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Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

(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 technology, including performance analytics, to help its customers acquire, engage and retain its patrons. The Company’s tablets and technology offer engaging solutions to establishments with guests who experience dwell time, such as in bars, restaurants, casinos and senior living centers. Casual dining venues subscribe to the Company’s customizable solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and arcade games. The Company’s platform creates connections among the players and venues, and amplifies guests’ positive experiences, and its in-venue TV network creates one of the largest digital out of home advertising audiences in the United States and Canada. The Company also continues to support its legacy network product line, which it calls its Classic platform.

The Company generates revenue by charging subscription fees for its service to network subscribers, by leasing tablet platform equipment to certain network subscribers, by selling tablet platform equipment, by hosting live trivia events, by selling advertising aired on in-venue screens and as part of customized games, by licensing its content for use with third-party equipment, from providing professional services (such as developing certain functionality within the Company’s platform for customers), and from pay-to-play arcade games.

At September 30, 2019, 2,565 venues in the U.S. and Canada subscribed to the Company’s interactive entertainment network.

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 with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2018. The accompanying condensed balance sheet as of December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2019, or any other period.

Liquidity

In connection with preparing its financial statements as of and for the period ended September 30, 2019, 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 twelve months after the date that such financial statements are issued. The Company believes it has sufficient cash to meet its operating cash requirements and to fulfill its debt obligations for at least the next twelve months after the date that such financial statements are issued.

Under the terms of the Company’s existing agreements, the Company’s relationship with Buffalo Wild Wings corporate-owned and franchisee-owned restaurants terminates on November 15, 2019. Although the Company continues to have discussions with Buffalo Wild Wings corporate and its franchisees to extend the relationship beyond that date, and although the Company has extended its relationship with certain franchisees, the Company does not expect the relationship with Buffalo Wild Wings corporate or with a majority of franchisees to be extended. The Company began reducing its operating expenses in anticipation of the termination of existing relationships and is working on a de-commission plan in anticipation of relationships ending on November 15, 2019.

The Company continues to explore and evaluate financing alternatives, including additional equity financings and alternative sources of debt. These efforts are being undertaken to increase the likelihood of the following:

	●	the Company will be able to successfully execute its current long-term operating and strategic plan;

	●	the Company positions itself to take advantage of market opportunities for growth and to respond to competitive pressures; and

	●	the Company will continue to meet its covenant of maintaining not less than $2,000,000 at all times in unrestricted cash in deposit accounts or securities accounts maintained with Avidbank. (See Note 6.)

If the Company’s cash and cash equivalents are not sufficient to meet future capital requirements, and if the Company cannot raise an adequate amount of capital, it will not be able to successfully execute its current long-term operating and strategic plan or take advantage of market opportunities for growth and will have to reduce planned capital expenses and further reduce operational cash uses. Any capital the Company may raise may be on terms that are not as favorable to the Company as they otherwise might be. Any actions the Company is undertaking or may undertake to reduce planned capital expenses or operational cash uses may not cover shortfalls in available funds.

Reclassifications

Certain reclassifications have been made to the prior year’s consolidated balance sheet and statement of cash flows to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.