Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 06, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
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 | $ 11,200 | ||
Entity Common Stock, Shares Outstanding | 2,520,554 | ||
Trading Symbol | NTN | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 3,378 | $ 5,686 |
Accounts receivable, net of allowances of $463 and $376, respectively | 714 | 928 |
Site equipment to be installed | 4,866 | 2,998 |
Prepaid expenses and other current assets | 680 | 1,050 |
Total current assets | 9,638 | 10,662 |
Fixed assets, net (Note 3) | 3,678 | 3,101 |
Software development costs, net of accumulated amortization of $2,651 and $2,641, respectively | 1,459 | 970 |
Deferred costs | 775 | 904 |
Goodwill (Note 4) | 1,004 | 937 |
Intangible assets, net (Note 4) | 29 | |
Other assets | 16 | 92 |
Total assets | 16,570 | 16,695 |
Current Liabilities: | ||
Accounts payable | 390 | 247 |
Accrued compensation (Note 6) | 646 | 1,060 |
Accrued expenses | 418 | 697 |
Sales taxes payable | 107 | 142 |
Income taxes payable | 13 | 4 |
Current portion of long-term debt (Note 11) | 5,059 | 2,988 |
Current portion of obligations under capital leases (Note 12) | 176 | 155 |
Current portion of deferred revenue | 3,564 | 1,059 |
Deferred rent | 182 | |
Other current liabilities | 192 | 291 |
Total current liabilities | 10,747 | 6,643 |
Long-term debt (Note 11) | 8 | 5,123 |
Long-term obligations under capital leases (Note 12) | 164 | 259 |
Long-term deferred revenue | 63 | 219 |
Deferred rent | 371 | |
Other liabilities | 52 | 12 |
Total liabilities | 11,034 | 12,627 |
Commitments and contingencies (Notes 12 and 13) | ||
Shareholders' Equity (Note 9): | ||
Series A 10% cumulative convertible preferred stock, $.005 par value, $156 liquidation preference, 156 shares authorized; 156 shares issued and outstanding at December 31, 2017 and 2016 | 1 | 1 |
Common stock, $.005 par value, 15,000 shares authorized at December 31, 2017 and 2016; 2,521 and 2,261 shares issued and outstanding at December 31, 2017 and 2016, respectively | 13 | 11 |
Treasury stock, at cost, 10 shares at December 31, 2017 and 2016 | (456) | (456) |
Additional paid-in capital | 134,752 | 132,315 |
Accumulated deficit | (129,119) | (128,026) |
Accumulated other comprehensive income (Note 14) | 345 | 223 |
Total shareholders' equity | 5,536 | 4,068 |
Total liabilities and shareholders' equity | $ 16,570 | $ 16,695 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts - accounts receivable | $ 463 | $ 376 |
Software accumulated amortization | $ 2,651 | $ 2,641 |
Cumulative 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 | 156,000 | 156,000 |
Preferred Stock Series A, shares issued | 156,000 | 156,000 |
Preferred Stock Series A, shares outstanding | 156,000 | 156,000 |
Common stock, par value | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 2,521,000 | 2,261,000 |
Common stock, shares outstanding | 2,521,000 | 2,261,000 |
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, 2017 | Dec. 31, 2016 | |
Revenues | ||
Subscription revenue | $ 16,949 | $ 17,463 |
Sales-type lease revenue | 770 | 1,266 |
Other revenue | 3,555 | 3,583 |
Total revenue | 21,274 | 22,312 |
Operating expenses: | ||
Direct operating costs (includes depreciation and amortization of $1,983 and $2,465, respectively) | 6,755 | 7,710 |
Selling, general and administrative | 15,587 | 16,458 |
Depreciation and amortization (excluding depreciation and amortization included in direct operating costs) | 334 | 422 |
Total operating expenses | 22,676 | 24,590 |
Operating loss | (1,402) | (2,278) |
Other (expense) income: | ||
Interest expense | (498) | (576) |
Other income (expense) | 889 | (31) |
Total other income (expense), net | 391 | (607) |
Loss before income taxes | (1,011) | (2,885) |
Provision for income taxes | (66) | (38) |
Net loss | $ (1,077) | $ (2,923) |
Net loss per common share - basic and diluted | $ (0.44) | $ (1.54) |
Weighted average shares outstanding - basic and diluted | 2,442,000 | 1,903,000 |
Comprehensive loss | ||
Net loss | $ (1,077) | $ (2,923) |
Foreign currency translation adjustment (Note 14) | 122 | 51 |
Total comprehensive loss | $ (955) | $ (2,872) |
Consolidated Statements of Ope5
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Depreciation and amortization - part of direct operating costs | $ 1,983 | $ 2,465 |
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, 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 (Note 9) | (3) | (3) | |||||
Net proceeds from issuance of common stock related to registered direct offering (Note 9) | $ 2 | 2,690 | 2,692 | ||||
Net proceeds from issuance of common stock related to registered direct offering (Note 9), shares | 412,000 | ||||||
Dividend paid to Series A preferred stockholders | (16) | (16) | |||||
Dividend paid to Series A preferred stockholders, 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 | |||||
Foreign currency translation adjustment | 122 | 122 | |||||
Net loss | (1,077) | (1,077) | |||||
Net proceeds from issuance of common stock related to registered direct offering (Note 9) | $ 1 | 1,772 | 1,773 | ||||
Net proceeds from issuance of common stock related to registered direct offering (Note 9), shares | 230,000 | ||||||
Dividend paid to Series A preferred stockholders | (16) | (16) | |||||
Dividend paid to Series A preferred stockholders, shares | |||||||
Non-cash stock based compensation | 457 | 457 | |||||
Common stock issued for compensation in lieu of cash payment | $ 1 | 208 | 209 | ||||
Common stock issued for compensation in lieu of cash payment, shares | 30,000 | ||||||
Balance at Dec. 31, 2017 | $ 1 | $ 13 | $ 134,752 | $ (456) | $ (129,119) | $ 345 | $ 5,536 |
Balance, shares at Dec. 31, 2017 | 156,000 | 2,521,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows provided by operating activities: | ||
Net loss | $ (1,077) | $ (2,923) |
Adjustments to reconcile net loss to net cash provide by operating activities: | ||
Depreciation and amortization | 2,317 | 2,887 |
Provision for doubtful accounts | 72 | 74 |
Excess and obsolete site equipment to be installed expense | 226 | 63 |
Transfer of fixed assets to sales-type lease | 5 | |
Stock-based compensation | 457 | 419 |
Amortization of debit issuance costs | 60 | 36 |
Common stock issued for compensation in lieu of cash payment | 209 | |
Loss from disposition of equipment and capitalized software | 18 | 33 |
Changes in assets and liabilities: | ||
Accounts receivable | 142 | (83) |
Site equipment to be installed | (3,932) | (217) |
Prepaid expenses and other assets | 443 | 121 |
Accounts payable and accrued liabilities | (586) | 47 |
Income taxes payable | 9 | (19) |
Deferred costs | 130 | 425 |
Deferred revenue | 2,349 | (327) |
