What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-04-15 compared with 2021-03-11 · 1563 added, 2259 removed, 102 unchanged (97% of the section changed)

Controls and Procedures

maintain “disclosure controls and procedures,”

as such term is defined under Exchange Act Rule 13a-15(e), that are

designed to ensure that information required to be disclosed, in our Exchange Act reports is recorded, processed, summarized,

and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and

communicated to our management, including our principal executive officer and our principal financial officer, as appropriate,

to allow timely decisions regarding required disclosures.

designing and evaluating the disclosure controls and procedures, we recognized that any controls and procedures, no matter how

well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we were required

to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an

evaluation as of the end of the period covered by this report under the supervision and with the participation of our management,

including our Chief Executive Officer and Senior Vice President of Finance, of the effectiveness of the design and operation of

our disclosure controls and procedures.

on that evaluation, our Chief Executive Officer and Senior Vice President of Finance concluded that our disclosure controls and

procedures were not effective as of the end of the period covered by this report in providing reasonable assurance of achieving

the desired control objectives due primarily to a material weakness discussed below.

Management’s

Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control

over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

the supervision and with the participation of our management, including our Chief Executive Officer and our Senior Vice President

of Finance, we conduct an annual evaluation of the effectiveness of our internal control over financial reporting based on the

guidelines established by the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission.

If management identifies any material weakness in the course of that evaluation, management cannot

conclude that our internal controls over financial reporting are effective.

A material weakness is a deficiency, or a combination

of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement

of our annual or interim financial statements will not be prevented or detected on a timely basis.

Based on the evaluation of

the effectiveness of our internal over financial reporting as of December 31, 2020, we concluded that, due to the material weakness

described below, our internal control over financial reporting was not effective as of December 31, 2020.

In response to the impact

of the pandemic on our business, we implemented measures to reduce our operating expenses and preserve capital, including by reducing

our headcount.

We reduced our headcount from 74 as of December 31, 2019 to 22 as of March 9, 2021.

Due to a limited number of

personnel, particularly in our accounting department, we do not have an internal audit department and we did not have the

resources necessary to adequately perform an internal assessment or engage a third party to perform the assessment of our

internal controls over financial reporting, which our management identified as a material weakness.

Management’s

Plan for Material Weakness in Internal Control over Financial Reporting

management and board of directors are committed to improving our overall system of internal controls over financial reporting.

To address the material weakness identified in our control environment, we plan to engage external resources with specialized

knowledge and expertise, where appropriate, to assist management in performing the internal assessment of our internal controls

over financial reporting.

in Internal Control over Financial Reporting

was no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected,

or is reasonably likely to materially affect, our internal control over financial reporting.

Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, designed to ensure that information required to be disclosed

in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management,

including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure controls and procedures, we recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable

assurance of achieving the desired control objectives, and we were required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation as of the end of the period

covered by this Annual Report on Form 10-K under the supervision, and with the participation, of our management, including our Chief Executive Officer and President (who serves as our principal executive officer) and our Vice President of Finance

(who serves as our principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on that evaluation, our Chief Executive Officer and Vice President of Finance concluded that our disclosure controls and procedures were not effective as of the end of the period covered

by this Annual Report on Form 10-K in providing reasonable assurance of achieving the desired control objectives due primarily to a material weakness discussed below.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Vice President of Finance, we conduct an annual evaluation of the effectiveness

of our internal control over financial reporting based on the guidelines established by the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway

If management identifies any material weakness in the course of that evaluation, management cannot conclude that our internal controls over financial reporting are effective.

A material weakness is a deficiency, or a combination of

deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Upon completion of the Merger in March 2021 and the resulting change in our business model and strategy, we experienced a complete turnover of our employees, including all of the members of our

executive management team, which resulted in, among other things, our having insufficient accounting staff available to enable and ensure adequate segregation of duties and our lacking appropriate and complete documentation of policies and

procedures critical to the accomplishment of financial reporting objectives.

The accounting personnel and documentation deficiencies each increase the risk that a material misstatement of our financial statements will not be prevented or detected

on a timely basis.

Based on this evaluation, our Chief Executive Officer and President and our Vice President of Finance concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective and did not provide

reasonable assurance of achieving the desired control objectives.

Management’s Plan for Material Weakness in Internal Control over Financial Reporting

Management plans to implement measures designed to ensure that the deficiencies contributing to the ineffectiveness of our disclosure controls and procedures are promptly remediated, such that

the controls and procedures are designed, implemented and operating effectively.

The remediation actions planned include:

hiring additional accounting personnel in a number, and with experience, to allow for proper segregation of duties;

developing and implementing, and then monitoring the effectiveness of, written policies and procedures required to achieve our financial reporting objectives in a timely manner, including policies and

procedures relating to internal control over financial reporting.

We are committed to developing a strong internal control environment, and we believe the remediation efforts that we will implement will result in significant improvements in our control

We hired our Vice President of Finance in the second quarter of 2021 to oversee all accounting and financial reporting matters, including implementing a framework for internal controls over financial reporting, and we hired a

full-time controller at the beginning of 2022.

Also, during the fourth quarter of 2021, we engaged a third-party consulting firm with expertise in implementing the framework for internal controls over financial reporting, and we currently

developing this framework.

Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed

to taking further action and implementing additional enhancements or improvements, as necessary.

Changes in Internal Control over Financial Reporting

Other than described above, there was no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our

internal control over financial reporting.

Other Information

Directors, Executive Officers and Corporate Governance

forth below are the names, ages, board committee assignments, tenure and certain biographical information of each of the members

of our Board of Directors as of March 9, 2021.

* Committee chairperson

**Nominating and Corporate Governance/Compensation Committee

Wolff was appointed as our chief executive officer and as a member of our board in January 2020.

He was appointed as chairman

of our board in April 2020.

Wolff served as our interim chief executive officer from September 2019 until he was appointed

as our chief executive officer.

From January 2016 through September 2019, Mr.

Wolff served as our chief financial officer and

executive vice president and served as chief financial officer from December 2014 through January 2016.

From July 2013 until December

Wolff served as the chief financial strategist of PlumDiggity, a privately-held financial and marketing strategy firm

that he co-founded.

From October 2012 to July 2013, Mr.

Wolff served as the chief financial officer of 365 Retail Markets, a privately-held

company in the self-checkout point of sale technology industry, where he also served on its board of directors during such period.

From July 2011 to April 2013, simultaneous with his role at 365 Retail Markets, Mr.

Wolff held the leadership role of “Game

Changer”

at Crowdrise, an online fundraising platform company.

Wolff joined Crowdrise after serving as the chief operating

officer and chief financial officer from January 2011 to July 2011 of RetailCapital, LLC, a small business specialty finance company.

Wolff co-founded PaySimple in January 2006 and held various roles including president, chief financial officer, executive

vice president and director, from 2006 until he left the company in January 2011.

From September 1998 until August 2012, Mr.

was a principal for a casual dining restaurant.

Wolff holds a B.A.

from the University of Michigan and an MBA, from the University

of Maryland, R.H.

Smith School of Business.

Wolff was chosen to serve on our board of directors because of our boards’

belief that our chief executive officer should serve on our board of directors, as well as his leadership of early stage, technology

companies and ability to raise capital.

Simtob has served on our board of directors since July 2017.

Since January 2001, Mr.

Simtob has been serving as president

of Simtob Consulting Group Corporation.

Simtob is a minority-owner of Zoup!

Holding, LLC, a company that operates and franchises

fast-casual soup restaurants and has been serving as vice president since January 2018.

Since April 2010, he has served as one

of its directors, and served as its president from April 2010 to December 2017.

From January 2004 through July 2009, Mr.

was also a partner at Wireless Toyz Franchise, LLC, a cellular service provider, where he also served in various roles such as

vice president of development, chief financial officer and chief operating officer.

Simtob owns a Michigan-based driving school

and eight swim school locations.

Simtob studied at the University of Western Ontario.

Simtob was chosen to serve on our

board of directors because of his extensive experience in the restaurant industry.

Miller was appointed to our board of directors in August 2019.

Miller is a partner with Morgan Kingston Advisors,

LLC a boutique investment bank she co-founded in September 2018 focused on supporting middle market companies and their stakeholders

across the restaurant and restaurant technology sectors, among others.

From March 2007 until September 2018, Ms.

Miller served

as a managing director at Mastodon Ventures, Inc., a strategic advisory firm focused on the restaurant industry, and from June

2002 until March 2007 she held various positions with J.P.

Morgan Securities Inc.

Miller was a Cornell Tradition Fellow and

graduated cum laude with a B.S.

degree in applied economics and management from Cornell University and holds FINRA Series 63 and

79 securities licenses.

Miller was chosen to serve on our board of directors because of her advisory, investment banking and

capital markets experience in the restaurant and technology markets.

Gottlieb was appointed to our board of directors in November 2019.

Since May 2020, Mr.

Gottlieb has been serving as vice

president of operations for Robot Cache USA, Inc., a company that offers a blockchain-based digital marketplace for videogames.

From December 2019 until April 2020, Mr.

Gottlieb provided consulting services to Digital Gaming Corporation, a computer software

company, and from October 2019 until December 2019, he was in charge of its US business development.

From April 2017 until October

Gottlieb served as the studio head for MahiGaming San Diego, a developer of online and mobile gaming software, and from

November 2014 until March 2017, Mr.

Gottlieb served as senior director of game development for Bally Technologies and Scientific

Games, gaming manufacturers.

Gottlieb has a business degree from Northern Illinois University.

He was chosen to serve on our

board of directors because of his expertise in developing interactive gaming experiences and turning them into successful businesses.

following table sets forth certain information regarding our executive officers as of March 9, 2021:

Executive Officer

Vice President of Finance

regarding Mr.

Wolff can be found under “Board of Directors”

Gurrola was appointed as our senior vice president of finance in September 2019 and served as vice president of finance

from September 2014 until September 2019.

From November 2009 through September 2014, Ms.

Gurrola served in various leadership

accounting roles including director of accounting, director of financial reporting and compliance, and controller.

July 2007 until April 2009, Ms.

Gurrola served as senior manager of financial reporting for Metabasis Therapeutics, Inc., a biotechnology

company, and served as a consultant to Metabasis from September 2009 to November 2009.

Gurrola holds a B.A.

in English from

San Diego State University.

Relationships;

Arrangements;

Legal Proceedings

are no family relationships among any of our directors and executive officers.

There are no arrangements or understandings with

another person under which our directors and officers was or is to be selected as a director or executive officer.

Additionally,

none of our directors or executive officers is involved in any legal proceeding that requires disclosure under Item 401(f) of

Regulation S-K.

Charters and Code of Ethics

board of directors has adopted charters for its audit and nominating & corporate governance/compensation (N&CG/C) committees,

which, among other things, outline the respective duties of the committees.

Our board of directors has also adopted a code of

conduct and ethics that applies to all our employees, officers and directors.

Our code of conduct and ethics, our corporate governance

guidelines and the charter of our audit and N&CG/C committee is available at www.buzztime.com/investors/ under the “Corporate

Governance”

We intend to disclose any amendment to, or a waiver from, a provision of our code of conduct and ethics

that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons

performing similar functions and that relates to any element of the code of ethics definition enumerated in paragraph (b) of Item

406 of Regulation S-K by posting such information on that website.

The information on our website is not incorporated by reference

in this report.

Committee and Audit Committee Financial Expert

audit committee is currently comprised of two non-employee directors:

Simtob and Ms.

Miller, each of whom our board of directors

has determined is an independent director under the rules of the NYSE American and of the Securities Exchange Act of 1934.

Board of Directors has determined that each member of the audit committee is able to read and understand fundamental financial

statements including our balance sheet, income statement and statement of cash flows.

Our former director, Gregory Thomas, served

on our audit committee and was determined by our board of directors to qualify as an “audit committee financial expert,”

as that term is defined in Item 407(d)(5) of Regulation S-K.

Thomas resigned from our board of directors and from the committees

on which he served on April 30, 2020.

Our board of directors has determined that none of the current members of the audit committee

qualifies as an “audit committee financial expert.”

Due in part to the fact that we were in the middle of a strategic

process when Mr.

Thomas resigned, the outcome of which could have led to a reverse merger, a reorganization, an assignment for

the benefit of creditors, a bankruptcy, a liquidation, or similar transaction, and in part to our financial condition and the

risks to which we have been subject since March 2020 arising from the effects of the COVID-19 pandemic on our business and financial

condition, we have not appointed been successful in finding an individual to join our board of directors to replace

Thomas as an audit committee financial expert.

in Stockholder Nomination Procedures

have been no material changes to the procedures by which stockholders may recommend nominees to our board of directors since such

procedures were last described in our definitive proxy statement filed with the SEC on April 26, 2019.

Executive Compensation

Processes and Procedures

nominating and corporate governance committee (the “N&CG/C Committee”) of the NTN board of directors is responsible

for determining the amount and form of compensation paid to our executive officers, including our chief executive officer.

chief executive officer presents compensation recommendations to the N&CG/C Committee with respect to the executive officers

who report to him.

The N&CG/C Committee may accept or adjust such recommendations.

The N&CG/C Committee is solely responsible

for determining the compensation of our executive officers.

Our full board of directors participates in evaluating the performance

of our executive officers, except that Mr.

Wolff, our chief executive officer and a member of our board of directors, does not

participate when our board of directors evaluates his performance and he is not present during voting or deliberations regarding

his performance or compensation matters.

determining executive officer compensation, and the various components that comprise it, the N&CG/C Committee evaluates and

considers publicly available executive officer compensation survey data, to present a competitive compensation package to attract

and retain top talent, including an appropriate level of salary, performance-based bonus, and/or equity incentives.

the N&CG/C Committee evaluates between three and five different sources of compensation data to provide relevant market benchmark

data for a given executive role.

Additionally, the N&CG/C Committee is authorized to engage outside advisors and experts to

assist and advise the N&CG/C Committee on matters relating to executive compensation.

The N&CG/C Committee did not engage

any outside advisors or experts to assist or advise the N&CG/C Committee on any matters relating to executive compensation

during 2020 or the hiring of any executive officers.

Named Executive Officers

applicable SEC rules and regulations, all individuals who served as our principal executive officer during 2020, our two most

highly compensated executive officers (other than our principal executive officer) who were serving as executive officers at the

end of 2020, and up to two additional individuals who would have been one of our top two most highly compensated executive officer

had they been serving as an executive officer at the end of 2020 are referred to as our “named executive officers.”

Our named executive officers for 2020 were:

Executive Officer

Vice President of Finance

Named Executive Officers Compensation Overview

2020, our named executive officers received an annual base salary.

As explained in more detail below under the caption entitled

“2020 Incentive Plan,”

the total amount of the performance bonuses earned by our named executive officers for 2020

has not yet been determined.

None of our named executive officers receive or are eligible for any perquisites or benefits, other

than benefits that are available to our other full-time employees.

The employment of each of our named executive officers is at-will.

During 2020, we had written employment agreements with Mr.

Wolff and Ms.

Each of the components of our 2020 executive

compensation program is discussed below under the Summary Compensation Table.

Compensation Table

following table sets forth information concerning compensation during the years ended December 31, 2020 and 2019 awarded to, earned

by or paid to our named executive officers.

2020 Summary Compensation Table

Name and Principal Position

Incentive Plan

All Other Compensation

Chief Executive Officer

Sandra Gurrola

Senior Vice President of Finance

The amounts reported in this column represents the aggregate grant date fair value of stock awards granted during the applicable

These amounts were calculated in accordance with FASB ASC Topic 718, Compensation –

Stock Compensation, except that

any estimate of forfeitures was disregarded.

For a description of the assumptions used in computing the dollar amount recognized

for financial statement reporting purposes with respect to the stock awards granted during 2019, see Note 13, Shareholders’

Equity, in the Notes to the accompanying Consolidated Financial Statements below.

The dollar amount recognized for financial statement

reporting purposes with respect to the stock awards granted during 2020 is based on the quoted market price of the stock at the

measurement date, which is the grant date, and consist of, with respect to Mr.

Wolff, the 75,000 stock unit award granted to him

in January 2020 and the $20,000 he earned under the 2019 Interim CEO Performance Incentive Plan that was paid to him in March

2020 in 9,506 shares of our common stock, and with respect to Ms.

Gurrola, the 25,000 stock unit award granted to her in January

For additional information regarding such compensation, see the discussion under the caption entitled “2019 Interim

CEO Performance Incentive Plan”

and “Employment Agreements—Equity Grants.”

Represents performance bonuses earned by the applicable named executive officer for 2020 based on our company’s achievement

of performance objectives, as determined by the N&CG/C Committee.

For additional information regarding 2020 performance bonuses,

see the discussion under the caption entitled “2020 Incentive Plan.”

Represents a cash retention bonus that was paid in shares of our common stock to help us conserve cash.

For additional information,

see the discussion under the caption entitled “Employment Agreements—Stay Bonus.”

Represents a cash retention bonus.

For additional information, see the discussion under the caption entitled “Retention

Agreement.”

Each of our named executive officers receives a base salary.

The base salary is the fixed cash compensation component of our executive

compensation program and it recognizes individual performance, time in role, scope of responsibility, leadership skills and experience.

The base salary compensates an executive for performing his or her job responsibilities on a day-to-day basis.

Generally, base

salaries are reviewed annually company-wide and adjusted (upward or downward) when appropriate based upon individual performance,

expanded duties, changes in the competitive marketplace and, with respect to upward adjustments, if we are, financially and otherwise,

able to pay it.

We try to offer competitive base salaries to help attract and retain executive talent.

Interim CEO Performance Incentive Plan

connection with Mr.

Wolff’s appointment as interim chief executive officer in September 2019, Mr.

Wolff was eligible to

participate in the 2019 Interim CEO Performance Incentive Plan (the “2019 Interim CEO PIP”).

