NTN BUZZTIME INC (Form: 8-K, Received: 03/17/2020 16:21:03)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): March 12, 2020

NTN BUZZTIME, INC.

(Exact name of Registrant as Specified in Charter)

Delaware

001-11460

31-1103425

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

1800 Aston Ave., Suite 100
Carlsbad, California		92008
(Address of Principal Executive Offices)		(Zip Code)

(760) 438-7400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		NTN		NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

In September 2018, NTN Buzztime, Inc. (“we,” “us,” or “our”) entered into loan and security agreement with Avidbank (the “Original LSA”) under which we borrowed a $4,000,000 term loan. On March 12, 2020, we entered into an amendment to the Original LSA (as amended, the “LSA”). In connection with entering into the amendment, we made a $433,000 payment on our term loan, which includes the $83,333 monthly principal payment plus accrued interest for March 2020 and a $350,000 principal prepayment, thereby reducing the outstanding principal balance of our term loan to $2.0 million. Under the terms of the amendment, the minimum earnings before interest, taxes, depreciation and amortization, or EBITDA, covenant in the Original LSA was replaced with a monthly minimum asset coverage ratio covenant, which we refer to as the ACR covenant, and the minimum liquidity covenant in the Original LSA was amended to provide that the aggregate amount of unrestricted cash we have in deposit accounts or securities accounts maintained with Avidbank must be at all times not less than the principal balance outstanding under our term loan. Under the ACR covenant, the ratio of (i) our unrestricted cash at Avidbank as of the last day of a calendar month plus 75% of our outstanding accounts receivable accounts that are within 90 days of invoice date to (ii) the outstanding principal balance of our term loan on such day must be no less than 1.25 to 1.00. The amendment also changed the maturity date of our term loan from September 28, 2022 to December 31, 2020, and commencing on April 30, 2020, we must make principal plus accrued interest payments on the last day of each month, such that all amounts owed under the LSA will be repaid by December 31, 2020. The principal payment we must make each month will be $125,000 for each of April, May and June, $300,000 for each of July, August, September, October and November, and $125,000 for December.

The foregoing summary of the material terms of the amendment does not purport to be complete and is qualified in its entirety by reference to the amendment, a copy of which is attached as an exhibit to this report and is incorporated herein by reference.

Item 2.02. Results of Operation and Financial Condition.

On March 17, 2020, we issued a press release announcing our financial results for the three and twelve months ended December 31, 2019. The press release is furnished as Exhibit 99.1.

The information set forth under this Item 2.02 and in Exhibit 99.1 is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 above is incorporated into this Item 2.03 by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

	10.1	First Amendment to Loan and Security Agreement dated as of March 12, 2020, between NTN Buzztime, Inc. and Avidbank.

	99.1	Press Release of NTN Buzztime, Inc. dated March 17, 2020 (financial results for the three and twelve months ended December 31, 2019).

SIGNATURES

Pursuant to the requirements 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 hereunto duly authorized.

	NTN BUZZTIME, INC.

Date: March 17, 2020	By:	/s/ Sandra Gurrola
		Sandra Gurrola
		Sr. Vice President of Finance

Exhibit 10.1

FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement (this “Amendment”), dated as of March 12, 2020, is entered into by and between NTN BUZZTIME, INC., a Delaware corporation (“Borrower”), and AVIDBANK, a California banking corporation (“Bank”).

RECITALS

WHEREAS, Borrower and Bank are parties to the Loan and Security Agreement, dated as of September 28, 2018 (the “Agreement”; capitalized terms used herein without definition have the meanings assigned to them in the Agreement); and

WHEREAS, Borrower and Bank wish to amend the terms of the Agreement, as specified herein;

NOW, THEREFORE, the parties agree as follows:

1. Amendments.

(a) Section 1.1 of the Agreement is amended by deleting the definitions “EBITDA”, “Interest Expense” and “Net Income”.

(b) Section 1.1 of the Agreement is amended by amending the definition “Maturity Date” to read as follows:

“Maturity Date” means December 31, 2020.

