PokerTek (PTEK) 10-Q 14 Aug 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 14, 2014
Document and Entity Information:	'	'
Entity Registrant Name	'PokerTek, Inc.	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-14	'
Amendment Flag	'false	'
Entity Central Index Key	'0001302177	'
Current Fiscal Year End Date	'--12-31	'
Entity Common Stock, Shares Outstanding	'	9,421,403
Entity Filer Category	'Smaller Reporting Company	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Well-known Seasoned Issuer	'No	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenue	'	'	'	'
License and service fees	$934,294	$1,225,353	$2,018,175	$2,586,022
Sales of systems and equipment	16,959	378,870	47,660	409,321
Total revenue	951,253	1,604,223	2,065,835	2,995,343
Cost of revenue	264,886	365,909	536,389	719,459
Gross profit	686,367	1,238,314	1,529,446	2,275,884
Operating expenses:	'	'	'	'
Selling, general and administrative	978,817	1,020,216	1,877,749	1,966,995
Research and development	161,492	169,922	319,442	338,349
Share-based compensation expense	70,703	75,880	132,149	146,659
Depreciation	2,135	2,310	4,551	4,633
Total operating expenses	1,213,147	1,268,328	2,333,891	2,456,636
Operating loss	-526,780	-30,014	-804,445	-180,752
Interest expense, net	7,850	9,470	16,108	20,013
Net loss from continuing operations before income taxes	-534,630	-39,484	-820,553	-200,765
Income tax provision	0	11,939	0	46,020
Net loss from continuing operations	-534,630	-51,423	-820,553	-246,785
Income from discontinued operations	'	'	'	535
Net loss	-534,630	-51,423	-820,553	-246,250
Other comprehensive loss:	'	'	'	'
Adjustments to net loss	'	'	'	'
Comprehensive loss	($534,630)	($51,423)	($820,553)	($246,250)
Net loss from continuing operations per common share - basic and diluted	($0.06)	($0.01)	($0.09)	($0.03)
Net income (loss) from discontinued operations per common share - basic and diluted	'	'	'	'
Net loss per common share - basic and diluted	($0.06)	($0.01)	($0.09)	($0.03)
Weighted average common shares outstanding - basic and diluted	9,394,729	9,227,808	9,379,168	9,004,560

CONSOLIDATED_BALANCE_SHEETS_Un

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets:	'	'
Cash and cash equivalents	$363,676	$415,533
Accounts receivable, net	422,690	793,949
Inventory	867,540	869,631
Prepaid expenses and other assets	87,175	90,314
Total current assets	1,741,081	2,169,427
Long-term assets:	'	'
Inventory	619,915	545,070
Gaming systems, net	988,437	1,224,931
Property and equipment, net	25,631	27,724
Other assets	98,618	110,740
Total long-term assets	1,732,601	1,908,465
Total assets	3,473,682	4,077,892
Current liabilities:	'	'
Accounts payable	305,404	243,960
Accrued liabilities	411,894	310,126
Deferred revenue	670	20,051
Long-term debt, current portion	85,781	70,822
Total current liabilities	803,749	644,959
Long-term liabilities:	'	'
Long-term liability	156,173	167,523
Long-term debt	131,742	169,607
Total long-term liabilities	287,915	337,130
Total liabilities	1,091,664	982,089
Shareholders' equity	'	'
Preferred stock, no par value per share; authorized 5,000,000 none issued and outstanding	'	'
Common stock, no par value per share; authorized 40,000,000 shares, issued and outstanding 9,421,403 and 9,363,434 shares at June 30, 2014 and December 31, 2013, respectively	'	'
Additional paid-in capital	50,462,676	50,355,908
Accumulated deficit	-48,080,658	-47,260,105
Accumulated other comprehensive loss, net	'	'
Total shareholders' equity	2,382,018	3,095,803
Total liabilities and shareholders' equity	$3,473,682	$4,077,892

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position	'	'
Common Stock, par or stated value	$0	$0
Common Stock, shares authorized	40,000,000	100,000,000
Common Stock, shares issued	9,421,403	9,363,434
Common Stock, shares outstanding	9,421,403	9,363,434
Preferred Stock, par or stated value	$0	$0
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0

CONSOLIDATED_STATEMENTS_OF_SHA

CONSOLIDATED STATEMENTS OF SHAREHOLDERS'EQUITY (Unaudited) (USD $)	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
		USD ($)	USD ($)	USD ($)
Equity Balance, beginning of period, Value at Dec. 31, 2013	'	$50,355,908	($47,260,105)	$3,095,803
Equity Balance, beginning of period, Shares at Dec. 31, 2013	9,363,434	'	'	'
Share-based compensation, net	'	61,446	'	61,446
Net loss	'	'	-285,923	-285,923
Equity Balance, end of period, Value at Mar. 31, 2014	'	50,417,354	-47,546,028	2,871,326
Equity Balance, beginning of period, Shares at Mar. 31, 2014	9,363,434	'	'	'
Share-based compensation, net	'	70,703	'	70,703
Share settlements of restricted stock awards and restricted stock units, Value	'	-25,381	'	-25,381
Share settlements of restricted stock awards and restricted stock units, Shares	57,969	'	'	'
Net loss	'	'	-534,630	-534,630
Equity Balance, end of period, Value at Jun. 30, 2014	'	$50,462,676	($48,080,658)	$2,382,018
Equity Balance, end of period, Shares at Jun. 30, 2014	9,421,403	'	'	'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:	'	'
Net loss	($820,553)	($246,250)
Net income (loss) from discontinued operations	'	-535
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	308,663	400,258
Share-based compensation expense	132,149	146,659
Provision for doubtful accounts and other receivables	-36,133	104,217
Changes in assets and liabilities:	'	'
Accounts and other receivables	407,392	-74,180
Prepaid expenses and other assets	15,261	19,132
Inventory	-72,754	96,678
Gaming systems	-67,617	-323,846
Accounts payable and accrued expenses	151,862	91,943
Deferred revenue	-19,381	177,262
Net cash provided by (used in) operating activities from continuing operations	-1,111	391,338
Net cash provided by operating activities from discontinued operations	'	535
Net cash provided by (used in) operating activities	-1,111	391,873
Cash flows from investing activities:	'	'
Purchases of property and equipment	-2,459	-5,870
Net cash used in investing activities	-2,459	-5,870
Cash flows from financing activities:	'	'
Proceeds from issuance of common stock, net of expenses	'	473,800
Tax payments on vesting of restricted stock units	-25,381	-51,856
Repayments of long-term debt	-22,906	-26,472
Net cash provided by (used in) financing activities	-48,287	395,472
Net increase (decrease) in cash and cash equivalents	-51,857	781,475
Cash and cash equivalents, beginning of year	415,533	235,757
Cash and cash equivalents, end of period	363,676	1,017,232
Supplemental Disclosure of Cash Flow Information	'	'
Cash paid for: Interest	16,182	23,756
Cash paid for: Income taxes	'	43,995
Non-cash transactions:	'	'
Shares of common stock issued in settlement of litigation	'	117,288
Notes receivable, net	'	$41,028

