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wtrh-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________

FORM 10-Q

_______________________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2022


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

Commission File Number 001-37788

_______________________________________________________

WAITR HOLDINGS INC.

(Exact name of Registrant as specified in its Charter)

_______________________________________________________


Delaware			26-3828008
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
214 Jefferson Street, Suite 200 Lafayette, Louisiana			70501
(Address of principal executive offices)			(Zip Code)

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

______________________

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $0.0001 Per Share

WTRH

The Nasdaq Stock Market LLC

______________________

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	x

Non-accelerated filer	o	Smaller reporting company	o

Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

The number of shares of Registrant’s Common Stock outstanding as of August 8, 2022 was 190,780,722.

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Table of Contents


		Page
PART I	Financial Information	1
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30 , 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Operations for the three and six months ended June 30 , 2022 and 2021	2
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2022 and 2021	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 202 1	4
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

PART II	Other Information	38
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41

	Signatures	42

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PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	June 30, 2022		December 31, 2021
	Unaudited
ASSETS
CURRENT ASSETS
Cash	$	28,203	$	60,111
Accounts receivable, net	3,319		3,027
Capitalized contract costs, current	1,377		1,170
Prepaid expenses and other current assets	5,126		8,706
TOTAL CURRENT ASSETS	38,025		73,014
Property and equipment, net	2,599		3,763
Capitalized contract costs, noncurrent	3,395		3,183
Goodwill	63,434		130,624
Intangible assets, net	42,506		43,126
Operating lease right-of-use assets	3,620		4,327
Other noncurrent assets	929		1,070
TOTAL ASSETS	$	154,508	$	259,107
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
CURRENT LIABILITIES
Accounts payable	$	5,422	$	7,018
Restaurant food liability	2,219		3,327
Accrued payroll	2,330		2,988
Short-term loans for insurance financing	2,351		3,142
Income tax payable	107		74
Operating lease liabilities	1,315		1,581
Other current liabilities	18,768		19,309
TOTAL CURRENT LIABILITIES	32,512		37,439
Long term debt - related party	61,805		81,977
Accrued medical contingency	—		53
Operating lease liabilities, net of current portion	2,537		3,034
Other noncurrent liabilities	36		2,115
TOTAL LIABILITIES	96,890		124,618
Commitments and contingent liabilities (Note 10)
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value; 249,000,000 shares authorized and 163,448,742 and 146,094,300 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	16		15
Additional paid in capital	515,624		503,609
Accumulated deficit	(458,022)		(369,135)
TOTAL STOCKHOLDERS’ EQUITY	57,618		134,489
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	154,508	$	259,107

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

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WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
REVENUE	$	31,171	$	49,167	$	66,211	$	100,097
COSTS AND EXPENSES:
Operations and support	15,983		31,273		36,262		61,611
Sales and marketing	6,973		4,500		13,226		8,516
Research and development	1,242		854		2,553		1,853
General and administrative	12,213		12,505		23,758		22,691
Depreciation and amortization	3,000		2,965		6,065		5,882
Goodwill impairment	—		—		67,190		—

(Gain) loss on disposal of assets	(71)		162		(88)		159
TOTAL COSTS AND EXPENSES	39,340		52,259		148,966		100,712
LOSS FROM OPERATIONS	(8,169)		(3,092)		(82,755)		(615)
OTHER EXPENSES AND LOSSES, NET
Interest expense	1,461		1,681		3,165		3,582



Other expense	2,024		835		2,934		5,099
NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(11,654)		(5,608)		(88,854)		(9,296)
Income tax expense	17		33		33		57
NET LOSS FROM CONTINUING OPERATIONS	$	(11,671)	$	(5,641)	$	(88,887)	$	(9,353)
LOSS PER SHARE:
Basic	$	(0.07)	$	(0.05)	$	(0.57)	$	(0.08)
Diluted	$	(0.07)	$	(0.05)	$	(0.57)	$	(0.08)
Weighted average shares used to compute net loss per share:
Weighted average common shares outstanding – basic	160,531,778		115,644,790		157,099,938		113,998,589
Weighted average common shares outstanding – diluted	160,531,778		115,644,790		157,099,938		113,998,589

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

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WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(88,887)	$	(9,353)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Non-cash interest expense	577		1,485
Induced conversion expense related to Notes	930		—
Stock-based compensation	3,250		4,465
(Gain) loss on disposal of assets	(88)		159
Depreciation and amortization	6,065		5,882
Goodwill impairment	67,190		—

Amortization of capitalized contract costs	629		423

Change in fair value of contingent consideration liability	104		—

Other	(58)		(84)
Changes in assets and liabilities:
Accounts receivable	(292)		(614)
Capitalized contract costs	(1,048)		(1,389)
Prepaid expenses and other current assets	3,580		(1,008)
Other noncurrent assets	161		(386)
Accounts payable	(1,596)		1,623
Restaurant food liability	(1,108)		(86)
Income tax payable	33		57
Accrued payroll	(658)		(1,368)
Accrued medical contingency	(53)		(258)

Other current liabilities	(2,224)		6,452
Other noncurrent liabilities	(336)		(64)
Net cash (used in) provided by operating activities	(13,829)		5,936
Cash flows from investing activities:
Purchases of property and equipment	(81)		(589)
Internally developed software	(4,318)		(4,137)
Purchase of domain names	(12)		—
Acquisitions, net of cash acquired	—		(12,706)

