PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) The financial statements for the period ended September 30, 2020, reflect significant financial deterioration, net loss, and a going concern warning [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a significant contraction by September 30, 2020, with total assets down **64%** and equity down **90%** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,710 | $3,209 | | Accounts receivable, net | $132 | $1,195 | | Goodwill | $0 | $696 | | Total Assets | $5,054 | $14,125 | | **Liabilities & Equity** | | | | Total current liabilities | $2,930 | $6,095 | | Total liabilities | $4,559 | $9,034 | | Total shareholders' equity | $495 | $5,091 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Operational performance worsened significantly, with total revenues falling **68%** and net loss increasing to **$4.7 million** Statement of Operations Highlights (in thousands, except per share amounts) | Metric | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Subscription revenue | $3,779 | $11,356 | | Total revenue | $4,625 | $14,638 | | Total operating expenses | $10,196 | $15,173 | | Operating loss | $(5,571) | $(535) | | Net loss attributable to common shareholders | $(4,730) | $(762) | | Net loss per common share | $(1.62) | $(0.27) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations was a net use of **$3.3 million**, a sharp reversal from the prior year, leading to a **$1.7 million** decrease in cash Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,280) | $1,761 | | Net cash used in investing activities | $(194) | $(964) | | Net cash provided by (used in) financing activities | $1,765 | $(826) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(1,699)** | **$(2)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail a proposed merger and asset sale, severe COVID-19 impact, a going concern warning, goodwill impairment, and debt obligations - The company has entered into a merger agreement with Brooklyn Immunotherapeutics LLC and an asset purchase agreement with eGames.com Holdings LLC to sell its current business assets for **$2.0 million** and pivot to Brooklyn's biopharmaceutical business[39](index=39&type=chunk)[41](index=41&type=chunk) - The COVID-19 pandemic has had an abrupt and substantial negative impact, causing material decreases in revenue and cash flow. At its peak, approximately **70%** of customers had temporarily suspended their subscriptions[44](index=44&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern. Without the proposed merger/asset sale or new capital, the company projects it will only have sufficient cash through mid-December 2020 or mid-January 2021, depending on an additional loan[49](index=49&type=chunk)[50](index=50&type=chunk) - In March 2020, the company recognized a full goodwill impairment charge of **$662,000** related to its Canadian business, citing the uncertain impact of the COVID-19 pandemic[135](index=135&type=chunk) - The company obtained a **$1.625 million** PPP loan in April 2020. Subsequently, in November 2020, approximately **$1.093 million** of this loan was forgiven[103](index=103&type=chunk)[141](index=141&type=chunk) - The company terminated its corporate headquarters lease in June 2020 to reduce operating expenses, resulting in a gain on termination of approximately **$8,000** and writing off related assets[112](index=112&type=chunk)[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses severe operational and financial challenges due to COVID-19, drastic cost-cutting, and critical liquidity issues [Overview and Highlights](index=33&type=section&id=Overview%20and%20Highlights) This section outlines the company's business, transformative strategic actions, and severe COVID-19 impact with cost-saving measures - The company has entered into a definitive merger agreement with Brooklyn Immunotherapeutics and an asset purchase agreement with eGames.com, signaling a complete exit from its historical interactive entertainment business[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - In response to the COVID-19 pandemic's impact, the company implemented significant cost-reduction measures, including reducing headcount from **74** to **22**, terminating its corporate headquarters lease, and deferring a portion of the CEO's salary[180](index=180&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - The company secured a **$1.0 million** bridge loan from an affiliate of eGames.com in connection with the asset sale agreement to fund working capital and transaction-related costs[177](index=177&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Operating results deteriorated significantly, with total revenue decreasing **68%** and net loss increasing to **$4.7 million** despite cost cuts Revenue Breakdown (Nine months ended September 30) | Revenue Stream | 2020 (in thousands) | 2019 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Subscription revenue | $3,779 | $11,356 | (67)% | | Hardware revenue | $421 | $811 | (48)% | | Other revenue | $425 | $2,471 | (83)% | | **Total** | **$4,625** | **$14,638** | **(68)%** | - The decrease in subscription revenue was driven by lower site count after the termination of the Buffalo Wild Wings agreement in November 2019 and the impact of the COVID-19 pandemic[194](index=194&type=chunk) - Selling, general and administrative (SG&A) expenses for the nine months decreased by **$3.6 million** (**35%**) due to reduced payroll, marketing, and lease expenses, partially offset by increased professional fees for the merger and asset sale transactions[209](index=209&type=chunk) - A full goodwill impairment charge of **$662,000** was recorded in the first quarter of 2020 due to the uncertain future operating results of the Canadian business unit caused by the pandemic[213](index=213&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is critical, with substantial doubt about its going concern ability and reliance on new capital or strategic transactions - Management concluded there is substantial doubt about the company's ability to continue as a going concern for the next twelve months[220](index=220&type=chunk)[225](index=225&type=chunk) - The company projects its cash resources will only be sufficient to pay forecasted outlays through mid-December 2020. This could be extended to mid-January 2021 if an additional **$500,000** loan is obtained[222](index=222&type=chunk) - The company must comply with financial covenants on its Avidbank term loan, including a minimum liquidity covenant. Failure to comply, which is a risk in December 2020, could lead