Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Fair value of warrants and convertibility feature of long term debt | |
Entity Registrant Name | Lightning Gaming, Inc. |
Entity Central Index Key | 1392545 |
Document Type | 10-K |
Document Period End Date | 31-Dec-14 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Public Float | $4,532 |
Entity Common Stock, Shares Outstanding | 4,532,474 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||
Cash | $274,547 | $462,200 |
Accounts receivable, net | 359,486 | 297,820 |
Inventory | 132,561 | 116,503 |
Prepaid expenses | 202,503 | 102,130 |
Total Current Assets | 969,097 | 978,653 |
Property, Plant and Equipment, net | 819,489 | 984,951 |
Other Assets | 8,193 | 8,193 |
License Fees, net of accumulated amortization | 95,058 | 172,017 |
Total Assets | 1,891,837 | 2,143,814 |
Liabilities and Stockholders' Deficit | ||
Accounts payable | 158,665 | 293,227 |
Accrued expenses | 213,959 | 204,660 |
Total Current Liabilities | 372,624 | 497,887 |
Long Term Debt and Other Liabilities | ||
Long term notes payable | 1,475,000 | 14,500,000 |
Interest payable and other long term liabilities | 7,677,826 | 6,513,223 |
Other long term liabilities | 46,313 | 41,926 |
Fair value of warrants and convertibility feature of long term debt | 26,945 | 31,794 |
Total Long Term Debt and Other Liabilities | 22,501,084 | 21,086,943 |
Commitments | ||
Stockholders' Deficit | ||
Preferred stock: $0.001 par value; authorized 10,000,000 shares, Series A Nonvoting capital stock 6,000,000 shares authorized, 4,500,000 shares issued and outstanding | 4,500 | 4,500 |
Common stock: $0.001 par value; authorized 90,000,000 shares; 4,660,285 shares issued and 4,652,474 shares outstanding | 4,661 | 4,661 |
Additional paid in capital | 7,633,255 | 7,628,404 |
Accumulated deficit | -28,610,476 | -27,070,770 |
Treasury stock, 7,811 shares at cost | -13,811 | -7,811 |
Total Stockholders' Deficit | -20,981,871 | -19,441,016 |
Total Liabilities and Stockholders' Deficit | $1,891,837 | $2,143,814 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders' Deficit | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 |
Preferred Stock Series A Nonvoting capital stock, authorized shares | 6,000,000 | 6,000,000 |
Preferred Stock Series A Nonvoting capital stock, issued shares | 4,500,000 | 4,500,000 |
Preferred Stock Series A Nonvoting capital stock, outstanding shares | 3,500,000 | 4,500,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized shares | 90,000,000 | 90,000,000 |
Common stock, issued shares | 4,660,285 | 4,660,285 |
Common stock, outstanding shares | 4,532,474 | 4,652,474 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | ||
Lease, license and service fees | $3,678,628 | $3,303,656 |
Sales of gaming products and parts | 87,217 | 131,228 |
Total revenues | 3,765,845 | 3,434,884 |
Costs and operating expenses | ||
Cost of products sold | 24,333 | -74,048 |
Operating expenses | 850,007 | 835,334 |
Research and development | 502,096 | 439,213 |
Selling, general & administrative expenses | 2,029,535 | 1,856,012 |
Depreciation and amortization | 740,903 | 899,075 |
Total costs and operating expenses | 4,146,874 | 3,955,586 |
Operating loss | -381,029 | -520,702 |
Non-operating income (expense) | ||
Net interest expense | -1,164,603 | -1,197,637 |
Change in value of warrants | 5,926 | 7,295 |
Net loss | ($1,539,706) | ($1,711,044) |
Net loss per common share including Series A Nonvoting shares-basic and diluted | ($0.17) | ($0.19) |
Weighted average Series A Nonvoting shares outstanding-basic and diluted | 4,500,000 | 3,944,746 |
Weighted average common shares outstanding- basic and diluted | 4,649,515 | 4,652,474 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Deficit (USD $) | Series A Nonvoting Capital Stock | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Treasury Stock | Total |
Begining Balance, Amount at Dec. 31, 2012 | ||||||
Issuance of Series A Nonvoting capital stock, Amount | $1,945,929 | |||||
Stock based compensation | 15,403 | -25,969 | ||||
Issuance of Warrants | -3,935 | |||||
Net Loss | -1,711,044 | -1,711,044 | ||||
Ending Balance, Amount at Dec. 31, 2013 | 4,500 | 4,661 | -19,441,016 | |||
Ending Balance, Shares at Dec. 31, 2013 | 4,500,000 | 4,660,285 | ||||
Stock based compensation | 5,928 | 5,928 | ||||
Issuance of Warrants | -1,077 | -1,077 | ||||
Net Loss | -1,539,706 | |||||
Purchase of stock for the treasury | -6,000 | -6,000 | ||||
Ending Balance, Amount at Dec. 31, 2014 | $4,500 | $4,661 | $7,633,255 | $28,610,476 | $13,811 | ($20,981,871) |
Ending Balance, Shares at Dec. 31, 2014 | 4,500,000 | 4,660,285 | 127,811 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | ||
Net loss | ($1,539,706) | ($1,711,044) |
Adjustments to reconcile net loss to net cash used in operating activities; | ||
Gain on sale of equipment | -58,667 | -71,095 |
Depreciation and amortization | 740,903 | 899,075 |
Stock based compensation | 5,928 | 15,403 |
Amortization of debt discount | 54,513 | |
Changes in Assets and Liabilities | ||
Increase in accounts receivable | -61,666 | -96,499 |
Decrease in inventory | -31,428 | 9,116 |
Increase in prepaid expenses and other assets | -100,373 | -67,648 |
Decrease increase in accounts payable | -134,562 | -49,546 |
Increase in accrued interest | 1,164,603 | 1,143,124 |
Decrease in accrued expenses | 9,299 | -114,137 |
Decrease in other long term liabilities | 4,387 | 24,477 |
NET CASH USED IN OPERATING ACTIVITES | -7,208 | -20,510 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment | -488,106 | -701,376 |
Proceeds from sale of equipment | 83,000 | 128,000 |
Increase in license fees | -19,339 | -131,696 |
Net cash used in investing activities | -424,445 | -705,072 |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of notes | 250,000 | 1,000,000 |
Proceeds from issuance of Series A Nonvoting Capital Stock | -6,000 | |
Net cash provided by financing activities | 244,000 | 1,000,000 |
Net increase decrease in cash | -187,653 | 274,418 |
Cash beginning | 462,200 | 187,782 |
Cash ending | 274,547 | 462,200 |
Issuance of capital stock warrants in connection with notes payable | 1,077 | 3,935 |
Inventory transferred to equipment | 15,370 | 12,751 |
Cash paid for interest |
Nature_of_Business_and_Signifi
Nature of Business and Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PaymentOnCapitalLease | |||||||||
