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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2005 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ Commission File Number 0-28383 Table Trac, Inc.
Nevada - - - - - - - - - - - - - - - - - - -
- - - - -- - - - - - - - - - - - 88-0336568 15612 Highway 7, (952) 548-8877 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 X No -- Securities registered pursuant to Section 12(b) of
the Act: Securities registered pursuant to Section 12(g) of
the Act: |
Table Trac, Inc.
| I N D E X |
| PART I. FINANCIAL INFORMATION |
| Item 1. Financial Statements |
| Balance Sheets as of September 30, 2005 (unaudited)
and December 31, 2004 (audited) |
| Statements of Operations for the three months and nine months ended September 30, 2005 and 2004 (unaudited) |
|
Statements of Cash Flows for the six |
| Selected Notes to Financial Statements (unaudited) |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
| PART II. OTHER INFORMATION |
| Item 1. Legal Proceedings |
| Item 6. Exhibits and Reports on Form 8-K |
| SIGNATURES |
Part I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
| September 30,
2005 (unaudited) |
December 31, 2004 |
|
| ASSETS | ||
| Current assets: | ||
| Cash | $87,945 | $19,776 |
| Accounts receivable, no allowance for doubtful accounts deemed necessary | 285,643 | 26,396 |
| Inventory | 6,835 | 2,956 |
| Prepaid expenses | 2,400 | 2,400 |
| Total current assets | 382,823 | 51,528 |
| Patent, net of accumulated amortization | 15,351 | 16,374 |
| Total assets | $398,174 | $67,902 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||
| Current liabilities: | ||
| Accounts payable | $ 13,175 | $ 5,874 |
| Accrued payroll and related | 10,571 | 11,077 |
| Deferred revenue | - | - |
| Total current liabilities | 23,746 | 16,951 |
| Stockholders’ equity (deficit): | ||
| Restricted common stock warrant conversion subscriptions received | 0 | |
| Common stock, no par value; 5,000,000 shares authorized: 3,831,534 shares issued and outstanding in 2005 and 2004, respectively | 1,315,583 | 1,302,302 |
| Retained deficit | (941,155) | (1,251,351) |
| Total stockholders’ equity | 374,428 | 50,951 |
| Total liabilities and stockholders’ equity | $398,174 | $ 67,902 |
Table Trac, Inc.
Statements of Operations
(Unaudited)
| Three Months Ending | Nine Months Ending | ||||||
| July - Sept '05 | July - Sept '04 | Jan. - Sept '05 | Sept. - June '04 | ||||
| Net Sales | $462,299 | $117,971 | $1,081,937 | $440,509 | |||
| Total COGS | 114,492 | 9,644 | 250,335 | 34,416 | |||
| Gross Profit | 347,807 | 108,327 | 831,602 | 406,093 | |||
| Total Operating Expense | 209,843 | 86,996 | 521,406 | 278,340 | |||
| Income (Loss) from operations | 137,964 | 21,331 | 310,196 | 127,753 | |||
| Other Income/Expense | |||||||
| Interest Expense | 0 | 0 | 0 | 368 | |||
| Net Income (loss) Before Taxes | 137,964 | 21,331 | 310,196 | 127,385 | |||
| Income Taxes | 0 | -0- | -0- | -0- | |||
| Net Income (loss) | $ 137,964 | $21,331 | $310,196 | $ 127,385 | |||
| Basic earnings (loss) per share | $ 0.035 | 0.006 | $ 0.080 | 0.033 | |||
| Weighted average basic shares outstanding | 3,959,034 | 3,831,534 | 3,895,284 | 3,831,534 | |||
| Diluted earnings (loss) per share | $ 0.033 | $ 0.006 | $ 0.075 | $ 0.033 | |||
| Weighed average diluted shares | 4,112,377 | 3,831,534 | 4,112,377 | 3,831,534 | |||
Table Trac, Inc.
Statements of Cash Flows
(Unaudited)
| Jan - Sept '05 | Jan - Sept '04 | |||
| OPERATING ACTIVITIES | ||||
| Net Income | $310,196 | $127,385 | ||
| Adjustments to reconcile Net Income to net cash provided by operations: | ||||
| Accounts receivable | (259,247) | (55,203) | ||
| Inventory | (3,879) | 825 | ||
| Accounts payable | 7,301 | 9,423 | ||
| Deferred revenue | - 0 - | (6,097) | ||
| Payroll liabilities | (506) | |||
| Patents amoritization | 1023 | 1023 | ||
| Net cash provided by Operating Activities | 54,888 | 77,356 | ||
| INVESTING ACTIVITIES | ||||
| Restricted common stock warrant conversion subscriptions received | 13,281 | -0- | ||
| Net cash provided by Investing Activities | 13,281 | -0- | ||
| Net cash increase for period | $68,169 | $77,356 | ||
| Cash at beginning of period | 19,776 | 16,594 | ||
| Cash at end of period | $87,945 | $93,950 |
Table Trac, Inc.
