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TABLE_CONTENTS

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 September 30, 2022

OR

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 November 9, 2022 was 207,818,373.

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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 September 30, 2022 and December 31, 2021			1
			Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021			2
			Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021			3
			Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021			4
			Notes to Condensed Consolidated Financial Statements			6
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			43
Item 4.			Controls and Procedures			44
PART II			Other Information			45
Item 1.			Legal Proceedings			45
Item 1A.			Risk Factors			46
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			48
Item 3.			Defaults Upon Senior Securities			48
Item 4.			Mine Safety Disclosures			48
Item 5.			Other Information			48
Item 6.			Exhibits			49
			Signatures			50

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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)

			September 30, 2022						December 31, 2021
			Unaudited
ASSETS
CURRENT ASSETS
Cash			$	20,118					$	60,111
Accounts receivable, net			3,102						3,027
Capitalized contract costs, current			1,490						1,170
Prepaid expenses and other current assets			5,180						8,706
TOTAL CURRENT ASSETS			29,890						73,014
Property and equipment, net			2,180						3,763
Capitalized contract costs, noncurrent			3,496						3,183
Goodwill			9,536						130,624
Intangible assets, net			41,447						43,126
Operating lease right-of-use assets			3,244						4,327
Other noncurrent assets			858						1,070
TOTAL ASSETS			$	90,651					$	259,107
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
CURRENT LIABILITIES
Accounts payable			$	4,545					$	7,018
Restaurant food liability			1,661						3,327
Accrued payroll			1,370						2,988
Short-term loans for insurance financing			1,224						3,142
Income tax payable			121						74
Operating lease liabilities			1,175						1,581
Other current liabilities			18,483						19,309
TOTAL CURRENT LIABILITIES			28,579						37,439
Long term debt - related party			55,941						81,977
Accrued medical contingency			—						53
Operating lease liabilities, net of current portion			2,276						3,034
Other noncurrent liabilities			20						2,115
TOTAL LIABILITIES			86,816						124,618
Commitments and contingent liabilities (Note 11)
STOCKHOLDERS’ EQUITY:
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			535,299						503,609
Accumulated deficit			(531,484)						(369,135)
TOTAL STOCKHOLDERS’ EQUITY			3,835						134,489
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	90,651					$	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 September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
REVENUE			$	25,141					$	43,448					$	91,352					$	143,545
COSTS AND EXPENSES:
Operations and support			13,457						25,043						49,719						86,654
Sales and marketing			8,263						4,965						21,489						13,481
Research and development			935						1,310						3,488						3,163
General and administrative			7,762						10,843						31,520						33,534
Depreciation and amortization			3,599						3,070						9,664						8,952
Goodwill impairment			53,898						—						121,088						—
Intangible and other asset impairments			—						186						—						186
(Gain) loss on disposal of assets			55						11						(33)						170
TOTAL COSTS AND EXPENSES			87,969						45,428						236,935						146,140
LOSS FROM OPERATIONS			(62,828)						(1,980)						(145,583)						(2,595)
OTHER (INCOME) EXPENSES AND (GAINS) LOSSES, NET
Interest expense			1,198						1,751						4,363						5,333
Other (income) expense			9,422						(16,006)						12,356						(10,907)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES			(73,448)						12,275						(162,302)						2,979
Income tax expense			14						25						47						82
NET INCOME (LOSS) FROM CONTINUING OPERATIONS			$	(73,462)					$	12,250					$	(162,349)					$	2,897
INCOME (LOSS) PER SHARE:
Basic			$	(0.40)					$	0.10					$	(0.98)					$	0.02
Diluted			$	(0.40)					$	0.09					$	(0.98)					$	0.02
Weighted average shares used to compute net income (loss) per share:
Weighted average common shares outstanding – basic			183,766,396						119,823,181						166,086,439						115,961,454
Weighted average common shares outstanding – diluted			183,766,396						130,167,296						166,086,439						128,279,820

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)

