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TABLE_CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 10-Q
_______________________________________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
oTRANSITION 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)
_______________________________________________________
Delaware26-3828008
(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
______________________
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.0001 Per ShareWTRHThe 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 x NO o
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 x NO o
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 fileroAccelerated filerx
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
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 NO x


TABLE_CONTENTS

The number of shares of Registrant’s Common Stock outstanding as of May 4, 2022 was 158,435,522.


TABLE_CONTENTS
Table of Contents
Page


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)
March 31,
2022
December 31,
2021
Unaudited
ASSETS
CURRENT ASSETS
Cash$54,877 $60,111 
Accounts receivable, net3,875 3,027 
Capitalized contract costs, current1,285 1,170 
Prepaid expenses and other current assets5,293 8,706 
TOTAL CURRENT ASSETS65,330 73,014 
Property and equipment, net3,137 3,763 
Capitalized contract costs, noncurrent3,346 3,183 
Goodwill63,434 130,624 
Intangible assets, net43,000 43,126 
Operating lease right-of-use assets3,901 4,327 
Other noncurrent assets999 1,070 
TOTAL ASSETS$183,147 $259,107 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
CURRENT LIABILITIES
Accounts payable$5,985 $7,018 
Restaurant food liability2,591 3,327 
Accrued payroll1,446 2,988 
Short-term loans for insurance financing1,293 3,142 
Income tax payable90 74 
Operating lease liabilities1,420 1,581 
Other current liabilities20,055 19,309 
TOTAL CURRENT LIABILITIES32,880 37,439 
Long term debt - related party82,284 81,977 
Accrued medical contingency 53 
Operating lease liabilities, net of current portion2,745 3,034 
Other noncurrent liabilities59 2,115 
TOTAL LIABILITIES117,968 124,618 
Commitments and contingent liabilities (Note 10)
STOCKHOLDERS’ EQUITY:
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 capital511,515 503,609 
Accumulated deficit(446,351)(369,135)
TOTAL STOCKHOLDERS’ EQUITY65,179 134,489 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$183,147 $259,107 
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 March 31,
20222021
REVENUE$35,040 $50,930 
COSTS AND EXPENSES:
Operations and support20,279 30,338 
Sales and marketing6,253 4,016 
Research and development1,311 999 
General and administrative11,545 10,186 
Depreciation and amortization3,065 2,917 
Goodwill impairment67,190  
Gain on disposal of assets(17)(3)
TOTAL COSTS AND EXPENSES109,626 48,453 
(LOSS) INCOME FROM OPERATIONS(74,586)2,477 
OTHER EXPENSES AND LOSSES, NET
Interest expense1,704 1,901 
Other expense910 4,264 
NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES(77,200)(3,688)
Income tax expense16 24 
NET LOSS FROM CONTINUING OPERATIONS$(77,216)$(3,712)
LOSS PER SHARE:
Basic$(0.50)$(0.03)
Diluted$(0.50)$(0.03)
Weighted average shares used to compute net loss per share:
Weighted average common shares outstanding – basic153,629,968 112,334,094 
Weighted average common shares outstanding – diluted153,629,968 112,334,094 
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)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net loss$(77,216)$(3,712)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Non-cash interest expense310 772 
Stock-based compensation1,671 2,078 
Gain on disposal of assets(17)(3)
Depreciation and amortization3,065 2,917 
Goodwill impairment67,190  
Amortization of capitalized contract costs302 194 
Change in fair value of contingent consideration liability81  
Other(24)(66)
Changes in assets and liabilities:
Accounts receivable(848)(1,624)
Capitalized contract costs(580)(655)
Prepaid expenses and other current assets3,413 1,899 
Other noncurrent assets93 27 
Accounts payable(1,033)20 
Restaurant food liability(736)1,589 
Income tax payable16 24 
Accrued payroll(1,542)1,479 
Accrued medical contingency(53)(143)
Other current liabilities(940)8,051 
Other noncurrent liabilities(387)(38)
Net cash (used in) provided by operating activities(7,235)12,809 
Cash flows from investing activities:
Purchases of property and equipment(26)(165)
Internally developed software(2,347)(1,722)