(c) The definition “Asset Coverage Ratio” is added to Section 1.1 of the Agreement in the appropriate alphabetical local to read as follows:

“Asset Coverage Ratio” means as of the last day of a calendar month a ratio of (i) Borrower’s unrestricted cash at Bank on such day plus seventy-five percent (75%) of the outstanding Accounts that are within ninety (90) days of invoice date on such day divided by (ii) the Term Loan principal outstanding on such day.

(d) Section 2.1(b) of the Agreement is amended and restated to read as follows:

(b) Term Loan.

(i) Principal Repayment. The principal amount of the term loan that Bank extended to Borrower on the Closing Date (the “Term Loan”), shall be repaid in monthly installments of principal, plus accrued but unpaid interest, as follows:

Payment Date	Principal Installment
March 31, 2020	$	0
April 30, 2020, May 31, 2020 and June 30, 2020	$	125,000
July 31, 2020, August 31, 2020, September 30, 2020, October 31, 2020, and November 30, 2020	$	300,000
December 31, 2020	$	125,000

On the Maturity Date all amounts owing under this Section 2.1(b) shall be immediately due and payable. The Term Loan principal, once repaid, may not be reborrowed.

(ii) Prepayment. Borrower may prepay the Term Loan principal, in whole or in part, from time to time, upon ten (10) days’ prior written notice to Bank and without payment of any prepayment premium. The prepayment of the Term Loan principal shall be accompanied by payment of the interest accrued and unpaid on the principal prepaid. Partial prepayments of the Term Loan principal shall be applied to the monthly installments of principal in the inverse order of maturity.

(e) Section 6.8 of the Agreement is amended and restated to read as follows:

6.8 Financial Covenants. Borrower shall at all times maintain the following financial covenants:

(a) Minimum Liquidity. Borrower shall maintain Liquidity tested at all times, and certified as of the last day of each calendar month, of not less than the Term Loan principal outstanding as of such day, after the principal repayment required under Section 2.1(b)(i) on such day.

(b) Minimum Asset Coverage Ratio. Borrower shall maintain as of the last day of each calendar month, an Asset Coverage Ratio of not less than 1.25 to 1.00.

(f) Exhibit B to the Agreement is replaced in its entirety with the Exhibit B attached hereto.

2. Representations and Warranties. Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

3. Conditions Precedent. This Amendment shall not take effect unless and until all of the following conditions precedent are satisfied:

(a) Execution and Delivery. It is executed by Borrower and accepted and executed by Bank;

(b) Term Loan Principal Prepayment. Borrower shall have prepaid the Term Loan principal outstanding to the extent necessary to reduce the outstanding Term Loan principal to Two Million Dollars ($2,000,000). No prepayment premium shall be due and payable under Section 2.1(b) of the Agreement with respect to such prepaid principal;

(c) Amendment Fee. Borrower shall have paid an amendment fee of Two Thousand Five Hundred Dollars ($2,500), which shall be fully-earned and non-refundable;

(d) No Event of Default. No Event of Default shall exist and the parties’ execution, delivery and performance of this Amendment shall not cause an Event of Default to occur; and

(e) Representations and Warranties. Borrower’s representations and warranties in Section 2 shall be true and correct.

4. Entire Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

5. Counterparts; Delivery of Original Amendment. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof. Notwithstanding the foregoing, Borrower shall deliver all original signed documents no later than ten (10) Business Days following the date of execution.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.

	NTN BUZZTIME, INC.,
	a Delaware corporation

	By:	/s/ Allen Wolff
	Name:	Allen Wolff
	Title:	CEO

	AVIDBANK,
	a California banking corporation

	By:	/s/ Samantha Kim
	Name:	Samantha Kim
	Title:	Vice President

[First Amendment to Loan and Security Agreement]

EXHIBIT B

COMPLIANCE CERTIFICATE

DEBTOR:

NTN BUZZTIME, INC.

SECURED PARTY:

AVIDBANK

The undersigned authorized officer of NTN Buzztime, Inc., a Delaware corporation (“Borrower”), for and on behalf of Borrower, hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement, dated as of September 28, 2018, by and between Bank and Borrower (the “Agreement”), (i) Borrower is in complete compliance for the period ending __________ with all required covenants except as noted below and (ii) except as noted below all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof except that those representations and warranties referring to another date shall be true and correct in all material respects on that other date. Attached hereto are the required documents supporting the above certification. The summary descriptions in the Reporting Covenants below are qualified by, and subject to, the terms of the Agreement.

