Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 10, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | NTN BUZZTIME INC | |
Entity Central Index Key | 0000748592 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,962,866 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 1,710 | $ 3,209 |
Restricted cash | 50 | |
Accounts receivable, net of allowances of $845 and $354, respectively | 132 | 1,195 |
Income tax receivable | 13 | |
Site equipment to be installed | 792 | 1,090 |
Prepaid expenses and other current assets | 146 | 526 |
Total current assets | 2,793 | 6,070 |
Restricted cash, long-term | 150 | |
Operating lease right-of-use assets | 5 | 2,101 |
Fixed assets, net | 689 | 2,822 |
Software development costs, net of accumulated amortization of $3,016 and $3,341, respectively | 1,420 | 1,915 |
Deferred costs | 85 | 274 |
Goodwill | 696 | |
Other assets | 62 | 97 |
Total assets | 5,054 | 14,125 |
Current Liabilities: | ||
Accounts payable | 275 | 835 |
Accrued compensation | 125 | 588 |
Accrued expenses | 490 | 490 |
Sales taxes payable | 14 | 131 |
Income taxes payable | 3 | |
Current portion of long-term debt, net | 1,724 | 2,739 |
Current portion of obligations under operating leases | 5 | 409 |
Current portion of obligations under finance leases | 23 | 21 |
Current portion of deferred revenue | 120 | 460 |
Other current liabilities | 154 | 419 |
Total current liabilities | 2,930 | 6,095 |
Long-term debt | 1,625 | |
Long-term obligations under operating leases | 2,891 | |
Long-term obligations under finance leases | 4 | 20 |
Long-term deferred revenue | 2 | |
Other liabilities | 26 | |
Total liabilities | 4,559 | 9,034 |
Shareholders' Equity | ||
Series A 10% cumulative convertible preferred stock, $0.005 par value, $156 liquidation preference, 156 shares authorized, issued and outstanding at September 30, 2020 and December 31, 2019 | 1 | 1 |
Common stock, $0.005 par value, 15,000 shares authorized at September 30, 2020 and December 31, 2019; 2,952 and 2,901 shares issued at September 30, 2020 and December 31, 2019, respectively | 15 | 14 |
Treasury stock, at cost, 10 shares at September 30, 2020 and December 31, 2019 | (456) | (456) |
Additional paid-in capital | 136,881 | 136,721 |
Accumulated deficit | (136,187) | (131,457) |
Accumulated other comprehensive income | 241 | 268 |
Total shareholders' equity | 495 | 5,091 |
Total liabilities and shareholders' equity | $ 5,054 | $ 14,125 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts - accounts receivable | $ 845 | $ 354 |
Software accumulated amortization | $ 3,016 | $ 3,341 |
Series A cumulative preferred stock, percentage | 10.00% | 10.00% |
Preferred stock series A, par value per share | $ 0.005 | $ 0.005 |
Preferred stock series A, liquidation preference | $ 156 | $ 156 |
Preferred stock series A, shares authorized | 156,000 | 156,000 |
Preferred stock series A, shares issued | 156,000 | 156,000 |
Preferred stock series A, shares outstanding | 156,000 | 156,000 |
Common stock, par value | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 2,952,000 | 2,901,000 |
Common stock, shares outstanding | 2,952,000 | 2,901,000 |
Treasury stock, shares | 10,000 | 10,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from contracts with customers | ||||
Total revenue from contracts with customers | $ 1,477 | $ 4,580 | $ 4,625 | $ 14,638 |
Operating expenses: | ||||
Direct operating costs (includes depreciation and amortization of $346 and $649 for the three months ended September 30, 2020 and 2019, respectively, and $1,241 and $1,918 for the nine months ended September 30, 2020 and 2019, respectively) | 801 | 1,344 | 2,364 | 4,545 |
Selling, general and administrative | 2,068 | 3,413 | 6,743 | 10,303 |
Impairment of capitalized software | 51 | 238 | 52 | |
Impairment of goodwill | 662 | |||
Depreciation and amortization (excluding depreciation and amortization included in direct operating costs) | 26 | 88 | 189 | 273 |
Total operating expenses | 2,895 | 4,896 | 10,196 | 15,173 |
Operating loss | (1,418) | (316) | (5,571) | (535) |
Other (expense) income, net | (82) | (16) | 826 | (189) |
Loss before income taxes | (1,500) | (332) | (4,745) | (724) |
Benefit (provision) for income taxes | 19 | (19) | 23 | (30) |
Net loss | (1,481) | (351) | (4,722) | (754) |
Series A preferred stock dividend | (8) | (8) | ||
Net loss attributable to common shareholders | $ (1,481) | $ (351) | $ (4,730) | $ (762) |
Net loss per common share - basic and diluted | $ (0.50) | $ (0.12) | $ (1.62) | $ (0.27) |
Weighted average shares outstanding - basic and diluted | 2,936 | 2,874 | 2,920 | 2,870 |
Comprehensive loss | ||||
Net loss | $ (1,481) | $ (351) | $ (4,722) | $ (754) |
Foreign currency translation adjustment | 1 | (18) | (27) | 47 |
Total comprehensive loss | (1,480) | (369) | (4,749) | (707) |
Subscription Revenue [Member] | ||||
Revenue from contracts with customers | ||||
Total revenue from contracts with customers | 1,053 | 3,723 | 3,779 | 11,356 |
Hardware Revenue [Member] | ||||
Revenue from contracts with customers | ||||
Total revenue from contracts with customers | 379 | 11 | 421 | 811 |
Other Revenue [Member] | ||||
Revenue from contracts with customers | ||||
Total revenue from contracts with customers | $ 45 | $ 846 | $ 425 | $ 2,471 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Depreciation and amortization - part of direct operating costs | $ 346 | $ 649 | $ 1,241 | $ 1,918 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Series A Cumulative Convertible Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Balance at Dec. 31, 2018 | $ 1 | $ 14 | $ (456) | $ 136,552 | $ (129,394) | $ 200 | $ 6,917 |
Balance, shares at Dec. 31, 2018 | 156,000 | 2,875,000 | |||||
Foreign currency translation adjustment | 47 | 47 | |||||
Net loss | (754) | (754) | |||||
Issuance of common stock upon vesting of restricted stock units | (29) | (29) | |||||
Issuance of common stock upon vesting of restricted stock units,shares | 20,000 | ||||||
Cash paid to Series A preferred stockholders for semi-annual dividend | (8) | (8) | |||||
Non-cash stock based compensation | 172 | 172 | |||||
Balance at Sep. 30, 2019 | $ 1 | $ 14 | (456) | 136,695 | (130,156) | 247 | 6,345 |
Balance, shares at Sep. 30, 2019 | 156,000 | 2,895,000 | |||||
Balance at Jun. 30, 2019 | $ 1 | $ 14 | (456) | 136,648 | (129,805) | 265 | 6,667 |
Balance, shares at Jun. 30, 2019 | 156,000 | 2,882,000 | |||||
Foreign currency translation adjustment | (18) | (18) | |||||
Net loss | (351) | (351) | |||||
Issuance of common stock upon vesting of restricted stock units | (16) | (16) | |||||
Issuance of common stock upon vesting of restricted stock units,shares | 13,000 | ||||||
Non-cash stock based compensation | 63 | 63 | |||||
Balance at Sep. 30, 2019 | $ 1 | $ 14 | (456) | 136,695 | (130,156) | 247 | 6,345 |
Balance, shares at Sep. 30, 2019 | 156,000 | 2,895,000 | |||||
Balance at Dec. 31, 2019 | $ 1 | $ 14 | (456) | 136,721 | (131,457) | 268 | 5,091 |
Balance, shares at Dec. 31, 2019 | 156,000 | 2,901,000 | |||||
Foreign currency translation adjustment | (27) | (27) | |||||
Net loss | (4,722) | (4,722) | |||||
Cash paid to Series A preferred stockholders for semi-annual dividend | (8) | (8) | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes | (18) | (18) | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes, shares | 28,000 | ||||||
Issuance of common stock in lieu of cash compensation, net of shares withheld for payroll taxes | $ 1 | 43 | 44 | ||||
Issuance of common stock in lieu of cash compensation, net of shares withheld for payroll taxes, shares | 23,000 | ||||||
Non-cash stock based compensation | 135 | 135 | |||||
Balance at Sep. 30, 2020 | $ 1 | $ 15 | (456) | 136,881 | (136,187) | 241 | 495 |
Balance, shares at Sep. 30, 2020 | 156,000 | 2,952,000 | |||||
Balance at Jun. 30, 2020 | $ 1 | $ 15 | (456) | 136,837 | (134,706) | 240 | 1,931 |
Balance, shares at Jun. 30, 2020 | 156,000 | 2,938,000 | |||||
Foreign currency translation adjustment | 1 | 1 | |||||
Net loss | (1,481) | (1,481) | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes | (9) | (9) | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes, shares | 14,000 | ||||||
Non-cash stock based compensation | 53 | 53 | |||||
Balance at Sep. 30, 2020 | $ 1 | $ 15 | $ (456) | $ 136,881 | $ (136,187) | $ 241 | $ 495 |
Balance, shares at Sep. 30, 2020 | 156,000 | 2,952,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows (used in) provided by operating activities: | ||
Net loss | $ (4,722) | $ (754) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,430 | 2,191 |
Provision for doubtful accounts | 124 | 144 |
Amortization of operating lease right-of-use-assets | 161 | 217 |
Common stock issued for compensation in lieu of cash payment | 61 | |
Transfer of fixed assets to sales-type lease | 7 | |
Stock-based compensation | 135 | 172 |
Gain from the asset sale of Stump! Trivia and OpinioNation | (1,225) | |
Loss from the termination of operating lease | 9 | |
Loss (gain) from the sale or disposition of assets, net | 511 | (5) |
Impairment of capitalized software | 238 | 52 |
Impairment of goodwill | 662 | |
Amortization of debt issuance costs | 12 | 7 |
Changes in assets and liabilities: | ||
Accounts receivable | 939 | 222 |
Site equipment to be installed | 51 | 475 |
Operating lease liabilities | (154) | (111) |
Prepaid expenses and other assets | 353 | (66) |
Accounts payable and accrued liabilities | (1,405) | (196) |
Income taxes | (16) | 4 |
Deferred costs | 189 | 84 |
Deferred revenue | (342) | (541) |
Other liabilities | (291) | (141) |
Net cash (used in) provided by operating activities | (3,280) | 1,761 |
Cash flows used in investing activities: | ||
Capital expenditures | (21) | (111) |
Capitalized software development expenditures | (173) | (882) |
Proceeds from the sales of equipment | 29 | |
Net cash used in investing activities | (194) | (964) |
Cash flows provided by (used in) financing activities: | ||
Net proceeds from the sale of Stump! Trivia | 1,226 | |
Proceeds from long-term debt | 2,625 | |
Payments on long-term debt | (2,025) | (750) |
Debt issuance costs on long-term debt | (3) | |
Principal payments on finance leases | (14) | (39) |
Payment of preferred stockholders dividends | (8) | (8) |
Payroll tax remitted on net share settlement of equity awards | (36) | (29) |
Net cash provided by (used in) financing activities | 1,765 | (826) |
Effect of exchange rate on cash and cash equivalents | 10 | 27 |
Net decrease in cash, cash equivalents and restricted cash | (1,699) | (2) |
Cash, cash equivalents and restricted cash at beginning of period | 3,409 | 2,786 |
Cash, cash equivalents and restricted cash at end of period | 1,710 | 2,784 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for: Interest | 86 | 195 |
Cash paid during the period for: Income taxes | 23 | 26 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Site equipment transferred to fixed assets | 69 | 458 |
Assets acquired under operating leases | 28 | 57 |
Initial measurement of operating lease right-of-use assets and liabilities | 3,458 | |
Reconciliation of cash, cash equivalents and restricted cash at end of period: | ||
Cash and cash equivalents | 1,710 | 2,533 |
Restricted cash | 51 | |
Restricted cash, long-term | 200 | |
