

16,113

—

16,114

Balances at June 30, 2020

102,382,511

$
10

$
420,368

$
(371,191
)

$
49,187

Six Months Ended June 30, 2020

Common stock

Additional
paid in
capital

Accumulated
deficit

Total
stockholders’
equity

Shares

Amount

Balances at December 31, 2019

76,579,175

$
8

$
385,137

$
(379,742
)

$
5,403

Net income

—

—

—

8,551

8,551

Exercise of stock options and vesting of restricted stock units

469,293

—

65

—

65

Taxes paid related to net settlement on stock-based compensation

—

—

(755
)

—

(755
)
Stock-based compensation

—

—

1,450

—

1,450

Stock issued for conversion of Notes

9,222,978

1

11,888

—

11,889

Issuance of common stock

16,111,065

1

22,583

—

22,584

Balances at June 30, 2020

102,382,511

$
10

$
420,368

$
(371,191
)

$
49,187

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~TABLE_CONTENTS~~

~~WAITR HOLDINGS INC.~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

1. Organization

Waitr Holdings Inc., a Delaware corporation, together with its wholly owned subsidiaries (the “Company,” “Waitr,” “we,” “us” and “our”), operates an online ordering technology platform, providing delivery, carryout and dine-in options, connecting restaurants, drivers and diners in cities across the United States. The Company’s technology platform includes the Waitr, Bite Squad and Delivery Dudes mobile applications, collectively referred to as the “Platforms”. The 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. Restaurants benefit from the online Platforms through increased exposure to consumers for expanded business in the delivery market and carryout sales.

Additionally, Waitr facilitates merchant access to third-party payment processing solution providers, pursuant to the acquisition of the Cape Payment Companies (as defined below) on August 25, 2021 (see Note 4 – Business Combinations).

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally 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”) as they apply to interim financial information. Accordingly, the interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete annual financial statements, although the Company believes that the disclosures made are adequate to make information not misleading. 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.

The unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Form 10-K”). The interim condensed consolidated financial statements are unaudited, but in the Company’s opinion, include all adjustments that are necessary for a fair presentation of the results for the periods presented. The interim results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

During the third quarter of 2020, the Company identified and corrected an immaterial error related to the understatement of an accrued medical contingency that affected previously issued consolidated financial statements. In order to present the impact of the updated estimated liability for the claim, previously issued financial statements have been revised. See ~~Note 9 – Correction of Prior Period Error~~ ~~for additional details, including a summary of the revisions to certain previously reported financial information presented herein for comparative purposes.~~

Reclassifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all wholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Significant estimates and judgments relied upon in preparing these condensed consolidated financial statements affect the following items:

•

~~incurred loss estimates under our insurance policies with large deductibles or retention levels;~~

•incurred loss estimates under our insurance policies with large deductibles or retention levels;•

~~loss exposure related to claims such as the Medical Contingency (see~~ ~~Note 9 – Correction of Prior Period Error~~);

•loss exposure related to claims;•

~~income taxes;~~

•determination of agent vs. principal classification for revenue recognition purposes;•

~~useful lives of tangible and intangible assets;~~

•

~~equity compensation;~~

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•

~~contingencies;~~

•income taxes;•

~~goodwill and other intangible assets, including the recoverability of intangible assets with finite lives and other long-lived assets; and~~

•useful lives of tangible and intangible assets;•

~~fair value of assets acquired and liabilities assumed as part of a business combination.~~

•equity compensation;

•contingencies;

•goodwill and other intangible assets, including the recoverability of intangible assets with finite lives and other long-lived assets; and

•fair value of assets acquired, liabilities assumed and contingent consideration as part of a business combination.

The Company regularly assesses these estimates and records changes to estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions believed to be reasonable under the circumstances. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ from those estimates.

~~Critical~~

Significant Accounting Policies ~~and Estimates~~

See “Recent Accounting Pronouncements” below for a description of accounting principle changes adopted during the ~~six~~three months ended ~~June 30, 2021 related to leases.~~March 31, 2022. There have been no ~~other~~ material changes to our ~~critical~~significant accounting policies ~~and estimates~~ described in the ~~2020~~2021 Form 10-K. ~~See “Revenue~~”

Recent Accounting Pronouncements

The Company considered the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on these unaudited condensed consolidated financial statements.

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU 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 2020-06 was effective for and adopted by the Company on January 1, 2022. The adoption of ASU 2020-06 did not have a ~~description~~material impact on the Company’s disclosures or consolidated financial statements.

Pending Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which creates an exception to the general recognition and measurement principle in ASC 805 by requiring companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. The guidance additionally clarifies that companies should apply the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. ASU 2021-08 is effective for the Company on January 1, 2023. The Company is currently evaluating the impacts of the provisions of ASU 2021-08 on its consolidated financial statements and related disclosures.

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3. Revenue

The following table presents our revenue ~~recognition policy.~~

disaggregated by offering. Revenue

consists of the following for the periods indicated (in thousands):


	Three Months Ended March 31,
		2022		2021
Delivery transaction fees		$	31,576	$	50,476
Payment processing referral fees		2,510		—
Setup and integration fees		—		7
Other		954		447
Total Revenue		$	35,040	$	50,930

Revenue from Contracts with Customers

Delivery Transaction Fees

The Company generates revenue (“Delivery Transaction Fees”) primarily when diners place an order on one of the Platforms. In the case of diner subscription fees relating to our diner subscription program, revenue is recognized for the receipt of the monthly fee in the applicable month for which the delivery service applies to. ~~Revenue consists of the following for the periods indicated (in thousands):~~

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Transaction Fees

$
48,251

$
60,422

$
98,727

$
104,233

Setup and integration fees

1

36

8

414

Other

915

48

1,362

102

Total Revenue

$
49,167

$
60,506

$
100,097

$
104,749

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 the 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 recognized on a daily basis. As an agent of the restaurant in the transaction, the Company recognizes Delivery Transaction Fees earned from the restaurant on the Platform on a net basis. Delivery 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 have the ability to unilaterally terminate the contract by providing notice of termination.

Payment Processing Referral Fees

The Company also generates revenue by facilitating access to third-party payment processing solution providers. Revenue from such services primarily consists of residual payments received from third-party payment processing solution providers, based on the volume of transactions a payment processing solution provider performs for the merchant. The Company also occasionally receives a bonus up-front fee from third-party payment processing solution providers, paid at the time of a merchant’s initial transaction with a payment processing solution provider, based on a price specified in the agreement between the merchant and the payment processing solution provider.

Payment processing referral fees represent revenue recognized from the Company’s offering of referral services, connecting a merchant with a third-party payment processing service. The Company’s performance obligation in its contracts with payment processors is for an unknown or unspecified quantity of transactions and the consideration received is contingent upon the number of transactions submitted by the merchant and processed by the payment processor. Accordingly, the total transaction price is variable. The performance obligation is satisfied when the third-party payment processor finalizes the processing of a transaction through the payment system and transaction volume is available from the payment processor to the Company. Consistent with the recognition objective in ASC Topic 606, the variable consideration due to the Company for serving as the facilitator of the arrangement between the third-party payment processor and merchant is recognized on a daily basis. The Company is the agent 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 between the merchant and the Company.

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Accounts Receivable

The Company records a receivable when it has an unconditional right to the consideration. ~~The balance of~~See Note 5 – Accounts Receivable, Net for additional details on the Company’s accounts ~~receivable, net was $3,883 and $2,954 as of June 30, 2021 and December 31, 2020, respectively, comprised primarily of receivables due from the credit card processor.~~

receivable.

Costs to Obtain a Contract with a Customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a restaurant 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 five years. 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.

Deferred costs related to obtaining contracts with restaurants were ~~$3,042~~$2,997 and ~~$2,424~~$2,968 as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, out of which ~~$755~~$866 and ~~$567,~~$818, respectively, was classified as current. Amortization of expense for the costs to obtain a contract were ~~$173~~$208 and ~~$94~~$149 for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $322 and $147 for the six months ended June 30, 2021 and 2020,~~ respectively.

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Costs to Fulfill a Contract with a Customer

The Company also recognizes an asset for the costs to fulfill a contract with a restaurant 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 onboarding restaurants onto the Platforms 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 the period of benefit, which the Company has determined to be five years.

Deferred costs related to fulfilling contracts with restaurants were ~~$1,090~~$1,634 and ~~$742~~$1,385 as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, out of which ~~$260~~$419 and ~~$170,~~$352, respectively, was classified as current. Amortization of expense for the costs to fulfill a contract were ~~$56~~$94 and ~~$20~~$45 for the three months ended ~~June 30,~~March 31, 2022 and 2021, respectively.

4. Business Combinations

2021 Acquisitions

Cape Payment Acquisition

On August 25, 2021, the Company completed the acquisition of certain assets and ~~2020, respectively,~~properties of ProMerchant LLC, Cape Cod Merchant Services LLC and ~~$101~~Flow Payments LLC (collectively referred to herein as the “Cape Payment Companies”) (the “Cape Payment Acquisition”). The Cape Payment Companies facilitate merchant access to third-party payment processing solution providers and ~~$35~~receive residual payments from the payment providers. The purchase price for the ~~six months ended June~~Cape Payment Companies consisted of $12,032 in cash and an aggregate of 2,564,103 shares of the Company’s common stock valued at $1.24 per share (the closing price of the Company’s common stock on August 24, 2021). The Cape Payment Acquisition included 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 March 31, 2022 and December 31, 2021, the earnout provision was valued at $2,020 and ~~2020, respectively.~~

~~Recent Accounting Pronouncements~~

$1,939, respectively (see Note 13 - Fair Value Measurements).

The ~~Company~~Cape Payment Acquisition was considered a business combination in accordance with ASC 805, and was accounted for using the ~~applicability and impact~~acquisition method. The results of ~~all ASUs. ASUs not listed below were assessed and determined to be either not applicable or~~operations of the Cape Payment Companies are ~~expected to have minimal impact on these unaudited~~ included in our

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condensed consolidated financial ~~statements. Throughout fiscal year 2020,~~statements beginning on the ~~Company qualified as an “emerging growth company” pursuant~~acquisition date, August 25, 2021, and were immaterial. Pro forma results were deemed immaterial to the provisions of the JOBS Act. As an emerging growth company, the Company elected to use the extended transition period for complying with certain new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Effective January 1, 2021, the Company is no longer an emerging growth company.

~~Recently Adopted Accounting Standards~~

~~Leases~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. The principal objective of ASU 2016-02 is to increase transparency and comparability among organizations by recognizing “right-of-use” lease assets and lease liabilities on the consolidated balance sheet. ASU 2016-02 continues to retain a distinction between finance and operating leases but requires lessees to recognize a right-of-use asset representing its right to use the underlying asset for the lease term and a corresponding lease liability on the balance sheet for all leases with terms greater than twelve months. ASU 2016-02 was effective for and adopted by the Company on January 1, 2021. The Company applied the modified retrospective transition approach, with no adjustment to prior comparative periods. Accordingly, financial information is not adjusted and the disclosures required under ASU 2016-02 are not provided for periods prior to January 1, 2021.

The Company determines if an arrangement is a lease at inception of a contract. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company elected the optional practical expedient package, which includes retaining the current classification of leases, and is utilizing the practical expedient which allows the use of hindsight in determining the lease term and in assessing impairment of its operating lease right-of-use assets. Additionally, the Company has elected to treat lease and non-lease components as a single lease component for all assets. The Company has elected to apply the short-term scope exception for leases with original terms of twelve months or less, and accordingly, recognizes the lease payments for such leases in the statement of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Under ASU 2016-02, the Company recorded in the unaudited condensed consolidated balance sheet as of January 1, 2021, lease liabilities for operating leases entered into prior to December 31, 2020 of $4,993, representing the present value of its future operating lease payments, and corresponding right-of-use assets of $4,681, based upon the operating lease liabilities adjusted for deferred rent. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date, which is estimated to be 5.0%. The adoption of ASU 2016-02 did not result in a cumulative-effect adjustment on retained earnings. See ~~Note 10 – Commitments and Contingencies~~ ~~for additional details.~~

~~Other~~

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes and also improves consistent application by clarifying and amending existing guidance. ASU 2019-12 was effective for and adopted by the Company on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s disclosures or consolidated financial statements.

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~~In July 2017, the FASB issued ASU 2017-11,~~ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of ASU 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced based on the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of ASU 2017-11 addresses the difficulty of navigating ASC Topic 480, ~~Distinguishing Liabilities from Equity,~~ because of the existence of extensive pending content in ASC 480. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. Part II of ASU 2017-11 does not have an accounting effect. ASU 2017-11 was effective for and adopted by the Company on January 1, 2021. The adoption of ASU 2017-11 did not have a material impact on the Company’s disclosures or consolidated financial statements.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,~~ to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 uses a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments and expands disclosure requirements. ASU 2016-13 was effective for and adopted by the Company on January 1, 2021. The adoption of ASU 2016-13 did not have a material impact on the Company’s disclosures or consolidated financial statements.

~~Pending Accounting Standards~~

~~In August 2020, the FASB issued ASU 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 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impacts of the provisions of ASU 2020-06 on its consolidated financial statements and related disclosures.

~~3. Business Combinations~~

Company.

Delivery Dudes Acquisition

On March 11, 2021, the Company completed the acquisition of certain assets and properties from Dude Holdings LLC (“Delivery Dudes”), a third-party delivery business primarily serving the South Florida market, for $11,500 in cash ~~subject to certain purchase price adjustments,~~ and 3,562,577 shares of the Company’s common stock valued at $2.96 per share (the closing price of the Company’s common stock on March 11, 2021) (the “Delivery Dudes Acquisition”). In the second quarter of 2021, the Company adjusted the per share fair value of the stock consideration from $3.23 (the average volume weighted average price of the Company’s common stock for the five consecutive trading days prior to March 9, 2021), down to the closing price of $2.96, resulting in a reduction of total consideration of $955 to $22,045. The acquisition expands the Company’s market presence in the on-demand delivery service sector. The following represents the preliminary estimated purchase consideration:

(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

10,927

Plus: net working capital deficit assumed

573

Total estimated consideration

$
22,045

The Delivery Dudes Acquisition was considered a business combination in accordance with ASC 805, and was accounted for using the acquisition method. Under the acquisition method of accounting, acquired assets and assumed liabilities are recorded based on their respective fair values on the acquisition date, with the excess of the consideration transferred in the acquisition over the fair value of the assets and liabilities acquired recorded as goodwill. The preliminary estimated fair value of assets acquired and liabilities assumed consists of the following (in thousands):

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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 estimated consideration

$
22,045

The Company engaged a third-party specialist to assist management in estimating the fair value of the assets and liabilities. Goodwill is attributable to the future anticipated economic benefits from combining operations of the Company and Delivery Dudes, including future growth into new markets, future customer relationships and the workforce in place. All of the goodwill is expected to be deductible for U.S. federal income tax purposes.While the Company has substantially completed the determination of the fair values of the assets acquired and liabilities assumed, the Company is still finalizing the calculation of the purchase price adjustments pursuant to the asset purchase agreement for the Delivery Dudes Acquisition, which could affect the final fair value analysis. The Company anticipates finalizing the determination of the fair values by the third quarter of 2021.

