Delaware
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31-1103425
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer
Identification
No.)
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5966
La Place Court
Carlsbad,
California
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92008
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Title
of Each Class
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Name
of Each Exchange on
Which
Registered
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Common
Stock, $.005 par value
|
NYSE
Amex
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non
accelerated filer ¨ (Do not check if
a smaller reporting company)
|
Smaller
reporting company x
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Item
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Page
|
|
Part
I
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||
1.
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Business
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1
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1A.
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Risk
Factors
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7
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1B.
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Unresolved
Staff Comments
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14
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2.
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Properties
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14
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3.
|
Legal
Proceedings
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14
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4.
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Submission
of Matters to a Vote of Security Holders
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14
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Part
II
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||
5.
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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15
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6.
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Selected
Financial Data
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15
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7.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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16
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7A.
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Quantitative
and Qualitative Disclosures About Market Risk
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27
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8.
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Financial
Statements and Supplementary Data
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27
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9.
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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27
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9A(T).
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Controls
and Procedures
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27
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9B.
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Other
Information
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28
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Part
III
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||
10.
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Directors,
Executive Officers and Corporate Governance
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29
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11.
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Executive
Compensation
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30
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12.
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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30
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13.
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Certain
Relationships and Related Transactions, and Director
Independence
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30
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14.
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Principal
Accounting Fees and Services
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30
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Part
IV
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||
15.
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Exhibits,
Financial Statement Schedules
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31
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Signatures
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33
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Index
to Financial Statements and Schedule
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F-1
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ITEM 1.
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Business
|
|
●
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Develop
integrated product offering. We plan to leverage our 25 year
history of providing compelling interactive entertainment in the
out-of-home digital media industry by extending our brand to the internet
and mobile devices in 2009. We believe expanding the
availability of Buzztime branded games beyond our traditional hospitality
venue-based platform to create a broadly integrated media platform and
experience will allow us to capture new customer segments, to
cross-promote our games across platforms to drive traffic to hospitality
venues from the internet/mobile and from hospitality venues to
the internet/mobile and to add value for our media
partners. Additionally, we plan to promote Buzztime through
online/mobile viral marketing, online trivia challenges and
direct-to-consumer grassroots marketing designed to drive additional
interest, excitement and traffic for our games and our venues. We believe
that these initiatives will play a significant role in improving our
customer retention and increasing sales to new
customers.
|
|
●
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Improve the
entertainment value of our content. We expect to grow our player
and audience community, improve customer retention and increase site sales
by continuing to improve the entertainment value of our games and our
content. We plan to introduce additional content offerings that for 2009
will focus on sports enthusiasts and trivia buffs. We intend to
continue to build the Buzztime brand into an increasingly popular
entertainment experience for people who are looking for competition,
social interaction and entertainment. We also plan to continue to invest
in account management including customer and consumer marketing support
activities to continue to drive on-premise participation and game play
through local events, endorsements, tournaments, championships and
prizing, all promoted in local
media.
|
|
●
|
Continue to
focus on national key accounts. Currently, national accounts
represent approximately 29% of our total subscriber base. We believe we
have significant opportunities to grow this segment by offering customized
solutions. These solutions will be aimed at addressing the revenue,
promotional, branding and operational needs of these unique
customers.
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Year
Ended
December 31,
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||||||||||
2008
|
2007
|
|||||||||
United
States
|
87
|
%
|
86 |
%
|
||||||
Canada
|
12 |
%
|
13 |
%
|
||||||
United
Kingdom
|
1 |
%
|
1 |
%
|
Year
Ended
December 31,
|
||||||||||
2008
|
2007
|
|||||||||
United
States
|
60 |
%
|
54 |
%
|
||||||
Canada
|
40 |
%
|
43 |
%
|
||||||
United
Kingdom
|
— | 3 |
%
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Playmaker Poker:
|
Compete
against the house in a game of jacks-or-better poker.
|
Acey
Duecey:
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Two
cards are dealt face up. Players bet that the third card will fall between
the previous two.
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Crystal
Ball:
|
Ask
the Crystal Ball a question and receive your answer.
|
Shark
Attack:
|
Just
like hangman, but with an oceanic
twist.
|
●
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user
privacy;
|
●
|
copyrights;
|
●
|
consumer
protection;
|
●
|
the
media distribution of specific material or content;
and
|
●
|
the
characteristics and quality of interactive television products and
services.
|
●
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our
ability to generate cash from operating activities;
|
●
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acceptance
of, and demand for, our interactive games and
entertainment;
|
●
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the
costs of developing new entertainment content, products or technology or
expanding our offering to new media platforms such as the internet and
mobile phones;
|
●
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the
extent to which we invest in the creation of new entertainment content and
new technology; and
|
●
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the
number and timing of acquisitions and other strategic transactions, if
any.
|
●
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identify
emerging technological trends and industry standards in our
market;
|
●
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identify
changing consumer needs, desires or
tastes;
|
●
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develop
and maintain competitive technology, including new product and service
offerings;
|
●
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improve
the performance, features and reliability of our existing products and
services, particularly in response to changes in consumer preferences,
technological changes and competitive offerings;
and
|
●
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bring
technology to the market quickly at cost-effective
prices.
|
●
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user
privacy;
|
●
|
copyrights;
|
●
|
consumer
protection;
|
●
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media
distribution of specific material or content;
and
|
●
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the
characteristics and quality of interactive television products and
services.
|
●
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the
number, election and term of
directors;
|
●
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the
removal of directors and the filling of vacancies;
and
|
●
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the
supermajority voting requirements of our restated certificate of
incorporation.
|
●
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authorize
the issuance of preferred stock which can be created and issued by the
Board of Directors without prior stockholder approval, with rights senior
to those of the common stock;
|
●
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prohibit
stockholders from filling Board vacancies, calling special stockholder
meetings, or taking action by written
consent;
|
●
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prohibit
our stockholders from making certain changes to our bylaws except with
66 2/3%
stockholder approval; and
|
●
|
require
advance written notice of stockholder proposals and director
nominations.