Proceeds from sale of property and equipment	32		13
Net cash used in investing activities	(4,379)		(17,419)
Cash flows from financing activities:
Proceeds from issuance of stock	7,120		—
Payments on long-term loan	(20,000)		(14,472)
Borrowings under short-term loans for insurance financing	2,811		5,209
Payments on short-term loans for insurance financing	(3,602)		(2,471)
Payments on acquisition loans	—		(132)
Payments on finance lease obligation	(2)		—
Proceeds from exercise of stock options	—		8
Taxes paid related to net settlement on stock-based compensation	(27)		(817)
Net cash used in financing activities	(13,700)		(12,675)
Net change in cash	(31,908)		(24,158)
Cash, beginning of period	60,111		84,706
Cash, end of period	$	28,203	$	60,548
Supplemental disclosures of cash flow information:

Cash paid during the period for interest	$	2,588	$	2,097
Supplemental disclosures of non-cash investing and financing activities:
Conversion of convertible notes to stock	$	1,673	$	—
Stock issued as consideration in acquisition	—		10,545
Noncash impact of operating lease assets upon adoption	—		5,600
Noncash impact of operating lease liabilities upon adoption	—		6,005

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

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WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE AND SIX MONTHS ENDED JUNE 30, 2022

(in thousands, except share data)

(unaudited)


Three Months Ended June 30, 2022
	Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balances at March 31, 2022	155,705,647	$	15	$	511,515	$	(446,351)	$	65,179
Net loss	—	—		—		(11,671)		(11,671)
Vesting of restricted stock units	715,260	—		—		—		—
Taxes paid related to net settlement on stock-based compensation	—	—		(27)		—		(27)
Stock-based compensation	—	—		1,579		—		1,579

Stock issued for conversion of Notes	4,411,500	—		1,673		—		1,673

Issuance of common stock, net	2,616,335	1		884		—		885
Balances at June 30, 2022	163,448,742	$	16	$	515,624	$	(458,022)	$	57,618


Six Months Ended June 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	—	—		—		(88,887)		(88,887)
Vesting of restricted stock units	867,952	—		—		—		—
Taxes paid related to net settlement on stock-based compensation	—	—		(27)		—		(27)
Stock-based compensation	—	—		3,250		—		3,250

Stock issued for conversion of Notes	4,411,500	—		1,673		—		1,673
Issuance of common stock, net	12,074,990	1		7,119		—		7,120
Balances at June 30, 2022	163,448,742	$	16	$	515,624	$	(458,022)	$	57,618

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

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WAITR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE AND SIX MONTHS ENDED JUNE 30, 2021

(in thousands, except share data)

(unaudited)


Three Months Ended June 30, 2021
	Common stock			Additional paid in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balances at March 31, 2021	115,387,140	$	11	$	464,843	$	(367,618)	$	97,236
Net loss	—	—		—		(5,641)		(5,641)
Exercise of stock options and vesting of restricted stock units	1,314,137	—		2		—		2
Taxes paid related to net settlement on stock-based compensation	—	—		(85)		—		(85)
Stock-based compensation	—	—		2,387		—		2,387


Adjustment of consideration for acquisition	—	—		(955)		—		(955)

Balances at June 30, 2021	116,701,277	$	11	$	466,192	$	(373,259)	$	92,944


Six Months Ended June 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 loss	—	—		—		(9,353)		(9,353)
Exercise of stock options and vesting of restricted stock units	1,851,573	—		8		—		8
Taxes paid related to net settlement on stock-based compensation	—	—		(817)		—		(817)
Stock-based compensation	—	—		4,465		—		4,465

Equity issued for asset acquisitions	3,590,667	—		10,545		—		10,545

Balances at June 30, 2021	116,701,277	$	11	$	466,192	$	(373,259)	$	92,944

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

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WAITR HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

1. Organization

Waitr Holdings Inc., a Delaware corporation, together with its wholly owned subsidiaries (the “Company,” “Waitr,” “we,” “us” and “our”), operates an online ordering technology platform, providing delivery, carryout and dine-in options, connecting restaurants, merchants, drivers and diners in cities across the United States. The Company’s technology platform includes the Waitr, Bite Squad and Delivery Dudes mobile applications, collectively referred to as the “Platforms”. The Platforms allow consumers to browse local restaurants and menus, track order and delivery status, and securely store previous orders for ease of use and convenience. Restaurants benefit from the online Platforms through increased exposure to consumers for expanded business in the delivery market and carryout sales.

Additionally, Waitr facilitates access to third parties that provide payment processing solutions for restaurants and other merchants, pursuant to the acquisition of the Cape Payment Companies (as defined below) on August 25, 2021 (see Note 4 – Business Combinations).

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) as they apply to interim financial information. Accordingly, the interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete annual financial statements, although the Company believes that the disclosures made are adequate to make information not misleading. References to the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) included hereafter refer to the ASC and ASUs established by the Financial Accounting Standards Board (the “FASB”) as the source of authoritative GAAP.

The unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The interim condensed consolidated financial statements are unaudited, but in the Company’s opinion, include all adjustments that are necessary for a fair presentation of the results for the periods presented. The interim results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

Reclassifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all wholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Significant estimates and judgments relied upon in preparing these condensed consolidated financial statements affect the following items:

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

•loss exposure related to claims;

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

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•income taxes;

•useful lives of tangible and intangible assets;

•equity compensation;

•contingencies;

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

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

The Company regularly assesses these estimates and records changes to estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions believed to be reasonable under the circumstances. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ from those estimates.

Liquidity and Capital Resources

The accompanying unaudited condensed consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As a result of recurring losses from operations and declines in cash positions, management considered its ability to continue as a going concern and evaluated the significance of these results during the six months ended June 30, 2022. The Company has experienced recurring losses from operations and has an accumulated deficit of $458,022 as of June 30, 2022. Additionally, during the second quarter of 2022, the Company’s cash position was impacted by the utilization of $20,000 in cash to pay down debt.