to default and foreclosure on all company assets[223](index=223&type=chunk)[229](index=229&type=chunk) - To bolster liquidity, the company received a **$1.625 million** PPP loan in April 2020 and a **$1.0 million** bridge loan in September 2020[234](index=234&type=chunk)[236](index=236&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, NTN Buzztime, Inc. is not required to provide this information - The company is a smaller reporting company and is not required to provide the information for this item[252](index=252&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The Chief Executive Officer and Senior Vice President of Finance concluded that the company's disclosure controls and procedures were effective as of the end of the period[255](index=255&type=chunk) - There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter[256](index=256&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings.) The company and directors face six lawsuits alleging material omissions in the merger's S-4 Registration Statement, seeking to enjoin the merger - The company and its directors are defendants in six substantially similar lawsuits brought by stockholders arising from the proposed merger with Brooklyn Immunotherapeutics[260](index=260&type=chunk) - The complaints allege violations of the Securities Exchange Act, claiming the Form S-4 Registration Statement failed to disclose material information regarding financial projections, conflicts of interest, and the sales process[260](index=260&type=chunk) - The plaintiffs are seeking to enjoin the merger, receive damages, and force the dissemination of a revised Registration Statement[260](index=260&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors.) The company highlights significant risks related to the proposed merger, ongoing COVID-19 impact, going concern issues, and potential delisting [Risks Related to the Proposed Merger and Asset Sale](index=48&type=section&id=Risks%20Related%20to%20the%20Proposed%20Merger%20and%20Asset%20Sale) Numerous risks exist for the proposed merger and asset sale, including failure to close, termination fees, significant stockholder dilution, and litigation - Failure to complete the merger may require NTN or Brooklyn to pay a **$750,000** termination fee to the other party and would significantly harm NTN's stock price and future operations[270](index=270&type=chunk)[271](index=271&type=chunk) - NTN stockholders will experience significant dilution, owning between approximately **3.26%** and **5.92%** of the combined company after the merger[279](index=279&type=chunk) - There is a risk the merger will not close if conditions are not met, such as NTN's net cash deficit exceeding **$3.0 million** or Brooklyn failing to secure at least **$10 million** in cash[268](index=268&type=chunk)[269](index=269&type=chunk) - Litigation related to the merger could incur significant costs, distract management, and potentially delay or enjoin the transaction[293](index=293&type=chunk)[294](index=294&type=chunk) [Risks Related to Our Business](index=54&type=section&id=Risks%20Related%20to%20Our%20Business) Fundamental business risks are severe, including COVID-19 impact, going concern warning, loan default risk, and potential NYSE American delisting - The company's cash flow and liquidity have been materially harmed by COVID-19, and it needs to raise capital or complete a strategic transaction in the near term to avoid potential restructuring, bankruptcy, or liquidation[307](index=307&type=chunk)[312](index=312&type=chunk) - Failure to comply with financial covenants in the Avidbank loan agreement could lead to a default, making all debt immediately due and potentially resulting in foreclosure on all of the company's assets[313](index=313&type=chunk)[314](index=314&type=chunk) - The company is not in compliance with NYSE American continued listing criteria regarding minimum stockholders' equity and is at risk of being delisted, which would harm its stock's liquidity and its ability to raise capital[316](index=316&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) None - None[324](index=324&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) None - None[325](index=325&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) Not Applicable - Not Applicable[326](index=326&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information.) None - None[327](index=327&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits.) This section lists key exhibits filed with the quarterly report, including merger and asset purchase agreements and loan notes - Key exhibits filed include the Agreement and Plan of Merger and Reorganization, the Asset Purchase Agreement, and the **8%** Promissory Note related to the bridge loan[329](index=329&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock NTN NYSE American Emerging growth company [ ] FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 Commission file number 001-11460 NTN Buzztime, Inc. (Exact name of registrant as specified in its charter) DELAWARE 31-1103425 (State of incorporation) (I.R.S ...

[Initial Filing Information](index=1&type=section&id=Initial%20Filing%20Information) Provides key registration details and outstanding share count for NTN Buzztime, Inc - NTN Buzztime, Inc. is registered on the NYSE American under the trading symbol **NTN**, classified as a non-accelerated filer and a smaller reporting company[2](index=2&type=chunk)[3](index=3&type=chunk) - As of May 18, 2020, the registrant had **2,936,769 shares of common stock outstanding**[5](index=5&type=chunk) [Disclosure Required Under the SEC's Order dated March 25, 2020](index=4&type=section&id=Disclosure%20Required%20Under%20the%20SEC%27s%20Order%20dated%20March%2025%2C%202020) Details the company's reliance on SEC relief for filing delays due to COVID-19 disruptions and operational challenges - NTN Buzztime, Inc. relied on the SEC's Order dated March 25, 2020, for this Quarterly Report on Form 10-Q, granting conditional relief for filing deadlines due to COVID-19 related disruptions[9](index=9&type=chunk)[10](index=10&type=chunk) - The filing delay resulted from significant COVID-19 disruptions, including substantial employee reductions, remote work, and third-party service provider issues in financial statement preparation[10](index=10&type=chunk) [PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) Presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements.](index=5&type=section&id=Item%201.