Table Trac Inc 10-K for FY2021

Table Trac Inc (TBTC)

10-K 2022-03-28 For: 2021-12-31

Added on April 06, 2026

About this 10-K

Table Trac Inc filed this 10-K on March 28, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.97M; up 58.3% from $4.4M a year earlier
Net income: $1.71M; up 457.4% from net income of $306.89K a year earlier
Diluted EPS: $0.37; up 428.6% from $0.07 a year earlier

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Nevada		88-0336568
(State or other jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

6101 Baker Road, Suite 206, Minnetonka, Minnesota		55345
(Address of principal executive office)		(Zip Code)

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

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

		Page
PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	3
Item 1B.	Unresolved Staff Comments	3
Item 2.	Properties	3
Item 3.	Legal Proceedings	3
Item 4.	Mine Safety Disclosures	3

PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4
Item 6.	Reserved	4
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	4
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	7
Item 8.	Financial Statements	F-1
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8
Item 9A.	Controls and Procedures	8
Item 9B.	Other Information	8

PART III.
Item 10.	Directors, Officers and Corporate Governance	9
Item 11.	Executive Compensation	11
Item 12.	Security Ownership of Certain Beneficial Owners and Management	12
Item 13.	Certain Relationships and Related Transactions and Director Independence	14
Item 14.	Principal Accountant Fees and Services	14

PART IV.
Item 15.	Exhibits and Financial Statement Schedules	15
Signatures		16
Certifications and Exhibits

	Years ended December 31,
	2021		2020		2021			2020

					(percent of revenues)			(percent of revenues)
System	$	722,153	$	460,540		10.4	%		10.5	%
Maintenance		654,912		371,205		9.4	%		8.4	%
Lease		167,770		0		2.4	%		0.0	%
Service and other		350,898		241,778		5.0	%		5.5	%
Total cost of sales	$	1,895,733	$	1,073,523		27.2	%		24.4	%
Gross profit	$	5,070,950	$	3,327,918		72.8	%		75.6	%


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


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

	*December 31,*			*December 31,*
	*2021*			*2020*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,945,913		$	1,731,869
Accounts receivable, net of allowance for doubtful accounts of $61,376 and $77,623 at December 31, 2021 and December 31, 2020, respectively.		1,017,533			1,303,724
Inventory, net		1,582,358			1,748,414
Prepaid expenses		799,524			311,170
Net investment in sales type leases - current		39,369			0
Income tax receivable		0			97,273
TOTAL CURRENT ASSETS		8,384,697			5,192,450

LONG-TERM ASSETS
Accounts receivable - Long-term		288,665			33,783
Property and equipment, net		7,879			30,843
Net investment in sales type leases - long term		137,337			0
Deferred tax asset		9,000			0
Operating lease right-of-use assets		174,096			46,810
TOTAL LONG-TERM ASSETS		616,977			111,436
TOTAL ASSETS	$	9,001,674		$	5,303,886

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	258,764		$	104,362
Payroll liabilities		26,370			41,641
Customer deposits		1,576,000			163,709
Current portion of operating lease liabilities		51,046			40,742
Accrued income taxes		438,022			0
TOTAL CURRENT LIABILITIES		2,350,202			350,454

LONG-TERM LIABILITIES
Operating lease liabilities		124,114			8,939
Deferred tax liability		0			251,000
TOTAL LIABILITIES		2,474,316			610,393

STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value; 25,000,000 shares authorized: 4,656,734 shares issued; and 4,521,988 and 4,506,788 shares outstanding at December 31, 2021 and December 31, 2020, respectively.		4,522			4,507
Additional paid-in capital		1,988,137			1,876,970
Retained earnings		4,768,298			3,057,647
		6,760,957			4,939,124
Treasury stock, 134,746 and 149,946 shares (at cost) at December 31, 2021 and December 31, 2020, respectively.		(233,599	)		(245,631	)
TOTAL STOCKHOLDERS’ EQUITY		6,527,358			4,693,493

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,001,674		$	5,303,886

	*For the Years Ended*
	*December 31,*
	*2021*			*2020*

Revenues	$	6,966,683		$	4,401,441
Cost of sales		1,895,733			1,073,523
Gross profit		5,070,950			3,327,918
Operating expenses:
Selling, general and administrative		3,562,003			3,670,912
Income (loss) from operations		1,508,947			(342,994	)
Investment loss		(57,000	)		0
Other income		473,400			473,400
Interest income		83,304			79,487
Income before taxes		2,008,651			209,893
Income tax expense (benefit)		298,000			(97,000	)
Net income	$	1,710,651		$	306,893
Net income per share - basic	$	0.38		$	0.07
Net income per share - diluted	$	0.37		$	0.07
Weighted-average shares outstanding - basic		4,509,198			4,486,788
Weighted-average shares outstanding - diluted		4,563,621			4,497,599

