Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 07, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | NTN BUZZTIME INC | ||
Entity Central Index Key | 748,592 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 12,100 | ||
Entity Common Stock, Shares Outstanding | 2,260,668 | ||
Trading Symbol | NTN | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 5,686 | $ 3,223 |
Accounts receivable, net of allowances of $376 and $266, respectively | 928 | 919 |
Site equipment to be installed | 2,998 | 3,990 |
Prepaid expenses and other current assets | 1,050 | 978 |
Total current assets | 10,662 | 9,110 |
Fixed assets, net (Note 3) | 3,101 | 3,915 |
Software development costs, net of accumulated amortization of $2,641 and $2,381, respectively | 970 | 943 |
Deferred costs | 904 | 1,328 |
Goodwill (Note 4) | 937 | 909 |
Intangible assets, net (Note 4) | 29 | 79 |
Other assets | 92 | 124 |
Total assets | 16,695 | 16,408 |
Current Liabilities: | ||
Accounts payable | 247 | 211 |
Accrued compensation (Note 6) | 1,060 | 1,024 |
Accrued expenses | 697 | 670 |
Sales taxes payable | 142 | 192 |
Income taxes payable | 4 | 22 |
Current portion of long-term debt (Note 11) | 2,988 | 1,072 |
Current portion of obligations under capital leases (Note 12) | 155 | 78 |
Current portion of deferred revenue | 1,059 | 1,214 |
Other current liabilities | 291 | 639 |
Total current liabilities | 6,643 | 5,122 |
Long-term debt (Note 11) | 5,123 | 6,366 |
Long-term obligations under capital leases (Note 12) | 259 | 138 |
Long-term deferred revenue | 219 | 393 |
Deferred rent | 371 | 541 |
Other liabilities | 12 | 0 |
Total liabilities | 12,627 | 12,560 |
Shareholders' Equity: | ||
Series A 10% cumulative convertible preferred stock, $.005 par value, $156 liquidation preference, 5,000 shares authorized; 156 shares issued and outstanding at December 31, 2016 and 2015 | 1 | 1 |
Common stock, $.005 par value, 168,000 shares authorized at December 31, 2016 and 2015; 2,261 and 1,849 shares issued and outstanding at December 31, 2016 and 2015, respectively (Note 9) | 11 | 9 |
Treasury stock, at cost, 10 shares at December 31, 2016 and 2015 | (456) | (456) |
Additional paid-in capital | 132,315 | 129,209 |
Accumulated deficit | (128,026) | (125,087) |
Accumulated other comprehensive income (Note 14) | 223 | 172 |
Total shareholders' equity | 4,068 | 3,848 |
Total liabilities and shareholders' equity | $ 16,695 | $ 16,408 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts - accounts receivable | $ 376 | $ 266 |
Software accumulated amortization | $ 2,641 | $ 2,381 |
Series A cumulative convertible preferred stock, percentage | 10.00% | 10.00% |
Preferred Stock Series A par value per share | $ .005 | $ .005 |
Preferred Stock Series A liquidation preference | $ 156 | $ 156 |
Preferred Stock Series A shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock Series A shares outstanding | 156,000 | 156,000 |
Preferred stock Series A shares issued | 156,000 | 156,000 |
Common stock par value | $ 0.005 | $ 0.005 |
Common stock shares authorized | 168,000,000 | 168,000,000 |
Common stock shares issued | 2,261,000 | 1,849,000 |
Common stock shares outstanding | 2,261,000 | 1,849,000 |
Treasury stock shares | 10,000 | 10,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | ||
Subscription revenue | $ 17,463 | $ 17,062 |
Sales-type lease revenue | 1,266 | 4,202 |
Other revenue | 3,583 | 3,255 |
Total revenue | 22,312 | 24,519 |
Operating expenses: | ||
Direct operating costs (includes depreciation and amortization of $2,465 and $2,615, respectively) | 7,710 | 12,570 |
Selling, general and administrative | 16,458 | 18,060 |
Impairment of capitalized software | 295 | |
Depreciation and amortization (excluding depreciation and amortization included in direct operating costs) | 422 | 489 |
Total operating expenses | 24,590 | 31,414 |
Operating loss | (2,278) | (6,895) |
Other (expense) income: | ||
Interest income | 3 | |
Interest expense | (576) | (484) |
Other (expense) income | (31) | 162 |
Total other expense, net | (607) | (319) |
Loss before income taxes | (2,885) | (7,214) |
Provision for income taxes | (38) | (12) |
Net loss | $ (2,923) | $ (7,226) |
Net loss per common share - basic and diluted | $ (1.54) | $ (3.93) |
Weighted average shares outstanding - basic and diluted | 1,903,000 | 1,838,000 |
Comprehensive loss | ||
Net loss | $ (2,923) | $ (7,226) |
Foreign currency translation adjustment (Note 14) | 51 | (307) |
Total comprehensive loss | $ (2,872) | $ (7,533) |
Consolidated Statements of Ope5
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Depreciation and amortization - part of direct operating costs | $ 2,465 | $ 2,615 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Series A Cumulative Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Balance at Dec. 31, 2014 | $ 1 | $ 9 | $ 128,736 | $ (456) | $ (117,845) | $ 479 | $ 10,924 |
Balance, shares at Dec. 31, 2014 | 156,000 | 1,847,000 | |||||
Foreign currency translation adjustment | (307) | (307) | |||||
Net loss | (7,226) | (7,226) | |||||
Adjustment to common stock in connection with reverse/forward stock split | |||||||
Issuance of common stock upon exercise of stock options | 1 | ||||||
Issuance of common stock upon exercise of stock options, shares | 1,000 | ||||||
Issuance of common stock in lieu of payment to consultant | 1 | 1 | |||||
Issuance of stock to Series A preferred stockholders in lieu of cash dividends | 16 | (16) | |||||
Issuance of stock to Series A preferred stockholders in lieu of cash dividends, shares | 1,000 | ||||||
Non-cash stock based compensation | 456 | 456 | |||||
Balance at Dec. 31, 2015 | $ 1 | $ 9 | 129,209 | (456) | (125,087) | 172 | 3,848 |
Balance, shares at Dec. 31, 2015 | 156,000 | 1,849,000 | |||||
Foreign currency translation adjustment | 51 | 51 | |||||
Net loss | (2,923) | (2,923) | |||||
Adjustment to common stock in connection with reverse/forward stock split | (3) | 3 | |||||
Net proceeds from issuance of common stock related to registered direct offering | $ 2 | 2,690 | 2,692 | ||||
Net proceeds from issuance of common stock related to registered direct offering, shares | 412,000 | ||||||
Issuance of common stock upon exercise of stock options | |||||||
Issuance of stock to Series A preferred stockholders in lieu of cash dividends | (16) | (16) | |||||
Issuance of stock to Series A preferred stockholders in lieu of cash dividends, shares | |||||||
Non-cash stock based compensation | 419 | 419 | |||||
Balance at Dec. 31, 2016 | $ 1 | $ 11 | $ 132,315 | $ (456) | $ (128,026) | $ 223 | $ 4,068 |
Balance, shares at Dec. 31, 2016 | 156,000 | 2,261,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows provided by (used in) operating activities: | ||
Net loss | $ (2,923) | $ (7,226) |
Adjustments to reconcile net loss to net cash provide by (used in) operating activities: | ||
Depreciation and amortization | 2,887 | 3,104 |
Provision for doubtful accounts | 74 | 12 |
Excess and obsolete site equipment to be installed expense | 63 | 797 |
Transfer of fixed assets to sales-type lease | 5 | 0 |
Stock-based compensation | 419 | 456 |
Amortization of debit issuance costs | 36 | 18 |
Issuance of common stock to consultant in lieu of cash payment | 0 | 1 |
Impairment of capitalized software | 295 | |
Loss from disposition of equipment and capitalized software | 33 | 28 |
Changes in assets and liabilities: | ||
Accounts receivable | (83) | 1,250 |
Site equipment to be installed | (217) | (1,394) |
Prepaid expenses and other assets | 121 | (235) |
Accounts payable and accrued liabilities | 47 | (372) |
Income taxes payable | (19) | (72) |
Deferred costs | 425 | (241) |
Deferred revenue | (327) | (608) |
Deferred rent | (170) | (152) |
Other liabilities | (348) | 159 |
Net cash provided by (used in) operating activities | 23 | (4,180) |
Cash flows used in investing activities: | ||
Capital expenditures | (427) | (991) |
Software development expenditures | (413) | (641) |
Proceeds from the sales of equipment and other assets | 9 | |
Net cash used in investing activities | (840) | (1,623) |
Cash flows provided by financing activities: | ||
Net proceeds from issuance of common stock related to registered direct offering | 2,692 | |
Proceeds from long-term debt | 2,502 | 6,737 |
Payments on long-term debt | (1,829) | (4,618) |
Debt issuance costs on long-term debt | (9) | (81) |
Principal payments on capital lease | (81) | (58) |
Adjustments to common stock in connection with reverse/forward stock split | (3) | |
Dividends paid to Series A preferred shareholders | (16) | |
Net cash provided by financing activities | 3,256 | 1,980 |
Net increase (decrease) in cash and cash equivalents | 2,439 | (3,823) |
Effect of exchange rate on cash | 24 | (139) |
Cash and cash equivalents at beginning of year | 3,223 | 7,185 |
Cash and cash equivalents at end of year | 5,686 | 3,223 |
Supplemental disclosures of cash flow information: Cash paid during the period for: | ||
Interest | 492 | 330 |
Income taxes | 47 | 69 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Site equipment transferred to fixed assets | 1,220 | 1,354 |
Site equipment transferred to other current assets | 176 | |
Equipment acquired under capital lease | 279 | 215 |
Issuance of common stock in lieu of payment of dividends | $ 16 |
Organization of Company
Organization of Company | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization of Company | 1. Organization of Company 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 dining technology to bars and restaurants in North America. Customers license the Company’s customizable solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and single player games, nationwide competitions, and by offering self-service dining features including dynamic menus, touchscreen ordering and secure payment. The Company’s platform can improve operating efficiencies, create connections among the players and venues and amplify guests’ positive experiences. Built on an extended network platform, the Company’s interactive entertainment system has historically allowed multiple players to interact at the venue, and now also enables competition between venues, referred to as massively multiplayer gaming. The Company’s current platform, which it refers to as Buzztime Entertainment On Demand, or BEOND, was first introduced as a pilot program in December 2012, was expanded commercially during 2013, and the expansion was scaled during 2014. The Company continues to enhance its network architecture and the BEOND tablet platform and player engagement paradigms. The Company also continues to support its legacy network product line, which it refers to as Classic. The Company currently generates revenue by charging subscription fees for its service to its network subscribers, by leasing equipment (including tablets used in its BEOND tablet platform and the cases and charging trays for the tablets) to certain network subscribers, by hosting live trivia events, and by selling advertising aired on in-venue screens and as part of customized games. In 2014, the Company began offering pay-to-play single player games to certain customers. During the second quarter of 2015, the Company made a strategic change in its premium content model by making single player games available on both a free-to-consumer (in exchange for an increased subscription fee) and pay-to-play basis. This change required the Company to delay the general availability of pay-to-play games as it retooled its content, workflow and positioning. As a result, during 2015, the Company generated additional subscription fee revenue from those venues offering free-to-consumer single player games. The Company began rolling out the new pay-to-play single player games during the second quarter of 2016. At December 31, 2016, 2,814 venues in the U.S. and Canada subscribed to the Company’s interactive entertainment network, of which approximately 71% were using the BEOND tablet platform. Basis of Accounting Presentation The consolidated financial statements include the accounts of NTN Buzztime, Inc. and its wholly-owned subsidiaries: IWN, Inc., IWN, L.P., Buzztime Entertainment, Inc., NTN Wireless Communications, Inc., NTN Software Solutions, Inc., NTN Canada, Inc., and NTN Buzztime, Ltd., all of which, other than NTN Canada, Inc., are dormant subsidiaries. Unless otherwise indicated, references to the Company include its consolidated subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Estimates | 2. Summary of Significant Accounting Policies and Estimates Consolidation Use of Estimates Cash and Cash Equivalents Statement of Cash Flows Capital Resources The Company has a financing arrangement with a lender under which the Company may request funds to finance the purchase of certain capital equipment. The lender determines whether to extend such funds on a case-by-case basis, taking into account such factors as the lender considers relevant, including the amount outstanding under this financing arrangement. Through December 31, 2016, the Company borrowed $9,690,000, which is recorded in short-term and long-term