%20Financial%20Statements.) This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of shareholders' equity, and statements of cash flows, along with detailed notes explaining the basis of presentation, impact of COVID-19, going concern uncertainty, revenue recognition, debt, leases, and recent accounting pronouncements [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets Summary | Metric | March 31, 2020 ($ thousands) | December 31, 2019 ($ thousands) | | :--------------------- | :--------------------------- | :------------------------------ | | Total Assets | 11,014 | 14,125 | | Total Liabilities | 7,165 | 9,034 | | Total Shareholders' Equity | 3,849 | 5,091 | | Goodwill | - | 696 | - Current liabilities exceeded current assets by **$87,000** as of March 31, 2020[34](index=34&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details the company's financial performance over the period, including revenue, expenses, and net loss Condensed Consolidated Statements of Operations and Comprehensive Loss Summary | Metric (Three Months Ended March 31) | 2020 ($ thousands) | 2019 ($ thousands) | Change ($ thousands) | % Change | | :----------------------------------- | :----------------- | :----------------- | :------------------- | :------- | | Total Revenue | 2,394 | 4,832 | (2,438) | (50.5)% | | Operating Loss | (2,521) | (217) | (2,304) | (1061.8)% | | Net Loss | (1,218) | (313) | (905) | (289.1)% | | Net Loss per Common Share - Basic and Diluted | (0.42) | (0.11) | (0.31) | (281.8)% | | Total Comprehensive Loss | (1,322) | (280) | (1,042) | (372.1)% | - Impairment of goodwill was **$662,000** in Q1 2020, compared to $0 in Q1 2019[17](index=17&type=chunk) - Other income (expense), net, significantly increased to **$1,284,000** in Q1 2020 from $(85,000) in Q1 2019, primarily due to a gain from asset sale[17](index=17&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Outlines changes in the company's equity during the period, including net loss and stock transactions Condensed Consolidated Statements of Shareholders' Equity Summary | Metric (Three Months Ended March 31, 2020) | Amount ($ thousands) | | :--------------------------------------- | :------------------- | | Balances at January 1, 2020 | 5,091 | | Foreign currency translation adjustment | (104) | | Net loss | (1,218) | | Issuance of common stock (net) | 41 | | Non-cash stock based compensation | 39 | | Balances at March 31, 2020 | 3,849 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports the cash generated and used by the company across operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Summary | Cash Flow Activity (Three Months Ended March 31) | 2020 ($ thousands) | 2019 ($ thousands) | Change ($ thousands) | | :----------------------------------------------- | :----------------- | :----------------- | :------------------- | | Net cash (used in) provided by operating activities | (1,165) | 780 | (1,945) | | Net cash used in investing activities | (140) | (396) | 256 | | Net cash provided by (used in) financing activities | 388 | (273) | 661 | | Effect of exchange rate on cash | (71) | 19 | (90) | | Net (decrease) increase in cash, cash equivalents and restricted cash | (988) | 130 | (1,118) | | Cash, cash equivalents and restricted cash at end of period | 2,421 | 2,916 | (495) | - Cash provided by financing activities in Q1 2020 included **$1,166,000** from the sale of assets[20](index=20&type=chunk) - Cash paid for interest decreased from **$71,000** in Q1 2019 to **$37,000** in Q1 2020[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [(1) BASIS OF PRESENTATION](index=11&type=section&id=(1)%20BASIS%20OF%20PRESENTATION) Describes the company's business model, revenue streams, and operational scope - The Company delivers interactive entertainment and innovative technology, including performance analytics, to establishments like bars, restaurants, casinos, and senior living centers[25](index=25&type=chunk) - Revenue is generated from subscription fees, leasing/selling tablet equipment, hosting live trivia events (until Feb 2020), selling advertising, licensing content, and providing professional services[26](index=26&type=chunk) - As of March 31, 2020, **1,396 venues** in the U.S. and Canada subscribed to the Company's network[27](index=27&type=chunk) [(2) COVID-19 UPDATE](index=12&type=section&id=(2)%20COVID-19%20UPDATE) Outlines the significant negative impact of the COVID-19 pandemic on the company's business, cash flows, and liquidity - The COVID-19 pandemic has had an abrupt and substantial negative impact on the restaurant and bar industry, materially affecting the Company's business, cash flows, and liquidity[32](index=32&type=chunk) - At its peak, approximately **70% of the Company's customers** requested temporary suspension of their subscriptions[32](index=32&type=chunk) - The Company expects material decreases in subscription revenue, advertising revenue, and cash flows from operations to continue[32](index=32&type=chunk) [(3) GOING CONCERN UNCERTAINTY](index=12&type=section&id=(3)%20GOING%20CONCERN%20UNCERTAINTY) Addresses management's assessment of the company's ability to continue operations, highlighting financial challenges and mitigation efforts - Management concluded there is substantial doubt about the Company's ability to continue as a going concern through the next twelve months due to a net loss of **$1,218,000** in Q1 2020 and current liabilities exceeding current assets by **$87,000**[34](index=34&type=chunk)[38](index=38&type=chunk) - The Company received a **$1,625,100** loan under the Paycheck Protection Program (PPP) subsequent to March 31, 2020[35](index=35&type=chunk) - The Company believes it will have sufficient cash resources through October 2020, assuming a significant hardware order, no Avidbank foreclosure, and successful working capital management, but needs pre-pandemic revenue levels or substantial capital in the very near term[36](index=36&type=chunk) [(4) RESTRICTED CASH](index=14&type=section&id=(4)%20RESTRICTED%20CASH) Details the nature and purpose of the company's restricted cash balance - The Company has **$250,000** in a restricted cash account with Avidbank, serving as security for a letter of credit related to its corporate headquarters lease[40](index=40&type=chunk) - This restricted cash does not count towards the **$2,000,000** minimum unrestricted cash covenant in the Avidbank loan agreement[40](index=40&type=chunk) [(5) ASSET SALE](index=14&type=section&id=(5)%20ASSET%20SALE) Reports the sale of live-hosted trivia events and the resulting financial impact - On January 13, 2020, the Company sold its live-hosted knowledge-based trivia events (Stump! Trivia and OpinioNation) to