CARLSBAD, Calif., Nov. 13, 2020 /PRNewswire/ -- NTN Buzztime,
Inc. (NYSE American: NTN), reported financial results for the
third quarter ended September 30,
2020.
"Buzztime is working diligently toward closing two
transformative transactions," said Allen
Wolff, CEO of NTN Buzztime. "Under the terms of the
previously announced asset purchase agreement with eGames.com
Holdings, LLC, we plan to sell all our assets related to our game
network to eGames.com. Our goal is to preserve our compelling
in-venue experience that engages patrons for Buzztime customer
venues and safeguard our large and loyal player and customer base
while monetizing our assets. The asset sale will strengthening our
balance sheet and improve our financial position for the previously
announced proposed merger with Brooklyn Immunotherapeutics LLC,
which is advancing clinical development of cytokine-based therapy
to enable the immune system to attack certain types of cancer
cells. We believe that the proposed merger will benefit both
investors of Brooklyn and
stockholders of NTN Buzztime. We expect both transactions to close
simultaneously in early 2021, subject to Buzztime's stockholders
approving both proposed transactions, the beneficial holders of
Brooklyn's Class A membership
units approving the proposed merger, and the satisfaction of
other customary closing conditions."
Financial Results
For the third quarter 2020, total
revenues were $1.5 million, up
$0.7 million (or 96%) sequentially as
compared to the second quarter of 2020, but down from $4.6 million in the third quarter of 2019. The
decrease reflects reduced site count, primarily as a result of the
termination of our relationships with Buffalo Wild Wings
corporate-owned restaurants and its franchisees in November 2019, and the impact of the COVID-19
pandemic on the company's business, as a substantial number of the
bars and restaurants that subscribe to the network suspended their
subscriptions for at least a portion of the current year period.
Third quarter 2020 operating expense decreased to $2.9 million, from $4.9
million in the third quarter of 2019, reflecting corporate
restructuring and cost reductions. Third quarter 2020 net loss
attributable to common shareholders was $1.5
million, or $0.50 per share,
compared to $351,000, or $0.12 per share, in the prior year
quarter.
Liquidity
Cash, cash equivalents and unrestricted
cash was $1.7 million at September 30, 2020, compared to $3.2 million at December
31, 2019. In April 2020, the
company received $1.6 million under
the Paycheck Protection Program of the CARES Act. In
November 2020, the Small Business
Administration approved the company's application to forgive
$1.1 million of such loan, leaving a
note balance of $0.5 million. Also,
in September 2020, the company
received a bridge loan of $1.0
million from an affiliate of eGames.com in connection with
entering into the asset purchase agreement with eGames.com.
Outstanding amounts under the bridge loan, if the asset sale
closes, will be applied to the purchase price of the asset sale
upon closing. At September 30, 2020,
the principal balance of the term loan with Avidbank was
$725,000, and the company had
negative working capital of $137,000.
For additional information regarding the company's liquidity and
capital resources, please see the quarterly report on Form 10-Q
expected to be filed with the SEC later today.
About Buzztime:
Buzztime (NYSE American: NTN) delivers
interactive entertainment and innovative technology that helps its
customers acquire, engage and retain its patrons. Most frequently
used in bars and restaurants in North
America, the Buzztime tablets, mobile app and technology
offer engaging solutions to establishments that have guests who
experience dwell time, such as casinos, senior living, and more.
Casual dining venues license Buzztime's customizable solution to
differentiate themselves via competitive fun by offering guests
trivia, card, sports and arcade games. Buzztime's platform creates
connections among the players and venues and amplifies guests'
positive experiences. Buzztime's in-venue TV network creates
one of the largest digital out of home ad audiences in the US and
Canada. Buzztime hardware
solutions leverages the company's experience manufacturing durable
tablets and charging systems, enabling a diverse group of
businesses including corrections, point-of-sale and loyalty with
product implementation. Buzztime games have also been
recently licensed by other businesses serving other markets.
For more information, please
visit http://www.buzztime.com or follow us
on Facebook or Twitter@buzztime.
