Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 12, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TABLE TRAC INC | |
Entity Central Index Key | 0001090396 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 4,506,788 | |
Entity File Number | 001-32987 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 1,204,805 | $ 1,263,762 |
Accounts receivable, net of allowance for doubtful accounts of $198,623 at March 31, 2020 and December 31, 2019 | 2,125,919 | 2,537,892 |
Inventory | 1,899,927 | 1,263,589 |
Prepaid expenses and other current assets | 264,371 | 379,982 |
Income tax receivable | 30,673 | 167,673 |
TOTAL CURRENT ASSETS | 5,525,695 | 5,612,898 |
LONG-TERM ASSETS | ||
Property and equipment, net | 60,193 | 74,149 |
Operating lease right-of-use assets | 63,510 | 77,922 |
Contract and other long-term assets | 862,624 | 1,037,364 |
Long-term accounts receivable - financed contracts | 1,756,931 | 2,253,667 |
TOTAL LONG-TERM ASSETS | 2,743,258 | 3,443,102 |
TOTAL ASSETS | 8,268,953 | 9,056,000 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 148,876 | 367,730 |
Payroll liabilities | 70,986 | 44,500 |
Current portion of operating lease liabilities | 51,392 | 53,538 |
Customer deposits | 291,284 | 253,709 |
TOTAL CURRENT LIABILITIES | 562,538 | 719,477 |
LONG-TERM LIABILITIES | ||
Operating lease liabilities | 16,041 | 27,867 |
Contract liabilities | 2,628,972 | 3,148,410 |
Deferred tax liability | 438,000 | 543,000 |
TOTAL LIABILITIES | 3,645,551 | 4,438,754 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 25,000,000 shares authorized: 4,656,734 shares issued; and 4,506,788 shares outstanding at March 31, 2020 and December 31, 2019. | 4,507 | 4,507 |
Additional paid-in capital | 1,854,938 | 1,847,594 |
Retained earnings | 3,009,588 | 3,010,776 |
Stockholders' Equity before Treasury Stock | 4,869,033 | 4,862,877 |
Treasury stock, 149,946 shares (at cost) at March 31, 2020 and December 31, 2019. | (245,631) | (245,631) |
TOTAL STOCKHOLDERS' EQUITY | 4,623,402 | 4,617,246 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 8,268,953 | $ 9,056,000 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in dollars) | $ 198,623 | $ 198,623 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 4,656,734 | 4,506,788 |
Common stock, shares outstanding | 4,656,734 | 4,506,788 |
Treasury stock, shares | 149,946 | 149,946 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 1,307,376 | $ 1,368,630 |
Cost of sales | 401,888 | 331,965 |
Gross profit | 905,488 | 1,036,665 |
Operating expenses: | ||
Selling, general and administrative | 932,790 | 1,061,508 |
Loss from operations | (27,302) | (24,843) |
Interest income | 58,114 | 16,798 |
Income (loss) before taxes | 30,812 | (8,045) |
Income tax expense(benefit) | 32,000 | (16,000) |
Net income (loss) | $ (1,188) | $ 7,955 |
Net income (loss) per share - basic | $ 0 | $ 0 |
Net income (loss) per share - diluted | $ 0 | $ 0 |
Weighted-average shares outstanding - basic | 4,486,788 | 4,496,494 |
Weighted-average shares outstanding - diluted | 4,486,788 | 4,504,503 |
Condendsed Statements of Stockh
Condendsed Statements of Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total |
Balance at Dec. 31, 2018 | $ 4,529 | $ 1,795,955 | $ 2,194,778 | $ (196,526) | $ 3,798,736 |
Stock compensation expense | 0 | 12,406 | 0 | 0 | 12,406 |
Net income loss | 0 | 0 | 7,955 | 0 | 7,955 |
Balance at Mar. 31, 2019 | 4,529 | 1,808,362 | 2,202,733 | (196,526) | 3,819,098 |
Balance at Dec. 31, 2019 | 4,507 | 1,847,594 | 3,010,776 | (245,631) | 4,617,246 |
Stock compensation expense | 0 | 7,344 | 0 | 0 | 7,344 |
Net income loss | 0 | 0 | (1,188) | 0 | (1,188) |
Balance at Mar. 31, 2020 | $ 4,507 | $ 1,854,938 | $ 3,009,588 | $ (245,631) | $ 4,623,402 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ (1,188) | $ 7,955 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 13,956 | 11,004 |
Gain on sale of asset | 0 | (25,713) |
Deferred income taxes | (105,000) | (41,000) |
Stock compensation expense | 7,344 | 12,407 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 908,709 | 15,861 |
Inventory | (636,338) | (277,894) |
Prepaid expenses and other assets | 304,763 | (274,960) |
Accounts payable and accrued expenses | (232,826) | (156,974) |
Payroll liabilities | 26,486 | 107,516 |
Contract liabilities and customer deposits | (481,863) | 15,572 |
Income taxes payable (receivable) | 137,000 | 25,000 |
Net cash used in operating activities | (58,957) | (581,226) |
FINANCING ACTIVITIES | ||
Payments on notes payable | 0 | (2,221) |
Net cash used in financing activities | 0 | (2,221) |
NET INCREASE (DECREASE) IN CASH | (58,957) | (583,447) |
CASH | ||
Beginning of period | 1,263,762 | 1,290,797 |
End of period | 1,204,805 | 707,350 |
Non-cash investing and financing activities: | ||
Note from sale of Colombian receivables | 800 | 7,800 |
Supplemental cash flow information: | ||