Purchase of domain names(12) 
Acquisitions, net of cash acquired (10,927)
Proceeds from sale of property and equipment 9 
Net cash used in investing activities(2,385)(12,805)
Cash flows from financing activities:
Proceeds from issuance of stock6,235  
Payments on long-term loan (14,472)
Payments on short-term loans for insurance financing(1,849)(1,583)
Payments on acquisition loans (66)
Proceeds from exercise of stock options 6 
Taxes paid related to net settlement on stock-based compensation (732)
Net cash provided by (used in) financing activities4,386 (16,847)
Net change in cash(5,234)(16,843)
Cash, beginning of period60,111 84,706 
Cash, end of period$54,877 $67,863 
Supplemental disclosures of cash flow information:
Cash paid during the period for interest$1,394 $1,129 
Supplemental disclosures of non-cash investing and financing activities:
Stock issued as consideration in acquisition$ $11,500 
Noncash impact of operating lease assets upon adoption 5,387 
Noncash impact of operating lease liabilities upon adoption 5,792 
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
(in thousands, except share data)
(unaudited)
Three Months Ended March 31, 2022
 Common stockAdditional
paid in
capital
Accumulated
deficit
Total
stockholders’
equity
 SharesAmount
Balances at December 31, 2021146,094,300 $15 $503,609 $(369,135)$134,489 
Net loss— — — (77,216)(77,216)
Exercise of stock options and vesting of restricted stock units152,692 — — —  
Stock-based compensation— — 1,671 — 1,671 
Issuance of common stock, net9,458,655 — 6,235 — 6,235 
Balances at March 31, 2022
155,705,647 $15 $511,515 $(446,351)$65,179 

Three Months Ended March 31, 2021
Common stockAdditional
paid in
capital
Accumulated
deficit
Total
stockholders’
equity
SharesAmount
Balances at December 31, 2020111,259,037 $11 $451,991 $(363,906)$88,096 
Net loss— — — (3,712)(3,712)
Exercise of stock options and vesting of restricted stock units537,436 — 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 acquisitions3,590,667 — 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.
4

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 4Business 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, 2021 (the “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.
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;
loss exposure related to claims;
determination of agent vs. principal classification for revenue recognition purposes;
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income taxes;
useful lives of tangible and intangible assets;
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.
Significant Accounting Policies
See “Recent Accounting Pronouncements” below for a description of accounting principle changes adopted during the three months ended March 31, 2022. There have been no material changes to our significant accounting policies described in the 2021 Form 10-K.
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 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 disaggregated by offering. Revenue consists of the following for the periods indicated (in thousands):
 Three Months Ended March 31,
 20222021
Delivery transaction fees$31,576 $50,476 
Payment processing referral fees2,510  
Setup and integration fees 7 
Other954 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. 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. See Note 5 – Accounts Receivable, Net for additional details on the Company’s accounts 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 $2,997 and $2,968 as of March 31, 2022 and December 31, 2021, respectively, out of which $866 and $818, respectively, was classified as current. Amortization of expense for the costs to obtain a contract were $208 and $149 for the three months ended March 31, 2022 and 2021, respectively.
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 $1,634 and $1,385 as of March 31, 2022 and December 31, 2021, respectively, out of which $419 and $352, respectively, was classified as current. Amortization of expense for the costs to fulfill a contract were $94 and $45 for the three months ended 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 properties of ProMerchant LLC, Cape Cod Merchant Services LLC and 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 receive residual payments from the payment providers. The purchase price for the 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 $1,939, respectively (see Note 13 - Fair Value Measurements).