Management has focused its efforts on certain initiatives to improve revenue, operating income and cash positions, including (i) collaborations with convenience stores, (ii) delivery from retailers in a variety of industries, (iii) the entry into new markets and (iv) the development of a proprietary stadium ordering application. In July 2022, the Company entered into a multi-year sponsorship agreement to serve as the exclusive mobile ordering platform at MetLife Stadium, providing an avenue for the Company to expand its delivery services into the New York and New Jersey markets. Our strategy is to grow order volume and revenue both in existing markets and new markets, such as New York and New Jersey. Additionally, management has evaluated its existing cost structure and will continue to implement cost saving initiatives where appropriate to reduce operating costs and manage the Company’s cash position.

Management considered its current business focus on improving revenues and plans to continue to implement cost savings where appropriate, and determined that we currently expect that our cash on hand, estimated cash flow from operations and net proceeds from additional equity raises, including any raises under the ATM Program (see Note 8 – Debt and Note 12 – Stockholders’ Equity), will be sufficient to meet our working capital needs for at least the next twelve months. However, there can be no assurance that we will generate cash flow at the levels we anticipate, nor can there be any assurance that we will be able to raise additional equity capital.

Significant Accounting Policies

See “Recent Accounting Pronouncements” below for a description of accounting principle changes adopted during the six months ended June 30, 2022. There have been no material changes to our significant accounting policies described in the 2021 Form 10-K.

Recent Accounting Pronouncements

The Company considered the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on these unaudited condensed consolidated financial statements.

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt, resulting in

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fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. ASU 2020-06 was effective for and adopted by the Company on January 1, 2022. The adoption of ASU 2020-06 did not have a material impact on the Company’s disclosures or consolidated financial statements.

Pending Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which creates an exception to the general recognition and measurement principle in ASC 805 by requiring companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. The guidance additionally clarifies that companies should apply the definition of a performance obligation in ASC 606 when recognizing contract liabilities assumed in a business combination. ASU 2021-08 is effective for the Company on January 1, 2023. The Company is currently evaluating the impacts of the provisions of ASU 2021-08 on its consolidated financial statements and related disclosures.

3. Revenue

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Delivery transaction fees	$	27,756	$	48,251	$	59,332	$	98,727
Payment processing referral fees	2,783		—		5,293		—
Setup and integration fees	—		1		—		8
Other	632		915		1,586		1,362
Total Revenue	$	31,171	$	49,167	$	66,211	$	100,097

Revenue from Contracts with Customers

Delivery Transaction Fees

The Company generates revenue (“Delivery Transaction Fees”) primarily when diners place an order on one of the Platforms. In the case of diner subscription fees relating to our diner subscription program, revenue is recognized for the receipt of the monthly fee in the applicable month for which the delivery service applies to. Delivery Transaction Fees represent the revenue recognized from the Company’s obligation to process orders on the Platforms. The performance obligation is satisfied when the Company successfully processes an order placed on one of the Platforms and the restaurant receives the order at their location. The obligation to process orders on the Platforms represents a series of distinct performance obligations satisfied over time that the Company combines into a single performance obligation. Consistent with the recognition objective in ASC Topic 606, Revenue from Contracts with Customers, the variable consideration due to the Company for processing orders is recognized on a daily basis. As an agent of the restaurant in the transaction, the Company recognizes Delivery Transaction Fees earned from the restaurant on the Platform on a net basis. Delivery Transaction Fees also include a fee charged to the end user customer when they request the order be delivered to their location. Revenue is recognized for diner fees once the delivery service is completed. The contract period for substantially all restaurant contracts is one month as both the Company and the restaurant have the ability to unilaterally terminate the contract by providing notice of termination.

Payment Processing Referral Fees

The Company also generates revenue by facilitating access to third-party payment processing solution providers. Revenue from such services primarily consists of residual payments received from third-party payment processing solution providers, based on the volume of transactions a payment processing solution provider performs for the merchant. The Company also occasionally receives a bonus up-front fee from third-party payment processing solution providers, paid at the time of a merchant’s initial transaction with a payment processing solution provider, based on a price specified in the agreement between the merchant and the payment processing solution provider.

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Payment processing referral fees represent revenue recognized from the Company’s offering of referral services, connecting a merchant with a third-party payment processing service. The Company’s performance obligation in its contracts with payment processors is for an unknown or unspecified quantity of transactions and the consideration received is contingent upon the number of transactions submitted by the merchant and processed by the payment processor. Accordingly, the total transaction price is variable. The performance obligation is satisfied when the third-party payment processor finalizes the processing of a transaction through the payment system and transaction volume is available from the payment processor to the Company. Consistent with the recognition objective in ASC Topic 606, the variable consideration due to the Company for serving as the facilitator of the arrangement between the third-party payment processor and merchant is recognized on a daily basis. The Company is the agent in these arrangements as it establishes the relationship between the third-party payment processor and merchant, and thus, recognizes revenue on a net basis. The third-party payment processor is considered the customer of the Company as no direct contract exists between the merchant and the Company.

Accounts Receivable

The Company records a receivable when it has an unconditional right to the consideration. See Note 5 – Accounts Receivable, Net for additional details on the Company’s accounts receivable.