Sporcle, Inc. for **$1,360,000** in gross proceeds[41](index=41&type=chunk) - The Company received **$1,260,000** at closing and recorded a net gain of approximately **$1,265,000** in January 2020[41](index=41&type=chunk) [(6) REVENUE RECOGNITION](index=14&type=section&id=(6)%20REVENUE%20RECOGNITION) Explains the company's accounting policies for recognizing revenue and provides a breakdown by stream and geography - The Company recognizes revenue in accordance with ASC No. 606, identifying contracts, performance obligations, transaction price, allocation, and recognition upon satisfaction of obligations[42](index=42&type=chunk) Revenue by Stream | Revenue Stream | 2020 ($) | % of Total (2020) | 2019 ($) | % of Total (2019) | $ Change | % Change | | :--------------------- | :---------- | :---------------- | :---------- | :---------------- | :------------ | :------- | | Subscription Revenue | 1,999,000 | 83.5% | 3,833,000 | 79.3% | (1,834,000) | (47.8)% | | Hardware Revenue | 16,000 | 0.7% | 205,000 | 4.2% | (189,000) | (92.2)% | | Other Revenue | 379,000 | 15.8% | 794,000 | 16.5% | (415,000) | (52.3)% | | **Total Revenue** | **2,394,000** | **100.0%** | **4,832,000** | **100.0%** | **(2,438,000)** | **(50.5)%** | - Subscription revenue decreased by **47.8%** primarily due to lower average site count and the termination of agreements with Buffalo Wild Wings corporate-owned restaurants and most of its franchisees in November 2019[47](index=47&type=chunk)[57](index=57&type=chunk) Geographic Revenue | Geographic Revenue | 2020 ($) | 2019 ($) | | :----------------- | :---------- | :---------- | | United States | 2,249,000 | 4,661,000 | | Canada | 145,000 | 171,000 | | **Total Revenue** | **2,394,000** | **4,832,000** | [(7) BASIC AND DILUTED EARNINGS PER COMMON SHARE](index=18&type=section&id=(7)%20BASIC%20AND%20DILUTED%20EARNINGS%20PER%20COMMON%20SHARE) Reports the net loss per common share and the number of shares used in its calculation - Net loss per common share (basic and diluted) was **$(0.42)** for the three months ended March 31, 2020, compared to **$(0.11)** for the same period in 2019[17](index=17&type=chunk) - Approximately **172,000** and **262,000 shares** of common stock were excluded from diluted net loss per common share computations for Q1 2020 and Q1 2019, respectively, as their effect was anti-dilutive[66](index=66&type=chunk) [(8) SHAREHOLDERS' EQUITY](index=18&type=section&id=(8)%20SHAREHOLDERS%27%20EQUITY) Details changes in stock-based compensation expense and Restricted Stock Unit (RSU) activity - Stock-based compensation expense for employees was **$39,000** for Q1 2020, down from **$59,000** for Q1 2019[75](index=75&type=chunk) - The Company granted **153,000 Restricted Stock Units (RSUs)** in Q1 2020 with a weighted average grant date fair value of **$2.43 per RSU**, vesting 12.5% every three months over two years[76](index=76&type=chunk) - **4,000 RSUs** vested and were settled in Q1 2020, resulting in **3,000 common shares** issued net of shares withheld for payroll taxes[77](index=77&type=chunk) [(9) DEBT](index=20&type=section&id=(9)%20DEBT) Provides information on the company's term loan, including principal balance, maturity, and financial covenants - The outstanding principal balance of the term loan with Avidbank was reduced to **$2,000,000** as of March 31, 2020, following prepayments of approximately **$150,000** in February and **$350,000** in March[78](index=78&type=chunk) - An amendment to the loan agreement changed the maturity date from September 28, 2022, to **December 31, 2020**, with accelerated monthly principal payments[80](index=80&type=chunk) - New financial covenants include a monthly minimum asset coverage ratio (ACR) of **1.25 to 1.00** and a minimum liquidity covenant requiring unrestricted cash at Avidbank to be not less than the outstanding term loan principal; the Company was in compliance as of March 31, 2020[82](index=82&type=chunk) [(10) LEASES](index=20&type=section&id=(10)%20LEASES) Details the company's adoption of new lease accounting standards and provides metrics for operating and finance leases - The Company adopted ASC No. 842, Leases, on January 1, 2019, recognizing approximately **$3,458,000** of operating lease liabilities and **$2,336,000** of corresponding operating right-of-use assets[90](index=90&type=chunk) Operating Lease Metrics | Operating Lease Metrics (as of March 31, 2020) | Amount ($ thousands) | | :--------------------------------------------- | :------------------- | | Operating lease right-of-use assets | 2,002 | | Operating lease liabilities | 3,167 | | Weighted-average remaining lease term | 6.0 years | | Weighted-average discount rate | 7.25% | | Total operating lease expense (Q1 2020) | 134 | Finance Lease Metrics | Finance Lease Metrics (as of March 31, 2020) | Amount ($ thousands) | | :------------------------------------------- | :------------------- | | Finance lease right-of-use assets | 36 | | Finance lease liabilities | 36 | | Weighted-average remaining lease term | 1.7 years | | Weighted-average discount rate | 5.52% | | Total finance lease costs (Q1 2020) | 6 | [(11) DISPOSITION OF SITE EQUIPMENT TO BE INSTALLED AND FIXED ASSETS](index=25&type=section&id=(11)%20DISPOSITION%20OF%20SITE%20EQUIPMENT%20TO%20BE%20INSTALLED%20AND%20FIXED%20ASSETS) Reports the write-off of older tablet equipment and ongoing monitoring of asset recoverability - The Company wrote off approximately **$188,000** related to older tablet equipment (no longer to be deployed) during the three months ended March 31, 2020, recorded in direct operating costs[102](index=102&type=chunk) - Due to COVID-19 uncertainty, no additional equipment write-offs were recorded in Q1 2020, but recoverability of assets will continue to be monitored[102](index=102&type=chunk) [(12) SOFTWARE DEVELOPMENT COSTS](index=25&type=section&id=(12)%20SOFTWARE%20DEVELOPMENT%20COSTS) Details amortization and impairment expenses related to capitalized software development projects - Amortization expense relating to capitalized software development costs totaled **$149,000** for Q1 2020, compared to **$97,000** for Q1 2019[103](index=103&type=chunk) - An impairment of **$138,000** was recognized in Q1 2020 (vs. $1,000 in Q1 2019) for abandoned software development projects that were no longer strategically aligned or marketable[104](index=104&type=chunk) - Approximately **$144,000** of capitalized software costs were not yet subject to amortization as of March 31, 2020, due to incomplete development[103](index=103&type=chunk) [(13) GOODWILL](index=25&type=section&id=(13)%20GOODWILL) Reports