Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 08, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Galaxy Gaming, Inc. | |
Entity Central Index Key | 13,156 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 39,565,591 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,161,666 | $ 2,304,761 |
Restricted cash | 93,270 | 84,577 |
Accounts receivable, net of allowance for bad debts of $38,015 and $31,125, respectively | 2,396,087 | 2,137,245 |
Inventory, net | 525,543 | 427,105 |
Prepaid expense and other | 307,157 | 194,747 |
Total current assets | 6,483,723 | 5,148,435 |
Goodwill and other intangible assets, net | 11,825,005 | 12,846,019 |
Deferred tax assets, net | 367,057 | 367,057 |
Other assets, net | 23,000 | 82,050 |
Total assets | 19,292,441 | 19,011,945 |
Current liabilities: | ||
Accounts payable | 329,193 | 461,913 |
Accrued expenses | 1,722,039 | 1,109,428 |
Income taxes payable | 662,159 | 786,430 |
Deferred revenue | 1,050,416 | 1,014,731 |
Deferred rent, current portion | 21,494 | 14,938 |
Current portion of long-term debt and capital lease obligations | 1,121,289 | 1,230,285 |
Other current liabilities | 119,960 | 90,960 |
Total current liabilities | 5,026,550 | 4,708,685 |
Deferred rent, net | 21,037 | 37,704 |
Capital lease obligations, net | 22,589 | 46,978 |
Common stock warrant liability | 1,333,333 | 923,616 |
Long-term debt, net | 7,620,230 | 8,669,151 |
Total liabilities | 14,023,739 | 14,386,134 |
Commitments and Contingencies (See Note 10) | ||
Stockholders’ equity | ||
Preferred stock, 10,000,000 shares authorized, $0.001 par value; 0 shares issued and outstanding, respectively | ||
Common stock, 65,000,000 shares authorized; $0.001 par value; 39,565,591 and 39,315,591 shares issued and outstanding, respectively | 39,566 | 39,316 |
Additional paid-in capital | 3,697,536 | 3,109,473 |
Accumulated earnings | 1,531,600 | 1,477,022 |
Total stockholders’ equity | 5,268,702 | 4,625,811 |
Total liabilities and stockholders’ equity | 19,292,441 | 19,011,945 |
Property Plant and Equipment Excluding Assets Leased to Others | ||
Current assets: | ||
Property and equipment, net | 293,488 | 356,253 |
Products Leased and Held for Lease, Net | ||
Current assets: | ||
Property and equipment, net | $ 300,168 | $ 212,131 |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Accounts receivables, net allowance for bad debts | $ 38,015 | $ 31,125 |
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Issued | 0 | 0 |
Preferred Stock, Outstanding | 0 | 0 |
Common Stock, Shares authorized | 65,000,000 | 65,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Issued | 39,565,591 | 39,315,591 |
Common Stock, Outstanding | 39,565,591 | 39,315,591 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Product leases and royalties | $ 3,830,351 | $ 3,190,823 | $ 10,955,055 | $ 9,229,815 |
Product sales and service | 69 | 1,146 | 9,469 | 10,425 |
Total revenue | 3,830,420 | 3,191,969 | 10,964,524 | 9,240,240 |
Costs and expenses: | ||||
Cost of ancillary products and assembled components | 50,369 | 26,763 | 133,517 | 78,075 |
Selling, general and administrative | 2,362,601 | 1,553,556 | 6,808,659 | 4,819,373 |
Research and development | 139,185 | 89,513 | 403,618 | 270,734 |
Depreciation and amortization | 440,130 | 419,540 | 1,323,772 | 1,252,860 |
Share-based compensation | 384,925 | 41,075 | 553,313 | 91,006 |
Total costs and expenses | 3,377,210 | 2,130,447 | 9,222,879 | 6,512,048 |
Income from operations | 453,210 | 1,061,522 | 1,741,645 | 2,728,192 |
Other income (expense): | ||||
Settlement income | 697,214 | 697,214 | ||
Interest expense | (432,466) | (227,632) | (1,316,045) | (741,045) |
Loss on extinguishment of debt | (515,037) | (515,037) | ||
Foreign currency exchange gains (losses) | 59,624 | (5,926) | 125,576 | 354,301 |
Change in estimated fair value of warrant liability | (86,308) | 2,933 | (409,717) | 2,933 |
Interest income | 56 | 202 | ||
Total other expense | (459,150) | (48,392) | (1,600,186) | (201,432) |
(Loss) income before provision for income taxes | (5,940) | 1,013,130 | 141,459 | 2,526,760 |
Provision for income taxes | (21,990) | (351,412) | (86,881) | (873,768) |
Net (loss) income | $ (27,930) | $ 661,718 | $ 54,578 | $ 1,652,992 |
Net (loss) income per share, basic and diluted | $ 0 | $ 0.02 | $ 0 | $ 0.04 |
Weighted-average shares outstanding: | ||||
Basic | 39,432,982 | 39,315,591 | 39,368,521 | 39,372,944 |
Diluted | 39,432,982 | 39,465,676 | 41,216,750 | 39,559,494 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 54,578 | $ 1,652,992 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,323,772 | 1,252,860 |
Amortization of debt issuance costs and debt discount | 218,910 | 136,710 |
Bad debt expense | 6,000 | |
Loss on extinguishment of debt | 515,037 | |
Change in estimated fair value of warrant liability | 409,717 | (2,933) |
Share-based compensation | 553,313 | 91,006 |
Unrealized foreign exchange (gains) losses on cash and cash equivalents | (92,243) | 31,886 |
Changes in operating assets and liabilities: | ||
Restricted cash | (8,693) | 10,009 |
Accounts receivable | (264,842) | (108,674) |
Inventory | (271,149) | (181,319) |
Prepaid expenses and other current assets | (112,410) | 8,922 |
Accounts payable | (132,720) | (858,404) |
Income tax payable | (124,271) | 822,482 |
Accrued expenses | 612,611 | 152,871 |
Deferred revenue | 35,685 | 152,938 |
Other current liabilities | 29,000 | (15,069) |
Deferred rent | (10,111) | (3,555) |
Net cash provided by operating activities | 2,227,147 | 3,657,759 |
Cash flows from investing activities: | ||
Investment in intangible assets | (43,917) | |
Acquisition of property and equipment | (52,352) | (43,345) |
Net cash used in investing activities | (96,269) | (43,345) |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 35,000 | |
Debt issuance costs | (17,091) | |
Proceeds received from long-term debt | 932,126 | |
Principal payments on capital lease obligations | (23,087) | (51,698) |
Principal payments on long-term debt | (1,361,038) | (3,209,922) |
Net cash used in financing activities | (1,366,216) | (2,329,494) |
Effect of exchange rate changes on cash | 92,243 | (31,886) |
Net increase in cash and cash equivalents | 856,905 | 1,253,034 |
Cash and cash equivalents – beginning of period | 2,304,761 | 570,623 |
Cash and cash equivalents – end of period | 3,161,666 | 1,823,657 |
Supplemental cash flow information: | ||
Cash paid for interest | 1,099,738 | 753,250 |
Inventory transferred to assets held for lease | 172,711 | 108,577 |
Cash paid for income taxes | $ 150,000 | 35,000 |
Supplemental non-cash financing activities information: | ||
Issuance of warrants in conjunction with term loan | 809,631 | |
Points paid on term loan | $ 262,500 |
NATURE OF OPERATIONS AND RESTAT
NATURE OF OPERATIONS AND RESTATEMENT | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND RESTATEMENT | NOTE 1. NATURE OF OPERATIONS AND RESTATEMENT Unless the context indicates otherwise, references to “Galaxy Gaming, Inc.,” “we,” “us,” “our,” or the “Company,” refer to Galaxy Gaming, Inc., a publicly reporting Nevada corporation (“Galaxy Gaming”). Nature of operations. We are an established global gaming company specializing in the design, development, manufacturing, marketing and acquisition of proprietary casino table games and associated technology, platforms and systems for the casino gaming industry. We are a leading supplier of gaming entertainment products worldwide and provide a diverse offering of quality products and services at competitive prices designed to enhance the player experience. Restatement. The financial statements as of and for the three and nine months ended September 30, 2016 have been restated to correct the following errors noted during the preparation of the financial statements for the year ended December 31, 2016: (i) the amortization of original issue discount related to notes payable to Prime Table Games LLC and Prime Table Games UK (the “PTG Notes”) was not previously deducted from taxable income in our federal tax returns from 2011 through 2015 or to derive the income tax provision for the three and nine months ended September 30, 2016, which resulted in an understatement of deferred tax assets and an overstatement of the income tax provision in those periods; and (ii) foreign currency exchange gains and losses related to the PTG Notes were incorrectly reported as other comprehensive income instead of earnings ( i.e. , non-operating income). The restatements to reflect the correction of both errors are referred to herein collectively as the "Restatement." The table below sets forth the amounts as originally reported for the categories presented in the condensed statements of operations that were affected by the Restatement, the effect of the Restatement and the restated amounts for the three and nine months ended September 30, 2016: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Statements of Income As originally reported Impact of restatement As restated As originally reported Impact of restatement As restated Selling, general and administrative $ 1,576,480 $ (22,924 ) $ 1,553,556 $ 4,850,785 $ (31,412 ) $ 4,819,373 Provision for income taxes (602,619 ) 251,207 (351,412 ) (990,639 ) 116,871 (873,768 ) Foreign currency exchange (losses) gains — (5,926 ) (5,926 ) — 354,301 354,301 Loss on extinguishment of debt (87,578 ) (427,459 ) (515,037 ) (87,578 ) (427,459 ) (515,037 ) Net income 820,972 (159,254 ) 661,718 1,577,867 75,125 1,652,992 The table below sets forth the amounts as originally reported for the categories presented in the condensed statements of cash flows that were affected by the Restatement, the effect of the Restatement and the restated amounts for the nine months ended September 30, 2016: Statement of Cash Flow As originally reported Impact of restatement As restated Net income $ 1,577,867 $ 75,125 $ 1,652,992 Loss on extinguishment of debt 87,578 427,459 515,037 Deferred income tax provision 54,370 (54,370 ) — Unrealized foreign exchange losses on cash and cash equivalents — 31,886 31,886 Increase in accounts receivable (107,969 ) (705 ) (108,674 ) Decrease in other current assets 43,017 (43,017 ) — Decrease in prepaid expenses and other current assets 6,608 2,314 8,922 Decrease in accounts payable (858,954 ) 550 (858,404 ) Increase in income taxes payable 936,269 (113,787 ) 822,482 Increase in accrued expenses 141,841 11,030 152,871 Net cash provided by operating activities 3,321,274 336,485 3,657,759 Principal payments on notes payable (2,873,437 ) (336,485 ) (3,209,922 ) Net cash used in financing activities (1,993,009 ) (336,485 ) (2,329,494 ) |
SIGNIFICANT BUSINESS DEVELOPMEN