~~The following table sets forth the components of estimated identifiable intangible assets acquired from Delivery Dudes (in thousands) and their estimated useful lives as of the acquisition date:~~

Amortizable
Life (in years)

Value

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

~~The acquired identifiable intangible assets are amortized on a straight-line basis to reflect the pattern in which the economic benefits of the intangible assets are consumed.~~ ~~The~~ acquired customer relationships were valued using the income approach, specifically, the multi-period excess earnings method, which measures the after-tax cash flows attributable to the existing customer relationships after deducting the operating costs and contributory asset charges associated with economic rents associated with supporting the existing customer relationships. The franchise relationships were also valued using the multi-period excess earnings method. The acquired trade name was valued using the income approach, specifically, the relief from royalty rate method,which measures the cash flow streams attributable to the trade name in the form of royalty payments that would be paid to the owner of the trade name in return for the rights to use the trade name. Developed technology was valued based on the cost approach, specifically the “with & without” methodology which considers the direct replacement and opportunity 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.~~

The results of operations of Delivery Dudes are included in our unaudited condensed consolidated financial statements beginning on the acquisition date, March 11, 2021. Revenue and net ~~loss~~income of Delivery Dudes included in the unaudited condensed consolidated statement of operations in the three months ended ~~June 30, 2021~~March 31, 2022 totaled approximately ~~$3,069~~$3,246 and ~~$581, respectively,~~$254, respectively.

During the second and inthird quarters of 2021, the ~~six months ended June 30, 2021 totaled approximately $3,900 and $602, respectively.~~

~~In connection with the Delivery Dudes Acquisition, the~~ Company incurred direct and incremental costs of $63 and $669 during the three and six months ended June 30, 2021, respectively, consisting of legal and professional fees, which are included in general and administrative expenses in the unaudited condensed consolidated statement of operations in such periods.

~~The Company subsequently~~ acquired the assets of 36 Delivery Dudes franchisees ~~in the quarter ended June 30, 2021~~ for total consideration of approximately ~~$1,812,~~$2,464, including ~~$1,779~~$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, which reflects the pattern in which the economic benefits of the acquired assets are consumed.~~ The results of operations of the acquired franchisees are included in our condensed consolidated financial statements beginning on their acquisition dates and were immaterial. Pro forma results were deemed immaterial to the Company.

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Additional Information

Included in general and administrative expenses in the consolidated statement of operations in certain periods are direct and incremental costs, consisting of legal and professional fees, related to business combinations and asset acquisitions. During the three months ended March 31, 2021, the Company incurred direct and incremental costs of $606 related to the Delivery Dudes Acquisition.

Pro-Forma Financial Information (Unaudited)

The supplemental condensed consolidated results of the Company on an unaudited pro forma basis as if the Delivery Dudes Acquisition had been consummated on January 1, ~~2020~~2021 are ~~as follows~~included in the table below (in thousands):

Three months ended June 30,

Six months ended June 30,

2021

2020

2021

2020

Net revenue

$
49,167

$
63,333

$
102,573

$
109,783

Net income (loss)

$
(5,641
)

$
10,895

$
(8,989
)

$
8,902


	Three Months Ended March 31, 2021

Net revenue		$	53,406
Net income		$	652

These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company been a consolidated company during the ~~periods~~period presented and are not indicative of consolidated results of operations in future periods. Acquisition costs and other non-recurring charges incurred are included in the ~~periods~~period presented.

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5. Accounts Receivable, Net

Accounts receivable consist of the following (in thousands):

	June 30,			December 31,
	2021			2020				March 31, 2022		December 31, 2021
Credit card receivables	$	3,703		$	3,013		Credit card receivables	$	2,204	$	1,354
Residual commissions receivable							Residual commissions receivable	1,388		1,342
Receivables from restaurants and customers		596			334		Receivables from restaurants and customers	593		660
Accounts receivable	$	4,299		$	3,347		Accounts receivable	$	4,185	$	3,356
Less: allowance for doubtful accounts and chargebacks		(416	)		(393	)	Less: allowance for doubtful accounts and chargebacks	(310)		(329)
Accounts receivable, net	$	3,883		$	2,954		Accounts receivable, net	$	3,875	$	3,027

6. Intangibles Assets and Goodwill

Intangible Assets

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and include internally developed software, as well as software to be otherwise marketed, and trademarks/trade name/patents and customer relationships. The Company has determined that the ~~Waitr~~ trademark intangible asset ~~is an~~and domain names related to the rebranding initiative are indefinite-lived ~~asset~~assets and therefore isare not subject to amortization but isare evaluated annually for impairment. The Bite Squad, ~~and~~ Delivery Dudes and Cape Payment Companies trade name intangible assets, however, are being amortized over their estimated useful lives.

Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consist of the following (in thousands):

	As of June 30, 2021
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Intangible Assets, Net			As of March 31, 2022
												Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Intangible Assets, Net
Intangible assets subject to amortization:											Intangible assets subject to amortization:
Software	$	31,311	$	(7,573	)	$	(11,825	)	$	11,913	Software	$	38,033	$	(10,848)	$	(11,779)	$	15,406
Trademarks/Trade name/Patents		6,205		(4,515	)		—			1,690	Trademarks/Trade name/Patents	6,549		(5,756)		—		793
Customer Relationships		89,357		(12,219	)		(57,378	)		19,760	Customer Relationships	96,510		(15,354)		(57,378)		23,778
Total intangible assets subject to amortization											Total intangible assets subject to amortization	141,092		(31,958)		(69,157)		39,977
Trademarks, not subject to amortization											Trademarks, not subject to amortization	3,023		—		—		3,023
Total	$	126,873	$	(24,307	)	$	(69,203	)	$	33,363	Total	$	144,115	$	(31,958)	$	(69,157)	$	43,000

	As of December 31, 2020											As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Intangible Assets, Net			Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Intangible Assets, Net
Intangible assets subject to amortization:											Intangible assets subject to amortization:
Software	$	25,204	$	(6,099	)	$	(11,825	)	$	7,280	Software	$	35,686	$	(9,632)	$	(11,779)	$	14,275
Trademarks/Trade name/Patents		5,405		(3,526	)		—			1,879	Trademarks/Trade name/Patents	6,549		(5,585)		—		964
Customer Relationships		82,845		(10,702	)		(57,378	)		14,765	Customer Relationships	96,510		(14,256)		(57,378)		24,876
Total intangible assets subject to amortization											Total intangible assets subject to amortization	138,745		(29,473)		(69,157)		40,115
Trademarks, not subject to amortization											Trademarks, not subject to amortization	3,011		—		—		3,011
Total	$	113,454	$	(20,327	)	$	(69,203	)	$	23,924	Total	$	141,756	$	(29,473)	$	(69,157)	$	43,126

During the ~~six~~three months ended ~~June 30, 2021, the Company acquired intangible assets in connection with the Delivery Dudes Acquisition (see Note 3 – Business Combinations). Additionally, during the six months ended June 30, 2021,~~March 31, 2022, the Company capitalized approximately ~~$4,137~~$2,347 of software costs related to the development of the ~~Platforms, with an estimated useful life of three years.~~

Platforms.

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The Company recorded amortization expense of ~~$2,233~~$2,485 and ~~$1,562~~$1,832 for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $4,065 and $3,102 for the six months ended June 30, 2021 and 2020,~~ respectively. Estimated future amortization expense of intangible assets subject to amortization as of ~~June 30, 2021~~March 31, 2022 is as follows (in thousands):

	Amortization
The remainder of 2021	$	5,357
2022		9,327
				Amortization
The remainder of 2022			The remainder of 2022	$	8,184
2023		6,709	2023	10,772
2024		4,711	2024	8,712
2025		3,573	2025	5,169
2026			2026	3,448
Thereafter		3,681	Thereafter	3,692
Total future amortization	$	33,358	Total future amortization	$	39,977

Goodwill

The change in the Company’s goodwill balance is as follows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and the year ended December 31, ~~2020~~2021 (in thousands):

	June 30,		December 31,
	2021		2020			March 31, 2022		December 31, 2021
Balance, beginning of period	$	106,734	$	106,734	Balance, beginning of period	$	130,624	$	106,734
Acquisitions during the period		14,343		0	Acquisitions during the period	—		23,890
Impairments during the period					Impairments during the period	(67,190)		—
Balance, end of period	$	121,077	$	106,734	Balance, end of period	$	63,434	$	130,624

The Company recorded ~~$14,343~~$23,890 of goodwill during the ~~six months~~year ended ~~June 30,~~December 31, 2021, including $14,343 associated with the Delivery Dudes Acquisition and $9,547 associated with the Cape Payment Acquisition (see Note 4 – Business Combinations).

Impairments

The Company conducts its goodwill and intangible asset impairment test annually in October, or more frequently if indicators of impairment exist. For purposes of testing for goodwill impairment, the Company has 1 reporting unit. As a result of a significant decline in the Company’s share price and market capitalization in mid-March 2022, as well as other macroeconomic and industry related conditions during the first quarter of 2022, the Company conducted its impairment test as of the valuation date of March 15, 2022. The impairment test was conducted in accordance with FASB ASC Topic 360, Impairment and Disposal of Long-Lived Assets (“ASC 360”) for certain long-lived assets, including capitalized contract costs, developed technology, customer relationships, and trade names, and in accordance with FASB ASC Topic 350, Intangibles – Goodwill and Other (“ASC 350”)for the reporting unit’s goodwill. The Company engaged a third-party to assist management in estimating the fair values of long-lived assets and the reporting unit for purposes of impairment testing under ASC 360 and ASC 350.

ASC 360 requires long-lived assets to be tested for impairment using a three-step impairment test. Step 1 of the test is giving consideration to whether indicators of impairment of long-lived assets are present. Given the significant decline in the Company’s market capitalization and other macroeconomic factors, indications were that an impairment may exist and the Company proceeded to Step 2 to determine whether an impairment loss should be recognized. As a part of Step 2, the Company performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in question to their carrying amounts. Given that the undiscounted cash flows for the long-lived assets were above the carrying amounts, the Company determined that the long-lived asset group is recoverable, and no impairment exists as of March 15, 2022.

Customer relationships, the Company’s primary long-lived asset, was tested for impairment under the guidance in ASC 360. The customer relationships intangible asset was valued using the Income Approach, specifically, the multi-period excess earnings method, which measures the after-tax cash flows attributable to the existing customer relationships

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after deducting the operating costs and contributory asset charges associated with supporting the existing customer relationships. The customer relationships analysis represents a Level 3 measurement as it was based on unobservable inputs reflecting the Company’s assumptions used in developing a fair value estimate. These inputs required significant judgments and estimates at the time of the valuation.

ASC 350 requires goodwill and other indefinite lived assets to be tested for impairment at the reporting unit level. For ASC 350 testing purposes, the Company compared the fair value of the reporting unit with its carrying amount. The fair value of the reporting unit was estimated giving consideration to the Income Approach, including the discounted cash flow method, and the Market Approach, including the similar transactions method and guideline public company method. Significant inputs and assumptions in the ASC 350 analysis included forecasts (e.g., revenue, operating costs, capital expenditures, etc.), discount rate, long-term growth rate, tax rates, etc. for the reporting unit under the Income Approach and market-based enterprise value to revenue multiples under the Market Approach.

As a result of the ~~allocation~~ASC 350 analysis, the Company recognized a non-cash pre-tax impairment loss of $67,190 during the ~~purchase price over assets acquired and liabilities assumed~~three months ended March 31, 2022 to write down the carrying value of goodwill to its implied fair value. The non-cash impairment loss is included in the ~~Delivery Dudes Acquisition (see~~ ~~Note 3 – Business Combinations~~).

6.unaudited condensed consolidated statement of operations under the caption “goodwill impairment” during the three months ended March 31, 2022.

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 described above could change in future periods. There can be no assurance that additional goodwill or intangible assets will not be impaired in future periods.

7. Other Current Liabilities

Other current liabilities consist of the following (in thousands):

	June 30,		December 31,
	2021		2020			March 31, 2022		December 31, 2021
Accrued insurance expenses	$	4,263	$	3,392	Accrued insurance expenses	$	4,082	$	3,932
Accrued estimated workers' compensation expenses		1,047		1,725	Accrued estimated workers' compensation expenses	524		644
Accrued medical contingency		454		448	Accrued medical contingency	370		370
Accrued legal contingency					Accrued legal contingency	1,250		1,250
Accrued sales tax payable		374		418	Accrued sales tax payable	119		175
Accrued legal contingency		4,700		—
Accrued cash incentives		2,395		60	Accrued cash incentives	51		3,130
Other accrued expenses		4,768		4,001	Other accrued expenses	5,713		3,685
Contingent consideration liability					Contingent consideration liability	2,020		—
Unclaimed property		1,924		1,679	Unclaimed property	2,542		2,372
Other current liabilities		4,317		2,199	Other current liabilities	3,384		3,751
Total other current liabilities	$	24,242	$	13,922	Total other current liabilities	$	20,055	$	19,309

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8. Debt

The Company’s outstanding debt obligations are as follows (in thousands):

	Coupon Rate	Effective
	Range in 2020	Interest Rate		June 30,			December 31,
	through 2Q21	at June 30, 2021	Maturity	2021			2020				Coupon Rate Range in 2021 through 1Q22	Effective Interest Rate at March 31, 2022	Maturity	March 31, 2022		December 31, 2021
Term Loan	5.125% - 7.125%	10.62%	November 2023	$	35,007		$	49,479		Term Loan	5.125% - 7.125%	10.62%	November 2023	$	35,007	$	35,007
Notes	4.0% - 6.0%	6.49%	November 2023		49,504			49,504		Notes	4.0% - 6.0%	6.49%	November 2023	49,504		49,504
				$	84,511		$	98,983						$	84,511	$	84,511
Less: unamortized debt issuance costs on Term Loan					(2,661	)		(3,541	)	Less: unamortized debt issuance costs on Term Loan				(1,847)		(2,099)
Less: unamortized debt issuance costs on Notes					(636	)		(1,224	)	Less: unamortized debt issuance costs on Notes				(380)		(435)
Long term debt - related party				$	81,214		$	94,218		Long term debt - related party				$	82,284	$	81,977

Short-term loans for insurance financing	3.99%	n/a	March 2022		5,465			2,726		Short-term loans for insurance financing	3.49% - 3.99%	n/a	August 2022 - October 2022	1,293		3,142
Total outstanding debt				$	86,679		$	96,944		Total outstanding debt				$	83,577	$	85,119

Interest expense related to the Company’s outstanding debt totaled ~~$1,681~~$1,704 and ~~$2,490~~$1,901 for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $3,582 and $5,404 for the six months ended June 30, 2021 and 2020,~~ respectively. Interest expense includes interest on outstanding borrowings and amortization of debt issuance ~~costs.~~costs and debt discount. See Note 15 – Related Party Transactions for additional information regarding the Company’s related party long-term debt.

~~Amendments to Loan Agreements~~

On March 9, 2021, the Company entered into an amendment to the Credit Agreement and an amendment to the Convertible Notes Agreement (together, the “Amended Loan Agreements”). The Amended Loan Agreements provide, among other things, for the Delivery Dudes Acquisition being included in the definition of Permitted Acquisition (as defined in the Credit Agreement and Convertible Notes Agreement). Additionally, pursuant to the amendment to the Credit Agreement, the Company made a $15,000 prepayment on the

Term Loan ~~on March 16, 2021. See~~

~~Term Loan~~ ~~and~~ ~~Notes~~ ~~below for definitions of certain capitalized terms included above.~~

~~The Company evaluated the amendments in the Amended Loan Agreements under ASC 470-50, “Debt Modification and Extinguishment~~”, and concluded that the amendments did not meet the characteristics of debt extinguishments under ASC 470-50. Accordingly, the amendments were treated as a debt modification, and thus, no gain or loss was recorded. A new effective interest rate for the Term Loan that equates the revised cash flows to the carrying amount of the original debt is computed and applied prospectively.

~~Term Loan~~

The Company maintains an agreement with Luxor Capital Group, LP (“Luxor Capital”) (as amended or otherwise modified from time to time, the “Credit Agreement”). The Credit Agreement provides for a senior secured first priority term loan (the “Term Loan”) which is guaranteed by certain subsidiaries of the Company. In connection with the Term Loan, the Company issued to Luxor Capital warrants which are ~~currently~~ exercisable for ~~478,464~~579,365 shares of the Company’s common stock at March 31, 2022 (see Note 12 – Stockholders’ Equity).