Nature of Business and Significant Accounting Policies | Note 1. Nature of Business and Summary of Significant Accounting Policies | ||||||||
Nature of Business: Lightning Gaming, Inc. (the “Company”) was incorporated on March 1, 2007 and on January 29, 2008, completed a merger with Lightning Poker, Inc. (“Lightning Poker”) which became a wholly owned subsidiary of the Company. | |||||||||
Lightning Poker was formed to manufacture and market a fully automated, proprietary electronic poker table (the “Poker Table”) to commercial and tribal casinos, card clubs, and other gaming and lottery venues. Lightning Poker’s Poker Table is designed to improve economics for casino operators while improving overall player experience. | |||||||||
In 2008, the Company, as the sole member, established Lightning Slot Machines, LLC (“Lightning Slots”) through which it commenced the design, manufacture, marketing, sale and operation of video slot machines to customers in various gaming jurisdictions. The current slot machine products are: | |||||||||
· | Popeye | · | Jungle Book | ||||||
· | Popeye’s Bonus Voyage | · | Golden Egg | ||||||
· | Popeye’s Seven Seas | · | Just Jackpots | ||||||
· | Blondie’s Penny Bonanza | · | Duck Dynamite | ||||||
· | Hagar the Horrible | · | Candy Cash | ||||||
· | Beetle Bailey | · | Olive Oyl’s Jumbo Stacks | ||||||
· | Pink Panther | · | Jumbo Fish Stacks | ||||||
· | Swamp Fever | · | Lightning Lotto | ||||||
· | Vampires Fortune | · | Slotto | ||||||
· | Penny Palooza | · | Year of the Horse | ||||||
· | Snow White | ||||||||
Our gaming products feature advanced graphics and engaging games based on licensed, well-recognized brands, cartoon characters and proprietary non-branded themes. | |||||||||
Our consolidated financial statements include the accounts of the Company, including Lightning Poker and Lightning Slots. All inter-company accounts and transactions have been eliminated. | |||||||||
The accompanying financial statements have been prepared on a going concern basis, which assumes realization of all assets and settlement or payment of all liabilities in the ordinary course of business. The Company has limited capital resources and the Company has experienced net operating losses and negative cash flows from operations since inception. Conditions improved during 2013 and 2014 and the Company expects these conditions to continue to improve, however the generation of cash flow sufficient to meet the Company’s cash needs in the future will depend on the Company’s ability to obtain the regulatory approvals required to distribute its products and successfully market them to more casinos and card clubs. Based on our cash flow projections and anticipated revenues, we believe we have sufficient cash flows to support our operations during 2015. However if supplemental financing becomes necessary, there is no assurance that the Company would be able to obtain such financing, on reasonable and feasible terms, or at all. If the Company needs additional funding and is unable to obtain it, its financial condition would be adversely affected. In that event, it would have to postpone or discontinue planned operations and projects. The Company’s continuance as a going concern is dependent upon these factors, among others. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |||||||||
A summary of the Company’s significant accounting policies is as follows: | |||||||||
Revenue Recognition: The Company generates revenue from leasing and selling our Poker Table and slot machines. The Company recognizes revenue on sales of our products, net of rebates, discounts and allowances, when persuasive evidence of an agreement exists, the sales price is fixed or determinable, our products are delivered and our ability to collect is reasonably assured. We recognize revenue generated under operating leases when the ability to collect is reasonably assured. The license agreements are based on either a fixed monthly price or a pre-determined percentage of the monthly net “rake” revenue collected for each Poker Table and daily revenue collected for each slot machine, subject to daily minimums and maximums. | |||||||||
If multiple units of our products are included in any one sale or lease agreement, we allocate revenue to each unit based upon its respective fair value against the total contract value and defer revenue recognition on those units where we have not met all requirements of revenue recognition. | |||||||||
For the years 2014 and 2013 revenue from customers outside the United States accounted for approximately $68,785 and $283,078 or 2% and 8% of revenues. Five and six casino customers accounted for 20% and 24% of our revenues for the years ended December 31, 2014 and 2013, respectively. One casino group represented 10% of total revenues for each of the years ended December 31, 2014 and 2013. | |||||||||
Use of Estimates: The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the recoverable value of long lived assets and the fair market value of warrants and the convertible feature of long term debt. Actual results could differ from those estimates. | |||||||||
Cash: For the purposes of reporting the statement of cash flows, the Company considers all cash accounts and highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintained and will maintain cash balances with highly reputable financial institutions, which at times throughout the year exceeded the federally-insured amount. The Company has not experienced any losses from deposits above the federally-insured amount. | |||||||||
Concentrations of Credit Risk: Financial instruments that subject us to credit risk primarily consist of cash and trade receivables. The Company’s credit risk is managed by investing cash primarily in high-quality financial institutions. Accounts receivable include amounts owed by various customers and groups of customers. No collateral is required. Accounts receivable are not sold or factored. The Company periodically reviews its trade receivables in determining its allowance for doubtful accounts and believes its credit and collection polices mitigate its credit risk relative to accounts receivable. | |||||||||
