Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 09, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | NTN BUZZTIME INC | |
Entity Central Index Key | 748,592 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,520,554 | |
Trading Symbol | NTN | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 2,635 | $ 3,378 |
Accounts receivable, net of allowances of $643 and $463, respectively | 1,033 | 714 |
Site equipment to be installed | 3,991 | 4,866 |
Prepaid expenses and other current assets | 1,069 | 680 |
Total current assets | 8,728 | 9,638 |
Fixed assets, net | 3,753 | 3,678 |
Software development costs, net of accumulated amortization of $2,732 and $2,651, respectively | 1,581 | 1,459 |
Deferred costs | 627 | 775 |
Goodwill | 978 | 1,004 |
Other assets | 34 | 16 |
Total assets | 15,701 | 16,570 |
Current Liabilities: | ||
Accounts payable | 521 | 390 |
Accrued compensation | 411 | 646 |
Accrued expenses | 498 | 418 |
Sales taxes payable | 92 | 107 |
Income taxes payable | 19 | 13 |
Current portion of long-term debt | 1,942 | 5,059 |
Current portion of obligations under capital leases | 177 | 176 |
Current portion of deferred revenue | 3,401 | 3,564 |
Deferred rent | 132 | 182 |
Other current liabilities | 146 | 192 |
Total current liabilities | 7,339 | 10,747 |
Long-term debt | 2,952 | 8 |
Long-term obligations under capital leases | 114 | 164 |
Long-term deferred revenue | 50 | 63 |
Other liabilities | 50 | 52 |
Total liabilities | 10,505 | 11,034 |
Shareholders' Equity: | ||
Series A 10% cumulative convertible preferred stock, $0.005 par value, $156 liquidation preference, 156 shares authorized; 156 shares issued and outstanding at March 31, 2018 and December 31, 2017 | 1 | 1 |
Common stock, $0.005 par value, 15,000 shares authorized at March 31, 2018 and December 31, 2017; 2,521 shares issued and outstanding at March 31, 2018 and December 31, 2017 | 13 | 13 |
Treasury stock, at cost, 10 shares at March 31, 2018 and December 31, 2017 | (456) | (456) |
Additional paid-in capital | 134,869 | 134,752 |
Accumulated deficit | (129,528) | (129,119) |
Accumulated other comprehensive income | 297 | 345 |
Total shareholders' equity | 5,196 | 5,536 |
Total liabilities and shareholders' equity | $ 15,701 | $ 16,570 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts - accounts receivable | $ 643 | $ 463 |
Software accumulated amortization | $ 2,732 | $ 2,651 |
Cumulative preferred stock, percentage | 10.00% | 10.00% |
Preferred stock series A, par value per share | $ 0.005 | $ 0.005 |
Preferred stock series A, liquidation preference | $ 156 | $ 156 |
Preferred stock series A, shares authorized | 156 | 156 |
Preferred stock series A, shares issued | 156 | 156 |
Preferred stock series A, shares outstanding | 156 | 156 |
Common stock, par value | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 15,000 | 15,000 |
Common stock, shares issued | 2,521 | 2,521 |
Common stock, shares outstanding | 2,521 | 2,521 |
Treasury stock, shares | 10 | 10 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Subscription revenue | $ 4,065 | $ 4,226 |
Sales-type lease revenue | 679 | 185 |
Other revenue | 1,017 | 820 |
Total Revenue | 5,761 | 5,231 |
Operating expenses: | ||
Direct operating costs (includes depreciation and amortization of $553 and $491, respectively) | 1,967 | 1,843 |
Selling, general and administrative | 4,021 | 4,134 |
Depreciation and amortization (excluding depreciation and amortization included in direct operating costs) | 86 | 88 |
Total operating expenses | 6,074 | 6,065 |
Operating loss | (313) | (834) |
Other (expense) income, net | (94) | 750 |
Loss before income taxes | (407) | (84) |
Provision for income taxes | (2) | (6) |
Net loss | $ (409) | $ (90) |
Net loss per common share - basic and diluted | $ (0.16) | $ (0.04) |
Weighted average shares outstanding - basic and diluted | 2,510 | 2,255 |
Comprehensive loss | ||
Net loss | $ (409) | $ (90) |
Foreign currency translation adjustment | (48) | 15 |
Total comprehensive loss | $ (457) | $ (75) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Depreciation and amortization - part of direct operating costs | $ 553 | $ 491 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows used in operating activities: | ||
Net loss | $ (409) | $ (90) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 639 | 579 |
Provision for doubtful accounts | 8 | 26 |
Scrap expense | 7 | |
Stock-based compensation | 117 | 117 |
Amortization of debt issuance costs | 8 | 12 |
Issuance of common stock in lieu of cash for bonus compensation | 164 | |
Loss from disposition of equipment | 2 | |
Changes in assets and liabilities: | ||
Accounts receivable | (327) | (863) |
Site equipment to be installed | 397 | 208 |
Prepaid expenses and other assets | (407) | (148) |
Accounts payable and accrued liabilities | (37) | (450) |
Income taxes payable | 7 | (22) |
Deferred costs | 148 | 53 |
Deferred revenue | (176) | (62) |
Deferred rent | (50) | (45) |