Note_1_Nature_of_Business_and_

Note 1. Nature of Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 1. Nature of Business and Basis of Presentation	'
	Note 1.                      Nature of Business and Basis of Presentation
	PokerTek, Inc. (the “Company”) is engaged in the business of developing, manufacturing and marketing electronic table games and related products for casinos, cruise lines, racinos, card clubs and lotteries worldwide.
	The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All significant intercompany transactions and accounts have been eliminated.
	These consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
	The accompanying consolidated financial statements are unaudited and are presented in accordance with Article 8-03 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for annual financial statements. In the opinion of management, these consolidated financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company’s results of operations for the periods presented. The results of operations for the three and six month periods ended June 30, 2014 are not necessarily indicative of the results to be expected for the entire year.
	Certain prior year amounts have been reclassified in our unaudited condensed consolidated financial statements to conform with current period presentation.
	Recent Accounting Pronouncements
	Recently issued accounting pronouncements adopted in the current year
	In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters – Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity” (“ASU No. 2013-05”), which permits companies to release cumulative translation adjustments into earnings when an entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into earnings only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. ASU No. 2013-05 is effective for annual reporting periods beginning on or after December 15, 2013. The Company adopted this guidance beginning with 2014 fiscal year with no significant impact on its consolidated results of operations, financial condition and cash flows.
	In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (Topic 740)” (“ASU No. 2013-11”) to provide explicit guidance and eliminate the diversity in practice on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU No. 2013-11 is effective for annual reporting periods beginning on or after December 15, 2013. The Company adopted this guidance beginning with its 2014 fiscal year with no significant impact on its consolidated results of operations, financial condition and cash flows.
	The Company believes there is no additional new accounting guidance adopted but not yet effective that is relevant to the readers of the Company's condensed consolidated financial statements. However, several new Exposure Drafts and proposals are under development which, if and when enacted, may have a significant impact on the Company's consolidated financial statements.

Note_2_Operations_and_Liquidit

Note 2. Operations and Liquidity Management	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 2. Operations and Liquidity Management	'
	Note 2.                      Operations and Liquidity Management
	Historically, the Company has incurred net losses and used cash from financing activities to fund its operations in each annual period since inception.
	As of June 30, 2014, the Company’s cash balances totaled approximately $364 thousand and availability under the SVB Credit Facility (see Note 10 “Debt”) was approximately $292 thousand. Cash used in operations for the six months ended June 30, 2014 was approximately $1 thousand. The level of additional capital needed to fund operations and the Company’s ability to conduct business on a standalone basis for the next 12 months is influenced primarily by the following factors:
		·	the pace of growth in the Company’s recurring-revenue gaming business, the related investments in inventory and the level of spending on development and regulatory efforts;
		·	the level of investment in development and approval of new products, entry into new markets, and investments in regulatory approvals;
		·	its ability to control growth of operating expenses as its business grows the business and expands with new products in new markets;
		·	its ability to negotiate and maintain favorable payment terms with customers and vendors;
		·	its ability to access the capital markets and maintain availability under its credit line;
		·	demand for its products, and the ability of its customers to pay on a timely basis; and
		·	general economic conditions as well as political events and legal and regulatory changes.
	The Company’s operating plans as an independent company for 2014 included placing existing inventory, entering new markets, commercializing new products and accelerating revenue growth while controlling operating expense and working capital levels.
	On April 29, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Multimedia Games, Inc., a Delaware corporation (“MGAM”), and 23 Acquisition Co., a North Carolina corporation and wholly owned subsidiary of MGAM (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company, and the separate corporate existence of Merger Sub will thereupon cease, and the Company will continue as the surviving corporation (the “Surviving Corporation”) and a wholly owned subsidiary of MGAM (the “Merger”). The Merger Agreement was unanimously approved by the Company’s Board of Directors (the “Board”), based on the recommendation of a Special Committee of the Board (the “Special Committee”) that was formed to evaluate and negotiate the terms of a sale of the Company. (See Note 17 “Merger with Multimedia Games, Inc.”).
	The Company believes that the Merger will also have a significant effect on its cash requirements during 2014 as it will incur additional legal, banking and other professional fees and merger related costs in addition to its planned expenditures. In order to fund its operation and merger-related costs through the closing of the Merger, in July 2014, the Company entered into the Note Agreement with MGAM, the Founders’ Loan Payment Deferral Agreement with Arthur L. Lomax and the Executive Salary Deferral Agreements with its chief executive officer and its president (see Note 10 “Debt,” Note 17 “Merger with Multimedia Games, Inc.” and Note 18 “Subsequent Events.”)
	The Company may seek to raise additional capital, expand its credit facility or seek additional capital sources to fund operations and merger-related expenses. The Company cannot assure you that, in the event it needs additional working capital, adequate additional working capital will be available or, if available, will be on terms acceptable to it. If the Company is unable to raise additional capital or expand its credit facilities or close the Merger, the Company’s ability to conduct business, complete the proposed merger and achieve its other objectives could be negatively impacted.

Note_3_Discontinued_Operations

Note 3. Discontinued Operations	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 3. Discontinued Operations	'
	Note 3.                      Discontinued Operations
	The statements of operations for the discontinued operations for the three and six months ended June 30, 2014 and 2013 consisted of the following:
		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2014	2013	2014	2013
	Revenue	-	-	-	$535
	Cost of revenue	-	-	-	-
	Gross profit	-	-	-	535
	Operating expenses	-	-	-	-
	Net income from discontinued operations	-	-	-	$535

Note_4_Accounts_Receivable

Note 4. Accounts Receivable	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 4. Accounts Receivable	'
	Note 4.                      Accounts Receivable
	Accounts receivable at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Accounts receivable	$503,279	$910,920
	Allowance for doubtful accounts	-80,589	-116,971
	Accounts receivable, net	$422,690	$793,949

Note_5_Inventory

Note 5. Inventory	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 5. Inventory	'
	Note 5.                      Inventory
	Inventory at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Raw materials and components	$1,080,799	$1,182,150
	Gaming systems in process	436,167	331,536
	Finished goods	208,235	116,114
	Reserve	-237,746	-215,099
	Inventory, net	$1,487,455	$1,414,701
	Long-Term Inventory	619,915	545,070
	Current Inventory	$867,540	$869,631

Note_6_Prepaid_Expenses_and_Ot

Note 6. Prepaid Expenses and Other Assets	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 6. Prepaid Expenses and Other Assets	'
	Note 6.                      Prepaid Expenses and Other Assets
	Prepaid expenses and other assets at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Prepaid expenses	$57,691	$62,924
	Other	29,484	27,390
	Prepaid expenses and other assets	$87,175	$90,314
	Deferred licensing fees, net	$49,939	$60,560
	Other	48,679	50,180
	Other assets	$98,618	$110,740

Note_7_Gaming_Systems

Note 7. Gaming Systems	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 7. Gaming Systems	'
	Note 7.                      Gaming Systems
	Gaming systems at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Gaming systems	$6,512,004	$6,716,864
	Less: accumulated depreciation	(5,523,567)	(5,491,933)
	Gaming systems, net	$988,437	$1,224,931

Note_8_Property_and_Equipment

Note 8. Property and Equipment	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 8. Property and Equipment	'
	Note 8.                      Property and Equipment
	Property and equipment at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Equipment	$464,863	$462,404
	Leasehold improvements	208,387	208,387
	Capitalized software	157,067	157,067
		830,317	827,858
	Less: accumulated depreciation	-804,686	-800,134
	Property and equipment, net	$25,631	$27,724