Total cash, cash equivalents and restricted cash at end of period | $ 1,710 | $ 2,784 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (1) BASIS OF PRESENTATION Description of Business NTN Buzztime, Inc. (the “Company”) was incorporated in Delaware in 1984 as Alroy Industries and changed its corporate name to NTN Communications, Inc. in 1985. The Company changed its name to NTN Buzztime, Inc. in 2005 to better reflect the growing role of the Buzztime consumer brand. The Company delivers interactive entertainment and innovative technology, including performance analytics, to help its customers acquire, engage and retain its patrons. The Company’s tablets and technology offer engaging solutions to establishments with guests who experience dwell time, such as in bars, restaurants, casinos and senior living centers. Casual dining venues subscribe to the Company’s customizable solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and arcade games. The Company’s platform creates connections among the players and venues, and amplifies guests’ positive experiences, and its in-venue TV network creates one of the largest digital out of home advertising audiences in the United States and Canada. The Company also continues to support its legacy network product line, which it calls its Classic platform. The Company generates revenue by charging subscription fees to partners for access to its 24/7 trivia network, by selling and leasing tablet and hardware equipment for custom usage beyond trivia/entertainment, by selling digital-out-of-home (DOOH) advertising direct to advertisers and on national ad exchanges, by licensing its entertainment and trivia content to other entities, and by providing professional services such as custom game design or development of new platforms on its existing tablet form factor. Until February 1, 2020, the Company also generated revenue from hosting live trivia events. The Company sold all of its assets used to host live trivia events in January 2020. At September 30, 2020, 1,080 venues in the U.S. and Canada subscribed to the Company’s interactive entertainment network. See Note 3 for more information regarding the impact of the COVID-19 pandemic on these venues and the Company’s subscription revenues. Basis of Accounting Presentation The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments that are necessary, which are of a normal and recurring nature, for a fair presentation for the periods presented of the financial position, results of operations and cash flows of the Company and its wholly-owned subsidiaries: IWN, Inc., IWN, L.P., Buzztime Entertainment, Inc., NTN Wireless Communications, Inc., NTN Software Solutions, Inc., NTN Canada, Inc., NTN Buzztime, Ltd. and BIT Merger Sub, Inc., all of which, other than NTN Canada, Inc. and BIT Merger Sub, Inc., are dormant subsidiaries. All significant intercompany transactions have been eliminated in consolidation. These condensed consolidated financial statements should be read with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2019. The accompanying condensed consolidated balance sheet as of December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2020, or any other period. Reclassifications Certain reclassifications have been made to the prior period’s financial statements to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. |
Merger Agreement and Asset Purc
Merger Agreement and Asset Purchase Agreement | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Merger Agreement and Asset Purchase Agreement | (2) MERGER AGREEMENT AND ASSET PURCHASE AGREEMENT On August 12, 2020, the Company entered into an agreement and plan of merger and reorganization (the “Merger Agreement”) with Brooklyn Immunotherapeutics LLC (“Brooklyn”), pursuant to which, subject to the terms and conditions thereof, a wholly-owned subsidiary of the Company will be merged with and into Brooklyn (the “Merger”), with Brooklyn surviving the Merger as a wholly-owned subsidiary of the Company. On the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), Brooklyn’s members will exchange their equity interests in Brooklyn for shares of the Company’s common stock representing between approximately 94.08% and 96.74% of the outstanding common stock of the Company immediately after the Effective Time on a fully diluted basis (less a portion of such shares which will be allocated to Maxim Group LLC in respect of the success fee owed to it by Brooklyn), and the Company’s stockholders as of immediately prior to the Effective Time, will own between approximately 5.92% and 3.26% of the outstanding common stock of the Company immediately after the Effective Time on a fully diluted basis. The exact number of shares to be issued in the Merger will be determined pursuant to a formula in the Merger Agreement. Upon completion of the Merger, the combined company will focus its resources on executing Brooklyn’s business plan, and the board of directors of the combined company is expected to consist entirely of individuals designated by Brooklyn and the officers of the combined company are expected to be members of Brooklyn’s current management team. On September 18, 2020, the Company and eGames.com Holdings LLC (“eGames.com”) entered into an asset purchase agreement (the “Asset Purchase Agreement”), pursuant to which, subject to the terms and conditions thereof, the Company will sell and assign (the “Asset Sale”) all of its right, title and interest in and to the assets relating to its current business (the “Purchased Assets”) to eGames.com. At the closing of the Asset Sale, in addition to assuming specified liabilities of the Company, eGames.com will pay the Company $2.0 million in cash. In connection with entering into the Asset Purchase Agreement, the sole owner of eGames.com absolutely, unconditionally and irrevocably guaranteed to the Company the full and prompt payment when due of any and all amounts, from time to time, payable by eGames.com under the Asset Purchase Agreement. In connection with entering into the Asset Purchase Agreement, an affiliate of eGames.com loaned $1,000,000 to the Company, which, if the closing of the Asset Sale occurs, will be applied toward the purchase price at the closing of the Asset Sale. See Note 10 for more information regarding this loan. The Company is in discussions with the affiliate of eGames.com regarding the possibility of borrowing an additional $500,000 on approximately December 1, 2020, which, if received, would also be applied toward the purchase price at the closing of the Asset Sale. No assurances can be given that the Company will obtain such $500,000 loan from such affiliate or from any other party. Consummation of the Merger and the Asset Sale is subject to certain closing conditions including, among others, approval by the Company’s stockholders of issuance of the Company’s common stock to Brooklyn’s members under the terms of the Merger Agreement and the approval of the Asset Sale. No assurances are, or can be given, that the Merger or the Asset Sale will be consummated. See Item 1A, “ Risk Factors—RISKS RELATED TO THE PROPOSED MERGER AND ASSET SALE.” |
Covid-19 Update
Covid-19 Update | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Covid-19 Update | (3) COVID-19 UPDATE The negative impact of the COVID-19 pandemic on the restaurant and bar industry was abrupt and substantial, and the Company’s business, cash flows from operations and liquidity suffered, and continues to suffer, materially as a result. In many jurisdictions, including those in which the Company has many customers and prospective customers, restaurants and bars were ordered by the government to shut-down or close all on-site dining operations in the latter half of March 2020. Since then, governmental orders and restrictions impacting restaurants and bars in certain jurisdictions were eased or lifted as the number of COVID-19 cases decreased or plateaued, but as jurisdictions began experiencing a resurgence in COVID-19 cases, many jurisdictions reinstated such orders and restrictions, including mandating the shut-down of bars and the closing of all on-site dining operations of restaurants. The Company has experienced material decreases in subscription revenue, advertising revenue and cash flows from operations, which the Company expects to continue for at least as long as the restaurant and bar industry continues to be negatively impacted by the COVID-19 pandemic, and which may continue thereafter if restaurants and bars seek to reduce their operating costs or are unable to re-open even if restrictions within their jurisdictions are eased or lifted. For example, at its peak, approximately 70% of the Company’s customers had their subscriptions to our services temporarily suspended. As of November 10, 2020, approximately 11% of the Company’s customers remain on subscription suspensions. See Item 2 “—Liquidity and Capital Resources,” and “Item 1A. Risk Factors” in Part II of this report for additional information regarding the impact of the pandemic on the Company’s business and outlook. While the Company expects the effects of the pandemic to negatively impact its future results of operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of the pandemic means the related future financial impact cannot be reasonably estimated at this time. The Company’s consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. Such estimates and assumptions affect, among other things, the allowance for doubtful accounts, site equipment to be installed, fixed assets, capitalized software development, goodwill and right-of-use assets. Events and changes in circumstances arising after the issuance of the financial statements as of and for the three and nine months ended September 30, 2020, including those resulting from the impacts of the pandemic, will be reflected future periods. |
Going Concern Uncertainty
Going Concern Uncertainty | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Uncertainty | (4) GOING CONCERN UNCERTAINTY. In connection with preparing its financial statements as of and for the three and nine months ended September 30, 2020, the Company’s management evaluated whether there are conditions or events, considered in the aggregate, that are known and reasonably knowable that would raise substantial doubt about the Company’s ability to continue as a going concern through twelve months after the date that such financial statements are issued. During the three and nine months ended September 30, 2020, the Company incurred a net loss of $1,481,000 and $4,722,000, respectively. As of September 30, 2020, the Company had $1,710,000 of unrestricted cash, total debt outstanding of $3,350,100, which is gross of approximately $1,000 in unamortized debt issuance costs, and negative working capital of $137,000. The total debt outstanding consists of $725,000 of principal outstanding under the Company’s term loan with Avidbank, $1,625,100 of principal outstanding under the loan the Company received in April 2020 under the Paycheck Protection Program, and $1,000,000 of principal outstanding under the loan the Company received in connection with entering into the Asset Purchase Agreement, which, if the closing of the Asset Sale occurs, will be applied toward the $2.0 million purchase price eGames.com will owe the Company at the closing of the Asset Sale. See Note 2 for more information on the Asset Sale. In November 2020, the Company was informed that approximately $1,093,000 of the $1,625,100 loan under the Paycheck Protection Program would be forgiven, leaving a principal balance of approximately $532,000. The Company is in discussions with the affiliate of eGames.com regarding the possibility of borrowing an additional $500,000 on approximately December 1, 2020, which, if received, would also be applied toward the purchase price at the closing of the Asset Sale. No assurances can be given that the Company will obtain such $500,000 loan from such affiliate or from any other party. As a result of the impact of the COVID-19 pandemic on the Company’s business and taking into account its current financial condition and its existing sources of projected revenue and cash flows from operations, if the Company is able to borrow an additional $500,000 from the affiliate of eGames.com discussed above, the Company believes it will have sufficient cash resources to pay forecasted cash outlays only through mid-January 2021, but if the Company does not borrow such amount from the affiliate of eGames.com or any other party, the Company believes it will have sufficient cash resources to pay forecasted cash outlays only through mid-December 2020, in each case, assuming Avidbank does not take actions to foreclose on the Company’s assets in the event the Company becomes out of compliance with its financial covenants, and the Company is able to continue to successfully manage its working capital deficit by managing the timing of payments to its vendors and other third parties. Based on the factors described above, management concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern through the twelve-month period subsequent to the issuance date of these financial statements. The Company needs to complete the Merger or the Asset Sale or raise capital to meet its debt service obligations to Avidbank and fund its working capital needs. The Company currently has no arrangements for such capital and no assurances can be given that it will be able to raise such capital when needed, on acceptable terms, or at all. The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. |