The 2019 Interim CEO

PIP is a performance incentive plan under which, for the achievement of each of the performance goals thereunder, we agreed to

Wolff such number of shares of our common stock equal to $20,000 divided by the closing price per share of our common

stock on the date of grant.

Upon grant, such shares would be fully vested.

The performance goals were related to:

(1) the retainment

of certain key employees determined by the N&CG/C Committee through at least March 17, 2020;

(2) having a target amount of

unrestricted cash, as determined and approved by the N&CG/C Committee, as of March 17, 2020;

and (3) meeting target sales

for our Buzztime Basic product offering, as determined and approved by the N&CG/C Committee, by March 31, 2020.

In March 2020,

the N&CG/C Committee determined that the performance goal related to the retainment of key employees was achieved, and we

issued 9,506 shares to Mr.

Wolff, representing $20,000 worth of shares of our common stock, net of withholding taxes.

of these shares is reflected in Mr.

Wolff’s 2020 compensation in the “Stock Awards”

column in the 2020 Summary

Compensation Table.

Incentive Plan

June 1, 2020, the N&CG/C Committee approved the NTN Buzztime, Inc.

Executive Incentive Plan for Eligible Employees of NTN

Buzztime, Inc.

Fiscal Year 2020 (the “2020 Incentive Plan”).

The 2020 Incentive Plan permits the payout of any incentive

compensation earned under the plan to be paid, at the discretion and in the sole determination of the N&CG/C Committee, either

in (i) cash, (ii) shares of our common stock issued under the NTN Buzztime, Inc.

2019 Performance Incentive Plan or any successor

long-term incentive plan, or (iii) any combination of (i) and (ii).

If incentive compensation is paid in shares, the number of

shares issued is determined by dividing the amount earned by the closing price of our common stock on the date on which the N&CG/C

Committee approves the amount of incentive compensation earned.

Payments under the 2020 Incentive Plan, if any, are contingent

on the applicable participant’s continued employment with us on the payout date.

2020 Incentive Plan participant has a target payout amount assigned according to such participant’s position and job level.

The table below sets forth the target payout amounts for our named executive officers under the 2020 Incentive Plan, assuming

all performance measures are achieved at a rate of 100%:

Target Payment Amount

Sandra Gurrola

performance targets were established by the N&CG/C Committee in June 2020 and fall into three categories, the achievement

of which will be determined following each quarter or year, as applicable:

strategic, financial and operational.

All incentive-based

compensation payable to Mr.

Wolff and Ms.

Gurrola is subject to any clawback policy that we may establish.

the terms of the 2020 Incentive Plan, the performance-based bonuses, if earned, were to be paid as follows:

16.66% if the applicable

performance targets for each of our 1st, 2nd and 3rd fiscal quarters were or are achieved, and 50% if the applicable performance

targets for the applicable fiscal year are achieved.

To preserve cash, we did not pay any amounts in respect of the performance

targets for either of the 1 st , 2 nd or 3 rd fiscal quarters despite the applicable performance

targets being achieved at certain levels.

As of December 31, 2020, approximately $63,000 has been accrued for bonuses earned under

the 2020 Incentive Plan.

entered into an employment agreement with Mr.

Wolff dated March 19, 2018, which was amended in each of September 2019, January

2020, March 2020 and September 2020.

We entered into an employment agreement with Ms.

Gurrola dated September 17, 2010, which

was amended in each of January 2020 and May 2020.

The following is a summary of the material terms of those employment agreements,

Wolff’s base salary is $325,000 and will increase to $350,000 effective July 1, 2021.

However, in an effort

to help preserve cash, up to 20% of Mr.

Wolff’s base salary may be paid in shares of our common stock at Mr.

Wolff’s

Wolff elected to receive 20% of his base salary in shares of our common stock from January 2020 through March

Gurrola’s base salary is $190,000.

The target payout amount of Mr.

Wolff’s and Ms.

Gurrola’s incentive performance-based bonus for 2020 is

$150,000 and $38,000, respectively.

See “2020 Incentive Plan,”

above for additional information.

Wolff was also entitled to receive a $30,000 cash bonus if he were to remain employed with us for at least 180

days from September 17, 2019, the date on which he was appointed as interim chief executive officer.

To preserve cash, we agreed

to issue to him such number of shares of our common stock equal to a pro rata amount of the $30,000 bonus (determined by multiplying

$30,000 by a fraction, the numerator of which is the number of days lapsed between September 17, 2019 and January 14, 2020, the

effective date of the amendment to his employment agreement appointing him as chief executive officer, and the denominator of

which is 180) divided by the closing price of our common stock on January 14, 2020.

As a result, we issued 5,102 shares of our

common stock to Mr.

Wolff in respect of this bonus, the value of which was net of withholding taxes on the amount of bonus earned.

The value of these shares issued is reflected in Mr.

Wolff’s 2020 compensation in the “Bonus”

column in the

2020 Summary Compensation Table.

Under the terms of the amendment we entered into with Mr.

Wolff in September 2020 to his employment agreement, if Mr.

Wolff is continuously employed by us through the consummation of a change in control (as defined in his employment agreement)

and such transaction is consummated before March 31, 2021 (a “Qualifying CiC”), then he is eligible to receive a cash

bonus of $162,500, subject to tax withholding and other authorized deductions and subject to Mr.

Wolff delivering a general release

of claims in our favor, and we will pay his COBRA premiums for up to six months following the termination of his employment with

us or, if earlier, until he becomes eligible for medical insurance coverage in connection with new employment.

that he will not be eligible for his severance payments or benefits under the terms of his employment agreement upon the consummation

of a Qualifying CiC because his employment with us will automatically terminate upon the consummation of such Qualifying CiC due

to his resignation without good reason.

Under the terms of their employment agreements, in January 2020, Mr.

Wolff and Ms.

Gurrola were each granted a stock

unit award of 75,000 and 25,000 shares of our common stock, respectively.

The awards were made under, and are subject to, our

2019 Performance Incentive Plan, and vest quarterly beginning on the 3-month anniversary of the grant date, in each case, subject

to the executive’s continued service to us as of the applicable vesting date.

connection with entering into the amendment to Ms.

Gurrola’s employment agreement in May 2020, we entered into a retention

bonus and general release of all claims agreement with Ms.

Gurrola, pursuant to which, in exchange for the reduction in her severance

compensation from nine months of her base salary to two months of her base salary, and subject to Ms.

Gurrola signing and not

revoking a general release of claims in our favor, we agreed to pay her a retention bonus of $110,833, which is equivalent to

seven months of her monthly salary, and which was payable in three installments, the last of which was made on June 19, 2020.

If, prior to August 31, 2020, Ms.

Gurrola’s employment was terminated by us for cause or by her without good reason, she

agreed to return to us 50% of the amount of the retention bonus paid to her on or before such termination of employment and we

would have had no obligation to pay any unpaid retention bonus.

of Employment and Change-in-Control Arrangements

of the employment agreements of Mr.

Wolff and Ms.

Gurrola provides for certain benefits upon termination of employment under specified

circumstances.

If the executive’s employment is terminated by us or by the executive, we will pay him or her any accrued

and unpaid base salary and reimburse him or her for expenses incurred through the date of termination of employment.

to the foregoing as the “accrued obligations.”

addition to the accrued obligations, if Mr.

Wolff’s employment with us is terminated by us without cause or by him for good

reason, subject to him delivering to us a general release of claims in our favor, we will pay him as severance an amount equal

to one month of his base salary for every full year of full-time employment, subject to a minimum of six months and a maximum

of nine months, payable in substantially equal installments on a bi-weekly basis over the applicable severance period, and we

will reimburse him for COBRA insurance premiums for a period of months equal to the number of months paid in severance.

has been employed with us for six years.

Wolff will not receive any such severance payment or benefits upon the consummation

of a Qualifying CiC because his employment with us will automatically terminate upon the consummation of such Qualifying CiC due

to his resignation without good reason.

addition to the accrued obligations, if Ms.

Gurrola’s employment with us is terminated by us without cause or by her for

good reason, subject to her delivering to us a general release of claims in our favor, we will pay her as severance an amount

equal to two months of her base salary, payable in one lump sum, plus the incentive compensation she is eligible to receive under

the 2020 Incentive Plan, and if so paid, she will waive payment to her of such incentive compensation under the 2020 Incentive

We will also reimburse her for COBRA insurance premiums for a period of nine months.

Gurrola has been employed with

us for over 11 years.

the event of a change in control and if the executive is employed by us through the effective date of the change in control, then

100% of the then unvested portion of the stock units and stock options we granted to each of Mr.

Wolff and Ms.

Gurrola then outstanding

will vest and, as applicable, become exercisable as of immediately before such effective date.

than as described above and the agreements that govern their equity awards, we do not have any contract, agreement, plan or arrangement,

whether written or unwritten, that provides for payment to a named executive officer at, following, or in connection with the

resignation, retirement or other termination of a named executive officer, or a change in control or a change in the named executive

officer’s responsibilities following a change in control.

Equity Awards at Fiscal Year-End

following table sets forth information concerning equity awards held by the named executive officers that were outstanding as

of December 31, 2020:

2020 Outstanding Equity Awards at Fiscal Year-End Option Awards

Exercisable (#)

Unexercisable

Shares or Units

of Stock that

have not Vested

Sandra Gurrola

restricted stock units vest at a rate of 12.50% of the shares subject to the award in eight substantially equal quarterly

installments beginning on the three-month anniversary of the grant date.

restricted stock units vest at a rate of 16.67% of the shares subject to the award on the six-month anniversary of the grant

date and the remaining units vest in 30 substantially equal monthly installments thereafter.

option vests and becomes exercisable at the rate of 25% of the shares underlying the option on the first anniversary of the

option grant date, and the remaining shares underlying the option vest in 36 substantially equal monthly installments thereafter.

account for stock-based payments including equity awards under our equity incentive plans in accordance with the requirements

of FASB ASC No.

718, Compensation –

Stock Compensation.

For a discussion regarding the effect of a change in control on

certain equity awards held by Mr.

Wolff and Ms.

Gurrola, see “Termination of Employment and Change-in-Control Arrangements,”

compensate our non-employee directors for their service in such capacity with annual retainers and equity compensation as described

Directors who are also our employees do not receive any additional compensation for their services as directors.

not pay fees to any of our directors for meeting attendance.

The N&CG/C Committee reviews our non-employee director compensation

practices and policies at least annually and makes a recommendation to our board of directors as to the amount, form and terms

of non-employee director compensation.

Our board of directors, taking the N&CG/C Committee’s recommendation into consideration,

sets the amount, form and terms of non-employee director compensation.

pay our non-employee directors a $25,000 annual retainer for their services as directors.

We pay the chairman of our board of

directors, assuming she or he is a non-employee director, an additional $20,000 annual retainer for services in such capacity.

We pay our non-employee directors an additional annual retainer for their service on board committees as set forth in the table

Audit Committee

N&CG/C Committee

annual retainers are paid quarterly in arrears and are paid no later than 30 days following the end of the applicable quarter.

Each non-employee director may elect that the retainer payment he or she is eligible to receive, or a portion of such retainer,

be paid in the form of a restricted stock award under our equity incentive plan rather than cash.

Such an election must be made

during an open trading window under our insider trading policy and no later than the 15th day of the last month of the quarter

for which the retainer is to be paid.

An election applies only to the quarter for which it is made.

Once an election is made with

respect to a quarter, it may not be withdrawn or substituted unless our board of directors determines, in its sole discretion,

that the withdrawal or substitution is occasioned by an extraordinary or unanticipated event.

Restricted stock awards will be

made on the same date as a cash retainer payment would otherwise be paid, will vest in full on the date of grant, and the amount

of shares subject to such award will equal the amount of the applicable cash retainer payment divided by the closing price of

our common stock on the last day of the applicable quarter.

grant stock options to our non-employee directors upon the commencement of their service as a director and upon their re-election

to our board of directors.

The stock options are granted under our stockholder-approved equity incentive plan.

connection with the commencement of a new non-employee director’s term of service, we grant to such new director a stock

option to purchase 600 shares of our common stock.

These stock options have an exercise price equal to the closing price of our

common stock on the date of grant, and are fully vested and exercisable on the date of grant as to 50% of the shares and the remaining

50% of the shares vest and become exercisable, subject to the director’s continued service on our board of directors, in

12 equal monthly installments beginning in the month immediately following the date of grant.

non-employee director who is re-elected for an additional term of service on our board of directors is automatically granted a

stock option to purchase 400 shares of our common stock on the date of our annual stockholder meeting.

These stock options have

an exercise price equal to the closing price of our common stock on the date of grant and vest and become exercisable, subject

to the director’s continued service on our board of directors, in 12 equal monthly installments thereafter.

stock options described above expire on the earlier of 10 years from the date of grant or 90 days from the date the director ceases

to serve on our board of directors.

In the event of a change in control the N&CG/C Committee may in its discretion determine

that these stock options vest and become fully exercisable as of immediately before such change in control.

Director Compensation

following table sets forth the compensation of each director, who is not a named executive officer, for service during 2020.

table excludes Mr.

Wolff, who is a named executive officer and does not receive any compensation from us for his service as a

See the section above entitled “Executive Compensation”

for information about Mr.

Wolff’s compensation.

2020 Director Compensation

Option Awards (2)

Richard Simtob

Michael Gottlieb

Gregory Thomas (1)

Thomas resigned from our board of directors effective April 30, 2020.

stock option awards were granted during 2020.

As of December 31, 2020, our non-employee directors had options outstanding

to purchase the following number of shares of our common stock:

# of Shares Subject

to Outstanding

Richard Simtob

Michael Gottlieb

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

following table sets forth the number and percentage ownership of NTN common stock as of March 9, 2021 by:

persons known to NTN to be the beneficial owner of more than 5% of NTN common stock;

of NTN’s directors;

of NTN’s named executive officers;

of NTN’s current executive officers and directors as a group.

as otherwise indicated in the footnotes to the table below:

(i) each of the persons named has sole voting and investment power

with respect to the shares of common stock shown, subject to applicable community property and similar laws;

and (ii) the address

for each director and named executive officer is c/o NTN Buzztime, Inc., 6965 El Camino Real, Suite 105-Box 517, Carlsbad, California

The information in the table is based solely on statements in filings with the SEC or other reliable information.

Directors and Named Executive Officers:

Allen Wolff (2)

Richard Simtob (3)

Michael Gottlieb (4)

Sandra Gurrola (5)

Susan Miller (6)

All executive officers and directors as a group (5 persons) (7)

5 % Stockholders:

Ault Global Holdings, Inc.

Gentile Guy (9)

as outstanding for purposes of this calculation are 2,976,774 shares of common stock outstanding as of March 9, 2021 plus,

in the case of each particular person, the shares of common stock subject to options exercisable for, or restricted stock

units that may be settled in, shares of common stock within 60 days after March 9, 2021 held by that person, which instruments

are specified by footnote.

Shares subject to outstanding options and restricted stock units other than as described in the

preceding sentence are not deemed to be outstanding for purposes of this calculation.

15,000 shares subject to options and 10,347 shares subject to restricted stock units held by Mr.

1,400 shares subject to options held by Mr.

600 shares subject to options held by Mr.

5,700 shares subject to options and 3,597 shares subject to restricted stock units held by Ms.

of 600 shares subject to options held by Ms.

23,300 shares subject to options and 13,944 shares subject to restricted stock units held by our directors and executive officers.

number of shares is the number stated as beneficially owned as of January 28, 2021 in a Schedule 13D filed with the SEC on

January 29, 2021.

In that filing, Ault Global Holdings, Inc.

states that it has sole power to vote and dispose of 295,000

shares of our common stock, and lists its address as 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141.

number of shares is the number stated as beneficially owned as of February 10, 2021 in a Schedule 13G filed with the SEC on

February 16, 2021.

In that filing, Gentile Guy states that he has sole power to vote and dispose of 175,000 shares of our

common stock, and lists his address as 103 Ave De Deigo , San Juan, Puerto Rico 00911.

Compensation Plan Information

following table sets forth information as of December 31, 2020 regarding our compensation plans authorizing us to issue equity

securities and the number of securities.

Plan Category

securities to be issued

upon exercise of

outstanding options,

warrants and rights

(b)Weighted-average

exercise price of

outstanding options,

warrants and rights

securities remaining

available for future

issuance under equity

compensation plans,

excluding securities

reflected in column (a)

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

(a) 33,000 shares issuable upon exercise of options and vesting of RSUs granted pursuant to the NTN Buzztime, Inc.

2010 Performance

Incentive Plan, as amended, and (b) 84,000 shares issuable upon exercise of options and vesting of RSUs granted pursuant to

the NTN Buzztime, Inc.

2019 Performance Incentive Plan.

Both of those plans are broad-based incentive plans, which allows

for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, and cash awards to employees,

consultants and non-employee directors.

plan allows for the issuance of non-qualified stock options to any prospective employee who has not previously been an employee

or director of the company or who has not been employed by the company for a bonafide period of time.

Certain Relationships and Related Transactions , and Director Independence

Party Transactions

January 1, 2019, there has not been nor are there currently proposed any transactions or series of similar transactions to which

we were or are to be a party in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets

at year-end for the last two completed fiscal years (which was $89,000) and in which any director, executive officer, holder of

more than 5% of our common stock or any member of the immediate family of any of the foregoing persons had or will have a direct

or indirect material interest.

Policy Regarding Related Party Transactions

to its charter, our audit committee has the responsibility to review, approve and oversee any transaction between the Company

and a related person (as defined in Item 404 of Regulation S-K) and to develop policies and procedures for the committee’s

approval of such transactions.

have entered into indemnity agreements with each of our directors and executive officers.

The indemnity agreements provide that

we will indemnify these individuals under certain circumstances against certain liabilities and expenses they may incur in their

capacities as our directors or officers.

We believe that the use of such indemnity agreements is customary and that the terms

of the indemnity agreements are reasonable and fair to us, and are in our best interests to attract and retain experienced directors

and officers.

board of directors has determined that each of our current directors other than Mr.