The Cape Payment Acquisition was considered a business combination in accordance with ASC 805, and was accounted for using the acquisition method. The results of operations of the Cape Payment Companies are included in our
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condensed consolidated financial statements beginning on the acquisition date, August 25, 2021, and were immaterial. Pro forma results were deemed immaterial to the 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 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”).
The Delivery Dudes Acquisition was considered a business combination in accordance with ASC 805, and was accounted for using the acquisition method. 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 income of Delivery Dudes included in the unaudited condensed consolidated statement of operations in the three months ended March 31, 2022 totaled approximately $3,246 and $254, respectively.
During the second and third quarters of 2021, the Company acquired the assets of six Delivery Dudes franchisees for total consideration of approximately $2,464, including $2,431 in cash. The asset acquisitions were accounted for under the acquisition method with the purchase consideration allocated to customer relationships. The 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.
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, 2021 are included in the table below (in thousands).
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 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 period presented.
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5. Accounts Receivable, Net
Accounts receivable consist of the following (in thousands):
March 31,
2022
December 31,
2021
Credit card receivables$2,204 $1,354 
Residual commissions receivable1,388 1,342 
Receivables from restaurants and customers593 660 
Accounts receivable$4,185 $3,356 
Less: allowance for doubtful accounts and chargebacks(310)(329)
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 trademark intangible asset and domain names related to the rebranding initiative are indefinite-lived assets and therefore are not subject to amortization but are evaluated annually for impairment. The Bite Squad, 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 March 31, 2022
Gross Carrying
Amount
Accumulated
Amortization
Accumulated
Impairment
Intangible
Assets, Net
Intangible assets subject to amortization:
Software$38,033 $(10,848)$(11,779)$15,406 
Trademarks/Trade name/Patents6,549 (5,756)— 793 
Customer Relationships96,510 (15,354)(57,378)23,778 
Total intangible assets subject to amortization141,092 (31,958)(69,157)39,977 
Trademarks, not subject to amortization3,023 — — 3,023 
Total$144,115 $(31,958)$(69,157)$43,000 
As of December 31, 2021
Gross Carrying
Amount
Accumulated
Amortization
Accumulated
Impairment
Intangible
Assets, Net
Intangible assets subject to amortization:
Software$35,686 $(9,632)$(11,779)$14,275 
Trademarks/Trade name/Patents6,549 (5,585)— 964 
Customer Relationships96,510 (14,256)(57,378)24,876 
Total intangible assets subject to amortization138,745 (29,473)(69,157)40,115 
Trademarks, not subject to amortization3,011 — — 3,011 
Total$141,756 $(29,473)$(69,157)$43,126 
During the three months ended March 31, 2022, the Company capitalized approximately $2,347 of software costs related to the development of the Platforms.
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The Company recorded amortization expense of $2,485 and $1,832 for the three months ended March 31, 2022 and 2021, respectively. Estimated future amortization expense of intangible assets subject to amortization as of March 31, 2022 is as follows (in thousands):
Amortization
The remainder of 2022
$8,184 
202310,772 
20248,712 
20255,169 
20263,448 
Thereafter3,692 
Total future amortization$39,977 
Goodwill
The change in the Company’s goodwill balance is as follows for the three months ended March 31, 2022 and the year ended December 31, 2021 (in thousands):
March 31,
2022
December 31,
2021
Balance, beginning of period$130,624 $106,734 
Acquisitions during the period 23,890 
Impairments during the period(67,190) 
Balance, end of period$63,434 $130,624 
The Company recorded $23,890 of goodwill during the year ended 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 one 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 ASC 350 analysis, the Company recognized a non-cash pre-tax impairment loss of $67,190 during the 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 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):
March 31,
2022
December 31,
2021
Accrued insurance expenses$4,082 $3,932 
Accrued estimated workers' compensation expenses524 644 
Accrued medical contingency370 370 
Accrued legal contingency1,250 1,250 
Accrued sales tax payable119 175 
Accrued cash incentives51 3,130 
Other accrued expenses5,713 3,685 
Contingent consideration liability2,020  
Unclaimed property2,542 2,372 
Other current liabilities3,384 3,751 
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
Range in 2021
through 1Q22
Effective
Interest Rate at
March 31, 2022
MaturityMarch 31,
2022
December 31,
2021
Term Loan
5.125% - 7.125%
10.62%November 2023$35,007 $35,007 
Notes
4.0% - 6.0%
6.49%November 202349,504 49,504 
$84,511 $84,511 
Less: unamortized debt issuance costs on Term Loan(1,847)(2,099)
Less: unamortized debt issuance costs on Notes(380)(435)
Long term debt - related party$82,284 $81,977 
Short-term loans for insurance financing
3.49% - 3.99%
n/aAugust 2022 - October 20221,293 3,142 
Total outstanding debt$83,577 $85,119 
Interest expense related to the Company’s outstanding debt totaled $1,704 and $1,901 for the three months ended March 31, 2022 and 2021, respectively. Interest expense includes interest on outstanding borrowings and amortization of debt issuance costs and debt discount. See Note 15 – Related Party Transactions for additional information regarding the Company’s related party long-term debt.