SIGNIFICANT BUSINESS DEVELOPMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Significant Business Developments [Abstract] | |
SIGNIFICANT BUSINESS DEVELOPMENTS | NOTE 2. SIGNIFICANT BUSINESS DEVEVELOPMENTS Resignation of Chairman, Chief Executive Officer (“CEO”) and President. On July 24, 2017, Robert B. Saucier resigned from his positions as Chairman of the Board, CEO and President in order to aid us in our expanded regulatory jurisdictional ambitions. Concurrently with Mr. Saucier’s resignation, the Board of Directors (the “Board”) appointed Mr. Saucier to serve as Executive Vice President of Business Development and Chief Product Officer. In these new positions, he receives an annual salary of $225,000 and is eligible to receive performance-based bonuses and incentives, as well as employee benefits and other perquisites. Mr. Saucier’s resignation was not the result of any disagreements with the Company, and he remains a member of the Board. Appointment of new President and CEO. Effective July 24, 2017, the Board appointed Todd P. Cravens to serve as President and CEO. Mr. Cravens was previously serving as our Vice President of Business Development, a position he had held since January 1, 2017. Mr. Cravens’ employment agreement related to his position as Vice President of Business Development was terminated and superseded with a new employment agreement to reflect his new positions and responsibilities. Pursuant to the new employment agreement (the “Cravens Employment Agreement”), Mr. Cravens receives an annual base salary of $230,000, is eligible for bonuses if and as approved by the Compensation Committee of the Board and was granted options to purchase our common stock. See Note 14 for further detail on the options granted. The term of the Cravens Employment Agreement is through July 26, 2020. Mr. Cravens is entitled to certain severance payments in the event his employment with us is terminated by us without cause following a change of control, or following termination of the Cravens Employment Agreement by Mr. Cravens. Appointment of new Director. On July 26, 2017, the Board appointed Mark A. Lipparelli as a member of the Board to fill a newly-created board seat and elected Mr. Lipparelli to serve as Chairman of the Board. On August 31, 2017, we entered into a Board of Directors Services Agreement (the “ Lipparelli Agreement”), pursuant to which Mr. Lipparelli receives monthly compensation of $7,500 and all customary and usual fringe benefits generally available to non-employee directors of the Board, and was granted shares of restricted common stock of the Company . See Note 12 for further detail on the restricted common stock granted. Voting and dispositive control transfer agreements. On September 22, 2017, the Nevada Gaming Commission (the “NGC”) granted us licensure as a manufacturer and distributor of gaming products, which approval triggered the effectiveness of five Voting and Dispositive Control Transfer Agreements (the “VDCTA Agreements”). The VDCTA Agreements collectively served to transfer voting and dispositive control of certain shares owned of record by Triangulum Partners, LLC, a New Mexico limited liability company (“Triangulum”) to named recipients (each a “Recipient” and collectively, the “Recipients”). We and the Recipients (named below) previously entered into the VDCTA Agreements on August 18, 2017. However, the VDCTA Agreements did not become effective until September 22, 2017, concurrently with the NGC granting us a license as a manufacturer and distributor of gaming products in accordance with the stated terms of the VDCTA Agreements. The term of the VDCTA Agreements is while Mr. Saucier’s application for licensure with the NGC is pending. The VDCTA Agreements were made and entered into by and among Triangulum, a limited liability company of which the managing member is Mr. Saucier, and each of the Recipients. Prior to the VDCTA Agreements, Triangulum owned and controlled shares equal to approximately 60.12% of our total issued and outstanding common stock. The Recipients of the voting and dispositive control of the shares under the VDCTA Agreements are as follows: Name Number of shares Percentage of total outstanding* Mark Lipparelli 1,269,161 shares 3.22% Bryan Waters 1,269,161 shares 3.22% Norm DesRosiers 1,269,161 shares 3.22% William Zender 1,269,161 shares 3.22% John Connelly 1,269,161 shares 3.22% Total 6,345,805 shares 16.12% * The percentages listed in the table are based on 39,365,591 total outstanding shares and do not include other shares held by such Recipients. Messrs. Lipparelli, Waters, DesRosiers and Zender are members of our Board. During the term of the VDCTA Agreements, Triangulum granted an irrevocable proxy to each of the Recipients to vote the shares of our common stock covered by the VDCTA Agreements, and conveyed to each Recipient the right to “Transfer” the shares, defined as a “sale, transfer, tender, assignment, encumbrance, gift, pledge, hedge, swap, or other disposition, directly or indirectly” of the shares or any right or interest therein. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) . In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. As permitted by the rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all necessary adjustments, consisting only of those of a recurring nature, and disclosures to present fairly our financial position and the results of its operations and cash flows for the periods presented. These unaudited interim condensed financial statements should be read in conjunction with the financial statements and the related notes thereto included in our Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on April 14, 2017 (the “2016 10-K”). Basis of accounting. The financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. Revenues are recognized when earned and expenses are recognized when they are incurred. We do not have significant cost of revenue, as most of our revenue is derived from the licensing of intellectual properties. As a result, we do not separately present cost of revenue and gross profit in our statements of operations. Significant Accounting Policies. S ee Note 2 in Item 8. “Financial Statements and Supplementary Data” included in our 2016 10-K. Use of estimates and assumptions. We are required to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our company and the industry as a whole, and information available from other outside sources. Our estimates affect reported amounts for assets, liabilities, revenues, expenses and related disclosures. Actual results may differ from initial estimates. Reclassifications. Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations. Recently adopted accounting standards Inventory. In July 2015, the FASB issued ASU No. 2015-11, Inventory is now required to be measured at the lower of cost or net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling process in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We adopted ASU 2015-11 effective January 1, 2017 using the required prospective adoption approach, which did not have a material effect on our financial condition, results of operations or cash flows. Stock-based compensation. In March 2016, the FASB issued No. ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. We adopted ASU 2016-09 effective January 1, 2017 using the prospective adoption approach, which did not have a material impact on our financial condition, results of operations or cash flows . New accounting standards not yet adopted Revenue Recognition. In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), , which is a comprehensive new revenue recognition standard that will supersede virtually all existing revenue guidance, including industry-specific guidance. Under the new standard, revenue will be recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. The standard creates a five-step model that will generally require companies to use more judgment and make more estimates than under current guidance when considering the terms of contracts along with all relevant facts and circumstances. These include the identification of customer contracts and separating performance obligations, the determination of transaction price that potentially includes an estimate of variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue in line with the pattern of transfer. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date We continue to assess the anticipated impact of adopting ASC 606 on our financial statements. The primary impacts of the adoption of ASC 606 are expected to be the following: (a) we will recognize an asset that represents the incremental costs of obtaining and fulfilling the contracts in existence at December 31, 2017 under the caption of prepaid expense and other assets. Such costs will be amortized on a straight-line basis over the expected term of the underlying contracts; and (b) revenues generated by our European distributors (which sublicense our intellectual properties to gaming establishments in Europe in accordance with license agreements entered into between us and such distributors) will be presented as gross revenue under the caption “product leases and royalties” and fees earned by such distributors will be presented as selling, general and administrative expenses. Currently, revenues generated by our European distributors are presented net of fees earned under the caption “product leases and royalties.” ASC 606 will significantly increase revenue disclosure requirements. We currently do not anticipate significant changes to our business processes and systems to support the adoption of ASC 606 and are currently assessing the impact on our internal controls. We will continue to monitor and assess the impact of any changes to ASC 606 and interpretations as they become available. Leases. In February 2016, the FASB issued ASU No. 2016-02, The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases being recognized on our balance sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance. Restricted Cash . In November 2016, the FASB issued ASU No. 2016-18, . This ASU requires amounts generally described as restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years with early adoption permitted. Upon the adoption of ASU 2016-08, restricted cash will be included within beginning and ending cash and cash equivalents amounts on our statements of cash flows, which we do not expect will have a material impact on our financial statements. Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-04, which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. This guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact of adopting this guidance. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4. INVENTORY Inventory, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Raw materials and component parts $ 270,863 $ 171,478 Finished goods 96,834 128,956 Work-in-process 182,846 151,671 Inventory, gross 550,543 452,105 Less: inventory reserve (25,000 ) (25,000 ) Inventory, net $ 525,543 $ 427,105 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Furniture and fixtures $ 280,694 $ 269,471 Automotive vehicles 215,127 202,143 Leasehold improvements 156,843 156,843 Computer equipment 117,645 105,114 Office equipment 53,483 37,871 Property and equipment, gross 823,792 771,442 Less: accumulated depreciation (530,304 ) (415,189 ) Property and equipment, net $ 293,488 $ 356,253 For the nine months ended September 30, 2017 and 2016, depreciation expense related to property and equipment of $115,117 and $97,326, respectively, is included in depreciation and amortization expense. Accumulated depreciation of leasehold improvements totaled $105,322 and $82,183 as of September 30, 2017 and December 31, 2016, respectively. |