Other liabilities | (47) | 55 |
Net cash used in operating activities | (120) | (466) |
Cash flows used in investing activities: | ||
Capital expenditures | (169) | (97) |
Software development expenditures | (203) | (152) |
Net cash used in investing activities | (372) | (249) |
Cash flows used in financing activities: | ||
Net proceeds from issuance of common stock related to registered direct offering | 1,554 | |
Principal payments on capital lease | (44) | (38) |
Payments on long-term debt | (182) | (359) |
Debt issuance costs on long-term debt | (22) | |
Net cash (used in) provided by financing activities | (226) | 1,135 |
Net (decrease) increase in cash and cash equivalents | (718) | 420 |
Effect of exchange rate on cash | (25) | 7 |
Cash and cash equivalents at beginning of period | 3,378 | 5,686 |
Cash and cash equivalents at end of period | 2,635 | 6,113 |
Supplemental disclosures of cash flow information: Cash paid during the period for: | ||
Interest | 85 | 171 |
Income taxes | 28 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Site equipment transferred to fixed assets | 472 | 222 |
Equipment acquired under capital lease | $ 5 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (1) BASIS OF PRESENTATION 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 its service to network subscribers, by leasing equipment (including tablets used in its BEOND tablet platform and the cases and charging trays for the tablets) to certain network subscribers, by hosting live trivia events, by selling advertising aired on in-venue screens and as part of customized games, from providing professional services (such as developing certain functionality within the Company’s platform for customers), and from pay-to-play single player games. At March 31, 2018, 2,703 venues in the U.S. and Canada subscribed to the Company’s interactive entertainment network, of which approximately 82% were using the BEOND tablet platform. Basis of Accounting Presentation The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments that are necessary, which are of a normal and recurring nature, for a fair presentation for the periods presented of the financial position, results of operations and cash flows of the Company and its wholly-owned subsidiaries: IWN, Inc., IWN, L.P., Buzztime Entertainment, Inc., NTN Wireless Communications, Inc., NTN Software Solutions, Inc., NTN Canada, Inc., and NTN Buzztime, Ltd., all of which, other than NTN Canada, Inc., are dormant subsidiaries. All significant intercompany transactions have been eliminated in consolidation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017. The accompanying condensed balance sheet as of December 31, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2018, or any other period. In connection with preparing the financial statement as of and for the year ended March 31, 2018, 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 such 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 such financial statements. To address the Company’s low stockholders’ equity, to increase the likelihood that it will be able to successfully execute its operating and strategic plan, and to better position the Company to 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 capital on terms that are acceptable to the Company, or at all. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | (2) Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date This update outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized as follows: 1. Identify the contract(s) with customers 2. Identify the performance obligations 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations 5. Recognize revenue when the performance obligations have been satisfied Topic 606 requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The Company has completed the process of evaluating the effect of adopting this update and has determined that the timing and amount of revenue recognized based on Topic 606 is consistent with the Company’s revenue recognition policy under previous guidance, and accordingly, there was no transition adoption adjustment necessary upon the adoption of the Topic 606 guidance. The Company recognizes revenue from recurring subscription fees for its service earned from its network subscribers, from leasing equipment (including tablets used in its BEOND tablet platform and the cases and charging trays for the tablets) to certain network subscribers, from hosting live trivia events, from selling advertising aired on in-venue screens and as part of customized games, directly from patrons who pay to play or use the Company’s premium game content and from customized professional development projects. In general, when multiple performance obligations are present in a customer contract, the transaction price is allocated to the individual performance obligations based on the relative stand-alone selling prices, and the revenue is recognized when or as each performance