UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-28383
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Table Trac, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 88-0336568
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4200 Kemrich Minnetonka, Minnesota 55345
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(Address of principal executive offices)
(952) 939-9679
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(Registrant's telephone number, including area code)
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
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2,865,688 Shares Of Common Stock were outstanding as of June 30, 2000
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Table Trac, Inc.
I N D E X
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets as of June 30, 2000
and December 31, 1999 1
Statements of Operations for the
three months and six months ended June 30,
2000 and 1999 2
Statements of Cash Flows for the
three months and six months ended June 30,
2000 and 1999 3
Selected Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II. OTHER INFORMATION 6-7
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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Part I. FINANCIAL INFORMATION
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Item I. FINANCIAL STATEMENTS
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Table Trac, Inc.
(A Development Stage Company)
Balance Sheets
(Unaudited)
June 30, 2000 December 31, 1999
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<S> <C> <C>
ASSETS
Current Assets
Cash $ 91,354 $ 77,621
Total Accounts Receivable 34,684 3,933
Other Current Assets
Deferred Loan Costs 11,667 0
Prepaid Insurance 0 180
Prepaid Legal 2,745 2,863
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Total Other Current Assets 14,412 3,043
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Total Current Assets 140,450 84,597
Fixed Assets
Fixed Assets 806 3,576
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Total Fixed Assets 806 3,576
Other Assets:
Loans To Shareholders 34,130 36,130
Inventory 32,126 22,227
Other assets 25,888 23,490
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Total other Assets 92,144 81,847
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TOTAL ASSETS $ 233,400 $ 170,020
========= =========
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Total Accounts Payable $ 9,689 $ 1,470
Notes payable - stockholders 50,000 50,000
Debentures payable - stockholders 72,500 72,500
Total Other Current Liabilities 824 2,127
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Total Current Liabilities 133,013 126,097
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Long Term Liabilities
Convertible Debentures 125,000 0
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Total Long Term Liabilities 125,000 0
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Total Liabilities 258,013 126,097
Equity
Capital Stock 574,703 574,703
Retained Earnings (599,316) (530,780)
0 0
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Total Equity (24,613) 43,923
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TOTAL LIABILITIES & EQUITY $ 233,400 $ 170,020
========= =========
See Notes to Financial Statements.
1
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Table Trac, Inc.
(A Development Stage Company)
Statements Of Operations
(Unaudited)
Three Months Ended Six Months Ended
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June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
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Ordinary Income/Expense
Sales $ 54,387 $ 26,982 $ 61,806 $ 37,748
Cost of Goods Sold 2,357 15,441 5,367 19,007
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Gross Profit 52,030 11,541 56,439 18,741
Operating Expense 67,254 42,468 127,237 63,688
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Net Ordinary Income (Loss) (15,224) (30,927) (70,798) (44,947)
Other Income (Expense)
Interest Income 1,311 387 2,262 387
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Net Income (Loss) before Taxes (13,913) (30,540) (68,536) (44,560)
Income Taxes 0 0 0 0
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Net Income (Loss) $ (13,913) $ (30,540) $ 68,536) $ 44,560)
=========== =========== =========== ===========
Loss per Share $ (0.01) $ (0.01) $ (0.02) $ (0.02)
=========== =========== =========== ===========
Loss Per Common Share Assuming Dilution $ (0.01) $ (0.01) $ (0.02) $ (0.02)
=========== =========== =========== ===========
Weighted Average Outstanding Shares 2,865,668 2,586,999 2,865,668 2,586,999
=========== =========== =========== ===========
See Notes to Financial Statements.
2
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Table Trac, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Three Months Ended Six Months Ended
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June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
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OPERATING ACTIVITIES
Net Income $ (13,912) $ (30,540) $ (68,536) $ (44,560)
Adjustments to reconcile Net Income
to net cash provided by operations:
Amortization 0 (2,169) 103 (2,169)
Depreciation 1,691 0 2,770 0
Accounts Payable 7,488 16,918 8,218 18,750
Accounts Receivable (30,987) (16,416) (30,751) (13,113)
Inventory (12,910) (10,721) (9,899) (8,961)
Loans To Shareholders (1,500) (7,650) 2,000 (19,234)
Payroll Liabilities (1,203) 430 (1,303) (2,417)
Prepaid Expenses 117 0 297 0
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Net cash provided by Operating Activities (51,216) (47,979) (97,101) (69,535)
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INVESTING ACTIVITIES
Stock Holdings 0 0 (2,500) 0
Deferred Loan Costs (1,125) 0 (11,667) 0
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Net cash provided by Investing Activities (1,125) 0 (14,167) 0
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FINANCING ACTIVITIES
Loan Payable 0 (16,000) 0 (6,000)
Convertible Debentures 25,000 0 125,000 0
Capital Stock 0 160,363 0 166,363
Capital Stock:offering expenses 0 (28,342) (31,469)
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Net cash provided by Financing Activities 25,000 116,021 125,000 128,894
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Net cash increase for period (27,341) 68,042 13,732 59,359
Cash at beginning of period 118,695 (24) 77,622 8,660
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Cash at end of period $ 91,354 $ 68,018 $ 91,354 $ 68,019
========= ========= ========= =========
See Notes to Financial Statements.
