Company Quick10K Filing
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Landcadia
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
8-K 2019-06-12 Officers, Regulation FD, Exhibits
8-K 2019-06-05 Shareholder Vote
8-K 2019-05-30 Regulation FD, Exhibits
8-K 2019-05-21 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-05-17 Regulation FD, Exhibits
8-K 2019-05-16 Regulation FD, Exhibits
8-K 2019-05-16 Enter Agreement, Regulation FD, Exhibits
8-K 2019-05-08 Earnings, Exhibits
8-K 2019-04-24 Officers
8-K 2019-04-18 Officers, Other Events, Exhibits
8-K 2019-04-03 Regulation FD, Exhibits
8-K 2019-02-25 Enter Agreement, Shareholder Rights, Shareholder Vote, Other Events, Exhibits
8-K 2019-02-10 Earnings, Officers, Other Events, Exhibits
8-K 2019-01-25 Other Events, Exhibits
8-K 2019-01-25 Other Events, Exhibits
8-K 2019-01-17 Enter Agreement, M&A, Off-BS Arrangement, Officers, Regulation FD, Exhibits
8-K 2018-12-17
8-K 2018-12-11 Enter Agreement, Sale of Shares, Regulation FD, Exhibits
8-K 2018-12-04 Regulation FD, Exhibits
8-K 2018-12-02 Accountant
8-K 2018-11-15 Enter Agreement, M&A, Off-BS Arrangement, Sale of Shares, Shareholder Rights, Accountant, Control, Officers, Amend Bylaw, Shell Status, Exhibits
8-K 2018-11-08 Regulation FD, Exhibits
8-K 2018-11-01 Other Events, Exhibits
8-K 2018-10-02 Enter Agreement, Sale of Shares, Regulation FD, Exhibits
8-K 2018-10-01 Regulation FD, Exhibits
8-K 2018-08-21 Enter Agreement, Off-BS Arrangement, Sale of Shares, Exhibits
8-K 2018-08-02 Regulation FD, Exhibits
8-K 2018-05-30 Enter Agreement, Amend Bylaw, Exhibits
8-K 2018-05-21 Regulation FD, Exhibits
8-K 2018-05-16 Enter Agreement, Sale of Shares, Regulation FD, Exhibits
8-K 2018-01-02
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HOPE Hope Bancorp 1,790
PTE PolarityTE 206
FLXS Flexsteel Industries 160
SBP SB Partners 0
ULPC Ultimate Products 0
LCA 2019-03-31
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 wtrh-ex311_53.htm
EX-31.2 wtrh-ex312_54.htm
EX-32.1 wtrh-ex321_55.htm
EX-32.2 wtrh-ex322_56.htm

Landcadia Earnings 2019-03-31

LCA 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 wtrh-10q_20190331.htm 10-Q wtrh-10q_20190331.htm

 

 

 

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 March 31, 2019

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.)

844 Ryan Street, Suite 300

Lake Charles, Louisiana

 

70601

(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 May 8, 2019 was 69,918,381.

 

 

 


 

Table of Contents

 

 

 

Page

PART I

Financial Information

1

Item 1.

Condensed Consolidated Financial Statements (unaudited)

1

 

Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018

1

 

Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018

2

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018

3

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months ended March 31, 2019 and 2018

4

 

Notes to Condensed Consolidated Financial Statements

5

Item 2.

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

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4.

Controls and Procedures

28

 

 

 

PART II

Other Information

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

Item 3.

Defaults Upon Senior Securities

29

Item 4.

Mine Safety Disclosures

29

Item 5.

Other Information

29

Item 6.

Exhibits

30

 

 

 

 

Signatures

31

 

 

 

 


 

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,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

Unaudited

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash

 

$

43,615

 

 

$

209,340

 

Accounts receivable, net

 

 

8,299

 

 

 

3,687

 

Capitalized contract costs, current

 

 

2,163

 

 

 

1,869

 

Prepaid expenses and other current assets

 

 

4,947

 

 

 

4,548

 

TOTAL CURRENT ASSETS

 

 

59,024

 

 

 

219,444

 

Property and equipment, net

 

 

4,673

 

 

 

4,551

 

Capitalized contract costs, noncurrent

 

 

957

 

 

 

827

 

Goodwill

 

 

225,797

 

 

 

1,408

 

Intangible assets, net

 

 

101,077

 

