Table Trac Inc 10-K for FY2023

Table Trac Inc (TBTC)

10-K 2024-03-29 For: 2023-12-31

Added on April 06, 2026

About this 10-K

Table Trac Inc filed this 10-K on March 29, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $9.49M; down 14.2% from $11.06M a year earlier
Net income: $1.61M; down 0.7% from net income of $1.62M a year earlier
Diluted EPS: $0.35; unchanged from $0.35 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 1C.	Cybersecurity
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	8
Item 11.	Executive Compensation	8
Item 12.	Security Ownership of Certain Beneficial Owners and Management	8
Item 13.	Certain Relationships and Related Transactions and Director Independence	8
Item 14.	Principal Accountant Fees and Services	8

PART IV.
Item 15.	Exhibits and Financial Statement Schedules	9
Signatures		10
Certifications and Exhibits

	Years ended December 31,
	2023		2022		2023			2022
					(percent of revenues)			(percent of revenues)
System	$	820,936	$	2,756,651		8.7	%		24.9	%
Maintenance		929,177		686,337		9.8	%		6.2	%
Lease		0		46,533		0.0	%		0.4	%
Service and other		686,336		616,782		7.2	%		5.6	%
Total cost of sales	$	2,436,449	$	4,106,303		25.7	%		37.1	%
Gross profit	$	7,050,404	$	6,950,284		74.3	%		62.9	%


☒			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

	o	We tested management’s assessment of collectability by obtaining an understanding of the facts and circumstances considered, and judgments applied.
	o	We tested significant cash receipts to verify the corresponding revenue.


	*December 31,*			*December 31,*
	*2023*			*2022*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3,489,771		$	4,786,923
Short-term investments		1,502,805			0
Accounts receivable, net		2,109,193			1,868,488
Inventory, net		2,904,158			1,560,175
Prepaid expenses		364,886			417,254
Net investment in sales type leases - current		64,310			59,173
Income tax receivable		0			124,198
TOTAL CURRENT ASSETS		10,435,123			8,816,211

LONG-TERM ASSETS
Accounts receivable - long-term		891,351			1,523,793
Property and equipment, net		38,357			0
Net investment in sales type leases - long term		113,621			176,444
Software development cost		16,691			0
Operating lease right-of-use assets		243,171			157,802
TOTAL LONG-TERM ASSETS		1,303,191			1,858,039
TOTAL ASSETS	$	11,738,314		$	10,674,250

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	305,664		$	417,853
Payroll liabilities		0			10,665
Customer deposits		785,805			1,485,622
Current portion of operating lease liabilities		114,294			55,942
Income tax payable		165,226			0
TOTAL CURRENT LIABILITIES		1,370,989			1,970,082

LONG-TERM LIABILITIES
Operating lease liabilities		126,760			97,476
Deferred tax liability		341,000			331,000
TOTAL LIABILITIES		1,838,749			2,398,558

STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value; 25,000,000 shares authorized: 4,756,734 and 4,756,734 shares issued; and 4,634,865 and 4,621,988 shares outstanding at December 31, 2023 and December 31, 2022, respectively.		4,635			4,622
Additional paid-in capital		2,346,483			2,207,030
Retained earnings		7,771,655			6,297,639
		10,122,773			8,509,291
Treasury stock, 121,869 and 134,746 shares (at cost) at December 31, 2023 and December 31, 2022, respectively.		(223,208	)		(233,599	)
TOTAL STOCKHOLDERS’ EQUITY		9,899,565			8,275,692

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	11,738,314		$	10,674,250

	*For the Years Ended*
	*December 31,*
	*2023*		*2022*

Revenues	$	9,486,853	$	11,056,587
Cost of sales		2,436,449		4,106,303
Gross profit		7,050,404		6,950,284
Operating expenses:
Selling, general and administrative		5,374,687		4,930,333
Income from operations		1,675,717		2,019,951
Other income		4,283		10,611
Interest income		330,005		145,891
Income before taxes		2,010,005		2,176,453
Income tax expense		397,000		552,000
Net income	$	1,613,005	$	1,624,453
Net income per share - basic	$	0.35	$	0.36
Net income per share - diluted	$	0.35	$	0.35
Weighted-average shares outstanding - basic		4,553,080		4,522,536
Weighted-average shares outstanding - diluted		4,619,046		4,583,115

	*Common Stock Outstanding*				*Additional*
	*Number of*		*Par*		*Paid-in*			*Retained*			*Treasury*
	*Shares*		*Amount*		*Capital*			*Earnings*			*Stock*			*Total*
BALANCE, December 31, 2021		4,521,988	$	4,522	$	1,988,137		$	4,768,298		$	(233,599	)	$	6,527,358
Stock compensation expense		100,000		100		218,893			0			0			218,993
Cash dividend		0		0		0			(95,112	)		0			(95,112	)
Net income		0		0		0			1,624,453			0			1,624,453
BALANCE, December 31, 2022		4,621,988	$	4,622	$	2,207,030		$	6,297,639		$	(233,599	)	$	8,275,692
Stock compensation expense		0		0		139,226			0			0			139,226
Cash dividend		0		0		0			(138,989	)		0			(138,989	)
Exercise of employee stock options		1,000		1		2,019			0			990			3,010
Stock issued to employees from treasury		10,000		10		(7,552	)					7,542			0
Stock issued for service from treasury		1,877		2		5,760			0			1,859			7,621
Net income		0		0		0			1,613,005			0			1,613,005
BALANCE, December 31, 2023		4,634,865	$	4,635	$	2,346,483		$	7,771,655		$	(223,208	)	$	9,899,565

