XML 20 R10.htm IDEA: XBRL DOCUMENT
v3.21.1

NTN BUZZTIME, INC TRANSACTION | 3 Months Ended
--- | ---
Mar. 31, 2021
NTN BUZZTIME, INC TRANSACTION [Abstract] |
NTN BUZZTIME, INC TRANSACTION |
NOTE 4 | NTN BUZZTIME, INC TRANSACTION
Merger Agreement with NTN Buzztime, Inc. On August 12, 2020, the Company, NTN and the Merger Sub, entered into the Merger Agreement. The merger closed on March 25, 2021. After the merger, NTN Buzztime, Inc. changed its name to Brooklyn ImmunoTherapeutics, Inc. The merger was accounted for as a reverse acquisition with Brooklyn LLC being deemed the acquiring company for accounting purposes. Brooklyn LLC, as the accounting acquirer, recorded the assets acquired and liabilities assumed of NTN in the merger at their fair values as of the acquisition date. The Company is trading on the NYSE American under the ticker symbol “BTX”. Merger Agreement with NTN Buzztime, Inc. (Continued) Brooklyn LLC was determined to be the accounting acquirer based upon the terms of the merger and other factors including (i) Brooklyn LLC members and Maxim Group LLC, Brooklyn LLC’s financial advisor (the “Financial Advisor”) received 96.35% of NTN’s outstanding common stock on a fully diluted basis immediately following the effective time of the merger, (ii) all of the board of directors of combined company was composed of directors designated by Brooklyn LLC under the terms of the Merger Agreement and (iii) existing members of Brooklyn LLC’s management became the management of the combined company. At the closing of the merger, all the outstanding membership interests of Brooklyn LLC’s converted into the right to receive shares of the Company’s common stock equal to the exchange ratio of 1-for-2. Brooklyn LLC exchanged all of their equity interests in Brooklyn LLC for an aggregate of 39,991,625 shares of common stock, of which 1,067,668 shares were issued as compensation to the Financial Advisor for its services to Brooklyn LLC in connection with the merger. The purchase price, which represents the consideration transferred in the merger to NTN’s stockholders, is calculated based on the fair value of the common stock of the combined company that NTN’s stockholders owned as of the closing date of the merger because that represents a more reliable measure of the fair value of consideration transferred in the merger. Accordingly, the purchase price of $8,177,614, which was calculated as follows:
Number of shares of the Common Stock owned by NTN stockholders (i) |  |  | 1,514,373 |
Multiplied by the fair value per share of Common Stock (ii) |  |  | 5.40 |
Total purchase price |  | $ | 8,177,614 |
| (i) | The purchase price was determined based on the number of shares of common stock of the combined company that NTN’s stockholders owned immediately prior to the merger.
| (ii) | The fair value per share is based on the closing price of $5.40 (post reverse stock split) per share of thecommon stock as reported on the NYSE American on March 25, 2021, the date of the merger.
