Form 10-Q TABLE TRAC INC For: Sep 30

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

Form 10-Q

 

☒   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2019 or

 

☐   Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission File Number:   001-32987

 

Table Trac, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada		88-0336568
(State or Other Jurisdiction of Incorporation or		(I.R.S. Employer Identification Number)
Organization)

 

6101 Baker Road, Suite 206, Minnetonka, Minnesota 55345

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (952) 548-8877

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which register
N/A		N/A		N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

 

As of November 13, 2019, the registrant had outstanding 4,503,669 shares of common stock, $.001 par value per share.

 

 

 

Table Trac, Inc.

 

Index

 

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures About Market Risk	18
Item 4. Controls and Procedures	18
PART II. OTHER INFORMATION
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 6. Exhibits	19
SIGNATURES	20

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

TABLE TRAC, INC.

 

CONTENTS

 

	Page
CONDENSED FINANCIAL STATEMENTS (Unaudited)
Condensed Balance Sheets	2
Condensed Statements of Operations	3
Condensed Statements of Stockholders’ Equity	4
Condensed Statements of Cash Flows	5
Notes to Condensed Financial Statements	6

 

 

 

 

TABLE TRAC, INC.

CONDENSED BALANCE SHEETS

 

		September 30, 2019				December 31, 2018
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	1,729,795			$	1,290,797
Accounts receivable, net of allowance for doubtful accounts of $198,623 at September 30, 2019 and $165,840 at December 31, 2018			2,754,624				2,866,474
Inventory			1,412,711				762,165
Prepaid expenses and other current assets			377,270				291,837
TOTAL CURRENT ASSETS			6,274,400				5,211,273
LONG-TERM ASSETS
Property and equipment, net			88,105				86,656
Operating lease right-of-use assets			92,334				0
Contract and other long-term assets			404,482				528,401
Long-term accounts receivable – financed contracts			897,781				1,030,354
TOTAL LONG-TERM ASSETS			1,482,702				1,645,411
TOTAL ASSETS		$	7,757,102			$	6,856,684
LIABILITIES AND  STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	211,508			$	387,868
Payroll liabilities			222,415				34,388
Current portion of operating lease liabilities			55,643				0
Notes payable			0				2,221
Customer deposits			520,029				334,784
Income taxes payable			237,727				53,027
TOTAL CURRENT LIABILITIES			1,247,322				812,288
LONG-TERM LIABILITIES
Operating lease liabilities			39,507				0
Contract liabilities			1,431,066				1,690,660
Deferred tax liability			449,000				555,000
TOTAL LIABILITIES			3,166,895				3,057,948
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value; 25,000,000 shares authorized:  4,656,734 shares issued; and 4,503,669 and 4,528,669 shares outstanding at September 30, 2019 and December 31, 2018, respectively.			4,504				4,529
Additional paid-in capital			1,833,173				1,795,955
Retained earnings			3,000,531				2,194,778
			4,838,208				3,995,262
Treasury stock, 153,065 and 128,065 shares (at cost) at September 30, 2019 and December 31, 2018, respectively			(248,001	)			(196,526	)
TOTAL STOCKHOLDERS’ EQUITY			4,590,207				3,798,736
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	7,757,102			$	6,856,684

 

See notes to condensed unaudited financial statements.

 

 

TABLE TRAC, INC.

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2019				2018				2019				2018
Revenues		$	2,438,819			$	2,329,681			$	6,061,788			$	6,414,084
Cost of sales			371,885				582,760				1,346,328				2,082,986
Gross profit			2,066,934				1,746,921				4,715,460				4,331,098
Operating expenses:
Selling, general and administrative			1,416,651				1,112,318				3,773,771				3,352,227
Income from operations			650,283				634,603				941,689				978,871
Loss on currency exchange			0				(1,420	)			0				(5,249	)
Interest income			10,752				11,825				39,064				52,087
Income before taxes			661,135				645,008				980,753				1,025,709
Income tax expense			130,000				180,600				175,000				330,600
Net income		$	531,035			$	464,408			$	805,753			$	695,109
Net income per share - basic		$	0.12			$	0.10			$	0.18			$	0.16
Net income per share - diluted		$	0.12			$	0.10			$	0.18			$	0.16
Weighted-average shares outstanding - basic			4,493,777				4,468,602				4,497,435				4,474,531
Weighted-average shares outstanding - diluted			4,500,862				4,475,982				4,503,138				4,482,148

 

See notes to condensed unaudited financial statements.