Restricted Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Restricted Cash | (5) RESTRICTED CASH At the commencement date of the Company’s lease for its corporate headquarters on December 1, 2018, the Company’s primary lender, Avidbank, issued a $250,000 letter of credit to the lessor as security, which amount was reduced by $50,000 on December 1, 2019 and was to be reduced by the same amount December 1 of each year thereafter, provided there has been no default under the lease. Avidbank required the Company to deposit $250,000 in a restricted cash account maintained with the bank, which amount was and would be reduced as the amount required under the letter of credit is reduced. The Company recorded the $250,000 deposit as restricted cash on its balance sheet, with $50,000 plus any earned interest being recorded in short-term restricted cash and the balance being recorded in long-term restricted cash. In June 2020, the Company terminated its lease for its corporate headquarters, and as part of the consideration to the lessor for the early least termination, the lessor received the $200,000 of restricted cash provided for under the letter of credit in July 2020. (See Note 10 for more information on the lease termination.) |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | (6) Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers 1. Identify the contract(s) with customers 2. Identify the performance obligations 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations 5. Recognize revenue when the performance obligations have been satisfied ASC No. 606 requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The Company generates revenue by charging subscription fees to partners for access to its 24/7 trivia network, by selling and leasing tablet and hardware equipment for custom usage beyond trivia/entertainment, by selling DOOH advertising direct to advertisers and on national ad exchanges, by licensing its entertainment and trivia content to other entities, and by providing professional services such as custom game design or development of new platforms on its existing tablet form factor. Until February 1, 2020, the Company also generated revenue from hosting live trivia events. The Company sold all of its assets used to host live trivia events in January 2020. In general, when multiple performance obligations are present in a customer contract, the transaction price is allocated to the individual performance obligation based on the relative stand-alone selling prices, and the revenue is recognized when or as each performance obligation has been satisfied. Discounts are treated as a reduction to the overall transaction price and allocated to the performance obligations based on the relative stand-alone selling prices. All revenues are recognized net of sales tax collected from the customer. ASC No. 606 specifies certain criteria that an arrangement with a customer must have in order for a contract to exist for purposes of revenue recognition, one of which is that it must be probable that the Company will collect the consideration to which it will be entitled under the contract. As a result of the impact that the COVID-19 pandemic has had, and continues to have, on the Company’s customers, the Company determined that due to the uncertainty of collectability of the subscription fees for certain customers, the Company’s arrangement with those customers no longer meets all the criteria needed for a contract to exist for revenue recognition purposes. Therefore, the Company did not recognize revenue for these customers and fully reserved for accounts receivable in the allowance for doubtful accounts. The Company only recognized revenue for the arrangements that continued to meet the contract criteria, including the criteria that collectability was probable. Revenue Streams The Company disaggregates revenue by material revenue stream as follows: Three months ended September 30, 2020 2019 $ % of Total Revenue $ % of Total Revenue $ Change % Change Subscription revenue 1,053,000 71.3 % 3,723,000 81 % (2,670,000 ) (71.7 )% Hardware revenue 379,000 25.7 % 11,000 0 % 368,000 3,345.5 % Other revenue 45,000 3.0 % 846,000 19 % (801,000 ) (94.7 )% Total 1,477,000 100.0 % 4,580,000 100 % (3,103,000 ) (67.8 )% Nine months ended September 30, 2020 2019 $ % of Total Revenue $ % of Total Revenue $ Change % Change Subscription revenue 3,779,000 82 % 11,356,000 78 % (7,577,000 ) (67 )% Hardware revenue 421,000 9 % 811,000 6 % (390,000 ) (48 )% Other revenue 425,000 9 % 2,471,000 17 % (2,046,000 ) (83 )% Total 4,625,000 100 % 14,638,000 100 % (10,013,000 ) (68 )% The following describes how the Company recognizes revenue under ASC No. 606. Subscription Revenue As discussed above, as a result of the impact that the COVID-19 pandemic has had, and continues to have, on the Company’s customers, the Company determined that due to the uncertainty of collectability of the subscription fees for certain customers, the Company’s arrangement with those customers no longer meets all the criteria needed for a contract to exist for revenue recognition purposes. Therefore, the Company did not recognize revenue for these customers and fully reserved for accounts receivable in the allowance for doubtful accounts. Costs associated with installing the equipment are considered direct costs. Costs associated with sales commissions are considered incremental costs for obtaining the contract because such costs would not have been incurred without obtaining the contract. The Company expects to recover both costs through future fees it collects and both costs are recorded in deferred costs on the balance sheet and amortized on a straight-line basis. For installation costs that are of an amount that is less than or equal to the deferred installation revenue for the related contract, the amortization period approximates the longer of the contract term and the expected term of the customer relationship. For any excess costs that exceed the deferred revenue, the amortization period of the excess cost is the initial term of the contract, which is generally one to two years because the Company can still recover that excess cost in the initial term of the contract. The Company amortizes commissions over the longer of the contract term and the expected term of the customer relationship. Sales-type Lease Revenue Leases. Equipment Sales Advertising Revenue Content Licensing Live-hosted Trivia Revenue Professional Development Revenue Revenue Concentrations The Company’s customers predominantly range from small independently operated bars and restaurants to bars and restaurants operated by national chains. This results in diverse venue sizes and locations. As of September 30, 2019, 2,565 venues in the U.S. and Canada subscribed to the Company’s interactive entertainment network, of which approximately 47% were Buffalo Wild Wings corporate-owned restaurants and its franchisees. As of September 30, 2020, the number declined to 1,080 venues, primarily due to the termination of its agreements with Buffalo Wild Wings corporate-owned restaurants and most of its franchisees in November 2019 in accordance with their terms and also in part to customers terminating their subscriptions or going out of business relating to the effects of the COVID-19 pandemic on their business. The table below sets forth the approximate amount of revenue the Company generated from Buffalo Wild Wings corporate-owned restaurants and its franchisees during the three and nine months ended September 30, 2020 and 2019, and the percentage of total revenue that such amount represents for such periods: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Buffalo Wild Wings revenue $ 25,000 $ 1,676,000 $ 176,000 $ 5,891,000 Percent of total revenue 2 % 37 % 4 % 40 % As of September 30, 2020 and December 31, 2019, approximately $112,000 and $158,000, respectively, was included in accounts receivable from Buffalo Wild Wings corporate-owned restaurants and its franchisees. The geographic breakdown of the Company’s revenue for the three and nine months ended September 30, 2020 and 2019 were as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 United States $ 1,420,000 $ 4,420,000 $ 4,390,000 $ 14,144,000 Canada 57,000 160,000 235,000 494,000 Total revenue $ 1,477,000 $ 4,580,000 $ 4,625,000 $ 14,638,000 Contract Assets and Liabilities The Company enters into contracts and may recognize contract assets and liabilities that arise from these contracts. The Company recognizes revenue and corresponding cash for customers who auto pay via their bank account or credit card, or the Company recognizes a corresponding accounts receivable for customers the Company invoices. The Company may receive consideration from customers, per the terms of the contract, prior to transferring goods or services to the customer. In such instances, the Company records a contract liability and recognizes the contract liability as revenue when all revenue recognition criteria are met. The table below shows the balance of contract liabilities as of January 1, 2020 and September 30, 2020, including the change during the period. Deferred Revenue Balance at January 1, 2020 $ 462,000 New performance obligations 198,000 Revenue recognized (540,000 ) Balance at September 30, 2020 120,000 Less non-current portion - Current portion at September 30, 2020 $ 120,000 The Company capitalizes installation costs associated with installing equipment in a customer location and sales commissions as a deferred cost asset on the balance sheet. For installation costs that are of an amount that is less than or equal to the deferred installation revenue for the related contract, the amortization period approximates the longer of the contract term and the expected term of the customer relationship. For any excess installation costs that exceed the deferred revenue, the amortization period of the excess cost is the initial term of the contract, which is generally one to two years because the Company can still recover that excess cost in the initial term of the contract. The Company amortizes commission costs over the longer of the contract term and the expected term of the customer relationship. The table below shows the balance of the unamortized installation cost and sales commissions as of January 1, 2020 and September 30, 2020, including the change during the period. Installation Costs Sales Commissions Total Deferred Costs Balance at January 1, 2020 $ 187,000 $ 87,000 $ 274,000 Incremental costs deferred 83,000 60,000 143,000 Deferred costs recognized (212,000 ) (120,000 ) (332,000 ) Balance at September 30, 2020 58,000 27,000 85,000 |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Common Share | (7) BASIC AND DILUTED EARNINGS PER COMMON SHARE Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding plus potential common shares. Stock options, restricted stock units, and other convertible securities are considered potential common shares and are included in the calculation of diluted net loss per share using the treasury method when their effect is dilutive. Options, restricted stock units and convertible preferred stock representing approximately 239,000 and 249,000 shares of common stock were excluded from the computations of diluted net loss per common share for the three and nine months ended September 30, 2020 and 2019, respectively, as their effect was anti-dilutive. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Shareholders' Equity | |