PRODUCTS LEASED AND HELD FOR LE
PRODUCTS LEASED AND HELD FOR LEASE | 9 Months Ended |
Sep. 30, 2017 | |
Leases Operating [Abstract] | |
PRODUCTS LEASED AND HELD FOR LEASE | NOTE 6. PRODUCTS LEASED AND HELD FOR LEASE Products leased and held for lease, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Enhanced table systems $ 546,539 $ 424,364 Less: accumulated depreciation (246,371 ) (212,233 ) Products leased and held for lease, net $ 300,168 $ 212,131 For the nine months ended September 30, 2017 and 2016, depreciation expense related to products leased and held for lease of $84,674 and $38,595, respectively, is included in depreciation and amortization expense. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and finite-lived intangible assets, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Goodwill $ 1,091,000 $ 1,091,000 Finite-lived intangible assets: Patents 13,615,967 13,615,967 Customer relationships 3,400,000 3,400,000 Trademarks 2,740,000 2,740,000 Non-compete agreements 660,000 660,000 Internally-developed software 102,968 — Other intangible assets, gross 20,518,935 20,415,967 Less: accumulated amortization (9,784,930 ) (8,660,948 ) Other intangible assets, net 10,734,005 11,755,019 Goodwill and other intangible assets, net $ 11,825,005 $ 12,846,019 Included in amortization expense was $1,123,980 and $1,116,938 related to the above intangible assets for the nine months ended September 30, 2017 and 2016, respectively. Estimated amortization expense to be recorded for the twelve months ending September 30, 2018 through 2022 and thereafter is as follows: September 30, Total 2018 $ 1,498,873 2019 1,498,873 2020 1,481,712 2021 1,391,218 2022 1,390,676 Thereafter 3,472,653 Total amortization $ 10,734,005 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2017 | |
Payables And Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8. ACCRUED EXPENSES Accrued expenses consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 TableMAX license fee $ 736,428 $ 470,512 Payroll and related 664,140 405,553 Professional fees 152,962 59,567 Commissions and royalties 110,353 54,551 Other 58,156 119,245 Total accrued expenses $ 1,722,039 $ 1,109,428 TableMAX license fee . Under the terms of a five-year licensing agreement (the “TMAX Agreement”) with TableMAX Corporation (“TMAX”), a provider of electronic table games and platforms headquartered in Las Vegas, Nevada, we previously had exclusive worldwide rights (excluding one international territory and two U.S. states) to the TMAX electronic gaming platform and certain related game titles. Pursuant to the terms of the TMAX Agreement, the licensee fee payable to TMAX is dependent upon our generating profitable operating results specifically from the use of TMAX products. To the extent there are net profits (as defined in the TMAX Agreement), a percentage of such net profits is payable to TMAX depending on the number of TMAX product installations. The TMAX Agreement expired during 2016, and we are currently negotiating the licensing fee that is payable to TMAX. |
CAPITAL LEASE OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
CAPITAL LEASE OBLIGATIONS | NOTE 9. CAPITAL LEASE OBLIGATIONS Capital lease obligations consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Capital lease obligation – leasehold improvements $ 54,921 $ 78,008 Less: Current portion (32,332 ) (31,030 ) Total capital lease obligations – long-term $ 22,589 $ 46,978 For the years ending September 30, future annual payments for capital leases obligations are as follows: September 30, Total 2018 $ 32,332 2019 22,589 Total minimum lease payments $ 54,921 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 10. LONG-TERM DEBT Long-term debt consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Term loan $ 9,712,500 $ 10,500,000 Notes payable, related party — 509,135 Equipment notes payable 133,935 162,274 Insurance notes payable — 36,063 Notes payable, gross 9,846,435 11,207,472 Less: Unamortized debt issuance costs (513,151 ) (595,462 ) Warrants issued (624,097 ) (743,604 ) Notes payable, net 8,709,187 9,868,406 Less: Current portion (1,088,957 ) (1,199,255 ) Long-term debt, net $ 7,620,230 $ 8,669,151 Term loan. In August 2016, we entered into a term loan agreement (the “Term Loan Agreement”) for an aggregate principal amount of $10,500,000 (the "Term Loan"). Proceeds of the Term Loan were primarily used to prepay in full the outstanding notes payable to unrelated parties. The remainder of the proceeds from the Term Loan was used for general corporate purposes and working capital needs. The Term Loan is secured by a senior lien on substantially all of our assets. In conjunction with the Term Loan, we also entered into a warrant agreement (the “Warrant Agreement”), pursuant to which we issued the lenders a six-year warrant to purchase 1,965,780 shares of our common stock (the “Warrants”). See Note 14. The estimated fair value of the Warrants on the grant date was determined to be $809,632 using the Black-Scholes option pricing model, and was recorded as a reduction of the related debt. The estimated fair value of the Warrants on the grant date is being amortized ratably over the term of the Warrants to interest expense. Under the Term Loan, we are subject to quarterly financial covenants that, among other things, limit our annual capital expenditures (as defined in the Term Loan Agreement), and require us to maintain a specified leverage ratio and minimum EBITDA amounts, each of which are defined in the Term Loan agreement. We were in compliance with the financial covenants of the Term Loan Agreement as of September 30, 2017. During the initial twelve-month period of the Term Loan, the outstanding principal will accrue interest at the rate of 14.0% per annum. Thereafter, the outstanding principal will accrue interest at the lesser of 14.0% per annum or 12.5% per annum for any quarterly period in which we achieve a specified leverage ratio. The Term Loan required quarterly interest-only payments through December 31, 2016, after which we are required to make quarterly principal payments of $262,500 plus accrued interest. The remaining principal and any unpaid interest will be payable in full on August 29, 2021. Voluntary prepayments of the Term Loan, in full or in part, are permitted after the first anniversary of the Term Loan, subject to certain premiums. The Term Loan also requires certain mandatory prepayments in the amount of 100% of the proceeds from certain asset dispositions (other than in the ordinary course of business) and certain other extraordinary events, and 25% of the proceeds from the sale and issuance of capital stock. The foregoing summary of the Term Loan Agreement and the Warrant Agreement is qualified in its entirety by reference to the respective agreements, which are found as Exhibits 99.1 and 99.2, respectively, to our Form 8-K filed with the SEC on August 29, 2016. Notes payable, related party . In connection with an asset purchase agreement executed in December 2007, we executed a note payable to an entity owned and controlled by Mr. Saucier (the “Related Party Note Payable”). The Related Party Note Payable required annual principal and interest payments of $109,908, at a fixed interest rate of 7.3% through December 2018, at which time there was a balloon payment due of $354,480. On August 11, 2017, we repaid in full the then-outstanding principal balance along with accrued and unpaid interest (in the aggregate amount of $459,683) on the Related Party Note Payable. This payment constituted a Restricted Payment as defined in our Term Loan, and we received a waiver with respect to the payment from the administrative agent for the Term Loan. As of September 30, 2017, maturities of our long-term debt obligations are as follows: September 30, Total 2018 $ 1,088,957 2019 1,090,223 2020 1,076,750 2021 6,584,849 2022 5,656 Total notes payable 9,846,435 Less: Unamortized debt issuance costs (513,151 ) Warrants issued (624,097 ) Notes payable, net $ 8,709,187 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Concentration of risk. We are exposed to risks associated with a client who represent a significant portion of total revenues. For the nine months ended September 30, 2017 and 2016, respectively, we had the following client revenue concentration: Location 2017 Revenue 2016 Revenue Client A North America 13.6% 13.6% We are also exposed to risks associated with the expiration of our patents. In 2015, domestic and international patents for two of our products expired, which accounted for approximately $5,370,094 or 49.0% of our revenue for the nine months ended September 30, 2017, as compared to $4,299,637 or 46.5% of our revenue for the nine months ended September 30, 2016. We continue to generate higher revenue from these products despite the expiration of the underlying patents and, accordingly, we do not expect the expiration of these patents to have a significant adverse impact on our future financial statements. Operating lease. In February 2014, we entered into a lease (the “Spencer Lease”) for a new corporate office with an unrelated third party. The five-year Spencer Lease is for an approximately 24,000 square foot space, which is comprised of approximately 16,000 square feet of office space and 8,000 square feet of warehouse space. The property is located in Las Vegas, Nevada. The initial term of the Spencer Lease commenced on April 1, 2014 and expires on June 30, 2019. We were obligated to pay approximately $153,000 in annual base rent in the first year, and the annual base rent is scheduled to increase by approximately 4% each year. We are also obligated to pay real estate taxes and other building operating costs. Subject to