 

 

261

 

Other noncurrent assets

 

 

552

 

 

 

61

 

TOTAL ASSETS

 

$

392,080

 

 

$

226,552

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,731

 

 

$

1,827

 

Restaurant food liability

 

 

8,566

 

 

 

208

 

Accrued payroll

 

 

6,349

 

 

 

3,055

 

Short-term loan

 

 

 

 

 

658

 

Deferred revenue, current

 

 

3,642

 

 

 

3,314

 

Income tax payable

 

 

87

 

 

 

25

 

Other current liabilities

 

 

12,933

 

 

 

4,508

 

TOTAL CURRENT LIABILITIES

 

 

34,308

 

 

 

13,595

 

Long-term debt

 

 

119,570

 

 

 

80,985

 

Accrued workers’ compensation liability

 

 

733

 

 

 

908

 

Deferred revenue, noncurrent

 

 

1,375

 

 

 

1,356

 

Other noncurrent liabilities

 

 

228

 

 

 

217

 

TOTAL LIABILITIES

 

 

156,214

 

 

 

97,061

 

Commitment and contingencies (Note 11)

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 249,000,000 shares authorized and 69,368,381

   and 54,035,538 shares issued and outstanding at March 31, 2019 and

   December 31, 2018, respectively

 

 

7

 

 

 

5

 

Additional paid in capital

 

 

331,539

 

 

 

200,417

 

Accumulated deficit

 

 

(95,680

)

 

 

(70,931

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

235,866

 

 

 

129,491

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

392,080

 

 

$

226,552

 

 

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

1


 

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

REVENUE

 

$

48,032

 

 

$

12,409

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

Operations and support

 

 

36,183

 

 

 

9,116

 

Sales and marketing

 

 

10,323

 

 

 

2,364

 

Research and development

 

 

1,940

 

 

 

588

 

General and administrative

 

 

18,918

 

 

 

3,513

 

Depreciation and amortization

 

 

4,116

 

 

 

226

 

Impairment of intangible assets

 

 

18

 

 

 

 

Loss on disposal of assets

 

 

5

 

 

 

8

 

TOTAL COSTS AND EXPENSES

 

 

71,503

 

 

 

15,815

 

LOSS FROM OPERATIONS

 

 

(23,471

)

 

 

(3,406

)

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

 

 

 

 

 

 

 

 

Interest expense

 

 

1,605

 

 

 

172

 

Interest income

 

 

(339

)

 

 

(1

)

Gain on derivatives

 

 

 

 

 

(162

)

Other expenses (income)

 

 

(50

)

 

 

1

 

NET LOSS BEFORE INCOME TAX EXPENSE

 

 

(24,687

)

 

 

(3,416

)

Income tax expense

 

 

62

 

 

 

11

 

NET LOSS

 

$

(24,749

)

 

$

(3,427

)

LOSS PER SHARE:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.38

)

 

$

(0.34

)

Weighted average common shares outstanding – basic and diluted

 

 

64,525,683

 

 

 

10,050,180

 

 

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

2


 

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(24,749

)

 

$

(3,427

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Non-cash interest expense

 

 

388

 

 

 

23

 

Non-cash advertising expense

 

 

142

 

 

 

71

 

Stock-based compensation

 

 

2,033

 

 

 

1,076

 

Equity issued in exchange for services

 

 

30

 

 

 

30

 

Loss on disposal of assets

 

 

5

 

 

 

8

 

Depreciation and amortization

 

 

4,116

 

 

 

226

 

Impairment of intangible assets

 

 

18

 

 

 

 

Amortization of capitalized contract costs

 

 

583

 

 

 

272

 

Gain on derivatives

 

 

 

 

 

(162

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,883

)

 

 

(261

)

Capitalized contract costs

 

 

(1,007

)

 

 

(592

)

Prepaid expenses and other current assets

 

 

961

 

 

 

(26

)

Lease deposits

 

 

4

 

 

 

(12

)

Accounts payable

 

 

(49

)

 

 

154

 

Restaurant food liability

 

 

7,428

 

 

 

37

 

Deferred revenue

 

 

347

 

 

 

643

 

Income taxes payable

 

 

62

 

 

 

11

 

Accrued payroll

 

 

2,168

 

 

 

698

 

Accrued interest

 

 

 

 

 

148

 

Accrued workers’ compensation liability

 

