	September 30,			December 31,
	2021			2020				September 30, 2022		December 31, 2021
	Unaudited							Unaudited
ASSETS							ASSETS
CURRENT ASSETS							CURRENT ASSETS
Cash	$	43,502		$	84,706		Cash	$	20,118	$	60,111
Accounts receivable, net		3,978			2,954		Accounts receivable, net	3,102		3,027
Capitalized contract costs, current		1,091			737		Capitalized contract costs, current	1,490		1,170
Prepaid expenses and other current assets		6,826			6,657		Prepaid expenses and other current assets	5,180		8,706
TOTAL CURRENT ASSETS		55,397			95,054		TOTAL CURRENT ASSETS	29,890		73,014
Property and equipment, net		4,362			3,503		Property and equipment, net	2,180		3,763
Capitalized contract costs, noncurrent		3,138			2,429		Capitalized contract costs, noncurrent	3,496		3,183
Goodwill		130,592			106,734		Goodwill	9,536		130,624
Intangible assets, net		40,616			23,924		Intangible assets, net	41,447		43,126
Operating lease right-of-use assets		4,743			—		Operating lease right-of-use assets	3,244		4,327
Other noncurrent assets		1,106			588		Other noncurrent assets	858		1,070
TOTAL ASSETS	$	239,954		$	232,232		TOTAL ASSETS	$	90,651	$	259,107
LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:							LIABILITIES:
CURRENT LIABILITIES							CURRENT LIABILITIES
Accounts payable	$	6,084		$	4,382		Accounts payable	$	4,545	$	7,018
Restaurant food liability		3,398			4,301		Restaurant food liability	1,661		3,327
Accrued payroll		1,661			4,851		Accrued payroll	1,370		2,988
Short-term loans for insurance financing		2,331			2,726		Short-term loans for insurance financing	1,224		3,142
Income tax payable		84			122		Income tax payable	121		74
Operating lease liabilities		1,654			—		Operating lease liabilities	1,175		1,581
Other current liabilities		19,093			13,922		Other current liabilities	18,483		19,309
TOTAL CURRENT LIABILITIES		34,305			30,304		TOTAL CURRENT LIABILITIES	28,579		37,439
Long term debt - related party		81,671			94,218		Long term debt - related party	55,941		81,977
Accrued medical contingency		53			16,987		Accrued medical contingency	—		53
Operating lease liabilities		3,395			—
Operating lease liabilities, net of current portion							Operating lease liabilities, net of current portion	2,276		3,034
Other noncurrent liabilities		2,733			2,627		Other noncurrent liabilities	20		2,115
TOTAL LIABILITIES		122,157			144,136		TOTAL LIABILITIES	86,816		124,618
Commitments and contingent liabilities (Note 9)
Commitments and contingent liabilities (Note 11)							Commitments and contingent liabilities (Note 11)
STOCKHOLDERS’ EQUITY:							STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value; 249,000,000 shares authorized and 126,616,410 and 111,259,037 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		13			11
Common stock, $0.0001 par value; 249,000,000 shares authorized and 206,420,738 and 146,094,300 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively							Common stock, $0.0001 par value; 249,000,000 shares authorized and 206,420,738 and 146,094,300 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	20		15
Additional paid in capital		478,793			451,991		Additional paid in capital	535,299		503,609
Accumulated deficit		(361,009	)		(363,906	)	Accumulated deficit	(531,484)		(369,135)
TOTAL STOCKHOLDERS’ EQUITY		117,797			88,096		TOTAL STOCKHOLDERS’ EQUITY	3,835		134,489
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	239,954		$	232,232		TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	90,651	$	259,107


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
	2021			2020			2021			2020				2022		2021		2022		2021
REVENUE	$	43,448		$	52,734		$	143,545		$	157,483		REVENUE	$	25,141	$	43,448	$	91,352	$	143,545
COSTS AND EXPENSES:													COSTS AND EXPENSES:
Operations and support		25,043			27,409			86,654			84,321		Operations and support	13,457		25,043		49,719		86,654
Sales and marketing		4,965			3,288			13,481			8,854		Sales and marketing	8,263		4,965		21,489		13,481
Research and development		1,310			820			3,163			3,457		Research and development	935		1,310		3,488		3,163
General and administrative		10,843			11,380			33,534			32,252		General and administrative	7,762		10,843		31,520		33,534
Depreciation and amortization		3,070			2,103			8,952			6,242		Depreciation and amortization	3,599		3,070		9,664		8,952
Goodwill impairment													Goodwill impairment	53,898		—		121,088		—
Intangible and other asset impairments		186			—			186			29		Intangible and other asset impairments	—		186		—		186
Loss on disposal of assets		11			4			170			15
(Gain) loss on disposal of assets													(Gain) loss on disposal of assets	55		11		(33)		170
TOTAL COSTS AND EXPENSES		45,428			45,004			146,140			135,170		TOTAL COSTS AND EXPENSES	87,969		45,428		236,935		146,140
INCOME (LOSS) FROM OPERATIONS		(1,980	)		7,730			(2,595	)		22,313
OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET
LOSS FROM OPERATIONS													LOSS FROM OPERATIONS	(62,828)		(1,980)		(145,583)		(2,595)
OTHER (INCOME) EXPENSES AND (GAINS) LOSSES, NET													OTHER (INCOME) EXPENSES AND (GAINS) LOSSES, NET
Interest expense		1,751			2,117			5,333			7,521		Interest expense	1,198		1,751		4,363		5,333
Interest income		—			(14	)		—			(95	)

Other (income) expense		(16,006	)		965			(10,907	)		1,640		Other (income) expense	9,422		(16,006)		12,356		(10,907)
NET INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		12,275			4,662			2,979			13,247
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES													NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(73,448)		12,275		(162,302)		2,979
Income tax expense		25			18			82			52		Income tax expense	14		25		47		82
NET INCOME FROM CONTINUING OPERATIONS	$	12,250		$	4,644		$	2,897		$	13,195
INCOME PER SHARE:
NET INCOME (LOSS) FROM CONTINUING OPERATIONS													NET INCOME (LOSS) FROM CONTINUING OPERATIONS	$	(73,462)	$	12,250	$	(162,349)	$	2,897
INCOME (LOSS) PER SHARE:													INCOME (LOSS) PER SHARE:
Basic	$	0.10		$	0.04		$	0.02		$	0.14		Basic	$	(0.40)	$	0.10	$	(0.98)	$	0.02
Diluted	$	0.09		$	0.04		$	0.02		$	0.13		Diluted	$	(0.40)	$	0.09	$	(0.98)	$	0.02
Weighted average shares used to compute net income per share:
Weighted average shares used to compute net income (loss) per share:													Weighted average shares used to compute net income (loss) per share:
Weighted average common shares outstanding – basic		119,823,181			109,181,847			115,961,454			93,763,069		Weighted average common shares outstanding – basic	183,766,396		119,823,181		166,086,439		115,961,454
Weighted average common shares outstanding – diluted		130,167,296			123,785,750			128,279,820			102,519,454		Weighted average common shares outstanding – diluted	183,766,396		130,167,296		166,086,439		128,279,820


	Nine Months Ended September 30,							Nine Months Ended September 30,
	2021			2020				2022		2021
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	2,897		$	13,195
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							Net (loss) income	$	(162,349)	$	2,897
Adjustments to reconcile net (loss) income to net cash used in operating activities:							Adjustments to reconcile net (loss) income to net cash used in operating activities:
Non-cash interest expense		1,948			5,126		Non-cash interest expense	1,417		1,948
Induced conversion expense related to Notes							Induced conversion expense related to Notes	9,499		—
Stock-based compensation		6,100			3,178		Stock-based compensation	4,588		6,100
Loss on disposal of assets		170			15
(Gain) loss on disposal of assets							(Gain) loss on disposal of assets	(33)		170
Depreciation and amortization		8,952			6,242		Depreciation and amortization	9,664		8,952
Goodwill impairment							Goodwill impairment	121,088		—
Intangible and other asset impairments		186			29		Intangible and other asset impairments	—		186
Amortization of capitalized contract costs		686			327		Amortization of capitalized contract costs	930		686
Other non-cash income		0			(31	)
Change in estimate of accrued medical contingency							Change in estimate of accrued medical contingency	—		(16,715)
Change in fair value of contingent consideration liability							Change in fair value of contingent consideration liability	(551)		—

Other		(93	)		0		Other	(80)		(93)
Changes in assets and liabilities:							Changes in assets and liabilities:
Accounts receivable		583			(653	)	Accounts receivable	(75)		583
Capitalized contract costs		(1,749	)		(2,219	)	Capitalized contract costs	(1,563)		(1,749)
Prepaid expenses and other current assets		16			3,732		Prepaid expenses and other current assets	3,526		16
Other noncurrent assets		(311	)		0		Other noncurrent assets	229		(311)
Accounts payable		373			591		Accounts payable	(2,473)		373
Restaurant food liability		(903	)		(876	)	Restaurant food liability	(1,666)		(903)
Income tax payable		(38	)		1		Income tax payable	47		(38)
Accrued payroll		(3,389	)		(3,037	)	Accrued payroll	(1,618)		(3,389)
Accrued medical contingency		(16,933	)		(363	)	Accrued medical contingency	(53)		(218)
Accrued workers’ compensation liability		0			(102	)

Other current liabilities		1,032			3,650		Other current liabilities	(3,054)		1,032
Other noncurrent liabilities		(102	)		781		Other noncurrent liabilities	826		(102)
Net cash (used in) provided by operating activities		(575	)		29,586
Net cash used in operating activities							Net cash used in operating activities	(21,701)		(575)
Cash flows from investing activities:							Cash flows from investing activities:
Purchases of property and equipment		(717	)		(968	)	Purchases of property and equipment	(224)		(717)
Internally developed software		(6,432	)		(2,387	)	Internally developed software	(6,335)		(6,432)
Purchase of domain names							Purchase of domain names	(27)		—
Acquisitions, net of cash acquired		(25,435	)		(339	)	Acquisitions, net of cash acquired	—		(25,435)
Collections on notes receivable		0			51

Proceeds from sale of property and equipment		21			14		Proceeds from sale of property and equipment	56		21
Net cash used in investing activities		(32,563	)		(3,629	)	Net cash used in investing activities	(6,530)		(32,563)
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from issuance of stock		7,900			47,574		Proceeds from issuance of stock	10,266		7,900
Payments on long-term loan		(14,472	)		(22,594	)	Payments on long-term loan	(20,000)		(14,472)
Borrowings under short-term loans for insurance financing		5,209			1,906		Borrowings under short-term loans for insurance financing	2,811		5,209
Payments on short-term loans for insurance financing		(5,605	)		(4,336	)	Payments on short-term loans for insurance financing	(4,729)		(5,605)
Payments on acquisition loans		(178	)		0		Payments on acquisition loans	—		(178)
Payments on finance lease obligation							Payments on finance lease obligation	(4)		—
Proceeds from exercise of stock options		12			40		Proceeds from exercise of stock options	—		12
Taxes paid related to net settlement on stock-based compensation		(932	)		(728	)	Taxes paid related to net settlement on stock-based compensation	(106)		(932)
Net cash (used in) provided by financing activities		(8,066	)		21,862
Net cash used in financing activities							Net cash used in financing activities	(11,762)		(8,066)
Net change in cash		(41,204	)		47,819		Net change in cash	(39,993)		(41,204)
Cash, beginning of period		84,706			29,317		Cash, beginning of period	60,111		84,706
Cash, end of period	$	43,502		$	77,136		Cash, end of period	$	20,118	$	43,502
Supplemental disclosures of cash flow information:							Supplemental disclosures of cash flow information:
Cash paid during the period for state income taxes	$	0		$	64

Cash paid during the period for interest	$	3,385		$	2,395		Cash paid during the period for interest	$	2,946	$	3,385
Supplemental disclosures of non-cash investing and financing activities:							Supplemental disclosures of non-cash investing and financing activities:
Conversion of convertible notes to stock	$	0		$	12,024		Conversion of convertible notes to stock	$	16,949	$	—
Stock issued as consideration in acquisition		13,724			0		Stock issued as consideration in acquisition	—		13,724
Noncash impact of operating lease assets upon adoption		5,833			0		Noncash impact of operating lease assets upon adoption	—		5,833
Noncash impact of operating lease liabilities upon adoption		6,232			0		Noncash impact of operating lease liabilities upon adoption	—		6,232

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;~~

•incurred loss estimates under our insurance policies with large deductibles or retention levels;•

~~loss exposure related to claims such as the Medical Contingency (as defined below);~~

•loss exposure related to claims;•

~~income taxes;~~

•determination of agent vs. principal classification for revenue recognition purposes;•

~~useful lives of tangible and intangible assets;~~

•income taxes;•

~~equity compensation;~~

•useful lives of tangible and intangible assets;•

~~contingencies;~~

~~TABLE_CONTENTS~~

•

~~goodwill and other intangible assets, including the recoverability of intangible assets with finite lives and other long-lived assets; and~~

•equity compensation;•

~~fair value of assets acquired, liabilities assumed and contingent consideration as part of a business combination.~~

•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 nine months ended September 30, ~~2021 related to leases.~~2022. There have been no ~~other~~ material changes to our significant accounting policies described in the ~~2020~~2021 Form 10-K. ~~See “Revenue~~”

Recent Accounting Pronouncements

The Company considered the applicability and impact of all ASUs. ASUs not listed below ~~for a description of our revenue recognition policy~~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

~~Contingent Consideration~~In August 2020, the FASB issued ASU 2020-06, ~~” for our policy on~~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 ~~earnout provisions~~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 ~~part~~compared with current GAAP. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation.