Deferred rent | (189) | (170) |
Other liabilities | (99) | (348) |
Net cash provided by operating activities | 549 | 23 |
Cash flows (used in) investing activities: | ||
Capital expenditures | (728) | (427) |
Software development expenditures | (724) | (413) |
Net cash (used in) investing activities | (1,452) | (840) |
Cash flows (used in) provided by financing activities: | ||
Net proceeds from issuance of common stock related to registered direct offering | 1,773 | 2,692 |
Proceeds from long-term debt | 50 | 2,502 |
Payments on long-term debt | (3,038) | (1,829) |
Debt issuance costs on long-term debt | (82) | (9) |
Principal payments on capital lease | (155) | (81) |
Adjustments to common stock in connection with reverse/forward stock split (Note 9) | (3) | |
Dividends paid to Series A preferred shareholders | (16) | (16) |
Net cash (used in) provided by financing activities | (1,468) | 3,256 |
Net (decrease) increase in cash and cash equivalents | (2,371) | 2,439 |
Effect of exchange rate on cash | 63 | 24 |
Cash and cash equivalents at beginning of year | 5,686 | 3,223 |
Cash and cash equivalents at end of year | 3,378 | 5,686 |
Supplemental disclosures of cash flow information: Cash paid during the period for: | ||
Interest | 458 | 492 |
Income taxes | 36 | 47 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Site equipment transferred to fixed assets | 1,838 | 1,220 |
Equipment acquired under capital lease | 81 | 279 |
Site equipment transferred to other current assets | $ 176 |
Organization of Company
Organization of Company | 12 Months Ended |
Dec. 31, 2017 | |
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 subscribe to 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 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 commercially launched during 2013 and then 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 our service to our network subscribers, by leasing equipment (including tablets used in our 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, from providing professional services (such as developing certain functionality within our platform for customers), and from pay-to-play single player games. At December 31, 2017, 2,730 venues in the U.S. and Canada subscribed to the Company’s interactive entertainment network, of which approximately 81% 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, 2017 | |
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 another financing arrangement with an equipment 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, 2017, the Company borrowed $9,690,000. As of December 31, 2017, $623,000 remained outstanding, of which $615,000 is recorded in current portion of long-term debt and $8,000 is recorded in long-term debt on the accompanying consolidated balance sheet. 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, 2017, 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, 2017 and determined to abandon various software development projects that it concluded were no longer a current strategic fit or for which it determined that the marketability of the content had decreased due to obtaining additional information regarding the specific industry for which the content was intended. As a result, an impairment of $5,000 was recognized for the year ended December 31, 2017, which was recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. The Company also performed its annual review for the year ended December 31, 2016 and determined that there were no indications of impairments during this period. 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 February 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220)—Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In July 2017, the FASB issued 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, In January 2017, the FASB issued 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 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, 2017 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | 3. Fixed Assets Fixed assets are recorded at cost and consist of the following at December 31, 2017 and 2016: December 31, 2017 2016 Broadcast equipment $ 10,419,000 $ 10,671,000 Machinery and equipment 2,678,000 2,523,000 Furniture and fixtures 279,000 271,000 Leasehold improvements 610,000 610,000 Other equipment 15,000 15,000 14,001,000 14,090,000 Accumulated depreciation (10,323,000 ) (10,989,000 ) Total $ 3,678,000 $ 3,101,000 Depreciation expense totaled $2,058,000 and $2,451,000 for the years ended December 31, 2017 and 2016, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets The Company’s goodwill balance of $1,004,000 and $937,000 as of December 31, 2017 and 2016, 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, 2017 and determined there were no indications of impairment. The Company performed its annual review of its other intangible assets as of December 31, 2017 and 2016 and determined that there were no indications of impairment for either of the years ended on those dates. As of December 31, 2017, all intangible assets were fully amortized with no remaining useful lives. Amortization expense relating to all intangible assets totaled $29,000 and $50,000 for the years ended December 31, 2017 and 2016, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017. |
Accrued Compensation
Accrued Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Compensation Related Costs [Abstract] | |
Accrued Compensation | 6. Accrued Compensation Accrued compensation consisted of the following at December 31, 2017 and 2016: December 31, 2017 2016 Accrued vacation $ 290,000 $ 291,000 Accrued salaries 278,000 264,000 Accrued bonuses 61,000 487,000 Accrued commissions 17,000 18,000 Total accrued compensation $ 646,000 $ 1,060,000 |
Concentrations of Risk
Concentrations of Risk | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016, the Company generated approximately $8,678,000 and $8,913,000, respectively, of total revenue from Buffalo Wild Wings corporate-owned restaurants and its franchisees, which represented approximately 41% and 40% of total revenue in each of those years, respectively. As of December 31, 2017 and 2016, approximately $191,000 and $261,000, 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, 2017, approximately $2,000 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, 2017 | |
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 384,000 and 453,000 shares were excluded from the computations of diluted net loss per common share for the years ended December 31, 2017 and 2016, respectively, as their effect was anti-dilutive. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders' Equity (Note 9): | |
