Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 02, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | NTN BUZZTIME INC | |
Entity Central Index Key | 748,592 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,515,533 | |
Trading Symbol | NTN | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 6,834 | $ 5,686 |
Accounts receivable, net of allowances of $505 and $376, respectively | 761 | 928 |
Income taxes receivable | 7 | |
Site equipment to be installed | 2,463 | 2,998 |
Prepaid expenses and other current assets | 2,158 | 1,050 |
Total current assets | 12,223 | 10,662 |
Fixed assets, net | 3,159 | 3,101 |
Software development costs, net of accumulated amortization of $2,742 and $2,641, respectively | 1,228 | 970 |
Deferred costs | 850 | 904 |
Goodwill | 968 | 937 |
Intangible assets, net | 4 | 29 |
Other assets | 100 | 92 |
Total assets | 18,532 | 16,695 |
Current Liabilities: | ||
Accounts payable | 1,022 | 247 |
Accrued compensation | 738 | 1,060 |
Accrued expenses | 438 | 697 |
Sales taxes payable | 95 | 142 |
Income taxes payable | 4 | |
Current portion of long-term debt (Note 4) | 5,196 | 2,988 |
Current portion of obligations under capital leases | 156 | 155 |
Current portion of deferred revenue | 3,836 | 1,059 |
Other current liabilities | 165 | 291 |
Total current liabilities | 11,646 | 6,643 |
Long-term debt (Note 4) | 264 | 5,123 |
Long-term obligations under capital leases | 181 | 259 |
Long-term deferred revenue | 111 | 219 |
Deferred rent | 281 | 371 |
Other liabilities | 15 | 12 |
Total liabilities | 12,498 | 12,627 |
Commitments and contingencies | ||
Shareholders' Equity: | ||
Series A convertible preferred stock, $.005 par value, 156 and 5,000 shares designated at June 30, 2017 and December 31, 2016, respectively; $156 liquidation preference and 156 shares issued and outstanding at June 30, 2017 and December 31, 2016 (Note 3) | 1 | 1 |
Common stock, $.005 par value, 15,000 and 168,000 shares authorized at June 30, 2017 and December 31, 2016, respectively; 2,513 and 2,261 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively (Note 3) | 13 | 11 |
Treasury stock, at cost, 10 shares at June 30, 2017 and December 31, 2016 | (456) | (456) |
Additional paid-in capital | 134,485 | 132,315 |
Accumulated deficit | (128,288) | (128,026) |
Accumulated other comprehensive income | 279 | 223 |
Total shareholders' equity | 6,034 | 4,068 |
Total liabilities and shareholders' equity | $ 18,532 | $ 16,695 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts - accounts receivable | $ 505 | $ 376 |
Software accumulated amortization | $ 2,742 | $ 2,641 |
Preferred Stock Series A par value per share | $ .005 | $ .005 |
Preferred Stock Series A shares designated | 156 | 5,000 |
Preferred Stock Series A liquidation preference | $ 156 | $ 156 |
Preferred Stock Series A shares issued | 156 | 156 |
Preferred Stock Series A shares outstanding | 156 | 156 |
Common stock par value | $ 0.005 | $ 0.005 |
Common stock shares authorized | 15,000 | 168,000 |
Common stock shares issued | 2,513 | 2,261 |
Common stock shares outstanding | 2,513 | 2,261 |
Treasury stock shares | 10 | 10 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Subscription revenue | $ 4,232 | $ 4,355 | $ 8,458 | $ 8,729 |
Sales-type lease revenue | 223 | 301 | 408 | 697 |
Other revenue | 1,094 | 751 | 1,914 | 1,463 |
Total Revenue | 5,549 | 5,407 | 10,780 | 10,889 |
Operating expenses: | ||||
Direct operating costs (includes depreciation and amortization of $465 and $620 for the three months ended June 30, 2017 and 2016, respectively, and $956 and $1,263 for the six months ended June 30, 2017 and 2016, respectively) | 1,631 | 1,840 | 3,474 | 3,876 |
Selling, general and administrative | 3,858 | 4,153 | 7,992 | 8,353 |
Depreciation and amortization (excluding depreciation and amortization included in direct operating costs) | 86 | 110 | 174 | 224 |
Total operating expenses | 5,575 | 6,103 | 11,640 | 12,453 |
Operating loss | (26) | (696) | (860) | (1,564) |
Other (expense) income, net | (132) | (149) | 618 | (303) |
Loss before income taxes | (158) | (845) | (242) | (1,867) |
Provision for income taxes | (6) | (5) | (12) | (24) |
Net loss | $ (164) | $ (850) | $ (254) | $ (1,891) |
Net loss per common share - basic and diluted | $ (0.07) | $ (0.46) | $ (0.11) | $ (1.03) |
Weighted average shares outstanding - basic and diluted (Note 2) | 2,494 | 1,839 | 2,375 | 1,839 |
Comprehensive loss | ||||
Net loss | $ (164) | $ (850) | $ (254) | $ (1,891) |
Foreign currency translation adjustment | 41 | 2 | 56 | 115 |
Total comprehensive loss | $ (123) | $ (848) | $ (198) | $ (1,776) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Depreciation and amortization - part of direct operating costs | $ 465 | $ 620 | $ 956 | $ 1,263 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows provided by operating activities: | ||