Note_9_Accrued_Liabilities

Note 9. Accrued Liabilities	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 9. Accrued Liabilities	'
	Note 9.                      Accrued Liabilities
	Accrued liabilities at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Inventory received, not invoiced	167,425	156,075
	Other liabilities and customer deposits	244,469	154,051
	Accrued liabilities	$411,894	$310,126

Note_10_Debt

Note 10. Debt	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 10. Debt	'
	Note 10.                       Debt
	The Company’s outstanding debt balances as of June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	SVB Credit Facility	-	-
	Founders' Loan	217,523	240,429
	Total debt	217,523	240,429
	Current portion of debt	85,781	70,822
	Long-term portion of debt	$131,742	169,607
	SVB Credit Facility. The Company maintains a credit facility with Silicon Valley Bank to support its working capital needs (the “SVB Credit Facility”). As of February 27, 2014, the Company entered into the Eighth Amendment to Loan and Security Agreement, which extended the maturity date of the facility to January 15, 2015. Maximum advances under the SVB Credit Facility are determined based on the composition of the Company’s eligible accounts receivable and inventory balances with a facility limit of $625,000. The SVB Credit Facility bears interest at an annual rate equal to the greater of 6.5% or prime plus 2.0%.
	Based on the Company’s accounts receivable and inventory levels at June 30, 2014, as of such date availability as calculated under the terms of the SVB Credit Agreement was approximately $292,000, and no amounts were outstanding. The SVB Credit Facility includes covenants requiring the achievement of specified financial ratios and thresholds and contains other terms and conditions customary for this type of credit facility. As of June 30, 2014, the Company was in compliance with these covenants. The SVB Credit Facility is collateralized by security interests in substantially all of the assets of the Company and is senior to the Founders’ Loan (described below).
	As of June 30, 2014, there were no amounts drawn under the SVB Credit Facility.
	Founders’ Loan.  On March 24, 2008, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Lyle A. Berman, James T. Crawford, Arthur L. Lomax and Gehrig H. White (collectively, the “Lenders”), all of whom were founders of PokerTek and members of its Board of Directors at the time. Pursuant to the terms of the Note Purchase Agreement, the Lenders loaned $2.0 million to the Company (the “Founders’ Loan”). The Founders’ Loan contains no restrictive covenants and is collateralized by security interests in 18 PokerPro systems. Such security interests have been subordinated to the SVB Credit Facility.
	On April 28, 2014, the Company and Arthur L. Lomax, entered into an Amendment to the Second Amended and Restated 9% Secured Promissory Note (the “Second Amended and Restated Promissory Note”), due December 31, 2016, made by the Company and held by Mr. Lomax (the “Note Modification Agreement”), to amend and restate the acceleration provision of the Second Amended and Restated Promissory Note. As amended, the outstanding principal of and accrued and unpaid interest on the Second Amended and Restated Promissory Note will automatically become immediately due and payable upon a Change in Control Transaction (as defined in the Second Amended and Restated Promissory Note). Prior to the amendment and restatement, the outstanding principal of and accrued and unpaid interest on the Second Amended and Restated Promissory Note would have automatically become immediately due and payable upon the Company’s execution of an agreement, including the Merger Agreement (see Note 17 “Merger with Multimedia Games, Inc.”), that provides for a Change in Control Transaction.
	On July 16, 2014, the Company and Arthur L. Lomax entered into the Founders' Loan Payment Deferral Agreement pursuant to which Mr. Lomax has agreed to defer all payments due to him pursuant to the Second Amended and Restated Promissory Note for the period commencing June 1, 2014 through and including December 31, 2014. (See Note 18 “Subsequent Events.”)
	As of June 30, 2014, the carrying value of the Founders’ Loan was $217,523 and its approximate fair value was $226,000. For the six month periods ended June 30 2014 and June 30, 2013, the Company made $22,906 and $26,472, respectively, of principal payments in cash and $6,957 and $13,231, respectively, in aggregate interest payments in cash.
	Loan Agreement with MGAM.  On July 16, 2014, the Company and MGAM entered into a Promissory Note Agreement (the "Note Agreement"), pursuant to which MGAM agreed to loan the Company up to $400,000 between July 16, 2014 and December 31, 2014. (See Note 18 “Subsequent Events.”).

Note_11_Employee_Benefit_Plan

Note 11. Employee Benefit Plan	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 11. Employee Benefit Plan	'
	Note 11.                       Employee Benefit Plan
	The Company has established a salary deferral plan under Section 401(k) of the Internal Revenue Code covering substantially all employees. The plan allows eligible employees to defer up to 96% of their annual compensation, subject to annual limitations imposed by the Internal Revenue Service pursuant to the authority granted to it under Section 401(k). The Company matches the employee contributions as follows: 100% on the first 3% of the deferred amount and 50% on the next 2% of the deferred amount. For the three months ended June 30, 2014 and 2013, the Company’s expenses related to the 401K Plan were $13,945 and $12,215, respectively. For the six months ended June 30, 2014 and 2013, the Company’s expenses related to the 401K Plan were $28,995 and $23,742, respectively.

Note_12_Shareholders_Equity_se

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc.")	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc.")	'
	Note 12.                       Shareholders’ Equity (See Note 17 “Merger with Multimedia Games, Inc.”)
	Common Stock. There are 40,000,000 shares, no par value, of the Company’s common stock (“Common Stock”) authorized, of which 9,421,403 and 9,363,434 shares were outstanding as of June 30, 2014 and December 31, 2013, respectively.
	Warrants.  As of June 30, 2014, the following common stock purchase warrants were outstanding:
		·	20,000 common stock warrants at an exercise price of $2.50 with an expiration date of March 31, 2015 issued in connection with a private placement in May 2010; and
		·	40,000 common stock warrants at an exercise price of $2.75 with an expiration date of December 29, 2015 issued in connection with the LPC transaction.
	Preferred Stock. There are 5,000,000 authorized shares of preferred stock, none of which were outstanding as of June 30, 2014 and December 31, 2013.
	Stock Incentive Plans.  The Company’s shareholders have approved stock incentive plans, authorizing the issuance of stock option, restricted stock, restricted stock units (“RSUs”) and other forms of equity compensation. Pursuant to the approved stock incentive plans, 232,559 shares remained available for future grant as of June 30, 2014. The Company has historically issued stock options and restricted shares as compensation, although it has the authority to use other forms of equity compensation instruments in the future.
	Principal assumptions used in determining the fair value of option awards include the following: (a) expected future volatility for the Company's stock price, which is based on the Company’s historical volatility, (b) expected dividends, (c) expected term and forfeiture rates, based on historical exercise and forfeiture activity, and (d) the risk-free rate is the rate on U.S. Treasury securities with a maturity equal to, or closest to, the expected life of the options.
	The assumptions used to determine the fair value of option awards for the periods ended June 30, 2014 and December 31, 2013 were as follows:
		June 30,	December 31,
		2014	2013
	Expected Volatility	93%	94% - 97%
	Expected Dividends	0	0
	Expected Term	6 yrs	6 yrs
	Risk-free Rate	1.64% - 1.68%	0.82% - 1.60%
	A summary of Stock Option activity and changes during the six months ended June 30, 2014 is as follows:
			Weighted Average
		Shares	Exercise Price	Remaining Contractual Term	Aggregate Instrinsic Value
	Stock Options
	Outstanding at December 31, 2013	724,720	$4.68
	Granted	-	-
	Exercised	-	-
	Forfeited	-	-
	Expired	-	-
	Outstanding at June 30, 2014	724,720	$4.68	5	($2,435,201)
	Exercisable at June 30, 2014	715,316	$4.37	5.1	($2,184,281)
	A summary of RSU activity and changes during the period ended June 30, 2014 is as follows:
			Weighted Average
	Restricted Stock Units (RSU's)	Shares	Remaining Contractual Term	Grant Date Fair Value
	Nonvested at December 31, 2013	253,312		$189,984
	Granted	300,000		408,000
	Vested	-77,750		-61,423
	Forfeited	-
	Nonvested at June 30, 2014	475,562	3.9	$536,622