debt on the accompanying consolidated balance sheet. As of December 31, 2016, $1,611,000 remained outstanding. The Company currently does not expect the lender to lend any additional funds under this financing arrangement. In connection with preparing the financial statement as of and for the year ended December 31, 2016, the Company evaluated whether there are conditions and events, considered in the aggregate, that are known and reasonably knowable that would raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. As a result of such evaluation, the Company believes it will have sufficient cash to meet its operating cash requirements and to fulfill its debt obligations for at least the next twelve months from the issuance date of these financial statements. In order to increase the likelihood that the Company will be able to successfully execute its operating and strategic plan and to position the Company to better take advantage of market opportunities for growth, the Company is continuing to evaluate additional financing alternatives, including additional equity financings and alternative sources of debt. If the Company’s cash and cash equivalents are not sufficient to meet future cash requirements, the Company may be required to reduce planned capital expenses, reduce operational cash uses or raise capital on terms that are not as favorable to the Company as they otherwise might be. Any actions the Company may undertake to reduce planned capital purchases or reduce expenses may be insufficient to cover shortfalls in available funds. If the Company requires additional capital, it may be unable to secure additional financing on terms that are acceptable to the Company, or at all. Allowance for Doubtful Accounts Site Equipment to be Installed – The BEOND tablet platform equipment remains in site equipment to be installed until it is installed in customer sites. For BEOND 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 BEOND tablet platform customers, the cost of the equipment is reclassified to fixed assets upon installation and depreciated over its useful life. Fixed Assets The Company incurs a relatively significant level of depreciation expense in relation to its operating income. The amount of depreciation expense in any fiscal year is largely related to the equipment located at the Company’s customers’ sites that are not under sales-type lease arrangements. Such equipment includes the Classic Playmaker, BEOND tablet, other associated electronics and the computers located at customer’s sites (collectively, “Site Equipment”). The components within Site Equipment are depreciated over two to five years based on the shorter of the contractual capital lease period or the estimated useful life, which considers anticipated technology changes. If the Company’s Site Equipment turns out to have longer lives, on average, than estimated, then its depreciation expense would be significantly reduced in those future periods. Conversely, if the Site Equipment turns out to have shorter lives, on average, than estimated, then its depreciation expense would be significantly increased in those future periods. Goodwill and Other Intangible Assets ASC No. 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC No. 360, Property, Plant and Equipment Revenue Recognition Revenue Recognition In addition, the direct expenses of the installation, commissions, setup and training are deferred and amortized on a straight-line basis and are classified as deferred costs on the accompanying consolidated balance sheets. For these direct expenses that are associated with the Classic product, the amortization period approximates the estimated life of the customer relationship for deferred direct costs that are of an amount that is less than or equal to the deferred revenue for the related contract. For costs that exceed the deferred revenue, the amortization period is the initial term of the contract, in accordance with ASC No. 605, which is generally one year. For direct costs associated with the BEOND tablet platform, the amortization period approximates the life of the contract. The Company evaluated its lease transactions in accordance with ASC No. 840, Leases, ● The lease transfers ownership of the property to the lessee by the end of the lease term; ● There is a bargain purchase option; ● The lease term is equal to or greater than 75% of the economic life of the equipment; or ● The present value of the minimum payments is equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. Because the Company’s current leasing agreement meets at least one of the criteria above because collectability of the minimum lease payments is reasonably assured and because there are no important uncertainties surrounding the amount of reimbursable costs yet to be incurred under the lease, the Company classifies the lease as a sales-type lease, and it recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed and determinable and collectability is reasonably assured. The Company recognizes revenues from selling advertising, from hosting live trivia events and from consumers who pay to play the Company’s premium content when all material services or conditions relating to the transaction have been performed or satisfied. The Company has arrangements with certain third parties to share in revenue generated from some of its products and services. The Company evaluates recognition of the associated revenue in accordance with ASC No. 605-45, Revenue Recognition, Principal Agent Considerations. Software Development Costs The Company performed its annual review of software development projects for the year ended December 31, 2016 and determined there were no indications of impairment for that period. During its annual review for the year ended December 31, 2015, the Company determined to abandon various software development projects that it concluded were no longer a current strategic fit or for which the Company 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, an impairment of $295,000 was recognized for the year ended December 31, 2015, which is separately stated on the Company’s consolidated statements of operations. Advertising Costs – Shipping and Handling Costs Stock-Based Compensation , Compensation – Stock Compensation Equity – Equity-Based Payments to Non-Employees. Income Taxes ASC No. 740, Income Taxes, Earnings Per Share Segment Reporting Segment Reporting Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (ASU) No 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In November 2016, the FASB issued Accounting Standards Update (ASU) No 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In October 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | 3. Fixed Assets Fixed assets are recorded at cost and consist of the following at December 31, 2016 and 2015: December 31, 2016 2015 Broadcast equipment $ 10,671,000 $ 13,001,000 Machinery and equipment 2,523,000 2,479,000 Furniture and fixtures 271,000 265,000 Leasehold improvements 610,000 610,000 Other equipment 15,000 16,000 14,090,000 16,371,000 Accumulated depreciation (10,989,000 ) (12,456,000 ) Total $ 3,101,000 $ 3,915,000 Depreciation expense totaled $2,451,000 and $2,061,000 for the years ended December 31, 2016 and 2015, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets The Company’s goodwill balance of $937,000 and $909,000 as of December 31, 2016 and 2015, respectively, relates to the purchase of NTN Canada, Inc. Fluctuations in the amount of goodwill shown on the accompanying balance sheets are due to changes in the foreign currency exchange rates used when translating NTN Canada, Inc.’s financial statement from Canadian dollars to US dollars during consolidation. The Company performed its annual assessment of goodwill impairment for NTN Canada as of December 31, 2016 and determined there were no indications of impairment. The Company performed its annual review of its other intangible assets as of December 31, 2016 and 2015 and determined that there were no indications of impairment for either of the years ended on those dates. The weighted average remaining useful life for all intangible assets is 0.6 years as of December 31, 2016. Amortization expense relating to all intangible assets totaled $50,000 for each of the years ended December 31, 2016 and 2015. As of December 31, 2016 and 2015, intangible assets with estimable lives were comprised of the following: December 31, 2016 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value Acquired technology $ 150,000 $ (121,000 ) $ 29,000 $ 150,000 $ (71,000 ) $ 79,000 Acquired customer lists 435,000 (435,000 ) - 435,000 (435,000 ) - Trivia database 332,000 (332,000 ) - 332,000 (332,000 ) - Trademarks and trademark licenses 67,000 (67,000 ) - 67,000 (67,000 ) - Total $ 984,000 $ (955,000 ) $ 29,000 $ 984,000 $ (905,000 ) $ 79,000 The estimated aggregate amortization expense relating to the Company’s intangible assets for the year ending December 31, 2017 is $29,000 and zero thereafter. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, long-term debt and obligations under capital leases approximate fair value due to the short maturity of these instruments. ASC No. 820, Fair Value Measurements and Disclosures, Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis: The Company does not have assets or liabilities that are measured at fair value on a recurring basis. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis: Certain assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments only in certain circumstances. Included in this category are goodwill written down to fair value when determined to be impaired, acquired assets and long-lived assets including capitalized software that are written down to fair value when they are held for sale or determined to be impaired. The valuation methods for goodwill, assets and liabilities resulting from acquisitions, and long-lived assets involve assumptions concerning interest and discount rates, growth projections, and/or other assumptions of future business conditions. As all of the assumptions employed to measure these assets and liabilities on a nonrecurring basis are based on management’s judgment using internal and external data, these fair value determinations are classified in Level 3 of the valuation hierarchy. There were no transfers between fair value measurement levels during the year ended December 31, 2016. |
Accrued Compensation
Accrued Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Compensation Related Costs [Abstract] | |
Accrued Compensation | 6. Accrued Compensation Accrued compensation consisted of the following at December 31, 2016 and 2015: December 31, 2016 2015 Accrued bonuses $ 487,000 $ 340,000 Accrued vacation 291,000 423,000 Accrued salaries 264,000 243,000 Accrued commissions 18,000 18,000 Total accrued compensation $ 1,060,000 $ 1,024,000 |
Concentrations of Risk
Concentrations of Risk | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | 7. Concentrations of Risk Credit Risk At times, the Company’s cash balances held in financial institutions are in excess of federally insured limits. The Company performs periodic evaluations of the relative credit standing of financial institutions and seeks to limit the amount of risk by selecting financial institutions with a strong credit standing. The Company believes it is not exposed to any significant credit risk with respect to its cash and cash equivalents. The Buzztime network provides services to group viewing locations, generally restaurants, sports bars and lounges throughout North America. Concentration of credit risk with respect to trade receivables is limited due to the large number of customers comprising the Company’s customer base, and their dispersion across many different geographic locations. The Company performs credit evaluations of new customers and generally requires no collateral. The Company maintains an allowance for doubtful accounts to provide for credit losses. Significant Customer For the years ended December 31, 2016 and 2015, the Company generated approximately $8,913,000 and $10,889,000, respectively, of total revenue from Buffalo Wild Wings corporate-owned restaurants and its franchisees, which represented approximately 40% and 44% of total revenue in each of those years, respectively. As of December 31, 2016 and 2015, approximately $261,000 and $172,000, respectively, was included in accounts receivable from Buffalo Wild Wings corporate-owned restaurants and its franchisees. Sole Equipment Supplier The Company currently purchases the tablets, cases and charging trays used in its BEOND platform from one unaffiliated third-party manufacturer. The Company currently does not have an alternative manufacturer for its tablets or an alternative manufacturer or device for the tablet cases or tablet charging trays. The Company no longer purchases playmakers for its Classic platform. As of December 31, 2015 approximately $127,000 was included in accounts payable or accrued expenses for the tablet equipment purchased from its sole supplier. There were no amounts outstanding in accounts payable or accrued expenses as of December 31, 2016 related to the sole supplier. |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Common Share | 8. Basic and Diluted Earnings Per Common Share Basic earnings per share excludes the dilutive effects of options, warrants and other convertible securities. Diluted earnings per share reflects the potential dilutions of securities that could share in the Company’s earnings. Options, warrants and convertible preferred stock representing approximately 453,000 and 424,000 shares (after taking into account the proportion adjustments as a result of the reverse/forward split described in Note 9) were excluded from the computations of diluted net loss per common share for the years ended December 31, 2016 and 2015, respectively, as their effect was anti-dilutive. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Shareholders' Equity: | |