Additional Information and Where to Find It
In
connection with the proposed merger and asset sale, Buzztime filed
relevant materials with the SEC, including a registration statement
on Form S-4, that will serve as a proxy statement and prospectus of
Buzztime and a consent solicitation statement for the beneficial
holders of Brooklyn's Class A
membership units, and will be mailed or otherwise disseminated to
Buzztime stockholders and to the beneficial holders of Brooklyn's Class A membership units if and
when it becomes available. INVESTORS AND SECURITY HOLDERS OF
BUZZTIME AND BROOKLYN ARE URGED TO
READ THESE MATERIALS CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT BUZZTIME, BROOKLYN, THE PROPOSED MERGER AND ASSET SALE,
AND RELATED MATTERS. The proxy statement/prospectus/consent
solicitation statement and other relevant materials (when they
become available) and any other documents filed by Buzztime with
the SEC, may be obtained free of charge at the SEC website at
www.sec.gov. In addition, investors and security holders may obtain
free copies of the documents filed with the SEC by Buzztime by
directing a written request to: NTN Buzztime, Inc, 6965 El Camino
Real, Suite 105-Box 517, Carlsbad,
California 92009. Investors and security holders are urged
to read the proxy statement/prospectus/consent solicitation
statement and the other relevant materials when they become
available before making any voting or investment decision with
respect to the proposed merger and asset sale.
Participants in the Solicitation
Buzztime and its
directors, executive officers and certain other members of
management and employees, Brooklyn
and its managers and officers, and eGames.com and its managers and
officers may, under SEC rules, be deemed to be participants in the
solicitation of proxies from the stockholders of Buzztime with
respect to the proposed merger and asset sale and related matters.
Information about the directors and executive officers of Buzztime,
including their ownership of shares of common stock is set forth in
Buzztime's Annual Report on Form 10-K for the year ended
December 31, 2019 and Amendment No. 1
thereto, which were filed with the SEC on March 19, 2020 and April
27, 2020, respectively. Additional information regarding the
persons or entities who may be deemed participants in the
solicitation of proxies from Buzztime stockholders, including a
description of their interests in the proposed merger and asset
sale, by security holdings or otherwise, are included in the joint
proxy statement/prospectus/consent solicitation statement referred
to above and other relevant documents to be filed with the SEC when
they become available. As described above, these documents will be
available free of charge at the SEC's website or by directing a
written request to Buzztime. Neither the managers or officers of
Brooklyn nor the managers or
officers of eGames.com currently hold any interests, by security
holdings or otherwise, in Buzztime.
Forward-Looking Statements
This press
release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are any statements that are not statements of historical
fact and may be identified by terminology such as "expect,"
"intend," "plan," "believe," "anticipate," "may," "will," "would,"
"should," "could," "contemplate," "estimate," "predict,"
"potential" or "continue," or the negative of these terms or other
similar words. These forward-looking statements include, but are
not limited to, statements concerning: the completion of the
proposed asset sale and merger and the anticipated timing thereof,
the benefits of the proposed asset sale and merger for Buzztime's
stockholders and other stakeholders. Forward-looking statements are
based on current beliefs and assumptions that are subject to risks
and uncertainties and are not guarantees of future
performance.