Please indicate compliance status for each covenant by checking the box under “Yes,” “No” or “N/A”.

Reporting Covenant	Required	Complies

Annual audited consolidated and consolidating financial statements	FYE within 120 days or filing with SEC	Yes [ ]	No [ ]	N/A [ ]

Monthly balance sheet , income statements and statements of cash (Borrower prepared)	Monthly within 30 days after each month	Yes [ ]	No [ ]	N/A [ ]

Board Approved Annual financial projections	Annually by February 15 of each year	Yes [ ]	No [ ]	N/A [ ]

Draft Annual financial projections	Annually 15 days prior to each year-end	Yes [ ]	No [ ]	N/A [ ]

Compliance Certificate	Monthly within 30 days after each month	Yes [ ]	No [ ]	N/A [ ]

Financial Covenants	Required	Actual	Complies

Minimum Liquidity (Tested All Times; Certified Monthly)	Term Loan principal	$___________	Yes [ ]	No [ ]	N/A [ ]

Minimum Asset Coverage Ratio (Last Day of Calendar Month)	> 1.25 to 1.00	____ to 1.00	Yes [ ]	No [ ]	N/A [ ]

Comments Regarding Exceptions: See Attached.	BANK USE ONLY

	Verified:
SIGNATURE		AUTHORIZED SIGNER


TITLE	Date:

DATE	Compliance Status Yes No

Exhibit 99.1

NTN Buzztime, Inc. Reports Fourth Quarter and Full Year 2019 Results

CARLSBAD, Calif., March 17, 2020, — NTN Buzztime, Inc. (NYSE American: NTN), reported financial results for the fourth quarter and year ended December 31, 2019.

Allen Wolff, CEO, said, “During the fourth quarter, we gained traction with Buzztime Basic, our lighter mobile-based, in-venue solution that complements our full featured Buzztime Elite offering, and we shipped the first installment of a substantial hardware contract. Our programmatic advertising continues to grow and augment our subscription revenue. We are proud 2019 closed with these significant operational accomplishments and our fourth consecutive year of positive EBITDA.”

“In January 2020, we seized the opportunity to monetize a non-core business and sold our hosted-events asset. We will continue to explore all types of go-to-market partnerships and to prioritize our most compelling opportunities to leverage our foundation for scalable growth. The economic and market conditions throughout the United States and the world have been dynamic and evolving as a result of the COVID-19 pandemic. Its effect on the restaurant and bar industry has been rapid, and its scope and magnitude is uncertain. We will continue to monitor the situation and evaluate steps we can take to respond to its effects. In 2020, we will remain focused on growing our digital entertainment and hardware businesses in an efficient manner and are evaluating financing alternatives to better position us to do so.”

Financial Results

Fourth quarter 2019 total revenues were $5.2 million, compared to $4.6 million in the third quarter of 2019 and $5.9 million in the fourth quarter of 2018. The fourth quarter 2019 recorded increased hardware revenue compared to prior periods. Revenue for 2019 was $19.8 million, compared to $23.3 million in 2018. As anticipated, 2019 results reflected lower subscription and advertising revenue due to reduced site count, which, taking into account the fourth quarter departure of Buffalo Wild Wings venues, was 1,440 at December 31, 2019.

During the fourth quarter of 2019, Buzztime received from Buffalo Wild Wings a substantial number of tablets with Buzztime’s new technology for only the cost of shipping, enabling the company to write off its older tablets. Fourth quarter 2019 direct costs were $2.9 million, compared to $2.1 million for the same period in 2018. Fourth quarter 2019 gross margin was 43%, compared to 65% for the same period in 2018. The increase in direct costs and the decrease in gross margin were both primarily attributable to higher equipment expense related to increased hardware sales and a $676,000 write-down associated with older tablets and related cases. Full year 2019 gross margin was 62%, compared to 65% for 2018. Although revenue mix will continue to result in margin fluctuations, the company continues to seek to optimize gross margin and anticipates it will be higher in future quarters than the fourth quarter of 2019.