|
Common
Stock
|
||||||||
Low
|
High
|
|||||||
2008
|
||||||||
First
Quarter
|
$ | 0.40 | $ | 0.64 | ||||
Second
Quarter
|
0.30 | 0.54 | ||||||
Third
Quarter
|
0.20 | 0.33 | ||||||
Fourth
Quarter
|
0.11 | 0.25 | ||||||
2007
|
||||||||
First
Quarter
|
$ | 1.12 | $ | 1.57 | ||||
Second
Quarter
|
1.01 | 1.25 | ||||||
Third
Quarter
|
0.75 | 1.03 | ||||||
Fourth
Quarter
|
0.48 | 0.95 |
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced
Plan
|
Approximate
Dollar Value of Shares that May Yet Be Purchased Under the
Plan
|
||||||||||||
April
1, 1007 through June 30, 2007
|
— | $ | — | — | $ | 3,500,000 | ||||||||||
July
1, 2007 through September 30, 2007
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454,000 | 0.98 | 454,000 | 3,056,000 | ||||||||||||
October
1, 2007 through December 31, 2007
|
— | — | — | 3,056,000 | ||||||||||||
2007
Total
|
454,000 | 0.98 | 454,000 | 3,056,000 | ||||||||||||
January
1, 2008 through March 31, 2008
|
— | — | — | 3,056,000 | ||||||||||||
April
1, 2008 through June 30, 2008
|
— | — | — | 3,056,000 | ||||||||||||
July
1, 2008 through September 30, 2008
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49,400 | 0.25 | 49,400 | 3,043,750 | ||||||||||||
October
1, 2008 through October 4, 20081
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— | — | — | — | ||||||||||||
2008
Total
|
49,400 | $ | 0.25 | 49,400 | $ | — | ||||||||||
Plan
Total
|
503,400 | 503,400 |
Network Subscribers
As of December 31,
|
||||||||
2008
|
2007
|
|||||||
United
States
|
3,429 | 3,490 | ||||||
Canada
|
317 | 322 | ||||||
United
Kingdom
|
- | 65 | ||||||
Total
|
3,746 | 3,877 |
For
the year ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Revenues
|
$ | 27,496,000 | $ | 30,542,000 | ||||
Direct
Costs
|
7,756,000 | 9,017,000 | ||||||
Gross
Margin
|
$ | 19,740,000 | $ | 21,525,000 | ||||
Gross
Margin Percentage
|
72% | 70% |
For
the year ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Operating
revenues
|
$ | 21,000 | $ | 4,825,000 | ||||
Operating
expenses
|
530,000 | 5,919,000 | ||||||
Operating
loss
|
(509,000 | ) | (1,094,000 | ) | ||||
Other
income
|
177,000 | 388,000 | ||||||
Loss
before income taxes
|
(332,000 | ) | (706,000 | ) | ||||
Income
tax expense
|
- | 29,000 | ||||||
Loss
from discontinued operations, net of tax
|
$ | (332,000 | ) | $ | (735,000 | ) |
For
the year ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Net
loss per GAAP
|
$ | (6,466,000 | ) | $ | (5,026,000 | ) | ||
Interest
income, net
|
(133,000 | ) | (317,000 | ) | ||||
Depreciation
and amortization
|
3,101,000 | 3,932,000 | ||||||
Income
taxes
|
234,000 | 361,000 | ||||||
EBITDA
|
$ | (3,264,000 | ) | $ | (1,050,000 | ) |
For the year
ended December 31, 2008
|
||||||||||||
Entertainment
|
Discontinued
operations
|
Total
|
||||||||||
Net
loss per GAAP
|
$ | (6,134,000 | ) | $ | (332,000 | ) | $ | (6,466,000 | ) | |||
Interest
income, net
|
(133,000 | ) | — | (133,000 | ) | |||||||
Depreciation
and amortization
|
3,101,000 | — | 3,101,000 | |||||||||
Income
taxes
|
234,000 | — | 234,000 | |||||||||
EBITDA
|
$ | (2,932,000 | ) | $ | (332,000 | ) | $ | (3,264,000 | ) |
For the year ended December 31, 2007 | ||||||||||||
Entertainment
|
Discontinued
operations
|
Total
|
||||||||||
Net
loss per GAAP
|
$ | (4,291,000 | ) | $ | (735,000 | ) | $ | (5,026,000 | ) | |||
Interest
income, net
|
(317,000 | ) | — | (317,000 | ) | |||||||
Depreciation
and amortization
|
3,932,000 | — | 3,932,000 | |||||||||
Income
taxes
|
332,000 | 29,000 | 361,000 | |||||||||
EBITDA
|
$ | (344,000 | ) | $ | (706,000 | ) | $ | (1,050,000 | ) |
Increase
(Decrease)
|
||||
(In
thousands)
|
||||
Working
capital as of December 31, 2007
|
$ | 7,698 | ||
Changes
in current assets:
|
||||
Cash
and cash equivalents
|
(6,911 | ) | ||
Restricted
cash
|
(55 | ) | ||
Accounts
receivable, net of allowances
|
(718 | ) | ||
Investment
available-for-sale
|
(206 | ) | ||
Prepaid
expenses and other current assets
|
(134 | ) | ||
Assets
held for sale
|
(212 | ) | ||
Total
current assets
|
(8,236 | ) | ||
Changes
in current liabilities:
|
||||
Accounts
payable
|
612 | |||
Accrued
expenses
|
(269 | ) | ||
Sales
tax payable
|
24 | |||
Accrued
salaries
|
(26 | ) | ||
Accrued
vacation
|
66 | |||
Income
tax payable
|
18 | |||
Deferred
revenue
|
315 | |||
Liabilities
of discontinued operations
|
672 | |||
Total
current liabilities
|
1,412 | |||
Net
change in working capital
|
(6,824 | ) | ||
Working
capital as of December 31, 2008
|
$ | 874 |
(In
thousands)
For
the year ended
|
||||||||
December
31,
2008
|
December
31,
2007
|
|||||||
Cash
(used in) provided by:
|
||||||||
Operating
activities
|
$ | (2,963 | ) | $ | (782 | ) | ||
Investing
activities
|
(2,925 | ) | 1,763 | |||||
Financing
activities
|
(24 | ) | (207 | ) | ||||
Effect
of exchange rates
|
(999 | ) | 725 | |||||
Net
(decrease) increase in cash and cash equivalents
|
$ | (6,911 | ) | $ | 1,499 |
●
|
Cash
used for capital expenditures increased
$1,568,000,
|
●
|
Cash
used for software development initiatives increased
$247,000,
|
●
|
Deposits
for broadcast equipment decreased
$161,000,
|
●
|
Proceeds
from the sale of equipment and other assets in continuing operations
decreased $466,000, and
|
●
|
Cash
generated from discontinued operations decreased $2,606,000 primarily due
to the proceeds from the sale of assets, in 2007, of the discontinued
operations.
|
2008
|
2007
|
|||||||||
Weighted-average
risk-free rate
|
2.97 |
%
|
4.57 |
%
|
||||||
Weighted-average
volatility
|
63.57 |
%
|
56.28 |
%
|
||||||
Dividend
yield
|
0.00 |
%
|
0.00 |
%
|
||||||
Expected
life
|
4.38 years
|
5.0 years
|
Name
|
Age (1)
|
Position(s)
Held
|
Terry
Bateman
|
52
|
President
and Chief Executive Officer
|
Kendra
Berger
|
42
|
Chief
Financial Officer
|
Peter
Boylan III
|
46
|
Executive
Vice President of Sales
|
Michael
Arzt
|
42
|
Executive
Vice President of Marketing
|
Jeff
Lewis
|
43
|
Senior
Vice President of Advertising
Sales
|
(1)
|
As
of March 10, 2009.
|
Exhibit
|
Description
|
|
2.1
|
Asset
Purchase Agreement, dated as of March 29, 2007, by and among the
Company, NTN Wireless Communications, Inc. and HME Wireless, Inc.