Interest on the Term Loan is payable quarterly, in cash or, at the election of the Company, as a payment-in-kind, with interest paid in-kind being added to the aggregate principal balance. The Credit Agreement includes a number of customary covenants that, among other things, limit or restrict the ability of ~~each of~~ the Company and its subsidiaries to incur additional debt, incur liens on assets, engage in mergers or consolidations, dispose of assets, pay dividends or repurchase capital stock and repay certain junior 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 June 30, 2021.~~

Notes

Additionally, the Company issued unsecured convertible promissory notes (the “Notes”) to Luxor Capital Partners, LP, Luxor Capital Partners Offshore Master Fund, LP, Luxor Wavefront, LP and Lugard Road Capital Master Fund, LP (the “Luxor Entities”) pursuant to an agreement, herein referred to as the “Convertible Notes Agreement”.

The net carrying value of the Notes as of March 31, 2022 and December 31, 2021 totaled $49,124 and $49,069, respectively.

Interest on the Notes is payable quarterly, in cash or, at the Company’s election, up to one-half of the dollar amount of an interest payment due can be paid-in-kind. Interest paid-in-kind is added to the aggregate principal balance. Interest expense related to the Notes was comprised of the following for the three months ended March 31, 2022 and 2021 (in thousands):

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	Three Months Ended March 31,
	2022		2021
Contractual interest expense	$	743	$	495
Amortization of debt discount	54		290
	$	797	$	785

The Notes include

~~TABLE_CONTENTS~~

customary anti-dilution protection, including broad-based weighted average adjustments for issuances of additional ~~shares (down-round features).~~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 Notes are ~~currently~~ convertible at the holder’s election into shares of the Company’s common stock at a rate of ~~$10.45~~$8.63 per ~~share.~~

share at March 31, 2022.

The Company’s payment obligations on the Notes are not guaranteed. The Convertible Notes Agreement contains negative covenants, affirmative covenants, representations and warranties and events of default that are substantially similar to those that are set forth in the Credit Agreement (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). ~~We believe that we were in compliance with all covenants under the Convertible Notes Agreement~~

Short-Term Loans

The Company has outstanding short-term loans as of ~~June 30, 2021.~~

~~Short-Term Loans~~

~~The Company’s short-term loans include loans to finance~~March 31, 2022 for the purpose of financing portions of ~~certain~~its annual insurance premium obligations. The loans are payable in monthly installments until maturity.

9. Income Taxes

The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable. The Company recorded income tax expense of ~~$33~~$16 and ~~$17~~$24 for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $57 and $34 for the six months ended June 30, 2021 and 2020,~~ respectively. The Company’s income tax expense is entirely related to state taxes in various jurisdictions. ~~A partial~~The Company recorded a full valuation allowance ~~has been recorded~~against net deferred tax assets as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 as the Company has generated net operating losses prior to the second quarter of 2020 and in the first, second and ~~second~~fourth quarters of 2021 and first quarter of 2022, 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.

~~As of June 30, 2021,~~

During 2020, the Company ~~recognized $1,334 in~~was permitted to defer payment of the employer portion of certain payroll ~~tax deferrals~~taxes under the Coronavirus Aid, Relief and Economic Security (CARES) ~~Act,~~Act. The Company did not defer any payroll taxes after December 31, 2020. As of March 31, 2022, the Company has $667 of employer payroll tax deferrals outstanding, all of which ~~50% will be paid in 2021 and 50%~~ will be paid in 2022. ~~These amounts are~~This amount is reflected in other current ~~and non-current~~ liabilities in the accompanying unaudited condensed consolidated balance sheet.

9~~. Correction of Prior Period Error~~

During the third quarter of 2020, the Company identified and corrected an immaterial error related to the understatement of an accrued medical contingency (the “Medical Contingency”) that affected previously issued consolidated financial statements. The Company became liable for a claim due to the insolvency of a previous workers compensation insurer. The Company assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No. 99, and concluded that the error was not material to any of its previously reported financial statements based upon qualitative aspects of the error. However, as the error was large quantitatively, previously issued financial statements have been revised and are presented for comparative purposes. The Company engaged a third-party actuary to assist in the calculation of the estimated loss exposure and determined that the accrued liability recorded at December 31, 2018 for the claim was understated by approximately $17,505, which resulted in additional expense for the year ended December 31, 2018 of $17,505.

The cumulative impact of the error correction on the Company’s retained earnings and stockholders’ equity as of January 1, 2020 was $17,505. As shown in the table below, there was no impact to net cash provided by operating activities for the six months ended June 30, 2020. Net income (loss) for the three and six months ended June 30, 2020 was not impacted by the revision. Line items affected by the revision are included in the tables below.

~~Revised Consolidated Cash Flow Statement (unaudited) (in thousands)~~

Six Months Ended June 30, 2020

As Reported

Adjustment

As Revised

Cash flows from operating activities:

Changes in liabilities:

Accrued medical contingency

$
—

$
(112
)

$
(112
)
Accrued workers' compensation liability

(117
)

116

(1
)
Other current liabilities

1,236

(4
)

1,232

Net cash provided by (used in) operating activities

18,961

—

18,961

~~TABLE_CONTENTS~~

~~Revised Consolidated Balance Sheet (unaudited) (in thousands)~~

June 30, 2020

As Reported

Adjustment

As Revised

Other current liabilities

$
13,923

$
659

$
14,582

Total current liabilities

44,532

659

45,191

Accrued medical contingency - long term

—

17,091

17,091

Accrued workers' compensation liability - long term

346

(245
)

101

Total liabilities

148,688

17,505

166,193

Accumulated deficit

(353,686
)

(17,505
)

(371,191
)
Total stockholders' equity

66,692

(17,505
)

49,187

10. Commitments and Contingent Liabilities

~~Leases~~

As of June 30, 2021, the Company had operating lease agreements for office facilities in various locations in the United States, which expire on various dates through August 2026. The terms of the lease agreements provide for rental payments that generally increase on an annual basis. The Company does not have any finance leases. The Company recognizes expense for leases on a straight-line basis over the lease term, which the Company generally expects to be the non-cancellable period of the lease. As of June 30, 2021, the Company recognized on its unaudited condensed consolidated balance sheet operating right-of-use assets of $4,903 and current and noncurrent operating lease liabilities of $1,603 and $3,622, respectively. Operating lease costs recognized in the unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2021 totaled $453 and $854, respectively.

~~The following table presents supplemental cash flow information and the weighted-average lease term and discount rate for the Company’s operating leases for the six months ended June 30, 2021:~~

Six Months Ended June 30, 2021

Cash paid for operating lease liabilities (in thousands)

$
780

Weighted-average remaining lease term (years)

4.2

Weighted-average discount rate

5.0
%

~~As of June 30, 2021, the future minimum lease payments required under non-cancelable operating leases were as follows (in thousands):~~

Amount

The remainder of 2021

$
917

2022

1,654

2023

1,038

2024

816

2025

803

Thereafter

535

Total future lease payments

$
5,763

Less: imputed interest

(538
)
Present value of operating lease liabilities

$
5,225

~~Medical Contingency Claim~~

As of June 30, 2021 and December 31, 2020, the long-term portion of the estimated Medical Contingency claim totaled $16,728 and $16,987, respectively, and is included in the unaudited condensed consolidated balance sheet as accrued medical contingency. The current portion of the Medical Contingency totaled $454 and $448 as of June 30, 2021 and December 31, 2020, respectively, and is included in other current liabilities. See ~~Note 9 – Correction of Prior Period Error~~ ~~for additional information.~~

Workers Compensation and Auto Policy Claims

We establish a liability under our workers’ compensation and auto insurance policies for claims incurred within our self-insured retention levels and an estimate for claims incurred but not yet reported. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020, $4,510~~2021, $4,446 and ~~$4,697,~~$4,305, respectively, in outstanding workers’ compensation and auto policy ~~claims~~reserves are included in the unaudited condensed consolidated balance ~~sheet in other current liabilities.~~

~~TABLE_CONTENTS~~

sheet.

Legal Matters

TABLE_CONTENTS

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. During the three months ended March 31, 2022, the Company ~~recorded~~accrued an ~~incremental $700~~$800 reserve in connection with its option to extend the ~~Settlement.~~license period by an additional eight months. The accrued legal ~~settlement of $4,700~~reserve is included in other current liabilities in the unaudited condensed consolidated balance sheet at ~~June 30, 2021. Included~~March 31, 2022 and in other expense in the unaudited condensed consolidated statement of operations for the three ~~and six~~ months ended ~~June 30, 2021 is $700 and $4,700, respectively, related to the accrued legal settlement.~~

March 31, 2022.

In April 2019, the Company was 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 United States District Court for the Western District of Louisiana. ~~Plaintiffs allege, among other things,~~The plaintiffs assert claims for breach of contract and violation of the duty of good faith and fair dealing, and ~~unjust enrichment, 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 two separate classes at issue. In February 2022, the parties reached a proposed settlement in principle to resolve the litigation in its entirety. While subject to Court approval and final written agreement between the parties regarding the pricing mechanism, the key terms of the proposed settlement include a total potential settlement fund of $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 the balance of the Gross Settlement Amount available for distribution to members of the settlement classes that file valid claims. The Company accrued a $1,250 reserve in connection with this lawsuit during the ~~representative plaintiffs are attempting to certify. Plaintiff’s deadline to file a motion for class certification~~three months ended December 31, 2021. The accrued legal contingency is ~~October 2021. Waitr maintains that~~included in other current liabilities in the ~~underlying allegations and claims lack merit, and that the classes, as pled, are incapable of certification. Waitr continues to vigorously defend the suit.~~

unaudited condensed consolidated balance sheet at March 31, 2022.

In September 2019, 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 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.~~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.

In addition to the lawsuits described above, Waitr is involved in other litigation arising from the normal course of business activities, including, without limitation, vehicle accidents involving employees and independent contractor drivers resulting in claims alleging personal injuries and medical expenses, labor and employment claims, allegations of ~~infringement, misappropriation and other violations of~~ intellectual property ~~or other rights, lawsuits and claims involving personal injuries, physical damage~~infringement, and workers’ compensation ~~benefits suffered~~benefit claims as a result of alleged conduct involving its employees, independent contractor drivers, and third-party negligence. Although Waitr believes that it maintains insurance with standard deductibles that generally covers liability for potential damages 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, ~~often these~~there are limits to insurance coverage and in certain instances claims are met with denial of coverage positions by the ~~carriers, and there are limits to insurance coverage;~~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.

11. Stock-Based Awards and Cash-Based Awards

In June 2020, the Company’s stockholders approved the Waitr Holdings Inc. Amended and Restated 2018 Omnibus Incentive Plan (the “2018 Incentive Plan”), which 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. As of ~~June 30, 2021,~~March 31, 2022, there were ~~6,632,886~~9,664,120 shares of common stock available for future grants pursuant to the 2018 Incentive Plan. The Company also has outstanding equity awards under the 2014 Stock Plan (as amended in 2017, the “Amended 2014 Plan”). Total compensation expense related to awards under the Company’s incentive plans was ~~$2,387~~$1,671 and ~~$602~~$2,078 for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $4,465 and $1,450 for the six months ended June 30, 2021 and 2020,~~ respectively.

TABLE_CONTENTS

Stock-Based Awards

Stock Options

During the three months ended March 31, 2021, 500,000 stock options were granted under the 2018 Incentive ~~Plan, with an aggregate grant date~~Plan. Such options were subsequently forfeited during the three months ended September 30, 2021. There were no grants of stock options during the three months ended March 31, 2022. The Company determines the fair value of $1,095. The weighted average exercise price of the options is $2.78, and the options will vest in twelve quarterly installments during the period from October 1, 2021 through July 1, 2024. The options have an approximate 5 year exercise term. 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 vest 50% on each of the first two anniversaries of the grant date. The options have a ~~five-year~~ ~~exercise term.~~

~~The fair value of each~~ stock option ~~grant during the six months ended June 30, 2021 and 2020 was estimated as of the~~grants on grant date using an option-pricing model with ~~the~~various assumptions ~~included in the table below. Expected~~regarding risk-free rate, volatility ~~for stock options is estimated based on a combination of the historical volatility of the Company’s stock price~~ and ~~the historical and implied volatility of comparable publicly traded companies.~~

2021

2020

Weighted-average fair value at grant

$
2.19

$
0.24

Risk free interest rate

0.46%

1.54%

Expected volatility

131.4%

100.6%

Expected option life (years)

3.59

3.25

expected term. The Company recognized compensation expense for stock options of ~~$358~~$13 and ~~$365~~$334 for the three months ended ~~June 30,~~March 31, 2022 and 2021, respectively. As of March 31, 2022, all outstanding stock options were fully vested and ~~2020, respectively, and $692 and $738 for the six months ended June 30, 2021 and 2020, respectively. Unrecognized~~there was no remaining unrecognized compensation cost related to ~~unvested~~ stock ~~options as of June 30, 2021 totaled $1,684, with a weighted average remaining vesting period of approximately 0.9 years.~~

options.

The stock option activity under the Company’s incentive plans during the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


	Six Months Ended June 30, 2021							Six Months Ended June 30, 2020								Three Months Ended March 31, 2022					Three Months Ended March 31, 2021
	Number of Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value			Number of Shares	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Balance, beginning of period		9,753,257		$	0.43	$	0.33		445,721		$	3.66	$	5.04	Balance, beginning of period	9,656,928	$	0.39	$	0.28	9,753,257	$	0.43	$	0.33
Granted		500,000			2.78		2.19		9,572,397			0.37		0.24	Granted	—	—		—		500,000	2.78		2.19
Exercised		(9,209	)		0.90		4.50		(54,478	)		0.68		3.51	Exercised	—	—		—		(6,779)	0.88		4.73
Forfeited		(21,553	)		6.49		4.97		(93,282	)		5.67		5.77	Forfeited	(12,014)	1.95		3.74		(13,995)	4.58		4.38
Expired		(10,097	)		3.47		4.13		(80,758	)		1.95		5.44	Expired	—	—		—		(6,536)	4.83		3.26
Balance, end of period		10,212,398		$	0.53	$	0.40		9,789,600		$	0.45	$	0.34	Balance, end of period	9,644,914	$	0.39	$	0.28	10,225,947	$	0.54	$	0.41

Outstanding stock options, which were fully vested and expected to vest and exercisable are as follows as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~

2021:


	As of June 30, 2021				As of December 31, 2020					As of March 31, 2022				As of December 31, 2021
	Options Fully Vested and Expected to Vest		Options Exercisable		Options Fully Vested and Expected to Vest		Options Exercisable			Options Fully Vested and Expected to Vest		Options Exercisable		Options Fully Vested and Expected to Vest		Options Exercisable
Number of Options		10,212,398		4,915,529		9,753,257		132,846	Number of Options	9,644,914		9,644,914		9,656,928		4,870,026
Weighted-average remaining contractual term (years)		3.63		3.59		4.07		6.82	Weighted-average remaining contractual term (years)	2.78		2.78		3.03		3.06
Weighted-average exercise price	$	0.53	$	0.45	$	0.43	$	3.20	Weighted-average exercise price	$	0.39	$	0.39	$	0.39	$	0.40
Aggregate Intrinsic Value (in thousands)	$	13,579	$	6,826	$	23,285	$	178	Aggregate Intrinsic Value (in thousands)	$	—	$	—	$	3,543	$	1,773

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the fair value of the common stock and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on each date. This amount will change in future periods based on the fair value of the Company’s stock and the number of options outstanding. The aggregate intrinsic value of awards exercised was ~~$5 and $29~~$15 during the three months ended ~~June 30, 2021 and 2020, respectively, and $20 and $41 during the six months ended June 30, 2021 and 2020, respectively.~~March 31, 2021. Upon exercise, the Company issued new common stock.

