Table Trac Inc 10-K for FY2022

Table Trac Inc (TBTC)

10-K 2023-03-27 For: 2022-12-31

Added on April 06, 2026

About this 10-K

Table Trac Inc filed this 10-K on March 27, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.06M; up 58.7% from $6.97M a year earlier
Net income: $1.62M; down 5.0% from net income of $1.71M a year earlier
Diluted EPS: $0.35; down 5.4% from $0.37 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	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,
	2022		2021		2022			2021
					(percent of revenues)			(percent of revenues)
System	$	2,756,651	$	722,153		24.9	%		10.4	%
Maintenance		686,337		654,912		6.2	%		9.4	%
Lease		46,533		167,770		0.4	%		2.4	%
Service and other		616,782		350,898		5.6	%		5.0	%
Total cost of sales	$	4,106,303	$	1,895,733		37.1	%		27.2	%
Gross profit	$	6,950,284	$	5,070,950		62.9	%		72.8	%


☒			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,*
	*2022*			*2021*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,786,923		$	4,945,913
Accounts receivable, net of allowance for doubtful accounts of $62,000 and $61,376 at December 31, 2022 and December 31, 2021, respectively.		1,868,488			1,017,533
Inventory, net		1,560,175			1,582,358
Prepaid expenses		417,254			799,524
Net investment in sales type leases - current		59,173			39,369
Income tax receivable		124,198			0
TOTAL CURRENT ASSETS		8,816,211			8,384,697

LONG-TERM ASSETS
Accounts receivable - long-term		1,523,793			288,665
Property and equipment, net		0			7,879
Net investment in sales type leases - long term		176,444			137,337
Deferred tax asset		0			9,000
Operating lease right-of-use assets		157,802			174,096
TOTAL LONG-TERM ASSETS		1,858,039			616,977
TOTAL ASSETS	$	10,674,250		$	9,001,674

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	417,853		$	258,764
Payroll liabilities		10,665			26,370
Customer deposits		1,485,622			1,576,000
Current portion of operating lease liabilities		55,942			51,046
Accrued income taxes		0			438,022
TOTAL CURRENT LIABILITIES		1,970,082			2,350,202

LONG-TERM LIABILITIES
Operating lease liabilities		97,476			124,114
Deferred tax liability		331,000			0
TOTAL LIABILITIES		2,398,558			2,474,316

STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value; 25,000,000 shares authorized: 4,756,734 and 4,656,734 shares issued; and 4,621,988 and 4,521,988 shares outstanding at December 31, 2022 and December 31, 2021.		4,622			4,522
Additional paid-in capital		2,207,030			1,988,137
Retained earnings		6,297,639			4,768,298
		8,509,291			6,760,957
Treasury stock, 134,746 shares (at cost) at both December 31, 2022 and December 31, 2021.		(233,599	)		(233,599	)
TOTAL STOCKHOLDERS’ EQUITY		8,275,692			6,527,358

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,674,250		$	9,001,674

	*For the Years Ended*
	*December 31,*
	*2022*		*2021*

Revenues	$	11,056,587	$	6,966,683
Cost of sales		4,106,303		1,895,733
Gross profit		6,950,284		5,070,950
Operating expenses:
Selling, general and administrative		4,930,333		3,562,003
Income from operations		2,019,951		1,508,947
Investment loss		0		(57,000	)
Other income		10,611		473,400
Interest income		145,891		83,304
Income before taxes		2,176,453		2,008,651
Income tax expense		552,000		298,000
Net income	$	1,624,453	$	1,710,651
Net income per share - basic	$	0.36	$	0.38
Net income per share - diluted	$	0.35	$	0.37
Weighted-average shares outstanding - basic		4,522,536		4,509,198
Weighted-average shares outstanding - diluted		4,583,115		4,563,621

	*Common Stock Outstanding*				*Additional*
	*Number of*		*Par*		*Paid-in*			*Retained*			*Treasury*
	*Shares*		*Amount*		*Capital*			*Earnings*			*Stock*			*Total*
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
Stock compensation expense		100,000		100		218,893			0			0			218,993
Cash Dividend		0		0		0			(95,112	)		0			(95,112	)
2022 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

	*For the Years ended December 31,*
	*2022*						*2021*
	*% Revenues*			*% AR*			*% Revenues*			*% AR*
Major		31.7	%		33.7	%		0.0	%		50.2	%
All Others		68.3	%		66.3	%		100.0	%		49.8	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