Wolff is independent as defined under NYSE

American listing standards.

Our board of directors has also determined that each current member of each of our Audit Committee

and Nominating and Corporate Governance/Compensation Committee is independent as defined under the NYSE American listing standards

and applicable SEC rules.

In making this determination, our board of directors found that none of these directors had a material

or other disqualifying relationship with us.

Principal Accountant Fees and Services

following table presents the aggregate fees billed for each of the last two fiscal years for professional services rendered by

Squar Milner LLP (which effective as of November 1, 2020, merged with Baker Tilly US, LLP) for the audit of our annual financial

statements, review of our quarterly financial statements and for other services:

Audit-Related Fees

All Other Fees

Committee Pre-Approval Policies and Procedures

audit committee has adopted a policy whereby all engagements of our independent auditor must be pre-approved by the audit committee.

The audit committee has delegated to its chairman the authority to evaluate and approve engagements on behalf of the committee

in the event that a need arises for pre-approval between committee meetings.

If the chairman approves any such engagements, the

chairman reports that approval to the full committee at the next committee meeting.

audit and permitted non-audit and tax services must be pre-approved by the audit committee except for certain services other than

audit, review or attest services that meet the “de minimis exception”

under 17 CFR Section 210.2-01, namely:

aggregate amount of fees paid for all such services is not more than 5% of the total fees paid by the Company to its auditor

during the fiscal year in which the services are provided;

services were not recognized by the Company at the time of the engagement to be non-audit services;

services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit.

fiscal years 2020 and 2019, there were no such services that were performed pursuant to the “de minimis exception.”

Not Applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable.

The information required in Item 10 (Directors, Executive Officers and Corporate Governance), Item 11 (Executive Compensation), Item 12 (Security Ownership of Certain Beneficial Owners and

Management and Related Stockholder Matters), Item 13 (Certain Relationships and Related Transactions, and Director Independence), and Item 14 (Principal Accounting Fees and Services) is incorporated by reference to the Company’s definitive proxy

statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2021.

Exhibits, Financial Statement Schedules

The following documents are filed as a part of this report:

(a) The following documents are filed as a part of this Annual Report on Form 10-K:

(1) Consolidated Financial Statements.

The consolidated financial statements of the Company and its consolidated subsidiaries

are set forth in the “Index to Consolidated Financial Statements”

The consolidated financial

statements of the Company and its consolidated subsidiaries are set forth in the “Index to Consolidated Financial Statements” on page F-1.

(2) Financial Statement Schedules.

Filed or Furnished Herewith

Incorporated By Reference From the Document Indicated Previously Filed by the Registrant

(3) Exhibits.

The following exhibits are submitted with this Annual

Report on Form 10-K or, where indicated, incorporated by reference to other filings.

Incorporated By Reference

Agreement and Plan of Merger and Reorganization, dated August 12, 2020, among NTN Buzztime, Inc., BIT Merger Sub, Inc.

1 unchanged sentence

Annex A to the proxy statement/prospectus/consent solicitation statement forming a part of the S-4 Registration Statement filed on January 20, 2021

Form of Support Agreement among NTN Buzztime, Inc., Brooklyn Immunotherapeutics LLC and the officers and directors of NTN Buzztime, Inc.

Exhibit to Form 8-K filed on August 14, 2020

Form of Support Agreement among NTN Buzztime, Inc., Brooklyn Immunotherapeutics LLC and certain beneficial holders of Class A membership interests of Brooklyn Immunotherapeutics LLC

Exhibit to Form 8-K filed on August 14, 2020

Asset Purchase Agreement dated September 18, 2020 by and between NTN Buzztime, Inc.

and eGames.com Holdings LLC **

Annex D-1 to the proxy statement/prospectus/consent solicitation statement forming a part of the S-4 Registration Statement filed on January 20, 2021

Omnibus Amendment and Agreement entered into as of November 19, 2020 by and among eGames.com Holdings LLC, NTN Buzztime, Inc., and Fertilemind Management, LLC

Annex D-2 to the proxy statement/prospectus/consent solicitation statement forming a part of the S-4 Registration Statement filed on January 20, 2021

Second Omnibus Amendment and Agreement entered into as of January 12, 2021 by and among eGames.com Holdings LLC, NTN Buzztime, Inc., and Fertilemind Management, LLC

Annex D-3 to the proxy statement/prospectus/consent solicitation statement forming a part of the S-4 Registration Statement filed on January 20, 2021

Agreement and Plan of Acquisition, dated as of July 16, 2021, by and among Brooklyn ImmunoTherapeutics, Inc., Brooklyn Acquisition Sub, Inc., Novellus LLC, Novellus, Inc., and the Sellers’ Representative.

Exhibit to Form 8-K filed on July 19, 2021

Restated Certificate of Incorporation

6 unchanged sentences

Exhibit to Form 8-K filed on June 9, 2017

Bylaws (as amended and restated and further amended through December 6, 2018).

Exhibit to Form 8-K filed on December 7, 2018

Form of Certificate of Common Stock of NTN Buzztime, Inc.

Exhibit to Form 8-K filed on June 17, 2016

Description of registrant’s securities

Certificate of Amendment to Restated Certificate of Amendment, dated March 25, 2021 (Reverse Stock Split)

Exhibit to Form 8-K filed on March 31, 2021

8% Promissory Note issued by NTN Buzztime, Inc.

on September 18, 2020.

Certificate of Amendment to Restated Certificate of Amendment, dated March 25, 2021 (Authorized Share Increase)

Exhibit to Form 8-K filed on March 31, 2021

Certificate of Amendment to Restated Certificate of Amendment, dated March 25, 2021 (Name Change)

Exhibit to Form 8-K filed on March 31, 2021

Certificate of Validation of Brooklyn ImmunoTherapeutics, Inc., as filed with the Secretary of State of the State of Delaware on September 3, 2021

Exhibit to Form 8-K filed on September 13, 2021

Guaranty by Aram Fuchs in favor of NTN Buzztime, Inc.

Amended and Restated Bylaws of Brooklyn ImmunoTherapeutics, Inc.

Exhibit to Form 8-K filed on September 23, 2021

10% Promissory Note issued by NTN Buzztime, Inc.

on December 1, 2020

Exhibit to Form 8-K filed on November 23, 2020

10% Promissory Note issued by NTN Buzztime, Inc.

on January 12, 2021

Exhibit to Form 8-K filed on January 15, 2021

Asset Purchase Agreement between NTN Buzztime, Inc.

and Sporcle, Inc.

dated January 13, 2020

Exhibit to Form 8-K filed on January 15, 2020

Amended 2010 Performance Incentive Plan.

Exhibit to Definitive Proxy Statement on Schedule 14A filed on April 24, 2015

NTN Buzztime, Inc.

2014 Inducement Plan.

Exhibit to Form 10-Q filed on November 7, 2014

Limited Term Employment and Separation Agreement and General Release of All Claims dated September 17, 2019 by and between NTN Buzztime, Inc.

and Ram Krishnan.

to Form 8-K filed on September 17, 2019

Employment Agreement by and between the registrant and Allen Wolff dated March 19, 2018.

to Form 10-Q filed on May 11, 2018

Stock Unit Agreement under the Amended 2010 Performance Incentive Plan between the registrant and Allen Wolff dated March 19, 2018.

to Form 10-Q filed on May 11, 2018

First Amendment to Employment Agreement by and between NTN Buzztime, Inc.

and Allen Wolff dated September 17, 2019.

to Form 8-K filed on September 17, 2019

2019 Interim CEO Performance Incentive Plan.

to Form 8-K filed on September 17, 2019

Second Amendment to Employment Agreement by and between NTN Buzztime, Inc.

and Allen Wolff dated January 14, 2020.

to Form 8-K filed on January 15, 2020

Third Amendment to Employment Agreement by and between NTN Buzztime, Inc.

and Allen Wolff dated March 27, 2020.

to Form 8-K filed on March 30, 2020

Amendment #4 to Employment Agreement made and entered into as of September 18, 2020 between NTN Buzztime, Inc.

and Allen Wolff.

to Form 8-K filed on September 18, 2020

Employment Agreement dated September 17, 2019 by and between NTN Buzztime, Inc.

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Filed herewith

Registration Rights Agreement, dated as of April 26, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Lincoln Park Capital Fund, LLC

Exhibit to Form 8-K filed on April 30, 2021

Registration Rights Agreement, dated as of May 26, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Lincoln Park Capital Fund, LLC

Exhibit to Form 8-K filed on May 26, 2021

Registration Rights Agreement, dated as of July 16, 2021, by and among Brooklyn ImmunoTherapeutics, Inc.

and the individuals and entities named therein.

Exhibit to Form 8-K filed on July 19, 2021

Amended and Restated Royalty Agreement and Distribution Agreement, dated March 22, 2021.

Exhibit to Form 8-K filed on March 31, 2021

Assignment and Assumption of Employment Agreement dated March 30, 2021 among Brooklyn ImmunoTherapeutics, LLC, Brooklyn ImmunoTherapeutics, Inc.

and Ronald Guido .

Exhibit to Form 8-K filed on March 31, 2021

Assignment and Assumption of Employment Agreement dated March 30, 2021 among Brooklyn ImmunoTherapeutics, LLC, Brooklyn ImmunoTherapeutics, Inc.

and Lynn Sadowski Mason.

Exhibit to Form 8-K filed on March 31, 2021

Executive Employment Agreement, dated as of April 1, 2021 and effective as of April 16, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Howard J.

Exhibit to Form 8-K filed on April 7, 2021

Executive Employment Agreement, dated as of June 5, 2021 and effective as of June 28, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Kevin D’Amour.

Exhibit to Form 8-K filed on June 10, 2021

Executive Employment Agreement, dated as of June 16, 2021 and effective as of June 21, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Sandra Gurrola.

to Form 8-K filed on September 17, 2019

First Amendment to Employment Agreement by and between NTN Buzztime, Inc.

and Sandra Gurrola dated January 14, 2020.

to Form 8-K filed on January 15, 2020

Second Amendment to Employment Agreement by and between NTN Buzztime, Inc.

and Sandra Gurrola dated May 27, 2020.

to Form 8-K filed on June 2, 2020

Retention Bonus and General Release of Claims Agreement by and between NTN Buzztime, Inc.

and Sandra Gurrola dated May 27, 2020.

to Form 8-K filed on June 2, 2020

NTN Buzztime, Inc.

Executive Incentive Plan for Eligible Employees of NTN Buzztime, Inc.

fiscal Year 2020.

to Form 8-K filed on June 2, 2020

2019 Performance Incentive Plan.

to Definitive Proxy Statement on Schedule 14A filed on April 26, 2019

Form of Incentive Stock Option Agreement under the 2019 Performance Incentive Plan.

to Form S-8 filed on June 14, 2019

Form of Nonstatutory Stock Option Agreement under the 2019 Performance Incentive Plan.

to Form S-8 filed on June 14, 2019

Form of Nonstatutory Stock Option Agreement for Directors under the 2019 Performance Incentive Plan.

to Form S-8 filed on June 14, 2019

Form of Stock Unit Agreement under the 2019 Performance Incentive Plan.

to Form S-8 filed on June 14, 2019

Form of Restricted Stock Grant Agreement under the 2019 Performance Incentive Plan.

to Form S-8 filed on June 14, 2019

NTN Buzztime, Inc.

Non-Employee Director Compensation Policy.

to Form 10-Q filed on August 6, 2018

Paycheck Protection Program Note issued by NTN Buzztime, Inc.

in favor of Level One Bank dated April 18, 2020.

to Form 8-K filed on April 21, 2020

Acknowledgment and Agreement Regarding Loan Forgiveness dated April 18, 2020.

to Form 8-K filed on April 21, 2020

Office lease, dated for reference purposes only July 26, 2018, by and between Burke Aston Partners, LLC and the registrant

to Form 10-Q filed on November 9, 2018

Lease Termination, Surrender and Buy-Out Agreement by and between NTN Buzztime, Inc.

and Burke Aston Partners, LLC dated June 25, 2020.

to Form 8-K filed on July 1, 2020

Form of Director and Officer Indemnification Agreement

to Form 10-K filed on March 22, 2019.

Subsidiaries of NTN Buzztime, Inc.

Consent of Baker Tilly US, LLP

Power of attorney (included on the signatures page of this report)

Exhibit to Form 8-K filed on June 21, 2021

Executive Employment Agreement, dated as of July 6, 2021 and effective as of July 15, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Jay Sial.

Exhibit to Form 8-K filed on July 19, 2021

Executive Employment Agreement, effective as of September 20, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Roger Sidhu.

Exhibit to Form 8-K filed on September 23, 2021

Form of Indemnification Agreement

Exhibit to Form 8-K filed on April 16, 2021

Purchase Agreement, dated as of April 26, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Lincoln Park Capital Fund, LLC

Exhibit to Form 8-K filed on April 30, 2021

Purchase Agreement, dated as of May 26, 2021, between Brooklyn ImmunoTherapeutics, Inc.

and Lincoln Park Capital Fund, LLC

Exhibit to Form 8-K filed on May 26, 2021

Exclusive License Agreement, dated as of April 26, 2021, between Factor Bioscience Limited, Novellus Therapeutics Limited and Brooklyn ImmunoTherapeutics LLC

Exhibit to Form 8-K filed on April 30, 2021

Brooklyn ImmunoTherapeutics, Inc.

2021 Inducement Stock Incentive Plan

Exhibit to Form 8-K filed on May 26, 2021

Brooklyn ImmunoTherapeutics, Inc.

Restated 2020 Stock Incentive Plan

Exhibit to Form 8-K filed on September 13, 2021

Lease Agreement, made as of September 28, 2015, between Biobat, Inc.

and IRX Therapeutics, LLC

Exhibit to Form S-4/A filed on November 25, 2020

First Amendment to Lease Agreement, dated September 28, 2015

Exhibit to Form S-4/A filed on November 25, 2020

Assignment and Assumption of Lease, made by and between IRX Therapeutics, LLC and Brooklyn, and consented to by Biobat, Inc., as landlord

Exhibit to Form S-4/A filed on November 25, 2020

Second Amendment to Lease Agreement, dated July 24, 2019

Exhibit to Form S-4/A filed on November 25, 2020

Sublease Agreement, dated April 18, 2019, between Brooklyn and Nezu Asia Capital Management, LLC

Exhibit to Form S-4/A filed on November 25, 2020

Consent to Sublease and Agreement, dated as of May 18, 2019, among 654 Madison Avenue Associates LP, Brooklyn, and Nezu Asia Capital Management, LLC

Exhibit to Form S-4/A filed on November 25, 2020

Commencement Date Confirmation Agreement, made as of June 27, 2019, among Brooklyn and Nezu Asia Capital Management, LLC.

Exhibit to Form S-4/A filed on November 25, 2020

Lease Agreement dated June 15, 2021 between Brooklyn ImmunoTherapeutics, Inc.

and Fairlane Columbia, LLC

Filed herewith

Subsidiaries of the Company.

Filed herewith.

Consent of the Independent Registered Accounting Firm.

Filed herewith

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Furnished herewith

Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Instance Document

Taxonomy Extension Schema Document

Taxonomy Extension Calculation Linkbase Document

Taxonomy Extension Definition Linkbase Document

Taxonomy Extension Label Linkbase Document

Contract or Compensatory Plan

schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

A copy of any omitted schedule and/or

exhibit will be furnished to the SEC or its staff upon request.

This certification is being furnished solely to accompany this report pursuant to U.S.C.

1350, and is not

being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated herein

by reference into any filing of the Company whether made before or after the date hereof, regardless of any general incorporation

language in such filing.

Furnished herewith

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

Filed herewith

Inline XBRL Taxonomy Extension Schema Document

Filed herewith

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Indicates management contract or compensatory plan.

Pursuant to Item 601(b)(2) of Regulation S-K, portions of this exhibit have been omitted because the Company customarily and actually treats the omitted portions as private or confidential, and such

portions are not material and would likely cause competitive harm to the Company if publicly disclosed.

The Company will supplementally provide a copy of an unredacted copy of this exhibit to the U.S.

Securities and Exchange Commission or

its staff upon request.

Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

Form 10-K Summary

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

March 11, 2021

BUZZTIME, INC.

Sandra Gurrola

Vice President of Finance

Principal Financial Officer and Principal Accounting Officer)

ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Allen Wolff and Sandra

Gurrola, and each of them acting individually, as his or her true and lawful attorneys-in-fact and agents, each with full power

to act alone, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in

any and all capacities, to sign any and all amendments to this annual report on Form 10-K, and to file the same, with all exhibits

thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact

and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection

therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all

that said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done

by virtue hereof.

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the Registrant and in the capacities and on the dates indicated.

Executive Officer and Director

Executive Officer)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized .

BROOKLYN IMMUNOTHERAPEUTICS, INC.

A pril 15, 2022

/s/ Howard J.

Chief Executive Officer and President

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on

the dates indicated.

/s/ Howard J.

Chief Executive Officer, President and Member of the Board (Principal Executive Officer)

A pril 15, 2022

/s/ Sandra Gurrola

Vice President of Finance (Principal Financial and Accounting Officer)

A pril 15, 2022

Sandra Gurrola

President of Finance (Principal Financial

and Principal Accounting Officer)

Richard Simtob

Michael Gottlieb

BUZZTIME, INC.

/s/ Charles Cherington

Chairman of the Board

A pril 15, 2022

Charles Cherington

/s/ Dennis H.

Member of the Board

A pril 15, 2022

/s/ Erich Mohr

Member of the Board

A pril 15, 2022

/s/ Heather B.

Member of the Board

A pril 15, 2022

Member of the Board

A pril 15, 2022

BROOKLYN IMMUNOTHERAPEUTICS, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Financial Statements:

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2020

Consolidated Statements of Shareholders’

Equity for the years ended December 31, 2020 and 2019

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and the Board of Directors of NTN Buzztime, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of NTN Buzztime, Inc.

and its subsidiaries (the “Company”)

as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, shareholders’

equity and cash flows for each of the years then ended, and the related notes to the consolidated financial statements (collectively,

the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for the

years then ended, in conformity with accounting principles generally accepted in the United States of America.