Selling, general and administrative expense was $2.9 million and $13.2 million for the three and twelve months ended December 31, 2019, decreasing from $3.4 million and $14.5 million for the same periods in 2018, respectively. The reduction reflects management’s efforts to lower operating expenses.

For the fourth quarter 2019, net loss attributable to common shareholders was $1.3 million, or $0.45 per share, compared to a net income attributable to common shareholders of $44,000, or $0.02 per share, in the prior year quarter. Net loss attributable to common shareholders was $2.1 million, or $0.72 per share, compared to $275,000, or $0.10 per share, for 2019 and 2018, respectively.

For the fourth quarter 2019, the company had negative EBITDA of $557,000, compared to positive EBITDA of $732,000 in the prior year quarter. For the year, EBITDA was $1.1 million in 2019, compared to $2.8 million in 2018.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization and is not intended to represent a measure of performance in accordance with accounting principles generally accepted in the United States (GAAP). Although EBITDA was positive for the full year, it may not be positive in future years. A detailed description and reconciliation of EBITDA and management’s reasons for using this measure is set forth at the end of this press release.

Liquidity

Cash, cash equivalents and restricted cash was $3.4 million at December 31, 2019, compared to $2.8 million at December 31, 2018. For 2019, cash flow from operations was $2.7 million, increasing from $1.4 million in 2018.

Conference Call

Management will review the results on a conference call with a live question and answer session today, March 17, 2020, at 4:30 p.m. ET. To access the call, please use passcode 8114999 and dial:

	●	(877) 307-1373 for the live call and (855) 859-2056 for the replay, if calling from the United States or Canada; or
	●	(678) 224-7873 for the live call and (404) 537-3406 for the replay, if calling internationally.

The call will also be accompanied live by webcast that will be accessible at the company’s website at http://www.buzztime.com/investors. The replay of the call will be available until March 24, 2020

Forward-looking Statements

This release contains forward-looking statements that reflect management’s current views of future events and operations, including that we will continue to explore all types of go-to-market partnerships and to prioritize our most compelling opportunities to leverage our foundation for scalable growth, that we will continue to monitor the effects of the COVID-19 pandemic and evaluate steps we can take to response thereto, that we will remain focused on growing our digital entertainment and hardware businesses in an efficient manner, and that we anticipate gross margin will be higher in future quarters than the fourth quarter of 2019. Among the factors that could cause or contribute to material differences between our actual results and the expectations indicated by the forward-looking statements are risks and uncertainties that include, but are not limited to: our ability to raise additional capital, on favorable terms or at all, to allow us to meet our debt service obligations and to fund our working capital needs and the effect that the COVID-19 pandemic may have on the capital markets generally; the impact of the COVID-19 pandemic on our business, the restaurant and bar industry generally and the broader macroeconomic environment; our ability to maintain or grow our revenue and successfully implement our other business strategies to make up for the revenue we have historically received from Buffalo Wild Wings corporate-owned restaurants and its franchisees after our existing relationships with them terminated in November 2019; the negative impact that measures we recently implemented and may implement to reduce our operating expenses and planned capital expenses (including investments in our business) may have on our ability to effectively manage and operate our business; our ability to comply with our financial covenants in our loan and security agreement with Avidbank and its right to declare a default if we do not, which could lead to all payment obligations becoming immediately due and payable; our ability to compete effectively within the highly competitive interactive games, entertainment and marketing services industries, including our ability to successfully commercially launch attractive product offerings, and the impact of new products and technological change, especially in the mobile and wireless markets, on our operations and competitiveness; our ability to adequately protect our proprietary rights and intellectual property;; and the other risks and uncertainties described in Part I, Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and described in other documents we file from time to time with the Securities and Exchange Commission thereafter. Please see NTN Buzztime, Inc.’s recent filings with the Securities and Exchange Commission for information about these and other risks that may affect the Company. All forward-looking statements included in this release are based on information available to us on the date hereof. These statements speak only as of the date hereof and NTN Buzztime, Inc. does not undertake to publicly update or revise any of its forward-looking statements, even if experience or future changes show that the indicated results or events will not be realized.