Receivables and Allowance for Doubtful Accounts: The Company regularly evaluates the collectability of its trade receivable balances based on a combination of factors. When a customer’s account becomes past due, we initiate dialogue with the customer to determine the cause. If it is determined that the customer will be unable to meet its financial obligation to us, such as in the case of a bankruptcy filing, deterioration in the customer’s operating results or financial position or other material events impacting its business, we record a specific reserve for bad debts to reduce the related receivable to the amount we expect to recover given all information presently available. The Company has a reserve of $4,000 and $7,254 as of December 31, 2014 and 2013, respectively. Except for this reserve, the Company believes its receivables are collectible. If circumstances related to specific customers change, our estimates of the recoverability of receivables could materially change. Recoveries of receivables previously written off are recorded as revenue when recovered. Delinquency of accounts receivable is determined based on contractual terms. The Company does not charge interest on its past due receivables. | |||||||||
At December 31, 2014 and 2013, accounts receivable from four and five casino customers, respectively, represented 22% and 28%, respectively, of total accounts receivable. | |||||||||
License Fees: Licensee fees are amortized on a straight-line basis over the life of the respective license, which ranges from one to three years. | |||||||||
Patents: The Company expenses legal fees and application costs related to its patent application process. There is a high degree of uncertainty in the outcome of approval for any of our patents. Once the patents are approved, any costs incurred to defend and register these patents will be capitalized. | |||||||||
Research and Development: Research and development costs are charged to expense when incurred and are included in the statement of operations until technological feasibility is reached. Technological feasibility is established when a product design and a working model of the software product have been completed and the completeness of the working model and its consistency with the product design have been confirmed by testing. These expenses include internally-developed software costs as well as employee and product costs associated with the development of our products. As of December 31, 2014 and 2013, no amounts had been capitalized. | |||||||||
Inventory: Inventory is stated at the lower of cost or market using the first-in, first-out method. | |||||||||
Property and Equipment: Property and equipment are recorded at cost. Depreciation is computed using the straight line method over estimated useful lives of three to five years. Leasehold improvements are amortized over the life of the lease or the useful life of the improvement if less. | |||||||||
Income Taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||
We have assessed the Company’s tax position and do not believe there are any uncertain tax positions. Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. We had no unrecognized tax benefits, and accordingly, we have not recognized any interest or penalties during 2014 and 2013 related to unrecognized tax benefits. We did not accrue for interest or penalties as of December 31, 2014 and 2013. | |||||||||
We file U.S. income tax returns and multiple state and foreign income tax returns. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2011 and thereafter are subject to examination by the relevant taxing authorities. | |||||||||
Advertising: The Company expenses advertising costs as incurred. There was no advertising expense in 2014 or 2013. | |||||||||
Impairment of Long-Lived Assets: The Company reviews its long-lived assets, including property and equipment and license fees, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, including definite lived license fees, the Company evaluates the probability that future undiscounted net cash flows, without interest charges, will be less than the carrying amount of the assets or for identifiable intangibles with finite useful lives. | |||||||||
Stock Option Plan: The Company has an equity-based compensation plan which is more fully described in Note 7. Compensation expense is recognized over the required service period. All options have been granted with an exercise price equal to the fair value of the Company’s common stock on the date of grant. | |||||||||
Warrants and Convertible Feature of Long Term Debt: As explained in further detail in Note 7, in accordance with loans obtained by the Company, the lender holds warrants to purchase shares of common stock. The purchase price stated in the warrant is subject to adjustment from time to time pursuant to the provisions of the respective warrant agreements. In addition, certain notes contain a right to convert the principal amount of the note and accrued interest into shares of common stock. The Company accounts for the value of the warrants and the debt conversion right in the same manner used for stock-based compensation. All future changes in the fair value of the warrants is recognized currently in earnings until such time as the warrants are exercised or expire. | |||||||||
Earnings (loss) per share: The Company computes earnings (loss) per share in accordance with generally accepted accounting principles which require presentation of both basic and diluted earnings per share ("EPS") on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted to common stock. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS for loss periods excludes all potential dilutive shares due to their anti-dilutive effect. | |||||||||
The Company uses the two-class method in computing earnings per share. Under the two-class method, undistributed earnings are allocated among common and participating shares to the extent each security may share in such earnings. | |||||||||
In computing earnings per share, the Company's Nonvoting Stock is considered a participating security. Each share of Nonvoting Stock has identical rights, powers, limitations and restrictions in all respects as each share of common stock of the Company including the right to receive the same consideration per share payable in respect of each share of common stock, except that holders of Nonvoting Stock shall have no voting rights or powers whatsoever. | |||||||||