(20)
|
|
2.2
|
Asset
Purchase Agreement, dated as of October 25, 2007, by and among the
Company, NTN Software Solutions, Inc. and ESP Systems, LLC
(7)
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of the Company, as amended
(2)
|
|
3.2
|
Certificate
of Designations, Rights and Preferences of Series B Convertible Preferred
Stock (5)
|
|
3.3
|
Bylaws
of the Company, as amended (3)
|
|
4.1
|
Warrant
Certificate issued January 13, 2003 by the Company to Robert M. and Marjie
Bennett, Trustees, The Bennett Family Trust, dated November 17, 1986
(13)
|
|
4.2
|
NTN
Investor Rights Agreement, dated May 7, 2003, by and between the Company
and Media General, Inc. (12)
|
|
4.3
|
Buzztime
Investor Rights Agreement, dated May 7, 2003, by and among the Company,
Buzztime Entertainment, Inc. and Media General, Inc.
(12)
|
|
4.4
|
Common
Stock Purchase Warrant dated May 7, 2003 issued to Media General, Inc.
exercisable for 500,000 shares of common stock of Buzztime Entertainment,
Inc. (12)
|
|
4.5
|
Form
of Common Stock Purchase Warrant by and between Roth Capital Partners, LLC
and the Company (10)
|
|
4.6*
|
2004
Performance Incentive Plan (15)
|
|
10.1
|
Subscription
Agreement, dated January 13, 2003, by and between the Company and
Robert M. and Marjie Bennett, Trustees, The Bennett Family Trust
dated November 17, 1986 (13)
|
|
10.2
|
Securities
Purchase Agreement dated May 5, 2003 by and among the Company, Buzztime
Entertainment, Inc. and Media General, Inc. (12)
|
|
10.3
|
Office
Lease, dated July 17, 2000, by and between Prentiss Properties Acquisition
Partners, L.P. and the Company (8)
|
|
10.4
|
First
Amendment to Lease, dated October 4, 2005, by and between Prentiss
Properties Acquisition Partners, L.P. and the Company
(16)
|
|
10.5*
|
2006
Incentive Bonus Plan (17)
|
|
10.6*
|
2007
Employee Bonus Plan (21)
|
|
10.7
|
Consulting
Agreement between the Company and Victor Tyrone Lam, dated March 31,
2007 (9)
|
|
10.8*
|
Form
of Executive Employee Incentive Stock Option Agreement under the 2004
Performance Incentive Plan (4)
|
|
10.9*
|
Form
of Non-Executive Employee Incentive Stock Option Agreement under the 2004
Performance Incentive Plan (4)
|
|
10.10*
|
Form
of Stock Unit Award Agreement under the 2004 Performance Incentive Plan
(4)
|
Exhibit
|
Description
|
|
10.11*
|
Form
of Initial Director Stock Option Agreement under the 2004 Performance
Incentive Plan (4)
|
|
10.12*
|
Form
of Annual Director Stock Option Agreement under the 2004 Performance
Incentive Plan (4)
|
|
10.13*
|
Summary
of Non-Employee Director Compensation (4)
|
|
10.14*
|
Consultation,
Retention and Release, dated February 1, 2008, by and between the Company
and Michele Richards (18)
|
|
10.15*
|
Employment
Agreement, dated May 29, 2008, by and between the Company and Michael
Fleming (2)
|
|
10.16*
|
Retention
and Severance Agreement, dated June 27, 2008, by and between the Company
and Kendra Berger (2)
|
|
10.17
|
Form
of Stock Unit Award Agreement under the 2004 Performance Incentive Plan
(2)
|
|
10.18
|
Release
of Claims Agreement, dated July 9, 2008, by and between the Company and
Dario Santana (2)
|
|
10.19*
|
Amendment
to Stock Option Grants, dated October 16, 2008, by and between the Company
and Barry Bergsman (14)
|
|
10.20*
|
Consultation
Agreement, dated November 18, 2008, by and between the Company and Terry
Bateman (1)
|
|
10.21*
|
Employment
Agreement, dated February 2, 2009, by and between the Company and Terry
Bateman (11)
|
|
10.22*
|
Separation
Agreement, dated February 6, 2009, by and between the Company and Gary
Arlen (6)
|
|
14.1
|
Company
Code of Ethics (1)
|
|
21.1
|
Subsidiaries
of Registrant (1)
|
|
23.1
|
Consent
of Mayer Hoffman McCann P.C. (1)
|
|
31.1#
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (1)
|
|
31.2#
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (1)
|
|
32.1#
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (1)
|
|
32.2#
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(1)
|
*
|
Management
Contract or Compensatory Plan
|
#
|
This
certification is being furnished solely to accompany this report pursuant
to U.S.C. § 1350, and is not being filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, and is not to be incorporated
herein by reference into any filing of the Company whether made before or
after the date hereof, regardless of any general incorporation language in
such filing.
|
(1)
|
Filed
herewith.
|
(2)
|
Previously
filed as an exhibit to NTN’s report on Form 10-Q for the quarter ended
June 30, 2008 and incorporated herein by reference.
|
(3)
|
Previously
filed as an exhibit to NTN’s report on Form 10-K for the fiscal year ended
December 31, 2007 and incorporated herein by reference.
|
(4)
|
Previously
filed as an exhibit to NTN’s report on Form 10-Q for the quarterly period
ended June 30, 2007 and incorporated herein by
reference.
|
(5)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed on November 7, 1997
and incorporated herein by reference.
|
(6)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed February 9, 2009 and
incorporated herein by reference.
|
(7)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed October 31, 2007 and
incorporated herein by reference.
|
(8)
|
Previously
filed as an exhibit to NTN’s report on Form 10-K for the fiscal year ended
December 31, 2000 and incorporated herein by reference.
|
(9)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed April 4, 2007 and
incorporated herein by reference.
|
(10)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed on January 29, 2004
and incorporated herein by reference.
|
(11)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed February 4, 2009 and
incorporated herein by reference.
|
(12)
|
Previously
filed as an exhibit to NTN’s registration statement on Form S-3, File No.