certain conditions, we have certain rights under the Spencer Lease, including rights of first offer to purchase the premises if the landlord elects to sell. We also have an option to extend the term of the Spencer Lease for two consecutive terms of three years each, at the then current fair market value rental rate determined in accordance with the terms of the Spencer Lease. In connection with the commencement of the Spencer Lease, the landlord agreed to finance tenant improvements (“TI Allowance”) of $150,000. The base rent is increased by an amount sufficient to fully amortize the TI Allowance through the initial Spencer Lease term upon equal monthly payments of principal and interest, with interest imputed on the outstanding principal balance at the rate of 5.5% per annum. The TI Allowance has been classified as a capital lease on the condensed balance sheet. Total rent expense was $217,650 and $208,961 for the nine months ended September 30, 2017 and 2016, respectively. There are currently no operating lease commitments that extend beyond April 1, 2020. As of September 30, 2017, the amounts shown in the accompanying table reflect our estimates of annual future minimum lease obligations: September 30, Annual obligation 2018 $ 232,368 2019 179,190 Total obligations $ 411,558 Legal proceedings. In the ordinary course of conducting our business, we are, from time to time, involved in various legal proceedings, administrative proceedings, regulatory government investigations and other matters, including those in which we are a plaintiff or defendant, that are complex in nature and have outcomes that are difficult to predict. We record accruals for such contingencies to the extent we conclude that it is probable that a liability will be incurred and the amount of the related loss can be reasonably estimated. Our assessment of each matter may change based on future unexpected events. An unexpected adverse judgment in any pending litigation could cause a material impact on our business operations, intellectual property, results of operations or financial position. Unless otherwise expressly stated, we believe costs associated with litigation will not have a material impact on our financial position or liquidity, but may be material to the results of operations in any given period. We assume no obligation to update the status of pending litigation, except as may be required by U.S. GAAP, applicable law, statue or regulation. For a complete description of the facts and circumstances surrounding material litigation to which we are a party, see Note 12 in Item 8. “Financial Statements and Supplementary Data” included in our 2016 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12. STOCKHOLDERS’ EQUITY In February 2017, a former employee forfeited 100,000 shares of unvested restricted stock and paid us $35,000 in connection with the exercise of 150,000 fully-vested stock options. On August 31, 2017, in accordance with the Lipparelli |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13. INCOME TAXES Our forecasted annual effective tax rate at September 30, 2017 was 56.6%, as compared to 34.2% at September 30, 2016. For the nine months ended September 30, 2017 and 2016, our effective tax rate was 51.4% and 34.3%, respectively. The increase in the effective tax rate was primarily due to the permanent book-to-tax difference generated by changes in the estimated fair value of the warrant liability as of and for the nine months ended September 30, 2017. |
STOCK WARRANTS, OPTIONS AND GRA
STOCK WARRANTS, OPTIONS AND GRANTS | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
STOCK WARRANTS, OPTIONS AND GRANTS | NOTE 14. STOCK WARRANTS, OPTIONS AND GRANTS Stock options. During the nine months ended September 30, 2017 and 2016, we issued 1,390,000 and 427,500 options to purchase our common stock, respectively, to members of our Board, independent contractors, executive officers and employees. On May 1, 2017, we entered into an employment agreement (the “Hagerty Employment Agreement”) with Harry C. Hagerty, pursuant to which Mr. Hagerty serves as our Secretary, Treasurer and Chief Financial Officer for a term that extends through April 30, 2020. Pursuant to the Hagerty Employment Agreement, Mr. Hagerty receives a base salary of $120,000 per annum and is eligible for bonuses if and as approved by the Compensation Committee of the Board. In addition, Mr. Hagerty has been granted options to purchase 400,000 shares of our Common Stock at an exercise price per share of $0.60, subject to vesting and other conditions. On July 26, 2017, in connection with the Cravens Employment Agreement, Mr. Cravens was granted options to purchase up to 450,000 shares of our common stock, which vest as follows: (i) as to the first 150,000 shares of stock, on July 26, 2017, (ii) as to the next 150,000 shares of stock, on August 1, 2018, and (iii) as to the next 150,000 shares of stock, on August 1, 2019, all pursuant to the terms of a stock option grant agreement by and between us and Mr. Cravens. Provided that Mr. Cravens is a full-time employee on August 1, 2020, we agreed to grant to Mr. Cravens an option to purchase an additional 150,000 shares of our common stock with a strike price equal to the price per share of our common stock as reported on OTC Markets on August 1, 2020 (or the nearest trading date thereafter), which option will vest on August 1, 2020 (or the nearest trading date thereafter). The fair value of all stock options granted for the nine months ended September 30, 2017 and 2016 was determined to be $652,895 and $96,137, respectively, using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2017 Nine months ended September 30, 2016 Dividend yield 0% 0% Expected volatility 80% - 87% 89% - 90% Risk free interest rate 1.73% - 1.94% 1.01% - 1.22% Expected life (years) 5.00 5.00 A summary of stock option activity is as follows: Common s Weighted- average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Outstanding – December 31, 2016 1,496,250 $ 0.32 $ 385,017 3.57 Issued 1,390,000 0.71 — — Exercised (150,000 ) 0.23 — — Expired — — — — Outstanding – September 30, 2017 2,736,250 $ 0.52 $ 1,767,429 3.87 Exercisable – September 30, 2017 1,822,359 $ 0.46 $ 1,289,100 3.53 A summary of unvested stock option activity is as follows: Common s options Weighted-average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Unvested – December 31, 2016 128,889 $ 0.34 $ 30,933 3.99 Granted 1,390,000 0.71 — — Vested (604,998 ) 0.73 — — Forfeited or expired — — — — Unvested – September 30, 2017 913,891 $ 0.65 $ 478,329 4.54 As of September 30, 2017, our unrecognized stock-based compensation expense associated with the stock options issued was $333,888, which will be amortized over a weighted-average of 1.96 years. Warrants. On August 29, 2016, in connection with the Term Loan Agreement, we issued the lenders the Warrants to purchase 1,965,780 shares of our common stock at an initial exercise price of $0.30 per share. The number of shares of common stock issuable upon exercise of the Warrants, and/or the exercise price of such shares, is subject to standard anti-dilution adjustments in the event of stock splits, reorganizations, stock dividends, and similar events. As of the date of the Warrant Agreement, the shares of common stock issuable upon a full exercise of the Warrants represented 5.0% of the total issued and outstanding shares of our common stock. The lenders were also granted the right, but not the obligation, to purchase up to 5.0% of the total number of new securities that we may, from time to time, sell and issue. The Warrants expire on August 29, 2022, and may not be exercised prior to the earliest of (a) the fifth anniversary of the Term Loan Agreement, (b) the date on which the obligations described in the Term Loan Agreement are satisfied in full, or (c) the date on which the lenders declare all or any portion of the outstanding amount of the Term Loan to be due and payable under the terms of the Term Loan Agreement (collectively, the "Trigger Date"). Exercise of the Warrants requires a sixty (60) day prior written notice, during which time we may exercise our Call Right described below. The Warrant Agreement includes a call right (the "Call Right") whereby we can purchase the Warrants for a fixed sum of $1,333,333 upon providing the Warrant holders with a thirty (30) day prior written notice. Furthermore, the Warrant Agreement also includes a put right (the "Put Right") whereby the lenders may require us to purchase from the lenders all or any portion of the Warrants at a purchase price equal to the lesser of (a) the fair market value of the underlying shares of common stock as of the date of exercise of the Put Right, or (b) $1,333,333. The Put Right may not be exercised prior to the Trigger Date (as defined above), and the Put Right expires on August 29, 2022. The foregoing summary of the Term Loan Agreement and the Warrant Agreement is qualified in its entirety by reference to the respective agreements, which are found as Exhibits 99.1 and 99.2, respectively, to our Form 8-K filed with the SEC on August 29, 2016. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS We estimate fair value for financial assets and liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. The estimated fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates their carrying amount due to their short-term nature. The estimated fair value of our long-term debt and capital lease obligations approximates their carrying value based upon our expected borrowing rate for debt with similar remaining maturities and comparable risk. As of September 30, 2017 , the Warrants were the only financial instrument measured at estimated fair value on a recurring basis based on level 2 inputs. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 16. SUBSEQUENT EVENTS We evaluated subsequent events through the date of issuance of the financial statements. There have been no subsequent events that occurred during such period that would require adjustment to or disclosure in the financial statements as of and for the three and nine months ended September 30, 2017. |
SIGNIFICANT ACCOUNTING POLICI22
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Nature of operations | Nature of operations. We are an established global gaming company specializing in the design, development, manufacturing, marketing and acquisition of proprietary casino table games and associated technology, platforms and systems for the casino gaming industry. We are a leading supplier of gaming entertainment products worldwide and provide a diverse offering of quality products and services at competitive prices designed to enhance the player experience. |
