Item 1. Business
ITEM
1. Business
Proposed
Merger and Asset Sale
Proposed
Merger with Brooklyn Immunotherapeutics LLC
On
August 12, 2020, we 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., our 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 our company and Brooklyn’s members receiving newly issued shares of our common stock in exchange for their ownership
interests in Brooklyn (the “Merger”). The Merger, if completed, will result in a change in control of NTN as described
below. The Merger is expected to close in mid- to late-March 2021.
We
filed a registration statement on Form S-4 relating to the Merger and the proposed sale of our assets to eGames.com Holdings LLC
(described further below) with the SEC and such registration statement was declared effective on February 3, 2021.
We
will be holding our special meeting of stockholders to consider the Merger, the Asset Sale (as defined below) and related proposals
on March 15, 2021 at 9:00 a.m., Pacific Time, unless postponed or adjourned to a later date or time. Additional details regarding
the proposals and the special meeting are in the proxy statement/prospectus/consent solicitation statement relating to the special
meeting filed with the SEC on February 8, 2021 (the “Proxy Statement”).
If
the Merger is completed, NTN expects to change its name to Brooklyn ImmunoTherapeutics, Inc. 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.
If
the Merger is completed, at the effective time of the Merger, Brooklyn’s members will exchange their equity interests in
Brooklyn for shares of NTN common stock representing between approximately 94.08% and 96.74% of the outstanding common stock of
NTN 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 NTN’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 NTN immediately after the effective time of the Merger on a fully diluted basis. The 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 NTN’s net cash is less than zero at the
closing. The Merger Agreement does not include provisions providing for an adjustment to the total shares of NTN common stock
that Brooklyn’s members will be entitled to receive for changes in the market price of NTN common stock.
The
Merger Agreement contains customary representations, warranties and covenants made by NTN and Brooklyn, including covenants relating
to both parties using their commercially reasonable efforts to cause the transactions contemplated by the Merger Agreement to
be satisfied, as well as covenants regarding the conduct of their respective businesses between the date of signing of the Merger
Agreement and the closing.
Consummation
of the Merger is subject to certain closing conditions including, among others, (i) the approval by our stockholders of the issuance
of shares of our common stock to Brooklyn’s members pursuant to the terms of the Merger Agreement and the change of control
of NTN resulting therefrom, (ii) the approval of the Merger and the transactions contemplated by the Merger Agreement by the beneficial
holders of the Class A membership units of Brooklyn, (iii) the amendment of our certificate of incorporation to provide voting
rights to the holders of our Series A Convertible Preferred Stock, (iv) Brooklyn having not less than $10 million in cash and
cash equivalents and not more than $750,000 of indebtedness for borrowed money at the closing, (v) our net cast at the closing
being not less than negative $3 million, and (vi) the shares of our common stock continuing to be traded on the NYSE American
until the effective time of the Merger and the approval for listing of the shares of our common stock to be issued pursuant to
the Merger Agreement on the NYSE American. In addition, the obligation of each party to consummate the Merger is also conditioned
on the other party’s representations and warranties being true and correct (subject to certain materiality qualifications)
and the other party having performed in all material respects its obligations under the Merger Agreement. Each party’s obligations
to consummate the Merger are further subject to the absence of a material adverse effect with respect to the other party since
the date of the Merger Agreement.
The
Merger Agreement contains certain termination rights for each party, including that either party may terminate the Merger Agreement
if the Merger has not been consummated by April 30, 2021, subject to extension under specified circumstances. The Merger Agreement
also provides that, upon the termination of the Merger Agreement under specified circumstances, NTN or Brooklyn will be required
to pay the other party a $750,000 termination fee or reimburse the other party for up to $250,000 of its third party expenses.
2
The
Merger Agreement requires that NTN not solicit proposals relating to alternative transactions and not enter into discussions concerning
or provide confidential information in connection with alternative transactions. These restrictions are subject to a “fiduciary
out” provision that allows NTN Buzztime under certain limited circumstances to provide confidential information to, enter
into discussions and negotiations with, and enter into an alternative transaction with a third party and/or to make a recommendation
change adverse to the Merger, which may result in payment of the termination fee described above.