Under the acquisition method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of NTN based on their estimated fair values as of the merger closing date. Because the consideration paid by Brooklyn LLC in the merger is more than the estimated fair values of NTN’s net assets acquired, goodwill equal to the difference has been reflected in the unaudited pro forma condensed consolidated balance sheet. The goodwill of $8,588,576 has been calculated using the fair values of the net assets of NTN as of March 25, 2021. Merger Agreement with NTN Buzztime, Inc. (Continued) The preliminary allocation of the estimated purchase price to the tangible and intangible assets acquired and liabilities assumed from NTN, based on their estimated fair values as of March 25, 2021, is as follows:
|  | Historical Balance Sheet of NTN at March 25, 2020 |  |  | Pro Forma Fair Value Adjustment to NTN Assets |  |  | Preliminary Purchase Price Allocation Pro Forma Adjustment |
Cash and cash equivalents |  | $ | 147,728 |  |  | $ | - |  |  | $ | 147,728 |
Accounts receivable |  |  | 102,517 |  |  |  | - |  |  |  | 102,517 |
Prepaid expense and other current assets |  |  | 329,596 |  |  |  | - |  |  |  | 329,596 |
Property and equipment, net |  |  | 1,015,370 |  |  |  | - |  |  |  | 1,015,370 |
Software development costs |  |  | 1,296,460 |  |  |  | (368,460 | ) |  |  | 928,000 |
Customers |  |  | - |  |  |  | 548,000 |  |  |  | 548,000 |
Trade name |  |  | - |  |  |  | 299,000 |  |  |  | 299,000 |
Accounts payable, accrued liabilities and other current liabilities |  |  | (3,781,173 | ) |  |  | - |  |  |  | (3,781,173 | )
Net assets acquired, excluding goodwill |  | $ | (889,502 | ) |  | $ | 478,540 |  |  | $ | (410,962 | )
Total consideration |  | $ | 8,177,614 |  |  |  |  |  |  |  |  |
Net assets acquired, excluding goodwill |  |  | (410,962 | ) |  |  |  |  |  |  |  |
Goodwill |  | $ | 8,588,576 |  |  |  |  |  |  |  |  |
Disposition On March 26, 2021, the Company sold its rights, title and interest in and to the assets relating to the business operated by NTN prior to the merger to eGames.com in exchange for a payment of a purchase price of $2,000,000 and assumption of specified liabilities relating to the NTN business. The sale was completed in accordance with the terms of the Asset Purchase Agreement. In the Disposition, the Company sold specified NTN assets and liabilities acquired as a result of the reverse acquisition to eGames.com, an unrelated party, for cash consideration of $2,000,000. Details of the Disposition are as follows:
Proceeds from sale: |  |  |
Cash |  | $ | 132,055 |
Escrow |  |  | 100,000 |
Assume advance/loans |  |  | 1,700,000 |
Interest on advance/loans |  |  | 67,945 |
Carrying value of assets sold: |  |  |  |
Cash and cash equivalents |  |  | (13,461 | )
Accounts receivable |  |  | (75,153 | )
Prepaids and other current assets |  |  | (123,769 | )
Property and equipment, net |  |  | (1,013,950 | )
Software development costs |  |  | (927,368 | )
Customers |  |  | (548,000 | )
Trade name |  |  | (299,000 | )
Goodwill |  |  | (8,588,576 | )
Other assets |  |  | (103,173 | )
Liabilities transferred upon sale: |  |  |  |
Accounts payable and accrued expenses |  |  | 113,156 |
Obligations under finance leases |  |  | 16,676 |
Lease liability |  |  | 25,655 |
Deferred revenue |  |  | 54,803 |
Other current liabilities |  |  | 148,987 |
Transaction costs |  |  | (265,000 | )
Total loss on sale of assets |  | $ | (9,598,173 | )
Rights Offering The Company was obligated under the Merger Agreement to have $10,000,000 in cash and cash equivalents on its balance sheet at the effective time of the merger (the “Required Funds”). To ensure that the Company has the Required Funds, certain beneficial holders of Brooklyn LLC’s Class A membership interests have entered into contractual commitments to invest $10,000,000 into Brooklyn LLC immediately prior to the closing of the merger with NTN. During March 2021 the Company offered to its Class A unit holders an additional 5% rights offering, a total amount of $500,000 was raised by this right offering. Funding to the rights offering was received between February 17 and April 5, 2021. Unaudited Pro Forma Disclosure The following unaudited pro forma financial information summarizes the results of operations for the three months ended March 31, 2021 and 2020 as if the merger and disposal described above had been completed as of January 1, 2020. Pro forma information primarily reflects adjustments relating to the reversal of transaction costs. Assuming that the merger had been completed as of January 1, 2020, the transaction costs would have been expensed in the prior period.
|  | Three Months Ended March 31, |
|  | 2021 |  |  | 2020 |
Net loss attributable to common stockholders |  | $ | (17,702,334 | ) |  | $ | (1,019,212 | )
Basic and diluted net loss per share attributable to common stockholders |  | $ | (0.64 | ) |  | $ | (0.06 | )

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration