8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 9, 2018

YELP INC.

(Exact name of registrant as specified in its charter)

Delaware	001-35444	20-1854266
(State of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

140 New Montgomery Street, 9th Floor

San Francisco, CA 94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (415) 908-3801

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company           ☐

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

Item 8.01. Other Events.

As previously announced:

On February 28, 2017, Yelp Inc. (the "Company") and Beagle Acquisition Corp, a wholly-owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with Nowait, Inc. ("Nowait") and the other parties named therein. Pursuant to the Merger Agreement, on February 28, 2017, Merger Sub merged with and into Nowait, with Nowait continuing as the surviving corporation and a wholly-owned subsidiary of the Company. The transaction closed upon the consummation of such merger.

On April 3, 2017, the Company and 10036773 Canada Inc., a wholly-owned subsidiary of the Company ("Yelp Canada"), entered into a Share Purchase Agreement (the "Purchase Agreement") with Turnstyle Analytics Inc. ("Turnstyle"), Turnstyle's shareholders and the other parties named therein. Pursuant to the Purchase Agreement, Yelp Canada acquired all of the outstanding equity interests in Turnstyle and Turnstyle became an indirect wholly-owned subsidiary of the Company. The transaction closed upon the execution of the Purchase Agreement.

On October 10, 2017, pursuant to the terms of a Unit Purchase Agreement, dated as of August 3, 2017 , by and among the Company, Eat24, LLC, a wholly-owned subsidiary of the Company ("Eat24"), Grubhub Inc. ("Grubhub") and Grubhub Holdings Inc., a wholly-owned subsidiary of Grubhub ("Purchaser"), the Company completed its sale of all of the outstanding equity interests in Eat24 to the Purchaser (the "Disposal"). Immediately prior to the closing of the Disposal, the Company transferred certain assets to Eat24, which consisted of assets that were material to or necessary for the operation of the Eat24 business that were not then owned by Eat24.

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The unaudited condensed consolidated financial information of Turnstyle for the three months ended March 31, 2017 and 2016 are filed as Exhibit 99.1 to this to this Current Report on Form 8-K.

(b) Pro forma financial information.

The unaudited pro forma condensed combined financial information of the Company for the year ended December 31, 2017 giving effect to the acquisitions of Nowait and Turnstyle, as well as the Disposal in accordance with SEC regulations, are filed as Exhibit 99.2 to this to this Current Report on Form 8-K.

(d) Exhibits.

Exhibit Number	Description
2.1*	Agreement and Plan of Merger, dated February 28, 2017, by and among Yelp Inc., Nowait, Inc., Beagle Acquisition Corp. and Shareholder Representative Services LLC, as Stockholders’ Agent.
2.2*	Share Purchase Agreement, dated April 3, 2017, by and among Yelp Inc., 10036773 Canada Inc., Turnstyle Analytics Inc., the shareholders of Turnstyle Analytics Inc., the vested optionholders of Turnstyle Analytics Inc., 500 Startups IV, L.P. and Fortis Advisors LLC, as the Securityholders’ Agent.*
2.3*	Unit Purchase Agreement, dated as of August 3, 2017, by and among Yelp Inc., Eat24, LLC, Grubhub Inc. and Grubhub Holdings Inc.
23.1	Consent of Independent Registered Public Accounting Firm.
99.1	Turnstyle Analytics Inc. Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2017 and 2016.
99.2	Unaudited Pro Forma Condensed Combined Financial Statements of Yelp Inc. for the year ended December 31, 2017.

*      Previously filed.

SIGNATURES

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

Date: May 9, 2018	YELP INC.
	By: /s/ Charles Baker
	Charles Baker
	Chief Financial Officer

EX-23.1

May 9, 2018

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in the Form 8-K of our report dated June 3, 2017 relating to the consolidated financial statements of Turnstyle Analytics Inc. consisting of the consolidated balance sheets as at December 31, 2016 and 2015, and the related consolidated statements of loss and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended.