Operating cash outflow for operating lease | $ 15,293 | $ 15,519 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Business and Summary of Significant Accounting Policies | 1. Nature of Business and Summary of Significant Accounting Policies – Basis of Presentation The accompanying unaudited condensed financial statements of Table Trac, Inc. (the "Company," or "Table Trac") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The balance sheet as of March 31, 2020 and the statements of operations, cash flows and stockholders' equity for the three months ended March 31, 2020 and 2019 are unaudited but include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position at such date and the operating results and cash flows for those periods. Certain information normally included in financial statements and related footnotes prepared in accordance with generally accepted accounting principles has been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts have been reclassified for consistency with the current year presentation. An adjustment has been made to the Consolidated Statements of Operations for fiscal quarter ended March 31, 2019, to identify the reclassification of maintenance related wages from Selling, General and Administrative to Cost of Sales. These reclassifications had no effect on the reported results of operations. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Table Trac Annual Report on Form 10-K for the year ended December 31, 2019. Nature of Business Table Trac was formed under the laws of the State of Nevada in June 1995. The Company has offices in Minnetonka, Minnesota and Oklahoma City, Oklahoma. The Company has developed and sells an information and management system that automates and monitors various aspects of the operations of casinos. Table Trac provides system sales and technical support to casinos. System sales include installation, custom casino system configuration, and training. In addition, license and technical support are provided under separate license and service contracts. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company's use of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price ("SSP") of performance obligations, variable consideration, and other obligations, realizability of accounts receivable, the valuation of deferred tax assets and liabilities, deferred revenue and costs, and inventory valuation. Actual results could differ from those estimates, and the difference could be significant. The Company's significant accounting policies are described in Note 1 of the financial statement included in its Annual Report on Form 10-K for the year ended December 31, 2019. Revenue The Company derives revenues from the sales of systems, licenses and maintenance fees, and services, and rental agreements. System Sales Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected, when applicable from customers, which are subsequently remitted to governmental authorities. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is a unit of account in ASC 606. A majority of the Company's systems sales have multiple performance obligations including an obligation to deliver a casino management system and another to provide maintenance services. For system sales with multiple performance obligations, the Company allocates revenue to each performance obligation based on its SSP. The Company generally determines the SSP based on the price charged to customers. The Company does offer customers extended payment terms representing a significant financing component. The Company must evaluate if any extended payment terms in the contract is an indicator of the transaction price not being probable. The Company only includes the amount for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company occasionally enters into a contract that includes multiple sites; management has determined that each site installation is a separate performance obligation. In these instances, the Company recognizes revenue upon completion of each performance obligation. In addition, the Company has a contract with a reseller who purchases and resells the Company's products; monthly the reseller notifies the Company of their successful installations, and submits an invoice to the Company for those installations. Provided all other revenue recognition steps have been satisfied, the Company recognizes the revenue if payment of a significant portion of the contract consideration is due within 12 months of the delivery of the product. System contracts that do not meet this criteria are deferred and recognized when the uncertainty is resolved, which is consistent with when contractual payments become due. The Company also analyzes its standard business practice of using long-term contracts and the history of collecting on extended payment term contracts which include a financing component which is usually a market interest rate. The associated interest income is reflected accordingly on the statement of operations without making concessions for determining if revenue should be recognized. Maintenance Revenue Maintenance revenue is recognized ratably over the contract period. The stand-alone selling price for maintenance is based upon the renewal rate for contracted services. Service Revenue and Other Revenue Service revenue is recognized after the services are performed and collection of the resulting receivable is reasonably assured. The SSP for service revenue is established based upon actual selling prices for the services or prior similar arrangements. The Company offers qualified customers a licensing agreement. Licensing revenue is recognized after the intellectual property (CMS system), the performance obligation, is delivered and in its operational and functional state. The SSP for licensing revenue is established based upon actual selling prices for the license. The Company may offer customers a rental contract. Revenues are billed monthly