In
connection with the Merger and the Merger Agreement, each of our directors and officers and certain beneficial holders of the
Class A membership interests of Brooklyn, including the managers and officers of Brooklyn, signed a Support Agreement, made and
entered into as of August 12, 2020, among NTN, Brooklyn, and each such person (the “Support Agreements”). Pursuant
to the Support Agreements, each director, manager, and officer has agreed that he or she will not, until the termination date
of the Merger Agreement, sell or transfer any shares of our common stock or any of the beneficial interests in the Class A membership
interests of Brooklyn, respectively, that he or she owns or may acquire prior to the termination of the Merger Agreement. Each
such director, manager, and officer has further agreed that he or she will vote all shares of our common stock and all beneficial
interests in the Class A membership units in Brooklyn, respectively, owned by such individual in favor of the Merger and the transactions
contemplated by the Merger Agreement.
The
foregoing description of the Merger Agreement and the Support Agreements do not purport to be complete and is qualified in its
entirety by the full text of the agreements, copies of which have been filed with the SEC and are incorporated by reference in
this report. The copies of the Merger Agreement and the Support Agreements filed with the SEC provide investors with information
regarding its terms. Such copies are not intended to provide any other factual information about NTN or Brooklyn or otherwise
to modify or supplement any factual disclosures about NTN in its reports filed with the SEC. The representations, warranties and
covenants of each party in the Merger Agreement have been made only for the purposes of, and were and are solely for the benefit
of the parties to, the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, and may be subject
to standards of materiality applicable to the contracting parties that differ from those generally applicable to SEC filings,
and may have been used for purposes of allocating risk among the parties to the Merger Agreement. Certain of the exhibits and
schedules that are a part of the Merger Agreement are not filed with the SEC and contain information that modifies, qualifies
and creates exceptions to the representations and warranties and certain covenants set forth in the Merger Agreement. Accordingly,
the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time,
and investors should not rely on them as statements of fact.
Proposed
Asset Sale to eGames.com
When
NTN announced the signing of the Merger Agreement, NTN 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.
On
September 18, 2020, NTN 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, NTN 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 NTN’s assets. At the closing
of the Asset Sale, in addition to assuming specified liabilities of NTN, eGames.com will pay NTN $2.0 million in cash. In connection
with entering into the APA, the sole owner of eGames.com absolutely, unconditionally and irrevocably guaranteed to NTN the full
and prompt payment when due of any and all amounts, from time to time, payable by eGames.com under the APA.
The
Asset Sale is expected to close in mid- to late-March 2021. We will be holding our special meeting of stockholders to consider
the Merger, the Asset Sale and related proposals on March 15, 2021 at 9:00 a.m., Pacific Time, unless postponed or adjourned to
a later date or time. Additional details regarding the proposals and the special meeting are in the Proxy Statement.
In
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 NTN. On November 19, 2020, NTN, 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 NTN on December 1, 2020, and the parties agreed
to increase the interest rate on the $1.0 million bridge loan Fertilemind made to NTN in September 2020 from 8% to 10% effective
December 1, 2020. Fertilemind provided the $0.5 million bridge loan to NTN on December 1, 2020. On January 12, 2021, NTN, 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 NTN on January
12, 2021. Fertilemind provided the $0.2 million bridge loan to NTN on January 12, 2021. The principal and accrued interest of
each of the loans provided by Fertilemind to NTN will be applied toward the $2.0 million purchase price at the closing of the
Asset Sale.
The
APA contains customary representations, warranties and covenants made by the parties, including covenants relating to both parties
using their efforts to cause the transactions contemplated by the APA to be satisfied, and covenants regarding the conduct of
NTN’s business between the date the APA was signed and the closing of the Asset Sale.