the full impairment charge recognized for goodwill related to the Canadian business - The Company recognized a full impairment charge of **$662,000** for goodwill related to its Canadian business in Q1 2020, reducing the balance to $0[105](index=105&type=chunk)[107](index=107&type=chunk) - The impairment was triggered by the uncertainty of COVID-19's impact on the Canadian Reporting Unit's future operating results[105](index=105&type=chunk) - Foreign currency effects also contributed a **$(34,000)** reduction to goodwill in Q1 2020[107](index=107&type=chunk) [(14) ACCUMULATED OTHER COMPREHENSIVE INCOME](index=26&type=section&id=(14)%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME) Describes the primary components and changes in accumulated other comprehensive income - Accumulated other comprehensive income primarily consists of foreign currency translation adjustments from the Canadian subsidiary[108](index=108&type=chunk) - The balance decreased from **$268,000** as of December 31, 2019, to **$164,000** as of March 31, 2020[108](index=108&type=chunk) [(15) RECENT ACCOUNTING PRONOUNCEMENTS](index=26&type=section&id=(15)%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) Summarizes the impact and effective dates of recently adopted and upcoming accounting standards - ASU No. 2019-12 (Income Taxes) is effective for fiscal years beginning after December 15, 2020 (January 1, 2021, for the Company), and its impact is currently being assessed[109](index=109&type=chunk) - ASU No. 2019-08 (Stock Compensation), ASU No. 2018-18 (Collaborative Arrangements), ASU No. 2018-15 (Internal-Use Software), and ASU No. 2018-13 (Fair Value Measurement) were adopted effective January 1, 2020, with no material or significant impact on the consolidated financial statements[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - ASU 2016-13 (Credit Losses) is effective for fiscal years beginning after December 15, 2022 (January 1, 2023, for the Company), and its impact is being evaluated[114](index=114&type=chunk) [(16) SUBSEQUENT EVENT](index=26&type=section&id=(16)%20SUBSEQUENT%20EVENT) Reports on a significant event occurring after the reporting period, specifically the receipt of a PPP loan - On April 18, 2020, the Company received a **$1,625,100** loan under the Paycheck Protection Program (PPP) of the CARES Act[115](index=115&type=chunk) - The PPP Loan matures on April 18, 2022, bears interest at **1.0% per annum**, and may be forgiven if used for qualifying expenses, though forgiveness is not assured[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial condition, results of operations, and liquidity, with a strong emphasis on the significant adverse impact of the COVID-19 pandemic and the company's going concern uncertainty. It details revenue declines, cost management efforts, and the urgent need for additional capital to sustain operations [CAUTION CONCERNING FORWARD-LOOKING STATEMENTS](index=28&type=section&id=CAUTION%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) Warns readers about the inherent uncertainties and risks associated with forward-looking statements in the report - The report contains forward-looking statements subject to various risks and uncertainties, including the ability to raise capital, manage liquidity, comply with financial covenants, and the impact of the COVID-19 pandemic[118](index=118&type=chunk) - The full extent of the COVID-19 pandemic's impact on the business, results of operations, and financial condition is highly uncertain[120](index=120&type=chunk) [INTRODUCTION](index=29&type=section&id=INTRODUCTION) Introduces the purpose of the Management's Discussion and Analysis section, supplementing the financial statements - This section supplements the condensed consolidated financial statements to provide an understanding of the Company's financial condition, changes, and results of operations[124](index=124&type=chunk) [OVERVIEW AND HIGHLIGHTS](index=29&type=section&id=OVERVIEW%20AND%20HIGHLIGHTS) Summarizes the company's business model, the impact of COVID-19, and recent strategic developments - The Company provides interactive entertainment and technology to hospitality partners, generating revenue from subscription fees, equipment sales/leasing, advertising, content licensing, and professional services[128](index=128&type=chunk)[130](index=130&type=chunk) - The COVID-19 pandemic has caused abrupt and substantial negative impacts on the restaurant and bar industry, leading to material decreases in the Company's business, cash flows, and liquidity[134](index=134&type=chunk) - Recent developments include receiving a **$1,625,100 PPP loan**, amending the Avidbank loan to accelerate maturity to December 31, 2020, and selling live-hosted trivia assets for approximately **$1.4 million**[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=30&type=section&id=CRITICALACCOUNTING%20POLICIES) Discusses the significant accounting policies and estimates used in preparing the financial statements - The Company's financial statements are prepared in accordance with GAAP, requiring estimates and judgments in areas such as deferred costs and revenues, depreciation, income taxes, stock-based compensation, bad debts, and impairment of assets[140](index=140&type=chunk)[141](index=141&type=chunk) - There have been no material changes in critical accounting policies, estimates, and judgments during the three months ended March 31, 2020[143](index=143&type=chunk) [RESULTS OF OPERATIONS](index=32&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, detailing revenue, costs, and operating expenses [Revenue](index=32&type=section&id=Revenue) Analyzes the changes in revenue across different streams and their contributing factors Revenue by Stream | Revenue Stream | 2020 ($) | % of Total (2020) | 2019 ($) | % of Total (2019) | $ Change | % Change | | :--------------------- | :---------- | :---------------- | :---------- | :---------------- | :------------ | :------- | | Subscription Revenue | 1,999,000 | 83.5% | 3,833,000 | 79.3% | (1,834,000) | (47.8)% | | Hardware Revenue | 16,000 | 0.7% | 205,000 | 4.2% | (189,000) | (92.2)% | | Other Revenue | 379,000 | 15.8% | 794,000 | 16.5% | (415,000) | (52.3)% | | **Total Revenue** | **2,394,000** | **100.0%** | **4,832,000** | **100.0%** | **(2,438,000)** | **(50.5)%** | - Subscription revenue decreased primarily due to lower average site count and the loss of revenue from Buffalo Wild Wings corporate-owned restaurants and franchisees after their agreements terminated in November 2019[147](index=147&type=chunk) - Hardware