 

 

TABLE TRAC, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

 

		Common Stock				Additional Paid-in Capital				Retained Earnings				Treasury Stock				Total
BALANCE, December 31, 2017		$	4,512			$	1,809,511			$	1,679,813			$	(146,360	)		$	3,347,476
Stock compensation expense			0				7,344				0				0				7,344
2018 Shares repurchased into treasury			(39	)			0				0				(92,701	)			(92,740	)
Common stock issued to employee from treasury			50				(50,599	)			0				50,549				0
Q1 2018  net loss			0				0				(179,836	)			0				(179,836	)
BALANCE, March 31, 2018		$	4,523			$	1,766,256			$	1,499,977			$	(188,512	)		$	3,082,244
Stock compensation expense			0				7,344				0				0				7,344
2018 Shares repurchased into treasury			(10	)			0				0				(19,490	)			(19,500	)
Common stock issued for services from treasury			5				9,371				0				1,874				11,250
Q2 2018  net income			0				0				410,538				0				410,538
BALANCE, June 30, 2018		$	4,518			$	1,782,971			$	1,910,515			$	(206,128	)		$	3,491,876
Stock compensation expense			0				7,344				0				0				7,344
Q3 2018  net income			0				0				464,408				0				464,408
BALANCE, September 30, 2018		$	4,518			$	1,790,315			$	2,374,922			$	(206,128	)		$	3,963,627
BALANCE, December 31, 2018		$	4,529			$	1,795,955			$	2,194,778			$	(196,526	)		$	3,798,736
Stock compensation expense			0				12,407				0				0				12,407
Q1 2019 net income			0				0				7,955				0				7,955
BALANCE, March 31, 2019		$	4,529			$	1,808,362			$	2,202,733			$	(196,526	)		$	3,819,098
Stock compensation expense			0				12,405				0				0				12,405
Q2 2019 net income			0				0				266,763				0				266,763
BALANCE, June 30, 2019		$	4,529			$	1,820,767			$	2,469,496			$	(196,526	)		$	4,098,266
Stock compensation expense			0				12,406				0				0				12,406
2019 Shares repurchased into treasury			(25	)			0				0				(51,475	)			(51,500	)
Q3 2019  net income			0				0				531,035				0				531,035
BALANCE, September 30, 2019		$	4,504			$	1,833,173			$	3,000,531			$	(248,001	)		$	4,590,207

 

See notes to condensed unaudited financial statements.

 

 

TABLE TRAC, INC.

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

 

		For the Nine Months Ended September 30,
		2019				2018
OPERATING ACTIVITIES
Net income		$	805,753			$	695,109
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			33,996				34,722
Gain on sale of asset			(25,713	)			0
Deferred income taxes			(106,000	)			235,000
Bad debt expense			115,000				84,592
Stock issued for services			0				11,250
Stock compensation expense			37,218				22,032
Changes in operating assets and liabilities:
Accounts receivable			117,751				(198,587	)
Inventory			(650,546	)			(36,827	)
Prepaid expenses and other assets			66,237				407,343
Accounts payable and accrued expenses			(216,780	)			(396,368	)
Payroll liabilities			188,027				27,508
Contract liabilities and customer deposits			(28,479	)			(1,313,908	)
Income taxes payable (receivable)			184,700				(128,000	)
Net cash provided by (used in) operating activities			521,164				(556,135	)
INVESTING ACTIVITIES
Proceeds from sale of Colombian receivables			7,000				0
Capital expenditures			(35,445	)			(20,615	)
Net cash used in investing activities			(28,445	)			(20,615	)
FINANCING ACTIVITIES
Payments on notes payable			(2,221	)			0
Repurchase of common stock			(51,500	)			(112,240	)
Net cash used in financing activities			(53,721	)			(112,240	)
NET INCREASE (DECREASE) IN CASH			438,998				(688,990	)
CASH
Beginning of period			1,290,797				1,322,743
End of period		$	1,729,795			$	633,753
Non-cash investing and financing activities:
Treasury stock cost related to compensation		$	0			$	52,474
Note from sale of Colombian receivables		$	800			$	0
Supplemental cash flow information:
Operating cash outflow for operating lease		$	46,367			$	0

 

See notes to condensed unaudited financial statements.

 

 

TABLE TRAC, INC.

 

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

1.	Nature of Business and Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements of Table Trac, Inc. (the “Company,” or “Table Trac”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The balance sheet as of September 30, 2019 and the statements of operations and stockholders’ equity for the three and nine months ended September 30, 2019 and 2018, and the statements of cash flows for the nine months ending September 30, 2019 and 2018 are unaudited but include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position at such date and the operating results and cash flows for those periods. Certain information normally included in financial statements and related footnotes prepared in accordance with generally accepted accounting principles has been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Table Trac Annual Report on Form 10-K for the year ended December 31, 2018.

 

Nature of Business

 

Table Trac was formed under the laws of the State of Nevada in June 1995. The Company has offices in Minnetonka, Minnesota and Oklahoma City, Oklahoma. The Company has developed and sells an information and management system that automates and monitors various aspects of the operations of casinos.

 

Table Trac provides system sales and technical support to casinos. System sales include installation, custom casino system configuration, and training. In addition, license and technical support are provided under separate license and service contracts.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company’s use of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations, realizability of accounts receivable, the valuation of deferred tax assets and liabilities, deferred revenue and costs, and inventory valuation. Actual results could differ from those estimates.