 

(176

)

 

 

 

Other current liabilities

 

 

(2,093

)

 

 

32

 

Other noncurrent liabilities

 

 

(15

)

 

 

 

Net cash used in operating activities

 

 

(12,687

)

 

 

(1,051

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(627

)

 

 

(505

)

Acquisition of Bite Squad, net of cash acquired

 

 

(192,419

)

 

 

 

Collections on notes receivable

 

 

22

 

 

 

 

Internally developed software

 

 

(59

)

 

 

 

Consideration paid for IndiePlate asset acquisition

 

 

 

 

 

(11

)

Proceeds from sale of property and equipment

 

 

21

 

 

 

 

Net cash used in investing activities

 

 

(193,062

)

 

 

(516

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from convertible notes issuance

 

 

 

 

 

1,410

 

Equity issuance costs

 

 

(600

)

 

 

 

Proceeds from Additional Term Loans

 

 

42,080

 

 

 

 

Payments on short-term loan

 

 

(658

)

 

 

 

Proceeds from exercise of stock options

 

 

1

 

 

 

 

Taxes paid related to net settlement on stock-based compensation

 

 

(799

)

 

 

 

Net cash provided by financing activities

 

 

40,024

 

 

 

1,410

 

Net change in cash

 

 

(165,725

)

 

 

(157

)

Cash, beginning of period

 

 

209,340

 

 

 

3,947

 

Cash, end of period

 

$

43,615

 

 

$

3,790

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

1,215

 

 

$

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Services receivable

 

$

 

 

$

1,000

 

Stock issued as consideration in Bite Squad acquisition

 

 

126,573

 

 

 

 

Stock issued in connection with Additional Term Loans

 

 

3,884

 

 

 

 

Debt assumed in IndiePlate asset acquisition

 

 

 

 

 

60

 

Bifurcated embedded derivatives

 

 

 

 

 

87

 

Discount on convertible notes due to beneficial conversion feature

 

 

 

 

 

1,471

 

 

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

3


 

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share data)

(unaudited)

 

Three Months Ended March 31, 2019

 

 

 

Preferred Seed I

 

 

Preferred Seed II

 

 

Preferred Seed AA

 

 

Common stock

 

 

Additional

paid in

capital

 

 

Accumulated

deficit

 

 

Total

stockholders’

equity (deficit)

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31,

   2018

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

54,035,538

 

 

$

5

 

 

$

200,417

 

 

$

(70,931

)

 

$

129,491

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,749

)

 

 

(24,749

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

886

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Taxes paid related to

   net settlement on stock-

   based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(79,900

)

 

 

 

 

 

(799

)

 

 

 

 

 

(799

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,033

 

 

 

 

 

 

2,033

 

Equity issued in exchange

   for services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

30

 

Issuance of common stock

   in connection with

   Additional Term Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

325,000

 

 

 

 

 

 

3,884

 

 

 

 

 

 

3,884

 

Public Warrants exchanged

   for common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,494,889

 

 

 

1

 

 

 

(600

)

 

 

 

 

 

(599

)

Stock issued as

   consideration in Bite

   Squad Merger

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,591,968

 

 

 

1

 

 

 

126,573

 

 

 

 

 

 

126,574

 

Balances at March 31,

   2019

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

69,368,381

 

 

$

7

 

 

$

331,539

 

 

$

(95,680

)

 

$

235,866

 

 

 

Three Months Ended March 31, 2018

 

 

 

Preferred Seed I

 

 

Preferred Seed II

 

 

Preferred Seed AA

 

 

Common stock

 

 

Additional

paid in

capital

 

 

Accumulated

deficit

 

 

Total

stockholders’

equity

(deficit)

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31,

   2017

 

 

3,413,235

 

 

$

 

 

 

3,301,326

 

 

$

 

 

 

7,264,489

 

 

$

 

 

 

10,050,180

 

 

$

 

 

$

35,110

 

 

$

(36,620

)

 

$

(1,510

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,427

)

 

 

(3,427

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,076

 

 

 

 

 

 

1,076

 

Equity issued in exchange

   for services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

30

 

Discount on convertible

   notes due to beneficial

   conversion feature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,471

 

 

 

 

 

 

1,471

 

Balances at March 31,

   2018

 

 

3,413,235

 

 

$

 

 

 

3,301,326

 

 

$

 

 

 

7,264,489

 

 

$

 

 

 

10,050,180

 

 

$

 

 

$

37,687

 

 

$

(40,047

)

 

$

(2,360

)

 

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

4


 

WAITR HOLDINGS INC.