Costs to Obtain a Contract with a Customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a restaurant and recognizes the expense over the course of the period when the Company expects to recover those costs. The Company has determined that certain internal sales incentives earned at the time when an initial contract is executed meet these requirements. Capitalized sales incentives are amortized to sales and marketing expense on a straight-line basis over the period of benefit, which the Company has determined to be five years. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

Deferred costs related to obtaining contracts with restaurants were $3,008 and $2,968 as of June 30, 2022 and December 31, 2021, respectively, out of which $913 and $818, respectively, was classified as current. Amortization of expense for the costs to obtain a contract were $221 and $173 for the three months ended June 30, 2022 and 2021, respectively, and $429 and $322 for the six months ended June 30, 2022 and 2021, respectively.

Costs to Fulfill a Contract with a Customer

The Company also recognizes an asset for the costs to fulfill a contract with a restaurant when they are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. The Company has determined that certain costs related to onboarding restaurants onto the Platforms meet the capitalization criteria under ASC Topic 340-40, Other Assets and Deferred Costs. Costs related to these implementation activities are deferred and then amortized to operations and support expense on a straight-line basis over the period of benefit, which the Company has determined to be five years.

Deferred costs related to fulfilling contracts with restaurants were $1,764 and $1,385 as of June 30, 2022 and December 31, 2021, respectively, out of which $464 and $352, respectively, was classified as current. Amortization of expense for the costs to fulfill a contract were $110 and $56 for the three months ended June 30, 2022 and 2021, respectively, and $204 and $101 for the six months ended June 30, 2022 and 2021, respectively.

4. Business Combinations

2021 Acquisitions

Cape Payment Acquisition

On August 25, 2021, the Company completed the acquisition of certain assets and properties of ProMerchant LLC, Cape Cod Merchant Services LLC and Flow Payments LLC (collectively referred to herein as the “Cape Payment Companies”) (the “Cape Payment Acquisition”). The Cape Payment Companies facilitate merchant access to third-party payment processing solution providers and receive residual payments from the payment providers. The purchase price for the Cape Payment Companies consisted of $12,032 in cash and an aggregate of 2,564,103 shares of the Company’s common stock valued at $1.24 per share (the closing price of the Company’s common stock on August 24, 2021). The

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Cape Payment Acquisition included an earnout provision which provided for a one-time payment to the sellers if the Cape Payment Companies exceed certain future revenue targets. The earnout provision, if any, is payable no later than March 30, 2023, and was valued at $1,686 as of the acquisition date. As of June 30, 2022 and December 31, 2021, the earnout provision was valued at $2,043 and $1,939, respectively (see Note 13 - Fair Value Measurements).

The Cape Payment Acquisition was considered a business combination in accordance with ASC 805, and was accounted for using the acquisition method. The results of operations of the Cape Payment Companies are included in our condensed consolidated financial statements beginning on the acquisition date, August 25, 2021, and were immaterial. Pro forma results were deemed immaterial to the Company.

Delivery Dudes Acquisition

On March 11, 2021, the Company completed the acquisition of certain assets and properties from Dude Holdings LLC (“Delivery Dudes”), a third-party delivery business primarily serving the South Florida market, for $11,500 in cash and 3,562,577 shares of the Company’s common stock valued at $2.96 per share (the closing price of the Company’s common stock on March 11, 2021) (the “Delivery Dudes Acquisition”).

The Delivery Dudes Acquisition was considered a business combination in accordance with ASC 805, and was accounted for using the acquisition method. The results of operations of Delivery Dudes are included in our unaudited condensed consolidated financial statements beginning on the acquisition date, March 11, 2021. Revenue and net income of Delivery Dudes included in the unaudited condensed consolidated statement of operations in the three months ended June 30, 2022 totaled approximately $2,905 and $326, respectively, and in the six months ended June 30, 2022 totaled approximately $6,151 and $580, respectively.

During the second and third quarters of 2021, the Company acquired the assets of six Delivery Dudes franchisees for total consideration of approximately $2,464, including $2,431 in cash. The asset acquisitions were accounted for under the acquisition method with the purchase consideration allocated to customer relationships. The results of operations of the acquired franchisees are included in our condensed consolidated financial statements beginning on their acquisition dates and were immaterial. Pro forma results were deemed immaterial to the Company.

Additional Information

Included in general and administrative expenses in the consolidated statement of operations in certain periods are direct and incremental costs, consisting of legal and professional fees, related to business combinations and asset acquisitions. During the three and six months ended June 30, 2021, the Company incurred direct and incremental costs of $63 and $669, respectively, related to the Delivery Dudes Acquisition.

Pro-Forma Financial Information

The supplemental condensed consolidated results of the Company for the six months ended June 30, 2021 on an unaudited pro forma basis as if the Delivery Dudes Acquisition had been consummated on January 1, 2021 are included in the table below (in thousands).


	Six months ended June 30, 2021


Net revenue	$	102,573
Net loss	$	8,989

These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company been a consolidated company during the period presented and are not indicative of consolidated results of operations in future periods. Acquisition costs and other non-recurring charges incurred are included in the period presented.

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5. Accounts Receivable, Net

Accounts receivable consist of the following (in thousands):


	June 30, 2022		December 31, 2021
Credit card receivables	$	1,480	$	1,354
Residual commissions receivable	1,494		1,342
Receivables from restaurants and customers	649		660
Accounts receivable	$	3,623	$	3,356
Less: allowance for doubtful accounts and chargebacks	(304)		(329)
Accounts receivable, net	$	3,319	$	3,027

6. Intangibles Assets and Goodwill

Intangible Assets

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and include internally developed software, as well as software to be otherwise marketed, and trademarks/trade name/patents and customer relationships. The Company has determined that the trademark intangible asset and domain names related to the rebranding initiative are indefinite-lived assets and therefore are not subject to amortization but are evaluated annually for impairment. The Bite Squad, Delivery Dudes and Cape Payment Companies trade name intangible assets, however, are being amortized over their estimated useful lives.

Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consist of the following (in thousands):


	As of June 30, 2022
	Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Intangible Assets, Net
Intangible assets subject to amortization:
Software	$	40,004	$	(12,120)	$	(11,779)	$	16,105
Trademarks/Trade name/Patents	6,549		(5,852)		—		697
Customer Relationships	96,510		(16,451)		(57,378)		22,681
Total intangible assets subject to amortization	143,063		(34,423)		(69,157)		39,483
Trademarks, not subject to amortization	3,023		—		—		3,023
Total	$	146,086	$	(34,423)	$	(69,157)	$	42,506

	As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Intangible Assets, Net
Intangible assets subject to amortization:
Software	$	35,686	$	(9,632)	$	(11,779)	$	14,275
Trademarks/Trade name/Patents	6,549		(5,585)		—		964
Customer Relationships	96,510		(14,256)		(57,378)		24,876
Total intangible assets subject to amortization	138,745		(29,473)		(69,157)		40,115
Trademarks, not subject to amortization	3,011		—		—		3,011
Total	$	141,756	$	(29,473)	$	(69,157)	$	43,126

During the six months ended June 30, 2022, the Company capitalized approximately $4,318 of software costs related to the development of the Platforms.

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The Company recorded amortization expense of $2,465 and $2,233 for the three months ended June 30, 2022 and 2021, respectively, and $4,950 and $4,065 for the six months ended June 30, 2022 and 2021, respectively. Estimated future amortization expense of intangible assets subject to amortization as of June 30, 2022 is as follows (in thousands):


	Amortization
The remainder of 2022	$	5,186
2023	11,551
2024	9,423
2025	6,171
2026	3,458
Thereafter	3,694
Total future amortization	$	39,483

Goodwill

The change in the Company’s goodwill balance is as follows for the six months ended June 30, 2022 and the year ended December 31, 2021 (in thousands):


	June 30, 2022		December 31, 2021
Balance, beginning of period	$	130,624	$	106,734
Acquisitions during the period	—		23,890
Impairments during the period	(67,190)		—
Balance, end of period	$	63,434	$	130,624

The Company recorded $23,890 of goodwill during the year ended December 31, 2021, including $14,343 associated with the Delivery Dudes Acquisition and $9,547 associated with the Cape Payment Acquisition (see Note 4 – Business Combinations).

Impairments

The Company conducts its goodwill and intangible asset impairment test annually in October, or more frequently if indicators of impairment exist. For purposes of testing for goodwill impairment, the Company has one reporting unit. As a result of a significant decline in the Company’s share price and market capitalization in mid-March 2022, as well as other macroeconomic and industry related conditions during the first quarter of 2022, the Company conducted its impairment test as of the valuation date of March 15, 2022. The impairment test was conducted in accordance with FASB ASC Topic 360, Impairment and Disposal of Long-Lived Assets (“ASC 360”) for certain long-lived assets, including capitalized contract costs, developed technology, customer relationships, and trade names, and in accordance with FASB ASC Topic 350, Intangibles – Goodwill and Other (“ASC 350”) for the reporting unit’s goodwill. The Company engaged a third-party to assist management in estimating the fair values of long-lived assets and the reporting unit for purposes of impairment testing under ASC 360 and ASC 350.

ASC 360 requires long-lived assets to be tested for impairment using a three-step impairment test. Step 1 of the test is giving consideration to whether indicators of impairment of long-lived assets are present. Given the significant decline in the Company’s market capitalization and other macroeconomic factors, indications were that an impairment may exist and the Company proceeded to Step 2 to determine whether an impairment loss should be recognized. As a part of Step 2, the Company performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in question to their carrying amounts. Given that the undiscounted cash flows for the long-lived assets were above the carrying amounts, the Company determined that the long-lived asset group is recoverable, and no impairment exists as of March 15, 2022.

Customer relationships, the Company’s primary long-lived asset, was tested for impairment under the guidance in ASC 360. The customer relationships intangible asset was valued using the Income Approach, specifically, the multi-period excess earnings method, which measures the after-tax cash flows attributable to the existing customer relationships

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after deducting the operating costs and contributory asset charges associated with supporting the existing customer relationships. The customer relationships analysis represents a Level 3 measurement as it was based on unobservable inputs reflecting the Company’s assumptions used in developing a fair value estimate. These inputs required significant judgments and estimates at the time of the valuation.

ASC 350 requires goodwill and other indefinite lived assets to be tested for impairment at the reporting unit level. For ASC 350 testing purposes, the Company compared the fair value of the reporting unit with its carrying amount. The fair value of the reporting unit was estimated giving consideration to the Income Approach, including the discounted cash flow method, and the Market Approach, including the similar transactions method and guideline public company method. Significant inputs and assumptions in the ASC 350 analysis included forecasts (e.g., revenue, operating costs, capital expenditures, etc.), discount rate, long-term growth rate, tax rates, etc. for the reporting unit under the Income Approach and market-based enterprise value to revenue multiples under the Market Approach.

As a result of the ASC 350 analysis, the Company recognized a non-cash pre-tax impairment loss of $67,190 during the three months ended March 31, 2022 to write down the carrying value of goodwill to its implied fair value. There was no goodwill impairment charge recognized during the three months ended June 30, 2022. The non-cash impairment loss is included in the unaudited condensed consolidated statement of operations under the caption “goodwill impairment” during the six months ended June 30, 2022.

