Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 10, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Galaxy Gaming, Inc. | |
Entity Central Index Key | 13,156 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 39,804,591 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 | |
Trading Symbol | GLXZ |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 3,395,590 | $ 3,581,209 |
Accounts receivable, net of allowance of $37,993 and $32,993, respectively | 2,557,016 | 2,301,752 |
Inventory, net | 573,138 | 524,126 |
Prepaid expense and other | 305,677 | 363,102 |
Total current assets | 6,831,421 | 6,770,189 |
Property and equipment, net | 263,050 | 263,867 |
Assets deployed at client locations, net | 371,871 | 373,650 |
Goodwill and other intangible assets, net | 11,077,077 | 11,452,809 |
Deferred tax assets, net | 230,648 | 230,648 |
Other assets, net | 23,000 | 23,000 |
Total assets | 18,797,067 | 19,114,163 |
Current liabilities: | ||
Accounts payable | 412,734 | 1,035,383 |
Accrued expenses | 582,700 | 887,796 |
Income taxes payable | 640,766 | 519,610 |
Revenue contract liability | 1,109,553 | 1,083,639 |
Deferred rent, current portion | 25,865 | 23,679 |
Current portion of long-term debt and capital lease obligations | 1,169,217 | 1,195,787 |
Other current liabilities | 126,905 | 123,441 |
Total current liabilities | 4,067,740 | 4,869,335 |
Deferred rent, net | 7,012 | 14,025 |
Capital lease obligations, net | 5,734 | 14,217 |
Common stock warrant liability | 1,333,333 | 1,333,333 |
Long-term debt, net | 7,217,104 | 7,420,385 |
Total liabilities | 12,630,923 | 13,651,295 |
Commitments and Contingencies (See Note 11) | ||
Stockholders’ equity | ||
Preferred stock, 10,000,000 shares authorized, $0.001 par value; 0 shares issued and outstanding, respectively | ||
Common stock, 65,000,000 shares authorized; $0.001 par value; 39,804,591 and 39,565,591 shares issued and outstanding, respectively | 39,805 | 39,566 |
Additional paid-in capital | 4,123,942 | 3,957,703 |
Accumulated earnings | 2,002,397 | 1,465,599 |
Total stockholders’ equity | 6,166,144 | 5,462,868 |
Total liabilities and stockholders’ equity | $ 18,797,067 | $ 19,114,163 |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Accounts receivables, net allowance | $ 37,993 | $ 32,993 |
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Issued | 0 | 0 |
Preferred Stock, Outstanding | 0 | 0 |
Common Stock, Shares authorized | 65,000,000 | 65,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Issued | 39,804,591 | 39,565,591 |
Common Stock, Outstanding | 39,804,591 | 39,565,591 |
Condensed Statements of Income
Condensed Statements of Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Product leases and royalties | $ 4,360,356 | $ 3,473,841 |
Product sales and service | 339 | 1,455 |
Total revenue | 4,360,695 | 3,475,296 |
Costs and expenses: | ||
Cost of ancillary products and assembled components | 22,758 | 20,882 |
Selling, general and administrative | 2,585,070 | 2,086,169 |
Research and development | 193,402 | 138,047 |
Depreciation and amortization | 451,560 | 436,085 |
Share-based compensation | 166,478 | 49,837 |
Total costs and expenses | 3,419,268 | 2,731,020 |
Income from operations | 941,427 | 744,276 |
Other income (expense): | ||
Interest expense | (366,093) | (445,332) |
Foreign currency exchange gains | 105,801 | 7,797 |
Change in estimated fair value of warrant liability | (66,500) | |
Interest income | 442 | |
Total other expense | (259,850) | (504,035) |
Income before provision for income taxes | 681,577 | 240,241 |
Provision for income taxes | (144,779) | (77,974) |
Net income | $ 536,798 | $ 162,267 |
Net income per share, basic and diluted | $ 0.01 | $ 0 |
Weighted-average shares outstanding: | ||
Basic | 39,763,802 | 39,305,591 |
Diluted | 42,153,901 | 40,817,678 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 536,798 | $ 162,267 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 451,560 | 436,085 |
Amortization of debt issuance costs and debt discount | 72,590 | 73,729 |
Bad debt expense | 5,000 | |
Change in estimated fair value of warrant liability | 66,500 | |
Share-based compensation | 166,478 | 49,837 |
Unrealized foreign exchange gains on cash, cash equivalents and restricted cash | (88,240) | (3,159) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (260,264) | 140,704 |
Inventory | (90,786) | (63,017) |
Prepaid expenses and other current assets | 57,425 | 33,665 |
Accounts payable | (622,649) | (67,905) |
Income tax payable | 121,156 | 77,975 |
Accrued expenses | (305,096) | 99,629 |
Revenue contract liability | 25,914 | (59,808) |
Other current liabilities | 3,464 | 34,042 |
Deferred rent | (4,827) | (2,641) |
Net cash provided by operating activities | 68,523 | 977,903 |
Cash flows from investing activities: | ||
Investment in intangible assets | (27,470) | |
Acquisition of property and equipment | (31,458) | (13,997) |
Net cash used in investing activities | (31,458) | (41,467) |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 35,000 | |
Debt issuance costs | (17,091) | |
Principal payments on capital lease obligations | (8,034) | (7,611) |
Principal payments on long-term debt | (302,891) | (303,564) |
Net cash used in financing activities | (310,925) | (293,266) |
Effect of exchange rate changes on cash | 88,241 | 3,159 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (185,619) | 646,329 |
Cash, cash equivalents and restricted cash – beginning of period | 3,581,209 | 2,389,338 |
Cash, cash equivalents and restricted cash – end of period | 3,395,590 | 3,035,667 |
Supplemental cash flow information: | ||
Cash paid for interest | 293,503 | 445,352 |
Inventory transferred to assets deployed at client locations | 41,774 | $ 24,132 |
Cash paid for income taxes | $ 23,664 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1. NATURE OF OPERATIONS Unless the context indicates otherwise, references to “Galaxy Gaming, Inc.,” “we,” “us,” “our,” or the “Company,” refer to Galaxy Gaming, Inc., a Nevada corporation (“Galaxy Gaming”). Nature of operations. We are an established global gaming company specializing in the design, development, manufacturing, marketing and acquisition of proprietary casino table games and associated technology, platforms and systems for the casino gaming industry. Casinos use our proprietary products and services to enhance their gaming floor operations and improve their profitability, productivity and security, as well as to offer popular cutting-edge gaming entertainment content and technology to their players. We market our products and services to land-based, riverboat, cruise ship and internet gaming companies located in North America, the Caribbean, Central America, the British Isles, Europe and Africa and to cruise ships and internet gaming sites worldwide. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) . In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. As permitted by the rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all necessary adjustments, consisting only of those of a recurring nature, and disclosures to present fairly our financial position and the results of our operations and cash flows for the periods presented. These unaudited interim condensed financial statements should be read in conjunction with the financial statements and the related notes thereto included in our Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on April 2, 2018 (the “2017 10-K”). Basis of accounting. The financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. Revenues are recognized when earned and expenses ( such as wages, consulting expenses, legal, regulatory and professional fees and rent) are recognized when they are incurred. We do not have significant categories of cost of revenue, as most of our revenue is derived from the licensing of intellectual property. Use of estimates and assumptions. We are required to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our company and the industry as a whole, and information available from other outside sources. Our estimates affect reported amounts for assets, liabilities, revenues, expenses and related disclosures. Actual results may differ from initial estimates. Reclassifications. Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations, including the addition of restricted cash to cash and cash equivalents on the consolidated statements of cash flows as a result of the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . See below for further detail. Other Significant Accounting Policies. S ee Note 3 in Item 8. “Financial Statements and Supplementary Data” included in our 2017 10-K. Recently adopted accounting standards Revenue Recognition. Effective January 1, 2018, we adopted Accounting Standards Update (“ ASU”) No. 2014-09, (“ASC 606”), which is a comprehensive new revenue recognition standard that supersedes virtually all existing revenue guidance, including industry-specific guidance. Under the new standard, revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. The standard creates a five-step model that generally requires companies to use more judgment and make more estimates than under the previous guidance when considering the terms of contracts along with all relevant facts and circumstances. These include the identification of customer contracts and separating performance obligations, the determination of transaction price that potentially includes an estimate of variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue in line with the pattern of transfer. We adopted ASC 606 using the modified retrospective approach (reporting the cumulative effect as of the date of adoption). See Note 3 for further detail. Restricted Cash . Effective January 1, 2018, we adopted ASU No. 2016-18, . This ASU requires amounts generally described as restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. We adopted this guidance on a retrospective basis, which resulted in the inclusion of restricted cash within cash and cash equivalents on our balance sheets and statements of cash flows. Such restricted cash represents reserves set side in a restricted bank account in accordance with the requirements of gaming regulations to be used for the purpose of funding payments to winners of our jackpots and was $108,363 and $95,062 at March 31, 2018 and December 31, 2017, respectively . Cash flows from operating activities for the three months ended March 31, 2017 increased by $30,936 as a result of the adoption of this guidance. Compensation - Stock Compensation. Effective January 1, 2018, we adopted ASU No. 2017-09, , which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The adoption did not have a material impact on our financial statements. New accounting standards not yet adopted Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases being recognized on our balance sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance. Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-04, which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. This guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact of adopting this guidance and will adopt this guidance for the annual test to be performed for the year ended December 31, 2018. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3. REVENUE RECOGNITION Adoption of ASC 606 , Revenue from Contracts with Customers On January 1, 2018, we adopted ASC 606 and applied it to all contracts using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not and will not be adjusted and continue to be reported in accordance with our historical accounting treatment under Topic 605, Revenue Recognition The adoption of ASC 606 had the following impact on our balance sheet and statement of income: (i) we reported higher product leases and royalty revenue and selling, general and administrative expense for the three months ended March 31, 2018 as a result of the assessment of our distributor relationships. We have entered into agreements with certain distributors in Europe, which sublicense our intellectual property to gaming establishments in Europe. We have historically recorded net revenues (gross revenue generated minus distributor fees paid) as product leases and royalty revenue. However, after applying principal vs. agent considerations to these distributor relationships in accordance with ASC 606, we have determined that revenues earned from gaming establishments in Europe should now be recorded as gross revenue and fees earned by such distributors should be recorded as selling, general and administrative expenses as we had control of the sub-licensed intellectual property prior to the licensing of such intellectual property to the gaming establishments; and (ii) p repayments from customers in advance of the period that the revenue is recognized were historically recorded under the caption “deferred revenue” in the accompanying balance sheet. This caption has now been renamed “revenue contract liability” in accordance with the requirements of ASC 606. For the three months ended March 31, 2018, the adoption of ASC 606 had the following impact on our statement of income: Three Months Ended March 31, 2018 As reported Balance without the adoption of ASC 606 Impact of the adoption Product leases and royalties $ 4,360,356 $ 4,153,659 $ 206,697 Selling, general and administrative expense $ 2,585,070 $ 2,378,373 $ 206,697 Revenue Recognition We generate revenue primarily from the licensing of our intellectual property. We also, occasionally, receive a one-time sale of certain products and/or reimbursement of our manufactured equipment. License Fees. We derive product lease and royalty revenue from negotiated recurring fee license agreements and the performance of our products. We account for these agreements as month-to-month contracts for the purposes of ASC 606 and recognize revenue each month as we satisfy our performance obligations by granting access to intellectual property to our clients. In addition, revenue associated with performance-based agreements is recognized during the month that the usage of the product or intellectual property occurs. We believe it is inappropriate to use the input method as the inputs do not correlate to the satisfaction of our performance obligations. Intellectual property requires significant upfront investment in the form of human resources required for their development and/or capital resources for acquisition from third parties. However, limited maintenance is required once the games have been placed on casino floors. The output method, on the other hand, recognizes revenue based on direct measurements of the value to our customers of the licensed intellectual property, which we believe is more appropriate. We have further applied the “as invoiced” practical expedient under the output method by recognizing product lease and royalty revenue in proportion to the amount for which we have the right to invoice. Some of our intellectual property requires the installation of certain equipment and both the intellectual property and the related equipment are licensed in one bundled package. We have determined that the equipment is not distinct from the intellectual property and, therefore, we have only one performance obligation and, as a result, the allocation of the transaction price to different performance obligations is not necessary. Product Sales. Occasionally, we sell certain incidental products or receive reimbursement of our manufactured equipment after the commencement of the new license agreement. Revenue from such sales is recognized as a separate performance obligation when we ship the items. Disaggregation of Revenue. The following table disaggregates our revenue by major source for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Table games $ 3,792,387 $ 3,193,094 Internet-based gaming 400,771 159,838 E-tables 158,828 113,529 Other 8,709 8,835 Total revenue $ 4,360,695 $ 3,475,296 The following table disaggregates our revenue by geographic location for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 North America and Caribbean $ 3,502,810 $ 2,800,905 Europe 857,885 674,391 Total revenue $ 4,360,695 $ 3,475,296 Revenue Contract Asset and Liability. Upon the adoption of ASC 606, we have applied the practical expedient of expensing incremental commissions paid to sales representatives directly related to the acquisition and fulfilment of new contracts, when the amortization period of the contract asset that we otherwise would have recognized is one year or less. We invoice our clients monthly in advance for unlimited use of our intellectual property licenses. Upon the adoption of ASC 606, we recognized a revenue contract liability that represents such advanced billing to our clients for unsatisfied performance. We derecognize the revenue contract liability and recognize revenue when we transfer those goods or services and, therefore, satisfy our performance obligation. The table below summarizes changes in the revenue contract liability during the three months ended March 31, 2018 Revenue Contract liability Beginning balance – January 1, 2018 $ 1,083,639 Increase (advanced billings) 3,260,177 Decrease (revenue recognition) (3,234,263 ) Ending balance – March 31. 