 

The Company’s significant accounting policies are described in Note 1 of the financial statement included in its Annual Report on Form 10-K for the year ended December 31, 2018.

 

Revenue

 

The Company derives revenues from the sales of systems, licenses and maintenance fees, services, and rental agreements.

 

System Revenue

 

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected, when applicable from customers, which are subsequently remitted to governmental authorities.

 

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is a unit of account in ASC 606. A majority of the Company’s systems sales have multiple performance obligations including an obligation to deliver a casino management system and another to provide maintenance services. For system sales with multiple performance obligations, the Company allocates revenue to each performance obligation based on its SSP. The Company generally determines the SSP based on the price charged to customers. The Company does offer its customers contracts with extended payment terms representing a significant financing component.  The Company must evaluate if any extended payment terms in the contract is an indicator of the transaction price not being probable. The Company only includes the amount for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved.  The Company occasionally enters into a contract that includes multiple sites; management has determined that each site installation is a separate performance obligation. In these instances the Company recognizes revenue upon completion of each performance obligation. In addition, the Company has a contract with a reseller who purchases and resells the Company’s products; monthly the reseller notifies the Company of their successful installations, and submits an invoice to the Company for those installations. Provided all other revenue recognition steps have been satisfied, the Company recognizes the revenue if payment of a significant portion of the contract consideration is due within 12 months of the delivery of the product.  System contracts that do not meet this criteria are deferred and recognized when the uncertainty is resolved, which is consistent with when contractual payments become due. The Company also analyzes its standard business practice of using long-term contracts and the history of collecting on extended payment term contracts which include a financing component which is usually a market interest rate. The associated interest income is reflected accordingly on the statement of operations without making concessions for determining if revenue should be recognized. 

 

Maintenance Revenue

 

Maintenance revenue is recognized ratably over the contract period. The stand-alone selling price for maintenance is based upon the renewal rate for contracted services.

 

Service Revenue and other revenue

 

Service revenue is recognized after the services are performed and collection of the resulting receivable is reasonably assured. The stand-alone selling price for service revenue is established based upon actual selling prices for the services or prior similar arrangements.

 

The Company offers qualified customers a licensing agreement. Licensing revenue is recognized after the intellectual property (CMS system), the performance obligation, is delivered and in its operational and functional state. The stand-alone selling price for licensing revenue is established based upon actual selling prices for the license. The Company may offer customers a rental contract.  Revenues are billed monthly on a per-game per-day basis. There is an option to purchase the system after the rental contract expires at a pre-determined residual value.

 

The following table summarizes disaggregated revenues by major product line for the three months ended September 30, 2019 and 2018, respectively:

 

		Three Months Ended September 30,
		2019				2018				2019				2018
										(percent of revenues)
System revenue		$	407,399			$	1,578,226				16.7	%			67.7	%
Maintenance revenue			735,023				684,738				30.1	%			29.4	%
Service and other revenue			1,296,397				66,717				53.2	%			2.9	%
Total revenues		$	2,438,819			$	2,329,681				100.0	%			100.0	%

 

 

The following table summarizes disaggregated revenues by major product line for the nine months ended September 30, 2019 and 2018, respectively:

 

		Nine Months ended September 30,
		2019				2018				2019				2018
										(percent of revenues)
System revenue		$	2,564,781			$	4,318,205				42.3	%			67.3	%
Maintenance revenue			2,099,295				1,938,446				34.6	%			30.2	%
Service and other revenue			1,397,712				157,433				23.1	%			2.5	%
Total revenues		$	6,061,788			$	6,414,084				100.0	%			100.0	%

 

See Major Customers for disaggregated revenue information about primary geographical markets.

 

Significant Judgments

 

Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

 

Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services.

 

In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP.  

 

We evaluated the contractual payment terms of all system sales generated during the year to determine the proper recognition or deferral of revenue. We believe the 12 month subsequent collection threshold of 67% or greater is the most appropriate for the Company to constrain revenue.

 

We evaluate the interest rates in customer contracts with extended payment terms, representing a significant financing component. These rates range from approximately 1% to 6% and we believe those to be appropriate market interest rates for the financing component.

 

Deferred System Sales Costs

 

Incremental cost to obtain and fulfil a contract are deferred and amortized over the related system contract term. These costs are recognized on a straight-line basis over the term of the contract which is generally 18-60 months beginning when revenues are generated. These costs are the most significant component of contract and other long-term assets on the balance sheet, and are $404,482 and $528,401 as of September 30, 2019 and December 31, 2018, respectively.