TABLE_CONTENTS

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, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination.

~~Revenue~~

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 ~~generates revenue (“Transaction Fees”) primarily when diners place an order~~does not expect ASU 2021-08 will have a material impact on the Company’s disclosures or consolidated financial statements.

3. Going Concern

The Company has had recurring losses from operations and declines in cash positions. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company has an accumulated deficit of $531,484 as of September 30, 2022. The Company has had a trend of negative cash flow from operations during each quarter of 2022. For the nine months ended September 30, 2022, the Company had negative cash flow from operations of $21,701. Additionally, the Company’s cash position was impacted by the utilization of $20,000 in cash to pay down debt in May 2022. The Company’s cash position has declined from $60,111 at December 31, 2021 to $20,118 as of September 30, 2022. In an effort to alleviate these conditions, management is implementing certain initiatives with the ~~case of diner subscription fees relating~~goal to ~~our diner subscription program,~~improve revenue ~~is recognized for the receipt~~and its cash position, including a comprehensive rebranding, consolidation of the ~~monthly fee~~Company’s technology platforms into a single application and cost reductions. The initiatives include (i) collaborations with convenience stores, (ii) delivery from retailers in ~~the applicable month for which the delivery service applies to. Additionally, in connection with the acquisition~~a variety of ~~the Cape Payment Companies on August 25, 2021, the Company generates revenue by facilitating~~industries, (iii) the entry into ~~merchant~~new markets, (iv) the development of a proprietary stadium ordering application and (v) the entry into sponsorship agreements byto serve as the exclusive mobile ordering platform at certain stadiums and ~~between merchants~~arenas. Additionally, management evaluated its existing cost structure and ~~payment processing solution providers. Revenue~~implemented cost saving initiatives to reduce operating costs and plans to continue to implement further cost saving initiatives where appropriate. Management also plans to raise additional capital through equity raises, including under the ATM Program (see Note 13 – Stockholders’ Equity).

The Company’s plans are designed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date these financial statements are issued; however, the plans are dependent on conditions and factors, many of which are outside of the Company’s control. There can be no assurance that we will be able to generate positive cash flow from operations in any future period.Additionally, we may be unable to raise additional equity capital or enter into any financing arrangements when needed on favorable terms or at all. Accordingly, management could not conclude that it was probable that the plans will sufficiently mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. As such, ~~services primarily consists~~the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of ~~residual payments received~~at least twelve months from ~~payment processing solution providers, based on~~ the ~~volume~~date of ~~transactions~~issuance of these financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a ~~payment processing solution provider performs~~going concern, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business for the ~~merchant.~~twelve-month period following the date the financial statements are issued. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset

TABLE_CONTENTS

amounts or the amounts and classification of liabilities that might result should the Company ~~also occasionally receives~~be unable to continue as a bonus up-front fee from 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.going concern.

4. Revenue

The following table presents our revenue disaggregated by offering. Revenue consists of the following for the periods indicated (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Transaction Fees

$
41,411

$
52,618

$
140,138

$
156,851

Setup and integration fees

—

23

8

437

Other

2,037

93

3,399

195

Total Revenue

$
43,448

$
52,734

$
143,545

$
157,483


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Delivery Services Segment:
Delivery Transaction Fees	$	21,806	$	41,411	$	81,138	$	140,138
Other revenue	491		1,028		2,077		2,398
Total Delivery Services Segment	22,297		42,439		83,215		142,536
Third-Party Payment Processing Referral Services Segment(1)	2,844		1,009		8,137		1,009


Total Revenue	$	25,141	$	43,448	$	91,352	$	143,545

(1)Amounts for the three and nine months ended September 30, 2021 include revenue from the Cape Payment Companies beginning on the acquisition date of August 25, 2021, through September 30, 2021.

Revenue from Contracts with Customers

Delivery Services Segment

The Delivery Services Segment includes operations related to the Company’s technology platform for online ordering and delivery. While food ordering and delivery is the primary component of the Delivery Services Segment, the Company recently added online ordering and delivery of various other products such as flowers, auto parts, alcohol and luxury goods. The Company generates revenue (“Delivery Transaction Fees”) in the Delivery Services Segment primarily when diners or customers place an order on the Platform.

Delivery Transaction Fees represent the revenue recognized from the Company’s obligation to process orders on the ~~Platforms.~~Platform. The performance obligation is satisfied when the Company successfully processes an order placed on ~~one of~~ the ~~Platforms~~Platform and the restaurant receives the order at their location. The obligation to process orders on the ~~Platforms~~Platform 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.

~~Residual fees and bonus up-front fees were immaterial for the three and nine months ended September 30, 2021 and are included in other~~

In addition to Delivery Transaction Fees, revenue in the ~~table above. Residual~~Delivery Services Segment includes other revenue sources such as paid placement revenue for prominent positioning of a restaurant on the Platform and revenue related to fees received for the early distribution of earnings to independent contractor drivers.

Third-Party Payment Processing Referral Services Segment

The Company generates revenue from Third-Party Payment Processing Referral Services 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.

TABLE_CONTENTS

Third-party 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 ~~with~~ between the merchant and the Company.

Accounts Receivable

~~TABLE_CONTENTS~~

The Company records a receivable when it has an unconditional right to the consideration. ~~The balance of~~See Note 6 – Accounts Receivable, Net for additional details on the Company’s accounts receivable, net was $3,978 and $2,954 as of September 30, 2021 and December 31, 2020, respectively, comprised primarily of receivables due from credit card processors, and at September 30, 2021, also comprised of residual commissions 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 ~~$3,000~~$3,142 and ~~$2,424~~$2,968 as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, out of which ~~$785~~$986 and ~~$567,~~$818, respectively, was classified as current. Amortization of expense for the costs to obtain a contract were ~~$192~~$234 and ~~$117~~$192 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$514~~$663 and ~~$264~~$514 for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ 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~~Platform 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 ~~$1,229~~$1,844 and ~~$742~~$1,385 as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, out of which ~~$306~~$504 and ~~$170,~~$352, respectively, was classified as current. Amortization of expense for the costs to fulfill a contract were ~~$71~~$121 and ~~$28~~$71 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$172~~$325 and ~~$63~~$172 for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively.

~~Contingent Consideration~~

~~The Company acquired the~~

5. Business Combinations

2021 Acquisitions

Cape Payment ~~Companies on August 25, 2021 (see~~ ~~Note 3 – Business Combinations). Consideration for the acquisition included an earnout provision~~ which provides for a one-time payment to the sellers, if the Cape Payment Companies exceed certain future revenue targets. The contingent consideration obligation for the earnout provision is valued at fair value as of the acquisition date, with subsequent changes in fair value evaluated at the end of each reporting period through the term of the earnout and recognized in earnings in other (income) expense in the unaudited condensed consolidated statement of operations. The contingent consideration obligation is included in other noncurrent liabilities in the unaudited condensed consolidated balance sheet.

~~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. Throughout fiscal year 2020, the Company qualified as an “emerging growth company” pursuant to the provisions of the JOBS Act. As an emerging growth company, the Company elected to use the extended transition period for complying with certain new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Effective January 1, 2021, the Company is no longer an emerging growth company.

~~Recently Adopted Accounting Standards~~

~~Leases~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. The principal objective of ASU 2016-02 is to increase transparency and comparability among organizations by recognizing “right-of-use” lease assets and lease liabilities on the consolidated balance sheet. ASU 2016-02 continues to retain a distinction between finance and operating leases but requires lessees to recognize a right-of-use asset representing its right to use the underlying asset for the lease term and a corresponding lease liability on the balance sheet for all leases with terms greater than twelve months. ASU 2016-02 was effective for and adopted by the Company on January 1, 2021. The Company applied the modified retrospective transition approach, with no adjustment to prior comparative periods. Accordingly, financial information is not adjusted and the disclosures required under ASU 2016-02 are not provided for periods prior to January 1, 2021.

~~TABLE_CONTENTS~~

The Company determines if an arrangement is a lease at inception of a contract. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company elected the optional practical expedient package, which includes retaining the current classification of leases, and is utilizing the practical expedient which allows the use of hindsight in determining the lease term and in assessing impairment of its operating lease right-of-use assets. Additionally, the Company has elected to treat lease and non-lease components as a single lease component for all assets. The Company has elected to apply the short-term scope exception for leases with original terms of twelve months or less, and accordingly, recognizes the lease payments for such leases in the statement of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Under ASU 2016-02, the Company recorded in the unaudited condensed consolidated balance sheet as of January 1, 2021, lease liabilities for operating leases entered into prior to December 31, 2020 of $4,993, representing the present value of its future operating lease payments, and corresponding right-of-use assets of $4,681, based upon the operating lease liabilities adjusted for deferred rent. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date, which is estimated to be 5.0%. The adoption of ASU 2016-02 did not result in a cumulative-effect adjustment on retained earnings. See ~~Note 9 – Commitments and Contingencies~~ ~~for additional details.~~

~~Other~~

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes and also improves consistent application by clarifying and amending existing guidance. ASU 2019-12 was effective for and adopted by the Company on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s disclosures or consolidated financial statements.

~~In July 2017, the FASB issued ASU 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 was effective for and adopted by the Company on January 1, 2021. The adoption of ASU 2017-11 did not have a material impact on the Company’s disclosures or consolidated financial statements.

~~In June 2016, the FASB issued ASU 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. ASU 2016-13 uses a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments and expands disclosure requirements. ASU 2016-13 was effective for and adopted by the Company on January 1, 2021. The adoption of ASU 2016-13 did not have a material impact on the Company’s disclosures or consolidated financial statements.

~~Pending 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 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impacts of the provisions of ASU 2020-06 on its consolidated financial statements and related disclosures.

~~TABLE_CONTENTS~~

~~3. Business Combinations~~

~~Cape Payment Companies~~ 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”)~~, pursuant to three substantially identical asset purchase agreements (collectively referred to herein as the~~ (the “Cape Payment ~~Agreements”~~Acquisition”). The Cape Payment Companies ~~are~~ ~~engaged in the business of facilitating the entry into~~facilitate merchant ~~agreements by and between merchants and~~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 ~~$12,000~~$12,032 in cash ~~subject to certain purchase price adjustments,~~ 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). ~~Additionally, the~~The Cape Payment ~~Agreements include~~Acquisition included an earnout provision which provided for a one-time payment to the sellers if the Cape

TABLE_CONTENTS

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. ~~The transactions contemplated by~~As of September 30, 2022 and December 31, 2021, the Cape Payment Agreements are referred to herein as the “Cape Payment Acquisition.” The acquisition is part of the Company’s overall growth strategy, positioning the Company to offer a full suite of payment processing services to its current base of merchants. The following represents the preliminary estimated consideration for the Cape Payment Acquisition:

earnout provision was valued at $1,388 and $1,939, respectively (see Note 14 - Fair Value Measurements).