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 exercisable for 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 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.
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,
20222021
Contractual interest expense$743 $495 
Amortization of debt discount54 290 
$797 $785 
The Notes include customary anti-dilution protection, including broad-based weighted average adjustments for issuances of additional shares. Upon maturity, the outstanding Notes (and any accrued but unpaid interest) will be repaid in cash or converted into shares of common stock, at the holder’s election. The Notes are convertible at the holder’s election into shares of the Company’s common stock at a rate of $8.63 per 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).
Short-Term Loans
The Company has outstanding short-term loans as of March 31, 2022 for the purpose of financing portions of 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 $16 and $24 for the three months ended March 31, 2022 and 2021, respectively. The Company’s income tax expense is entirely related to state taxes in various jurisdictions. The Company recorded a full valuation allowance against net deferred tax assets as of March 31, 2022 and December 31, 2021 as the Company has generated net operating losses prior to the second quarter of 2020 and in the first, second and 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.
During 2020, the Company was permitted to defer payment of the employer portion of certain payroll taxes under the Coronavirus Aid, Relief and Economic Security (CARES) 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 will be paid in 2022. This amount is reflected in other current liabilities in the accompanying unaudited condensed consolidated balance sheet.
10. Commitments and Contingent Liabilities
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 March 31, 2022 and December 31, 2021, $4,446 and $4,305, respectively, in outstanding workers’ compensation and auto policy reserves are included in the unaudited condensed consolidated balance sheet.
Legal Matters
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. On June 22, 2021, the Company entered into a License, Release and Settlement Agreement (the “Settlement”) to settle all claims related to this lawsuit. Pursuant to the Settlement, the Company paid the plaintiff $4,700 in cash on July 1, 2021. In connection with the Settlement, we agreed to adopt a new trademark or tradename to replace the Waitr trademark and to discontinue use of the Waitr trademark in connection with the marketing, sale or provision of any web-based or mobile app-based delivery, pick-
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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 accrued legal reserve is included in other current liabilities in the unaudited condensed consolidated balance sheet at March 31, 2022 and in other expense in the unaudited condensed consolidated statement of operations for the three months ended 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. The plaintiffs assert claims for breach of contract and violation of the duty of good faith and fair dealing, and they seek recovery on behalf of themselves and two separate classes. Based on the current class definitions, as many as 10,000 restaurant partners could be members of the 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 three months ended December 31, 2021. The accrued legal contingency is included in other current liabilities in the 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, 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 intellectual property infringement, and workers’ compensation 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, there are limits to insurance coverage and in certain instances claims are met with denial of coverage positions by the carriers; accordingly, we could suffer material losses as a result of these claims, the denial of coverage for such 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 March 31, 2022, there were 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 $1,671 and $2,078 for the three months ended March 31, 2022 and 2021, respectively.
