Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | Galaxy Gaming, Inc. | ||
Entity Central Index Key | 0000013156 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 70,923,698 | ||
Entity Common Stock, Shares Outstanding | 23,718,968 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Trading Symbol | GLXZ | ||
Entity File Number | 000-30653 | ||
Entity Tax Identification Number | 20-8143439 | ||
Entity Address, Address Line One | 6480 Cameron Street Ste. 305 | ||
Entity Address, City or Town | Las Vegas | ||
Entity Address, State or Province | NV | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Postal Zip Code | 89118 | ||
City Area Code | 702 | ||
Local Phone Number | 939-3254 | ||
Title of 12(b) Security | Common stock | ||
Entity Interactive Data Current | Yes | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Firm ID | 659 | ||
Auditor Name | Moss Adams LLP | ||
Auditor Location | San Diego, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 16,058,714 | $ 5,993,388 |
Accounts receivable, net of allowance of $348,695 and $145,000, respectively | 4,377,165 | 2,493,254 |
Inventory | 770,248 | 668,525 |
Income tax receivable | 1,536,682 | 1,229,795 |
Prepaid expenses | 1,125,777 | 1,167,068 |
Other current assets | 21,536 | 10,803 |
Total current assets | 23,890,122 | 11,562,833 |
Property and equipment, net | 98,594 | 116,724 |
Operating lease right-of-use assets | 1,167,903 | 1,367,821 |
Assets deployed at client locations, net | 360,735 | 232,156 |
Goodwill | 1,091,000 | 1,091,000 |
Other intangible assets, net | 13,677,264 | 16,086,896 |
Other assets, net | 167,087 | 117,164 |
Total assets | 40,452,705 | 30,574,594 |
Current liabilities: | ||
Accounts payable | 374,323 | 467,792 |
Accrued expenses | 2,666,073 | 1,333,032 |
Revenue contract liability | 37,500 | 29,167 |
Current portion of long-term debt | 1,100,369 | 2,222,392 |
Current portion of operating lease liabilities | 222,806 | 195,411 |
Total current liabilities | 4,401,071 | 4,247,794 |
Long-term operating lease liabilities | 1,019,029 | 1,215,680 |
Long-term debt and liabilities, net | 52,143,810 | 49,691,184 |
Interest rate swap liability | 66,009 | |
Deferred tax liabilities, net | 175,218 | 150,892 |
Total liabilities | 57,739,128 | 55,371,559 |
Commitments and Contingencies (See Note 11) | ||
Stockholders’ deficit | ||
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; 23,523,969 and 21,970,638 shares issued and outstanding, respectively | 23,524 | 21,971 |
Additional paid-in capital | 16,380,597 | 10,798,536 |
Accumulated deficit | (33,543,351) | (35,655,163) |
Accumulated other comprehensive (loss) income | (147,193) | 37,691 |
Total stockholders’ deficit | (17,286,423) | (24,796,965) |
Total liabilities and stockholders’ deficit | $ 40,452,705 | $ 30,574,594 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Accounts receivables, net allowance | $ 348,695 | $ 145,000 |
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 | 23,523,969 | 21,970,638 |
Common Stock, Outstanding | 23,523,969 | 21,970,638 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | ||
Total revenue | $ 19,984,378 | $ 10,230,316 |
Costs and expenses: | ||
Cost of ancillary products and assembled components | 80,833 | 72,684 |
Selling, general and administrative | 10,646,524 | 8,964,930 |
Research and development | 520,449 | 487,679 |
Depreciation and amortization | 2,858,991 | 2,222,042 |
Share-based compensation | 1,532,455 | 737,991 |
Total costs and expenses | 15,639,252 | 12,485,326 |
Income (loss) from operations | 4,345,126 | (2,255,010) |
Other income (expense): | ||
Interest income | 2,048 | 25,702 |
Interest expense | (1,505,386) | (683,357) |
Share redemption consideration | (682,469) | (781,928) |
Foreign currency exchange (loss) | (64,879) | (34,961) |
Change in estimated fair value of interest rate swap liability | 66,009 | 74,487 |
Paycheck Protection Program Loan forgiveness | 840,243 | |
Total other expense | (2,184,677) | (559,814) |
Income (loss) before (provision) benefit for income taxes | 2,160,449 | (2,814,824) |
(Provision) benefit for income taxes | 48,637 | (605,937) |
Net income (loss) | 2,111,812 | (2,208,887) |
Foreign currency translation adjustment | (184,884) | 37,691 |
Comprehensive income (loss) | $ 1,926,928 | $ (2,171,196) |
Net income (loss) per share: | ||
Basic | $ 0.10 | $ (0.12) |
Diluted | $ 0.10 | $ (0.12) |
Weighted-average shares outstanding: | ||
Basic | 20,328,110 | 18,282,262 |
Diluted | 21,840,609 | 18,282,262 |
Licensing Fees | ||
Revenue: | ||
Total revenue | $ 19,984,378 | $ 10,230,316 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Total | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income | Accumulated (Deficit) Earnings |
Beginning balance, amount at Dec. 31, 2019 | $ (27,632,622) | $ 18,018 | $ 5,795,636 | $ (33,446,276) | |
Beginning balance, shares at Dec. 31, 2019 | 18,017,944 | ||||
Shares issued in connection with PGP asset acquisition | 3,989,528 | $ 3,141 | 3,986,387 | ||
Shares issued in connection with PGP asset acquisition, shares | 3,141,361 | ||||
Net income (loss) | (2,208,887) | (2,208,887) | |||
Foreign currency translation | 37,691 | $ 37,691 | |||
Stock options exercised | 279,334 | $ 559 | 278,775 | ||
Stock options exercised, share | 558,000 | ||||
Share-based compensation | 737,991 | $ 253 | 737,738 | ||
Share based compensation, share | 253,333 | ||||
Ending balance, amount at Dec. 31, 2020 | (24,796,965) | $ 21,971 | 10,798,536 | 37,691 | (35,655,163) |
Ending balance, shares at Dec. 31, 2020 | 21,970,638 | ||||
Warrants issued in connection with Fortress credit agreement | 3,149,002 | 3,149,002 | |||
Net income (loss) | 2,111,812 | 2,111,812 | |||
Foreign currency translation | (184,884) | (184,884) | |||
Stock options exercised | 902,157 | $ 1,095 | 901,062 | ||
Stock options exercised, share | 1,094,998 | ||||
Share-based compensation | 1,532,455 | $ 458 | 1,531,997 | ||
Share based compensation, share | 458,333 | ||||
Ending balance, amount at Dec. 31, 2021 | $ (17,286,423) | $ 23,524 | $ 16,380,597 | $ (147,193) | $ (33,543,351) |
Ending balance, shares at Dec. 31, 2021 | 23,523,969 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,111,812 | $ (2,208,887) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,858,991 | 2,222,042 |
Amortization of right-of-use assets | 228,522 | 329,040 |
Amortization of debt issuance costs and debt discount | 369,093 | 38,195 |
Bad debt expense | 358,160 | 226,691 |
Change in estimated fair value of interest rate swap liability | (66,009) | (74,487) |
Gain on forgiveness of Paycheck Protection Program Loan | (835,300) | |
Deferred income tax | 24,326 | 596,874 |
Share-based compensation | 1,532,455 | 737,991 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,367,258) | (236,890) |
Inventory | (427,795) | (51,709) |
Income tax receivable/payable | (306,887) | (893,930) |
Prepaid expense and other current assets | 680,663 | 259,616 |
Other assets | (49,923) | |
Accounts payable | (91,242) | (1,081,836) |
Accrued expenses | 1,338,195 | (257,179) |
Revenue contract liability | 8,333 | |
Operating lease liabilities | (197,860) | (403,363) |
Net cash provided by (used in) operating activities | 6,003,576 | (1,633,132) |
Cash flows from investing activities: | ||
Investment in intangible assets | (198,667) | |
Proceeds from sale of property and equipment | 25,000 | |
Acquisition of PGP assets, net of cash acquired | (6,393,920) | |
Acquisition of property and equipment | (60,067) | (62,794) |
Net cash used in investing activities | (233,734) | (6,456,714) |
Cash flows from financing activities: | ||
Proceeds from draw on revolving loan | 1,000,000 | |
Proceeds from Paycheck Protection Program | 835,300 | |
Proceeds from Mainstreet Priority Loan Program | 3,920,000 | |
Proceeds from stock option exercises | 902,157 | 279,334 |
Principal payments on long-term debt | (13,104,942) | (1,645,400) |
Proceeds from Fortress Credit Agreement, net | 58,800,000 | |
Payments of debt issuance costs | (3,138,521) | |
Settlement of Redemption Consideration Obligation | (39,096,401) | |
Net cash provided by financing activities | 4,362,293 | 4,389,234 |
Effect of exchange rate changes on cash | (66,809) | 7,302 |
Net increase (decrease) in cash and cash equivalents | 10,065,326 | (3,693,310) |
Cash and cash equivalents – beginning of period | 5,993,388 | 9,686,698 |
Cash and cash equivalents – end of period | 16,058,714 | 5,993,388 |
Supplemental cash flow information: | ||
Cash paid for interest | 940,097 | 612,840 |
Cash paid for income taxes | 319,967 | 75,786 |
Supplemental schedule of non-cash activities: | ||
Shares issued in connection with PGP asset acquisition | 3,989,528 | |
Gain on forgiveness of Paycheck Protection Program Loan | 835,300 | |
Fortress warrants issued | 3,149,002 | |
Insurance acquired under note payable | 653,521 | 678,108 |
Right-of-use assets obtained in exchange for lease liabilities | 28,604 | 1,390,002 |
Inventory transferred to assets deployed at client locations | $ 326,072 | $ 48,838 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
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”). We are an established global gaming company specializing in the design, development, acquisition, assembly, marketing and licensing 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 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 online casinos worldwide and to land-based casino gaming companies in North America, the Caribbean, Central America, the United Kingdom, Europe and Africa and to cruise ship companies. We license our products and services for use solely in legalized gaming markets. We also license our content and distribute content from other companies to iGaming operators throughout the world. Share Redemption. On May 6, 2019, we redeemed all 23,271,667 shares of our common stock held by Triangulum Partners, LLC (“Triangulum”), an entity controlled by Robert B. Saucier, Galaxy Gaming's founder, and, prior to the redemption, the holder of a majority of our outstanding common stock. Our Articles of Incorporation (the “Articles”) provide that if certain events occur in relation to a stockholder that is required to undergo a gaming suitability review or similar investigative process, we have the option to purchase all or any part of such stockholder’s shares at a price per share that is equal to the average closing share price over the thirty calendar days preceding the purchase. The average closing share price over the thirty calendar days preceding the redemption was $1.68 per share. The consideration owed to Triangulum for the redemption was $39,096,401 (the “Redemption Consideration Obligation”). See Note 10. All of the litigation related to the Redemption Consideration Obligation and other matters between the Company and Triangulum was resolved on November 15, 2021, when Galaxy made a settlement payment in the amount of $39,507,717 to Triangulum. See Note 10 and Note 11. Membership Interest Purchase Agreement. On February 25, 2020, Galaxy Gaming entered into a Membership Interest Purchase Agreement, dated February 25, 2020 (the “Purchase Agreement”), between the Company and the membership interest holders of Progressive Games Partners, LLC (“PGP”). On August 21, 2020, the Company entered into a First Amendment to the Purchase Agreement between the Company and the membership interest holders of PGP. The First Amendment, among other things, fixed the cash portion of the purchase price at $6.425 million and established that the stock portion would be satisfied through the issuance of 3,141,361 shares of the Company’s common stock with a value of $1.27 per share on the date of the acquisition. The shares issued are being held in escrow with Philadelphia Stock Transfer, Inc., the Company’s stock transfer agent. The shares were released to the sellers in August 2021. On August 21, 2020, the Company completed the acquisition of 100% of the member interests in PGP. The entirety of the purchase price ($10,414,528) has been allocated to customer relationships and is included in Other intangible assets, net, on the Company’s balance sheet. See Note 7. The Company also acquired certain receivables and payables in the net amount of $581,885, which was to be remitted to the sellers of PGP as the receivables and payables were settled. The remaining balance of $76,053 at December 31, 2020 was paid to the sellers on May 7, 2021. Management has determined that, for accounting purposes, the PGP transaction does not meet the definition of a business combination and, therefore, has been accounted for as an asset acquisition. COVID-19. On March 11, 2020, the World Health Organization declared a pandemic related to the COVID-19 outbreak, which led to a global health emergency. The public-health impact of the outbreak continues to remain largely unknown and still evolving as new strains of COVID-19 continue to evolve. The related health crisis could continue to adversely affect the global economy, resulting in continued economic downturn that could impact demand for our products. Virtually all of our land-based clients have reopened, although casino revenues have not returned to pre-COVID-19 levels. We rely on third-party suppliers and manufacturers in China, many of whom were shut down or severely cut back production during some portion of 2020, with supply shortages continuing into 2021. Although we have been able to maintain inventories adequate to our needs, any future disruption of our suppliers and their contract manufacturers may impact our sales and operating results going forward. Because of the uncertainties of COVID-19, the Company drew on its Revolving Loan in the amount of $1,000,000 on March 12, 2020. Also, on April 17, 2020, the Company obtained the Paycheck Protection Program (the “PPP Loan”) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Paycheck Protection Program Flexibility Act (the “Flexibility Act”). On July 16, 2020, the Company filed an application and supporting documentation for forgiveness in full of the PPP Loan. On November 21, 2020, the Company received notification the PPP Loan had been forgiven in full, including $4,943 in accrued interest. Pursuant to the CARES Act, the Federal Reserve created the Main Street Priority Loan Program (“MSPLP”) to provide financing for small and medium-sized businesses. On October 26, 2020, the Company borrowed $4 million from Zions Bancorporation N.A., dba Nevada State Bank under this program. All of the Company’s obligations under the Nevada State Bank credit agreement were repaid on November 15, 2021. See Note 10. Credit Agreement Amendments and Fortress Credit Agreement. See Note 10 for discussion of amendments made to the Company’s credit agreement and the entry into the Fortress Credit Agreement. