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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 September 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 November 5, 2020 was 110,997,964.

 

 


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 September 30, 2020 and December 31, 2019

1

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019

2

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019

3

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 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

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

35

 

 

 

PART II

Other Information

36

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

37

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38

Item 3.

Defaults Upon Senior Securities

38

Item 4.

Mine Safety Disclosures

38

Item 5.

Other Information

38

Item 6.

Exhibits

39

 

 

 

 

Signatures

40

 

 

 

 


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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

Unaudited

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

77,136

 

 

$

29,317

 

Accounts receivable, net

 

 

3,925

 

 

 

3,272

 

Capitalized contract costs, current

 

 

643

 

 

 

199

 

Prepaid expenses and other current assets

 

 

4,597

 

 

 

8,329

 

TOTAL CURRENT ASSETS

 

 

86,301

 

 

 

41,117

 

Property and equipment, net

 

 

3,452

 

 

 

4,072

 

Capitalized contract costs, noncurrent

 

 

2,220

 

 

 

772

 

Goodwill

 

 

106,734

 

 

 

106,734

 

Intangible assets, net

 

 

23,414

 

 

 

25,761

 

Other noncurrent assets

 

 

435

 

 

 

517

 

TOTAL ASSETS

 

$

222,556

 

 

$

178,973

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,975

 

 

$

4,384

 

Restaurant food liability

 

 

4,736

 

 

 

5,612

 

Accrued payroll

 

 

2,248

 

 

 

5,285

 

Short-term loans

 

 

1,172

 

 

 

3,612

 

Deferred revenue, current

 

 

24

 

 

 

414

 

Income tax payable

 

 

52

 

 

 

51

 

Other current liabilities

 

 

17,026

 

 

 

13,293

 

TOTAL CURRENT LIABILITIES

 

 

30,233

 

 

 

32,651

 

Long-term debt

 

 

93,689

 

 

 

123,244

 

Accrued medical contingency

 

 

16,839

 

 

 

17,203

 

Accrued workers’ compensation liability

 

 

 

 

 

102

 

Deferred revenue, noncurrent

 

 

 

 

 

45

 

Other noncurrent liabilities

 

 

1,107

 

 

 

325

 

TOTAL LIABILITIES

 

 

141,868

 

 

 

173,570

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 249,000,000 shares authorized and 110,120,621

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

   December 31, 2019, respectively

 

 

11

 

 

 

8

 

Additional paid in capital

 

 

447,224

 

 

 

385,137

 

Accumulated deficit

 

 

(366,547

)

 

 

(379,742

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

80,688

 

 

 

5,403

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

222,556

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

REVENUE

 

$

52,734

 

 

$

49,201

 

 

$

157,483

 

 

$

148,575

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

 

27,409

 

 

 

37,289

 

 

 

84,321

 

 

 

113,170

 

Sales and marketing

 

 

3,288

 

 

 

15,953

 

 

 

8,854

 

 

 

41,615

 

Research and development

 

 

820

 

 

 

1,920

 

 

 

3,457

 

 

 

6,009

 

General and administrative

 

 

11,380

 

 

 

12,817

 

 

 

32,252

 

 

 

44,115

 

Depreciation and amortization

 

 

2,103

 

 

 

4,851

 

 

 

6,242

 

 

 

13,791

 

Goodwill impairment

 

 

 

 

 

119,212

 

 

 

 

 

 

119,212

 

Intangible and other asset impairments

 

 

 

 

 

72,917

 

 

 

29

 

 

 

72,935

 

Loss on disposal of assets

 

 

4

 

 

 

11

 

 

 

15

 

 

 

26

 

TOTAL COSTS AND EXPENSES

 

 

45,004

 

 

 

264,970

 

 

 

135,170

 

 

 

410,873

 

INCOME (LOSS) FROM OPERATIONS

 

 

7,730

 

 

 

(215,769

)

 

 

22,313

 

 

 

(262,298

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

2,117

 