	*Years ended December 31,*
	*2022*		*2021*		*2022*			*2021*
					(percent of revenues)
System revenue	$	6,245,287	$	3,074,393		56.5	%		44.1	%
Maintenance revenue		3,507,924		3,121,283		31.7	%		44.8	%
Lease revenue		228,886		212,658		2.1	%		3.1	%
Service and other revenue		1,074,490		558,349		9.6	%		8.0	%
Total revenues	$	11,056,587	$	6,966,683		100.0	%		100.0	%

	Amount
2023		71,700
2024		71,700
2025		71,700
2026		26,875
2027		22,800
Total undiscounted cash flows		264,775
Present value discount		29,158
Net investment in lease as of December 31, 2022	$	235,617

	*Leased Facilities*
2023		64,666
2024		65,683
2025		35,445
Total Lease Payments		165,794
Less: Interest		12,376
Present value of lease liabilities	$	153,418

	*For the Years Ended*
	*December 31,*
	*2022*			*2021*
OPERATING ACTIVITIES
Net income	$	1,624,453		$	1,710,651
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		7,879			22,964
Deferred income taxes		340,000			(260,000	)
Stock compensation expense		218,993			123,214
Bad debt expense		87,627			0
Loss on Investment		0			57,000
Inventory obsolescence reserve		1,274			0
Paycheck Protection Program (PPP) loan forgiveness income		0			(473,400	)
Changes in operating assets and liabilities:
Accounts receivable		(2,173,710	)		31,309
Inventory		20,909			166,056
Prepaid expenses		382,270			(488,354	)
Net investment in sales type leases		(58,911	)		(176,706	)
Accounts payable, accrued expenses and other		153,641			152,595
Payroll liabilities		(15,705	)		(15,271	)
Customer deposits		(90,378	)		1,412,291
Income tax receivable (accrued income taxes)		(562,220	)		535,295
Net cash provided by (used in) operating activities		(63,878	)		2,797,644
INVESTING ACTIVITIES
Purchase of investment		0			(57,000	)
Net cash used in investing activities		0			(57,000	)
FINANCING ACTIVITIES
Proceeds from Paycheck Protection Program loan		0			473,400
Payment of dividends		(95,112	)		0
Net cash provided by (used in) financing activities		(95,112	)		473,400

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(158,990	)		3,214,044

CASH AND CASH EQUIVALENTS
Beginning of year		4,945,913			1,731,869
End of year	$	4,786,923		$	4,945,913



Non-cash investing and financing activities:

	*December 31,*			*December 31,*
	*2022*			*2021*

Accounts receivable allowance, beginning of year	$	61,376		$	77,623
Provision adjustment		87,627			—
Write-off		(87,003	)		(16,247	)
Accounts receivable allowance, end of year		62,000		$	61,376

Expected volatility	70.0	%
Expected life (years)	.62to 2.5
Risk-free interest rate	3.94% - 4.65	%
Expected dividend yield	0.38	%

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
101,500		5.76	$	2.97	$	215,550		76,500	$	3.15	$	149,550

	2022				2021
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Options outstanding at beginning of year		85,000	$	2.52		0	$	0
Granted		16,500		5.29		85,000		2.52
Exercised		0		0		0		0
Forfeited		0		0		0		0
Balance at December 31:		101,500	$	2.97		85,000	$	2.52

Options Exercisable at December 31:		76,500	$	3.15		32,500	$	2.69

Weighted Average Grant Date Fair Value for options granted during the period			$	2.34			$	1.79

	*2022*		*2021*

Current tax expense	$	212,000	$	558,000
Deferred tax (benefit)		340,000		(260,000	)
Total income tax expense	$	552,000	$	298,000

	*2022*			*2021*
Current deferred tax asset (liabilities):
Accounts payable and accrued expenses	$	83,000			27,000
Accounts receivable		(865,000	)		(316,000	)
Allowance for doubtful accounts		14,000			14,000
Inventory obsolescence		1,000			8,000
Prepaid expenses		(85,000	)		(185,000	)
Section 174 capitalization		36,000			0
Customer deposits		348,000			365,000
Net current deferred tax liability		(468,000	)		(87,000	)

Long-term deferred tax asset (liabilities):
NOL - State		4,000			5,000
Foreign tax credit		21,000			29,000
R&D tax credit		30,000			29,000
Book - Tax depreciation		0			(2,000	)
Stock compensation		69,000			22,000
Investment impairment		13,000			13,000
Net long-term deferred tax asset		137,000			96,000
Net deferred tax asset (liability)	$	(331,000	)	$	9,000

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		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)
10.6		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)
		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 27, 2023

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