333-105429, filed on May 21, 2003 and incorporated herein by
reference.
|
(13)
|
Previously
filed as an exhibit to NTN’s Form 10-Q for the quarterly period ended
March 31, 2003 and incorporated herein by reference.
|
(14)
|
Previously
filed as an exhibit to NTN’s report on Form 8-K filed October 21, 2008 and
incorporated herein by reference.
|
(15)
|
Previously
filed as Appendix A to the Definitive Proxy Statement on Schedule 14A
filed by NTN on September 3, 2004 and incorporated herein by
reference.
|
(16)
|
Previously
filed as an exhibit to NTN’s report on Form 10-K/A filed on July 12, 2006
and incorporated herein by reference.
|
(17)
|
Previously
filed as an exhibit to NTN’s report on Form 10-Q for the quarterly period
ended June 30, 2006 and incorporated herein by
reference.
|
(18)
|
Previously
filed as an exhibit to NTN’s report on Form 10-Q for the quarterly period
ended March 31, 2008 and incorporated herein by
reference.
|
(19)
|
Previously
filed as an exhibit to NTN’s report on Form 10-Q for the quarterly period
ended March 31, 2007 and incorporated herein by
reference.
|
(20)
|
Previously
filed as a description on Form 8-K filed March 16, 2007 and incorporated
herein by
reference.
|
NTN
BUZZTIME, INC.
|
|||
|
By:
|
/s/ KENDRA BERGER
|
|
Kendra
Berger
Chief
Financial Officer
(As
Principal Financial and Accounting Officer)
|
|||
Signature
|
Title
|
Date
|
||
/s/ TERRY
A. BATEMAN
Terry A. Bateman
|
Chief
Executive Officer and Director
|
March 24,
2009
|
||
/s/ JEFF
BERG
Jeff Berg
|
Director
and Chairman of the Board
|
March 24,
2009
|
||
/s/ JOSEPH
FARRICIELLI
Joseph
Farricielli
|
Director
|
March 24,
2009
|
||
/s/ KENNETH
KEYMER
Kenneth Keymer
|
Director
|
March 24,
2009
|
||
/s/ MARY
BETH LEWIS
Mary Beth Lewis |
Director
|
March 24,
2009
|
||
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Consolidated
Financial Statements:
|
|
|
|
Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
F-3
|
|
|
Consolidated
Statements of Operations for the years ended December 31, 2008 and
2007
|
F-4
|
|
|
Consolidated
Statements of Comprehensive Loss for the years ended December 31,
2008 and 2007
|
F-5
|
|
|
Consolidated
Statements of Shareholders’ Equity for the years ended December 31,
2008 and 2007
|
F-6
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and
2007
|
F-7
|
Notes
to Consolidated Financial Statements
|
F-9
|
ASSETS
|
2008
|
2007
|
||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 3,362 | $ | 10,273 | ||||
Restricted
cash
|
- | 55 | ||||||
Accounts
receivable, net of allowances of $298 and $396,
respectively
|
636 | 1,354 | ||||||
Investment
available-for-sale (Note 6)
|
58 | 264 | ||||||
Prepaid
expenses and other current assets
|
611 | 745 | ||||||
Assets
held for sale (Note 20)
|
- | 212 | ||||||
Total
current assets
|
4,667 | 12,903 | ||||||
Broadcast
equipment and fixed assets, net
|
3,428 | 4,101 | ||||||
Software
development costs, net of accumulated amortization of $1,002 and
$1,071, respectively
|
860 | 895 | ||||||
Deferred
costs
|
1,383 | 1,204 | ||||||
Goodwill
|
1,032 | 1,285 | ||||||
Intangible
assets, net (Note 5)
|
185 | 318 | ||||||
Other
assets
|
107 | 154 | ||||||
Total
assets
|
$ | 11,662 | $ | 20,860 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable
|
$ | 219 | $ | 831 | ||||
Accrued
expenses
|
1,169 | 901 | ||||||
Sales
tax payable
|
958 | 982 | ||||||
Accrued
salaries
|
383 | 357 | ||||||
Accrued
vacation
|
381 | 447 | ||||||
Income
taxes payable
|
18 | 36 | ||||||
Obligations
under capital leases—current portion (Note 14)
|
8 | 7 | ||||||
Deferred
revenue
|
657 | 972 | ||||||
Liabilities
of discontinued operations (Note 20)
|
- | 672 | ||||||
Total
current liabilities
|
3,793 | 5,205 | ||||||
Obligations
under capital leases, excluding current portion
|
32 | - | ||||||
Deferred
revenue, excluding current portion
|
91 | 87 | ||||||
Total
liabilities
|
3,916 | 5,292 | ||||||
Commitments
and contingencies (Notes 14, 15 and 16)
|
||||||||
Shareholders’
equity:
|
||||||||
Series
A 10% cumulative convertible preferred stock, $.005 par value, $161
liquidation preference, 5,000,000 shares authorized; 161,000 shares issued
and outstanding
|
1 | 1 | ||||||
Common
stock, $.005 par value, 84,000,000 shares authorized; 55,727,000 and
55,640,000 shares issued and outstanding at December 31, 2008 an 2007,
respectively
|
277 | 277 | ||||||
Treasury
stock, at cost, 503,000 and 454,000 shares at December 31, 2008 and
2007, respectively
|
(456 | ) | (444 | ) | ||||
Additional
paid-in capital
|
113,267 | 112,942 | ||||||
Accumulated
deficit
|
(105,351 | ) | (98,870 | ) | ||||
Accumulated
other comprehensive income (Note 19)
|
8 | 1,662 | ||||||
Total
shareholders’ equity
|
7,746 | 15,568 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 11,662 | $ | 20,860 |
2008
|
2007
|
|||||||
Revenues
|
$ | 27,496 | $ | 30,542 | ||||
|
||||||||
Operating
expenses:
|
||||||||
Direct
operating costs of services (includes depreciation of $2,569 and $3,366,
respectively)