NOTES TO THE 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 food ordering and delivery platform, powered by its team of delivery drivers. Waitr’s business model is the three-sided marketplace (restaurants, drivers and diners), enabled by its purpose-built platform. On January 17, 2019, Waitr acquired BiteSquad.com, LLC (“Bite Squad”), an online food ordering and delivery platform, which operates a three-sided marketplace, consistent with Waitr. The Company connects diners and restaurants via Waitr’s website and mobile application (the “Waitr Platform”) and Bite Squad’s website and mobile application (the “Bite Squad Platform” and together with the Waitr Platform, the “Platforms”). The Company’s Platforms allow consumers to browse local restaurants and menus, track order and delivery status, and securely store previous orders and payment information for ease of use and convenience. Restaurants benefit from the online Platforms through increased exposure to consumers for carryout sales and expanded business in the delivery market.  

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 accounting principles generally accepted 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.

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, 2018 (the “2018 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.

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.

Reclassification

Certain prior period amounts included in the unaudited condensed consolidated statements of operations have been reclassified to conform to the current period’s presentation. The Company has revised the classification of certain employee-related wages and payroll taxes associated with such wages for the three months ended March 31, 2018 to better align the statement of operations line items with departmental responsibilities and management of operations. These reclassifications had no effect on the Company’s reported total costs and expenses, loss from operations, net loss or loss per share for the three months ended March 31, 2018.

The table below summarizes the financial statement line items impacted by these reclassifications (in thousands):

 

 

 

Three Months Ended March 31, 2018

 

 

 

As Previously

Reported

 

 

Reclassification

 

 

As

Reclassified

 

Operations and support expenses

 

$

7,916

 

 

$

1,200

 

 

$

9,116

 

Sales and marketing expenses

 

 

2,353

 

 

 

11

 

 

 

2,364

 

General and administrative expenses

 

 

4,701

 

 

 

(1,188

)

 

 

3,513

 

Related party expenses

 

 

23

 

 

 

(23

)

 

 

 

Certain prior period amounts included in the unaudited condensed consolidated balance sheets and statements of cash flows have been reclassified to conform to the current period’s presentation.

5


 

Restaurant Food Liability

All transactions processed through the Bite Squad Platform and certain transactions processed through the Waitr Platform result in the Company receiving all of the transaction proceeds. The Company records as a restaurant food liability the net balance owed to the restaurant, after deducting the commissions and other fees charged to the restaurant. The Company remits payments to the restaurants twice a month, generally on the 1st and 15th.

 

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: determination of the nature and timing of satisfaction of revenue-generating performance obligations and the standalone selling price of performance obligations, variable consideration, other obligations such as product returns and refunds, allowance for doubtful accounts, allowance for chargebacks, incurred loss estimates under our insurance policies with large deductibles or retention levels, income taxes, useful lives of tangible and intangible assets, depreciation and amortization, equity compensation, contingencies, goodwill and other intangible assets, and fair value of assets acquired and liabilities assumed as part of a business combination. The Company regularly assesses these estimates and records changes to estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions believed to be reasonable under the circumstances. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ from those estimates.

Critical Accounting Policies and Estimates

Except as set forth below, there has been no material change to our critical accounting policies and estimates described in the 2018 Form 10-K.

Revenue

The Company generates revenue (“transaction fees”) primarily when diners place an order on the Waitr Platform or Bite Squad Platform. Revenue consists of the following for the periods indicated (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Transaction fees

 

$

46,968

 

 

$

11,843

 

Setup and integration fees

 

 

1,022

 

 

 

490

 

Other

 

 

42

 

 

 

76

 

 

 

$

48,032

 

 

$

12,409

 

 

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 Accounting Standards Codification (“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 transaction fees earned from the restaurant on the platform on a net basis. 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.

The Company also receives non-refundable upfront setup and integration fees for onboarding certain restaurants. Setup and integration activities primarily represent administrative activities that allow the Company to fulfill future performance obligations for these restaurants and do not represent services transferred to the restaurant. However, the non-refundable upfront setup and integration fees charged to restaurants results in a performance obligation in the form of a material right related to the restaurant’s option to renew the contract each day rather than provide a notice of termination. Upfront non-refundable fees are generally due shortly after the contract is executed; however, the Company may provide installment payment options for up to six months. Revenue is recognized ratably over a two-year period, at which point the restaurant must make another non-refundable payment to renew the contract.