Determining the fair value of a reporting unit and intangible assets requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. There can be no assurance that additional goodwill or intangible assets will not be impaired in future periods.

7. Other Current Liabilities

Other current liabilities consist of the following (in thousands):


	June 30, 2022		December 31, 2021
Accrued insurance expenses	$	5,436	$	3,932
Accrued estimated workers’ compensation expenses	411		644
Accrued medical contingency	366		370
Accrued legal contingency	1,250		1,250
Accrued sales tax payable	100		175
Accrued cash incentives	108		3,130
Other accrued expenses	3,461		3,685
Contingent consideration liability	2,043		—
Unclaimed property	2,630		2,372
Other current liabilities	2,963		3,751
Total other current liabilities	$	18,768	$	19,309

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8. Debt

The Company’s outstanding debt obligations are as follows (in thousands):


	Coupon Rate Range in 2021 through 2Q22	Effective Interest Rate at June 30, 2022	Maturity	June 30, 2022		December 31, 2021
Term Loan	5.125% - 7.125%	13.63%	May 2024	$	15,007	$	35,007
Notes	4.0% - 6.0%	6.38%	May 2024	48,754		49,504
				$	63,761	$	84,511
Less: unamortized debt issuance costs on Term Loan				(1,628)		(2,099)
Less: unamortized debt issuance costs on Notes				(328)		(435)
Long term debt - related party				$	61,805	$	81,977

Short-term loans for insurance financing	3.99% - 4.85%	n/a	August 2022 - March 2023	2,351		3,142
Total outstanding debt				$	64,156	$	85,119

Interest expense related to the Company’s outstanding debt totaled $1,461 and $1,681 for the three months ended June 30, 2022 and 2021, respectively, and $3,165 and $3,582 for the six months ended June 30, 2022 and 2021, respectively. Interest expense includes interest on outstanding borrowings and amortization of debt issuance costs and debt discount. See Note 15 – Related Party Transactions for additional information regarding the Company’s related party long-term debt.

Term Loan

The Company maintains an agreement with Luxor Capital Group, LP (“Luxor Capital”) (as amended or otherwise modified from time to time, the “Credit Agreement”). The Credit Agreement provides for a senior secured first priority term loan (the “Term Loan”) which is guaranteed by certain subsidiaries of the Company. In connection with the Term Loan, the Company issued to Luxor Capital warrants which are exercisable for 586,845 shares of the Company’s common stock at June 30, 2022 (see Note 12 – Stockholders’ Equity). See Amendments to Loan Agreements below for details on an amendment to the Credit Agreement entered into in May 2022.

Interest on the Term Loan is payable quarterly, in cash or, at the election of the Company, as a payment-in-kind, with interest paid in-kind being added to the aggregate principal balance. The Credit Agreement includes a number of customary covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional debt, incur liens on assets, engage in mergers or consolidations, dispose of assets, pay dividends or repurchase capital stock and repay certain junior indebtedness. The Credit Agreement also includes customary affirmative covenants, representations and warranties and events of default.

Notes

Additionally, the Company issued unsecured convertible promissory notes (the “Notes”) to Luxor Capital Partners, LP, Luxor Capital Partners Offshore Master Fund, LP, Luxor Wavefront, LP and Lugard Road Capital Master Fund, LP (the “Luxor Entities”) pursuant to an agreement, herein referred to as the “Convertible Notes Agreement”. The net carrying value of the Notes as of June 30, 2022 and December 31, 2021 totaled $48,426 and $49,069, respectively. See Amendments to Loan Agreements and Conversion Agreement below for details on amendments to the Convertible Notes Agreement and a conversion agreement entered into in May 2022.

Interest on the Notes is payable quarterly, in cash or, at the Company’s election, up to one-half of the dollar amount of an interest payment due can be paid-in-kind. Interest paid-in-kind is added to the aggregate principal balance.

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Interest expense related to the Notes was comprised of the following for the three and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Contractual interest expense	$	745	$	501	$	1,488	$	996
Amortization of debt discount	47		298		101		588
	$	792	$	799	$	1,589	$	1,584

The Notes include customary anti-dilution protection, including broad-based weighted average adjustments for issuances of additional shares. Upon maturity, the outstanding Notes (and any accrued but unpaid interest) will be repaid in cash or converted into shares of common stock, at the holder’s election. The Notes are convertible at the holder’s election into shares of the Company’s common stock at a rate of $8.52 per share at June 30, 2022.

The Company’s payment obligations on the Notes are not guaranteed. The Convertible Notes Agreement contains negative covenants, affirmative covenants, representations and warranties and events of default that are substantially similar to those that are set forth in the Credit Agreement (except those that relate to collateral and related security interests, which are not contained in the Convertible Notes Agreement or otherwise applicable to the Notes).

Amendments to Loan Agreements

On May 9, 2022, the Company entered into an amendment to the Credit Agreement and an amendment to the Convertible Notes Agreement (together, the “May 9, 2022 Amended Loan Agreements”). The May 9, 2022 Amended Loan Agreements provide, among other things, (i) that going forward on a quarterly basis, 50% of the proceeds of any future at-the-market public common stock issuances by the Company will be applied to the prepayment of the Term Loan and (ii) a six-month extension of the maturity date of the Credit Agreement and Convertible Notes Agreement until May 15, 2024. Additionally, pursuant to the amendment to the Credit Agreement, the Company made a $20,000 prepayment on the Term Loan on May 9, 2022.