About Buzztime:

Buzztime (NYSE American: NTN) delivers interactive entertainment and innovative technology that helps its customers acquire, engage and retain its patrons. Most frequently used in bars and restaurants in North America, the Buzztime tablets, mobile app and technology offer engaging solutions to establishments that have guests who experience dwell time, such as casinos, senior living, and more. Casual dining venues license Buzztime’s customizable solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and arcade games. Buzztime’s platform creates connections among the players and venues and amplifies guests’ positive experiences. Buzztime’s in-venue TV network creates one of the largest digital out of home ad audiences in the US and Canada. Buzztime hardware solutions leverages the company’s experience manufacturing durable tablets and charging systems, enabling a diverse group of businesses including corrections, point-of-sale and loyalty with product implementation. Buzztime games have also been recently licensed by other businesses serving other markets. For more information, please visit http://www.buzztime.com or follow us on Facebook or Twitter@buzztime.

IR AGENCY CONTACT:

Kirsten Chapman, LHA Investor Relations, buzztime@lhai.com 415-433-3777

NTN BUZZTIME, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except par value amount)

	December 31, 2019			December 31, 2018
ASSETS
Current Assets:
Cash and cash equivalents	$	3,209		$	2,536
Restricted cash		50			50
Accounts receivable, net		1,195			1,143
Site equipment to be installed		1,090			2,539
Prepaid expenses and other current assets		526			517
Total current assets		6,070			6,785

Restricted cash, long-term		150			200
Operating lease right-of-use assets		2,101			—
Fixed assets, net		2,822			4,667
Software development costs, net		1,915			2,018
Deferred costs		274			424
Goodwill		696			667
Other assets		97			103

Total assets	$	14,125		$	14,864

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	835		$	271
Accrued compensation		588			572
Accrued expenses		490			444
Sales taxes payable		131			87
Income taxes payable		3			1
Current portion of long-term debt		2,739			1,000
Current portion of obligations under operating leases		409			—
Current portion of obligations under financing leases		21			45
Current portion of deferred revenue		460			1,267
Other current liabilities		419			337
Total current liabilities		6,095			4,024

Long-term debt		—			2,729
Obligations under operating leases		2,891			—
Obligations under financing leases		20			41
Deferred revenue		2			30
Deferred rent		—			1,123
Other liabilities		26			—
Total liabilities		9,034			7,947

Commitments and contingencies

Shareholders’ equity:
Series A 10% cumulative convertible preferred stock, $0.005 par value, $156 liquidation preference, 156 shares authorized; 156 shares issued and outstanding at December 31, 2019 and 2018		1			1
Common stock, $0.005 par value, 15,000 shares authorized at December 31, 2019 and 2018; 2,901 and 2,875 shares issued at December 31, 2919 and 2018, respectively		14			14
Treasury stock, at cost, 10 shares at December 31, 2091 and 2018		(456	)		(456	)
Additional paid-in capital		136,721			136,552
Accumulated deficit		(131,457	)		(129,394	)
Accumulated other comprehensive income		268			200
Total shareholders’ equity		5,091			6,917

Total liabilities and shareholders’ equity	$	14,125		$	14,864

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

	Three months ended December 31,						Twelve months ended December 31,
	2019			2018			2019			2018
Revenues
Subscription revenue	$	2,922		$	3,920		$	14,278		$	16,031
Hardware revenue		1,539			1,162			2,350			3,589
Other revenue		707			837			3,178			3,715
Total revenues		5,168			5,919			19,806			23,335

Operating expenses:
Direct operating costs (includes depreciation and amortization)		2,938			2,051			7,483			8,070
Selling, general and administrative		2,872			3,363			13,175			14,463
Impairment of capitalized software		498			—			550			23
Impairment of goodwill		—			261			—			261
Depreciation and amortization (excluding depreciation and amortization included in direct costs		87			71			360			315
Total operating expenses		6,395			5,746			21,568			23,132
Operating (loss) income		(1,227	)		173			(1,762	)		203
Other expense, net		(69	)		(221	)		(258	)		(526	)
Loss before income taxes		(1,296	)		(48	)		(2,020	)		(323	)
Income tax benefit (provision)		3			100			(27	)		64
Net (loss) income		(1,293	)		52			(2,047	)		(259	)
Series A preferred stock dividend		(8	)		(8	)		(16	)		(16	)
Net (loss) income attributable to common shareholders	$	(1,301	)	$	44		$	(2,063	)	$	(275	)