on a per-game per-day basis. There is an option to purchase the system after the rental contract expires at a pre-determined residual value. The following table summarizes disaggregated revenues by major product line for the three months ended March 31, 2020 and 2019, respectively: Three Months Ended March 31, 2020 2019 2020 2019 (percent of revenues) System revenue $ 564,132 $ 658,595 43.1 % 48.1 % Maintenance revenue 710,827 672,569 54.4 % 49.1 % Service and other revenue 32,417 37,466 2.5 % 2.8 % Total revenues $ 1,307,376 $ 1,368,630 100.0 % 100.0 % See Major Customers for disaggregated revenue information about primary geographical markets. Significant Judgments Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. We evaluated the contractual payment terms of all system sales generated during the year to determine the proper recognition or deferral of revenue. We believe the twelve-month subsequent collection threshold of 67% or greater is the most appropriate for the Company to constrain revenue. We evaluate the interest rates in customer contracts with extended payment terms, representing a significant financing component. These rates range from approximately 1% to 6% and we believe those to be appropriate market interest rates for the financing component. Deferred System Sales Costs Incremental costs to obtain and fulfill a contract are deferred and amortized over the related system contract term. These costs are recognized on a straight-line basis over the term of the contract which is generally 18-48 months beginning when revenues are generated. These costs are the most significant component of contract and other long-term assets on the balance sheet, and are $862,624 and $1,037,364 as of March 31, 2020 and December 31, 2019, respectively. Accounts Receivable / Allowance for Doubtful Accounts Accounts receivable are initially recorded at the invoiced amount and carried on the balance sheet at net realizable value, which includes foreign currency translation as of each balance sheet date. Accounts receivable include unsecured regular customer receivables and unsecured amounts from financed contracts coming due within twelve months. Amounts from financed contracts due beyond twelve months are recorded as "Long-term accounts receivable – financed contracts." Interest is recorded upon receipt to other income on the statements of operations. An allowance for doubtful accounts is recorded when the Company believes the amounts may not be collected. Management believes that receivables, net of the allowance for doubtful accounts, are fully collectible. Accounts receivable are written off when management determines collection is no longer likely. While the ultimate result may differ, management believes future write-offs not included in the allowance will not have a material impact on the Company's financial position. Major Customers For the three-month period ended March 31, 2020, one customer comprised approximately 26% of revenue compared to two customer who accounted for approximately 28% for the three months ending March 31, 2019. At March 31, 2020, three customers comprised approximately 61% of accounts receivable compared to three customers accounting for approximately 41% at March 31, 2019. The following table summarizes major customer's information for the three months ended March 31, 2020 and 2019: For the Three months ended March 31 2020 2019 % Revenues % AR % Revenues % AR Major 25.9 % 61.3 % 27.6 % 40.9 % All Others 74.1 % 38.7 % 72.4 % 59.1 % Total 100.0 % 100.0 % 100.0 % 100.0 % For the three-month periods ending March 31, 2020 and 2019, sales to customers in the United States represent 91.8% and 79.1% of total revenues, respectively. For the three-month periods ending March 31, 2020 and 2019, sales to a customer in Australia represent 1.2% and 12.3% of total revenues, respectively. A major customer is defined as any customer that represents at least 10% of revenue for a given period or outstanding account receivable at the end of a period. Inventory Inventory, consisting of finished goods, is stated at the lower of cost or net realizable value. The average cost method, which approximates the first in, first out method, is used to value inventory. Inventory is reviewed annually for the lower of cost or net realizable value and obsolescence. Any material cost found to be above net realizable value or considered obsolete is written down accordingly. The inventory value as of March 31, 2020 was $1,899,927, which included work-in-process of $680. The inventory value was $1,263,589 as of December 31, 2019, which included work-in-process of $7,742. The Company had no obsolescence reserve at March 31, 2020 or December 31, 2019. Research and Development The Company expenses all costs related to research and development as incurred. Research and development expense were $19,322 and $1,760 for the three months ended March 31, 2020 and 2019, respectively. Research and development expenses are included in selling, general and administrative expenses on the statements of operations. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | 2. Accounts Receivable – Accounts receivable consisted of the following at: March 31, December 31, Accounts receivable under normal 30-day terms $ 1,178,777 $ 1,649,695 Financed contracts: Current portion of long-term 1,145,765 1,086,820 Long-term, net of current portion 1,756,931 2,253,667 Total accounts receivable 4,081,473 4,990,182 Less allowance for doubtful accounts (198,623 ) (198,623 ) Accounts receivable, net $ 3,882,850 $ 4,791,559 Presented on the balance sheet as: Accounts receivable, net $ 2,125,919 $ 2,537,892 Long-term accounts receivable - financed contracts 1,756,931 2,253,667 The allowance for financed and trade receivable represents management’s estimate of probable losses in our trade and financed receivables as of the date of the financial statements. The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be inherent in the trade and financed receivables, but that have not been specifically identified. Accounts receivable includes financed contracts at March 31, 2020 and December 31, 2019 which were $2,902,696 and $3,340,487, respectively, offset by contract liabilities on the balance sheets of $2,628,972 and $3,148,410, respectively. A roll-forward of the Company’s allowance for doubtful accounts for the periods presented is as follows: March 31, December 31, Accounts receivable allowance, beginning of period $ 198,623 $ 165,840 Provision adjustment 0 115,000 Write-off 0 (82,217 ) Accounts receivable allowance, end of period $ 198,623 $ 198,623 The allowance for doubtful accounts as of March 31, 2020 is $47,623 for the trade receivables and $151,000 for financed contracts. The allowance for doubtful accounts as of December 31, 2019 is $42,623 for the trade receivables and $156,000 for financed contracts. |
Operating Leases
Operating Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | 3. Operating Leases – We lease space under non-cancelable operating leases for our two office locations. These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions. Our leases include one or more options to renew. The exercise of lease renewal options included in our ROU assets and lease liabilities if they are reasonably certain of exercise. Our leases do not provide an implicit rate; we use our incremental borrowing rate of 5% which is based on the information available at the date of adoption in determining the present value of the lease payments. The cost components of our operating leases were $15,861 and 15,519 for the period ended March 31, 2020 and 2019, respectively. Maturities of our lease liabilities for all operating leases are as follows as of March 31, 2020: Leased Facilities 2020 42,143 2021 28,632 Total Lease Payments 70,775 Less: Interest (3,342 ) Present value of lease liabilities $ 67,433 The weighted average remaining lease terms equals .92 years as of March 31, 2020. |
General Credit Agreement
General Credit Agreement | 3 Months Ended |
Mar. 31, 2020 | |
General Credit Agreement [Abstract] | |
General Credit Agreement | 4. General Credit Agreement – In February 2020, the Company obtained a general credit and security agreement with a lender, which provides a revolving credit line of up to $500,000 and expires on February 1, 2021. The line of credit is collateralized by all receivables, inventory, equipment, and general intangibles of the Company. The Company had no borrowings under the credit line during the three months ended March 31, 2020. Interest on outstanding borrowing is payable monthly and charged at the Prime Rate, which was 3.25% at March 31, 2020. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders' Equity – Stock Repurchase Program During the three-month period ended March 31, 2020, the Company did not repurchase any shares for its treasury. Stock Compensation On January 8, 2018, the Board of Directors of Table Trac Inc. appointed Randy Gilbert as the Company's Chief Financial Officer and awarded him 50,000 Restricted Stock shares. These shares are subject to a four-year vesting schedule as follows: 20,000 shares on January 8, 2019 and 10,000 shares in each subsequent year. Grant date fair value of $117,500 will be recognized equally over the vesting period as stock compensation expense as a component of selling, general and administration expense. The unvested stock compensation expense is expected to be recognized over a weighted average period of approximately two years. As of March 31, 2020, the remaining unrecognized stock compensation expense approximated $51,500. The Company has no stock options outstanding as of March 31, 2020 and 2019. The Company had 20,000 and 30,000 unvested restricted shares outstanding at March 31, 2020 and December 31, 2019, respectively. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 6. Income Tax – The Company accounts for income taxes by following the asset and liability approach to accounting for income taxes. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of the tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. Management believes that any write-off not allowed for will not have a material impact on the Company’s financial position. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Based on its evaluation, the Company believes that it has no significant unrecognized tax positions. The Company’s evaluation was performed for the tax years ended December 31, 2016 through 2019, which are the tax years that remain subject to examination by major tax jurisdictions as of March 31, 2020. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to its financial results. In accordance with current guidance, the Company classifies interest and penalties as income tax expense is incurred. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 7. Earnings Per Share – The Company computes earnings per share under two different methods, basic and diluted, and presents per-share data for all periods in which statements of operations are presented. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding. The following table provides a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share for the three months ended March 31, 2020 and 2019: For the Three Months Ended March 31, 2020 2019 Basic and diluted earnings per share calculation: Net income (loss) to common stockholders $ (1,188 ) $ 7,955 Weighted average number of common shares outstanding - basic 4,486,788 4,496,494 Basic net income (loss) per share $ (0.00 ) $ 0.00 Weighted average number of common shares outstanding - diluted 4,486,788 4,504,503 Diluted net income (loss) per share $ (0.00 ) $ 0.00 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | 8. Subsequent Event – On April 14, 2020, the Company entered into a Promissory Note with Alerus Financial, N.A. (the "Promissory Note"), which provides for an unsecured loan of $473,400 pursuant to the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the "CARES Act"). The Promissory Note has a term of 2 years with a 1% per annum interest rate. Payments are deferred for 6 months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. Forgiveness of the Promissory Note will be determined in accordance with the provisions of the CARES Act and applicable regulations. Any principal and interest amounts outstanding after the determination of amounts forgiven will be repaid on a monthly basis. The Company intends to use the entire loan amount for designated qualifying expenses and to apply for forgiveness of the loan in accordance with the terms of the PPP. No assurance can be given that the Company will obtain forgiveness of the loan in whole or in part. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements of Table Trac, Inc. (the “Company,” or “Table Trac”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The balance sheet as of March 31, 2020 and the statements of operations, cash flows and stockholders’ equity for the three months ended March 31, 2020 and 2019 are unaudited but include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position at such date and the operating results and cash flows for those periods. Certain information normally included in financial statements and related footnotes prepared in accordance with generally accepted accounting principles has been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts have been reclassified for consistency with the current year presentation. An adjustment has been made to the Consolidated Statements of Operations for fiscal quarter ended March 31, 2019, to identify the reclassification of maintenance related wages from Selling, General and Administrative to Cost of Sales. These reclassifications had no effect on the reported results of operations. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Table Trac Annual Report on Form 10-K for the year ended December 31, 2019. |
Nature of Business | Nature of Business Table Trac was formed under the laws of the State of Nevada in June 1995. The Company has offices in Minnetonka, Minnesota and Oklahoma City, Oklahoma. The Company has developed and sells an information and management system that automates and monitors various aspects of the operations of casinos. Table Trac provides system sales and technical support to casinos. System sales include installation, custom casino system configuration, and training. In addition, license and technical support are provided under separate license and service contracts. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company’s use of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations, realizability of accounts receivable, the valuation of deferred tax assets and liabilities, deferred revenue and costs, and inventory valuation. Actual results could differ from those estimates, and the difference could be significant. The Company’s significant accounting policies are described in Note 1 of the financial statement included in its Annual Report on Form 10-K for the year ended December 31, 2019. |
Revenue | Revenue The Company derives revenues from the sales of systems, licenses and maintenance fees, and services, and rental agreements. System Sales Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected, when applicable from customers, which are subsequently remitted to governmental authorities. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is a unit of account in ASC 606. A majority of the Company's systems sales have multiple performance obligations including an obligation to deliver a casino management system and another to provide maintenance services. For system sales with multiple performance obligations, the Company allocates revenue to each performance obligation based on its SSP. The Company generally determines the SSP based on the price charged to customers. The Company does offer customers extended payment terms representing a significant financing component. The Company must evaluate if any extended payment terms in the contract is an indicator of the transaction price not being probable. The Company only includes the amount for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company occasionally enters into a contract that includes multiple sites; management has determined that each