(in thousands, except per share amount)

Shares transferred at closing

2,564

Value per share

$
1.24

Total share consideration

$
3,179

Plus: cash transferred to Cape Payment Companies

12,000

Total estimated consideration at closing

15,179

Contingent consideration

1,686

Total estimated consideration

$
16,865

The Cape Payment Acquisition was considered a business combination in accordance with ASC 805 and was accounted for using the acquisition method. Under the acquisition method of accounting, acquired assets and assumed liabilities are recorded based on their respective fair values on the acquisition date, with the excess of the consideration transferred in the acquisition over the fair value of the assets and liabilities acquired recorded as goodwill. The preliminary estimated fair value of assets acquired and liabilities assumed consists of the following (in thousands):

Cash and cash equivalents

$
42

Accounts receivable

1,180

Prepaid expenses and other current assets

7

Intangible assets

6,850

Other noncurrent assets

17

Accrued expenses and other current liabilities

(746
)
Total assets acquired, net of liabilities assumed

7,350

Goodwill

9,515

Total estimated consideration

$
16,865

The Company engaged a third-party specialist to assist management in estimating the fair value of the assets and liabilities and the contingent consideration for the earnout provision. Goodwill is attributable to the future anticipated economic benefits from combining operations of the Company and the Cape Payment Companies, including future growth in the payment processing arena, future customer relationships and the workforce in place. All of the goodwill is expected to be deductible for U.S. federal tax ~~purposes.~~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 Cape Payment Agreements, which could affect the final fair value analysis. The Company anticipates finalizing the determination of the fair values by the end of 2021.

~~The following table sets forth the components of estimated identifiable intangible assets acquired from the Cape Payment Companies and their estimated useful lives as of the acquisition date:~~

Amortizable
Life (in years)

Value (in thousands)

Customer relationships

7.5

$
6,500

Trade name

3.0

350

Total

$
6,850

~~TABLE_CONTENTS~~

~~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.~~ ~~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 of supporting the existing customer relationships. 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.~~ ~~These fair value measurements were 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. See~~ ~~Note 12 – Fair Value Measurements~~ ~~for details of the valuation method used in estimating the fair value of the earnout provision as of acquisition date.~~

The results of operations of the Cape Payment Companies are included in our condensed consolidated financial statements beginning on the acquisition date, August 25, 2021, and were ~~immaterial.~~immaterial at such time. Pro forma results were also deemed immaterial to the Company.

The Delivery Dudes Acquisition was considered a business combination in accordance with ASC 805 and was accounted for using the acquisition method. ~~The fair value of assets acquired and liabilities assumed consists of the following (in thousands):~~

The Company engaged a third-party specialist to assist management in estimating the fair value of the assets and liabilities. Goodwill is attributable to the future anticipated economic benefits from combining operations of the Company and Delivery Dudes, including future growth into new markets, future customer relationships and the workforce in place. All of the goodwill is expected to be deductible for U.S. federal income tax purposes.

~~The following table sets forth the components of identifiable intangible assets acquired from Delivery Dudes and their estimated useful lives as of the acquisition date:~~

~~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.~~ ~~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 of supporting the existing customer relationships. The franchise relationships were also valued using the multi-period excess earnings method. 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. Developed technology was valued based on the cost approach, specifically the “with & without” methodology which considers the direct replacement and opportunity costs associated with the underlying technology, and in-process research and development assets were valued using the replacement cost method. ~~These fair value measurements were 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 results of operations of Delivery Dudes are included in our unaudited condensed consolidated financial statements beginning on the acquisition date, March 11, 2021. ~~Revenue~~

The Company recorded $23,858 of goodwill during the nine months ended September 30, 2021, including $14,343 associated with the Delivery Dudes Acquisition and $9,515 associated with the Cape Payment Acquisition (see ~~Note 3 – Business Combinations~~).

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Basic income per share:

Net income attributable to common stockholders - basic

$
12,250

$
4,644

$
2,897

$
13,195

Weighted average number of shares outstanding

119,823,181

109,181,847

115,961,454

93,763,069

Basic income per common share

$
0.10

$
0.04

$
0.02

$
0.14

Diluted income per share:

Net income attributable to common stockholders - diluted

$
12,250

$
4,644

$
2,897

$
13,195

Weighted average number of shares outstanding

119,823,181

109,181,847

115,961,454

93,763,069

Effect of dilutive securities:

   Stock options

6,733,754

8,433,152

7,604,969

5,107,989

   Restricted stock units

3,610,361

6,170,751

4,713,397

3,648,396

   Warrants

—

—

—

—

Weighted average diluted shares

130,167,296

123,785,750

128,279,820

102,519,454

Diluted income per common share

$
0.09

$
0.04

$
0.02

$
0.13

Average Order Size. We calculate Average Order Size as Gross Food Sales for a given period divided by the number of completed orders during the same period. Average Order Size is an important metric for us because the average value of gross food sales on our ~~Platforms~~Platform is a key revenue driver.

Three Months Ended September 30,

Nine Months Ended September 30,

Key Business Metrics⁽¹⁾

2021

2020

2021

2020

Active Diners (as of period end)

1,769,999

2,005,760

1,769,999

2,005,760

Average Daily Orders

30,563

39,880

35,565

40,563

Gross Food Sales (dollars in thousands)

$
128,534

$
153,532

$
433,553

$
462,089

Average Order Size (in dollars)

$
45.71

$
41.85

$
44.65

$
41.58

~~(1)~~

~~The key business metrics include the operations of Delivery Dudes beginning on the acquisition date, March 11, 2021.~~

TABLE_CONTENTS


	Three Months Ended September 30,				Nine Months Ended September 30,
Key Business Metrics(1)	2022		2021		2022		2021
Active Diners (as of period end)	1,170,993		1,769,999		1,170,993		1,769,999
Average Daily Orders	14,156		30,563		18,346		35,565
Gross Food Sales (dollars in thousands)	$	70,754	$	128,534	$	258,136	$	433,553
Average Order Size (in dollars)	$	54.33	$	45.71	$	51.54	$	44.65

_____________________

~~TABLE_CONTENTS~~(1)

The key business metrics include the operations of Delivery Dudes beginning on the acquisition date, March 11, 2021.

Basis of Presentation

Revenue

We generate revenue primarily when diners place an order on ~~one of~~ the ~~Platforms.~~Platform. We recognize revenue from diner orders when orders are delivered. Our revenue consists primarily of net Delivery Transaction Fees. Additionally, effective August 25, 2021, we generate revenue by facilitating ~~the entry into~~ merchant ~~agreements by and between merchants and~~access to third-party payment processing solution providers.

Cost and Expenses:

Operations and Support. Operations and support expense consists primarily of salaries, benefits, stock-based compensation and bonuses for employees engaged in operations and customer service, as well as territory managers, market ~~managers,~~success associates, restaurant onboarding, and driver logistics personnel, and payments to independent contractor drivers for delivery services. Operations and support expense also includes payment processing costs incurred on customer orders and the cost of software and related services providing support for diners, restaurants and drivers.

Sales and Marketing. Sales and marketing expense consists primarily of salaries, commissions, benefits, stock-based compensation and bonuses for personnel supporting sales and marketing efforts, including restaurant business development managers, marketing employees and contractors, and third-party marketing expenses such as social media and search engine marketing, online display advertisements, sponsorships and print marketing. Sales and marketing expense also includes referral agent commissions related to the facilitation of merchant access to third-party payment processing solution providers.

Research and Development. Research and development expense consists primarily of salaries, benefits, stock-based compensation and bonuses for employees and contractors engaged in the design, development, maintenance and testing of the ~~Platforms.~~Platform, net of costs capitalized for the development of the Platform. This expense also includes such items as software subscriptions that are necessary for the upkeep and maintenance of the ~~Platforms.~~Platform.

General and Administrative. General and administrative expense consists primarily of salaries, benefits, stock-based compensation and bonuses for executive, finance and accounting, human resources and other administrative employees as well as third-party legal, accounting, and other professional services, insurance (including workers’ compensation, auto liability and general liability), travel, facilities rent, and other corporate overhead costs.

Depreciation and Amortization. Depreciation and amortization expense consists primarily of amortization of capitalized costs for software development, trademarks and customer relationships and depreciation of leasehold improvements and equipment, primarily consisting of tablets deployed in restaurants. We do not allocate depreciation and amortization expense to other line items.

Other (Income) Expenses ~~(Income)~~ and (Gains) Losses, ~~(Gains),~~ Net. Other (income) expenses ~~(income)~~ and (gains) losses, ~~(gains),~~ net, includes interest expense on outstanding debt, as well as any other items not considered to be incurred in the normal operations of the business, including accrued legal settlements and contingencies, expense related to the induced conversion of the Notes and income related to the change in estimate ~~for~~of the Medical Contingency.

TABLE_CONTENTS

Results of Operations

The following table sets forth our results of operations for the periods indicated, with line items presented in thousands of dollars and as a percentage of our revenue:


	Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except percentages(1))	2022		% of Revenue		2021		% of Revenue		2022		% of Revenue		2021		% of Revenue
Revenue	$	25,141	100	%	$	43,448	100	%	$	91,352	100	%	$	143,545	100	%
Costs and expenses:
Operations and support	13,457		54	%	25,043		58	%	49,719		54	%	86,654		60	%
Sales and marketing	8,263		33	%	4,965		11	%	21,489		24	%	13,481		9	%
Research and development	935		4	%	1,310		3	%	3,488		4	%	3,163		2	%
General and administrative	7,762		31	%	10,843		25	%	31,520		35	%	33,534		23	%
Depreciation and amortization	3,599		14	%	3,070		7	%	9,664		11	%	8,952		6	%
Goodwill impairment	53,898		214	%	—		—	%	121,088		133	%	—		—	%
Intangible and other asset impairments	—		—	%	186		—	%	—		—	%	186		—	%
(Gain) loss on disposal of assets	55		—	%	11		—	%	(33)		—	%	170		—	%
Total costs and expenses	87,969		350	%	45,428		105	%	236,935		259	%	146,140		102	%
Loss from operations	(62,828)		(250)	%	(1,980)		(5)	%	(145,583)		(159)	%	(2,595)		(2)	%
Other (income) expenses and (gains) losses, net:
Interest expense	1,198		5	%	1,751		4	%	4,363		5	%	5,333		4	%



Other (income) expense	9,422		37	%	(16,006)		(37)	%	12,356		14	%	(10,907)		(8)	%
Net income (loss) before income taxes	(73,448)		(292)	%	12,275		28	%	(162,302)		(178)	%	2,979		2	%
Income tax expense	14		—	%	25		—	%	47		—	%	82		—	%
Net income (loss)	$	(73,462)	(292)	%	$	12,250	28	%	$	(162,349)	(178)	%	$	2,897	2	%

________________

~~TABLE_CONTENTS~~(1)

Percentages may not foot due to rounding.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except percentages⁽¹⁾)

2021

% of
Revenue

2020

% of
Revenue

2021

% of
Revenue

2020

% of
Revenue

Revenue

$
43,448

100
%

$
52,734

100
%

$
143,545

100
%

$
157,483

100
%
Costs and expenses:

Operations and support

25,043

58
%

27,409

52
%

86,654

60
%

84,321

54
%
Sales and marketing

4,965

11
%

3,288

6
%

13,481

9
%

8,854

6
%
Research and development

1,310

3
%

820

2
%

3,163

2
%

3,457

2
%
General and administrative

10,843

25
%

11,380

22
%

33,534

23
%

32,252

20
%
Depreciation and amortization

3,070

7
%

2,103

4
%

8,952

6
%

6,242

4
%
Intangible and other asset impairments

186

0
%

—

0
%

186

0
%

29

0
%
Loss on disposal of assets

11

0
%

4

0
%

170

0
%

15

0
%
Total costs and expenses

45,428

105
%

45,004

85
%

146,140

102
%

135,170

86
%
Income (loss) from operations

(1,980
)

(5
%)

7,730

15
%

(2,595
)

(2
%)

22,313

14
%
Other expenses (income) and losses (gains), net:

Interest expense

1,751

4
%

2,117

4
%

5,333

4
%

7,521

5
%
Interest income

—

0
%

(14
)

0
%

—

0
%

(95
)

0
%
Other (income) expense

(16,006
)

(37
%)

965

2
%

(10,907
)

(8
%)

1,640

1
%
Net income before income taxes

12,275

28
%

4,662

9
%

2,979

2
%

13,247

8
%
Income tax expense

25

0
%

18

0
%

82

0
%

52

0
%
Net income

$
12,250

28
%

$
4,644

9
%

$
2,897

2
%

$
13,195

8
%

~~________________~~

~~(1)~~

~~Percentages may not foot due to rounding.~~

The following section includes a discussion of our results of operations for the three and nine months ended September 30, ~~2021~~2022 and ~~the three and nine months ended September 30, 2020.~~2021. The results of operations of Delivery Dudes and the Cape Payment Companies are included in our unaudited condensed consolidated financial statements beginning on the acquisition dates of March 11, 2021 and August 25, 2021, respectively (see Part I, Item 1, Note 35 – Business Combinations).