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation. The accompanying consolidated 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, the accompanying consolidated financial statements contain all necessary adjustments (including all those of a recurring nature and those necessary in order for the financial statements to be not misleading) and all disclosures to present fairly our financial position and the results of our operations and cash flows for the periods presented . Basis of accounting. The consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. 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. Consolidation. The financial statements are presented on a consolidated basis and include the results of the Company and its wholly owned subsidiary, PGP. All intercompany transactions and balances have been eliminated in consolidation. Reclassifications. Certain accounts and financial statement captions in the prior period have been reclassified to conform to the current period financial statement presentations and had no effect on net income (loss). Cash and cash equivalents. We consider cash on hand and cash in banks as cash. We consider certificates of deposit and other short-term securities with maturities of three months or less when purchased as cash equivalents. Our cash in bank balances are deposited in insured banking institutions, which are insured up to $ 250,000 Accounts receivable and allowance for doubtful accounts. Accounts receivable are stated at face value less an allowance for doubtful accounts. Accounts receivable are non-interest bearing. The Company reviews the accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. The allowance for doubtful accounts is estimated based on specific customer reviews, historical collection trends and current economic and business conditions. Inventory. Inventory consists of ancillary products such as signs, layouts and bases for the various games and electronic devices and components to support all our electronic enhancements used on casino table games (“Enhanced Table Systems”), and we maintain inventory levels based on historical and industry trends. We regularly assess inventory quantities for excess and obsolescence primarily based on forecasted product demand. Inventory is valued at the lower of net realizable value or cost, which is determined by the average cost method. Assets deployed at client locations, net. Our Enhanced Table Systems are assembled by us and accounted for as inventory until deployed at our casino clients’ premises (Note 6). Once deployed and placed into service at client locations, the assets are transferred from inventory and reported as assets deployed at client locations. These assets are stated at cost, net of accumulated depreciation. Depreciation on assets deployed at client locations is calculated using the straight-line method over a three-year period. P roperty and equipment, net. Property and equipment are being depreciated over their estimated useful lives ( three to five years Goodwill. Goodwill (Note 7) is assessed for impairment at least annually or at other times during the year if events or circumstances indicate that it is more-likely-than-not that the fair value of a reporting asset is below the carrying amount. If found to be impaired, the carrying amount will be reduced, and an impairment loss will be recognized. Other intangible assets, net. The following intangible assets have finite lives and are being amortized using the straight-line method over their estimated economic lives as follows: Patents 4 - 20 years Client relationships 9 - 22 years Trademarks 12 - 30 years Non-compete agreements 9 years Software 3 years Other intangible assets (Note 7) are analyzed for potential impairment at least annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds the fair value, which is the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the intangible assets. No impairment was recorded for the years ended December 31, 2021 or 2020. Interest rates swap agreement . In May 2018, the Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on its floating rate long-term debt. The interest rate swap has not been designated a hedging instrument and is adjusted to fair value through earnings in the Company’s statements of operations. The interest rate swap agreement matured on May 1, 2021 Fair value of financial instruments. We estimate fair value for financial assets and liabilities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: • 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 values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts due to their short-term nature. The estimated fair value of our long-term debt approximates its carrying value based upon our expected borrowing rate for debt with similar remaining maturities and comparable risk. The Company currently has no financial instruments measured at estimated fair value on a recurring basis based on valuation reports provided by counterparties. Leases . We account for lease components (such as rent payments) separately from non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). Operating and finance leases with terms greater than 12 months are recorded on the consolidated balance sheets as right-of-use assets with corresponding lease liabilities. Lease expense is recognized on a straight-line basis using the discount rate implicit in each lease or our incremental borrowing rate at lease commencement date (Note 9). Revenue recognition. We account for our revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . See Note 3. Costs of ancillary products and assembled components. Ancillary products include pay tables (display of payouts), bases, layouts, signage and other items as they relate to support of specific proprietary games in connection with the licensing of our games. Assembled components represent the cost of the equipment, devices and incorporated software used to support our Enhanced Table Systems. Research and development. We incur research and development (“R&D”) costs to develop our new and next-generation products. Our products reach commercial feasibility shortly before the products are released, and therefore R&D costs are expensed as incurred. Employee related costs associated with product development are included in R&D costs. Foreign currency translation. The functional currency for PGP is the Euro. Gains and losses from settlement of transactions involving foreign currency amounts are included in other income or expense in the consolidated statements of operations. Gains and losses resulting from translating assets and liabilities from the functional currency to U.S. dollars are included in accumulated other comprehensive income or (loss) in the consolidated statements of changes in stockholders’ deficit . Net income per share. Basic net income per share is calculated by dividing net income by the weighted-average number of common shares issued and outstanding during the year. Diluted net income per share is similar to basic, except that the weighted-average number of shares outstanding is increased by the potentially dilutive effect of outstanding stock options and restricted stock, if applicable, during the year. Segmented information. We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We currently have two operating segments (land-based gaming and online gaming) which are aggregated into one reporting segment. Share-based compensation. We recognize compensation expense for all restricted stock and stock option awards made to employees, directors and independent contractors. The fair value of restricted stock is measured using the grant date trading price of our stock. The fair value of stock option awards (Note 13) is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. We estimate volatility based on historical volatility of our common stock, and estimate the expected term based on several criteria, including the vesting period of the grant and the term of the award. We estimate employee stock option exercise behavior based on actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. Income taxes. We are subject to income taxes in both the United States and in certain non-U.S. jurisdictions. We account for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”) using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. These temporary differences will result in deductible or taxable amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more-likely-than-not that some or all of the deferred tax assets may not be realized. Adjustments to the valuation allowance increase or decrease our income tax provision or benefit. To the extent we believe that recovery is more likely than not, we establish a valuation allowance against these deferred tax assets. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. As of December 31, 2021 and 2020, we recorded a full valuation allowance against certain deferred assets. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, our tax returns are subject to audit by various tax authorities. Although we believe that our estimates are reasonable, actual results could differ from these estimates. We recognize the tax benefit from an uncertain tax position if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on an evaluation of the technical merits of the position, which requires a significant degree of judgment (Note 13). Recently adopted accounting standards. Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued Accounting Standard Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance is effective for the first quarter of 2021 on a prospective basis. We adopted the new standard effective January 1, 2021, and its adoption did not have a material impact on our consolidated financial statements. New accounting standards not yet adopted. Financial Instruments – Credit Losses. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments – Credit Losses (Topic 326). ASU 2020-02 provides updated guidance on ho w an entity should measure credit losses on financial instruments and delayed the effective date of Topic 326 for smaller reporting companies until fiscal years beginning after December 15, 2022. Early adoption is permitted. We do not believe the adoption of this guidance will have a material impact on our financial statements or related disclosures. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3. REVENUE RECOGNITION Revenue recognition. We generate revenue primarily from the licensing of our intellectual property. We recognize revenue under recurring fee license contracts monthly as we satisfy our performance obligation, which consists of granting the customer the right to use our intellectual property. Amounts billed are determined based on flat rates or usage rates stipulated in the customer contract. Disaggregation of revenue The following table disaggregates our revenue by geographic location for the years ended December 31, 2021 and 2020: 2021 2020 North America and Caribbean $ 10,024,537 $ 5,757,143 Europe, Middle East and Africa 9,959,841 4,473,173 Total revenue $ 19,984,378 $ 10,230,316 Contract liabilities. Amounts billed and cash received in advance of performance obligations fulfilled are recorded as contract liabilities and recognized as performance obligations are fulfilled. Contract assets. The Company’s contract assets consist solely of unbilled receivables which are recorded when the Company recognizes revenue in advance of billings. Unbilled receivables totaled $771,293 and $502,860 for the years ended December 31, 2021 and 2020 and are included in the accounts receivable balance in the accompanying balance sheets Royalty agreements. From time to time, the Company licenses intellectual property from third-party owners and the Company, in turn, re-licenses that intellectual property to its casino clients. In these arrangements, the Company usually agrees to pay the owner of the intellectual property a royalty based on the revenues the Company receives from licensing the intellectual property to its casino clients. For the years ended December 31, 2021 and 2020, license royalty payments of $1,670,210 and $438,837, respectively, are recorded net in revenue. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4. INVENTORY Inventory consisted of the following as of December 31, 2021 and 2020: 2021 2020 Raw materials and component parts $ 413,320 $ 300,244 Finished goods 356,928 368,281 Inventory $ 770,248 $ 668,525 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31, 2021 and 2020: 2021 2020 Furniture and fixtures $ 312,639 $ 312,639 Automotive vehicles 171,671 215,127 Office and computer equipment 389,628 332,544 Leasehold improvements 35,531 32,547 Property and equipment, gross 909,469 892,857 Less: accumulated depreciation (810,875 ) (776,133 ) Property and equipment, net $ 98,594 $ 116,724 For the years ended December 31, 2021 and 2020, depreciation expense related to property and equipment was $78,199 and $90,979, respectively. |
ASSETS DEPLOYED AT CLIENT LOCAT
ASSETS DEPLOYED AT CLIENT LOCATIONS | 12 Months Ended |
Dec. 31, 2021 | |