3
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Table Trac, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
Note 1. Basis of Presentation:
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period and six month
period ended June 30, 2000 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2000. For
further information, refer to the financial statements and footnotes
thereto included in the Company's Form 10-KSB for the year ended
December 31, 1999.
Note 2. Revenue Recognition:
Revenues are recorded at the time of shipment of products or
performance of services. Monthly license fees are recorded over the
lives of the respective contracts or as earned.
Note 3. Customer Concentration:
One major customer comprised 100% of the Company's revenues from
installation and licensing fees from the installation of the Company's
Table Trac(TM) system through April 2000.
Note 4. Contingent Debenture Interest:
Payment of interest on the debentures payable - stockholders is
contingent on future earnings. If the Company is successful in
achieving profitable operations it will be obligated to pay contingent
debenture interest of $72,500 in addition to the $72,500 in debentures
currently reflected as current in the accompanying financial
statements. It is at least reasonably possible the Company will
achieve profitable operations and will be required to settle this
obligation for $145,000.
Note 5. Convertible Debenture Private Placement:
In 2000 the Company attempted to raise $700,000 through a private
placement of convertible debentures. The Company sold $125,000 of
these convertible debentures. These convertible debentures bear
interest at 10% per year payable monthly. Beginning in the 13th month
the investor will receive monthly payments of interest plus 9% of the
principal. These debentures are convertible into shares of the
Company's common stock at $2 per share.
4
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Table Trac, Inc.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Business Overview:
The Table Trac(TM) system (patent number 5,957,776) is available for an
installation and monthly license fee from the Company for casinos with a minimum
number of tables. The first customer installation was in June 1996, in a 10
table casino in northern Minnesota. The second customer installation was
purchased by the same operator and installed in July 1997. Both systems have
been operational since. In April 2000 the Company completed installation at the
L.C.O. Casino in Hayward, Wisconsin. With the system developed, site tested and
commercial viability established, the Company has turned its focus to sales and
marketing.
Results of Operations:
Revenues in the quarter ended June 30 increased to $54,387 in 2000 from
$26,982 in 1999. There were increased license fees, increased sales, and
decreased consulting fees in 2000 to account for the difference. All of the
Company's revenues from installation and licensing fees from the installation of
the Company's Table Trac(TM) system were from one customer through April 2000.
In April 2000 license fees commenced from a second installation of the Company's
Table Trac(TM) system.
Costs of sales in the quarter ended June 30 decreased in 2000 to $2,357
from $15,441 in 1999 as a result of increased custom software in 2000.
Operating expenses in the quarter ended June 30 increased in 2000, to
$67,199 from $42,468. The major changes were increased sales expense, payroll
and professional fees in 2000 compared to 1999.
The result was that there was a net loss of $13,858 in the second quarter
2000 compared to a net loss of $30,540 in the second quarter 1999. The net loss
per share was $.01 in the second quarter 2000 compared to a net loss per share
of $.01 in the second quarter 1999.
Revenues in the six months ended June 30 increased to $61,806 in 2000 from
$37,748 in 1999. Costs of sales decreased in 2000 to $5,367 from $19,007 in
1999. Operating expenses increased in 2000 to $127,237 from $63,688 in 1999.
The result was that there was a net loss of $68,536 through June 30, 2000
compared to a net loss of $44,560 through June 30, 1999. The net loss per share
was $.02 through June 30, 2000 compared to a net loss per share of $.02 through
June 30, 1999.
Liquidity and Capital Resources:
In 2000 the Company has raised $125,000 through the sale of convertible
debentures. The Company feels that these monies, as well as monies provided from
current revenues will be sufficient to meet operating needs during the next
twelve-month period. The Company will continue to look for additional
installations, but there can be no assurances that the Company will be
successful in its efforts.
5
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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
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Item 1. Legal Proceedings
The Company is aware of no legal proceeding that is pending or
threatened to which the Company is a party or of which its property is
subject.
Item 6. Exhibits and Reports on Form 8-K
(b) No reports on Form 8-K were filed during the three months ended
June 30, 2000.
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 August 9, 2000 By: /s/ Chad Hoehne
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President and Director