Restatement | Restatement. The financial statements as of and for the three and nine months ended September 30, 2016 have been restated to correct the following errors noted during the preparation of the financial statements for the year ended December 31, 2016: (i) the amortization of original issue discount related to notes payable to Prime Table Games LLC and Prime Table Games UK (the “PTG Notes”) was not previously deducted from taxable income in our federal tax returns from 2011 through 2015 or to derive the income tax provision for the three and nine months ended September 30, 2016, which resulted in an understatement of deferred tax assets and an overstatement of the income tax provision in those periods; and (ii) foreign currency exchange gains and losses related to the PTG Notes were incorrectly reported as other comprehensive income instead of earnings ( i.e. , non-operating income). The restatements to reflect the correction of both errors are referred to herein collectively as the "Restatement." The table below sets forth the amounts as originally reported for the categories presented in the condensed statements of operations that were affected by the Restatement, the effect of the Restatement and the restated amounts for the three and nine months ended September 30, 2016: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Statements of Income As originally reported Impact of restatement As restated As originally reported Impact of restatement As restated Selling, general and administrative $ 1,576,480 $ (22,924 ) $ 1,553,556 $ 4,850,785 $ (31,412 ) $ 4,819,373 Provision for income taxes (602,619 ) 251,207 (351,412 ) (990,639 ) 116,871 (873,768 ) Foreign currency exchange (losses) gains — (5,926 ) (5,926 ) — 354,301 354,301 Loss on extinguishment of debt (87,578 ) (427,459 ) (515,037 ) (87,578 ) (427,459 ) (515,037 ) Net income 820,972 (159,254 ) 661,718 1,577,867 75,125 1,652,992 The table below sets forth the amounts as originally reported for the categories presented in the condensed statements of cash flows that were affected by the Restatement, the effect of the Restatement and the restated amounts for the nine months ended September 30, 2016: Statement of Cash Flow As originally reported Impact of restatement As restated Net income $ 1,577,867 $ 75,125 $ 1,652,992 Loss on extinguishment of debt 87,578 427,459 515,037 Deferred income tax provision 54,370 (54,370 ) — Unrealized foreign exchange losses on cash and cash equivalents — 31,886 31,886 Increase in accounts receivable (107,969 ) (705 ) (108,674 ) Decrease in other current assets 43,017 (43,017 ) — Decrease in prepaid expenses and other current assets 6,608 2,314 8,922 Decrease in accounts payable (858,954 ) 550 (858,404 ) Increase in income taxes payable 936,269 (113,787 ) 822,482 Increase in accrued expenses 141,841 11,030 152,871 Net cash provided by operating activities 3,321,274 336,485 3,657,759 Principal payments on notes payable (2,873,437 ) (336,485 ) (3,209,922 ) Net cash used in financing activities (1,993,009 ) (336,485 ) (2,329,494 ) |
Basis of presentation and Basis of accounting | Basis of presentation. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) . In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. As permitted by the rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all necessary adjustments, consisting only of those of a recurring nature, and disclosures to present fairly our financial position and the results of its operations and cash flows for the periods presented. These unaudited interim condensed financial statements should be read in conjunction with the financial statements and the related notes thereto included in our Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on April 14, 2017 (the “2016 10-K”). Basis of accounting. The financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. Revenues are recognized when earned and expenses are recognized when they are incurred. We do not have significant cost of revenue, as most of our revenue is derived from the licensing of intellectual properties. As a result, we do not separately present cost of revenue and gross profit in our statements of operations. |
Use of estimates and assumptions | Use of estimates and assumptions. We are required to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our company and the industry as a whole, and information available from other outside sources. Our estimates affect reported amounts for assets, liabilities, revenues, expenses and related disclosures. Actual results may differ from initial estimates. |
Reclassifications | Reclassifications. Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations. |
Recently adopted accounting standards | Recently adopted accounting standards Inventory. In July 2015, the FASB issued ASU No. 2015-11, Inventory is now required to be measured at the lower of cost or net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling process in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We adopted ASU 2015-11 effective January 1, 2017 using the required prospective adoption approach, which did not have a material effect on our financial condition, results of operations or cash flows. Stock-based compensation. In March 2016, the FASB issued No. ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. We adopted ASU 2016-09 effective January 1, 2017 using the prospective adoption approach, which did not have a material impact on our financial condition, results of operations or cash flows . |
New accounting standards not yet adopted | New accounting standards not yet adopted Revenue Recognition. In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), , which is a comprehensive new revenue recognition standard that will supersede virtually all existing revenue guidance, including industry-specific guidance. Under the new standard, revenue will be recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. The standard creates a five-step model that will generally require companies to use more judgment and make more estimates than under current guidance when considering the terms of contracts along with all relevant facts and circumstances. These include the identification of customer contracts and separating performance obligations, the determination of transaction price that potentially includes an estimate of variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue in line with the pattern of transfer. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date We continue to assess the anticipated impact of adopting ASC 606 on our financial statements. The primary impacts of the adoption of ASC 606 are expected to be the following: (a) we will recognize an asset that represents the incremental costs of obtaining and fulfilling the contracts in existence at December 31, 2017 under the caption of prepaid expense and other assets. Such costs will be amortized on a straight-line basis over the expected term of the underlying contracts; and (b) revenues generated by our European distributors (which sublicense our intellectual properties to gaming establishments in Europe in accordance with license agreements entered into between us and such distributors) will be presented as gross revenue under the caption “product leases and royalties” and fees earned by such distributors will be presented as selling, general and administrative expenses. Currently, revenues generated by our European distributors are presented net of fees earned under the caption “product leases and royalties.” ASC 606 will significantly increase revenue disclosure requirements. We currently do not anticipate significant changes to our business processes and systems to support the adoption of ASC 606 and are currently assessing the impact on our internal controls. We will continue to monitor and assess the impact of any changes to ASC 606 and interpretations as they become available. Leases. In February 2016, the FASB issued ASU No. 2016-02, The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases being recognized on our balance sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance. Restricted Cash . In November 2016, the FASB issued ASU No. 2016-18, . This ASU requires amounts generally described as restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years with early adoption permitted. Upon the adoption of ASU 2016-08, restricted cash will be included within beginning and ending cash and cash equivalents amounts on our statements of cash flows, which we do not expect will have a material impact on our financial statements. Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-04, which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. This guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact of adopting this guidance. |
NATURE OF OPERATIONS AND REST23
NATURE OF OPERATIONS AND RESTATEMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Restatement Adjustments to Financial Statements | The table below sets forth the amounts as originally reported for the categories presented in the condensed statements of operations that were affected by the Restatement, the effect of the Restatement and the restated amounts for the three and nine months ended September 30, 2016: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Statements of Income As originally reported Impact of restatement As restated As originally reported Impact of restatement As restated Selling, general and administrative $ 1,576,480 $ (22,924 ) $ 1,553,556 $ 4,850,785 $ (31,412 ) $ 4,819,373 Provision for income taxes (602,619 ) 251,207 (351,412 ) (990,639 ) 116,871 (873,768 ) Foreign currency exchange (losses) gains — (5,926 ) (5,926 ) — 354,301 354,301 Loss on extinguishment of debt (87,578 ) (427,459 ) (515,037 ) (87,578 ) (427,459 ) (515,037 ) Net income 820,972 (159,254 ) 661,718 1,577,867 75,125 1,652,992 The table below sets forth the amounts as originally reported for the categories presented in the condensed statements of cash flows that were affected by the Restatement, the effect of the Restatement and the restated amounts for the nine months ended September 30, 2016: Statement of Cash Flow As originally reported Impact of restatement As restated Net income $ 1,577,867 $ 75,125 $ 1,652,992 Loss on extinguishment of debt 87,578 427,459 515,037 Deferred income tax provision 54,370 (54,370 ) — Unrealized foreign exchange losses on cash and cash equivalents — 31,886 31,886 Increase in accounts receivable (107,969 ) (705 ) (108,674 ) Decrease in other current assets 43,017 (43,017 ) — Decrease in prepaid expenses and other current assets 6,608 2,314 8,922 Decrease in accounts payable (858,954 ) 550 (858,404 ) Increase in income taxes payable 936,269 (113,787 ) 822,482 Increase in accrued expenses 141,841 11,030 152,871 Net cash provided by operating activities 3,321,274 336,485 3,657,759 Principal payments on notes payable (2,873,437 ) (336,485 ) (3,209,922 ) Net cash used in financing activities (1,993,009 ) (336,485 ) (2,329,494 ) |