site installation is a separate performance obligation. In these instances, the Company recognizes revenue upon completion of each performance obligation. In addition, the Company has a contract with a reseller who purchases and resells the Company's products; monthly the reseller notifies the Company of their successful installations, and submits an invoice to the Company for those installations. Provided all other revenue recognition steps have been satisfied, the Company recognizes the revenue if payment of a significant portion of the contract consideration is due within 12 months of the delivery of the product. System contracts that do not meet this criteria are deferred and recognized when the uncertainty is resolved, which is consistent with when contractual payments become due. The Company also analyzes its standard business practice of using long-term contracts and the history of collecting on extended payment term contracts which include a financing component which is usually a market interest rate. The associated interest income is reflected accordingly on the statement of operations without making concessions for determining if revenue should be recognized. Maintenance Revenue Maintenance revenue is recognized ratably over the contract period. The stand-alone selling price for maintenance is based upon the renewal rate for contracted services. Service Revenue and Other Revenue Service revenue is recognized after the services are performed and collection of the resulting receivable is reasonably assured. The SSP for service revenue is established based upon actual selling prices for the services or prior similar arrangements. The Company offers qualified customers a licensing agreement. Licensing revenue is recognized after the intellectual property (CMS system), the performance obligation, is delivered and in its operational and functional state. The SSP for licensing revenue is established based upon actual selling prices for the license. The Company may offer customers a rental contract. Revenues are billed monthly on a per-game per-day basis. There is an option to purchase the system after the rental contract expires at a pre-determined residual value. The following table summarizes disaggregated revenues by major product line for the three months ended March 31, 2020 and 2019, respectively: Three Months Ended March 31, 2020 2019 2020 2019 (percent of revenues) System revenue $ 564,132 $ 658,595 43.1 % 48.1 % Maintenance revenue 710,827 672,569 54.4 % 49.1 % Service and other revenue 32,417 37,466 2.5 % 2.8 % Total revenues $ 1,307,376 $ 1,368,630 100.0 % 100.0 % See Major Customers for disaggregated revenue information about primary geographical markets. Significant Judgments Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. We evaluated the contractual payment terms of all system sales generated during the year to determine the proper recognition or deferral of revenue. We believe the twelve-month subsequent collection threshold of 67% or greater is the most appropriate for the Company to constrain revenue. We evaluate the interest rates in customer contracts with extended payment terms, representing a significant financing component. These rates range from approximately 1% to 6% and we believe those to be appropriate market interest rates for the financing component. |
Deferred System Sales Costs | Deferred System Sales Costs Incremental costs to obtain and fulfill a contract are deferred and amortized over the related system contract term. These costs are recognized on a straight-line basis over the term of the contract which is generally 18-48 months beginning when revenues are generated. These costs are the most significant component of contract and other long-term assets on the balance sheet, and are $862,624 and $1,037,364 as of March 31, 2020 and December 31, 2019, respectively. |
Accounts Receivable / Allowance for Doubtful Accounts | Accounts Receivable / Allowance for Doubtful Accounts Accounts receivable are initially recorded at the invoiced amount and carried on the balance sheet at net realizable value, which includes foreign currency translation as of each balance sheet date. Accounts receivable include unsecured regular customer receivables and unsecured amounts from financed contracts coming due within twelve months. Amounts from financed contracts due beyond twelve months are recorded as “Long-term accounts receivable – financed contracts.” Interest is recorded upon receipt to other income on the statements of operations. An allowance for doubtful accounts is recorded when the Company believes the amounts may not be collected. Management believes that receivables, net of the allowance for doubtful accounts, are fully collectible. Accounts receivable are written off when management determines collection is no longer likely. While the ultimate result may differ, management believes future write-offs not included in the allowance will not have a material impact on the Company’s financial position. |