 

Accounts Receivable / Allowance for Doubtful Accounts

 

Accounts receivable are initially recorded at the invoiced amount and carried on the balance sheet at net realizable value, which includes foreign currency translation as of each balance sheet date. Accounts receivable include unsecured regular customer receivables and unsecured amounts from financed contracts coming due within 12 months. Amounts from financed contracts due beyond 12 months are recorded as “Long-term accounts receivable – financed contracts.”  Interest is recorded upon receipt to other income on the statements of operations. An allowance for doubtful accounts is recorded when the Company believes the amounts may not be collected. Management believes that receivables, net of the allowance for doubtful accounts, are fully collectible. Accounts receivable are written off when management determines collection is no longer likely. While the ultimate result may differ, management believes future write-offs not included in the allowance will not have a material impact on the Company’s financial position.

 

 

Major Customers

 

For the nine month period ended September 30, 2019, two customers comprised approximately 39% of revenue compared to two customers who accounted for approximately 45% for the nine months ending September 30, 2018. At September 30, 2019, three customers comprised approximately 40% of accounts receivable compared to three customers accounting for approximately 47% at September 30, 2018. The following table summarizes major customer’s information for the nine months ended September 30, 2019 and 2018:

 

		For the Nine Months ended September 30
		2019								2018
		% Revenues				% AR				% Revenues				% AR
Major			38.9	%			40.2	%			44.7	%			46.9	%
All Others			61.1	%			59.8	%			55.3	%			53.1	%
Total			100.0	%			100.0	%			100.0	%			100.0	%

 

For the nine month periods ending September 30, 2019 and 2018, sales to customers in the United States represent 68.6% and 91.2% of total revenues, respectively. The Company does derive a portion of its revenue from foreign customers. For the nine month periods ending September 30, 2019 and 2018, sales to customers in Japan represent 20% and 0% of total revenues, respectively.

 

The following table summarizes the major customer information for the three months ended September 30, 2019 and 2018:

 

		For the Three Months Ended September 30
		2019				2018
		% Revenues				% Revenues
Major			49.2	%			54.2	%
All Others			50.8	%			45.8	%
Total			100.0	%			100.0	%

 

For the three month periods ending September 30, 2019 and 2018, sales to customers in the United States represent 41.3% and 95.6% of total revenues, respectively. For the three month periods ending September 30, 2019 and 2018, sales to customers in Japan represent 49.2% and 0% of total revenues, respectively.

 

A major customer is defined as any customer that represents at least 10% of revenue or outstanding account receivable for a given period.

 

Inventory

 

Inventory, consisting of finished goods, is stated at the lower of cost or net realizable value. The average cost method, which approximates the first in, first out method, is used to value inventory. Inventory is reviewed annually for the lower of cost or net realizable value and obsolescence. Any inventory item found to be above net realizable value or considered obsolete is written down accordingly. The inventory value as of September 30, 2019 was $1,412,711, which included work-in-process of $710. The inventory value was $762,165 as of December 31, 2018, which included work-in-process of $50,824. The Company had no obsolescence reserve at September 30, 2019 or December 31, 2018. At September 30, 2019 the Company recorded a prepayment for inventory yet to be received of approximately $251,777 as a component of prepaid expenses and other current assets.

 

Research and Development

 

The Company expenses all costs related to research and development as incurred. Research and development expense was $57,040 and $28,827 for the three months ended September 30, 2019 and 2018, and $73,044 and $85,411 for the nine months ended September 30, 2019 and 2018, respectively. Research and development expenses are included in selling, general and administrative expenses on the statements of operations.

 

 

Recently Adopted Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (‘FASB’) issued a new standard related to revenue recognition. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

 

We adopted the standard effective January 1, 2018, using the modified retrospective method, which did not require us to restate each prior reporting period presented. We elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption.

 

Effective January 1, 2019, we adopted the FASB Accounting Standards Update (‘ASU’) 2016-02, Leases, which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The original guidance required application on a modified retrospective basis with the earliest period presented. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842, which included an option to not restate comparative periods in transition and elect to use the effective date of ASC 842, Leases, as the date of initial application of transition, which we elected. As a result of the adoption of ASC 842 on January 1, 2019, we recorded both operating lease right-of-use (‘ROU’) assets and lease liabilities of approximately $136,000. The adoption of ASC 842 had an immaterial impact on our Condensed Statement of Operations and Condensed Statement of Cash Flows for the nine-month period ended September 30, 2019. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward the historical lease classification.

 

2.	Accounts Receivable

 

Accounts receivable consisted of the following at:

 

		September 30, 2019				December 31, 2018
Accounts receivable under normal 30 day terms		$	2,208,622			$	2,165,820
Financed contracts:
Current portion of long-term			744,624				866,494
Long-term, net of current portion			897,781				1,030,354
Total accounts receivable			3,851,027				4,062,668
Less allowance for doubtful accounts			(198,623	)			(165,840	)
Accounts receivable, net		$	3,652,405			$	3,896,828
Presented on the balance sheet as:
Accounts receivable, net		$	2,754,624			$	2,866,474
Long-term accounts receivable - financed contracts			897,781				1,030,354

 

The allowance for financed and trade receivable represents management’s estimate of probable losses in our trade and financed receivables as of the date of the financial statements. The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be inherent of the trade and financed receivables, but that have not been specifically identified.