|
7,756 | 9,017 | ||||||
Impairment
of intangible asset (Note 5)
|
— | 968 | ||||||
Selling,
general and administrative
|
25,314 | 23,872 | ||||||
Depreciation
and amortization (excluding depreciation and amortization included
in direct operation costs)
|
532 | 566 | ||||||
Restructuring
costs (Note 21)
|
— | 478 | ||||||
Total
operating expenses
|
33,602 | 34,901 | ||||||
Operating
loss
|
(6,106 | ) | (4,359 | ) | ||||
Other
income (expense):
|
||||||||
Interest
income
|
138 | 347 | ||||||
Interest
expense
|
(5 | ) | (30 | ) | ||||
Other
income, net
|
73 | 83 | ||||||
Total
other income
|
206 | 400 | ||||||
Loss
from continuing operations before income taxes
|
(5,900 | ) | (3,959 | ) | ||||
Provision
for income taxes (Note 13)
|
(234 | ) | (332 | ) | ||||
Loss
from continuing operations
|
(6,134 | ) | (4,291 | ) | ||||
Loss
from discontinued operations, net of tax (including gain on sale of NTN
Wireless of $396 in 2007—Note 20)
|
(332 | ) | (735 | ) | ||||
Net
loss
|
$ | (6,466 | ) | $ | (5,026 | ) | ||
Net
loss per common share—basic and diluted:
|
||||||||
Loss
from continuing operations
|
$ | (0.11 | ) | $ | (0.08 | ) | ||
Loss
from discontinued operations
|
(0.01 | ) | (0.01 | ) | ||||
Net
loss
|
$ | (0.12 | ) | $ | (0.09 | ) | ||
Weighted
average shares outstanding—basic and diluted
|
55,189 | 55,154 |
2008
|
2007
|
|||||||
Net
loss
|
$ | (6,466 | ) | $ | (5,026 | ) | ||
Other comprehensive (loss)
income, net of tax:
|
||||||||
Foreign
currency translation adjustments (Note 19)
|
(1,448 | ) | 1,534 | |||||
Unrealized
holding loss in investment available-for-sale
|
(206 | ) | (73 | ) | ||||
Other
comprehensive (loss) income
|
(1,654 | ) | 1,461 | |||||
Comprehensive
loss
|
$ | (8,120 | ) | $ | (3,565 | ) |
Series
A
Cumulative
Convertible
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||
Balances
at December 31, 2006
|
161 | $ | 1 | 54,633 | $ | 272 | $ | 111,617 | $ | — | $ | (93,561 | ) | $ | 201 | $ | 18,530 | |||||||||||||||||||
Issuance
of stock for exercise of warrants and options
|
— | — | 991 | 5 | 646 | — | — | — | 651 | |||||||||||||||||||||||||||
Issuance
of stock in lieu of dividends
|
— | — | 16 | — | 13 | — | (13 | ) | — | — | ||||||||||||||||||||||||||
Adjustment
to revalue common stock paid in lieu of dividends (see Note
12)
|
— | — | — | — | 270 | — | (270 | ) | — | — | ||||||||||||||||||||||||||
Deferred
stock units granted to employees
|
— | — | — | — | 15 | — | — | — | 15 | |||||||||||||||||||||||||||
Purchase
of treasury stock
|
— | — | — | — | — | (444 | ) | — | — | (444 | ) | |||||||||||||||||||||||||
Repurchase
of option awards
|
— | — | — | — | (27 | ) | — | — | — | (27 | ) | |||||||||||||||||||||||||
Settlement
of options
|
— | — | — | — | (54 | ) | — | — | — | (54 | ) | |||||||||||||||||||||||||
Non-cash
stock based compensation
|
— | — | — | — | 462 | — | — | — | 462 | |||||||||||||||||||||||||||
Accumulated
other comprehensive income
|
— | — | — | — | — | — | — | 1,461 | 1,461 | |||||||||||||||||||||||||||
Net
loss
|
— | — | — | — | — | — | (5,026 | ) | — | (5,026 | ) | |||||||||||||||||||||||||
Balances
at December 31, 2007
|
161 | $ | 1 | 55,640 | $ | 277 | $ | 112,942 | $ | (444 | ) | $ | (98,870 | ) | $ | 1,662 | $ | 15,568 | ||||||||||||||||||
Issuance
of deferred stock units
|
— | — | 17 | — | (2 | ) | — | — | — | (2 | ) | |||||||||||||||||||||||||
Issuance
of stock in lieu of dividends
|
— | — | 70 | — | 15 | — | (15 | ) | — | — | ||||||||||||||||||||||||||
Purchase
of treasury stock
|
— | — | — | — | — | (12 | ) | — | — | (12 | ) | |||||||||||||||||||||||||
Non-cash
stock based compensation
|
— | — | — | — | 312 | — | — | — | 312 | |||||||||||||||||||||||||||
Accumulated
other comprehensive income (Note 19)
|
— | — | — | — | — | — | — | (1,654 | ) | (1,654 | ) | |||||||||||||||||||||||||
Net
loss
|
— | — | — | — | — | — | (6,466 | ) | — | (6,466 | ) | |||||||||||||||||||||||||
Balances
at December 31, 2008
|
161 | $ | 1 | 55,727 | $ | 277 | $ | 113,267 | $ | (456 | ) | $ | (105,351 | ) | $ | 8 | $ | 7,746 |
2008
|
2007
|
|||||||
Cash
flows (used in) provided by operating activities:
|
||||||||
Net
loss
|
$ | (6,466 | ) | $ | (5,026 | ) | ||
Loss
from discontinued operations, net of tax
|
(332 | ) | (735 | ) | ||||
Loss
from continuing operations
|
$ | (6,134 | ) | $ | (4,291 | ) | ||
Adjustments
to reconcile net loss to net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
3,101 | 3,932 | ||||||
Provision
for doubtful accounts
|
557 | 356 | ||||||
Stock-based
compensation
|
312 | 439 | ||||||
Impairment
of intangible asset
|
— | 968 | ||||||
Loss
(gain) from disposition of equipment and capitalized
software
|
618 | (269 | ) | |||||
Changes
in assets and liabilities:
|
||||||||
Accounts
receivable
|
142 | 199 | ||||||
Prepaid
expenses and other assets
|
129 | 337 | ||||||
Accounts
payable and accrued expenses
|
(367 | ) | (624 | ) | ||||
Income
taxes payable
|
(19 | ) | (42 | ) | ||||
Deferred
costs
|
(199 | ) | 883 | |||||
Deferred