Shareholders' Equity | (8) SHAREHOLDERS’ EQUITY Equity Incentive Plans The Company’s stock-based compensation plans include the NTN Buzztime, Inc. 2019 Performance Incentive Plan (the “2019 Plan”), the NTN Buzztime, Inc. Amended 2010 Performance Incentive Plan (the “2010 Plan”) and the NTN Buzztime, Inc. 2014 Inducement Plan (the “2014 Plan”). The Company’s board of directors designated its nominating and corporate governance/compensation committee as the administrator of the foregoing plans (the “Plan Administrator”). Among other things, the Plan Administrator selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures, if any, and other provisions of the award. The 2019 Plan provides for the issuance of up to 240,000 shares of Company common stock. Awards under the 2019 Plan may be granted to officers, directors, employees and consultants of the Company. Stock options granted under the 2019 Plan may either be incentive stock options or nonqualified stock options, have a term of up to ten years, and are exercisable at a price per share not less than the fair market value on the date of grant. As of September 30, 2020, there were stock options to purchase approximately 2,000 shares of common stock and 98,000 restricted stock units outstanding under the 2019 Plan. As a result of stockholder approval of the 2019 Plan in June 2019, no future grants will be made under the 2010 Plan. All awards that are outstanding under the 2010 Plan will continue to be governed by the 2010 Plan until they are exercised or expire in accordance with the terms of the applicable award or the 2010 Plan. As of September 30, 2020, there were stock options to purchase approximately 24,000 shares of common stock and 12,000 restricted stock units outstanding under the 2010 Plan. The 2014 Plan provides for the grant of up to 85,000 share-based awards to a new employee as an inducement material to the new employee entering into employment with the Company and expires in September 2024. As of September 30, 2020, there were no equity grants outstanding under the 2014 Plan. Stock-Based Compensation The Company records stock-based compensation in accordance with ASC No. 718 , Compensation – Stock Compensation. The Company uses the historical stock price volatility as an input to value its stock options under ASC No. 718. The expected term of stock options represents the period of time options are expected to be outstanding and is based on observed historical exercise patterns of the Company, which the Company believes are indicative of future exercise behavior. For the risk-free interest rate, the Company uses the observed interest rates appropriate for the term of time options are expected to be outstanding. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company did not grant any stock options and no options were exercised during the three or nine months ended September 30, 2020. During the three and nine months ended September 30, 2019, the Company granted stock options to purchase approximately 1,000 and 2,000 shares of common stock, respectively, and no options were exercised. The following weighted-average assumptions were used for stock option awards granted during the three and nine months ended September 30, 2019: Three months ended Nine months ended September 30, 2019 September 30, 2019 Weighted average risk-free rate 1.39 % 1.70 % Weighted average volatility 95.11 % 108.83 % Dividend yield 0.00 % 0.00 % Expected term 5.61 years 5.73 years The Company estimates forfeitures, based on historical activity, at the time of grant and revised if necessary in subsequent periods if actual forfeiture rates differ from those estimates. Stock-based compensation expense for the three months ended September 30, 2020 and 2019 was $53,000 and $63,000, respectively, and $135,000 and $172,000 for the nine months ended September 30, 2020 and 2019, respectively, and is expensed in selling, general and administrative expenses and credited to additional paid-in-capital. Outstanding restricted stock units (“RSUs”) are settled in an equal number of shares of common stock on the vesting date of the award. An RSU award is settled only to the extent vested. Vesting generally requires the continued employment or service by the award recipient through the respective vesting date. Because RSUs are settled in an equal number of shares of common stock without any offsetting payment by the recipient, the measurement of cost is based on the quoted market price of the stock at the measurement date, which is the grant date. During the three months ended September 30, 2019, the Company granted 30,000 RSUs. No RSUs were granted during the three months ended September 30, 2020. During the nine months ended September 30, 2020 and 2019, the Company granted 172,000 and 77,000 RSUs, respectively. The weighted average grant date fair value of the RSUs awarded during the three months ended September 30, 2019 was $2.76 per RSU. The weighted average grant date fair value of the RSUs awarded during the nine months ended September 30, 2020 and 2019 was $2.51 and $2.95 per RSU, respectively. During the three months ended September 30, 2019, 30,000 RSUs were awarded as a performance-based award granted to the Company’s former chief executive officer in connection with his resignation. The award would have vested in full upon the effective date of a change in control transaction in which an individual, entity or group acquired all of the Company’s then-outstanding equity interests on or before March 17, 2020, or in which an individual, entity or group acquired 51% of our then-outstanding equity interests on or before March 17, 2020, and then that same individual, entity or group acquired the remaining equity so that it held all of the Company’s then-outstanding equity interests on or before June 17, 2020. Continuing service was not required for vesting to occur. Because a change in control is not considered probable until a change in control occurs, and because the change in control did not occur as discussed above, the Company did not recognize stock compensation expense on this award and this award expired unvested. In connection with the resignation of the Company’s former chief executive officer, the vesting of 10,000 of his RSUs were accelerated, 5,000 in September 2019 and 5,000 in October 2019. The modification of this award resulted in the Company recognizing stock compensation expense for the accelerated vesting of RSUs in the period in which the accelerated vesting occurred. With the exception of the performance-based award and the acceleration of vesting of RSUs discussed above, RSUs typically vest over a period of two to three years, generally in monthly or quarterly increments. Some awards may have an initial cliff period of six months before the monthly vesting begins. All outstanding RSUs as of September 30, 2020 are subject to accelerated vesting in the event of a change in control. The following table shows the number of RSUs that vested and were settled during the three and nine months ended September 30, 2020 and 2019, as well as the number of shares of common stock issued upon settlement. In lieu of paying cash to satisfy withholding taxes due upon the settlement of vested RSUs, an employee may elect to have shares of common stock withheld that would otherwise be issued at settlement, the value of which is equal to the amount of withholding taxes payable. Three months ended Nine months ended 2020 2019 2020 2019 Restricted stock units vested and settled 19,000 18,000 39,000 29,000 Common stock issued, net of shares withheld 14,000 13,000 28,000 20,000 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | (9) DEBT Term Loan In September 2018, the Company entered into a loan and security agreement with Avidbank for a 48-month term loan in the amount of $4,000,000. In February 2020, the Company made a pre-payment on the term loan of approximately $150,000 following the sale of all of the Company’s assets used to conduct the live-hosted knowledge-based trivia events in January 2020. In March 2020, the Company and Avidbank entered into an amendment to the loan and security agreement (“Amendment #1”). In connection with entering into Amendment #1, the Company made a $433,000 payment on the term loan, which included the $83,333 monthly principal payment plus accrued interest for March 2020 and a $350,000 principal prepayment, thereby reducing the outstanding principal balance of the term loan to $2,000,000 as of March 31, 2020. The Company incurred approximately $26,000 of debt issuance costs related to the loan and security agreement and its amendment, of which approximately $3,000 was related to Amendment #1. The debt issuance costs are being amortized to interest expense using the effective interest rate method over the life of the loan. The unamortized balance of the debt issuance costs as of September 30, 2020 and December 31, 2019 was $1,000 and $11,000, respectively, and is recorded as a reduction of long-term debt. Under the terms of Amendment #1, the Company’s financial covenants were changed as described below, the maturity date was changed from September 28, 2022 to December 31, 2020, and the amount of the Company’s monthly payment obligations increased as described below. Before entering into Amendment #1, the Company’s adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) was required to be at least $1,000,000 for the trailing six-month period as of the last day of each fiscal quarter and the aggregate amount of unrestricted cash it had in deposit accounts or securities accounts maintained with Avidbank must be not less than $2,000,000 at all times. Under the terms of Amendment #1, the minimum EBITDA covenant was replaced with a monthly minimum asset coverage ratio covenant, which the Company refers to as the ACR covenant, and the minimum liquidity covenant was amended to provide that the aggregate amount of unrestricted cash the Company has in deposit accounts or securities accounts maintained with Avidbank must be at all times not less than the principal balance outstanding under the term loan. Under the ACR covenant, the ratio of (i) the Company’s unrestricted cash at Avidbank as of the last day of a calendar month plus 75% of its outstanding accounts receivable accounts that are within 90 days of invoice date to (ii) the outstanding principal balance of the term loan on such day must be no less than 1.25 to 1.00. As of September 30, 2020, the Company was in compliance with both of those covenants. Before entering into Amendment #1, the Company was required to make monthly principal payments of approximately $83,000 plus accrued and unpaid interest. Under the terms of the amendment, the monthly principal payment increased to $125,000 for each of April, May and June 2020, to $300,000 for each of July, August, September, October and November 2020, and to $125,000 for December 2020. As of September 30, 2020, the outstanding principal balance of the term loan was $725,000. On June 1, 2020, the Company and Avidbank entered into an amendment to the loan and security agreement to formally memorialize Avidbank’s consent to the Company receiving the PPP Loan (as defined below). Avidbank initially consented to the Company receiving the PPP loan in April 2020. Paycheck Protection Program Loan On April 18, 2020, the Company issued a note in the principal amount of approximately $1,625,000 to Level One Bank evidencing the loan (the “PPP Loan”) the Company received under the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act administered by the U.S. Small Business Administration (the “CARES Act”). As of September 30, 2020, the outstanding principal balance of the PPP Loan was approximately $1,625,000. The PPP Loan matures on April 18, 2022 and bears interest at a rate of 1.0% per annum. The Company must make monthly interest only payments beginning on November 18, 2020. One final payment of all unforgiven principal plus any accrued unpaid interest is due at maturity. Under the terms of the PPP, the Company may prepay the PPP Loan at any time with no prepayment penalties. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. In October 2020, the Company submitted its loan forgiveness application for the PPP Loan, and in November 2020, the U.S Small Business Administration approved the forgiveness of approximately $1,093,000 of the $1,625,000 loan, leaving a principal balance of approximately $532,000. Bridge Loan In connection with the Asset Purchase Agreement entered into with eGames.com on September 18, 2020, the Company issued to Fertilemind Management, LLC, an affiliate of eGames.com, an unsecured promissory note (the “Note”) in the principal amount of $1,000,000, evidencing a $1,000,000 loan received from Fertilemind Management, LLC on behalf of eGames.com (the “Bridge Loan”). The Company may use the loan proceeds for, among other things, the payment of obligations related to the transactions contemplated by the Asset Purchase Agreement and the Merger Agreement and other general working capital purposes. The principal amount accrues interest at rate of 8% per annum (increasing to 15% per annum upon the occurrence of an event of default), compounded annually. The principal amount of the Bridge Loan and accrued interest thereon is due and payable upon the earlier of (i) the termination of the Asset Purchase Agreement, (ii) the closing of a Business Combination (as defined in the Note), and (iii) December 31, 2020. Upon the closing of the Asset Sale, the Bridge Loan will be applied against the purchase price under the Asset Purchase Agreement, and the Note will be extinguished. All of the Company’s obligations under the Note are subordinate to the indebtedness and all other obligations owed by the Company to Avidbank including under the loan and security agreement, dated as of September 28, 2018 and as amended from time to time, between the Company and Avidbank. The Note includes customary events of default, including if any portion of the Note is not paid when due; if the Company defaults in the performance of any other material term, agreement, covenant or condition of the Note, subject to a cure period; if any final judgment for the payment of money is rendered against the Company and the Company does not discharge the same or cause it to be discharged or vacated within 90 days; if the Company makes an assignment for the benefit of creditors, if the Company generally does not pay its debts as they become due; if a receiver, liquidator or trustee of the Company is appointed, or if the Company is adjudicated bankrupt or insolvent. In the event of an event of default, the Note will accelerate and become immediately due and payable at the option of the holder. The Company is in discussions with Fertilemind Management, LLC regarding the possibility of borrowing an additional $500,000 on approximately December 1, 2020, which, if received, would also be applied toward the purchase price at the closing of the Asset Sale. No assurances can be given that the Company will obtain such $500,000 loan from Fertilemind Management, LLC or from any other party. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | (10) LEASES As Lessee The Company has operating leases for its warehouse facility and for equipment under agreements that expire at various dates through 2023. Certain of these leases contain renewal provisions and the warehouse lease requires the Company to pay utilities, insurance, taxes and other operating expenses. The Company terminated its lease for its corporate headquarters as of June 30, 2020, which is discussed further below. The Company also has property held under finance leases that expire at various dates through 2021. The Company’s leases do not contain any residual value guarantees or material restrictive covenants. Upon adoption of ASC No. 842, Leases Corporate Headquarters Lease Termination As part of the Company’s on-going efforts to implement measures designed to reduce operating expenses and preserve capital as it continues to seek to mitigate the substantial negative impact of the COVID-19 pandemic on the Company’s business, on June 25, 2020, the Company entered into a Lease Termination, Surrender and Buy-Out Agreement (the “Lease Termination Agreement”) with Burke Aston Partners, LLC (the “Lessor”) to terminate, effective June 30, 2020, the lease dated July 26, 2018 for the Company’s corporate headquarters. Absent the Lease Termination Agreement, the lease would have expired in accordance with its terms in April 2026. Since January 1, 2020, the Company reduced its headcount from 74 to 19 employees, all of whom are currently working remotely, and the Company did not currently need a corporate headquarters of the size subject to that lease. After paying all the amounts the Company potentially could be required to pay under the Lease Termination Agreement, including both contingent payments described below, the Company will have reduced its future cash obligations under the lease by approximately $3.5 million as compared to the amount of rent the Company would have otherwise paid if the lease remained in effect for the duration of its original term. Pursuant to the Lease Termination Agreement, in exchange for allowing the Company to terminate the lease early, the Company agreed to (i) allow the Lessor to keep its security deposits of approximately $260,000, which includes $200,000 of restricted cash under a letter of credit, (ii) pay the Lessor approximately $121,000 for past due rent, and (iii) pay the Lessor $80,000 if the Company sells all or any material part of its assets or all or any material part of its equity interests and $5,000 if the Lessor needs to dispose of furniture that remained in the office space. In July 2020, the Lessor informed the Company that it needed to dispose of the remaining furniture, and the Company paid the Lessor $5,000 to do so. As a result of the lease termination, the Company recorded a gain on the termination of the lease of approximately $8,000 during the three months ended June 30, 2020, which includes writing off the remaining balances of the right-of-use asset of approximately $1,913,000 and the corresponding lease liability of approximately $3,135,000, applying the principal portion of past due rents to be paid in July 2020 of approximately $64,000, writing off of the unamortized tenant improvement allowance of approximately $890,000, and applying the security deposit of approximately $260,000. Additionally, as part of the lease termination and vacating the facility, the Company recorded a loss on the disposal of fixed assets of approximately $282,000 during the three months ended June 30, 2020, which includes approximately $197,000 in furniture and fixtures and the Company’s vehicle, and $85,000 in other leasehold improvement assets. The tables below show the beginning balances of the operating lease right-of-use assets and liabilities as of January 1, 2019 and the ending balances as of September 30, 2020, including the changes during the periods. Operating lease right-of-use assets Operating lease right-of use assets at January 1, 2020 $ 2,101,000 Amortization of operating lease right-of-use assets (161,000 ) Addition of operating lease right-of -use asset 28,000 Write-off of right-of-use asset due to headquarters lease termination (1,913,000 ) Write-off of right-of-use asset related to other lease terminations (50,000 ) Operating lease right-of-use assets at September 30, 2020 $ 5,000 Operating lease liabilities Operating lease liabilities at January 1, 2020 $ 3,300,000 Principal payments on operating lease liabilities (154,000 ) Addition of operating lease liability 28,000 Write-off of lease liability related to headquarters lease termination (3,135,000 ) Write-off of lease liability related to other lease terminations (34,000 ) Operating lease liabilities at September 30, 2020 5,000 Less non-current portion - Current portion at September 30, 2020 $ 5,000 As of September 30, 2020, the Company’s operating leases have a weighted-average remaining lease term of 1 month for $5,000 in future payments and a weighted-average discount rate of 5%. For the three months ended September 30, 2020 and 2019, total lease expense under operating leases was approximately $17,000 and $137,000, respectively. For the nine months ended September 30, 2020 and 2019, total lease expense under operating leases was approximately $281,000 and $407,000, respectively. Lease expense is recorded in selling, general and administrative expenses. The tables below show the beginning balances of the finance lease right-of-use assets and liabilities as of January 1, 2020 and the ending balances as of September 30, 2020, including the changes during the periods. The Company’s finance lease right-of-use assets are included in “Fixed assets, net” on the accompanying consolidated balance sheet. Finance lease right-of-use assets Finance lease right-of use assets at January 1, 2020 $ 41,000 Depreciation of finance lease right-of-use assets (15,000 ) Finance lease right-of-use assets at September 30, 2020 $ 26,000 Finace lease liabilities Finance lease liabilities at January 1, 2020 $ 41,000 Principal payments on finance lease liabilities as of September 30, 2020 (14,000 ) Finance lease liabilities at September 30, 2020 27,000 Less non-current portion (4,000 ) Current portion at September 30, 2020 $ 23,000 As of September 30, 2020, the Company’s finance leases have a weighted-average remaining lease term of 1.2 years and a weighted-average discount rate of 5.52%. The maturities of the finance lease liabilities are as follows: As of September 30, 2020 2020 7,000 2021 21,000 Total Finance lease payments 28,000 Less imputed interest (1,000 ) Present value of Finance lease liabilities $ 27,000 For the three months ended September 30, 2020 and 2019, total lease costs under finance leases were approximately $5,000 and $10,000, respectively. For the nine months ended September 30, 2020 and 2019, total lease costs under finance leases were approximately $15,000 and $41,000, respectively. As Lessor ASC No. 842 did not make fundamental changes to lease accounting guidance for lessors. Therefore there was no financial statement impact due to the adoption of ASC No. 842. As a lessor, the Company has two types of customer contracts that involve leases: right-to-use operating leases and sales-type leases. Right-to-use operating leases. Revenue from Contracts with Customers, Sales-type leases. |
Disposition of Site Equipment t