Stockholders' Equity | 9. Stockholders’ Equity Registered Direct Offerings In November 2016, the Company sold approximately 412,000 shares of its common stock at a purchase price of $6.64 per share and received net proceeds of approximately $2,692,000, after deducting estimated offering expenses. In March 2017, the Company sold approximately 200,000 shares of its common stock at a purchase price of $7.85 per share and received net proceeds of approximately $1,554,000, after deducting estimated offering expenses. In April 2017, the Company sold approximately 30,000 shares of its common stock at a purchase price of $7.78 per share and received net proceeds of approximately $219,000, after deducting estimated offering expenses. The Company used the net proceeds from the offerings for general corporate purposes, which included working capital, general and administrative expenses, capital expenditures and implementation of its strategic priorities. Reverse/Forward Split of Common Stock In June 2016, the Company effected a stockholder-approved 1-100 reverse split immediately followed by a 2-for-1 forward split. Any fractional share of common stock resulting from the forward split was rounded up to the nearest whole share. The Company refers to the reverse split and to the forward split, together, as the “reverse/forward split.” Any stockholder who, as of immediately prior to the effective time of the reverse split, 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 American over the five trading days immediately before and including the effective date of the reverse/forward split. As of immediately prior to the reverse split/forward split, 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. 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. Equity Incentive Plans All amounts for the year ended December 31, 2016 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, 2017, 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, 2017, there were options to purchase approximately 70,000 shares of the Company’s common stock outstanding under the Amended 2010 Plan. As of December 31, 2017, there were approximately 108,000 share-based awards available to be granted 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 American 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 2017 and 2016 under the ASC No. 718 requirements: 2017 2016 Weighted average risk-free rate 1.97 % 1.20 % Weighted average volatility 113.57 % 111.02 % Dividend yield 0.00 % 0.00 % Expected life 7.19 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 employees in 2017 and 2016 was $457,000 and $419,000, 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, 2017 and 2016: Outstanding Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding January 1, 2016 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 Granted 8,000 6.66 - - Exercised - - - - Cancelled (8,000 ) 16.76 - - Forfeited (9,000 ) 9.87 - - Expired - - - - Outstanding December 31, 2017 156,000 $ 17.74 7.12 $ - Options vested and exercisable at December 31, 2017 112,000 $ 18.71 6.92 $ - No options were exercised during the years ended December 31, 2017 or 2016. The per share weighted average grant-date fair value of stock options granted during the years ended December 31, 2017 and 2016 was $5.87 and $6.48, respectively. As of December 31, 2017, the unamortized compensation expense related to outstanding unvested options was approximately $383,000 with a weighted average remaining requisite service period of 1.21 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, 2017 and 2016: Outstanding Warrants Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Outstanding January 1, 2016 132,000 $ 33.64 2.18 Granted - - - Exercised - - - Forfeited - - - Outstanding December 31, 2016 132,000 $ 33.64 1.18 Granted - - - Exercised - - - Forfeited (60,000 ) - - Outstanding December 31, 2017 72,000 $ 20.00 0.87 Balance exercisable at December 31, 2017 72,000 $ 20.00 0.87 During 2009, the Company issued warrants to purchase an aggregate of 60,000 shares of common stock in connection with an asset acquisition. 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 and all expired as of December 31, 2017. 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, 2017. 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, 2017 and 2016, 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. The Company paid approximately $16,000 in cash for payment of dividends in each of the years ended December 31, 2017 and 2016. 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, 2017 and 2016. 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, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes For each of the years 2017 and 2016, current tax provisions and current deferred tax provisions were recorded as follows: 2017 2016 Current Tax Provision Federal $ - $ - State (27,000 ) (25,000 ) Foreign (5,000 ) (1,000 ) (32,000 ) (26,000 ) Deferred Tax Provision Federal - - State (24,000 ) (4,000 ) Foreign (10,000 ) (8,000 ) (34,000 ) (12,000 ) Total Tax Provison Federal - - State (51,000 ) (29,000 ) Foreign (15,000 ) (9,000 ) $ (66,000 ) $ (38,000 ) The net deferred tax assets and liabilities have been reported in other liabilities in the consolidated balance sheets at December 31, 2017 and 2016 as follows: 2017 2016 Deferred Tax Assets: NOL carryforwards $ 15,337,000 $ 23,291,000 UK NOL carryforwards 567,000 516,000 Allowance for doubtful accounts 119,000 139,000 Compensation and vacation accrual 64,000 92,000 Operating accruals 47,000 147,000 Research and experimentation, AMT and foreign tax credits 148,000 147,000 Texas Margin Tax Credit 136,000 126,000 Fixed assets and intangibles (220,000 ) 199,000 Other 514,000 664,000 Total gross deferred tax assets 16,712,000 25,321,000 Valuation allowance (16,340,000 ) (24,880,000 ) Net deferred tax assets 372,000 441,000 Deferred Tax Liabilities: Capitalized software 375,000 359,000 Foreign 49,000 45,000 Deferred revenue - 49,000 Total gross deferred liabilities 424,000 453,000 Net deferred taxes $ (52,000 ) $ (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, 2017 2016 Tax at federal income tax rate $ 316,000 $ 962,000 State provision (51,000 ) (29,000 ) Foreign tax differential 3,000 2,000 Change in valuation allowance 8,898,000 (917,000 ) Impact related to tax reform (8,791,000 ) - Permanent items (441,000 ) (56,000 ) Total Provision $ (66,000 ) $ (38,000 ) On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant change in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the current rate of 35% to 21%. As a result of the enacted law, the Company was required to revalue deferred tax assets and liability at the enacted rate. This revaluation resulted in an expense of $8,791,000 recorded in continuing operations and a corresponding reduction in the valuation allowance. The new legislation will require the Company to pay tax on the unremitted earnings of its foreign subsidiaries though December 31, 2017. Because of the complexities involved in determining the previously unremitted earnings and profits of all our foreign subsidiaries, the Company is still in the process of obtaining, preparing, and analyzing the required information and recorded an initial estimate of the impact in our Consolidated Financial Statements. The net change in the total valuation allowance for the year ended December 31, 2017 was a decrease of $8,898,000. The net change in the total valuation allowance for the year ended December 31, 2016 was an increase of $917,000. 