Major Customers | Major Customers For the three-month period ended March 31, 2020, one customer comprised approximately 26% of revenue compared to two customer who accounted for approximately 28% for the three months ending March 31, 2019. At March 31, 2020, three customers comprised approximately 61% of accounts receivable compared to three customers accounting for approximately 41% at March 31, 2019. The following table summarizes major customer’s information for the three months ended March 31, 2020 and 2019: For the Three months ended March 31 2020 2019 % Revenues % AR % Revenues % AR Major 25.9 % 61.3 % 27.6 % 40.9 % All Others 74.1 % 38.7 % 72.4 % 59.1 % Total 100.0 % 100.0 % 100.0 % 100.0 % For the three-month periods ending March 31, 2020 and 2019, sales to customers in the United States represent 91.8% and 79.1% of total revenues, respectively. For the three-month periods ending March 31, 2020 and 2019, sales to a customer in Australia represent 1.2% and 12.3% of total revenues, respectively. A major customer is defined as any customer that represents at least 10% of revenue for a given period or outstanding account receivable at the end of a period. |
Inventory | Inventory Inventory, consisting of finished goods, is stated at the lower of cost or net realizable value. The average cost method, which approximates the first in, first out method, is used to value inventory. Inventory is reviewed annually for the lower of cost or net realizable value and obsolescence. Any material cost found to be above net realizable value or considered obsolete is written down accordingly. The inventory value as of March 31, 2020 was $1,899,927, which included work-in-process of $680. The inventory value was $1,263,589 as of December 31, 2019, which included work-in-process of $7,742. The Company had no obsolescence reserve at March 31, 2020 or December 31, 2019. |
Research and Development | Research and Development The Company expenses all costs related to research and development as incurred. Research and development expense were $19,322 and $1,760 for the three months ended March 31, 2020 and 2019, respectively. Research and development expenses are included in selling, general and administrative expenses on the statements of operations. |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of disaggregation of revenue | Three Months Ended March 31, 2020 2019 2020 2019 (percent of revenues) System revenue $ 564,132 $ 658,595 43.1 % 48.1 % Maintenance revenue 710,827 672,569 54.4 % 49.1 % Service and other revenue 32,417 37,466 2.5 % 2.8 % Total revenues $ 1,307,376 $ 1,368,630 100.0 % 100.0 % |
Summary of major customer's information | For the Three months ended March 31 2020 2019 % Revenues % AR % Revenues % AR Major 25.9 % 61.3 % 27.6 % 40.9 % All Others 74.1 % 38.7 % 72.4 % 59.1 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of accounts receivable | March 31, December 31, Accounts receivable under normal 30-day terms $ 1,178,777 $ 1,649,695 Financed contracts: Current portion of long-term 1,145,765 1,086,820 Long-term, net of current portion 1,756,931 2,253,667 Total accounts receivable 4,081,473 4,990,182 Less allowance for doubtful accounts (198,623 ) (198,623 ) Accounts receivable, net $ 3,882,850 $ 4,791,559 Presented on the balance sheet as: Accounts receivable, net $ 2,125,919 $ 2,537,892 Long-term accounts receivable - financed contracts 1,756,931 2,253,667 |
Schedule of allowance for doubtful accounts | March 31, December 31, Accounts receivable allowance, beginning of period $ 198,623 $ 165,840 Provision adjustment 0 115,000 Write-off 0 (82,217 ) Accounts receivable allowance, end of period $ 198,623 $ 198,623 |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of maturities of lease liabilities for operating leases | Leased Facilities 2020 42,143 2021 28,632 Total Lease Payments 70,775 Less: Interest (3,342 ) Present value of lease liabilities $ 67,433 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | For the Three Months Ended March 31, 2020 2019 Basic and diluted earnings per share calculation: Net income (loss) to common stockholders $ (1,188 ) $ 7,955 Weighted average number of common shares outstanding - basic 4,486,788 4,496,494 Basic net income (loss) per share $ (0.00 ) $ 0.00 Weighted average number of common shares outstanding - diluted 4,486,788 4,504,503 Diluted net income (loss) per share $ (0.00 ) $ 0.00 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total revenues | $ 1,307,376 | $ 1,368,630 |
Revenues [Member] | ||
Total revenues | $ 1,307,376 | $ 1,368,630 |
Percent of revenues | 100.00% | 100.00% |
Revenues [Member] | System revenue [Member] | ||
Total revenues | $ 564,132 | $ 658,595 |
Percent of revenues | 43.10% | 48.10% |
Revenues [Member] | Maintenance revenue [Member] | ||
Total revenues | $ 710,827 | $ 672,569 |
Percent of revenues | 54.40% | 49.10% |
Revenues [Member] | Service and other revenue [Member] | ||
Total revenues | $ 32,417 | $ 37,466 |
Percent of revenues | 2.50% | 2.80% |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies (Details 1) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
% Revenues [Member] | ||
Total | 100.00% | 100.00% |
% Revenues [Member] | Major [Member] | ||
Total | 25.90% | 27.60% |
% Revenues [Member] | All Others [Member] | ||
Total | 74.10% | 72.40% |
% AR [Member] | ||
Total | 100.00% | 100.00% |
% AR [Member] | Major [Member] | ||
Total | 61.30% | 40.90% |
% AR [Member] | All Others [Member] | ||
Total | 38.70% | 59.10% |
Nature of Business and Summar_6
Nature of Business and Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Other assets, noncurrent | $ 862,624 | $ 1,037,364 | |
Inventory, net | 1,899,927 | 1,263,589 | |
Inventory, work in process, gross | 680 | $ 7,742 | |
Research and development expense | $ 19,322 | $ 1,760 | |