revenue
|
(296 | ) | (1,054 | ) | ||||
Net
cash (used in) provided by continuing operations
|
(2,156 | ) | 834 | |||||
Discontinued
operations
|
(807 | ) | (1,616 | ) | ||||
Net
cash used in operating activities
|
(2,963 | ) | (782 | ) | ||||
Cash
flows (used in) provided by investing activities:
|
||||||||
Capital
expenditures
|
(2,160 | ) | (592 | ) | ||||
Software
development expenditures
|
(835 | ) | (588 | ) | ||||
Deposits
on broadcast equipment
|
— | (161 | ) | |||||
Proceeds
from sale of equipment and other assets
|
12 | 478 | ||||||
Restricted
cash
|
51 | 13 | ||||||
Net
cash used in investing activities by continuing operations
|
(2,932 | ) | (850 | ) | ||||
Discontinued
operations
|
7 | 2,613 | ||||||
Net
cash (used in) provided by investing activities
|
(2,925 | ) | 1,763 | |||||
Cash
flows (used in) provided by financing activities:
|
||||||||
Principal
payments on capital leases
|
(12 | ) | (363 | ) | ||||
Settlement
of stock options
|
— | (94 | ) | |||||
Purchase
of treasury stock
|
(12 | ) | (444 | ) | ||||
Proceeds
from exercise of warrants and options
|
— | 694 | ||||||
Net
cash used in financing activities by continuing operations
|
(24 | ) | (207 | ) | ||||
Net
(decrease) increase in cash and cash equivalents
|
(5,912 | ) | 774 | |||||
Effect
of exchange rate on cash
|
(999 | ) | 725 | |||||
Cash
and cash equivalents at beginning of year
|
10,273 | 8,774 | ||||||
Cash
and cash equivalents at end of year
|
$ | 3,362 | $ | 10,273 |
2008
|
2007
|
|||||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 5 | $ | 27 | ||||
Income
taxes
|
$ | 234 | $ | 358 | ||||
Supplemental
disclosure of non-cash investing and financing activities:
|
||||||||
Reclass
of investment to accounts receivable
|
$ | — | $ | 69 | ||||
Reclass
of royalty receivable to prepaid maintenance contracts
|
$ | — | $ | 73 | ||||
Reclass
of deposits for equipment placed in service
|
$ | — | $ | 524 | ||||
Unrealized
holding loss on investments available for sale
|
$ | (206 | ) | $ | (73 | ) | ||
Issuance
of common stock in payment of dividends
|
$ | 15 | $ | 13 | ||||
Equipment
acquired under capital lease
|
$ | 43 | $ | — |
For
the year ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Broadcast
equipment
|
$ | 17,208,000 | $ | 19,550,000 | ||||
Furniture
and fixtures
|
733,000 | 733,000 | ||||||
Machinery
and equipment
|
4,768,000 | 11,908,000 | ||||||
Leasehold
improvements
|
615,000 | 1,281,000 | ||||||
Other
equipment
|
24,000 | 24,000 | ||||||
23,348,000 | 33,496,000 | |||||||
Accumulated
depreciation and amortization
|
(19,920,000 | ) | (29,395,000 | ) | ||||
$ | 3,428,000 | $ | 4,101,000 |
Gross Carrying
Value
|
Accumulated
Amortization
|
Net
|
||||||||||
Developed
technology
|
$ | 206,000 | $ | (206,000 | ) | $ | — | |||||
Trivia
database
|
365,000 | (184,000 | ) | 181,000 | ||||||||
Trademarks
|
67,000 | (63,000 | ) | 4,000 | ||||||||
Total
|
$ | 638,000 | $ | (453,000 | ) | $ | 185,000 |
Gross Carrying
Value
|
Accumulated
Amortization
|
Net
|
||||||||||
Developed
technology
|
$ | 206,000 | $ | (167,000 | ) | $ | 39,000 | |||||
Trivia
database
|
455,000 | (184,000 | ) | 271,000 | ||||||||
Trademarks
|
149,000 | (141,000 | ) | 8,000 | ||||||||
Total
|
$ | 810,000 | $ | (492,000 | ) | $ | 318,000 |
Year
Ending
|
Estimated
Aggregate
Amortization Expense
|
|||
2009
|
$ | 39,000 | ||
2010
|
37,000 | |||
2011
|
37,000 | |||
2012
|
37,000 | |||
2013
|
35,000 | |||
Total
|
$ | 185,000 |
Available for
Distribution
|
||||
December 31,
2006
|
1,594,000 | |||
Granted
|
(1,224,000 | ) | ||
Canceled
|
1,290,000 | |||
December 31,
2007
|
1,660,000 | |||
Granted
|
(942,000 | ) | ||
Canceled
|
3,382,000 | |||
December 31,
2008
|
4,100,000 |
2008
|
2007
|
|||||||
Weighted-average
risk-free rate
|
2.97% | 4.57% | ||||||
Weighted-average
volatility
|
63.57% | 56.28% | ||||||
Dividend
yield
|
0.0% | 0.0% | ||||||
Expected
life
|
4.38 years
|
5.0 years
|
Special
Plan
|
Option
Plan
|
|||||||||||||||
Shares
|
Weighted
Average
Exercise Price
|
Shares
|
Weighted
Average
Exercise Price
|
|||||||||||||
Outstanding
December 31, 2006
|
400,000 | $ | 2.81 | 8,918,000 | $ | 1.37 | ||||||||||
Granted
|
— | — | 1,209,000 | 1.04 | ||||||||||||
Exercised
|
— | — | (929,000 | ) | 0.82 | |||||||||||
Forfeited
|
— | — | (222,000 | ) | 1.62 | |||||||||||
Expired
|
(400,000 | ) | — | (1,195,000 | ) | 2.16 | ||||||||||
Outstanding
December 31, 2007
|
— | $ | — | 7,781,000 | $ | 1.30 | ||||||||||
Granted
|
— | — | 784,000 | 0.34 | ||||||||||||
Exercised
|
— | — | — | — | ||||||||||||
Forfeited
|
— | — | (1,378,000 | ) | 1.13 | |||||||||||
Expired
|
— | — | (1,938,000 | ) | 1.25 | |||||||||||
Outstanding
December 31, 2008
|
— | $ | — | 5,249,000 | $ | 1.22 | ||||||||||
Vested
December 31, 2008
|
— | — | 4,517,000 | 1.31 |
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||||||
Range
of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life (in years)
|
Weighted
Average
Exercise Price
|
Number
Exercisable
|
Weighted
Average