Actual results could differ materially from those stated or
implied in any forward-looking statement as a result of various
factors, including, but not limited to: (i) risks that the
conditions to the closing of the proposed merger and/or asset sale
are not satisfied, including the failure of Buzztime and
Brooklyn to timely obtain the
requisite stockholder and member approvals for the merger and/or
asset sale and related matters, or to meet the net cash and
capitalization requirements under the merger agreement, as
applicable; (ii) uncertainties as to the timing of the consummation
of the proposed merger and asset sale and the ability of each party
to consummate the proposed merger and asset sale; (iii) risks
related to Buzztime's and Brooklyn's ability to manage their respective
operating expenses and their expenses associated with the proposed
merger and asset sale, as applicable, pending closing; (iv)
uncertainties related to the impact of the COVID-19 pandemic on the
business and financial condition of Buzztime and the ability of
Buzztime and Brooklyn to
consummate the merger and Buzztime and eGames.com to consummate the
asset sale; (v) Buzztime's ability to continue to operate as a
going concern if the proposed merger or asset sale is not
consummated in a timely manner, or at all; (vi) the outcome of any
legal proceedings that have been instituted against Buzztime,
Brooklyn or others related to the
merger agreement and the asset purchase agreement; (vii) the
occurrence of any event, change or other circumstance or condition
that could give rise to the termination of either or both of those
agreements; (viii) potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the proposed merger or asset sale; and (ix) those
risks and uncertainties discussed in Buzztime's reports filed with
the SEC, including its most recent Annual Report on Form 10-K, its
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as other documents that may be filed by Buzztime from time to
time with the SEC available at www.sec.gov.
You should not rely upon forward-looking statements as
predictions of future events. Buzztime cannot assure you that the
events and circumstances reflected in the forward-looking
statements will be achieved or occur, and actual results could
differ materially from those projected in the forward-looking
statements. The forward-looking statements made in this
communication speak only as of the date on which they were made.
Buzztime does not undertake any obligation to update the
forward-looking statements contained herein to reflect events that
occur or circumstances that exist after the date hereof, except as
may be required by applicable law or regulation.
IR AGENCY CONTACT: Kirsten
Chapman, LHA Investor Relations, buzztime@lhai.com
415-433-3777
NTN BUZZTIME, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except par value
amount)
|
|
ASSETS
|
September
30,
2020
|
|
December
31,
2019
|
Current
Assets:
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
1,710
|
|
$
3,209
|
Restricted
cash
|
--
|
|
50
|
Accounts receivable,
net
|
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
|
1,420
|
|
1,915
|
Deferred
costs
|
85
|
|
274
|
Goodwill
|
--
|
|
696
|
Other
assets
|
62
|
|
97
|
|
|
|
|
Total
assets
|
$
5,054
|
|
$
14,125
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
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
|
1,724
|
|
2,739
|
Current portion of
obligations under operating leases
|
5
|
|
409
|
Current portion of
obligations under financing 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
|
|
--
|
Obligations under
operating leases
|
--
|
|
2,891
|
Obligations under
financing leases
|
4
|
|
20
|
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; 156 shares 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
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE
LOSS (unaudited) (In thousands, except per
share data)
|
|
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
1,053
|
|
$
3,723
|
|
$
3,779
|
|
$
11,356
|
Hardware
revenue
|
379
|
|
11
|
|
421
|
|
811
|
Other
revenue
|
45
|
|
846
|
|
425
|
|
2,471
|
Total
revenues
|
1,477
|
|
4,580
|
|
4,625
|
|
14,638
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
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 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)
|
Income tax benefit
(provision)
|
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
translations adjustment
|
1
|
|
(18)
|
|
(27)
|
|
47
|
Total comprehensive
loss
|
$
(1,480)
|
|
$
(396)
|
|
$
(4,749)
|
|
$
(707)
|
|
|
|
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited) (In
thousands)
|
|
|
Nine months
ended
September
30,
|
|
2020
|
|
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 leases
|
9
|
|
--
|
Loss (gain) from the
disposition or sale of assets
|
511
|
|
(5)
|
Loss from impairment
of capitalized software
|
238
|
|
52
|
Loss from 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 expenses
|
(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 sale
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 and OpinoNation
|
1,226
|
|
--
|
Proceeds on long-term
debt
|
2,625
|
|
--
|
Payment on long-term
debt
|
(2,025)
|
|
(750)
|
Debt issuance costs on
long-term debt
|
(3)
|
|
--
|
Principal payments on
financing leases
|
(14)
|
|
(39)
|
Payment of preferred
stockholder dividends
|
(8)
|
|
(8)
|
Payroll taxes 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
and cash equivalents
|
(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
|
|
$
2,984
|
|
|
|
|
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SOURCE NTN Buzztime, Inc.