	*Common Stock Outstanding*				*Additional*
	*Number of*		*Par*		*Paid-in*			*Retained*		*Treasury*
	*Shares*		*Amount*		*Capital*			*Earnings*		*Stock*			*Total*
BALANCE, December 31, 2019		4,506,788	$	4,507	$	1,847,594		$	2,750,754	$	(245,631	)	$	4,357,224
Stock compensation expense		0		0		29,376			0		0			29,376
2020 Net income		0		0		0			306,893		0			306,893
BALANCE, December 31, 2020		4,506,788	$	4,507	$	1,876,970		$	3,057,647	$	(245,631	)	$	4,693,493
Stock compensation expense		0		0		123,214			0		0			123,214
Stock issued to employees from treasury		15,200		15		(12,047	)		0		12,032			0
2021 Net income		0		0		0			1,710,651		0			1,710,651
BALANCE, December 31, 2021		4,521,988	$	4,522	$	1,988,137		$	4,768,298	$	(233,599	)	$	6,527,358

	*For the Years ended December 31,*
	*2021*						*2020*
	*% Revenues*			*% AR*			*% Revenues*			*% AR*
Major		0.0	%		50.2	%		10.2	%		40.5	%
All Others		100.0	%		49.8	%		89.8	%		59.5	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

	*Years ended December 31,*
	*2021*		*2020*		*2021*			*2020*
					(percent of revenues)
System revenue	$	3,074,393	$	1,614,594		44.1	%		36.7	%
Maintenance revenue		3,121,283		2,615,024		44.8	%		59.4	%
Lease revenue		212,658		0		3.1	%		0.0	%
Service and other revenue		558,349		171,823		7.9	%		3.9	%
Total revenues	$	6,966,683	$	4,401,441		100.0	%		100.0	%

	Amount
2022		48,900
2023		48,900
2024		48,900
2025		48,900
2026		4,075
Total undiscounted cash flows		199,675
Present value discount		22,969
Net investment in lease as of December 31, 2021	$	176,706

	*Leased Facilities*
2022		57,621
2023		50,566
2024		51,582
2025		26,045
Total Lease Payments		185,814
Less: Interest		10,654
Present value of lease liabilities	$	175,160

Expected volatility	80.0% - 90.0	%
Expected life (years)	2.5 to 6.6
Risk-free interest rate	0.82% - 1.47	%
Expected dividend yield	0	%

	*For the Years Ended*
	*December 31,*
	*2021*			*2020*
OPERATING ACTIVITIES
Net income	$	1,710,651		$	306,893
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		22,964			43,306
Deferred income taxes		(260,000	)		(214,000	)
Stock compensation expense		123,214			29,376
Bad debt expense		0			64,378
Loss on Investment		57,000			0
Inventory obsolescence reserve		0			45,045
Paycheck Protection Program (PPP) loan forgiveness income		(473,400	)		(473,400	)
Changes in operating assets and liabilities:
Accounts receivable		31,309			940,604
Inventory		166,056			(529,870	)
Prepaid expenses		(488,354	)		68,812
Net investment in sales type leases		(176,706	)		0
Accounts payable, accrued expenses and other		152,595			(263,980	)
Payroll liabilities		(15,271	)		(2,857	)
Customer deposits		1,412,291			(90,000	)
Income tax receivable (accrued income taxes)		535,295			70,400
Net cash provided by (used in) operating activities		2,797,644			(5,293	)
INVESTING ACTIVITIES
Purchase of investment		(57,000	)		0
Net cash used in investing activities		(57,000	)		0
FINANCING ACTIVITIES
Proceeds from Paycheck Protection Program loan		473,400			473,400
Net cash provided by in financing activities		473,400			473,400

NET INCREASE IN CASH AND CASH EQUIVALENTS		3,214,044			468,107

CASH AND CASH EQUIVALENTS
Beginning of period		1,731,869			1,263,762
End of period	$	4,945,913		$	1,731,869



Non-cash investing and financing activities:
Treasury stock cost related to compensation	$	12,047		$	0

	*December 31,*			*December 31,*
	*2021*			*2020*

Accounts receivable allowance, beginning of year	$	77,623		$	42,623
Provision adjustment		0			64,378
Write-off		(16,247	)		(29,378	)
Accounts receivable allowance, end of year	$	61,376		$	77,623