			Nine Months Ended September 30,
			2022						2021
Cash flows from operating activities:
Net (loss) income			$	(162,349)					$	2,897
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Non-cash interest expense			1,417						1,948
Induced conversion expense related to Notes			9,499						—
Stock-based compensation			4,588						6,100
(Gain) loss on disposal of assets			(33)						170
Depreciation and amortization			9,664						8,952
Goodwill impairment			121,088						—
Intangible and other asset impairments			—						186
Amortization of capitalized contract costs			930						686
Change in estimate of accrued medical contingency			—						(16,715)
Change in fair value of contingent consideration liability			(551)						—
Other			(80)						(93)
Changes in assets and liabilities:
Accounts receivable			(75)						583
Capitalized contract costs			(1,563)						(1,749)
Prepaid expenses and other current assets			3,526						16
Other noncurrent assets			229						(311)
Accounts payable			(2,473)						373
Restaurant food liability			(1,666)						(903)
Income tax payable			47						(38)
Accrued payroll			(1,618)						(3,389)
Accrued medical contingency			(53)						(218)
Other current liabilities			(3,054)						1,032
Other noncurrent liabilities			826						(102)
Net cash used in operating activities			(21,701)						(575)
Cash flows from investing activities:
Purchases of property and equipment			(224)						(717)
Internally developed software			(6,335)						(6,432)
Purchase of domain names			(27)						—
Acquisitions, net of cash acquired			—						(25,435)
Proceeds from sale of property and equipment			56						21
Net cash used in investing activities			(6,530)						(32,563)
Cash flows from financing activities:
Proceeds from issuance of stock			10,266						7,900
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			(4,729)						(5,605)
Payments on acquisition loans			—						(178)
Payments on finance lease obligation			(4)						—
Proceeds from exercise of stock options			—						12
Taxes paid related to net settlement on stock-based compensation			(106)						(932)
Net cash used in financing activities			(11,762)						(8,066)
Net change in cash			(39,993)						(41,204)
Cash, beginning of period			60,111						84,706
Cash, end of period			$	20,118					$	43,502
Supplemental disclosures of cash flow information:
Cash paid during the period for interest			$	2,946					$	3,385
Supplemental disclosures of non-cash investing and financing activities:
Conversion of convertible notes to stock			$	16,949					$	—
Stock issued as consideration in acquisition			—						13,724
Noncash impact of operating lease assets upon adoption			—						5,833
Noncash impact of operating lease liabilities upon adoption			—						6,232

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 NINE MONTHS ENDED SEPTEMBER 30, 2022

(in thousands, except share data)

(unaudited)

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, 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

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 NINE MONTHS ENDED SEPTEMBER 30, 2021

(in thousands, except share data)

(unaudited)

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 asset acquisitions			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

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 asset 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

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 (the “Platform”), providing delivery, carryout and dine-in options, connecting restaurants, merchants, drivers and diners in cities across the United States. The Platform uses the “deliver anything ASAP” model making it easy for consumers to order food, alcohol, convenience, grocery, flowers, auto parts and more. The Platform also includes proprietary in-stadium mobile ordering technology, providing an enhanced fan experience at sports and entertainment venues. 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 5 – 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.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (the “CODM”) in making decisions regarding resource allocation and assessing performance. The Company has determined that its Chief Executive Officer is the CODM of the Company.

Our operations revolve around two primary areas of service: (i) delivery services, which include operations related to the Company’s technology platform for online ordering and delivery (“Delivery Services”), and (ii) third-party payment processing referral services, which include operations related to facilitating access to third parties that provide payment processing solutions for restaurants and other merchants (“Third-Party Payment Processing Referral Services”). Prior to the three months ended September 30, 2022, the Company concluded that we had one operating segment as the operations of Third-Party Payment Processing Referral Services were not material to the Company’s consolidated operations. The CODM monitored performance of the Company on a consolidated basis during such time, with financial data related to Third-Party Payment Processing Referral Services being reviewed primarily for purposes of monitoring the achievement of an earnout provision associated with the acquisition of the Cape Payment Companies (see Note 5 - Business Combinations).

During the three months ended September 30, 2022, as the Third-Party Payment Processing Referral Services area became more significant to the operations of the Company, primarily on a percentage of revenue basis, our CODM began to manage operations and assess the Company’s performance based on the operations of the Delivery Services and Third-Party Payment Processing Referral Services areas separately. We quantitatively and qualitatively reassessed our segment reporting and determined the Third-Party Payment Processing Referral Services Segment is material to the group and now

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have two operating segments. See Note 15 – Segment Information for additional information on the Company’s segments and Note 4 - Revenue for additional information on revenue derived by segments.

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;

•income taxes;

•useful lives of tangible and intangible assets;

•equity compensation;

•contingencies;

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

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

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

Significant Accounting Policies

See “Recent Accounting Pronouncements” below for a description of accounting principle changes adopted during the nine months ended September 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 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.

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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. 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 does not expect ASU 2021-08 will have a material impact on the Company’s disclosures or consolidated financial statements.