2018 $ 1,109,553 Revenue recognized during the three months ended March 31, 2018 that was included in the beginning balance of revenue contract liability above was $1,083,639. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4. INVENTORY Inventory, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Raw materials and component parts $ 322,908 $ 235,673 Work-in-process 187,998 214,895 Finished goods 92,232 103,558 Inventory, gross 603,138 554,126 Less: inventory reserve (30,000 ) (30,000 ) Inventory, net $ 573,138 $ 524,126 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Furniture and fixtures $ 291,948 $ 280,694 Automotive vehicles 215,127 215,127 Leasehold improvements 156,843 156,843 Computer equipment 142,195 121,992 Office equipment 53,484 53,483 Property and equipment, gross 859,597 828,139 Less: accumulated depreciation (596,547 ) (564,272 ) Property and equipment, net $ 263,050 $ 263,867 Property and equipment, net included $156,843 of leasehold improvements acquired under capital leases as of March 31, 2018 and December 31, 2017. Accumulated depreciation of leasehold improvements totaled $120,748 and $113,035 as of March 31, 2018 and December 31, 2017, respectively (Note 9). For the three months ended March 31, 2018 and 2017, depreciation expense related to property and equipment was $32,275 and $42,650, respectively. |
ASSETS DEPLOYED AT CLIENT LOCAT
ASSETS DEPLOYED AT CLIENT LOCATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Leases Operating [Abstract] | |
ASSETS DEPLOYED AT CLIENT LOCATIONS | NOTE 6. ASSETS DEPLOYED AT CLIENT LOCATIONS Assets deployed at client locations, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Enhanced table systems $ 672,508 $ 638,981 Less: accumulated depreciation (300,637 ) (265,331 ) Assets deployed at client locations, net $ 371,871 $ 373,650 For the three months ended March 31, 2018 and 2017, depreciation expense related to a ssets deployed at client locations was |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and finite-lived intangible assets, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Goodwill $ 1,091,000 $ 1,091,000 Finite-lived intangible assets: Patents 13,475,000 13,475,000 Customer relationships 3,400,000 3,400,000 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Internally-developed software 102,968 102,968 Other intangible assets, gross 20,518,935 20,518,935 Less: accumulated amortization (10,532,858 ) (10,157,126 ) Other intangible assets, net 9,986,077 10,361,809 Goodwill and other intangible assets, net $ 11,077,077 $ 11,452,809 For the three months ended March 31, 2018 and 2017, amortization expense related to the finite-lived intangible assets was $375,732 and $372,966, respectively. Estimated future amortization expense is as follows: Twelve months Ending March 31, Total 2019 $ 1,498,873 2020 1,498,873 2021 1,427,884 2022 1,391,218 2023 821,532 Thereafter 3,347,697 Total amortization $ 9,986,077 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2018 | |
Payables And Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8. ACCRUED EXPENSES Accrued expenses consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Payroll and related $ 457,663 $ 712,584 Commissions and royalties 58,069 65,380 Professional fees 39,108 63,488 Other 27,860 46,344 Total accrued expenses $ 582,700 $ 887,796 |
CAPITAL LEASE OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
CAPITAL LEASE OBLIGATIONS | NOTE 9. CAPITAL LEASE OBLIGATIONS Capital lease obligations consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Capital lease obligation $ 38,967 $ 47,002 Less: Current portion (33,233 ) (32,785 ) Total capital lease obligations – long-term $ 5,734 $ 14,217 The capital leases cover leasehold improvements located at our corporate headquarters in Las Vegas, Nevada. As of March 31, future annual payments for capital leases obligations are as follows: Twelve months Ending March 31, Total 2019 $ 33,233 2020 5,734 Total minimum lease payments $ 38,967 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 10. LONG-TERM DEBT Long-term debt consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Breakaway Term Loan $ 9,187,500 $ 9,450,000 Equipment notes payable 111,361 124,311 Insurance notes payable 46,294 73,734 Notes payable, gross 9,345,155 9,648,045 Less: Unamortized debt issuance costs (447,643 ) (480,397 ) Warrants issued (544,425 ) (584,261 ) Notes payable, net 8,353,087 8,583,387 Less: Current portion (1,135,983 ) (1,163,002 ) Long-term debt, net $ 7,217,104 $ 7,420,385 Breakaway Term loan. In August 2016, we entered into a term loan agreement (the “Breakaway Term Loan Agreement”) for an aggregate principal amount of $10,500,000 (the "Breakaway Term Loan"). Proceeds of the Breakaway Term Loan were primarily used to prepay in full the outstanding notes payable to unrelated parties. The Breakaway Term Loan was secured by a senior lien on substantially all of our assets. In conjunction with the Breakaway Term Loan, we also entered into a warrant agreement (the “Warrant Agreement”), pursuant to which we issued the lenders a six-year warrant to purchase 1,965,780 shares of our common stock (the “Warrants”). The estimated fair value of the Warrants (Note 14) on the grant date was determined to be $809,632 using the Black-Scholes option pricing model, and was recorded as a reduction of the related debt. The estimated fair value of the Warrants on the grant date was amortized ratably over the term of the Warrants to interest expense. Under the Breakaway Term Loan, we were subject to quarterly financial covenants that, among other things, limited our annual capital expenditures (as defined in the Breakaway Term Loan Agreement), and required us to maintain a specified leverage ratio and minimum EBITDA amounts, each of which were defined in the Breakaway Term Loan Agreement. The outstanding principal initially accrued interest at the rate of 14.0% per annum, which decreased to 12.5% per annum for any quarterly period in which we achieved a specified leverage ratio. Beginning October 1, 2017, the interest rate per annum decreased to 12.5% due to the achievement of such ratio. The foregoing summary of the Breakaway Term Loan Agreement and the Warrant Agreement is qualified in its entirety by reference to the respective agreements, which are found as Exhibits 99.1 and 99.2, respectively, to our Form 8-K filed with the SEC on August 29, 2016. Nevada State Bank Credit Agreement. On April 24, 2018, we entered into a credit agreement with ZB, N.A. dba Nevada State Bank (“NSB” and the “NSB Credit Agreement”), which provides for a $11.0 million five-year term loan (the “NSB Term Loan”) and a $1.0 million one-year revolving credit facility (the “NSB Revolver”). Upon execution of the NSB Credit Agreement, we borrowed $11.0 million under the NSB Term Loan and $0.1 million under the NSB Revolver and used the proceeds to pay off in full the outstanding balance under the Breakaway Term Loan, redeem the Warrants and pay interest, fees and an early redemption premium associated with these transactions (Note 16). As of March 31, 2018, future maturities of our long-term debt obligations are as follows, without giving effect to the NSB Credit Agreement: Twelve Months ending March 31, Total 2019 $ 1,135,983 2020 1,084,480 2021 1,070,309 2022 6,054,383 Total notes payable 9,345,155 Less: Unamortized debt issuance costs (447,643 ) Warrants issued (544,425 ) Notes payable, net $ 8,353,087 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Concentration