Deferred system sales costs, terms | These costs are recognized on a straight-line basis over the term of the contract which is generally 18-48 months beginning when revenues are generated. | ||
Sales Revenue, Net [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 100.00% | 100.00% | |
Accounts Receivable [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 100.00% | 100.00% | |
Accounts Receivable [Member] | Three Customers [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 61.00% | 41.00% | |
Revenues [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 100.00% | 100.00% | |
Revenues [Member] | United States [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 91.80% | 79.10% | |
Revenues [Member] | Australia [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 1.20% | 12.30% | |
Revenues [Member] | One Customers [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 26.00% | ||
Revenues [Member] | Two Customers [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 28.00% | ||
Minimum [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Interest variable rate | 1.00% | ||
Maximum [Member] | |||
Nature of Business and Summary of Significant Accounting Policies (Textual) | |||
Interest variable rate | 6.00% |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable under normal 30 day terms | $ 1,178,777 | $ 1,649,695 |
Financed contracts: | ||
Current portion of long-term | 1,145,765 | 1,086,820 |
Long-term, net of current portion | 1,756,931 | 2,253,667 |
Total accounts receivable | 4,081,473 | 4,990,182 |
Less allowance for doubtful accounts | (198,623) | (198,623) |
Accounts receivable, net | 3,882,850 | 4,791,559 |
Presented on the balance sheet as: | ||
Accounts receivable, net | 2,125,919 | 2,537,892 |
Long-term accounts receivable - financed contracts | $ 1,756,931 | $ 2,253,667 |
Accounts Receivable (Details 1)
Accounts Receivable (Details 1) - Trade Accounts Receivable [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable allowance, beginning of period | $ 198,623 | $ 165,840 |
Provision adjustment | 0 | 115,000 |
Write-off | 0 | (82,217) |
Accounts receivable allowance, end of period | $ 198,623 | $ 198,623 |
Accounts Receivable (Details Te
Accounts Receivable (Details Textual) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts Receivable (Textual) | ||
Allowance for doubtful accounts | $ 198,623 | $ 198,623 |
Accounts receivable | 2,125,919 | 2,537,892 |
Contract liabilities | 2,628,972 | 3,148,410 |
Trade Receivables [Member] | ||
Accounts Receivable (Textual) | ||
Allowance for doubtful accounts | 47,623 | 42,623 |
Financed Contracts [Member] | ||
Accounts Receivable (Textual) | ||
Allowance for doubtful accounts | 151,000 | 156,000 |
Accounts receivable | $ 2,902,696 | $ 3,340,487 |
Operating Leases (Details)
Operating Leases (Details) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 42,143 |
2021 | 28,632 |
Total Lease Payments | 70,775 |
Less: Interest | (3,342) |
Present value of lease liabilities | $ 67,433 |
Operating Leases (Details Textu
Operating Leases (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Leases (Textual) | ||
Lease space, description | We lease space under non-cancelable operating leases for our two office locations. These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions. | |
Operating leases | $ 15,861 | $ 15,519 |
Weighted average lease terms | 11 months 1 day | |
Borrowing rate | 5.00% |
General Credit Agreement (Detai
General Credit Agreement (Details) | 1 Months Ended |
Feb. 29, 2020 | |
General Credit Agreement (Textual) | |
General credit agreement, description | The Company obtained a general credit and security agreement with a lender, which provides a revolving credit line of up to $500,000 and expires on February 1, 2021. |
Interest prime rate | 3.25% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jan. 08, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders' Equity (Textual) | |||
Description of vesting schedule | These shares are subject to a four-year vesting schedule as follows: 20,000 shares on January 8, 2019 and 10,000 shares in each subsequent year | ||
Weighted average period | 2 years | ||
Unrecognized stock compensation expense | $ 51,500 | ||
Unvested restricted stock outstanding | 20,000 | 30,000 | |
Treasury stock, shares | 149,946 | 149,946 | |
Restricted stock shares | 50,000 | ||
Grant date fair value | $ 117,500 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic and diluted earnings per share calculation: | ||
Net income (loss) to common stockholders | $ (1,188) | $ 7,955 |
Weighted average number of common shares outstanding - basic | 4,486,788 | 4,496,494 |
Basic net income (loss) per share | $ 0 | $ 0 |
Weighted average number of common shares outstanding - diluted | 4,486,788 | 4,504,503 |
Diluted net income (loss) per share | $ 0 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) | Apr. 14, 2020 |
Subsequent Event [Member] | |
Subsequent Event (Textual) | |
Subsequent event, description | The Company entered into a Promissory Note with Alerus Financial, N.A. (the “Promissory Note”), which provides for an unsecured loan of $473,400 pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”). The Promissory Note has a term of 2 years with a 1% per annum interest rate. Payments are deferred for 6 months from the date of the Promissory Note and the Company can apply for forgiveness of the Promissory Note after 60 days. |