The following table summarizes the number of dilutive shares, which may dilute future earnings per share, outstanding for each of the periods presented, but not included in the calculation of diluted loss per share: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Stock options | 1,198,000 | 1,548,000 | |||||||
Warrants | 12,151,385 | 11,901,385 | |||||||
Convertible notes and accrued interest | 12,696,850 | 11,762,247 | |||||||
26,046,235 | 25,211,632 | ||||||||
Inventory
Inventory | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PaymentOnCapitalLease | |||||||||
Inventory | Note 2. Inventory | ||||||||
Inventory consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Finished products | $ | 1,685 | $ | 17,055 | |||||
Raw materials | 130,876 | 99,448 | |||||||
Inventory | $ | 132,561 | $ | 116,503 | |||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PaymentOnCapitalLease | |||||||||
Property and Equipment | Note 3. Property and Equipment | ||||||||
Property and equipment consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Equipment, principally gaming equipment | $ | 4,213,187 | $ | 3,755,098 | |||||
Delivery truck | 28,140 | 28,140 | |||||||
Furniture and fixtures | 75,177 | 75,177 | |||||||
Leasehold improvements | 91,794 | 91,794 | |||||||
Property and equipment | 4,408,298 | 3,950,209 | |||||||
Less accumulated depreciation | (3,588,809 | ) | (2,965,258 | ) | |||||
Property and equipment, net | $ | 819,489 | $ | 984,981 | |||||
License_Fees
License Fees | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PaymentOnCapitalLease | |||||||||
License Fees | Note 4. License Fees | ||||||||
License fees consist of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Purchased licenses | $ | 342,505 | $ | 323,166 | |||||
Less accumulated amortization | (247,447 | ) | (151,149 | ) | |||||
License fees, net | $ | 95,058 | $ | 172,017 | |||||
The weighted average useful life of purchased licenses is 3 years. | |||||||||
Estimated amortization expense related to recorded license fees is as follows: | |||||||||
Year Ending | Amount | ||||||||
December 31, | |||||||||
2015 | $ | 92,658 | |||||||
2016 | 1,950 | ||||||||
2017 | 450 | ||||||||
$ | 95,058 | ||||||||
Debt
Debt | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
PaymentOnCapitalLease | |||||||||||||
Debt | Note 5. Debt | ||||||||||||
Notes Payable consist of the following: | |||||||||||||
Warrants | December 31, | December 31, | |||||||||||
2014 | 2013 | ||||||||||||
The Co-Investment Fund II, L.P. (“CI II”) | 12,151,385 | $ | 14,750,000 | $ | 11,500,000 | ||||||||
Stewart J. Greenebaum, LLC (“Greenebaum”) | — | — | 3,000,000 | ||||||||||
Total notes payable | 14,750,000 | 14,500,000 | |||||||||||
Less: unamortized fair market value of warrants | — | — | |||||||||||
Notes payable, long-term | $ | 14,750,000 | $ | 14,500,000 | |||||||||
Substantially all of the Company’s assets are pledged as collateral on debt and all of the notes are due on June 30, 2017 with interest at the rate of 8% per annum on each note payable at maturity. | |||||||||||||
On October 8, 2014, the Company borrowed $250,000 from The Co-Investment Fund II, L.P. (“CI II”) to fund the purchase of twenty-five slot machine cabinets and component parts. The promissory note is due on June 30, 2017 including interest at the rate of 8% per annum and may be converted to Nonvoting Stock at $1.00 per share at the discretion of the holder. In connection with the promissory note, the Company issued to CI II warrants to purchase up to 250,000 shares of common stock at an exercise price of $1.00 per share (subject to anti-dilution adjustments), with an expiration date of October 8, 2019. | |||||||||||||
In January 2013 and May 2013, the Company borrowed $500,000 on each occurrence from CI II. The notes are due on June 30, 2017 and include interest at the rate of 8% per annum and may be converted to Nonvoting Stock at $1.00 per share at the discretion of the lender. Warrants to purchase 1,000,000 shares of common stock were issued on these notes in December 2013. | |||||||||||||
On December 19, 2014, CI II purchased all of the outstanding debt and the related accrued interest and warrants thereon owed by the Company to Stewart J. Greenebaum, LLC (“Greenebaum”). See Note 9 Related Party Transactions. | |||||||||||||
In accordance with various loans obtained by the Company, CI II holds warrants to purchase the following maximum number of shares of common stock as of December 31, 2014: | |||||||||||||
Maximum Number of Shares | Price per Share | Expiration Date | |||||||||||
8,901,385 | $ | 1 | 12-Apr-16 | ||||||||||
1,000,000 | $ | 1 | 17-Jan-17 | ||||||||||
1,000,000 | $ | 1 | 6-Jul-17 | ||||||||||
500,000 | $ | 1 | 30-Jan-18 | ||||||||||
500,000 | $ | 1 | 6-May-18 | ||||||||||
250,000 | $ | 1 | 8-Oct-19 | ||||||||||
12,151,385 | |||||||||||||
The purchase price of the common stock is subject to adjustment from time to time pursuant to the anti-dilution provisions of the respective warrant agreements. Also, certain notes contain a right to convert the principal amount of the note and accrued interest into shares of common stock. Expense recognized for the amortization of the debt discount for the years ended December 31, 2014 and 2013 related to these warrants was $0 and $45,467 respectively, and was included in interest expense. Expense recognized for the years ended December 31, 2014 and 2013 related to the debt conversion right was $0 and $9,046, respectively, and was included in interest expense. | |||||||||||||
Certain notes in the amount of $8,750,000 and related accrued interest of $3,946,538 at December 31, 2014 are convertible at the discretion of the note holder into shares of the Company’s common stock on the same terms and conditions of the next equity offering. | |||||||||||||
See Note 7, Stockholders’ Deficit and Note 9, Related Party Transactions for more information on debt and warrant transactions. |
Commitments
Commitments | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
PaymentOnCapitalLease | |||||||
Commitments | Note 6. Commitments | ||||||