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, 2017, the Company has available net operating loss (“NOL”) carryforwards of approximately $66,554,000 for federal income tax purposes, which will begin to expire in 2018. The NOL carryforwards for state purposes, which will continue expiring in 2018, are approximately $29,185,000. 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, the Company had a Section 382 analysis performed to determine the impact of any changes in ownership. Based on this analysis, no ownership change has occurred that would limit the use of the NOLs. Under Internal Revenue Code (IRC) 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 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 $171,000 of state tax credit tax carryforwards that expire in the years 2018 through 2026. The deferred tax assets as of December 31, 2017 include a deferred tax asset of $437,000 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 2013. 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, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 11. Long-term Debt Term Loan In November 2017, the Company entered into an amended and restated loan and security agreement (the “Amended and Restated Loan Agreement”) with East West Bank (“EWB”). The Amended & Restated Loan Agreement amends and restates the loan and security agreement that the Company entered into with EWB dated as of April 14, 2015 (as the same has been previously amended, the “Prior Loan Agreement”). The following is a summary of the material terms of the Amended and Restated Loan Agreement: ● EWB loaned the Company $4,500,000 as a one-time 36-month term loan, $4,450,000 of which the Company agreed to use, and did use, to refinance the $4,450,000 that it had outstanding under the Prior Loan Agreement. The Company applied the additional $50,000 to pay the facility fee ($45,000) and to pay reasonable costs or expenses incurred by EWB in connection with, among other matters, the preparation and negotiation of the Amended and Restated Loan Agreement. ● The Company are required to make payments on the loan on the last calendar day of each month commencing on December 31, 2017 and through its maturity date, November 29, 2020. Payments will be interest only until the payment due on June 30, 2018, at which time payments will become principal plus interest. ● Other than during the continuance of an event of default, the loan bears interest, on the outstanding daily balance thereof, at the Company’s option, at either: (A) a variable rate per annum equal to the prime rate as set forth in The Wall Street Journal plus 1.75%, or (B) a fixed rate per annum equal to the LIBOR rate for the interest period for the advance plus 4.50%. ● The Company continues to grant and pledge to EWB a first-priority security interest in all its existing and future personal property, including its intellectual property, subject to customary exceptions. ● Subject to customary exceptions, the Company continues to generally be prohibited from borrowing additional Indebtedness other than subordinated debt and up to $2.0 million in the aggregate for the purpose of equipment financing to the extent EWB approves such debt. “Indebtedness” means (i) all the Company’s other indebtedness for borrowed money or the deferred purchase price of property or services, (ii) all the its obligations evidenced by notes, bonds, debentures and similar instruments, (iii) all its capital lease obligations, and (iv) all its contingent obligations. ● The Company must comply with the following financial covenants: o Minimum Fixed Charge Coverage Ratio – The Company must not have a Fixed Charge Coverage Ratio (as defined below) as of the last day of a fiscal quarter less than 1.25 to 1.00. However, if the Company’s unrestricted cash exceeds the loan principal outstanding, then what would otherwise be a breach of the covenant will be deemed automatically cured. The automatic cure may not be used more than (A) two times in any fiscal year or (B) four times during the term of the Amended and Restated Loan Agreement. Fixed Charge Coverage Ratio means the ratio of (a) Adjusted EBITDA (as defined below) for the four fiscal quarters ending on the applicable measuring date, less (i) unfinanced capital expenditures during such period and (ii) cash taxes paid during such period, to (b) the sum of (i) scheduled principal and interest payments with respect to the loan, (ii) scheduled principal and interest payments with respect to other Indebtedness (as defined below) and (C) scheduled lease payments. “Adjusted EBITDA” means (a) EBITDA (which is net income, plus interest expense, plus, to the extent deducted in the calculation of net income, depreciation expense and amortization expense, plus income tax expense) plus (b) other noncash expenses and charges, plus (c) to the extent approved by EWB, other onetime charges, plus (g) 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. o Minimum Liquidity – The aggregate amount of unrestricted cash the Company has in deposit accounts or securities accounts maintained with EWB must not be less than $2,000,000. This liquidity test will be measured the last day of each calendar month. o Maximum Sr. Leverage Ratio – As of the last day of a fiscal quarter, the ratio of (a) all the Company’s Indebtedness outstanding on such day, other than subordinated debt, to (b) Adjusted EBITDA for four fiscal quarters ending on such day, must not be greater than 2.75 to 1.00 for fiscal quarters ending December 31, 2017 through March 31, 2018, and must not be greater than 2.50 to 1.00 for fiscal quarters ending June 30, 2018 and later. As of December 31, 2017, the Company was in compliance with all covenants except the Fixed Charge Coverage Ratio. The Company anticipates that EWB will waive such non-compliance, and EWB informed the Company that it would forbear from taking action with respect to the event of default caused by such non-compliance. Accordingly, the Company expects that its repayment terms will not change as a result of this non-compliance. As of December 31, 2017, $4,500,000 was outstanding under the Amended and Restated Loan Agreement, all which is recorded in current portion of long-term debt on the accompanying consolidated balance sheet as a result of the covenant non-compliance as of December 31, 2017 discussed above. The Company recorded total debt issuance costs of $59,000, which includes the $45,000 facility fee. The debt issuance costs will be amortized to interest expense using the effective interest rate method over the life of the loan. As of December 31, 2017, the unamortized portion of the debt issuance costs was $56,000 and is recorded as a reduction of long term debt. The Company has no more borrowing availability under the Amended and Restated Loan Agreement. 