The Company evaluated the amendments in the May 9, 2022 Amended Loan Agreements under ASC 470-50, “Debt Modification and Extinguishment”, and concluded that the amendments did not meet the characteristics of debt extinguishments under ASC 470-50. Accordingly, the amendments were treated as a debt modification, and thus, no gain or loss was recorded. A new effective interest rate for each of the Term Loan and Notes that equates the revised cash flows to the carrying amount of the original debt is computed and applied prospectively.

On May 12, 2022, the Company entered into an additional amendment to the Convertible Notes Agreement (the “May 12, 2022 Amended Convertible Notes Agreement”) which provides that subsequent to the payment in full of the Term Loan outstanding under the existing Credit Agreement, on a quarterly basis, 50% of the proceeds of any future at-the-market public common stock issuances received by the Company will be applied to prepayment of the Notes under the Convertible Notes Agreement. The provisions of the May 12, 2022 Amended Convertible Notes Agreement did not contain changes to the Convertible Notes Agreement that warranted an evaluation of debt modification or extinguishment.

Conversion Agreement

On May 13, 2022, the Company entered into a conversion agreement (the “Conversion Agreement”), pursuant to which the lenders under the Convertible Notes Agreement were permitted to convert $750 of the outstanding principal amount of the Notes into shares of Company common stock at a conversion rate of 5,882 shares of Company common stock per one thousand principal amount of the Notes (calculated based on a per share price of $0.17 of Company common stock on Nasdaq), notwithstanding the conversion rate then in effect pursuant to the terms of the Notes.

Pursuant to the Conversion Agreement, the Luxor Entities converted $750 principal amount of the Notes into 4,411,500 shares of Company common stock during the three months ended June 30, 2022 (see Note 12 - Stockholders’ Equity). In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the fair value of the securities transferred in the induced conversion over the fair value of securities issuable pursuant to the original conversion terms is recognized as induced conversion expense. Accordingly, upon the induced conversion, the Company recognized $930 of expense with a corresponding entry to equity of $1,673 and a net reduction of the Notes of $743, consisting of the $750 of

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principal, net of related discount. The expense is included in general and administrative expenses in the unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2022.

Short-Term Loans

The Company has outstanding short-term loans as of June 30, 2022 for the purpose of financing portions of its annual insurance premium obligations. The loans are payable in monthly installments until maturity.

9. Income Taxes

The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable. The Company recorded income tax expense of $17 and $33 for the three months ended June 30, 2022 and 2021, respectively, and $33 and $57 for the six months ended June 30, 2022 and 2021, respectively. The Company’s income tax expense is entirely related to state taxes in various jurisdictions. The Company recorded a full valuation allowance against net deferred tax assets as of June 30, 2022 and December 31, 2021 as the Company has historically generated net operating losses, and the Company did not consider future book income as a source of taxable income when assessing if a portion of the deferred tax assets is more likely than not to be realized.

During 2020, the Company was permitted to defer payment of the employer portion of certain payroll taxes under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Company did not defer any payroll taxes after December 31, 2020. As of June 30, 2022, the Company has $667 of employer payroll tax deferrals outstanding, all of which will be paid in 2022. This amount is reflected in other current liabilities in the accompanying unaudited condensed consolidated balance sheet.

10. Commitments and Contingent Liabilities

Workers Compensation and Auto Policy Claims

We establish a liability under our workers’ compensation and auto insurance policies for claims incurred within our self-insured retention levels and an estimate for claims incurred but not yet reported. As of June 30, 2022 and December 31, 2021, $5,724 and $4,305, respectively, in outstanding workers’ compensation and auto policy reserves are included in the unaudited condensed consolidated balance sheet.

Legal Matters

In July 2016, Waiter.com, Inc. filed a lawsuit against Waitr Inc. in the United States District Court for the Western District of Louisiana, alleging trademark infringement based on Waitr’s use of the “Waitr” trademark and logo, Civil Action No.: 2:16-CV-01041. The plaintiff sought injunctive relief and damages relating to Waitr’s use of the “Waitr” name and logo. During the third quarter of 2020, the trial date was rescheduled to June 2021. On June 22, 2021, the Company entered into a License, Release and Settlement Agreement (the “Settlement”) to settle all claims related to this lawsuit. Pursuant to the Settlement, the Company paid the plaintiff $4,700 in cash on July 1, 2021. In connection with the Settlement, we agreed to adopt a new trademark or tradename to replace the Waitr trademark and to discontinue use of the Waitr trademark in connection with the marketing, sale or provision of any web-based or mobile app-based delivery, pick-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 $800 legal reserve and $4,700 legal settlement are included in other expense in the unaudited condensed consolidated statement of operations for the six months ended June 30, 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. The plaintiffs assert claims for breach of contract and violation of the duty of good faith and fair dealing, and they seek recovery on behalf of themselves and two separate classes. Based on the current class definitions, as many as 10,000 restaurant partners could be members of the two separate classes at issue. In February 2022, the parties reached a proposed settlement in principle to resolve the litigation in its entirety and requested a stay of the pending litigation. This proposed settlement in principle was subject to Court approval and entry into a settlement agreement between the parties, and contemplated a total potential settlement fund of

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$2,500 of Company shares of common stock. Ultimately, no settlement agreement was executed by the parties nor was Court approval obtained, and the parties have asked the Court to lift the stay and reopen the litigation. 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. The accrued legal contingency is included in other current liabilities in the unaudited condensed consolidated balance sheet at June 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, 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 assigned that motion to the Magistrate Judge, who recently issued her Report and Recommendation to the District Court Judge that the motion be granted in all respects. The parties are now briefing their respective positions on the Report and Recommendation and will await the District Court Judge’s ruling. In the meantime, all discovery remains stayed and no trial date has been set. Waitr believes that this lawsuit lacks merit and that it has strong defenses to all of the claims alleged. Waitr continues to vigorously defend the suit.