obligation has been satisfied. Discounts are treated as a reduction to the overall transaction price and allocated to the performance obligations based on the stand-alone selling prices. All revenues are recognized net of sales tax collected from the customer. The following describes how the Company recognizes its revenue streams under Topic 606. Subscription Revenue Costs associated with installing the equipment are considered direct costs. Costs associated with sales commissions are considered incremental costs for fulfilling the contract because such costs would not have been incurred without obtaining the contract. The Company expects to recover both costs through future fees it collects and both costs are recorded in deferred costs on the balance sheet and amortized on a straight-line basis. For costs that are of an amount that is less than or equal to the deferred revenue for the related contract, the amortization period approximates the longer of the contract term and the expected term of the customer relationship. For any excess costs that exceed the deferred revenue, the amortization period of the excess cost is the initial term of the contract, which is generally one year because the Company can still recover that excess cost in the initial term of the contract. Sales-type Lease Revenue Leases. Live Hosted Trivia Revenue – Advertising Revenue Pay-to-Play Revenue Professional Development Revenue |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Common Share | (3) Basic and Diluted Earnings Per Common Share The Company computes basic and diluted earnings per common share in accordance with the provisions of FASB ASC No. 260, Earnings per Share |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity: | |
Stockholders' Equity | (4) STOCKHOLDERS’ EQUITY Stock-based Compensation The Company’s stock-based compensation plans include the NTN Buzztime, Inc. 2004 Performance Incentive Plan (the “2004 Plan”), the NTN Buzztime, Inc. Amended 2010 Performance Incentive Plan (the “Amended 2010 Plan”) and the NTN Buzztime, Inc. 2014 Inducement Plan (the “2014 Plan”). The 2004 Plan expired in September 2009. From and after the date it expired, no awards could be granted under that plan and all awards that had been granted under that plan before it expired are governed by that plan until they are exercised or expire in accordance with that plan’s terms. The Amended 2010 Plan provides for the grant of up to 240,000 share-based awards and expires in February 2020. As of March 31, 2018, approximately 59,000 share-based awards were available to be issued under the Amended 2010 Plan. The 2014 Plan, which provides for the grant of up to 85,000 share-based awards to a new employee as an inducement material to the new employee entering into employment with the Company, was approved by the nominating and corporate governance/compensation committee of the Company’s board of directors (the “Committee”) in September 2014 in connection with the appointment of Ram Krishnan as the Company’s Chief Executive Officer. As of March 31, 2018, there were no share-based awards available to be granted under the 2014 Plan. The Company’s stock-based compensation plans are administered by the Committee, which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures, if any, and other provisions of the award. The Company records stock-based compensation in accordance with ASC No. 718 , Compensation – Stock Compensation Equity – Equity-Based Payments to Non-Employees. The Company uses the historical stock price volatility as an input to value its stock options under ASC No. 718. The expected term of stock options represents the period of time options are expected to be outstanding and is based on observed historical exercise patterns of the Company, which the Company believes are indicative of future exercise behavior. For the risk-free interest rate, the Company uses the observed interest rates appropriate for the term of time options are expected to be outstanding. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company granted stock options to purchase 2,000 shares of common stock during the three months ended March 31, 2017. There were no options granted during the three months ended March 31, 2018. The following weighted-average assumptions were used for grants issued during the three months ended March 31, 2017 under the ASC No. 718 requirements. Three months ended March 31, 2017 Weighted average risk-free rate 1.63 % Weighted average volatility 115.0 % Dividend yield 0.00 % Expected life 7.14 years No options were exercised during either of the three months ended March 31, 2018 or 2017. Grants of restricted stock units are settled in an equal number of shares of common stock on the vesting date of the award. A stock unit award is settled only to the extent vested. Vesting generally requires the continued employment by the award recipient through the respective vesting date. Because restricted stock units are settled in an equal number of shares of common stock without any offsetting payment by the recipient, the measurement of cost is based on the quoted market price of the stock at the measurement date, which is the date of grant. During the three months ended March 31, 2018, the Company granted 53,000 restricted stock units with a grant date fair value of $6.04 per restricted stock unit. Of the 53,000 restricted stock units, 25,000 and 15,000 were granted to Messrs. Ram Krishnan and Allen Wolff, respectively, and are subject to accelerated vesting provisions in their respective employment agreements. 