 

Accounts receivable includes financed contracts at September 30, 2019 and December 31, 2018 which are $1,642,405 and $1,896,848, respectively, offset by contract liabilities on the balance sheets of $1,431,066 and $1,690,660, respectively.

 

 

A roll-forward of the Company’s allowance for doubtful accounts for the periods presented is as follows:

 

		September 30, 2019				December 31, 2018
Accounts receivable allowance, beginning of year		$	165,840			$	181,473
Provision adjustment			115,000				125,405
Write-off			(82,217	)			(141,038	)
Accounts receivable allowance, end of period		$	198,623			$	165,840

 

The allowance for doubtful accounts is $42,623 and $104,040 for the trade receivables at September 30, 2019 and December 31, 2018, respectively, and $156,000 and $61,800 for the financed contracts at September 30, 2019 and December 31, 2018, respectively.

 

3.	Operating Leases

 

We lease space under non-cancelable operating leases for our two office locations. These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions.

 

Our leases include one or more options to renew. The exercise of lease renewal options are included in our ROU assets and lease liabilities if they are reasonably certain of exercise.

 

Our leases do not provide an implicit rate; we use our incremental borrowing rate of 5% which is based on the information available at the date of adoption in determining the present value of the lease payments.

 

The cost components of our operating leases were $15,569 and $46,607 for the three months and nine months ended September 30, 2019, respectively.

 

Maturities of our lease liabilities for all operating leases are as follows as of September 30, 2019:

 

		Leased Facilities
2019 (remainder)		$	15,293
2020			57,436
2021			28,632
Total Lease Payments			101,361
Less: Interest			(6,211	)
Present value of lease liabilities		$	95,150

 

The weighted average remaining lease terms equals 1.63 years as of September 30, 2019.

 

4.	Stockholders’ Equity

 

Stock Repurchase Program

 

On January 7, 2018, the Company’s Board of Directors approved the repurchase of its outstanding shares, using management’s discretion, of its common stock from private unsolicited sellers’ in the open market. On May 10, 2018, the Company’s Board of Directors approved the repurchase of its outstanding common shares in an aggregate amount of up to 200,000 shares not to exceed $600,000, in both private unsolicited and open–market transactions, until December 31, 2019. Company insiders are prohibited from participating in the stock repurchase program. Approximately 170,000 shares may yet be purchased under the program.

 

During the nine month period ended September 30, 2019, the Company repurchased 25,000 shares for its treasury at an average price of $2.06.

 

 

Stock Compensation

 

On January 8, 2018, the Board of Directors of Table Trac Inc. appointed Randy Gilbert as the Company’s Chief Financial Officer and awarded him 50,000 Restricted Stock shares. These shares are subject to a four year vesting schedule as follows: 20,000 shares on January 8, 2019 and 10,000 shares in each subsequent year. Grant date fair value of $117,500 is recognized equally over the vesting period as stock compensation expense as a component of selling, general and administration expense.

 

Additionally, on December 12, 2018, the Board of Directors of Table Trac Inc. approved a resolution which awarded 9,000 Restricted Stock shares to employees and the new Board of Directors. These shares are subject to a one year vesting period.

 

The unvested stock compensation expense is expected to be recognized over a weighted average period of approximately two years. As of September 30, 2019, the remaining unrecognized stock compensation expense approximated $66,000.

 

The Company has no stock options outstanding as of September 30, 2019 and December 31, 2018.

 

The Company has 39,000 shares of restricted stock outstanding as of September 30, 2019 and 59,000 restricted shares outstanding at December 31, 2018.

 

5.	Income Tax

 

The Company accounts for income taxes by following the asset and liability approach to accounting for income taxes. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of the tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. Management believes that any write-off not allowed will not have a material impact on the Company’s financial position.

 

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Based on its evaluation, the Company believes that it has no significant unrecognized tax positions. The Company’s evaluation was performed for the tax years ended December 31, 2015 through 2018, which are the tax years that remain subject to examination by major tax jurisdictions as of September 30, 2019. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months.

 

The Company may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to its financial results. In accordance with current guidance, the Company classifies interest and penalties as income tax expense is incurred.

 

6.	Earnings Per Share

 

The Company computes earnings per share under two different methods, basic and diluted, and presents per-share data for all periods in which statements of operations are presented. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding.