In addition to the lawsuits described above, Waitr is involved in other litigation arising from the normal course of business activities, including, without limitation, vehicle accidents involving employees and independent contractor drivers resulting in claims alleging personal injuries and medical expenses, labor and employment claims, allegations of intellectual property infringement, and workers’ compensation benefit claims as a result of alleged conduct involving its employees, independent contractor drivers, and third-party negligence. Although Waitr believes that it maintains insurance with standard deductibles that generally covers liability for potential damages in many of these matters where coverage is available on acceptable terms (it is not maintained for claims involving intellectual property), insurance coverage is not guaranteed, there are limits to insurance coverage and in certain instances claims are met with denial of coverage positions by the carriers; accordingly, we could suffer material losses as a result of these claims, the denial of coverage for such claims, or damages awarded for any such claim that exceeds coverage. Litigation is unpredictable and we may determine in the future that certain existing claims have greater exposure or liability than previously understood.

11. Stock-Based Awards and Cash-Based Awards

In June 2021, the Company’s stockholders approved the Waitr Holdings Inc. Amended and Restated 2018 Omnibus Incentive Plan (the “2018 Incentive Plan”), which permits the granting of awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock-based or cash-based awards. As of June 30, 2022, there were 5,529,255 shares of common stock available for future grants pursuant to the 2018 Incentive Plan. The Company also has outstanding equity awards under the 2014 Stock Plan (as amended in 2017, the “Amended 2014 Plan”). Total compensation expense related to awards under the Company’s incentive plans was $1,579 and $2,387 for the three months ended June 30, 2022 and 2021, respectively, and $3,250 and $4,465 for the six months ended June 30, 2022 and 2021, respectively.

Stock-Based Awards

Stock Options

During the six months ended June 30, 2021, 500,000 stock options were granted under the 2018 Incentive Plan. Such options were subsequently forfeited during the three months ended September 30, 2021. There were no grants of stock options during the six months ended June 30, 2022. The Company determines the fair value of stock option grants on the grant date using an option-pricing model with various assumptions regarding the risk-free rate, volatility and expected term. As of March 31, 2022, all outstanding stock options were fully vested and there was no remaining unrecognized compensation cost related to stock options. The Company recognized compensation expense for stock options of $358 for the three months ended June 30, 2021, and $13 and $692 for the six months ended June 30, 2022 and 2021, respectively.

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The stock option activity under the Company’s incentive plans during the six months ended June 30, 2022 and 2021 is as follows:


	Six Months Ended June 30, 2022					Six Months Ended June 30, 2021
	Number of Shares	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Balance, beginning of period	9,656,928	$	0.39	$	0.28	9,753,257	$	0.43	$	0.33
Granted	—	—		—		500,000	2.78		2.19
Exercised	—	—		—		(9,209)	0.90		4.50
Forfeited	(21,327)	2.20		4.46		(21,553)	6.49		4.97
Expired	—	—		—		(10,097)	3.47		4.13
Balance, end of period	9,635,601	$	0.38	$	0.27	10,212,398	$	0.53	$	0.40

Outstanding stock options, which were fully vested and expected to vest and exercisable are as follows as of June 30, 2022 and December 31, 2021:


	As of June 30, 2022				As of December 31, 2021
	Options Fully Vested and Expected to Vest		Options Exercisable		Options Fully Vested and Expected to Vest		Options Exercisable
Number of Options	9,635,601		9,635,601		9,656,928		4,870,026
Weighted-average remaining contractual term (years)	2.53		2.53		3.03		3.06
Weighted-average exercise price	$	0.38	$	0.38	$	0.39	$	0.40
Aggregate Intrinsic Value (in thousands)	$	—	$	—	$	3,543	$	1,773

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the fair value of the common stock and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on each date. This amount will change in future periods based on the fair value of the Company’s stock and the number of options outstanding. There were no exercises of stock options during the six months ended June 30, 2022. The aggregate intrinsic value of awards exercised during the three and six months ended June 30, 2021 was $5 and $20, respectively. Upon exercise, the Company issued new common stock.

Restricted Stock

The Company’s restricted stock grants include performance-based and time-based vesting awards. The fair value of restricted shares is typically determined based on the closing price of the Company’s common stock on the date of grant.

Performance-Based Awards

As of June 30, 2022, there were 3,134,325 performance-based RSUs outstanding under the Company’s 2018 Incentive Plan. Such RSUs were granted to the Company’s chief executive officer, Carl Grimstad, in April 2020 (the “Grimstad RSU Grant”). The Grimstad RSU Grant has an aggregate grant date fair value of $3,542 and vests in full in the event of a change of control, as defined in Mr. Grimstad’s employment agreement with the Company, subject to his continuous employment with the Company through the date of a change of control; provided, however, that the Grimstad RSU Grant shall fully vest in the event that Mr. Grimstad terminates his employment for good reason or he is terminated by the Company for reason other than misconduct. No stock-based compensation expense will be recognized for the Grimstad RSU Grant until such time that is probable that the performance goal will be achieved, or at the time that Mr. Grimstad terminates his employment for good reason or he is terminated by the Company for reason other than misconduct, should either occur.

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Awards with Time-Based Vesting

During the six months ended June 30, 2022, 8,470,000 RSUs with time-based vesting were granted pursuant to the 2018 Incentive Plan (with an aggregate grant fair value of value of $3,445). The RSUs generally vest over three years in accordance with the terms specified in the applicable award agreements, all of which accelerate and vest upon a change of control.

The Company recognized compensation expense for restricted stock of $