Note_13_Income_Tax_Provisions

Note 13. Income Tax Provisions	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 13. Income Tax Provisions	'
	Note 13.                       Income Tax Provisions
	For the three months ended June 30, 2014 and 2013, the Company recognized a tax provision of $0 and $11,939, respectively. For the six months ended June 30, 2014 and 2013, the Company recognized a tax provision of $0 and $46,020, respectively. These provisions are based principally on the Company’s estimated foreign income tax withholding liability, which is attributable to revenues generated outside of the United States.
	The effective rates for the periods ending June 30, 2014 and 2013 differ from the U.S. federal statutory rate principally due to the tax benefit arising from the Company’s net operating losses that are fully offset by the valuation allowance established against the Company’s deferred tax assets and deferred tax liabilities.

Note_14_Related_Party_Transact

Note 14. Related Party Transactions	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 14. Related Party Transactions	'
	Note 14.                       Related Party Transactions
	Office Lease
	The Company currently leases its office and manufacturing facility from an entity owned and controlled by the Company’s President and Vice Chairman of the Board of Directors. The entity purchased the building while the Company was already a tenant. The lease terms were negotiated on an arm’s length basis and are consistent with the rent paid by other tenants in the building and comparable market rents in the area. (See Note 16 “Commitments and Contingencies.”)
	Founders’ Loan
	The Company has a loan outstanding with a member of the Board. (See Note 10 “Debt.” And Note 18 “Subsequent Events.”)

Note_15_Segment_Information

Note 15. Segment Information	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 15. Segment Information	'
	Note 15.                       Segment Information
	The Company reports segment information based on the “management approach”. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. Following the Company’s exit from its amusement business, the Company’s operations are entirely focused on gaming products. Based on the criteria specified in ASC Topic 280, Segment Reporting, the Company has one reportable segment. The results of operations for the amusement products have been reported as discontinued operations for all periods presented.
	Revenues by geographic area are determined based on the location of the Company’s customers. For the three months ended June 30, 2014 and 2013, revenues from customers outside the United States accounted for 31.4% and 28.3% of consolidated revenue, respectively. For the six months ended June 30, 2014 and 2013, revenues from customers outside the United States accounted for 29.6% and 28.5% of consolidated revenue, respectively.
	For the three and six months ended June 30, 2014 and 2013 the following are the revenues and long-lived assets by geographic area:
		For Three Months Ended June 30,		For Six Months Ended June 30,
		2014	2013	2014	2013
	Revenue:
	United States	$652,207	$1,149,664	$1,454,106	$2,141,371
	Other Americas	252,516	374,723	521,191	746,228
	Europe	32,730	35,482	65,364	50,632
	Other International	13,800	44,354	25,174	57,112
		$951,253	$1,604,223	$2,065,835	$2,995,343
		30-Jun-14	31-Dec-13
	Long-lived assets, end of period:
	United States	$475,630	$450,714
	Other America's	464,506	718,982
	Europe	131,384	157,035
	Other International	41,166	36,664
		$1,112,686	$1,363,395

Note_16_Commitments_and_Contin

Note 16. Commitments and Contingencies	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 16. Commitments and Contingencies	'
	Note 16.                       Commitments and Contingencies
	Leases.  The Company leases its corporate office and manufacturing facility from an entity owned and controlled by the Company’s President and Vice Chairman of the Board of Directors. The lease expires on August 31, 2016. (See Note 14 “Related Party Transactions.”) Rent expense for the three months ended June 30, 2014 and 2013 was $33,750 and $33,750, respectively. Rent expense recorded for the leased space for the six months ended June 30, 2014 and 2013, was $67,500 and $67,500 respectively. Rent income for the three months ended June 30, 2014 and 2013 was $4,800 and none, respectively. Rent income for the six months ended June 30, 2014 and 2013 was $9,600 and none, respectively.
	Legal Proceedings.  The Company is subject to claims and assertions in the ordinary course of business. Legal matters are inherently unpredictable and the Company’s assessments may change based on future unknown or unexpected events.
	The Company is a party to several lawsuits related to the Merger and the transactions contemplated by the Merger Agreement. A description of the lawsuits is included in Note 17 “Merger with Multimedia Games, Inc., Certain Litigation related to Merger.”