SELECTED NOTES TO FINANCIAL
STATEMENTS
September 30, 2005
Note 1. Condensed Financial Statements:
The condensed balance sheet as of September 30, 2005, the statement
of operations and cash flows for the periods ended September 30, 2005 and 2004
have been prepared by the Company, without audit. In the opinion of management,
all adjustments (which include normal recurring adjustments and adjustments to
revenues for compliance with the company's revenue recognition policy)
necessary to present fairly the financial position, results of operations and
changes in cash flows at September 30, 2005 and for all periods presented have
been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2004 audited financial statements filed on form 10-KSB.
Note 2. Revenue Recognition:
The Company derives revenues from the sale of systems, license and maintenance and services.
System sales: Revenue from systems that have been demonstrated to meet customer specifications during installation is recognized when the product has been installed, title and risk of loss have transferred to the customer and collection of the resulting receivable is probable.
System sales are accounted for as multiple-element arrangements. In transactions that include multiple products and/or services, the Company allocates the revenue to each element based on their relative fair value (or in the absence of fair value, the residual method) and recognizes the associated revenue when all revenue recognition criteria have been met for each element.
License and maintenance revenue: Software and maintenance revenue are recognized ratably over the contract period.
Service revenue: Service revenue is recognized after the services are performed and collection of the resulting receivable is probable.
Note 3. Customer Concentration: Ten casino customers comprised 100% of the Company's revenues for the nine months ended September 30, 2005.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Business Overview:
Table Trac, Inc.'s patented real-time management system product automates and monitors the operations of casino table games (blackjack, craps, etc.) The Table Trac(TM) system (patent number 5,957,776) is available for an installation and monthly license fee from the Company. The system is operating in 10 casinos. The Company's primary mission is to provide a high level of support for its customers systems in the field. Continued efforts to expand the Company's sales through marketing are ongoing. Development to expand the products offered, and expand the functionality of existing products have been ongoing. Predicted revenues from the development efforts in 2004 on new product offerings have been realized in 2005.
Results of Operations:
Revenues for the three months ended June 30 increased to $462,299 in 2005 from $117,971 in 2004. One new system installation in the third quarter accounted for the increase in revenues. Cost of sales for the three months ended September 30 increased in 2005 to $114,492 from $9,644 in 2004 as a result of new systems installations in 2005. Operating expenses for the three months ended September 30 increased in 2005, to $209,843 from $86,996 in 2004. The major changes were increased travel, increases to payroll during installations, sales commissions and employee benefits in 2005 compared to 2004. The result was that there was net income of $137,964 for the three months ended September 30, 2005 compared to net income of $21,331 for the three months ended September 30, 2004. The basic earnings per share was $0.035 for the three months ended September 30, 2005, compared to $0.006 for the three months ended September 30, 2004.
Revenues for the nine months ended September 30 increased to $1,081,937 in 2005 from $440,509 in 2004. Four system installations accounted for the majority of the increase along with increased license and maintenance fees. Cost of sales for the nine months ended September 30 increased in 2005 to $250,335 from $34,416 in 2004 as a result of manufacturing and installing hardware for systems. Operating expenses in the nine months ended September 30 increased in 2005, to $521,406 from $278,340. The major changes were increased expenses to support installations, sales commissions, payroll, employee benefits and sales in 2005 compared to 2004. The result was net income of $310,196 for the nine months ended September 30, 2005 compared to a net income of $127,753 for the nine months ended September 30, 2004. The basic earnings per share was $0.080 for the nine months ended September 30, 2005, compared to $(0.033) for the nine months ended September 30, 2004.
Accounting Procedures:
Management has recognized that expenses related to the installation and training on its new systems have traditionally been booked as operating expenses. For prior years operations the effect was negligible. Beginning in September the Company has begun to recognize these expenses as a cost of sales associated with its installations instead of general operating costs. This change has no affect on Company's net income but in the future will more accurately reflect the cost of sales and operating expenses.
Liquidity and Capital Resources:
There are no known trends, events or uncertainties that are likely to have a material impact on the short or long-term liquidity. The primary source of liquidity in both the short term and the long term will be sales. Management has been able to manage its expenses and cash flows for the swings in cash flows the Company has experienced so that monthly obligations are met by revenues from existing contracts. Management believes that the Company has adequate cash to meet its obligations and continue operations for both existing customer contracts and ongoing product development.