3. Going Concern

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. This evaluation 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. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will sufficiently mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

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 goal to improve revenue and its cash position, including a comprehensive rebranding, consolidation of the Company’s technology platforms into a single application and cost reductions. The initiatives include (i) collaborations with convenience stores, (ii) delivery from retailers in a variety of industries, (iii) the entry into new markets, (iv) the development of a proprietary stadium ordering application and (v) the entry into sponsorship agreements to serve as the exclusive mobile ordering platform at certain stadiums and arenas. Additionally, management evaluated its existing cost structure and 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, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least twelve months from the date of issuance of these financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business for the 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

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amounts or the amounts and classification of liabilities that might result should the Company be unable to continue as a 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,
			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 Platform. The performance obligation is satisfied when the Company successfully processes an order placed on the Platform and the restaurant receives the order at their location. The obligation to process orders on the 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 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.

In addition to Delivery Transaction Fees, revenue in the 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.

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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 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 6 – 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 $3,142 and $2,968 as of September 30, 2022 and December 31, 2021, respectively, out of which $986 and $818, respectively, was classified as current. Amortization of expense for the costs to obtain a contract were $234 and $192 for the three months ended September 30, 2022 and 2021, respectively, and $663 and $514 for the nine months ended September 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 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 $1,844 and $1,385 as of September 30, 2022 and December 31, 2021, respectively, out of which $504 and $352, respectively, was classified as current. Amortization of expense for the costs to fulfill a contract were $121 and $71 for the three months ended September 30, 2022 and 2021, respectively, and $325 and $172 for the nine months ended September 30, 2022 and 2021, respectively.

5. Business Combinations

2021 Acquisitions

Cape Payment Acquisition

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

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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 September 30, 2022 and December 31, 2021, the earnout provision was valued at $1,388 and $1,939, respectively (see Note 14 - 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 at such time. Pro forma results were also deemed immaterial to the Company.

During the three months ended September 30, 2022, our operations related to the business acquired from the Cape Payment Companies became more significant to the operations of the Company. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies and Note 15 - Segment Information for additional details.

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.

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 nine months ended September 30, 2021, the Company incurred direct and incremental costs of $171 and $840, respectively, related to the Delivery Dudes Acquisition.

Pro-Forma Financial Information

The supplemental condensed consolidated results of the Company for the nine months ended September 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).

																					Nine months ended September 30, 2021
Net revenue																					$	146,021
Net income																					$	3,261

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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6. Accounts Receivable, Net

Accounts receivable consist of the following (in thousands):

			September 30, 2022						December 31, 2021
Credit card receivables			$	1,159					$	1,354
Residual commissions receivable			1,445						1,342
Receivables from restaurants and customers			778						660
Accounts receivable			3,382						3,356
Less: allowance for doubtful accounts and chargebacks			(280)						(329)
Accounts receivable, net			$	3,102					$	3,027

7. 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 September 30, 2022
			Gross Carrying Amount						Accumulated Amortization						Accumulated Impairment						Intangible Assets, Net
Intangible assets subject to amortization:
Software			$	42,021					$	(14,017)					$	(11,779)					$	16,225
Trademarks/Trade name/Patents			6,549						(5,948)						—						601
Customer Relationships			96,510						(17,549)						(57,378)						21,583
Total intangible assets subject to amortization			145,080						(37,514)						(69,157)						38,409
Trademarks, not subject to amortization			3,038						—						—						3,038
Total			$	148,118					$	(37,514)					$	(69,157)					$	41,447
			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 nine months ended September 30, 2022, the Company capitalized approximately $6,335 of software costs related to the development of the Platform.

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See “Impairments” below for details of impairment testing for intangible assets during the nine months ended September 30, 2022. The Company recorded amortization expense of $3,091 and $2,354 for the three months ended September 30, 2022 and 2021, respectively, and $8,041 and $6,419 for the nine months ended September 30, 2022 and 2021, respectively. Estimated future amortization expense of intangible assets subject to amortization as of September 30, 2022 is as follows (in thousands):

			Amortization
The remainder of 2022			$	1,948
2023			11,871
2024			10,006
2025			7,420
2026			3,469
Thereafter			3,695
Total future amortization			$	38,409

Goodwill

Prior to the three months ended September 30, 2022, we concluded that we had one reporting unit for purposes of goodwill impairment testing. During the three months ended September 30, 2022, we quantitatively and qualitatively reassessed our segment reporting and determined the Third-Party Payment Processing Referral Services Segment is material to the group and now have two reporting units for purposes of goodwill impairment testing. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.