of risk. We are exposed to risks associated with a client who represent a significant portion of total revenues. For the three months ended March 31, 2018 and 2017, respectively, we had the following client revenue concentration: Location 2018 Revenue 2017 Revenue Client A North America 11.3% 14.6% We are also exposed to risks associated with the expiration of our patents. In 2015, domestic and international patents for two of our products expired, which accounted for approximately $2,044,883 or 46.9% of our revenue for the three months ended March 31, 2018, as compared to $1,767,437 or 50.9% of our revenue for the three months ended March 31, 2017. We continue to generate higher revenue from these products despite the expiration of the underlying patents and, accordingly, we do not expect the expiration of these patents to have a significant adverse impact on our future financial statements. Operating lease. In February 2014, we entered into a lease (the “Spencer Lease”) for a new corporate office with an unrelated third party. The five-year Spencer Lease is for an approximately 24,000 square foot space, which is comprised of approximately 16,000 square feet of office space and 8,000 square feet of warehouse space. The property is located in Las Vegas, Nevada. The initial term of the Spencer Lease commenced on April 1, 2014 and expires on June 30, 2019. We were obligated to pay approximately $153,000 in annual base rent in the first year, and the annual base rent is scheduled to increase by approximately 4% each year. We are also obligated to pay real estate taxes and other building operating costs. Subject to certain conditions, we have certain rights under the Spencer Lease, including rights of first offer to purchase the premises if the landlord elects to sell. We also have an option to extend the term of the Spencer Lease for two consecutive terms of three years each, at the then current fair market value rental rate determined in accordance with the terms of the Spencer Lease. In connection with the Spencer Lease, the landlord agreed to finance tenant improvements of $150,000 (“TI Allowance”). The base rent is increased by an amount sufficient to fully amortize the TI Allowance through the initial Spencer Lease term upon equal monthly payments of principal and interest, with interest imputed on the outstanding principal balance at the rate of 5.5% per annum. The TI Allowance has been classified as a capital lease on the condensed balance sheet (Note 9). Total rent expense was $71,300 and $70,570 for the three months ended March 31, 2018 and 2017, respectively. The following table reflects our estimates of future minimum operating lease payment obligations, which are based upon our current operating leases: Twelve Months Ending March 31, Annual Obligation 2019 $ 236,736 2020 59,730 Total obligations $ 296,466 Legal proceedings. In the ordinary course of conducting our business, we are, from time to time, involved in various legal and administrative proceedings, regulatory government investigations and other matters, including those in which we are a plaintiff or defendant, that are complex in nature and have outcomes that are difficult to predict. We record accruals for such contingencies to the extent we conclude that it is probable that a liability will be incurred and the amount of the related loss can be reasonably estimated. Our assessment of each matter may change based on future unexpected events. An unexpected adverse judgment in any pending litigation could cause a material impact on our business operations, intellectual property, results of operations or financial position. Unless otherwise expressly stated, we believe costs associated with litigation will not have a material impact on our financial position or liquidity, but may be material to the results of operations in any given period. We assume no obligation to update the status of pending litigation, except as may be required by U.S. GAAP, applicable law, statue or regulation. For a complete description of the facts and circumstances surrounding material litigation to which we are a party, see Note 11 in Item 8. “Financial Statements and Supplementary Data” included in our 2017 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12. STOCKHOLDERS’ EQUITY On March 31, 2018, we issued 13,000 restricted shares of our common stock valued at $13,520, to each of Messrs. Norm DesRosiers, Bryan Waters and William Zender, who are members of our Board of Directors (the “ in consideration of their service on the Board during the three months ended March 31, 2018. These shares vested immediately on grant date. In February 2017, a former employee forfeited 100,000 shares of unvested restricted stock and paid us $35,000 in connection with the exercise of 150,000 fully-vested stock options. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13. INCOME TAXES Our forecasted annual effective tax rate at March 31, 2018 was 21.2%, as compared to 35.0% at March 31, 2017. For the three months ended March 31, 2018 and 2017, our effective tax rate was 21.2% and 32.4%, respectively. The decrease in both rates was primarily due to a reduction in the federal statutory rate as a result of the Tax Cuts and Jobs Act signed in December 2017 (the “Tax Act”) As of March 31, 2018, we had completed our preliminary assessment for the tax effects resulting from the enactment of the Tax Act and made a reasonable estimate of the effect on our existing deferred tax balances. We will continue to make and refine our calculations as additional analysis is completed. In addition, our estimates may also be affected as we gain a more thorough understanding of the Tax Act. |
STOCK WARRANTS, OPTIONS AND GRA
STOCK WARRANTS, OPTIONS AND GRANTS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
STOCK WARRANTS, OPTIONS AND GRANTS | NOTE 14. STOCK WARRANTS, OPTIONS AND GRANTS Stock options. During the three months ended March 31, 2018 and 2017, we issued 145,000 and 112,500 options to purchase our common stock, respectively, to members of our Board, independent contractors, executive officers and employees. The fair value of all stock options granted for the three months ended March 31, 2018 and 2017 was determined to be $98,333 and $47,635, respectively, using the Black-Scholes option pricing model with the following assumptions: Options issued three months ended March 31, 2018 Options issued three months ended March 31, 2017 Dividend yield 0% 0% Expected volatility 78% 85% Risk free interest rate 2.46% - 2.56% 1.93% Expected life (years) 5.00 5.00 A summary of stock option activity is as follows: Common s Weighted- average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Outstanding – December 31, 2017 2,811,250 0.54 $ 1,849,517 3.65 Issued 145,000 1.06 — — Exercised — — — — Expired — — — — Outstanding – March 31, 2018 2,956,250 $ 0.57 $ 1,397,117 3.49 Exercisable – March 31, 2018 2,057,916 $ 0.50 $ 1,102,116 3.16 A summary of unvested stock option activity is as follows: Common s options Weighted-average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Unvested – December 31, 2017 825,557 $ 0.63 $ 467,379 4.27 Granted 145,000 1.06 — — Vested (72,223 ) 0.52 — — Forfeited or expired — — — — Unvested – March 31, 2018 898,334 $ 0.71 $ 295,001 4.13 As of March 31, 2018, our unrecognized stock-based compensation expense associated with the stock options issued was $323,230, which will be amortized over a weighted-average of 2.06 years. Warrants. On August 29, 2016, in connection with the Breakaway Term Loan Agreement, we issued the lenders the Warrants to purchase 1,965,780 shares of our common stock at an initial exercise price of $0.30 per share. On April 24, 2018, we paid $1,333,333 to redeem the Warrants in full upon extinguishment of the Breakaway Term Loan (Note 16). |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS We estimate fair value for financial assets and liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. The estimated fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates their carrying amount due to their short-term nature. The estimated fair value of our long-term debt and capital lease obligations approximates their carrying value based upon our expected borrowing rate for debt with similar remaining maturities and comparable risk. As of March 31, 2018 , the Warrants were the only financial instrument measured at estimated fair value on a recurring basis based on level 2 inputs. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16. SUBSEQUENT EVENTS On April 24, 2018, we entered into the NSB Credit Agreement, which provides for the $11.0 million NSB Term Loan and the $1.0 million NSB Revolver. Outstanding balances under the NSB Term Loan and the NSB Revolver will accrue interest based on one-month US dollar London interbank offered rate Effective May 1, 2018, we entered into an interest rate swap agreement with an affiliate of NSB (the “Swap Agreement”) to fix the interest rate on the NSB Term Loan at 6.43% (assuming a Leverage Ratio less than 2.0) for three years. The notional amount of the Swap Agreement is initially $10.9 million but will decrease overtime as a result of the anticipated principal paydowns. We are required to make monthly principal and interest payments, both of which are calculated over a seven-year term, with a balloon payment due on April 24, 2023. Borrowings under the NSB Credit Agreement are secured by a lien on substantially all of our assets. The NSB Credit Agreement contains affirmative and negative financial covenants and other restrictions customary for borrowings of this nature. In particular, we are required to maintain a minimum trailing-four-quarters Fixed Charge Coverage Ratio (as defined in the NSB Credit Agreement) of 1.25x. The NSB Credit Agreement allows us to make share repurchases and to incur up to an additional $1.0 million of unsecured indebtedness provided that we are in compliance with the covenants in the NSB Credit Agreement on a pro forma basis. Upon the execution of the NSB Credit Agreement, we borrowed $11.0 million under the NSB Term Loan and $0.1 million under the NSB Revolver to repay in full the remaining principal amount under the Breakaway Term Loan, together with accrued but unpaid interest, an early redemption premium and associated legal fees. In addition, we redeemed the Warrants at $1,333,333. The early redemption of the Breakaway Term Loan resulted in approximately $1.3 million of loss on extinguishment of debt. On April 24, 2018, our Board authorized the repurchase of shares of our common stock in an amount not to exceed $1.0 million. Such repurchases may be made from time to time based on market conditions and may be completed in the open market or in privately-negotiated transactions. Repurchase transactions will be executed only when we believe that we will remain in compliance with the covenants of the NSB Credit Agreement. Finally, execution of share repurchases may require regulatory approval in one or more jurisdictions. |
SIGNIFICANT ACCOUNTING POLICI22
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation and Basis of accounting | Basis of presentation. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) . In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. As permitted by the rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all necessary adjustments, consisting only of those of a recurring nature, and disclosures to present fairly our financial position and the results of our operations and cash flows for the periods presented. These unaudited interim condensed financial statements should be read in conjunction with the financial statements and the related notes thereto included in our Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on April 2, 2018 (the “2017 10-K”). Basis of accounting. The financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. Revenues are recognized when earned and expenses ( such as wages, consulting expenses, legal, regulatory and professional fees and rent) are recognized when they are incurred. We do not have significant categories of cost of revenue, as most of our revenue is derived from the licensing of intellectual property. |
Use of estimates and assumptions | Use of estimates and assumptions. We are required to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our company and the industry as a whole, and information available from other outside sources. Our estimates affect reported amounts for assets, liabilities, revenues, expenses and related disclosures. Actual results may differ from initial estimates. |
Reclassifications | Reclassifications. Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations, including the addition of restricted cash to cash and cash equivalents on the consolidated statements of cash flows as a result of the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . See below for further detail. |
Recently adopted accounting standards | Recently adopted accounting standards Revenue Recognition. Effective January 1, 2018, we adopted Accounting Standards Update (“ ASU”) No. 2014-09, (“ASC 606”), which is a comprehensive new revenue recognition standard that supersedes virtually all existing revenue guidance, including industry-specific guidance. Under the new standard, revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. The standard creates a five-step model that generally requires companies to use more judgment and make more estimates than under the previous guidance when considering the terms of contracts along with all relevant facts and circumstances. These include the identification of customer contracts and separating performance obligations, the determination of transaction price that potentially includes an estimate of variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue in line with the pattern of transfer. We adopted ASC 606 using the modified retrospective approach (reporting the cumulative effect as of the date of adoption). See Note 3 for further detail. Restricted Cash . Effective January 1, 2018, we adopted ASU No. 2016-18, . This ASU requires amounts generally described as restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. We adopted this guidance on a retrospective basis, which resulted in the inclusion of restricted cash within cash and cash equivalents on our balance sheets and statements of cash flows. Such restricted cash represents reserves set side in a restricted bank account in accordance with the requirements of gaming regulations to be used for the purpose of funding payments to winners of our jackpots and was $108,363 and $95,062 at March 31, 2018 and December 31, 2017, respectively . Cash flows from operating activities for the three months ended March 31, 2017 increased by $30,936 as a result of the adoption of this guidance. Compensation - Stock Compensation. Effective January 1, 2018, we adopted ASU No. 2017-09, , which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The adoption did not have a material impact on our financial statements. |
New accounting standards not yet adopted | New accounting standards not yet adopted Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases being recognized on our balance sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance. Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-04, which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. This guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact of adopting this guidance and will adopt this guidance for the annual test to be performed for the year ended December 31, 2018. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Line Items] | |
Summary of Disaggregation of Revenue by Major Source and Geographic Location | The following table disaggregates our revenue by major source for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Table games $ 3,792,387 $ 3,193,094 Internet-based gaming 400,771 159,838 E-tables 158,828 113,529 Other 8,709 8,835 Total revenue $ 4,360,695 $ 3,475,296 The following table disaggregates our revenue by geographic location for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 North America and Caribbean $ 3,502,810 $ 2,800,905 Europe 857,885 674,391 Total revenue $ 4,360,695 $ 3,475,296 |
Summary of Changes in Revenue Contract Liability | The table below summarizes changes in the revenue contract liability during the three months ended March 31, 2018 Revenue Contract liability Beginning balance – January 1, 2018 $ 1,083,639 Increase (advanced billings) 3,260,177 Decrease (revenue recognition) (3,234,263 ) Ending balance – March 31. 2018 $ 1,109,553 |