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There were no exercises of stock options during the three months ended March 31, 2022.

Restricted Stock

The Company’s restricted stock grants include performance-based and time-based vesting awards. The fair value of restricted shares is typically determined based on the closing price of the Company’s common stock on the date of grant.

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Performance-Based Awards

As of ~~June 30, 2021,~~March 31, 2022, there were ~~3,159,325~~3,134,325 performance-based RSUs outstanding under the Company’s 2018 Incentive ~~Plan, including 3,134,325~~Plan. Such RSUs were granted to the Company’s chief executive officer, Carl Grimstad, 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 a change of control, as defined in Mr. Grimstad’s employment agreement with the Company, subject to his continuous employment with the Company through the date of a change of control; provided, however, that the Grimstad RSU Grant shall fully vest in the event that Mr. Grimstad terminates his employment for good reason or he is terminated by the Company for reason other than misconduct. ~~NaN~~No stock-based compensation expense will be recognized for the Grimstad RSU Grant until such time that is probable that the performance goal will be achieved, or at the time that Mr. Grimstad terminates his employment for good reason or he is terminated by the Company for reason other than misconduct, should either occur.

Awards with Time-Based Vesting

During the ~~six~~three months ended ~~June 30, 2021, a total of 5,308,960~~March 31, 2022, 3,630,000 RSUs with time-based vesting were granted pursuant to the ~~Company’s~~ 2018 Incentive Plan (with an aggregate grant fair value of value of ~~$13,538)~~$2,006). ~~Included in such grants were 600,960~~The RSUs granted to non-employee directors vesting upon the earlier of June 15, 2022 and the date of the 2022 annual meeting of the Company’s stockholders and 1,208,000 RSUs granted to employees and consultants vestinggenerally vest over three ~~years. The RSU grants vest in various manners~~years in accordance with the terms specified in the applicable award agreements, all of which accelerate and vest upon a change of control. Also included in such grants was an award of 3,500,000 RSUs granted (the “Grimstad 2021 RSU Grant”) to Mr. Grimstad, with an aggregate grant date fair value of $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 change of 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.

The Company recognized compensation expense for restricted stock of ~~$2,029~~$1,658 and ~~$237~~$1,744 during the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $3,773 and $712 during the six months ended June 30, 2021 and 2020,~~ respectively. Unrecognized compensation cost related to unvested time-based RSUs as of ~~June 30, 2021~~March 31, 2022 totaled ~~$16,288,~~$14,707, with a weighted average remaining vesting period of approximately ~~2.79~~2.5 years. The total fair value of restricted shares that vested during the three months ended ~~June 30,~~March 31, 2022 and 2021 was $68 and ~~2020 was $2,893 and $1,147, respectively, and during the six months ended June 30, 2021 and 2020 was $5,386 and $1,153,~~$2,247, respectively.

The activity for restricted stock with time-based vesting under the Company’s incentive plans is as follows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~

2021:


	Six Months Ended June 30, 2021							Six Months Ended June 30, 2020								Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
	Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)		Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)			Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)
Nonvested, beginning of period		4,558,603		$	2.23		1.71		3,182,639		$	1.42		2.16	Nonvested, beginning of period	8,614,746	$	2.15	2.5	4,558,603	$	2.23	1.71
Granted		5,308,960			2.55				2,754,501			1.95			Granted	3,630,000	0.55			195,000	3.66
Shares vested		(2,103,310	)		2.03				(545,319	)		1.94			Shares vested	(152,692)	2.47			(749,870)	0.97
Forfeitures		(230,084	)		1.50				(1,459,580	)		1.27			Forfeitures	(286,168)	1.92			(126,084)	1.05
Nonvested, end of period		7,534,169		$	2.53		2.79		3,932,241		$	1.78		1.40	Nonvested, end of period	11,805,886	$	1.66	2.5	3,877,649	$	2.58	1.77

Cash-Based Awards

Performance Bonus Agreement

On April ~~23,~~ 2020, the Company entered into a 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 change of control in which the holders of the Company’s common stock receive per share consideration that is

~~TABLE_CONTENTS~~

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 of the change of control; provided, however, that in the event Mr. Grimstad terminates his employment for good reason or the Company terminates his employment other than for misconduct, Mr. Grimstad will be entitled to receive the Bonus provided the change of control occurs on or before January 3, 2025. Compensation expense related to the bonus agreement will not be recognized until such time that is probable that the performance goal will be achieved.

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12. Stockholders’ Equity

Common Stock

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were 249,000,000 shares of common stock authorized and ~~116,701,277~~155,705,647 and ~~111,259,037~~146,094,300 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 ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021. The Company’s common stockholders are entitled to one vote per share.

At-the-Market Offering

In November 2021, the Company entered into a third amended and restated open market sale agreement with respect to an at-the-market offering program (the “ATM Program”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $50,000, through Jefferies LLC (“Jefferies”) as its sales agent. The issuance and sale of shares by the Company under the agreement was made pursuant to the Company’s effective registration statement on Form S-3 which was filed on April 4, 2019. Details of sales through March 31, 2022 pursuant to the ATM Program are included in the table below. As of March 31, 2022, approximately $42,289 remained unsold under the ATM Program. See Note 16 - Subsequent Events for details regarding sales pursuant to the ATM Program in April 2022.


	November 2021 ATM Program
	Sales during December 2021		Sales during the three months ended March 31, 2022		Total
Maximum aggregate offering price (in thousands)					$	50,000
Total shares sold	1,679,631		9,458,655		11,138,286
Average sales price per share	$	0.83	$	0.67	$	0.69
Gross proceeds (in thousands)	$	1,398	$	6,313	$	7,711
Net proceeds (in thousands)	$	1,359	$	6,235	$	7,594

Preferred Stock

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company was authorized to issue 1,000,000 shares of preferred stock ($0.0001 par value per share). There were 0no issued or outstanding preferred shares as of ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~

2021.

Notes

The Company has outstanding Notes which are convertible into shares of the Company’s common stock at a rate of $8.63 per share. See Note 8 – Debt for additional information regarding the Notes.

Warrants

In November 2018, the Company issued to Luxor Capital warrants which are ~~currently~~ exercisable for ~~478,464~~579,365 shares of the Company’s common stock at March 31, 2022, with ~~a current~~an exercise price of ~~$10.45~~$8.63 per share (the “Debt Warrants”). The Debt Warrants expire on November 15, 2022 and include customary anti-dilution protection, including broad-based weighted average adjustments for certain issuances of additional ~~shares (down-round features).~~shares. Additionally, holders of the Debt Warrants have customary registration rights with respect to the shares underlying the Debt Warrants.

13. Fair Value Measurements

Medical Contingency

At ~~June 30, 2021 and~~ December 31, ~~2020,~~2021, the Company had an outstanding medical contingency claim which iswas measured at fair value on a recurring ~~basis (see~~ ~~Note 10 – Commitments and Contingencies~~).basis. The ~~long-term portion of~~estimated loss exposure for the medical contingency claim reflected the liability for ~~such claim is included in the unaudited condensed consolidated balance sheets under accrued~~unpaid medical ~~contingency, with the short-term portion included within other current liabilities.~~expenses and dependent death benefits, totaling $423 as of December 31, 2021. The medical contingency claim is measured at fair value using a method that incorporates life-expectancy assumptions, along with projected annual medical costs for each future year, adjusted for inflation. An average annual inflation rate of 3.5% wasanalysis used in the ~~development~~

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measurement of the ~~actuarial estimate~~reserve for ~~medical costs, based on historical medical cost inflation trends as published by~~ the U.S. Bureau of Labor Statistics. Additionally, the measurement includes factors to derive a probability-weighted average of future payments in order to reflect variations from the life-expectancy assumptions, using CDC National Vital Statistics Reports as a tool in the analysis. Projected cash flows are discounted using an interest rate consistent with the U.S. 30-year treasury yield curve rates.

~~The~~ medical contingency ~~claim analysis represents a Level 3 measurement as it was based on unobservable inputs reflecting~~reflected the Company’s assumptions regarding unpaid medical expenses and estimated death benefits used in developing the fair value ~~estimate. The inputs used in the measurement, particularly life expectancy~~estimate and projected medical costs, are sensitive inputs to the measurement and changes to either could result in significantly higher or lower fair value measurements. The Company utilized historical transactional data regarding the claim, along with projections for future comprehensive medical care costs.was a Level 3 measurement. These inputs required significant judgments and estimates at the time of the valuation.

At March 31, 2022, management no longer deemed the medical contingency claim a liability requiring fair value measurement estimation as the remaining liability at such time consisted entirely of discrete costs related to certain unpaid medical expenses. Accordingly, during the three months ended March 31, 2022, the medical contingency claim was transferred out the Level 3 fair value hierarchy.

Contingent Consideration

The fair value of contingent consideration is measured at acquisition date, and at the end of each reporting period through the term of the arrangement, using the Black Scholes option-pricing model with assumptions for volatility and risk-free rate. Contingent consideration relates to the earnout provision in the Company’s acquisition of the Cape Payment Companies in August 2021 and the future contingent payment based on the achievement of certain revenue targets (see Note 4 – Business Combinations). 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 measurement was 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. The Company engaged a third-party specialist to assist management in estimating the fair value of the contingent consideration obligation.

Summary by Fair Value Hierarchy

The following table presents the Company’s liabilities measured at fair value on a recurring basis as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):

	As of June 30, 2021
	Level 1		Level 2		Level 3		Total
										As of March 31, 2022
										Level 1		Level 2		Level 3		Total
Liabilities									Liabilities

Contingent consideration									Contingent consideration	$	—	$	—	$	2,020	$	2,020
Total liabilities measured and recorded at fair value									Total liabilities measured and recorded at fair value	$	—	$	—	$	2,020	$	2,020

										As of December 31, 2021
										Level 1		Level 2		Level 3		Total
Liabilities									Liabilities
Accrued medical contingency	$	—	$	—	$	17,182	$	17,182	Accrued medical contingency	$	—	$	—	$	423	$	423

	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities
Accrued medical contingency	$	—	$	—	$	17,435	$	17,435
Contingent consideration									Contingent consideration	—		—		1,939		1,939
Total liabilities measured and recorded at fair value									Total liabilities measured and recorded at fair value	$	—	$	—	$	2,362	$	2,362

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The Company had 0no assets required to be measured at fair value on a recurring basis at ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~ 2021.

Adjustments to the fair value of the accrued medical contingency are recognized in other expense (income) on the condensed consolidated statement of operations. ~~There have been 0 transfers between levels during the periods presented in the accompanying condensed consolidated financial statements.~~ The following table presents a reconciliation of ~~liabilities~~the accrued medical contingency liability classified as a Level 3 financial ~~instruments~~instrument for the periods indicated (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
															Medical Contingency
														Three Months Ended March 31,
															2022		2021
Balance, beginning of the period	$	17,300		$	17,812		$	17,435		$	17,883		Balance, beginning of the period		$	423	$	17,435
Increases/additions		41			—			84			—		Increases/additions		—		43
Reductions/settlements		(159	)		(45	)		(337	)		(116	)	Reductions/settlements		(53)		(178)
Transfers out of Level 3													Transfers out of Level 3		(370)		—
Balance, end of the period	$	17,182		$	17,767		$	17,182		$	17,767		Balance, end of the period		$	—	$	17,300

Adjustments to the fair value of the contingent consideration liability at the end of each reporting period are recognized in income (loss) from operations in the condensed consolidated statement of operations. The following table presents a reconciliation of the contingent consideration liability classified as a Level 3 financial instrument for the three months ended March 31, 2022 (in thousands):


	Contingent Consideration
Balance, beginning of the period	$	1,939
Additions	—
Increase in fair value	81
Reductions/settlements	—
Balance, end of the period	$	2,020

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 non-recurring basis. The Company generally applies fair value concepts in recording assets and liabilities acquired in business combinations and asset acquisitions (see Note 34 – Business Combinations).

Fair value concepts are also generally applied in estimating the fair value of long-lived assets and a reporting unit in connection with impairment analyses. See Note 6 – Intangible Assets and Goodwill, for further discussion of the fair value of long-lived assets and the reporting unit associated with impairment testing conducted at March 15, 2022.

14. ~~Earnings (Loss)~~Loss Per Share Attributable to Common Stockholders

The calculation of basic and diluted ~~income (loss)~~loss per share attributable to common stockholders for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows (in thousands, except share and per share data):

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Basic income (loss) per share:

Net income (loss) attributable to common stockholders - basic

$
(5,641
)

$
10,653

$
(9,353
)

$
8,551

Weighted average number of shares outstanding

115,644,790

95,053,207

113,998,589

85,968,962

Basic income (loss) per common share

$
(0.05
)

$
0.11

$
(0.08
)

$
0.10

Diluted income (loss) per share:

Net income (loss) attributable to common stockholders - diluted

$
(5,641
)

$
10,653

$
(9,353
)

$
8,551

Weighted average number of shares outstanding

115,644,790

95,053,207

113,998,589

85,968,962

Effect of dilutive securities:

   Stock options

—

6,842,922

—

3,427,138

   Restricted stock units

—

4,055,103

—

2,373,360

   Warrants

—

—

—

—

Weighted average diluted shares

115,644,790

105,951,232

113,998,589

91,769,460

Diluted income (loss) per common share

$
(0.05
)

$
0.10

$
(0.08
)

$
0.09


	Three Months Ended March 31,
		2022		2021
Basic and diluted loss per share:
Net loss attributable to common stockholders - basic and diluted		$	(77,216)	$	(3,712)
Weighted average number of shares outstanding		153,629,968		112,334,094
Basic and diluted loss per common share		$	(0.50)	$	(0.03)

The Company has outstanding Notes which are convertible into shares of the Company’s common stock. See Note 78 – Debt for additional details on the Notes. Based on the conversion price in effect at the end of the respective periods, the Notes were convertible into ~~4,737,237~~5,736,283 and ~~4,728,127~~4,737,237 shares, respectively, of the Company’s common stock at ~~June 30, 2021~~March 31,

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2022 and ~~2020. For the three and six months ended June 30, 2021, the Company was in a net loss position, therefore, the~~2021. Such shares ~~that would be issued upon conversion of the Notes~~ were excluded from the fully diluted calculations because the effect on net loss per common share ~~calculation as the effect~~ would have been antidilutive. Furthermore, during the three and six months ended June 30, 2021 and 2020, the Company’s weighted average common stock price was below the Notes conversion price for such periods. Accordingly, the shares were not considered in the dilutive earnings per share calculation.

anti-dilutive.

Additionally, the following table includes securities outstanding at the end of the respective periods, which have been excluded from the fully diluted calculations because the effect on net ~~earnings (loss)~~loss per common share would have been antidilutive:


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
	2021		2020		2021		2020				2022	2021
Antidilutive shares underlying stock-based awards:									Antidilutive shares underlying stock-based awards:
Stock options		10,212,398		84,747		10,212,398		84,747	Stock options		9,644,914	10,225,947
Restricted stock units		10,693,494		1,917,091		10,693,494		1,917,091	Restricted stock units		14,940,211	7,036,974
Warrants (1)		478,464		476,185		478,464		476,185	Warrants (1)		579,365	478,458

(1)Includes the Debt Warrants as of March 31, 2022 and 2021. See Note 12 – Stockholders’ Equity for additional details.