Options Outstanding							Options Exercisable
Options Outstanding	Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value		Options Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value
85,000		8.39	$	2.52	$	65,950		32,500	$	2.69	$	19,750

	*2021*			*2020*

Current tax expense	$	558,000		$	117,000
Deferred tax (benefit)		(260,000	)		(214,000	)
Total income tax expense (benefit)	$	298,000		$	(97,000	)

	*2021*			*2020*
Current deferred tax asset (liabilities):
Accounts payable and accrued expenses	$	27,000			20,000
Accounts receivable		(316,000	)		(328,000	)
Allowance for doubtful accounts		14,000			18,000
Inventory obsolescence		8,000			10,000
Prepaid expenses		(185,000	)		(72,000	)
Customer deposits		365,000			38,000
Net current deferred tax liability		(87,000	)		(314,000	)

Long-term deferred tax asset (liabilities):
NOL - State		5,000			6,000
Foreign tax credit		29,000			43,000
R&D tax credit		29,000			17,000
Book - Tax depreciation		(2,000	)		(7,000	)
Stock compensation		22,000			4,000
Investment impairment		13,000			0.00
Net long-term deferred tax asset		96,000			63,000
Net deferred tax asset (liability)	$	9,000		$	(251,000	)

Chad B. Hoehne	60	Chief Executive Officer, President, Chief Technology Officer, Director, and Chairman of the Board	Mr. Hoehne is the Chief Executive Officer, President, founder and Chief Technology Officer of the Company. He was appointed as the Company’s Chief Executive Officer on November 20, 2017. From November 20, 2017 until January 8, 2018, he also served as the interim Chief Financial Officer of the Company. He has a B.S. degree in Business Administration, Finance and computer minor from Minnesota State University. Mr. Hoehne founded Table Trac, Inc. in 1994 after working nine years for a successful Minneapolis electronics manufacturer and software company. Mr. Hoehne has been on the board since the Company’s founding.
Randy W. Gilbert	57	Chief Financial Officer	Mr. Gilbert was appointed as the Company’s Chief Financial Officer on January 8, 2018. Previously and since September 2015, Mr. Gilbert served as a Principal with Assurance Consulting 3 (AC3) a division of Boeckermann, Grafstrom and Mayer, which provides Sarbanes Oxley and internal audit services. Prior to that and since 2006, he was a manager with AC3. Additionally, Mr. Gilbert served as the Chief Financial Officer for EVO Transportation & Energy Services, Inc. (formerly called Minn Shares Inc.) from May 2016 to December 2017. Mr. Gilbert has a Bachelor of Accounting B.ACC degree from the University of Minnesota - Duluth and began his Accounting career with KPMG.
Robert R. Siqveland	77	Corporate Secretary	Mr. Siqveland is employed by Table Trac, Inc. and has served as Corporate Secretary since 1999. Prior to joining Table Trac, Mr. Siqveland was an investment advisor with Summit Investment and venture capitalist with Property Growth Company for 25 years, providing “seed capital” and management to over 30 companies. Mr. Siqveland was a director at Table Trac from 1999 through 2011.
William Martinez	59	Director and Chair of the Compliance Committee	Mr. Martinez has been private contractor for the Department of Justice for the past three years, serving as an expert in homicide investigations and Use of Force. From 2012 to 2016, Mr. Martinez was the Assistant Chief of Police-Chief of Detectives/Major Crimes, for the city of St. Paul. Prior to that, he was the Senior Commander of St. Paul’s Homicide and Robbery Unit. Bill has also been committed to numerous Community Building Initiatives over the years. In addition to his extensive experience in multiple facets of law enforcement, Bill is a skilled leader with strong communication and teaching skills and will be highly effective in developing the Company’s organizational and ongoing development vision Mr. Martinez was elected a director at Table Trac in October 2018.
Thomas J. Mertens	57	Director and Chair of the Audit and Compensation Committee	Mr. Mertens is a graduate of St. John’s University with a degree in accounting. He became a Certified Public Accountant in 1990 and a Master Graduate of Rapport Leadership International in 2002. Since 2013, Tom has been the Chief Financial Officer for the Archdiocese of St. Paul and Minneapolis where he developed, implemented and provided oversight of processes, procedures and best practices. Tom was the CFO and Controller for Macquarie Air-Serv Holding Inc. for eight years where he provided expertise and leadership in growing the company’s revenues from $60M to $130M mainly through acquisitions. Tom began his career as an auditor for KPMG Peat Marwick in Minneapolis. Tom is a proven leader and will bring that skill and decades of experience to the Company’s Board of Directors. Mr. Mertens was elected a director at Table Trac in October 2018.