Remaining
Contractual
Life (in years)
|
Weighted
Average
Exercise
Price
|
||||||||||||||||||||
Option
Plan:
|
||||||||||||||||||||||||||
$0.11-$0.98 | 2,007,000 | 3.12 | $ | 0.70 | 1,485,000 | $ | 0.82 | |||||||||||||||||||
$1.00-$1.49 | 2,016,000 | 2.62 | 1.23 | 1,807,000 | 1.23 | |||||||||||||||||||||
$1.50-$4.50 | 1,226,000 | 1.65 | 2.04 | 1,225,000 | 2.03 | |||||||||||||||||||||
5,249,000 | 2.58 | $ | 1.22 | 4,517,000 | 1.64 | $ | 1.31 |
Outstanding
Deferred Stock
|
||||
December 31,
2006
|
110,000 | |||
Granted
|
15,000 | |||
Released
|
(61,500 | ) | ||
Canceled
|
|
(8,500 | ) | |
December 31,
2007
|
55,000 | |||
Granted
|
158,000 | |||
Released
|
(20,000 | ) | ||
Canceled
|
(52,000 | ) | ||
December 31,
2008
|
141,000 | |||
Balance
exercisable at December 31, 2008
|
20,000 |
Outstanding
Warrants
|
Weighted
Average
Exercise Prices
|
|||||||
December 31,
2006
|
1,344,000 | $ | 2.16 | |||||
Granted
|
— | — | ||||||
Exercised
|
— | — | ||||||
Canceled
|
(441,000 | ) | — | |||||
December 31,
2007
|
903,000 | $ | 1.85 | |||||
Granted
|
— | — | ||||||
Exercised
|
— | — | ||||||
Canceled
|
(500,000 | ) | 1.15 | |||||
December 31,
2008
|
403,000 | $ | 2.71 | |||||
Balance
exercisable at December 31, 2008
|
403,000 | $ | 2.71 |
Warrants
Outstanding
|
Warrants
Exercisable
|
|||||||||||||||||||||
Range
of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life (in years)
|
Weighted
Average
Exercise Price
|
Number
Exercisable
|
Weighted
Average
Exercise Price
|
|||||||||||||||||
$0.77-$1.15 | 166,000 | 0.73 | $ | 1.00 | 166,000 | $ | 1.00 | |||||||||||||||
$1.31-$3.91 | 237,000 | 0.08 | $ | 3.91 | 237,000 | $ | 3.91 | |||||||||||||||
403,000 | 0.35 | $ | 2.71 | 403,000 | $ | 2.71 |
2008
|
2007
|
|||||||
Current
Tax Provision:
|
||||||||
Federal
|
$ | 50,000 | $ | 1,000 | ||||
State
|
15,000 | 22,000 | ||||||
Foreign
|
139,000 | 359,000 | ||||||
Deferred
Provision
|
204,000 | 382,000 | ||||||
Federal
|
— | — | ||||||
State
|
— | — | ||||||
Foreign
|
30,000 | (21,000 | ) | |||||
Total
Tax Provision
|
30,000 | (21,000 | ) | |||||
Federal
|
50,000 | 1,000 | ||||||
State
|
15,000 | 22,000 | ||||||
Foreign
|
169,000 | 338,000 | ||||||
Total
|
$ | 234,000 | $ | 361,000 |
2008
|
2007
|
|||||||||||||||
Current
|
Non
Current
|
Current
|
Non
Current
|
|||||||||||||
Deferred
tax assets:
|
||||||||||||||||
NOL
carryforwards
|
$ | — | $ | 21,297,000 | $ | — | $ | 22,306,000 | ||||||||
UK
NOL carryforwards
|
— | 904,000 | — | 708,000 | ||||||||||||
Legal
and litigation accruals
|
41,000 | — | 15,000 | — | ||||||||||||
Allowance
for doubtful accounts
|
126,000 | — | 126,000 | — | ||||||||||||
Compensation
and vacation accrual
|
116,000 | — | 199,000 | — | ||||||||||||
Operating
accruals
|
356,000 | — | 394,000 | — | ||||||||||||
Deferred
revenue
|
78,000 | — | 189,000 | — | ||||||||||||
Research
and experimentation credit
|
— | 9,000 | — | 186,000 | ||||||||||||
AMT
credit
|
— | 21,000 | — | 21,000 | ||||||||||||
Foreign
tax credit
|
— | 50,000 | — | — | ||||||||||||
Amortization
|
— | 524,000 | — | 514,000 | ||||||||||||
Depreciation
|
— | 983,000 | — | 804,000 | ||||||||||||
Foreign
|
— | 118,900 | — | 149,000 | ||||||||||||
Charitable
contributions
|
— | — | — | — | ||||||||||||
Other
|
— | 306,000 | — | 270,000 | ||||||||||||
Total
gross deferred tax assets
|
$ | 717,000 | $ | 24,212,900 | $ | 923,000 | $ | 24,958,000 | ||||||||
Valuation
allowance
|
(717,000 | ) | (23,338,000 | ) | (923,000 | ) | (24,269,000 | ) | ||||||||
Net
deferred tax assets
|
$ | — | $ | 874,900 | $ | — | $ | 689,000 | ||||||||
Deferred
tax liabilities:
|
||||||||||||||||
Capitalized
software
|
— | 661,000 | — | 356,000 | ||||||||||||
Deferred
revenue
|
— | 95,000 | — | 184,000 | ||||||||||||
Total
gross deferred liabilities
|
$ | — | $ | 756,000 | $ | — | $ | 540,000 | ||||||||
Net
deferred tax assets
|
$ | — | $ | 118,900 | $ | — | $ | 149,000 |
For
the year ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Tax
at federal income tax rate
|
$ | (2,120,000 | ) | $ | (1,578,000 | ) | ||
State
tax
|
(177,000 | ) | 22,000 | |||||
Foreign
tax differential
|
(32,000 | ) | 6,000 | |||||
Foreign
losses (income) with no federal benefit
|
155,000 | 77,000 | ||||||
Change
in valuation allowance
|
(1,137,000 | ) | 939,000 | |||||
Change
in depreciable basis of fixed assets
|
— | — | ||||||
Intangibles
|
— | (127,000 | ) | |||||
Rate
adjustment
|
— | 23,000 | ||||||
Expiration
of net operating loss carryforwards
|
2,840,000 | 776,000 | ||||||
Permanent
items
|
165,000 | 163,000 | ||||||
Expiration
of research credit
|
177,000 | — | ||||||
Other
|
363,000 | 60,000 | ||||||
Total
tax provision
|
$ | 234,000 | $ | 361,000 |
Year
Ending December 31,
|
Lease
Payment
|
|||
2009
|
$ | 994,000 | ||
2010
|
866,000 | |||
2011
|
404,000 | |||
2012
|
65,000 | |||
2013
|
65,000 | |||
Thereafter
|
65,000 | |||
Total
|
$ | 2,459,000 |
Year
Ending December 31,
|
Lease
Payment
|
|||
2009
|
$ | 57,000 | ||
2010
|
57,000 | |||
2011
|
61,000 | |||
2012
|
62,000 | |||