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The
closing of the Asset Sale is subject to the satisfaction or waiver of certain closing conditions, including NTN obtaining, as
required by Delaware law, the approval of the Asset Sale by the holders of a majority of the outstanding shares of common stock
of NTN entitled to vote thereon. Each party’s obligation to close the Asset Sale is also subject to other specified customary
conditions, including (1) the representations and warranties of the other party being true and correct (subject to certain materiality
qualifications, including qualifications with respect to a material adverse effect), and (2) the performance in all material respects
by the other party of its covenants and agreements in the APA required to be performed on or before the closing.
Unless
the parties to the APA agree to an earlier date, the closing of the Asset Sale is expected to occur as promptly as practicable
after the conditions to closing in the APA are satisfied or waived, and, if the conditions to closing the Merger are satisfied
or waived, immediately prior to the closing of the Merger.
Pursuant
to the APA, NTN may not, among other things, solicit proposals relating to alternative transactions or enter into discussions
concerning or provide confidential information in connection with alternative transactions (with an exception related to the Merger)
until the earlier of the termination of the APA and the closing of the Asset Sale. These restrictions are subject to a “fiduciary
out” provision that allows NTN under certain limited circumstances to furnish confidential information to, enter into discussions
and negotiations with, and enter into an alternative transaction with a third party and/or to make a recommendation change adverse
to the Asset Sale, which may result in payment of the termination fee described below.
NTN
will be obligated to indemnify eGames.com against specified losses that eGames.com may incur following the Closing, subject to
the terms of the APA, including certain thresholds and caps on liability, and $100,000 will be deposited into an escrow account
to secure any such indemnification claims.
The
APA contains certain termination rights for each party, including that either party may terminate the APA if the asset sale has
not been consummated by April 30, 2021, subject to extension under specified circumstances. The APA also provides that, upon the
termination of the APA under specified circumstances, NTN will pay eGames.com a $275,000 termination fee.
The
foregoing descriptions of the APA, the personal guaranty, and the promissory notes evidencing the bridge loans do not purport
to be complete and are qualified in their entirety by the full text of the APA, the personal guaranty, and such notes, copies
of which have been filed with the SEC and are incorporated by reference in this report. The APA, the personal guaranty, and such
notes provide investors with information regarding its terms. Such documents are not intended to provide any other factual information
about NTN or eGames.com or otherwise to modify or supplement any factual disclosures about NTN or eGames.com in their respective
reports filed with the SEC. The representations, warranties and covenants of each party in the APA have been made only for the
purposes of, and were and are solely for the benefit of the parties to, the APA, may be subject to limitations agreed upon by
the contracting parties, and may be subject to standards of materiality applicable to the contracting parties that differ from
those generally applicable to SEC filings, and may have been used for purposes of allocating risk among the parties. Certain of
the exhibits and schedules that are a part of the APA are not filed with the SEC and contain information that modifies, qualifies
and creates exceptions to the representations and warranties and certain covenants in the APA. Accordingly, the representations
and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should
not rely on them as statements of fact.
About
Our Business and How We Talk About It
As
mentioned above, the Merger and Asset Sale are expected to close in mid- to late-March 2021. If either the Asset Sale or the Merger
close, the description of our business contained in this report will no longer be our business following the closing of the Asset
Sale and/or Merger. If the Merger is completed, 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. If the Asset Sale is completed
but the Merger is not completed, NTN’s board of directors may elect to, among other things, attempt to find another reverse
merger partner or dissolve and liquidate its assets. Because NYSE Regulation, Inc. may begin delisting proceedings if NTN has
no assets or operations, and due to NTN’s limited cash and resources, NTN may be unable to identify and complete another
reverse merger and it would likely be required to dissolve and liquidate its assets. In such case, NTN would likely be required
to pay all its debts and other obligations and to set aside certain reserves for potential future claims. There can be no assurances
as to the amount or timing of available cash, if any, left to distribute to stockholders after paying its debts and other obligations
and setting aside funds for reserves.
We
deliver interactive entertainment and innovative technology to our partners in a wide range of verticals – from bars and
restaurants to casinos and senior living centers. By enhancing the overall guest experience, we believe we help our hospitality
partners acquire, engage, and retain patrons.