Disposition of Site Equipment to Be Installed and Fixed Assets | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Disposition of Site Equipment to be Installed and Fixed Assets | (11) DISPOSITION OF SITE EQUIPMENT TO BE INSTALLED AND FIXED ASSETS Site equipment to be installed consists of fixed assets related to the Company’s tablet platform that have not yet been placed in service and are stated at cost. These assets remain in site equipment to be installed until they are deployed at the Company’s customer sites. For tablet platform customers that are under sales-type lease arrangements, the cost of the equipment is recognized in direct costs upon installation. For all other tablet platform customers, the cost of the equipment is reclassified to fixed assets upon installation and depreciated over its estimated useful life. The Company evaluates the recoverability of site equipment to be installed and fixed assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted future net cash flows expected to be generated. If the carrying amount of the asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. The COVID-19 pandemic has had, and continues to have, a significant adverse impact on the Company’s business, cash flows from operations and liquidity. However, based on the cash flows the Company is receiving from its customers during the pandemic and the future undiscounted cash flows the Company expects to receive from these customers, the Company has determined that recoverability of the carrying amounts of its site equipment to be installed and the site equipment in fixed assets is probable and, therefore, during the three months ended September 30, 2020, the Company did not record any impairment charges on these assets, other than disposals of approximately $3,000 in the ordinary course of business. For the nine months ended September 30, 2020, the Company disposed of approximately $229,000 of site equipment, primarily related to older equipment the Company determined would no longer be deployed. For other fixed assets, as previously discussed, the Company terminated its lease for its corporate headquarters and vacated the facility as of June 30, 2020. (See Note 10) As a result, during the nine months ended September 30, 2020, the Company wrote-off approximately $890,000 of unamortized tenant improvement allowance that is recorded as part of the gain on termination of lease, as well as approximately $85,000 in leasehold improvement assets and $197,000 in furniture and fixtures and the Company’s vehicle. The Company disposed of approximately $4,000 and $24,000 of site equipment during the three and nine months ended September 30, 2019 in the ordinary course of business. The Company will continue to monitor the recoverability of its site equipment and other fixed assets as it relates to the continued impact of the COVID-19 pandemic and will recognize any additional write-offs during the period in which it determines that impairment exists. |
Software Development Costs
Software Development Costs | 9 Months Ended |
Sep. 30, 2020 | |
Research and Development [Abstract] | |
Software Development Costs | (12) SOFTWARE DEVELOPMENT COSTS The Company capitalizes costs related to developing certain software programs in accordance with ASC No. 350, Intangibles – Goodwill and Other The Company performed its quarterly review of software development projects for the three months ended September 30, 2019, and determined to abandon certain software development projects that were no long a strategic fit for the Company, which resulted in recognizing approximately $51,000 in capitalized software impairment charges. The Company’s quarterly review for the three months ended September 30, 2020 did not result in recognizing any impairment charges for the period. During the nine months ended September 3, 2020 and 2019, the Company abandoned various software development projects that the Company concluded were no longer a current strategic fit or for which it determined that the marketability of the content had decreased due to obtaining additional information regarding the specific industry for which the content was intended. As a result, the Company recognized impairment charges of $238,000 and $52,000, respectively. Impairment of capitalized software is shown separately on the Company’s consolidated statement of operations. Taking into consideration the impact the COVID-19 pandemic has had, and continues to have, on the Company’s business, the Company determined that based on the future undiscounted cash flows the Company expects to receive from its customers, recoverability of the carrying amounts of capitalized software development costs is probable and, therefore, no additional impairment charges were required to be recognized other than as discussed above. The Company will continue to monitor the recoverability of these assets as it relates to the continued impact of the COVID-19 pandemic on the Company’s business and recognize any additional write-offs during the period in which it determines that impairment exists. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | (13) GOODWILL The Company’s goodwill balance of $696,000 as of December 31, 2019 relates to the excess of costs over the fair value of assets the Company acquired in 2003 related to its Canadian business (the “Reporting Unit”). In the Company’s evaluation of impairment indicators as of March 31, 2020, it determined that the uncertainty relating to the impact of the COVID-19 pandemic on the Reporting Unit’s future operating results represented an indicator of impairment. Accordingly, the Company compared the estimated fair value of the Reporting Unit to its carrying value at March 31, 2020, determined that a full impairment loss was warranted and recognized an impairment charge of $662,000 for the three months ended March 31, 2020. No further evaluations are necessary after March 31, 2020. There was no goodwill impairment recorded for the three or nine months ended September 30, 2019. In addition to the impairment loss recognized, fluctuations in the amount of goodwill shown on the accompanying balance sheets can occur due to changes in the foreign currency exchange rates used when translating NTN Canada’s financial statement from Canadian dollars to US dollars during consolidation. The following table shows the changes in the carrying amount of goodwill for the nine months ended September 30, 2020. Goodwill balance at January 1, 2020 $ 696,000 Activity for the three months ended March 31, 2020 Effects of foreign currency (34,000 ) Goodwill impairment (662,000 ) Goodwill balance at March 31, 2020 and September 30, 2020 $ - |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2020 | |
Shareholders' Equity | |
Accumulated Other Comprehensive Income | 14) ACCUMULATED OTHER COMPREHENSIVE INCOME The United States dollar is the Company’s functional currency, except for its operations in Canada where the functional currency is the Canadian dollar. The financial position and results of operations of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. In accordance with ASC No. 830, Foreign Currency Matters |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | (15) RECENT ACCOUNTING PRONOUNCEMENTS In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | (16) SUBSEQUENT EVENTS PPP Loan Forgiveness In November 2020, the U.S. Small Business Administration approved the forgiveness of approximately $1,093,000 of the Company’s $1,625,000 PPP Loan, leaving a principal balance of approximately $532,000. Legal Proceedings From time to time, the Company is subject to legal proceedings in the ordinary course of business. While management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm its financial position, cash flows, or overall trends in results of operations, legal proceedings are subject to inherent uncertainties, and unfavorable rulings or outcomes could occur that have, individually or in the aggregate, a material adverse effect on the Company’s business, financial condition or operating results. The Company is not currently subject to any pending material legal proceedings except as described below. The Company and its directors have been named as defendants in six substantially similar actions brought by purported stockholders of the Company’s arising out of the Merger: Henson v. NTN Buzztime, Inc. Chinta v. NTN Buzztime, Inc. Amanfo v. NTN Buzztime, Inc. Falikman v. NTN Buzztime, Inc. Haas v. NTN Buzztime, Inc. Monsour v. NTN Buzztime, Inc. Chinta Henson Henson The Company and its directors deny the allegations asserted against the Company in these actions and intend to oppose them vigorously. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregates Material Revenue | The Company disaggregates revenue by material revenue stream as follows: Three months ended September 30, 2020 2019 $ % of Total Revenue $ % of Total Revenue $ Change % Change Subscription revenue 1,053,000 71.3 % 3,723,000 81 % (2,670,000 ) (71.7 )% Hardware revenue 379,000 25.7 % 11,000 0 % 368,000 3,345.5 % Other revenue 45,000 3.0 % 846,000 19 % (801,000 ) (94.7 )% Total 1,477,000 100.0 % 4,580,000 100 % (3,103,000 ) (67.8 )% Nine months ended September 30, 2020 2019 $ % of Total Revenue $ % of Total Revenue $ Change % Change Subscription revenue 3,779,000 82 % 11,356,000 78 % (7,577,000 ) (67 )% Hardware revenue 421,000 9 % 811,000 6 % (390,000 ) (48 )% Other revenue 425,000 9 % 2,471,000 17 % (2,046,000 ) (83 )% Total 4,625,000 100 % 14,638,000 100 % (10,013,000 ) (68 )% The table below sets forth the approximate amount of revenue the Company generated from Buffalo Wild Wings corporate-owned restaurants and its franchisees during the three and nine months ended September 30, 2020 and 2019, and the percentage of total revenue that such amount represents for such periods: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Buffalo Wild Wings revenue $ 25,000 $ 1,676,000 $ 176,000 $ 5,891,000 Percent of total revenue 2 % 37 % 4 % 40 % |
Schedule of Revenues Geographic Breakdown | The geographic breakdown of the Company’s revenue for the three and nine months ended September 30, 2020 and 2019 were as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 United States $ 1,420,000 $ 4,420,000 $ 4,390,000 $ 14,144,000 Canada 57,000 160,000 235,000 494,000 Total revenue $ 1,477,000 $ 4,580,000 $ 4,625,000 $ 14,638,000 |
Schedule of Contract Liabilities | The table below shows the balance of contract liabilities as of January 1, 2020 and September 30, 2020, including the change during the period. Deferred Revenue Balance at January 1, 2020 $ 462,000 New performance obligations 198,000 Revenue recognized (540,000 ) Balance at September 30, 2020 120,000 Less non-current portion - Current portion at September 30, 2020 $ 120,000 |
Schedule of Unamortized Installation Cost and Sales Commissions | The table below shows the balance of the unamortized installation cost and sales commissions as of January 1, 2020 and September 30, 2020, including the change during the period. Installation Costs Sales Commissions Total Deferred Costs Balance at January 1, 2020 $ 187,000 $ 87,000 $ 274,000 Incremental costs deferred 83,000 60,000 143,000 Deferred costs recognized (212,000 ) (120,000 ) (332,000 ) Balance at September 30, 2020 58,000 27,000 85,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Shareholders' Equity | |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were used for stock option awards granted during the three and nine months ended September 30, 2019: Three months ended Nine months ended September 30, 2019 September 30, 2019 Weighted average risk-free rate 1.39 % 1.70 % Weighted average volatility 95.11 % 108.83 % Dividend yield 0.00 % 0.00 % Expected term 5.61 years 5.73 years |