	*For the Year Ended*
	*December 31,*
	*2023*			*2022*
OPERATING ACTIVITIES
Net income	$	1,613,005		$	1,624,453
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		1,065			7,879
Deferred income taxes		10,000			340,000
Provision for credit losses		46,934			87,627
Stock issued for services to non-employee		7,621			0
Stock compensation expense		139,226			218,993
Accrued interest on short-term investment		(2,805	)
Changes in operating assets and liabilities:
Accounts receivable		344,803			(2,173,710	)
Inventory		(1,343,983	)		22,183
Prepaid expenses		52,368			382,270
Net investment in sales type leases		57,686			(58,911	)
Accounts payable, accrued expenses and other		(109,922	)		153,641
Payroll liabilities		(10,665	)		(15,705	)
Customer deposits		(699,817	)		(90,378	)
Income tax receivable and payable		289,424			(562,220	)
Net cash provided by (used) in operating activities		394,940			(63,878	)
INVESTING ACTIVITIES
Capital expenditures		(39,422	)		0
Purchase of short-term investment		(1,500,000	)
Capitalized software development costs		(16,691	)		0
Net cash used in investing activities		(1,556,113	)		0
FINANCING ACTIVITIES
Proceeds from employee stock options		3,010			0
Payment of dividends		(138,989	)		(95,112	)
Net cash used in financing activities		(135,979	)		(95,112	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,297,152	)		(158,990	)

CASH AND CASH EQUIVALENTS
Beginning of year		4,786,923			4,945,913
End of year	$	3,489,771		$	4,786,923



Non-cash investing and financing activities:
Treasury stock cost related to compensation	$	10,391		$	0

	*For the Years ended December 31,*
	*2023*						*2022*
	*% Revenues*			*% AR*			*% Revenues*			*% AR*
Major		19.2	%		0.0	%		31.7	%		33.7	%
All Others		80.8	%		100.0	%		68.3	%		66.3	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

	*Years ended December 31,*
	*2023*		*2022*		*2023*			*2022*
					(percent of revenues)
System revenue	$	3,330,158	$	6,245,287		35.1	%		56.6	%
Maintenance revenue		4,985,415		3,507,924		52.6	%		31.7	%
Lease revenue		0		228,886		0.0	%		2.1	%
Service and other revenue		1,171,280		1,074,490		12.3	%		9.6	%
Total revenues	$	9,486,853	$	11,056,587		100.0	%		100.0	%

	Amount
2024		71,700
2025		71,700
2026		26,875
2027		22,800
Total undiscounted cash flows		193,075
Present value discount		15,144
Net investment in lease as of December 31, 2023	$	177,931

	*Leased Facilities*
2024		121,351
2025		95,030
2026		40,496
Total Lease Payments		256,877
Less: Interest		15,823
Present value of lease liabilities	$	241,054

Expected volatility	83.1	%
Expected life (years)	2.5
Risk-free interest rate	5.51	%
Expected dividend yield	1.04	%

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
119,750		4.81	$	3.11	$	109,340		107,250	$	3.20	$	91,840

	2023					2022
	Shares			Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Options outstanding at beginning of year		101,500		$	2.97		85,000	$	2.52
Granted		19,750			3.85		16,500		5.29
Exercised		(1,000	)		3.01		0		0
Forfeited		(500	)		5.29		0		0
Balance at December 31:		119,750		$	3.11		101,500	$	2.97

Options Exercisable at December 31:		107,250		$	3.20		76,500	$	3.15

	*2023*		*2022*

Current tax expense	$	387,000	$	212,000
Deferred tax		10,000		340,000
Total income tax expense	$	397,000	$	552,000

	*2023*			*2022*
Current deferred tax asset (liabilities):
Accounts payable and accrued expenses	$	57,000			83,000
Accounts receivable, net		(727,000	)		(851,000	)
Inventory obsolescence		2,000			1,000
Prepaid expenses		(83,000	)		(85,000	)
Customer deposits		180,000			348,000
Net current deferred tax liability		(571,000	)		(504,000	)

Long-term deferred tax asset (liabilities):
NOL - State		4,000			4,000
Foreign tax credit		14,000			21,000
R&D tax credit		75,000			30,000
Book - Tax depreciation		(9,000	)		0
Section 174 capitalization		73,000			36,000
Stock compensation		60,000			69,000
Investment impairment		13,000			13,000
Net long-term deferred tax asset		230,000			173,000
Net deferred tax liability	$	(341,000	)	$	(331,000	)

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		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
10.3		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).
10.4		Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.5 to registrant's annual report on Form 10-K for the fiscal year end December 31. 2022.
10.5		Letter Agreement between Table Trac Inc. and Robert Siqveland, dated December 15, 2022 (incorporated by reference to Exhibit 10.1 to registrant’s current report on Form 8-K filed on December 20, 2022
23.1		Consent of Boulay PLLP (filed herewith)
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 29, 2024

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