Through
social fun and friendly competition, our platform creates bonds between our hospitality partners and their patrons, and between
patrons themselves. We believe this unique experience increases dwell time, revenue, and repeat business for venues – and
has also created a large and engaged audience which we connect with through our in-venue TV network. Until 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 our network each month. Since March 2020, approximately 100,000
hours per month of such games have been played on our network each month.
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We
generate revenue by charging subscription fees to our partners for access to our 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 our entertainment and trivia content to other parties, and by providing
professional services such as custom game design or development of new platforms on our existing tablet form factor. Until February
1, 2020, we also generated revenue by hosting live trivia events. We sold all our assets used to host live trivia events in January
2020.
We
own several trademarks and consider the Buzztime®, Playmaker®, Mobile Playmaker, and BEOND Powered by Buzztime trademarks
to be among our most valuable assets. These and our other registered and unregistered trademarks used in this document are our
property. Other trademarks are the property of their respective owners.
Recent
Developments
The
negative impact of the pandemic on the restaurant and bar industry was abrupt and substantial, and our business, cash flows
from operations and liquidity suffered, and continues to suffer, materially as a result. In many jurisdictions, including
those in which we have 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. We have experienced material decreases in subscription revenue, advertising revenue and cash flows from
operations, which we expect to continue for at least as long as the restaurant and bar industry continues to be negatively
impacted by the 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 our customers had their subscriptions to our services temporarily suspended. As of March 9, 2021,
approximately 11% of our customers remain on subscription suspensions. As of December 31, 2020, 1,036 customers subscribed
to our service, a decrease of 404 customers, or 28%, from the 1,440 subscribers as of December 31, 2019. We believe the year-over-year decrease was primarily due to
customers terminating their subscriptions or going out of business relating to the effects of the pandemic on their
business.
In
response to the impact of the pandemic on our business, we implemented measures to reduce our operating expenses and preserve
capital, and we may implement additional measures in the future.
●
We
reduced our headcount (as of March 9, 2021, we had 22 employees, compared to 74 at December 31, 2019).
●
Our
chief executive officer agreed to defer payment of 45% of his base salary between May 1, 2020 and October 31, 2020 until the
earlier of October 31, 2020 or such time as our board of directors determines in good faith that we are in the financial position
to pay his accumulated deferred salary. All such deferred base salary payments were made by November 6, 2020.
●
We
terminated the lease for our corporate headquarters, resulting in a reduction in our future cash obligations under the lease
by approximately $3.4 million (see Note 16 to our audited consolidated financial statements included herein).
●
We
substantially eliminated all capital projects and are aggressively managing our expenditures to limit further cash outlays
and manage our working capital.
In
April 2020, we received a loan of approximately $1,625,000 under the Paycheck Protection Program of the Coronavirus Aid, Relief,
and Economic Security Act administered by the U.S. Small Business Administration. The loan matures on April 18, 2022 and bears
interest at a rate of 1.0% per annum. We began making monthly interest only payments in November 2020. One final payment of all
unforgiven principal plus any accrued unpaid interest is due at maturity. In November 2020, we were informed by our lender that
the U.S Small Business Administration approved the forgiveness of approximately $1,093,000 of the $1,625,000 loan, leaving a principal
balance of approximately $532,000. For additional information, see the section entitled “Liquidity and Capital Resources—Paycheck
Protection Program Loan” in “ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations” of Part II of this report.
All
amounts outstanding under our term loan we entered into with Avidbank in September 2018 were paid in full on December 31, 2020
and we have no further obligations to Avidbank.
In
January 2020, we sold all of our assets used to conduct the live hosted knowledge-based trivia events known as Stump! Trivia and
OpinioNation for approximately $1.4 million in cash.