6


 

The Company sells gift cards on the Bite Squad Platform and recognizes revenue upon gift card redemption. Gift cards that have not yet been utilized are recorded on the unaudited condensed consolidated balance sheet in other current liabilities.

Other revenue consists primarily of subscription revenue from restaurants who have opted to pay an ongoing monthly fee to remain on the Platforms instead of a lump sum setup fee.

Significant Judgment

Most of the Company’s contracts with restaurants contain multiple performance obligations as described above. For these contracts, the Company accounts for individual performance obligations separately if they are both capable of being distinct, and distinct in the context of the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgment.

Judgment is also required to determine the standalone selling price for each distinct performance obligation. The Company uses the alternative approach in ASC 606 to allocate the upfront fee between the material right obligation and the transaction fee obligation, which results in all of the upfront non-refundable payment at inception of the contract being allocated to the material right obligation. When contracts with restaurants include other performance obligations, such as ancillary equipment, the Company establishes a single amount to estimate the standalone selling price for the goods or services. In instances where the standalone selling price is not directly observable, it is determined using observable inputs.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to restaurants. The Company records a receivable when it has an unconditional right to the consideration. Setup and integration fees are due at inception of the contract; in certain cases, extended payment terms may be provided for up to six months and are included in accounts receivable. The opening balance of accounts receivable, net was $3,687 and $2,124 as of January 1, 2019 and 2018, respectively.

Payment terms and conditions on setup and integration fees vary by contract type, although terms typically include a requirement of payment within six months. The Company records a contract liability in deferred revenue for the unearned portion of the upfront non-refundable fee. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts do not include a significant financing component.

Assets Recognized from Costs to Obtain and Costs to Fulfill 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 two years. Deferred costs related to obtaining contracts with restaurants were $1,130 and $986 as of March 31, 2019 and December 31, 2018, respectively, out of which $789 and $679, respectively, were classified as current. Amortization of expense for the costs to obtain a contract were $209 and $95 for the three months ended March 31, 2019 and 2018, respectively.

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 setup and integration activities 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 a period of benefit, which the Company has determined to be two years. Deferred costs related to fulfilling contracts with restaurants were $1,990 and $1,710 as of March 31, 2019 and December 31, 2018, respectively, out of which $1,374 and $1,190, respectively, were classified as current. Amortization of expense for the costs to fulfill a contract were $374 and $177 for the three months ended March 31, 2019 and 2018, respectively.

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a restaurant when the amortization period would have been one year or less.

There was no impairment loss in relation to capitalized costs for the periods presented.

Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”), in the form of Accounting Standards Updates (“ASUs”), to the FASB’s ASCs.

7


 

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 condensed consolidated financial statements. As an emerging growth company, the Company has elected to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.  

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies or adds disclosure requirements regarding fair value measurements. The amendments in this ASU are effective for all entities beginning after December 15, 2019, with amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and narrative description of measurement uncertainty requiring prospective adoption and all other amendments requiring retrospective adoption. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2018-13 on its related disclosures and does not expect it to have a material impact on the unaudited condensed consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation Stock Compensation (Topic 718), to simplify the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. Under the new standard, equity-classified non-employee awards will be initially measured on the grant date and re-measured only upon modification, rather than at each reporting period. Measurement will be based on an estimate of the fair value of the equity instruments to be issued. ASU 2018-07 is effective for public business entities in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the standard is effective in fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including in an interim period for which financial statements have not been issued or made available for issuance but not before an entity adopts ASC 606. As an emerging growth company, the Company will not be subject to the requirements of ASU 2018-07 until fiscal year 2020. The Company’s adoption of this ASU will not have a material impact on the unaudited condensed consolidated financial statements.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of ASU 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced based on the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of ASU 2017-11 addresses the difficulty of navigating ASC Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in ASC 480. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. Part II of ASU 2017-11 does not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. As an emerging growth company, the Company will not be subject to the requirements of ASU 2017-11 until fiscal year 2020. The Company is currently evaluating the impact that adopting this ASU will have on the unaudited condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. ASU 2016-13 is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2020, including interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. As an emerging growth company, the Company will not be subject to the requirements of ASU 2016-13 until fiscal year 2020. The Company is currently evaluating the impact that adopting this ASU will have on the unaudited condensed consolidated financial statements. 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2019 and interim periods beginning after December 15, 2020. Early adoption is permitted. As an emerging growth company, the Company will not be subject to the requirements of ASU 2016-02 until fiscal year 2020. The

8


 

Company is currently evaluating the impact that adopting this ASU will have on the unaudited condensed consolidated financial statements.