Yours truly,

MNP LLP

EX-99.1

Turnstyle Analytics Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands of U.S. dollars)

	Three Months Ended March 31,
	2017			2016
Net revenue	$	359		$	261
Costs and expenses:
Costs of revenue	134			118
Sales and marketing	94			69
Product development	125			49
General and administrative	351			253
Depreciation	3			2
Total costs and expenses	707			491
Loss from operations	(348		)	(230		)
Other income, net	427			154
Income (loss) before income taxes	79			(76		)
Provision for income taxes	—			—
Net income (loss)	$	79		$	(76	)
Foreign currency translation adjustments	—			—
Comprehensive income (loss)	$	79		$	(76	)

See notes to condensed consolidated financial information.

Turnstyle Analytics Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands of U.S. dollars)

	Three Months Ended March 31,
	2017			2016
OPERATING ACTIVITIES:
Net income (loss)	$	79		$	(76	)
Non-cash adjustments to net income (loss)	47			69
Changes in operating assets and liabilities	(195		)	(32		)
Net cash used by operating activities	(69		)	(39		)
INVESTING ACTIVITIES:
Net cash used in investing activities	(84		)	(1		)
FINANCING ACTIVITIES:
Net cash provided by financing activities	(102		)	(34		)
Effect of foreign exchange on cash flows	—			(1		)
CHANGE IN CASH AND CASH EQUIVALENTS	(255		)	(75		)
CASH AND CASH EQUIVALENTS—Beginning of period	295			146
CASH AND CASH EQUIVALENTS—End of period	$	40		$	71

See notes to condensed consolidated financial information.

Turnstyle Analytics Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION

THREE MONTHS ENDED MARCH 31, 2017 and 2016

(Unaudited)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Turnstyle Analytics Inc. was incorporated in Ontario, Canada on June 12, 2012. Except where specifically noted or the context otherwise requires, the use of terms such as the "Company" and "Turnstyle" in these Notes to Condensed Consolidated Financial Information refers to Turnstyle and its subsidiary.

Turnstyle is a marketing platform that utilizes guest Wi-Fi to retain and reward customers. Turnstyle enables restaurants and retailers to learn actionable insights about on-premises customer behavior and send real-time promotions to customers without requiring customers to download a mobile app. Turnstyle manages thousands of locations in 40+ countries. Businesses of all sizes use the Turnstyle platform to engage with consumers on premise at the critical moment when they are deciding where to spend their money.

The Company consists of Turnstyle Analytics Inc. and a single wholly-owned entity, Turnstyle America Inc., which was incorporated on December 6, 2016. The financial results of the subsidiary were immaterial and are included within the condensed consolidated financial information of the Company presented herein.

Basis of Presentation-The accompanying interim condensed consolidated financial information is unaudited. The condensed consolidated financial information has been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and all balances presented are in U.S. dollars. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, the unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements contained in the Company’s audited Consolidated Financial Statements for the year ended December 31, 2016.

The unaudited interim condensed consolidated financial information has been prepared on the same basis as the audited consolidated financial statements. There is no unaudited condensed consolidated balance sheet included in this financial information as the consolidated balance sheet of the Company is included in the audited Annual Report on Form 10K of Yelp Inc. for the year ended December 31, 2017, filed with the Securities and Exchange Commission on February 28, 2017.

In the opinion of management, the accompanying unaudited condensed consolidated financial information includes all adjustments of a normally recurring nature necessary for the fair presentation of the interim periods presented.

Certain Significant Risks and Uncertainties-The Company operates in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, the Company's management believes that changes in any of the following areas could have a significant negative impact on the Company in terms of its future financial position, results of operations or cash flows: rates of revenue growth; traffic to the Company's WiFi network; popularity and usage of WiFi as a means of connectivity; industry competition; qualified employees and key personnel; intellectual property infringement and other claims; and changes in government regulation affecting the Company's business, among other things.

The Company had continued losses, accumulated deficit, negative cash flows from operations, and negative working capital, the Company had been dependent upon the ongoing availability of financing in the form of its Convertible Debenture offerings in the periods presented in this financial information. On April 3, 2017, the all of the equity interests of the Company were acquired by Yelp Inc. , a publicly listed entity in the United States of America. As a result of the acquisition, and with the support and significant resources of a larger public company, tthe preparation of the financial information by the Company on a going concern basis is deemed appropriate.