Stockholders' Equity | 9. Stockholders’ Equity Registered Direct Offering On November 1, 2016, the Company entered into a subscription agreement with certain investors relating to the issuance and sale of shares of the Company’s common stock at a purchase price of $6.64 per share, which was the closing price of its common stock on October 31, 2016. The offering closed on November 4, 2016. The Company sold 412,071 shares of its common stock and received net proceeds of approximately $2.7 million, after deducting estimated offering expenses. The Company intends to use the net proceeds of the offering for general corporate purposes, which may include working capital, general and administrative expenses, capital expenditures and implementation of its strategic priorities. The terms of the offering were approved by a committee of the Company’s board of directors comprised solely of independent directors, none of whom invested in the offering. The Company’s board of directors gave that committee the power and authority to direct the process and procedures related to the review and evaluation of possible offerings, including the authority to determine not to proceed with any particular offering, to review, evaluate and negotiate, or designate officers of the Company to review, evaluate and negotiate, the terms of one or more offerings, and to authorize and approve one or more offerings and its terms. The investors in the offering included certain existing stockholders and the Company’s chief executive officer, chief financial officer and senior vice president marketing, Ram Krishnan, Allen Wolff and Dave Miller, respectively. The shares were offered and sold pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration Statement No. 333-193012) filed with the Securities and Exchange Commission on December 20, 2013 and declared effective by the SEC on January 9, 2014, and the base prospectus included therein, as supplemented by a prospectus supplement filed with the SEC in connection with the takedown relating to the offering. Reverse/Forward Split of Common Stock At the Company’s annual meeting of stockholders held on June 3, 2016, the Company’s stockholders approved an amendment to the Company’s restated certificate of incorporation to give effect to, first, a reverse split of the Company’s outstanding common stock at an exchange ratio of 1-for-100 and, then, immediately following such reverse split, a forward split of its outstanding common stock at a ratio that is not less than 2-for-1 nor greater than 4-for-1, with the final ratio to be selected by the Company’s board of directors in its sole discretion. The board of directors set the final ratio of the forward split at 2-for-1. The Company refers to the reverse split and to the forward split, together, as the “reverse/forward split.” On June 16, 2016 (the “Effective Date”), the Company filed with the Secretary of State of Delaware the amendment to its restated certificate of incorporation to effect the reverse/forward split. The 1-100 reverse split was effective at 6:00 p.m. Eastern Time on the Effective Date and the 2-for-1 forward split was effective at 6:01 p.m. Eastern Time on the Effective Date. Any fractional share of common stock resulting from the forward split was rounded up to the nearest whole share. Any stockholder who, as of immediately prior to 6:00 p.m. Eastern Time on the Effective Date, held fewer than 100 shares of the Company’s common stock in one account and, subsequent to the reverse split, would otherwise have been entitled to less than one full share of common stock, received, instead of the fractional share, $0.12 in cash for each such share held in that account, which was equal to the average of the closing price per share of the Company’s common stock on the NYSE MKT over the five trading days immediately before and including the Effective Date. As of immediately prior to the reverse split/forward split on the Effective Date, the Company had 92,439,174 of common stock outstanding, and subsequent to the reverse/forward split, it had 1,848,597 shares of common stock outstanding. Approximately $3,000 was paid to cashed-out stockholders who owned less than 100 shares immediately prior to the reverse split on the Effective Date. The number of shares of the Company’s authorized common stock did not change in connection with the reverse/forward split. However, upon the effectiveness of the reverse/forward split, the number of authorized shares of the Company’s common stock that were not issued or outstanding increased due to the reduction in the number of shares of its common stock issued and outstanding as a result of the reverse/forward split. The reverse/forward split did not affect the par value of a share of the Company’s common stock, which remains at $0.005 per share. As a result, the stated capital attributable to common stock on the Company’s consolidated balance sheet has been reduced proportionately based on the reverse/forward split exchange ratio, and the additional paid-in capital account was credited with the amount by which the stated capital was reduced. Comparative financial statements have been retroactively adjusted. There are no other accounting consequences arising from the reverse/forward split. As provided for in the Company’s equity incentive plans and outstanding warrant agreements, the number of shares subject to the equity plans and warrant agreements along with any exercise prices of outstanding awards, were equitably and proportionately adjusted and are reflected. Additionally, the conversion rate for the Company’s Series A convertible preferred stock was also equitably and proportionately adjusted so that holders of the Series A convertible preferred stock would be entitled to receive, upon conversion, the number of shares of the Company’s common stock that such holders would have been entitled to receive immediately following the reverse/forward split, had such shares of the Series A convertible preferred stock been converted into shares of the Company’s common stock immediately prior to the reserve/forward split. Equity Incentive Plans All amounts reported below have been proportionately adjusted as a result of the reverse/forward split discussed above, when applicable. 2004 Performance Incentive Plan In September 2004 at a Special Meeting of Stockholders, the Company’s stockholders approved the 2004 Performance Incentive Plan (the “2004 Plan”). The 2004 Plan provided for the issuance of up to 50,000 shares of NTN common stock. In addition, all shares that remained unissued under the 1995 Employee Stock Option Plan (the “1995 Plan”) on the effective date of the 2004 Plan, and all shares issuable upon exercise of options granted pursuant to the 1995 Plan that expire or become unexercisable for any reason without having been exercised in full, were available for issuance under the 2004 Plan. Options under both the 1995 Plan and the 2004 Plan 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. In September 2009, the 2004 Plan expired. All awards that were granted under the 2004 Plan will continue to be governed by the 2004 Plan until they are exercised or expire in accordance with that plan’s terms. As of December 31, 2016, there were approximately 1,000 options outstanding under the 2004 Plan. 2010 Amended Performance Incentive Plan In June 2010, the Company’s stockholders approved the 2010 Performance Incentive Plan (the “2010 Plan”). The 2010 Plan provided for the issuance of up to 120,000 shares of the Company’s common stock. At the Company’s 2015 Annual Meeting of Stockholders, the Company’s stockholders approved the Amended 2010 Performance Plan (the “Amended 2010 Plan”), which, among other things, amended the 2010 Plan to increase the authorized shares to be issued thereunder from 120,000 to 240,000. The Amended 2010 Plan expires in February 2020. Under the Amended 2010 Plan, options to the purchase the Company’s common stock or other instruments such as restricted stock units may be granted to officers, directors, employees and consultants. The Company’s Board of Directors designated its Nominating and Corporate Governance/Compensation Committee as the Amended 2010 Plan Committee. Stock options granted under the Amended 2010 Plan may either be incentive stock options or nonqualified stock options. A stock option granted under the Amended 2010 Plan generally cannot be exercised until it becomes vested. The Amended 2010 Plan Committee establishes the vesting schedule of each stock option at the time of grant. At its discretion, the Amended 2010 Plan Committee can accelerate the vesting, extend the post-termination exercise term or waive restrictions of any stock options or other awards under the Amended 2010 Plan. Options under the Amended 2010 Plan 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 December 31, 2016, there were options to purchase approximately 79,000 shares of the Company’s common stock outstanding under the Amended 2010 Plan. 2014 Inducement Plan In August 2014, the Nominating and Corporate Governance/Compensation Committee of the Company’s Board of Directors (the “Committee”) approved the 2014 Inducement Plan (the “2014 Plan”) in reliance on Section 771(a) of the NYSE MKT Company Guide as an inducement material to Ram Krishnan entering into employment with the Company as its Chief Executive Officer. The 2014 Plan provides for the issuance of up to 85,000 shares of the Company’s common stock, of which, an option to purchase 70,000 shares of common stock was issued to Mr. Krishnan in September 2014. In accordance with the terms of his employment agreement, in April 2015, Mr. Krishnan was granted another performance-based option to purchase 15,000 shares of common stock. Options under the 2014 Plan 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. Both of the option grants described above will, subject to Mr. Krishnan’s continued employment through the applicable vesting date and, with respect to the performance-based option granted in April 2015, subject to meeting performance goals, vest as to 25% of the total number of shares subject to the option on the first anniversary of the grant date and the remaining 75% of the total number of shares subject to the option will vest in 36 substantially equal monthly installments thereafter. There are no share-based awards available to be granted under the 2014 Plan. The 2014 Plan expires in September 2024. Stock-Based Compensation Valuation Assumptions The Company records stock-based compensation in accordance with ASC No. 718 , Compensation – Stock Compensation Equity – Equity-Based Payments to Non-Employees. 