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Stock-Based Awards
Stock Options
During the three months ended March 31, 2021, 500,000 stock options were granted under the 2018 Incentive 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 stock option grants on grant date using an option-pricing model with various assumptions regarding risk-free rate, volatility and expected term. The Company recognized compensation expense for stock options of $13 and $334 for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, all outstanding stock options were fully vested and there was no remaining unrecognized compensation cost related to stock options.
The stock option activity under the Company’s incentive plans during the three months ended March 31, 2022 and 2021 is as follows:
Three Months Ended March 31, 2022Three 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
Balance, beginning of period9,656,928 $0.39 $0.28 9,753,257 $0.43 $0.33 
Granted   500,000 2.78 2.19 
Exercised   (6,779)0.88 4.73 
Forfeited(12,014)1.95 3.74 (13,995)4.58 4.38 
Expired   (6,536)4.83 3.26 
Balance, end of period9,644,914 $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 March 31, 2022 and December 31, 2021:
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
Number of Options9,644,914 9,644,914 9,656,928 4,870,026 
Weighted-average remaining contractual term (years)2.782.783.033.06
Weighted-average exercise price$0.39 $0.39 $0.39 $0.40 
Aggregate Intrinsic Value (in thousands)$ $ $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 $15 during the three months ended March 31, 2021. Upon exercise, the Company issued new common stock. 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 March 31, 2022, there were 3,134,325 performance-based RSUs outstanding under the Company’s 2018 Incentive 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. 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 three months ended March 31, 2022, 3,630,000 RSUs with time-based vesting were granted pursuant to the 2018 Incentive Plan (with an aggregate grant fair value of value of $2,006). The RSUs generally vest over three years in accordance with the terms specified in the applicable award agreements, all of which accelerate and vest upon a change of control.
The Company recognized compensation expense for restricted stock of $1,658 and $1,744 during the three months ended March 31, 2022 and 2021, respectively. Unrecognized compensation cost related to unvested time-based RSUs as of March 31, 2022 totaled $14,707, with a weighted average remaining vesting period of approximately 2.5 years. The total fair value of restricted shares that vested during the three months ended March 31, 2022 and 2021 was $68 and $2,247, respectively.
The activity for restricted stock with time-based vesting under the Company’s incentive plans is as follows for the three months ended March 31, 2022 and 2021:
Three Months Ended March 31, 2022Three 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)
Nonvested, beginning of period8,614,746 $2.15 2.54,558,603 $2.23 1.71
Granted3,630,000 0.55 195,000 3.66 
Shares vested(152,692)2.47 (749,870)0.97 
Forfeitures(286,168)1.92 (126,084)1.05 
Nonvested, end of period11,805,886 $1.66 2.53,877,649 $2.58 1.77
Cash-Based Awards
Performance Bonus Agreement
On April 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 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 March 31, 2022 and December 31, 2021, there were 249,000,000 shares of common stock authorized and 155,705,647 and 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 March 31, 2022 or December 31, 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 2021Sales during the three months ended March 31, 2022 Total
Maximum aggregate offering price (in thousands)$50,000 
Total shares sold1,679,631 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 March 31, 2022 and December 31, 2021, the Company was authorized to issue 1,000,000 shares of preferred stock ($0.0001 par value per share). There were no issued or outstanding preferred shares as of March 31, 2022 or December 31, 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 exercisable for 579,365 shares of the Company’s common stock at March 31, 2022, with an exercise price of $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. 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 December 31, 2021, the Company had an outstanding medical contingency claim which was measured at fair value on a recurring basis. The estimated loss exposure for the medical contingency claim reflected the liability for unpaid medical expenses and dependent death benefits, totaling $423 as of December 31, 2021. The analysis used in the
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measurement of the reserve for the medical contingency reflected the Company’s assumptions regarding unpaid medical expenses and estimated death benefits used in developing the fair value estimate and 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 March 31, 2022 and December 31, 2021 (in thousands):
As of March 31, 2022
Level 1Level 2Level 3Total
Liabilities
Contingent consideration$— $— $2,020 $2,020 
Total liabilities measured and recorded at fair value$ $ $2,020 $2,020 
As of December 31, 2021
Level 1Level 2Level 3Total
Liabilities
Accrued medical contingency$— $— $423 $423 
Contingent consideration— — 1,939 1,939 
Total liabilities measured and recorded at fair value$ $ $2,362 $2,362 
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The Company had no assets required to be measured at fair value on a recurring basis at March 31, 2022 or December 31, 2021.