Note_17_Merger_With_Multimedia

Note 17. Merger With Multimedia Games, Inc.	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 17. Merger With Multimedia Games, Inc.	'
	Note 17.  Merger with Multimedia Games, Inc.
	On April 29, 2014, the Company entered into the Merger Agreement, with MGAM, and Merger Sub, pursuant to which Merger Sub will merge with and into the Company, and the separate corporate existence of Merger Sub will thereupon cease, and the Company will continue as the surviving corporation and a wholly owned subsidiary of MGAM . The Merger Agreement was unanimously approved by the Board based on the recommendation of the Special Committee that was formed to evaluate and negotiate the terms of a sale of the Company.
	At the time the Merger becomes effective pursuant to the terms and conditions of the Merger Agreement and under North Carolina law (the “Effective Time”): (a) each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time will be converted into and become one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation, (b) each share of common stock of the Company issued and outstanding immediately prior to the Effective Time (other than shares owned by the Company, MGAM or Merger Sub and shares owned by shareholders of the Company who have perfected and not withdrawn a demand for appraisal rights under North Carolina law) will automatically be cancelled and converted into the right to receive $1.35 in cash, without interest (the “Merger Consideration”), and (c) each option outstanding (whether or not then vested or exercisable) that represents the right to acquire shares of Common Stock will be cancelled and terminated whereby the holder of any such option to acquire Common Stock shall receive an amount for each such option equal to the excess, if any, of (i) the Merger Consideration over (ii) the exercise price payable in respect of such share of Common Stock issuable upon exercise of such option. The Company’s stockholders approved the Merger on July 24, 2014 at a special meeting of Company’s stockholders.
	The Merger Agreement contains customary representations, warranties and covenants. The consummation of the Merger is subject to customary conditions, including, without limitation, (a) approval by the holders of a majority of the outstanding shares of Common Stock entitled to vote on the Merger and (b) the absence of any law, order, injunction or other legal restraint prohibiting the Merger. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including, without limitation, (i) the accuracy of the other party’s representations and warranties (subject to customary qualifiers), and (ii) the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary qualifiers). In addition, the obligation of MGAM and Merger Sub to consummate the Merger is conditioned upon (1) certain required consents having been obtained, (2) the receipt of certain approvals from gaming regulators, (3) holders of not more than five percent (5%) of the outstanding shares of Common Stock having exercised their appraisal rights, and (4) there not being any Company Material Adverse Effect (as defined in the Merger Agreement).
	From the date of the Merger Agreement, subject to certain exceptions, the Company is subject to customary “no-shop” restrictions on its ability to solicit or respond to alternative takeover proposals from third parties, furnish information to and engage in discussions with third parties regarding alternative takeover proposals, recommend an alternative takeover proposal or enter into an agreement with respect to an alternative takeover proposal.
	The Merger Agreement contains certain termination rights for the Company and MGAM, including the right of the Company under certain circumstances to terminate the Merger Agreement to accept a Superior Proposal (as defined in the Merger Agreement) and enter into a definitive agreement with respect thereto. Upon termination of the Merger Agreement under specified circumstances, including termination of the Merger Agreement to accept a Superior Proposal and enter into a definitive agreement with respect thereto, the Company is required to pay MGAM a termination fee of up to $650,000. Upon termination of the Merger Agreement by the Company under certain other specified circumstances, MGAM and Merger Sub are required to pay the Company a termination fee of $500,000.
	The representations, warranties and covenants made in the Merger Agreement (a) have been made only for purposes of the Merger Agreement, (b) have been qualified by confidential disclosures made to MGAM and Merger Sub in connection with the Merger Agreement, (c) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, (d) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement and (e) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its Subsidiaries (as defined in the Merger Agreement) or Affiliates (as defined in the Merger Agreement). Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or incorporated by reference into, Forms 10-K, Forms 10-Q and other documents that the Company files with the Securities and Exchange Commission (“SEC”).
	The Board, acting upon the recommendation of the Special Committee, has approved the adoption of the Merger Agreement and consummation of the Merger and recommended adoption of the Merger Agreement and consummation of the Merger by the Company’s shareholders. At a special meeting of the Company’s shareholders held on July 24, 2014, shareholders approved the Merger and transactions contemplated by the Merger Agreement. (See Note 18 “Subsequent Events.”) The Merger is expected to close in calendar year 2014 subject to the fulfillment of the conditions to closing delineated in the Merger Agreement.
	Certain Litigation related to the Merger.  As described in the Definitive Proxy Statement, dated June 16, 2014, under the heading “Proposal I: The Merger - Litigation Related to the Merger,” a purported class action complaint on behalf of the Company’s shareholders was filed on May 9, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No. 14-CVS-8300, captioned Robert Simmer, on behalf of himself and all others similarly situated, Plaintiff, v. PokerTek, Inc., Multimedia Games Holding Company, Inc., Multimedia Games, Inc., 23 Acquisition Co., James Crawford, Joe Lahti, Lyle Berman, Lou White and Arthur L. Lomax, Defendants, and a purported amended class action complaint was filed on June 6, 2014 (“Action #1”).
	A second purported class action complaint on behalf of the Company’s shareholders was filed on May 15, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No 14-CVS-8911, captioned Jeffrey Weber and James Dabord, individually and on behalf of all others similarly situated, Plaintiff, v. PokerTek, Inc., Multimedia Games Holding Company, Inc., Multimedia Games, Inc., 23 Acquisition Co., James Crawford, Joe Lahti, Lyle Berman, Lou White and Arthur L. Lomax, Defendants, and an purported amended class action complaint was filed on June 6, 2014 (“Action #2”).
	A third purported class action complaint on behalf of the Company’s shareholders was filed on May 16, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No. 14-CVS-9215, captioned Herald J. Stephens, individually and on behalf of all others similarly situated, as Plaintiff, v. Mark D. Roberson, James T. Crawford III, Joseph J. Lahti, Lyle A. Berman, Gehrig H. White, Arthur L. Lomax, PokerTek, Inc., Multimedia Games, Inc., Multimedia Games Holding Company, Inc. and 23 Acquisition Co., Defendants (“Action #3”).
	A fourth purported class action complaint on behalf of the Company’s shareholders was filed on May 19, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No 14-CVS-9271, captioned Luis Lobo, individually and on behalf of all others similarly situated, as Plaintiff, v. PokerTek, Inc., James Crawford, Joe Lahti, Lyle Berman, Gehrig White, Lee Lomax, Mark Roberson, Multimedia Games, Inc. and 23 Acquisition Co., Defendants, and an purported amended class action complaint was filed on June 6, 2014 (“Action #4”).
	A firth purported class action and shareholder derivative complaint on behalf of the Company’s shareholders was filed on June 9, 2014 in the General Court of Justice, Superior Court Division in and for Mecklenburg County, North Carolina, Case No 14-CVS-10579, captioned Arkady Sandler, individually and on behalf of all others similarly situated, as Plaintiff, v. Joseph J. Lahti, Lyle A. Berman, Gehrig H. White, Arthur L. Lomax, James T. Crawford III, Multimedia Games, Inc. and 23 Acquisition Co., Defendants and PokerTek, Inc., Nominal Defendant (“Action #5”).
	Actions #1, #2, #3, #4 and #5 are collectively referred to herein as the Actions. On July 8, 2014, the Actions were consolidated into a single action under the caption of Action #5 (the “Consolidated Action”).
	On July 10, 2014, a substantially similar shareholder action was filed in the United States District Court for the Western District of North Carolina, captioned Clark v. PokerTek, Inc., Case No. 3:14 cv 00380 (W.D.N.C.) (the "Federal Action" and, together with the Consolidated Action, the "Actions"), alleging breaches of fiduciary duty and aiding and abetting thereof and related violations of federal securities laws relating to the Proposed Transaction. The Company has not received service of process in the Federal Action.
	The Company believes that the Actions are without merit and that the defendants committed no breach of any duty, aided or abetted any breach or violated any federal securities laws or other laws in connection with the Proposed Transaction. Further, the Company believes no further disclosure was required to supplement the Definitive Proxy Statement under any applicable rule, statute, regulation or law. However, to eliminate the burden, expense and uncertainties inherent in all such litigation, on July 13, 2014, the defendants entered into a memorandum of understanding (the "Memorandum of Understanding") regarding settlement of the Consolidated Action. The Memorandum of Understanding outlines the terms of the parties' agreement in principle to settle and release all claims which were or could have been asserted in the Consolidated Action and the Federal Action. In consideration for such settlement and release, the parties to the Consolidated Action agreed that the Company would make certain supplemental disclosures to the Definitive Proxy Statement, and those disclosures were made in a Current Report on Form 8-K dated July 13, 2014. The Memorandum of Understanding contemplates that the parties will attempt in good faith to agree promptly upon a stipulation of settlement to be submitted to the assigned Judge of the North Carolina Business Court of the General Court of Justice, Superior Court Division, Mecklenburg County, North Carolina for approval at the earliest practicable time. The stipulation will be subject to customary conditions, including confirmatory discovery and approval by the Court, which will consider the fairness, reasonableness and adequacy of the settlement. The parties have also agreed to negotiate in good faith regarding the amount of attorneys’ fees, if any, to be paid to Plaintiffs’ counsel. Any amount of agreed attorneys’ fees in the stipulation is subject to court approval, and in the event there is no agreement on attorneys’ fees or Plaintiffs’ counsel seeks an award of fees in excess of the negotiated amount then the Company has reserved the right to object to the requested award of attorneys’ fees. Under the terms of the proposed settlement, following final approval by the Court, the Consolidated Action will be dismissed with prejudice. There can be no assurance that the parties will ultimately enter into the stipulation or that the Court will approve the settlement even if the parties were to enter into the stipulation. In such event, or if the Merger is not consummated for any reason, the proposed settlement will be null and void and of no force and effect.
	The settlement does not affect the amount of merger consideration to be paid to shareholders in connection with the proposed Merger.