revenue decreased significantly due to reduced sales-type lease arrangements, and other revenue declined due to the sale of live-hosted trivia events and decreased advertising sales impacted by COVID-19[151](index=151&type=chunk)[152](index=152&type=chunk) [Direct Operating Costs and Gross Margin](index=33&type=section&id=Direct%20Operating%20Costs%20and%20Gross%20Margin) Examines the changes in direct costs and their impact on the company's gross margin Direct Operating Costs and Gross Margin Summary | Metric (Three Months Ended March 31) | 2020 ($) | 2019 ($) | Change ($) | % Change | | :----------------------------------- | :---------- | :---------- | :------------ | :------- | | Revenues | 2,394,000 | 4,832,000 | (2,438,000) | (50.5)% | | Direct Costs | 950,000 | 1,484,000 | (534,000) | (36.0)% | | Gross Margin | 1,444,000 | 3,348,000 | (1,904,000) | (56.9)% | | Gross Margin Percentage | 60.3% | 69.3% | | | - The decrease in direct costs was primarily due to reduced direct wages (**$199,000**) following the sale of live-hosted trivia events, decreased depreciation expense (**$190,000**), and lower service provider and freight expenses (**$89,000**)[153](index=153&type=chunk) - Gross margin percentage declined from **69.3% to 60.3%** due to changes in revenue mix and a **$188,000** write-off of older technology equipment[154](index=154&type=chunk) [Operating Expenses](index=34&type=section&id=Operating%20Expenses) Details the changes in various operating expenses, including SG&A, impairment charges, and depreciation Operating Expense Summary | Operating Expense (Three Months Ended March 31) | 2020 ($) | 2019 ($) | Change ($) | % Change | | :---------------------------------------------- | :---------- | :---------- | :---------- | :--------- | | Selling, general and administrative | 3,080,000 | 3,468,000 | (388,000) | (11.2)% | | Impairment of capitalized software | 138,000 | 1,000 | 137,000 | 13,700.0% | | Impairment of goodwill | 662,000 | - | 662,000 | 100.0% | | Depreciation and amortization (non-direct) | 85 | 96 | (11) | (11.5)% | - Selling, general and administrative expenses decreased due to reduced payroll (**$283,000**), marketing fees (**$198,000**), and professional fees (**$60,000**), partially offset by increased bad debt expense (**$159,000**)[156](index=156&type=chunk) - Impairment of capitalized software increased significantly due to abandoning projects no longer strategically fit, and goodwill impairment of **$662,000** was recognized due to COVID-19's impact on the Canadian business[157](index=157&type=chunk)[159](index=159&type=chunk) [Other Income (Expense), Net](index=35&type=section&id=Other%20Income%20(Expense)%2C%20Net) Explains the significant increase in other income, primarily driven by an asset sale Other Income (Expense), Net Summary | Metric (Three Months Ended March 31) | 2020 ($) | 2019 ($) | Increase in other income, net ($) | | :----------------------------------- | :---------- | :---------- | :-------------------------------- | | Total other income (expense), net | 1,284,000 | (85,000) | 1,369,000 | - The significant increase in other income (expense), net, was primarily driven by a **$1,265,000** gain from the asset sale of live-hosted trivia events in Q1 2020[162](index=162&type=chunk) [Income Taxes](index=35&type=section&id=Income%20Taxes) Discusses the income tax benefit and the establishment of a valuation allowance for deferred tax assets Income Taxes Summary | Metric (Three Months Ended March 31) | 2020 ($) | 2019 ($) | Change ($) | % Change | | :----------------------------------- | :------- | :------- | :--------- | :------- | | Benefit (provision) for income taxes | 19,000 | (11,000) | 30,000 | (273)% | - The income tax benefit in Q1 2020 was primarily due to a goodwill impairment in Canada[163](index=163&type=chunk) - A full valuation allowance has been established for substantially all deferred tax assets, including NOL carryforwards, as future taxable income to realize these assets is not deemed likely[163](index=163&type=chunk) [EBITDA—Consolidated Operations](index=35&type=section&id=EBITDA%E2%80%94Consolidated%20Operations) Presents EBITDA, a non-GAAP measure, and its shift from positive to negative performance - EBITDA, a non-GAAP measure, shifted from a positive **$512,000** in Q1 2019 to a negative **$(646,000)** in Q1 2020[166](index=166&type=chunk) EBITDA—Consolidated Operations Summary | Metric (Three Months Ended March 31) | 2020 ($) | 2019 ($) | | :----------------------------------- | :---------- | :---------- | | Net loss per GAAP | (1,218,000) | (313,000) | | Interest expense, net | 45,000 | 67,000 | | Income tax (benefit) provision | (19,000) | 11,000 | | Depreciation and amortization | 546,000 | 747,000 | | **EBITDA** | **(646,000)** | **512,000** | [LIQUIDITY AND CAPITAL RESOURCES](index=35&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's cash position, going concern risks, and efforts to manage liquidity amidst the COVID-19 pandemic - As of March 31, 2020, cash, cash equivalents, and restricted cash totaled approximately **$2.4 million**, down from **$3.4 million** at December 31, 2019[167](index=167&type=chunk) - The Company faces substantial doubt about its ability to continue as a going concern, with current liabilities exceeding current assets by **$87,000** and a net loss of **$1,281,000** in Q1 2020[168](index=168&type=chunk)[176](index=176&type=chunk) - The COVID-19 pandemic has caused material decreases in subscription revenue, advertising revenue, and cash flows from operations, with approximately **70% of customers** temporarily suspending subscriptions[169](index=169&type=chunk) - Cost reduction measures include reducing headcount (**17 employees** as of May 20, 2020, down from 74), deferring CEO salary, eliminating capital projects, and aggressively managing payables and rent[172](index=172&type=chunk) - The Company expects not to satisfy its asset coverage ratio covenant with Avidbank by June 2020, which could lead to a default and potential foreclosure on assets[173](index=173&type=chunk)[174](index=174&type=chunk) - Net cash used in operating activities was **$(1,165,000)** in Q1 2020, a significant decrease from **$780,000** provided in Q1 2019[188](index=188&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=41&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) Summarizes the impact and effective dates of recently adopted and upcoming accounting standards - ASU No. 2019-12 (Income Taxes) is effective for fiscal years beginning after December 15, 2020 (January 1, 2021, for the Company), and