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. All statements, other than statements of historical or current

~~TABLE_CONTENTS~~

fact, that reflect future plans, estimates, beliefs or expected performance are forward-looking statements. In some cases, you can identify forward-looking statements because they are preceded by, followed by or include words such as ~~“may,~~“may,” “can,” “should,” “will,” “goal,” “strategy,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions. These forward-looking statements are based on information available as of the date of this Form 10-Q and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties, including the following factors, in addition to the factors discussed elsewhere in this Form 10-Q, and the factors discussed in our ~~2020~~2021 Form 10-K and subsequent filings with the SEC (Part I, Item 1A, Risk Factors):

~~Operational Risks~~

•

~~failure to retain existing diners or add new diners or our diners decreasing their number of orders or order sizes on the Platforms;~~

•

~~declines in our delivery service levels or lack of increases in business for restaurants;~~

Risks Related to Our Operations

•failure to retain existing diners or add new diners or continuing to experience a decrease in number of diners and number of orders or decrease in order sizes on the Platform;•

~~loss of restaurants on the Platforms, including due to changes in our fee structure;~~

•declines in our delivery service levels or lack of increases in business for restaurants;•

~~inability to sustain profitability in the future;~~

•

risks related to our relationships with the independent contractor drivers, including shortages of available drivers, loss of independent contractor drivers, adverse conditions impacting independent contractor drivers, and possible increases in driver compensation;

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•loss of restaurants on the Platform, including due to changes in our fee structure;•

inability to maintain and enhance our brands, including our comprehensive rebranding initiative to change our corporate name and visual identity, or occurrence of events that damage our reputation and brands, including unfavorable media coverage;

•inability to successfully expand our operations of facilitating the entry into merchant agreements by and between merchants and third-party payment processing solution providers;•

seasonality and the impact of inclement weather, including major hurricanes, tropical cyclones, major snow and/or ice storms in areas not accustomed to them and other instances of severe weather and other natural phenomena;

•inability to achieve profitability in the future;•

~~inability to manage growth and meet demand;~~

•risks related to our relationships with the independent contractor drivers, including shortages of available drivers, loss of independent contractor drivers, adverse conditions impacting independent contractor drivers, and possible increases in driver compensation;•

~~inability to successfully improve the experience of restaurants and diners in a cost-effective manner;~~

•recent inflationary pressures, increased gasoline prices and other macroeconomic factors that are largely beyond our control;•

~~changes in our products or to operating systems, hardware, networks or standards that our operations depend on;~~

•inability to maintain and enhance our brands, including possible degradation thereto resulting from our comprehensive rebranding initiative to change our corporate name and visual identity, or occurrence of events that damage our reputation and brands, including unfavorable media coverage;•

~~dependence of our business on our ability to maintain and scale our technical infrastructure;~~

•seasonality and the impact of inclement weather, including major hurricanes, tropical cyclones, major snow and/or ice storms in areas not accustomed to them and other instances of severe weather and other natural phenomena;•

~~personal data, internet security breaches or loss of data provided by diners or restaurants on our Platforms;~~

•inability to manage growth and meet demand;•

~~inability to comply with applicable law or standards if we become a payment processor at some point in the future;~~

•inability to successfully improve the experience of restaurants and diners in a cost-effective manner;•

~~risks related to the credit card and debit card payments we accept;~~

•changes in our products or to operating systems, hardware, networks or standards that our operations depend on;•

~~reliance on third-party vendors to provide products and services;~~

•dependence of our business on our ability to maintain and scale our technical infrastructure;•

~~substantial competition in technology innovation and distribution and inability to continue to innovate and provide technology desirable to diners and restaurants;~~

•personal data, internet security breaches or loss of data provided by diners or restaurants on our Platform;•

~~failure to pursue and successfully make additional acquisitions;~~

•inability of third-party payment processing services, of which we may facilitate the entry into merchant agreements, to comply with applicable state or federal regulations;•

~~failure to comply with covenants in the agreements governing our debt;~~

•inability to comply with applicable law or standards if we were to become a payment processor at some point in the future;•

~~additional impairments of the carrying amounts of goodwill or other indefinite-lived assets;~~

•risks related to the credit card and debit card payments we accept;•

~~dependence on search engines, display advertising, social media, email, content-based online advertising and other online sources to attract diners to the Platforms;~~

•reliance on third-party vendors to provide products and services;•

~~loss of senior management or key operating personnel and dependence on skilled personnel to grow and operate our business;~~

•substantial competition in technology innovation and distribution and inability to continue to innovate and provide technology desirable to diners and restaurants;•

~~inability to successfully integrate and maintain acquired businesses;~~

•failure to pursue and successfully make additional acquisitions;•

~~failure to protect our intellectual property;~~

•failure to comply with covenants in the agreements governing our debt;•

~~patent lawsuits and other intellectual property rights claims;~~

•additional impairments of the carrying amounts of goodwill or other indefinite-lived assets;•

~~potential liability and expenses for existing and future legal claims, including claims that may exceed insurance coverage or are not insured against;~~

•dependence on search engines, display advertising, social media, email, content-based online advertising and other online sources to attract diners to the Platform;•

~~our use of open source software;~~

•loss of senior management or key operating personnel and dependence on skilled personnel to grow and operate our business;•

~~insufficient capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances;~~

•inability to successfully integrate and maintain acquired businesses;•

~~unionization of our employees, the magnitude of which increases if our independent contractor drivers were ever reclassified as employees; and~~

•failure to protect our intellectual property;•

~~failure to maintain an effective system of disclosure controls and internal control over financial reporting.~~

~~Industry Risks~~

•

~~the highly competitive and fragmented nature of our industry;~~

•patent lawsuits and other intellectual property rights claims;•

~~dependence on discretionary spending patterns in the areas in which the restaurants on our Platforms operate and in the economy at large;~~

•potential liability and expenses for existing and future legal claims, including claims that may exceed insurance coverage or are not insured against;•

~~general economic and business risks affecting our industry that are largely beyond our control;~~

•our use of open source software;•

~~the COVID-19 pandemic, or a similar public health threat that could significantly affect our business, financial condition and results of operations;~~

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•

~~implementation of fee caps by jurisdictions in areas where we operate;~~

•insufficient capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances;•

~~failure of restaurants in our networks to maintain their service levels;~~

•unionization of our employees, the magnitude of which increases if our independent contractor drivers were ever reclassified as employees; and•

~~slower than anticipated growth in the use of the Internet via websites, mobile devices and other platforms;~~

•failure to maintain an effective system of disclosure controls and internal control over financial reporting.•

~~federal and state laws and regulations regarding privacy, data protection, and other matters affecting our business;~~

•

~~the potential for increased misclassification claims following the change to the U.S. presidential administration;~~

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•

~~risks relating to our relationships with the independent contractor drivers, including shortages of available drivers and possible increases in driver compensation;~~

Risks Related to Our Industry

•the intensely competitive and fragmented nature of our industry;•

failure to continue to meet all applicable Nasdaq listing requirements and risks relating to the consequent delisting of our common stock from Nasdaq, which could adversely affect the market liquidity of our common stock and could decrease the market price of our common stock significantly; and

•dependence on discretionary spending patterns in the areas in which the restaurants on our Platform operate and in the economy at large;•

~~risks related to the cannabis industry with respect to the business operations of the Cape Payment Companies.~~

•general economic and business risks affecting our industry that are largely beyond our control;

•the COVID-19 pandemic, or a similar public health threat that could significantly affect our business, financial condition and results of operations;

•implementation of fee caps by jurisdictions in areas where we operate;

•failure of restaurants in our networks to maintain their service levels;

•slower than anticipated growth in the use of the Internet via websites, mobile devices and other platforms;

•federal and state laws and regulations regarding privacy, data protection, and other matters affecting our business;

•the potential for increased misclassification claims following the change to the U.S. presidential administration;

•risks relating to our relationships with the independent contractor drivers, including shortages of available drivers and possible increases in driver compensation; and

•risks related to the cannabis industry with respect to the business operations of referring merchants to third-party payment processing solution providers.

Risks Related to Ownership of Our Securities

•risks related to future sales of a substantial number of shares by existing stockholders which could in turn cause our share price to decline;

•the risk that management’s use of the net proceeds from, or the continuation of, our ATM Program does not increase the value of a stockholder’s investment;

•the risk that future offerings of debt or equity securities that rank senior to our common stock may adversely affect the market price of our common stock;

•the risk that the Debt Warrants and Notes as well as other derivative securities, if exercised or converted into shares of our common stock, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders; and

•the risk that we fail to continue to meet all applicable Nasdaq listing requirements in future periods and risks relating to the consequent delisting of our common stock from Nasdaq if we fail to meet Nasdaq listing requirements, which could adversely affect the market liquidity of our common stock, the ability for us to raise capital, and could decrease the market price of our common stock significantly.

These risks and uncertainties may be outside of our control. Forward-looking statements should not be relied upon as representing our views as of any subsequent date. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Our actual results could differ materially from those discussed in these forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to interest rate risk and certain other market risks in the ordinary course of our business.

Interest Rate Risk

As of September 30, ~~2021,~~2022, we had outstanding interest-bearing long-term debt totaling ~~$84,511,~~$57,619, consisting of the Term Loan in the amount of ~~$35,007~~$15,280 and the Notes of ~~$49,504,~~$42,339, both of which bear interest at fixed rates. As a result, we were not exposed to interest rate risk on our outstanding debt at September 30, ~~2021.~~2022. If we enter into variable-rate debt in the future, we may be subject to increased sensitivity to interest rate movements.

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We invest excess cash primarily in bank accounts and money market accounts, on which we earn interest. Our current investment strategy is to preserve principal and provide liquidity for our operating and market expansion needs. Since our investments have been and are expected to remain mainly short-term in nature, we do not believe that changes in interest rates would have a material effect on the fair market value of our investments or our operating results.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level as of September 30, ~~2021.~~

2022.

Changes in Internal ~~Controls~~Control Over Financial Reporting

There has not been any change in our internal control over financial reporting that occurred during the quarter ended September 30, ~~2021~~2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Effective January 1, 2021, we are no longer an emerging growth company. Accordingly, for fiscal year 2021, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.

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PART II. OTHER INFORMATION

Dollar amounts in the discussion in Part II. Other Information are expressed in thousands, except as otherwise noted.

Item 1. Legal Proceedings

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-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 ~~Settlement payment is~~$800 legal reserve and $4,700 legal settlement are included in other expense in the unaudited condensed consolidated statement of operations for the nine months ended September 30, ~~2021.~~

2022 and 2021, respectively.