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, 2017, 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 under the Prior Loan Agreement with EWB to pay down a portion of the principal amount the Company had borrowed under this financing arrangement, accrued interest and a prepayment fee. 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. As of December 31, 2017, $623,000 was outstanding under this financing arrangement, of which $615,000 is recorded in current portion of long-term debt and $8,000 is recorded in long-term debt on the accompanying consolidated balance sheet. The Company currently does not expect the lender to lend any additional funds under this financing arrangement. Long-Term Debt Principal Payments Future minimum principal payments under long-term debt as of December 31, 2017 are as follows: Years Ending December 31, Principal Payments 2018 $ 1,665,000 2019 1,808,000 2020 1,650,000 Total $ 5,123,000 Interest expense related to long-term debt for the years ended December 31, 2017 and 2016 was $425,000 and $517,000, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
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 $510,000 and $582,000 in 2017 and 2016, respectively. As of December 31, 2017, future minimum lease payments under operating leases are as follows: Years Ending December 31, Lease Payment 2017 $ 624,000 2018 10,000 Total $ 634,000 Capital Leases As of December 31, 2017 and 2016, property held under current capital leases was as follows: For the Years Ended December 31, 2017 2016 Office equipment $ 362,000 $ 328,000 Site equipment 250,000 250,000 Accumulated depreciation (322,000 ) (185,000 ) Total $ 290,000 $ 393,000 Total depreciation expense under capital leases was $95,000 and $88,000 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, future minimum principal payments under capital leases are as follows: Years Ending December 31, Prinicipal Payment 2018 $ 176,000 2019 119,000 2020 22,000 2021 21,000 2022 2,000 Total $ 340,000 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
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. 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. There were no liabilities recorded in either of the years ended December 31, 2017 or 2016. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders' Equity (Note 9): | |
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, 2017 and 2016, $345,000 and $223,000, respectively, of accumulated foreign currency translation adjustments were recorded in accumulated other comprehensive income, respectively. |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 United States $ 20,570,000 $ 21,559,000 Canada 704,000 753,000 Total revenue $ 21,274,000 $ 22,312,000 Geographic breakdown of the Company’s long-term tangible assets for the last two fiscal years were as follows: As of December 31, 2017 2016 United States $ 3,406,000 $ 3,015,000 Canada 272,000 86,000 Total assets $ 3,678,000 $ 3,101,000 |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2017 | |
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. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 another financing arrangement with an equipment 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, 2017, the Company borrowed $9,690,000. As of December 31, 2017, $623,000 remained outstanding, of which $615,000 is recorded in current portion of long-term debt and $8,000 is recorded in long-term debt on the accompanying consolidated balance sheet. 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, 2017, 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, 2017 and determined to abandon various software development projects that it concluded were no longer a current strategic fit or for which it determined that the marketability of the content had decreased due to obtaining additional information regarding the specific industry for which the content was intended. As a result, an impairment of $5,000 was recognized for the year ended December 31, 2017, which was recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. The Company also performed its annual review for the year ended December 31, 2016 and determined that there were no indications of impairments during this period. |
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 February 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220)—Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In July 2017, the FASB issued 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, In January 2017, the FASB issued 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 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, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Fixed assets are recorded at cost and consist of the following at December 31, 2017 and 2016: December 31, 2017 2016 Broadcast equipment $ 10,419,000 $ 10,671,000 Machinery and equipment 2,678,000 2,523,000 Furniture and fixtures 279,000 271,000 Leasehold improvements 610,000 610,000 Other equipment 15,000 15,000 14,001,000 14,090,000 Accumulated depreciation (10,323,000 ) (10,989,000 ) Total $ 3,678,000 $ 3,101,000 |
Accrued Compensation (Tables)
Accrued Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Compensation Related Costs [Abstract] | |
Schedule of Accrued Compensation | Accrued compensation consisted of the following at December 31, 2017 and 2016: December 31, 2017 2016 Accrued vacation $ 290,000 $ 291,000 Accrued salaries 278,000 264,000 Accrued bonuses 61,000 487,000 Accrued commissions 17,000 18,000 Total accrued compensation $ 646,000 $ 1,060,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Shareholders' Equity (Note 9): | |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were used for grants issued during 2017 and 2016 under the ASC No. 718 requirements: 2017 2016 Weighted average risk-free rate 1.97 % 1.20 % Weighted average volatility 113.57 % 111.02 % Dividend yield 0.00 % 0.00 % Expected life 7.19 years 6.17 years |