ASC 606 | |
Revenue Recognition [Line Items] | |
Summary of Adoption of ASC 606 had Impact on Statement of Income | For the three months ended March 31, 2018, the adoption of ASC 606 had the following impact on our statement of income: Three Months Ended March 31, 2018 As reported Balance without the adoption of ASC 606 Impact of the adoption Product leases and royalties $ 4,360,356 $ 4,153,659 $ 206,697 Selling, general and administrative expense $ 2,585,070 $ 2,378,373 $ 206,697 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Raw materials and component parts $ 322,908 $ 235,673 Work-in-process 187,998 214,895 Finished goods 92,232 103,558 Inventory, gross 603,138 554,126 Less: inventory reserve (30,000 ) (30,000 ) Inventory, net $ 573,138 $ 524,126 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Plant Equipment, Net | Property and equipment, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Furniture and fixtures $ 291,948 $ 280,694 Automotive vehicles 215,127 215,127 Leasehold improvements 156,843 156,843 Computer equipment 142,195 121,992 Office equipment 53,484 53,483 Property and equipment, gross 859,597 828,139 Less: accumulated depreciation (596,547 ) (564,272 ) Property and equipment, net $ 263,050 $ 263,867 |
ASSETS DEPLOYED AT CLIENT LOC26
ASSETS DEPLOYED AT CLIENT LOCATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Leases Operating [Abstract] | |
Schedule of Assets Deployed at Client Locations, Net | Assets deployed at client locations, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Enhanced table systems $ 672,508 $ 638,981 Less: accumulated depreciation (300,637 ) (265,331 ) Assets deployed at client locations, net $ 371,871 $ 373,650 |
GOODWILL AND OTHER INTANGIBLE27
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Finite-lived Intangible Assets, Net | Goodwill and finite-lived intangible assets, net consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Goodwill $ 1,091,000 $ 1,091,000 Finite-lived intangible assets: Patents 13,475,000 13,475,000 Customer relationships 3,400,000 3,400,000 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Internally-developed software 102,968 102,968 Other intangible assets, gross 20,518,935 20,518,935 Less: accumulated amortization (10,532,858 ) (10,157,126 ) Other intangible assets, net 9,986,077 10,361,809 Goodwill and other intangible assets, net $ 11,077,077 $ 11,452,809 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is as follows: Twelve months Ending March 31, Total 2019 $ 1,498,873 2020 1,498,873 2021 1,427,884 2022 1,391,218 2023 821,532 Thereafter 3,347,697 Total amortization $ 9,986,077 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Payroll and related $ 457,663 $ 712,584 Commissions and royalties 58,069 65,380 Professional fees 39,108 63,488 Other 27,860 46,344 Total accrued expenses $ 582,700 $ 887,796 |
CAPITAL LEASE OBLIGATIONS (Tabl
CAPITAL LEASE OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Schedule of Capital Lease Obligations | Capital lease obligations consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Capital lease obligation $ 38,967 $ 47,002 Less: Current portion (33,233 ) (32,785 ) Total capital lease obligations – long-term $ 5,734 $ 14,217 |
Schedule of Future Annual Payments for Capital Leases Obligations | The capital leases cover leasehold improvements located at our corporate headquarters in Las Vegas, Nevada. As of March 31, future annual payments for capital leases obligations are as follows: Twelve months Ending March 31, Total 2019 $ 33,233 2020 5,734 Total minimum lease payments $ 38,967 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following at March 31, 2018 and December 31, 2017: 2018 2017 Breakaway Term Loan $ 9,187,500 $ 9,450,000 Equipment notes payable 111,361 124,311 Insurance notes payable 46,294 73,734 Notes payable, gross 9,345,155 9,648,045 Less: Unamortized debt issuance costs (447,643 ) (480,397 ) Warrants issued (544,425 ) (584,261 ) Notes payable, net 8,353,087 8,583,387 Less: Current portion (1,135,983 ) (1,163,002 ) Long-term debt, net $ 7,217,104 $ 7,420,385 |
Schedule of Future Maturities | As of March 31, 2018, future maturities of our long-term debt obligations are as follows, without giving effect to the NSB Credit Agreement: Twelve Months ending March 31, Total 2019 $ 1,135,983 2020 1,084,480 2021 1,070,309 2022 6,054,383 Total notes payable 9,345,155 Less: Unamortized debt issuance costs (447,643 ) Warrants issued (544,425 ) Notes payable, net $ 8,353,087 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Client Revenue Concentration | For the three months ended March 31, 2018 and 2017, respectively, we had the following client revenue concentration: Location 2018 Revenue 2017 Revenue Client A North America 11.3% 14.6% |
Schedule of Estimates of Future Minimum Operating Lease Payment Obligations | The following table reflects our estimates of future minimum operating lease payment obligations, which are based upon our current operating leases: Twelve Months Ending March 31, Annual Obligation 2019 $ 236,736 2020 59,730 Total obligations $ 296,466 |
STOCK WARRANTS, OPTIONS AND G32
STOCK WARRANTS, OPTIONS AND GRANTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Pricing | Options issued three months ended March 31, 2018 Options issued three months ended March 31, 2017 Dividend yield 0% 0% Expected volatility 78% 85% Risk free interest rate 2.46% - 2.56% 1.93% Expected life (years) 5.00 5.00 |
Summary of Stock Option Activity | A summary of stock option activity is as follows: Common s Weighted- average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Outstanding – December 31, 2017 2,811,250 0.54 $ 1,849,517 3.65 Issued 145,000 1.06 — — Exercised — — — — Expired — — — — Outstanding – March 31, 2018 2,956,250 $ 0.57 $ 1,397,117 3.49 Exercisable – March 31, 2018 2,057,916 $ 0.50 $ 1,102,116 3.16 |
Summary of Unvested Stock Option Activity | A summary of unvested stock option activity is as follows: Common s options Weighted-average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Unvested – December 31, 2017 825,557 $ 0.63 $ 467,379 4.27 Granted 145,000 1.06 — — Vested (72,223 ) 0.52 — — Forfeited or expired — — — — Unvested – March 31, 2018 898,334 $ 0.71 $ 295,001 4.13 |
SIGNIFICANT ACCOUNTING POLICI33
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Significant Accounting Policies [Line Items] | |||
Cash flows from operating activities | $ 68,523 | $ 977,903 | |
ASU No. 2016-18 | |||
Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 108,363 | $ 95,062 | |
ASU No. 2016-18 | Restatement Adjustment | |||
Significant Accounting Policies [Line Items] | |||
Cash flows from operating activities | $ 30,936 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Adoption of ASC 606 had Impact on Statement of Income (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Product leases and royalties | $ 4,360,356 | $ 3,473,841 |
Selling, general and administrative | 2,585,070 | $ 2,086,169 |
ASC 606 | Balance Without the Adoption of ASC 606 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Product leases and royalties | 4,153,659 | |
Selling, general and administrative | 2,378,373 | |
ASC 606 | Impact of the Adoption | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Product leases and royalties | 206,697 | |
Selling, general and administrative | $ 206,697 |
REVENUE RECOGNITION - Summary35
REVENUE RECOGNITION - Summary of Disaggregation of Revenue by Major Source (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 4,360,695 | $ 3,475,296 |
Table Games | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 3,792,387 | 3,193,094 |
Internet-Based Gaming | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 400,771 | 159,838 |
E-Tables | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 158,828 | 113,529 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 8,709 | $ 8,835 |
REVENUE RECOGNITION - Summary36
REVENUE RECOGNITION - Summary of Disaggregation of Revenue by Geographic Location (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 4,360,695 | $ 3,475,296 |