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. ~~Plaintiffs allege, among other things,~~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 ~~that~~at issue. In February 2022, the ~~representative plaintiffs are attempting~~parties reached a proposed settlement in principle to ~~certify. An initial mediation session~~resolve the litigation in its entirety and requested a stay of the pending litigation. This proposed settlement in principle was subject to District Court approval and entry into a settlement agreement between the parties, and contemplated a total potential settlement fund of $2,500 of Company shares of common stock. Ultimately, no settlement agreement was executed by the parties nor was District Court approval obtained. Consequently, the stay of the litigation was briefly lifted until the District Court certified its ruling on a motion for summary judgment for immediate appeal. The litigation is ~~scheduled for mid-November~~currently stayed while the matter proceeds on appeal. Based on the settlement negotiations, the Company accrued a $1,250 reserve in connection with this lawsuit during the three months ended December 31, 2021. ~~Waitr maintains that~~The accrued legal contingency is included in other current liabilities in the ~~underlying allegations and claims lack merit, and that the classes, as pled, are incapable of certification. Waitr continues to vigorously defend the suit.~~

unaudited condensed consolidated balance sheet at September 30, 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.~~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~~assigned that motion to the Magistrate Judge, who issued her Report and ~~has taken~~Recommendation to the District Court Judge that the motion ~~under advisement. Waitr believes that this lawsuit lacks merit and that it has strong defenses to~~be granted in all respects. On August 10, 2022, the Court ruled in favor of the Company and its former officers and directors on all claims ~~alleged.~~and dismissed the case with prejudice. The deadline for appeal has passed with no action from plaintiffs; the judgment dismissing the case with prejudice is now final.

In October, 2017, the Company was named as a defendant in the matter of Michael Boone and Jennifer Walters, individually and on behalf of their minor child Grace Boone, vs. Waitr ~~continues~~Inc., pending in the 22nd Judicial District Court for the Parish of St. Tammany, State of Louisiana. The action arises from a pedestrian/vehicle collision that occurred in November 2016, and the alleged substantial damages as a result thereof. This matter was not resolved through mediation. A trial date has not been set and discovery is ongoing. The Company intends to vigorously defend this lawsuit.

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In May 2020, the ~~suit.~~

Company was named as a defendant in Mary Ritchey, Individually and as Conservator for A.M., a minor, vs. Kristi Rando, Waitr Holdings, Inc., et al., Civil No. 1CCV-20-0722 LWC, and Robert P. McPherson vs. Kristi Rando, Waitr Holdings, Inc., et al., Civil No. 1CCV-20-0764 LWC, consolidated and which is currently pending in the Circuit Court of the First Circuit, State of Hawaii. This action is a result of an automobile accident that occurred in October 2018 involving an employee of a Company subsidiary and the alleged substantial injuries and damages as a result thereof. Discovery is ongoing, as well as the motion practice. Trial is currently set for 2023. The Company intends to vigorously defend this lawsuit.

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 ~~infringement, misappropriation and other violations of~~ intellectual property ~~or other rights, lawsuits and claims involving personal injuries, physical damage~~infringement, and workers’ compensation ~~benefits suffered~~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, ~~often these~~there are limits to insurance coverage and in certain instances claims are met with denial of coverage positions by the ~~carriers, and there are limits to insurance coverage;~~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.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes with respect to Waitr’s risk factors previously reported in Part I, Item 1A, of the ~~2020~~2021 Form 10-K.

~~If we fail~~

As required by ASC 205-40, Going Concern, our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern and management’s plans to alleviate this condition may be unsuccessful.

Pursuant to the requirements of ASC 205-40, Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Based on their assessment, our management has raised concerns about our ability to continue as a going concern within one year after the date that the unaudited consolidated financial statements contained in this report are issued. This evaluation of our ability to continue as a going concern initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. Management has focused its efforts on certain initiatives to improve revenue and its cash position, including a comprehensive rebranding, consolidation of its technology platforms into a single application and cost reductions. For a discussion of these initiatives, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Additionally, management evaluated its existing cost structure and implemented cost savings initiatives to reduce operating costs and plans to continue to ~~meet all applicable Nasdaq listing requirements,~~implement further cost saving initiatives where appropriate. While the Company believes that the initiatives described above will result in improved liquidity and ~~Nasdaq determines~~cash flow, there can be no assurance that the Company will be able to ~~delist our common stock,~~generate positive cash flow from operations in the ~~delisting could~~future, affecting the Company’s ability to continue as a going concern.

The Company’s results of operations and cash positions have been adversely ~~affect~~impacted primarily by declines in order volumes. Our primary source of liquidity during the ~~market liquidity~~nine months ended September 30, 2022 has been proceeds from the issuance of our common ~~stock~~stock. The Company has had a trend of negative cash flow from operations during 2022. Cash flow used in operations totaled $21,701 for the nine months ended September 30, 2022 and $7,870 for the ~~market price~~three months ended September 30, 2022. During the nine months ended September 30, 2022, pursuant to our ATM Program, we sold 27,041,659 shares of ~~our~~the Company’s common stock for net proceeds of $10,266. The Company’s cash position has declined from $60,111 at December 31, 2021 to $20,118 as of September 30, 2022 and approximately $14,700 as of November 3, 2022. For each of the first three quarters of 2022, the Company had net losses. As reflected in the

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accompanying unaudited condensed consolidated financial statements, the Company has an accumulated deficit of $531,484 as of September 30, 2022.

As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through the sale and issuance of debt or equity securities or through bank or other financing could ~~decrease significantly.~~

~~Nasdaq requires~~be impaired. Management continues to explore raising additional capital to supplement the Company’s capitalization and liquidity and expects that the ~~closing bid price of our common stock does not fall below $1.00 per share for 30 consecutive business days. Historically, our common stock has experienced substantial price volatility, particularly~~Company will seek to additionally fund its operations through proceeds from equity raises, including any raises under the ATM Program, but there can be no assurance that such financing will be available on terms commercially acceptable to the Company, or at all. Our ability to continue as a ~~result of the COVID-19 pandemic, significant fluctuations in~~going concern may depend on our ~~revenue, earnings and margins over the past few years, and variations between our actual financial~~

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~~results and the published expectations of analysts. Although the trading price of our common stock is currently above $1.00 per share, the closing price of our common stock has been~~ability to obtain additional capital, as ~~low as $0.80 per share during the current fiscal year and $0.31 per share during the fiscal year ended December 31, 2020, and~~ there can be no assurance that we will ~~continue~~be able to ~~meet this, or any other, requirement~~generate positive cash flow from operations in the ~~future.~~future as a result of our initiatives or otherwise. If we ~~are unable~~raise funds by issuing debt securities or preferred stock, or by incurring loans, these forms of financing would have rights, preferences, and privileges senior to ~~maintain compliance with this closing bid price requirement,~~those of holders of our ~~common stock~~Common Stock. If adequate capital is not available to us when needed, or in the amounts required, we may be forced to terminate, or significantly curtail our operations and strategic initiatives. Our consolidated results of operations could be ~~delisted from Nasdaq. If this were to occur, trading~~materially adversely affected by these decisions and your investment in the Company could be materially impaired.

Additional impairments of our common stock would most likely take place in an over-the-counter market for unlisted securities. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock in an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchangethe carrying amounts of goodwill or other ~~reasons. In addition, as a delisted security,~~indefinite-lived assets could negatively affect our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our securities, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of ~~operations,~~operations.

We conduct our goodwill and intangible asset impairment test annually in October, or more frequently if indicators of impairment exist, and we review the recoverability of long-lived assets, including ~~our ability to attract~~acquired technology, capitalized software costs, and ~~retain qualified employees, to raise capital,~~property and ~~execute on a strategic alternative.~~

~~Our acquisition~~equipment when events or changes in circumstances occur that indicate that the carrying value of the ~~Cape Payment Companies, which receive certain revenue from financial institutions that provide services to customers operating~~asset may not be recoverable. As a result of the significant decline in the ~~cannabis~~Company’s stock price in mid-March 2022 and other macroeconomic and industry ~~may expose us~~factors, thereby contributing to ~~changes related to the enforcement of federal law on cannabis.~~

We recently acquired substantially all of the assets of the Cape Payment Companies with respect to their business operations, and we plan to continue the Cape Payment Companies’ business operations. As such, these business operations will engagea decline in the ~~business~~Company’s market capitalization, we conducted an impairment test as of providing referral services to merchants—including state licensed cannabis businesses—by connecting such businesses to money services businesses (“MSB”) and/or financial institutions (e.g., payment processors, banks and credit unions) that are willing to service them. For these referral services, we are paid exclusively by the financial institutions and/or MSBs—never by the merchants—on a monthly or bi-monthly basis based on the volume of transactions the financial institutions and/or MSBs perform for the merchants. Any risks related to the cannabis industry that may adversely affect the clients and potential clients of these MSBs and/or financial institutions may, in turn, adversely affect us. Specific risks we might face include, but are not limited to, the following:

~~Marijuana remains illegal under United States federal law~~

Marijuana is a Schedule-I controlled substance under the Controlled Substances Act, or CSA, and is illegal under federal law. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the U.S. and a lack of safety for the use of the drug under medical supervision. The concepts of “medical cannabis” and “adult-use cannabis” do not exist under U.S. federal law. It remains illegal under federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire with those who do so. Even in those states in which the use of marijuana has been authorized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana is not preempted by state laws that legalize its use, strict enforcement of federal law regarding marijuana could adversely affect our operations and financial performance.

Businesses that are not directly engaged in the cannabis industry, but that transact business with cannabis companies, also face at least a theoretical risk of being prosecuted for a violation of the CSA. In light of our receiving revenue from financial institutions and/or MSBs that provide services directly to businesses that violate the CSA—and that such business operations will continue—there is a theoretical risk that we could be prosecuted as a co-conspirator with, or for aiding and abetting, other parties’ violations of the CSA.

~~Uncertainty of federal enforcement~~

On January 4, 2018, Attorney General Sessions rescinded the previously issued memoranda (the “Cole Memoranda”) from the U.S. Department of Justice (“DOJ”) that had de-prioritized the enforcement of federal law against marijuana users and businesses that comply with state marijuana laws, adding uncertainty to the question of how the federal government will choose to enforce federal laws regarding marijuana. Under previous administrations, the DOJ indicated that those users and suppliers of marijuana who complied with state laws, which required compliance with certain criteria, would not be prosecuted. Attorney General Sessions issued a memorandum (“Sessions Memorandum”) to all United States Attorneys in which the DOJ affirmatively rescinded the previous guidance as to marijuana enforcement, calling such guidance “unnecessary.” This one-page memorandum was vague in nature, stating that federal prosecutors should use established principles in setting their law enforcement priorities. Thus, federal prosecutors were free then (and continue to be free) to utilize their prosecutorial discretion to decide whether to prosecute cannabis activities despite the existence of state-level laws that may be inconsistent with federal prohibitions. No direction was given to federal prosecutors in the Sessions Memorandum as to the priority they should ascribe to such cannabis activities, and resultantly it is uncertain how active U.S. federal prosecutors will be in relation to such activities.

On November 7, 2018, Jeff Sessions resigned from his position as Attorney General. Following Mr. Sessions’ resignation, William Barr was eventually appointed to the role. During his Senate confirmation hearing, Mr. Barr stated that he disagrees with

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efforts by states to legalize marijuana, but would not go after marijuana companies in states that legalized it under Obama administration policies. He stated further that he would not upset settled expectations that have arisenMarch 15, 2022. Additionally, as a result of ~~the Cole Memoranda. Federal enforcement of cannabis-related activity remained consistent with the priorities outlined~~continued declines in the ~~Cole Memoranda throughout Attorney General Barr’s tenure.~~

~~In January 2021, Joseph R. Biden Jr. was sworn in~~Company’s stock price and market capitalization during the second and third quarters of 2022, we conducted an additional impairment test as the new President of the United States. President Biden nominated federal judge Merrick Garland to serve as his Attorney General. During his confirmation hearings in the Senate on February 22, 2021, U.S. Attorney General, Merrick Garland, noted that it “does not seem to me a useful use of limited resources … to be pursuing prosecutions in states that have legalized and that are regulating the use of marijuana, either medically or otherwise.” The Senate confirmed Judge Garland as Attorney General on March 10, 2021.