Summarizes Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2017 and 2016: Outstanding Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding January 1, 2016 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 Granted 8,000 6.66 - - Exercised - - - - Cancelled (8,000 ) 16.76 - - Forfeited (9,000 ) 9.87 - - Expired - - - - Outstanding December 31, 2017 156,000 $ 17.74 7.12 $ - Options vested and exercisable at December 31, 2017 112,000 $ 18.71 6.92 $ - |
Summarizes Warrant Activity | The following summarizes warrant activity for the year ended December 31, 2017 and 2016: Outstanding Warrants Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Outstanding January 1, 2016 132,000 $ 33.64 2.18 Granted - - - Exercised - - - Forfeited - - - Outstanding December 31, 2016 132,000 $ 33.64 1.18 Granted - - - Exercised - - - Forfeited (60,000 ) - - Outstanding December 31, 2017 72,000 $ 20.00 0.87 Balance exercisable at December 31, 2017 72,000 $ 20.00 0.87 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Current and Deferred Income Tax Provision (Benefit) | For each of the years 2017 and 2016, current tax provisions and current deferred tax provisions were recorded as follows: 2017 2016 Current Tax Provision Federal $ - $ - State (27,000 ) (25,000 ) Foreign (5,000 ) (1,000 ) (32,000 ) (26,000 ) Deferred Tax Provision Federal - - State (24,000 ) (4,000 ) Foreign (10,000 ) (8,000 ) (34,000 ) (12,000 ) Total Tax Provison Federal - - State (51,000 ) (29,000 ) Foreign (15,000 ) (9,000 ) $ (66,000 ) $ (38,000 ) |
Schedule of Deferred Tax Assets and Liabilities | The net deferred tax assets and liabilities have been reported in other liabilities in the consolidated balance sheets at December 31, 2017 and 2016 as follows: 2017 2016 Deferred Tax Assets: NOL carryforwards $ 15,337,000 $ 23,291,000 UK NOL carryforwards 567,000 516,000 Allowance for doubtful accounts 119,000 139,000 Compensation and vacation accrual 64,000 92,000 Operating accruals 47,000 147,000 Research and experimentation, AMT and foreign tax credits 148,000 147,000 Texas Margin Tax Credit 136,000 126,000 Fixed assets and intangibles (220,000 ) 199,000 Other 514,000 664,000 Total gross deferred tax assets 16,712,000 25,321,000 Valuation allowance (16,340,000 ) (24,880,000 ) Net deferred tax assets 372,000 441,000 Deferred Tax Liabilities: Capitalized software 375,000 359,000 Foreign 49,000 45,000 Deferred revenue - 49,000 Total gross deferred liabilities 424,000 453,000 Net deferred taxes $ (52,000 ) $ (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, 2017 2016 Tax at federal income tax rate $ 316,000 $ 962,000 State provision (51,000 ) (29,000 ) Foreign tax differential 3,000 2,000 Change in valuation allowance 8,898,000 (917,000 ) Impact related to tax reform (8,791,000 ) - Permanent items (441,000 ) (56,000 ) Total Provision $ (66,000 ) $ (38,000 ) |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Payments of Notes Payable | Future minimum principal payments under long-term debt as of December 31, 2017 are as follows: Years Ending December 31, Principal Payments 2018 $ 1,665,000 2019 1,808,000 2020 1,650,000 Total $ 5,123,000 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease Commitments | As of December 31, 2017, future minimum lease payments under operating leases are as follows: Years Ending December 31, Lease Payment 2017 $ 624,000 2018 10,000 Total $ 634,000 |
Schedule of Property Held Under Capital Leases | As of December 31, 2017 and 2016, property held under current capital leases was as follows: For the Years Ended December 31, 2017 2016 Office equipment $ 362,000 $ 328,000 Site equipment 250,000 250,000 Accumulated depreciation (322,000 ) (185,000 ) Total $ 290,000 $ 393,000 |
Schedule of Future Minimum Capital Lease Payments | As of December 31, 2017, future minimum principal payments under capital leases are as follows: Years Ending December 31, Prinicipal Payment 2018 $ 176,000 2019 119,000 2020 22,000 2021 21,000 2022 2,000 Total $ 340,000 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 United States $ 20,570,000 $ 21,559,000 Canada 704,000 753,000 Total revenue $ 21,274,000 $ 22,312,000 |
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, 2017 2016 United States $ 3,406,000 $ 3,015,000 Canada 272,000 86,000 Total assets $ 3,678,000 $ 3,101,000 |
Organization of Company (Detail
Organization of Company (Details Narrative) | 12 Months Ended |
Dec. 31, 2017Integer | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of venues | 2,730 |
Percentage of entertainment network | 81.00% |
Summary of Significant Accoun33
Summary of Significant Accounting Policies and Estimates (Details Narrative) - USD ($) $ in Thousands | Dec. 22, 2017 | Nov. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Term loan | $ 5,123 | |||
Facility fee | 45 | |||
Long term debt current portion | 5,059 | $ 2,988 | ||
Debt issuance costs | 59 | |||
Unamortized debt issuance cost | 56 | |||
Proceeds from short and long term debt | 969 | |||
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 | 230 | $ 386 | ||
Capitalized software costs not subject to amortization | 784 | 642 | ||
Software impairment | 5 | |||
Advertising costs | ||||
Minimum percentage of tax benefit | 50.00% | |||
US corporate tax percentage | 35.00% | |||
Reduced income tax rate percentage | 21.00% | |||
Minimum [Member] | ||||
Estimated useful lives | P2Y | |||
Maximum [Member] | ||||
Estimated useful lives | P5Y | |||
East West Bank [Member] | ||||
Debt instrument maturity date | Nov. 29, 2020 | |||
Amended and Restated Loan Agreement [Member] | ||||
Term loan | $ 4,500 | |||
Debt instrument outstanding amount | 4,450 | $ 4,500 | ||
Amended and Restated Loan Agreement [Member] | East West Bank [Member] | ||||
Term loan | 50 | |||
Facility fee | 45 | |||
Prior Loan Agreement [Member] | ||||
Debt instrument outstanding amount | $ 4,450 | |||
Financing Arrangement [Member] | ||||
Term loan | 8 | |||
Debt instrument outstanding amount | 623 | |||
Long term debt current portion | $ 615 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 2,058 | $ 2,451 |
Fixed Assets - Schedule of Prop
Fixed Assets - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment, gross | $ 14,001 | $ 14,090 |
Accumulated depreciation | (10,323) | (10,989) |
Property and equipment, net | 3,678 | 3,101 |
Broadcast Equipment [Member] | ||
Property and equipment, gross | 10,419 | 10,671 |
Machinery and Equipment [Member] | ||
Property and equipment, gross | 2,678 | 2,523 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 279 | 271 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 610 | 610 |
Other Equipment [Member] | ||
Property and equipment, gross | $ 15 | $ 15 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill balance | $ 1,004 | $ 937 |
Amortization expense | $ 29 | $ 50 |