its impact is currently being assessed[194](index=194&type=chunk) - ASU No. 2019-08 (Stock Compensation), ASU No. 2018-18 (Collaborative Arrangements), ASU No. 2018-15 (Internal-Use Software), and ASU No. 2018-13 (Fair Value Measurement) were adopted effective January 1, 2020, with no material or significant impact on the consolidated financial statements[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - ASU 2016-13 (Credit Losses) is effective for fiscal years beginning after December 15, 2022 (January 1, 2023, for the Company), and its impact is being evaluated[199](index=199&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=41&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Confirms the absence of any material off-balance sheet arrangements that could affect the company's financial position - The Company has no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on its financial condition, results of operations, liquidity, or capital resources[200](index=200&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, NTN Buzztime, Inc. is exempt from providing the quantitative and qualitative disclosures about market risk typically required by this item under SEC rules and regulations - As a smaller reporting company, NTN Buzztime, Inc. is not required to provide quantitative and qualitative disclosures about market risk[202](index=202&type=chunk) [Item 4. Controls and Procedures.](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the Chief Executive Officer and Senior Vice President of Finance, concluded that the company's disclosure controls and procedures were effective as of March 31, 2020. There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter - Management, including the CEO and Senior VP of Finance, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2020, in providing reasonable assurance of achieving desired control objectives[204](index=204&type=chunk)[205](index=205&type=chunk) - There was no change in the Company's internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[206](index=206&type=chunk) [PART II – OTHER INFORMATION](index=43&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) Presents additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings.](index=43&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not currently involved in any pending material legal proceedings. Management believes that the ultimate outcome of any ordinary course legal proceedings will not materially harm its financial position, cash flows, or results of operations - The Company is not currently subject to any pending material legal proceedings[208](index=208&type=chunk) - Management believes that the ultimate outcome of ordinary course legal proceedings will not materially harm the Company's financial position, cash flows, or overall trends in results of operations[208](index=208&type=chunk) [Item 1A. Risk Factors.](index=43&type=section&id=Item%201A.%20Risk%20Factors.) This section highlights critical risks, primarily focusing on the severe adverse impact of the COVID-19 pandemic on the company's cash flows and liquidity, which creates substantial doubt about its ability to continue as a going concern. It emphasizes the urgent need for additional capital or a return to pre-pandemic revenue levels to avoid debt default, potential foreclosure by its lender, or restructuring/bankruptcy. Additionally, the company faces a significant risk of delisting from the NYSE American due to non-compliance with continued listing criteria - The COVID-19 pandemic has materially adversely affected the Company's cash flows and liquidity, leading to substantial doubt about its ability to continue as a going concern[210](index=210&type=chunk)[211](index=211&type=chunk) - The Company needs to raise substantial capital in the very near term or have subscription and advertising revenue return to pre-pandemic levels to maintain operations and avoid potential default on debt obligations, foreclosure by Avidbank, or restructuring/bankruptcy[216](index=216&type=chunk)[217](index=217&type=chunk) - The Company is not in compliance with NYSE American LLC continued listing standards (stockholders' equity less than **$6 million** and net losses in five of the most recent fiscal years) and faces a risk of delisting, which could impair its ability to raise capital and affect stock trading[222](index=222&type=chunk)[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company reported no unregistered sales of equity securities or use of proceeds during the period - None to report[229](index=229&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities during the period - None to report[230](index=230&type=chunk) [Item 4. Mine Safety Disclosures.](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company's operations - Not Applicable[231](index=231&type=chunk) [Item 5. Other Information.](index=46&type=section&id=Item%205.%20Other%20Information.) The company reported no other information required by this item - None to report[232](index=232&type=chunk) [Item 6. Exhibits.](index=47&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed as part of the Form 10-Q, including various corporate governance documents, material agreements, and certifications - Exhibits include Restated Certificate of Incorporation, Bylaws, Asset Purchase Agreement with Sporcle, Inc., Employment Agreements, First Amendment to the Loan and Security Agreement with Avidbank, Paycheck Protection Program Note, and various certifications (Sections 302 and 906 of Sarbanes-Oxley Act)[234](index=234&type=chunk) [Signatures](index=48&type=section&id=Signatures) The report is officially signed on behalf of NTN Buzztime, Inc. by Sandra M. Gurrola, Senior Vice President of Finance and Principal Financial Officer, on May 20, 2020 - The report was signed by Sandra M. Gurrola, Senior Vice President of Finance and Principal Financial Officer, on May 20, 2020[241](index=241&type=chunk)

NTN Buzztime, Inc. (NTN) Q1 2020 Results Conference Call May 19, 2020 4:30 PM ET Company Participants Kirsten Chapman - LHA, IR Allen Wolf - CEO Conference Call Participants Operator Ladies and gentlemen, thank you for standing by and welcome to the NTN Buzztime Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your host for today, Kirsten Cha ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2019 Commission File Number 1-11460 NTN Buzztime, Inc. (Exact name of registrant as specified in its charter) Delaware 31-1103425 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 1800 Aston Avenue, Suite 100 Carlsbad, California 92008 (Address of Principa ...

Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $5.2 million, an increase from $4.6 million in Q3 2019 but a decrease from $5.9 million in Q4 2018. For the full year 2019, revenue was $19.8 million compared to $23.3 million in 2018 [25] - Gross margin for Q4 2019 was 43%, lower than typical due to revenue mix and equipment write-off. The gross margin for 2019 was 62%, down from 65% in 2018 [28] - Net loss attributable to common shareholders for Q4 2019 was $1.3 million or $0.45 per share, compared to net income of $44,000 or $0.02 per share in Q4 2018. For 2019, the net loss was $2.1 million or $0.72 per share, compared to a loss of $275,000 or $0.10 per share in 2018 [31] Business Line Data and Key Metrics Changes - The Buzztime Basic offering has been launched, with approximately 165 sites currently using it. The product has a lower revenue per venue but is expected to scale due to its low cash requirement and high gross margin [10][11] - Buzztime Elite ended 2019 with 1,440 sites, including approximately 100 franchise Buffalo Wild Wings venues. The company has seen migration of players from locations that no longer offer Buzztime to new venues [12][13] - Hardware revenue increased in Q4 2019 due to the delivery of tablets to a jail partner, with expectations to continue deliveries throughout 2020 [26] Market Data and Key Metrics Changes - The company is facing strong headwinds in the restaurant and bar industry due to the COVID-19 pandemic, which has created uncertainty in growth and site count [11] - The advertising revenue from the programmatic ad exchange grew over 50% sequentially from Q3 to Q4 2019, reaching $78,000, with expectations for further growth in Q1 2020 [17][18] Company Strategy and Development Direction - The company is focused on growing its digital entertainment and hardware businesses efficiently, with a roadmap for scalable growth that includes mobile-based solutions and programmatic advertising [7][8] - A mid-range hybrid solution is being developed to offer a cost-effective upgrade to the Buzztime Basic offering, targeting a broader market [14] - The company is exploring partnerships and customizable channels to expand its audience and enhance its marketing capabilities [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the rapid impact of the COVID-19 pandemic on the restaurant and bar industry and is monitoring government restrictions to mitigate effects on the business [11] - The company is seeking creative financing solutions to address liquidity constraints and is focused on reducing overhead costs, including staff reductions [22][23][34] Other Important Information - The company has a healthy hardware pipeline valued at over $30 million, indicating optimism for future revenue growth despite potential lumpiness in orders [20] - Cash, cash equivalents, and restricted cash were $3.4 million at the end of 2019, an increase from $2.8 million at the end of 2018 [35] Q&A Session Summary Question: What are the expectations for advertising revenue growth? - Management indicated that advertising revenue is on track to more than double sequentially from Q4 2019, despite having 40% fewer sites at the beginning of Q1 2020 [17] Question: How is the company addressing liquidity constraints? - The company is exploring financing opportunities and has signed an amendment to its loan agreement to manage increased debt service obligations [22][34] Question: What is the strategy for the hardware business moving forward? - The company plans to continue expanding its hardware business and is optimistic about the market opportunity, despite potential supply chain disruptions due to COVID-19 [19][21]

Financial Data and Key Metrics Changes - For Q3 2019, revenue was $4.6 million, down from $6 million in the prior year, primarily due to a decrease in subscription revenue and hardware revenue [29] - Gross margin improved to 71% from 65% in the prior-year period, attributed to revenue mix [31] - Net loss attributable to common shareholders was $351,000 or $0.12 per share, compared to net income of $222,000 or $0.08 per share in the prior-year period [32] - EBITDA for Q3 2019 was $465,000, down from $1.1 million in the prior-year quarter [33] - Cash flow from operations increased to $1.8 million, more than tripling the prior-year period [10] Business Line Data and Key Metrics Changes - The total site count, excluding new Buzztime Basic locations, was 2,565, down from 2,609 sites at the end of the last quarter [30] - Buzztime Basic has grown to over 120 locations, with expectations to reach close to 200 by year-end [19] - Hardware solutions saw a repeat order and a new partner, with the sales pipeline more than doubling to over $30 million [10][14] Market Data and Key Metrics Changes - The company signed a second order in the correctional facility industry for $3 million, with delivery expected to commence in Q4 [14] - The average deal size for a private marketplace campaign was over $30,000 for approximately a one-month run, with gross advertiser spend increasing from just over $2,000 to approximately $50,000, a more than 20X increase [26] Company Strategy and Development Direction - The company is narrowing its focus to key initiatives that prioritize generating revenue and returns more quickly [12] - Plans to continue investing in lighter offerings and improving player experience while focusing on hardware, entertainment, and advertising [12] - The company aims to scale hardware revenue in 2020 and is positioned to monetize its hardware platform and capital-light advertising [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to operate more efficiently and achieve significant growth [36] - The company is exploring adding capital to the balance sheet to ensure execution of its growth strategy [36] - Management highlighted the importance of perseverance and financial discipline to reach the company's potential [36] Other Important Information - The company continues to recognize positive EBITDA for 14 consecutive quarters [33] - Management is soliciting feedback to improve the mobile app experience and drive player engagement [22] Q&A Session Summary Question: What is the outlook for the advertising revenue growth? - Management indicated that programmatic digital out-of-home advertising is attracting more ad dollars, and they are excited about monetization opportunities through this type of advertising [24] Question: How is the company managing its costs? - The company is implementing further cost management initiatives and is on track to achieve a revised SG&A expense target of $13.5 million for 2019 [31] Question: What are the expectations for hardware orders in the upcoming quarters? - Management expects initial orders from new partners and a steady flow of reorders as business grows, particularly from the correctional facility industry [15]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock NTN NYSE American FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 Commission file number 001-11460 NTN Buzztime, Inc. (Exact name of registrant as specified in its charter) DELAWARE 31-1103425 (State of incorporation) (I.R.S. Employer Identification N ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of Each Class Name of Each Exchange on Which Registered Common Stock, $.005 par value NYSE American Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 Commission File Number 1-11460 NTN Buzztime, Inc. (Exact name of registrant as specified in its charter) Delaware 31-1103425 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. ...

NTN Buzztime, Inc. (NTN) Q4 2018 Earnings Conference Call March 20, 2019 4:30 PM ET Company Participants Kirsten Chapman - LHA, IR Ram Krishnan - Director & CEO Allen Wolff - EVP & CFO Conference Call Participants William Gibson - Roth Capital Partners Operator Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 NTN Buzztime Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conferenc ...