In November 2009, the Company entered into a lease agreement for its corporate offices which became effective in January 2010 for a term of sixty-seven months. In September 2014, the lease was amended to include the following: 1) an extension of the lease term to February 28, 2021; 2) modification of the minimum annual and monthly rents for the extended lease term; 3) a rent abatement period of six months commencing October 1, 2014; and 4) an option to extend the term for a period of five years. | |||||||
Rental expense is recognized on a straight-line basis over the life of the lease and is recorded as a deferred rent obligation during the abatement period. The deferred rent is reduced by the difference between the rent due and the straight-line expense upon commencement of the rental payments. Rental expense under this lease for the years ended December 31, 2014 and 2013 was $135,590 and $129,896, respectively. | |||||||
Future minimum lease payments are as follows: | |||||||
Year Ending December 31, | Amount | ||||||
2015 | $ | 79,815 | |||||
2016 | 96,915 | ||||||
2017 | 99,337 | ||||||
2018 | 101,821 | ||||||
2019 | 104,366 | ||||||
2020 and thereafter | 125,099 | ||||||
$ | 607,353 | ||||||
The Company routinely enters into license agreements for the use of intellectual properties and technologies. These agreements generally provide for royalty advances and license fee payments when the agreements are signed and minimum commitments which are cancelable in certain circumstances. | |||||||
In March 2009, the Company entered into an exclusive license agreement with Hasbro, Inc. to use the SCRABBLE brand in gaming devices distributed in the United States and Canada. The initial term of the agreement was five years with the Company’s right to extend the agreement for two additional five year terms if certain performance standards were met. The agreement called for minimum annual payments and could be cancelled under certain conditions. An amendment to the license agreement between the Company and Hasbro, Inc. was executed in January 2013, modifying the terms of the guarantee license fee payment for the fifth year of the agreement reducing the fee to $150,000 from $300,000. In addition, the Company’s sell-off rights and rights to continue any leases were null and void upon the termination of the agreement, which was December 31, 2013. | |||||||
In October 2009, the Company entered into an exclusive license agreement with Hearst Holdings, Inc. and King Features Syndicate Division to use the brands POPEYE and related family of characters in gaming devices distributed worldwide excluding the United Kingdom and Japan. The initial term of the agreement was for one year with the Company’s right to extend the agreement for eight additional one-year terms | |||||||
upon payment of minimum royalties. The Company paid the minimum royalties and extended the term of the agreement to December 2013. In April 2013, the Company was granted the right to sublicense the POPEYE brand for distribution to bar and salon customers only in Spain for the remainder of the renewal term. In December 2013, the Company and Hearst Holdings entered into a second renewal agreement extending the license and sublicense renewal term from January 1, 2014 to December 31, 2016. The extension agreement provides the Company the right to extend the agreement for six additional renewal terms upon the payment of minimum royalties during the renewal period. | |||||||
In June 2011, the Company entered into an exclusive license agreement with MGM/Brandegenuity, LLC to use the images of the Pink Panther and related family of characters in gaming devices distributed in theUnited States and Canada. The initial term of the agreement was for three years with the Company’s right to extend the agreement for an additional five years upon payment of minimum royalties. The agreement is currently on a month-to-month basis. | |||||||
In November 2011, the Company entered into a license agreement with Hearst Holdings, Inc. to use the brand Beetle Bailey and related family of characters in gaming devices distributed worldwide. The initial term of the agreement was for two years with the Company’s right to extend the agreement for eight additional one-year terms upon payment of minimum royalties during the term of the agreement. The Company and Hearst Holdings entered into a renewal agreement extending the renewal term from January 1, 2014 to December 31, 2015. | |||||||
In June 2011, the Company entered into a license agreement with Hearst Holdings, Inc. to use the brand Blondie and related family of characters in gaming devices distributed worldwide. The initial term of the agreement was for two years with the Company’s right to extend the agreement for eight additional one-year terms upon payment of minimum royalties. The Company and Hearst Holdings entered into a renewal agreement extending the renewal term from June 1, 2013 to December 31, 2015. | |||||||
In March 2013, the Company entered into a license agreement with Hearst Holdings, Inc. to use the brand Hagar the Horrible and related family of characters in gaming devices distributed worldwide. The initial term of the agreement runs from April 1, 2013 to June 30, 2015. The Company will have the right to extend the agreement for eight additional one-year terms upon payment of minimum royalties during each term. | |||||||
In October 2014, the Company entered into a license agreement with Paws, Inc. to use the brand Garfield and associated family of characters in gaming devices distributed worldwide, except in the embargo countries of Cuba, Iran and Sudan. The initial term of the agreement runs from December 1, 2014 to November 30, 2017 and is subject to a guaranteed minimum royalty of $75,000. In December 2014, the Company paid $25,000 as a non-refundable advance against the guaranteed royalty with an additional $25,000 payable before November 1, 2015 and another $25,000 payable before November 1, 2016. The guaranteed advanced payments are recoupable out of royalties earned on the license. | |||||||
In November 2014, the Company entered into a license agreement with Hearst Holdings, Inc. for the worldwide distribution of gaming devices using Flash Gordon and associated family of characters. The initial term of the agreement runs from November 1, 2014 to October 31, 2017 with royalties based on a percentage of revenues earned on the license, payable on a quarterly basis commencing January 31, 2016. | |||||||
