Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 12, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Galaxy Gaming, Inc. | |
Entity Central Index Key | 0000013156 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 21,582,638 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Trading Symbol | GLXZ | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 000-30653 | |
Entity Tax Identification Number | 20-8143439 | |
Entity Address, Address Line One | 6767 Spencer Street | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Postal Zip Code | 89119 | |
City Area Code | 702 | |
Local Phone Number | 939-3254 | |
Title of 12(b) Security | Common stock | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 2,668,906 | $ 9,686,698 |
Accounts receivable, net of allowance of $129,587 and $77,433, respectively | 2,183,744 | 3,099,586 |
Inventory, net | 761,345 | 665,654 |
Income tax receivable | 350,244 | 260,347 |
Prepaid expense and other current assets | 704,557 | 761,650 |
Total current assets | 6,668,796 | 14,473,935 |
Property and equipment, net | 116,152 | 144,909 |
Operating lease right-of-use assets | 1,482,534 | 306,859 |
Assets deployed at client locations, net | 258,856 | 405,522 |
Goodwill | 1,091,000 | 1,091,000 |
Other intangible assets, net | 16,610,045 | 7,430,643 |
Deferred tax assets, net | 892,090 | 399,283 |
Other assets, net | 27,305 | |
Total assets | 27,146,778 | 24,252,151 |
Current liabilities: | ||
Accounts payable | 2,099,180 | 766,305 |
Accrued expenses | 844,146 | 1,450,879 |
Revenue contract liability | 587,094 | 1,294,265 |
Current portion of long-term debt | 2,530,149 | 1,634,527 |
Current portion of operating lease liabilities | 197,067 | 276,963 |
Total current liabilities | 6,257,636 | 5,422,939 |
Long-term operating lease liabilities | 1,266,215 | 30,325 |
Long-term liabilities, net | 45,991,154 | 46,291,014 |
Interest rate swap liability | 118,846 | 140,495 |
Total liabilities | 53,633,851 | 51,884,773 |
Commitments and Contingencies (See Note 11) | ||
Stockholders’ equity (deficit) | ||
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; 21,582,638 and 18,017,944 shares issued and outstanding, respectively | 21,582 | 18,018 |
Additional paid-in capital | 10,344,181 | 5,795,636 |
Accumulated deficit | (36,833,752) | (33,446,276) |
Accumulated other comprehensive loss | (19,084) | |
Total stockholders’ deficit | (26,487,073) | (27,632,622) |
Total liabilities and stockholders’ deficit | $ 27,146,778 | $ 24,252,151 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Accounts receivables, net allowance | $ 129,587 | $ 77,433 |
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 | 21,582,638 | 18,017,944 |
Common Stock, Outstanding | 21,582,638 | 18,017,944 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total revenue | $ 1,797,833 | $ 5,371,646 | $ 6,956,122 | $ 16,117,583 |
Costs and expenses: | ||||
Cost of ancillary products and assembled components | 11,142 | 37,674 | 40,855 | 167,009 |
Selling, general and administrative | 1,833,723 | 3,645,319 | 7,264,410 | 10,126,029 |
Research and development | 97,081 | 208,253 | 391,333 | 685,693 |
Depreciation and amortization | 575,637 | 476,112 | 1,499,927 | 1,439,220 |
Share-based compensation | 178,553 | 242,016 | 512,818 | 678,199 |
Total costs and expenses | 2,696,136 | 4,609,374 | 9,709,343 | 13,096,150 |
(Loss) income from operations | (898,303) | 762,272 | (2,753,221) | 3,021,433 |
Other income (expense): | ||||
Interest income | 1,412 | 25,326 | 25,313 | 45,891 |
Interest expense | (162,082) | (165,706) | (506,922) | (503,262) |
Share redemption consideration | (195,482) | (195,482) | (586,446) | (315,293) |
Foreign currency exchange gain (loss) | 20,014 | (69,470) | (95,976) | (57,299) |
Change in estimated fair value of interest rate swap liability | 55,330 | 13,162 | 21,650 | (78,440) |
Other non-recurring income | 15,320 | 15,320 | ||
Total other expense | (265,488) | (392,170) | (1,127,061) | (908,403) |
(Loss) income before benefit (provision) for income taxes | (1,163,791) | 370,102 | (3,880,282) | 2,113,030 |
Benefit (provision) for income taxes | (133,708) | 210,132 | 492,807 | (17,189) |
Net (loss) income | $ (1,297,499) | $ 580,234 | $ (3,387,475) | $ 2,095,841 |
Net (loss) income per share: | ||||
Basic | $ (0.07) | $ 0.03 | $ (0.18) | $ 0.07 |
Diluted | $ (0.06) | $ 0.03 | $ (0.17) | $ 0.07 |
Weighted-average shares outstanding: | ||||
Basic | 19,745,525 | 17,774,022 | 18,675,769 | 28,083,665 |
Diluted | 20,475,085 | 19,102,709 | 19,483,464 | 29,672,645 |
Product Lease Royalties And Other | ||||
Revenue: | ||||
Total revenue | $ 1,797,833 | $ 5,371,646 | $ 6,956,122 | $ 16,117,583 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity (deficit) - USD ($) | Total | Common Stock | Additional Paid in Capital | Accumulated Earnings (Deficit) | Accumulated Other Comprehensive Income |
Beginning balance, amount at Dec. 31, 2018 | $ 7,457,101 | $ 39,922 | $ 4,733,701 | $ 2,683,478 | |
Beginning balance, shares at Dec. 31, 2018 | 39,921,591 | ||||
Net income (loss) | 460,664 | 460,664 | |||
Stock options exercised | 36,232 | $ 98 | 36,134 | ||
Stock options exercised, shares | 98,332 | ||||
Share-based compensation | 223,604 | $ 470 | 223,134 | ||
Share based compensation, shares | 470,200 | ||||
Ending balance, amount at Mar. 31, 2019 | 8,177,601 | $ 40,490 | 4,992,969 | 3,144,142 | |
Ending balance, shares at Mar. 31, 2019 | 40,490,123 | ||||
Beginning balance, amount at Dec. 31, 2018 | 7,457,101 | $ 39,922 | 4,733,701 | 2,683,478 | |
Beginning balance, shares at Dec. 31, 2018 | 39,921,591 | ||||
Net income (loss) | 2,095,841 | ||||
Ending balance, amount at Sep. 30, 2019 | (28,739,404) | $ 17,910 | 5,536,497 | (34,293,811) | |
Ending balance, shares at Sep. 30, 2019 | 17,910,344 | ||||
Beginning balance, amount at Mar. 31, 2019 | 8,177,601 | $ 40,490 | 4,992,969 | 3,144,142 | |
Beginning balance, shares at Mar. 31, 2019 | 40,490,123 | ||||
Common stock redemption | (39,096,401) | $ (23,271) | (39,073,130) | ||
Common stock redemption, shares | (23,271,667) | ||||
Net income (loss) | 1,054,943 | 1,054,943 | |||
Stock options exercised | 60,375 | $ 458 | 59,917 | ||
Stock options exercised, shares | 457,888 | ||||
Share-based compensation | 212,578 | $ 76 | 212,502 | ||
Share based compensation, shares | 76,400 | ||||
Ending balance, amount at Jun. 30, 2019 | (29,590,904) | $ 17,753 | 5,265,388 | (34,874,045) | |
Ending balance, shares at Jun. 30, 2019 | 17,752,744 | ||||
Net income (loss) | 580,234 | 580,234 | |||
Stock options exercised | 29,250 | $ 75 | 29,175 | ||
Stock options exercised, shares | 75,000 | ||||
Share-based compensation | 242,016 | $ 82 | 241,934 | ||
Share based compensation, shares | 82,600 | ||||
Ending balance, amount at Sep. 30, 2019 | (28,739,404) | $ 17,910 | 5,536,497 | (34,293,811) | |
Ending balance, shares at Sep. 30, 2019 | 17,910,344 | ||||
Beginning balance, amount at Dec. 31, 2019 | (27,632,622) | $ 18,018 | 5,795,636 | (33,446,276) | |
Beginning balance, shares at Dec. 31, 2019 | 18,017,944 | ||||
Net income (loss) | 116,605 | 116,605 | |||
Stock options exercised | 7,500 | $ 25 | 7,475 | ||
Stock options exercised, shares | 25,000 | ||||
Share-based compensation | 157,596 | $ 63 | 157,533 | ||
Share based compensation, shares | 63,333 | ||||
Ending balance, amount at Mar. 31, 2020 | (27,350,921) | $ 18,106 | 5,960,644 | (33,329,671) | |
Ending balance, shares at Mar. 31, 2020 | 18,106,277 | ||||
Beginning balance, amount at Dec. 31, 2019 | (27,632,622) | $ 18,018 | 5,795,636 | (33,446,276) | |
Beginning balance, shares at Dec. 31, 2019 | 18,017,944 | ||||
Net income (loss) | (3,387,475) | ||||
Ending balance, amount at Sep. 30, 2020 | (26,487,073) | $ 21,582 | 10,344,181 | (36,833,752) | $ (19,084) |
Ending balance, shares at Sep. 30, 2020 | 21,582,638 | ||||
Beginning balance, amount at Mar. 31, 2020 | (27,350,921) | $ 18,106 | 5,960,644 | (33,329,671) | |
Beginning balance, shares at Mar. 31, 2020 | 18,106,277 | ||||
Net income (loss) | (2,206,582) | (2,206,582) | |||
Stock options exercised | 30,263 | $ 150 | 30,113 | ||
Stock options exercised, shares | 150,000 | ||||
Share-based compensation | 176,669 | $ 80 | 176,589 | ||
Share based compensation, shares | 80,000 | ||||
Ending balance, amount at Jun. 30, 2020 | (29,350,571) | $ 18,336 | 6,167,346 | (35,536,253) | |
Ending balance, shares at Jun. 30, 2020 | 18,336,277 | ||||
Shares issued in connection with PGP asset acquisition | 3,989,528 | $ 3,141 | 3,986,387 | ||
Shares issued in connection with PGP asset acquisition, shares | 3,141,361 | ||||
Net income (loss) | (1,297,499) | (1,297,499) | |||
Foreign currency translation adjustment | (19,084) | (19,084) | |||
Stock options exercised | 12,000 | $ 50 | 11,950 | ||
Stock options exercised, shares | 50,000 | ||||
Share-based compensation | 178,553 | $ 55 | 178,498 | ||
Share based compensation, shares | 55,000 | ||||
Ending balance, amount at Sep. 30, 2020 | $ (26,487,073) | $ 21,582 | $ 10,344,181 | $ (36,833,752) | $ (19,084) |
Ending balance, shares at Sep. 30, 2020 | 21,582,638 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,387,475) | $ 2,095,841 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of intangible assets | 1,499,927 | 1,424,934 |
Non-cash lease expense | 207,378 | 203,205 |
Amortization of debt issuance costs and debt discount | 26,935 | 25,584 |
Bad debt expense | 166,002 | 101,938 |
Change in estimated fair value of interest rate swap liability | (21,650) | 78,440 |
Deferred income tax benefit | (492,807) | (4,194) |
Share-based compensation | 512,818 | 678,199 |
Unrealized foreign exchange loss | 84,757 | 33,291 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,333,515 | (477,319) |
Inventory | (123,359) | (315,155) |
Income tax receivable/payable | (14,379) | (414,817) |
Prepaid expenses and other current assets | 54,953 | (40,086) |
Accounts payable | 552,166 | 332,566 |
Accrued expenses | (698,380) | (14,826) |
Revenue contract liability | (707,171) | (143,812) |
Operating lease liabilities | (254,363) | (197,875) |
Other current liabilities | (71,581) | |
Net cash (used in) provided by operating activities | (1,261,133) | 3,294,333 |
Cash flows from investing activities: | ||
Investment in intangible assets | (27,400) | |
Acquisition of PGP assets, net of cash acquired | (6,266,335) | |
Acquisition of property and equipment | (38,712) | (32,495) |
Net cash used in investing activities | (6,305,047) | (59,895) |
Cash flows from financing activities: | ||
Proceeds from draw on revolving loan | 1,000,000 | |
Proceeds from Paycheck Protection Program | 835,300 | |
Proceeds from stock option exercises | 49,750 | 189,981 |
Payments of debt issuance costs | (5,736) | |
Principal payments on finance lease obligations | (14,198) | |
Principal payments on long-term debt | (1,264,322) | (1,105,461) |
Net cash provided by (used in) financing activities | 620,728 | (935,414) |