SIGNIFICANT BUSINESS DEVELOPM24
SIGNIFICANT BUSINESS DEVELOPMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Significant Business Developments [Abstract] | |
Recipients of Voting and Dispositive Control of Shares | The Recipients of the voting and dispositive control of the shares under the VDCTA Agreements are as follows: Name Number of shares Percentage of total outstanding* Mark Lipparelli 1,269,161 shares 3.22% Bryan Waters 1,269,161 shares 3.22% Norm DesRosiers 1,269,161 shares 3.22% William Zender 1,269,161 shares 3.22% John Connelly 1,269,161 shares 3.22% Total 6,345,805 shares 16.12% * The percentages listed in the table are based on 39,365,591 total outstanding shares and do not include other shares held by such Recipients. |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Raw materials and component parts $ 270,863 $ 171,478 Finished goods 96,834 128,956 Work-in-process 182,846 151,671 Inventory, gross 550,543 452,105 Less: inventory reserve (25,000 ) (25,000 ) Inventory, net $ 525,543 $ 427,105 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Plant Equipment, Net | Property and equipment, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Furniture and fixtures $ 280,694 $ 269,471 Automotive vehicles 215,127 202,143 Leasehold improvements 156,843 156,843 Computer equipment 117,645 105,114 Office equipment 53,483 37,871 Property and equipment, gross 823,792 771,442 Less: accumulated depreciation (530,304 ) (415,189 ) Property and equipment, net $ 293,488 $ 356,253 |
PRODUCTS LEASED AND HELD FOR 27
PRODUCTS LEASED AND HELD FOR LEASE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases Operating [Abstract] | |
Schedule of Products Leased and Held for Lease, Net | Products leased and held for lease, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Enhanced table systems $ 546,539 $ 424,364 Less: accumulated depreciation (246,371 ) (212,233 ) Products leased and held for lease, net $ 300,168 $ 212,131 |
GOODWILL AND OTHER INTANGIBLE28
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Finite-lived Intangible Assets, Net | Goodwill and finite-lived intangible assets, net consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Goodwill $ 1,091,000 $ 1,091,000 Finite-lived intangible assets: Patents 13,615,967 13,615,967 Customer relationships 3,400,000 3,400,000 Trademarks 2,740,000 2,740,000 Non-compete agreements 660,000 660,000 Internally-developed software 102,968 — Other intangible assets, gross 20,518,935 20,415,967 Less: accumulated amortization (9,784,930 ) (8,660,948 ) Other intangible assets, net 10,734,005 11,755,019 Goodwill and other intangible assets, net $ 11,825,005 $ 12,846,019 |
Schedule of Estimated Amortization Expense | Estimated amortization expense to be recorded for the twelve months ending September 30, 2018 through 2022 and thereafter is as follows: September 30, Total 2018 $ 1,498,873 2019 1,498,873 2020 1,481,712 2021 1,391,218 2022 1,390,676 Thereafter 3,472,653 Total amortization $ 10,734,005 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 TableMAX license fee $ 736,428 $ 470,512 Payroll and related 664,140 405,553 Professional fees 152,962 59,567 Commissions and royalties 110,353 54,551 Other 58,156 119,245 Total accrued expenses $ 1,722,039 $ 1,109,428 |
CAPITAL LEASE OBLIGATIONS (Tabl
CAPITAL LEASE OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Schedule of Capital Lease Obligations | Capital lease obligations consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Capital lease obligation – leasehold improvements $ 54,921 $ 78,008 Less: Current portion (32,332 ) (31,030 ) Total capital lease obligations – long-term $ 22,589 $ 46,978 |
Schedule of Future Annual Payments for Capital Leases Obligations | For the years ending September 30, future annual payments for capital leases obligations are as follows: September 30, Total 2018 $ 32,332 2019 22,589 Total minimum lease payments $ 54,921 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following at September 30, 2017 and December 31, 2016: 2017 2016 Term loan $ 9,712,500 $ 10,500,000 Notes payable, related party — 509,135 Equipment notes payable 133,935 162,274 Insurance notes payable — 36,063 Notes payable, gross 9,846,435 11,207,472 Less: Unamortized debt issuance costs (513,151 ) (595,462 ) Warrants issued (624,097 ) (743,604 ) Notes payable, net 8,709,187 9,868,406 Less: Current portion (1,088,957 ) (1,199,255 ) Long-term debt, net $ 7,620,230 $ 8,669,151 |
Schedule of Maturities | As of September 30, 2017, maturities of our long-term debt obligations are as follows: September 30, Total 2018 $ 1,088,957 2019 1,090,223 2020 1,076,750 2021 6,584,849 2022 5,656 Total notes payable 9,846,435 Less: Unamortized debt issuance costs (513,151 ) Warrants issued (624,097 ) Notes payable, net $ 8,709,187 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Client Revenue Concentration | For the nine months ended September 30, 2017 and 2016, respectively, we had the following client revenue concentration: Location 2017 Revenue 2016 Revenue Client A North America 13.6% 13.6% |
Schedule of Estimates of Annual Future Minimum Lease Obligations | As of September 30, 2017, the amounts shown in the accompanying table reflect our estimates of annual future minimum lease obligations: September 30, Annual obligation 2018 $ 232,368 2019 179,190 Total obligations $ 411,558 |
STOCK WARRANTS, OPTIONS AND G33
STOCK WARRANTS, OPTIONS AND GRANTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Pricing | Nine months ended September 30, 2017 Nine months ended September 30, 2016 Dividend yield 0% 0% Expected volatility 80% - 87% 89% - 90% Risk free interest rate 1.73% - 1.94% 1.01% - 1.22% Expected life (years) 5.00 5.00 |
Summary of Stock Option Activity | A summary of stock option activity is as follows: Common s Weighted- average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Outstanding – December 31, 2016 1,496,250 $ 0.32 $ 385,017 3.57 Issued 1,390,000 0.71 — — Exercised (150,000 ) 0.23 — — Expired — — — — Outstanding – September 30, 2017 2,736,250 $ 0.52 $ 1,767,429 3.87 Exercisable – September 30, 2017 1,822,359 $ 0.46 $ 1,289,100 3.53 |
Summary of Unvested Stock Option Activity | A summary of unvested stock option activity is as follows: Common s options Weighted-average exercise price Aggregate intrinsic value Weighted-average remaining contractual term (years) Unvested – December 31, 2016 128,889 $ 0.34 $ 30,933 3.99 Granted 1,390,000 0.71 — — Vested (604,998 ) 0.73 — — Forfeited or expired — — — — Unvested – September 30, 2017 913,891 $ 0.65 $ 478,329 4.54 |
NATURE OF OPERATIONS AND REST34
NATURE OF OPERATIONS AND RESTATEMENT - Schedule of Restatement Adjustments of Condensed Statements of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statements of Income | ||||
Selling, general and administrative | $ 2,362,601 | $ 1,553,556 | $ 6,808,659 | $ 4,819,373 |
Provision for income taxes | (21,990) | (351,412) | (86,881) | (873,768) |
Foreign currency exchange (losses) gains | 59,624 | (5,926) | 125,576 | 354,301 |
Loss on extinguishment of debt | (515,037) | (515,037) | ||
Net income | $ (27,930) | 661,718 | $ 54,578 | 1,652,992 |
As Originally Reported | ||||
Statements of Income | ||||
Selling, general and administrative | 1,576,480 | 4,850,785 | ||
Provision for income taxes | (602,619) | (990,639) | ||
Loss on extinguishment of debt | (87,578) | (87,578) | ||
Net income | 820,972 | 1,577,867 | ||
Impact of Restatement | ||||
Statements of Income | ||||
Selling, general and administrative | (22,924) | (31,412) | ||
Provision for income taxes | 251,207 | 116,871 | ||
Foreign currency exchange (losses) gains | (5,926) | 354,301 | ||
Loss on extinguishment of debt | (427,459) | (427,459) | ||
Net income | $ (159,254) | $ 75,125 |
NATURE OF OPERATIONS AND REST35
NATURE OF OPERATIONS AND RESTATEMENT - Schedule of Restatement Adjustments of Condensed Statements of Cash Flows (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flow | ||||
Net income | $ (27,930) | $ 661,718 | $ 54,578 | $ 1,652,992 |
Loss on extinguishment of debt | 515,037 | 515,037 | ||
Unrealized foreign exchange losses on cash and cash equivalents | (92,243) | 31,886 | ||
Increase in accounts receivable | (264,842) | (108,674) | ||
Decrease in prepaid expenses and other current assets | (112,410) | 8,922 | ||
Decrease in accounts payable | (132,720) | (858,404) | ||
Increase in income taxes payable | (124,271) | 822,482 | ||
Increase in accrued expenses | 612,611 | 152,871 | ||
Net cash provided by operating activities | 2,227,147 | 3,657,759 | ||
Principal payments on notes payable | (1,361,038) | (3,209,922) | ||
Net cash used in financing activities | $ (1,366,216) | (2,329,494) | ||
As Originally Reported | ||||
Statement of Cash Flow | ||||
Net income | 820,972 | 1,577,867 | ||
Loss on extinguishment of debt | 87,578 | 87,578 | ||
Deferred income tax provision | 54,370 | |||
Increase in accounts receivable | (107,969) | |||
Decrease in other current assets | 43,017 | |||
Decrease in prepaid expenses and other current assets | 6,608 | |||
Decrease in accounts payable | (858,954) | |||
Increase in income taxes payable | 936,269 | |||
Increase in accrued expenses | 141,841 | |||
Net cash provided by operating activities | 3,321,274 | |||
Principal payments on notes payable | (2,873,437) | |||
Net cash used in financing activities | (1,993,009) | |||
Impact of Restatement | ||||
Statement of Cash Flow | ||||
Net income | (159,254) | 75,125 | ||
Loss on extinguishment of debt | $ 427,459 | 427,459 | ||
Deferred income tax provision | (54,370) | |||
Unrealized foreign exchange losses on cash and cash equivalents | 31,886 | |||
Increase in accounts receivable | (705) | |||
Decrease in other current assets | (43,017) | |||
Decrease in prepaid expenses and other current assets | 2,314 | |||
Decrease in accounts payable | 550 | |||
Increase in income taxes payable | (113,787) | |||
Increase in accrued expenses | 11,030 | |||
Net cash provided by operating activities | 336,485 | |||
Principal payments on notes payable | (336,485) | |||
Net cash used in financing activities | $ (336,485) |
SIGNIFICANT BUSINESS DEVELOPM36
SIGNIFICANT BUSINESS DEVELOPMENTS (Details Narrative) | Aug. 31, 2017USD ($) | Jul. 24, 2017USD ($) | Sep. 30, 2017 | Sep. 22, 2017Agreement | Aug. 17, 2017 |
Executive Vice President of Business Development and Chief Product Officer | |||||
Significant Business Developments [Line Items] | |||||
Annual salary | $ 225,000 | ||||