Concern Uncertainty

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 5 to the financial statements, the Company incurred a significant net loss for the year ended December 31, 2020 and as

of December 31, 2020 had a negative working capital balance, and does not expect to have sufficient cash or working capital resources

to fund operations for the twelve-month period subsequent to the issuance date of these financial statements.

These factors raise

substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these

matters also are described in Note 5.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders, Members and Board of Directors of

Brooklyn ImmunoTherapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Brooklyn ImmunoTherapeutics, Inc.

(the “Company”) as of December 31,

2021 and 2020, the related consolidated statements of operations, stockholders’ and members’ equity (deficit) and cash flows for each of the

two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 2, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company's ability to

continue as a going concern.

Management's plans in regard to these matters are also described in Note 2 .

The consolidated financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

Change in Accounting Principle

As discussed in Notes 3 and 7 to the financial statements, the Company has changed its method of accounting for leases in 2020 due

to the adoption of the guidance in ASC Topic 842, Leases (“Topic 842”).

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the

Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in

accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to

obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over

financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over

financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements

that were communicated or required to be communicated to the Company’s audit committee and that:

(i) relate to accounts

or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective,

or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial

statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on

the critical audit matters or on the accounts or disclosures to which they relate.

Audit Matter Description

discussed in Note 6 to the consolidated financial statements, the Company generates revenue by charging subscription fees to partners

for access to its 24/7 trivia network, by selling and leasing tablet and hardware equipment for custom usage beyond trivia/entertainment,

by selling digital-out-of-home advertising direct to advertisers and on national ad exchanges, by licensing its entertainment

and trivia content to other entities, and by providing professional services such as custom game design or development of new

platforms on its existing tablet form factor.

general, when multiple performance obligations are present in a customer contract, the transaction price is allocated to the individual

performance obligation 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 relative stand-alone selling prices.

All revenues are recognized net of sales tax collected from the

related audit effort in evaluating management’s judgments in determining revenue recognition for these customer agreements

was extensive and required a high degree of auditor judgment.

We Addressed the Matter in Our Audit

primary procedures we performed to address this critical audit matter included:

evaluated management’s significant accounting policies related to these customer agreements for reasonableness.

selected a sample of customer agreements and performed the following procedures:

and read contract source documents for each selection, including master agreements, and other documents that were part of

the agreement.

management’s identification of significant terms for completeness, including the identification of distinct performance

obligations and variable consideration.

the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting

policies, along with their use of estimates, in the determination of revenue recognition conclusions.

evaluated the reasonableness of management’s estimate of stand-alone selling prices for products and services that are

not sold separately.

tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized

in the financial statements.

software development costs

Audit Matter Description

in Note 6 to the consolidated financial statements, the Company capitalizes costs related to developing certain internal-use

software in accordance with ASC No.

The Company recognizes the capitalized costs on a straight-line basis over

the estimated useful lives, which are generally two to three years.

The Company capitalized $244,000 and impaired $248,000

of software costs in the year ended December 31, 2020 and had total capitalized software development costs, net of accumulated

amortization, of $1.36 million as of December 31, 2020.

the Company’s capitalization of software development costs is complex.

Management applies significant judgment in determining

which software projects, and activities within those projects, qualify for capitalization, as only those costs incurred in certain

stages of software development or implementation can be capitalized in accordance with the applicable accounting standards.

addition, measuring the appropriate amounts to capitalize requires the Company to maintain detailed records of time spent by personnel

on implementation and development activities across all projects in development.

Finally, management applies judgment in determining

when to cease the capitalization of costs that will be placed in service.

We Addressed the Matter in Our Audit

primary procedures we performed to address this critical audit matter included, among others:

inspected underlying documentation to evaluate whether the costs were appropriately capitalizable under the applicable accounting

inquired of project managers for significant projects to assess the nature of the costs, including the internal time devoted

to capitalizable activities and the externally contracted costs.

evaluated the software implementation timeline and the related underlying documentation obtained to support the capitalization

period for implementation and development amounts as well as the date the costs were placed in service.

BAKER TILLY US, LLP

have served as the Company’s auditor since 2013.

Diego, California

BUZZTIME, INC.

AND SUBSIDIARIES

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were

communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit

matter or on the accounts or disclosures to which it relates.

Fair Value of Contingent Consideration

Description of the Matter

As discussed in Note 5 to the financial statements, contingent consideration is recorded at fair value at the transaction date and

subsequently revalued each reporting period, with changes in the fair value recognized within the statement of operations.

As of and for the year ended December 31, 2021, management recorded a contingent consideration liability of $19.9 million

and change in fair value of $0.2 million.

Management utilized a third-party valuation specialist to assist in estimating the contingent consideration fair value using the income approach, and the discounted cash flows were used to estimate the

expected royalty payments to third parties.

Auditing management’s estimated fair value of contingent consideration is highly subjective and judgmental as the assumptions used in

the fair value measurement, including the discount rate, the amount and timing of cash flows, and the forecast of future product sales, are all based on significant inputs not observable in the market.

This in turn led to a high degree of

auditor judgment, subjectivity and effort in performing procedures related to the fair value of contingent consideration and the audit effort involved the use of professionals with specialized skill and knowledge to assist in evaluating the audit

evidence obtained.

How we Addressed the Matter in Our Audit

With the assistance of our valuation specialists, our audit procedures included, amongst others:

We obtained an understanding of management’s process in regards to the methodology used and the factors considered around the inputs, sources of data used and assumptions and estimates made in

determining the fair value of contingent consideration, including those over management’s review of its third-party specialist valuation report.

We tested the completeness and accuracy of the data used in the discounted cash flow model.

We evaluated the appropriateness of the discounted cash flow model.

We performed a sensitivity analysis on the discount rate used in the discounted cash flow model to determine the impact rate changes could have on the fair value.

/s/ Marcum llp

We are uncertain as to the year we began serving consecutively as the auditor of the Company’s financial statements;

however, we are aware that we have

been the Company’s auditor consecutively since at least 2013.

April 15, 2022

BROOKLYN IMMUNOTHERAPEUTICS, INC.

AND SUBSDIARIES

CONSOLIDATED BALANCE SHEETS

thousands, except par value amount)

(In thousands, except par value amount)

Current assets:

Cash and cash equivalents

Restricted cash

Accounts receivable, net of allowances of $748 and $354, respectively

Site equipment to be installed

Accounts receivable

Prepaid expenses and other current assets

Total current assets

Restricted cash, long-term

Operating lease right-of-use assets

Fixed assets, net

Software development costs, net of accumulated amortization of $3,081 and $3,341,

Deferred costs

LIABILITIES AND SHAREHOLDERS’

Property and equipment, net

Right-of-use assets - operating leases

In-process research and development

Investment in minority interest

Security deposits and other assets

LIABILITIES AND STOCKHOLDERS’ AND MEMBERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

Accrued compensation

Accrued expenses

Sales taxes payable

Income taxes payable

Current portion of long-term debt

Current portion of obligations under operating leases

Current portion of obligations under finance leases

Current portion of deferred revenue

Loans payable

PPP loan, current

Operating lease liabilities, current

Other current liabilities

Total current liabilities

Long-term debt

Long-term obligations under operating leases

Long-term obligations under finance leases

Long-term deferred revenue

Contingent consideration

Operating lease liabilities, non-current

PPP loan, non-current

Other liabilities

Total liabilities

Shareholders’

Series A 10% cumulative convertible preferred stock, $0.005 par value, $156 liquidation preference, 156 shares

authorized, issued and outstanding at December 31, 2020 and 2019

Common stock, $0.005 par value, 15,000 shares authorized at December 31, 2020 and 2019;

and 2,901 shares issued at December 31, 2020 and 2019, respectively

Treasury stock, at cost, 10 shares at December 31, 2020 and 2019

Stockholders’ and members’ equity (deficit):

Class A membership units

Class B membership units

Class C membership units

Series A preferred stock, $ 0.005 par value, $ 156 liquidation preference, 156 shares

authorized, issued and outstanding at December 31, 2021;

no shares issued and outstanding at December 31, 2020.

Common stock, $ 0.005 par value, 100,000 shares authorized, 52,021 issued and

outstanding at December 31, 2021 ;

no shares issued and outstanding at December 31, 2020 .

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income

Total shareholders’

Total liabilities and shareholders’

accompanying notes to consolidated financial statements

BUZZTIME, INC.

Total stockholders’ and members’ equity (deficit)

Total liabilities and stockholders’ and members’ equity (deficit)

The accompanying notes are an integral part of these consolidated financial statements.

BROOKLYN IMMUNOTHERAPEUTICS, INC.

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

thousands, except per share amounts)

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

Years ended December 31,

Revenue from contracts with customers

Subscription revenue

Hardware revenue

Other revenue

Total revenue from contracts with customers

Operating expenses:

Direct operating costs (includes depreciation and amortization of $1,538 and $2,517,

respectively)

Selling, general and administrative

Impairment of capitalized software

Impairment of goodwill

Depreciation and amortization (excluding depreciation and amortization

included in direct operating costs)

Research and development

Acquired in-process research and development

General and administrative

Transaction costs

Change in fair value of contingent consideration

Total operating expenses

Operating loss

Other expense, net:

Interest expense, net

Loss from operations

Other expenses:

Loss on sale of NTN assets

Other income (expense), net

Total other income (expense), net

Total other expenses, net

Loss before income taxes

Benefit (provision) for income taxes

Provision for income taxes

Series A preferred stock dividend

Net loss attributable to common shareholders

Net loss attributable to common stockholders

Net loss per common share - basic and diluted

Weighted average shares outstanding - basic and diluted

Comprehensive loss

Foreign currency translation adjustment

Total comprehensive loss

accompanying notes to consolidated financial statements

BUZZTIME, INC.

The accompanying notes are an integral part of these consolidated financial statements.

BROOKLYN IMMUNOTHERAPEUTICS, INC.

AND SUBSIDIARIES

STATEMENTS OF SHAREHOLDERS’

the years ended December 31, 2020 and 2019

Series A Cumulative Convertible Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ AND MEMBERS’ EQUITY (DEFICIT)

For the years ended December 31, 2021 and 2020

(In thousands)

Membership Equity

Preferred Stock

Balances at January 1, 2021

Foreign currency translation adjustment

Issuance of common stock upon vesting of restricted stock units

Dividend paid to Series A preferred stockholders

Non-cash stock based compensation

Brooklyn rights offerings membership units

Elimination of Brooklyn’s historical members’ equity

Common stock to be retained by NTN stockholders

Issuance of Series A preferred stock retained

by NTN stockholders

Issuance of common stock to Brooklyn members

Issuance of common stock to Financial Advisor upon

consummation of merger

Issuance of common stock from the exercise of

stock options

Issuance of common stock related to stock purchase

agreement with Lincoln Park Capital Fund, LLC, net

Issuance of common stock in connection with

the acquisition of Novellus, Inc.

Cash dividends to Series A preferred stockholders

Issuance of common stock in lieu of cash

dividend to Series A preferred stockholders

Forfeiture of unvested restricted stock

Stock based compensation

Balances at December 31, 2021

Foreign currency translation adjustment

Issuance of common stock in lieu of cash compensation

Issuance of common stock upon vesting of restricted stock units

Dividend paid to Series A preferred stockholders

Non-cash stock based compensation

Membership Equity

Balances at January 1, 2020

Implementation of new accounting principle

Stock based compensation

Sale of members’ equity

Balances at December 31, 2020

accompanying notes to consolidated financial statements

BUZZTIME, INC.

The accompanying notes are an integral part of these consolidated financial statements.

BROOKLYN IMMUNOTHERAPEUTICS, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

For the years ended December

Cash flows provided by operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For years ended

Cash flows used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Provision for doubtful accounts

Transfer of fixed assets to sales-type lease

Amortization of operating lease right-of-use-assets

Stock-based compensation

Amortization of debt issuance costs

Common stock issued for compensation in lieu of cash payment

Gain from the asset sale of Stump!

Trivia and OpinioNation

Loss from the termination of operating lease

Loss from the disposition of assets

Gain from PPP loan forgiveness

Impairment of capitalized software

Impairment of goodwill

Changes in assets and liabilities:

Accounts receivable

Site equipment to be installed

Operating lease liabilities

Prepaid expenses and other assets

Accounts payable and accrued liabilities

Income taxes payable

Deferred costs

Deferred revenue

Amortization of right-to-use asset

Transaction costs - shares to Financial Advisor

Loss on sale of NTN assets

Loss on disposal of fixed assets

Gain on forgiveness of PPP loan

Acquired in-process research and development

Change in fair value of contingent consideration

Changes in operating assets and liabilities:

Account receivable

Prepaid expenses and other current assets

Security deposits and other non-current assets

Accounts payable and accrued expenses

Operating lease liability

Other liabilities

Net cash (used in) provided by operating activities

Cash flows provided by (used in) investing activities:

Capital expenditures

Capitalized software development expenditures

Net proceeds from the sale of Stump!

Proceeds from sale of other assets

Net cash provided by (used in) investing activities

Cash flows provided by (used in) financing activities:

Proceeds from long-term debt

Payments on long-term debt

Debt issuance costs on long-term debt

Principal payments on finance leases

Payroll tax remitted on net share settlement of equity awards

Net cash used in operating activities

Cash flows used in investing activities:

Purchase of property and equipment

Purchase of NTN, net of cash acquired

Purchase of Novellus, net of common stock issued and cash acquired

Proceeds from the sale of NTN assets, net of cash disposed

Net cash used in investing activities

Cash flows provided by financing activities:

Net proceeds of common stock issued to Lincoln Park

Proceeds from sale of members’ equity

Proceeds from the exercise of stock options

Proceeds from loans payable

Repayment of NTN’s PPP loan

Principal payments on notes payable

Dividends paid to Series A preferred shareholders

Net cash provided by (used in) financing activities

Effect of exchange rate on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of year

Cash, cash equivalents and restricted cash at end of year

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosures of cash flow information:

1 unchanged sentence

Supplemental disclosure of non-cash investing and financing activities:

Site equipment transferred to fixed assets

Initial measurement of operating lease right-of-use assets and liabilities

Assets acquired under operating lease

Reconciliation of cash, cash equivalents and restricted cash at end of period:

Cash and cash equivalents

Restricted cash

Restricted cash, long-term

Total cash, cash equivalents and restricted cash at end of period

accompanying notes to consolidated financial statements

BUZZTIME, INC.

Issuance of common stock for Series A preferred stock dividend

Issuance of common stock for business combination

Issuance of common Stock for Novellus acquisition

Forfeiture of unvested restricted stock

Preferred shares issued in connection with reverse merger

Initial measurement of ROU assets, net of tenant improvement allowance

Initial measurement of operating lease liabilities

Investor deposits for sale of members’ equity

Right of use assets obtained in exchange for new operating lease liabilities

The accompanying notes are an integral part of these consolidated financial statements.

BROOKLYN IMMUNOTHERAPEUTICS, INC.

AND SUBSIDIARIES

TO THE CONSOLIDATED FINANCIAL STATEMENTS

the Years Ended December 31, 2020 and 2019

Buzztime, Inc.

(the “Company”) was incorporated in Delaware in 1984 as Alroy Industries and changed its corporate

name to NTN Communications, Inc.

The Company changed its name to NTN Buzztime, Inc.

in 2005 to better reflect the growing

role of the Buzztime consumer brand.

Company delivers interactive entertainment and innovative technology to its partners in a wide range of verticals –

bars and restaurants to casinos and senior living centers.

By enhancing the overall guest experience, the Company believes it

helps its hospitality partners acquire, engage, and retain patrons.

social fun and friendly competition, the Company’s platform creates bonds between our hospitality partners and their patrons,

and between patrons themselves.

The Company believes this unique experience increases dwell time, revenue, and repeat business

for venues –

and has also created a large and engaged audience which it connects with through its in-venue TV network.

the significant disruptions to the restaurant and bar industry resulting from the COVID-19 pandemic, or the pandemic, that began

in March 2020, over 1 million hours of trivia, card, sports and arcade games were played on the Company’s network each month.

Since March 2020, approximately 100,000 hours per month of such games have been played on the network each month.

Company generates revenue by charging subscription fees to partners for access to its 24/7 trivia network, by selling and leasing

tablet and hardware equipment for custom usage beyond trivia/entertainment, by selling digital-out-of-home (DOOH) advertising

direct to advertisers and on national ad exchanges, by licensing the Company’s entertainment and trivia content to other

parties, and by providing professional services such as custom game design or development of new platforms on the Company’s

existing tablet form factor.

Until February 1, 2020, the Company also generated revenue by hosting live trivia events.

sold all of its assets used to host live trivia events in January 2020.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Organization and Description of Business Operations

Brooklyn ImmunoTherapeutics Inc., a Delaware corporation (“Brooklyn” or the “Company”), together with its subsidiaries including Brooklyn

ImmunoTherapeutics LLC (“Brooklyn LLC”), Novellus, Inc.

(“Novellus”) and Novellus Therapeutics, Ltd.

(“Novellus, Ltd.”), is a clinical stage biopharmaceutical company focused on exploring the role that cytokine, gene editing and cell therapy can

have in treating patients with cancer, blood disorders and monogenic diseases.

As used herein, the “Company” refers collectively to Brooklyn and its subsidiaries.

On August 12, 2020, Brooklyn (then known as “NTN Buzztime, Inc.”), Brooklyn LLC and BIT Merger Sub, Inc., a wholly owned subsidiary of Brooklyn

(the “Merger Sub”), entered into an agreement and plan of merger and reorganization (the “Merger Agreement”) pursuant to which, among other matters, Merger Sub merged with and into Brooklyn LLC, with Brooklyn LLC continuing as a wholly owned

subsidiary of Brooklyn and as the surviving company of the merger (the “Merger”).