Regarding medical cannabis specifically, it has largely been protected against enforcement by enacted legislation from the United States Congress in the form of what is commonly called the “Rohrabacher-Blumenauer Amendment,” which prevents federal prosecutors from using federal funds to impede the implementation of medical cannabis laws enacted at the state-level, subject to the United States Congress restoring such funding. Notably, this amendment has always applied to only medical cannabis programs, and has no effect on pursuit of recreational cannabis activities. The amendment has historically been passed as an amendment to omnibus appropriations bills, which by their nature expire at the end of a fiscal year or other defined term. The current omnibus appropriations bill continued the protections for the medical cannabis marketplace and its lawful participants from interference by the U.S. DOJ up and through the 2021 appropriations deadline of September 30, ~~2021.~~

~~In July 2020, the House~~2022. The impairment tests were conducted in accordance with ASC 360, Impairment and Disposal of Representatives passed the “Blumenauer-McClintock-Norton-Lee amendment,” to the Commerce, Justice, Science (CJS) Appropriations bill. That amendment proposed continuing the Rohrabacher-Blumenauer Amendment’s protectionsLong-Lived Assets for ~~state medical cannabis programs~~certain long-lived assets including capitalized contract costs, developed technology, customer relationships, and ~~extending those protections to include recreational programs~~trade names, and in states where recreational cannabis is legal. The amendment was not included in the final spending bill, so at this time the protections afforded by the Rohrabacher-Blumenauer Amendment apply only to medical cannabis programs.

Should the Rohrabacher-Blumenauer Amendment language not be included in the Fiscal Year 2022 appropriations package, there can be no assurance that the federal government will not seek to prosecute cases involving medical cannabis businesses that are otherwise compliantaccordance with ~~state law.~~

~~Unless~~ASC 350, Intangibles – Goodwill and until the United States Congress amends the CSA with respect to medical and/or adult-use cannabis (and as to the timing or scope of any such potential amendments there can be no assurance), there is a risk that U.S. federal authorities may choose to enforce current federal law that criminalizes cannabis. If the federal government begins to enforce federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing applicable state laws are repealed or curtailed, our business, results of operations, financial condition and prospects would be materially adversely affected.

Such potential proceedings could involve significant restrictions being imposed upon us, while diverting the attention of key executives. Such proceedings could have a material adverse effect on us, as well as on our reputation, even if such proceedings were concluded successfully in our favor. In the extreme case, such proceedings could ultimately involve the prosecution of our key executives or the seizure of corporate assets; however as of the date hereof, we believe that proceedings of this nature are remote. Moreover, violations of any federal laws and regulations may also result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities or divestiture. This could have a material adverse effect on us, including our reputation and ability to conduct business, our financial position, operating results, profitability or liquidity. In addition, it is difficult for us to estimate the time or resources that would be neededOther for the investigation of any such matters or its final resolution because, in part, the time and resources that may be needed are dependent on the nature and extent of any information requested by the applicable authorities involved, and such time or resources could be substantial.

~~Banking laws and regulations could limit access to banking services and expose us to risk~~

Our receipt of payments from third-party financial institutions and/or MSBs providing services for customers engaged in state-legal cannabis operations could also subject those institutions to the consequences of a variety of federal laws and regulations that involve money laundering, financial record keeping and proceeds of crime, including the Bank Secrecy Act (“BSA”), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and any related or similar rules, regulations or guidelines, issued, administered or enforced by the federal government.

By receiving payments from these third party financial institutions and/or MSBs based on revenues derived by those institutions from federally illegal cannabis businesses, we arguably are “indirectly” obtaining property derived from unlawful activity. Accordingly, prosecutors could argue that we violate federal anti-money laundering statutes (“MLCA”) in the course of providing services to cannabis-related businesses.

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In the event that any of our operations, or any proceeds thereof, any dividends or distributions therefrom, or any profits or revenues accruing from such operations in the U.S. were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of the statutes noted above or any other applicable legislation. This could restrict or otherwise jeopardize our ability to declare or pay dividends or effect other distributions.

Further, banks often refuse to provide banking services to businesses involved in the cannabis industry due to the present state of federal laws and regulations governing financial institutions. Additionally, some courts have denied marijuana-related businesses bankruptcy protection, thus, making it very difficult for lenders to recoup their investments, which may limit the willingness of banks to lend to us. Accordingly, we may experience difficulties in obtaining and maintaining regular banking and financial services because of the activities of their clients, which may in turn adversely affect our business.

Regarding the BSA, specifically, the Department of the Treasury, Financial Crimes Enforcement Network, has not rescinded the “FinCEN Memo” dated February 14, 2014. This guidance includes burdensome due diligence expectations and reporting requirements, and does not provide any safe harbors or legal defenses from examination or regulatory or criminal enforcement actions by the U.S. DOJ, FinCEN or other federal regulators. Thus, many banks and other financial institutions in the United States choose not to provide banking services to cannabis-related businesses or rely on this guidance, which can be amended or revoked at any time by the Biden administration.

~~Risk of legal, regulatory or other political change~~

The success of the business strategy relating to the assets acquired from the Cape Payment Companies depends, in part, on the legality of the cannabis industry. The political environment surrounding the cannabis industry in general can be volatile and the regulatory framework remains in flux. To our knowledge, as of the date hereof, some form of cannabis has been legalized in 36 states, the District of Columbia, and the territories of Guam, U.S. Virgin Islands, Northern Mariana Islands and Puerto Rico; however, the risk remains that a shift in the regulatory or political realm could occur and have a significant impact on the industry as a whole, adversely impacting our business, results of operations, financial condition or prospects.

Delays in enactment of new state or federal regulations could restrict our ability to expand in this particular market. This growth strategy is contingent, in part, upon certain federal and state regulations being enacted to facilitate the legalization of medical and adult-use marijuana. If such regulations are not enacted, or enacted but subsequently repealed or amended, or enacted with prolonged phase-in periods, our growth in this particular market could be negatively impacted.

~~We are unable to predict with certainty when and how the outcome of these complex regulatory and legislative proceedings will affect our business in this particular market.~~

Further, there is no guarantee that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. If the federal government begins to enforce federal laws relating to cannabis in states where the sale and use of cannabis is currently legal under state law, or if existing applicable state laws are repealed or curtailed, our business, results of operations, financial condition and prospects would be materially adversely affected. Federal actions against individuals or entities engaged in the cannabis industry or a repeal of applicable marijuana legislation could adversely affect our business, results of operations, financial condition and prospects.

We are also aware that multiple states are considering special taxes or fees on businesses in the cannabis industry. It is a potential yet unknown risk at this time that other states are in the process of reviewing such additional fees and taxation. Should such special taxes or fees be adopted, this could have a material adverse effect upon our business, results of operations, financial condition or prospects.

Overall, the medical and adult-use cannabis industry is subject to significant regulatory change at both the state and federal level. Our inability to respond to the changing regulatory landscape may cause us to not be successful in developing this particular market and could adversely affect us.

~~The cannabis industry is a new industry that may not succeed~~

The cannabis industry is a new industry subject to extensive regulation, and there can be no assurance that it will grow, flourish or continue to the extent necessary to facilitate our success in this particular market.

~~Our operations in the U.S. cannabis market as~~units’ goodwill. As a result of the ASC 360 and ASC 350 analyses, we recognized non-cash pre-tax impairment losses of $67,190 during the three months ended March 31, 2022 and $53,898 during the three months ended September 30, 2022 to write down the carrying value of goodwill to its implied fair value. See Part I, Item 1, Note 7 – Intangible Assets and Goodwill for additional details.

Determining the fair value of a reporting unit and intangible assets ~~acquired from~~requires the ~~Cape Payment Companies may become~~use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the ~~subject of heightened scrutiny~~

~~For the reasons set forth above, these operations~~judgments and estimates used could change in ~~the U.S., and any~~ future ~~operations in this particular market may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the U.S. As a result, we may be subject to~~

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~~significant direct and indirect interaction with public officials.~~periods. There can be no assurance that ~~this heightened scrutiny~~additional goodwill or intangible assets will not be impaired and that the carrying value of other indefinite-lived assets will be recoverable in ~~turn lead to the imposition of certain restrictions on our ability to exploit this acquisition.~~

Government policy changes or public opinion may also result in a significant influence over the regulation of the cannabis industry in the U.S. or elsewhere. A negative shift in the public’s perception of medical and/or adult-use cannabis in the U.S. or any other applicable jurisdiction could affect future legislation or regulation. Among other things, such a shift could cause state jurisdictions to abandon initiatives or proposals to legalize medical and/or adult-use cannabis, thereby limiting the number of new state-legal cannabis markets intoperiods, which we could expand. Any inability to fully implement such expansion strategy may result in a material adverse effect on this business, as well as the financial condition, results of operations or prospects thereof.

~~Regulatory scrutiny of the business comprising the Cape Payment Companies’ industry may negatively impact our ability to raise additional capital~~

Our business activities relating to the assets acquired from the Cape Payment Companies rely, in part, on newly established and/or developing laws and regulations in the various states in which this business will operate. These laws and regulations are evolving and subject to change with minimal notice. Regulatory changes may adversely affect our results of operations in this regard. Additionally, the cannabis industry may come under the scrutiny or further scrutiny by the U.S. DOJ or other federal, state or non-governmental regulatory authorities or self-regulatory organizations that supervise or regulate the medical and/or adult-use cannabis markets in the U.S. It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any proposals will become law. The regulatory uncertainty surrounding this industry may adversely affect our business and operations, including without limitation, the costs to remain compliant with applicable laws and the impairment of our ability to raise additional capital.

~~The change in presidential administration could result in increased misclassification claims against the Company.~~

During the Trump administration, the U.S. Department of Labor (“DOL”) relaxed enforcement of misclassification claims under the Fair Labor Standards Act (“FLSA”). Additionally, just before President Trump left office, the DOL issued a new, company-friendly independent contractor standard via regulation that was set to go into effect in March 2021. However, after President Biden took office, the DOL paused and ultimately rescinded implementation of the regulation in May 2021. The DOL has not yet proposed a substitute regulation, meaning that previous, more worker-friendly standard is still in effect. Some legal experts expect the DOL to issue additional regulations or guidance proposing an even more worker-friendly standard, such as the “ABC” test that was implemented in California. Legal experts also expect the DOL under President Biden to become more aggressive in enforcing misclassification claims against companies, particularly in the gig economy space. The issuance of such additional regulations or guidance, or the increase in such DOL enforcement activity, could adversely affect our ~~operations~~financial results and ~~profitability.~~

stockholders’ equity.

We are subject to a variety of risks relating to our relationships with the independent contractor drivers, including shortages of available drivers, loss of independent contractor drivers, adverse conditions impacting independent contractor drivers, and possible increases in driver compensation.

During the year ended December 31, 2020, we terminated our employee drivers and outsourced our driver function to Delivery Logistics, who provides us with independent contractor drivers. While we implemented this change in a way intended to ensure that the drivers are classified as independent contractors under applicable law and regulation, certain state and local governmental authorities have initiated efforts to classify independent contractors performing driver jobs as employees. In ~~response~~January 2020, California State Assembly Bill 5 (“AB5”) came into effect, which codifies an employee-friendly test to ~~economic hardships experienced during~~determine whether a worker is an employee or independent contractor under California law. However, in November 2020, California voters passed Proposition 22, the ~~COVID-19 pandemic,~~App-Based Drivers as Contractors and Labor Policies Initiative. Proposition 22 classifies app-based transportation and delivery drivers as independent contractors and adopts various labor and wage policies specific to this class of workers, which policies will likely increase operating costs. Gig economy companies initially argued that Proposition 22 effectively exempts this class of workers from the ~~U.S. federal government rolled out stimulus payments~~reach of AB5. However, in late 2021, a California appellate court ruled that Proposition 22 was unconstitutional and unenforceable. This decision is pending appeal.