3.   Business Combinations

Bite Squad Merger

On January 17, 2019, the Company completed the acquisition of Bite Squad, a Minnesota limited liability company, pursuant to the Agreement and Plan of Merger, dated as of December 11, 2018 (the “Bite Squad Merger Agreement”), by and among the Company, Bite Squad and Wingtip Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company. The transactions contemplated by the Bite Squad Merger Agreement are referred to herein as the “Bite Squad Merger.” Upon consummation of the Bite Squad Merger, Wingtip Merger Sub, Inc. merged with and into Bite Squad, with Bite Squad surviving the merger in accordance with the Minnesota Revised Uniform Limited Liability Act as a wholly-owned, indirect subsidiary of the Company. Founded in 2012 and based in Minneapolis, Bite Squad operates a three-sided marketplace, consistent with Waitr, through the Bite Squad Platform. The consideration for the Bite Squad Merger consisted of $192,949 payable in cash (subject to adjustments), the pay down of $12,705 of indebtedness of Bite Squad and an aggregate of 10,591,968 shares of the Company’s common stock, par value $0.0001 per share (“common stock”), valued at $11.95 per share. The following represents the preliminary estimated merger consideration:

(in thousands, except per share amount)

 

 

 

Shares transferred at closing

 

10,592

 

Value per share

$

11.95

 

Total share consideration

$

126,574

 

Plus: cash transferred to Bite Squad members

 

192,949

 

Plus: pay down of debt

 

12,705

 

Total estimated merger consideration

$

332,228

 

 

The Bite Squad Merger was considered a business combination in accordance with ASC 805, and has been accounted for using the acquisition method. Under the acquisition method of accounting, total merger consideration, acquired assets and assumed liabilities are recorded based on their estimated fair values on the acquisition date. The excess of the fair value of merger consideration over the fair value of the assets less liabilities acquired has been recorded as goodwill.

The preliminary estimated fair value of assets acquired and liabilities assumed consists of the following (in thousands):

Cash and cash equivalents

 

$

11,819

 

Settlements due from credit card processors

 

 

1,097

 

Accounts receivable

 

 

2,048

 

Inventory

 

 

940

 

Prepaid expenses and other

 

 

562

 

Intangible assets

 

 

104,400

 

Loans receivable

 

 

336

 

Other noncurrent assets

 

 

163

 

Restaurant food liability

 

 

(930

)

Accounts payable

 

 

(953

)

Accrued payroll

 

 

(1,125

)

Accrued taxes

 

 

(1,818

)

Other accruals

 

 

(8,652

)

Indebtedness

 

 

(48

)

Total assets acquired and liabilities assumed

 

 

107,839

 

Goodwill

 

 

224,389

 

Total estimated merger consideration

 

$

332,228

 

 

The Company engaged a third-party to assist management in estimating the fair value of the assets and liabilities. The goodwill recorded in the Bite Squad Merger represents future anticipated economic benefits from combining operations of Waitr and Bite Squad, including, but not limited to, future growth into new markets, future enhancements to the Platforms, future customer relationships and the workforce in place. Approximately 81% of the goodwill is expected to be deductible for U.S. federal income tax purposes given the federal tax treatment of the transaction.

9


 

The acquired identifiable intangible assets include customer relationships, trade name and developed technology. The developed technology asset was valued using the with & without methodology which considers the direct replacement and opportunity costs associated with the underlying technology. The developed technology acquired represents a Level 3 measurement as it was based on unobservable inputs reflecting the Company’s assumptions used in pricing the asset at fair value. These inputs required significant judgments and estimates at the time of the valuation.