Adjustments to the fair value of the accrued medical contingency are recognized in other expense (income) on the condensed consolidated statement of operations. The following table presents a reconciliation of the accrued medical contingency liability classified as a Level 3 financial instrument for the periods indicated (in thousands):
Medical Contingency
Three Months Ended March 31,
20222021
Balance, beginning of the period$423 $17,435 
Increases/additions 43 
Reductions/settlements(53)(178)
Transfers out of Level 3(370) 
Balance, end of the period$ $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 value81 
Reductions/settlements 
Balance, end of the period$2,020 
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company is required to record certain assets and liabilities at fair value on a non-recurring basis. The Company generally applies fair value concepts in recording assets and liabilities acquired in business combinations and asset acquisitions (see Note 4 – Business Combinations). Fair value concepts are also generally applied in estimating the fair value of long-lived assets and a reporting unit in connection with impairment analyses. See Note 6 – Intangible Assets and Goodwill, for further discussion of the fair value of long-lived assets and the reporting unit associated with impairment testing conducted at March 15, 2022.
14. Loss Per Share Attributable to Common Stockholders
The calculation of basic and diluted loss per share attributable to common stockholders for the three months ended March 31, 2022 and 2021 is as follows (in thousands, except share and per share data):
Three Months Ended March 31,
20222021
Basic and diluted loss per share:
Net loss attributable to common stockholders - basic and diluted$(77,216)$(3,712)
Weighted average number of shares outstanding153,629,968 112,334,094 
Basic and diluted loss per common share$(0.50)$(0.03)
The Company has outstanding Notes which are convertible into shares of the Company’s common stock. See Note 8 – 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 5,736,283 and 4,737,237 shares, respectively, of the Company’s common stock at March 31,
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2022 and 2021. Such shares were excluded from the fully diluted calculations because the effect on net loss per common share would have been 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 loss per common share would have been antidilutive:
Three Months Ended March 31,
20222021
Antidilutive shares underlying stock-based awards:
Stock options9,644,914 10,225,947 
Restricted stock units14,940,211 7,036,974 
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.
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, and an amendment to the Convertible Notes Agreement with the Luxor Entities. In addition, on each of May 21, 2019, July 15, 2020 and March 9, 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 April 11, 2022, the Company entered into a Restricted Stock Unit Award Agreement (“RSU Agreement”) with Mr. Grimstad pursuant to which 4,000,000 RSUs were granted to Mr. Grimstad, subject to the terms and conditions of the RSU Agreement and the 2018 Incentive Plan, with an aggregate grant date fair value of $1,228 (the “Grimstad 2022 RSU Grant”). The Grimstad 2022 RSU Grant will vest in three equal installments on the first, second and third anniversaries of 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 executive officers, with an aggregate grant date fair value of $147. The RSUs will vest in three equal installments on the first, second and third anniversaries of the 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 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.

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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 2021 Form 10-K filed with the SEC on March 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 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 online ordering technology Platforms, including the Waitr, Bite Squad and Delivery Dudes mobile applications. Our technology platform provides delivery, carryout and dine-in options, connecting restaurants, drivers and diners in cities across the United States. Our strategy is to bring in the logistics infrastructure to underserved populations of restaurants, grocery stores and other merchants and establish strong market presence or leadership positions in the markets in which we operate. Our business has been built with a 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 convenie