Effect of exchange rate changes on cash | (72,340) | (33,291) |
Net (decrease) increase in cash and cash equivalents | (7,017,792) | 2,265,733 |
Cash and cash equivalents – beginning of period | 9,686,698 | 6,311,563 |
Cash and cash equivalents – end of period | 2,668,906 | 8,577,296 |
Supplemental cash flow information: | ||
Cash paid for interest | 462,959 | 502,764 |
Cash paid for income taxes | 77,465 | 436,200 |
Supplemental schedule of non-cash activities: | ||
Common stock redemption in exchange for share redemption consideration obligation | 39,096,401 | |
Shares issued in connection with PGP asset acquisition | 3,989,528 | |
Right-of-use assets obtained in exchange for lease liabilities | 1,383,052 | 305,163 |
Inventory transferred to assets deployed at client locations | $ 27,668 | $ 157,202 |
NATURE OF OPERATIONS AND RECENT
NATURE OF OPERATIONS AND RECENT DEVELOPMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND RECENT DEVELOPMENTS | NOTE 1. NATURE OF OPERATIONS AND RECENT DEVELOPMENTS Unless the context indicates otherwise, references to “Galaxy Gaming, Inc.,” “we,” “us,” “our,” or the “Company,” refer to Galaxy Gaming, Inc., a Nevada corporation (“Galaxy Gaming”). We are an established global gaming company specializing in the design, development, assembly, marketing and acquisition of proprietary casino table games and associated technology, platforms and systems for the casino gaming industry. Casinos use our proprietary products and services to enhance their gaming floor operations and improve their profitability, productivity and security, as well as to offer popular cutting-edge gaming entertainment content and technology to their players. We market our products and services to online casinos worldwide and to land-based casino gaming companies in North America, the Caribbean, Central America, the British Isles, Europe and Africa and to cruise ship companies. We license our products and services for use solely in legalized gaming markets. Share Redemption. On May 6, 2019, we redeemed all 23,271,667 shares of our common stock held by Triangulum Partners, LLC (“Triangulum”), an entity controlled by Robert B. Saucier, Galaxy Gaming's founder, and, prior to the redemption, the holder of a majority of our outstanding common stock. Our Articles of Incorporation (the “Articles”) provide that if certain events occur in relation to a stockholder that is required to undergo a gaming suitability review or similar investigative process, we have the option to purchase all or any part of such stockholder’s shares at a price per share that is equal to the average closing share price over the thirty calendar days preceding the purchase. The average closing share price over the thirty calendar days preceding the redemption was $1.68 per share. The consideration owed to Triangulum for the redemption is $39,096,401 (the “Redemption Consideration”). See Note 10. There is ongoing litigation between the Company and Triangulum related to the redemption and other matters. See Note 11. Membership Interest Purchase Agreement. On February 25, 2020, Galaxy Gaming entered into a Membership Interest Purchase Agreement, dated February 25, 2020 (the “Purchase Agreement”), between the Company and the membership interest holders of Progressive Games Partners LLC (“PGP”). On August 21, 2020, the Management has determined that the PGP transaction does not meet the definition of a business combination and therefore has been accounted for as an asset acquisition. COVID-19 . On March 11, 2020, the World Health Organization declared a pandemic related to the COVID-19 outbreak, which led to a global health emergency. The public-health impact of the outbreak continues to remain largely unknown and still evolving. The related health crisis could continue to adversely affect the global economy, resulting in continued economic downturn that could impact demand for our products. On March 17, 2020, the Company announced that it suspended billing to customers who had closed their doors due to the COVID-19 outbreak. As a result, we did not earn revenue for the use of our games by our physical casino customers during the time that they were closed. In general, the online gaming customers who license our games through our distributor remained and continue to remain in operation in spite of the COVID-19 crisis. We earned revenue from them during the crisis and expect to continue to do so, but potentially at levels that may be lower than we previously received. As of the date of this filing, many land-based casinos have begun to re-open with significantly reduced occupancy and other limitations. As they reopen, it will take additional time for their operations to return to pre-crisis levels. Given the uncertainties around casino re-openings, we instituted a phased billing approach for our clients through fiscal year 2020, which will result in us realizing substantially less revenue than we might otherwise expect. In addition, b ecause of COVID-19-related financial pressures on our physical casino customers, there can be no assurance that our accounts receivable we will be paid timely (or at all) for revenues earned prior to the shutdowns. Finally, some of our casino clients have notified vendors (including us) that they will lengthen payment terms for a period of time after reopening as they attempt to preserve their own liquidity. We also rely on third-party suppliers and manufacturers in China, many of whom were shut down or severely cut back production during the shutdown. Although this has not had a material effect on our supply chain, any future disruption of our suppliers and their contract manufacturers may impact our sales and operating results going forward. Because of the uncertainties of COVID-19, the Company drew on its Revolving Loan in the amount of $1,000,000 on March 12, 2020. Also, on April 17, 2020, the Company obtained an unsecured loan of $835,300 through Zions Bancorporation, N.A. dba Nevada State Bank under the Paycheck Protection Program (the “PPP Loan”) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Paycheck Protection Program Flexibility Act (the “Flexibility Act”). Pursuant to the CARES Act, the Federal Reserve created the Main Street Lending Program to provide financing for small and medium-sized businesses. On October 26, 2020, the Company borrowed $4 million from Zions Bancorporation N.A., dba Nevada State Bank under the Main Street Lending Program (the “Main Street Loan”). The Main Street Loan bears interest at a rate of three-month US dollar LIBOR plus 300 basis points (initially 3.215%), and interest payments during the first year are deferred and added to the loan balance. The Main Street Loan may be prepaid at any time and matures on the fifth anniversary of the date it was funded, with 15% of principal amortizing in each of the third and fourth years the loan is outstanding. As of the date of this filing, the Company believes that it has adequate liquidity to meet its short-term obligations. If the effects of the COVID-19 crisis endure or there is a second period of casino closures (Note 16), we may be required to reassess our obligations, including our ability to pay employee compensation and benefits. The COVID-19 crisis may change the behavior of gaming patrons. Most of our clients operate places of public accommodation, and their patrons may reduce visitation and play as a precaution. Further, governmental authorities may continue to impose reduced hours of operation or limit the capacity of such places of public accommodation. A long-term reduction in play could have a material adverse impact on our results of operations. Depending on the length and severity of any such adverse impact, we may fail to comply with our obligations, including covenants in our credit agreement, and we may need to reassess the carrying value of our assets. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. 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, the accompanying unaudited interim condensed financial statements contain all necessary adjustments (including all those of a recurring nature and those necessary in order for the financial statements to be not misleading) and all disclosures to present fairly our financial position and the results of our operations and cash flows for the periods presented . 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. 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, 2019, filed with the SEC on March 30, 2020 (the “2019 10-K”). 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. Basis of accounting. The financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. Revenues are recognized as income when earned and expenses are recognized when they are incurred. We do not have significant categories of cost of revenues. Expenses such as wages, consulting expenses, legal, regulatory and professional fees and rent are recorded when the expense is incurred. 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. Consolidation. The financial statements are presented on a consolidated basis, including the results of the Company and its wholly owned subsidiary, PGP. All intercompany transactions and balances have been eliminated in consolidation. Impairment considerations. We considered whether the impact of the current COVID-19 pandemic on operations and financial results is an indicator that impairment may exist related to the Company’s inventory (Note 4), property and equipment (Note 5), assets deployed at client locations (Note 6) and intangible assets (Note 7). As a result of its impairment assessments, management has determined that its assets are not currently impaired. We considered the following: Inventory. We considered whether additional write-offs or reserves were necessary to our inventory balance as a result of the impact of COVID-19. T he vast majority of our Inventory is not sold to customers but, rather, is used to support new installations and repairs of our electronic table game systems which we account for as Assets Deployed at Client Locations. Based on our assessment, we determined additional write-offs and reserves were not required. We are in the process of developing a new generation of electronic table game systems and, once that new generation of system is available for customer installation, we will review inventory to determine how much of existing Inventory can be used in the next generation of systems. To the extent that there is Inventory that 1) cannot be used in the new generation of systems and 2) is in excess of what we might expect to need for repair of older generation systems that we expect to remain in the field, we may incur an impairment charge with respect to Inventory that is obsolete. Long-lived assets. Our long-lived assets include property and equipment, assets deployed at client locations, and intangible assets. We assessed whether there was an indication of impairment of each asset group due to COVID-19 noting that based on the current contracts, including the lengthened payment terms noted above, the carrying value of our long-lived asset groups were recoverable. Goodwill. We performed a qualitative assessment and determined that it was not more likely than not that the carrying value of the reporting unit was impaired. As part of our qualitative assessment, we considered our previous forecasts and assumptions based on our current projections, which are subject to various risks and uncertainties, including projected revenue, projected operating income, terminal growth rates, and the cost of capital. Reclassifications. Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statement presentations. Other significant accounting policies. See Note 2 in Item 8. “Financial Statements and Supplementary Financial Information” included in our 2019 10-K. Recently adopted accounting standards Fair Value Measurement. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, . ASU 2018-13 addresses the required disclosures around fair value measurement, removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. We have adopted the new standard effective January 1, 2020, which did not have a material effect on our financial statements or related disclosures. New accounting standards not yet adopted Financial Instruments – Credit Losses. In February 2020, the FASB issued ASU No. 2020-02, ASU 2020-02 provides updated guidance on ho w an entity should measure credit losses on financial instruments and delayed the effective date of Topic 326 for certain smaller reporting companies until fiscal years beginning after December 15, 2022. Early adoption is permitted. We do not believe the adoption of this guidance will have a material impact on our financial statements or related disclosures. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3. REVENUE RECOGNITION Revenue recognition. We generate revenue primarily from the licensing of our intellectual property. We also, occasionally, receive a one-time sale of certain products and/or reimbursement of our equipment. License fees. We derive product lease and royalty revenue from negotiated recurring fee license agreements and the performance of our products. We account for these agreements as month-to-month contracts and recognize revenue each month as we satisfy our performance obligations. In addition, revenue associated with performance-based agreements is recognized during the month that the usage of the product or intellectual property occurs. Product sales. Occasionally, we sell certain incidental products or receive reimbursement of our equipment after the commencement of the new license agreement. Revenue from such sales is recognized as a separate performance obligation when we ship the items. Disaggregation of revenue The following table disaggregates our revenue by geographic location for the following periods: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 North America and Caribbean $ 971,147 $ 3,891,875 $ 4,262,408 $ 11,644,353 Europe, Middle East and Africa 826,686 1,479,771 2,693,714 4,473,230 Total revenue $ 1,797,833 $ 5,371,646 $ 6,956,122 $ 16,117,583 Revenue contract liability For a portion of our business, we invoice our clients monthly in advance for unlimited use of our intellectual property licenses and recognize a revenue contract liability that represents such advanced billing to our clients for unsatisfied performance. We reduce the revenue contract liability and recognize revenue when we transfer those goods or services and, therefore, satisfy our performance obligation. The table below summarizes changes in the revenue contract liability during the nine months ended September 30, 2020: Beginning balance – January 1, 2020 $ 1,294,265 Increase (advanced billings) 7,199,100 Decrease (revenue recognition) (7,906,271 ) Ending balance – September 30, 2020 $ 587,094 Revenue recognized during the three and nine months ended September 30, 2020 that was included in the beginning balance of revenue contract liability was $6,250 and $1,292,182, respectively. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4. INVENTORY Inventory, net consisted of the following at: September 30, December 31, 2020 2019 Raw materials and component parts $ 379,711 $ 359,349 Finished goods 428,103 343,305 Inventory, gross 807,814 702,654 Less: inventory reserve (46,469 ) (37,000 ) Inventory, net $ 761,345 $ 665,654 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following at: September 30, December 31, 2020 2019 Furniture and fixtures $ 312,640 $ 312,639 Automotive vehicles 215,127 215,127 Office and computer equipment 329,296 302,296 Leasehold improvements 18,554 6,843 Property and equipment, gross 875,617 836,905 Less: accumulated depreciation (759,465 ) (691,996 ) Property and equipment, net $ 116,152 $ 144,909 For the three months ended September 30, 2020 and 2019, depreciation expense related to property and equipment was $22,153 and $26,467, respectively. For the nine months ended September 30, 2020 and 2019, depreciation expense related to property and equipment was $67,469 and $80,445, respectively. |
ASSETS DEPLOYED AT CLIENT LOCAT
ASSETS DEPLOYED AT CLIENT LOCATIONS | 9 Months Ended |
Sep. 30, 2020 | |
Leases Operating [Abstract] | |
ASSETS DEPLOYED AT CLIENT LOCATIONS | NOTE 6. ASSETS DEPLOYED AT CLIENT LOCATIONS Assets deployed at client locations, net consisted of the following at: September 30, December 31, 2020 2019 Enhanced table systems $ 908,295 $ 993,127 Less: accumulated depreciation (649,439 ) (587,605 ) Assets deployed at client locations, net $ 258,856 $ 405,522 For the three months ended September 30, 2020 and 2019, depreciation expense related to assets deployed at client locations was $51,778 and $70,145, respectively. For the nine months ended September 30, 2020 and 2019, depreciation expense related to a ssets deployed at client locations was |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill. A goodwill balance of $1,091,000 was created as a result of a transaction completed in October 2011 with Prime Table Games, LLC (“PTG”). Other intangible assets, net. Other intangible assets, net consisted of the following at: September 30, December 31, 2020 2019 Patents $ 13,507,997 $ 13,485,000 Customer relationships 13,814,528 3,400,000 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Internally-developed software 183,416 183,415 Other intangible assets, gross 31,046,908 20,609,382 Less: accumulated amortization (14,436,863 ) (13,178,739 ) Other intangible assets, net $ 16,610,045 $ 7,430,643 For the three months ended September 30, 2020 and 2019, amortization expense related to other intangibles was $501,706 and $379,499, respectively . The increase in customer relationships was result of acquiring customer contracts/agreements valued at $10.4 million in connection with the closing on the Purchase Agreement in August 2020. Estimated future amortization expense is as follows: Twelve Months Ending September 30, Total 2021 $ 2,582,511 2022 2,570,659 2023 1,417,510 2024 1,414,600 2025 1,410,100 Thereafter 7,214,665 Total amortization $ 16,610,045 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8. ACCRUED EXPENSES Accrued expenses consisted of the following at: September 30, December 31, 2020 2019 Payroll and related $ 249,902 $ 747,458 Interest 26,924 9,895 Share redemption consideration 315,293 510,776 Commissions and royalties 148,098 78,528 Income tax payable — 64,832 Other 103,929 39,390 Total accrued expenses $ 844,146 $ 1,450,879 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 9. LEASES Lessee We have operating leases for our corporate office, two satellite facilities in the state of Washington, and for certain equipment. We account for lease components (such as rent payments) separately from the non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). The discount rate represents the interest rate implicit in each lease or our incremental borrowing rate at lease commencement date. As of September 30, 2020, our leases have remaining lease terms ranging from three months to 75 months. Supplemental balance sheet information related to leases is as follows: As of September 30, 2020 Amount Classification Operating leases: Operating lease right-of-use lease assets $ 1,482,534 Operating lease current liabilities $ 197,067 Current portion of operating lease liabilities Operating lease long-term liabilities 1,266,215 Long-term operating lease liabilities Total operating lease liabilities $ 1,463,282 Weighted-average remaining lease term: Operating leases 5.9 years Weighted-average discount rate: Operating leases 4.3 % The components of lease expense are as follows: Three Months Ended September 30, 2020 Amount Classification Operating lease cost $ 71,716 Selling, general and administrative expense Nine Months Ended September 30, 2020 Amount Classification Operating lease cost $ 215,142 Selling, general and administrative expense Supplemental cash flow information related to leases is as follows: Nine Months Ended September 30, 2020 Amount Classification Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 215,142 Net income Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 1,383,052 Supplemental cash flow information As of September 30, 2020, future maturities of our operating lease liabilities are as follows: Twelve Months Ending September 30, Amount 2021 $ 197,067 2022 208,249 2023 215,373 2024 234,917 2025 255,707 Thereafter 351,969 Total lease liabilities $ 1,463,282 On July 3, 2020 we entered into a new 75-month lease for our corporate headquarters in Las Vegas. Pursuant to the new lease, we now occupy approximately 14,000 square feet of office and warehouse space. The lease commenced on October 1, 2020, with rent abated through the remainder of 2020. Early occupancy was granted on September 15, 2020. Therefore, the right-of-use asset and corresponding liability were recorded on this date. Beginning in January 2021, we will commence paying rent and common area charges in an amount that is approximately equal to what we are paying pursuant to our current lease. |
LONG-TERM LIABILITIES