Schedule of Restricted Stock and Common Stock Unit Vested | The following table shows the number of RSUs that vested and were settled during the three and nine months ended September 30, 2020 and 2019, as well as the number of shares of common stock issued upon settlement. In lieu of paying cash to satisfy withholding taxes due upon the settlement of vested RSUs, an employee may elect to have shares of common stock withheld that would otherwise be issued at settlement, the value of which is equal to the amount of withholding taxes payable. Three months ended Nine months ended 2020 2019 2020 2019 Restricted stock units vested and settled 19,000 18,000 39,000 29,000 Common stock issued, net of shares withheld 14,000 13,000 28,000 20,000 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Operating Lease Right-of-use Assets and Liabilities | The tables below show the beginning balances of the operating lease right-of-use assets and liabilities as of January 1, 2019 and the ending balances as of September 30, 2020, including the changes during the periods. Operating lease right-of-use assets Operating lease right-of use assets at January 1, 2020 $ 2,101,000 Amortization of operating lease right-of-use assets (161,000 ) Addition of operating lease right-of -use asset 28,000 Write-off of right-of-use asset due to headquarters lease termination (1,913,000 ) Write-off of right-of-use asset related to other lease terminations (50,000 ) Operating lease right-of-use assets at September 30, 2020 $ 5,000 Operating lease liabilities Operating lease liabilities at January 1, 2020 $ 3,300,000 Principal payments on operating lease liabilities (154,000 ) Addition of operating lease liability 28,000 Write-off of lease liability related to headquarters lease termination (3,135,000 ) Write-off of lease liability related to other lease terminations (34,000 ) Operating lease liabilities at September 30, 2020 5,000 Less non-current portion - Current portion at September 30, 2020 $ 5,000 |
Schedule of Financing Lease Right-of-use Assets and Liabilities | The tables below show the beginning balances of the finance lease right-of-use assets and liabilities as of January 1, 2020 and the ending balances as of September 30, 2020, including the changes during the periods. The Company’s finance lease right-of-use assets are included in “Fixed assets, net” on the accompanying consolidated balance sheet. Finance lease right-of-use assets Finance lease right-of use assets at January 1, 2020 $ 41,000 Depreciation of finance lease right-of-use assets (15,000 ) Finance lease right-of-use assets at September 30, 2020 $ 26,000 Finace lease liabilities Finance lease liabilities at January 1, 2020 $ 41,000 Principal payments on finance lease liabilities as of September 30, 2020 (14,000 ) Finance lease liabilities at September 30, 2020 27,000 Less non-current portion (4,000 ) Current portion at September 30, 2020 $ 23,000 |
Schedule of Maturities of Financing Leases | As of September 30, 2020, the Company’s finance leases have a weighted-average remaining lease term of 1.2 years and a weighted-average discount rate of 5.52%. The maturities of the finance lease liabilities are as follows: As of September 30, 2020 2020 7,000 2021 21,000 Total Finance lease payments 28,000 Less imputed interest (1,000 ) Present value of Finance lease liabilities $ 27,000 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table shows the changes in the carrying amount of goodwill for the nine months ended September 30, 2020. Goodwill balance at January 1, 2020 $ 696,000 Activity for the three months ended March 31, 2020 Effects of foreign currency (34,000 ) Goodwill impairment (662,000 ) Goodwill balance at March 31, 2020 and September 30, 2020 $ - |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) | 9 Months Ended |
Sep. 30, 2020Number | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of venues | 1,080 |
Merger Agreement and Asset Pu_2
Merger Agreement and Asset Purchase Agreement (Details Narrative) - USD ($) $ in Thousands | Dec. 02, 2020 | Sep. 18, 2020 | Jan. 31, 2021 | Aug. 12, 2020 |
Subsequent Event [Member] | ||||
Expected additional proceeds from loan | $ 500 | $ 500 | ||
Merger Agreement [Member] | Brooklyn Immunotherapeutics LLC [Member] | Minimum [Member] | ||||
Equity interests exchange | 94.08% | |||
Shares outstanding precentage | 5.92% | |||
Merger Agreement [Member] | Brooklyn Immunotherapeutics LLC [Member] | Maximum [Member] | ||||
Equity interests exchange | 96.74% | |||
Shares outstanding precentage | 3.26% | |||
Asset Purchase Agreement [Member] | eGames.com Holdings LLC [Member] | ||||
Proceed from sale of assets | $ 2,000 | |||
Proceeds from loan | $ 1,000 | |||
Loan amount, description | No assurances can be given that the Company will obtain such $500,000 loan from such affiliate or from any other party. |
Covid-19 Update (Details Narrat
Covid-19 Update (Details Narrative) | Nov. 10, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Customer subscriptions | 100.00% | 100.00% | 100.00% | 100.00% | |
Customers [Member] | |||||
Customer subscriptions | 70.00% | ||||
Customers [Member] | Subsequent Event [Member] | |||||
Customer subscriptions | 11.00% |
Going Concern Uncertainty (Deta
Going Concern Uncertainty (Details Narrative) - USD ($) | Dec. 02, 2020 | Sep. 18, 2020 | Jan. 31, 2021 | Nov. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Apr. 30, 2020 | Apr. 18, 2020 |
Net loss | $ (1,481,000) | $ (351,000) | $ (4,722,000) | $ (754,000) | ||||||
Unrestricted cash | 1,710,000 | 1,710,000 | ||||||||
Debt instrument principal amount | 3,350,100 | 3,350,100 | ||||||||
Unamortized debt issuance costs | 1,000 | 1,000 | ||||||||
Negative working capital | (137,000) | (137,000) | ||||||||
Subsequent Event [Member] | ||||||||||
Expected additional proceeds from loan | $ 500,000 | $ 500,000 | ||||||||
Asset Purchase Agreement [Member] | eGames.com Holdings LLC [Member] | ||||||||||
Proceed from sale of assets | $ 2,000,000 | |||||||||
Loan amount, description | No assurances can be given that the Company will obtain such $500,000 loan from such affiliate or from any other party. | |||||||||
Paycheck Protection Program [Member] | ||||||||||
Debt instrument principal amount | $ 1,625,000 | |||||||||
Paycheck Protection Program [Member] | Subsequent Event [Member] | ||||||||||
Debt instrument principal amount | $ 532,000 | |||||||||
Debt forgiven | 1,093,000 | |||||||||
Loan amount | $ 1,625,100 | |||||||||
Paycheck Protection Program [Member] | Asset Purchase Agreement [Member] | ||||||||||
Debt instrument principal amount | 1,000,000 | 1,000,000 | ||||||||
Avid Bank Term Loan [Member] | Paycheck Protection Program [Member] | ||||||||||
Debt instrument principal amount | $ 725,000 | $ 725,000 | $ 16,251,000 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | |||
Jul. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Restricted cash | $ 51 | |||
Short-term restricted cash | $ 50 | |||
Avidbank [Member] | Minimum [Member] | ||||
Aggregate amount of unrestricted cash to be maintained | $ 200 | |||
Avidbank [Member] | ||||
Line of credit facility | 250 | |||
Reduction in line of credit facility | 50 | |||
Deposit | 250 | |||
Restricted cash | 250 | |||
Short-term restricted cash | $ 50 |
Revenue Recognition - (Details
Revenue Recognition - (Details Narrative) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020USD ($)Number | Sep. 30, 2019Number | Dec. 31, 2019USD ($) | |
Number of venues | Number | 1,080 | ||
Accounts receivable | $ | $ 132 | $ 1,195 | |
Buffalo Wild Wings [Member] | |||
Number of venues | Number | 1,080 | 2,565 | |
Owned percentage | 47.00% | ||
Accounts receivable | $ | $ 112 | $ 158 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregates Material Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total Revenue | $ 1,477 | $ 4,580 | $ 4,625 | $ 14,638 |
Percent of total revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Change in revenue | $ (3,103) | $ (10,013) | ||
Change in revenue percentage | (67.80%) | (68.00%) | ||
Buffalo Wild Wings [Member] | ||||
Total Revenue | $ 25 | $ 1,676 | $ 176 | $ 5,891 |
Percent of total revenue | 2.00% | 37.00% | 4.00% | 40.00% |
Subscription Revenue [Member] | ||||
Total Revenue | $ 1,053 | $ 3,723 | $ 3,779 | $ 11,356 |
Percent of total revenue | 71.30% | 81.00% | 82.00% | 78.00% |
Change in revenue | $ (2,670) | $ (7,577) | ||
Change in revenue percentage | (71.70%) | (67.00%) | ||
Hardware Revenue [Member] | ||||
Total Revenue | $ 379 | $ 11 | $ 421 | $ 811 |
Percent of total revenue | 25.70% | 0.00% | 9.00% | 6.00% |
Change in revenue | $ 368 | $ (390) | ||
Change in revenue percentage | (3345.50%) | (48.00%) | ||
Other Revenue [Member] | ||||
Total Revenue | $ 45 | $ 846 | $ 425 | $ 2,471 |
Percent of total revenue | 3.00% | 19.00% | 9.00% | 17.00% |
Change in revenue | $ (801) | $ (2,046) | ||
Change in revenue percentage | (94.70%) | (83.00%) |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenues Geographic Breakdown (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total Revenue | $ 1,477 | $ 4,580 | $ 4,625 | $ 14,638 |
United States [Member] | ||||
Total Revenue | 1,420 | 4,420 | 4,390 | 14,144 |
Canada [Member] | ||||
Total Revenue | $ 57 | $ 160 | $ 235 | $ 494 |
Revenue Recognition - Schedul_3
Revenue Recognition - Schedule of Contract Liabilities (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue Recognition [Abstract] | |
Balance at January 1, 2020 | $ 462,000 |
New performance obligations | 198,000 |
Revenue recognized | (540,000) |
Balance at September 30, 2020 | 120,000 |
Less non-current portion | |
Current portion | $ 120,000 |
Revenue Recognition - Schedul_4
Revenue Recognition - Schedule of Unamortized Installation Cost and Sales Commissions (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Balance at January 1, 2020 | $ 274 |
Incremental costs deferred | 143 |
Deferred costs recognized | (332) |
Balance at September 30, 2020 | 85 |
Installation Costs [Member] | |
Balance at January 1, 2020 | 187 |
Incremental costs deferred | 83 |
Deferred costs recognized | (212) |
Balance at September 30, 2020 | 58 |
Sales Commissions [Member] | |
Balance at January 1, 2020 | 87 |
Incremental costs deferred | 60 |
Deferred costs recognized | (120) |
Balance at September 30, 2020 | $ 27 |
Basic and Diluted Earnings Pe_2
Basic and Diluted Earnings Per Common Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Antidilutive shares excluded from earnings per share | 239,000 | 249,000 | 167,000 | 249,000 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 17, 2020 | |
Stock options, granted | 1,000 | 2,000 | ||||
Stock options, exercised | ||||||
Share based compensation | $ 53 | $ 63 | $ 135 | $ 172 | ||
Restricted Stock Units [Member] | ||||||
Restricted stock units, granted | 30,000 | 172,000 | 77,000 | |||
Weighted average grant date fair value | $ 2.76 | $ 2.51 | $ 2.95 | |||
Restricted Stock Units [Member] | Former Chief Executive Officer [Member] | ||||||
Stock options, granted | 30,000 | |||||
Outstanding equity interests | 51.00% | |||||
Share based payment vested number of shares | 5,000 | 10,000 | 5,000 | |||
2019 Performance Incentive Plan [Member] | ||||||
Stock option granted terms description | Stock options granted under the 2019 Plan may either be incentive stock options or nonqualified stock options, have a term of up to ten years, and are exercisable at a price per share not less than the fair market value on the date of grant. | |||||
2019 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Stock option to purchase common stock | 98,000 | |||||
2019 Performance Incentive Plan [Member] | Common Stock [Member] | ||||||
Stock option to purchase common stock | 2,000 | |||||
2019 Performance Incentive Plan [Member] | Maximum [Member] | ||||||
Number of option available for grants | 240,000 | 240,000 | ||||