Net loss | $ (254) | $ (1,891) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 1,130 | 1,487 |
Provision for doubtful accounts | 40 | 24 |
Excess and obsolete site equipment to be installed expense | 24 | 27 |
Stock-based compensation | 234 | 223 |
Amortization of debt issuance costs | 26 | 18 |
Issuance of common stock in lieu of cash for bonus compensation | 164 | |
Impairment of capitalized software | 4 | |
Loss from disposition of equipment | 6 | 6 |
Changes in assets and liabilities: | ||
Accounts receivable | 127 | 254 |
Site equipment to be installed | (218) | 265 |
Prepaid expenses and other assets | (1,121) | 131 |
Accounts payable and accrued liabilities | 148 | (254) |
Income taxes | (12) | (10) |
Deferred costs | 55 | 141 |
Deferred revenue | 2,669 | 27 |
Deferred rent | (90) | (81) |
Other liabilities | (126) | (354) |
Net cash provided by operating activities | 2,806 | 13 |
Cash flows used in investing activities: | ||
Capital expenditures | (339) | (291) |
Software development expenditures | (362) | (175) |
Net cash used in investing activities | (701) | (466) |
Cash flows (used in) provided by financing activities: | ||
Proceeds from long-term debt | 2,114 | |
Payments on long-term debt | (2,651) | (1,311) |
Debt issuance costs on long-term debt | (22) | (2) |
Principal payments on capital lease | (77) | (42) |
Net proceeds from issuance of common stock related to registered direct offering (Note 3) | 1,773 | |
Payments to cashed-out stockholders in connection with reverse/forward stock split | (3) | |
Payment of preferred stockholders dividends | (8) | (8) |
Net cash (used in) provided by financing activities | (985) | 748 |
Net increase in cash and cash equivalents | 1,120 | 295 |
Effect of exchange rate on cash | 28 | 53 |
Cash and cash equivalents at beginning of year | 5,686 | 3,223 |
Cash and cash equivalents at end of year | 6,834 | 3,571 |
Supplemental disclosures of cash flow information: Cash paid during the period for: | ||
Interest | 303 | 217 |
Income taxes | 33 | 35 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Site equipment transferred to fixed assets | 729 | 537 |
Site equipment transferred to other current assets | 176 | |
Equipment acquired under capital lease | $ 22 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (1) BASIS OF PRESENTATION Description of Business NTN Buzztime, Inc. (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, by selling advertising aired on in-venue screens and as part of customized games and by pay-to-play single player games. 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. Basis of Accounting Presentation The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments that are necessary, which are of a normal and recurring nature, for a fair presentation for the periods presented of the financial position, results of operations and cash flows of the Company and its wholly-owned subsidiaries: IWN, Inc., IWN, L.P., Buzztime Entertainment, Inc., NTN Wireless Communications, Inc., NTN Software Solutions, Inc., NTN Canada, Inc., and NTN Buzztime, Ltd., all of which, other than NTN Canada, Inc., are dormant subsidiaries. All significant intercompany transactions have been eliminated in consolidation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016. The accompanying condensed balance sheet as of December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2017, or any other period. |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Common Share | (2) Basic and Diluted Earnings Per Common Share The Company computes basic and diluted earnings per common share in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 260, Earnings per Share |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Shareholders' Equity: | |
Stockholders' Equity | (3) STOCKHOLDERS’ EQUITY Reduction in Designated Shares of Series A Preferred Stock The Company has only shares of one series of preferred stock issued and outstanding—the Series A Convertible Preferred Stock. As of April 10, 2017 and as of June 30, 2017, there were 156,112 shares of Series A Convertible Preferred Stock issued and outstanding. As previously reported, on April 10, 2017, the Company filed a certificate of decrease with the Secretary of State of the State of Delaware with respect to the Series A Convertible Preferred Stock for the purpose of decreasing the number of shares of such stock authorized for issuance from 5,000,000 to 156,112. The effective date of the filing was April 10, 2017. Reduction in Authorized Shares At the Company’s annual meeting of stockholders held on June 8, 2017, the Company’s stockholders approved an amendment to its restated certificate of incorporation to reduce the number