LONG-TERM LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM LIABILITIES | NOTE 10. LONG-TERM LIABILITIES Long-term liabilities consisted of the following at: September 30, December 31, 2020 2019 Nevada State Bank credit agreement $ 8,629,800 $ 8,699,900 Paycheck Protection Program borrowing 835,300 — Share redemption consideration obligation 39,096,401 39,096,401 Vehicle notes payable 28,162 44,490 Insurance notes payable — 177,894 Long-term liabilities, gross 48,589,663 48,018,685 Less: Unamortized debt issuance costs (68,360 ) (93,144 ) Long-term liabilities, net of debt issuance costs 48,521,303 47,925,541 Less: Current portion (2,530,149 ) (1,634,527 ) Long-term liabilities, net $ 45,991,154 $ 46,291,014 Nevada State Bank (“NSB”) Credit Agreement . The Company is party to a Credit Agreement with Zions Bancorporation, N.A. dba Nevada State Bank (as amended, the “Credit Agreement”), which was last amended on October 26, 2020. The Credit Agreement provided for a Term Loan in the initial amount of $11,000,000 and a Revolving Loan in the amount of $1,000,000. On March 12, 2020, the Company drew down $1,000,000 on the Revolving Loan component of the Credit Agreement. At September 30, 2020, the principal amount outstanding under the Term Loan component of the Credit Agreement was $7,629,800, bringing the total amount outstanding under the Credit Agreement at September 30, 2020, to $8,629,800. Under the Credit Agreement, outstanding balances accrue interest based on one-month US dollar London interbank offered rate (“LIBOR”) plus an Applicable Margin of 3.50% or 4.00%, depending on our Total Leverage Ratio (as defined in the amended Credit Agreement). Effective December 31, 2021, LIBOR will no longer serve as a reference rate for bank loans, among other investment classes. The Fourth Amendment to the Credit Agreement stipulates that an alternative reference rate will be selected and used in lieu of LIBOR. The Credit Agreement, as amended, contains affirmative and negative financial covenants and other restrictions customary for borrowings of this nature. In particular, we are required to maintain (i) a minimum trailing-four-quarters Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of 1.25x; (ii) a maximum Total Leverage Ratio (as defined in the Credit Agreement) of 7.25x (with semi-annual step-downs of 0.25x every six months, commencing June 30, 2020 through December 31, 2022 (the current required Total Leverage Ratio is 7.00x) and (iii) a maximum Senior Leverage Ratio (as defined in the Credit Agreement) of 2.00x. We were not in compliance with the Fixed Charge Coverage Ratio, Total Leverage Ratio and Senior Leverage Ratio as of September 30, 2020. Furthermore, because the impact of the COVID-19 crisis on our trailing-four-quarters Adjusted EBITDA into 2021, we think it is likely that we will not be in compliance with one or more of the Fixed Charge Coverage Ratio, Total Leverage Ratio and Senior Leverage Ratio through the first quarter of 2021. In view of that, the Company and NSB entered into a Forbearance and Fifth Amendment to Credit Agreement dated August 14, 2020 (the “Fifth Amendment”). In the Fifth Amendment, NSB agreed to forbear from exercising any of its rights or remedies that result from the aforementioned covenant breaches during the aforementioned period. The Fifth Amendment also imposes a new Minimum EBITDA covenant pursuant to which the Company must demonstrate trailing-four-quarter EBITDA of $2.4 million for the each of the quarters ended September 30, 2020, December 31, 2020 and March 31, 2021 and $3.0 million thereafter. The Company was in compliance with the Minimum EBITDA covenant as of September 30, 2020. On October 26, 2020, the Company and NSB entered into the Sixth Amendment to Credit Agreement dated August 14, 2018 (the “Sixth Amendment”) in connection with the Company’s borrowing under the Main Street Loan Program (see Note 16 Subsequent Events). The Sixth Amendment added a Minimum Liquidity covenant requiring that the Company have cash and cash equivalents of no less than $1.5 million at quarter ends through and including June 30, 2021, and $2.5 million thereafter. The Company was in compliance with the Minimum Liquidity covenant as of September 30, 2020. On November 16, 2020, the Company entered into a Seventh Amendment to the Credit Agreement with Zions Bancorporation N.A., dba Nevada State Bank. The Seventh Amendment changed the trailing-four-quarter Minimum EBITDA covenant from $3.0 million to $2.4 million for each fiscal quarter ending September 30, 2020 and thereafter. Paycheck Protection Program Borrowings . On April 17, 2020, the Company obtained an unsecured loan of $835,300 through Zions Bancorporation, N.A. dba Nevada State Bank under the Paycheck Protection Program pursuant to the CARES Act and the Flexibility Act. The Paycheck Protection Program is administered by the United States Small Business Administration. In accordance with the requirements of the CARES Act, the Company used proceeds from the PPP Loan primarily for payroll costs. Under the terms of the CARES and Flexibility Acts, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the Paycheck Protection Program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs and mortgage interest, rent and utility costs. On July 16, 2020, the Company filed an application and supporting documentation for forgiveness in full of the PPP Loan. The review of the Company’s forgiveness application could take as long as five months, and there is no assurance that the PPP Loan will be forgiven in full or in any amount. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the pending application for forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our adherence to the forgiveness criteria. Share Redemption Consideration Obligation . On May 6, 2019, we issued a promissory note in the face amount of $39,096,401 to Triangulum in connection with the share redemption disclosed in Note 1. In the litigation that followed the share redemption (Note 11), Triangulum is disputing, among other things, the validity of the note and has not accepted its terms. Since no agreement on terms exists between the Company and Triangulum, the promissory note has not been given accounting effect in the Company’s financial statements. The Company has instead recorded a long-term obligation payable to Triangulum, based on the redemption value specified in our Articles of Incorporation. The obligation is classified as long-term because we do not expect that a final agreement with respect to the litigation will be reached between the parties in the next twelve months. We may repay the Redemption Consideration Obligation at any time but no later than May 6, 2029; however, there can be no assurance that Triangulum will accept such payments. Additional share redemption consideration is being accrued at 2% on the redemption obligation, and we paid the first annual payment on May 5, 2020 in the amount of $781,928, which was accepted by Triangulum. The share redemption consideration obligation is unsecured and is subordinated to our existing and future indebtedness. As of September 30, 2020, future maturities of our long-term liabilities are as follows: Twelve Months Ending September 30, Total 2021 $ 2,530,307 2022 1,616,655 2023 4,511,000 2024 — 2025 835,300 Thereafter 39,096,401 Long-term liabilities, gross $ 48,589,663 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Concentration of risk. We are exposed to risks associated with clients who represent a significant portion of total revenues. For the nine months ended September 30, 2020 and 2019, respectively, we had the following client revenue concentration: Location 2020 Revenue 2019 Revenue Accounts Receivable September 30, 2020 Accounts Receivable December 31, 2019 Client A Europe 17.0 % 6.2 % $ 308,794 $ 101,402 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. As discussed in Note 1, we redeemed the shares of our common stock held by Triangulum, an entity controlled by Robert B. Saucier, Galaxy Gaming's founder, and, prior to the redemption, the holder of a majority of our outstanding common stock. On May 6, 2019, we filed a lawsuit seeking (i) a declaratory judgment that we acted lawfully and in full compliance with the Articles when we redeemed the Triangulum shares and (ii) certain remedies for breach of fiduciary duty and breach of contract by Triangulum and its Managing Member, Mr. Saucier (the “Triangulum Lawsuit”). The suit alleges that the redemption and the other relief sought by us are appropriate and in accordance with the Articles. The defendants to that lawsuit responded to the complaint, and Triangulum filed counterclaims. Triangulum also filed a Motion seeking the redeemed shares be held in a constructive trust. On July 11, 2019, the Court denied Triangulum’s Motion. On September 6, 2019, Triangulum appealed the denial of the Motion to the Nevada Supreme Court. We submitted our brief in opposition, and Triangulum filed its reply brief on June 17, 2020. Separately, Triangulum filed amended counterclaims, which we moved to dismiss on a number of legal grounds. The Court denied the motion. On October 18, 2019, Saucier also filed counterclaims, including a claim of breach of contract alleging Galaxy Gaming was obligated to pay Saucier his year-end bonuses, despite his resignation. We filed an answer disputing these claims. As a result of the effects of Coronavirus, the Court issued a revised Scheduling Order extending time frames for discovery and setting a new trial date in April of 2021. On May 6, 2020, Saucier made a demand of the Company under our Bylaws and an Indemnity Agreement between Saucier and the Company, for indemnity and advancement of funds seeking repayment of his lawyer’s fees and expenses he allegedly incurred in connection with the Company’s claims against him in the Triangulum Lawsuit. An independent counsel, selected per the terms of the Indemnification Agreement, concluded that Saucier was entitled to a small amount of indemnity funds related to the time he was employed by the Company, but denied an entitlement to indemnification thereafter. On May 19, 2020, Saucier commenced a separate action in Nevada district court, by filing a complaint he verified as true, seeking advancement of indemnification fees to which he claims an entitlement under the Bylaws and an Indemnification Agreement. The Company filed its opposition on June 4, 2020. Saucier’s Motion was denied in a hearing that occurred on June 24, 2020. Saucier filed a notice of his appeal of the decision to the Nevada Supreme Court on August 10, 2020. On July 22, 2020 Galaxy and its Directors, filed an Anti-SLAPP motion seeking to dismiss certain claims made against Galaxy and its Directors. The Anti-SLAPP motion was denied by the court. Galaxy has appealed the denial of that motion to the Nevada Supreme Court. The appeal will stay most aspects of the litigation, pending outcome of the appeal. The appeals to the Nevada Supreme Court by Saucier and by Galaxy, have also been referred to the Supreme Court’s Settlement Program where they are pending. A mandatory settlement conference is scheduled for November 16, 2020. We remain in the discovery phase of the Triangulum Lawsuit, with discovery set to close on December 31, 2020. In September 2018, we were served with a complaint by TableMax Corporation (“TMAX”) regarding the TMAX Agreement. We filed an answer denying the allegations and filed a partial motion for summary judgment seeking dismissal of the plaintiff’s claims. The suit was dismissed, subject to the right of the plaintiff to file an amended complaint on or before March 20, 2019. The plaintiff did not file an amended complaint within the time period set by the Judge. After that time, the Company considered the matter closed. TMAX filed a Motion for Leave to Amend their Complaint, which was granted by the Judge on May 11, 2020. On May 26, 2020 TMAX filed an Amended Complaint against the Company and other Co-Defendants. The Company will respond to the Amended Complaint denying the allegations. 