Products
and Services
Our
principal product and service is our interactive entertainment system that offers trivia, card, sports and arcade games through
an extended network platform. Generally, as part of the subscription to our platform, we provide the equipment for the platform
to network subscribers (including tablets, cases and charging trays for the tablets), though we have also leased such equipment
to certain network subscribers. We also monetize our network by offering it as an advertising platform through which parties can
advertise their products and services across the thousands of TV and tablet screens in our network. In 2017, we began licensing
our content to customers to be installed on equipment they obtain from other parties. In 2018, we began selling the tablets, cases
and charging trays for the tablets used in our platform to customers who may not subscribe to our network but who can use the
equipment in their business for other purposes. In 2019, we redesigned the personal computer installed in venues to stream our
content to televisions and tablets within the venue. The redesigned personal computer, which we call Site Hub, has a smaller form
factor (about the size of a deck of cards) compared to our historical personal computer. During the second quarter of 2019, we
began field testing a lower cost, entry-level tablet product offering that we call Buzztime Basic. The brains behind Buzztime
Basic is Site Hub. We have deployed Buzztime Basic on a market-by-market basis and as of March 9, 2021, we were in approximately
212 locations. In 2019, we also released our mobile trivia app, allowing our customers’ patrons to play our trivia
games on their mobile devices in addition to on our tablets. The app is the primary means of playing our trivia games in Buzztime
Basic.
5
During
the first quarter of 2019, we rolled out our new, modernized advertising system, which gives us access to ad buying platforms
where digital advertising inventory is bought and sold on public exchanges and private marketplaces. We work with advertising
sales companies to help us improve our advertisement sales and with an advertisement technology company to improve our ad loading,
management, and delivery and testing capabilities. We can use advertising to monetize Buzztime Basic, as well as our entire network.
We had quarter-over-quarter advertising sales and revenue growth during 2019. In 2020, our advertising sales and revenue was materially
adversely impacted as a result of the pandemic.
Our
primary network subscribers are bars and restaurants in North America, which we target directly through our internal sales organization.
In April 2016, we began offering our platform in adjacent markets, such as senior centers and casinos, which we target through
third parties who have existing business relationships with potential customers in such markets.
We
primarily develop the content and functionality available through our platform internally. We use an Android-based tablet customized
to our specifications by a single unaffiliated third-party manufacturer. Such third-party also manufactures the cases and charging
trays for the tablets and sources the raw materials used to manufacture those cases and trays.
Competition
We
face direct competition in venues and face competition for total entertainment and marketing dollars in the marketplace from other
companies offering similar content and services. A relatively small number of direct competitors are active in the hospitality
marketing services and entertainment markets, including UpShow, The Chive and other broadcast entertainment service providers.
Competing forms of technology, entertainment, and marketing available in hospitality venues include games, apps and other forms
of entertainment offerings available directly to consumers on their smart phones and tablets, on-table bar and restaurant entertainment
systems, music and video-based systems, live entertainment and live trivia games, cable, satellite and pay-per-view programming,
coin-operated single-player games/amusements, and traffic-building promotions like happy hour specials.
Significant
Customer
The
table below sets forth the approximate amount of revenue we 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. The decrease reflects the loss of 1,088 Buffalo Wild Wings corporate-owned restaurants and franchisees in
November 2019, when their agreements with us terminated in accordance with their terms.
Year Ended
December 31,
2020
2019
Buffalo Wild Wings revenue
$ 199,000
$ 6,820,000
Percent of total revenue
3 %
34 %
As
of December 31, 2020 and 2019, approximately $108,000 and $158,000, respectively, was included in gross accounts receivable from
Buffalo Wild Wings corporate-owned restaurants and its franchisees.
Backlog
We
generally do not have a significant backlog because we normally can deliver and install new systems within the delivery schedule
requested by customers (generally within three to four weeks).
Licensing,
Trademarks, Copyrights and Patents
A
majority of the gaming content available on our platform is internally developed. The balance is licensed from third parties.
We also license third party content for our pay-to-play and free-to-consumer games lobby. The amounts paid for such third-party
licensed content was not material during either of the years ended December 31, 2020 or 2019.
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Our
intellectual property assets, including patents, trademarks, and copyrights, are important to our business and, accordingly, we
actively seek to protect the proprietary technology we consider important to our business. No single patent or copyright is solely
responsible for protecting our products.