 

 

2,775

 

 

 

7,521

 

 

 

6,570

 

Interest income

 

 

(14

)

 

 

(297

)

 

 

(95

)

 

 

(877

)

Other expense

 

 

965

 

 

 

1,827

 

 

 

1,640

 

 

 

1,654

 

NET INCOME (LOSS) BEFORE INCOME TAXES

 

 

4,662

 

 

 

(220,074

)

 

 

13,247

 

 

 

(269,645

)

Income tax expense

 

 

18

 

 

 

30

 

 

 

52

 

 

 

60

 

NET INCOME (LOSS)

 

$

4,644

 

 

$

(220,104

)

 

$

13,195

 

 

$

(269,705

)

INCOME (LOSS) PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

 

$

(2.89

)

 

$

0.14

 

 

$

(3.77

)

Diluted

 

$

0.04

 

 

$

(2.89

)

 

$

0.13

 

 

$

(3.77

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

 

 

109,181,847

 

 

 

76,145,317

 

 

 

93,763,069

 

 

 

71,071,777

 

Weighted average common shares outstanding – diluted

 

 

123,785,750

 

 

 

76,145,317

 

 

 

102,519,454

 

 

 

71,071,777

 

 

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)

 

 

 

Nine Months Ended September 30,

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

13,195

 

 

$

(269,705

)

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

 

 

 

 

 

 

 

 

Non-cash interest expense

 

 

5,126

 

 

 

3,346

 

Non-cash advertising expense

 

 

 

 

 

379

 

Stock-based compensation

 

 

3,178

 

 

 

6,747

 

Equity issued in exchange for services

 

 

 

 

 

90

 

Loss on disposal of assets

 

 

15

 

 

 

26

 

Depreciation and amortization

 

 

6,242

 

 

 

13,791

 

Goodwill impairment

 

 

 

 

 

119,212

 

Intangible and other asset impairments

 

 

29

 

 

 

72,935

 

Amortization of capitalized contract costs

 

 

327

 

 

 

1,614

 

Other non-cash income

 

 

(31

)

 

 

(39

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(653

)

 

 

(248

)

Capitalized contract costs

 

 

(2,219

)

 

 

(3,585

)

Prepaid expenses and other current assets

 

 

3,732

 

 

 

(2,803

)

Accounts payable

 

 

591

 

 

 

2,640

 

Restaurant food liability

 

 

(876

)

 

 

5,851

 

Deferred revenue

 

 

(435

)

 

 

(3,691

)

Income tax payable

 

 

1

 

 

 

5

 

Accrued payroll

 

 

(3,037

)

 

 

2,853

 

Accrued medical contingency

 

 

(363

)

 

 

(604

)

Accrued workers’ compensation liability

 

 

(102

)

 

 

(160

)

Other current liabilities

 

 

4,085

 

 

 

(76

)

Other noncurrent liabilities

 

 

781

 

 

 

111

 

Net cash provided by (used in) operating activities

 

 

29,586

 

 

 

(51,311

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(968

)

 

 

(1,493

)

Acquisition of Bite Squad, net of cash acquired

 

 

 

 

 

(192,568

)

Other acquisitions

 

 

(339

)

 

 

(395

)

Collections on notes receivable

 

 

51

 

 

 

72

 

Internally developed software

 

 

(2,387

)

 

 

(1,096

)

Proceeds from sale of property and equipment

 

 

14

 

 

 

28

 

Net cash used in investing activities

 

 

(3,629

)

 

 

(195,452

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Waitr shares redeemed for cash

 

 

 

 

 

(10

)

Proceeds from issuance of stock

 

 

48,314

 

 

 

50,002

 

Equity issuance costs

 

 

(740

)

 

 

(4,179

)

Proceeds from Additional Term Loans

 

 

 

 

 

42,080

 

Payments on long-term loans

 

 

(22,594

)

 

 

 

Proceeds from short-term loans

 

 