Note_18_Subsequent_Events

Note 18. Subsequent Events	6 Months Ended
	Jun. 30, 2014
Notes	'
Note 18. Subsequent Events	'
	Note 18. Subsequent Events
	Shareholder Approval of the Merger.  On July 24, 2014, at a special meeting of the Company’s shareholders, the Company’s shareholders approved the Merger Agreement and the Merger contemplated thereby.
	Loan Agreement with MGAM.  On July 16, 2014, the Company and MGAM entered into the Note Agreement, pursuant to which MGAM agreed to loan up to $400,000 to the Company between July 16, 2014 and December 31, 2014. Any amount borrowed under the Note Agreement accrues interest at the rate of five (5%) percent per annum payable quarterly in arrears. If any amount is not paid when due, such overdue amount shall bear interest at the rate of fifteen (15%) percent per annum. All unpaid principal and interest will be due and payable on March 31, 2015. The Company may prepay the loan in whole or in part at any time without penalty. On July 18, 2014, $250,000 was advanced by MGAM to the Company under this facility.
	Founders' Loan Payment Deferral Agreement.   On July 16, 2014, the Company entered into an agreement (the "Founders' Loan Payment Deferral Agreement") with Arthur L. Lomax, pursuant to which Mr. Lomax has agreed to defer all payments due to him pursuant to the Second Amended and Restated Promissory Note for the period commencing June 1, 2014 through and including December 31, 2014. The deferred amounts will be payable to Mr. Lomax upon the earliest of: (i) the closing of either (a) the Merger contemplated by the Merger Agreement, or (b) the closing of a transaction in connection with a “Superior Proposal” (as defined in the Merger Agreement); or (ii) January 31, 2015.
	Executive Officer Salary Deferral Agreement.   Each of Mark D. Roberson, the Company’s chief executive officer and James T. Crawford, the Company's president and a director, have agreed to defer thirty (30%) percent of the compensation payable pursuant to their respective employment agreements with the Company for the period from June 1, 2014 through and including December 31, 2014 until the earliest of: (i) the closing of either (a) the Merger contemplated by the Merger Agreement, or (b) the closing of a transaction in connection with a "Superior Proposal" (as defined in the Merger Agreement); or (ii) January 31, 2015 (“Executive Salary Deferral Agreement.”)
	Settlement of Certain Litigation Related to the Merger.  As described in Note 16. “Commitments and Contingencies” several purported class action complaints on behalf of the Company’s shareholders were filed after the announcement of the Merger Agreement.
	On July 13, 2014, a Memorandum of Understanding was entered into by the Company relating to the settlement of the Consolidated Action. (See Note 17 “Merger with Multimedia Games, Inc. – Litigation Related to the Merger”).

Note_3_Discontinued_Operations1

Note 3. Discontinued Operations: Statements of Operations, Discontinued Operations (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Statements of Operations, Discontinued Operations	'
	The statements of operations for the discontinued operations for the three and six months ended June 30, 2014 and 2013 consisted of the following:
		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2014	2013	2014	2013
	Revenue	-	-	-	$535
	Cost of revenue	-	-	-	-
	Gross profit	-	-	-	535
	Operating expenses	-	-	-	-
	Net income from discontinued operations	-	-	-	$535

Note_4_Accounts_Receivable_Sch

Note 4. Accounts Receivable: Schedule of Accounts Receivable (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Accounts Receivable	'
	Accounts receivable at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Accounts receivable	$503,279	$910,920
	Allowance for doubtful accounts	-80,589	-116,971
	Accounts receivable, net	$422,690	$793,949

Note_5_Inventory_Schedule_of_I

Note 5. Inventory: Schedule of Inventory (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Inventory	'
	Inventory at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Raw materials and components	$1,080,799	$1,182,150
	Gaming systems in process	436,167	331,536
	Finished goods	208,235	116,114
	Reserve	-237,746	-215,099
	Inventory, net	$1,487,455	$1,414,701
	Long-Term Inventory	619,915	545,070
	Current Inventory	$867,540	$869,631

Note_6_Prepaid_Expenses_and_Ot1

Note 6. Prepaid Expenses and Other Assets: Prepaid Expenses and Other Assets (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Prepaid Expenses and Other Assets	'
		June 30,	December 31,
		2014	2013
	Prepaid expenses	$57,691	$62,924
	Other	29,484	27,390
	Prepaid expenses and other assets	$87,175	$90,314
	Deferred licensing fees, net	$49,939	$60,560
	Other	48,679	50,180
	Other assets	$98,618	$110,740

Note_7_Gaming_Systems_Schedule

Note 7. Gaming Systems: Schedule of Gaming Systems (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Gaming Systems	'
	Gaming systems at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Gaming systems	$6,512,004	$6,716,864
	Less: accumulated depreciation	(5,523,567)	(5,491,933)
	Gaming systems, net	$988,437	$1,224,931

Note_8_Property_and_Equipment_

Note 8. Property and Equipment: Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Property and Equipment	'
	Property and equipment at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Equipment	$464,863	$462,404
	Leasehold improvements	208,387	208,387
	Capitalized software	157,067	157,067
		830,317	827,858
	Less: accumulated depreciation	-804,686	-800,134
	Property and equipment, net	$25,631	$27,724

Note_9_Accrued_Liabilities_Sch

Note 9. Accrued Liabilities: Schedule of Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Accrued Liabilities	'
	Accrued liabilities at June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	Inventory received, not invoiced	167,425	156,075
	Other liabilities and customer deposits	244,469	154,051
	Accrued liabilities	$411,894	$310,126

Note_10_Debt_Schedule_of_Debt_

Note 10. Debt: Schedule of Debt (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Debt	'
	The Company’s outstanding debt balances as of June 30, 2014 and December 31, 2013 consisted of the following:
		June 30,	December 31,
		2014	2013
	SVB Credit Facility	-	-
	Founders' Loan	217,523	240,429
	Total debt	217,523	240,429
	Current portion of debt	85,781	70,822
	Long-term portion of debt	$131,742	169,607

Note_12_Shareholders_Equity_se1

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc."): Schedule of Stock Options, Valuation Assumptions (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Stock Options, Valuation Assumptions	'
	The assumptions used to determine the fair value of option awards for the periods ended June 30, 2014 and December 31, 2013 were as follows:
		June 30,	December 31,
		2014	2013
	Expected Volatility	93%	94% - 97%
	Expected Dividends	0	0
	Expected Term	6 yrs	6 yrs
	Risk-free Rate	1.64% - 1.68%	0.82% - 1.60%