~~Includes the Debt Warrants as of June 30, 2021 and 2020. See~~ ~~Note 12 – Stockholders’ Equity~~ ~~for additional details.~~

~~TABLE_CONTENTS~~

15. Related-Party Transactions

Credit Agreement and Convertible Notes Agreement

In November 2018, the Company entered into the Credit Agreement, and in January 2019, the Company entered into an amendment to the Credit Agreement, ~~with Luxor Capital~~ and an amendment to the Convertible Notes Agreement with the Luxor Entities. In addition, ~~Luxor Capital has warrants which are convertible into shares of the Company’s common stock (see~~ ~~Note 12 – Stockholders’ Equity). On~~on each of May 21, 2019, July 15, 2020 and March 9, 2021, the Company entered into amendments to the Credit Agreement with Luxor Capital and 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.

On May 9, 2022, the Company entered into an amendment to the Credit Agreement and an amendment to the Convertible Notes Agreement (see Note 16 - Subsequent Events).

Other Transactions with Related Parties

As of March 31, 2022, we had over 26,000 restaurants on our Platforms, some of which are affiliated with one current and one prior member of our board (“Board”). We estimate that we generated total revenue, inclusive of diner fees, of approximately $102 and $263 during the three months ended March 31, 2022 and 2021, respectively, from such restaurants that are affiliated with those current and prior members of our Board. Such restaurants enter into customary master service agreements with the Company, which are generally consistent with the other national partner agreements.

16. Subsequent Events

ATM Program

From April 1, 2022 through April 12, 2022, we sold 2,616,335 shares of common stock under the ATM Program for gross proceeds of $898.

Cash-Based and Stock-Based Awards

On ~~August 9, 2021,~~April 11, 2022, the Company ~~and its wholly owned subsidiary, Cape Payments, LLC,~~ entered into ~~definitive purchase agreements~~a Restricted Stock Unit Award Agreement (“RSU Agreement”) with ~~ProMerchant LLC, Cape Cod Merchant Services LLC~~Mr. Grimstad pursuant to which 4,000,000 RSUs were granted to Mr. Grimstad, subject to the terms and ~~Flow Payments LLC (collectively referred to herein as~~conditions of the ~~“Cape Payment Companies”,~~RSU Agreement and the 2018 Incentive Plan, with ~~the agreements collectively referred to herein as the “Cape Payment Agreements”~~an aggregate grant date fair value of $1,228 (the “Grimstad 2022 RSU Grant”). The ~~Cape Payment Companies are engaged~~Grimstad 2022 RSU Grant will vest in three equal installments on the ~~business~~first, second and third anniversaries of facilitating the entry into merchant agreements by and between retailers/merchants and payment processing solution providers and receive residual payments from the payment providers (not the merchants). The aggregate purchase price for the Cape Payment Companies will be ~~$15,000, consisting of $12,000 in cash,~~April 11, 2022, subject to Mr. Grimstad’s continued employment through the applicable vesting date, and shall fully vest upon the consummation of a change of control, subject to Mr. Grimstad’s continued employment through the closing of such change of control or the termination of Mr. Grimstad’s employment agreement by Mr. Grimstad for good reason or by

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the Company for other than misconduct. Additionally, on April 11, 2022, the Company determined to pay Mr. Grimstad a discretionary cash bonus of $1,000.

On April 11, 2022, a total of 480,000 RSUs were granted to certain ~~purchase price adjustments,~~executive officers, with an aggregate grant date fair value of $147. The RSUs will vest in three equal installments on the first, second and ~~a number of shares~~third anniversaries of the ~~Company’s~~grant date, subject to the executive officer’s continued employment through the applicable vesting date, and will vest in full upon a change of control, subject to the executive officer’s continued employment through the closing of such change of control. Additionally, on April 11, 2022, the Company determined to pay discretionary cash bonuses totaling $550 to certain executive officers of the Company.

Amended Loan Agreements

On May 9, 2022, Waitr Inc., Waitr Intermediate Holdings, LLC, the lenders party thereto and Luxor Capital entered into an amendment to the Credit Agreement and the Company, the lenders party thereto and Luxor Capital entered into an amendment to the Convertible Notes Agreement (collectively, the “Amended Debt Agreements”). Pursuant to the Amended Debt Agreements, the Company will make a $20,000 prepayment on the Term Loan, reducing the outstanding amount of the Term Loan from $35,007 to $15,007. Additionally, the Amended Debt Agreements (i) provide that going forward on a quarterly basis, 50% of the proceeds of any future at-the-market public common stock ~~equal~~issuances will be applied to ~~$3,000 divided by~~ the ~~volume weighted average price~~prepayment of the ~~Company’s common stock over~~Term Loan under the ~~five days prior to closing. Additionally, the Cape Payment Agreements~~Credit Agreement and (ii) include ~~an earn-out provision which provides for~~ a ~~one-time payment to the sellers if the Cape Payment Companies exceed certain future revenue targets. The Cape Payment Agreements contain representations, warranties and covenants~~six-month extension of the ~~parties that are customary for similar transactions. Closing is subject to satisfaction~~maturity date of ~~negotiated closing conditions (including, without limitation, the approval~~each of the ~~Company’s board of directors of the transactions as set forth in the Cape Payment Agreements)~~Credit Agreement and ~~deliverables for such similar transactions and is expected to occur, if at all, during the third quarter of 2021.~~

Convertible Notes Agreement until May 15, 2024.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”) and with the audited consolidated financial statements included in the Company’s ~~2020~~2021 Form 10-K filed with the SEC on March ~~8, 2021.~~11, 2022. 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 are set forth in the ~~section~~sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors”.

Dollar amounts in this discussion are expressed in thousands, except as otherwise noted.

Overview

Waitr operates an online ordering technology Platforms, including the Waitr, Bite Squad and Delivery Dudes mobile applications. Our technology platform ~~providing~~provides delivery, carryout and dine-in options, connecting restaurants, drivers and diners in cities across the United States. Our strategy is to bring ~~delivery, carryout and dine-in~~in the logistics infrastructure to underserved populations of restaurants, grocery stores and ~~diners~~other merchants and establish strong market presence or leadership positions in the markets in which we operate. Our business has been built with a restaurant-first philosophy by providing differentiated and brand additive services to the restaurants 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. ~~Restaurants benefit from the online Platforms through increased exposure~~

Additionally, Waitr facilitates merchant access to ~~consumers for expanded business in the delivery market and carryout sales.~~

~~On March 11, 2021, we completed~~third-party payment processing solution providers, pursuant to the acquisition of ~~Delivery Dudes,~~the Cape Payment Companies in August 2021. Revenue from such services primarily consists of residual payments received from third-party payment processing solution providers, based on the volume of transactions a payment processing solution provider performs for the merchant.

At the end of 2021, we initiated several integrations expected to be completed by mid-2022 with other companies to deliver their products. During the first quarter of 2022, we focused our efforts on these initiatives with the goal of further expanding our last-mile delivery offerings as well as continuing to build on our ancillary revenue streams and diversifying the Company beyond third-party ~~delivery business primarily serving~~food delivery. Another key step in pursuing our overall growth strategy has been to facilitate merchant access to third-party payment processing solution providers. Through our acquisitions in August 2021, we now facilitate merchant and restaurant access to third parties that provide payment processing solutions.

During the ~~South Florida market (see “Liquidity and Capital Resources” for additional details). The acquisition strengthens~~first quarter of 2022, we recognized a non-cash impairment charge totaling $67,190 to write down the carrying value of goodwill to its implied fair value, resulting from the significant decline in the Company’s market ~~presence~~capitalization in March 2022. See Part I, Item 1, Note 6 – Intangible Assets and Goodwill for additional details. The write-down to goodwill was determined using estimates of fair value, which utilize significant inputs and assumptions such as forecasts (e.g., revenue, operating costs, capital expenditures, etc.), discount rate, long-term growth rate, tax rates, and market-based enterprise value to revenue multiples, among others. Should our estimates or assumptions worsen, or should negative events or circumstances occur, additional impairments may be needed.

As previously announced, we acquired the ~~on-demand delivery service sector.~~ “ASAP.com” domain name and several related domains and also reserved the Nasdaq trading symbol “ASAP” in connection with our rebranding strategy. We are making progress on our rebranding strategy and we expect that “ASAP” will serve as the foundation of our brand moving forward, as we believe it better embodies the future direction of our Company.

At ~~June 30, 2021,~~March 31, 2022, we had over ~~25,000~~26,000 restaurants, in ~~over 900~~approximately 1,000 cities, on the Platforms. Average Daily Orders for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ were approximately ~~38,583~~22,907 and ~~44,241,~~37,627, respectively, and revenue was ~~$49,167~~$35,040 and ~~$60,506,~~$50,930, respectively. ~~For the six months ended June 30, 2021 and 2020, Average Daily Orders were 38,108 and 40,909, respectively, and revenue was $100,097 and $104,749, respectively.~~

During the second quarter of 2021, we added a variety of additional national brands to our Platforms and continued to opportunistically launch new markets in numerous underserved cities and towns. The acquisition of Delivery Dudes in the first quarter of 2021 and organic expansion throughout the first half of 2021 expanded our presence in multiple small and medium sized markets. Additionally, we recently announced a strategic initiative to change our corporate name and visual identity in a comprehensive rebrand, to be effective within the next 12 – 18 months. The rebranding strategy reflects our ongoing commitment to innovation, continued expansion into new delivery verticals in the “last mile delivery” segment, maintenance of a technology-forward platform, and anticipated diversification and expansion into payment solutions.

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Impact of COVID-19 on our Business

We have thus far been able to operate effectively during the COVID-19 pandemic. In response to economic hardships experienced during the COVID-19 pandemic, the U.S. federal government rolled out stimulus payments in the first 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 COVID-19 pandemic, we experienced an increase in revenue and orders due to increased consumer demand for delivery and more restaurants using our platform to facilitate both delivery and take-out. During the second quarter of 2021 and thereafter, we believe the impact of the stimulus payments on our order volumes began to decrease.

While the widespread rollout of vaccines is leading to increased confidence that the impacts of the pandemic may be stabilizing, the spread of certain 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 pandemic 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 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 the Company’s ~~2020~~2021 Form 10-K and this quarterly report on Form 10-Q for the three months ended ~~June 30, 2021.~~March 31, 2022. Management continues to monitor the impact of the COVID-19 outbreak and the possible effects on its financial position, liquidity, operations, industry and workforce.

Nasdaq Compliance

On January 26, 2022, we received written notice from Nasdaq Listing Qualifications staff of The Nasdaq Stock Market (the “Staff”), indicating that the minimum bid price of our common stock has closed at less than $1.00 per share over the last 30 consecutive business days and, as a result, did not comply with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share (the “Bid Price Rule”).

The notification has no immediate effect on the listing of the Company’s common stock. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days, or until July 25, 2022, to regain compliance with the Bid 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, the Staff will provide us with written confirmation of compliance with the Bid Price Rule and the matter will be closed.

If we fail to regain compliance with the Bid Price Rule before July 25, 2022, but meet certain other applicable standards, the Company may be eligible for additional time to comply with the Bid Price Rule. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards of The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period.

If we do not regain compliance with the Bid Price Rule in the relevant compliance period, the Staff may provide written notification to the Company that its securities will be delisted. The Company may then appeal the delisting determination to a Nasdaq Listing Qualifications Hearings Panel.

The Company is actively taking steps to regain compliance with the Nasdaq Listing Rules, including actively monitoring the bid price for its common stock between now and July 25, 2022 and considering available options to resolve the deficiency and regain compliance with the Bid Price Rule, including a reverse stock split.

Significant Accounting Policies and Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, along with related disclosures. We regularly assess these estimates and record changes to estimates in the period in which they become known. We base our estimates on historical experience

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and various other assumptions believed to be reasonable under the circumstances. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ from estimates. Significant estimates and judgements relied upon in preparing these condensed consolidated financial statements affect the following items:

•

~~incurred loss estimates under our insurance policies with large deductibles or retention levels;~~

•incurred loss estimates under our insurance policies with large deductibles or retention levels;•

~~loss exposure related to claims such as the Medical Contingency (see Part I, Item 1,~~ ~~Note 9 – Correction of Prior Period Error~~);

•loss exposure related to claims;•

~~income taxes;~~

•

~~useful lives of tangible and intangible assets;~~

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•determination of agent vs. principal classification for revenue recognition purposes;•

~~equity compensation;~~

•income taxes;•

~~contingencies;~~

•useful lives of tangible and intangible assets;•

~~goodwill and other intangible assets, including the recoverability of intangible assets with finite lives and other long-lived assets; and~~

•equity compensation;

•contingencies;

•goodwill and other intangible assets, including the recoverability of intangible assets with finite lives and other long-lived assets; and

•fair value of assets acquired, liabilities assumed and contingent consideration as part of a business combination.

•

~~fair value of assets acquired and liabilities assumed as part of a business combination.~~

Other than the changes disclosed in Part I, Item 1, Note 2 – Basis of Presentation and Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements in this Form 10-Q, there have been no material changes to our significant accounting policies and estimates described in the ~~2020~~2021 Form 10-K.

New Accounting Pronouncements and Pending Accounting Standards

See Part I, Item 1, Note 2 – Basis of Presentation and Summary of Significant Accounting Policies for a description of accounting standards adopted during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. Also described in Note 2 are pending standards and their estimated effect on our ~~unaudited~~ condensed consolidated financial statements.

Through year-end 2020, we qualified as an “emerging growth company” pursuant to the provisions of the JOBS Act. As an emerging growth company, we were able to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. Effective January 1, 2021, we are no longer an emerging growth company. Accordingly, for fiscal year 2021, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal controls over financial reporting.

Factors Affecting the Comparability of Our Results of Operations

~~Delivery Dudes Acquisition.~~

Acquisitions. The Delivery Dudes Acquisition ~~was~~and Cape Payment Acquisition were considered a business ~~combination~~combinations in accordance with ASC 805, and ~~has~~have been accounted for using the acquisition method. Under the acquisition method of accounting, total purchase consideration, acquired assets, ~~and~~ assumed liabilities and contingent consideration are recorded based on their estimated fair values on the acquisition date. ~~The~~For each of these acquisitions, the excess of the fair value of purchase consideration over the fair value of the assets less liabilities acquired (and contingent consideration when applicable) has been recorded as goodwill on our ~~unaudited~~ condensed consolidated balance sheet as of ~~June 30, 2021.~~March 31, 2022. The results of operations of Delivery Dudes and Cape Payment Companies are included in our ~~unaudited condensed~~ consolidated financial statements beginning on the acquisition ~~date,~~dates, March 11, ~~2021.~~2021 and August 25, 2021, respectively.

In connection with the Delivery Dudes Acquisition, wethe Company incurred direct and incremental costs of $606 during the three ~~and six~~ months ended ~~June 30,~~March 31, 2021, ~~of approximately $63 and $669, respectively,~~ consisting of legal and professional fees, which are included in general and administrative expenses in the ~~unaudited condensed~~ consolidated statement of operations in such ~~periods.~~

period.

Changes in Fee Structure. Our fee structure has changed at various times since our inception. We continue 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 (whether externally to comply with governmental imposed caps or as a result of internal decision-making) could affect the comparability of our results of operations from period to period.

Goodwill Impairment. During the three months ended March 31, 2022, we recognized a non-cash impairment charge totaling $67,190 to write down the carrying value of goodwill to its implied fair value, as a result of our goodwill impairment analysis, which concluded that the fair value of the reporting unit (the Company) at such time 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 future periods. There can be no assurance that additional goodwill or intangible assets will not be impaired in future periods. Significant goodwill and intangible asset impairments may impact the comparability of our results from period to period.

Seasonality and Holidays. Our business tends to follow restaurant closure and diner behavior patterns with respect to demand of our service offering. In many of our markets, we have historically experienced variations in order frequency as a result 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 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. 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 restaurant partners. The

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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.