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 December 31, 2021 and 2020: 2021 2020 Enhanced table systems $ 1,139,827 $ 890,560 Less: accumulated depreciation (779,092 ) (658,404 ) Assets deployed at client location, net $ 360,735 $ 232,156 For the years ended December 31, 2021 and 2020, depreciation expense related to a ssets deployed at client locations was |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill. A goodwill balance of $1,091,000 was created as a result of a transaction completed in October 2011 with Prime Table Games, LLC (“PTG”). Other intangible assets, net. Other intangible assets, net consisted of the following at December 31, 2021 and 2020: 2021 2020 Patents $ 13,507,997 $ 13,507,997 Customer relationships 14,040,856 13,942,115 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Software 283,340 183,415 Other intangible assets, gross 31,373,160 31,174,494 Less: accumulated amortization (17,695,896 ) (15,087,598 ) Other intangible assets, net $ 13,677,264 $ 16,086,896 For the years ended December 31, 2021 and 2020, amortization expense related to the finite-lived intangible assets was $2,608,299 and $1,908,858 respectively. Estimated future amortization expense is as follows: Year Ended December 31, Total 2022 $ 2,325,888 2023 1,459,601 2024 1,444,126 2025 1,436,968 2026 1,436,968 Thereafter 5,523,691 Total amortization $ 13,627,242 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Payables And Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8. ACCRUED EXPENSES Accrued expenses consisted of the following at December 31, 2021 and 2020: 2021 2020 Share redemption consideration $ — $ 510,776 Commissions and royalties 1,165,744 398,096 Payroll and related 1,156,291 173,487 Interest 233,333 95,879 Income tax (receivable) payable (3,111 ) 42,218 Other 113,816 112,576 Total accrued expenses $ 2,666,073 $ 1,333,032 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | Leases . We account for lease components (such as rent payments) separately from non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). Operating and finance leases with terms greater than 12 months are recorded on the consolidated balance sheets as right-of-use assets with corresponding lease liabilities. Lease expense is recognized on a straight-line basis using the discount rate implicit in each lease or our incremental borrowing rate at lease commencement date (Note 9). NOTE 9. LEASES We have operating leases for our corporate office, two satellite facilities in the state of Washington and for certain equipment. We account for lease components (such as rent payments) separately from the non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). The discount rate represents the interest rate implicit in each lease or our incremental borrowing rate at lease commencement date. On September 21, 2021, we executed a third amendment to one of our satellite facilities to amend the lease expiration date from December 31, 2021 to December 31, 2023, with monthly base rents of $1,025 from January 1, 2022 to December 31, 2023. As a result of the amendment, we recorded a $23,293 increase to operating lease right-of-use assets and operating lease liabilities. As of December 31, 2021, our leases have remaining lease terms ranging from 6 months to 60 months. Supplemental balance sheet information related to leases is as follows: As of December 31, 2021 Amount Classification Operating leases: Operating lease right-of-use lease assets $ 1,167,903 Operating lease current liabilities $ 222,806 Current portion of operating lease liabilities Operating lease long-term liabilities 1,019,029 Long-term operating lease liabilities Total operating lease liabilities $ 1,241,835 Weighted-average remaining lease term: Operating leases 4.5 years Weighted-average discount rate: Operating leases 4.2 % The components of lease expense are as follows: Year Ended December 31, 2021 Amount Classification Operating lease cost $ 282,121 Selling, general and administrative expense Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2021 Amount Classification Cash paid for amounts included in the measure of lease liabilities: Operating cash flows from operating leases $ 197,388 Net income Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 28,604 Supplemental cash flow information As of December 31, 2021, future maturities of our operating lease liabilities are as follows: Year Ended December 31, Amount 2023 $ 222,806 2024 234,253 2025 240,034 2026 261,148 2027 283,594 Thereafter — Total lease liabilities $ 1,241,835 |
LONG-TERM DEBT AND LIABILITIES
LONG-TERM DEBT AND LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND LIABILITIES | NOTE 10. LONG-TERM DEBT AND LIABILITIES Long-term debt and liabilities consisted of the following at December 31, 2021 and 2020: 2021 2020 Fortress credit agreement $ 60,000,000 $ — Nevada State Bank credit agreement — 8,413,184 Main Street Priority Loan — 4,000,000 Redemption Consideration Obligation — 39,096,401 Vehicle notes payable — 22,614 Insurance notes payable 500,369 519,194 Long-term debt, gross 60,500,369 52,051,393 Less: Unamortized debt issuance costs (7,256,190 ) (137,817 ) Long-term liabilities, net of debt issuance costs 53,244,179 51,913,576 Less: Current portion (1,100,369 ) (2,222,392 ) Long-term debt, net $ 52,143,810 $ 49,691,184 Share Redemption Consideration Obligation . On May 6, 2019, we issued a promissory note in the face amount of $39,096,401 to Triangulum in connection with the share redemption disclosed in Note 1. In the litigation that followed the share redemption (Note 11), Triangulum is disputing, among other things, the validity of the note and has not accepted its terms. Because Triangulum disputes the promissory note issued by the Company and its terms, the promissory note has not been given accounting effect in the Company’s financial statements. The Company has instead recorded a long-term obligation payable to Triangulum, based on the redemption value specified in our Articles of Incorporation. The obligation is classified as long-term because we do not expect that a final agreement with respect to the litigation will be reached between the parties in the next twelve months. We may repay the Redemption Consideration Obligation at any time but no later than May 6, 2029; however, there can be no assurance that Triangulum will accept such payments. Additional share redemption consideration is being accrued at 2% on the Redemption Consideration Obligation. We paid the first and second annual payments in the amounts of $781,928 on May 5, 2020 and May 6, 2021. Both payments were accepted by Triangulum. The Redemption Consideration Obligation is unsecured and is subordinated to our existing and future indebtedness. On October 7, 2021, Galaxy announced that it had entered into a Settlement Agreement with Triangulum and Robert Saucier. The Settlement Agreement, among other things, resolves the previously disclosed pending litigation between the parties related to the redemption of the Company equity securities owned by Triangulum and Saucier in 2019; provides broad mutual releases to the Company, the Company’s officers and directors, Triangulum and Saucier related to all claims against each other; and includes an agreement by Saucier and Triangulum not to compete with the Company for a period of five years from the date of payment of settlement consideration. Consummation of the settlement was conditioned upon the Company paying Triangulum and Saucier $39.1 million, plus interest accrued at 2% per annum from May 6, 2021, through the date of actual payment. On November 15, 2021, Galaxy made a payment in the amount of $39,507,717 to Triangulum as settlement of the previously disclosed litigation. The Company considers all Triangulum and Saucier related matters to be now closed. Nevada State Bank (“NSB”) Credit Agreement . The Company was party to a Credit Agreement with Zions Bancorporation, N.A. dba Nevada State Bank (as amended, the “Credit Agreement”). The Credit Agreement provided for a Term Loan in the initial amount of $11,000,000 and a Revolving Loan in the amount of $1,000,000. On March 29, 2021, the Company entered into an amended and restated credit agreement with Zions Bancorporation, N.A. dba Nevada State Bank (“the A&R Credit Agreement”). The A&R Credit Agreement replaced the original Credit Agreement entered into by the Company with Zions Bancorporation, N.A. dba Nevada State Bank on April 24, 2018 and last modified on November 16, 2020. The A&R Credit Agreement provided for a Term Loan in the amount of $7,022,300 and a Revolving Loan in the amount of $1,000,000. If not paid earlier, amounts outstanding under the Revolving Loan would mature on April 24, 2022, and amounts outstanding under the Term Loan would mature on April 24, 2023. Under the A&R Credit Agreement, outstanding balances accrued interest based on one-month U.S. dollar London interbank offered rate (“LIBOR”) plus an applicable margin of 3.50% or 4.00%, depending on our Total Leverage Ratio (as defined in the A&R Credit Agreement). Effective December 31, 2021, LIBOR will no longer serve as a reference rate for bank loans, among other investment classes. The A&R Credit Agreement stipulates that a substitute index rate will be selected and used in lieu of LIBOR. The A&R Credit Agreement contained affirmative and negative financial covenants (as defined in the A&R Credit Agreement) and other restrictions customary for borrowings of this nature. In particular, we were required to maintain (i) a quarterly minimum Fixed Charge Coverage ratio of 1.25x; (ii) a quarterly maximum Total Leverage ratio of 22.50x for the quarter ending March 31, 2021, 10.00x for quarter ending June 30, 2021, 6.50x for the quarter ending September 30, 2021 with semi-annual step-downs of 0.25x commencing December 31, 2021 and quarterly thereafter; (iii) a quarterly maximum Senior Leverage ratio of 5.25x for the quarter ending March 31, 2021, 2.50x for the quarter ending June 30, 2021 and 2.00x quarterly thereafter; (iv) a quarterly Minimum EBITDA covenant of $2.4 million for each of the quarters ending March 31, 2021, June 30, 2021 and September 30, 2021 and $8.0 million quarterly thereafter; (v) a quarterly Minimum Liquidity covenant requiring the Company to have cash and cash equivalents of no less than $1.5 million at quarter ends through and including June 30, 2021 and $2.5 million quarterly thereafter; and (vi) a yearly maximum Maintenance Capital Expenditure covenant of 5% of total revenues for the prior year. The Company was in compliance with its Fixed Charge Coverage ratio, Senior Leverage ratio, Total Leverage ratio and Minimum Liquidity covenants as of June 30, 2021. However, the Company was not in compliance with its Minimum EBITDA covenant as of June 30, 2021. On May 13, 2021, the Company and NSB entered into a Forbearance to the A&R Credit Agreement, in which NSB agreed to forbear from exercising any of its rights or remedies that would result from the potential breaches of the Minimum EBITDA and Total Leverage ratio covenant for the quarters ending June 30, 2021 and September 30, 2021. The Company was in compliance with its Fixed Charge Coverage ratio, Senior Leverage ratio, Minimum EBITDA and Minimum Liquidity covenants as of September 30, 2021. However, the Company was not in compliance with its Total Leverage ratio as of September 30, 2021. On May 13, 2021, the Company and NSB entered into a Forbearance to the A&R Credit Agreement, in which NSB agreed to forbear from exercising any of its rights or remedies that would result from the potential breaches of the Minimum EBITDA and Total Leverage ratio covenant for the quarters ending June 30, 2021 and September 30, 2021. The obligations under the A&R Credit Agreement were secured by substantially all of the assets of the Company. The Company’s wholly owned subsidiary, PGP, was also a guarantor of the A&R Credit Agreement and related agreements. On November 15, 2021, Galaxy made a payment in the amount of $7,012,265 to NSB as payment in full for both the Term Loan and the Revolving Loan. Main Street Priority Loan Borrowings . On October 26, 2020, the Company obtained an unsecured loan of $4,000,000 through Zions Bancorporation, N.A. dba Nevada State Bank under section 13(3) of the Federal Reserve Act. On November 15, 2021, Galaxy made a payment in the amount of $4,126,755 to NSB as payment in full for the MSPLP. The MSPLP bore interest at a rate of three-month U.S. dollar LIBOR plus 300 basis points (initially 3.215%), and interest payments during the first year were deferred and added to the loan balance. The MSPLP had a five-year Fortress Credit Agreement. On November 15, 2021, the Company entered into a senior secured term loan agreement with Fortress Credit Corp. (“Fortress Credit Agreement”) in the amount of $60 million. The proceeds of the loan were used to (i) pay approximately $39.5 million to Triangulum as full payment of the settlement amount due under the previously filed settlement agreement between the Galaxy and Triangulum, as set forth above; (ii) repay approximately $11.1 million due and owing to NSB under the MSPLP and under the Amended and Restated Credit Agreement, dated as of May 13, 2021, made between Galaxy and Zions Bancorporation, N.A. dba Nevada State Bank, a Nevada state banking corporation, and (iii) approximately $4.1 million was used to pay fees and expenses. The remaining approximately $5.3 million was added to the Company’s cash on hand and will be used for corporate and operating purposes. The Fortress Credit Agreement bears interest at a rate equal to, at the Company’s option, either (a) LIBOR (or a successor rate, determined in accordance with the Fortress Credit Agreement) plus 7.75%, subject to a reduction to 7.50% upon the achievement of a net leverage target or (b) a base rate determined by reference to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by reference to The Wall Street Journal’s “Prime Rate” and (iii) the one-month adjusted LIBOR rate plus 1.00%, plus 6.75%, subject to a reduction to 6.50% upon the achievement of a net leverage target. not In connection with entering into the Fortress Credit Agreement, the Company also issued warrants to purchase a total of up to 778,320 shares of the Company’s common stock to certain affiliates of Fortress at a price per share of $0.01 (the “Warrants”). The Warrants are exercisable at any time, subject to certain restrictions As of December 31, 2021, future maturities of our long-term obligations are as follows: December 31, Total 2022 $ 1,100,369 2023 600,000 2024 600,000 2025 600,000 2026 57,600,000 Thereafter — Total long-term debt, gross $ 60,500,369 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Concentration of risk. We are exposed to risks associated with clients who represent a significant portion of total revenues. For the years ended December 31, 2021 and 2020, respectively, we had the following client revenue concentrations: Location 2021 Revenue 2020 Revenue Accounts Receivable December 31, 2021 Accounts Receivable December 31, 2020 Client A Europe 26.1% 21.5% $ — $ 348,781 Legal proceedings. In the ordinary course of conducting our business, we are, from time to time, involved in various legal proceedings, 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. As discussed in Note 1, we redeemed the shares of our common stock held by Triangulum, an entity controlled by Robert B. Saucier, the Company’s founder, and, prior to the redemption, the holder of a majority of our outstanding common stock. On May 6, 2019, the Company redeemed the shares of our common stock held by Triangulum. Also on May 6, 2019, the Company filed a lawsuit seeking: (i) a declaratory judgment that it acted lawfully and in full compliance with the Articles when it redeemed the Triangulum shares and (ii) certain remedies for breach of fiduciary duty and breach of contract by Triangulum and its Managing Member, Mr. Saucier (the “Triangulum Lawsuit”). The suit alleges that the redemption and the other relief sought by the Company are appropriate and in accordance with the Articles. On October 18, 2019, Saucier filed counterclaims against the Company and its Chairman of the Board, Mark Lipparelli, including a breach of contract claim alleging that the Company was obligated to pay Saucier his year-end bonus despite his resignation. The Company and Chairman Lipparelli filed an answer to the counterclaims. Subsequent to its original counterclaims, Triangulum filed amended counterclaims, which the Company and its Directors moved to dismiss on a number of legal grounds (the “Motion to Dismiss”). The Court denied the Motion to Dismiss. On May 6, 2020, Saucier made a demand of the Company under our Bylaws and an Indemnification Agreement between Saucier and the Company, for indemnity and advancement of funds seeking repayment of his attorneys’ fees and expenses he allegedly incurred in connection with the Company’s claims against him in the Triangulum Lawsuit. An independent counsel, selected per the terms of the Indemnification Agreement, concluded that Saucier was entitled to a small amount of indemnity funds related to the time he was employed by the Company, but denied an entitlement to indemnification thereafter. On May 19, 2020, Saucier commenced a separate action in Nevada district court by filing a complaint he verified as true, seeking advancement of indemnification fees to which he claims an entitlement under the Bylaws and an Indemnification Agreement (the “Advancement Lawsuit”). The Company filed its opposition on June 4, 2020. Saucier’s Motion was denied in a hearing that occurred on June 24, 2020. Saucier filed a notice of his appeal of the Nevada district court’s decision in the Advancement Lawsuit to the Nevada Supreme Court on August 10, 2020. Saucier subsequently moved for attorneys' fees related to the filing of the Advancement Lawsuit, which the Nevada district court granted, and the Company filed a notice of appeal to the Nevada Supreme Court. When Saucier filed a supplemental motion for attorneys’ fees, the Nevada district court denied his motion, finding the fees incurred to be unreasonable, among other things. Saucier also appealed this ruling of the Nevada district court. Various other but related matters and appeals remained pending between the parties. On October 7, 2021, Galaxy announced that it had entered into a Settlement Agreement with Triangulum and Robert Saucier. The Settlement Agreement, among other things, resolves the previously disclosed pending litigation between the parties related to the redemption of the Company equity securities owned by Triangulum and Saucier in 2019; provides broad mutual releases to the Company, the Company’s officers and directors, Triangulum and Saucier related to all claims against each other; and includes an agreement by Saucier and Triangulum not to compete with the Company for a period of five years from the date of payment of settlement consideration. Consummation of the settlement was conditioned upon the Company paying Triangulum and Saucier $39.1 million, plus interest accrued at 2% per annum from May 6, 2021, through the date of actual payment. On November 15, 2021, Galaxy made a payment in the amount of $39,507,717 to Triangulum as settlement of previously disclosed litigation. The Company considers all Triangulum and Saucier related matters to be now closed. In September 2018, we were served with a complaint by TableMax Corporation (“TMAX”) regarding the TMAX Agreement. We filed an answer denying the allegations and filed a partial motion for summary judgment seeking dismissal of the plaintiff’s claims. The suit was dismissed, subject to the right of the plaintiff to file an amended complaint on or before March 20, 2019. The plaintiff did not file an amended complaint within the time period set by the Judge. After that time, the Company considered the matter closed. TMAX filed a Motion for Leave to Amend their Complaint, which was granted by the Judge on May 11, 2020. On May 26, 2020 TMAX filed an Amended Complaint against the Company and other Co-Defendants. The Company filed a Motion To Enforce Settlement Or, In The Alternative, Motion To Dismiss And/Or For Summary Judgement and Request For Sanctions, on April 30, 2021. On June 22, 2021, the Company’s s Motion to Dismiss was granted, with prejudice to the right of TMAX to file an amended complaint. The Company considers the matter closed. 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 and accordingly, no provision for loss has been reflected in the accompanying financial statements related to these matters. Intellectual property agreements. From time to time, the Company purchases intellectual property from third-parties and the Company, in turn, utilizes that intellectual property in certain games sold to clients. In these purchase agreements, the Company may agree to pay the seller of the intellectual property a fee, if and when, the Company receives revenue from games containing the intellectual property. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12. INCOME TAXES The components of the provision consist of the following for the years ended December 31, 2021 and 2020: 2021 2020 U.S.(loss) $ (770,771 ) $ (3,477,895 ) Non-U.S. income 2,931,220 663,071 Income (loss) before income taxes $ 2,160,449 $ (2,814,824 ) 2021 2020 Current: Federal $ (62,074 ) $ (1,204,556 ) State 11,500 1,745 Foreign 74,885 — Total current 24,311 (1,202,811 ) Deferred: Federal (97,965 ) 674,138 State 122,291 (77,264 ) Total deferred 24,326 596,874 Provision (benefit) for income taxes $ 48,637 $ (605,937 ) The income tax provision differs from that computed at the federal statutory corporate income tax rate as follows for the years ended December 31, 2021 and 2020: 2021 2020 Tax provision computed at the federal statutory rate $ 453,694 $ (591,113 ) Foreign rate differential (540,670 ) (139,246 ) State income tax, net of federal benefit 22,226 (55,558 ) 162(m) compensation limit 228,069 — Share based compensation (615,062 ) (4,568 ) Subpart F income 717,218 204,326 Non-taxable PPP loan forgiveness — (176,451 ) Other permanent items 1,138 29,511 Credits (94,223 ) (24,801 ) Impact of CARES Act (71,168 ) (466,642 ) State tax true ups (79,997 ) 10,153 Change in federal statutory rate, net of benefit (15,698 ) 1,364 Uncertain tax positions 1,933 46,699 Valuation allowance 41,177 560,389 Provision (benefit) for income taxes $ 48,637 $ (605,937 ) The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following at December 31, 2021 and 2020: 2021 2020 Deferred Tax Assets: Right-of-use asset $ 268,137 $ 320,787 Share based compensation 228,574 313,910 Intangible assets 176,457 182,511 Accruals and reserves 127,332 67,259 Debt issuance costs 50,246 — Other 96,111 86,231 Total deferred tax assets 946,857 970,698 Total valuation allowance (601,566 ) (560,389 ) Deferred Tax Liabilities: Right-of-use liability (285,111 ) (316,481 ) Prepaid assets (171,411 ) (207,005 ) Basis difference in fixed assets (62,968 ) (37,715 ) Other (1,019 ) — Total deferred tax liabilities (520,509 ) (561,201 ) Net deferred tax liabilities $ (175,218 ) $ (150,892 ) On August 21, 2020, the Company completed the acquisition of 100% of the member interests in PGP. As of December 31, 2020, the Company has evaluated its deferred tax attributes related to the acquisition within the foreign jurisdiction of Isle of Man and recorded a tax-effected deferred tax asset of $0 as of December 31, 2020. The Company has assessed the foreign subsidiary income and Subpart F requires us to include the income of PGP in the U.S. tax base on an annual basis. In addition, as of December 31, 2021, the Company recognized state net operating loss carryforwards of $1.0 million. The majority of the state carryforward amounts will begin to expire in 2040, while some state net operating losses have an indefinite carryforward period. In accordance with U.S. GAAP, the need to establish a valuation allowance against deferred tax assets is assessed periodically based on a more-likely-than-not realization threshold. Appropriate consideration is given to all positive and negative evidence related to that realization. This assessment considers, among other matters, the nature, frequency and severity of recent losses; forecasts of future profitability; the duration of statutory carryforward periods; experience with tax attributes expiring unused; and tax planning alternatives. The weight given to these considerations depends upon the degree to which they can be objectively verified. A significant piece of objective negative evidence evaluated was the three-year Upon assessing all of the relevant evidence, the Company determined it has not met the more-likely-than-not threshold to support the realization of all or part of its deferred tax assets. The Company has recorded a valuation allowance against certain of its deferreds in the amount of $601,566. The current-year change resulted in additional tax expense of $41,177, which impacted the Company’s effective tax rate by 1.91%. The aggregate changes in the balance of gross unrecognized tax benefits (included as part of deferred tax liabilities, net in the accompanying financial statements), which excludes interest and penalties, are as follows as of and for the years ended December 31, 2021 and 2020: 2021 2020 Beginning balance $ 46,699 $ — Increases related to tax positions taken during the prior year — 45,207 Increases related to tax positions taken during the current year 1,933 1,492 Other adjustments — — Ending balance $ 48,632 $ 46,699 Our total liability for unrecognized gross tax benefits was $48,632 as of December 31, 2021, which, if ultimately recognized, would impact the annual estimated effective tax rate in future periods. We are subject to examination by the Internal Revenue Service for fiscal years 2018 and thereafter. For states within the U.S. in which we conduct significant business, we generally remain subject to examination for fiscal years 2018 and thereafter, unless extended for longer periods under state laws. We have no accrual for interest or penalties related to uncertain tax positions at December 31, 2021 and 2020, and did not recognize interest or penalties in the statements of operations during the years ended December 31, 2021 and 2020, as such amounts would be immaterial, if any. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 13. SHARE-BASED COMPENSATION Stock Options On May 10, 2018, the Board ratified and confirmed the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan is a broad-based plan under which shares of our common stock are authorized for issuance for awards, including stock options, stock appreciation rights, restricted stock, and cash incentive awards to members of our Board, executive officers, employees and independent contractors December 31, 2021, December 31, 2021 745,368 During the years ended December 31, 2021 and 2020, we issued 90,000 and 465,000 options to purchase our common stock, respectively, to executive officers, employees and independent contractors. The fair value of all stock options granted for the years ended December 31, 2021 Options Issued For the Twelve Months Ended December 31, 2021 Options Issued For the Twelve Months Ended December 31, 2020 Dividend yield 0% 0% Expected volatility 61.12% - 68.74% 70.98% - 76.97% Risk free interest rate 0.48% - 0.98% 0.27% - 1.39% Expected life (years) 5.00 5.00 A summary of stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Outstanding – December 31, 2020 2,982,000 $ 1.08 $ 2,101,780 2.35 Issued 90,000 $ 3.38 — — Exercised (1,094,998 ) $ 0.82 $ (3,166,433 ) — Forfeited or expired (42,000 ) $ 1.04 — — Outstanding – December 31, 2021 1,935,002 $ 1.33 $ 4,788,314 1.87 Exercisable – December 31, 2021 1,458,001 $ 1.12 $ 3,914,356 1.35 A summary of unvested stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Unvested – December 31, 2020 845,000 $ 1.55 $ 197,608 3.83 Granted 90,000 $ 3.38 — — Vested (416,333 ) $ 1.51 — — Forfeited (41,666 ) $ 1.04 — — Unvested – December 31, 2021 477,001 $ 1.97 $ 873,958 3.45 As of December 31, 2021, our unrecognized share-based compensation expense associated with the stock options issued was $ 382,021 1.75 Restricted Awards During the year ended December 31, 2021 of 298,333 res 1,112,882 in consideration of their service on the Board. These shares vested immediately on the grant date. An additional 80,000 restricted shares of our common stock valued at $181,600 were issued to an employee of the Company on February 17, 2021. These shares were granted in consideration of the individual’s service to the Company. These shares vested on November 11, 2021. As of December 31, 2021, 2,379,466 100,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14. SUBSEQUENT EVENTS On March 16 2022, we, the lenders from time to time party (the “Loan Parties”) and Fortress Credit Corp., as the Agent entered into the Consent and Waiver to Fortress Credit Agreement. Pursuant to the Consent and Waiver Agreement, the Company acknowledged that it was in default under the Fortress Credit Agreement as a result of its failure to comply with a requirement of the Fortress Credit Agreement not to permit, on the last Business Day of each calendar month, more than the Dollar Equivalent of $1,000,000 (or such greater amount determined by the Agent in its sole discretion) in the aggregate to be on deposit in Isle of Man deposit or securities accounts which are not subject to Control Agreements (as such term is defined in the Guaranty and Security Agreement) or other security arrangements acceptable to the Agent (the “Existing Default”) for the months of November 2021, December 2021, January 2022 and February 2022 (the “Specified Compliance Periods”). The Company cured the default. Pursuant to the Consent and Waiver Agreement, the Company has requested that the Agent and Required Lenders waive, and the Agent and the Lenders signatory hereto constituting the Required Lenders agree to waive, the Existing Default for the Specified Compliance Periods indicated above. Other than as specifically referenced in the Consent and Waiver Agreement, the Credit Agreement remains in full force and effect. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation and Basis of accounting | Basis of presentation. The accompanying consolidated 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, the accompanying consolidated financial statements contain all necessary adjustments (including all those of a recurring nature and those necessary in order for the financial statements to be not misleading) and all disclosures to present fairly our financial position and the results of our operations and cash flows for the periods presented . Basis of accounting. The consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. |
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. |
Consolidation | Consolidation. The financial statements are presented on a consolidated basis and include the results of the Company and its wholly owned subsidiary, PGP. All intercompany transactions and balances have been eliminated in consolidation. |
Reclassifications | Reclassifications. Certain accounts and financial statement captions in the prior period have been reclassified to conform to the current period financial statement presentations and had no effect on net income (loss). |
Cash and cash equivalents | Cash and cash equivalents. We consider cash on hand and cash in banks as cash. We consider certificates of deposit and other short-term securities with maturities of three months or less when purchased as cash equivalents. Our cash in bank balances are deposited in insured banking institutions, which are insured up to $ 250,000 |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts. Accounts receivable are stated at face value less an allowance for doubtful accounts. Accounts receivable are non-interest bearing. The Company reviews the accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. The allowance for doubtful accounts is estimated based on specific customer reviews, historical collection trends and current economic and business conditions. |
Inventory | Inventory. Inventory consists of ancillary products such as signs, layouts and bases for the various games and electronic devices and components to support all our electronic enhancements used on casino table games (“Enhanced Table Systems”), and we maintain inventory levels based on historical and industry trends. We regularly assess inventory quantities for excess and obsolescence primarily based on forecasted product demand. Inventory is valued at the lower of net realizable value or cost, which is determined by the average cost method. |
Assets deployed at client locations, net | Assets deployed at client locations, net. Our Enhanced Table Systems are assembled by us and accounted for as inventory until deployed at our casino clients’ premises (Note 6). Once deployed and placed into service at client locations, the assets are transferred from inventory and reported as assets deployed at client locations. These assets are stated at cost, net of accumulated depreciation. Depreciation on assets deployed at client locations is calculated using the straight-line method over a three-year period. |
Property and equipment, net | P roperty and equipment, net. Property and equipment are being depreciated over their estimated useful lives ( three to five years |
Goodwill | Goodwill. Goodwill (Note 7) is assessed for impairment at least annually or at other times during the year if events or circumstances indicate that it is more-likely-than-not that the fair value of a reporting asset is below the carrying amount. If found to be impaired, the carrying amount will be reduced, and an impairment loss will be recognized. |
Other intangible assets, net | Other intangible assets, net. The following intangible assets have finite lives and are being amortized using the straight-line method over their estimated economic lives as follows: Patents 4 - 20 years Client relationships 9 - 22 years Trademarks 12 - 30 years Non-compete agreements 9 years Software 3 years Other intangible assets (Note 7) are analyzed for potential impairment at least annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds the fair value, which is the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the intangible assets. No impairment was recorded for the years ended December 31, 2021 or 2020. |
Interest rates swap agreement | Interest rates swap agreement . In May 2018, the Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on its floating rate long-term debt. The interest rate swap has not been designated a hedging instrument and is adjusted to fair value through earnings in the Company’s statements of operations. The interest rate swap agreement matured on May 1, 2021 |
Fair value of financial instruments | Fair value of financial instruments. We estimate fair value for financial assets and liabilities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: • 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 values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts due to their short-term nature. The estimated fair value of our long-term debt approximates its carrying value based upon our expected borrowing rate for debt with similar remaining maturities and comparable risk. The Company currently has no financial instruments measured at estimated fair value on a recurring basis based on valuation reports provided by counterparties. |
LEASES | Leases . We account for lease components (such as rent payments) separately from non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). Operating and finance leases with terms greater than 12 months are recorded on the consolidated balance sheets as right-of-use assets with corresponding lease liabilities. Lease expense is recognized on a straight-line basis using the discount rate implicit in each lease or our incremental borrowing rate at lease commencement date (Note 9). NOTE 9. LEASES We have operating leases for our corporate office, two satellite facilities in the state of Washington and for certain equipment. We account for lease components (such as rent payments) separately from the non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). The discount rate represents the interest rate implicit in each lease or our incremental borrowing rate at lease commencement date. On September 21, 2021, we executed a third amendment to one of our satellite facilities to amend the lease expiration date from December 31, 2021 to December 31, 2023, with monthly base rents of $1,025 from January 1, 2022 to December 31, 2023. As a result of the amendment, we recorded a $23,293 increase to operating lease right-of-use assets and operating lease liabilities. As of December 31, 2021, our leases have remaining lease terms ranging from 6 months to 60 months. Supplemental balance sheet information related to leases is as follows: As of December 31, 2021 Amount Classification Operating leases: Operating lease right-of-use lease assets $ 1,167,903 Operating lease current liabilities $ 222,806 Current portion of operating lease liabilities Operating lease long-term liabilities 1,019,029 Long-term operating lease liabilities Total operating lease liabilities $ 1,241,835 Weighted-average remaining lease term: Operating leases 4.5 years Weighted-average discount rate: Operating leases 4.2 % The components of lease expense are as follows: Year Ended December 31, 2021 Amount Classification Operating lease cost $ 282,121 Selling, general and administrative expense Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2021 Amount Classification Cash paid for amounts included in the measure of lease liabilities: Operating cash flows from operating leases $ 197,388 Net income Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 28,604 Supplemental cash flow information As of December 31, 2021, future maturities of our operating lease liabilities are as follows: Year Ended December 31, Amount 2023 $ 222,806 2024 234,253 2025 240,034 2026 261,148 2027 283,594 Thereafter — Total lease liabilities $ 1,241,835 |
Revenue Recognition | Revenue recognition. We account for our revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . See Note 3. |
Costs of ancillary products and assembled components | Costs of ancillary products and assembled components. Ancillary products include pay tables (display of payouts), bases, layouts, signage and other items as they relate to support of specific proprietary games in connection with the licensing of our games. Assembled components represent the cost of the equipment, devices and incorporated software used to support our Enhanced Table Systems. |
Research and development | Research and development. We incur research and development (“R&D”) costs to develop our new and next-generation products. Our products reach commercial feasibility shortly before the products are released, and therefore R&D costs are expensed as incurred. Employee related costs associated with product development are included in R&D costs. |
Foreign currency translation | Foreign currency translation. The functional currency for PGP is the Euro. Gains and losses from settlement of transactions involving foreign currency amounts are included in other income or expense in the consolidated statements of operations. Gains and losses resulting from translating assets and liabilities from the functional currency to U.S. dollars are included in accumulated other comprehensive income or (loss) in the consolidated statements of changes in stockholders’ deficit . |
Net income per share | Net income per share. Basic net income per share is calculated by dividing net income by the weighted-average number of common shares issued and outstanding during the year. Diluted net income per share is similar to basic, except that the weighted-average number of shares outstanding is increased by the potentially dilutive effect of outstanding stock options and restricted stock, if applicable, during the year. |
Segmented Information | Segmented information. We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We currently have two operating segments (land-based gaming and online gaming) which are aggregated into one reporting segment. |
Share-based compensation | Share-based compensation. We recognize compensation expense for all restricted stock and stock option awards made to employees, directors and independent contractors. The fair value of restricted stock is measured using the grant date trading price of our stock. The fair value of stock option awards (Note 13) is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. We estimate volatility based on historical volatility of our common stock, and estimate the expected term based on several criteria, including the vesting period of the grant and the term of the award. We estimate employee stock option exercise behavior based on actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. |
Income taxes | Income taxes. We are subject to income taxes in both the United States and in certain non-U.S. jurisdictions. We account for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”) using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. These temporary differences will result in deductible or taxable amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more-likely-than-not that some or all of the deferred tax assets may not be realized. Adjustments to the valuation allowance increase or decrease our income tax provision or benefit. To the extent we believe that recovery is more likely than not, we establish a valuation allowance against these deferred tax assets. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. As of December 31, 2021 and 2020, we recorded a full valuation allowance against certain deferred assets. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, our tax returns are subject to audit by various tax authorities. Although we believe that our estimates are reasonable, actual results could differ from these estimates. We recognize the tax benefit from an uncertain tax position if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on an evaluation of the technical merits of the position, which requires a significant degree of judgment (Note 13). |