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 and accordingly, no provision for loss has been reflected in the accompanying financial statements related to these matters. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 12. STOCKHOLDERS’ EQUITY (DEFICIT) During the nine months ended September 30, 2020, we issued an aggregate of 173,333 restricted shares of our common stock valued at $187,186, to our board members in consideration of their service on the Board. These shares vested immediately on the grant date. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13. INCOME TAXES Our forecasted annual effective tax rate (“AETR”) at September 30, 2020 was 12.0%, as compared to 16.5% at September 30, 2019. This decrease was primarily due to the global intangible low-taxed income (“GILTI”) inclusion related to the PGP acquisition and other changes in permanent book-to-tax differences f For the nine months ended September 30, 2020 and 2019, our effective tax rate (“ETR”) was 12.7% and 0.8%, respectively. The increase in the ETR for the nine months ended September 30, 2020 is a result of favorable discrete items from the comparable prior-year period that are not recurring in the current period. |
STOCK OPTIONS
STOCK OPTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
STOCK OPTIONS | NOTE 14. STOCK OPTIONS On May 10, 2018, the Board ratified and confirmed the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan is a broad-based plan under which shares of our common stock are authorized for issuance for awards, including stock options, stock appreciation rights, restricted stock, and cash incentive awards to members of our Board, executive officers, employees and independent contractors September 30, 2020 Stock options. During the nine months ended September 30, 2020 and 2019, we issued 465,000 and 320,000 options to purchase our common stock, respectively, to members of our Board, executive officers, employees and independent contractors. Options Issued 2020 Options Issued 2019 Dividend yield 0 % 0 % Expected volatility 70.98% - 76.97% 71.61% - 72.11% Risk free interest rate 0.27% - 1.39% 1.37% - 2.51% Expected life (years) 5.00 5.00 On February 21, 2019, we amended the employment agreement between the Company and Todd Cravens, our President and Chief Executive Officer (“Mr. Cravens”). Among other things, this amendment grants Mr. Cravens an option to purchase 150,000 shares of our common stock at an exercise price of $1.90 per share, which vested on August 1, 2020. On February 17, 2020, we entered into Amendment No. #2 to the employment agreement with Mr. Cravens. Among other things, Amendment No. #2 provides that Mr. Cravens receive a grant of 225,000 options at a strike price of $1.93 and vest as follows: 88,000 shares on July 26, 2021, 87,000 shares on July 26, 2022 and 50,000 shares on July 26, 2023. A summary of stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Outstanding – December 31, 2019 3,175,000 $ 0.92 $ 2,692,025 2.79 Issued 465,000 1.57 — — Exercised (225,000 ) 0.22 — — Forfeited (100,000 ) 1.57 — — Outstanding – September 30, 2020 3,315,000 $ 1.04 $ 144,450 2.49 Exercisable – September 30, 2020 2,245,000 $ 0.81 $ 614,750 1.81 A summary of unvested stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Unvested – December 31, 2019 1,053,333 $ 1.43 $ 357,734 3.92 Granted 465,000 1.57 — — Vested (348,333 ) 1.29 — — Forfeited (100,000 ) 1.57 — — Unvested – September 30, 2020 1,070,000 $ 1.52 $ (470,300 ) 3.92 As of September 30, 2020, our unrecognized share-based compensation expense associated with the stock options issued was $708,698, which will be amortized over a weighted-average of 2.24 years. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
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 • 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, 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 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, 2020 , the interest rate swap agreement was the only financial instrument measured at estimated fair value on a recurring basis based on level 2 inputs. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16. SUBSEQUENT EVENTS We evaluate 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 quarter ended September 30, 2020 except as disclosed in Note 1 and as follows: As discussed in Note 1, o n October 26, 2020, the Company entered into a business loan agreement with Zions Bancorporation N.A., dba Nevada State Bank for a secured loan in the amount of $4 million under Main Street Priority Loan Facility as established by the Board of Governors of the Federal Reserve System Section 13(3) of the Federal Reserve Act. Among other things, the Main Street Loan has a five-year maturity, bears interest at a rate of three-month US dollar LIBOR plus 300 basis points and has deferred interest payments during the first year which will be added to the loan balance. Also, on October 26, 2020, the Company entered into a Sixth Amendment to the Credit Agreement between Zions Bancorporation N.A., dba Nevada State Bank. The Sixth Amendment permits the Company to accept the Main Street Loan, establishes a minimum liquidity covenant through the term of the Credit Agreement and permits the security interest under the Main Street Loan to be pari passu with the Lender’s security interest under the Credit Agreement. On November 16, 2020, the Company entered into a Seventh Amendment to the Credit Agreement with Zions Bancorporation N.A., dba Nevada State Bank. The Seventh Amendment changed the trailing-four-quarter Minimum EBITDA covenant from $3.0 million to $2.4 million for each fiscal quarter ending September 30, 2020 and thereafter. Cases of COVID-19 infection have been rising in many of the markets we serve. As a result, there have been restrictions put in place on the opening hours of casinos in those markets. In the United Kingdom in particular, casinos have been forced to close for a period of at least one month beginning on November 5, 2020. Other jurisdictions in which we operate may also decide to order closures of casinos in an effort to reduce transmission of the virus. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
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, the accompanying unaudited interim condensed financial statements contain all necessary adjustments (including all those of a recurring nature and those necessary in order for the financial statements to be not misleading) and all disclosures to present fairly our financial position and the results of our operations and cash flows for the periods presented . 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. 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, 2019, filed with the SEC on March 30, 2020 (the “2019 10-K”). 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. Basis of accounting. The financial statements have been prepared on the accrual basis of accounting in conformity with U.S. GAAP. Revenues are recognized as income when earned and expenses are recognized when they are incurred. We do not have significant categories of cost of revenues. Expenses such as wages, consulting expenses, legal, regulatory and professional fees and rent are recorded when the expense is incurred. |
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. |
Consolidation | Consolidation. The financial statements are presented on a consolidated basis, including the results of the Company and its wholly owned subsidiary, PGP. All intercompany transactions and balances have been eliminated in consolidation. |
Impairment considerations | Impairment considerations. We considered whether the impact of the current COVID-19 pandemic on operations and financial results is an indicator that impairment may exist related to the Company’s inventory (Note 4), property and equipment (Note 5), assets deployed at client locations (Note 6) and intangible assets (Note 7). As a result of its impairment assessments, management has determined that its assets are not currently impaired. We considered the following: Inventory. We considered whether additional write-offs or reserves were necessary to our inventory balance as a result of the impact of COVID-19. T he vast majority of our Inventory is not sold to customers but, rather, is used to support new installations and repairs of our electronic table game systems which we account for as Assets Deployed at Client Locations. Based on our assessment, we determined additional write-offs and reserves were not required. We are in the process of developing a new generation of electronic table game systems and, once that new generation of system is available for customer installation, we will review inventory to determine how much of existing Inventory can be used in the next generation of systems. To the extent that there is Inventory that 1) cannot be used in the new generation of systems and 2) is in excess of what we might expect to need for repair of older generation systems that we expect to remain in the field, we may incur an impairment charge with respect to Inventory that is obsolete. Long-lived assets. Our long-lived assets include property and equipment, assets deployed at client locations, and intangible assets. We assessed whether there was an indication of impairment of each asset group due to COVID-19 noting that based on the current contracts, including the lengthened payment terms noted above, the carrying value of our long-lived asset groups were recoverable. Goodwill. We performed a qualitative assessment and determined that it was not more likely than not that the carrying value of the reporting unit was impaired. As part of our qualitative assessment, we considered our previous forecasts and assumptions based on our current projections, which are subject to various risks and uncertainties, including projected revenue, projected operating income, terminal growth rates, and the cost of capital. |
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 Fair Value Measurement. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, . ASU 2018-13 addresses the required disclosures around fair value measurement, removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. We have adopted the new standard effective January 1, 2020, which did not have a material effect on our financial statements or related disclosures. |