At December 31, 2014, the Company had total license fee commitments and advance payments made as follows: | |||||||
Minimum | |||||||
Commitments | |||||||
Total royalty and license fee commitments | $ | 81,250 | |||||
Advances made | -31,250 | ||||||
Potential future payments | $ | 50,000 | |||||
As of December 31, 2014, the Company estimates that potential future royalty payments will be as follows: | |||||||
Year ending December 31, | Minimum | ||||||
Commitments | |||||||
2015 | $ | 25,000 | |||||
2016 | 25,000 | ||||||
Potential future payments | $ | 50,000 | |||||
Stockholders_Deficit
Stockholdersb Deficit | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PaymentOnCapitalLease | |||||||||
Stockholdersb Deficit | Note 7. Stockholders’ Deficit | ||||||||
Stock Option Plan: On March 8, 2006, Lightning Poker adopted an equity incentive plan to enable Lightning Poker to offer key employees, consultants and directors equity interests in Lightning Poker, thereby helping to attract, retain and motivate such persons to exercise their best efforts on behalf of Lightning Poker. After the Merger, the options previously granted by Lightning Poker were exchanged for options to buy the Company's stock under the Company's 2007 Equity Incentive Plan (the "Stock Plan") having substantially the same terms. The options are granted at the discretion of the Board of Directors and, at December 31, 2014, the maximum aggregate number of shares issuable under the Stock Plan was 2,500,000. The purchase price of each option will be determined by the Board of Directors at the time the option is granted, but in no event will be less than 100% of the fair market value of the common stock at the time of grant. Options granted will not be exercisable after 10 years from the grant date. | |||||||||
Options generally vest at 20% per year starting from the grant date and are fully vested after five years. The options can be exercised in partial or full amounts upon a change in control and at such other times as specified in the award agreements. | |||||||||
Expense relating to the stock option plan was $5,928 and $15,403 for the years ended December 31, 2014, and 2013, respectively. | |||||||||
A summary of option transactions in 2014 and 2013 is as follows: | |||||||||
Shares | Weighted | ||||||||
Average | |||||||||
Exercise Price | |||||||||
Options at January 1, 2013 | 1,856,000 | $ | 1.35 | ||||||
Options granted | — | — | |||||||
Options cancelled | (308,000 | ) | 1.03 | ||||||
Options at December 31, 2013 | 1,548,000 | 1.41 | |||||||
Options granted | — | — | |||||||
Options cancelled | (350,000 | ) | 0.63 | ||||||
Options at December 31, 2014 | 1,198,000 | 1.64 | |||||||
Options exercisable at December 31, 2014 | 1,192,000 | 1.63 | |||||||
Shares available for grant at December 31, 2014 | 1,302,000 | ||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility is based upon publicly traded companies with similar characteristics. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. There were no options granted during 2014 or 2013. | |||||||||
Stock-based compensation expense is recognized in the Statements of Operations based on awards ultimately expected to vest and may be reduced for estimated forfeitures. There was no adjustment in 2014 or 2013 with respect to forfeited awards.The following table summarizes information with respect to stock options outstanding at December 31, 2014: | |||||||||
Options Outstanding | Vested Options | ||||||||
Weighted | |||||||||
Average | Weighted | Weighted | Weighted | ||||||
Remaining | Average | Aggregate | Average | Average | Aggregate | ||||
Contractual | Exercise | Intrinsic | Contractual | Exercise | Intrinsic | ||||
Number | Life (Years) | Price | Value | Number | Term (Years) | Price | Value | ||
1,198,000 | 3 | $1.64 | - | 1,192,000 | 3 | $1.63 | - | ||
The following table summarizes information with respect to stock options outstanding at December 31, 2013: | |||||||||
Options Outstanding | Vested Options | ||||||||
Weighted | |||||||||
Average | Weighted | Weighted | Weighted | ||||||
Remaining | Average | Aggregate | Average | Average | Aggregate | ||||
Contractual | Exercise | Intrinsic | Contractual | Exercise | Intrinsic | ||||
Number | Life (Years) | Price | Value | Number | Term (Years) | Price | Value | ||
1,548,000 | 3.5 | $1.41 | - | 1,408,000 | 3.5 | $1.48 | - | ||
As of December 31, 2014, there was approximately $600 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Plan. The cost is expected to be recognized over a weighted-average period of .6 years. | |||||||||
Warrants: In accordance with the loans obtained by the Company, the lender holds warrants to purchase 12,151,385 shares of the Company’s common stock at a price of $1.00 per share, expiring at various times from April 2016 through October 2019. The purchase price shall be subject to adjustment from time to time pursuant to the respective provisions of the warrant agreements. The Company calculates the value of these warrants at the time of issuance using a Binomial pricing model. | |||||||||
The following table is a summary of the Company’s warrant activity for the years ended December 31, 2014 and 2013: | |||||||||
Warrants | Weighted | ||||||||
Outstanding | Average | ||||||||
Exercise | |||||||||
Price | |||||||||
Outstanding at January 1, 2013 | 10,901,385 | 1 | |||||||
Warrants granted | 1,000,000 | 1 | |||||||
Warrants exercised | — | — | |||||||
Warrants cancelled | — | — | |||||||
Warrants at December 31, 2013 | 11,901,385 | 1 | |||||||
Warrants granted | 250,000 | 1 | |||||||
Warrants exercised | — | — | |||||||
Warrants cancelled | — | — | |||||||
Warrants at December 31, 2014 | 12,151,385 | 1 | |||||||
Warrants exercisable at December 31, 2014 | 12,151,385 | ||||||||
The following table summarizes information with respect to warrants outstanding at December 31, 2014: | |||||||||
Warrants Outstanding | Vested Warrants | ||||||||
Weighted | |||||||||
Average | Weighted | Weighted | |||||||
Remaining | Average | Aggregate | Average | Aggregate | |||||
Contractual | Exercise | Intrinsic | Exercise | Intrinsic | |||||
Number | Life (Years) | Price | Value | Number | Price | Value | |||
12,151,385 | 1.7 | $1.00 | - | 12,151,385 | $1.00 | - | |||
The following table summarizes information with respect to warrants outstanding at December 31, 2013: | |||||||||