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 following weighted-average assumptions were used for grants issued during 2016 and 2015 under the ASC No. 718 requirements: 2016 2015 Weighted average risk-free rate 1.20 % 1.20 % Weighted average volatility 111.02 % 82.80 % Dividend yield 0.00 % 0.00 % Expected life 6.17 years 4.31 years ASC No. 718 requires forfeitures to be estimated at the time of grant and revised if necessary in subsequent periods if actual forfeiture rates differ from those estimates. Forfeitures were estimated based on historical activity for the Company. Stock-based compensation expense for employees in 2016 and 2015 was $419,000 and $456,000, respectively, and is expensed in selling, general and administrative expenses and credited to the additional paid-in-capital account. Stock Option Activity The following table summarizes stock option activity for the year ended December 31, 2016 and 2015: Outstanding Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding January 1, 2015 144,000 $ 24.99 8.60 $ 285,000 Granted 43,000 20.59 - - Exercised (2,000 ) 14.32 - - Cancelled (26,000 ) 37.56 - - Forfeited (23,000 ) 29.20 - - Expired - - - - Outstanding December 31, 2015 136,000 20.38 8.67 2,000 Granted 35,000 7.73 - - Exercised - - - - Cancelled (3,000 ) 21.49 - - Forfeited (3,000 ) 15.51 - - Expired - - - - Outstanding December 31, 2016 165,000 $ 17.78 8.02 $ 36,000 Options vested and exercisable at December 31, 2016 75,000 $ 20.06 7.55 $ 4,000 The aggregate intrinsic value of options at December 31, 2016 is based on the Company’s closing stock price on that date of $8.50 per share as reported by the NYSE MKT. The total intrinsic value of options exercised during the year ended December 31, 2015 was approximately $7,000. Under the 2004 Plan and the Amended 2010 Plan, stock options may be exercised on a net-exercise arrangement, where shares of common stock with a value equal to the exercise price are withheld as payment therefor. Under such net-exercise arrangements, options to purchase approximately 2,000 shares of common stock were exercised and approximately 360 shares of common stock were issued during the year ended December 31, 2015. The Company received less than $1,000 in cash payments for the exercise of options to purchase approximately 43 shares during the years ended December 31, 2015. No options were exercised during the year ended December 31, 2016. The per share weighted average grant-date fair value of stock options granted during the years ended December 31, 2016 and 2015 was $6.48 and $12.74, respectively. As of December 31, 2016, the unamortized compensation expense related to outstanding unvested options was approximately $647,000 with a weighted average remaining requisite service period of 2.09 years. The Company expects to amortize this expense over the remaining requisite service period of these stock options. A deferred tax asset generally would be recorded related to the expected future tax benefit from the exercise of the non-qualified stock options. However, due to a history of net operating losses, a full valuation allowance has been recorded related to the tax benefit for non-qualified stock options. Warrant Activity The following summarizes warrant activity for the year ended December 31, 2016 and 2015: Outstanding Warrants Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Outstanding January 1, 2015 132,000 $ 33.64 3.18 Granted - - - Exercised - - - Forfeited - - - Outstanding December 31, 2015 132,000 $ 33.64 2.18 Granted - - - Exercised - - - Forfeited - - - Outstanding December 31, 2016 132,000 $ 33.64 1.18 Balance exercisable at December 31, 2016 132,000 $ 33.64 1.18 During 2009, the Company issued warrants to purchase an aggregate of 60,000 shares of common stock in connection with asset acquisitions of i-am TV. The fair value of the warrants was approximately $537,000 in aggregate and were determined using the Black-Scholes model using the following weighted-average assumptions: risk-free interest rates of 2.79%; dividend yield of 0%; expected volatility of 78.1%; and a term of 8 years. None of these warrants were exercised as of December 31, 2016. During 2013, the Company issued warrants to purchase an aggregate of 72,000 shares of common stock in connection with a private placement. The fair value of the warrants was approximately $1,379,000 in aggregate and was determined using the Black-Scholes model using the following weighted-average assumptions: risk-free interest rates of 1.06%; dividend yield of 0%; expected volatility of 80.25%; and a term of 5 years. The Company has concluded that these warrants qualify as equity instruments and not liabilities. None of these warrants were exercised as of December 31, 2016. Cumulative Convertible Preferred Stock The Company has authorized 10,000,000 shares of preferred stock. The preferred stock may be issued in one or more series. The only series currently designated is a series of 5,000,000 shares of Series A Cumulative Convertible Preferred Stock (Series A Preferred Stock). As of December 31, 2016 and 2015, there were 156,000 shares of Series A Preferred Stock issued and outstanding. The Series A Preferred Stock provides for a cumulative annual dividend of $0.10 per share, payable in semi-annual installments in June and December. Dividends may be paid in cash or with shares of common stock. During the year ended December 31, 2016, the Company paid approximately $16,000 in cash for payment of dividends. During the year ended December 31, 2015, the Company issued approximately 1,000 shares of common stock for payment of dividends. The Series A Preferred Stock has no voting rights and has a $1.00 per share liquidation preference over common stock. The registered holder has the right at any time to convert shares of Series A Preferred Stock into that number of shares of common stock that equals the number of shares of Series A Preferred Stock that are surrendered for conversion divided by the conversion rate. The conversion rate is subject to adjustment in certain events and is established at the time of each conversion. There were no conversions during either of the years ended December 31, 2016 and 2015. There is no mandatory conversion term, date or any redemption features associated with the Series A Preferred Stock. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes For each of the years 2016 and 2015, current tax provisions and current deferred tax provisions were recorded as follows: 2016 2015 Current Tax Provision Federal $ - $ - State (25,000 ) (26,000 ) Foreign (1,000 ) 24,000 (26,000 ) (2,000 ) Deferred Tax Provision Federal - - State (4,000 ) (4,000 ) Foreign (8,000 ) (6,000 ) (12,000 ) (10,000 ) Total Tax Provison Federal - - State (29,000 ) (30,000 ) Foreign (9,000 ) 18,000 $ (38,000 ) $ (12,000 ) The net deferred tax assets and liabilities have been reported in other assets in the consolidated balance sheets at December 31, 2016 and 2015 as follows: 2016 2015 Deferred Tax Assets: NOL carryforwards $ 23,291,000 $ 21,462,000 UK NOL carryforwards 516,000 693,000 Capital loss - 416,000 Allowance for doubtful accounts 139,000 - Compensation and vacation accrual 92,000 221,000 Operating accruals 147,000 213,000 Deferred revenue - 677,000 Research and experimentation, AMT and foreign tax credits 147,000 156,000 Texas Margin Tax Credit 126,000 129,000 Fixed assets and intangibles 199,000 204,000 Foreign - 181,000 Other 664,000 504,000 Total gross deferred tax assets 25,321,000 24,856,000 Valuation allowance (24,880,000 ) (24,441,000 ) Net deferred tax assets 441,000 415,000 Deferred Tax Liabilities: Capitalized software 359,000 349,000 Amortization - 18,000 Foreign 45,000 42,000 Deferred revenue 49,000 - Other - 6,000 Total gross deferred liabilities 453,000 415,000 Net deferred taxes $ (12,000 ) $ - The reconciliation of computed expected income taxes to effective income taxes by applying the federal statutory rate of 34% is as follows: For the year ended December 31, 2016 2015 Tax at federal income tax rate $ 962,000 $ 2,435,000 State provision (29,000 ) (30,000 ) Foreign tax differential 2,000 38,000 Change in valuation allowance (917,000 ) (2,407,000 ) Permanent items (56,000 ) (48,000 ) Total Provision $ (38,000 ) $ (12,000 ) The net change in the total valuation allowance for the year ended December 31, 2016 was an increase of $917,000. The net change in the total valuation allowance for the year ended December 31, 2015 was an increase of $2,407,000. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and planning strategies in making this assessment. Based on the level of historical operating results and projections for the taxable income for the future, management has determined that it is more likely than not that the portion of deferred taxes not utilized through the reversal of deferred tax liabilities will not be realized. Accordingly, the Company has recorded a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. At December 31, 2016, the Company has available net operating loss (“NOL”) carryforwards of approximately $65,291,000 for federal income tax purposes, which will begin to expire in 2017. The NOL carryforwards for state purposes, which will continue expiring in 2017, are approximately $35,969,000. There can be no assurance that the Company will ever be able to realize the benefit of some or all of the federal and state loss carryforwards due to continued operating losses. Further, under Internal Revenue Code Section 382 and similar state provisions, ownership changes may limit the annual utilization of NOL carryforwards existing prior to a change in control that are available to offset future taxable income. Such limitations would reduce, potentially significantly, the gross deferred tax assets disclosed in the table above related to the NOL carryforwards. The Company completed a Section 382 analysis for the period from January 1, 1992 through September 30, 2016 and determined that the Company does not expect to be limited in regards to utilizing the total NOL carryforwards that existed as of September 30, 2016, provided it generates sufficient future earnings prior to the expiration of the NOLs and that future changes in ownership do not trigger a Section 382 limitation. Based on the Company’s analysis of its stockholder activity for the three months ended December 31, 2016, there does not appear to be ownership changes that would have caused an annual limitation under the provisions of Section 382. The Company continues to disclose the NOL carryforwards at their original amount in the table above as no potential limitation has been quantified. The Company has also established a full valuation allowance for substantially all deferred tax assets, including the NOL carryforwards, since the Company could not conclude that it was more likely than not able to generate future taxable income to realize these assets. In addition, the Company has approximately $190,000 of state tax credit tax carryforwards that expire in the years 2017 through 2026. The deferred tax assets as of December 31, 2016 include a deferred tax asset of $631,000 representing NOLs arising from the exercise of stock options by Company employees for 2005 and prior years. To the extent the Company realizes any tax benefit for the NOLs attributable to the stock option exercises, such amount would be credited directly to stockholders' equity. United States income taxes were not provided on unremitted earnings from non-United States subsidiaries. Such unremitted earnings are considered to be indefinitely reinvested and determination of the amount of taxes that might be paid on these undistributed earnings is not practicable. The Company and its subsidiaries are subject to federal income tax as well as income tax of multiple state jurisdictions. With few exceptions, the Company is no longer subject to income tax examination by tax authorities in major jurisdictions for years prior to 2011. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where NOLs were generated and carried forward, and make adjustments up to the amount of the carryforwards. The Company is not currently under examination by the IRS or state taxing authorities. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 11. Long-term Debt Revolving Line of Credit In April 2015, the Company entered into a loan and security agreement (the “Original Loan Agreement”) with East West Bank, or EWB, pursuant to which, the Company may request advances in an aggregate outstanding amount at any time up to the lesser of $7,500,000, which is referred to as the revolving line, or an amount equal to its borrowing base, in each case, less the aggregate outstanding principal amount of prior advances. So long as there is no event of default, the Company may make a one-time request to increase the revolving line by up to $2,500,000, which EWB may accept or decline. In March 2016, the Company and EWB entered into an amendment (the “First Amendment”) to the Original Loan Agreement. The Original Loan Agreement as amended by the First Amendment is referred to as the “Amended Loan Agreement.” Under the Amended Loan Agreement, through March 31, 2017, the Company may request advances in an aggregate outstanding amount at any time up to the lesser of (a) the revolving line (or $7,500,000) or (b) the sum of $2,000,000 (which the Company refers to as the “sublimit”) plus the amount equal to the Company’s borrowing base, in each case, less the aggregate outstanding principal amount of prior advances. On March 31, 2017, the sublimit becomes zero. If the aggregate amount of advances as of March 31, 2017 exceeds the lesser of the revolving line or the amount equal to the Company’s borrowing base, then it must pay EWB the amount of such excess. Under the Original Loan Agreement, the Company’s borrowing base was, as of the date of determination, an amount equal to the product of: (a) the average monthly recurring revenue for the immediately preceding three months; times (b) one plus the average churn rate for the immediately preceding three months (not to exceed zero); times (c) 300%. The churn rate, with respect to any month, is the quotient of the Company’s monthly net revenue change calculated with respect to such month, divided by its monthly revenue from subscriptions for the month. The manner in which the borrowing base is determined is unchanged under the Amendment, except that the monthly recurring revenue is limited to all recurring subscription revenue attributable to software that the Company sold or licensed and all recurring revenue relating to services it delivered and 50% of all revenue attributable to the Company’s “Stump” product line. In addition, under the Amended Loan Agreement, the Company is required to meet a minimum adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), target and churn rate targets, in each case, as specified in the Amended Loan Agreement. Adjusted EBITDA is the sum (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) non-cash stock compensation expenses, plus (f) other non-cash expenses and charges, plus (g) to the extent approved by the EWB, other one-time charges, plus (h) to the extent approved by the EWB, any losses arising from the sale, exchange, transfer or other disposition of assets not in the ordinary course of business. Under the Original Loan Agreement, the Adjusted EBITDA target was measured as of the last day of each fiscal quarter with respect to the immediately prior six-month period. Under the Amended Loan Agreement, the Adjusted EBITDA target is measured as of the last day of each fiscal quarter with respect to the immediately prior three-month period. The churn rate targets, which were unchanged in the Amendment, are measured on a monthly and trailing three-month basis. The Company met the Adjusted EBITDA and the trailing three-month churn rate targets as of the quarter ended March 31, 2016. The Company did not meet the monthly churn rate for the month ended January 31, 2016, which constituted an event of default under the Original Loan Agreement, however, EWB waived that event of default. The Amended Loan Agreement requires: (a) that the Company maintain a balance on deposit with the EWB equal to (i) on March 31, 2017, 100% of the aggregate outstanding principal amount of the advances at such time, and (ii) at all times after March 31, 2017, an amount determined by EWB based on the Company’s 2017 financial projections; and (b) that the sum of the following be not less than $2,000,000: (i) the aggregate amount of unrestricted cash that the Company holds in accounts maintained with EWB and (ii) the amount available to the Company under the Amended Loan Agreement. Under the Amended Loan Agreement, all then-outstanding advances are due on December 31, 2017 (under the Original Loan Agreement, the due date was April 14, 2018). On or before March 31, 2017, advances will bear interest, at the Company’s option, at the rate of either (A) a variable rate per annum equal to the prime rate as set forth in The Wall Street Journal On December 30, 2016, the Company entered into a second amendment (the “Second Amendment”) to the loan and security agreement with EWB. Under the terms of the Second Amendment, the due date of all advances under the revolving line was extended from December 31, 2017 to January 15, 2018. No other terms of the Loan Agreement were changed under the Second Amendment. As of December 31, 2016, the Company requested and received advances in the aggregate of $6,500,000, all of which were advanced at the LIBOR rate plus the applicable margin with a three-month interest period. Each time the interest period expired on these advances, the Company elected to renew the advance at the LIBOR rate plus the applicable margin with a three-month interest period. Prior to the Amendment, the interest rate on advances ranged from 4.313% to 4.688% per annum. The interest rate on advances since the Amendment have ranged from 6.125% to 6.50% per annum. As of December 31, 2016, $6,500,000 remained outstanding under this credit facility, of which, $2,000,000 is recorded in current portion of long-term debt on the accompanying consolidated balance sheet. The Company had approximately $97,000 available to borrow as of December 31, 2016 based on its borrowing base calculated as of that date. The Company used approximately $3,381,000 of the total amount borrowed under this credit facility to pay down existing indebtedness that was owed to an equipment lender (see “—Equipment Notes Payable,” below). Under the Amended Loan Agreement, the amount that the Company may owe under its current financing arrangement with that equipment lender is not limited to any specified amount. In addition, with EWB’s consent, the Company may incur additional indebtedness with other equipment lenders of up to $2,000,000 in the aggregate for equipment financing. Pursuant to the Amended Loan Agreement, the Company continues to grant and pledge to EWB a first-priority security interest in all the Company’s existing and future personal property. The Company paid $37,500 to EWB as a facility fee at the time of closing in April 2014, and has incurred approximately $9,000 for fees associated with the amendments. An additional facility fee (equal to the product of (x) 0.50% of the increase in the revolving line times (y) the quotient of the number of days remaining between the effective date of such increase and January 15, 2018, divided by 1,095) will be due if the revolving line is increased pursuant to the Company’s request. The Company also pays an unused line fee equal to 0.50% per year of the difference between the amount of the revolving line as in effect from time to time and the average monthly balance in each month, which is payable monthly in arrears. The average monthly balance is calculated by adding the ending outstanding balance under the revolving line for each day in the month divided by the number of days in the month. On February 28, 2017, the Company entered into a third amendment to the loan and security agreement with EWB. See Note 17 for more information. Equipment Notes Payable In May 2013, the Company entered into a financing arrangement with a lender under which the Company may borrow funds to purchase certain equipment. Initially, the maximum amount the Company could borrow under this financing arrangement was $500,000. Over time, the lender increased that maximum amount, and as of December 31, 2016, the maximum amount was $9,690,000, all of which has been borrowed. In April 2015, the Company used approximately $3,381,000 of the proceeds received from the East West Bank credit facility to pay down a portion of the principal amount the Company had borrowed under this financing arrangement, accrued interest and a prepayment fee. As of December 31, 2016, approximately $1,611,000 of principal remained outstanding under this financing arrangement, of which $975,000 is recorded in current portion of long-term debt on the accompanying consolidated balance sheet. The Company was able to borrow up to the maximum amount available under this financing arrangement in tranches as needed. Each tranche borrowed through August 2015 incurred interest at 8.32% per annum; the interest for tranches borrowed thereafter was reduced to rates between 7.32% to 8.05% per annum. With respect to the first $1,000,000 in the aggregate borrowed, principal and interest payments are due in 36 equal monthly installments. With respect to amounts borrowed in excess of the first $1,000,000 in the aggregate, the first monthly payment will be equal to 24% of the principal amount outstanding, and the remaining principal and interest due is payable in 35 equal monthly installments. The Company granted the lender a first security interest in the equipment purchased with the funds borrowed. This equipment lender entered into a subordination agreement with East West Bank. Long-Term Debt Principal Payments Future minimum principal payments under long-term debt as of December 31, 2016 are as follows: Years Ending December 31, Principal Payment 2017 $ 2,988,000 2018 5,115,000 2019 8,000 Total $ 8,111,000 Interest expense related to long-term debt for the years ended December 31, 2016 and 2015 was $517,000 and $283,000, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 12. Commitments Operating Leases The Company leases office and production facilities and equipment under agreements that expire at various dates through 2018. Certain leases contain renewal provisions and escalating rental clauses and generally require the Company to pay utilities, insurance, taxes and other operating expenses. Lease expense under operating leases totaled $582,000 and $620,000 in 2016 and 2015, respectively. As of December 31, 2016, future minimum lease payments under operating leases are as follows: Years Ending December 31, Lease Payment 2017 $ 659,000 2018 586,000 Total $ 1,245,000 Capital Leases As of December 31, 2016 and 2015, property held under current capital leases was as follows: For the Years Ended December 31, 2016 2015 Office equipment $ 328,000 $ 299,000 Other 250,000 - Accumulated depreciation (185,000 ) (97,000 ) Total $ 393,000 $ 202,000 Total depreciation expense under capital leases was $88,000 and $56,000 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, future minimum principal payments under capital leases are as follows: Years Ending December 31, Prinicipal Payment 2017 $ 155,000 2018 158,000 2019 99,000 2020 1,000 2021 1,000 Total $ 414,000 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 13. Contingencies Litigation The Company is subject to litigation from time to time in the ordinary course of its business. There can be no assurance that any claims will be decided in the Company’s favor and the Company is not insured against all claims made. During the pendency of such claims, the Company will continue to incur the costs of its legal defense. Currently, there is no material litigation pending or threatened against the Company. Equipment Repairs Beginning in the fourth quarter of 2014, the Company encountered challenges with assembling its second generation cases for its BEOND tablet. As a result, the Company accrued approximately $716,000 and $204,000 of expense during the years ended December 31, 2015 and 2014, respectively, for cases deployed at customer sites that the Company has deemed probable it will need to repair. This expense was recognized in direct costs on the consolidated statement of operations and other current liabilities on the consolidated balance sheets. As of December 31, 2016, approximately $175,000 remained in other current liabilities. The Company may continue to experience challenges with its tablet equipment, and as a result, it may be required to recognize additional repair expense contingencies in the future. Sales and Use Tax From time to time, state tax authorities will make inquiries as to whether or not a portion of the Company’s services require the collection of sales and use taxes from customers in those states. Many states have expanded their interpretation of their sales and use tax statutes to subject more activities to tax. The Company evaluates such inquiries on a case-by-case basis and has favorably resolved the majority of these tax issues in the past without any material adverse consequences. The Company has been involved in sales tax inquiries with certain states and provinces. As a result of those inquiries, the Company recorded a total net liability of $25,000 as of December 31, 2015, which is included in the sales taxes payable balance in the accompanying consolidated balance sheets. Based on the guidance set forth by ASC No. 450, Contingencies, |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Shareholders' Equity: | |
Accumulated Other Comprehensive Income | 14. Accumulated Other Comprehensive Income Accumulated other comprehensive income includes the accumulated gains or losses from foreign currency translation adjustments. The Company translated the assets and liabilities of its Canadian statement of financial position into U.S. dollars using the period end exchange rate. Revenue and expenses were translated using the weighted-average exchange rates for the reporting period. As of December 31, 2016 and 2015, $223,000 and $172,000, respectively, of accumulated foreign currency translation adjustments were recorded in accumulated other comprehensive income, respectively. |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Geographical Information | 15. Geographical Information Geographic breakdown of the Company’s revenue for the last two fiscal years were as follows: For the years ended December 31, 2016 2015 United States $ 21,559,000 $ 23,678,000 Canada 753,000 841,000 Total revenue $ 22,312,000 $ 24,519,000 Geographic breakdown of the Company’s long-term tangible assets for the last two fiscal years were as follows: As of December 31, 2016 2015 United States $ 3,015,000 $ 3,799,000 Canada 86,000 116,000 Total assets $ 3,101,000 $ 3,915,000 |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Retirement Savings Plan | 16. Retirement Savings Plan In 1994, the Company established a defined contribution plan, organized under Section 401(k) of the Internal Revenue Code, which allows employees who have completed at least three months of service, have worked a minimum of 250 hours in a quarter, and have reached age 18 to defer up to 50% of their pay on a pre-tax basis. The Company does not contribute a match to the employees’ contribution. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | 17. Subsequent Event On February 28, 2017, the Company entered into a third amendment to the loan and security agreement with EWB that provided for the following: ● The date on which the $2.0 million sublimit becomes zero was extended from March 31, 2017 to June 15, 2017. As was the case prior to the third amendment, if the aggregate amount of advances as of the date the sublimit becomes zero exceeds the lesser of the revolving line or the amount equal to our borrowing base, then the Company must pay EWB the amount of such excess. ● The minimum adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, targets for each of the Company’s 2017 fiscal quarters were established. The manner in which adjusted EBITDA is calculated was not changed. ● Compliance with the churn rate target is now measured only on trailing three-month basis; previously it was also measured monthly. ● The amount the Company must maintain on deposit with EWB (which amount is equal to 100% of the aggregate outstanding principal amount of advances) is now measured only at June 15, 2017, or if earlier, at such time that the $2.0 million sublimit has been paid off. Previously, compliance was going to be measured on March 31, 2017 and thereafter the Company was going to be required to maintain an amount determined by EWB based on the Company’s 2017 financial projections. ● The interest rates on amounts advanced was increased by 0.50%, such that under the third amendment, advances bear interest, at the Company’s option, at the rate of either of the following: (A) for amounts advanced as a prime rate loan, a variable rate per annum equal to the prime rate as set forth in The Wall Street Journal plus 3.25% (was previously 2.75%), and (B) for amounts advanced as a LIBOR loan, at a fixed rate per annum equal to the LIBOR rate for the interest period for the advance plus 6.00% (was previously 5.50%). After the earlier of June 15, 2017 (was previously March 31, 2017) or such time as the Company pays off in full in cash the $2.0 million sublimit, the additional margins decrease to 1.75% for prime rate loans (was previously 1.25%) and to 4.50% for LIBOR loans (was previously 4.00%). |
Summary of Significant Accoun25
Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents Statement of Cash Flows |
Capital Resources | Capital Resources The Company has a financing arrangement with a lender under which the Company may request funds to finance the purchase of certain capital equipment. The lender determines whether to extend such funds on a case-by-case basis, taking into account such factors as the lender considers relevant, including the amount outstanding under this financing arrangement. Through December 31, 2016, the Company borrowed $9,690,000, which is recorded in short-term and long-term debt on the accompanying consolidated balance sheet. As of December 31, 2016, $1,611,000 remained outstanding. The Company currently does not expect the lender to lend any additional funds under this financing arrangement. In connection with preparing the financial statement as of and for the year ended December 31, 2016, the Company evaluated whether there are conditions and events, considered in the aggregate, that are known and reasonably knowable that would raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. As a result of such evaluation, the Company believes it will have sufficient cash to meet its operating cash requirements and to fulfill its debt obligations for at least the next twelve months from the issuance date of these financial statements. In order to increase the likelihood that the Company will be able to successfully execute its operating and strategic plan and to position the Company to better take advantage of market opportunities for growth, the Company is continuing to evaluate additional financing alternatives, including additional equity financings and alternative sources of debt. If the Company’s cash and cash equivalents are not sufficient to meet future cash requirements, the Company may be required to reduce planned capital expenses, reduce operational cash uses or raise capital on terms that are not as favorable to the Company as they otherwise might be. Any actions the Company may undertake to reduce planned capital purchases or reduce expenses may be insufficient to cover shortfalls in available funds. If the Company requires additional capital, it may be unable to secure additional financing on terms that are acceptable to the Company, or at all. |
Allowances for Doubtful Accounts | Allowance for Doubtful Accounts |
Site Equipment to be Installed | Site Equipment to be Installed – The BEOND tablet platform equipment remains in site equipment to be installed until it is installed in customer sites. For BEOND 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 BEOND tablet platform customers, the cost of the equipment is reclassified to fixed assets upon installation and depreciated over its useful life. |
Fixed Assets | Fixed Assets The Company incurs a relatively significant level of depreciation expense in relation to its operating income. The amount of depreciation expense in any fiscal year is largely related to the equipment located at the Company’s customers’ sites that are not under sales-type lease arrangements. Such equipment includes the Classic Playmaker, BEOND tablet, other associated electronics and the computers located at customer’s sites (collectively, “Site Equipment”). The components within Site Equipment are depreciated over two to five years based on the shorter of the contractual capital lease period or the estimated useful life, which considers anticipated technology changes. If the Company’s Site Equipment turns out to have longer lives, on average, than estimated, then its depreciation expense would be significantly reduced in those future periods. Conversely, if the Site Equipment turns out to have shorter lives, on average, than estimated, then its depreciation expense would be significantly increased in those future periods. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets ASC No. 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC No. 360, Property, Plant and Equipment |
Revenue Recognition | Revenue Recognition Revenue Recognition In addition, the direct expenses of the installation, commissions, setup and training are deferred and amortized on a straight-line basis and are classified as deferred costs on the accompanying consolidated balance sheets. For these direct expenses that are associated with the Classic product, the amortization period approximates the estimated life of the customer relationship for deferred direct costs that are of an amount that is less than or equal to the deferred revenue for the related contract. For costs that exceed the deferred revenue, the amortization period is the initial term of the contract, in accordance with ASC No. 605, which is generally one year. For direct costs associated with the BEOND tablet platform, the amortization period approximates the life of the contract. The Company evaluated its lease transactions in accordance with ASC No. 840, Leases, ● The lease transfers ownership of the property to the lessee by the end of the lease term; ● There is a bargain purchase option; ● The lease term is equal to or greater than 75% of the economic life of the equipment; or ● The present value of the minimum payments is equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. Because the Company’s current leasing agreement meets at least one of the criteria above because collectability of the minimum lease payments is reasonably assured and because there are no important uncertainties surrounding the amount of reimbursable costs yet to be incurred under the lease, the Company classifies the lease as a sales-type lease, and it recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed and determinable and collectability is reasonably assured. The Company recognizes revenues from selling advertising, from hosting live trivia events and from consumers who pay to play the Company’s premium content when all material services or conditions relating to the transaction have been performed or satisfied. The Company has arrangements with certain third parties to share in revenue generated from some of its products and services. The Company evaluates recognition of the associated revenue in accordance with ASC No. 605-45, Revenue Recognition, Principal Agent Considerations. |
Software Development Costs | Software Development Costs The Company performed its annual review of software development projects for the year ended December 31, 2016 and determined there were no indications of impairment for that period. During its annual review for the year ended December 31, 2015, the Company determined to abandon various software development projects that it concluded were no longer a current strategic fit or for which the Company 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, an impairment of $295,000 was recognized for the year ended December 31, 2015, which is separately stated on the Company’s consolidated statements of operations. |
Advertising Costs | Advertising Costs – |
Shipping and Handling Costs | Shipping and Handling Costs |
Stock-based Compensation | Stock-Based Compensation , Compensation – Stock Compensation Equity – Equity-Based Payments to Non-Employees. |
Income Taxes | Income Taxes ASC No. 740, Income Taxes, |
Earnings Per Share | Earnings Per Share |
Segment Reporting | Segment Reporting Segment Reporting |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (ASU) No 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In November 2016, the FASB issued Accounting Standards Update (ASU) No 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In October 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Fixed assets are recorded at cost and consist of the following at December 31, 2016 and 2015: December 31, 2016 2015 Broadcast equipment $ 10,671,000 $ 13,001,000 Machinery and equipment 2,523,000 2,479,000 Furniture and fixtures 271,000 265,000 Leasehold improvements 610,000 610,000 Other equipment 15,000 16,000 14,090,000 16,371,000 Accumulated depreciation (10,989,000 ) (12,456,000 ) Total $ 3,101,000 $ 3,915,000 |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | As of December 31, 2016 and 2015, intangible assets with estimable lives were comprised of the following: December 31, 2016 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value Acquired technology $ 150,000 $ (121,000 ) $ 29,000 $ 150,000 $ (71,000 ) $ 79,000 Acquired customer lists 435,000 (435,000 ) - 435,000 (435,000 ) - Trivia database 332,000 (332,000 ) - 332,000 (332,000 ) - Trademarks and trademark licenses 67,000 (67,000 ) - 67,000 (67,000 ) - Total $ 984,000 $ (955,000 ) $ 29,000 $ 984,000 $ (905,000 ) $ 79,000 |
Accrued Compensation (Tables)
Accrued Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation Related Costs [Abstract] | |
Schedule of Accrued Compensation | Accrued compensation consisted of the following at December 31, 2016 and 2015: December 31, 2016 2015 Accrued bonuses $ 487,000 $ 340,000 Accrued vacation 291,000 423,000 Accrued salaries 264,000 243,000 Accrued commissions 18,000 18,000 Total accrued compensation $ 1,060,000 $ 1,024,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Shareholders' Equity: | |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were used for grants issued during 2016 and 2015 under the ASC No. 718 requirements: 2016 2015 Weighted average risk-free rate 1.20 % 1.20 % Weighted average volatility 111.02 % 82.80 % Dividend yield 0.00 % 0.00 % Expected life 6.17 years 4.31 years |
Summarizes Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2016 and 2015: Outstanding Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding January 1, 2015 144,000 $ 24.99 8.60 $ 285,000 Granted 43,000 20.59 - - Exercised (2,000 ) 14.32 - - Cancelled (26,000 ) 37.56 - - Forfeited (23,000 ) 29.20 - - Expired - - - - Outstanding December 31, 2015 136,000 20.38 8.67 2,000 Granted 35,000 7.73 - - Exercised - - - - Cancelled (3,000 ) 21.49 - - Forfeited (3,000 ) 15.51 - - Expired - - - - Outstanding December 31, 2016 165,000 $ 17.78 8.02 $ 36,000 Options vested and exercisable at December 31, 2016 75,000 $ 20.06 7.55 $ 4,000 |
Summarizes Warrant Activity | The following summarizes warrant activity for the year ended December 31, 2016 and 2015: Outstanding Warrants Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Outstanding January 1, 2015 132,000 $ 33.64 3.18 Granted - - - Exercised - - - Forfeited - - - Outstanding December 31, 2015 132,000 $ 33.64 2.18 Granted - - - Exercised - - - Forfeited - - - Outstanding December 31, 2016 132,000 $ 33.64 1.18 Balance exercisable at December 31, 2016 132,000 $ 33.64 1.18 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Current and Deferred Income Tax Provision (benefit) | For each of the years 2016 and 2015, current tax provisions and current deferred tax provisions were recorded as follows: 2016 2015 Current Tax Provision Federal $ - $ - State (25,000 ) (26,000 ) Foreign (1,000 ) 24,000 (26,000 ) (2,000 ) Deferred Tax Provision Federal - - State (4,000 ) (4,000 ) Foreign (8,000 ) (6,000 ) (12,000 ) (10,000 ) Total Tax Provison Federal - - State (29,000 ) (30,000 ) Foreign (9,000 ) 18,000 $ (38,000 ) $ (12,000 ) |