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While the Company does not operate in California, multiple other states including Illinois, Massachusetts, New Jersey, and New York have attempted to codify employee-friendly language similar to AB5 while other public gig economy companies have attempted to lobby for protective measures similar to Proposition 22 putting the future of classification in the ~~first quarter~~gig economy in limbo. Further, since 2020, numerous lawsuits have been filed against various gig economy companies based on the misclassification of ~~2021 which we believe presented challenges~~their drivers. Most recently, Uber settled a misclassification suit in ~~maintaining~~New Jersey for over $100 million. These regulatory actions and/or increased scrutiny could result in increased costs and burdens for the Company. The Company has already experienced an ~~appropriate level~~increase in misclassification claims since the beginning of the pandemic, particularly from various state unemployment agencies. It is possible that these claims may increase pending the Department of Labor’s proposed rule making around employment classification.

The change in composition of our driver ~~supply at certain times~~base could also result in a degradation of service provided by contracted delivery drivers, and ~~has required us~~an increase in the turnover rates of delivery drivers. If Delivery Logistics is unable to ~~spend more to procure driver services in certain instances. Additional shortages~~attract and retain a sufficient number of ~~available~~independent contractor drivers, ~~could require us to spend more to procure driver services and could create shortages at peak order times. Furthermore,~~ we could face ~~a challenge with having enough qualified drivers primarily due~~difficulty meeting consumer order demands or be forced to ~~intense market competition, which may subject us to increased payments for independent contractor driver rates~~forego business that would ~~negatively impact our profitability~~.

~~The COVID-19 pandemic, or a similar public health threat, could significantly~~otherwise be available to us, which would adversely affect our ~~business,~~ financial ~~condition and results of operations.~~

~~Waitr has thus far been able to operate effectively during the COVID-19 pandemic. However,~~ the spread of certain COVID variants and cases rising in areas with low vaccination rates provide continued uncertainty as to the potential short and long-term impacts of the pandemic on the global economy and on the Company’s business, in particular. There remains uncertainty as to whether or not the pandemic will continue to impact diner behavior, and if so, in what manner. To the extent that the COVID-19 pandemic, or a similar public health threat, adversely impacts the Company’s business, results of operations, liquidity or financial condition, it may also have the effect of heightening many of the other risks described in the risk factors in the Company’s 2020 Form 10-K and this quarterly report on Form 10-Q for the three months ended September 30, 2021.

Our strategic initiative to change our corporate name and visual identity in a comprehensive rebrand may not be successful and may negatively impact our name recognition with customers and partners or otherwise impact our business.

In June 2021, we launched a strategic initiative to change our corporate name and visual identity in a comprehensive rebrand. There is no assurance that our rebranding initiative will be successful or result in a positive return on investment. ~~In connection with the~~

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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-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. The failure by us to timely cease using the Waitr trademark provides Waiter.com, Inc. the right to pursue injunctive relief and liquidated damages. We could be required to devote significant resources to advertising and marketing in order to increase awareness of the new brand and for the successful integration of our rebranding process. Furthermore, our rebranding initiative may negatively impact our name recognition with customers and partners, which could have an adverse impact on our business.

condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

~~None~~

On November 8, 2022, ASAP Inc. (f/k/a Waitr Inc.), Waitr Intermediate Holdings, LLC, the lenders party thereto and Luxor Capital entered into an amendment to the Credit Agreement (the “November 2022 Amended Credit Agreement”) and the Company, the lenders party thereto and Luxor Capital entered into an amendment to the Convertible Notes Agreement (the “November 2022 Amended Convertible Notes Agreement”).

Pursuant to the November 2022 Amended Credit Agreement, commencing with the fiscal quarter ending December 31, 2022, the portion of the proceeds of any ATM public common stock issuances to be applied to the prepayment of the Term Loan under the Credit Agreement increases from 50% to 60%. The November 2022 Amended Convertible Notes Agreement includes (i) a reduction of the interest rate under the Convertible Notes Agreement from 6% to 4.5% per annum and (ii) an adjustment of the portion of an interest payment that can be paid in-kind, if elected by the Company, from 50% to approximately 33%. Additionally, pursuant to the November 2022 Amended Convertible Notes Agreement, subsequent to the payment in full of the Term Loan outstanding under the Credit Agreement, the portion of the proceeds of any future ATM public common stock issuances to be applied to the prepayment of the Notes under the Convertible Notes Agreement increases from 50% to 60%.

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Item 6. Exhibits

~~Exhibit No.~~	~~Description~~
Exhibit No.		Description
~~10.1~~		~~Asset Purchase Agreement, dated as of August 9, 2021, by and among Waitr Holdings, Inc., Cape Payments LLC, Cape Cod Merchant Services LLC, Brett Husak, and Brad Anderson.~~⁽¹⁾
10.1
~~10.2~~	~~Asset Purchase Agreement, dated as of August 9, 2021, by and among Waitr Holdings, Inc., Cape Payments LLC, Flow Payments LLC, Eastham Holdings LLC and ProMerchant LLC.~~⁽¹⁾

~~10.3~~	~~Asset Purchase Agreement, dated as of August 9, 2021, by and among Waitr Holdings, Inc., Cape Payments LLC, ProMerchant LLC, Jabalah LLC and PMSB Holdings, LLC.~~⁽¹⁾

~~10.4~~	~~Second~~Fourth Amended and Restated Open Market Sale Agreement dated August ~~30, 2021,~~17, 2022, by and between Waitr Holdings Inc. and Jefferies LLC (incorporated by reference to Exhibit 1.1 of the Current Report on Form 8-K (File No. 001-37788) filed by the Company on August ~~30, 2021)~~17, 2022) .

~~10.5~~ 10.2		~~Amendment No. 1 to Executive Employment~~Conversion Agreement dated ~~April 23, 2021,~~as of July 22, 2022 by and ~~between~~among Waitr Holdings Inc., the lenders party thereto, and ~~Leo Bogdanov.~~Luxor Capital Group, LP (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K (File No. 001-37788) filed by the Company on July 25, 2022)⁽¹⁾

~~10.6~~ 10.3		~~Employment~~Amendment No. 6 to Credit and Guaranty Agreement ~~dated September 2, 2021,~~ by and ~~between~~among ASAP Inc. (f/k/a Waitr Inc.), Waitr Intermediate Holdings, LLC, other guarantors party hereto, Luxor Capital, LLC and Luxor Capital Group, LP (1)

10.4		Amendment No. 7 to Credit Agreement by and among Waitr Holdings Inc., various lenders thereto, and ~~Armen Yeghyazarians~~Luxor Capital Group, LP (1). ⁽¹⁾

~~31.1~~ 10.5		Amendment to the Mark D ’Ambrosio employment agreement dated effective October 24, 20 2 2 (1)

31.1		Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule15d-14(a).(1)

31.2		Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule15d-14(a). (1)

32.1		Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section ~~1350.~~ ¹³⁵⁰ (1)

32.2		Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section ~~1350.~~ ¹³⁵⁰ (1)

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101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

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104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

⁽¹⁾Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: November ~~2, 2021~~ 9, 2022	By:	~~By:~~	/s/ ~~Leo Bogdanov~~ Armen Yeghyazarians
			~~Leo Bogdanov~~ Armen Yeghyazarians
			Chief Financial Officer and Chief Accounting Officer
			(Principal Financial Officer and Duly Authorized Officer)


~~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~~

	~~Page~~
~~PART I~~		~~Financial Information~~	1 Page
PART I		Financial Information	1
Item 1.		Condensed Consolidated Financial Statements (unaudited)	1
		Condensed Consolidated Balance Sheets as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021	1
		Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	2
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	3
		Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	4
		Notes to Condensed Consolidated Financial Statements	6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	24 29
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	33 43
Item 4.		Controls and Procedures	33 44

PART II		Other Information	34 45
Item 1.		Legal Proceedings	34 45
Item 1A.		Risk Factors	34 46
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	39 48
Item 3.		Defaults Upon Senior Securities	39 48
Item 4.		Mine Safety Disclosures	39 48
Item 5.		Other Information	39 48
Item 6.		Exhibits	40 49

		Signatures	41 50

(in thousands, except per share amount)
Shares transferred at closing		3,562
Value per share	$	2.96
Total share consideration	$	10,545
Plus: cash transferred to Delivery Dudes members		11,500
Total consideration	$	22,045

	Three months ended September 30,				Nine months ended September 30,
		2021		2020		2021		2020
Net revenue	$	43,448	$	55,622	$	146,021	$	165,405
Net income	$	12,250	$	4,942	$	3,261	$	13,844


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


☐ o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Three Months Ended September 30, 2021
	Common stock				Additional paid in capital			Accumulated deficit			Total stockholders’ equity
	Shares		Amount
Balances at June 30, 2021		116,701,277	$	11	$	466,192		$	(373,259	)	$	92,944
Net income		—		—		—			12,250			12,250
Exercise of stock options and vesting of restricted stock units		667,207		1		3			—			4
Taxes paid related to net settlement on stock-based compensation		—		—		(115	)		—			(115	)
Stock-based compensation		—		—		1,635			—			1,635
Equity issued for acquisition		2,564,103		—		3,179			—			3,179
Issuance of common stock		6,683,823		1		7,899			—			7,900
Balances at September 30, 2021		126,616,410	$	13	$	478,793		$	(361,009	)	$	117,797


Three Months Ended September 30, 2022
	Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balances at June 30, 2022	163,448,742	$	16	$	515,624	$	(458,022)	$	57,618
Net loss	—	—		—		(73,462)		(73,462)
Vesting of restricted stock units	1,005,327	—		—		—		—
Taxes paid related to net settlement on stock-based compensation	—	—		(79)		—		(79)
Stock-based compensation	—	—		1,338		—		1,338

Stock issued for conversion of Notes	27,000,000	3		15,271		—		15,274

Issuance of common stock, net	14,966,669	1		3,145		—		3,146
Balances at September 30, 2022	206,420,738	$	20	$	535,299	$	(531,484)	$	3,835

Nine Months Ended September 30, 2021
	Common stock				Additional paid in capital			Accumulated deficit			Total stockholders’ equity
	Shares		Amount
Balances at December 31, 2020		111,259,037	$	11	$	451,991		$	(363,906	)	$	88,096
Net income		—		—		—			2,897			2,897
Exercise of stock options and vesting of restricted stock units		2,518,780		1		11			—			12
Taxes paid related to net settlement on stock-based compensation		—		—		(932	)		—			(932	)
Stock-based compensation		—		—		6,100			—			6,100
Equity issued for acquisitions		6,154,770		—		13,724			—			13,724
Issuance of common stock		6,683,823		1		7,899			—			7,900
Balances at September 30, 2021		126,616,410	$	13	$	478,793		$	(361,009	)	$	117,797


Nine Months Ended September 30, 2022
	Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balances at December 31, 2021	146,094,300	$	15	$	503,609	$	(369,135)	$	134,489
Net loss	—	—		—		(162,349)		(162,349)
Vesting of restricted stock units	1,873,279	—		—		—		—
Taxes paid related to net settlement on stock-based compensation	—	—		(106)		—		(106)
Stock-based compensation	—	—		4,588		—		4,588

Stock issued for conversion of Notes	31,411,500	3		16,944		—		16,947
Issuance of common stock, net	27,041,659	2		10,264		—		10,266
Balances at September 30, 2022	206,420,738	$	20	$	535,299	$	(531,484)	$	3,835

Three Months Ended September 30, 2020
	Common stock				Additional paid in capital		Accumulated deficit			Total stockholders’ equity
	Shares		Amount
Balances at June 30, 2020		102,382,511	$	10	$	420,368	$	(371,191	)	$	49,187
Net income		—		—		—		4,644			4,644
Exercise of stock options and vesting of restricted stock units		45,071		—		2		—			2
Stock-based compensation		—		—		1,728		—			1,728
Stock issued for conversion of Notes		105,384		—		137		—			137
Issuance of common stock		7,587,655		1		24,989		—			24,990
Balances at September 30, 2020		110,120,621	$	11	$	447,224	$	(366,547	)	$	80,688