 

 

The following table provides a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share for the nine months ended September 30, 2019 and 2018:

 

		For the Nine Months Ended September 30,
		2019				2018
Basic and diluted earnings per share calculation:
Net income to common stockholders		$	805,753			$	695,109
Weighted average number of common shares outstanding - basic			4,497,435				4,474,531
Basic net income per share		$	0.18			$	0.16
Weighted average number of common shares outstanding - diluted			4,503,138				4,482,148
Diluted net income per share		$	0.18			$	0.16

 

The following table provides a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share for the three months ended September 30, 2019 and 2018:

 

		For the Three Months Ended September 30,
		2019				2018
Basic and diluted earnings per share calculation:
Net income to common stockholders		$	531,035			$	464,408
Weighted average number of common shares outstanding - basic			4,493,777				4,468,602
Basic net income per share		$	0.12			$	0.10
Weighted average number of common shares outstanding - diluted			4,500,862				4,475,982
Diluted net income per share		$	0.12			$	0.10

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth below should be read in conjunction with our audited financial statements, and notes thereto, contained in our Form 10-K filed with the SEC on March 28, 2019 relating to our year ended December 31, 2018.

 

Forward-Looking Statements

 

Some of the statements made in this section of our report are forward-looking statements. These forward-looking statements generally relate to and are based upon our current plans, expectations, assumptions and projections about future events.  Our management currently believes that the various plans, expectations, and assumptions reflected in or suggested by these forward-looking statements are reasonable.  Nevertheless, all forward-looking statements involve risks and uncertainties and our actual actions or future results may be materially different from our plans, objectives or expectations, or our assumptions and projections underlying our present plans, objectives and expectations, which are expressed in this report.

 

In light of the foregoing, prospective investors are cautioned that the forward-looking statements included in this filing may ultimately prove to be inaccurate - even materially inaccurate.  Because of the significant uncertainties inherent in such forward-looking statements, the inclusion of such information should not be regarded as a representation or warranty by Table Trac or any other person that our objectives, plans, expectations or projections that are contained in this filing will be achieved in any specified time frame, if ever.

 

General Overview

 

Table Trac, Inc. is a Nevada corporation, formed on June 27, 1995, with principal offices in Minnetonka, Minnesota.

 

The Company has developed and patented (U.S. patent # 5,957,776) a proprietary information and management system (called our “Table Trac” system) that automates and monitors the operations of casino table game operations. In addition to its table games management system, Table Trac has been adding functionality to related casino system modules for guest rewards and loyalty club, marketing analysis, guest service, promotions, administration / management, vault / cage management and audit / accounting tasks. Aggregated together, all of these modules have become the “Casino Trac” product, a full-featured Casino Management System (CMS) offering what we believe to be a powerful combination of value, efficiency and reliability for casinos seeking to add or upgrade their casino systems.

 

In May of this year the Company received Patent Pending status on its April 2017 application 15/946,227 “SYSTEMS AND METHODS OF FACILITATING INTERACTIONS BETWEEN AN ELECTRONIC GAMING MACHINE, GAME PLAYER, AND A CONTROL SYSTEM”.  In addition, the Company renewed its Trademark claim for “Table Trac” which was granted July 31, 2018 Reg. No. 5,529,779 and made a new Trademark claim on its “CasinoTrac” brand which is pending.

 

The Company sells systems and technical support to casinos. The open architecture of the Table Trac system is designed to provide operators with a scalable and flexible system that can interconnect and operate with most third-party software or hardware. Key products and services include modules designed to drive player tracking programs and kiosk promotions, as well as vault and cage controls. The Company’s systems are designed to meet strict auditing, accounting and regulatory requirements applicable to the gaming industry. The Company has developed a patented, real-time system that automates and monitors the operations of casino gaming tables. The Company continues to increase its market share by expanding its product offerings to include new system features, and ancillary products.

 

 

During the third quarter of 2019, the Company delivered four casino management systems and one table management system. In addition, Table Trac signed an exclusivity contract with the Japanese company, BroadBand Security Inc., in Tokyo, to rebrand, adapt and market their casino management system (CMS) to the developing Japanese gaming market. The contract deliverables were satisfied early in the third quarter; $1.2 million of revenue was recognized during the third quarter. At the end of the quarter, the Company had casino management systems, table games management systems and ancillary products installed with on-going support and maintenance contracts with 100 casino operators in over 160 casinos worldwide.

 

Results of Operations – Three Months Ended September 30, 2019 Compared to Three months ended September 30, 2018

 

During the three months ended September 30, 2019, income from operations was $650,283 compared to income from operations of $634,603 for the three months ended September 30, 2018. The major components of revenues, cost of sales and selling, general and administrative expenses, and the reasons for changes in each, are discussed below.

 

Revenues

 

Revenues totaled $2,438,819 for the three months ended September 30, 2019 compared to $2,329,681 for the three months ended September 30, 2018.  

 

Refer to Note 1 – Revenue, disaggregated revenues by major product line table

 

During the three months ended September 30, 2019, the Company delivered five systems. During the same period in 2018, the Company delivered two systems. In the periods presented, the Company continues to recognize revenue as payments become due for systems that were previously installed and for which revenue was deferred.