Safe Harbor:
The Private Securities Litigation Reform Act of 1995 provides "safe harbor" for forward-looking statements. Certain information included in this Form 10-QSB and other materials filed or to be filed by the Company with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Company) contain statements that are forward-looking, such as statements relating to plans for sales and marketing, liquidity, and other business activities and developments. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, dependence on a limited number of customers, general economic conditions, or changes in federal or state laws or regulations.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 3. CONTROLS AND PROCEDURES
The President and Chief Executive Officer and of the Company have concluded based on their evaluation as of the period covered by this Report, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the president, as appropriate to allow timely decisions regarding required disclosure.
There were no significant changes in the Company's internal controls or, to our knowledge, in other factors that could significantly affect these internal controls subsequent to the date of such evaluation.
ITEM 6. Exhibits and Reports on Form 8-K
None.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Table Trac, Inc.
Date November 10, 2005
By: /s/ Chad
Hoehne
President CEO
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
SECURITIES EXCHANGE ACT OF 1934
RULE 13a-14(a) OR 15d-14(a)
I, Chad Hoehne, certify that:
1. I have reviewed and read
this Quarterly Report on Form 10-QSB of Table Trac, Inc.;
2. Based on my
knowledge, this Quarterly 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 Quarterly Report;
3.
Based on my knowledge, the financial statements and other financial information
included in this Quarterly Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods presented in this Quarterly Report;
4. I am
responsible for establishing and maintaining disclosure controls and procedures
(as defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervisions, to
ensure that material information relating to the registrant is made known to us
by others within those entities, particularly during the period in which this
Quarterly Report is being prepared;
(b) 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 Quarterly Report based
on such evaluation; and
(c) disclosed in this Quarterly 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. I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant's
auditors and board of directors performing the equivalent functions of an audit
committee:
(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 controls over financial
reporting; and
Date: November 14, 2005
By: /s/ Chad Hoehne
Name: Chad
Hoehne
Title: Chief Executive Officer and principal financial officer
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
SECURITIES EXCHANGE ACT OF 1934
RULE 13a-14(a) OR 15d-14(a)
I, Chad Hoehne certify that:
6. I have reviewed and read this
Quarterly Report on Form 10-QSB of Table Trac, Inc.;
7. Based on my
knowledge, this Quarterly 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 Quarterly Report;
8.
Based on my knowledge, the financial statements and other financial information
included in this Quarterly Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods presented in this Quarterly Report;
9. I am
responsible for establishing and maintaining disclosure controls and procedures
(as defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervisions, to
ensure that material information relating to the registrant is made known to us
by others within those entities, particularly during the period in which this
Quarterly Report is being prepared;
(b) 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 Quarterly Report based
on such evaluation; and
(c) disclosed in this Quarterly 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
10. I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant's auditors and board of directors performing the equivalent
functions of an audit committee:
(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 controls over financial reporting; and
Date: November 14, 2005
By: /s/ Chad Hoehne
Chief Executive Officer and principal financial
officer
CERTIFICATION PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
RULE 13a-14(b) OR 15d-14(b) AND
18 U.S.C. SECTION 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-QSB for quarter ended September 30, 2005 as filed with
the Securities and Exchange Commission on the date hereof (the "Quarterly
Report"), I, Chad Hoehne, Chief Executive Officer of the Company, certify for
the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the
Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of
Chapter 63 of Title 18 of the United States Code, that:
1. the Quarterly
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Exchange Act; and
2. the information contained in the Quarterly Report
fairly presents, in all material respect, the financial condition and results
of operations of the Company.
Dated: November 14, 2005
By: /s/ Chad Hoehne
Chief Executive
Officer and principal financial officer
CERTIFICATION PURSUANT TO SECURITIES EXCHANAGE ACT OF
1934
RULE 13a-14(b) OR 15d-14(b) AND
18 U.S.C. SECTION 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-QSB for quarter ended September 30, 2005, as filed with
the Securities and Exchange Commission on the date hereof (the "Quarterly
Report"), I, Chad Hoehne, Chief Financial Officer of the Company, certify for
the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the
Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of
Chapter 63 of Title 18 of the United States Code, that:
3. the Quarterly
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Exchange Act; and
4. the information contained in the Quarterly Report
fairly presents, in all material respect, the financial condition and results
of operations of the Company.
Dated: November 14, 2005
By: /s/ Chad Hoehne
Chief Executive Officer and principal financial
officer