Schedule of Deferred Tax Assets and Liabilities | The net deferred tax assets and liabilities have been reported in other assets in the consolidated balance sheets at December 31, 2016 and 2015 as follows: 2016 2015 Deferred Tax Assets: NOL carryforwards $ 23,291,000 $ 21,462,000 UK NOL carryforwards 516,000 693,000 Capital loss - 416,000 Allowance for doubtful accounts 139,000 - Compensation and vacation accrual 92,000 221,000 Operating accruals 147,000 213,000 Deferred revenue - 677,000 Research and experimentation, AMT and foreign tax credits 147,000 156,000 Texas Margin Tax Credit 126,000 129,000 Fixed assets and intangibles 199,000 204,000 Foreign - 181,000 Other 664,000 504,000 Total gross deferred tax assets 25,321,000 24,856,000 Valuation allowance (24,880,000 ) (24,441,000 ) Net deferred tax assets 441,000 415,000 Deferred Tax Liabilities: Capitalized software 359,000 349,000 Amortization - 18,000 Foreign 45,000 42,000 Deferred revenue 49,000 - Other - 6,000 Total gross deferred liabilities 453,000 415,000 Net deferred taxes $ (12,000 ) $ - |
Reconciliation of Expected Income Taxes | The reconciliation of computed expected income taxes to effective income taxes by applying the federal statutory rate of 34% is as follows: For the year ended December 31, 2016 2015 Tax at federal income tax rate $ 962,000 $ 2,435,000 State provision (29,000 ) (30,000 ) Foreign tax differential 2,000 38,000 Change in valuation allowance (917,000 ) (2,407,000 ) Permanent items (56,000 ) (48,000 ) Total Provision $ (38,000 ) $ (12,000 ) |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Payments of Notes Payable | Future minimum principal payments under long-term debt as of December 31, 2016 are as follows: Years Ending December 31, Principal Payment 2017 $ 2,988,000 2018 5,115,000 2019 8,000 Total $ 8,111,000 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease Commitments | As of December 31, 2016, future minimum lease payments under operating leases are as follows: Years Ending December 31, Lease Payment 2017 $ 659,000 2018 586,000 Total $ 1,245,000 |
Schedule of Property Held Under Capital Leases | As of December 31, 2016 and 2015, property held under current capital leases was as follows: For the Years Ended December 31, 2016 2015 Office equipment $ 328,000 $ 299,000 Other 250,000 - Accumulated depreciation (185,000 ) (97,000 ) Total $ 393,000 $ 202,000 |
Schedule of Future Minimum Capital Lease Payments | As of December 31, 2016, future minimum principal payments under capital leases are as follows: Years Ending December 31, Prinicipal Payment 2017 $ 155,000 2018 158,000 2019 99,000 2020 1,000 2021 1,000 Total $ 414,000 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Revenues Geographic Breakdown | Geographic breakdown of the Company’s revenue for the last two fiscal years were as follows: For the years ended December 31, 2016 2015 United States $ 21,559,000 $ 23,678,000 Canada 753,000 841,000 Total revenue $ 22,312,000 $ 24,519,000 |
Schedule of Asset Geographic Breakdown | Geographic breakdown of the Company’s long-term tangible assets for the last two fiscal years were as follows: As of December 31, 2016 2015 United States $ 3,015,000 $ 3,799,000 Canada 86,000 116,000 Total assets $ 3,101,000 $ 3,915,000 |
Organization of Company (Detail
Organization of Company (Details Narrative) | 12 Months Ended |
Dec. 31, 2016Venues | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of venues | 2,814 |
Percentage of entertainment network | 71.00% |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Credit line amount outstanding | $ 97,000 | ||
Credit line borrowing capacity | 6,500,000 | ||
Line of credit available for borrowing | 6,500,000 | ||
Proceeds from short and long term debt | $ 969,000 | ||
Lease arrangements description | The lease term is equal to or greater than 75% of the economic life of the equipment; or The present value of the minimum payments is equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. | ||
Amortization expense for capitalized software development | $ 386,000 | $ 993,000 | |
Capitalized software costs not subject to amorization | 642,000 | 421,000 | |
Software impairment | 295,000 | ||
Advertising costs | |||
Minimum percentage of tax benifit | 50.00% | ||
Minimum [Member] | |||
Estimated useful lives | P2Y | ||
Maximum [Member] | |||
Estimated useful lives | P3Y | ||
East West Bank [Member] | |||
Credit line amount outstanding | $ 7,500,000 | ||
Increase the revolving line of credit | 2,500,000 | ||
Credit line borrowing capacity | $ 6,500,000 | ||
Line of credit available for borrowing | 97,000 | ||
Proceeds to pay down existing indebtedness | 3,381,000 | ||
Line of credit current | $ 1,611,000 | ||
East West Bank [Member] | Minimum [Member] | |||
Credit line amount outstanding | 2,000,000 | ||
East West Bank [Member] | Amended Loan Agreement [Member] | |||
Credit line amount outstanding | $ 2,000,000 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 2,451 | $ 2,061 |
Fixed Assets - Schedule of Prop
Fixed Assets - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and equipment, gross | $ 14,090 | $ 16,371 |
Accumulated depreciation | (10,989) | (12,456) |
Property and equipment, net | 3,101 | 3,915 |
Broadcast Equipment [Member] | ||
Property and equipment, gross | 10,671 | 13,001 |
Machinery and Equipment [Member] | ||
Property and equipment, gross | 2,523 | 2,479 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 271 | 265 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 610 | 610 |
Other Equipment [Member] | ||
Property and equipment, gross | $ 15 | $ 16 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill balance | $ 937 | $ 909 |
Weighted average remaining useful life of intangibles | 7 months 6 days | |
Amortization expense | $ 50 | $ 50 |
Amortization expense 2017 | 29 | |
Amortization expense thereafter | $ 0 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Gross Carrying Value | $ 984 | $ 984 |
Accumulated Amortization | (955) | (905) |
Net Book Value | 29 | 79 |
Acquired Technology [Member] | ||
Gross Carrying Value | 150 | 150 |
Accumulated Amortization | (121) | (71) |
Net Book Value | 29 | 79 |
Acquired Customer Lists [Member] | ||
Gross Carrying Value | 435 | 435 |
Accumulated Amortization | (435) | (435) |
Net Book Value | ||
Trivia Database [Member] | ||
Gross Carrying Value | 332 | 332 |
Accumulated Amortization | (332) | (332) |
Net Book Value | ||
Trademarks And Trademark Licenses [Member] | ||
Gross Carrying Value | 67 | 67 |
Accumulated Amortization | (67) | (67) |
Net Book Value |
Accrued Compensation - Schedule
Accrued Compensation - Schedule of Accrued Compensation (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued bonuses | $ 487 | $ 340 |
Accrued vacation | 291 | 423 |
Accrued salaries | 264 | 243 |
Accrued commissions | 18 | 18 |
Total accrued compensation | $ 1,060 | $ 1,024 |
Concentrations of Risk (Details
Concentrations of Risk (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts receivable from customer | $ 928 | $ 919 |
Sales Revenue, Net [Member] | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | ||
Revenues | $ 8,913 | $ 10,889 |
Supplier Concentration Risk [Member] | ||
Concentration risk percentage | 40.00% | 44.00% |
Accounts payable | $ 127 | |
Accounts Receivable | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | ||
Accounts receivable from customer | $ 261 | $ 172 |
Basic and Diluted Earnings Pe42
Basic and Diluted Earnings Per Common Share (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from earnings per share | 453,000 | 424,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Nov. 02, 2016 | Jun. 16, 2016 | Jun. 03, 2016 | Apr. 30, 2015 | Sep. 30, 2014 | Aug. 30, 2014 | Jun. 30, 2010 | Sep. 30, 2004 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2009 |
Common stock at purchase price per share | $ 6.64 | |||||||||||
Sale of stock common, shares | 412,071 | |||||||||||
Proceeds from offering expenses | $ 2,700 | |||||||||||
Reverse stock split | On June 16, 2016 (the Effective Date), the Company filed with the Secretary of State of Delaware the amendment to its restated certificate of incorporation to effect the reverse/forward split. The 1-100 reverse split was effective at 6:00 p.m. Eastern Time on the Effective Date and the 2-for-1 forward split was effective at 6:01 p.m. Eastern Time on the Effective Date. | At the Companys annual meeting of stockholders held on June 3, 2016, the Companys stockholders approved an amendment to the Companys restated certificate of incorporation to give effect to, first, a reverse split of the Companys outstanding common stock at an exchange ratio of 1-for-100 and, then, immediately following such reverse split, a forward split of its outstanding common stock at a ratio that is not less than 2-for-1 nor greater than 4-for-1, with the final ratio to be selected by the Companys board of directors in its sole discretion. The board of directors set the final ratio of the forward split at 2-for-1. The Company refers to the reverse split and to the forward split, together, as the reverse/forward split. | As of immediately prior to the reverse split/forward split on the Effective Date, the Company had 92,439,174 of common stock outstanding, and subsequent to the reverse/forward split, it had 1,848,597 shares of common stock outstanding. Approximately $3,000 was paid to cashed-out stockholders who owned less than 100 shares immediately prior to the reverse split on the Effective Date. | |||||||||
Fractional share cash for each such share held price per share | $ 0.12 | |||||||||||
Common stock, shares outstanding | 92,439,174 | 2,261,000 | 1,849,000 | |||||||||
Paid to cashed out stockholders | $ 3 | |||||||||||
Number of shares owned by stockholders | 100,000 | |||||||||||
Common stock par value | $ 0.005 | $ 0.005 | ||||||||||
Option issued to purchase number of additional common stock | 2,000 | |||||||||||
Stock-based compensation | $ 419 | $ 456 | ||||||||||
Closing stock price per share | $ 8.50 | |||||||||||
Aggregate intrinsic value of options exercised | $ 7 | |||||||||||
Number of common stock issued during period | 18,000 | 360 | ||||||||||
Option exercised during period, value | $ 1 | |||||||||||
Number of option exercised during period | 43 | |||||||||||
Weighted average grant-date fair value per share price | $ 6.48 | $ 12.74 | ||||||||||
Unamortized compensation expense | $ 647 | |||||||||||
Unamortized compensation expense remaining service period | 2 years 1 month 2 days | |||||||||||
Preferred Stock authorized | 5,000,000 | 5,000,000 | ||||||||||
Preferred stock shares issued | 156,000 | 156,000 | ||||||||||
Preferred Stock, shares outstanding | 156,000 | 156,000 | ||||||||||
Payment of dividend | $ 16 | |||||||||||
Common stock shares issued | 2,261,000 | 1,849,000 | ||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 156 | $ 156 | ||||||||||
Preferred Stock | ||||||||||||
Preferred Stock authorized | 10,000,000 | |||||||||||
Series A Cumulative Convertible Preferred Stock [Member] | ||||||||||||
Option exercised during period, value | ||||||||||||
Preferred Stock authorized | 5,000,000 | |||||||||||
Preferred stock shares issued | 156,000 | 156,000 | ||||||||||
Preferred Stock, shares outstanding | 156,000 | 156,000 | ||||||||||
Dividends payable per share | $ 0.10 | $ 0.10 | ||||||||||
Common Stock [Member] | ||||||||||||
Option exercised during period, value | ||||||||||||
Common stock shares issued | 1,000 | |||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 1 | |||||||||||
Warrants [Member] | ||||||||||||
Warrants issued to purchase number of common stock | 72,000 | 60,000 | ||||||||||
Fair value of the warrants | $ 1,379 | $ 537 | ||||||||||
Risk-free interest rates | 1.06% | 2.79% | ||||||||||
Dividend yield | 0.00% | 0.00% | ||||||||||
Expected volatility | 80.25% | 78.10% | ||||||||||
Term of weighted-average assumptions | 5 years | 8 years | ||||||||||
2004 Performance Incentive Plan [Member] | ||||||||||||
Maximum number of shares authorized to issue | 50,000 | |||||||||||
Options outstanding | 1,000 | |||||||||||
2010 Amended Performance Incentive Plan [Member] | ||||||||||||
Maximum number of shares authorized to issue | 120,000 | |||||||||||
Options outstanding | 79,000 | |||||||||||
Incentive plan expiry description | The Amended 2010 Plan expires in February 2020. | |||||||||||
2010 Amended Performance Incentive Plan [Member] | Minimum [Member] | ||||||||||||
Maximum number of shares authorized to issue | 120,000 | |||||||||||
2010 Amended Performance Incentive Plan [Member] | Maximum [Member] | ||||||||||||
Maximum number of shares authorized to issue | 240,000 | |||||||||||
2014 Inducement Plan [Member] | ||||||||||||
Maximum number of shares authorized to issue | 85,000 | |||||||||||
Incentive plan expiry description | The 2014 Plan expires in September 2024. | |||||||||||
2014 Inducement Plan [Member] | Mr Krishnan [Member] | ||||||||||||
Option issued to purchase number of additional common stock | 15,000 | 70,000 | ||||||||||
2014 Inducement Plan [Member] | First Anniversary [Member] | ||||||||||||