New accounting standards not yet adopted | New accounting standards not yet adopted Financial Instruments – Credit Losses. In February 2020, the FASB issued ASU No. 2020-02, ASU 2020-02 provides updated guidance on ho w an entity should measure credit losses on financial instruments and delayed the effective date of Topic 326 for certain smaller reporting companies until fiscal years beginning after December 15, 2022. Early adoption is permitted. We do not believe the adoption of this guidance will have a material impact on our financial statements or related disclosures. |
Revenue recognition | Revenue recognition. We generate revenue primarily from the licensing of our intellectual property. We also, occasionally, receive a one-time sale of certain products and/or reimbursement of our equipment. License fees. We derive product lease and royalty revenue from negotiated recurring fee license agreements and the performance of our products. We account for these agreements as month-to-month contracts and recognize revenue each month as we satisfy our performance obligations. In addition, revenue associated with performance-based agreements is recognized during the month that the usage of the product or intellectual property occurs. Product sales. Occasionally, we sell certain incidental products or receive reimbursement of our equipment after the commencement of the new license agreement. Revenue from such sales is recognized as a separate performance obligation when we ship the items. Disaggregation of revenue The following table disaggregates our revenue by geographic location for the following periods: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 North America and Caribbean $ 971,147 $ 3,891,875 $ 4,262,408 $ 11,644,353 Europe, Middle East and Africa 826,686 1,479,771 2,693,714 4,473,230 Total revenue $ 1,797,833 $ 5,371,646 $ 6,956,122 $ 16,117,583 Revenue contract liability For a portion of our business, we invoice our clients monthly in advance for unlimited use of our intellectual property licenses and recognize a revenue contract liability that represents such advanced billing to our clients for unsatisfied performance. We reduce the revenue contract liability and recognize revenue when we transfer those goods or services and, therefore, satisfy our performance obligation. The table below summarizes changes in the revenue contract liability during the nine months ended September 30, 2020: Beginning balance – January 1, 2020 $ 1,294,265 Increase (advanced billings) 7,199,100 Decrease (revenue recognition) (7,906,271 ) Ending balance – September 30, 2020 $ 587,094 Revenue recognized during the three and nine months ended September 30, 2020 that was included in the beginning balance of revenue contract liability was $6,250 and $1,292,182, respectively. |
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 • 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, 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 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, 2020 , the interest rate swap agreement was the only financial instrument measured at estimated fair value on a recurring basis based on level 2 inputs. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenue by Geographic Location | The following table disaggregates our revenue by geographic location for the following periods: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 North America and Caribbean $ 971,147 $ 3,891,875 $ 4,262,408 $ 11,644,353 Europe, Middle East and Africa 826,686 1,479,771 2,693,714 4,473,230 Total revenue $ 1,797,833 $ 5,371,646 $ 6,956,122 $ 16,117,583 |
Summary of Changes in Revenue Contract Liability | The table below summarizes changes in the revenue contract liability during the nine months ended September 30, 2020: Beginning balance – January 1, 2020 $ 1,294,265 Increase (advanced billings) 7,199,100 Decrease (revenue recognition) (7,906,271 ) Ending balance – September 30, 2020 $ 587,094 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory, net consisted of the following at: September 30, December 31, 2020 2019 Raw materials and component parts $ 379,711 $ 359,349 Finished goods 428,103 343,305 Inventory, gross 807,814 702,654 Less: inventory reserve (46,469 ) (37,000 ) Inventory, net $ 761,345 $ 665,654 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Plant Equipment, Net | Property and equipment, net consisted of the following at: September 30, December 31, 2020 2019 Furniture and fixtures $ 312,640 $ 312,639 Automotive vehicles 215,127 215,127 Office and computer equipment 329,296 302,296 Leasehold improvements 18,554 6,843 Property and equipment, gross 875,617 836,905 Less: accumulated depreciation (759,465 ) (691,996 ) Property and equipment, net $ 116,152 $ 144,909 |
ASSETS DEPLOYED AT CLIENT LOC_2
ASSETS DEPLOYED AT CLIENT LOCATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases Operating [Abstract] | |
Schedule of Assets Deployed at Client Locations, Net | Assets deployed at client locations, net consisted of the following at: September 30, December 31, 2020 2019 Enhanced table systems $ 908,295 $ 993,127 Less: accumulated depreciation (649,439 ) (587,605 ) Assets deployed at client locations, net $ 258,856 $ 405,522 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets, Net | Other intangible assets, net consisted of the following at: September 30, December 31, 2020 2019 Patents $ 13,507,997 $ 13,485,000 Customer relationships 13,814,528 3,400,000 Trademarks 2,880,967 2,880,967 Non-compete agreements 660,000 660,000 Internally-developed software 183,416 183,415 Other intangible assets, gross 31,046,908 20,609,382 Less: accumulated amortization (14,436,863 ) (13,178,739 ) Other intangible assets, net $ 16,610,045 $ 7,430,643 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is as follows: Twelve Months Ending September 30, Total 2021 $ 2,582,511 2022 2,570,659 2023 1,417,510 2024 1,414,600 2025 1,410,100 Thereafter 7,214,665 Total amortization $ 16,610,045 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following at: September 30, December 31, 2020 2019 Payroll and related $ 249,902 $ 747,458 Interest 26,924 9,895 Share redemption consideration 315,293 510,776 Commissions and royalties 148,098 78,528 Income tax payable — 64,832 Other 103,929 39,390 Total accrued expenses $ 844,146 $ 1,450,879 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows: As of September 30, 2020 Amount Classification Operating leases: Operating lease right-of-use lease assets $ 1,482,534 Operating lease current liabilities $ 197,067 Current portion of operating lease liabilities Operating lease long-term liabilities 1,266,215 Long-term operating lease liabilities Total operating lease liabilities $ 1,463,282 Weighted-average remaining lease term: Operating leases 5.9 years Weighted-average discount rate: Operating leases 4.3 % |
Schedule of Components of Lease Expense | The components of lease expense are as follows: Three Months Ended September 30, 2020 Amount Classification Operating lease cost $ 71,716 Selling, general and administrative expense Nine Months Ended September 30, 2020 Amount Classification Operating lease cost $ 215,142 Selling, general and administrative expense |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases is as follows: Nine Months Ended September 30, 2020 Amount Classification Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 215,142 Net income Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 1,383,052 Supplemental cash flow information |
Schedule of Future Maturities of Operating Lease Liabilities | As of September 30, 2020, future maturities of our operating lease liabilities are as follows: Twelve Months Ending September 30, Amount 2021 $ 197,067 2022 208,249 2023 215,373 2024 234,917 2025 255,707 Thereafter 351,969 Total lease liabilities $ 1,463,282 |
LONG-TERM LIABILITIES (Tables)
LONG-TERM LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Liabilities | Long-term liabilities consisted of the following at: September 30, December 31, 2020 2019 Nevada State Bank credit agreement $ 8,629,800 $ 8,699,900 Paycheck Protection Program borrowing 835,300 — Share redemption consideration obligation 39,096,401 39,096,401 Vehicle notes payable 28,162 44,490 Insurance notes payable — 177,894 Long-term liabilities, gross 48,589,663 48,018,685 Less: Unamortized debt issuance costs (68,360 ) (93,144 ) Long-term liabilities, net of debt issuance costs 48,521,303 47,925,541 Less: Current portion (2,530,149 ) (1,634,527 ) Long-term liabilities, net $ 45,991,154 $ 46,291,014 |
Schedule of Future Maturities of Long-term Liabilities | As of September 30, 2020, future maturities of our long-term liabilities are as follows: Twelve Months Ending September 30, Total 2021 $ 2,530,307 2022 1,616,655 2023 4,511,000 2024 — 2025 835,300 Thereafter 39,096,401 Long-term liabilities, gross $ 48,589,663 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Client Revenue Concentration | For the nine months ended September 30, 2020 and 2019, respectively, we had the following client revenue concentration: Location 2020 Revenue 2019 Revenue Accounts Receivable September 30, 2020 Accounts Receivable December 31, 2019 Client A Europe 17.0 % 6.2 % $ 308,794 $ 101,402 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Pricing | Options Issued 2020 Options Issued 2019 Dividend yield 0 % 0 % Expected volatility 70.98% - 76.97% 71.61% - 72.11% Risk free interest rate 0.27% - 1.39% 1.37% - 2.51% Expected life (years) 5.00 5.00 |
Summary of Stock Option Activity | A summary of stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Outstanding – December 31, 2019 3,175,000 $ 0.92 $ 2,692,025 2.79 Issued 465,000 1.57 — — Exercised (225,000 ) 0.22 — — Forfeited (100,000 ) 1.57 — — Outstanding – September 30, 2020 3,315,000 $ 1.04 $ 144,450 2.49 Exercisable – September 30, 2020 2,245,000 $ 0.81 $ 614,750 1.81 |
Summary of Unvested Stock Option Activity | A summary of unvested stock option activity is as follows: Common Stock Options Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Term (Years) Unvested – December 31, 2019 1,053,333 $ 1.43 $ 357,734 3.92 Granted 465,000 1.57 — — Vested (348,333 ) 1.29 — — Forfeited (100,000 ) 1.57 — — Unvested – September 30, 2020 1,070,000 $ 1.52 $ (470,300 ) 3.92 |
NATURE OF OPERATIONS AND RECE_2
NATURE OF OPERATIONS AND RECENT DEVELOPMENTS (Details Narrative) - USD ($) | Oct. 26, 2020 | Aug. 21, 2020 | Mar. 12, 2020 | May 06, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Apr. 17, 2020 | Dec. 31, 2019 |
Significant Business Developments [Line Items] | ||||||||
Common stock redemption description | Our Articles of Incorporation (the “Articles”) provide that if certain events occur in relation to a stockholder that is required to undergo a gaming suitability review or similar investigative process, we have the option to purchase all or any part of such stockholder’s shares at a price per share that is equal to the average closing share price over the thirty calendar days preceding the purchase. The average closing share price over the thirty calendar days preceding the redemption was $1.68 per share. | |||||||