of the Company’s authorized shares from 178,000,000, consisting of 168,000,000 shares of common stock and 10,000,000 shares of preferred stock, to 16,000,000, consisting of 15,000,000 shares of common stock and 1,000,000 shares of preferred stock. Registered Direct Offerings On April 25, 2017, 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 $7.78 per share, which was the closing price of its common stock on April 25, 2017. The offering closed on April 28, 2017. The Company sold 29,566 shares of its common stock and received net proceeds of approximately $0.2 million, after deducting offering expenses. On March 27, 2017, 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 $7.85 per share, which was the closing price of its common stock on March 24, 2017. The offering closed on March 31, 2017. The Company sold 200,000 shares of its common stock and received net proceeds of approximately $1,554,000, after deducting offering expenses. The Company intends to use the net proceeds of the offerings for general corporate purposes, which may include working capital, general and administrative expenses, capital expenditures and implementation of its strategic priorities. The shares in both offerings were offered and sold pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration Statement No. 333-215271) filed with the Securities and Exchange Commission on December 22, 2016 and declared effective by the SEC on February 2, 2017, and the base prospectus included therein, as supplemented by a prospectus supplement filed with the SEC in connection with the takedown relating to the offerings. Stock-based Compensation The Company’s stock-based compensation plans include the NTN Buzztime, Inc. 2004 Performance Incentive Plan (the “2004 Plan”), the NTN Buzztime, Inc. Amended 2010 Performance Incentive Plan (the “Amended 2010 Plan”) and the NTN Buzztime, Inc. 2014 Inducement Plan (the “2014 Plan”). The 2004 Plan expired in September 2009. From and after the date it expired, no awards could be granted under that plan and all awards that had been granted under that plan before it expired are governed by that plan until they are exercised or expire in accordance with that plan’s terms. The Amended 2010 Plan provides for the grant of up to 240,000 share-based awards and expires in February 2020. As of June 30, 2017, approximately 105,000 share-based awards were available to be issued under the Amended 2010 Plan. The 2014 Plan, which provides for the grant of up to 85,000 share-based awards to a new employee as an inducement material to the new employee entering into employment with the Company, was approved by the nominating and corporate governance/compensation committee of the Company’s board of directors (the “Committee”) in September 2014 in connection with the appointment of Ram Krishnan as the Company’s Chief Executive Officer. As of June 30, 2017, there were no share-based awards available to be granted under the 2014 Plan. The Company’s stock-based compensation plans are administered by the Committee, which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures, if any, and other provisions of the award. The 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 the three and six months ended June 30, 2017 and 2016 under the ASC No. 718 requirements. Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Weighted average risk-free rate 1.61 % 1.16 % 1.62 % 1.20 % Weighted average volatility 114.33 % 111.27 % 114.70 % 111.02 % Dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Expected life 7.38 years 6.29 years 7.25 years 6.17 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 the three months ended June 30, 2017 and 2016 was $117,000 and $110,000, respectively, and $234,000 and $223,000 for the six months ended June 30, 2017 and 2016, respectively, and is expensed in selling, general and administrative expenses and credited to additional paid-in-capital. The Company granted stock options to purchase approximately 2,000 and 20,000 shares of common stock during the three months ended June 30, 2017 and 2016, respectively, and stock options to purchase approximately 4,000 and 35,000 shares of common stock during the six months ended June 30, 2017 and 2016, respectively. No options were exercised during either of the three and six months ended June 30, 2017 or 2016. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | (4) DEBT Revolving Line of Credit In April 2015, the Company entered into a loan and security agreement with East West Bank, or EWB, which was amended in March 2016, December 2016 and February 2017. The Company refers to the loan and security agreement as amended in March 2016, December 2016 and February 2017 as the EWB credit facility. Under the EWB credit facility, the Company may request advances in an aggregate outstanding amount at any time up to the lesser of (a) $7,500,000, which the Company refers to as the revolving line, or (b) the sum of $2,000,000 (which the Company refers to as the “sublimit”) plus the amount equal to its borrowing base, in each case, less the aggregate outstanding principal amount of prior advances. On June 15, 2017, the sublimit became zero. Advances 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 plus 3.25% (which decreases to 1.75% at the earlier of June 15, 2017 or such time the Company pays off in full in cash the $2.0 million sublimit), or (B) at a fixed rate per annum equal to the LIBOR Rate for the interest period for the advance plus 6.00% (which, after the Company repaid the sublimit in April 2017, decreased to 4.50% on all amounts then outstanding and on any subsequent borrowings). 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. All advances are due on January 15, 2018. The Company uses the proceeds available under this credit facility to fund strategic growth initiatives and for general working capital purposes. The Company’s borrowing base under the EWB credit facility is, 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 our average churn rate for the immediately preceding three months (not to exceed zero); times (c) 300%. For this purpose, the Company’s 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. Because the amount of the Company’s monthly recurring revenue and how much each source contributes to it will change from month to month, the Company’s borrowing base will fluctuate accordingly. Under the EWB credit facility, the Company is required to meet a minimum adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, target and churn rate targets, in each case, as specified in the EWB credit facility. 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 EWB, other one-time charges, plus (h) to the extent approved by EWB, any losses arising from the sale, exchange, transfer or other disposition of assets not in the ordinary course of business. Compliance with the adjusted EBITDA target is measured as of the last day of each fiscal quarter with respect to the immediately prior three-month period. Through January 31, 2017, compliance with the churn rate target was measured on a monthly and trailing three-month basis. In February 2017, compliance began to be measured only on a trailing three-month basis. The EWB credit facility also requires the Company to maintain, at June 15, 2017, or if earlier, at such time that the $2.0 million sublimit has been paid off, a balance on deposit with EWB equal to 100% of the aggregate outstanding principal amount of the advances at the applicable measurement time. As of June 30, 2017, the Company borrowed $6,500,000 in the aggregate under the EWB credit facility, of which $4,450,000 remained outstanding after paying in full the $2,000,000 outstanding under the sublimit in April 2017 and $50,000 on the revolving line. The remaining $4,450,000 is recorded in current portion of long-term debt on the accompanying consolidated balance sheet. As of June 30, 2017, and based on our borrowing base calculated as of that date, approximately $50,000 was available to borrow. As a result of paying the sublimit in full, the Company was required to have a balance on deposit with EWB equal to 100% of the aggregate outstanding principal amount of the advances at that time, and the Company complied with this covenant. The Company was also in compliance with all other covenants as of June 30, 2017. The Company used approximately $3,381,000 of the total $6,500,000 borrowed under the EWB credit facility to pay down indebtedness that was then owed to an equipment lender and to pay related prepayment fees. Under the EWB credit facility, the amount the Company may owe under its current credit facility with that equipment lender is not limited to any specified amount. With EWB’s consent, the Company may incur additional indebtedness of up to $2,000,000 in the aggregate with other equipment lenders for equipment financing. Subject to the foregoing, the EWB credit facility prohibits the Company from borrowing additional amounts from other lenders. The Company paid $37,500 to EWB as a facility fee at the time of closing in April 2014, and has incurred approximately $31,000 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. 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 June 30, 2017, the maximum amount was $9,690,000, all of which has been borrowed. As of June 30, 2017, approximately $1,010,000 of principal remained outstanding under this financing arrangement, of which $746,000 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 EWB. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2017 | |
Shareholders' Equity: | |