The Merger closed on March 25, 2021.

After the Merger, Brooklyn changed its name from “NTN Buzztime, Inc.” to “Brooklyn ImmunoTherapeutics, Inc.” The Merger was

accounted for as a reverse acquisition, in which Brooklyn LLC was deemed the acquiring company for accounting purposes.

On March 26, 2021, Brooklyn sold (the “Disposition”) its rights, title and interest in and to the assets relating to the business operated under

the name “NTN Buzztime, Inc.” prior to the Merger to eGames.com Holdings LLC (“eGames.com”) in accordance with the terms of an asset purchase agreement dated September 18, 2020, as amended, between Brooklyn and eGames.com (the “Asset Purchase

(See Note 4.)

of December 31, 2020, 1,036 venues subscribed to the Company’s interactive entertainment network and approximately 18% of

its network subscriber venues were affiliated with national and regional restaurant brands.

See Note 2 for more information regarding

the impact of the COVID-19 pandemic on these venues and the Company’s subscription revenues.

Company owns several trademarks and consider the Buzztime®, Playmaker®, Mobile Playmaker, and BEOND Powered by Buzztime

trademarks to be among its most valuable assets.

These and the Company’s other registered and unregistered trademarks used

in this document are the Company’s property.

Other trademarks are the property of their respective owners.

of Accounting Presentation

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., NTN Buzztime,

and BIT Merger Sub Inc., all of which, other than NTN Canada, Inc.

and BIT Merger Sub, Inc., are dormant subsidiaries.

otherwise indicated, references to the Company include its consolidated subsidiaries.

Reclassifications

reclassifications have been made to the prior years’

financial statements to conform to the current year presentation.

reclassifications had no effect on previously reported results of operations or retained earnings.

negative impact of the COVID-19 pandemic on the restaurant and bar industry was abrupt and substantial, and the Company’s

business, cash flows from operations and liquidity suffered, and continues to suffer, materially as a result.

In many jurisdictions,

including those in which the Company has many customers and prospective customers, restaurants and bars were ordered by the government

to shut-down or close all on-site dining operations in the latter half of March 2020.

Since then, governmental orders and restrictions

impacting restaurants and bars in certain jurisdictions were eased or lifted as the number of COVID-19 cases decreased or plateaued,

but as jurisdictions began experiencing a resurgence in COVID-19 cases, many jurisdictions reinstated such orders and restrictions,

including mandating the shut-down of bars and the closing of all on-site dining operations of restaurants.

The Company has experienced

material decreases in subscription revenue, advertising revenue and cash flows from operations, which the Company expects to continue

for at least as long as the restaurant and bar industry continues to be negatively impacted by the COVID-19 pandemic, and which

may continue thereafter if restaurants and bars seek to reduce their operating costs or are unable to re-open even if restrictions

within their jurisdictions are eased or lifted.

For example, at its peak, approximately 70% of the Company’s customers had

their subscriptions to our services temporarily suspended.

As of December 31, 2020, approximately 19% of the Company’s customers

remain on subscription suspensions.

Company’s consolidated financial statements reflect estimates and assumptions made by management that affect the reported

amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses

during the reporting periods presented.

Such estimates and assumptions affect, among other things, the allowance for doubtful

accounts, site equipment to be installed, fixed assets, capitalized software development and right-of-use assets.

Events and changes

in circumstances that affect such estimates and assumptions after December 31, 2020, including those resulting from the impacts

of the pandemic, will be reflected in future periods.

Agreement and Asset Purchase Agreement

Merger with Brooklyn Immunotherapeutics LLC

August 12, 2020, the Company entered into an agreement and plan of merger and reorganization (the “Merger Agreement”)

with Brooklyn Immunotherapeutics LLC (“Brooklyn”), a privately-held, biopharmaceutical company focused on exploring

the role that cytokine-based therapy can have in treating patients with cancer.

Pursuant to the Merger Agreement, subject to the

satisfaction or waiver of the conditions set forth in the agreement, BIT Merger Sub, Inc., the Company’s wholly-owned subsidiary

formed solely for purposes of carrying out the merger, will merge with and into Brooklyn, with Brooklyn surviving the merger as

a wholly-owned subsidiary of the Company and Brooklyn’s members receiving newly issued shares of the Company’s common

stock in exchange for their ownership interests in Brooklyn (the “Merger”).

The Merger, if completed, will result

in a change in control of the Company.

If the Merger is completed, the Company expects to change its name to Brooklyn ImmunoTherapeutics,

and the combined company will focus on Brooklyn’s business of exploring the role that cytokine-based therapy can have

on the immune system in treating patients with cancer.

Upon completion of the Merger, the board of directors of the combined company

is expected to consist entirely of individuals designated by Brooklyn and the officers of the combined company are expected to

be members of Brooklyn’s current management team.

the Merger is completed, at the effective time of the Merger, Brooklyn’s members will exchange their equity interests in

Brooklyn for shares of the Company’s common stock representing between approximately 94.08% and 96.74% of the outstanding

common stock of the Company immediately following the effective time of the Merger on a fully diluted basis (less a portion of

such shares which will be allocated to Brooklyn’s banker, Maxim, in respect of the success fee owed to it by Brooklyn),

and the Company’s stockholders as of immediately prior to the effective time, will own between approximately 5.92% and 3.26%

of the outstanding common stock of the Company immediately after the effective time of the Merger on a fully diluted basis.

exact number of shares to be issued in the Merger will be determined pursuant to a formula in the Merger Agreement that takes

into account the amount of Brooklyn’s cash and cash equivalents as of the closing of the Merger and the amount by which

the Company’s net cash is less than zero at the closing.

Asset Sale to eGames.com Holdings LLC

the Company announced the signing of the Merger Agreement, it also announced that it was continuing to explore the sale of substantially

all of the assets relating to its current business to provide additional capital and allow the combined company following the

closing of the Merger, if it closes, to be in a position to focus exclusively on Brooklyn’s business.

September 18, 2020, the Company and eGames.com Holdings LLC (“eGames.com”) entered into an asset purchase agreement

(as amended from time to time, the “APA”) pursuant to which, subject to the terms and conditions thereof, the Company

will sell and assign (the “Asset Sale”) all of its right, title and interest in and to the assets relating to its

current business (the “Purchased Assets”) to eGames.com.

The Purchased Assets comprise substantially all of the Company’s

At the closing of the Asset Sale, in addition to assuming specified liabilities of the Company, eGames.com will pay the

Company $2.0 million in cash.

In connection with entering into the APA, the sole owner of eGames.com absolutely, unconditionally

and irrevocably guaranteed to the Company the full and prompt payment when due of any and all amounts, from time to time, payable

by eGames.com under the APA.

connection with entering into the APA, Fertilemind Management, LLC, an affiliate of eGames.com (“Fertilemind”), on

behalf of eGames.com, made a $1.0 million bridge loan to the Company.

On November 19, 2020, the Company, eGames.com and Fertilemind

entered into an omnibus amendment and agreement pursuant to which, among other things, eGames.com agreed to provide, or cause

Fertilemind, on behalf of eGames.com, to provide, an additional $0.5 million bridge loan to the Company on December 1, 2020, and

the parties agreed to increase the interest rate on the $1.0 million bridge loan Fertilemind made to the Company in September

2020 from 8% to 10% effective December 1, 2020.

Fertilemind provided the $0.5 million bridge loan to the Company on December 1,

On January 12, 2021, the Company, eGames.com and Fertilemind entered into a second omnibus amendment and agreement pursuant

to which, among other things, eGames.com agreed to provide, or cause Fertilemind, on behalf of eGames.com, to provide an additional

$0.2 million bridge loan to the Company on January 12, 2021.

Fertilemind provided the $0.2 million bridge loan to the Company

on January 12, 2021.

The principal and accrued interest of each of the loans provided by Fertilemind to the Company will be applied

toward the $2.0 million purchase price at the closing of the Asset Sale.

Hosted Trivia Asset Sale

January 13, 2020, the Company entered into an asset purchase agreement with Sporcle, Inc., a Delaware corporation (“Sporcle”),

pursuant to which the Company agreed to sell to Sporcle all of its assets necessary for Sporcle to conduct the live-hosted knowledge-based

trivia events known as Stump!

Trivia and OpinioNation for $1,360,000 in gross proceeds.

On the closing date of the transaction

(January 31, 2020), the Company received $1,260,000.

The remaining $100,000 was being held back until the one-year anniversary

of the closing date, or January 31, 2021, to satisfy indemnification claims, if any, for which the Company is liable.

2020, the Company and Sporcle entered into an agreement and amendment to the asset purchase agreement to change the end of the

indemnification period from January 31, 2021 to August 31, 2020 in exchange for a $40,000 reduction to the $100,000 holdback amount.

On September 1, 2020, the Company received the $60,000 holdback amount.

The Company recorded a net gain of approximately $1,225,000

on this asset sale.

Concern Uncertainty

connection with preparing its financial statements as of and for the year ended December 31, 2020, the Company’s management

evaluated whether there are conditions or events, considered in the aggregate, that are known and reasonably knowable that would

raise substantial doubt about the Company’s ability to continue as a going concern through twelve months after the date

that such financial statements are issued.

During the year ended December 31, 2020, the Company incurred a net loss of $4,415,000.

As of December 31, 2020, the Company had $777,000 of cash, total debt outstanding of $2,032,000, and negative working capital

The total debt outstanding consists of $532,000 of principal outstanding under the loan the Company received in April

2020 under the Paycheck Protection Program and $1,500,000 of principal outstanding under the loans the Company received in connection

with entering into the APA, as amended, which, if the closing of the Asset Sale occurs, will be applied toward the $2.0 million

purchase price eGames.com will owe the Company at the closing of the Asset Sale.

See Note 2 for more information on the Asset

In November 2020, the Company was informed that approximately $1,093,000 of the $1,625,100 loan under the Paycheck Protection

Program would be forgiven, leaving a principal balance of approximately $532,000.

All amounts owing under the loan and security

agreement with Avidbank were paid on December 31, 2020, when the term loan matured, and Avidbank released its security interest

in all of the Company’s existing personal property.

a result of the impact of the COVID-19 pandemic on the Company’s business and taking into account its current financial

condition and its existing sources of projected revenue and cash flows from operations, the Company believes it will have sufficient

cash resources to pay forecasted cash outlays only through mid-March 2021, assuming the Company is able to continue to successfully

manage its working capital deficit by managing the timing of payments to its vendors and other third parties.

on the factors described above, management concluded that there is substantial doubt regarding the Company’s ability to

continue as a going concern through the twelve-month period subsequent to the issuance date of these financial statements.

Company needs to complete the Merger or the Asset Sale or raise capital to meet its debt service obligations and fund its working

capital needs.

The Company currently has no arrangements for such capital and no assurances can be given that it will be able

to raise such capital when needed, on acceptable terms, or at all.

accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization

of assets and the satisfaction of liabilities in the normal course of business.

The accompanying consolidated financial statements

do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the

amounts and classifications of liabilities that may result from uncertainty related to the Company’s ability to continue

as a going concern.

of Significant Accounting Policies and Estimates

Consolidation —The

Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States (GAAP).

All significant intercompany balances and transactions have been eliminated in consolidation.

of Estimates —Preparing the Company’s consolidated financial statements requires it to make estimates and judgments

that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and

On an ongoing basis, the Company evaluates its estimates, including those related to deferred costs and revenues;

depreciation of fixed assets;

allowance for doubtful accounts;

site equipment to be installed;

stock-based compensation assumptions;

impairment of fixed assets, software development costs, intangible assets and goodwill;

contingencies, including the reserve for

sales tax inquiries;

and the provision for income taxes, including the valuation allowance.

The Company bases its estimates on

a combination of historical experience and various other assumptions that it believes are reasonable under the circumstances.

Actual results may differ materially from these estimates.

and Cash Equivalents —The Company considers all highly liquid investment instruments with original maturities of three

months or less, or any investment redeemable without penalty or loss of interest, to be cash equivalents.

of Functional Currencies —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 Canadian

subsidiary is measured using the foreign subsidiary’s local currency as the functional currency.

In accordance with Accounting

Standards Codification (“ASC”) No.

830, Foreign Currency Matters , revenues and expenses of its foreign subsidiary

have been translated into U.S.

dollars at weighted average exchange rates prevailing during the period.

Assets and liabilities

have been translated at the rates of exchange on the balance sheet date.

The resulting translation gain and loss adjustments are

recorded as a separate component of shareholders’

equity, unless there is a sale or complete liquidation of the underlying

foreign investments.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a

currency other than the functional currency are included in the results of operations as incurred.

For the years ended December

31, 2020 and 2019, the Company recorded $16,000 and $48,000 of foreign currency transaction losses, respectively, due to settlements

of intercompany transactions, re-measurement of intercompany balances with its Canadian subsidiary and other non-functional currency

denominated transactions, which are included in other income (expense) in the accompanying consolidated statements of operations.

Fluctuations in the rate of exchange between the U.S.

dollar and Canadian dollar may affect the Company’s results of operations

and period-to-period comparisons of its operating results.

The Company does not currently engage in hedging or similar transactions

to reduce these risks.

For the year ended December 31, 2020, the net impact to the Company’s results of operations from

the effect of exchange rate fluctuations was immaterial.

for Doubtful Accounts —The Company maintains allowances for doubtful accounts for estimated losses resulting from nonpayment

by its customers.

The Company reserves for all accounts that have been suspended or terminated from its Buzztime network services

and for customers with balances that are greater than a predetermined number of days past due.

The Company analyzes historical

collection trends, customer concentrations and creditworthiness, economic trends and anticipated changes in customer payment patterns

when evaluating the adequacy of its allowance for doubtful accounts for specific and general risks.

Additional reserves may also

be established if specific customers’

balances are identified as potentially uncollectible.

If the financial condition of

its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be

Equipment to be Installed —

Site equipment to be installed consists of fixed assets related to the Company’s tablet

platform that have not yet been placed in service and are stated at cost.

Such equipment includes the Classic Playmaker, tablets,

other associated electronics and the computers located at customer’s sites.

These assets remain in site equipment to be

installed until installed at the Company’s customer sites, at which point, the cost of the deployed site equipment is reclassified

to fixed assets and depreciated over the estimated useful life.

The Company evaluates the recoverability of site equipment to

be installed for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable.

Recoverability is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted future net cash

flows expected to be generated.

If the carrying amount of the asset or asset group is not recoverable on an undiscounted cash

flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

Fair value is determined

through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent

appraisals, as considered necessary.

During the year ended December 31, 2020 and 2019, the Company recognized a loss of approximately

$307,000 and $591,000, respectively, for the disposition of site equipment to be installed for which the Company did not expect

to generate future cash flows.

Assets —

Fixed assets are recorded at cost.

Equipment under finance leases is recorded at the present value of future

minimum lease payments.

The Company evaluates the recoverability of its fixed assets for impairment whenever events or circumstances

indicate that the carrying amounts of such assets may not be recoverable.

If the carrying amount of the asset or asset group is

not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds

its fair value.

During the year ended December 31, 2020, the Company recognized a loss of approximately $54,000 of fixed assets

related to deployed site equipment in the ordinary course of business.

As discussed further in Note 16, the Company terminated

its lease for its corporate headquarters and vacated the facility as of June 30, 2020.

As a result, during the year ended December

31, 2020, the Company wrote-off approximately $890,000 of unamortized tenant improvement allowance that is recorded as part of

the gain on termination of lease, as well as approximately $87,000 in leasehold improvement assets and $197,000 in furniture and

fixtures and the Company’s vehicle.

During the year ended December 31, 2019, total loss for the disposition of fixed assets

was approximately $127,000.

of fixed assets is computed using the straight-line method over the estimated useful lives of the assets.

Depreciation of leasehold

improvements and fixed assets under finance leases is computed using the straight-line method over the shorter of the estimated

useful lives of the assets or the lease period.

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’

Such equipment

is depreciated over one to three years based on the shorter of the contractual finance lease period or the estimated useful life,

which considers anticipated technology changes.

Machinery and equipment are depreciated over three to five years.

If the Company’s

fixed assets turn out to have longer lives, on average, than estimated, then its depreciation expense would be significantly reduced

in those future periods.

Conversely, if the fixed assets turn out to have shorter lives, on average, than estimated, then its

depreciation expense would be significantly increased in those future periods.

As of December 31, 2020, the Company determined

there were no changes to the estimated useful lives for any of its assets.

Goodwill —Goodwill

represents the excess of costs over fair value of assets of businesses acquired (reporting unit).

Goodwill and intangible assets

acquired in a purchase combination determined to have an indefinite useful life are not amortized, but instead are assessed annually,

or at interim periods, for impairment based on qualitative factors to determine whether the existence of events or circumstances

leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

Such qualitative factors include macroeconomic conditions, industry and market considerations, cost factors, overall financial

performance and other relevant events.

If after assessing the totality of events or circumstances the Company determines it is

more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company must perform

the one-step impairment test outlined in ASC No.

350, Intangibles –

Goodwill and Other.

Recognition —The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”)

606, Revenue from Contracts with Customers .

Company generates revenue by charging subscription fees to partners for access to its 24/7 trivia network, by selling and leasing

tablet and hardware equipment for custom usage beyond trivia/entertainment, by selling DOOH advertising direct to advertisers

and on national ad exchanges, by licensing its entertainment and trivia content to other entities, and by providing professional

services such as custom game design or development of new platforms on its existing tablet form factor.

Until February 1, 2020,

the Company also generated revenue from hosting live trivia events.

The Company sold all of its assets used to host live trivia

events in January 2020.

general, when multiple performance obligations are present in a customer contract, the transaction price is allocated to the individual

performance obligation 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 relative stand-alone selling prices.

All revenues are recognized net of sales tax collected from the

606 specifies certain criteria that an arrangement with a customer must have in order for a contract to exist for purposes

of revenue recognition, one of which is that it must be probable that the Company will collect the consideration to which it will

be entitled under the contract.