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Acquisition Pipeline. We continue to maintain and evaluate an active pipeline of potential acquisition targets and may pursue acquisitions in the future, both in the restaurant delivery space as well as other ~~verticals.~~verticals, such as payments and other complimentary businesses. These potential business acquisitions may impact the comparability of our results in future periods relative to prior periods.

Key Factors Affecting Our Performance

Efficient Market Expansion and Penetration. ~~Revenue~~Our continued revenue growth and ~~any corresponding~~ improved cash flow and profitability is dependent on successful restaurant, diner and driver penetration of our markets and achieving our targeted scale in current and future markets. Failure in achieving ~~this~~our targeted scale could adversely affect our working capital, which in turn, could slow our growth plans.

We typically target markets that we believe could achieve sustainable positive operating cash flows and profits, improve efficiency, and appropriately leverage the scale of our advertising, marketing, research and development, and other corporate resources. 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.

~~Waitr’s~~

Our Restaurant, Diner and Driver Network. A significant part of our ~~strategy~~growth is our ability to successfully expand our network of restaurants, diners and independent contractor drivers using the Platforms. If 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 revenue, ~~and overall~~ financial results and business may be adversely affected.

Key Business Metrics

Defined below are the key business metrics that we use to analyze our business performance, determine financial forecasts, and help develop long-term strategic plans:

Active Diners. We count Active Diners as the number of unique diner accounts from which an order has been ~~successfully~~ completed through the Platforms during the past twelve months (as of the end of the relevant period) 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.

Average Daily Orders. 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.

Gross Food Sales. We calculate Gross Food Sales as the total food and beverage sales, sales taxes, prepaid gratuities, and diner fees processed through the Platforms during a given period. Gross Food Sales are different than the order value upon which we charge our fee to restaurants, which excludes ~~sales taxes,~~ gratuities and diner fees. ~~Gratuities,~~Prepaid gratuities, which are not included in our ~~net~~ revenue, are determined by diners and may vary from order to order. Gratuities other than prepaid gratuities, such as cash tips, are not included in Gross Food Sales. 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.

Average Order Size. We calculate Average Order Size as Gross Food Sales for a given period divided by the number of completed orders during the same period. Average Order Size is an important metric for us because the average value of gross food sales on our Platforms is a key revenue driver.

Three Months Ended June 30,

Six Months Ended June 30,

Key Business Metrics⁽¹⁾

2021

2020

2021

2020

Active Diners (as of period end)

1,878,904

2,109,353

1,878,904

2,109,353

Average Daily Orders

38,583

44,241

38,108

40,909

Gross Food Sales (dollars in thousands)

$
154,738

$
175,044

$
305,019

$
308,557

Average Order Size (in dollars)

$
44.07

$
43.48

$
44.22

$
41.44

~~(1)~~

~~The key business metrics include the operations of Delivery Dudes beginning on the acquisition date, March 11, 2021.~~

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	Three Months Ended March 31,
Key Business Metrics(1)		2022		2021
Active Diners (as of period end)		1,523,618		1,966,815
Average Daily Orders		22,907		37,627
Gross Food Sales (dollars in thousands)		$	101,068	$	150,281
Average Order Size (in dollars)		$	49.02	$	44.38

_____________________

(1)The key business metrics include the operations of Delivery Dudes beginning on the acquisition date, March 11, 2021.

Basis of Presentation

Revenue

We generate revenue primarily when diners place an order on one of the Platforms. We recognize revenue from diner orders when orders are delivered. Our revenue consists primarily of net Delivery Transaction Fees.

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Additionally, effective August 25, 2021, we generate revenue by facilitating merchant access to third-party payment processing solution providers.

Cost and Expenses:

Operations and Support. Operations and support expense consists primarily of salaries, benefits, stock-based compensation, and bonuses for employees engaged in operations and customer service, as well as territory managers, market ~~managers,~~success associates, restaurant onboarding, 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 diners, restaurants and drivers.

Sales and Marketing. Sales and marketing expense consists primarily of salaries, commissions, benefits, stock-based compensation and bonuses for personnel supporting sales and 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 advertisements, sponsorships and print marketing.

Research and Development. Research and development expense 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. This expense also includes such items as software subscriptions that are necessary for the upkeep and maintenance of the Platforms.

General and Administrative. General and administrative expense 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.

Depreciation and Amortization. Depreciation and amortization expense consists primarily of amortization of capitalized costs for software development, trademarks and customer relationships and depreciation of leasehold improvements and equipment, primarily consisting of tablets deployed in restaurants. We do not allocate depreciation and amortization expense to other line items.

Other Expenses ~~(Income)~~ and Losses, ~~(Gains),~~ Net. Other expenses ~~(income)~~ and losses, ~~(gains),~~ net, ~~primarily~~ includes interest expense on outstanding debt, as well as any other items not considered to be incurred in the normal operations of the ~~business.~~business, including accrued legal settlements and contingencies.

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Results of Operations

The following table sets forth our results of operations for the periods indicated, with line items presented in thousands of dollars and as a percentage of our revenue:

	Three Months Ended June 30,												Six Months Ended June 30,
(in thousands, except percentages⁽¹⁾)	2021			% of Revenue			2020			% of Revenue			2021			% of Revenue			2020			% of Revenue
																										Three Months Ended March 31,
(in thousands, except percentages(1))																									(in thousands, except percentages(1))		2022		% of Revenue		2021		% of Revenue
Revenue	$	49,167			100	%	$	60,506			100	%	$	100,097			100	%	$	104,749			100	%	Revenue		$	35,040	100	%	$	50,930	100	%
Costs and expenses:																									Costs and expenses:
Operations and support		31,273			64	%		30,547			50	%		61,611			62	%		56,912			54	%	Operations and support		20,279		58	%	30,338		60	%
Sales and marketing		4,500			9	%		2,740			5	%		8,516			9	%		5,566			5	%	Sales and marketing		6,253		18	%	4,016		8	%
Research and development		854			2	%		1,167			2	%		1,853			2	%		2,637			3	%	Research and development		1,311		4	%	999		2	%
General and administrative		12,505			25	%		10,094			17	%		22,691			23	%		20,872			20	%	General and administrative		11,545		33	%	10,186		20	%
Depreciation and amortization		2,965			6	%		2,075			3	%		5,882			6	%		4,139			4	%	Depreciation and amortization		3,065		9	%	2,917		6	%
Intangible and other asset impairments		—			0	%		29			0	%		—			0	%		29			0	%
Loss on disposal of assets		162			0	%		3			0	%		159			0	%		11			0	%
Goodwill impairment																									Goodwill impairment		67,190		192	%	—		—	%

Gain on disposal of assets																									Gain on disposal of assets		(17)		—	%	(3)		—	%
Total costs and expenses		52,259			106	%		46,655			77	%		100,712			101	%		90,166			86	%	Total costs and expenses		109,626		313	%	48,453		95	%
Income (loss) from operations		(3,092	)		(6	%)		13,851			23	%		(615	)		(1	%)		14,583			14	%
Other expenses (income) and losses (gains), net:
(Loss) income from operations																									(Loss) income from operations		(74,586)		(213)	%	2,477		5	%
Other expenses and losses, net:																									Other expenses and losses, net:
Interest expense		1,681			3	%		2,490			4	%		3,582			4	%		5,404			5	%	Interest expense		1,704		5	%	1,901		4	%
Interest income		—			0	%		(21	)		0	%		—			0	%		(81	)		0	%

Other expense		835			2	%		712			1	%		5,099			5	%		675			1	%	Other expense		910		3	%	4,264		8	%
Net income (loss) before income taxes		(5,608	)		(11	%)		10,670			18	%		(9,296	)		(9	%)		8,585			8	%
Net loss before income taxes																									Net loss before income taxes		(77,200)		(220)	%	(3,688)		(7)	%
Income tax expense		33			0	%		17			0	%		57			0	%		34			0	%	Income tax expense		16		—	%	24		—	%
Net income (loss)	$	(5,641	)		(11	%)	$	10,653			18	%	$	(9,353	)		(9	%)	$	8,551			8	%
Net loss																									Net loss		$	(77,216)	(220)	%	$	(3,712)	(7)	%

________________

(1)Percentages may not foot due to rounding.

~~(1)~~

~~Percentages may not foot due to rounding.~~

The following section includes a discussion of our results of operations for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~the three and six months ended June 30, 2020.~~2021. The results of operations of Delivery Dudes and the Cape Payment Companies are included in our unaudited condensed consolidated financial statements beginning on the acquisition ~~date,~~dates of March 11, 2021 and August 25, 2021, respectively (see Part I, Item 1, Note 34 – Business Combinations).

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Revenue

Three Months Ended June 30,

Percentage

Six Months Ended June 30,

Percentage

2021

2020

Change

2021

2020

Change

(dollars in thousands)

(dollars in thousands)

Revenue

$
49,167

$
60,506

(19
%)

$
100,097

$
104,749

(4
%)


	Three Months Ended March 31,					Percentage Change
		2022			2021
	(dollars in thousands)
Revenue			$	35,040		$	50,930	(31	%)

Revenue decreased for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, primarily as a result of decreased order volumes. We experienced a significant increase in Average Daily Orders in the three months ended June 30, 2020 as the COVID-19 pandemic, related stay-at-home orders, and government stimulus payments affected diner behavior. Additionally, Average Daily Orders were impacted by adverse weather-related events in early 2021 as well as certain federal government responses to the COVID-19 pandemic.

Partially offsetting the impact of decreased order volumes ~~in the three and six months ended June 30, 2021~~ was an increase in the Average Order Size in such ~~periods. The Average Order Size increased to $44.22 for~~period as well as revenue from the ~~six months ended June 30, 2021, from $41.44 for the six months ended June 30, 2020, an improvement of 7%.~~Cape Payment Companies and Delivery Dudes acquisitions, beginning on their respective acquisition dates. The Average Order Size was ~~$44.07~~$49.02 for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$43.48~~$44.38 for the three months ended ~~June 30, 2020.~~

March 31, 2021, an improvement of 10%.

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Operations and Support


	Three Months Ended June 30,						Percentage			Six Months Ended June 30,						Percentage				Three Months Ended March 31,						Percentage Change
	2021			2020			Change			2021			2020			Change					2022				2021
	(dollars in thousands)									(dollars in thousands)										(dollars in thousands)
Operations and support	$	31,273		$	30,547			2	%	$	61,611		$	56,912			8	%	Operations and support			$	20,279			$	30,338		(33	%)
As a percentage of revenue		64	%		50	%					62	%		54	%				As a percentage of revenue			58		%		60		%

Operations and support expenses ~~increased~~decreased in dollar terms and as a percentage of revenue in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, primarily due to ~~the Company opening more markets and serving more markets in the 2021 periods compared to 2020, including~~lower driver operations costs ~~for operations and support personnel and software related to supporting those markets. As~~as a ~~percentage~~result of ~~revenue, operations and support expenses were higher in the three and six months ended June 30, 2021 compared to the 2020 periods as we strategically invested in our support staffing and drivers in~~decreased order ~~to combat labor shortages pervasive in the industry and broader economy.~~

volumes.

Sales and Marketing


	Three Months Ended June 30,						Percentage			Six Months Ended June 30,						Percentage				Three Months Ended March 31,						Percentage Change
	2021			2020			Change			2021			2020			Change					2022				2021
	(dollars in thousands)									(dollars in thousands)										(dollars in thousands)
Sales and marketing	$	4,500		$	2,740			64	%	$	8,516		$	5,566			53	%	Sales and marketing			$	6,253			$	4,016		56	%
As a percentage of revenue		9	%		5	%					9	%		5	%				As a percentage of revenue			18		%		8		%

Sales and marketing expense increased in dollar terms and as a percentage of revenue in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, primarily attributable to ~~increased digital advertising as we further invested in market expansion and solidifying our presence in existing territories.~~

referral agent commission expense related to the Cape Payment Companies acquisition.

Research and Development


	Three Months Ended June 30,						Percentage			Six Months Ended June 30,						Percentage				Three Months Ended March 31,						Percentage Change
	2021			2020			Change			2021			2020			Change					2022				2021
	(dollars in thousands)									(dollars in thousands)										(dollars in thousands)
Research and development	$	854		$	1,167			(27	%)	$	1,853		$	2,637			(30	%)	Research and development			$	1,311			$	999		31	%
As a percentage of revenue		2	%		2	%					2	%		3	%				As a percentage of revenue			4		%		2		%

Research and development expense ~~decreased~~increased in dollar terms ~~in the three~~ and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020, primarily due to the capitalization of increased software development costs during the first and second quarters of 2021 as further product features and functionality were incorporated into the Platforms. Research and development expense as a percentage of revenue ~~remained relatively flat for~~in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to the three ~~and six~~ months ended ~~June 30, 2020.~~

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March 31, 2021, primarily due to the hiring of product and engineering personnel to further develop and refine our Platforms.

General and Administrative


	Three Months Ended June 30,						Percentage			Six Months Ended June 30,						Percentage				Three Months Ended March 31,						Percentage Change
	2021			2020			Change			2021			2020			Change					2022				2021
	(dollars in thousands)									(dollars in thousands)										(dollars in thousands)
General and administrative	$	12,505		$	10,094			24	%	$	22,691		$	20,872			9	%	General and administrative			$	11,545			$	10,186		13	%
As a percentage of revenue		25	%		17	%					23	%		20	%				As a percentage of revenue			33		%		20		%

General and administrative expense increased in dollar terms and as a percentage of revenue in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to the three ~~and six~~ months ended ~~June 30, 2020. The increase~~March 31, 2021, primarily ~~related~~due to increased ~~stock-based compensation~~insurance expense ~~payroll~~ and recruiting ~~costs, and transaction costs associated with the Delivery Dudes Acquisition, partially offset by a decrease in workers compensation insurance expenses.~~

fees.

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Depreciation and Amortization


	Three Months Ended June 30,						Percentage			Six Months Ended June 30,						Percentage				Three Months Ended March 31,						Percentage Change
	2021			2020			Change			2021			2020			Change					2022				2021
	(dollars in thousands)									(dollars in thousands)										(dollars in thousands)
Depreciation and amortization	$	2,965		$	2,075			43	%	$	5,882		$	4,139			42	%	Depreciation and amortization			$	3,065			$	2,917		5	%
As a percentage of revenue		6	%		3	%					6	%		4	%				As a percentage of revenue			9		%		6		%

Depreciation and amortization expense increased in dollar terms and as a percentage of revenue in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, driven by an increase in depreciation expense related to computer tablets for restaurants on the Platforms and amortization expense on intangible assets acquired in the Delivery Dudes Acquisition and Cape Payment Companies Acquisition.

Goodwill Impairment

During the three months ended March 31, 2022, we recognized a non-cash goodwill impairment charge of $67,190 to write down the carrying value of goodwill to its implied fair value. The primary factor contributing to a reduction in the fair value was the significant decline in the Company’s stock price in mid-March 2022, resulting in a market capitalization that was lower than the carrying value of the Company’s consolidated stockholders’ equity. See Part I, Item 1, Note 6 – Intangible Assets and Goodwill for additional details.

Other Expenses ~~(Income)~~ and Losses, ~~(Gains),~~ Net

	Three Months Ended June 30,						Percentage			Six Months Ended June 30,						Percentage
	2021			2020			Change			2021			2020			Change				Three Months Ended March 31,						Percentage Change
	(dollars in thousands)									(dollars in thousands)											2022				2021
Other expenses (income) and losses (gains), net	$	2,516		$	3,181			(21	%)	$	8,681		$	5,998			45	%
																				(dollars in thousands)
Other expenses and losses, net																			Other expenses and losses, net			$	2,614			$	6,165		(58	%)
As a percentage of revenue		5	%		5	%					9	%		6	%				As a percentage of revenue			7		%		12		%

Other expenses ~~(income)~~ and losses, ~~(gains),~~ net for the three months ended ~~June 30, 2021~~March 31, 2022 primarily consisted of ~~$1,660~~$1,673 of interest expense associated with the Term Loan and Notes and ~~a $700 accrual~~$800 of expense for aan accrued legal ~~settlement.~~reserve. For the three months ended ~~June 30, 2020,~~March 31, 2021, other expenses ~~(income)~~ and losses, ~~(gains),~~ net primarily consisted of ~~$2,465~~a $4,000 accrual for a legal contingency and $1,860 of interest expense associated with the Term Loan and Notes.

~~For~~ See Part I, Item 1, Note 10 - Commitments and Contingent Liabilities for additional details on the ~~six months ended June 30, 2021, other expenses (income)~~accrued legal reserve and losses (gains), net primarily consisted of a $4,700 accrual for a legal settlement and $3,520 of interest expense associated with the Term Loan and Notes. For the six months ended June 30, 2020, other expenses (income) and losses (gains), net primarily consisted of $5,325 of interest expense associated with the Term Loan and Notes.

contingency.

Income Tax Expense

Income tax expense for the three months ended ~~June 30,~~March 31, 2022 and 2021 was $16 and ~~2020 was $33 and $17,~~$24, respectively, ~~and $57 and $34 for the six months ended June 30, 2021 and 2020, respectively. The Company’s income tax expense is~~ entirely related to state taxes in various jurisdictions. We have historically generated net operating losses; therefore, a valuation allowance has been recorded on our net deferred tax assets.

Liquidity and Capital Resources

Overview

As of ~~June 30, 2021,~~March 31, 2022, we had cash on hand of ~~$60,548.~~$54,877. Our primary sources of liquidity have ~~recently~~ been cash flow from operations and proceeds from the issuance of stock in the first quarter of 2022 and fiscal 2021 and 2020.

During the first ~~half~~quarter of ~~2021,~~2022, we made investments in our business related to the enhancement of our Platforms and initiatives focused on further supplementing our offerings beyond third-party food delivery.

In November 2021, we entered into an amended and restated open market sale agreement with ~~numerous new market launches and~~respect to our ATM Program. Pursuant to the Delivery Dudes Acquisition, expanding our scope of delivery in multiple small and medium sized markets. The Delivery Dudes Acquisition included $11,500 in cash, subject to certain purchase price adjustments, and 3,562,577ATM Program, we sold 9,458,655 shares of the Company’s common ~~stock. Additionally, pursuant~~stock during the three months ended March 31, 2022 for gross proceeds of $6,313, and from April 1, 2022 through April 12, 2022, we sold 2,616,335 shares of common stock for gross proceeds of $898. In April 2022, we filed a universal shelf registration

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statement on Form S-3 for the issuance from time to ~~an amendment~~time of up to $150,000 of our securities, which was declared effective by the ~~Credit Agreement, the Company made a $15,000 prepayment~~SEC on ~~the Term Loan on March 16, 2021.~~

April 27,

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2022.

The aggregate principal amount of outstanding long-term debt totaled $84,511 as of ~~June 30, 2021,~~March 31, 2022, consisting of $35,007 for the Term Loan and $49,504 of Notes. As of ~~June 30, 2021,~~March 31, 2022, the Company had ~~$5,465~~$1,293 of outstanding short-term loans for insurance premium financing.

On May 9, 2022, the Company entered into the Amended Debt Agreements, pursuant to which the Company will make a $20,000 prepayment on the Term Loan, reducing the outstanding amount of the Term Loan from $35,007 to $15,007. Additionally, the Amended Debt Agreements (i) provide that going forward on a quarterly basis, 50% of the proceeds of any future at-the-market public common stock issuances will be applied to the prepayment of the Term Loan under the Credit Agreement and (ii) include a six-month extension of the maturity date of each of the Credit Agreement and Convertible Notes Agreement until May 15, 2024.

We currently expect that our cash on hand and estimated cash flow from operations will be sufficient to meet our working capital needs for at least the next twelve months; however, there can be no assurance that we will generate cash flow at the levels we anticipate. We may use cash on hand to repay additional debt or to acquire or invest in complementary businesses, products, services and technologies. We continually evaluate additional opportunities to strengthen our liquidity position, fund growth initiatives and/or combine with other businesses 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.

We are continuously reviewing our liquidity and anticipated working capital needs, particularly in light of the uncertainty created by the COVID-19 ~~pandemic. Thus far, we have been able to operate effectively during~~pandemic, inflationary pressures, the ~~pandemic, however, the potential impacts~~Ukrainian conflict, increased gasoline prices and ~~duration~~other macroeconomic factors that could affect consumer demand, order volume and restaurant prices, all of ~~the COVID-19 pandemic (including those related to variants) on the economy and on~~which could impact our ~~business, in particular, is difficult to assess or predict.~~

business.

Capital Expenditures

Our main capital expenditures relate to the purchase of tablets for 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 requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors” in our ~~2020~~2021 Form 10-K and subsequent filings with the SEC, including this quarterly report on Form 10-Q for the three months ended ~~June 30, 2021.~~

March 31, 2022.

Cash Flow

The following table sets forth our summary cash flow information for the periods indicated:


	Six Months Ended June 30,							Three Months Ended March 31,
(in thousands)	2021			2020			(in thousands)	2022		2021
Net cash provided by operating activities	$	5,936		$	18,961
Net cash (used in) provided by operating activities							Net cash (used in) provided by operating activities	$	(7,235)	$	12,809
Net cash used in investing activities		(17,419	)		(1,963	)	Net cash used in investing activities	(2,385)		(12,805)
Net cash (used in) provided by financing activities		(12,675	)		20,387
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	4,386		(16,847)

Cash Flows (Used in) Provided by Operating Activities

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, net cash used in operating activities was $7,235, compared to net cash provided by operating activities ~~was $5,936, compared to $18,961~~of $12,809 for the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021. The decrease in cash flows from operating activities in the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 from the comparable ~~2020~~2021 period was primarily driven by a decrease in revenue and ~~increased operations and support expenses, partially offset by~~ changes in operating assets and ~~liabilities.~~liabilities, partially offset by a decrease in operations and support expenses. During the ~~six~~three months ended ~~June 30,~~March 31, 2022, the net change in operating assets and liabilities decreased net cash provided by operating activities by $2,597, primarily consisting of a decrease in accrued payroll of $1,542 and a decrease in accounts payable of $1,033. During the three months ended March 31, 2021, the net change in operating assets and liabilities increased net cash provided by operating activities by ~~$2,179,~~$10,629, primarily consisting of an increase in other current liabilities of ~~$6,452, partially offset by a decrease in~~$8,051 related to accrued ~~payroll~~expenses at the end of ~~$1,368, an increase in capitalized contract costs of $1,389 and an increase in prepaid expenses and other current assets of $1,008. During~~ the ~~six months ended June 30, 2020, the net change in operating assets and liabilities increased net cash provided by operating activities by $167.~~

reporting period.

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Cash Flows Used in Investing Activities

For the ~~six~~three months ended ~~June 30,~~March 31, 2022, net cash used in investing activities consisted primarily of $2,347 for internally developed software. For the three months ended March 31, 2021, net cash used in investing activities consisted primarily of ~~$12,706~~$10,927 for the acquisition of a business and related intangible assets and ~~$4,137~~$1,722 of costs for internally developed software.

Cash Flows Provided by (Used in) Financing Activities

For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2022, net cash ~~used in investing~~provided by financing activities consisted primarily of ~~$1,335~~$6,235 of ~~costs~~net proceeds from the sales of common stock under the Company’s ATM Program, less $1,849 of payments on short-term loans for ~~internally developed software.~~

~~Cash Flows (Used in) Provided by Financing Activities~~

insurance financing. For the ~~six~~three months ended ~~June 30,~~March 31, 2021, net cash used in financing activities ~~primarily consisted of~~included a $14,472 principal ~~prepayment~~payment on the Term ~~Loan. Additionally, during the six months ended June 30, 2021, cash flows from financing activities included $5,209 of borrowings under a short-term loan for insurance premium financing~~Loan and ~~$2,471~~$1,583 of payments on short-term loans for insurance ~~premium~~ financing. For the six months ended June 30, 2020, net cash provided by financing activities included net proceeds from the issuance of common stock of $22,585 and $1,906 of proceeds from short-term loans for insurance premium financing, less $3,415 of payments on short-term loans for insurance premium financing.

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~~Off-Balance Sheet Arrangements~~

~~We did not have any off-balance sheet arrangements as of June 30, 2021.~~

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. All statements, other than statements of historical or current ~~facts,~~fact, that reflect future plans, estimates, beliefs or expected performance are forward-looking statements. In some cases, you can identify forward-looking statements because they are preceded by, followed by or include words such as ~~“may,~~“may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions. These forward-looking statements are based on information available as of the date of this Form 10-Q and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties, including the following factors, in addition to the factors discussed elsewhere in this Form 10-Q, and the factors discussed in our ~~2020~~2021 Form 10-K and subsequent filings with the SEC (Part I, Item 1A, Risk Factors):

~~Operational Risks~~

•

~~failure to retain existing diners or add new diners or our diners decreasing their number of orders or order sizes on the Platforms;~~

•

~~declines in our delivery service levels or lack of increases in business for restaurants;~~

Risks Related to Our Operations

•failure to retain existing diners or add new diners or continuing to experience a decrease in number of diners and number of orders or decrease in order sizes on the Platforms;•

~~loss of restaurants on the Platforms, including due to changes in our fee structure;~~

•declines in our delivery service levels or lack of increases in business for restaurants;•

~~inability to sustain profitability in the future;~~

•loss of restaurants on the Platforms, including due to changes in our fee structure;•

risks related to our relationships with the independent contractor drivers, including shortages of available drivers, loss of independent contractor drivers, adverse conditions impacting independent contractor drivers, and possible increases in driver compensation;

•inability to sustain profitability in the future;•

~~inability to maintain and enhance our brands or occurrence of events that damage our reputation and brands, including unfavorable media coverage;~~

•risks related to our relationships with the independent contractor drivers, including shortages of available drivers, loss of independent contractor drivers, adverse conditions impacting independent contractor drivers, and possible increases in driver compensation;•

seasonality and the impact of inclement weather, including major hurricanes, tropical cyclones, major snow and/or ice storms in areas not accustomed to them and other instances of severe weather and other natural phenomena;

•recent inflationary pressures, increased gasoline prices, economic impact resulting from the Ukrainian conflict, and other macroeconomic factors that are largely beyond our control;•

~~inability to manage growth and meet demand;~~

•inability to maintain and enhance our brands, including possible degradation thereto resulting from our comprehensive rebranding initiative to change our corporate name and visual identity, or occurrence of events that damage our reputation and brands, including unfavorable media coverage;•

~~inability to successfully improve the experience of restaurants and diners in a cost-effective manner;~~

•seasonality and the impact of inclement weather, including major hurricanes, tropical cyclones, major snow and/or ice storms in areas not accustomed to them and other instances of severe weather and other natural phenomena;•

~~changes in our products or to operating systems, hardware, networks or standards that our operations depend on;~~

•inability to manage growth and meet demand;•

~~dependence of our business on our ability to maintain and scale our technical infrastructure;~~

•inability to successfully improve the experience of restaurants and diners in a cost-effective manner;•

~~personal data, internet security breaches or loss of data provided by diners or restaurants on our Platforms;~~

•changes in our products or to operating systems, hardware, networks or standards that our operations depend on;•

~~inability to comply with applicable law or standards if we become a payment processor at some point in the future;~~

•dependence of our business on our ability to maintain and scale our technical infrastructure;•

~~risks related to the credit card and debit card payments we accept;~~

•personal data, internet security breaches or loss of data provided by diners or restaurants on our Platforms;•

~~reliance on third-party vendors to provide products and services;~~

•

~~substantial competition in technology innovation and distribution and inability to continue to innovate and provide technology desirable to diners and restaurants;~~

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•inability to successfully expand our operations of facilitating the entry into merchant agreements by and between merchants and third-party payment processing solution providers;•

~~failure to pursue and successfully make additional acquisitions;~~

•inability of third-party payment processing services, of which we may facilitate the entry into merchant agreements, to comply with applicable state or federal regulations;•

~~uncertainty of the successful closing of the transaction relating to the acquisition of the Cape Payment Companies and the timing of such closing;~~

•inability to comply with applicable law or standards if we were to become a payment processor at some point in the future;•

~~failure to comply with covenants in the agreements governing our debt;~~

•risks related to the credit card and debit card payments we accept;•

~~additional impairments of the carrying amounts of goodwill or other indefinite-lived assets;~~

•reliance on third-party vendors to provide products and services;•

~~dependence on search engines, display advertising, social media, email, content-based online advertising and other online sources to attract diners to the Platforms;~~

•substantial competition in technology innovation and distribution and inability to continue to innovate and provide technology desirable to diners and restaurants;•

~~loss of senior management or key operating personnel and dependence on skilled personnel to grow and operate our business;~~

•failure to pursue and successfully make additional acquisitions;•

~~inability to successfully integrate and maintain acquired businesses;~~

•failure to comply with covenants in the agreements governing our debt;•

~~failure to protect our intellectual property;~~

•additional impairments of the carrying amounts of goodwill or other indefinite-lived assets;•

~~patent lawsuits and other intellectual property rights claims;~~

•dependence on search engines, display advertising, social media, email, content-based online advertising and other online sources to attract diners to the Platforms;•

~~potential liability and expenses for existing and future legal claims, including claims that may exceed insurance coverage or are not insured against;~~

•loss of senior management or key operating personnel and dependence on skilled personnel to grow and operate our business;•

~~our use of open source software;~~

•inability to successfully integrate and maintain acquired businesses;•

~~insufficient capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances;~~

•failure to protect our intellectual property;•

~~unionization of our employees, the magnitude of which increases if our independent contractor drivers were ever reclassified as employees; and~~

•patent lawsuits and other intellectual property rights claims;•

~~failure to maintain an effective system of disclosure controls and internal control over financial reporting.~~

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~~Industry Risks~~

•

~~the highly competitive and fragmented nature of our industry;~~

•potential liability and expenses for existing and future legal claims, including claims that may exceed insurance coverage or are not insured against;•

~~dependence on discretionary spending patterns in the areas in which the restaurants on our Platforms operate and in the economy at large;~~

•our use of open source software;•

~~general economic and business risks affecting our industry that are largely beyond our control;~~

•insufficient capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances;•

~~the COVID-19 pandemic, or a similar public health threat that could significantly affect our business, financial condition and results of operations;~~

•unionization of our employees, the magnitude of which increases if our independent contractor drivers were ever reclassified as employees; and•

~~implementation of fee caps by jurisdictions in areas where we operate;~~

•failure to maintain an effective system of disclosure controls and internal control over financial reporting.•

~~failure of restaurants in our networks to maintain their service levels;~~

•

~~slower than anticipated growth in the use of the Internet via websites, mobile devices and other platforms;~~

Risks Related to Our Industry

•the highly competitive and fragmented nature of our industry;•

~~federal and state laws and regulations regarding privacy, data protection, and other matters affecting our business;~~

•dependence on discretionary spending patterns in the areas in which the restaurants on our Platforms operate and in the economy at large;•

~~the potential for increased misclassification claims following the change to the U.S. presidential administration; and~~

•general economic and business risks affecting our industry that are largely beyond our control;•

~~risks relating to our relationships with the independent contractor drivers, including shortages of available drivers and possible increases in driver compensation.~~

•the COVID-19 pandemic, or a similar public health threat that could significantly affect our business, financial condition and results of operations;

•implementation of fee caps by jurisdictions in areas where we operate;

•failure of restaurants in our networks to maintain their service levels;

•slower than anticipated growth in the use of the Internet via websites, mobile devices and other platforms;

•federal and state laws and regulations regarding privacy, data protection, and other matters affecting our business;

•the potential for increased misclassification claims following the change to the U.S. presidential administration;

•risks relating to our relationships with the independent contractor drivers, including shortages of available drivers and possible increases in driver compensation; and

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•risks related to the cannabis industry with respect to the business operations of referring merchants to third-party payment processing solution providers.