Accumulated Other Comprehensive Income | (5) ACCUMULATED OTHER COMPREHENSIVE INCOME The United States dollar is the Company’s functional currency, except for its operations in Canada where the functional currency is the Canadian dollar. The financial position and results of operations of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. In accordance with ASC No. 830, Foreign Currency Matters |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | (6) RECENT ACCOUNTING PRONOUNCEMENTS In July 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, |
Concentrations of Risk
Concentrations of Risk | 6 Months Ended |
Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | (7) CONCENTRATIONS OF RISK Significant Customer For the three months ended June 30, 2017 and 2016, the Company generated approximately $2,379,000 and $2,173,000, respectively, of total revenue from Buffalo Wild Wings corporate-owned restaurants and its franchisees, which represented approximately 43% and 40% of total revenue for those periods, respectively. For the six months ended June 30, 2017 and 2016, the Company generated approximately $4,484,000 and $4,465,000, respectively, of total revenue from Buffalo Wild Wings corporate-owned restaurants and its franchisees, which represented approximately 42% and 41% of total revenue for those periods, respectively. As of June 30, 2017 and December 31, 2016, approximately $254,000 and $261,000, respectively, was included in accounts receivable from Buffalo Wild Wings corporate-owned restaurants and its franchisees. Equipment Suppliers 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 June 30, 2017, approximately $485,000 was included in accounts payable or accrued expenses for the tablet equipment purchased from its sole supplier. There were no amounts outstanding in accounts payable or accrued expenses as of December 31, 2016 related to the sole supplier. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Shareholders' Equity: | |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were used for grants issued during the three and six months ended June 30, 2017 and 2016 under the ASC No. 718 requirements. Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Weighted average risk-free rate 1.61 % 1.16 % 1.62 % 1.20 % Weighted average volatility 114.33 % 111.27 % 114.70 % 111.02 % Dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Expected life 7.38 years 6.29 years 7.25 years 6.17 years |
Basic and Diluted Earnings Pe15
Basic and Diluted Earnings Per Common Share (Details Narrative) - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from earnings per share | 394,000 | 457,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 25, 2017 | Mar. 27, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 08, 2017 | Apr. 10, 2017 | Dec. 31, 2016 |
Preferred stock, shares issued | 156 | 156 | 156 | ||||||
Preferred stock, shares outstanding | 156 | 156 | 156 | ||||||
Stock-based compensation | $ 117 | $ 110 | $ 234 | $ 223 | |||||
Stock options to purchase shares of common stock | 2,000 | 20,000 | 4,000 | 35,000 | |||||
Option exercised during period, value | |||||||||
Amended 2010 Plan [Member] | |||||||||
Number of option available for grants | 105,000 | 105,000 | |||||||
Share-based awards, expiration date | Feb. 29, 2020 | ||||||||
Subscription Agreement [Member] | |||||||||
Common stock at purchase price per share | $ 7.78 | $ 7.85 | |||||||
Sale of stock common, shares | 29,566 | 200,000 | |||||||
Proceeds from offering expenses | $ 200 | $ 1,554 | |||||||
Minimum [Member] | |||||||||
Number of shares authorized | 16,000,000 | ||||||||
Minimum [Member] | Common Stock [Member] | |||||||||
Number of shares authorized | 15,000,000 | ||||||||
Minimum [Member] | Preferred Stock [Member] | |||||||||
Number of shares authorized | 1,000,000 | ||||||||
Maximum [Member] | |||||||||
Number of shares authorized | 178,000,000 | ||||||||
Maximum [Member] | Amended 2010 Plan [Member] | |||||||||
Number of option available for grants | 240,000 | 240,000 | |||||||
Maximum [Member] | 2014 Inducement Plan [Member] | New Employee [Member] | |||||||||
Number of option available for grants | 85,000 | 85,000 | |||||||
Maximum [Member] | Common Stock [Member] | |||||||||
Number of shares authorized | 168,000,000 | ||||||||
Maximum [Member] | Preferred Stock [Member] | |||||||||
Number of shares authorized | 10,000,000 | ||||||||
Series A Convertible Preferred Stock [Member] | |||||||||
Preferred stock, shares issued | 156,112 | 156,112 | 156,112 | ||||||
Preferred stock, shares outstanding | 156,112 | 156,112 | 156,112 | ||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||
Series A Convertible Preferred Stock [Member] | Minimum [Member] | |||||||||