As a result of the impact that the COVID-19 pandemic has had, and continues to have, on the Company’s

customers, the Company determined that due to the uncertainty of collectability of the subscription fees for certain customers,

the Company’s arrangement with those customers no longer meets all the criteria needed for a contract to exist for revenue

recognition purposes.

Therefore, the Company did not recognize revenue for these customers and fully reserved for accounts receivable

in the allowance for doubtful accounts.

The Company only recognized revenue for the arrangements that continued to meet the contract

criteria, including the criteria that collectability was probable.

Company disaggregates revenue by material revenue stream as follows:

On July 16, 2021, Brooklyn and its newly formed, wholly owned subsidiary Brooklyn Acquisition Sub, Inc.

entered into an agreement and plan of

acquisition (the “Acquisition Agreement”) with (a) Novellus LLC, (b) Novellus (the sole equity holder of Novellus, Ltd.

and, prior to the closing under the Acquisition Agreement, a wholly owned subsidiary of Novellus, LLC), and (c) a seller

representative (the “Acquisition”), pursuant to which Brooklyn acquired Novellus and its subsidiary, Novellus, Ltd.

As part of the Acquisition, Brooklyn also acquired 25.0 % of the total outstanding equity interests of NoveCite, Inc.

(“NoveCite”), a corporation focused on developing an allogeneic mesenchymal stem cell product for patients with acute respiratory distress

syndrome, including from COVID-19.

(See Note 4.)

Liquidity and Capital Resources

The Company has incurred significant operating losses and has an accumulated deficit as a result of ongoing efforts to develop product candidates,

including conducting clinical trials and providing general and administrative support for these operations.

As of December 31, 2021, the Company had a cash balance of approximately $ 16,985,000 and an accumulated deficit of approximately $ 159,703,000 .

For the year ended December 31, 2021, the Company incurred a net loss of $ 122,306,000 and the Company used cash in operating activities

of $ 23,488,000 (inclusive of $ 80,538,000

IPR&D expense related to the Acquisition, $ 9,648,000 related to the loss on sale of assets in the Disposition and $ 180,000 related to the change in fair value of contingent consideration).

On April 26, 2021, Brooklyn entered into a common stock purchase agreement (the “First Purchase Agreement”) with Lincoln Park Capital Fund, LLC

(“Lincoln Park”), which provided that Brooklyn could offer to Lincoln Park up to an aggregate of $ 20,000,000 of common stock over a 36 -month period commencing after May 10, 2021, the date that a registration statement covering the resale of shares of common stock issued under the

First Purchase Agreement was declared effective by the SEC.

As of December 31, 2021, Brooklyn had issued and sold an aggregate of approximately 1,128,000

shares of common stock to Lincoln Park pursuant to the First Purchase Agreement, resulting in gross proceeds of $ 20,000,000 .

On May 26, 2021, Brooklyn entered into a second common stock purchase agreement (the “Second Purchase Agreement”) with Lincoln Park, which

provides that Brooklyn may offer to Lincoln Park up to an aggregate of $ 40,000,000 of common stock over a 36 -month period commencing after June 4, 2021, the date that a registration statement covering the resale of shares of common stock issued under the

Second Purchase Agreement was declared effective by the SEC.

As of December 31, 2021, Brooklyn had issued and sold an aggregate of approximately 2,424,000

shares of common stock to Lincoln Park pursuant to the Second Purchase Agreement, resulting in gross proceeds of approximately $ 34,106,000 .

On July 16, 2021, Brooklyn used approximately $ 22,854,000

of cash, net of cash acquired, as part of the purchase price of the Acquisition.

Brooklyn issued common stock as the remaining portion of the purchase price of the Acquisition.

On March 9, 2022, we consummated a private placement of equity resulting in net proceeds of approximately $ 11 million.

See Note 17 for details.

In connection with

preparing its financial statements as of and for the year ended December 31, 2021, the Company’s management concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern because it does not expect to

have sufficient cash or working capital resources to fund operations for the twelve-month period subsequent to the issuance date of these financial statements.

The Company will need to raise additional capital, which could be through the

remaining availability under the Second Purchase Agreement (to the extent the Company is permitted to use such agreement), public or private equity offerings, debt financings, corporate collaborations or other means.

The Company may also seek

governmental grants to support our clinical trials and preclinical trials..

The Company currently has no arrangements for such capital and no assurances can be given that it will be able to raise such capital when needed, on acceptable terms,

The accompanying

consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The accompanying consolidated financial statements do

not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to the Company’s ability to continue as

a going concern.

Basis of Accounting Presentation and Summary of Significant Accounting Policies

Basis of Accounting Presentation

The consolidated financial statements have been prepared in conformity with U.S.

generally accepted accounting principles (“GAAP”).

Any reference

in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

All significant intercompany

balances and transactions have been eliminated in consolidation.

As described above, the Merger closed on March 25, 2021.

The Merger was accounted for as a reverse acquisition, in which Brooklyn LLC was deemed

the acquiring company for accounting purposes.

Brooklyn LLC’s historical financial statements have replaced Brooklyn’s historical financial statements with respect to periods prior to the completion of the Merger (when Brooklyn operated under the

name “NTN Buzztime, Inc.”).

The Company retrospectively adjusted the weighted average shares used in determining loss per common share to reflect the conversion of the outstanding Class A units, Class B units, Class C units, and common units of

Brooklyn LLC that converted into shares of Brooklyn’s common stock upon the Merger and to reflect the effect of a 2-to-1 reverse stock

split of Brooklyn’s common stock that occurred immediately prior to the Merger.

Also as described above, the Acquisition closed on July 16, 2021.

The Acquisition was accounted for as an asset acquisition, and substantially

all of the value was attributed to in-process research and development (“IPR&D”), with the exception of the cash paid for the investment in NoveCite, which is being accounted for as an investment in equity securities.

The IPR&D had no

alternative future uses and no separate economic value from its originally intended purpose and was therefore expensed in the period the cost was incurred.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (a)

the reported amounts of assets and liabilities;

(b) disclosure of contingent assets and liabilities at the date of the consolidated financial statements;

reported amount of the fair value of assets acquired in connection with business combinations.

Actual results could differ from those estimates.

The Company’s significant estimates and assumptions include the recoverability and useful lives of

long-lived assets and the contingent consideration liability.

Cash and Cash Equivalents

The Company classifies highly liquid investments with a remaining contractual maturity at date of purchase of three months or less as cash

The Company had no cash equivalents as of December 31, 2021 or 2020.

Property and Equipment

Property and equipment are recorded at cost and are depreciated over their estimated useful lives using the straight-line method.

Laboratory and

manufacturing equipment are depreciated over an estimated useful life of seven years .

Leasehold improvements are depreciated over the

shorter of their estimated useful life, or the lease term.

Computer equipment are depreciated over an estimated useful life of three years .

Upon retirement or other disposition of these assets, the cost and related accumulated depreciation of these assets are removed from the accounts and the resulting gain or losses are reflected in the results of operations.

Expenditures for

maintenance and repairs are charged to operations.

Renewals and betterments are capitalized.

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in the acquisition of IRX

Therapeutics, Inc.

in November 2018 (the “IRX Acquisition”), which was accounted for as a business combination.

Goodwill is not amortized but is tested for impairment annually, or if events occur or circumstances change that would reduce the fair

value of a reporting unit below its carrying value.

Because management evaluates the Company as a single reporting unit, goodwill is tested for impairment at the entity level by first performing a qualitative assessment to determine whether it is

more likely than not that the fair value of the entity is less than its carrying value.

Such qualitative factors include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant

If the entity does not pass the qualitative assessment, then the entity’s carrying value is compared to its fair value.

Goodwill is considered impaired if the carrying value of the entity exceeds its fair value.

IPR&D assets represent the fair value assigned to technologies that were acquired in connection with the IRX Acquisition, which have not

reached technological feasibility and have no alternative future use.

IPR&D assets are considered to be indefinite lived until the completion or abandonment of the associated research and development projects.

During the period that the

IPR&D assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the

IPR&D assets are less than their carrying amounts.

If and when development is complete, which generally occurs upon regulatory approval, and the Company is able to commercialize products associated with the IPR&D assets, these assets are

then deemed definite-lived and are amortized based on their estimated useful lives beginning at that point in time.

If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets,

calculated as the excess of carrying value of the IPR&D assets over fair value.

Impairment of Long-Lived Assets

The Company reviews long-lived assets and certain identifiable assets for impairment whenever circumstances and situations change such that there

is an indication that the carrying amounts may not be recovered.

An impairment exists when the carrying value of the long-lived asset is not recoverable and exceeds its fair value.

For the years ended December 31, 2021 and 2020, there were no

qualitative factors that indicated it was more likely than not that the fair value of the long-lived assets exceeded the carrying value.

Research and Development

The Company expenses its research and development costs as incurred.

Research and development expenses consist of costs incurred for

company-sponsored research and development activities, as well as support for selected investigator-sponsored research.

Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the

period in which they are incurred if the technology is not expected to have any alternative future uses other than the specific research and development project for which it was intended.

IPR&D that is acquired through an asset acquisition (as

opposed to a business combination) and has no alternative future uses and, therefore, no separate economic values, is expensed to research and development costs at the time the costs are incurred.

The major components of research and development costs include preclinical study costs, clinical manufacturing costs, clinical study and trial

expenses, insurance coverage for clinical trials, expensed licensed technology, expensed IPR&D, consulting, scientific advisors and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and

materials and allocations of various overhead costs related to our product development efforts.

In the normal course of our business, the Company contracts with third parties to perform various clinical study and trial activities in the

on-going development and testing of potential products.

The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows.

Payments under the contracts depend on factors

such as the achievement of certain events or milestones, the successful enrollment of patients, the allocation of responsibilities among the parties to the agreement, and the completion of portions of the clinical study or trial or similar

Preclinical and clinical study and trial associated activities such as production and testing of clinical material require significant up-front expenditures.

The Company anticipates paying significant portions of a study’s or trial’s

cost before they begin and incurring additional expenditures as the study or trial progresses and reaches certain milestones.

The Company records deferred tax liabilities and assets based on the differences between the consolidated financial statements carrying amounts

and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse and established a valuation allowance when it was more likely than not that some portion or all of the deferred tax

assets would not be realized.

Income tax expense consists of the tax payable for the period and the change during the period in deferred tax assets and liabilities.

Tax benefits from uncertain tax positions are recognized only if it is more likely than not that the tax position will be sustained on examination

by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of

being realized upon ultimate resolution.

The Company has no material uncertain tax positions for any of the reporting periods presented.

Earnings Per Share

Basic and diluted loss per common share have been computed by dividing the losses applicable to common stock by the weighted average number of

common shares outstanding.

The Company’s basic and fully diluted earnings per share (“EPS”) calculation are the same since the increased number of shares that would be included in the diluted calculation from assumed exercise of common stock

equivalents would be anti-dilutive to the net loss in each of the years shown in the consolidated financial statements.

Segment Reporting

In accordance with ASC No.

280, Segment Reporting , the Company has determined that it operates as one operating segment.

Decisions regarding the Company’s overall operating performance and allocation of its resources are assessed on a consolidated

Concentration of Credit Risk

The Company maintains its cash balances in financial institutions located in the United States.

Accounts at each institution are insured by the

Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

At times, the Company’s cash balances may be uninsured for deposit accounts that exceed the FDIC insurance limit.

In the Company’s business, vendor concentrations could be indicative of vulnerabilities in the Company’s supply chain, which could ultimately

impact the Company’s ability to continue its research and development activities.

For the years ended December 31, 2021 and 2020, there was no vendor concentration related to the Company’s research and development activities.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between

willing market participants.

A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

fair value hierarchy is as follows:

• Level 1 Inputs – Valued based on quoted prices in active markets for identical

assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 Inputs – Valued based on inputs other than quoted prices included in Level

1 that are observable for the asset or liability, either directly or indirectly.

These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that

are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market

data by correlation or other means.

• Level 3 Inputs – Valued based on inputs for which there is little or no market

value, which require the reporting entity to develop its own assumptions.

The carrying amounts reported on the balance sheet for cash and cash equivalents, accounts receivable, prepaid assets and other current assets,

accounts payable and accrued expenses, other current liabilities and other liabilities approximate fair value based due to their short maturities.

The carrying value of loans payable approximates its fair market value because the effective yield on

this debt, which includes contractual interest rates as well as other finance charges, is comparable to rates of returns for instruments of similar credit risk.

The Company adopted ASC Topic 842, Leases,

on December 31, 2020 using the modified transition method without retrospective application to comparative periods.

The Company elected the package of three practical expedients allowed for under the transition guidance.

Accordingly, the Company

did not reassess:

(1) whether any expired or existing contracts are/or contain leases;

(2) the lease classification for any expired or existing leases;

or (3) initial direct costs for any existing leases.

The Company has also elected not to

recognize right-of-use assets (“ROU assets”) and lease liabilities for short-term leases that have a term of 12 months or less.

Operating lease liabilities represent the present value of lease payments not yet paid.

ROU assets represent the Company’s right to use an

underlying asset and are based upon the operating lease liabilities adjusted for prepaid or accrued lease payments, initial direct costs, lease incentives and impairment of operating lease assets.

If the interest rate implicit in the lease is not

readily determinable, the Company uses the incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments.

To determine the present value of lease payments not yet

paid, the Company estimates secured borrowing rates corresponding to the maturities of the leases.

The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate and instead

account for each as a single lease component for all underlying asset classes.

Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance, tax payments and other

miscellaneous costs.

The variable portion of lease payments is not included in the ROU assets or lease liabilities.

Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments

is incurred and are included in lease expenses.

Accordingly, all expenses associated with a lease contract are accounted for as lease expenses.

Commitment and Contingencies

The Company follows ASC No.450-20, Loss Contingencies , to report accounting for contingencies.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Stock-Based Compensation

The Company recognizes stock-based compensation expense for equity awards granted to employees, directors and certain consultants.

estimates the fair value of stock options using the Black-Scholes option pricing model.

The fair value of stock options granted is recognized as expense over the requisite service period.

Stock-based compensation expense for share-based payment

awards is recognized using the straight-line single-option method.

Recent Accounting Standards

In May 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04,

Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain

Modifications or Exchanges of Freestanding Equity-Classified Written Call Options .

ASU 2021-04 addresses the accounting for certain modifications or exchanges of freestanding equity-classified written call options.

ASU 2021-04 is effective

for fiscal years beginning after December 15, 2021 (January 1, 2022 for the Company) and interim periods within those fiscal years, with early adoption permitted.

The Company does not expect the adoption of this update to have a significant impact

on its financial statements.

In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842) – Lessors - Certain Leases with Variable Lease

Payments, which amends the lessor classification guidance to introduce additional criteria when classifying leases with variable lease payments that do not depend on a reference index or a rate.

This guidance is effective for annual

periods beginning after December 15, 2021 (January 1, 2022 for the Company), with early adoption permitted.

The Company does not expect the adoption of this update to have a significant impact on its financial statements.

Merger, Disposition and Acquisition Transactions

On August 12, 2020, Brooklyn, Brooklyn LLC and the Merger Sub entered into the Merger Agreement.

The Merger closed on March 25, 2021.

Merger, Brooklyn changed its name from “NTN Buzztime, Inc.” to “Brooklyn ImmunoTherapeutics, Inc.” The Merger was accounted for as a reverse acquisition, in which Brooklyn LLC was deemed the acquiring company for accounting purposes.

LLC, as the accounting acquirer, recorded the assets acquired and liabilities assumed of Brooklyn in the Merger at their fair values as of the acquisition date.

Brooklyn’s common stock trades on the NYSE American stock exchange under the ticker

symbol “BTX”.

Brooklyn LLC was determined to be the accounting acquirer based upon the terms of the Merger and other factors including that (i) Brooklyn LLC

members, received common stock in the Merger that represented 96.35 % of Brooklyn’s outstanding common stock on a fully diluted basis

as of immediately after the Merger, (ii) all of the directors of Brooklyn immediately after the Merger were designated by Brooklyn LLC under the terms of the Merger Agreement and (iii) existing members of Brooklyn LLC’s management became the

management of Brooklyn immediately after the Merger.

At the closing of the Merger, all the outstanding membership interests of Brooklyn LLC converted into the right to receive an aggregate of

approximately 39,992,000 shares of common stock, of which 1,068,000 shares were issued as compensation to Maxim Group LLC, Brooklyn LLC’s financial advisor (the “Financial Advisor”) for its services to Brooklyn LLC in connection with the Merger.

The purchase price of $ 8,178,000 ,

which represents the consideration transferred in the Merger to stockholders of Brooklyn immediately before the Merger, was calculated based on the closing price of $ 5.40 per share for approximately 1,514,000 shares common stock that those stockholders owned on March

25, 2021 immediately prior to the Merger because that represented a more reliable measure of the fair value of consideration transferred in the Merger.

Under the acquisition method of accounting, the total purchase price has been allocated to the acquired tangible and intangible assets and assumed

liabilities of Brooklyn based on their estimated fair values as of March 25, 2021, the Merger closing date.

Because the consideration paid by Brooklyn LLC in the Merger is more than the estimated fair values of Brooklyn’s net assets deemed to be

acquired, goodwill is equal to the difference of approximately $ 8,589,000 , which has been calculated using the fair values of the net

assets of Brooklyn as of March 25, 2021.

The allocation of the estimated purchase price to the tangible and intangible assets acquired and liabilities deemed to be assumed from Brooklyn,

based on their estimated fair values as of March 25, 2021, is as follows:

March 25, 2020

Allocation Pro

Cash and cash equivalents

Accounts receivable

Prepaid expense and other current assets

Property and equipment, net

Software development costs

Accounts payable, accrued liabilities and other current liabilities

Net assets acquired, excluding goodwill

Total consideration

Net assets acquired, excluding goodwill

Brooklyn LLC 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.

