| Debt | 7. Debt The Company’s outstanding debt obligations are as follows (in thousands):
March 31,
December 31,
2019
2018
Term Loans
$
67,080
$
25,000
Notes
60,000
60,000
$
127,080
$
85,000
Less: unamortized debt issuance costs on Term Loans
(5,871
)
(2,268
)
Less: unamortized debt issuance costs on Notes
(1,639
)
(1,747
)
Total long-term debt
$
119,570
$
80,985
Short-term loan
—
658
Total outstanding debt
$
119,570
$
81,643
The following discussion includes a description of the Company’s outstanding debt at March 31, 2019 and December 31, 2018. Debt Facility O n January 17, 2019, the Company’s wholly-owned direct subsidiary Waitr Intermediate Holdings, LLC, a Delaware limited liability company (“Intermediate Holdings”), and the Company’s wholly-owned indirect subsidiary Waitr Inc., entered into that certain Amendment No. 1 to Credit and Guaranty Agreement (the “Credit Agreement Amendment”) with the various lenders party thereto and Luxor Capital Group, LP (“Luxor Capital”), as administrative agent and collateral agent, which amended in order to provide to Waitr Inc. additional senior secured first priority term loans under the Debt Facility (as defined below) in the aggregate principal amount of $42,080 the (“Additional Term Loans”), the proceeds of which were used to consummate the Bite Squad Merger. The Existing Term Loans are guaranteed by Intermediate Holdings and secured by (i) a first priority pledge of the equity interests of Waitr Inc. and (ii) a first priority lien on substantially all other assets of Waitr Inc. and Intermediate Holdings (subject to customary exceptions). The Additional Term Loans are guaranteed by Intermediate Holdings, Bite Squad and its subsidiaries and the other guarantors party to the Credit Agreement and secured by a lien on substantially all assets of Waitr Inc., Intermediate Holdings, Bite Squad and its subsidiaries and the other guarantors under the Credit Agreement. The Additional Term Loans and Existing Term Loans (together, the “Term Loans”), will mature on November 15, 2022. Interest on borrowings under the Debt Facility initially accrued at a rate of 7.0% per annum. Effective January 17, 2019, in connection with the Credit Agreement Amendment, interest on borrowings under the Debt Facility accrues at a rate of 7.125% per annum, payable quarterly, in cash or, at the election of the borrower From the closing date of the Additional Term Loans through November 15, 2019, Waitr Inc. will be required to pay a prepayment premium of 5.0% of the principal amount of any Term Loans to be prepaid during such period in connection with (i) any prepayments (whether before or after an event of default), (ii) any payment, repayment or redemption of the obligations following an acceleration, (iii) certain bankruptcy events, or (iv) acceleration upon the termination for any reason of the definitive agreements documenting the convertible promissory notes issued under the Convertible Notes Agreement (as defined under Notes In connection with the Additional Term Loans, the Company issued to the lenders under the Credit Agreement Amendment 325,000 shares of common stock of the Company in a private placement. The lenders under the Credit Agreement Amendment have customary registration rights with respect to such shares. The Credit Agreement requires Intermediate Holdings to maintain minimum consolidated liquidity of $15,000 as of the last day of each fiscal quarter. The Credit Agreement also includes a number of customary covenants. Such covenants, among other things, limit or restrict the ability of each of Intermediate Holdings, Waitr Inc. and its subsidiaries to:
•
incur additional indebtedness and make guarantees;
•
incur liens on assets;
•
engage in mergers or consolidations or fundamental changes;
•
dispose of assets;
•
pay dividends and distributions or repurchase capital stock;
•
make investments, loans and advances, including acquisitions;
•
amend organizational documents and other material contracts;
•
enter into certain agreements that would restrict the ability to incur liens on assets;
•
repay certain junior indebtedness;
•
enter into certain transactions with affiliates;
•
enter into sale leaseback transactions; and
•
change the conduct of its business. The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, dividends and distributions, and prepayments In connection with the Debt Facility, the Company issued to Luxor Capital warrants exercisable for 384,615 shares of the Company’s common stock (the “Debt Warrants”). See Note 13 – Stockholders’ Equity Notes In connection with the Credit Agreement Amendment, the Company entered into that certain Amendment No. 1 to Credit Agreement, dated as of January 17, 2019 (the “Convertible Notes Amendment”), among the Company, the lenders party thereto and Luxor Capital, as administrative agent, which amended the Convertible Notes Agreement (as defined below), to permit the Bite Squad Merger and to make certain other amendments in conformity with the Credit Agreement Amendment. On November 15, 2018, in connection with the closing of the Landcadia Business Combination, the Company entered into a convertible notes credit agreement (the “Convertible Notes Agreement”), pursuant to which the Company issued unsecured convertible promissory notes to Luxor Capital Partners, LP, Luxor Capital Partners Offshore Master Fund, LP, Luxor Wavefront, LP and Lugard Road Capital Master Fund, LP in the aggregate principal amount of $60,000 (the “Notes”). T he Notes bear interest at 1.0% per annum, paid quarterly in cash, and will mature four years from the date of the closing of the Landcadia Business Combination, unless earlier converted at the election of the holder. Upon maturity, the outstanding Notes (and any accrued but unpaid interest) will be repaid in cash or converted into shares of common stock, at the holder’s election. The effective interest rate for borrowings on the Notes, after considering the allocated discount, is approximately 1.77%. At any time at the holder’s election, each Note may be converted in whole or in part into shares of common stock at a rate of $13.00 per share (subject to a 9.9% conversion cap). The Company’s payment Short-term loan On June 4, 2018, the Company entered into a loan agreement with First Insurance Funding to finance a portion of its annual insurance premium obligation. The loan had a principal amount of $2,172, payable in monthly installments, until maturity, and carried an annual interest rate of 3.39%. The loan was paid in full upon maturity on March 21, 2019. Series 2018 Convertible Promissory Notes Between March 2, 2018 and March 15, 2018, the Company issued a series of convertible promissory notes (“Series 2018 Notes”) to various investors with a maturity date of 24 months from the date of issuance with an aggregate principal amount of $2,470, of which $1,410 was received in cash, $1,000 in advertising services receivable, and $60 was debt assumed in the IndiePlate LLC asset acquisition. The Series 2018 Notes accrued interest at a rate of 8% per annum that was due and payable at maturity, unless otherwise converted prior to maturity. In connection with the Landcadia Business Combination, the Series 2018 Notes were either ultimately converted into common stock of the post-combination company or redeemed for cash. The Company determined that the feature in the Series 2018 Notes providing for conversion into shares sold in the next financing at a stated discount, and the ability for holders to redeem their notes at a substantial premium, represented an embedded derivative requiring separate accounting recognition in accordance with subtopic ASC 815-15 . Note 8 – Derivatives |