Accrued Compensation - Schedule
Accrued Compensation - Schedule of Accrued Compensation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Compensation Related Costs [Abstract] | ||
Accrued vacation | $ 290 | $ 291 |
Accrued salaries | 278 | 264 |
Accrued bonuses | 61 | 487 |
Accrued commissions | 17 | 18 |
Total accrued compensation | $ 646 | $ 1,060 |
Concentrations of Risk (Details
Concentrations of Risk (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts receivable from customer | $ 714 | $ 928 |
Sales Revenue, Net [Member] | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | ||
Revenues | $ 8,678 | $ 8,913 |
Supplier Concentration Risk [Member] | ||
Concentration risk percentage | 41.00% | 40.00% |
Accounts payable | $ 2 | |
Accounts Receivable | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | ||
Accounts receivable from customer | $ 191 | $ 261 |
Basic and Diluted Earnings Pe39
Basic and Diluted Earnings Per Common Share (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from earnings per share | 384,000 | 453,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||
Apr. 30, 2017 | Mar. 31, 2017 | Nov. 30, 2016 | Jun. 30, 2016 | Apr. 30, 2015 | Sep. 30, 2014 | Aug. 30, 2014 | Jun. 30, 2010 | Sep. 30, 2004 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2009 | Jun. 16, 2016 | |
Sale of stock common, shares | 30,000 | 200,000 | 412,000 | |||||||||||
Common stock at purchase price per share | $ 7.78 | $ 7.85 | $ 6.64 | |||||||||||
Proceeds from offering expenses | $ 219 | $ 1,554 | $ 2,692 | |||||||||||
Reverse stock split | Company effected a stockholder-approved 1-100 reverse split immediately followed by a 2-for-1 forward split. Any fractional share of common stock resulting from the forward split was rounded up to the nearest whole share. The Company refers to the reverse split and to the forward split, together, as the reverse/forward split. Any stockholder who, as of immediately prior to the effective time of the reverse split, held fewer than 100 shares of the Companys common stock in one account and, subsequent to the reverse split | As of immediately prior to the reverse split/forward split, 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. | ||||||||||||
Fractional share cash for each such share held price per share | $ 0.12 | |||||||||||||
Common stock, shares outstanding | 2,521,000 | 2,261,000 | 92,439,174 | |||||||||||
Paid to cashed out stockholders | $ 3 | |||||||||||||
Common stock par value | $ 0.005 | $ 0.005 | ||||||||||||
Stock-based compensation | $ 457 | $ 419 | ||||||||||||
Option exercised during period, value | ||||||||||||||
Weighted average grant-date fair value per share price | $ 5.87 | $ 6.48 | ||||||||||||
Unamortized compensation expense | $ 383 | |||||||||||||
Unamortized compensation expense remaining service period | 1 year 2 months 16 days | |||||||||||||
Preferred Stock authorized | 156,000 | 156,000 | ||||||||||||
Preferred stock shares issued | 156,000 | 156,000 | ||||||||||||
Preferred Stock, shares outstanding | 156,000 | 156,000 | ||||||||||||
Payment of dividend | $ 16 | $ 16 | ||||||||||||
Preferred Stock | ||||||||||||||
Preferred Stock authorized | 10,000,000 | |||||||||||||
Series A Cumulative Convertible Preferred Stock [Member] | ||||||||||||||
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] | ||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 1 | |||||||||||||
Warrants [Member] | ||||||||||||||
Warrants issued to purchase number of common stock | 72,000 | 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 | 70,000 | |||||||||||||
Incentive plan expiry description | The Amended 2010 Plan expires in February 2020. | |||||||||||||
Number of shares available for grant | 108,000 | |||||||||||||
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, 2017 | Dec. 31, 2016 | |
Shareholders' Equity (Note 9): | ||
Weighted-average risk-free rate | 1.97% | 1.20% |
Weighted-average volatility | 113.57% | 111.02% |
Dividend yield | 0.00% | 0.00% |
Expected life | 7 years 2 months 8 days | 6 years 2 months 1 day |
Stockholders' Equity - Summariz
Stockholders' Equity - Summarizes Stock Option Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options outstanding, beginning balance | 165,000 | 136,000 |
Options granted | 8,000 | 35,000 |
Options exercised | ||
Options cancelled | (8,000) | (3,000) |
Options forfeited | (9,000) | (3,000) |
Options expired | ||
Options outstanding, ending balance | 156,000 | 165,000 |
Options vested and exercisable | 112,000 | |
Weighted average exercise price per share outstanding, beginning balance | $ 17.78 | $ 20.38 |
Weighted average exercise price per share granted | 6.66 | 7.73 |
Weighted average exercise price per share exercised | ||
Weighted average exercise price per share cancelled | 16.76 | 21.49 |
Weighted average exercise price per share forfeited | 9.87 | 15.51 |
Weighted average exercise price per share expired | ||
Weighted average exercise price per share outstanding, ending balance | 17.74 | $ 17.78 |
Weighted average exercise price per share vested and exercisable | $ 18.71 | |
Weighted average remaining contractual life (in years) outstanding, beginning balance | 8 years 7 days | 8 years 8 months 2 days |
Weighted average remaining contractual life (in years) outstanding, ending balance | 7 years 1 month 13 days | 8 years 7 days |
Weighted average remaining contractual life (in years) vested and exercisable | 6 years 11 months 1 day | |
Aggregate intrinsic value outstanding, beginning balance | $ 36 | $ 2 |
Aggregate intrinsic value outstanding, ending balance | $ 36 | |
Aggregate intrinsic value vested and exercisable |
Stockholders' Equity - Summar43
Stockholders' Equity - Summarizes Warrant Activity (Details) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Warrants outstanding, beginning balance | 132,000 | 132,000 |
Warrants granted | ||
Warrants exercised | ||
Warrants forfeited | (60,000) | |
Warrants outstanding, ending balance | 72,000 | 132,000 |
Warrants exercisable | 72,000 | |
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 | 20 | $ 33.64 |
Weighted average exercise price per share exercisable | $ 20 | |
Weighted average remaining contractual life (in years) outstanding, beginning balance | 1 year 2 months 5 days | 2 years 2 months 5 days |
Weighted average remaining contractual life (in years) outstanding, ending balance | 10 months 14 days | 1 year 2 months 5 days |
Weighted average remaining contractual life (in years) exercisable | 10 months 14 days |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
US corporate tax percentage | 35.00% | ||
Reduced income tax rate percentage | 21.00% | ||
Income tax expenses | $ 8,791 | $ (32) | $ (26) |
Net change in valuation allowance | 8,898 | 917 | |