To ensure Brooklyn LLC had the required funds, certain beneficial holders of Brooklyn LLC’s

Class A membership interests entered into contractual commitments to invest $ 10,000,000 into Brooklyn LLC immediately prior to the

closing of the Merger.

During March 2021, Brooklyn offered its Class A unit holders an additional 5 % rights offering for an additional $ 500,000 to be raised by a rights offering.

Brooklyn received funds from the rights offering between February 17, 2021 and April 5, 2021.

On March 26, 2021, Brooklyn sold its rights, title and interest in and to the assets relating to the business it operated (under the name NTN

Buzztime, Inc.) prior to the Merger to eGames.com in exchange for a purchase price of $ 2,000,000 and assumption of specified liabilities

relating to that business.

The sale was completed in accordance with the terms of the Asset Purchase Agreement.

Details of the Disposition are as follows:

Proceeds from sale:

Assume advance/loans

Interest on advance/loans

Carrying value of assets sold:

Cash and cash equivalents

Accounts receivable

Prepaids and other current assets

Property and equipment, net

Software development costs

Liabilities transferred upon sale:

Accounts payable and accrued expenses

Obligations under finance leases

Lease liability

Deferred revenue

Other current liabilities

Transaction costs

Total loss on sale of assets

Unaudited Pro Forma Disclosure

The following unaudited pro forma financial information summarizes the results of operations for the years months ended December 31, 2021 and 2020

as if the Merger and the Disposition 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 and the Disposition had been completed as of

January 1, 2020, the transaction costs would have been expensed in the prior period.

Years ended December 31,

Subscription revenue

Hardware revenue

Other revenue

following describes how the Company recognizes revenue under ASC No.

Revenue - Prior to the COVID-19 pandemic, the Company recognized the recurring subscription fees it received for its services

over time as customers received and consumed the benefits of such services, the Company’s equipment to access the Company’s

content and the installation of the equipment.

In general, customers pay for the subscription services during the month in which

they receive the services.

Due to the timing of providing the services and receiving payment for the services, the Company does

not record any unbilled contract asset.

Occasionally, a customer will prepay up to one year of services, in which case, the Company

will record deferred revenue on the balance sheet related to such prepayment and will recognize the revenue over the time the

customer receives the Company’s services.

Revenue from installation services is also recorded as deferred revenue and recognized

over the longer of the contract term and the expected term of the customer relationship using the straight-line method.

has certain contingent performance obligations with respect to repairing or replacing equipment and will recognize any revenue

related to the performance of such obligations at the point in time the Company performs them.

discussed above, as a result of the impact that the COVID-19 pandemic has had, and continues to have, on the Company’s customers,

the Company determined that due to the uncertainty of collectability of the subscription fees for certain customers, the Company’s

arrangement with those customers no longer meets all the criteria needed for a contract to exist for revenue recognition purposes.

Therefore, the Company did not recognize revenue for these customers and fully reserved for accounts receivable in the allowance

for doubtful accounts.

associated with installing the equipment are considered direct costs.

Costs associated with sales commissions are considered incremental

costs for obtaining 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 installation costs that are of an amount that is less than or equal to the deferred installation

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 to two years because the Company can still recover that excess cost in

the initial term of the contract.

The Company amortizes commissions over the longer of the contract term and the expected term

of the customer relationship.

Lease Revenue –

For certain customers that lease equipment under sale-type lease arrangements, the Company recognizes

revenue in accordance with ASC No.

Such revenue is recognized at the time of installation based on the net

present value of the leased equipment.

Interest income is recognized over the life of the lease for customers who have remaining

lease payments to make.

In the event a customer under a sales-type lease arrangement prepays for the lease in full prior to receiving

the equipment under the lease, such amounts are recorded in deferred revenue and recognized as revenue once the equipment has

been installed and activated at the customer’s location.

The cost of the leased equipment is recognized at the same time

as the revenue.

The Company has not recognized revenue under sales-type lease arrangements after the year ended December 31, 2019

and does not expect to in the future.

Sales –

The Company recognizes revenue from equipment sales at a point in time, which is when control has been transferred

to the customer, the customer holds legal title and the customer has significant risks and rewards of ownership.

Generally, the

Company has determined that any customer acceptance provisions of the equipment is a formality, as the Company has historically

demonstrated the ability to produce and deliver similar equipment.

If the Company sells equipment with unique specifications,

then customer control of the equipment will occur upon customer acceptance as defined in the contract, and revenue will be recognized

at that time.

Costs associated with the equipment sold is recognized at the same point in time as the revenue.

The Company expects

to recognize an immaterial amount of equipment sales revenue in the future.

Revenue –

The Company recognizes advertising revenue either over the time the advertising campaign airs in its customers’

locations or at a point in time by impression.

For advertising campaigns that are airing over a specific period of time (regardless

of number of impressions), the Company uses the time elapsed output method to measure its progress toward satisfying the performance

When the Company contracts with an advertising agent, the Company shares in the advertising revenue generated with

In these cases, the Company generally recognizes revenue on a net basis, as the agent typically has the responsibility

for the relationship with the advertiser and the credit risk.

When the Company contracts directly with the advertiser, it will

recognize the revenue on a gross basis and will recognize any revenue share arrangement it has with a third party as a direct

expense, as the Company has the responsibility for the relationship with the advertiser and the credit risk.

Generally, there

is no unbilled revenue associated with the Company’s advertising activities.

Licensing –

The Company licenses content (trivia packages) to a certain customer, who in turn installs the content on

its equipment that it sells to its customers.

The content license is characterized as a “right to use intellectual property

as it exists at the point in time at which the license is granted,”

meaning the Company is not expected to undertake activities

that affect the intellectual property or any such activities would not affect the intellectual property the customer is using.

The content license is considered to be on consignment, and the Company retains title of the licensed content throughout the license

The Company’s customer has no obligation to pay for the licensed content until the customer sells and installs the

content to its customer.

Accordingly, the Company recognizes revenue at the point in time when such installation occurs.

recognizes costs related to developing the content during the period incurred.

Trivia Revenue –

As of February 1, 2020, the Company no longer has revenue related to hosting live- trivia events as

a result of the sale of all of the Company’s assets used to host live trivia events in January 2020.

The Company recognized

revenue from hosting live-trivia events at a point in time, which is when the event took place.

Some customers hosted their own

trivia events and the Company provided the game materials.

In those cases, the Company recognized the revenue at the point in

time the Company sent the game materials to the customer.

The Company recognized related costs at the same point in time the revenue

was recognized.

Generally, there was no unbilled revenue or deferred revenue associated with live-hosted trivia events.

Development Revenue –

Depending on the type of development work the Company is performing, the Company will recognize

revenue, and associated costs, at the point in time when the Company satisfies each performance obligation, which is generally

when the customer can direct the use of, and obtain substantially all of the remaining benefits of the goods or service provided.

For services provided over time, the corresponding revenue is generally recognized over the time the Company provides such services.

Any payments received before satisfying the performance obligations are recorded as deferred revenue and recognized as revenue

when or as such obligations are satisfied.

The Company does not have unbilled revenue assets associated with professional development

Concentrations

Company’s customers predominantly range from small independently operated bars and restaurants to bars and restaurants operated

by national chains.

This results in diverse venue sizes and locations.

During 2019, the Company’s agreements with Buffalo

Wild Wings corporate-owned restaurants and most of its franchisees ended in November 2019 in accordance with their terms.

result, the Company ended 2019 with 1,440 sites.

As of December 31, 2020, the number of sites declined to 1,036 venues, primarily

due to customers terminating their subscriptions or going out of business relating to the effects of the COVID-19 pandemic on

their business.

table below sets forth the approximate amount of revenue the Company generated from Buffalo Wild Wings corporate-owned restaurants

and its franchisees during the years ended December 31, 2020 and 2019, and the percentage of total revenue that such amount represents

for such periods:

Buffalo Wild Wings revenue

Percent of total revenue

of December 31, 2020 and 2019, approximately $112,000 and $158,000, respectively, was included in gross accounts receivable from

Buffalo Wild Wings corporate-owned restaurants and its franchisees.

geographic breakdown of the Company’s revenue for the years ended December 31, 2020 and 2019 were as follows:

United States

Assets and Liabilities

Company enters into contracts and may recognize contract assets and liabilities that arise from these contracts.

The Company recognizes

revenue and corresponding cash for customers who auto pay via their bank account or credit card, or the Company recognizes a corresponding

accounts receivable for customers the Company invoices.

The Company may receive consideration from customers, per the terms of

the contract, prior to transferring goods or services to the customer.

In such instances, the Company records a contract liability

and recognizes the contract liability as revenue when all revenue recognition criteria are met.

The table below shows the balance

of contract liabilities as of January 1, 2020 and December 31, 2020, including the change during the period.

Balance at January 1, 2020

New performance obligations

Revenue recognized

Balance at December 31, 2020

Less non-current portion

Current portion at December 31, 2020

Company capitalizes installation costs associated with installing equipment in a customer location and sales commissions as a

deferred cost asset on the balance sheet.

For installation costs that are of an amount that is less than or equal to the deferred

installation 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 installation costs that exceed the deferred revenue, the amortization period

of the excess cost is the initial term of the contract, which is generally one to two years because the Company can still recover

that excess cost in the initial term of the contract.

The Company amortizes commission costs over the longer of the contract term

and the expected term of the customer relationship.

The table below shows the balance of the unamortized installation cost and

sales commissions as of January 1, 2020 and December 31, 2020, including the change during the period.

Deferred Costs

Balance at January 1, 2020

Incremental costs deferred

Deferred costs recognized

Balance at December 31, 2020

and Development —

Research and development costs, which include the cost of equipment the Company is evaluating for future

integration or use, are expensed as incurred.

For the years ended December 31, 2020 and 2019, research and developments costs

totaled $2,000 and $26,000, respectively, and are included in selling, general and administrative expense.

Development Costs —The Company capitalizes costs related to developing certain software products in accordance with ASC

The Company recognizes costs related to interactive programs on a straight-line basis over the programs’

useful lives, generally two to three years.

Amortization expense relating to capitalized software development costs totaled $551,000

and $519,000 for the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020 and 2019, approximately $123,000

and $177,000, respectively, of capitalized software costs were not subject to amortization as the development of various software

projects was not complete.

Company performed its annual review of software development projects for the years ended December 31, 2020 and 2019, and determined

to abandon various software development projects that the Company 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, for the year ended December 31, 2020 and 2019, the Company recognized

an impairment charge of $248,000 and $550,000, respectively.

Impairment of capitalized software is shown separately on the Company’s

consolidated statement of operations.

Costs –

There were no marketing-related advertising costs for the either of the years ended December 31, 2020 or 2019.

and Handling Costs —Shipping and handling costs are included in direct operating costs in the accompanying consolidated

statements of operations and are expensed as incurred.

Compensation —The Company records stock-based compensation in accordance with ASC No.

718 , Compensation –

Compensation.

The Company estimates the fair value of stock options using the Black-Scholes option pricing model.

value of stock options granted is recognized as expense over the requisite service period.

Stock-based compensation expense for

share-based payment awards is recognized using the straight-line single-option method.

Taxes —Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets

and liabilities and their respective tax bases, and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are

expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized

in income in the period that includes the enactment date.

Deferred tax assets are reduced by a valuation allowance when, in the

opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

740, Income Taxes, defines the threshold for recognizing the benefits of tax return positions in the financial statements

as “more-likely-than-not”

to be sustained by the taxing authority.

A tax position that meets the “more-likely-than-not”

criterion is measured at the largest amount of benefit that is more than 50% likely of being realized upon ultimate settlement.

The Company reviewed its tax positions and determined that an adjustment to the tax provision is not considered necessary nor

is a reserve for income taxes required.

Per Share —Basic and diluted loss per common share have been computed by dividing the losses applicable to common stock

by the weighted average number of common shares outstanding.

The Company’s basic and fully diluted earnings per share (“EPS”)

calculation are the same since the increased number of shares that would be included in the diluted calculation from assumed exercise

of common stock equivalents would be anti-dilutive to the net loss in each of the years shown in the consolidated financial statements.

Reporting —In accordance with ASC No.

280, Segment Reporting , the Company has determined that it operates as one

operating segment.

Decisions regarding the Company’s overall operating performance and allocation of its resources are assessed

on a consolidated basis.

Accounting Pronouncements

December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

2019-12, Income Taxes (Topic

Simplifying the Accounting for Income Taxes.

This ASU enhances and simplifies various aspect of the income tax

accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business

combination, ownership changes in investments, methodology for calculating income taxes in an interim period when a year-to-date

loss exceeds the anticipated loss for the year and interim-period accounting for enacted changes in tax law.

The amendment is

effective for public companies with fiscal years beginning after December 15, 2020, (which was January 1, 2021 for the Company);

early adoption is permitted.

The Company does not expect that the adoption of this accounting standard update to have a material

impact on its consolidated financial statements.

June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which supersedes current

guidance requiring recognition of credit losses when it is probable that a loss has been incurred.

The ASU requires an entity

to establish an allowance for estimated credit losses on financial assets, including trade and other receivables, at each reporting

This ASU will result in earlier recognition of allowances for losses on trade and other receivables and other contractual

rights to receive cash.

For smaller reporting companies, the effective date for this standard has been delayed and will be effective

for fiscal years beginning after December 15, 2022 (which will be January 1, 2023 for the Company).

The Company is evaluating

the impact that the adoption of this accounting standard update will have on its consolidated financial statements.

the commencement date of the Company’s lease for its corporate headquarters on December 1, 2018, the Company’s primary

lender, Avidbank, issued a $250,000 letter of credit to the lessor as security, which amount was reduced by $50,000 to $200,000

on December 1, 2019 and was to be reduced by the same amount December 1 of each year thereafter, provided there has been no default

under the lease.

Avidbank required the Company to deposit $250,000 in a restricted cash account maintained with the bank, which

amount was and would be reduced as the amount required under the letter of credit is reduced.

The Company recorded the $250,000

deposit as restricted cash on its balance sheet, with $50,000 plus any earned interest being recorded in short-term restricted

cash and the balance being recorded in long-term restricted cash.

June 2020, the Company terminated its lease for its corporate headquarters, and as part of the consideration to the lessor for

the early least termination, the lessor received the $200,000 of restricted cash provided for under the letter of credit in July

(See Note 16 for more information on the lease termination.)

assets are recorded at cost and consist of the following at December 31, 2020 and 2019:

Net loss attributable to common stockholders

( 122,306,000

Basic and diluted net loss per share attributable to common stockholders

On July 16, 2021, Brooklyn and Brooklyn Acquisition Sub, Inc.

entered into the Acquisition Agreement.

The Acquisition closed contemporaneously

with the execution and delivery of the Acquisition Agreement.

At the closing:

• Brooklyn acquired all of the outstanding equity interests of Novellus, Inc.

the result of the merger of Brooklyn Acquisition Sub, Inc.

with and into Novellus, Inc., following which, Novellus, Inc., as the surviving corporation, became Brooklyn’s wholly owned subsidiary and Novellus Ltd.

became Brooklyn’s indirectly

owned subsidiary;

• Brooklyn acquired 25.0 % of the total outstanding equity interests of NoveCite.

Brooklyn delivered consideration for the Acquisition totaling approximately $ 124,000,000 , which consisted of (a) approximately $ 22,854,000

in cash, net of cash acquired, and (b) approximately 7,022,000 shares of common stock, which under the terms of the Acquisition

Agreement were valued at a total of $ 102,000,000 , based on a price of $ 14.5253 per share.

The Acquisition Agreement contained customary representations, warranties and certain indemnification provisions.

Approximately 741,000 of the shares issued as consideration were placed in escrow for a period of up to 12 months in order to secure indemnification obligations to Brooklyn under the Acquisition Agreement.

The Acquisition Agreement also contains certain non-competition and

non-solicitation provisions pursuant to which Novellus LLC agreed not to engage in certain competitive activities for a period of five years

following the closing, including customary restrictions relating to employees.

No employees of Novellus Ltd.

or Novellus, Inc.

prior to the Acquisition continued their employment, or were otherwise engaged by Brooklyn, following the Acquisition.

In connection with the Acquisition, the co-founders of Novellus, Ltd.

entered into lock-up agreements with respect to approximately 3,378,000 of the shares of common stock received in the Acquisition, and Brooklyn’s Chairman of the Board of Directors and its Chief Executive Officer

and President entered into identical lock-up agreements with respect to their current holdings of Brooklyn stock.

Each lock-up agreement extends for a period of three years , provided that up to 75 % of the shares of common stock subject to the lock-up agreement

may be released from the lock-up restrictions earlier if the price of common stock on the Nasdaq exceeds specified thresholds.

The lock-up agreements include customary exceptions for transfers during the applicable lock-up period.

The Company expects the Acquisition will advance its evolution into a platform company with a pipeline of next generation engineered cellular,

gene editing and cytokine programs.

In addition, the acquisition of Novellus, Ltd.

builds on the License Agreement.

(See Note 11).

The completion of the acquisition of Novellus, Ltd.

relieved Brooklyn LLC from potential obligations to pay Novellus,

certain upfront fees, clinical development milestone fees and post-registration royalties under the License Agreement.

The agreement with Factor Bioscience Limited (“Factor”) under the License Agreement, which grants Brooklyn LLC exclusive

rights to develop certain next-generation mRNA gene editing and cell therapy products, remained unchanged.

Although Brooklyn acquired all of the outstanding equity interests of Novellus, Inc., the Company accounted for the Acquisition as an asset

acquisition (as the assets acquired did not constitute a business as defined in Accounting Standards Codification (“ASC”) Topic 805, Business Combinations ) , and was

measured by the amount of cash paid and by the fair value of the shares of common stock issued.

As a result, substantially all of the value acquired was attributed to IPR&D, with the exception of the cash paid for the investment in NoveCite,

which is being accounted for as an investment in equity securities, as discussed further below.