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 each of the three months ended March 31, 2018 and 2017 was $117,000, and is expensed in selling, general and administrative expenses and credited to additional paid-in-capital. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | (5) 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 amended and restated the loan and security agreement that the Company entered into with EWB in April 2015 (as the same has been previously amended, the “Prior Loan Agreement”). The Amended and Restated Loan Agreement provides for a $4,500,000 36-month term loan, which the Company used to refinance the $4,450,000 that it had outstanding under the Prior Loan Agreement. The Company is 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. The Company must comply with certain financial covenants, including a minimum fixed charge coverage ratio, minimum liquidity and a maximum senior leverage ratio. As of December 31, 2017, the Company was in compliance with all covenants except the fixed charge coverage ratio covenant. In March 2018, the Company entered into an amendment to the Amended and Restated Loan Agreement, which provided for the following: ● EWB waived the minimum fixed charge coverage ratio covenant default for the fiscal quarter ended December 31, 2017. ● The minimum fixed charge coverage ratio covenant was suspended for 2018, and as a result, the Company is not required to satisfy this covenant until the quarter ending March 31, 2019. ● A covenant was added under which the Company is required to achieve a minimum Adjusted EBITDA (as defined below) set forth below for the period indicated: Six Month Period Ending Minimum Adjusted EBITDA March 31, 2018 $ 600,000 June 30, 2018 $ 1,200,000 September 30, 2018 $ 1,600,000 December 31, 2018 $ 1,500,000 “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 (d) 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. As of March 31, 2018, the Company was in compliance with all covenants. As of March 31, 2018, $4,500,000 was outstanding under the Amended and Restated Loan Agreement, of which $1,500,000 is recorded in current portion of long-term debt and $3,000,000 is recorded in long-term debt on the accompanying consolidated balance sheet. The Company recorded total debt issuance costs of $59,000, which includes a $45,000 facility fee. The Company is amortizing the debt issuance costs to interest expense using the effective interest rate method over the life of the loan. As of March 31, 2018, the unamortized portion of the debt issuance costs was $48,000 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 March 31, 2018, 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 March 31, 2018, $442,000 was outstanding under this financing arrangement, all of which is recorded in current portion of 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity: | |
Accumulated Other Comprehensive Income | (6) ACCUMULATED OTHER COMPREHENSIVE INCOME The United States dollar is the Company’s functional currency, except for its operations in Canada where the functional currency is the Canadian dollar. The financial position and results of operations of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. In accordance with ASC No. 830, Foreign Currency Matters |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | (7) RECENT ACCOUNTING PRONOUNCEMENTS In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 |
Concentrations of Risk
Concentrations of Risk | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | (8) CONCENTRATIONS OF RISK Significant Customer For the three months ended March 31, 2018 and 2017, the Company generated approximately $2,798,000 and $2,105,000, respectively, of total revenue from Buffalo Wild Wings corporate-owned restaurants and its franchisees, which represented approximately 49% and 40% of total revenue for those periods, respectively. As of March 31, 2018 and December 31, 2017, approximately $504,000 and $191,000, 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 tablet 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. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity: | |