We
keep confidential as trade secrets our technology, know-how and software. Most of the hardware we use in our platform is purchased
from a third party and customized for use with our service. We enter into agreements with third parties with whom we conduct business,
which contain provisions designed to protect our intellectual property and to limit access to, and disclosure of, our proprietary
information. We also enter into confidentiality and invention assignment agreements with our employees and contractors.
We
believe the duration of our patents is adequate relative to the expected lives of our products. We consider the following United
States and Canadian patents to be important to the protection of our products and service:
Patent No.
Description
Expiration Date
8,562,438
System and method for television-based services
4/21/2031
8,562,442
Interactive gaming via mobile playmaker
6/3/2031
2741999 (CAN)
Interactive gaming via mobile playmaker
6/3/2031
8,790,186
User-controlled entertainment system, apparatus and method
2/6/2034
8,898,075
Electronic menu system and method
9/11/2032
9,044,681
System and method for television-based services
10/13/2033
9,358,463
Interactive gaming via mobile playmaker
10/16/2033
9,498,713
User-controlled entertainment system, apparatus and method
2/6/2034
10,410,188
Electronic check splitting system, method and apparatus
8/2/2036
We
have trademark protection for the names of our key proprietary programming, products, and services to the extent that we believe
trademark protection is appropriate. We are expanding our efforts to protect these investments. We consider the Buzztime, Playmaker,
Mobile Playmaker and PlayersPlus trademarks and our other related trademarks to be valuable assets, and we seek to protect them
through a variety of actions. Our content, branding, and some of our game titles, such as Countdown, SIX, and Showdown are also
protected by copyright and trademark law.
Government
Regulations
The
cost of compliance with federal, state, and local laws has not had a material effect on our capital expenditures, earnings, or
competitive position to date. In December 2012, we received approval from the Federal Communications Commission, or the FCC, for
our tablet charging trays, and in September 2015, we received FCC approval for our third-generation tablet cases with and without
payment electronics. The tablets we currently use have been certified by its manufacturer.
In
addition to laws and regulations applicable to businesses generally, we are also subject to laws and regulations that apply directly
to the interactive entertainment and product marketing industries. Additionally, state and federal governments may adopt additional
laws and regulations that address issues related to certain aspects of our business such as:
●
user
privacy;
●
copyrights;
●
gaming,
lottery and alcohol beverage control regulations;
●
consumer
protection;
●
the
distribution of specific material or content; and
●
the
characteristics and quality of interactive entertainment products and services.
As
part of our service, we operate games of chance and skill, including several interactive card games, such as Texas Hold’em
poker. These games are subject to regulation in many jurisdictions, and some games are restricted in certain jurisdictions. The
laws and regulations that govern these games, however, vary from jurisdiction to jurisdiction and are subject to legislative and
regulatory change, as well as law enforcement discretion. Most of our games are played solely for fun and winner recognition,
however, we recently began awarding nominal cash prizes to winners of certain trivia competitions. We may find it necessary to
eliminate, modify, or cancel certain of our offerings in certain jurisdictions based on changes in law, regulations and law enforcement
discretion, which could result in additional development costs and/or the possible loss of customers and revenue.
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Web
Site Access to SEC Filings
Our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, and
proxy statements and other information we file or furnish pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) are available on our website at www.buzztime.com/business/investor-relations/
under the heading SEC Filings as soon as reasonably practicable after we electronically file such reports with,
or furnish them to, the SEC. In addition, we make available on that same website under the heading Corporate Governance
our (i) our code of conduct and ethics; (ii) our corporate governance guidelines; and (iii) the charter of each active committee
of our board of directors. 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
SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information
regarding companies that file electronically with the SEC, including our company.
Employees
As
of March 9, 2021, we had 22 full-time employees. We also engage independent contractors for specific projects. None of our employees
are represented by a labor union, and we believe our employee relations are satisfactory.
Our
Corporate History
NTN
Buzztime, Inc. was incorporated in Delaware in 1984 as Alroy Industries and changed its corporate name to NTN Communications,
Inc. in 1985. The name was changed to NTN Buzztime, Inc. in 2005 to better reflect the growing role of the Buzztime consumer brand.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.