Warrants Outstanding | Vested Warrants | ||||||||
Weighted | |||||||||
Average | Weighted | Weighted | |||||||
Remaining | Average | Aggregate | Average | Aggregate | |||||
Contractual | Exercise | Intrinsic | Exercise | Intrinsic | |||||
Number | Life (Years) | Price | Value | Number | Price | Value | |||
11,901,385 | 2.6 | $1.00 | - | 11,901,385 | $1.00 | - | |||
The weighted average fair value per share of each warrant granted for the years ended December 31, 2014 and 2013 was $.01. | |||||||||
The fair value of each warrant is estimated on the date of grant using the Binomial pricing model, with the following assumptions for the years ended December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Weighted average volatility | 40.5. | % | 41.3 | % | |||||
Expected dividend yield | — | — | |||||||
Expected term (in years) | 1.7 | 2.6 | |||||||
Weighted average risk free interest rate | 0.5 | % | 0.6 | % | |||||
In October 2014, the Company borrowed $250,000 from a related party. The note is due on June 30, 2017 together with interest at the rate of 8% per annum. The note may be converted to Nonvoting Stock at $1.00 per share at the discretion of the lender. A warrant to purchase 250,000 shares of common stock was issued concurrently with the note. The aggregate fair market value of the warrant at the time of issuance was $1,077. | |||||||||
In January 2013 and May 2013, the Company borrowed $500,000 on each occurrence from a related party. The notes are due on June 30, 2017 and include interest at the rate of 8% per annum and may be converted to Nonvoting Stock at $1.00 per share at the discretion of the lender. Warrants to purchase 1,000,000 shares of common stock were issued on these notes in December 2013. The aggregate fair market value of the warrants at time of issuance was $3,935. | |||||||||
In accordance with various loans obtained by the Company, the lender holds warrants to purchase the following maximum number of shares as of December 31, 2014: | |||||||||
Shares of Common Stock | Price per Share | Expiration Date | |||||||
8,901,385 | $1.00 | 12-Apr-16 | |||||||
1,000,000 | $1.00 | 17-Jan-17 | |||||||
1,000,000 | $1.00 | 6-Jul-17 | |||||||
500,000 | $1.00 | 30-Jan-18 | |||||||
500,000 | $1.00 | 6-May-18 | |||||||
250,000 | $1.00 | 8-Oct-19 | |||||||
The purchase price is subject to adjustment from time to time pursuant to the provisions of the respective warrant agreements. The warrants were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation. The warrants do not qualify for hedge accounting, and as such, all future changes in the fair value of these warrants will be recognized currently in earnings until such time as the warrants are exercised or expire. The fair value of the warrants is included in other long term liabilities in the accompanying balance sheets. Also, certain notes contain a right to convert the principal amount of the note and accrued interest into shares of common stock. The Company accounts for the value of the warrants and the debt conversion right in the same manner used for stock-based compensation. In accordance with FASB guidance, warrants and the debt conversion feature are classified within Level 3 because they are valued using the Binomial model. Some of the inputs to these valuations are unobservable in the market and are significant. | |||||||||
The changes in Level 3 liabilities measured at fair value on a recurring basis are summarized as follows: | |||||||||
Fair Value of | Fair Value of | ||||||||
Debt | Warrants | ||||||||
Conversion Feature | |||||||||
Balance January 1, 2013 | $ | — | $ | 35,154 | |||||
Fair value of warrants issued in 2013 | — | 3,935 | |||||||
Net change in fair value | — | (7,295 | ) | ||||||
Balance December 31, 2013 | — | 31,794 | |||||||
Fair value of warrants issued in 2014 | — | 1,077 | |||||||
Net change in fair value | — | (5,926 | ) | ||||||
Balance December 31, 2014 | $ | — | $ | 26,945 | |||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PaymentOnCapitalLease | |||||||||
Income Taxes | Note 8. Income Taxes | ||||||||
The components of the income tax provision (benefit) for the years ended December 31, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Current tax expense: | |||||||||
Federal | $ | — | $ | — | |||||
State | — | — | |||||||
$ | — | $ | — | ||||||
Deferred tax benefit: | |||||||||
Federal | $ | 459,000 | $ | 507,000 | |||||
State | 148,000 | 164,000 | |||||||
Valuation reserve | (607,000 | ) | (671,000 | ) | |||||
$ | — | $ | — | ||||||
Net deferred tax assets consist of the following components as of December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Deferred tax asset: | |||||||||
Net operating loss carryforward | $ | 7,513,000 | $ | 7,322,000 | |||||
Accounts receivable reserves | 2,000 | 3,000 | |||||||
Property and equipment | (109,000 | ) | (129,000 | ) | |||||
Accrued expenses | 3,198,000 | 2,750,000 | |||||||
Impairment charge | 296,000 | 296,000 | |||||||
Start-up costs | 33,000 | 37,000 | |||||||
Stock based compensation | 62,000 | 61,000 | |||||||
Inventory reserves | 128,000 | 158,000 | |||||||
Other | 85,000 | 103,000 | |||||||
11,208,000 | 10,601,000 | ||||||||
Less valuation allowance | (11,208,000 | ) | (10,601,000 | ) | |||||
Net deferred taxes | $ | — | $ | — | |||||
A reconciliation of income tax expense at statutory rates to the income tax expense reported in the statements of operations is as follows for the years ended December 31, 2014 and 2013. | |||||||||
Year ended December 31, | |||||||||
2014 | 2013 | ||||||||
Federal tax benefit at statutory rate | $ | (524,000 | ) | $ | (582,000 | ) | |||
State tax benefit net of federal taxes | (101,000 | ) | (112,000 | ) | |||||
Expense on stock options and warrants | 2,000 | 4,000 | |||||||
Warrant valuation | (2,000 | ) | (3,000 | ) | |||||
Other | 18,000 | 22,000 | |||||||
Increase in valuation allowance | 607,000 | 671,000 | |||||||
Income tax expense | $ | — | $ | — | |||||
As of December 31, 2014, the Company has available, for federal and state income tax purposes, net operating loss (“NOL”) carryforwards of approximately $18,536,000, which expire at various times through 2034. The utilization of the NOL carryforwards is dependent upon the ability of the Company to generate sufficient taxable income during the carryforward periods. The NOL carryforwards are also subject to certain limitations on their utilization should changes in Company ownership occur. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