2013
|
62,000 | |||
Thereafter
|
62,000 | |||
Total
|
$ | 361,000 |
As of
December 31,
|
||||||||
2008
|
2007
|
|||||||
Broadcast
equipment
|
$ | 806,000 | $ | 828,000 | ||||
Machinery
and equipment
|
1,509,000 | 1,705,000 | ||||||
Other
equipment
|
21,000 | 24,000 | ||||||
Total
property under capital leases
|
2,336,000 | 2,557,000 | ||||||
Accumulated
depreciation
|
(2,296,000 | ) | (2,459,000 | ) | ||||
$ | 40,000 | $ | 98,000 |
2008
|
2007
|
|||||||
Beginning
balance
|
$ | 1,662,000 | $ | 201,000 | ||||
Unrealized
loss on investment available-for-sale
|
(206,000 | ) | (73,000 | ) | ||||
Foreign
currency translation adjustments
|
(1,448,000 | ) | 1,534,000 | |||||
Ending
balance
|
$ | 8,000 | $ | 1,662,000 |
2008
|
2007
|
|||||||
Net
loss
|
$ | (6,466,000 | ) | $ | (5,026,000 | ) | ||
Comprehensive
(loss) income
|
(1,654,000 | ) | 1,461,000 | |||||
Comprehensive
net loss
|
$ | (8,120,000 | ) | $ | (3,565,000 | ) |
For the year
ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Operating
revenues
|
$ | 21,000 | $ | 4,825,000 | ||||
Operating
expenses
|
530,000 | 5,919,000 | ||||||
Operating
loss
|
(509,000 | ) | (1,094,000 | ) | ||||
Other
Income
|
177,000 | 388,000 | ||||||
Loss
before income taxes
|
(332,000 | ) | (706,000 | ) | ||||
Income
tax expense
|
— | 29,000 | ||||||
Loss
from discontinued operations, net of tax
|
$ | (332,000 | ) | $ | (735,000 | ) |
2007
|
||||
Assets
held for sale:
|
||||
Current
assets
|
$ | 192,000 | ||
Property,
plant and equipment, net
|
20,000 | |||
Total
assets of discontinued operations
|
212,000 | |||
Liabilities
of discontinued operations:
|
||||
Current
liabilities
|
672,000 | |||
Total
liabilities of discontinued operations
|
672,000 | |||
Net
assets of discontinued operations
|
$ | (460,000 | ) |
2007
|
||||
Severance
for Involuntary Employee Terminations
|
$ | 337,000 | ||
Costs
to Exit Certain Contractual and Lease obligations
|
99,000 | |||
Moving,
Relocation, and Other Associated Costs
|
51,000 | |||
Total
Restructuring Costs
|
$ | 487,000 |
For the year
ended December 31,
|
||||||||
2008
|
2007
|
|||||||
United
States
|
$ | 23,946,000 | $ | 26,335,000 | ||||
Canada
|
3,373,000 | 3,768,000 | ||||||
United
Kingdom
|
177,000 | 439,000 | ||||||
Total
Revenue
|
$ | 27,496,000 | $ | 30,542,000 |
As of
December 31,
|
||||||||
2008
|
2007
|
|||||||
United
States
|
$ | 6,936,000 | $ | 11,075,000 | ||||
Canada
|
4,726,000 | 8,936,000 | ||||||
United
Kingdom
|
- | 637,000 | ||||||
Total
Assets
|
$ | 11,662,000 | $ | 20,648,000 |
Three Months
Ended
|
||||||||||||||||||||
Mar
31,
2008
|
Jun
30,
2008
|
Sep
30,
2008
|
Dec
31,
2008
|
Total
2008
|
||||||||||||||||
Total
revenue
|
$ | 7,182 | $ | 7,017 | $ | 6,772 | $ | 6,525 | $ | 27,496 | ||||||||||
Operating
loss
|
(2,301 | ) | (2,108 | ) | (1,056 | ) | (641 | ) | (6,106 | ) | ||||||||||
Loss
from continuing operations
|
(2,283 | ) | (2,129 | ) | (1,032 | ) | (690 | ) | (6,134 | ) | ||||||||||
Loss
(income) from discontinued operations, net of tax
|
(291 | ) | (216 | ) | 175 | — | (332 | ) | ||||||||||||
Net
loss
|
(2,574 | ) | (2,345 | ) | (857 | ) | (690 | ) | (6,466 | ) | ||||||||||
Per share
amounts:
|
||||||||||||||||||||
Loss
from continuing operations
|
$ | (0.04 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.11 | ) | |||||
Loss
from discontinued operations
|
$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||||
Net
loss
|
(0.05 | ) | (0.04 | ) | (0.02 | ) | (0.01 | ) | (0.12 | ) | ||||||||||
Weighted-average
shares outstanding—basic and diluted
|
55,187 | 55,203 | 55,196 | 55,170 | 55,189 |
Three Months
Ended
|
||||||||||||||||||||
Mar 31,
2007
|
Jun 30,
2007
|
Sep 30,
2007
|
Dec
31,
2007
|
Total
2007
|
||||||||||||||||
Total
revenue
|
$ | 7,733 | $ | 7,640 | $ | 7,476 | $ | 7,693 | $ | 30,542 | ||||||||||
Operating
loss
|
(812 | ) | (381 | ) | (1,686 | ) | (1,480 | ) | (4,359 | ) | ||||||||||
Loss
from continuing operations
|
(763 | ) | (377 | ) | (1,617 | ) | (1,534 | ) | (4,291 | ) | ||||||||||
Loss
from discontinued operations, net of tax
|
(4 | ) | (177 | ) | (168 | ) | (386 | ) | (735 | ) | ||||||||||
Net
loss
|
$ | (767 | ) | $ | (554 | ) | $ | (1,785 | ) | $ | (1,920 | ) | $ | (5,026 | ) | |||||
Per share
amounts:
|
||||||||||||||||||||
Loss
from continuing operations
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.08 | ) | |||||
Loss
from discontinued operations
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||
Net
loss
|
(0.01 | ) | (0.01 | ) | (0.03 | ) | (0.04 | ) | (0.09 | ) | ||||||||||
Weighted-average
shares outstanding—basic and diluted
|
54,754 | 54,691 | 56,000 | 55,170 | 55,154 |
Allowance
for
Doubtful
Accounts
|
Balance
at
Beginning
|
Additions
Charged to
Expense
|
Deductions (a)
|
Balance
at
End
of
Period
|
||||||||||||
2008
|
$ | 396,000 | 557,000 | (655,000 | ) | $ | 298,000 | |||||||||
2007
|
$ | 571,000 | 356,000 | (531,000 | ) | $ | 396,000 |
(a)
|
Reflects
trade accounts receivable written off during the year, net of amounts
recovered.
|