North America and Caribbean | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 3,502,810 | 2,800,905 |
Europe | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 857,885 | $ 674,391 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation Of Revenue [Line Items] | |
Revenue recognized included in revenue contract liability | $ 1,083,639 |
ASC 606 | Maximum | |
Disaggregation Of Revenue [Line Items] | |
Contract asset amortization period | 1 year |
REVENUE RECOGNITION - Summary38
REVENUE RECOGNITION - Summary of Changes in Revenue Contract Liability (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning balance – January 1, 2018 | $ 1,083,639 |
Increase (advanced billings) | 3,260,177 |
Decrease (revenue recognition) | (3,234,263) |
Ending balance – March 31. 2018 | $ 1,109,553 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory, Net (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials and component parts | $ 322,908 | $ 235,673 |
Work-in-process | 187,998 | 214,895 |
Finished goods | 92,232 | 103,558 |
Inventory, gross | 603,138 | 554,126 |
Less: inventory reserve | (30,000) | (30,000) |
Inventory, net | $ 573,138 | $ 524,126 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Plant Equipment, Net (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, net | $ 263,050 | $ 263,867 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 291,948 | 280,694 |
Automotive Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 215,127 | 215,127 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 156,843 | 156,843 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 142,195 | 121,992 |
Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 53,484 | 53,483 |
Property Plant and Equipment Excluding Assets Leased to Others | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 859,597 | 828,139 |
Less: accumulated depreciation | (596,547) | (564,272) |
Property and equipment, net | $ 263,050 | $ 263,867 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property Plant And Equipment [Line Items] | |||
Capital Lease Assets | $ 156,843 | $ 156,843 | |
Capital Lease Assets, Accumulated depreciation | 120,748 | $ 113,035 | |
Property Plant and Equipment Excluding Assets Leased to Others | |||
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 32,275 | $ 42,650 |
ASSETS DEPLOYED AT CLIENT LOC42
ASSETS DEPLOYED AT CLIENT LOCATIONS - Schedule of Assets Deployed at Client Locations, Net (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Leases Operating [Abstract] | ||
Enhanced table systems | $ 672,508 | $ 638,981 |
Less: accumulated depreciation | (300,637) | (265,331) |
Assets deployed at client locations, net | $ 371,871 | $ 373,650 |
ASSETS DEPLOYED AT CLIENT LOC43
ASSETS DEPLOYED AT CLIENT LOCATIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Leases Operating [Abstract] | ||
Depreciation expense related to assets deployed at client locations | $ 43,553 | $ 20,469 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill and Finite-lived Intangible Assets, Net (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Goodwill | $ 1,091,000 | $ 1,091,000 |
Finite-lived intangible assets: | ||
Other intangible assets, gross | 20,518,935 | 20,518,935 |
Less: accumulated amortization | (10,532,858) | (10,157,126) |
Other intangible assets, net | 9,986,077 | 10,361,809 |
Goodwill and other intangible assets, net | 11,077,077 | 11,452,809 |
Patents | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 13,475,000 | 13,475,000 |
Customer Relationships | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 3,400,000 | 3,400,000 |
Trademarks | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 2,880,967 | 2,880,967 |
Non-compete Agreements | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 660,000 | 660,000 |
Internally-developed Software | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | $ 102,968 | $ 102,968 |
GOODWILL AND OTHER INTANGIBLE45
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 375,732 | $ 372,966 |
GOODWILL AND OTHER INTANGIBLE46
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) | Mar. 31, 2018USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,019 | $ 1,498,873 |
2,020 | 1,498,873 |
2,021 | 1,427,884 |
2,022 | 1,391,218 |
2,023 | 821,532 |
Thereafter | 3,347,697 |
Total amortization | $ 9,986,077 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Payroll and related | $ 457,663 | $ 712,584 |
Commissions and royalties | 58,069 | 65,380 |
Professional fees | 39,108 | 63,488 |
Other | 27,860 | 46,344 |
Total accrued expenses | $ 582,700 | $ 887,796 |
CAPITAL LEASE OBLIGATIONS - Sch
CAPITAL LEASE OBLIGATIONS - Schedule of Capital Lease Obligations (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Leases [Abstract] | ||
Capital lease obligation | $ 38,967 | $ 47,002 |
Less: Current portion | (33,233) | (32,785) |
Total capital lease obligations – long-term | $ 5,734 | $ 14,217 |
CAPITAL LEASE OBLIGATIONS - S49
CAPITAL LEASE OBLIGATIONS - Schedule of Future Annual Payments for Capital Leases Obligations (Details) | Mar. 31, 2018USD ($) |
Leases [Abstract] | |
2,019 | $ 33,233 |
2,020 | 5,734 |
Total minimum lease payments | $ 38,967 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2016 |
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 9,345,155 | $ 9,648,045 | |
Unamortized debt issuance costs | (447,643) | (480,397) | |
Warrants issued | (544,425) | (584,261) | |
Notes payable, net | 8,353,087 | 8,583,387 | |
Less: Current portion | (1,135,983) | (1,163,002) | |
Long-term debt, net | 7,217,104 | 7,420,385 | |
Breakaway Term Loan | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 9,187,500 | 9,450,000 | $ 10,500,000 |
Equipment Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 111,361 | 124,311 | |
Insurance Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 46,294 | $ 73,734 |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | Apr. 24, 2018 | Aug. 31, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | Aug. 29, 2016 |
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 9,345,155 | $ 9,648,045 | |||
Subsequent Event | NSB and NSB Credit Agreement | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 1,000,000 | ||||
Debt instrument term | 1 year | ||||
Warrant Agreement | |||||
Debt Instrument [Line Items] | |||||
Warrants issued, number of shares of common stock | 1,965,780 | ||||
Breakaway Term Loan | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 10,500,000 | $ 9,187,500 | $ 9,450,000 | ||
Debt instrument, interest rate during period | 14.00% | ||||
Debt instrument, interest rate for quarterly period | 12.50% | ||||
Breakaway Term Loan | Subsequent Event | NSB and NSB Credit Agreement | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Proceeds to pay outstanding balance amount | $ 100,000 | ||||
Breakaway Term Loan | Warrant Agreement | |||||
Debt Instrument [Line Items] | |||||
Warrants purchase period | 6 years | ||||
Warrants issued, number of shares of common stock | 1,965,780 | ||||
Estimated fair value of warrants on grant date | $ 809,632 | ||||
Term Loan | Subsequent Event | NSB and NSB Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 11,000,000 | ||||
Debt instrument term | 5 years | ||||
Proceeds to pay outstanding balance amount | $ 11,000,000 |
LONG-TERM DEBT - Schedule of Fu
LONG-TERM DEBT - Schedule of Future Maturities (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total notes payable | $ 9,345,155 | $ 9,648,045 |
Unamortized debt issuance costs | (447,643) | (480,397) |
Warrants issued | (544,425) | (584,261) |
Notes payable, net | 8,353,087 | $ 8,583,387 |
Promissory Note | ||
Debt Instrument [Line Items] | ||
2,019 | 1,135,983 | |
2,020 | 1,084,480 | |
2,021 | 1,070,309 | |
2,022 | 6,054,383 | |
Total notes payable | 9,345,155 | |
Unamortized debt issuance costs | (447,643) | |
Warrants issued | (544,425) | |
Notes payable, net | $ 8,353,087 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Client Revenue Concentration (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Customer Concentration Risk | Revenue | North America | Client A | ||
Product Information [Line Items] | ||
Concentration Risk | 11.30% | 14.60% |
COMMITMENTS AND CONTINGENCIES54