Note_12_Shareholders_Equity_se2

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc."): Schedule of Stock Options, Activity (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Stock Options, Activity	'
	A summary of Stock Option activity and changes during the six months ended June 30, 2014 is as follows:
			Weighted Average
		Shares	Exercise Price	Remaining Contractual Term	Aggregate Instrinsic Value
	Stock Options
	Outstanding at December 31, 2013	724,720	$4.68
	Granted	-	-
	Exercised	-	-
	Forfeited	-	-
	Expired	-	-
	Outstanding at June 30, 2014	724,720	$4.68	5	($2,435,201)
	Exercisable at June 30, 2014	715,316	$4.37	5.1	($2,184,281)

Note_12_Shareholders_Equity_se3

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc."): Schedule of RSU Activity (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of RSU Activity	'
	A summary of RSU activity and changes during the period ended June 30, 2014 is as follows:
			Weighted Average
	Restricted Stock Units (RSU's)	Shares	Remaining Contractual Term	Grant Date Fair Value
	Nonvested at December 31, 2013	253,312		$189,984
	Granted	300,000		408,000
	Vested	-77,750		-61,423
	Forfeited	-
	Nonvested at June 30, 2014	475,562	3.9	$536,622

Note_15_Segment_Information_Sc

Note 15. Segment Information: Schedule of Revenues and Long-lived Assets by Geographic Area (Tables)	6 Months Ended
	Jun. 30, 2014
Tables/Schedules	'
Schedule of Revenues and Long-lived Assets by Geographic Area	'
	For the three and six months ended June 30, 2014 and 2013 the following are the revenues and long-lived assets by geographic area:
		For Three Months Ended June 30,		For Six Months Ended June 30,
		2014	2013	2014	2013
	Revenue:
	United States	$652,207	$1,149,664	$1,454,106	$2,141,371
	Other Americas	252,516	374,723	521,191	746,228
	Europe	32,730	35,482	65,364	50,632
	Other International	13,800	44,354	25,174	57,112
		$951,253	$1,604,223	$2,065,835	$2,995,343
		30-Jun-14	31-Dec-13
	Long-lived assets, end of period:
	United States	$475,630	$450,714
	Other America's	464,506	718,982
	Europe	131,384	157,035
	Other International	41,166	36,664
		$1,112,686	$1,363,395

Note_2_Operations_and_Liquidit1

Note 2. Operations and Liquidity Management (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Cash and cash equivalents	$363,676	$1,017,232	$415,533	$235,757
Net cash used in operating activities	-1,111	391,873	'	'
SVB Credit Facility	'	'	'	'
Line of Credit Facility, Current Borrowing Capacity	$292,000	'	'	'

Note_3_Discontinued_Operations2

Note 3. Discontinued Operations: Statements of Operations, Discontinued Operations (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Details	'	'	'	'
Revenue	$0	$0	$0	$535
Cost of revenue	0	0	0	0
Gross profit	0	0	0	535
Operating expenses	0	0	0	0
Net income from discontinued operations	$0	$0	$0	$535

Note_4_Accounts_Receivable_Sch1

Note 4. Accounts Receivable: Schedule of Accounts Receivable (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
Accounts receivable	$503,279	$910,920
Allowance for doubtful accounts	-80,589	-116,971
Accounts receivable, net	$422,690	$793,949

Note_5_Inventory_Schedule_of_I1

Note 5. Inventory: Schedule of Inventory (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
Raw materials and components	$1,080,799	$1,182,150
Gaming systems in process	436,167	331,536
Finished goods	208,235	116,114
Reserve	-237,746	-215,099
Inventory, net	1,487,455	1,414,701
Long-Term Inventory	619,915	545,070
Current Inventory	$867,540	$869,631

Note_6_Prepaid_Expenses_and_Ot2

Note 6. Prepaid Expenses and Other Assets: Prepaid Expenses and Other Assets (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
Prepaid expenses	$57,691	$62,924
Other	29,484	27,390
Prepaid expenses and other assets	87,175	90,314
Deferred licensing fees, net	49,939	60,560
Other	48,679	50,180
Other assets	$98,618	$110,740

Note_7_Gaming_Systems_Schedule1

Note 7. Gaming Systems: Schedule of Gaming Systems (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
Gaming systems	$6,512,004	$6,716,864
Less: accumulated depreciation	-5,523,567	-5,491,933
Gaming systems, net	$988,437	$1,224,931

Note_8_Property_and_Equipment_1

Note 8. Property and Equipment: Property and Equipment (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
Equipment	$464,863	$462,404
Leasehold improvements	208,387	208,387
Capitalized software	157,067	157,067
Property, Plant and Equipment, Gross, Total	830,317	827,858
Less: accumulated depreciation	-804,686	-800,134
Property and equipment, net	$25,631	$27,724

Note_9_Accrued_Liabilities_Sch1

Note 9. Accrued Liabilities: Schedule of Accrued Liabilities (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
Inventory received, not invoiced	$167,425	$156,075
Other liabilities and customer deposits	244,469	154,051
Accrued liabilities	$411,894	$310,126

Note_10_Debt_Schedule_of_Debt_1

Note 10. Debt: Schedule of Debt (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Details	'	'
SVB Credit Facility	$0	$0
Founders' Loan	217,523	240,429
Total debt	217,523	240,429
Current portion of debt	85,781	70,822
Long term portion of debt	$131,742	$169,607

Note_10_Debt_Details

Note 10. Debt (Details) (USD $)	6 Months Ended		6 Months Ended			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Jun. 30, 2013	24-May-08	Jun. 30, 2014	Jun. 30, 2014
			Founders' Loan	Founders' Loan	Founders' Loan	MGAM Loan	SVB Credit Facility
Line of Credit Facility, Expiration Date	15-Jan-15	'	'	'	'	'	'
Line of Credit Facility, Maximum Borrowing Capacity	'	'	'	'	'	'	$625,000
Line of Credit Facility, Interest Rate Description	'	'	'	'	'	'	'The SVB Credit Facility bears interest at an annual rate equal to the greater of 6.5% or prime plus 2.0%.
Line of Credit Facility, Current Borrowing Capacity	'	'	'	'	'	'	292,000
Line Of Credit, Outstanding	0	0	'	'	'	'	'
Line of Credit Facility, Collateral	'	'	'	'	'	'	'The SVB Credit Facility is collateralized by security interests in substantially all of the assets of the Company and is senior to the Founders’ Loan (described below).
Debt Instrument, Face Amount	'	'	'	'	2,000,000	'	'
Debt Instrument, Collateral	'	'	'The Founders’ Loan contains no restrictive covenants and is collateralized by security interests in 18 PokerPro systems. Such security interests have been subordinated to the SVB Credit Facility.	'	'	'	'
Loan, Carrying value	217,523	240,429	217,523	'	'	'	'
Loan, Fair value disclosure	'	'	226,000	'	'	'	'
Loan, Principal payment in cash	'	'	22,906	26,472	'	'	'
Loan, Aggregate interest payments in cash	'	'	$6,957	$13,231	'	'	'
Debt Instrument, Unused Borrowing Capacity, Description	'	'	'	'	'	'$400,000	'

Note_11_Employee_Benefit_Plan_

Note 11. Employee Benefit Plan (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	'	'	96.00%	'
401K Plan, Expense Recognized	$13,945	$12,215	$28,995	$23,742
On first 3% of deferral	'	'	'	'
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	'	'	100.00%	'
Deferral from 4% to 5%	'	'	'	'
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	'	'	50.00%	'

