Eterna Therapeutics (ERNA) - 2020 Q1 - Quarterly Report

Initial Filing Information 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][3] - As of May 18, 2020, the registrant had 2,936,769 shares of common stock outstanding[5] Disclosure Required Under the SEC's Order dated March 25, 2020 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][10] - 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] PART I – FINANCIAL INFORMATION Presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period Item 1. Financial Statements. 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 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 $87,000 as of March 31, 2020[34] Condensed Consolidated Statements of Operations and Comprehensive Loss Details the company's financial performance over the period, including revenue, expenses, and net loss Condensed Consolidated Statements of Operations and Comprehensive Loss Summary | Metric (Three Months Ended March 31) | 2020 ($ 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] - Other income (expense), net, significantly increased to $1,284,000 in Q1 2020 from $(85,000) in Q1 2019, primarily due to a gain from asset sale[17] Condensed Consolidated Statements of Shareholders' Equity Outlines changes in the company's equity during the period, including net loss and stock transactions Condensed Consolidated Statements of Shareholders' Equity Summary | Metric (Three Months Ended March 31, 2020) | Amount ($ 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 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] - Cash paid for interest decreased from $71,000 in Q1 2019 to $37,000 in Q1 2020[20] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and additional information supporting the condensed consolidated financial statements (1) BASIS OF PRESENTATION 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] - 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] - As of March 31, 2020, 1,396 venues in the U.S. and Canada subscribed to the Company's network[27] (2) COVID-19 UPDATE 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] - At its peak, approximately 70% of the Company's customers requested temporary suspension of their subscriptions[32] - The Company expects material decreases in subscription revenue, advertising revenue, and cash flows from operations to continue[32] (3) GOING CONCERN UNCERTAINTY 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][38] - The Company received a $1,625,100 loan under the Paycheck Protection Program (PPP) subsequent to March 31, 2020[35] - 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] (4) RESTRICTED CASH 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] - This restricted cash does not count towards the $2,000,000 minimum unrestricted cash covenant in the Avidbank loan agreement[40] (5) ASSET SALE 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] - The Company received $1,260,000 at closing and recorded a net gain of approximately $1,265,000 in January 2020[41] (6) REVENUE RECOGNITION Explains the company's accounting policies for recognizing revenue and provides a breakdown by stream and geography - The Company recognizes revenue in accordance with ASC No. 606, identifying contracts, performance obligations, transaction price, allocation, and recognition upon satisfaction of obligations[42] Revenue by Stream | Revenue Stream | 2020 ($) | % 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][57] 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 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] - 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] (8) SHAREHOLDERS' EQUITY 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] - 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] - 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] (9) DEBT 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] - An amendment to the loan agreement changed the maturity date from September 28, 2022, to December 31, 2020, with accelerated monthly principal payments[80] - 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] (10) LEASES 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 $2,336,000 of corresponding operating right-of-use assets[90] Operating Lease Metrics | Operating Lease Metrics (as of March 31, 2020) | Amount ($ 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 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] - 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] (12) SOFTWARE DEVELOPMENT COSTS 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] - 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] - Approximately $144,000 of capitalized software costs were not yet subject to amortization as of March 31, 2020, due to incomplete development[103] (13) GOODWILL 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][107] - The impairment was triggered by the uncertainty of COVID-19's impact on the Canadian Reporting Unit's future operating results[105] - Foreign currency effects also contributed a $(34,000) reduction to goodwill in Q1 2020[107] (14) ACCUMULATED OTHER COMPREHENSIVE INCOME 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] - The balance decreased from $268,000 as of December 31, 2019, to $164,000 as of March 31, 2020[108] (15) RECENT ACCOUNTING PRONOUNCEMENTS 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] - 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][111][112][113] - 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] (16) SUBSEQUENT EVENT 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] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 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 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] - The full extent of the COVID-19 pandemic's impact on the business, results of operations, and financial condition is highly uncertain[120] 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] OVERVIEW AND HIGHLIGHTS 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][130] - 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] - 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 $1.4 million[136][137][138] CRITICAL ACCOUNTING POLICIES Discusses the significant accounting policies and estimates used in preparing the financial statements - The Company's financial statements are prepared in accordance with GAAP, requiring estimates and judgments in areas such as deferred costs and revenues, depreciation, income taxes, stock-based compensation, bad debts, and impairment of assets[140][141] - There have been no material changes in critical accounting policies, estimates, and judgments during the three months ended March 31, 2020[143] RESULTS OF OPERATIONS Analyzes the company's financial performance, detailing revenue, costs, and operating expenses Revenue Analyzes the changes in revenue across different streams and their contributing factors Revenue by Stream | Revenue Stream | 2020 ($) | % 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] - 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][152] Direct Operating Costs and Gross Margin 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] - Gross margin percentage declined from 69.3% to 60.3% due to changes in revenue mix and a $188,000 write-off of older technology equipment[154] Operating Expenses Details the changes in various operating expenses, including SG&A, impairment charges, and depreciation Operating Expense Summary | Operating Expense (Three Months Ended March 31) | 2020 ($) | 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] - Impairment of capitalized software increased significantly due to abandoning projects no longer strategically fit, and goodwill impairment of $662,000 was recognized due to COVID-19's impact on the Canadian business[157][159] Other Income (Expense), Net Explains the significant increase in other income, primarily driven by an asset sale Other Income (Expense), Net Summary | Metric (Three Months Ended March 31) | 2020 ($) | 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 $1,265,000 gain from the asset sale of live-hosted trivia events in Q1 2020[162] Income Taxes Discusses the income tax benefit and the establishment of a valuation allowance for deferred tax assets Income Taxes Summary | Metric (Three Months Ended March 31) | 2020 ($) | 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] - 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] EBITDA—Consolidated Operations 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 $(646,000) in Q1 2020[166] EBITDA—Consolidated Operations Summary | Metric (Three Months Ended March 31) | 2020 ($) | 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 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] - 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][176] - 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] - 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] - 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][174] - Net cash used in operating activities was $(1,165,000) in Q1 2020, a significant decrease from $780,000 provided in Q1 2019[188] RECENT ACCOUNTING PRONOUNCEMENTS 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] - 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][196][197][198] - 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] OFF-BALANCE SHEET ARRANGEMENTS 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk. 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] Item 4. Controls and Procedures. 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][205] - 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] PART II – OTHER INFORMATION Presents additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings. 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] - 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] Item 1A. Risk Factors. 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][211] - 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][217] - 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][225] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. The company reported no unregistered sales of equity securities or use of proceeds during the period - None to report[229] Item 3. Defaults Upon Senior Securities. The company reported no defaults upon senior securities during the period - None to report[230] Item 4. Mine Safety Disclosures. This item is not applicable to the company's operations - Not Applicable[231] Item 5. Other Information. The company reported no other information required by this item - None to report[232] Item 6. Exhibits. 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] 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]