Use of Estimates-The preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management's estimates. Significant estimates include: assessment of useful lives and impairment analysis of property and equipment and application development costs, valuation of stock-based compensation, allowance for doubtful accounts and valuation of convertible debentures.

Recent Accounting Pronouncements Not Yet Effective- In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09 “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue when they transfer promised goods or services to customers, in an amount that reflects the consideration that the entity expects to be entitled to in exchange for such goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016.

The new revenue standard may be applied retrospectively to each prior period presented “full retrospective”, or retrospectively with the cumulative effect recognized as of the date of adoption- “modified retrospective”. The Company does not expect the of the adoption of ASU 2014-09 and the related implementation guidance to have a material impact on its consolidated financial statements.

In February 2016, FASB issued Accounting Standards Update No. 2016-02, “Leases” (“ASU 2016-02”). The new guidance generally requires an entity to recognize on its balance sheet operating and financing lease liabilities and corresponding right-of-use assets. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The new standard requires a modified retrospective transition for existing leases to each prior reporting period presented. The Company does not expect the impact of the adoption of ASU 2016-02 to have a material impact on its consolidated financial statements.

In August 2016, FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows (Subtopic 230)” (“ASU 2016-15”). The new guidance provides clarity around the cash flow classification for specific issues in an effort to reduce the current and potential future diversity in practice. The standard is effective for the first interim period within annual reporting periods beginning after December 15, 2017 and early adoption is permitted. The Company does not expect the the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements.

In November 2016, FASB issued Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Subtopic 230)” (“ASU 2016-18”). The new guidance requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2017 and early adoption is permitted. The Company does not expect the adoption of ASU 2016-18 to have a material impact on its consolidated financial statements as the Company does not have restricted cash.

2. COMMITMENTS AND CONTINGENCIES

Office Facility Leases-The Company leases its office facilities under operating lease agreements that expire in July 2018. The Company recognizes rent expense as it is paid. Rental expense for the three months ended March 31, 2017 and 2016 was $16,400 and $16,400 respectively.

The Company's minimum payments under non-cancelable operating leases for equipment and office space having initial terms in excess of one year were as follows as of March 31, 2017 (in thousands):

Year Ending December 31,	Operating Leases
2017 (from April 1, 2017)	$	98
2018	76
Total minimum lease payments	$	174

The Company has subleased certain office facilities under operating lease agreements that expire in 2018. The Company recognizes sublease rentals as a reduction in rental expense as it is paid.

Legal Proceedings-The Company is not subject to any current legal proceedings arising in the ordinary course of business.

Indemnification Agreements-In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees.

While the outcome of claims cannot be predicted with certainty, the Company does not believe that the outcome of any claims under the indemnification arrangements will have a material effect on the Company's results of operations or cash flows.

3. STOCK-BASED COMPENSATION

The Company recorded an immaterial amount and $49,710 of stock-based compensation expense in the three months ended March 31, 2017 and March 31, 2016 respectively. An immaterial amount of stock-based compensation expense was capitalized as part of certain capitalized development costs in each of those periods presented.

The fair value of options granted to employees is estimated on the grant date using the Black-Scholes-Merton option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the volatility in the fair market value of the Company's common stock, a risk-free interest rate, expected dividends and the estimated forfeitures of unvested stock options. No compensation cost is recorded for options that do not vest. The Company uses the simplified calculation of expected life and volatility is based on an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Expected forfeitures are based on the Company's historical experience.