Deferred tax asset NOLs | 15,337 | $ 23,291 | |
2005 And Prior Years [Member] | |||
Deferred tax asset NOLs | 437 | ||
Federal Income Tax Purposes [Member] | |||
NOL carryforwards | $ 66,554 | ||
NOL carryforward expiration date | Dec. 31, 2018 | ||
State Purposes [Member] | |||
NOL carryforwards | $ 29,185 | ||
NOL carryforward expiration date | Dec. 31, 2018 | ||
State Tax [Member] | |||
Deferred tax asset NOLs | $ 171 | ||
Tax carryforwards description | Expire in the years 2018 through 2026. |
Income Taxes - Schedule of Curr
Income Taxes - Schedule of Current and Deferred Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | |||
Federal | |||
State | (27) | (25) | |
Foreign | (5) | (1) | |
Current Tax Provision | $ 8,791 | (32) | (26) |
Federal | |||
State | (24) | (4) | |
Foreign | (10) | (8) | |
Deferred Tax Provision | (34) | (12) | |
Federal | |||
State | (51) | (29) | |
Foreign | (15) | (9) | |
Total Tax Provision | $ (66) | $ (38) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
NOL carryforwards | $ 15,337 | $ 23,291 |
UK NOL carryforwards | 567 | 516 |
Allowance for doubtful accounts | 119 | 139 |
Compensation and vacation accrual | 64 | 92 |
Operating accruals | 47 | 147 |
Research and experimentation, AMT and foreign tax credits | 148 | 147 |
Texas Margin Tax Credit | 136 | 126 |
Fixed assets and intangibles | (220) | 199 |
Other | 514 | 664 |
Total gross deferred tax assets | 16,712 | 25,321 |
Valuation allowance | (16,340) | (24,880) |
Net deferred tax assets | 372 | 441 |
Capitalized software | 375 | 359 |
Foreign | 49 | 45 |
Deferred revenue | 49 | |
Total gross deferred liabilities | 424 | 453 |
Net deferred taxes | $ (52) | $ (12) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Expected Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Tax at federal income tax rate | $ 316 | $ 962 |
State provision | (51) | (29) |
Foreign tax differential | 3 | 2 |
Change in valuation allowance | 8,898 | (917) |
Impact related to tax reform | (8,791) | |
Permanent items | (441) | (56) |
Total Tax Provision | $ (66) | $ (38) |
Long-term Debt (Details Narrati
Long-term Debt (Details Narrative) - USD ($) $ in Thousands | Apr. 30, 2015 | Nov. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2013 |
Term loan | $ 5,123 | ||||
Facility fee | 45 | ||||
Long term debt current portion | 5,059 | $ 2,988 | |||
Debt issuance costs | 59 | ||||
Unamortized debt issuance cost | 56 | ||||
Amount borrowed during period | 969 | ||||
Interest expense related to long term debt | $ 425 | $ 517 | |||
Equipment Notes Payable [Member] | |||||
Line of credit interest rate | 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. | ||||
Maximum borrowing capacity | $ 9,690 | $ 500 | |||
Line of credit facility interest rate | 24.00% | ||||
East West Bank [Member] | |||||
Debt instrument maturity date | Nov. 29, 2020 | ||||
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 | ||||
Amended Loan and Security Agreement [Member] | |||||
Term loan | $ 4,500 | ||||
Facility fee | $ 50 | $ 45 | |||
Debt instrument maturity date | Nov. 29, 2020 | ||||
Line of credit interest rate | The loan bears interest, on the outstanding daily balance thereof, at the Company’s option, at either: (A) a variable rate per annum equal to the prime rate as set forth in The Wall Street Journal plus 1.75%, or (B) a fixed rate per annum equal to the LIBOR rate for the interest period for the advance plus 4.50%. | ||||
Maximum borrowing capacity | $ 2,000 | ||||
Debt instrument, fixed coverage ratio description | Adjusted EBITDA for four fiscal quarters ending on such day, must not be greater than 2.75 to 1.00 for fiscal quarters ending December 31, 2017 through March 31, 2018, and must not be greater than 2.50 to 1.00 for fiscal quarters ending June 30, 2018 and later. | ||||
Debt instrument outstanding amount | $ 4,500 | ||||
Debt issuance costs | 59 | ||||
Unamortized debt issuance cost | 56 | ||||
Amended Loan and Security Agreement [Member] | Minimum [Member] | |||||
Debt instrument, fixed coverage ratio description | The Company must not have a Fixed Charge Coverage Ratio (as defined below) as of the last day of a fiscal quarter less than 1.25 to 1.00 | ||||
Aggregate amount of unrestricted cash | $ 2,000 | ||||
Amended Loan and Security Agreement [Member] | East West Bank [Member] | |||||
Facility fee | $ 45 | ||||
Loan Agreement with EWB [Member] | Equipment Notes Payable [Member] | |||||
Amount borrowed during period | $ 3,381 | ||||
Financing Arrangement [Member] | |||||
Term loan | 8 | ||||
Debt instrument outstanding amount | 623 | ||||
Long term debt current portion | 615 | ||||
Financing Arrangement [Member] | Equipment Notes Payable [Member] | |||||
Term loan | 8 | ||||
Debt instrument outstanding amount | 623 | ||||
Long term debt current portion | $ 615 |
Long-term Debt - Schedule of Fu
Long-term Debt - Schedule of Future Minimum Payments of Notes Payable (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 1,665 |
2,019 | 1,808 |
2,020 | 1,650 |
Total | $ 5,123 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating lease expense | $ 510 | $ 582 |
Depreciation expense | 2,058 | 2,451 |
Assets Held under Capital Leases [Member] | ||
Depreciation expense | $ 95 | $ 88 |
Commitments - Schedule of Opera
Commitments - Schedule of Operating Lease Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 624 |
2,018 | 10 |
Total | $ 634 |
Commitments - Schedule of Prope
Commitments - Schedule of Property Held Under Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated depreciation | $ (322) | $ (185) |
Total | 290 | 393 |
Office Equipment [Member] | ||
Capital leased equipment gross | 362 | 328 |
Site Equipment [Member] | ||
Capital leased equipment gross | $ 250 | $ 250 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Capital Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 176 |
2,019 | 119 |
2,020 | 22 |
2,021 | 21 |
2,022 | 2 |
Total | $ 340 |
Accumulated Other Comprehensi54
Accumulated Other Comprehensive Income (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Shareholders' Equity (Note 9): | ||
Accumulated foreign currency translation adjustments | $ 345 | $ 223 |
Geographical Information - Sche
Geographical Information - Schedule of Revenues Geographic Breakdown (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Total revenue | $ 21,274 | $ 22,312 |
United States [Member] | ||
Total revenue | 20,570 | 21,559 |
Canada [Member] | ||
Total revenue | $ 704 | $ 753 |
Geographical Information - Sc56
Geographical Information - Schedule of Asset Geographic Breakdown (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Total assets | $ 3,678 | $ 3,101 |
United States [Member] | ||
Total assets | 3,406 | 3,015 |
Canada [Member] | ||
Total assets | $ 272 | $ 86 |