Nine Months Ended September 30, 2020

Three Months Ended September 30, 2021														Three Months Ended September 30, 2021
	Common stock				Additional paid in capital			Accumulated deficit			Total stockholders’ equity				Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares		Amount												Shares	Amount
Balances at December 31, 2019		76,579,175	$	8	$	385,137		$	(379,742	)	$	5,403
Balances at June 30, 2021														Balances at June 30, 2021	116,701,277	$	11	$	466,192	$	(373,259)	$	92,944
Net income		—		—		—			13,195			13,195		Net income	—	—		—		12,250		12,250
Exercise of stock options and vesting of restricted stock units		514,364		—		40			—			40		Exercise of stock options and vesting of restricted stock units	667,207	1		3		—		4
Taxes paid related to net settlement on stock-based compensation		—		—		(728	)		—			(728	)	Taxes paid related to net settlement on stock-based compensation	—	—		(115)		—		(115)
Stock-based compensation		—		—		3,178			—			3,178		Stock-based compensation	—	—		1,635		—		1,635
Stock issued for conversion of Notes		9,328,362		1		12,025			—			12,026

Equity issued for asset acquisitions														Equity issued for asset acquisitions	2,564,103	—		3,179		—		3,179

Issuance of common stock		23,698,720		2		47,572			—			47,574		Issuance of common stock	6,683,823	1		7,899		—		7,900
Balances at September 30, 2020		110,120,621	$	11	$	447,224		$	(366,547	)	$	80,688
Balances at September 30, 2021														Balances at September 30, 2021	126,616,410	$	13	$	478,793	$	(361,009)	$	117,797

(in thousands, except per share amount)
Shares transferred at closing		2,564
Value per share	$	1.24
Total share consideration	$	3,179
Plus: cash transferred to Cape Payment Companies		12,000
Total estimated consideration at closing		15,179
Contingent consideration		1,686
Total estimated consideration	$	16,865

Cash and cash equivalents	$	42
Accounts receivable		1,180
Prepaid expenses and other current assets		7
Intangible assets		6,850
Other noncurrent assets		17
Accrued expenses and other current liabilities		(746	)
Total assets acquired, net of liabilities assumed		7,350
Goodwill		9,515
Total estimated consideration	$	16,865

	Amortization
The remainder of 2021	$	2,072
2022		11,322
				Amortization
The remainder of 2022			The remainder of 2022	$	1,948
2023		9,076	2023	11,871
2024		6,904	2024	10,006
2025		4,526	2025	7,420
2026			2026	3,469
Thereafter		6,711	Thereafter	3,695
Total future amortization	$	40,611	Total future amortization	$	38,409

	Amortizable Life (in years)		Value (in thousands)
Customer relationships		7.5	$	6,500
Trade name		3.0		350
Total			$	6,850

	As of September 30, 2021
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Intangible Assets, Net			As of September 30, 2022
												Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Intangible Assets, Net
Intangible assets subject to amortization:											Intangible assets subject to amortization:
Software	$	33,687	$	(8,523	)	$	(12,011	)	$	13,153	Software	$	42,021	$	(14,017)	$	(11,779)	$	16,225
Trademarks/Trade name/Patents		6,555		(5,042	)		—			1,513	Trademarks/Trade name/Patents	6,549		(5,948)		—		601
Customer Relationships		96,509		(13,181	)		(57,378	)		25,950	Customer Relationships	96,510		(17,549)		(57,378)		21,583
Total intangible assets subject to amortization											Total intangible assets subject to amortization	145,080		(37,514)		(69,157)		38,409
Trademarks, not subject to amortization											Trademarks, not subject to amortization	3,038		—		—		3,038
Total	$	136,751	$	(26,746	)	$	(69,389	)	$	40,616	Total	$	148,118	$	(37,514)	$	(69,157)	$	41,447

	As of December 31, 2020											As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Intangible Assets, Net			Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Intangible Assets, Net
Intangible assets subject to amortization:											Intangible assets subject to amortization:
Software	$	25,204	$	(6,099	)	$	(11,825	)	$	7,280	Software	$	35,686	$	(9,632)	$	(11,779)	$	14,275
Trademarks/Trade name/Patents		5,405		(3,526	)		—			1,879	Trademarks/Trade name/Patents	6,549		(5,585)		—		964
Customer Relationships		82,845		(10,702	)		(57,378	)		14,765	Customer Relationships	96,510		(14,256)		(57,378)		24,876
Total intangible assets subject to amortization											Total intangible assets subject to amortization	138,745		(29,473)		(69,157)		40,115
Trademarks, not subject to amortization											Trademarks, not subject to amortization	3,011		—		—		3,011
Total	$	113,454	$	(20,327	)	$	(69,203	)	$	23,924	Total	$	141,756	$	(29,473)	$	(69,157)	$	43,126


Balance as of December 31, 2021	$	130,624
March 15, 2022 impairment	(67,190)
Balance prior to segment allocation	63,434
September 30, 2022 impairment	(51,991)
Remaining goodwill to be allocated to segments	$	11,443

	Coupon Rate	Effective
	Range in 2020	Interest Rate at		September 30,			December 31,
	through 3Q21	September 30, 2021	Maturity	2021			2020				Coupon Rate Range in 2021 through 3Q22	Effective Interest Rate at September 30, 2022	Maturity	September 30, 2022		December 31, 2021
Term Loan	5.125% - 7.125%	10.62%	November 2023	$	35,007		$	49,479		Term Loan	5.125% - 7.125%	13.51%	May 2024	$	15,280	$	35,007
Notes	4.0% - 6.0%	6.49%	November 2023		49,504			49,504		Notes	4.0% - 6.0%	6.37%	May 2024	42,339		49,504
				$	84,511		$	98,983						$	57,619	$	84,511
Less: unamortized debt issuance costs on Term Loan					(2,351	)		(3,541	)	Less: unamortized debt issuance costs on Term Loan				(1,433)		(2,099)
Less: unamortized debt issuance costs on Notes					(489	)		(1,224	)	Less: unamortized debt issuance costs on Notes				(245)		(435)
Long term debt - related party				$	81,671		$	94,218		Long term debt - related party				$	55,941	$	81,977

Short-term loan for insurance financing	3.99%	n/a	March 2022		2,331			2,726
Short-term loans for insurance financing										Short-term loans for insurance financing	3.99% - 4.85%	n/a	August 2022 - March 2023	1,224		3,142
Total outstanding debt				$	84,002		$	96,944		Total outstanding debt				$	57,165	$	85,119

	Nine Months Ended September 30, 2021
Cash paid for operating lease liabilities (in thousands)	$	1,184
Weighted-average remaining lease term (years)		3.9
Weighted-average discount rate		5.0	%

	2021		2020
Weighted-average fair value at grant	$	2.19	$	0.24
Risk free interest rate	0.46%		1.54%
Expected volatility	131.4%		100.6%
Expected option life (years)		3.59		3.25


	Sales during nine months ended September 30, 2022
	November 2021 ATM Program		August 2022 ATM Program		Total

Total shares sold	12,074,990		14,966,669		27,041,659
Average sales price per share	$	0.60	$	0.22	$	0.39
Gross proceeds (in thousands)	$	7,211	$	3,225	$	10,436
Net proceeds (in thousands)	$	7,120	$	3,146	$	10,266

	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
										As of September 30, 2022
										Level 1		Level 2		Level 3		Total
Liabilities									Liabilities

Contingent consideration									Contingent consideration	$	—	$	—	$	1,388	$	1,388
Total liabilities measured and recorded at fair value									Total liabilities measured and recorded at fair value	$	—	$	—	$	1,388	$	1,388

										As of December 31, 2021
										Level 1		Level 2		Level 3		Total
Liabilities									Liabilities
Accrued medical contingency	$	—	$	—	$	423	$	423	Accrued medical contingency	$	—	$	—	$	423	$	423
Contingent consideration		—		—		1,686		1,686	Contingent consideration	—		—		1,939		1,939
Total liabilities measured and recorded at fair value	$	—	$	—	$	2,109	$	2,109	Total liabilities measured and recorded at fair value	$	—	$	—	$	2,362	$	2,362

	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities
Accrued medical contingency	$	—	$	—	$	17,435	$	17,435
Contingent consideration		—		—		—		—
Total liabilities measured and recorded at fair value	$	—	$	—	$	17,435	$	17,435

	Medical Contingency
	Three Months Ended September 30,						Nine Months Ended September 30,							Medical Contingency
	2021			2020			2021			2020
														Three Months Ended September 30,				Nine Months Ended September 30,
														2022		2021		2022		2021
Balance, beginning of the period	$	17,182		$	17,767		$	17,435		$	17,883		Balance, beginning of the period	$	—	$	17,182	$	423	$	17,435
Increases/additions		—			—			84			—		Increases/additions	—		—		—		84
Reductions/settlements		(16,759	)		(262	)		(17,096	)		(378	)	Reductions/settlements	—		(16,759)		(53)		(17,096)
Transfers out of Level 3													Transfers out of Level 3	—		—		(370)		—
Balance, end of the period	$	423		$	17,505		$	423		$	17,505		Balance, end of the period	$	—	$	423	$	—	$	423

	Three Months Ended September 30,				Nine Months Ended September 30,
Key Business Metrics⁽¹⁾	2021		2020		2021		2020
Active Diners (as of period end)		1,769,999		2,005,760		1,769,999		2,005,760
Average Daily Orders		30,563		39,880		35,565		40,563
Gross Food Sales (dollars in thousands)	$	128,534	$	153,532	$	433,553	$	462,089
Average Order Size (in dollars)	$	45.71	$	41.85	$	44.65	$	41.58

	Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, except percentages⁽¹⁾)	2021			% of Revenue			2020			% of Revenue			2021			% of Revenue			2020			% of Revenue
Revenue	$	43,448			100	%	$	52,734			100	%	$	143,545			100	%	$	157,483			100	%
Costs and expenses:
Operations and support		25,043			58	%		27,409			52	%		86,654			60	%		84,321			54	%
Sales and marketing		4,965			11	%		3,288			6	%		13,481			9	%		8,854			6	%
Research and development		1,310			3	%		820			2	%		3,163			2	%		3,457			2	%
General and administrative		10,843			25	%		11,380			22	%		33,534			23	%		32,252			20	%
Depreciation and amortization		3,070			7	%		2,103			4	%		8,952			6	%		6,242			4	%
Intangible and other asset impairments		186			0	%		—			0	%		186			0	%		29			0	%
Loss on disposal of assets		11			0	%		4			0	%		170			0	%		15			0	%
Total costs and expenses		45,428			105	%		45,004			85	%		146,140			102	%		135,170			86	%
Income (loss) from operations		(1,980	)		(5	%)		7,730			15	%		(2,595	)		(2	%)		22,313			14	%
Other expenses (income) and losses (gains), net:
Interest expense		1,751			4	%		2,117			4	%		5,333			4	%		7,521			5	%
Interest income		—			0	%		(14	)		0	%		—			0	%		(95	)		0	%
Other (income) expense		(16,006	)		(37	%)		965			2	%		(10,907	)		(8	%)		1,640			1	%
Net income before income taxes		12,275			28	%		4,662			9	%		2,979			2	%		13,247			8	%
Income tax expense		25			0	%		18			0	%		82			0	%		52			0	%
Net income	$	12,250			28	%	$	4,644			9	%	$	2,897			2	%	$	13,195			8	%

	Three Months Ended September 30,				Percentage			Nine Months Ended September 30,				Percentage
	2021		2020		Change			2021		2020		Change
	(dollars in thousands)							(dollars in thousands)
Revenue	$	43,448	$	52,734		(18	%)	$	143,545	$	157,483		(9	%)


	Three Months Ended September 30,				Percentage Change		Nine Months Ended September 30,				Percentage Change
	2022		2021				2022		2021
	(dollars in thousands)						(dollars in thousands)
Revenue	$	25,141	$	43,448	(42	%)	$	91,352	$	143,545	(36	%)

	Nine Months Ended September 30,
(in thousands)	2021			2020
Net cash (used in) provided by operating activities	$	(575	)	$	29,586
Net cash used in investing activities		(32,563	)		(3,629	)
Net cash (used in) provided by financing activities		(8,066	)		21,862

~~Delaware~~

~~26-3828008~~

(State or other jurisdiction of
incorporation or organization)

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

214 Jefferson Street, Suite 200
Lafayette, Louisiana

(Address of principal executive offices)

(Zip Code)