Recently adopted accounting standards | Recently adopted accounting standards. Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued Accounting Standard Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance is effective for the first quarter of 2021 on a prospective basis. We adopted the new standard effective January 1, 2021, and its adoption did not have a material impact on our consolidated financial statements. |
New accounting standards not yet adopted | New accounting standards not yet adopted. Financial Instruments – Credit Losses. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments – Credit Losses (Topic 326). ASU 2020-02 provides updated guidance on ho w an entity should measure credit losses on financial instruments and delayed the effective date of Topic 326 for smaller reporting companies until fiscal years beginning after December 15, 2022. Early adoption is permitted. We do not believe the adoption of this guidance will have a material impact on our financial statements or related disclosures. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Other Intangible Assets, Net | The following intangible assets have finite lives and are being amortized using the straight-line method over their estimated economic lives as follows: Patents 4 - 20 years Client relationships 9 - 22 years Trademarks 12 - 30 years Non-compete agreements 9 years Software 3 years 2021 2020 Patents $ 13,507,997 $ 13,507,997 Customer relationships 14,040,856 13,942,115 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Software 283,340 183,415 Other intangible assets, gross 31,373,160 31,174,494 Less: accumulated amortization (17,695,896 ) (15,087,598 ) Other intangible assets, net $ 13,677,264 $ 16,086,896 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenue by Geographic Location | The following table disaggregates our revenue by geographic location for the years ended December 31, 2021 and 2020: 2021 2020 North America and Caribbean $ 10,024,537 $ 5,757,143 Europe, Middle East and Africa 9,959,841 4,473,173 Total revenue $ 19,984,378 $ 10,230,316 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of December 31, 2021 and 2020: 2021 2020 Raw materials and component parts $ 413,320 $ 300,244 Finished goods 356,928 368,281 Inventory $ 770,248 $ 668,525 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at December 31, 2021 and 2020: 2021 2020 Furniture and fixtures $ 312,639 $ 312,639 Automotive vehicles 171,671 215,127 Office and computer equipment 389,628 332,544 Leasehold improvements 35,531 32,547 Property and equipment, gross 909,469 892,857 Less: accumulated depreciation (810,875 ) (776,133 ) Property and equipment, net $ 98,594 $ 116,724 |
ASSETS DEPLOYED AT CLIENT LOC_2
ASSETS DEPLOYED AT CLIENT LOCATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases Operating [Abstract] | |
Schedule of Assets Deployed at Client Locations, Net | Assets deployed at client locations, net consisted of the following at December 31, 2021 and 2020: 2021 2020 Enhanced table systems $ 1,139,827 $ 890,560 Less: accumulated depreciation (779,092 ) (658,404 ) Assets deployed at client location, net $ 360,735 $ 232,156 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets, Net | The following intangible assets have finite lives and are being amortized using the straight-line method over their estimated economic lives as follows: Patents 4 - 20 years Client relationships 9 - 22 years Trademarks 12 - 30 years Non-compete agreements 9 years Software 3 years 2021 2020 Patents $ 13,507,997 $ 13,507,997 Customer relationships 14,040,856 13,942,115 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Software 283,340 183,415 Other intangible assets, gross 31,373,160 31,174,494 Less: accumulated amortization (17,695,896 ) (15,087,598 ) Other intangible assets, net $ 13,677,264 $ 16,086,896 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is as follows: Year Ended December 31, Total 2022 $ 2,325,888 2023 1,459,601 2024 1,444,126 2025 1,436,968 2026 1,436,968 Thereafter 5,523,691 Total amortization $ 13,627,242 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following at December 31, 2021 and 2020: 2021 2020 Share redemption consideration $ — $ 510,776 Commissions and royalties 1,165,744 398,096 Payroll and related 1,156,291 173,487 Interest 233,333 95,879 Income tax (receivable) payable (3,111 ) 42,218 Other 113,816 112,576 Total accrued expenses $ 2,666,073 $ 1,333,032 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows: As of December 31, 2021 Amount Classification Operating leases: Operating lease right-of-use lease assets $ 1,167,903 Operating lease current liabilities $ 222,806 Current portion of operating lease liabilities Operating lease long-term liabilities 1,019,029 Long-term operating lease liabilities Total operating lease liabilities $ 1,241,835 Weighted-average remaining lease term: Operating leases 4.5 years Weighted-average discount rate: Operating leases 4.2 % |
Schedule of Components of Lease Expense | The components of lease expense are as follows: Year Ended December 31, 2021 Amount Classification Operating lease cost $ 282,121 Selling, general and administrative expense |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2021 Amount Classification Cash paid for amounts included in the measure of lease liabilities: Operating cash flows from operating leases $ 197,388 Net income Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 28,604 Supplemental cash flow information |
Schedule of Future Maturities of Operating Lease Liabilities | As of December 31, 2021, future maturities of our operating lease liabilities are as follows: Year Ended December 31, Amount 2023 $ 222,806 2024 234,253 2025 240,034 2026 261,148 2027 283,594 Thereafter — Total lease liabilities $ 1,241,835 |
LONG-TERM DEBT AND LIABILITIES
LONG-TERM DEBT AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Liabilities | Long-term debt and liabilities consisted of the following at December 31, 2021 and 2020: 2021 2020 Fortress credit agreement $ 60,000,000 $ — Nevada State Bank credit agreement — 8,413,184 Main Street Priority Loan — 4,000,000 Redemption Consideration Obligation — 39,096,401 Vehicle notes payable — 22,614 Insurance notes payable 500,369 519,194 Long-term debt, gross 60,500,369 52,051,393 Less: Unamortized debt issuance costs (7,256,190 ) (137,817 ) Long-term liabilities, net of debt issuance costs 53,244,179 51,913,576 Less: Current portion (1,100,369 ) (2,222,392 ) Long-term debt, net $ 52,143,810 $ 49,691,184 |
Schedule of Future Maturities of Long-term Obligations | As of December 31, 2021, future maturities of our long-term obligations are as follows: December 31, Total 2022 $ 1,100,369 2023 600,000 2024 600,000 2025 600,000 2026 57,600,000 Thereafter — Total long-term debt, gross $ 60,500,369 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Client Revenue Concentrations | For the years ended December 31, 2021 and 2020, respectively, we had the following client revenue concentrations: Location 2021 Revenue 2020 Revenue Accounts Receivable December 31, 2021 Accounts Receivable December 31, 2020 Client A Europe 26.1% 21.5% $ — $ 348,781 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The components of the provision consist of the following for the years ended December 31, 2021 and 2020: 2021 2020 U.S.(loss) $ (770,771 ) $ (3,477,895 ) Non-U.S. income 2,931,220 663,071 Income (loss) before income taxes $ 2,160,449 $ (2,814,824 ) 2021 2020 Current: Federal $ (62,074 ) $ (1,204,556 ) State 11,500 1,745 Foreign 74,885 — Total current 24,311 (1,202,811 ) Deferred: Federal (97,965 ) 674,138 State 122,291 (77,264 ) Total deferred 24,326 596,874 Provision (benefit) for income taxes $ 48,637 $ (605,937 ) |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision differs from that computed at the federal statutory corporate income tax rate as follows for the years ended December 31, 2021 and 2020: 2021 2020 Tax provision computed at the federal statutory rate $ 453,694 $ (591,113 ) Foreign rate differential (540,670 ) (139,246 ) State income tax, net of federal benefit 22,226 (55,558 ) 162(m) compensation limit 228,069 — Share based compensation (615,062 ) (4,568 ) Subpart F income 717,218 204,326 Non-taxable PPP loan forgiveness — (176,451 ) Other permanent items 1,138 29,511 Credits (94,223 ) (24,801 ) Impact of CARES Act (71,168 ) (466,642 ) State tax true ups (79,997 ) 10,153 Change in federal statutory rate, net of benefit (15,698 ) 1,364 Uncertain tax positions 1,933 46,699 Valuation allowance 41,177 560,389 Provision (benefit) for income taxes $ 48,637 $ (605,937 ) |
Schedule of Deferred Tax Assets | The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following at December 31, 2021 and 2020: 2021 2020 Deferred Tax Assets: Right-of-use asset $ 268,137 $ 320,787 Share based compensation 228,574 313,910 Intangible assets 176,457 182,511 Accruals and reserves 127,332 67,259 Debt issuance costs 50,246 — Other 96,111 86,231 Total deferred tax assets 946,857 970,698 Total valuation allowance (601,566 ) (560,389 ) Deferred Tax Liabilities: Right-of-use liability (285,111 ) (316,481 ) Prepaid assets (171,411 ) (207,005 ) Basis difference in fixed assets (62,968 ) (37,715 ) Other (1,019 ) — Total deferred tax liabilities (520,509 ) (561,201 ) Net deferred tax liabilities $ (175,218 ) $ (150,892 ) |
Schedule of Gross Unrecognized Tax Benefits | The aggregate changes in the balance of gross unrecognized tax benefits (included as part of deferred tax liabilities, net in the accompanying financial statements), which excludes interest and penalties, are as follows as of and for the years ended December 31, 2021 and 2020: 2021 2020 Beginning balance $ 46,699 $ — Increases related to tax positions taken during the prior year — 45,207 Increases related to tax positions taken during the current year 1,933 1,492 Other adjustments — — Ending balance $ 48,632 $ 46,699 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Pricing | Options Issued For the Twelve Months Ended December 31, 2021 Options Issued For the Twelve Months Ended December 31, 2020 Dividend yield 0% 0% Expected volatility 61.12% - 68.74% 70.98% - 76.97% Risk free interest rate 0.48% - 0.98% 0.27% - 1.39% Expected life (years) 5.00 5.00 |
Summary of Stock Option Activity | A summary of stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Outstanding – December 31, 2020 2,982,000 $ 1.08 $ 2,101,780 2.35 Issued 90,000 $ 3.38 — — Exercised (1,094,998 ) $ 0.82 $ (3,166,433 ) — Forfeited or expired (42,000 ) $ 1.04 — — Outstanding – December 31, 2021 1,935,002 $ 1.33 $ 4,788,314 1.87 Exercisable – December 31, 2021 1,458,001 $ 1.12 $ 3,914,356 1.35 |
Summary of Unvested Stock Option Activity | A summary of unvested stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Unvested – December 31, 2020 845,000 $ 1.55 $ 197,608 3.83 Granted 90,000 $ 3.38 — — Vested (416,333 ) $ 1.51 — — Forfeited (41,666 ) $ 1.04 — — Unvested – December 31, 2021 477,001 $ 1.97 $ 873,958 3.45 |
NATURE OF OPERATIONS - (Details
NATURE OF OPERATIONS - (Details Narrative) - USD ($) | Nov. 15, 2021 | May 07, 2021 | Aug. 21, 2020 | Mar. 12, 2020 | May 06, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 21, 2020 | Oct. 26, 2020 |
Significant Business Developments [Line Items] | |||||||||
Common stock redemption description | Our Articles of Incorporation (the “Articles”) provide that if certain events occur in relation to a stockholder that is required to undergo a gaming suitability review or similar investigative process, we have the option to purchase all or any part of such stockholder’s shares at a price per share that is equal to the average closing share price over the thirty calendar days preceding the purchase. The average closing share price over the thirty calendar days preceding the redemption was $1.68 per share | ||||||||
Common stock redemption price per share | $ 1.68 | ||||||||
Redemption consideration owed | $ 60,500,369 | $ 52,051,393 | |||||||
Cash portion of purchase price for acquisition of other intangible assets, net | 198,667 | ||||||||
Drew on revolving loan amount | $ 1,000,000 | 1,000,000 | |||||||
Progressive Games Partners LLC | |||||||||
Significant Business Developments [Line Items] | |||||||||
Percentage of acquisition of member interest | 100.00% | ||||||||
Acquisition of certain receivables and payables net amount | $ 581,885 | ||||||||
Remaining balance owed to the seller | 76,053 | ||||||||
Remaining balance paid to the seller | $ 76,053 | ||||||||
Progressive Games Partners LLC | Other Intangible Assets, Net | |||||||||
Significant Business Developments [Line Items] | |||||||||
Cash portion of purchase price for acquisition of other intangible assets, net | $ 6,425,000 | ||||||||
Issuance of shares of common stock for acquisition of other intangible assets, net | 3,141,361 | ||||||||
Issuance of shares of common stock price per share | $ 1.27 | ||||||||
Progressive Games Partners LLC | Customer Relationships | |||||||||
Significant Business Developments [Line Items] | |||||||||
Purchase price | $ (10,414,528) | ||||||||
Share Redemption Consideration Obligation | |||||||||
Significant Business Developments [Line Items] | |||||||||
Redemption consideration owed | $ 39,096,401 | 39,096,401 | |||||||
Share Redemption Consideration Obligation | Settlement Agreement | |||||||||
Significant Business Developments [Line Items] | |||||||||
Payment as settlement of previously disclosed litigation | $ 39,507,717 | ||||||||
Paycheck Protection Program (PPP Loan) | Nevada State Bank | |||||||||
Significant Business Developments [Line Items] | |||||||||
Debt instrument forgiven accrued interest | $ 4,943 | ||||||||
Main Street Priority Loan Facility | |||||||||
Significant Business Developments [Line Items] | |||||||||
Redemption consideration owed | $ 4,000,000 | ||||||||
Main Street Priority Loan Facility | Nevada State Bank | |||||||||
Significant Business Developments [Line Items] | |||||||||
Unsecured Debt | $ 4,000,000 | ||||||||
Triangulum | |||||||||
Significant Business Developments [Line Items] | |||||||||
Shares redeemed | 23,271,667 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | |
Dec. 31, 2021USD ($)Segment | Dec. 31, 2020USD ($) | |
Significant Accounting Policies [Line Items] | ||