Preferred stock, shares authorized | 156,112 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Weighted Average Assumptions (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Weighted average risk-free rate | 1.61% | 1.16% | 1.62% | 1.20% |
Weighted average volatility | 114.33% | 111.27% | 114.70% | 111.02% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected life | 7 years 4 months 17 days | 6 years 3 months 15 days | 7 years 2 months 30 days | 6 years 2 months 1 day |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Apr. 30, 2017 | Apr. 30, 2015 | Jun. 30, 2017 | Dec. 31, 2016 | May 31, 2013 | |
Current portion of long term debt | $ 5,196,000 | $ 2,988,000 | |||
Debt principal amount | $ 1,010,000 | ||||
Equipment Notes Payable [Member] | |||||
Line of credit facility interest rate | 24.00% | ||||
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. | ||||
Current portion of long term debt | $ 746,000 | ||||
Maximum borrowing capacity | $ 9,690,000 | $ 500,000 | |||
Wall Street Journal [Member] | |||||
Payments of line of credit | $ 2,000,000 | ||||
Prime Rate [Member] | Wall Street Journal [Member] | |||||
Line of credit facility interest rate | 3.25% | ||||
LIBOR Rate [Member] | Wall Street Journal [Member] | |||||
Line of credit facility interest rate | 6.00% | ||||
Minimum [Member] | Prime Rate [Member] | Wall Street Journal [Member] | |||||
Line of credit facility interest rate | 1.75% | ||||
Minimum [Member] | LIBOR Rate [Member] | Wall Street Journal [Member] | |||||
Line of credit facility interest rate | 4.50% | ||||
East West Bank [Member] | |||||
Credit line amount outstanding | $ 7,500,000 | ||||
Advance due date | Jan. 15, 2018 | ||||
Line of credit facility, description | Under the EWB credit facility, the Company may request advances in an aggregate outstanding amount at any time up to the lesser of (a) $7,500,000, which the Company refers to as the revolving line, or (b) the sum of $2,000,000 (which the Company refers to as the sublimit) plus the amount equal to its borrowing base, in each case, less the aggregate outstanding principal amount of prior advances | ||||
Line of credit facility interest rate | 100.00% | ||||
Increase the revolving line of credit | $ 2,500,000 | ||||
Percentage of churn rate | 300.00% | ||||
Proceeds from line of credit | $ 6,500,000 | ||||
Line of credit interest rate | The EWB credit facility also requires the Company to maintain, at June 15, 2017, or if earlier, at such time that the $2.0 million sublimit has been paid off, a balance on deposit with EWB equal to 100% of the aggregate outstanding principal amount of the advances at the applicable measurement time. | ||||
Line of credit | 4,450,000 | ||||
Line of credit facility, periodic payment, principal | $ 2,000,000 | 50,000 | |||
Current portion of long term debt | 4,450,000 | ||||
Line of credit remaining borrowing capacity | 50,000 | ||||
Proceeds to pay down existing indebtedness | 3,381,000 | ||||
Maximum borrowing capacity | 6,500,000 | ||||
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 | ||||
Percentage of pays an unused line fee | 0.50% | ||||
East West Bank [Member] | Amended Loan Agreement [Member] | |||||
Facility fee to lender | $ 31,000 | ||||
East West Bank [Member] | Sublimit [Member] | |||||
Line of credit facility, periodic payment, principal | $ 2,000,000 | ||||
East West Bank [Member] | Stump Product Line [Member] | |||||
Concentration risk percentage | 50.00% | ||||
East West Bank [Member] | Minimum [Member] | |||||
Credit line amount outstanding | $ 2,000,000 | ||||
East West Bank [Member] | Maximum [Member] | Amended Loan Agreement [Member] | |||||
Proceeds to pay down existing indebtedness | 2,000,000 | ||||
Equipment Notes Payable [Member] | Tranches One [Member] | |||||
Maximum borrowing capacity | $ 1,000,000 | ||||
Line of credit, installment term | 36 months | ||||
Equipment Notes Payable [Member] | Tranches Two [Member] | |||||
Maximum borrowing capacity | $ 1,000,000 | ||||
Line of credit, installment term | 35 months |
Accumulated Other Comprehensi19
Accumulated Other Comprehensive Income (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Shareholders' Equity: | ||
Accumulated foreign currency translation adjustments | $ 279 | $ 223 |
Concentrations of Risk (Details
Concentrations of Risk (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Accounts receivable from customer | $ 761 | $ 761 | $ 928 | ||
Sales Revenue, Net [Member] | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | |||||
Revenues | $ 2,379 | $ 2,173 | $ 4,484 | $ 4,465 | |
Supplier Concentration Risk [Member] | |||||
Concentration risk percentage | 43.00% | 40.00% | 42.00% | 41.00% | |
Accounts payable | $ 485 | $ 485 | |||
Accounts Receivable | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | |||||
Accounts receivable from customer | $ 254 | $ 254 | $ 261 |