Common stock redemption price per share | $ 1.68 | |||||||
Redemption consideration owed | $ 48,589,663 | $ 48,018,685 | ||||||
Cash portion of purchase price for acquisition of other intangible assets, net | $ 27,400 | |||||||
Purchase price allocated to other intangible assets, net | 16,610,045 | 7,430,643 | ||||||
Drew on revolving loan amount | $ 1,000,000 | 1,000,000 | ||||||
Progressive Games Partners LLC | ||||||||
Significant Business Developments [Line Items] | ||||||||
Purchase price allocated to other intangible assets, net | $ 10,414,528 | |||||||
Payments to acquire net of working capital | 581,885 | |||||||
Payments to acquire businesses, cash | 158,665 | |||||||
Progressive Games Partners LLC | Other Intangible Assets, Net | ||||||||
Significant Business Developments [Line Items] | ||||||||
Cash portion of purchase price for acquisition of other intangible assets, net | $ 6,425,000 | |||||||
Issuance of shares of common stock for acquisition of other intangible assets, net | 3,141,361 | |||||||
Issuance of shares of common stock price per share | $ 1.27 | |||||||
Share Redemption Consideration Obligation | ||||||||
Significant Business Developments [Line Items] | ||||||||
Redemption consideration owed | $ 39,096,401 | $ 39,096,401 | $ 39,096,401 | |||||
Paycheck Protection Program (PPP Loan) | Nevada State Bank | ||||||||
Significant Business Developments [Line Items] | ||||||||
Unsecured Debt | $ 835,300 | |||||||
Main Street Loan | Nevada State Bank | Subsequent Event | ||||||||
Significant Business Developments [Line Items] | ||||||||
Secured loan | $ 4,000,000 | |||||||
Debt instrument, initial interest rate | 3.215% | |||||||
Secured loan, maturity period | 5 years | |||||||
Debt instrument, amortization price percentage principal amount outstanding | 15.00% | |||||||
Main Street Loan | Nevada State Bank | LIBOR | ||||||||
Significant Business Developments [Line Items] | ||||||||
Variable rate basis, description | three-month US dollar LIBOR plus 300 basis points | |||||||
Main Street Loan | Nevada State Bank | LIBOR | Subsequent Event | ||||||||
Significant Business Developments [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 3.00% | |||||||
Triangulum | ||||||||
Significant Business Developments [Line Items] | ||||||||
Common stock redemption, shares | 23,271,667 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201813Member |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Disaggregation of Revenue by Geographic Location (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 1,797,833 | $ 5,371,646 | $ 6,956,122 | $ 16,117,583 |
North America and Caribbean | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 971,147 | 3,891,875 | 4,262,408 | 11,644,353 |
Europe, Middle East and Africa | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 826,686 | $ 1,479,771 | $ 2,693,714 | $ 4,473,230 |
REVENUE RECOGNITION - Summary_2
REVENUE RECOGNITION - Summary of Changes in Revenue Contract Liability (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning balance – January 1, 2020 | $ 1,294,265 |
Increase (advanced billings) | 7,199,100 |
Decrease (revenue recognition) | (7,906,271) |
Ending balance – September 30, 2020 | $ 587,094 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | ||
Revenue recognized included in revenue contract liability | $ 6,250 | $ 1,292,182 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and component parts | $ 379,711 | $ 359,349 |
Finished goods | 428,103 | 343,305 |
Inventory, gross | 807,814 | 702,654 |
Less: inventory reserve | (46,469) | (37,000) |
Inventory, net | $ 761,345 | $ 665,654 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Plant Equipment, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 875,617 | $ 836,905 |
Less: accumulated depreciation | (759,465) | (691,996) |
Property and equipment, net | 116,152 | 144,909 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 312,640 | 312,639 |
Automotive Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 215,127 | 215,127 |
Office and Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 329,296 | 302,296 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 18,554 | $ 6,843 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property Plant and Equipment Excluding Assets Leased to Others | ||||
Property Plant And Equipment [Line Items] | ||||
Depreciation expense | $ 22,153 | $ 26,467 | $ 67,469 | $ 80,445 |
ASSETS DEPLOYED AT CLIENT LOC_3
ASSETS DEPLOYED AT CLIENT LOCATIONS - Schedule of Assets Deployed at Client Locations, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Leases Operating [Abstract] | ||
Enhanced table systems | $ 908,295 | $ 993,127 |
Less: accumulated depreciation | (649,439) | (587,605) |
Assets deployed at client locations, net | $ 258,856 | $ 405,522 |
ASSETS DEPLOYED AT CLIENT LOC_4
ASSETS DEPLOYED AT CLIENT LOCATIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases Operating [Abstract] | ||||
Depreciation expense related to assets deployed at client locations | $ 51,778 | $ 70,145 | $ 174,334 | $ 209,729 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 1,091,000 | $ 1,091,000 | $ 1,091,000 | |||
Amortization expense | $ 501,706 | $ 379,499 | $ 1,258,124 | $ 1,134,760 | ||
Customer Relationships | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Increase in finite-lived intangible assets | $ 10,400,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Other Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | $ 31,046,908 | $ 20,609,382 |
Less: accumulated amortization | (14,436,863) | (13,178,739) |
Other intangible assets, net | 16,610,045 | 7,430,643 |
Patents | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 13,507,997 | 13,485,000 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 13,814,528 | 3,400,000 |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 2,880,967 | 2,880,967 |
Non-compete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | 660,000 | 660,000 |
Internally-developed Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Other intangible assets, gross | $ 183,416 | $ 183,415 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) | Sep. 30, 2020USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2021 | $ 2,582,511 |
2022 | 2,570,659 |
2023 | 1,417,510 |
2024 | 1,414,600 |
2025 | 1,410,100 |
Thereafter | 7,214,665 |
Total amortization | $ 16,610,045 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Payroll and related | $ 249,902 | $ 747,458 |
Interest | 26,924 | 9,895 |
Share redemption consideration | 315,293 | 510,776 |
Commissions and royalties | 148,098 | 78,528 |
Income tax payable | 64,832 | |
Other | 103,929 | 39,390 |
Total accrued expenses | $ 844,146 | $ 1,450,879 |
LEASES (Details Narrative)
LEASES (Details Narrative) | Jul. 03, 2020ft² | Sep. 30, 2020Satellite |
Lessee Lease Description [Line Items] | ||
Rental term | 75 months | |
Operating lease commencement date | Oct. 1, 2020 | |
Office and Warehouse Space | ||
Lessee Lease Description [Line Items] | ||
Area of building | ft² | 14,000 | |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Operating leases and finance leases remaining lease term | 3 months | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Operating leases and finance leases remaining lease term | 75 months | |
Washington | ||
Lessee Lease Description [Line Items] | ||
Operating leases, number of leased assets | Satellite | 2 |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Operating leases: | ||
Operating lease right-of-use lease assets | $ 1,482,534 | $ 306,859 |
Operating lease current liabilities | 197,067 | 276,963 |
Operating lease long-term liabilities | 1,266,215 | $ 30,325 |
Total operating lease liabilities | $ 1,463,282 | |
Weighted-average remaining lease term: | ||
Operating leases | 5 years 10 months 24 days | |
Weighted-average discount rate: | ||
Operating leases | 4.30% |
LEASES - Schedule of Components
LEASES - Schedule of Components of Lease Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Selling, General and Administrative Expenses | ||
Lessee Lease Description [Line Items] | ||
Operating lease cost | $ 71,716 | $ 215,142 |
LEASES - Schedule of Suppleme_2
LEASES - Schedule of Supplemental Cash Flow Information Related to Leases (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Net Income | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 215,142 |
Supplemental Cash Flow Information | |
Right-of-use assets obtained in exchange for lease liabilities: | |
Operating leases | $ 1,383,052 |
LEASES - Schedule of Future Mat
LEASES - Schedule of Future Maturities of Operating Lease Liabilities (Details) | Sep. 30, 2020USD ($) |
Operating Lease [Abstract] | |
Operating Leases, 2021 | $ 197,067 |
Operating Leases, 2022 | 208,249 |
Operating Leases, 2023 | 215,373 |
Operating Leases, 2024 | 234,917 |
Operating Leases, 2025 | 255,707 |
Operating Leases, Thereafter | 351,969 |
Operating Leases, Total lease liabilities | $ 1,463,282 |
LONG-TERM LIABILITIES - Schedul
LONG-TERM LIABILITIES - Schedule of Long-term Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | May 06, 2019 |
Debt Instrument [Line Items] | |||
Long-term liabilities, gross | $ 48,589,663 | $ 48,018,685 | |
Less: Unamortized debt issuance costs | (68,360) | (93,144) | |
Long-term liabilities, net of debt issuance costs | 48,521,303 | 47,925,541 | |
Less: Current portion | (2,530,149) | (1,634,527) | |
Long-term liabilities, net | 45,991,154 | 46,291,014 | |
Share Redemption Consideration Obligation | |||
Debt Instrument [Line Items] | |||
Long-term liabilities, gross | 39,096,401 | 39,096,401 | $ 39,096,401 |
Nevada State Bank Credit Agreement | |||
Debt Instrument [Line Items] | |||
Long-term liabilities, gross | 8,629,800 | 8,699,900 | |
Vehicle Notes Payable | |||
Debt Instrument [Line Items] | |||
Long-term liabilities, gross | 28,162 | 44,490 | |
Unsecured Debt | Paycheck Protection Program (PPP Loan) | |||
Debt Instrument [Line Items] | |||
Long-term liabilities, gross | $ 835,300 | ||
Insurance Notes Payable | |||
Debt Instrument [Line Items] | |||
Long-term liabilities, gross | $ 177,894 |
LONG-TERM LIABILITIES (Details
LONG-TERM LIABILITIES (Details Narrative) - USD ($) | May 05, 2020 | Mar. 12, 2020 | May 06, 2019 | Sep. 30, 2020 | Nov. 16, 2020 | Apr. 17, 2020 |
Debt Instrument [Line Items] | ||||||
Drew on revolving loan amount | $ 1,000,000 | $ 1,000,000 | ||||
NSB and Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | $ 8,629,800 | |||||
Debt instrument, interest rate terms | Outstanding balances accrue interest based on one-month US dollar London interbank offered rate (“LIBOR”) plus an Applicable Margin of 3.50% or 4.00%, depending on our Total Leverage Ratio (as defined in the amended Credit Agreement). | |||||