Impairment of intangible assets | $ | $ 0 | $ 0 |
Interest rate swap agreement maturity date | May 1, 2021 | |
Number of operating segment | Segment | 2 | |
Number of reporting segment | Segment | 1 | |
Change in accounting principle, accounting standards update, adopted [true false] | true | |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2021 | |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | |
Accounting standards update description | ASU 2019-12 | |
Maximum | ||
Significant Accounting Policies [Line Items] | ||
Cash, FDIC Insured Amount | $ | $ 250,000 | |
Property plant and equipment useful life | 5 years | |
Minimum | ||
Significant Accounting Policies [Line Items] | ||
Property plant and equipment useful life | 3 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Finite Lived Intangible Assets Estimated Economic Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Patents | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 4 years |
Patents | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 20 years |
Client Relationships | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 9 years |
Client Relationships | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 22 years |
Trademarks | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 12 years |
Trademarks | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 30 years |
Non-compete Agreements | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 9 years |
Software | |
Finite Lived Intangible Assets [Line Items] | |
Finite lived intangible assets useful life | 3 years |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Disaggregation of Revenue by Geographic Location (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 19,984,378 | $ 10,230,316 |
North America and Caribbean | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 10,024,537 | 5,757,143 |
Europe, Middle East and Africa | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 9,959,841 | $ 4,473,173 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | ||
License royalty payments | $ 1,670,210 | $ 438,837 |
Accounts Receivable | ||
Disaggregation Of Revenue [Line Items] | ||
Unbilled receivables | $ 771,293 | $ 502,860 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and component parts | $ 413,320 | $ 300,244 |
Finished goods | 356,928 | 368,281 |
Inventory | $ 770,248 | $ 668,525 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 909,469 | $ 892,857 |
Less: accumulated depreciation | (810,875) | (776,133) |
Property and equipment, net | 98,594 | 116,724 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 312,639 | 312,639 |
Automotive Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 171,671 | 215,127 |
Office and Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 389,628 | 332,544 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 35,531 | $ 32,547 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property Plant and Equipment Excluding Assets Leased to Others | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | $ 78,199 | $ 90,979 |
ASSETS DEPLOYED AT CLIENT LOC_3
ASSETS DEPLOYED AT CLIENT LOCATIONS - Schedule of Assets Deployed at Client Locations, Net (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases Operating [Abstract] | ||
Enhanced table systems | $ 1,139,827 | $ 890,560 |
Less: accumulated depreciation | (779,092) | (658,404) |
Assets deployed at client location, net | $ 360,735 | $ 232,156 |
ASSETS DEPLOYED AT CLIENT LOC_4
ASSETS DEPLOYED AT CLIENT LOCATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases Operating [Abstract] | ||
Depreciation expense related to assets deployed at client locations | $ 197,493 | $ 222,204 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2011 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Goodwill resulted from transaction | $ 1,091,000 | ||
Amortization expense | $ 2,608,299 | $ 1,908,858 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Other Intangible Assets, Net (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | $ 31,373,160 | $ 31,174,494 |
Less: accumulated amortization | (17,695,896) | (15,087,598) |
Other intangible assets, net | 13,677,264 | 16,086,896 |
Patents | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 13,507,997 | 13,507,997 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 14,040,856 | 13,942,115 |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 2,880,967 | 2,880,967 |
Non-compete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 660,000 | 660,000 |
Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | $ 283,340 | $ 183,415 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) | Dec. 31, 2021USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2022 | $ 2,325,888 |
2023 | 1,459,601 |
2024 | 1,444,126 |
2025 | 1,436,968 |
2026 | 1,436,968 |
Thereafter | 5,523,691 |
Total amortization | $ 13,627,242 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Payables And Accruals [Abstract] | ||
Share redemption consideration | $ 510,776 | |
Commissions and royalties | $ 1,165,744 | 398,096 |
Payroll and related | 1,156,291 | 173,487 |
Interest | 233,333 | 95,879 |
Income tax (receivable) payable | (3,111) | 42,218 |
Other | 113,816 | 112,576 |
Total accrued expenses | $ 2,666,073 | $ 1,333,032 |
LEASES (Details Narrative)
LEASES (Details Narrative) | Sep. 21, 2021USD ($) | Sep. 20, 2021 | Dec. 31, 2021Satellite | Dec. 31, 2023USD ($) |
Lessee Lease Description [Line Items] | ||||
Operating lease expiration date | Dec. 31, 2023 | Dec. 31, 2021 | ||
Increase in operating lease right-of-use assets and operating lease liabilities | $ 23,293 | |||
Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating leases and finance leases remaining lease term | 6 months | |||
Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating leases and finance leases remaining lease term | 60 months | |||
Scenario Forecast | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease, monthly base rents | $ 1,025 | |||
Washington | ||||
Lessee Lease Description [Line Items] | ||||
Operating leases, number of leased assets | Satellite | 2 |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Operating leases: | ||
Operating lease right-of-use lease assets | $ 1,167,903 | $ 1,367,821 |
Operating lease current liabilities | 222,806 | 195,411 |
Operating lease long-term liabilities | 1,019,029 | $ 1,215,680 |
Total operating lease liabilities | $ 1,241,835 | |
Weighted-average remaining lease term: | ||
Operating leases | 4 years 6 months | |
Weighted-average discount rate: | ||
Operating leases | 4.20% |
LEASES - Schedule of Components
LEASES - Schedule of Components of Lease Expense (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Selling, General and Administrative Expense | |
Lessee Lease Description [Line Items] | |
Operating lease cost | $ 282,121 |
LEASES - Schedule of Suppleme_2
LEASES - Schedule of Supplemental Cash Flow Information Related to Leases (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Net Income | |
Cash paid for amounts included in the measure of lease liabilities: | |
Operating cash flows from operating leases | $ 197,388 |
Supplemental Cash Flow Information | |
Right-of-use assets obtained in exchange for lease liabilities: | |
Operating leases | $ 28,604 |
LEASES - Schedule of Future Mat
LEASES - Schedule of Future Maturities of Operating Lease Liabilities (Details) | Dec. 31, 2021USD ($) |
Operating Lease [Abstract] | |
2023 | $ 222,806 |
2024 | 234,253 |
2025 | 240,034 |
2026 | 261,148 |
2027 | 283,594 |
Total lease liabilities | $ 1,241,835 |
LONG-TERM DEBT AND LIABILITIE_2
LONG-TERM DEBT AND LIABILITIES - Schedule of Long-term Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | May 06, 2019 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 60,500,369 | $ 52,051,393 | |
Less: Unamortized debt issuance costs | (7,256,190) | (137,817) | |
Long-term liabilities, net of debt issuance costs | 53,244,179 | 51,913,576 | |
Less: Current portion | (1,100,369) | (2,222,392) | |
Long-term debt, net | 52,143,810 | 49,691,184 | |
Fortress Credit Corp. | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 60,000,000 | ||
Nevada State Bank Credit Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 8,413,184 | ||
Vehicle Notes Payable | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 22,614 | ||
Insurance Notes Payable | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 500,369 | 519,194 | |
Main Street Priority Loan Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 4,000,000 | ||
Share Redemption Consideration Obligation | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 39,096,401 | $ 39,096,401 |
LONG-TERM DEBT AND LIABILITIE_3
LONG-TERM DEBT AND LIABILITIES (Details Narrative) - USD ($) | Mar. 31, 2022 | Feb. 28, 2022 | Jan. 31, 2022 | Nov. 30, 2021 | Nov. 15, 2021 | Oct. 07, 2021 | May 06, 2021 | Mar. 29, 2021 | May 05, 2020 | May 06, 2019 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 26, 2020 |
Debt Instrument [Line Items] | |||||||||||||||||
Repayment of debt | $ 13,104,942 | $ 1,645,400 | |||||||||||||||
Payment of fees and expenses | 3,138,521 | ||||||||||||||||
Fortress Credit Corp. | Minimum | Scenario Forecast | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Account control agreement balance reduced amount | $ 1,000,000 | ||||||||||||||||
Fortress Credit Corp. | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Account control agreement balance amount | $ 1,000,000 | ||||||||||||||||
Fortress Credit Corp. | Maximum | Isle of Man | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Account control agreement balance amount | $ 1,000,000 | 1,000,000 | |||||||||||||||
Fortress Credit Corp. | Maximum | Isle of Man | Subsequent Event | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Account control agreement balance amount | $ 1,000,000 | $ 1,000,000 | |||||||||||||||
Senior Secured Term Loan | Nevada State Bank | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayment of debt | $ 11,100,000 | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Borrowing capacity | $ 60,000,000 | ||||||||||||||||
Maturity date | Nov. 13, 2026 | ||||||||||||||||
Debt instrument, interest rate terms | The Fortress Credit Agreement bears interest at a rate equal to, at the Company’s option, either (a) LIBOR (or a successor rate, determined in accordance with the Fortress Credit Agreement) plus 7.75%, subject to a reduction to 7.50% upon the achievement of a net leverage target or (b) a base rate determined by reference to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by reference to The Wall Street Journal’s “Prime Rate” and (iii) the one-month adjusted LIBOR rate plus 1.00%, plus 6.75%, subject to a reduction to 6.50% upon the achievement of a net leverage target. | ||||||||||||||||
Payment of fees and expenses | $ 4,100,000 | ||||||||||||||||
Cash on hand | 5,300,000 | ||||||||||||||||
Amortization payments per quarter | $ 150,000 | ||||||||||||||||
Percentage of excess cash flow on annual sweep | 50.00% | ||||||||||||||||
Total Net Leverage Ratio | 8.00% | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | Warrants | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Warrants issued to purchase shares | 778,320 | ||||||||||||||||
Warrants issued price per share | $ 0.01 | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | Triangulum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Payment as settlement of previously disclosed litigation | $ 39,500,000 | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | LIBOR | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 7.75% | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | LIBOR | Achievement of Net Leverage Target | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 7.50% | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | Federal Funds Rate | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 0.50% | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | One-month Adjusted LIBOR | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 1.00% | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | One-month Adjusted LIBOR | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 6.75% | ||||||||||||||||
Senior Secured Term Loan | Fortress Credit Corp. | One-month Adjusted LIBOR | Maximum | Achievement of Net Leverage Target | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 6.50% | ||||||||||||||||
NSB and Credit Agreement | Revolving Credit Facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Borrowing capacity | $ 1,000,000 | $ 1,000,000 | |||||||||||||||
A&R Credit Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, covenant compliance | The A&R Credit Agreement contained affirmative and negative financial covenants (as defined in the A&R Credit Agreement) and other restrictions customary for borrowings of this nature. In particular, we were required to maintain (i) a quarterly minimum Fixed Charge Coverage ratio of 1.25x; (ii) a quarterly maximum Total Leverage ratio of 22.50x for the quarter ending March 31, 2021, 10.00x for quarter ending June 30, 2021, 6.50x for the quarter ending September 30, 2021 with semi-annual step-downs of 0.25x commencing December 31, 2021 and quarterly thereafter; (iii) a quarterly maximum Senior Leverage ratio of 5.25x for the quarter ending March 31, 2021, 2.50x for the quarter ending June 30, 2021 and 2.00x quarterly thereafter; (iv) a quarterly Minimum EBITDA covenant of $2.4 million for each of the quarters ending March 31, 2021, June 30, 2021 and September 30, 2021 and $8.0 million quarterly thereafter; (v) a quarterly Minimum Liquidity covenant requiring the Company to have cash and cash equivalents of no less than $1.5 million at quarter ends through and including June 30, 2021 and $2.5 million quarterly thereafter; and (vi) a yearly maximum Maintenance Capital Expenditure covenant of 5% of total revenues for the prior year. The Company was in compliance with its Fixed Charge Coverage ratio, Senior Leverage ratio, Total Leverage ratio and Minimum Liquidity covenants as of June 30, 2021. | ||||||||||||||||
Step down leverage ratio | 0.25% | ||||||||||||||||