The following table presents changes in the carrying value of goodwill for the Company’s single reporting unit prior to the allocation of goodwill to segments (in thousands). See “Impairments” below for a discussion of goodwill impairment testing for the reporting unit.

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

During the three months ended September 30, 2022, the Company reallocated its goodwill from a single reporting unit to the Delivery Services Segment and the Third-Party Payment Processing Referral Services Segment based on a relative fair value analysis using several probability weighted scenarios. The following table presents changes in the carrying value of goodwill for the Company’s segments (in thousands). See “Impairments” below for a discussion of goodwill impairment for the segments.

			Delivery Services Segment						Third-Party Payment Processing Referral Services Segment						Total
Goodwill allocation to segments			$	1,907					$	9,536					$	11,443
September 30, 2022 impairment			(1,907)						—						(1,907)
Balance as of September 30, 2022			$	—					$	9,536					$	9,536

Impairments

The Company has historically conducted its goodwill and intangible asset impairment test annually in October, or more frequently if indicators of impairment exist. The Company conducts the impairment test 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.

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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. If indicators are present, the Company proceeds to Step 2 to determine whether an impairment loss should be recognized. As a part of Step 2, the Company performs 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. ASC 350 requires goodwill and other indefinite lived assets to be tested for impairment at the reporting unit level. See the discussion below of impairment testing conducted as of March 15, 2022 and September 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 could change in future periods. There can be no assurance that additional goodwill or intangible assets will not be impaired in future periods.

March 15, 2022 Impairment Analysis

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 an impairment test as of the valuation date of March 15, 2022. For purposes of testing for goodwill impairment, the Company had one reporting unit at such time. 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.

Given the results of the qualitative assessment and indications of possible impairment, the Company proceeded to Step 2 to determine whether an impairment loss should be recognized. The Company’s primary long-lived assets, customer relationships and developed technology, were tested for impairment under the guidance in ASC 360. The undiscounted cash flows for the long-lived assets were above the carrying amounts and the Company determined that the long-lived asset group was recoverable, and no impairment existed as of March 15, 2022. The customer relationships intangible asset and developed technology assets were valued using an undiscounted cash flow model. The analysis for each of the long-lived assets 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.

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 and capital expenditures), discount rate, long-term growth rate and tax rates 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.

September 30, 2022 Impairment Analysis

As a result of continued declines in the Company’s share price and market capitalization during the second and third quarters of 2022, the Company conducted an additional impairment test as of the valuation date of September 30, 2022. The Company engaged a third-party to assist management in estimating the fair values of long-lived assets and the reporting units for purposes of impairment testing under ASC 360 and ASC 350.

Impairment Analysis on Single Reporting Unit Prior to Allocation of Goodwill to Segments

Given the results of the qualitative assessment and indications of possible impairment, the Company proceeded to Step 2 to determine whether an impairment loss should be recognized for the single reporting unit prior to the allocation of goodwill to segments. The Company’s primary long-lived assets, customer relationships and developed technology, were tested for impairment under the guidance in ASC 360. The undiscounted cash flows for the long-lived assets were above the carrying amounts and the Company determined that the long-lived asset group was recoverable, and no impairment existed as of September 30, 2022. The customer relationships intangible asset and developed technology assets were valued using methods in a manner similar to the March 15, 2022 impairment analysis, and represent Level 3 measurements as both were 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.

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For ASC 350 testing purposes, the Company estimated the fair value of the single reporting unit giving consideration to the Income Approach and the Market Approach in a manner similar to the March 15, 2022 impairment analysis discussed above. As a result of the ASC 350 analysis, the Company recognized a non-cash pre-tax impairment loss of $51,991 during the three months ended September 30, 2022 to write down the carrying value of goodwill in the reporting unit to its implied fair value.

Impairment Analysis on Segments

In conjunction with the reallocation of goodwill, the Company tested the goodwill at its Delivery Services Segment and Third-Party Payment Processing Referral Services Segment as of September 30, 2022.

The Company’s long-lived assets in each of the segments, including customer relationships and developed technology, were tested for impairment under the guidance in ASC 360. The undiscounted cash flows for the long-lived assets were above the carrying amounts for each segment and the Company determined that the long-lived asset groups were recoverable, and no impairment existed as of September 30, 2022. The customer relationships intangible assets and developed technology assets were valued using methods in a manner similar to the March 15, 2022 impairment analysis discussed above, and represent Level 3 measurements as both were 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.