Net (loss) income per common share – basic and diluted	$	(0.45	)	$	0.02		$	(0.72	)	$	(0.10	)

Weighted average shares outstanding – basic and diluted		2,888			2,864			2,875			2,688

Comprehensive loss:
Net (loss) income	$	(1,293	)	$	52		$	(2,047	)	$	(259	)
Foreign currency translations adjustment		21			(93	)		68			(145	)
Total comprehensive loss	$	(1,272	)	$	(41	)	$	(1,979	)	$	(404	)

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Twelve months ended December 31,
	2019			2018
Cash flows provided by operating activities:
Net loss	$	(2,047	)	$	(259	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2,877			2,764
Provision for doubtful accounts		196			78
Amortization of operating lease right-of-use assets		291			—
Transfer of fixed assets to sales-type lease		10			23
Stock-based compensation		206			443
Amortization of debt issuance costs		9			59
Loss from sale or disposition of equipment		689			242
Loss from disposition of capitalized software		550			23
Loss from impairment of goodwill		—			261
Changes in assets and liabilities:
Accounts receivable		(248	)		(507	)
Site equipment to be installed		337			431
Operating lease liabilities		(215	)		—
Prepaid expenses and other assets		(5	)		29
Accounts payable and accrued expenses		669			(186	)
Income taxes payable		1			(10	)
Deferred costs		151			350
Deferred revenue		(835	)		(2,227	)
Deferred rent		—			(190	)
Other liabilities		108			41
Net cash provided by operating activities		2,744			1,365

Cash flows used in investing activities:
Capital expenditures		(128	)		(648	)
Capitalized software development expenditures		(966	)		(964	)
Proceeds from sale of equipment		29			33
Net cash used in investing activities		(1,065	)		(1,579	)

Cash flows used in financing activities:
Net proceeds from issuance of common stock related to registered direct offering		—			1,375
Proceeds from long-term debt		—			4,000
Payment on long-term debt		(1000	)		(5,373	)
Debt issuance costs on long-term debt		—			(23	)
Principal payments on financing leases		(45	)		(249	)
Payment of preferred stockholder dividends		(16	)		(16	)
Tax withholding related to net share settlement of vested restricted stock units		(37	)		(17	)
Net cash used in financing activities		(1,098	)		(303	)

Effect of exchange rate on cash		42			(75	)
Net increase (decrease) in cash and cash equivalents		623			(592	)
Cash, cash equivalents and restricted cash at beginning of period		2,786			3,378
Cash, cash equivalents and restricted cash at end of period	$	3,409		$	2,786

NTN BUZZTIME, INC. AND SUBSIDIARIES

RECONCILIATION of GAAP TO NON-GAAP

(In thousands)

A schedule reconciling the Company’s consolidated net (loss) income calculated in accordance with GAAP to EBITDA is included in the supplemental table below. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is not intended to represent a measure of performance in accordance with GAAP, nor should EBITDA be considered as an alternative to statements of cash flows as a measure of liquidity. EBITDA is included herein because the Company believes it is a measure of operating performance that financial analysts, lenders, investors and other interested parties find to be a useful tool for analyzing companies like Buzztime that carry significant levels of non-cash depreciation and amortization charges in comparison to their net income or loss calculation in accordance with GAAP.

The following table reconciles our net (loss) income per GAAP (in thousands) to EBITDA:

	Three months ended December 31,						Twelve months ended December 31,
	2019			2018			2019			2018
Net (loss) income per GAAP	$	(1,293	)	$	52		$	(2,047	)	$	(259	)
Interest expense, net		53			84			249			389
Income tax (benefit) provision		(3	)		(100	)		27			(64	)
Depreciation and amortization		686			696			2,877			2,764
Total EBITDA	$	(557	)	$	732		$	1,106		$	2,830