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2020-08-06

TABLE_CONTENTS

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2020 

OR

 

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)

 

 

Delaware

 

26-3828008

(State or other jurisdiction of

incorporation or organization)

 

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

214 Jefferson Street, Suite 200

Lafayette, Louisiana

 

70501

(Address of principal executive offices)

 

(Zip Code)

 

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

______________________

 

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  NO 

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  NO 

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.  

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

 

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

The number of shares of Registrant’s Common Stock outstanding as of August 4, 2020 was 110,075,737.

 

 


TABLE_CONTENTS

 

Table of Contents

 

 

 

Page

PART I

Financial Information

1

Item 1.

Condensed Consolidated Financial Statements (unaudited)

1

 

Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019

1

 

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019

2

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019

3

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2020 and 2019

4

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

33

 

 

 

PART II

Other Information

34

Item 1.

Legal Proceedings

34

Item 1A.

Risk Factors

34

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

Item 3.

Defaults Upon Senior Securities

35

Item 4.

Mine Safety Disclosures

35

Item 5.

Other Information

35

Item 6.

Exhibits

36

 

 

 

 

Signatures

37

 

 

 

 


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,

 

 

 

2020

 

 

2019

 

 

 

Unaudited

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

66,702

 

 

$

29,317

 

Accounts receivable, net

 

 

6,121

 

 

 

3,272

 

Capitalized contract costs, current

 

 

546

 

 

 

199

 

Prepaid expenses and other current assets

 

 

5,506

 

 

 

8,329

 

TOTAL CURRENT ASSETS

 

 

78,875

 

 

 

41,117

 

Property and equipment, net

 

 

3,398

 

 

 

4,072

 

Capitalized contract costs, noncurrent

 

 

1,978

 

 

 

772

 

Goodwill

 

 

106,734

 

 

 

106,734

 

Intangible assets, net

 

 

23,941

 

 

 

25,761

 

Other noncurrent assets

 

 

454

 

 

 

517

 

TOTAL ASSETS

 

$

215,380

 

 

$

178,973

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Current portion of Term Loans

 

$

12,500

 

 

$

 

Accounts payable

 

 

5,335

 

 

 

4,384

 

Restaurant food liability

 

 

5,528

 

 

 

5,612

 

Accrued payroll

 

 

5,020

 

 

 

5,285

 

Short-term loans

 

 

2,094

 

 

 

3,612

 

Deferred revenue, current

 

 

47

 

 

 

414

 

Income tax payable

 

 

85

 

 

 

51

 

Other current liabilities

 

 

13,923

 

 

 

12,630

 

TOTAL CURRENT LIABILITIES

 

 

44,532

 

 

 

31,988

 

Long-term debt

 

 

103,311

 

 

 

123,244

 

Accrued workers’ compensation liability

 

 

346

 

 

 

463

 

Deferred revenue, noncurrent

 

 

 

 

 

45

 

Other noncurrent liabilities

 

 

499

 

 

 

325

 

TOTAL LIABILITIES

 

 

148,688

 

 

 

156,065

 

Commitment and contingencies (Note 10)

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 249,000,000 shares authorized and 102,382,511

   and 76,579,175 shares issued and outstanding at June 30, 2020 and

   December 31, 2019, respectively

 

 

10

 

 

 

8

 

Additional paid in capital

 

 

420,368

 

 

 

385,137

 

Accumulated deficit

 

 

(353,686

)

 

 

(362,237

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

66,692

 

 

 

22,908

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

215,380

 

 

$

178,973

 

 

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

1


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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

REVENUE

 

$

60,506

 

 

$

51,342

 

 

$

104,749

 

 

$

99,374

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

 

30,547

 

 

 

39,698

 

 

 

56,912

 

 

 

75,881

 

Sales and marketing

 

 

2,740

 

 

 

15,339

 

 

 

5,566

 

 

 

25,662

 

Research and development

 

 

1,167

 

 

 

2,149

 

 

 

2,637

 

 

 

4,089

 

General and administrative

 

 

10,094

 

 

 

12,380

 

 

 

20,872

 

 

 

31,298

 

Depreciation and amortization

 

 

2,075

 

 

 

4,824

 

 

 

4,139

 

 

 

8,940

 

Intangible and other asset impairments

 

 

29

 

 

 

 

 

 

29

 

 

 

18

 

Loss on disposal of assets

 

 

3

 

 

 

10

 

 

 

11

 

 

 

15

 

TOTAL COSTS AND EXPENSES

 

 

46,655

 

 

 

74,400

 

 

 

90,166

 

 

 

145,903

 

INCOME (LOSS) FROM OPERATIONS

 

 

13,851

 

 

 

(23,058

)

 

 

14,583

 

 

 

(46,529

)

OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

2,490

 

 

 

2,190

 

 

 

5,404

 

 

 

3,795

 

Interest income

 

 

(21

)

 

 

(241

)

 

 

(81

)

 

 

(580

)

Other expense (income)

 

 

712

 

 

 

(123

)

 

 

675

 

 

 

(173

)

NET INCOME (LOSS) BEFORE INCOME TAXES

 

 

10,670

 

 

 

(24,884

)

 

 

8,585

 

 

 

(49,571

)

Income tax expense (benefit)

 

 

17

 

 

 

(32

)

 

 

34

 

 

 

30

 

NET INCOME (LOSS)

 

$

10,653

 

 

$

(24,852

)

 

$

8,551

 

 

$

(49,601

)

INCOME (LOSS) PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

 

$

(0.32

)

 