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2014ft² | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
Commitments And Contingencies [Line Items] | |||
Rent expense | $ 71,300 | $ 70,570 | |
Spencer Lease | |||
Commitments And Contingencies [Line Items] | |||
Rental term | 5 years | ||
Area of building | ft² | 24,000 | ||
Rent expense | $ 153,000 | ||
Annual rental increase | 4.00% | ||
Lease expiration date | Jun. 30, 2019 | ||
Tenant Improvement Allowance Option | $ 150,000 | ||
Interest rate | 5.50% | ||
Spencer Lease | Office | |||
Commitments And Contingencies [Line Items] | |||
Area of building | ft² | 16,000 | ||
Spencer Lease | Warehouse | |||
Commitments And Contingencies [Line Items] | |||
Area of building | ft² | 8,000 | ||
Credit Concentration Risk | Patents | |||
Commitments And Contingencies [Line Items] | |||
Accounts receivable from client account | $ 2,044,883 | $ 1,767,437 | |
Credit Concentration Risk | Revenue | Patents | |||
Commitments And Contingencies [Line Items] | |||
Concentration risk percentage | 46.90% | 50.90% |
COMMITMENTS AND CONTINGENCIES55
COMMITMENTS AND CONTINGENCIES - Schedule of Estimates of Future Minimum Operating Lease Payment Obligations (Details) | Mar. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,019 | $ 236,736 |
2,020 | 59,730 |
Total obligations | $ 296,466 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Mar. 31, 2018 | Feb. 28, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Temporary Equity [Line Items] | ||||
Stock options exercised, vested | 150,000 | |||
Proceeds from stock option exercises | $ 35,000 | $ 35,000 | ||
Restricted Stock | ||||
Temporary Equity [Line Items] | ||||
Award vesting date | Mar. 31, 2018 | |||
Forfeited of restricted stock, shares | 100,000 | |||
Restricted Stock | Norm DesRosiers | ||||
Temporary Equity [Line Items] | ||||
Restricted common stock, granted | 13,000 | |||
Restricted common stock granted, value | $ 13,520 | |||
Restricted Stock | Bryan Waters | ||||
Temporary Equity [Line Items] | ||||
Restricted common stock, granted | 13,000 | |||
Restricted common stock granted, value | $ 13,520 | |||
Restricted Stock | William Zender | ||||
Temporary Equity [Line Items] | ||||
Restricted common stock, granted | 13,000 | |||
Restricted common stock granted, value | $ 13,520 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Contingency [Line Items] | ||
Effective tax rate | 21.20% | 32.40% |
Plan | ||
Income Tax Contingency [Line Items] | ||
Effective tax rate | 21.20% | 35.00% |
STOCK WARRANTS, OPTIONS AND G58
STOCK WARRANTS, OPTIONS AND GRANTS (Details Narrative) - USD ($) | Apr. 24, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Aug. 29, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of shares granted | $ 98,333 | $ 47,635 | ||
Unrecognized stock-based compensation expense | $ 323,230 | |||
Unrecognized stock-based compensation expense, weighted-average period of amortization | 2 years 21 days | |||
Term Loan | Subsequent Event | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Amount paid to redeem warrants | $ 1,333,333 | |||
Common Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock Options Issued | 145,000 | 112,500 | ||
Warrant Agreement | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants issued, number of shares of common stock | 1,965,780 | |||
Warrants to purchase common stock, exercise price per share | $ 0.30 |
STOCK WARRANTS, OPTIONS AND G59
STOCK WARRANTS, OPTIONS AND GRANTS - Summary of Stock Options Pricing (Details) - Stock Option | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility | 78.00% | 85.00% |
Risk free interest rate, minimum | 2.46% | |
Risk free interest rate, maximum | 2.56% | |
Risk free interest rate | 1.93% | |
Expected life (years) | 5 years | 5 years |
STOCK WARRANTS, OPTIONS AND G60
STOCK WARRANTS, OPTIONS AND GRANTS - Summary of Stock Option Activity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options Exercised, number of shares | (150,000) | ||
Common Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Beginning Balance, number of shares | 2,811,250 | ||
Options Issued, number of shares | 145,000 | ||
Ending Balance, number of shares | 2,956,250 | 2,811,250 | |
Ending Balance, Options Exercisable | 2,057,916 | ||
Beginning Balance, Weighted-average exercise price | $ 0.54 | ||
Options Issued, Weighted-average exercise price | 1.06 | ||
Ending Balance, Weighted-average exercise price | 0.57 | $ 0.54 | |
Ending Balance, Options Exercisable, Weighted-average exercise price | $ 0.50 | ||
Options Outstanding, Aggregate intrinsic value | $ 1,397,117 | $ 1,849,517 | |
Options Exercisable, Aggregate intrinsic value | $ 1,102,116 | ||
Weighted-average remaining contractual term (years) | 3 years 5 months 27 days | 3 years 7 months 24 days | |
Weighted-average remaining contractual term (years), Exercisable | 3 years 1 month 28 days |
STOCK WARRANTS, OPTIONS AND G61
STOCK WARRANTS, OPTIONS AND GRANTS - Summary of Unvested Stock Option Activity (Details) - Common Stock - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, number of shares | 825,557 | |
Options Granted, number of shares | 145,000 | |
Options Vested, number of shares | (72,223) | |
Ending Balance, number of shares | 898,334 | 825,557 |
Beginning Balance, Weighted-average exercise price | $ 0.63 | |
Granted, Weighted-average exercise price | 1.06 | |
Vested, Weighted-average exercise price | 0.52 | |
Ending Balance, Weighted-average exercise price | $ 0.71 | $ 0.63 |
Aggregate intrinsic value | $ 295,001 | $ 467,379 |
Weighted-average remaining contractual term (years) | 4 years 1 month 17 days | 4 years 3 months 8 days |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | May 01, 2018USD ($) | Apr. 28, 2018USD ($) | Apr. 24, 2018USD ($)Jurisdiction | Mar. 31, 2018 |
Breakaway Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate during period | 14.00% | |||
Subsequent Event | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Warrants redemption value | $ 1,333,333 | |||
Subsequent Event | NSB | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate terms | Outstanding balances under the NSB Term Loan and the NSB Revolver will accrue interest based on one-month US dollar London interbank offered rate (“LIBOR”) plus an Applicable Margin of 3.50%, or 4.00%, depending on our Leverage Ratio (as defined in the NSB Credit Agreement). Effective May 1, 2018, we entered into an interest rate swap agreement with an affiliate of NSB (the “Swap Agreement”) to fix the interest rate on the NSB Term Loan at 6.43% (assuming a Leverage Ratio less than 2.0) for three years. | |||
Notional amount | $ 10,900,000 | |||
Debt instrument, frequency of periodic payment | monthly | |||
Debt instrument principal and interest term | 7 years | |||
Maturity date | Apr. 24, 2023 | |||
Debt instrument, covenant, description | we are required to maintain a minimum trailing-four-quarters Fixed Charge Coverage Ratio (as defined in the NSB Credit Agreement) of 1.25x. | |||
Fixed charge coverage ratio | 125.00% | |||
Additional amount of unsecured indebtedness | $ 1,000,000 | |||
Warrants redemption value | $ 1,333,333 | |||
Repurchase of shares of common stock | $ 1,000,000 | |||
Minimum required number of jurisdiction approval for execution of share repurchase | Jurisdiction | 1 | |||
Subsequent Event | NSB | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 1,000,000 | |||
Subsequent Event | NSB | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | 11,000,000 | $ 11,000,000 | ||
Debt instrument interest rate payable term | 3 years | |||
Subsequent Event | NSB | Leverage Ratio Less Than 2.0 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate during period | 6.43% | |||
Subsequent Event | NSB | Leverage Ratio Less Than 2.0 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt insturment, applicable margin rate | 3.50% | |||
Subsequent Event | NSB | Leverage Ratio 2.0 or Greater | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt insturment, applicable margin rate | 4.00% | |||
Subsequent Event | NSB | Breakaway Term Loan | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | 1,300,000 | |||
Subsequent Event | NSB | Breakaway Term Loan | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Repayment of outstanding balance | $ 100,000 |