For ASC 350 testing purposes, the Company estimated the fair value of the Delivery Services Segment and the Third-Party Payment Processing Referral Services Segment giving consideration to the Income Approach and the Market Approach in a manner similar to the March 15, 2022 impairment analysis discussed above. The impairment assessment indicated that the fair value of the Third-Party Payment Processing Referral Services Segment exceeded its carrying value, and therefore did not result in a goodwill impairment. The fair value of the Delivery Services Segment was less than its carrying value, and as a result, the Company recognized a non-cash pre-tax impairment loss of $1,907 during the three months ended September 30, 2022 to write down the carrying value of goodwill in the Delivery Services Segment to its implied fair value.

The non-cash impairment losses discussed above are included in the unaudited condensed consolidated statement of operations under the caption “goodwill impairment” and totaled $53,898 and $121,088 for the three and nine months ended September 30, 2022, respectively.

8. Other Current Liabilities

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

			September 30, 2022						December 31, 2021
Accrued insurance expenses			$	6,125					$	3,932
Accrued estimated workers’ compensation expenses			305						644
Accrued medical contingency			366						370
Accrued legal contingency			1,250						1,250
Accrued sales tax payable			121						175
Accrued cash incentives			160						3,130
Other accrued expenses			3,151						3,685
Contingent consideration liability			1,388						—
Unclaimed property			2,710						2,372
Other current liabilities			2,907						3,751
Total other current liabilities			$	18,483					$	19,309

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9. Debt

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

			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%						13.51%						May 2024						$	15,280					$	35,007
Notes			4.0% - 6.0%						6.37%						May 2024						42,339						49,504
																					$	57,619					$	84,511
Less: unamortized debt issuance costs on Term Loan																					(1,433)						(2,099)
Less: unamortized debt issuance costs on Notes																					(245)						(435)
Long term debt - related party																					$	55,941					$	81,977
Short-term loans for insurance financing			3.99% - 4.85%						n/a						August 2022 - March 2023						1,224						3,142
Total outstanding debt																					$	57,165					$	85,119

Interest expense related to the Company’s outstanding debt totaled $1,198 and $1,751 for the three months ended September 30, 2022 and 2021, respectively, and $4,363 and $5,333 for the nine months ended September 30, 2022 and 2021, respectively. Interest expense includes interest on outstanding borrowings and amortization of debt issuance costs and debt discount. See Note 17 – 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 624,989 shares of the Company’s common stock at September 30, 2022 (see Note 13 – Stockholders’ Equity). See Amendments to Loan Agreements below for additional details on the Term Loan and Credit Agreement.

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 Company elected to pay the interest payment of $273 due on September 30, 2022 in-kind, resulting in such amount being added to the principal balance of the Term Loan. 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 September 30, 2022 and December 31, 2021 totaled $42,094 and $49,069, respectively. See Amendments to Loan Agreements and Conversion Agreements below for additional details on the Notes.

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. The Company elected to pay one-half of the $669 interest payment due on September 30, 2022 in-kind, resulting in

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approximately $335 being added to the principal balance of the Notes. Interest expense related to the Notes was comprised of the following for the three and nine months ended September 30, 2022 and 2021 (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Contractual interest expense			$	669					$	666					$	2,157					$	1,662
Amortization of debt discount			37						147						138						735
			$	706					$	813					$	2,295					$	2,397

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 $8.00 per share at September 30, 2022, subject to certain “blocker” limitations limiting the amount of shares into which the Notes can be converted.

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 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. See Note 18 - Subsequent Events for details on a Term Loan prepayment made in October 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 Agreements

On May 13, 2022, the Company entered into a conversion agreement (the “May 2022 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 dollars of 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.

On July 22, 2022, the Company entered into a conversion agreement (the “July 2022 Conversion Agreement”), pursuant to which the lenders under the Convertible Notes Agreement were permitted to convert $6,750 of the outstanding principal amount of the Notes into shares of Company common stock at a conversion rate of 4,000 shares of Company common stock per one thousand dollars of principal amount of the Notes (calculated based on a per share price of $0.25 of Company common stock on Nasdaq), notwithstanding the conversion rate then in effect pursuant to the terms of the Notes.

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Accordingly, pursuant to the May 2022 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, and pursuant to the July 2022 Conversion Agreement, the Luxor Entities converted $6,750 principal amount of the Notes into 27,000,000 shares of Company common stock during the three months ended September 30, 2022 (see Note 13 - 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, (i) upon the induced conversion related to the May 2022 Conversion Agreement, the Company recognized $930 of expense with a corresponding entry to equity of $1,673 and a net reduction of the Notes of $