Step down leverage ratio | 0.25% | |||||
Step down leverage ratio description | semi-annual step- downs of 0.25x every six months, commencing June 30, 2020 through December 31, 2022. | |||||
Current total leverage ratio | 7.00% | |||||
Maximum senior leverage ratio | 2.00% | |||||
Debt instrument, covenant compliance | Furthermore, because the impact of the COVID-19 crisis on our trailing-four-quarters Adjusted EBITDA into 2021, we think it is likely that we will not be in compliance with one or more of the Fixed Charge Coverage Ratio, Total Leverage Ratio and Senior Leverage Ratio through the first quarter of 2021. In view of that, the Company and NSB entered into a Forbearance and Fifth Amendment to Credit Agreement dated August 14, 2020 (the “Fifth Amendment”). In the Fifth Amendment, NSB agreed to forbear from exercising any of its rights or remedies that result from the aforementioned covenant breaches during the aforementioned period. The Fifth Amendment also imposes a new Minimum EBITDA covenant pursuant to which the Company must demonstrate trailing-four-quarter EBITDA of $2.4 million for the each of the quarters ended September 30, 2020, December 31, 2020 and March 31, 2021 and $3.0 million thereafter. The Company was in compliance with the Minimum EBITDA covenant as of September 30, 2020. On October 26, 2020, the Company and NSB entered into the Sixth Amendment to Credit Agreement dated August 14, 2018 (the “Sixth Amendment”) in connection with the Company’s borrowing under the Main Street Loan Program (see Note 16 Subsequent Events). The Sixth Amendment added a Minimum Liquidity covenant requiring that the Company have cash and cash equivalents of no less than $1.5 million at quarter ends through and including June 30, 2021, and $2.5 million thereafter. The Company was in compliance with the Minimum Liquidity covenant as of September 30, 2020. | |||||
Minimum required EBITDA covenant for current quarter | $ 2,400,000 | |||||
Minimum required EBITDA covenant for next quarter | 2,400,000 | |||||
Minimum required EBITDA covenant for next second quarter | 2,400,000 | |||||
Minimum required EBITDA covenant for next third quarter | 3,000,000 | |||||
Minimum liquidity covenant required of cash and cash equivalents for next quarter | 1,500,000 | |||||
Minimum liquidity covenant required of cash and cash equivalents for next second quarter | 1,500,000 | |||||
Minimum liquidity covenant required of cash and cash equivalents for next third quarter | 1,500,000 | |||||
Minimum liquidity covenant required of cash and cash equivalents for next fourth quarter | $ 2,500,000 | |||||
NSB and Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Fixed charge coverage ratio | 1.25% | |||||
NSB and Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Leverage ratio | 7.25% | |||||
NSB and Credit Agreement | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Minimum required EBITDA covenant for next third quarter | $ 2,400,000 | |||||
Revolving Credit Facility | NSB and Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Drew on revolving loan amount | $ 1,000,000 | |||||
Term Loan | NSB and Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | $ 7,629,800 | |||||
Leverage Ratio Less Than 2.0 | NSB and Credit Agreement | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, applicable margin rate | 3.50% | |||||
Leverage Ratio 2.0 or Greater | NSB and Credit Agreement | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, applicable margin rate | 4.00% | |||||
Paycheck Protection Program (PPP Loan) | Nevada State Bank | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured Debt | $ 835,300 | |||||
Share Redemption Consideration Obligation | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 39,096,401 | |||||
Debt instrument, redemption period, start date | May 6, 2019 | |||||
Debt instrument, redemption period, end date | May 6, 2029 | |||||
Interest rate | 2.00% | |||||
Debt instrument, first annual payment | $ 781,928 | |||||
NSB and Credit Agreement | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity | $ 1,000,000 | |||||
NSB and Credit Agreement | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity | $ 11,000,000 |
LONG-TERM LIABILITIES - Sched_2
LONG-TERM LIABILITIES - Schedule of Future Maturities of Long-term Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term liabilities, gross | $ 48,589,663 | $ 48,018,685 |
Promissory Note | ||
Debt Instrument [Line Items] | ||
2021 | 2,530,307 | |
2022 | 1,616,655 | |
2023 | 4,511,000 | |
2025 | 835,300 | |
Thereafter | 39,096,401 | |
Long-term liabilities, gross | $ 48,589,663 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Client Revenue Concentration (Details) - Europe - Client A - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Product Information [Line Items] | |||
Accounts Receivable | $ 308,794 | $ 101,402 | |
Customer Concentration Risk | Revenue | |||
Product Information [Line Items] | |||
Concentration Risk | 17.00% | 6.20% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Commitments And Contingencies [Line Items] | |
Lawsuit filing date | May 6, 2019 |
Pending Litigation | |
Commitments And Contingencies [Line Items] | |
Provision for loss on legal proceedings | $ 0 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) - Restricted Stock | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
Temporary Equity [Line Items] | |
Restricted common stock, granted | shares | 173,333 |
Restricted common stock granted, value | $ | $ 187,186 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Contingency [Line Items] | ||
Effective tax rate | 12.70% | 0.80% |
Plan | ||
Income Tax Contingency [Line Items] | ||
Effective tax rate | 12.00% | 16.50% |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | Feb. 17, 2020 | Feb. 21, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of shares granted | $ 435,639 | $ 564,450 | ||
Unrecognized share-based compensation expense | $ 708,698 | |||
Unrecognized share-based compensation expense, weighted-average period of amortization | 2 years 2 months 26 days | |||
Todd Cravens | Amendment #1 Cravens Employment Agreement | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock exercise price | $ 1.90 | |||
Todd Cravens | Amendment #2 Cravens Employment Agreement | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options granted | 225,000 | |||
Strike price of stock options | $ 1.93 | |||
Todd Cravens | Amendment #2 Cravens Employment Agreement | July 26, 2021 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options expected to vest | 88,000 | |||
Todd Cravens | Amendment #2 Cravens Employment Agreement | July 26, 2022 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options expected to vest | 87,000 | |||
Todd Cravens | Amendment #2 Cravens Employment Agreement | July 26, 2023 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options expected to vest | 50,000 | |||
Common Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options granted | 465,000 | 320,000 | ||
Common Stock | Todd Cravens | Amendment #1 Cravens Employment Agreement | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options granted | 150,000 | |||
Award vesting date | Aug. 1, 2020 | |||
2014 Plan | Common Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized for issuance of awards | 6,550,750 | |||
Shares available for issuance of awards | 381,701 |
STOCK OPTIONS - Summary of Stoc
STOCK OPTIONS - Summary of Stock Options Pricing (Details) - Stock Option | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 70.98% | 71.61% |
Expected volatility, maximum | 76.97% | 72.11% |
Risk free interest rate, minimum | 0.27% | 1.37% |
Risk free interest rate, maximum | 1.39% | 2.51% |
Expected life (years) | 5 years | 5 years |
STOCK OPTIONS - Summary of St_2
STOCK OPTIONS - Summary of Stock Option Activity (Details) - Common Stock | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, number of shares | shares | 3,175,000 | |
Options Issued, number of shares | shares | 465,000 | |
Options Exercised, number of shares | shares | (225,000) | |
Options Forfeited, number of shares | shares | (100,000) | |
Ending Balance, number of shares | shares | 3,315,000 | 3,175,000 |
Ending Balance, Options Exercisable | shares | 2,245,000 | |
Beginning Balance, Weighted-average exercise price | $ / shares | $ 0.92 | |
Options Issued, Weighted-average exercise price | $ / shares | 1.57 | |
Options Exercised, Weighted-average exercise price | $ / shares | 0.22 | |
Options Forfeited, Weighted-average exercise price | $ / shares | 1.57 | |
Ending Balance, Weighted-average exercise price | $ / shares | 1.04 | $ 0.92 |
Ending Balance, Options Exercisable, Weighted-average exercise price | $ / shares | $ 0.81 | |
Options Outstanding, Aggregate intrinsic value | $ | $ 144,450 | $ 2,692,025 |
Options Exercisable, Aggregate intrinsic value | $ | $ 614,750 | |
Weighted-average remaining contractual term (years) | 2 years 5 months 26 days | 2 years 9 months 14 days |
Weighted-average remaining contractual term (years), Exercisable | 1 year 9 months 21 days |
STOCK OPTIONS - Summary of Unve
STOCK OPTIONS - Summary of Unvested Stock Option Activity (Details) - Common Stock - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, number of shares | 1,053,333 | |
Options Granted, number of shares | 465,000 | |
Options Vested, number of shares | (348,333) | |
Options Forfeited, number of shares | (100,000) | |
Ending Balance, number of shares | 1,070,000 | 1,053,333 |
Beginning Balance, Weighted-average exercise price | $ 1.43 | |
Granted, Weighted-average exercise price | 1.57 | |
Vested, Weighted-average exercise price | 1.29 | |
Forfeited, Weighted-average exercise price | 1.57 | |
Ending Balance, Weighted-average exercise price | $ 1.52 | $ 1.43 |
Aggregate intrinsic value | $ (470,300) | $ 357,734 |
Weighted-average remaining contractual term (years) | 3 years 11 months 1 day | 3 years 11 months 1 day |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 26, 2020 | Sep. 30, 2020 | Nov. 16, 2020 |
Nevada State Bank | Main Street Loan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Secured loan | $ 4,000,000 | ||
Secured loan, maturity period | 5 years | ||
Nevada State Bank | Main Street Loan | LIBOR | |||
Subsequent Event [Line Items] | |||
Variable rate basis, description | three-month US dollar LIBOR plus 300 basis points | ||
Nevada State Bank | Main Street Loan | LIBOR | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, basis spread on variable rate | 3.00% | ||
NSB and Credit Agreement | |||
Subsequent Event [Line Items] | |||
Minimum required EBITDA covenant for next third quarter | $ 3,000,000 | ||
NSB and Credit Agreement | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Minimum required EBITDA covenant for next third quarter | $ 2,400,000 |