The acquired customer relationships were valued using the income approach, specifically, the multi-period excess earnings method, which measures the after-tax cash flows attributable to the existing customer relationships after deducting the operating costs and contributory asset charges associated with economic rents associated with supporting the existing customer relationships. The customer relationships acquired represent a Level 3 measurement as it was based on unobservable inputs reflecting the Company’s assumptions used in pricing the asset at fair value. These inputs required significant judgments and estimates at the time of the valuation.

The acquired trade name was valued using the income approach, specifically, the relief from royalty rate method, which measures the cash flow streams attributable to the trade name in the form of royalty payments that would be paid to the owner of the trade name in return for the rights to use the trade name. The trade name acquired represents a Level 3 measurement as it was based on unobservable inputs reflecting the Company’s assumptions used in pricing the asset at fair value. These inputs required significant judgments and estimates at the time of the valuation.

 

While the Company has substantially completed the determination of the fair values of the assets acquired and liabilities assumed, the Company is still finalizing the calculation of the purchase price adjustments pursuant to the Bite Squad Merger Agreement, which could affect the final fair value analysis. The Company anticipates finalizing the determination of the fair values by the fourth quarter of 2019.

The results of operations of Bite Squad are included in our unaudited condensed consolidated financial statements beginning on the acquisition date, January 17, 2019. Revenue and net loss of Bite Squad included in the unaudited condensed consolidated statement of operations in the three months ended March 31, 2019 totaled approximately $22,915 and $4,584, respectively.

Identifiable intangible assets acquired from Bite Squad consist of the following (in thousands):

 

 

 

Amortizable

Life (in years)

 

 

Value

 

Customer Relationships

 

 

7.5

 

 

$

81,000

 

Trade name

 

 

3.0

 

 

 

5,400

 

Developed technology

 

 

4.0

 

 

 

18,000

 

Total

 

 

 

 

 

$

104,400

 

 

The acquired identifiable intangible assets are amortized on a straight-line basis to reflect the pattern in which the economic benefits of the intangible assets are consumed.

In connection with the Bite Squad Merger, the Company incurred direct and incremental costs of $6,949 consisting of legal and professional fees, which are included in general and administrative expenses in the unaudited condensed consolidated statement of operations in the three months ended March 31, 2019.

Pro-Forma Financial Information (Unaudited)

The supplemental condensed consolidated results of the Company on an unaudited pro forma basis as if the Bite Squad Merger had been consummated on January 1, 2018 are as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Net Revenue

 

$

52,318

 

 

$

29,369

 

Net Loss

 

 

26,410

 

 

 

8,229

 

 

These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company been a consolidated company during the periods presented and are not indicative of consolidated results of operations in future periods. The pro forma results include adjustments primarily related to acquisition accounting adjustments and interest expense associated with the related Additional Term Loans. Acquisition costs and other nonrecurring charges incurred are included in the period presented.

10


 

Landcadia Business Combination

On November 15, 2018, the Company (f/k/a Landcadia Holdings, Inc.) completed the acquisition of Waitr Incorporated (the “Landcadia Business Combination”). Waitr Incorporated began operations in 2014 as a restaurant platform for online food ordering and delivery services. Landcadia Holdings, Inc. was a special purpose acquisition company whose business was to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination. The Landcadia Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Landcadia Holdings, Inc. was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Landcadia Business Combination was treated as the equivalent of Waitr Incorporated issuing stock for the net assets of Landcadia Holdings, Inc., accompanied by a recapitalization. The net assets of Landcadia Holdings, Inc. were stated at historical cost, with no goodwill or other intangible assets recorded. Reported amounts from operations included herein prior to the Landcadia Business Combination are those of Waitr Incorporated. The shares and earnings per share available to holders of the Company’s common stock as of and for the three months ended March 31, 2018, respectively, have been retroactively restated to reflect the exchange ratio established in the Landcadia Business Combination (0.8970953 Waitr Holdings Inc. shares to 1.0 Waitr Incorporated share). The pro forma information of the Landcadia Business Combination has been excluded as the amounts are not material.

The aggregate consideration for the Landcadia Business Combination was $300,000, consisting of $71,680 in cash and 22,831,697 shares of the Company’s common stock valued at $10.00 per share.

4. Accounts Receivable

Accounts receivable consist of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Credit card receivables

 

$

5,979

 

 

$

1,871

 

Receivables from restaurants

 

 

2,680

 

 

 

1,991

 

Accounts receivable

 

$

8,659

 

 

$

3,862

 

Less: allowance for doubtful accounts and chargebacks