The Company uses the straight-line method for expense attribution. For the three months ended March 31, 2017 and 2016, the weighted- average assumptions are as follows:

	Three Months Ended March 31,
	2017		2016
Dividend yield	—	%	—	%
Annual risk-free rate	1.60	%	1.60	%
Expected volatility	100	%	100	%
Expected term (years)	5		5

4. OTHER INCOME, NET

Other income, net for the three months ended March 31, 2017 and 2016 consisted of the following (in thousands):

	Three Months Ended March 31,
	2018			2017
Research income (Scientific Research and Experimental Development credit)	$	447		$	153
Interest expense	(43		)	—
Miscellaneous income	23			1
Other income, net	$	427		$	154

5. INCOME TAXES

The Company is subject to income tax in Canada where it conducts business. The Company recorded an income tax provision of nil for each of the three months ended March 31, 2017 and March 31, 2016, respectively. The primary difference between the effective tax rate and the Canadian statutory tax rate of 26.5% relates to the valuation allowances on the Company's deferred tax assets. A valuation allowance has been recorded against net deferred tax assets as it is not more likely than not that future income will be realized against which the net deferred tax assets can be recognized.

EX-99.2

YELP INC. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

On February 28, 2017, Yelp Inc. (“Yelp” or “Company”) acquired Nowait, Inc. (“Nowait”). In connection with the acquisition, all of the outstanding capital stock and warrants to purchase capital stock of Nowait — including the 20% equity investment in Nowait the Company acquired in July 2016 — were converted into the right to receive an aggregate of approximately $39.8 million in cash. Of the total consideration paid in connection with the acquisition, $7.9 million in cash is being held in escrow for a two-year period after closing to secure the Company’s indemnification rights. The key factor underlying the acquisition was to secure waitlist system and seating tool technology.

On April 3, 2017, the Company acquired all of the equity interests in Turnstyle Analytics, Inc. (“Turnstyle”) for approximately $20.6 million, of which approximately $1.0 million represents compensation cost due to a continuous service requirement, with the remainder representing purchase consideration. Of the total consideration paid in connection with the acquisition, $3.1 million is being held in escrow for an 18-month period after closing to secure the Company’s indemnification rights. The key factor underlying the acquisition was to secure a location-based marketing and analytics platform that provides Wi-Fi as a digital marketing tool to retain and reward customers.

On October 10, 2017, the Company completed its sale of all of the outstanding equity interests in Eat24, LLC ("Eat24"), a wholly owned subsidiary of the Company, to Grubhub Holdings Inc. (“Purchaser”), a wholly owned subsidiary of Grubhub Inc. The Company received $252.7 million in cash, and the Purchaser paid an additional $28.8 million into an escrow account, which will be held for an 18-month period after closing to secure the Purchaser’s indemnification rights. The purchase price remains subject to customary post-closing adjustments.

The unaudited pro forma condensed consolidated statement of operations included in this Current Report on Form 8-K have been presented to reflect the historical statement of operations for Yelp as though each of the Nowait and Turnstyle acquisitions and the disposal of Eat24 had occurred on January 1, 2017. There is no unaudited pro forma condensed consolidated balance sheet included in this financial information as the each of the acquisition and disposal transactions included in the unaudited pro forma condensed consolidated statement of operations are reflected in the audited results of the Company as of December 31, 2017.

The historical financial information has been adjusted in the unaudited condensed consolidated pro forma statement of operations to give effect to events that are (1) directly attributable to the acquisitions and the disposal; (2) factually supportable; and (3) expected to have a continuing impact on the Company’s results. Accordingly, the portion of the Turnstyle purchase price which was recorded as compensation cost and the gain associated with the disposal of Eat24 are excluded from the unaudited pro forma condensed consolidated statement of operations adjustments due to the non-recurring nature of these items. The pro forma adjustments are described in the accompanying footnotes.

The unaudited pro forma condensed consolidated statement of operations was based on and should be read in conjunction with the following historical financial statements and accompanying notes:

• Separate audited consolidated financial statements of Yelp as of and for the year ended then December 31, 2017, together with management’s discussion and analysis of financial condition and results of operations, presented in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commissions ("SEC") on February 28, 2018;

• Separate audited historical financial statements of Nowait as of and for the year ended December 31, 2016 included in the Current Report on Form 8-K/A filed with the SEC on May 15, 2017; and

• Separate audited historical financial statements of Turnstyle as of and for the year ended December 31, 2016 included in the Current Report on Form 8-K/A filed with the SEC on June 16, 2017.