President and CEO | |||||
Significant Business Developments [Line Items] | |||||
Annual salary | $ 230,000 | ||||
Bonus compensation description | eligible for bonuses if and as approved by the Compensation Committee of the Board | ||||
Employment Agreement term expiration | Jul. 26, 2020 | ||||
Lipparelli Agreement | Mark Lipparelli | |||||
Significant Business Developments [Line Items] | |||||
Monthly compensation | $ 7,500 | ||||
VDCTA Agreements | |||||
Significant Business Developments [Line Items] | |||||
Number of agreements | Agreement | 5 | ||||
Triangulum | |||||
Significant Business Developments [Line Items] | |||||
Percentage of total issued and outstanding common stock owned and controlled | 60.12% |
SIGNIFICANT BUSINESS DEVELOPM37
SIGNIFICANT BUSINESS DEVELOPMENTS - Recipients of Voting and Dispositive Control of Shares (Details) - shares | Sep. 30, 2017 | Sep. 22, 2017 | Dec. 31, 2016 | |
Significant Business Developments [Line Items] | ||||
Number of shares | 39,565,591 | 39,365,591 | 39,315,591 | |
VDCTA Agreements | ||||
Significant Business Developments [Line Items] | ||||
Number of shares | 6,345,805 | |||
Percentage of total outstanding | [1] | 16.12% | ||
VDCTA Agreements | Mark Lipparelli | ||||
Significant Business Developments [Line Items] | ||||
Number of shares | 1,269,161 | |||
Percentage of total outstanding | [1] | 3.22% | ||
VDCTA Agreements | Bryan Waters | ||||
Significant Business Developments [Line Items] | ||||
Number of shares | 1,269,161 | |||
Percentage of total outstanding | [1] | 3.22% | ||
VDCTA Agreements | Norm DesRosiers | ||||
Significant Business Developments [Line Items] | ||||
Number of shares | 1,269,161 | |||
Percentage of total outstanding | [1] | 3.22% | ||
VDCTA Agreements | William Zender | ||||
Significant Business Developments [Line Items] | ||||
Number of shares | 1,269,161 | |||
Percentage of total outstanding | [1] | 3.22% | ||
VDCTA Agreements | John Connelly | ||||
Significant Business Developments [Line Items] | ||||
Number of shares | 1,269,161 | |||
Percentage of total outstanding | [1] | 3.22% | ||
[1] | The percentages listed in the table are based on 39,365,591 total outstanding shares and do not include other shares held by such Recipients. |
SIGNIFICANT BUSINESS DEVELOPM38
SIGNIFICANT BUSINESS DEVELOPMENTS - Recipients of Voting and Dispositive Control of Shares (Parenthetical) (Details) - shares | Sep. 30, 2017 | Sep. 22, 2017 | Dec. 31, 2016 |
Significant Business Developments [Abstract] | |||
Total outstanding shares | 39,565,591 | 39,365,591 | 39,315,591 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials and component parts | $ 270,863 | $ 171,478 |
Finished goods | 96,834 | 128,956 |
Work-in-process | 182,846 | 151,671 |
Inventory, gross | 550,543 | 452,105 |
Less: inventory reserve | (25,000) | (25,000) |
Inventory, net | $ 525,543 | $ 427,105 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Plant Equipment, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 280,694 | $ 269,471 |
Automotive Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 215,127 | 202,143 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 156,843 | 156,843 |
Less: accumulated depreciation | (105,322) | (82,183) |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 117,645 | 105,114 |
Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 53,483 | 37,871 |
Property Plant and Equipment Excluding Assets Leased to Others | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 823,792 | 771,442 |
Less: accumulated depreciation | (530,304) | (415,189) |
Property and equipment, net | $ 293,488 | $ 356,253 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property Plant and Equipment Excluding Assets Leased to Others | |||
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 115,117 | $ 97,326 | |
Accumulated depreciation | 530,304 | $ 415,189 | |
Leasehold Improvements | |||
Property Plant And Equipment [Line Items] | |||
Accumulated depreciation | $ 105,322 | $ 82,183 |
PRODUCTS LEASED AND HELD FOR 42
PRODUCTS LEASED AND HELD FOR LEASE - Schedule of Products Leased and Held for Lease, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Leases Operating [Abstract] | ||
Enhanced table systems | $ 546,539 | $ 424,364 |
Less: accumulated depreciation | (246,371) | (212,233) |
Products leased and held for lease, net | $ 300,168 | $ 212,131 |
PRODUCTS LEASED AND HELD FOR 43
PRODUCTS LEASED AND HELD FOR LEASE (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Leases Operating [Abstract] | ||
Products leased and held for lease, Depreciation | $ 84,674 | $ 38,595 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill and Finite-lived Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Goodwill | $ 1,091,000 | $ 1,091,000 |
Finite-lived intangible assets: | ||
Other intangible assets, gross | 20,518,935 | 20,415,967 |
Less: accumulated amortization | (9,784,930) | (8,660,948) |
Other intangible assets, net | 10,734,005 | 11,755,019 |
Goodwill and other intangible assets, net | 11,825,005 | 12,846,019 |
Patents | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 13,615,967 | 13,615,967 |
Customer Relationships | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 3,400,000 | 3,400,000 |
Trademarks | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 2,740,000 | 2,740,000 |
Non-compete Agreements | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | 660,000 | $ 660,000 |
Internally-developed Software | ||
Finite-lived intangible assets: | ||
Other intangible assets, gross | $ 102,968 |
GOODWILL AND OTHER INTANGIBLE45
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 1,123,980 | $ 1,116,938 |
GOODWILL AND OTHER INTANGIBLE46
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Amortization Expense (Details) | Sep. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,018 | $ 1,498,873 |
2,019 | 1,498,873 |
2,020 | 1,481,712 |
2,021 | 1,391,218 |
2,022 | 1,390,676 |
Thereafter | 3,472,653 |
Total amortization | $ 10,734,005 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Expenses [Line Items] | ||
Payroll and related | $ 664,140 | $ 405,553 |
Professional fees | 152,962 | 59,567 |
Commissions and royalties | 110,353 | 54,551 |
Other | 58,156 | 119,245 |
Total accrued expenses | 1,722,039 | 1,109,428 |
TableMAX | ||
Accrued Expenses [Line Items] | ||
TableMAX license fee | $ 736,428 | $ 470,512 |
ACCRUED EXPENSES (Details Narra
ACCRUED EXPENSES (Details Narrative) | 9 Months Ended |
Sep. 30, 2017 | |
TMAX Agreement | TableMAX Corporation | |
Accrued Expenses [Line Items] | |
Terms of licensing agreement | 5 years |
CAPITAL LEASE OBLIGATIONS - Sch
CAPITAL LEASE OBLIGATIONS - Schedule of Capital Lease Obligations (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Capital Lease Obligation [Line Items] | ||
Less: Current portion | $ (32,332) | $ (31,030) |
Total capital lease obligations – long-term | 22,589 | 46,978 |
Leasehold Improvements | ||
Capital Lease Obligation [Line Items] | ||
Capital lease obligation | $ 54,921 | $ 78,008 |
CAPITAL LEASE OBLIGATIONS - S50
CAPITAL LEASE OBLIGATIONS - Schedule of Future Annual Payments for Capital Leases Obligations (Details) | Sep. 30, 2017USD ($) |
Leases [Abstract] | |
2,018 | $ 32,332 |
2,019 | 22,589 |
Total minimum lease payments | $ 54,921 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Aug. 31, 2016 |
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 9,846,435 | $ 11,207,472 | |
Unamortized debt issuance costs | (513,151) | (595,462) | |
Warrants issued | (624,097) | (743,604) | |
Notes payable, net | 8,709,187 | 9,868,406 | |
Less: Current portion | (1,088,957) | (1,199,255) | |
Long-term debt, net | 7,620,230 | 8,669,151 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 9,712,500 | 10,500,000 | $ 10,500,000 |
Notes Payable, Related Party | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 509,135 | ||
Equipment Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 133,935 | 162,274 | |
Insurance Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 36,063 |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | Aug. 11, 2017 | Aug. 31, 2016 | Sep. 30, 2017 | Jan. 01, 2017 | Dec. 31, 2016 | Aug. 29, 2016 |
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 9,846,435 | $ 11,207,472 | ||||
Notes Payable, Related Party | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | 509,135 | |||||
Maturity date | Dec. 31, 2018 | |||||
Annual principal and interest payments | $ 109,908 | |||||
Note payable, Frequency of periodic payment | annual | |||||
Fixed interest rate | 7.30% | |||||
Balloon payment | $ 354,480 | |||||
Notes payable, repayment date | Aug. 11, 2017 | |||||
Repayment of outstanding principal along with accrued and unpaid interest | $ 459,683 | |||||
Warrant Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Warrants issued, number of shares of common stock | 1,965,780 | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 10,500,000 | $ 9,712,500 | $ 10,500,000 | |||
Debt instrument, interest rate during period | 14.00% | |||||
Debt instrument, interest rate for quarterly period | 12.50% | |||||
Quarterly principal payments of borrowings plus accrued interest | $ 262,500 | |||||
Maturity date | Aug. 29, 2021 | |||||
Percentage of proceeds from disposition of asset | 100.00% | |||||
Percentage of proceeds from sale and issuance of capital stock | 25.00% | |||||
Term Loan | Warrant Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Warrants purchase period | 6 years | |||||
Warrants issued, number of shares of common stock | 1,965,780 | |||||
Estimated fair value of warrants on grant date | $ 809,632 |
LONG-TERM DEBT - Schedule of Ma
LONG-TERM DEBT - Schedule of Maturities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total notes payable | $ 9,846,435 | $ 11,207,472 |
Unamortized debt issuance costs | (513,151) | (595,462) |
Warrants issued | (624,097) | (743,604) |
Notes payable, net | 8,709,187 | $ 9,868,406 |
Promissory Note | ||
Debt Instrument [Line Items] | ||
2,018 | 1,088,957 | |
2,019 | 1,090,223 | |
2,020 | 1,076,750 | |
2,021 | 6,584,849 | |
2,022 | 5,656 | |
Total notes payable | 9,846,435 | |
Unamortized debt issuance costs | (513,151) | |
Warrants issued | (624,097) | |
Notes payable, net | $ 8,709,187 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Client Revenue Concentration (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Customer Concentration Risk | Revenue | North America | Client A | ||
Product Information [Line Items] | ||
Concentration Risk | 13.60% | 13.60% |
COMMITMENTS AND CONTINGENCIES55
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 9 Months Ended | |
Feb. 28, 2014ft² | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Commitments And Contingencies [Line Items] | |||