Schedule of Weighted Average Assumptions | The following weighted-average assumptions were used for grants issued during the three months ended March 31, 2017 under the ASC No. 718 requirements. Three months ended March 31, 2017 Weighted average risk-free rate 1.63 % Weighted average volatility 115.0 % Dividend yield 0.00 % Expected life 7.14 years |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Minimum Adjusted EBITDA | A covenant was added under which the Company is required to achieve a minimum Adjusted EBITDA (as defined below) set forth below for the period indicated: Six Month Period Ending Minimum Adjusted EBITDA March 31, 2018 $ 600,000 June 30, 2018 $ 1,200,000 September 30, 2018 $ 1,600,000 December 31, 2018 $ 1,500,000 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) | 3 Months Ended |
Mar. 31, 2018Number | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of venues | 2,703 |
Percentage of entertainment network | 82.00% |
Basic and Diluted Earnings Pe18
Basic and Diluted Earnings Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Antidilutive shares excluded from earnings per share | 433,000 | 454,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock options to purchase shares of common stock | 2,000 | |
Option exercised during period, value | ||
Stock-based compensation | $ 117 | $ 117 |
Restricted Stock Units (RSUs) [Member] | ||
Number of shares granted | 53,000 | |
Grant date fair value, per share | $ 6.04 | |
Restricted Stock Units (RSUs) [Member] | Employment Agreements [Member] | ||
Number of shares granted | 53,000 | |
Messrs. Ram Krishnan [Member] | Restricted Stock Units (RSUs) [Member] | Employment Agreements [Member] | ||
Number of shares granted | 25,000 | |
Allen Wolff [Member] | Restricted Stock Units (RSUs) [Member] | Employment Agreements [Member] | ||
Number of shares granted | 15,000 | |
Amended 2010 Performance Incentive Plan [Member] | ||
Number of option available for grants | 59,000 | |
Share-based awards, expiration date | Feb. 29, 2020 | |
Amended 2010 Performance Incentive Plan [Member] | Maximum [Member] | ||
Number of option available for grants | 240,000 | |
2014 Inducement Plan [Member] | Maximum [Member] | New Employee [Member] | ||
Number of option available for grants | 85,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Weighted Average Assumptions (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Shareholders' Equity: | |
Weighted average risk-free rate | 1.63% |
Weighted average volatility | 115.00% |
Dividend yield | 0.00% |
Expected life | 7 years 1 month 20 days |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | Apr. 30, 2015 | Mar. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2017 | May 31, 2013 |
Current portion of long-term debt | $ 1,942 | $ 5,059 | |||
Long-term debt | 2,952 | $ 8 | |||
Equipment Notes Payable [Member] | |||||
Maximum borrowing capacity | $ 9,690 | $ 500 | |||
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. | ||||
Line of credit facility interest rate | 24.00% | ||||
First Line Of Credit [Member] | |||||
Line of credit principal and interest payments due | $ 1,000 | ||||
Line of credit, installment term | 36 months | ||||
Second Line Of Credit [Member] | |||||
Line of credit principal and interest payments due | $ 1,000 | ||||
Line of credit, installment term | 35 months | ||||
Amended and Restated Loan Agreement [Member] | |||||
Term loan | $ 4,500 | ||||
Debt instrument outstanding amount | $ 4,500 | ||||
Current portion of long-term debt | 1,500 | ||||
Long-term debt | 3,000 | ||||
Debt issuance costs | 59 | ||||
Facility fee | 45 | ||||
Unamortized debt issuance cost | $ 48 | ||||
Prior Loan Agreement [Member] | |||||
Debt instrument outstanding amount | $ 4,450 | ||||
Amended and Restated Loan and Security Agreement [Member] | |||||
Debt instrument maturity date | Nov. 29, 2020 | ||||
Loan Agreement with EWB [Member] | Equipment Notes Payable [Member] | |||||
Amount borrowed during period | $ 3,381 | ||||
Financing Arrangement [Member] | Equipment Notes Payable [Member] | |||||
Debt instrument outstanding amount | $ 442 |
Debt - Schedule of Minimum Adju
Debt - Schedule of Minimum Adjusted EBITDA (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Minimum Adjusted EBITDA | $ 600 |
June 30, 2018 [Member] | |
Minimum Adjusted EBITDA | 1,200 |
September 30, 2018 [Member] | |
Minimum Adjusted EBITDA | 1,600 |
December 31, 2018 [Member] | |
Minimum Adjusted EBITDA | $ 1,500 |
Accumulated Other Comprehensi23
Accumulated Other Comprehensive Income (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Shareholders' Equity: | ||
Accumulated foreign currency translation adjustments | $ 297 | $ 345 |
Concentrations of Risk (Details
Concentrations of Risk (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Accounts receivable from customer | $ 1,033 | $ 714 | |
Sales Revenue, Net [Member] | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | |||
Revenues | $ 2,798 | $ 2,105 | |
Concentration risk percentage | 49.00% | 40.00% | |
Accounts Receivable | Buffalo Wild Wings Corporate-owned Restaurants and Its Franchisees [Member] | |||
Accounts receivable from customer | $ 504 | $ 191 |