Note_12_Shareholders_Equity_se4

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc.") (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Jun. 30, 2014
			Lincoln Park Capital LLC	May 2010 Private Placement
Common Stock, shares authorized	40,000,000	100,000,000	'	'
Common Stock, shares outstanding	9,421,403	9,363,434	'	'
Class of Warrant, Outstanding	'	'	40,000	20,000
Class of Warrant, Exercise Price	'	'	$2.75	$2.50
Warrant Expiration Date	'	'	29-Dec-15	31-Mar-15
Preferred Stock, shares authorized	5,000,000	5,000,000	'	'
Preferred Stock, shares outstanding	0	0	'	'
Approved stock incentive plans, shares available for future grant	232,559	'	'	'

Note_12_Shareholders_Equity_se5

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc."): Schedule of Stock Options, Valuation Assumptions (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Expected Volatility	93.00%	'
Expected Dividends	$0	$0
Expected Term	'6 years	'6 years
Minimum	'	'
Expected Volatility	'	94.00%
Risk-free Rate	1.64%	0.82%
Maximum	'	'
Expected Volatility	'	97.00%
Risk-free Rate	1.68%	1.60%

Note_12_Shareholders_Equity_se6

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc."): Schedule of Stock Options, Activity (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Details	'
Options, Outstanding, Beginning of Period	724,720
Options, Outstanding, Weighted Average Exercise Price, Beginning of Period	$4.68
Options, Granted	0
Options, Granted, Weighted Average Exercise Price	$0
Options, Exercised	0
Options, Exercised, Weighted Average Exercise Price	$0
Options, Forfeited	0
Options, Forfeited, Weighted Average Exercise Price	$0
Options, Expired	0
Options, Expired, Weighted Average Exercise Price	$0
Options, Outstanding, End of Period	724,720
Options, Outstanding, Weighted Average Exercise Price, End of Period	$4.68
Options, Outstanding, Weighted Average Remaining Contractual Term	'5 years
Options, Outstanding, Intrinsic Value	($2,435,201)
Options, Exercisable	715,316
Options, Exercisable, Weighted Average Exercise Price	$4.37
Options, Exercisable, Weighted Average Remaining Contractual Term	'5 years 1 month 6 days
Options, Exercisable, Intrinsic Value	($2,184,281)

Note_12_Shareholders_Equity_se7

Note 12. Shareholders' Equity (see Note 17 "merger With Multimedia Games, Inc."): Schedule of RSU Activity (Details) (Restricted Stock Units R S U, USD $)	6 Months Ended
	Jun. 30, 2014
Restricted Stock Units R S U	'
Nonvested shares, Beginning	253,312
Nonvested, Weighted Average Grant Date Fair Value, Beginning	$189,984
Granted	300,000
Granted, Weighted Average Grant Date Fair Value	408,000
Vested	-77,750
Vested in Period, Fair Value	-61,423
Forfeited	0
Nonvested shares, Ending	475,562
Nonvested, Weighted Average Remaining Contractual Term	'3 years 10 months 24 days
Nonvested, Weighted Average Grant Date Fair Value, Ending	$536,622

Note_13_Income_Tax_Provisions_

Note 13. Income Tax Provisions (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Details	'	'	'	'
Income tax provision	$0	$11,939	$0	$46,020

Note_15_Segment_Information_De

Note 15. Segment Information (Details) (Sales, Non United States)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Sales | Non United States	'	'	'	'
Concentration Risk, Percentage	31.40%	28.30%	29.60%	28.50%

Note_15_Segment_Information_Sc1

Note 15. Segment Information: Schedule of Revenues and Long-lived Assets by Geographic Area (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenue	$951,253	$1,604,223	$2,065,835	$2,995,343
Long Lived Assets	1,112,686	1,363,395	1,112,686	1,363,395
UNITED STATES	'	'	'	'
Revenue	652,207	1,149,664	1,454,106	2,141,371
Long Lived Assets	475,630	450,714	475,630	450,714
Other Americas	'	'	'	'
Revenue	252,516	374,723	521,191	746,228
Long Lived Assets	464,506	718,982	464,506	718,982
Europe	'	'	'	'
Revenue	32,730	35,482	65,364	50,632
Long Lived Assets	131,384	157,035	131,384	157,035
Other International	'	'	'	'
Revenue	13,800	44,354	25,174	57,112
Long Lived Assets	$41,166	$36,664	$41,166	$36,664

Note_16_Commitments_and_Contin1

Note 16. Commitments and Contingencies (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Details	'	'	'	'
Rent expense for leased space	$33,750	$33,750	$67,500	$67,500
Rental income	$4,800	$0	$9,600	$0

Note_17_Merger_With_Multimedia1

Note 17. Merger With Multimedia Games, Inc. (Details) (Subsequent Event, USD $)	6 Months Ended
	Jun. 30, 2014
Subsequent Event	'
Merger consideration to be paid to shareholders, price per share	$1.35
Fee payable upon termination of merger by company	$650,000
Fee receivable upon termination of merger by parent	$500,000

Note_18_Subsequent_Events_Deta

Note 18. Subsequent Events (Details) (USD $)	6 Months Ended		1 Months Ended	0 Months Ended		6 Months Ended
	Jun. 30, 2014	24-May-08	Jul. 31, 2014	Jul. 31, 2014	Jul. 18, 2014	Jun. 30, 2014
	MGAM Loan	Founders' Loan	Subsequent Event	Subsequent Event	Subsequent Event	Subsequent Event
			Chief Executive Officer	MGAM Loan	MGAM Loan	Founders' Loan
Debt Instrument, Unused Borrowing Capacity, Description	'$400,000	'	'	'$400,000	'	'
Debt Instrument, Interest Rate, Minimum	'	'	'	5.00%	'	'
Debt Instrument, Interest Rate, Maximum	'	'	'	15.00%	'	'
Debt Instrument, Maturity Date	'	'	'	31-Mar-15	'	'
Debt Instrument, Face Amount	'	$2,000,000	'	'	$250,000	'
Loan Payment Deferral Agreement, Terms	'	'	'	'	'	'On July 16, 2014, the Company entered into an agreement (the 'Founders' Loan Payment Deferral Agreement') with Arthur L. Lomax, pursuant to which Mr. Lomax has agreed to defer all payments due to him pursuant to the Second Amended and Restated Promissory Note for the period commencing June 1, 2014 through and including December 31, 2014. The deferred amounts will be payable to Mr. Lomax upon the earliest of: (i) the closing of either (a) the Merger contemplated by the Merger Agreement, or (b) the closing of a transaction in connection with a “Superior Proposal” (as defined in the Merger Agreement); or (ii) January 31, 2015.
Salary Deferral Agreement, Terms	'	'	'Each of Mark D. Roberson, the Company’s chief executive officer and James T. Crawford, the Company's president and a director, have agreed to defer thirty (30%) percent of the compensation payable pursuant to their respective employment agreements with the Company for the period from June 1, 2014 through and including December 31, 2014 until the earliest of: (i) the closing of either (a) the Merger contemplated by the Merger Agreement, or (b) the closing of a transaction in connection with a 'Superior Proposal' (as defined in the Merger Agreement); or (ii) January 31, 2015 (“Executive Salary Deferral Agreement.”)	'	'	'