PaymentOnCapitalLease | |
Related Party Transactions | Note 9. Related Party Transactions |
In October 2014, the Company borrowed $250,000 from The Co-Investment Fund II, L.P. (“CI II”) to fund the purchase of twenty-five slot machine cabinets and component parts. The note is due on June 30, 2017 together with interest at the rate of 8% per annum. The note may be converted to Nonvoting Stock at $1.00 per share at the discretion of the lender. A warrant to purchase 250,000 shares of common stock was issued concurrently with the note. | |
In January 2013 and May 2013, the Company borrowed $500,000 on each occurrence from CI II. The notes are due on June 30, 2017 and include interest at the rate of 8% per annum and may be converted to Nonvoting Stock at $1.00 per share at the discretion of the lender. Warrants to purchase 1,000,000 shares of common stock were issued on these notes in December 2013. | |
On December 19, 2014, Stewart J. Greenebaum, LLC (“Greenebaum”) sold all of its legal rights, title and interest in and to the stock, notes, including all accrued interest thereon, and warrants held with respect to the Company as of that date to CI II. Among the items transferred were 1,500,000 shares of Series A Nonvoting capital stock, notes of $1,000,000 in principal including accrued interest, convertible notes of $2,000,000 in principal including accrued interest, and warrants to purchase 2,500,000 shares of common stock at $1.00 per share. | |
During the twelve months ended December 31, 2014 and 2013, respectively, interest on all of the loans including those transferred from Greenebaum to CI II as described above, amounted to $1,164,603 and $1,143,123, respectively. During 2014 and 2013, respectively, the Company made no principal or interest payments on those loans. | |
As of December 31, 2014, included in the notes held by CI II and accrued interest thereon, are notes in the principal amount of $8,750,000 and accrued interest of $3,946,538, which are convertible into shares of our common stock on the same terms and conditions of the next equity offering. | |
As of December 31, 2014, CI II holds warrants to purchase up to 12,151,385 shares of common stock at a weighted average exercise price of $1.00 per share. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events |
Recently_Issued_Pronouncements
Recently Issued Pronouncements | 12 Months Ended |
Dec. 31, 2014 | |
PaymentOnCapitalLease | |
Concentration of Risk - Major Customer | Note 10. Recently Issued Pronouncements |
In July 2013, the FASB issued authoritative guidance regarding the presentation of unrecognized tax benefits resulting from a net operating loss carryforward, a similar tax loss, or a tax credit carryforward that exist at the reporting date. The guidance requires that when such a benefit exists at the reporting date, it should be presented in the financial statements as a reduction to a deferred tax asset. To the extent the tax benefit is not available, is disallowed by jurisdictional law, or is not intended to be used by the entity at the reporting date, it should be presented as a liability and should not be combined with deferred tax assets. The guidance is effective for fiscal years beginning after December 15, 2013 and the adoption of this guidance did not have a material impact on our financial statements. | |
In May 2014, the FASB and the International Accounting Standards Board issued converged guidance on recognizing revenue from contracts with customers. The new guidance removes inconsistencies in current revenue recognition requirements, provides a framework for addressing revenue issues, improves comparability of revenue recognition across industries, entities and jurisdictions, and provides more useful information to users of financial statements through improved disclosure requirements. This guidance replaces the numerous GAAP revenue recognition requirements that are industry specific and establishes the principles to report about the nature, timing, and uncertainty of revenue from contracts with customers to users of financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2016, and the Company is assessing the impact it will have on our financial statements. | |
In August 2014, the FASB issued guidance regarding disclosures in the presentation of financial statements when the uncertainty exists about an entity’s ability to continue as a going concern. The update provides guidance in GAAP about management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Along with requiring management’s assessment of the entity’s ability to continue as a going concern, the guidance provides: | |
· a definition for the term “substantial doubt”; | |
· requires an evaluation every reporting period including interim periods; | |
· provides principles for considering the mitigating effect of management’s plans; | |
· requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; | |
· requires an express statement and other disclosures when substantial doubt is not alleviated; and | |
· requires an assessment for a period of one year after the date that the financial statements are issued. | |
The amendment is effective for the annual and interim periods ending after December 15, 2016. The Company is assessing the impact this guidance may have on our financial statements. | |
In November 2014, the FASB issued an amendment under the derivatives and hedging topic. The amendment clarifies how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. In evaluating the nature of a host contract, the amendment states that an entity should assess the substance of the relevant terms and features when considering how to weight those terms and features. Specifically, the assessment of the substance should include consideration of the characteristics of the terms and features themselves, the circumstances under which the hybrid financial instrument was issued, and the potential outcomes of the hybrid financial instrument. | |
The amendment is effective for the fiscal years and interim periods beginning after December 15, 2015. The Company is assessing the impact this guidance may have on our financial statements. | |