2010 Performance Incentive Plan [Member] | Common Stock [Member] | ||||||
Stock option to purchase common stock | 24,000 | |||||
2010 Performance Incentive Plan [Member] | Restricted Stock Units [Member] | ||||||
Stock option to purchase common stock | 12,000 | |||||
2014 Plan [Member] | ||||||
Stock option to purchase common stock | 85,000 | |||||
Share-based awards expiration date, description | Expires in September 2024. |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Weighted Average Assumptions (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Shareholders' Equity | ||
Weighted average risk-free rate | 1.39% | 1.70% |
Weighted average volatility | 95.11% | 108.83% |
Dividend yield | 0.00% | 0.00% |
Expected term | 5 years 7 months 10 days | 5 years 8 months 23 days |
Shareholders' Equity - Schedu_2
Shareholders' Equity - Schedule of Restricted Stock and Common Stock Unit Vested (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Shareholders' Equity | ||||
Restricted stock units vested and settled | 19,000 | 18,000 | 39,000 | 29,000 |
Common stock issued, net of shares withheld | 14,000 | 13,000 | 28,000 | 20,000 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Dec. 02, 2020 | Apr. 18, 2020 | Apr. 18, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Sep. 30, 2018 | Sep. 30, 2020 | Sep. 18, 2020 | Apr. 30, 2020 | Dec. 31, 2019 |
Term loan amount | $ 725,000 | |||||||||
Unamortized debt issuance costs | 1,000 | |||||||||
Principal amount | $ 3,350,100 | |||||||||
Fertilemind Management LLC [Member] | ||||||||||
Debt description | No assurances can be given that the Company will obtain such $500,000 loan from Fertilemind Management, LLC or from any other party. | |||||||||
Expected additional proceeds from loan | $ 50,000 | |||||||||
Paycheck Protection Program [Member] | ||||||||||
Term loan amount | $ 1,625,000 | |||||||||
Principal amount | $ 1,625,000 | $ 1,625,000 | ||||||||
Debt maturity date | Apr. 18, 2022 | |||||||||
Debt instrument, interest rate | 1.00% | 1.00% | ||||||||
November 2020 [Member] | Paycheck Protection Program [Member] | ||||||||||
Payment of debt | $ 532,000 | |||||||||
Debt forgiven | 1,093,000 | |||||||||
Loan amount | $ 1,625,000 | $ 1,625,000 | ||||||||
Avid Bank Term Loan [Member] | Paycheck Protection Program [Member] | ||||||||||
Principal amount | 725,000 | $ 16,251,000 | ||||||||
Bridge Loan [Member] | Fertilemind Management LLC [Member] | Minimum [Member] | ||||||||||
Debt instrument, interest rate | 8.00% | |||||||||
Bridge Loan [Member] | Fertilemind Management LLC [Member] | Maximum [Member] | ||||||||||
Debt instrument, interest rate | 15.00% | |||||||||
Avidbank [Member] | ||||||||||
Prepayment of debt | $ 150,000 | |||||||||
Accrued interest | $ 350,000 | |||||||||
Debt instrument, reducing the outstanding principal balance | 2,000,000 | |||||||||
Avidbank [Member] | ||||||||||
Debt issuance costs | $ 3,000 | |||||||||
Loan and Security Agreement [Member] | ||||||||||
Unamortized debt issuance costs | $ 1,000 | $ 11,000 | ||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | ||||||||||
Payment of debt | 433,000 | |||||||||
Debt instrument monthly principal payments | $ 83,333 | |||||||||
Debt maturity date description | The maturity date was changed from September 28, 2022 to December 31, 2020 | |||||||||
Debt description | Before entering into Amendment #1, the Company's adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") was required to be at least $1,000,000 for the trailing six-month period as of the last day of each fiscal quarter and the aggregate amount of unrestricted cash it had in deposit accounts or securities accounts maintained with Avidbank must be not less than $2,000,000 at all times. | |||||||||
Accounts receivable percentage | 75.00% | |||||||||
Debt covenant description | Under the ACR covenant, the ratio of (i) the Company's unrestricted cash at Avidbank as of the last day of a calendar month plus 75% of its outstanding accounts receivable accounts that are within 90 days of invoice date to (ii) the outstanding principal balance of the term loan on such day must be no less than 1.25 to 1.00. As of September 30, 2020, the Company was in compliance with both of those covenants. | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | April 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | $ 125,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | May 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 125,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | June 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 125,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | July 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 300,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | August 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 300,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | September 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 300,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | October 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 300,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | November 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 300,000 | |||||||||
Loan and Security Agreement [Member] | Avid Bank Term Loan [Member] | December 2020 [Member] | ||||||||||
Debt instrument monthly principal payments | 125,000 | |||||||||
Loan and Security Agreement [Member] | Avidbank [Member] | ||||||||||
Term of loan | 48 months | |||||||||
Term loan amount | $ 4,000,000 | |||||||||
Debt instrument monthly principal payments | $ 83,000 | |||||||||
Debt issuance costs | 26,000 | |||||||||
Asset Purchase Agreement [Member] | Fertilemind Management LLC [Member] | ||||||||||
Principal amount | $ 1,000,000 | |||||||||
Asset Purchase Agreement [Member] | Paycheck Protection Program [Member] | ||||||||||
Principal amount | $ 1,000,000 | |||||||||
Asset Purchase Agreement [Member] | Bridge Loan [Member] | Fertilemind Management LLC [Member] | ||||||||||
Principal amount | $ 1,000,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Jul. 20, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jan. 02, 2019 |
Operating leases description | The Company has operating leases for its warehouse facility and for equipment under agreements that expire at various dates through 2023. | ||||||||
Financing leases description | The Company also has property held under finance leases that expire at various dates through 2021. | ||||||||
Operating lease liabilities | $ 5 | $ 5 | $ 3,300 | $ 3,458 | |||||
Operating lease right-of-use assets | 5 | 5 | 2,101 | $ 2,336 | |||||
Retained earnings (accumulated deficit) | $ (136,187) | (136,187) | $ (131,457) | ||||||
Future cash obligations | 3,500 | ||||||||
Gain on termination | $ (9) | ||||||||
Operating leases weighted-average remaining lease term | 1 month | 1 month | |||||||
Operating leases weighted-average discount rate lease | 5.00% | 5.00% | |||||||
Financing leases weighted-average remaining lease term | 1 year 2 months 12 days | 1 year 2 months 12 days | |||||||
Financing leases weighted-average discount rate lease | 5.52% | 5.52% | |||||||
Financing lease cost | $ 5 | $ 10 | $ 15 | 41 | |||||
Selling, General and Administrative Expenses [Member] | |||||||||
Operating lease expense | 17 | $ 137 | 281 | $ 407 | |||||
Lease Termination Agreement [Member] | |||||||||
Operating lease liabilities | $ 3,135 | ||||||||
Operating lease right-of-use assets | 1,913 | ||||||||
Security deposits | $ 260 | 260 | 260 | ||||||
Restricted cash | 200 | 200 | |||||||
Rent | 64 | 121 | |||||||
Lessor sale amount | 80 | ||||||||
Dispose of furniture | $ 5 | $ 5 | |||||||
Lessor operating description | In July 2020, the Lessor informed the Company that it needed to dispose of the remaining furniture, and the Company paid the Lessor $5,000 to do so. | ||||||||
Gain on termination | 8 | ||||||||
Unamortized tenant improvement allowance | $ 890 | ||||||||
Loss on the disposal of fixed assets | 282 | ||||||||
Furniture and fixtures | 197 | ||||||||
Other leasehold improvement assets | $ 85 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Revision of Prior Period, Adjustment [Member] | ASU 2016-02 [Member] | |||||||||
Retained earnings (accumulated deficit) | $ 0 | $ 0 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Right-of-use Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease right-of-use assets, Beginning | $ 2,101 | |
Amortization of operating lease right-of-use assets | (161) | $ (217) |
Addition of operating lease right-of -use asset | 28 | |
Write-off of right-of-use asset due to headquarters lease termination | (1,913) | |
Write-off of right-of-use asset related to other lease terminations | (50) | |
Operating lease right-of-use assets, Ending | 5 | |
Operating lease liabilities, Beginning | 3,300 | |
Principal payments on operating lease liabilities | (154) | |
Addition of operating lease liability | 28 | |
Write-off of lease liability related to headquarters lease termination | (3,135) | |
Write-off of lease liability related to other lease terminations | (34) | |
Operating lease liabilities, Ending | 5 | |
Less non-current portion | ||
Current portion | $ 5 |
Leases - Schedule of Financing
Leases - Schedule of Financing Lease Right-of-use Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Finance lease right-of use assets at January 1, 2020 | $ 41 | |
Depreciation of finance lease right-of-use assets | (15) | |
Finance lease right-of-use assets at September 30, 2020 | 26 | |
Finance lease liabilities at January 1, 2020 | 41 | |
Principal payments on finance lease liabilities as of September 30, 2020 | (14) | $ (39) |
Finance lease liabilities at September 30, 2020 | 27 | |
Less non-current portion | (4) | |
Current portion at September 30, 2020 | $ 23 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Financing Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 | $ 7 | |
2021 | 21 | |
Total Finance lease payments | 28 | |
Less imputed interest | (1) | |
Present value of Finance lease liabilities | $ 27 | $ 41 |
Disposition of Site Equipment_2
Disposition of Site Equipment to Be Installed and Fixed Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Impairment charges | ||||
Disposal of business | 3 | |||
Disposal of site equiptment | $ 4 | $ 24 | ||
Wrote off unamortized tenant improvement allowance | $ 890 | |||
Older Equipment [Member] | ||||
Disposal of site equiptment | 229 | |||
Vehicles [Member] | ||||
Leasehold improvement assets | 85 | 85 | ||
Furniture and fixtures | $ 197 | $ 197 |
Software Development Costs (Det
Software Development Costs (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Software Development Costs Abstract | |||||
Amortization of capitalized software development costs | $ 137 | $ 100 | $ 430 | $ 293 | |
Capitalized software development costs | 62 | 62 | $ 177 | ||
Impairment of capitalized software | $ 51 | $ 238 | $ 52 |
Goodwill (Details Narrative)
Goodwill (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Goodwill balance | $ 696 | |||||
Impairment loss on goodwill | $ 662 | $ 662 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill, beginning balance | $ 696 | $ 696 | |||
Effects of Foreign Currency | (34) | (34) | |||
Goodwill impairment | (662) | (662) | |||
Goodwill, ending balance |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Shareholders' Equity | ||
Accumulated foreign currency translation adjustments | $ 241 | $ 268 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | ||
Nov. 30, 2020 | Sep. 30, 2020 | Apr. 18, 2020 | |
Principal amount | $ 3,350,100 | ||
Paycheck Protection Program [Member] | |||
Principal amount | $ 1,625,000 | ||
Subsequent Event [Member] | Paycheck Protection Program [Member] | |||
Debt forgiven | $ 1,093,000 | ||
Loan amount | 1,625,100 | ||
Principal amount | $ 532,000 |