 

Cost of Sales

 

Cost of sales decreased to $371,885 for the three months ended September 30, 2019 from $582,760 for the three months ended September 30, 2018 due to a decrease in the total size of the systems sold.  The following table summarizes our cost of sales for the three months ended September 30, 2019 and 2018, respectively:

 

		Three Months Ended September 30,
		2019				2018				2019				2018
										(percent of revenues)
System sales		$	68,967			$	534,376				2.8	%			22.9	%
Maintenance fees			83,457				25,794				3.4	%			1.1	%
Service and other sales			219,461				22,590				9.0	%			1.0	%
Total cost of sales		$	371,885			$	582,760				15.2	%			25.0	%
Gross profit		$	2,066,934			$	1,746,921				84.8	%			75.0	%

 

The Company’s gross profit was 84.8% and 75.0% for the three months ended September 30, 2019 and 2018, respectively. This increase is due to recognition of revenue from a licensing agreement in Japan that had minimal cost of sales during the three months ended September 30, 2019.

 

Selling, General and Administrative Expenses

 

For the three months ended September 30, 2019, selling, general and administrative expenses were $1,416,651 compared to $1,112,318 for the same period in 2018.  These expenses increased as a result of the Company’s increased marketing efforts included the commission and other costs to obtain the licensing agreement in Japan.

 

Interest Income

 

For the three months ended September 30, 2019, interest income was $10,752 compared to $11,825 for the same period in 2018.  This decrease is primarily related to having fewer contracts that have financed payment plans in the current period.

 

 

Tax Provision

 

The income tax expense for the three months ended September 30, 2019 was $130,000, which was calculated at a 19.7% effective rate, compared to an income tax expense of $180,600 for the same period in 2018, which was calculated at a 28.0% effective rate. The decrease in the effective rate is due to fluctuations in periodic net income, increased foreign derived intangible income deductions and changes in state apportionment rates.

 

Net Income

 

Income before taxes for the three months ended September 30, 2019, was $661,035 compared to income before taxes of $645,008 for the same period in 2018. Net income for the three months ended September 30, 2019 was $531,035 compared to net income of $464,408 for the same period in 2018. The basic and diluted income per share was $0.12 compared to income per share of $0.10 for the three months ended September 30, 2019 and 2018, respectively.

 

Results of Operations - Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

 

During the nine months ended September 30, 2019, income from operations was $941,689 compared to income from operations of $979,871 for the nine months ended September 30, 2018. The major components of revenues, cost of sales and selling, general and administrative expenses, and the reasons for changes in each, are discussed below.

 

Revenues

 

Revenues totaled $6,061,788 for the nine months ended September 30, 2019 compared to $6,414,084 for the nine months ended September 30, 2018.  

 

Refer to Note 1 – Revenue, disaggregated revenues by major product line table

 

During the nine months ended September 30, 2019, the Company delivered nine systems, signed a licensing agreement and an exclusive supplier installed our system in fourteen locations in Australia. During the same period in 2018, the Company delivered eight systems.

 

Cost of Sales

 

Cost of sales for the nine months ended September 30, 2019 decreased to $1,346,328 from $2,082,986 for the nine months ended September 30, 2018.  The following table summarizes our cost of sales for the nine months ended September 30, 2019 and 2018, respectively:

 

		Nine Months ended September 30,
		2019				2018				2019				2018
										(percent of revenues)
System sales		$	802,848			$	1,929,825				13.2	%			30.1	%
Maintenance fees			105,957				82,803				1.8	%			1.3	%
Service and other sales			437,523				70,358				7.2	%			1.1	%
Total cost of sales		$	1,346,328			$	2,082,986				22.2	%			32.5	%
Gross profit		$	4,715,460			$	4,331,098				77.8	%			67.5	%

 

The Company’s gross profit was 77.8% and 67.5% for the nine months ended September 30, 2019 and 2018, respectively. This increase is primarily due to the recognition of revenue from a licensing agreement in Japan that had minimal cost of sales and a more favorable mix of higher margin hardware sold with the systems and the system sales made in Australia during the nine months ended September 30, 2019.

 

Selling, General and Administrative Expenses

 

For the nine months ended September 30, 2019, selling, general and administrative expenses were $3,773,771 compared to $3,352,227 for the same period in 2018.   These expenses increased as a result of the Company’s increased marketing efforts included the commission and other costs to sell the licensing agreement in Japan.

 

 

Interest Income

 

For the nine months ended September 30, 2019, interest income was $39,064 compared to $52,087 for the same period in 2018.  This decrease is primarily related to fewer contracts that have financed payment plans in the current period.

 

Tax Provision

 

The income tax expense for the nine months ended September 30, 2019 was $175,000, which was calculated at a 17.9% effective rate, compared to an income tax expense of $330,600 for the same period in 2018, which was calculated at a 32.2% effective rate. The decrease in the effective rate is due to fluctuations in periodic net income, increased foreign derived intangible income deductions and changes in state apportionment rates.

 

Net Income

 

Income before taxes for the nine months ended September 30, 2019, was $980,753 compared to income before taxes of $1,025,709 for the same period in 2018. Net income for the nine months ended September 30, 2019 was $805,753 compared to net income of $695,109 for the same period in 2018. The basic and diluted income per share was $0.18 compared to income per share of $0.16 for the nine months ended September 30, 2019 and 2018, respectively.

