Current Report Filing (8-k)
October 01 2018 - 8:32AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): September 28, 2018
NTN
BUZZTIME, INC.
(Exact
name of Registrant as Specified in Charter)
Delaware
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001-11460
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31-1103425
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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2231
Rutherford Rd, Suite 200
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Carlsbad,
California
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92008
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(760)
438-7400
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act
of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (
see
General Instruction A.2. below):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive Agreement.
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On
September 28, 2018, we entered into a loan and security agreement with AvidBank. The following is a summary of the material terms
of that agreement:
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AvidBank
will loan us $4,000,000 as a one-time 48-month term loan, all of which we must use to pay-off the $4,050,000 of principal
we borrowed from East West Bank (“EWB”). We will use our cash on hand to pay the remaining $50,000 we borrowed
from EWB plus accrued and unpaid interest.
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We
must make monthly principal payments of $83,333.33 plus accrued and unpaid interest on the last business day of each month
commencing on October 31, 2018 and through the loan’s maturing date, September 30, 2022.
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Other
than during the continuance of an event of default, the loan will bear interest at a variable rate per annum equal to the
prime rate as set forth in
The Wall Street Journal
plus 1.75%.
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We
granted and pledged to AvidBank a first-priority security interest in all our existing and future personal property.
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We
must comply with these financial covenants:
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o
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Our
EBITDA (as defined below) must be at least $1,000,000 for the trailing six month period as of the last day of each fiscal
quarter. “EBITDA” means (a) net profit (or loss), after provision for taxes, plus (b) interest expense, plus (c)
to the extent deducted in the calculation of net profit (or loss), depreciation expense and amortization expense, plus (d)
income tax expense, plus (e) to the extent approved by AvidBank, other noncash expenses and charges, other onetime charges,
and any losses arising from the sale, exchange, transfer or other disposition of assets not in the ordinary course of business.
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o
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The
aggregate amount of unrestricted cash we have in deposit accounts or securities accounts maintained with AvidBank must be
not less than $2,000,000 at all times.
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Subject
to customary exceptions, we are prohibited from borrowing additional indebtedness.
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We
paid $20,000 to AvidBank as a facility fee upon entering into the loan and security agreement.
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If
we prepay the loan before September 28, 2019, we must pay a prepayment fee of 1.75% of the principal amount repaid, and if
we prepay the loan after such date but before September 28, 2020, we must pay a prepayment fee of 1.00% of the principal amount
prepaid. There is no prepayment fee if we prepay the loan after September 28, 2020.
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The
loan and security agreement includes customary representations, warranties and covenants (affirmative and negative), including
restrictive covenants that, subject to specified exceptions, limit our ability to: dispose of our business or property; merge
or consolidate with or into any other business organization; incur or prepay additional indebtedness; create or incur any liens
on our property; declare or pay any dividend or make a distribution on any class of our stock; or enter specified material transactions
with our affiliates.
The
loan and security agreement also includes customary events of default, including: payment defaults; breaches of covenants following
any applicable cure period; material breaches of representations or warranties; the occurrence of a material adverse effect; events
relating to bankruptcy or insolvency; and the occurrence of an unsatisfied material judgment against us. Upon the occurrence of
an event of default, AvidBank may declare all outstanding obligations immediately due and payable, do such acts as it considers
necessary or reasonable to protect its security interest in the collateral, and take such other actions as are set forth in the
loan and security agreement.
The
foregoing summary description of the loan and security agreement does not purport to be complete and is qualified in its entirety
by reference to the loan and security agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by
reference.
Item
1.02
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Termination
of a Material Definitive Agreement
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The
information in Item 1.01 is incorporated into this Item 1.02 by reference. On September 28, 2018 the amended and restated loan
and security agreement we entered into with EWB on November 29, 2017, as amended on March 12, 2018, was terminated. Under that
agreement EWB loaned us $4,500,000 as a one-time 36-month term loan. We were required to payments on the loan on the last calendar
day of each month commencing on December 31, 2017 and through its maturity date, November 29, 2020. Payments were interest only
until the payment due on June 30, 2018, at which time payments became principal plus interest. We granted a first-priority security
interest to EWB under that agreement in all our existing and future personal property, which security interest was terminated
upon repayment of the amounts owed thereunder.
The
foregoing summary description of the EWB amended and restated loan and security agreement does not purport to be complete and
is qualified in its entirety by reference to the full text of that agreement, which was filed as an exhibit to our Form 8-K filed
with the U.S Securities and Exchange Commission (the “SEC”) on November 30, 2017 and to the first amendment to amended
and restated loan and security agreement we entered into with EWB as of March 12, 2018, which was filed as an exhibit to our Form
10-Q filed with the SEC on May 11, 2018.
Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
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The
information set forth in Item 1.01 above is incorporated into this Item 2.03 by reference.
Item
9.01.
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Financial
Statements and Exhibits.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
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NTN
BUZZTIME, INC.
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BY:
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/s/
Allen Wolff
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Allen
Wolff
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Chief
Financial Officer
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Date:
October 1, 2018
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