$

0.10

 

 

$

(0.70

)

Diluted

 

$

0.10

 

 

$

(0.32

)

 

$

0.09

 

 

$

(0.70

)

Weighted average shares used to compute net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

 

 

95,053,207

 

 

 

72,416,614

 

 

 

85,968,962

 

 

 

68,492,911

 

Weighted average common shares outstanding – diluted

 

 

105,951,232

 

 

 

72,416,614

 

 

 

91,769,460

 

 

 

68,492,911

 

 

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

2


TABLE_CONTENTS

 

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

8,551

 

 

$

(49,601

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Non-cash interest expense

 

 

4,453

 

 

 

1,079

 

Non-cash advertising expense

 

 

 

 

 

310

 

Stock-based compensation

 

 

1,450

 

 

 

4,552

 

Equity issued in exchange for services

 

 

 

 

 

60

 

Loss on disposal of assets

 

 

11

 

 

 

15

 

Depreciation and amortization

 

 

4,139

 

 

 

8,940

 

Intangible and other asset impairments

 

 

29

 

 

 

18

 

Amortization of capitalized contract costs

 

 

183

 

 

 

1,250

 

Other non-cash income

 

 

(22

)

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,849

)

 

 

(1,734

)

Capitalized contract costs

 

 

(1,736

)

 

 

(2,346

)

Prepaid expenses and other current assets

 

 

2,823

 

 

 

(3,932

)

Accounts payable

 

 

951

 

 

 

(592

)

Restaurant food liability

 

 

(84

)

 

 

6,399

 

Deferred revenue

 

 

(414

)

 

 

(151

)

Income tax payable

 

 

34

 

 

 

(25

)

Accrued payroll

 

 

(265

)

 

 

4,113

 

Accrued workers’ compensation liability

 

 

(117

)

 

 

(305

)

Other current liabilities

 

 

1,650

 

 

 

(2,441

)

Other noncurrent liabilities

 

 

174

 

 

 

40

 

Net cash provided by (used in) operating activities

 

 

18,961

 

 

 

(34,351

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(381

)

 

 

(990

)

Acquisition of Bite Squad, net of cash acquired

 

 

 

 

 

(192,568

)

Other acquisitions

 

 

(290

)

 

 

 

Collections on notes receivable

 

 

36

 

 

 

53

 

Internally developed software

 

 

(1,335

)

 

 

(155

)

Proceeds from sale of property and equipment

 

 

7

 

 

 

23

 

Net cash used in investing activities

 

 

(1,963

)

 

 

(193,637

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Waitr shares redeemed for cash

 

 

 

 

 

(10

)

Proceeds from issuance of stock

 

 

22,944

 

 

 

50,002

 

Equity issuance costs

 

 

(359

)

 

 

(4,175

)

Proceeds from Additional Term Loans

 

 

 

 

 

42,080

 

Proceeds from short-term loans

 

 

1,906

 

 

 

5,032

 

Payments on short-term loans

 

 

(3,415

)

 

 

(658

)

Proceeds from exercise of stock options

 

 

39

 

 

 

3

 

Taxes paid related to net settlement on stock-based compensation

 

 

(728

)

 

 

(799

)

Net cash provided by financing activities

 

 

20,387

 

 

 

91,475

 

Net change in cash

 

 

37,385

 

 

 

(136,513

)

Cash, beginning of period

 

 

29,317

 

 

 

209,340

 

Cash, end of period

 

$

66,702

 

 

$

72,827

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for state income taxes

 

$

 

 

$

30

 

Cash earned during the period for interest

 

 

43

 

 

 

 

Cash paid during the period for interest

 

 

951

 

 

 

2,715

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Stock issued as consideration in Bite Squad acquisition

 

 

 

 

 

126,574

 

Conversion of convertible notes to stock

 

 

11,888

 

 

 

 

Stock issued in connection with Additional Term Loans

 

 

 

 

 

3,884

 

Non-cash gain on debt extinguishment

 

 

 

 

 

1,897

 

 

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

3


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

 

 

$

(364,339

)

 

$

27,673

 

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

 

 

$

(353,686

)

 

$

66,692

 

 

 

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

 

 

$

(362,237

)

 

$

22,908

 

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

 

 

$

(353,686

)

 

$

66,692

 

 

 

 

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

 

4


TABLE_CONTENTS

 

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE AND SIX MONTHS ENDED JUNE 30, 2019

(in thousands, except share data)

(unaudited)

 

Three Months Ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

Additional

paid in

capital

 

 

Accumulated

deficit

 

 

Total

stockholders’

equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at March 31, 2019

 

 

69,368,381

 

 

$

7

 

 

$

331,539

 

 

$

(95,680

)

 

$

235,866

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(24,852

)

 

 

(24,852

)

Gain on debt extinguishment

 

 

 

 

 

 

 

 

1,897

 

 

 

 

 

 

1,897

 

Exercise of stock options and vesting of restricted

   stock units

 

 

8,713

 

 

 

 

 

 

2

 

 

 

 

 

 

2

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,519

 

 

 

 

 

 

2,519

 

Equity issued in exchange for services

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

30

 

Public Warrants exchanged for common stock

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

(10

)

Issuance of common stock

 

 

6,757,000

 

 

 

1

 

 

 

46,425

 

 

 

 

 

 

46,426

 

Balances at June 30, 2019

 

 

76,134,094

 

 

$

8

 

 

$

382,402

 

 

$

(120,532

)

 

$

261,878

 

 

 

Six Months Ended June 30, 2019