 

Backlog

 

The Company’s backlog generally consists of incomplete system installations and expansion of offerings for currently installed and supported systems.

 

The Company had one project in its backlog at September 30, 2018. The Company had two projects in its backlog as of September 30, 2019.

 

Subsequent to September 30, 2019, the Company has not signed any new contracts with a customer.

 

The Company is currently serving gaming establishments in thirteen U.S. states, as well as countries in Central and South America, the Caribbean and Australia. The Company aims to pursue further opportunities and strategic partnerships.

 

Liquidity and Capital Resources

 

We expect that we will be able meet our operating, investing and financing needs for liquidity through cash on hand and anticipated positive cash flows from operations

 

Cash provided by operations for the nine month period ending September 30, 2019 was approximately $521,000, compared to cash used from operation of $556,000 for the period ending September 30, 2018. This increase was a result of a number of factors including an increase in net income; a decrease in the change in contract liabilities, a decrease in net receivable and an increase in both payroll and income taxes payables. These increases were offset by an increase in inventory, a decrease in accounts payable and accrued expenses and a decrease in deferred tax liability.

 

Investing activities used cash of $28,445 for the nine months ended September 30, 2019, which was due to primarily to capital expenditures compared to $20,615 in the same period of 2018.  Cash used in financing activities relating to the repurchasing of stock during the nine months ended September 30, 2019 was $51,500 compared to $112,240 used for stock repurchases in the same period of 2018.

 

We do not know of any trends, events or uncertainties that are likely to have a material impact on our short or long-term liquidity or our capital resources. We expect that our primary source of liquidity in both the short and long-term will be system sales and the resulting license and maintenance fees generated from existing systems. We anticipate we will be able to manage expenses and cash flow in order to satisfy our monthly expense obligations with cash flow from operations. We believe the Company has adequate cash for at least the next 12 months to meet its obligations and continue operations for both existing and future customers as well as ongoing sales efforts and product development.

 

Off-Balance Sheet Arrangements

 

The Company had no off-balance sheet arrangements as of September 30, 2019.

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

 

As of September 30, 2019, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures were effective as of September 30, 2019. There were no changes in our internal controls over financial reporting during our most recently completed reporting period that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Company Repurchases of Registered Common Stock

 

The Company made the following repurchases of registered common stock during the period covered by this report:

 

Period		Total Number of Shares Purchased				Average Price Paid per Share				Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Jul-19			5,000			$	2.30				190,000
Aug-19			0			$	-				190,000
Sept-19			20,000			$	2.00				170,000

 

On January 7, 2018, The Company’s Board of Directors approved the repurchase of its outstanding shares, using management’s discretion, of its common stock from private unsolicited sellers’ in the open market. On May 10, 2018, the Company’s Board of Directors approved the repurchase of its outstanding common shares in an aggregate amount of up to 200,000 shares not to exceed $600,000, in both private unsolicited and open-market transactions, until December 31, 2019. Company insiders are prohibited from participating in the stock repurchase program

 

 

Item 6. Exhibits

 

Exhibit		Description
3.1		Articles of Incorporation, filed with the Nevada Secretary of State on June 2, 1995 (incorporated by reference to Exhibit 3 to the registrant’s registration statement on Form 10SB-12G filed on December 6, 1999).
3.2		Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on January 26, 2010 (incorporated by reference to Exhibit 3.2 to the registrant’s annual report on Form 10-K filed on March 31, 2011).
3.3		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the registrant’s annual report on Form 10-K filed on March 31, 2011).
3.4		Amendment No. 1 to Bylaws dated March 9, 2016 (incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed on March 15, 2016).
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated:  November 13, 2019	Table Trac, Inc.
	(Registrant)
	By:	/s/ Chad Hoehne
		Chad Hoehne
		Chief Executive Officer
		(principal executive officer)

 

	By:	/s/ Randy Gilbert
		Randy Gilbert
		Chief Financial Officer
		(principal financial and accounting officer)

 

 

- 20 -

EXHIBIT 31.1

 

SECTION 302 CERTIFICATION

 

I, Chad Hoehne, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Table Trac, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  November 13, 2019	/s/ Chad Hoehne
	Chad Hoehne
	Chief Executive Officer

EXHIBIT 31.2

 

SECTION 302 CERTIFICATION

 

I, Randy Gilbert, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Table Trac, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  November 13, 2019	/s/ Randy Gilbert
	Randy Gilbert
	Chief Financial Officer

EXHIBIT 32

 

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Table Trac, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chad Hoehne, Chief Executive Officer of the Company and I, Randy Gilbert, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 13, 2019	/s/ Chad Hoehne
	Chad Hoehne
	Chief Executive Officer
Date: November 13, 2019	/s/ Randy Gilbert
	Randy Gilbert
	Chief Financial Officer

 

 

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