Rent expense | $ 217,650 | $ 208,961 | |
Operating lease commitments beyond April 1, 2020 | $ 0 | ||
Spencer Lease | |||
Commitments And Contingencies [Line Items] | |||
Rental term | 5 years | ||
Area of building | ft² | 24,000 | ||
Lease expiration date | Jun. 30, 2019 | ||
Rent expense | $ 153,000 | ||
Annual rental increase | 4.00% | ||
Tenant Improvement Allowance Option | $ 150,000 | ||
Interest rate | 5.50% | ||
Spencer Lease | Office | |||
Commitments And Contingencies [Line Items] | |||
Area of building | ft² | 16,000 | ||
Spencer Lease | Warehouse | |||
Commitments And Contingencies [Line Items] | |||
Area of building | ft² | 8,000 | ||
Credit Concentration Risk | Patents | |||
Commitments And Contingencies [Line Items] | |||
Accounts receivable from client account | $ 5,370,094 | $ 4,299,637 | |
Credit Concentration Risk | Revenue | Patents | |||
Commitments And Contingencies [Line Items] | |||
Concentration risk percentage | 49.00% | 46.50% |
COMMITMENTS AND CONTINGENCIES56
COMMITMENTS AND CONTINGENCIES - Schedule of Estimates of Annual Future Minimum Lease Obligations (Details) | Sep. 30, 2017USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,018 | $ 232,368 |
2,019 | 179,190 |
Total obligations | $ 411,558 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Jan. 02, 2019 | Jan. 02, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | Sep. 30, 2017 |
Temporary Equity [Line Items] | |||||
Stock options exercised, vested | 150,000 | ||||
Proceeds from stock option exercises | $ 35,000 | $ 35,000 | |||
Restricted Stock | |||||
Temporary Equity [Line Items] | |||||
Forfeited of restricted stock, shares | 100,000 | ||||
Restricted Stock | Board | |||||
Temporary Equity [Line Items] | |||||
Restricted common stock, granted | 800,000 | ||||
Vesting period description | shares vest as follows: (i) as to the first 200,000 shares, on August 31, 2017, (ii) as to the next 200,000 shares, on January 2, 2018, and (iii) as to the next 400,000 shares, on January 2, 2019 | ||||
Restricted Stock | Board | Share-based Compensation Award, Tranche One | |||||
Temporary Equity [Line Items] | |||||
Restricted common stock, vested | 200,000 | ||||
Award vesting date | Aug. 31, 2017 | ||||
Restricted Stock | Board | Share-based Compensation Award, Tranche Two | |||||
Temporary Equity [Line Items] | |||||
Award vesting date | Jan. 2, 2018 | ||||
Restricted Stock | Board | Share-based Compensation Award, Tranche Two | Scenario Forecast | |||||
Temporary Equity [Line Items] | |||||
Restricted common stock, vested | 200,000 | ||||
Restricted Stock | Board | Share-based Compensation Award, Tranche Three | |||||
Temporary Equity [Line Items] | |||||
Award vesting date | Jan. 2, 2019 | ||||
Restricted Stock | Board | Share-based Compensation Award, Tranche Three | Scenario Forecast | |||||
Temporary Equity [Line Items] | |||||
Restricted common stock, vested | 400,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Contingency [Line Items] | ||
Effective tax rate | 51.40% | 34.30% |
Plan | ||
Income Tax Contingency [Line Items] | ||
Effective tax rate | 56.60% | 34.20% |
STOCK WARRANTS, OPTIONS AND G59
STOCK WARRANTS, OPTIONS AND GRANTS (Details Narrative) - USD ($) | Aug. 01, 2020 | Jul. 26, 2017 | Jul. 24, 2017 | May 01, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 01, 2019 | Aug. 01, 2018 | Aug. 29, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Fair market value of shares granted | $ 652,895 | $ 96,137 | |||||||
Unrecognized stock-based compensation expense | $ 333,888 | ||||||||
Unrecognized stock-based compensation expense, weighted-average period of amortization | 1 year 11 months 16 days | ||||||||
Percentage of outstanding common stock issuance upon exercise of warrants | 5.00% | ||||||||
Warrants exercise description | The Warrants expire on August 29, 2022, and may not be exercised prior to the earliest of (a) the fifth anniversary of the Term Loan Agreement, (b) the date on which the obligations described in the Term Loan Agreement are satisfied in full, or (c) the date on which the lenders declare all or any portion of the outstanding amount of the Term Loan to be due and payable under the terms of the Term Loan Agreement (collectively, the "Trigger Date"). | ||||||||
Warrants expiration date | Aug. 29, 2022 | ||||||||
Period for warrant exercise prior written notice | 60 days | ||||||||
Call Right | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Value of warrants to be purchased prior written notice | $ 1,333,333 | ||||||||
Warrants purchase prior written notice period | 30 days | ||||||||
Put Right | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Value of warrants to be purchased prior to trigger date | $ 1,333,333 | ||||||||
Warrants expiration date | Aug. 29, 2022 | ||||||||
Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock Options Issued | 1,390,000 | ||||||||
Common stock exercise price | $ 0.71 | ||||||||
Chief Financial Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Employment Agreement term expiration | Apr. 30, 2020 | ||||||||
Annual salary | $ 120,000 | ||||||||
Bonus compensation description | eligible for bonuses if and as approved by the Compensation Committee of the Board. | ||||||||
Common stock exercise price | $ 0.60 | ||||||||
President and CEO | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Employment Agreement term expiration | Jul. 26, 2020 | ||||||||
Annual salary | $ 230,000 | ||||||||
Bonus compensation description | eligible for bonuses if and as approved by the Compensation Committee of the Board | ||||||||
Vesting period description | On July 26, 2017, in connection with the Cravens Employment Agreement, Mr. Cravens was granted options to purchase up to 450,000 shares of our common stock, which vest as follows: (i) as to the first 150,000 shares of stock, on July 26, 2017, (ii) as to the next 150,000 shares of stock, on August 1, 2018, and (iii) as to the next 150,000 shares of stock, on August 1, 2019, all pursuant to the terms of a stock option grant agreement by and between us and Mr. Cravens. Provided that Mr. Cravens is a full-time employee on August 1, 2020, we agreed to grant to Mr. Cravens an option to purchase an additional 150,000 shares of our common stock with a strike price equal to the price per share of our common stock as reported on OTC Markets on August 1, 2020 (or the nearest trading date thereafter), which option will vest on August 1, 2020 (or the nearest trading date thereafter). | ||||||||
President and CEO | Common Stock | Scenario Forecast | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock Options Issued | 150,000 | ||||||||
President and CEO | Common Stock | Maximum | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock Options Issued | 450,000 | ||||||||
President and CEO | Share-based Compensation Award, Tranche One | Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, vested | 150,000 | ||||||||
Award vesting date | Jul. 26, 2017 | ||||||||
President and CEO | Share-based Compensation Award, Tranche Two | Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Award vesting date | Aug. 1, 2018 | ||||||||
President and CEO | Share-based Compensation Award, Tranche Two | Common Stock | Scenario Forecast | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, vested | 150,000 | ||||||||
President and CEO | Share-based Compensation Award, Tranche Three | Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Award vesting date | Aug. 1, 2019 | ||||||||
President and CEO | Share-based Compensation Award, Tranche Three | Common Stock | Scenario Forecast | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, vested | 150,000 | ||||||||
President and CEO | Share-based Compensation Award, Tranche Four | Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Award vesting date | Aug. 1, 2020 | ||||||||
Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock Options Issued | 1,390,000 | 427,500 | |||||||
Common Stock | Chief Financial Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock Options Issued | 400,000 | ||||||||
Warrant Agreement | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Warrants issued, number of shares of common stock | 1,965,780 | ||||||||
Warrants to purchase common stock, exercise price per share | $ 0.30 | ||||||||
Maximum percentage of shares granted for lender to purchase common stock | 5.00% |
STOCK WARRANTS, OPTIONS AND G60
STOCK WARRANTS, OPTIONS AND GRANTS - Summary of Stock Options Pricing (Details) - Stock Option | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 80.00% | 89.00% |
Expected volatility, maximum | 87.00% | 90.00% |
Risk free interest rate, minimum | 1.73% | 1.01% |
Risk free interest rate, maximum | 1.94% | 1.22% |
Expected life (years) | 5 years | 5 years |
STOCK WARRANTS, OPTIONS AND G61
STOCK WARRANTS, OPTIONS AND GRANTS - Summary of Stock Option Activity (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options Exercised, number of shares | (150,000) | ||
Common Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Beginning Balance, number of shares | 1,496,250 | ||
Options Issued, number of shares | 1,390,000 | ||
Options Exercised, number of shares | (150,000) | ||
Ending Balance, number of shares | 2,736,250 | 1,496,250 | |
Ending Balance, Options Exercisable | 1,822,359 | ||
Beginning Balance, Weighted-average exercise price | $ 0.32 | ||
Options Issued, Weighted-average exercise price | 0.71 | ||
Options Exercised, Weighted-average exercise price | 0.23 | ||
Ending Balance, Weighted-average exercise price | 0.52 | $ 0.32 | |
Ending Balance, Options Exercisable, Weighted-average exercise price | $ 0.46 | ||
Options Outstanding, Aggregate intrinsic value | $ 1,767,429 | $ 385,017 | |
Options Exercisable, Aggregate intrinsic value | $ 1,289,100 | ||
Weighted-average remaining contractual term (years) | 3 years 10 months 14 days | 3 years 6 months 26 days | |
Weighted-average remaining contractual term (years), Exercisable | 3 years 6 months 11 days |
STOCK WARRANTS, OPTIONS AND G62
STOCK WARRANTS, OPTIONS AND GRANTS - Summary of Unvested Stock Option Activity (Details) - Common Stock - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, number of shares | 128,889 | |
Options Granted, number of shares | 1,390,000 | |
Options Vested, number of shares | (604,998) | |
Ending Balance, number of shares | 913,891 | 128,889 |
Beginning Balance, Weighted-average exercise price | $ 0.34 | |
Granted, Weighted-average exercise price | 0.71 | |
Vested, Weighted-average exercise price | 0.73 | |
Ending Balance, Weighted-average exercise price | $ 0.65 | $ 0.34 |
Aggregate intrinsic value | $ 478,329 | $ 30,933 |
Weighted-average remaining contractual term (years) | 4 years 6 months 14 days | 3 years 11 months 27 days |