According to the Complaint, NTN Buzztime, Inc. delivers interactive entertainment and innovative technology that helps its customers acquire, engage and retain patrons.
On August 13, 2020, NTN and Brooklyn ImmunoTherapeutics LLC issued a joint press release announcing that they had entered into an Agreement and Plan of Merger and Reorganization dated August 12, 2020 (the “Merger Agreement”) to merge NTN with Brooklyn. Under the terms of the Merger Agreement, Brooklyn’s members will exchange their equity interests in Brooklyn for shares of NTN common stock representing between approximately 94.08% and 96.74% of the outstanding common stock of NTN, and NTN’s current stockholders, will own between just 5.92% and 3.26% of the outstanding common stock of NTN. In effect, the Proposed Transaction is a reverse merger, whereby Brooklyn will become a publicly traded company.
On September 18, 2020, NTN entered into an asset purchase agreement (the “Asset Purchase Agreement”) with eGames.com, pursuant to which NTN agreed to sell all of its right, title and interest in and to the assets relating to the Company’s business of licensing its interactive entertainment network and services and the tablets and related equipment used therein to eGames.com. At the closing of the Proposed Asset Sale, in addition to assuming the liabilities of NTN specified in the Asset Purchase Agreement, including NTN’s trade accounts payable and other accrued liabilities arising in the ordinary course of the business, and liabilities relating to NTN’s contracts included in the purchased assets, eGames.com will pay NTN $2.0 million in cash. A $1.0 million bridge loan that eGames.com made to NTN in connection with entering into the Asset Purchase Agreement will be applied toward the $2.0 million purchase price.
On October 2, 2020, NTN filed a Form S-4 Registration Statement (the “Registration Statement”) with the SEC. The Complaint alleges that the Registration Statement, which recommends that NTN stockholders vote in favor of the Proposed Transaction, omits or misrepresents material information concerning, among other things: (i) the Company’s and Brooklyn’s financial projections and the data and inputs underlying the financial valuation analyses that support the fairness opinion provided by the Company’s financial advisor; and (ii) the background of the Proposed Transaction.