	●	involved in any petition under the federal bankruptcy laws or any state insolvency law that was filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years, or any corporation or business association of which he was an executive officer at or within two years within the date of this report;

	●	convicted in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

	●	the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: (1) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; (2) engaging in any type of business practice; or (3) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

	●	the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in subsection (3) of the immediately preceding item listed above, or to be associated with persons engaged in any such activity;

	●	found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated;

	●	found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

	●	the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (1) any federal or state securities or commodities law or regulation; or (2) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (3) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

	●	the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Name, Principal Position		Salary and Bonus		Stock Awards		Stock Option Awards(1)		Total
Chad Hoehne, President, CTO and CEO	2021	$	285,550	$	0	$	48,400	$	333,950
	2020		353,325		0		0		353,325
Robert Siqveland, Secretary	2021		123,620		0		48,400		172,020
	2020		130,135		0		0		130,135
Randy Gilbert, CFO	2021		156,060		0		72,600		228,660
	2020		215,353		0		0		215,353

	Outstanding Equity Awards Table at Fiscal 2021 Year-End
	Option Awards								Stock Awards
	Number of Securities Underlying Unexercised Options (#)
Named Executive Officer	Exercisable		Unexercisable			Option Exercise Price		Option Expiration Date	Number of Shares of Stock that Have Not Vested			Market Value of Shares of Stock that Have Not Vested (1)
Chad Hoehne		5,000		15,000	(2)	$	2.42	5/13/2031		0		$	0
Robert Siqveland		5,000		15,000	(2)		2.42	5/13/2031		0			0
Randy Gilbert		7,500		22,500	(2)		2.42	5/13/2031		10,000	(3)		33,000

(1)	The market value is based on the closing price of $3.30 on December 31, 2021
(2)	One third of the options vest in each of the following three years on May 14
(3)	Shares vest on January 8, 2022

Name		Compensation		Stock Awards		Stock Option Awards		Total
William Martinez	2021		20,000		0		0		20,000
Thomas Mertens	2021		22,000		0		0		22,000

	●	each person known by the Company to be the beneficial owner of more than five percent of the Company’s outstanding common stock

	●	each current director

	●	each named executive in Item 11 above, and

	●	all current executive officers and directors as a group.

	Common Shares		Percentage of
	Beneficially		Common
Name and Address	Owned(1)		Shares(1)
Chad Hoehne⁽²⁾		1,171,600		25.91	%
Randy Gilbert⁽³⁾		55,225		1.22	%
Robert Siqveland⁽⁴⁾		206,500		4.57	%
William Martinez⁽⁵⁾		2,000		*
Thomas Mertens⁽⁶⁾		2,000		*
All directors and officers as a group⁽⁷⁾		1,437,325		31.79	%
Zeff Capital, LP(8) 1601 Broadway, 12th floor New York, NY 10019		450,000		9.95	%

	2021		2020
Audit fees, including quarterly review of Form 10-Q	$	97,900	$	95,000
Tax fees		12,500		12,916
Audit-related fees ⁽¹⁾		22,800		15,010
All other fees		0		0
	$	133,200	$	122,926

Exhibit No.		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, 2013 (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).
4.1		Description of Table Trac, Inc. Common Stock (incorporated by reference to Exhibit 4.1 to the registrant’s annual report on Form 10-K for the fiscal year ended December 31, 2019).
10.1		Offer Letter by and between Table Trac Inc. and Randy W. Gilbert (incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed on January 12, 2018).
10.2		Promissory Note dated February 8, 2021 between Table Trac Inc. and Alerus Financial, N.A. (incorporated by reference to Exhibit 10.2 to registrant’s annual report on Form 10-K for the fiscal year ended December 31, 2020).
10.3		Table Trac, Inc. 2021 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K filed on May 20, 2021
10.4		Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to registrant’s quarterly report on Form 10-Q filed on August 12, 2021).
10.5		Form of Restricted Stock Agreement (filed herewith)
23.1		Consent of Boulay PLLP
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 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

Dated: March 28, 2022

TABLE TRAC, INC.

/s/ Chad Hoehne
Chad Hoehne, Chief Executive Officer
(principal executive officer)

	/s/ Chad Hoehne
Chad Hoehne, Chief Executive Officer and Director
(principal executive officer)

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

/s/ William Martinez
William Martinez, Director

/s/ Thomas Mertens
Thomas Mertens, Director