Step down leverage ratio description | semi-annual step-downs of 0.25x commencing December 31, 2021 and quarterly thereafter | ||||||||||||||||
Maximum senior leverage ratio | 2.00% | 2.50% | 5.25% | ||||||||||||||
Minimum required EBITDA covenant for first quarter | 2,400,000 | $ 2,400,000 | |||||||||||||||
Minimum required EBITDA covenant for prior quarter | 2,400,000 | 2,400,000 | |||||||||||||||
Minimum required EBITDA covenant for current quarter | 2,400,000 | 2,400,000 | |||||||||||||||
Minimum required EBITDA covenant for thereafter | 8,000,000 | 8,000,000 | |||||||||||||||
Minimum liquidity covenant required of cash and cash equivalents for current quarter | 1,500,000 | 1,500,000 | |||||||||||||||
Minimum liquidity covenant required of cash and cash equivalents for thereafter | 2,500,000 | $ 2,500,000 | |||||||||||||||
A&R Credit Agreement | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fixed charge coverage ratio | 1.25% | ||||||||||||||||
A&R Credit Agreement | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Leverage ratio | 6.50% | 10.00% | 22.50% | ||||||||||||||
Percentage of maintenance capital expenditures to be made from prior fiscal year total revenues | 5.00% | ||||||||||||||||
A&R Credit Agreement | Nevada State Bank | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, interest rate terms | outstanding balances accrued interest based on one-month U.S. dollar London interbank offered rate (“LIBOR”) plus an applicable margin of 3.50% or 4.00%, depending on our Total Leverage Ratio (as defined in the A&R Credit Agreement). | ||||||||||||||||
A&R Credit Agreement | Revolving Credit Facility | Nevada State Bank | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Borrowing capacity | $ 1,000,000 | ||||||||||||||||
Maturity date | Apr. 24, 2022 | ||||||||||||||||
Share Redemption Consideration Obligation | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, face amount | $ 39,096,401 | ||||||||||||||||
Debt instrument, redemption period, start date | May 6, 2019 | ||||||||||||||||
Debt instrument, redemption period, end date | May 6, 2029 | ||||||||||||||||
Interest rate | 2.00% | ||||||||||||||||
Debt instrument, annual payment | $ 781,928 | $ 781,928 | |||||||||||||||
Share Redemption Consideration Obligation | Settlement Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, redemption period, start date | May 6, 2021 | ||||||||||||||||
Interest rate | 2.00% | ||||||||||||||||
Non compete period | 5 years | ||||||||||||||||
Debt instrument, contingent payment upon settlement | $ 39,100,000 | ||||||||||||||||
Payment as settlement of previously disclosed litigation | $ 39,507,717 | ||||||||||||||||
Term Loan | Revolving Credit Facility | Nevada State Bank Credit Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayment of debt | 7,012,265 | ||||||||||||||||
Term Loan | NSB and Credit Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Borrowing capacity | $ 11,000,000 | $ 11,000,000 | |||||||||||||||
Term Loan | A&R Credit Agreement | Nevada State Bank | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Borrowing capacity | $ 7,022,300 | ||||||||||||||||
Maturity date | Apr. 24, 2023 | ||||||||||||||||
Leverage Ratio Less Than 2.0 | A&R Credit Agreement | Nevada State Bank | LIBOR | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 3.50% | ||||||||||||||||
Leverage Ratio 2.0 or Greater | A&R Credit Agreement | Nevada State Bank | LIBOR | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 4.00% | ||||||||||||||||
Main Street Priority Loan Facility | Nevada State Bank | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Unsecured Debt | $ 4,000,000 | ||||||||||||||||
Repayments of unsecured debt | $ 4,126,755 | ||||||||||||||||
Variable rate basis, description | three-month U.S. dollar LIBOR plus 300 basis points (initially 3.215%) | ||||||||||||||||
Debt instrument, initial interest rate | 3.215% | 3.215% | |||||||||||||||
Loan, maturity period | 5 years | ||||||||||||||||
Debt instrument, amortization price percentage principal amount outstanding | 15.00% | ||||||||||||||||
Main Street Priority Loan Facility | Nevada State Bank | LIBOR | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, applicable margin rate | 3.00% |
LONG-TERM DEBT AND LIABILITIE_4
LONG-TERM DEBT AND LIABILITIES - Schedule of Future Maturities of Long-term Obligations (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total long-term debt, gross | $ 60,500,369 | $ 52,051,393 |
Promissory Note | ||
Debt Instrument [Line Items] | ||
2022 | 1,100,369 | |
2023 | 600,000 | |
2024 | 600,000 | |
2025 | 600,000 | |
2026 | 57,600,000 | |
Total long-term debt, gross | $ 60,500,369 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Client Revenue Concentration (Details) - Europe - Client A - Customer Concentration Risk - Revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | ||
Concentration Risk | 26.10% | 21.50% |
Accounts Receivable | $ 348,781 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Nov. 15, 2021 | Oct. 07, 2021 | May 06, 2019 | Dec. 31, 2021 |
Loss Contingencies [Line Items] | ||||
Lawsuit filing date | May 6, 2019 | |||
Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Provision for loss on legal proceedings | $ 0 | |||
Share Redemption Consideration Obligation | ||||
Loss Contingencies [Line Items] | ||||
Interest rate | 2.00% | |||
Debt instrument, redemption period, start date | May 6, 2019 | |||
Share Redemption Consideration Obligation | Settlement Agreement | ||||
Loss Contingencies [Line Items] | ||||
Non compete period | 5 years | |||
Debt instrument, contingent payment upon settlement | $ 39,100,000 | |||
Interest rate | 2.00% | |||
Debt instrument, redemption period, start date | May 6, 2021 | |||
Payment as settlement of previously disclosed litigation | $ 39,507,717 |
INCOME TAXES - Schedule of Prov
INCOME TAXES - Schedule of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
U.S.(loss) | $ (770,771) | $ (3,477,895) |
Non-U.S. income | 2,931,220 | 663,071 |
Income (loss) before (provision) benefit for income taxes | 2,160,449 | (2,814,824) |
Current: Federal | (62,074) | (1,204,556) |
Current: State | 11,500 | 1,745 |
Foreign | 74,885 | |
Current: Total | 24,311 | (1,202,811) |
Deferred: Federal | (97,965) | 674,138 |
Deferred: State | 122,291 | (77,264) |
Deferred: Total | 24,326 | 596,874 |
Provision (benefit) for income taxes | $ 48,637 | $ (605,937) |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | ||
Tax provision computed at the federal statutory rate | $ 453,694 | $ (591,113) |
Foreign rate differential | (540,670) | (139,246) |
State income tax, net of federal benefit | 22,226 | (55,558) |
162(m) compensation limit | 228,069 | |
Share based compensation | (615,062) | (4,568) |
Subpart F income | 717,218 | 204,326 |
Non-taxable PPP loan forgiveness | (176,451) | |
Other permanent items | 1,138 | 29,511 |
Credits | (94,223) | (24,801) |
Impact of CARES Act | (71,168) | (466,642) |
State tax true ups | (79,997) | 10,153 |
Change in federal statutory rate, net of benefit | (15,698) | 1,364 |
Uncertain tax positions | 1,933 | 46,699 |
Valuation allowance | 41,177 | 560,389 |
Provision (benefit) for income taxes | $ 48,637 | $ (605,937) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Right-of-use asset | $ 268,137 | $ 320,787 |
Share based compensation | 228,574 | 313,910 |
Intangible assets | 176,457 | 182,511 |
Accruals and reserves | 127,332 | 67,259 |
Debt issuance costs | 50,246 | |
Other | 96,111 | 86,231 |
Total deferred tax assets | 946,857 | 970,698 |
Total valuation allowance | (601,566) | (560,389) |
Deferred Tax Liabilities: | ||
Right-of-use liability | (285,111) | (316,481) |
Prepaid assets | (171,411) | (207,005) |
Basis difference in fixed assets | (62,968) | (37,715) |
Other | (1,019) | |
Total deferred tax liabilities | (520,509) | (561,201) |
Net deferred tax liabilities | $ (175,218) | $ (150,892) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 21, 2020 | |
Income Taxes [Line Items] | |||
Number of cumulative loss position term | 3 years | ||
Valuation allowance against certain deferreds | $ 601,566 | $ 560,389 | |
Additional tax expense due to change in valuation allowance | $ 41,177 | 560,389 | |
Decrease in effective tax rate due to change in valuation allowance | 1.91% | ||
Unrecognized gross tax benefits, if recognized, would affect effective tax rate | $ 48,632 | ||
Accrual for interest or penalties related to uncertain tax positions | 0 | 0 | |
Uncertain tax positions, interest and penalties recognized | $ 0 | 0 | |
Internal Revenue Service (IRS) | Minimum | |||
Income Taxes [Line Items] | |||
Income tax, fiscal year subject to examination | 2018 | ||
States | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 1,000,000 | ||
Majority of net operating loss carryforwards, expiration year | 2040 | ||
States | Minimum | |||
Income Taxes [Line Items] | |||
Income tax, fiscal year subject to examination | 2018 | ||
Progressive Games Partners LLC | |||
Income Taxes [Line Items] | |||
Percentage of acquisition of member interest | 100.00% | ||
Deferred tax asset related to acquisition | $ 0 |
INCOME TAXES - Schedule of Gros
INCOME TAXES - Schedule of Gross Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 46,699 | |
Increases related to tax positions taken during the prior year | $ 45,207 | |
Increases related to tax positions taken during the current year | 1,933 | 1,492 |
Ending balance | $ 48,632 | $ 46,699 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | Feb. 17, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair market value of shares granted | $ 162,252 | $ 435,639 | |
Unrecognized share-based compensation expense | $ 382,021 | ||
Unrecognized share-based compensation expense, weighted-average period of amortization | 1 year 9 months | ||
Restricted Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted shares outstanding | 2,379,466 | ||
Restricted shares unvested | 100,000 | ||
Restricted Awards | Board Members | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted common stock, granted | 298,333 | ||
Restricted common stock granted, value | $ 1,112,882 | ||
Restricted Awards | Employee and Contractor | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted common stock, granted | 80,000 | ||
Restricted common stock granted, value | $ 181,600 | ||
Common Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock options granted | 90,000 | 465,000 | |
2014 Plan | Common Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares authorized for issuance of awards | 7,550,750 | ||
Shares available for issuance of awards | 745,368 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Stock Options Pricing (Details) - Stock Option | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 61.12% | 70.98% |
Expected volatility, maximum | 68.74% | 76.97% |
Risk free interest rate, minimum | 0.48% | 0.27% |
Risk free interest rate, maximum | 0.98% | 1.39% |
Expected life (years) | 5 years | 5 years |
SHARE-BASED COMPENSATION - Su_2
SHARE-BASED COMPENSATION - Summary of Stock Option Activity (Details) - Common Stock - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, number of shares | 2,982,000 | |
Options Issued, number of shares | 90,000 | |
Options Exercised, number of shares | (1,094,998) | |
Options Forfeited or expired, number of shares | (42,000) | |
Ending Balance, number of shares | 1,935,002 | 2,982,000 |
Ending Balance, Options Exercisable | 1,458,001 | |
Beginning Balance, Weighted-Average Exercise Price | $ 1.08 | |
Options Issued, Weighted-Average Exercise Price | 3.38 | |
Options Exercised, Weighted-Average Exercise Price | 0.82 | |
Options Exercised, Weighted-Average Exercise Price | 1.04 | |
Ending Balance, Weighted-Average Exercise Price | 1.33 | $ 1.08 |
Ending Balance, Options Exercisable, Weighted-Average Exercise Price | $ 1.12 | |
Options Outstanding, Aggregate Intrinsic Value | $ 4,788,314 | $ 2,101,780 |
Options Exercised, Aggregate Intrinsic Value | (3,166,433) | |
Options Exercisable, Aggregate Intrinsic Value | $ 3,914,356 | |
Weighted-Average Remaining Contractual Term (Years) | 1 year 10 months 13 days | 2 years 4 months 6 days |
Weighted-Average Remaining Contractual Term (Years), Exercisable | 1 year 4 months 6 days |
SHARE-BASED COMPENSATION - Su_3
SHARE-BASED COMPENSATION - Summary of Unvested Stock Option Activity (Details) - Common Stock - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, number of shares | 845,000 | |
Options Granted, number of shares | 90,000 | |
Options Vested, number of shares | (416,333) | |
Options Forfeited, number of shares | (41,666) | |
Ending Balance, number of shares | 477,001 | 845,000 |
Beginning Balance, Weighted-Average Exercise Price | $ 1.55 | |
Granted, Weighted-Average Exercise Price | 3.38 | |
Vested, Weighted-Average Exercise Price | 1.51 | |
Forfeited, Weighted-Average Exercise Price | 1.04 | |
Ending Balance, Weighted-Average Exercise Price | $ 1.97 | $ 1.55 |
Aggregate Intrinsic Value | $ 873,958 | $ 197,608 |
Weighted-Average Remaining Contractual Term (Years) | 3 years 5 months 12 days | 3 years 9 months 29 days |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event | Mar. 16, 2022USD ($) |
Subsequent Event [Line Items] | |
Debt default, description | Pursuant to the Consent and Waiver Agreement, the Company acknowledged that it was in default under the Fortress Credit Agreement as a result of its failure to comply with a requirement of the Fortress Credit Agreement not to permit, on the last Business Day of each calendar month, more than the Dollar Equivalent of $1,000,000 (or such greater amount determined by the Agent in its sole discretion) in the aggregate to be on deposit in Isle of Man deposit or securities accounts which are not subject to Control Agreements (as such term is defined in the Guaranty and Security Agreement) or other security arrangements acceptable to the Agent (the “Existing Default”) for the months of November 2021, December 2021, January 2022 and February 2022 (the “Specified Compliance Periods”). |
Maximum aggregate amount permitted to be on deposit or securities account | $ 1,000,000 |