1,906

 

 

 

5,032

 

Payments on short-term loans

 

 

(4,336

)

 

 

(2,509

)

Proceeds from exercise of stock options

 

 

40

 

 

 

4

 

Taxes paid related to net settlement on stock-based compensation

 

 

(728

)

 

 

(799

)

Net cash provided by financing activities

 

 

21,862

 

 

 

89,621

 

Net change in cash

 

 

47,819

 

 

 

(157,142

)

Cash, beginning of period

 

 

29,317

 

 

 

209,340

 

Cash, end of period

 

$

77,136

 

 

$

52,198

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for state income taxes

 

$

64

 

 

$

30

 

Cash paid during the period for interest

 

 

2,395

 

 

 

3,224

 

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

 

 

12,024

 

 

 

 

Stock issued in connection with Additional Term Loans

 

 

 

 

 

3,884

 

Non-cash gain on debt extinguishment

 

 

 

 

 

1,897

 

Seller-financed payables related to other acquisitions

 

 

 

 

 

801

 

Non-cash investments in other acquisitions

 

 

 

 

 

801

 

 

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 NINE MONTHS ENDED SEPTEMBER 30, 2020

(in thousands, except share data)

(unaudited)

 

Three Months Ended September 30, 2020

 

 

 

Common stock

 

 

Additional

paid in

capital

 

 

Accumulated

deficit

 

 

Total

stockholders’

equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2020

 

 

102,382,511

 

 

$

10

 

 

$

420,368

 

 

$

(371,191

)

 

$

49,187

 

Net income

 

 

 

 

 

 

 

 

 

 

 

4,644

 

 

 

4,644

 

Exercise of stock options and vesting of restricted

   stock units

 

 

45,071

 

 

 

 

 

 

2

 

 

 

 

 

 

2

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,728

 

 

 

 

 

 

1,728

 

Stock issued for conversion of Notes

 

 

105,384

 

 

 

 

 

 

137

 

 

 

 

 

 

137

 

Issuance of common stock

 

 

7,587,655

 

 

 

1

 

 

 

24,989

 

 

 

 

 

 

24,990

 

Balances at September 30, 2020

 

 

110,120,621

 

 

$

11

 

 

$

447,224

 

 

$

(366,547

)

 

$

80,688

 

 

 

Nine Months Ended September 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

 

 

 

 

 

 

 

 

 

 

 

13,195

 

 

 

13,195

 

Exercise of stock options and vesting of restricted

   stock units

 

 

514,364

 

 

 

 

 

 

40

 

 

 

 

 

 

40

 

Taxes paid related to net settlement on stock-based

  compensation

 

 

 

 

 

 

 

 

(728

)

 

 

 

 

 

(728

)

Stock-based compensation

 

 

 

 

 

 

 

 

3,178

 

 

 

 

 

 

3,178

 

Stock issued for conversion of Notes

 

 

9,328,362

 

 

 

1

 

 

 

12,025

 

 

 

 

 

 

12,026

 

Issuance of common stock

 

 

23,698,720

 

 

 

2

 

 

 

47,572

 

 

 

 

 

 

47,574

 

Balances at September 30, 2020

 

 

110,120,621

 

 

$

11

 

 

$

447,224

 

 

$

(366,547

)

 

$

80,688

 

 

 

 

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 NINE MONTHS ENDED SEPTEMBER 30, 2019

(in thousands, except share data)

(unaudited)

 

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

Additional

paid in

capital

 

 

Accumulated

deficit

 

 

Total

stockholders’

equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2019

 

 

76,134,094

 

 

$

8

 

 

$

382,402

 

 

$

(138,037

)

 

$

244,373

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(220,104

)

 

 

(220,104

)

Exercise of stock options and vesting of restricted

   stock units

 

 

16,826

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,195

 

 

 

 

 

 

2,195

 

Equity issued in exchange for services

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

30

 

Balances at September 30, 2019

 

 

76,150,920