The unaudited pro forma condensed consolidated statement of operations is presented for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial position that the Company would have reported had the acquisitions and disposition been completed as of the date and for the period presented, and should not be taken as representative of its consolidated results of operations or financial condition following the acquisitions. In addition, the unaudited pro forma condensed consolidated financial information is not intended to project the future financial position or results of operations of the Company.

The unaudited pro forma condensed consolidated statement of operations does not reflect any cost savings, operating synergies, or revenue enhancements that the Company may have achieved as a result of the acquisitions. Conversely, the unaudited pro forma condensed consolidated financial information does not reflect any cost inefficiencies, operating dis-synergies, or incidental revenue reduction that the Company may have incurred as a result of the disposition of Eat24. Additionally, any costs necessary to achieve such measures, or futher costs to integrate or de-integrate the operations of Nowait, Turnstyle, or Eat24 are not reflected in the unaudited pro forma condensed consolidated statement of operations.

The unaudited pro forma information was prepared on a basis consistent with the accounting policies presented in the consolidated financial statements of the Company's Annual Report on Form 10K for the year ended December 31, 2017.

Yelp Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

December 31, 2017

(In thousands, except per share data)

	Historical
	Yelp (as reported)			Nowait for period to February 28, 2017			Turnstyle for period to April 3, 2017			Eat24 for period to October 10, 2017			Adjustments			Pro Forma Consolidated			Notes
Net revenue	$	846,813		$	774		$	359		$	(53,909	)	—			$	794,037
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	70,518			146			134			(15,079		)	—			55,719
Sales and marketing	438,643			591			94			(33,307		)	—			406,021
Product development	175,787			375			125			(7,356		)	(387		)	168,544			(a)
General and administrative	105,673			419			351			(5,390		)	(387		)	100,666			(a)
Depreciation and amortization	41,198			33			3			(4,717		)	496			37,013			(b)
Restructuring and integration	288			—			—			—			—			288
Gain on disposal of a business unit	(164,779		)	—			—			—			164,779			—			(c)
Total costs and expenses	667,328			1,564			707			(65,849		)	164,501			768,251
Income (loss) from operations	179,485			(790		)	(348		)	11,940			(164,501		)	25,786
Other income, net	4,864			21			427			1			—			5,313
Income (loss) before income taxes	184,349			(769		)	79			11,941			(164,501		)	31,099
Provision for income taxes	(31,491		)	—			—			—			30,708			(783		)	(d)
Net income (loss) attributable to common stockholders	$	152,858		$	(769	)	$	79		$	11,941		$	(133,793	)	$	30,316
Net income per share attributable to common stockholders:
Basic	$	1.87														$	0.37
Diluted	$	1.75														$	0.35
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic	81,602															81,602
Diluted	87,170															87,170

The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial information.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

Adjustments to the condensed consolidated statement of operations for the year ended December 31, 2017 are as follows:

(a)	Adjustment to exclude Turnstyle compensation cost due to a continuous service requirement for certain employees of Turnstyle with the Company, which was recorded in the period from the acquisition date to December 31, 2017 as such amounts are not expected to have a continuing impact on the business.
(b)	Adjustment to reflect additional Nowait and Turnstyle intangible amortization expense for the period from January 1, 2017 to the respective acquisition date. The amortization is related to restaurant and business relationships, user relationships, acquired technology and trademarks intangible assets, which are amortized on a straight line basis over 3-12 years.
(c)	Adjustment to exclude the gain, including related transactions costs, recorded on the disposal of Eat24 in October 2017, as the gain is a non-recurring event for the purpose of the unaudited pro forma.
(d)	The adjustment made to the pro forma condensed consolidated statemnet of operations to reduce the provision for income taxes relates to the impact of the removal of the gain on the disposal of Eat24, as described in adustment (c). No adjustment to the provision for income taxes as a result of Nowait and Turnstyle. The primary difference between the effective tax rate for the pro forma condensed consolidated results of operations and the statutory income tax rate relates to the valuation allowances on certain of the Company’s net operating losses and tax credits.