Risks Related to Ownership of Our Securities

•risks related to future sales of a substantial number of shares by existing stockholders which could in turn cause our share price to decline;

•the risk that management’s use of the net proceeds from, or the continuation of, our ATM Program does not increase the value of a stockholder's investment;

•the risk that future offerings of debt or equity securities that rank senior to our common stock may adversely affect the market price of our common stock;

•the risk that the Debt Warrants and Notes as well as other derivative securities, if exercised or converted into shares of our common stock, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders; and

•the risk that we fail to continue to meet all applicable Nasdaq listing requirements and risks relating to the consequent delisting of our common stock from Nasdaq, which could adversely affect the market liquidity of our common stock, the ability for us to raise capital, and could decrease the market price of our common stock significantly.

These risks and uncertainties may be outside of our control. Forward-looking statements should not be relied upon as representing our views as of any subsequent date. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Our actual results could differ materially from those discussed in these forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to interest rate risk and certain other market risks in the ordinary course of our business.

Interest Rate Risk

As of ~~June 30, 2021,~~March 31, 2022, we had outstanding interest-bearing long-term debt totaling $84,511, consisting of the Term Loan in the amount of $35,007 and the Notes of ~~$49,504. The~~$49,504, both of which bear interest ~~rates under the Term Loan and Notes~~at fixed rates. As a result, we were reduced by 200 basis points for a one-year period, effective August 3, 2020, in connection with amendments to the loan agreements governing the Term Loan and Notes and a payment on the Term Loan. Although the interest rates decreased on August 3, 2020, we are not ~~currently~~ exposed to interest rate risk on our outstanding debt ~~as the new rates are fixed and revert back to the fixed rates in effect prior to the amendments.~~at March 31, 2022. If we enter into variable-rate debt in the future, we may be subject to increased sensitivity to interest rate movements.

We invest excess cash primarily in bank accounts and money market accounts, on which we earn interest. Our current investment strategy is to preserve principal and provide liquidity for our operating and market expansion needs. Since our investments have been and are expected to remain mainly short-term in nature, we do not believe that changes in interest rates would have a material effect on the fair market value of our investments or our operating results.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level as of ~~June 30, 2021.~~

March 31, 2022.

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Changes in Internal ~~Controls~~Control Over Financial Reporting

There has not been any change in our internal control over financial reporting that occurred during the quarter ended ~~June 30, 2021~~March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Effective January 1, 2021, we are no longer an emerging growth company. Accordingly, for fiscal year 2021, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.

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PART II. OTHER INFORMATION

Dollar amounts in the discussion in Part II. Other Information are expressed in thousands, except as otherwise noted.

Item 1. Legal Proceedings

In July 2016, Waiter.com, Inc. filed a lawsuit against Waitr Inc. 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. The plaintiff sought injunctive relief and damages relating to Waitr’s use of the “Waitr” name and logo. During the third quarter of 2020, the trial date was rescheduled to June 2021, and in September 2020, the court ruled on various motions, certain of which ruled against defenses the Company had advanced. The Company recorded a $4 million reserve in connection with this lawsuit during the first quarter of 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 ~~agreed, among other things, to pay~~paid the plaintiff ~~$4.7 million~~$4,700 in cash byon July 1, 2021. ~~As such,~~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. During the three months ended March 31, 2022, the Company ~~recorded~~accrued an ~~incremental $0.7 million~~$800 reserve in connection with its option to extend the ~~Settlement.~~license period by an additional eight months. The accrued legal ~~settlement of $4.7 million~~reserve is included in other current liabilities in the unaudited condensed consolidated balance sheet at ~~June 30, 2021. Included~~March 31, 2022 and in other expense in the unaudited condensed consolidated statement of operations for the three ~~and six~~ months ended ~~June 30, 2021 is $0.7 million and $4.7 million, respectively, related to the accrued legal settlement.~~

March 31, 2022.

unaudited condensed consolidated balance sheet at March 31, 2022.

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guaranteed, ~~often these~~there are limits to insurance coverage and in certain instances claims are met with denial of coverage positions by the ~~carriers, and there are limits to insurance coverage;~~carriers; accordingly, we could suffer material losses as a result of these claims, or the denial of coverage for such ~~claims.~~

Item 1A. Risk Factors

Except as set forth below, there have been no material changes with respect to Waitr’s risk factors previously reported in Part I, Item 1A, of the ~~2020~~2021 Form 10-K.

~~The change in presidential administration could result in increased misclassification claims against the Company.~~

During the Trump administration, the U.S. Department of Labor (“DOL”) relaxed enforcement of misclassification claims under the Fair Labor Standards Act (“FLSA”). Additionally, just before President Trump left office, the DOL issued a new, company-friendly independent contractor standard via regulation that was set to go into effect in March 2021. However, after President Biden took office, the DOL paused and ultimately rescinded implementation

Additional impairments of the regulation in May 2021. The DOL has not yet proposed a substitute regulation, meaning that previous, more worker-friendly standard is still in effect. Some legal experts expect the DOL to issue additional

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~~regulations~~carrying amounts of goodwill or guidance proposing an even more worker-friendly standard, such as the “ABC” test that was implemented in California. Legal experts also expect the DOL under President Biden to become more aggressive in enforcing misclassification claims against companies, particularly in the gig economy space. The issuance of such additional regulations or guidance, or the increase in such DOL enforcement activity,other indefinite-lived assets could ~~adversely~~negatively affect our ~~operations and profitability.~~

~~We are subject to a variety of risks relating to our relationships with the independent contractor drivers, including shortages of available drivers and possible increases in driver compensation.~~

In response to economic hardships experienced during the COVID-19 pandemic, the U.S. federal government rolled out stimulus payments in the first quarter of 2021 which we believe presented challenges in maintaining an appropriate level of driver supply at certain times and has required us to spend more to procure driver services in certain instances. Additional shortages of available drivers could require us to spend more to procure driver services and could create shortages at peak order times. Furthermore, we could face a challenge with having enough qualified drivers primarily due to intense market competition, which may subject us to increased payments for independent contractor driver rates that would negatively impact our profitability.

~~The COVID-19 pandemic, or a similar public health threat, could significantly affect our business,~~ financial condition and results of operations.

~~Waitr has thus far been able to operate effectively during~~

We conduct our goodwill and intangible asset impairment test annually in October, or more frequently if indicators of impairment exist, and we review the ~~COVID-19 pandemic. However,~~ recoverability of long-lived assets, including acquired technology, capitalized software costs, and property and equipment when events or changes in circumstances occur that indicate that the ~~spread of certain COVID variants and cases rising in areas with low vaccination rates provide continued uncertainty as to the potential short and long-term impacts~~carrying value of the ~~pandemic on the global economy and on the Company’s business, in particular. There remains uncertainty as to whether or~~asset may not ~~the pandemic will continue to impact diner behavior, and if so, in what manner. To the extent that the COVID-19 pandemic, or~~be recoverable. For purposes of testing for goodwill impairment, we have one reporting unit. As 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~~result of the ~~other risks described in the risk factors~~significant decline in the Company’s ~~2020 Form 10-K~~stock price in mid-March 2022 and ~~this quarterly report on Form 10-Q~~other macroeconomic and industry factors, thereby contributing to a decline in the Company’s market capitalization, we conducted the impairment test as of March 15, 2022. The impairment test was conducted in accordance with ASC 360, Impairment and Disposal of Long-Lived Assets for certain long-lived assets including capitalized contract costs, developed technology, customer relationships, and trade names, and in accordance with ASC 350, Intangibles – Goodwill and Other for the reporting unit’s goodwill. As a result of the ASC 360 and ASC 350 analyses, we recognized a non-cash pre-tax impairment loss of $67,190 during the three months ended ~~June 30, 2021.~~March 31, 2022 to write down the carrying value of goodwill to its implied fair value. See Part I, Item 1,

Note 6 – Intangible Assets and Goodwill for additional details.

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 future periods. There can be no assurance that additional goodwill or intangible assets will not be impaired and that the carrying value of other indefinite-lived assets will be recoverable in future periods, which could adversely affect our financial results and stockholders’ equity.

Our strategic initiative to change our corporate name and visual identity in a comprehensive rebrand may not be successful and may negatively impact our name recognition with customers and partners or otherwise impact our business.

In June 2021, we launched a strategic initiative to change our corporate name and visual identity in a comprehensive rebrand. There is no assurance that our rebranding initiative will be successful or result in a positive return on investment. 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. During the three months ended March 31, 2022, the Company accrued an $800 reserve in connection with its option to extend the license period by an additional eight months. The failure by us to timely cease using the Waitr trademark provides Waiter.com, Inc. the right to pursue injunctive relief and liquidated damages. We could be required to devote significant resources to advertising and marketing in order to increase awareness of the new brand and for the successful integration of our rebranding process. Furthermore, our rebranding initiative may negatively impact our name recognition with customers and partners, which could have an adverse impact on our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

Not applicable

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Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

On August 9, 2021, the Company and its wholly-owned subsidiary, Cape Payments, LLC, entered into three substantially identical agreements to acquire substantially all of the assets of each of Flow Payments LLC (“Flow”), Cape Cod Merchant Services LLC (“Cape Cod”) and ProMerchant LLC (“ProMerchant” and collectively with Flow and Cape Cod, the “Cape Payment Companies”). The agreements are collectively referred to herein as the “Cape Payment Agreements”. The Cape Payment Companies are engaged in the business of facilitating the entry into merchant agreements by and between retailers/merchants and payment processing solution providers and receive residual payments from the payment providers (not the merchants). The aggregate purchase price for the Cape Payment Companies will be $15 million (80% to be paid in cash and 20% to be paid through the issuance of unregistered shares of our common stock in an amount equal to $3 million divided by the volume weighted average price of our common stock over the five days prior to closing), subject to standard purchase price adjustments, plus an unsecured, contingent earn-out payable in March 2023 based on the amount that the 2022 residuals of the Cape Payment Companies exceed 125% of the 2021 residual revenue of the Cape Payment Companies (while we are not able to quantify such amount as of the date hereof, at closing we will estimate and reflect such contingent payment as a liability on our balance sheet). The Cape Payment Agreements contain

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representations, warranties and covenants of the parties that are customary for similar transactions. Closing is subject to satisfaction of negotiated closing conditions (including, without limitation, the approval of the Company’s board of directors of the transactions as set forth in the Cape Payment Agreements) and deliverables for such similar transactions and is expected to occur, if at all, during the third quarter of 2021. The foregoing description of the Cape Payment Agreements and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Cape Payment Agreements, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2021.

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None

Item 6. Exhibits

~~Exhibit No.~~	~~Description~~
Exhibit No.		Description
~~10.1~~		~~License, Release and Settlement Agreement, entered into as of June 22, 2021, by Waiter.com, Inc. and Waitr Holdings Inc. and Waitr Inc.~~ ⁽¹⁾
31.1
~~10.2~~	Amended and Restated Employment Agreement, dated April 23, 2021, by and between Waitr Holdings Inc. and Carl A. Grimstad (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K (File No. 001-37788) filed by the Company on April 29, 2021).

~~10.3~~	Executive Employment Agreement, dated April 23, 2021, by and between Waitr Holdings Inc. and Leo Bogdanov (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K (File No. 001-37788) filed by the Company on April 29, 2021).

~~31.1~~	Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule15d-14(a).(1)

31.2		Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule15d-14(a). (1)

32.1		Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section 1350. (1)

32.2		Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section 1350. (1)

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

⁽¹⁾Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: ~~August~~May 9, ~~2021~~ 2022	By:	~~By:~~	/s/ Leo Bogdanov
			Leo Bogdanov
			Chief Financial Officer
			(Principal Financial Officer and Duly Authorized Officer)

Three Months Ended June 30, 2021
	Common stock				Additional paid in capital			Accumulated deficit			Total stockholders’ equity
	Shares		Amount
Balances at March 31, 2021		115,387,140	$	11	$	464,843		$	(367,618	)	$	97,236
Net loss		—		—		—			(5,641	)		(5,641	)
Exercise of stock options and vesting of restricted stock units		1,314,137		—		2			—			2
Taxes paid related to net settlement on stock-based compensation		—		—		(85	)		—			(85	)
Stock-based compensation		—		—		2,387			—			2,387
Adjustment of consideration for acquisition		—		—		(955	)		—			(955	)
Balances at June 30, 2021		116,701,277	$	11	$	466,192		$	(373,259	)	$	92,944

Three Months Ended June 30, 2020
	Common stock				Additional paid in capital			Accumulated deficit			Total stockholders’ equity
	Shares		Amount
Balances at March 31, 2020		80,807,908	$	8	$	392,004		$	(381,844	)	$	10,168
Net income		—		—		—			10,653			10,653
Exercise of stock options and vesting of restricted stock units		433,303		—		57			—			57
Taxes paid related to net settlement on stock-based compensation		—		—		(296	)		—			(296	)
Stock-based compensation		—		—		602			—			602
Stock issued for conversion of Notes		9,222,978		1		11,888			—			11,889
Issuance of common stock		11,918,322		1		16,113			—			16,114
Balances at June 30, 2020		102,382,511	$	10	$	420,368		$	(371,191	)	$	49,187

(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		10,927
Plus: net working capital deficit assumed		573
Total estimated 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 estimated consideration	$	22,045

	Amortizable Life (in years)		Value
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

	Six Months Ended June 30, 2020
	As Reported			Adjustment			As Revised
Cash flows from operating activities:
Changes in liabilities:
Accrued medical contingency	$	—		$	(112	)	$	(112	)
Accrued workers' compensation liability		(117	)		116			(1	)
Other current liabilities		1,236			(4	)		1,232
Net cash provided by (used in) operating activities		18,961			—			18,961

	June 30, 2020
	As Reported			Adjustment			As Revised
Other current liabilities	$	13,923		$	659		$	14,582
Total current liabilities		44,532			659			45,191
Accrued medical contingency - long term		—			17,091			17,091
Accrued workers' compensation liability - long term		346			(245	)		101
Total liabilities		148,688			17,505			166,193
Accumulated deficit		(353,686	)		(17,505	)		(371,191	)
Total stockholders' equity		66,692			(17,505	)		49,187

	Six Months Ended June 30, 2021
Cash paid for operating lease liabilities (in thousands)	$	780
Weighted-average remaining lease term (years)		4.2
Weighted-average discount rate		5.0	%

	2021		2020
Weighted-average fair value at grant	$	2.19	$	0.24
Risk free interest rate	0.46%		1.54%
Expected volatility	131.4%		100.6%
Expected option life (years)		3.59		3.25

	Three Months Ended June 30,				Six Months Ended June 30,
Key Business Metrics⁽¹⁾	2021		2020		2021		2020
Active Diners (as of period end)		1,878,904		2,109,353		1,878,904		2,109,353
Average Daily Orders		38,583		44,241		38,108		40,909
Gross Food Sales (dollars in thousands)	$	154,738	$	175,044	$	305,019	$	308,557
Average Order Size (in dollars)	$	44.07	$	43.48	$	44.22	$	41.44

~~Delaware~~

~~26-3828008~~

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

214 Jefferson Street, Suite 200
Lafayette, Louisiana

(Address of principal executive offices)

(Zip Code)