Option expected to vest during period, percentage | 25.00% | |||||||||||
2014 Inducement Plan [Member] | 36 Substantially Equal Monthly Installments Thereafter [Member] | ||||||||||||
Option expected to vest during period, percentage | 75.00% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Weighted Average Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted-average risk-free rate | 1.20% | 1.20% |
Weighted-average volatility | 111.02% | 82.80% |
Dividend yield | 0.00% | 0.00% |
Expected life | 6 years 2 months 1 day | 4 years 3 months 22 days |
Stockholders' Equity - Summariz
Stockholders' Equity - Summarizes Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Options exercised | (43) | |
Stock Options [Member] | ||
Options outstanding, beginning balance | 136,000 | 144,000 |
Options granted | 35,000 | 43,000 |
Options exercised | (2,000) | |
Options cancelled | (3,000) | (26,000) |
Options forfeited | (3,000) | (23,000) |
Options expired | ||
Options outstanding, ending balance | (165,000) | 136,000 |
Options vested and exercisable | 75,000 | |
Weighted average exercise price per share outstanding, beginning balance | $ 20.38 | $ 24.99 |
Weighted average exercise price per share granted | 7.73 | 20.59 |
Weighted average exercise price per share exercised | 14.32 | |
Weighted average exercise price per share cancelled | 21.49 | 37.56 |
Weighted average exercise price per share forfeited | 15.51 | 29.20 |
Weighted average exercise price per share expired | ||
Weighted average exercise price per share outstanding, ending balance | 17.78 | $ 20.38 |
Weighted average exercise price per share vested and exercisable | $ 20.06 | |
Weighted average remaining contractual life (in years) outstanding, beginning balance | 8 years 8 months 1 day | 8 years 7 months 6 days |
Weighted average remaining contractual life (in years) outstanding, ending balance | 8 years 7 days | 8 years 8 months 1 day |
Weighted average remaining contractual life (in years) vested and exercisable | 7 years 6 months 18 days | |
Aggregate intrinsic value outstanding, beginning balance | $ 2 | $ 285 |
Aggregate intrinsic value outstanding, ending balance | 36 | $ 2 |
Aggregate intrinsic value vested and exercisable | $ 4 |
Stockholders' Equity - Summar46
Stockholders' Equity - Summarizes Warrant Activity (Details) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Warrants outstanding, beginning balance | 132,000 | 132,000 |
Warrants granted | ||
Warrants exercised | ||
Warrants forfeited | ||
Warrants outstanding, ending balance | 132,000 | 132,000 |
Warrants exercisable | 132,000 | |
Weighted average exercise price per share outstanding, beginning balance | $ 33.64 | $ 33.64 |
Weighted average exercise price per share granted | ||
Weighted average exercise price per share exercised | ||
Weighted average exercise price per share forfeited | ||
Weighted average exercise price per share outstanding, ending balance | 33.64 | $ 33.64 |
Weighted average exercise price per share exercisable | $ 33.64 | |
Weighted average remaining contractual life (in years) outstanding, beginning balance | 2 years 2 months 5 days | 4 years 2 months 5 days |
Weighted average remaining contractual life (in years) outstanding, ending balance | 1 year 2 months 5 days | 2 years 2 months 5 days |
Weighted average remaining contractual life (in years) exercisable | 1 year 2 months 5 days |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Net change in valuation allowance | $ 917 | $ 2,407 |
Deferred tax asset NOLs | 23,291 | $ 21,462 |
2005 And Prior Years [Member] | ||
Deferred tax asset NOLs | 631 | |
Federal Income Tax Purposes [Member] | ||
NOL carryforwards | $ 65,291 | |
NOL carryforward expiration date | Dec. 31, 2017 | |
State Purposes [Member] | ||
NOL carryforwards | $ 35,969 | |
NOL carryforward expiration date | Dec. 31, 2017 | |
State Tax [Member] | ||
Deferred tax asset NOLs | $ 190 | |
Tax carryforwards description | Expire in the years 2017 through 2026. |
Income Taxes - Schedule of Curr
Income Taxes - Schedule of Current and Deferred Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
State | (25) | (26) |
Foreign | (1) | 24 |
Current Tax Provision | (26) | (2) |
Federal | ||
State | (4) | (4) |
Foreign | (8) | (6) |
Deferred Tax Provision | (12) | (10) |
Federal | ||
State | (29) | (30) |
Foreign | (9) | 18 |
Total Tax Provision | $ (38) | $ (12) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
NOL carryforwards | $ 23,291 | $ 21,462 |
UK NOL carryforwards | 516 | 693 |
Capital loss | 416 | |
Allowance for doubtful accounts | 139 | |
Compensation and vacation accrual | 92 | 221 |
Operating accruals | 147 | 213 |
Deferred revenue | 677 | |
Research and experimentation, AMT and foreign tax credits | 147 | 156 |
Texas Margin Tax Credit | 126 | 129 |
Fixed assets and intangibles | 199 | 204 |
Foreign | 181 | |
Other | 664 | 504 |
Total gross deferred tax assets | 25,321 | 24,856 |
Valuation allowance | (24,880) | (24,441) |
Net deferred tax assets | 441 | 415 |
Capitalized software | 359 | 349 |
Amortization | 18 | |
Foreign | 45 | 42 |
Deferred revenue | 49 | |
Other | 6 | |
Total gross deferred liabilities | 453 | 415 |
Net deferred taxes | $ (12) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Expected Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Tax at federal income tax rate | $ 962 | $ 2,435 |
State provision | (29) | (30) |
Foreign tax differential | 2 | 38 |
Change in valuation allowance | (917) | (2,407) |
Permanent items | (56) | (48) |
Total Tax Provision | $ (38) | $ (12) |
Long-term Debt (Details Narrati
Long-term Debt (Details Narrative) - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2013 |
Credit line amount outstanding | $ 97,000 | ||||
Maximum borrowing capacity | 6,500,000 | ||||
Line of credit remaining borrowing capacity | 6,500,000 | ||||
Long-term debt, current | 2,988,000 | ||||
Amount borrowed during period | 969,000 | ||||
Debt principal amount | 1,611,000 | ||||
Interest expense related to long term debt | $ 517,000 | $ 283,000 | |||
Equipment Notes Payable [Member] | |||||
Line of credit interest rate | 8.32% per annum; the interest for tranches borrowed thereafter was reduced to rates between 7.32% to 8.05% per annum. | ||||
Maximum borrowing capacity | $ 9,690,000 | $ 500,000 | |||
Line of credit facility interest rate | 24.00% | ||||
Long-term debt, current | $ 975,000 | ||||
Amount borrowed during period | $ 3,381,000 | ||||
Minimum [Member] | Prior to Amendment [Member] | |||||
Line of credit facility interest rate | 4.313% | ||||
Minimum [Member] | Post Amendment [Member] | |||||
Line of credit facility interest rate | 6.125% | ||||
Maximum [Member] | Prior to Amendment [Member] | |||||
Line of credit facility interest rate | 4.688% | ||||
Maximum [Member] | Post Amendment [Member] | |||||
Line of credit facility interest rate | 6.50% | ||||
East West Bank [Member] | |||||
Credit line amount outstanding | $ 7,500,000 | ||||
Increase the revolving line of credit | $ 2,500,000 | ||||
Advance due date | Mar. 31, 2017 | ||||
Line of credit facility, description | The Original Loan Agreement as amended by the First Amendment is referred to as the Amended Loan Agreement. Under the Amended Loan Agreement, through March 31, 2017, the Company may request advances in an aggregate outstanding amount at any time up to the lesser of (a) the revolving line (or $7,500,000) or (b) the sum of $2,000,000 (which the Company refers to as the sublimit) plus the amount equal to the Companys borrowing base, in each case, less the aggregate outstanding principal amount of prior advances. | ||||
Percentage of churn rate | 300.00% | ||||
Line of credit interest rate | On or before March 31, 2017, advances will bear interest, at the Companys option, at the rate of either (A) a variable rate per annum equal to the prime rate as set forth in The Wall Street Journal plus 2.75%, up from 1.25% under the original terms, or (B) at a fixed rate per annum equal to the LIBOR rate for the interest period for the advance plus 5.50%, up from 4.00% under the original terms. After March 31, 2017, the interest rates will revert to their original terms. | ||||
Maximum borrowing capacity | $ 6,500,000 | ||||
Line of credit remaining borrowing capacity | 97,000 | ||||
Proceeds to pay down existing indebtedness | 3,381,000 | ||||
Facility fee to lender | $ 37,500 | ||||
Increase in the revolving line times percentage | 0.50% | ||||
Line of credit principal and interest payments due | $ 1,095,000 | ||||
Percentage of pays an unused line fee | 0.50% | ||||
East West Bank [Member] | Amended Loan Agreement [Member] | |||||
Maximum borrowing capacity | $ 3,381,000 | ||||
Proceeds to pay down existing indebtedness | 2,000,000 | ||||
Facility fee to lender | 9,000 | ||||
East West Bank [Member] | Minimum [Member] | |||||
Credit line amount outstanding | $ 2,000,000 | ||||
East West Bank [Member] | Stump Product Line [Member] | |||||
Concentration risk percentage | 50.00% | ||||
Line of credit interest rate | The Amended Loan Agreement requires: (a) that the Company maintain a balance on deposit with the EWB equal to (i) on March 31, 2017, 100% of the aggregate outstanding principal amount of the advances at such time, and (ii) at all times after March 31, 2017, an amount determined by EWB based on the Companys 2017 financial projections; and (b) that the sum of the following be not less than $2,000,000: | ||||
First Line Of Credit [Member] | |||||
Line of credit principal and interest payments due | $ 1,000,000 | ||||
Line of credit, installment term | 36 months | ||||
Second Line Of Credit [Member] | |||||
Line of credit principal and interest payments due | $ 1,000,000 | ||||
Line of credit, installment term | 35 months |
Long-term Debt - Schedule of Fu
Long-term Debt - Schedule of Future Minimum Payments of Notes Payable (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 2,988 |
2,018 | 5,115 |
2,019 | 8 |
Total notes payable | $ 8,111 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating lease expense | $ 582 | $ 620 |
Depreciation expense | 2,451 | 2,061 |
Assets Held under Capital Leases [Member] | ||
Depreciation expense | $ 88 | $ 56 |
Commitments - Schedule of Opera
Commitments - Schedule of Operating Lease Commitments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 659 |
2,018 | 586 |
Total | $ 1,245 |
Commitments - Schedule of Prope
Commitments - Schedule of Property Held Under Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments and Contingencies Disclosure [Abstract] | ||
Office equipment | $ 328 | $ 299 |
Other | 250 | |
Accumulated depreciation | (185) | (97) |
Capital leased equipment, net | $ 393 | $ 202 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Capital Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 155 |
2,018 | 158 |
2,019 | 99 |
2,020 | 1 |
2,021 | 1 |
Total minimum payments | $ 414 |
Contingencies (Details Narrativ
Contingencies (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments and Contingencies Disclosure [Abstract] | ||
Repair accrual | $ 716 | $ 204 |
Other current liabilities remained | 175 | |
Sales taxes payable | $ 25 | |
Accrued sales tax liability after adjustment | $ 25 |
Accumulated Other Comprehensi58
Accumulated Other Comprehensive Income (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Shareholders' Equity: | ||
Accumulated foreign currency translation adjustments | $ 223 | $ 172 |
Geographical Information - Sche
Geographical Information - Schedule of Revenues Geographic Breakdown (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Total revenue | $ 22,312 | $ 24,519 |
United States [Member] | ||
Total revenue | 21,559 | 23,678 |
Canada [Member] | ||
Total revenue | $ 753 | $ 841 |
Geographical Information - Sc60
Geographical Information - Schedule of Asset Geographic Breakdown (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Total assets | $ 3,101 | $ 3,915 |
United States [Member] | ||
Total assets | 3,015 | 3,799 |
Canada [Member] | ||
Total assets | $ 86 | $ 116 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - USD ($) | Feb. 28, 2017 | Dec. 31, 2016 |
Revoving line of credit | $ 97,000 | |
Subsequent Event [Member] | ||
Revoving line of credit | $ 2,000,000 | |
Percentage of outstanding principal amount of advances | 100.00% | |
Sublimit value paid off | $ 2,000,000 | |
Subsequent Event [Member] | Third Amendment [Member] | ||
Interest rate of amount advanced increase | 0.50% | |
Line of credit interest rate description | The Wall Street Journal plus 3.25% (was previously 2.75%), and (B) for amounts advanced as a LIBOR loan, at a fixed rate per annum equal to the LIBOR rate for the interest period for the advance plus 6.00% (was previously 5.50%). After the earlier of June 15, 2017 (was previously March 31, 2017) or such time as the Company pays off in full in cash the $2.0 million sublimit, the additional margins decrease to 1.75% for prime rate loans (was previously 1.25%) and to 4.50% for LIBOR loans (was previously 4.00%). | |
Subsequent Event [Member] | June 15, 2017 [Member] | ||
Sublimit value paid off | $ 2,000,000 |