Brooklyn paid $ 22,854,000 in cash,

net of cash acquired, as part of the consideration for the Acquisition, of which $ 1,000,000 was paid in cash for the investment in

Brooklyn also issued approximately 7,022,000 shares of the Company’s common stock, of which approximately 3,644,000 shares are unrestricted and 3,378,000

shares are subject to the three-year lockup.

The unrestricted shares were valued at $ 10.05 per share, which was the closing price of Brooklyn’s common stock on July 16, 2021.

The fair value of the restricted shares was discounted by approximately 35 % to $ 6.53 per restricted share, which

was derived from the average discount rate between the Black Scholes and Finnerty valuation models.

The resulting fair value of the asset acquired is as follows:

Fair Value of

Consideration

Cash acquired

Unrestricted shares

Restricted shares

Total fair value of consideration paid

Less amount of cash paid for NoveCite investment

Fair value of IPR&D acquired

IPR&D that is acquired through an asset purchase that has no alternative future uses and no separate economic values from its original

intended purpose is expensed in the period the cost is incurred.

Accordingly, the Company expensed the fair value of the IPR&D during the third quarter of 2021 in the amount of $ 80,538,000 .

Investment in NoveCite

As a result of the Acquisition, Brooklyn acquired and currently owns 25 % of NoveCite and Citius Pharmaceuticals, Inc.

(“Citius”) owns the remaining 75 %.

A member of the Company’s management holds one of three board seats on NoveCite’s board of directors.

Citius’ s officers and directors

hold the other two board seats.

Citius also retains the ability, in its sole discretion, to increase the size of the board of directors of NoveCite.

Pursuant to a subscription agreement, as amended, between NoveCite and Novellus, LLC (the former

parent of Novellus, Inc.), which was further amended and assigned to Brooklyn by Novellus, LLC upon the completion of the Acquisition, Citius has complete operational control and financial responsibility for NoveCite.

Citrus’s officers are also the

officers of NoveCite and oversee the business strategy and operations of NoveCite.

Therefore, despite Brooklyn’s ownership of greater than 20 %

of NoveCite, which leads to a presumption that in the absence of predominant evidence to the contrary, an investor has the ability to exercise significant influence over an investee, Brooklyn does not exercise any significant influence over

NoveCite or its board of directors.

Brooklyn also has no contractual rights in the profits or obligations to share in the losses of NoveCite.

Accordingly, the Company is accounting for its interest in NoveCite under ASC Topic 321, Investments – Equity Securities.

Because NoveCite’s stock is not publicly traded and, therefore, does not have a readily determinable fair value, the Company has elected to account for its investment at cost,

which was $ 1,000,000 .

The Company will make adjustments to this amount when there are observable transactions for the identical or

similar equity securities of the same issuer that would provide an indicator of fair value.

In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it

is lower than the carrying value.

As of December 31, 2021, there were no observable transactions for identical or similar equity securities of NoveCite to provide an indication of fair value, nor were there any indications of impairment of the

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between

market participants.

value hierarchy is as follows:

• Level 1 Inputs – Valued based on quoted prices in active markets for identical

assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 Inputs – Valued based on inputs other than quoted prices included in

Level 1 that are observable for the asset or liability, either directly or indirectly.

These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets

that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by

market data by correlation or other means.

• Level 3 Inputs – Valued based on inputs for which there is little or no market

value, which require the reporting entity to develop its own assumptions.

The following tables summarize the liabilities that are measured at fair value as of December 31, 2021 and 2020:

As of December 31, 2021

Site equipment

Machinery and equipment

Furniture and fixtures

Contingent consideration

As of December 31, 2020

Contingent consideration

The contingent consideration is related to an asset purchase agreement entered into between Brooklyn LLC and IRX Therapeutics (“IRX”) in

connection with the IRX Acquisition, according to which, Brooklyn LLC is obligated to pay royalties to certain noteholders and shareholders of IRX based on future revenues from any future IRX-2 product sales.

Contingent consideration for the IRX Acquisition was initially valued at the transaction price and is subsequently valued at the end of each

reporting period using third-party valuation services or other market observable data.

The third-party valuation services use industry standard valuation models, including discounted cash flow analysis, to determine the value.

After completing its

validation procedures as of December 31, 2021, the Company adjusted the carrying amount of its contingent consideration liabilities as follows:

December 31, 2021

Balance as of beginning of period

Fair value adjustments included in operating expenses

Balance as of end of period

Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3

measurement within the fair value hierarchy.

The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant.

The Company assesses these estimates on an on-going basis as additional data

impacting the assumptions is obtained.

Future changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the statements of operations.

Contingent consideration may change significantly as development progresses and additional data are obtained, impacting the Company’s assumptions

regarding probabilities of successful achievement of related milestones used to estimate the fair value of the liability and the timing in which the milestones are expected to be achieved.

In evaluating the fair value information, considerable

judgment is required to interpret the market data used to develop the estimates.

The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange.

Accordingly, the use of different market

assumptions and/or different valuation techniques could result in materially different fair value estimates.

For purposes of this calculation, a royalty equal to 13 % of revenue (consisting of the royalty due to University of South Florida and the royalty due to the collaborator) is assumed until 2029 and a royalty of 7 % of revenues is assumed from 2030 to 2038.

The post patent decline is 50 %

in the first year and 10 % thereafter.

Income taxes were projected to be 26 % of net royalty savings.

The cash flows were discounted by the liability specific weighted average cost of capital of 26 % using the mid-point convention.

Property and Equipment

Property and equipment consist of the following:

Laboratory and manufacturing equipment

Leasehold improvements

Computer equipment

accumulated depreciation and amortization

expense totaled $1,188,000 and $2,358,000 for the years ended December 31, 2020 and 2019, respectively.

geographic breakdown of the Company’s long-term tangible assets for the last two fiscal years were as follows:

Property and equipment, net

Depreciation expense totaled $ 117,000

and $ 98,000 for the years ended December 31, 2021 and 2020, respectively.

No depreciation expense is recorded on fixed assets in process

until such time as the assets are completed and are placed into service.

The Company has operating leases for office and laboratory space in the boroughs of Brooklyn and Manhattan in New York, New York, which expire

in 2025 and 2026, respectively.

In June 2021, the Company entered into an additional lease agreement to lease approximately 2,700

square feet of office and laboratory space in Cambridge, Massachusetts for approximately $ 56.00 per square foot annually.

provides for annual escalation of the base rent based on the year-over-year increase of the consumer price index, as well as the payment of other customary expenses, such as common area maintenance fees, property taxes, and insurance.

entering into this lease agreement, the Company paid a lease deposit of approximately $ 25,000 .

The Cambridge, Massachusetts lease

expires in June 2028.

See Note 17 for subsequent event information regarding the Company’s leases.

The Company adopted ASC Topic 842, Leases, on December 31, 2020 using the modified transition method

without retrospective application to comparative periods.

The Company elected the package of three practical expedients allowed for under the transition guidance.

Accordingly, the Company did not reassess:

(1) whether any expired or existing

contracts are/or contain leases;

(2) the lease classification for any expired or existing leases;

or (3) initial direct costs for any existing leases.

The Company has also elected not to recognize right-of-use assets (“ROU assets”) and lease

liabilities for short-term leases that have a term of 12 months or less.

Operating lease liabilities represent the present value of lease payments not yet paid.

ROU assets represent the Company’s right to use an

underlying asset and are based upon the operating lease liabilities adjusted for prepaid or accrued lease payments, initial direct costs, lease incentives and impairment of operating lease assets.

As the rate implicit in the lease is not readily

determinable, the Company used its incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments.

To determine the present value of lease payments not yet paid,

the Company estimates secured borrowing rates corresponding to the maturities of the leases.

The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate and instead

account for each as a single lease component for all underlying asset classes.

Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance, tax payments and other

miscellaneous costs.

The variable portion of lease payments is not included in the ROU assets or lease liabilities.

Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments

is incurred and are included in lease expenses.

Accordingly, all expenses associated with a lease contract are accounted for as lease expenses.

Operating leases are included in right of use assets - operating leases and operating lease liabilities, current and long-term, on the balance

Lease expense for operating leases is recognized on a straight-line basis over the lease term and is included in general and administrative costs in the statements of operations.

The Company recognizes operating lease expense and lease payments from the sublease on a straight-line basis in its statements of operations

over the lease terms.

During the years ended December 31, 2021 and 2020, the net operating lease expenses were as follows:

Years ended December 31,

Operating lease expense

Sublease income

Variable lease expense

Total lease expense

The tables below show the beginning balances of the operating ROU assets and lease liabilities as of January 1, 2021 and the ending balances as of

December 31, 2021, including the changes during the period.

Operating Lease

Operating lease ROU assets at January 1, 2021

Amortization of operating lease ROU assets

Addition of operating lease ROU assets

Operating lease ROU assets at December 31, 2021

Operating Lease

Operating lease liabilities at January 1, 2021

Principal payments on operating lease liabilities

Addition of operating lease liabilities

Operating lease liabilities at December 31, 2021

Less non-current portion

Current portion at December 31, 2021

As of December 31, 2021, the Company’s operating leases had a weighted-average remaining life of 4.9 years with a weighted-average discount rate of 12.76 %.

The maturities of the operating

lease liabilities are as follows:

Total payments

Less imputed interest

Total operating lease liabilities

Sublease Agreement

On April 18, 2019, the Company entered into a sublease agreement with Nezu Asia Capital Management, LLC (the “Tenant”), whereby the Tenant

agreed to sublease approximately 999 square feet of space currently rented by the Company in the borough of Manhattan in New York, New

York commencing on May 15, 2019.

The term of this sublease expires on October 31, 2026 with no option to extend the sublease term.

Rent payments provided by the Tenant under the sublease agreement began on September 1, 2019.

agreement stipulates an annual rent increase of 2.25 %.

The Tenant is also responsible for paying to the Company all tenant energy costs, annual

operating costs, and annual tax costs attributable to the subleased space during the term of the sublease.

The Company received sublease payments of approximately $ 83,000 and $ 79,000 during the years ended December 31, 2021 and 2020,

respectively.

In accordance with ASC Topic 842, the Company treats the sublease as a separate lease, as the Company was not relieved of the primary obligation under the original lease.

The Company continues to account for the Manhattan lease as a

lessee and in the same manner as prior to the commencement date of the sublease.

The Company accounts for the sublease as a lessor of the lease.

The sublease is classified as an operating lease, as it does not meet the criteria of a sale-type or

direct financing lease.

Goodwill and In-Process Research & Development

The Company recorded goodwill and IPR&D in the amount of $ 2,044,000 and $ 6,860,000 , respectively, in connection with the IRX Acquisition

in the year ended December 31, 2018.

IPR&D assets are considered to be indefinite lived until the completion or abandonment of the associated research and development projects.

In connection with the Acquisition, the Company expensed the fair value of the IPR&D it acquired in the amount of $ 80,538,000 , as the Company determined there were no future alternative uses or separate economic values from its original intended purpose.

Accrued Expenses

Accrued expenses consisted of the following:

As of December 31,

United States

Total fixed assets

Company’s goodwill balance of $696,000 as of December 31, 2019 related to the excess of costs over the fair value of assets

the Company acquired in 2003 related to its Canadian business (the “Reporting Unit”).

In the Company’s evaluation

of impairment indicators as of March 31, 2020, it determined that the uncertainty relating to the impact of the COVID-19 pandemic

on the Reporting Unit’s future operating results represented an indicator of impairment.

Accordingly, the Company compared

the estimated fair value of the Reporting Unit to its carrying value at March 31, 2020, determined that a full impairment loss

was warranted and recognized an impairment charge of $662,000 for the three months ended March 31, 2020.

No further evaluations

are necessary after March 31, 2020.

addition to the impairment loss recognized, fluctuations in the amount of goodwill shown on the accompanying balance sheets can

occur due to changes in the foreign currency exchange rates used when translating NTN Canada’s financial statement from

Canadian dollars to US dollars during consolidation.

The following table shows the changes in the carrying amount of goodwill

for the year ended December 31, 2020.

Goodwill balance at January 1, 2020

Activity for the three months ended March 31, 2020

Effects of foreign currency

Goodwill impairment

Goodwill balance at December 31, 2020

Value of Financial Instruments

carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities

approximate fair value due to the short maturity of these instruments.

The carrying value of the Company’s debt approximates

fair value as interest rates approximate market rates for similar types of borrowing arrangements.

820, Fair Value Measurements and Disclosures, applies to certain assets and liabilities that are being measured and

reported on a fair value basis.

Broadly, the ASC No.

820 framework requires fair value to be determined based on the exchange

price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous

market for the asset or liability in an orderly transaction between market participants.

820 also establishes a fair value

hierarchy for ranking the quality and reliability of the information used to determine fair values.

This hierarchy is as follows:

Quoted market prices in active markets for identical assets or liabilities.

Observable market based inputs or unobservable inputs that are corroborated by market data.

Unobservable inputs that are not corroborated by market data.

the year ended December 31, 2020, there were no assets or liabilities that were measures at fair value on a recurring or non-recurring

There were no transfers between fair value measurement levels during the year ended December 31, 2020.

times, the Company’s cash balances held in financial institutions are in excess of federally insured limits.

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.

Buzztime network provides services to group viewing locations, generally restaurants, sports bars and lounges throughout North

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.

and Diluted Earnings Per Common Share

net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period,

without consideration of potential common shares.

Diluted net loss per share is calculated by dividing net loss by the weighted-average

number of common shares outstanding plus potential common shares.

Stock options, restricted stock units, and other convertible

securities are considered potential common shares and are included in the calculation of diluted net loss per share using the

treasury method when their effect is dilutive.

Options, restricted stock units and convertible preferred stock representing approximately

201,000 and 210,000 shares of common stock were excluded from the computations of diluted net loss per common share for the years

ended December 31, 2020 and 2019, respectively, as their effect was anti-dilutive.

Shareholders’

Incentive Plans

Company’s stock-based compensation plans include the NTN Buzztime, Inc.

2019 Performance Incentive Plan (the “2019

Plan”), the NTN Buzztime, Inc.

Amended 2010 Performance Incentive Plan (the “2010 Plan”) and the NTN Buzztime,

2014 Inducement Plan (the “2014 Plan”).

The Company’s board of directors designated its nominating and

corporate governance/compensation committee as the administrator of the foregoing plans (the “Plan Administrator”).

Among other things, the Plan Administrator 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’s 2019 Annual Meeting of Stockholders, the Company’s stockholders approved the 2019 Plan, which provides

for the issuance of up to 240,000 shares of Company common stock.

Awards the under the 2019 Plan may be granted to officers, directors,

employees and consultants of the Company.

Stock options granted under the 2019 Plan may either be incentive stock options or nonqualified

stock options, 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, 2020, there were stock options to purchase approximately 2,000 shares of common stock and

82,000 restricted stock units outstanding under the 2019 Plan.

a result of stockholder approval of the 2019 Plan, no future grants will be made under the 2010 Plan.

All awards that are outstanding

under the 2010 Plan will continue to be governed by the 2010 Plan until they are exercised or expire in accordance with the terms

of the applicable award or the 2010 Plan.

As of December 31, 2020, there were stock options to purchase approximately 24,000 shares

of common stock and 9,000 restricted stock units outstanding under the 2010 Plan.

2014 Plan 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 and expires in September 2024.

As of December 31, 2020, there were no stock options

or restricted stock units outstanding under the 2014 Plan.

Compensation Valuation Assumptions

Company uses the historical stock price volatility as an input to value its stock options under ASC No.

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.

yield assumption is based on the Company’s history and expectation of dividend payouts.

following weighted-average assumptions were used for grants issued during 2019 under the ASC No.

718 requirements:

Accrued compensation

Accrued research and development expenses

Accrued general and administrative expenses

Accrued interest

Total accrued expenses

Loans Payable

In connection with the IRX Acquisition in 2018, Brooklyn LLC assumed certain notes payable (the “IRX Notes”) in the amount of $ 410,000 .

On January 27, 2020, the IRX Notes were amended to extend the maturity date to the earlier of (i) a change of control, as defined in the IRX

Notes, and (ii) December 31, 2021.

On December 31, 2021, the Company paid the outstanding $ 410,000 in principal plus accrued and unpaid

interest of approximately $ 210,000 under the IRX Notes, and the Company has no further obligations thereunder.

Payment Protection Program Loan

Brooklyn LLC PPP Loan.

On May 4, 2020, Brooklyn LLC issued a note in the principal amount of approximately $ 310,000 to Silicon Valley Bank evidencing a loan (the “Brooklyn LLC PPP Loan”) Brooklyn LLC received under the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and

Economic Security Act administered by the U.S.

Small Business Administration (the “CARES Act”).

Brooklyn LLC PPP Loan incurred interest at a rate of 1.0 %

Under the terms of the Cares Act, certain amounts of the Brooklyn LLC PPP Loan could be forgiven if they were used for qualifying expenses, as

described in the CARES Act.

In June 2021, Brooklyn LLC submitted its loan forgiveness application for the Brooklyn LLC PPP Loan, and in September 2021, the lender informed Brooklyn LLC that the U.S Small Business Administration approved the

forgiveness of 100% of the outstanding principal and interest of the Brooklyn LLC PPP Loan.

As of December 31, 2021, there was no

outstanding principal balance of the Brooklyn LLC PPP Loan.

Commitments and Contingencies

Legal Matters

The Company is involved in litigation and arbitrations from time to time in the ordinary course of business.

Legal fees and other costs associated

with such actions are expensed as incurred.

In addition, the Company assesses the need to record a liability for litigation and contingencies.

The Company reserves for costs relating to these matters when a loss is probable, and the amount can be

reasonably estimated.

Merger-Related Shareholder Litigation

Brooklyn (then known as NTN Buzztime, Inc.) and its former directors were named as defendants in ten substantially similar actions arising out of the Merger that were brought by purported pre-Merger stockholders of Brooklyn: