☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
06-1456680
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
One Hamden Center, 2319 Whitney Avenue, Suite 3B, Hamden, Connecticut
|
06518
|
|
(Address of principal executive offices)
|
(Zip Code)
|
(203) 859-6800
|
(Registrant’s Telephone Number, Including Area Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common stock, par value $0.01 per share
|
TACT
|
NASDAQ Global Market
|
Large accelerated filer □
|
Accelerated filer □
|
Non-accelerated filer ⌧
|
Smaller reporting company ☒
|
Emerging growth company ☐
|
|
PART I.
|
|
Item 1.
|
Business
|
1
|
Item 1A.
|
Risk Factors
|
8
|
Item 1B.
|
Unresolved Staff Comments
|
17
|
Item 2.
|
Properties
|
17
|
Item 3.
|
Legal Proceedings
|
17
|
Item 4.
|
Mine Safety Disclosures
|
17
|
PART II.
|
||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
18
|
Item 6.
|
Selected Financial Data
|
18
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
18
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
28
|
Item 8.
|
Financial Statements and Supplementary Data
|
28
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
28
|
Item 9A.
|
Controls and Procedures
|
28
|
Item 9B.
|
Other Information
|
29
|
PART III.
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
30
|
Item 11.
|
Executive Compensation
|
30
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
30
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
30
|
Item 14.
|
Principal Accounting Fees and Services
|
30
|
PART IV.
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
31
|
Item 16.
|
Form 10-K Summary
|
32
|
SIGNATURES
|
||
Signatures
|
33
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
||
Index to Consolidated Financial Statements
|
F-1
|
● |
a reduction of our workforce starting in July 2020 by approximately 20% through a combination of employee terminations and temporary furloughs. During the fourth quarter, we brought back all furloughed employees. As of December 31, 2020 our overall headcount was reduced by approximately 16% when compared to December 31, 2019;
|
● |
a 10% reduction in the salaries of all salaried, non-commissioned employees, including executive officers, starting in March 2020. From May 1, 2020 until early July 2020, employees below the vice president level were paid their full salary as a result of the receipt of the PPP Loan proceeds (defined below). All employee full salaries were reinstated on January 1, 2021;
|
● |
a reduction in sales commissions for all commissioned employees starting in March 2020 through the end of 2020;
|
● |
a 10% reduction of cash retainer fees for all non-employee directors starting in March 2020 through the end of 2020; and
|
● |
the elimination of discretionary spending wherever possible starting in March 2020, which has continued into the first quarter of 2021.
|
● |
Public Offering – On October 16, 2020, the Company raised net proceeds of $8.7 million, after deducting underwriting discounts, commissions and offering expenses, through an underwritten public offering (the “Offering”) and sold an aggregate of 1,380,000 shares of common stock.
|
● |
PPP Loan – On May 1, 2020 (the “Loan Date”), the Company was granted a $2.2 million loan (the “PPP Loan”) under the Paycheck Protection Program (the “PPP”) administered by the Small Business Administration (“SBA”) established under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which enabled us to return our furloughed employees to full time employment and to restore certain pay cuts until the PPP Loan proceeds were exhausted.
|
● |
New Credit Facility – On March 13, 2020, we entered into a new credit facility with Siena Lending Group LLC that provides a revolving credit line of up to $10.0 million, subject to a borrowing base.
|
● |
Reduced Capital Expenditures – We limited capital expenditures during 2020.
|
● |
staggered shifts and a rotational or flexible work schedule to minimize the number of employees at any particular facility at a single time;
|
● |
mandated use of protective equipment, such as masks and gloves, when in common areas, which is provided to employees;
|
● |
spaced seating in workspaces such as manufacturing cells, lunch/break rooms, conference rooms and other common areas to comply with social distancing guidelines;
|
● |
employees who (i) show symptoms of COVID-19 or (ii) have been exposed to someone who shows symptoms or has tested positive for COVID-19 are prohibited from reporting to work for 10 days;
|
● |
visitors are prohibited from entering all facilities;
|
● |
cleaning and disinfecting protocols at all facilities; and
|
● |
daily temperature checks of all employees before entering all facilities.
|
Name
|
Age
|
Position
|
||
Bart C. Shuldman
|
63
|
Chairman of the Board and Chief Executive Officer
|
||
Steven A. DeMartino
|
51
|
President, Chief Financial Officer, Treasurer and Secretary
|
||
Donald E. Brooks
|
68
|
Senior Vice President, Engineering
|
||
Tracey S. Chernay
|
61
|
Senior Vice President, Casino, Gaming and Lottery Sales
|
||
Andrew J. Hoffman
|
63
|
Senior Vice President, Operations
|
||
David B. Peters
|
42
|
Vice President and Chief Accounting Officer
|
||
Brent Richtsmeier
|
56
|
Senior Vice President, Software Engineering
|
||
Raymond T. Walsh, Jr.
|
35
|
Senior Vice President, Global Sales
|
● |
delays between our expenditures to develop and market new or enhanced products and consumables and the generation of sales from those products;
|
● |
the geographic distribution of our sales and our supply chain;
|
● |
market acceptance of our products, both domestically and internationally;
|
● |
development of new competitive products by others;
|
● |
our responses to price competition;
|
● |
our level of research and development activities;
|
● |
changes in the amount that we spend to develop, acquire or license new products, consumables, technologies or businesses;
|
● |
changes in the amount we spend to promote our products and services;
|
● |
changes in the cost of satisfying our warranty obligations and servicing our installed base of products;
|
● |
availability of third-party components at reasonable prices;
|
● |
general economic and industry conditions, including changes in interest rates affecting returns on cash balances and investments, that affect customer demand;
|
● |
fluctuations of world-wide oil and gas prices;
|
● |
the dependence of our supply chain on a few, foreign third-party manufacturers and suppliers;
|
● |
severe weather events, public health crises, and other external events out of our control that can disrupt our operations or the operations of our customers’ or suppliers’ facilities; and
|
● |
changes in accounting rules.
|
● |
operating losses in excess of those we anticipated in transitioning our business focus toward the food service technology market, which, in addition to the factors discussed below, may require us to seek to obtain additional capital through debt or equity financings or other arrangements to fund operations, or if such arrangements are not available, to take additional significant cost-cutting measures;
|
● |
supply chain disruptions, including delayed product shipments from two contract manufacturers located in China and Thailand that conduct substantially all of our printer and terminal manufacturing, which, if sustained, could lead to insufficient inventory levels and harm our ability to deliver products to our customers on time or at all;
|
● |
continuing or new restrictions on the operations of our customers in the casino industry and food service industry, including, in some cases, partial or complete business shutdowns, which have resulted in, and are likely to continue to result in, reduced demand for our products in the two primary markets that we serve;
|
● |
an inability of our customers to make payments in a timely fashion or at all, which may continue even after operating restrictions are lifted in the event that the downturn in economic conditions persist;
|
● |
devotion of significant time, management attention and resources to monitoring the COVID-19 pandemic and its impacts, and anticipated impacts, on our business, and seeking to mitigate the effects of the pandemic on our business and workforce, which diverts management’s attention and resources away from strategic initiatives, new business opportunities, the transition of our business toward the food service and casino and gaming markets, and the overall profitability of our business;
|
● |
necessary modifications to our business practices and operations, including suspension of employee travel, cancellation of physical participation in meetings, events and conferences and social distancing measures, including work-from-home policies, and such further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers and suppliers, which may adversely impact efficiency and productivity and may increase operational risks, including cybersecurity risks, and have affected the way that we conduct our product development, marketing, customer support and other activities;
|
● |
a permanent reduction in workforce, furlough of workers and an across-the-board 10% salary reduction, as well as other cost-cutting measures we have taken to help mitigate the impact of the COVID-19 crisis on our business, which may, along with any additional such measures that may be taken in the future, impair our ability to operate and have a negative effect on employee loyalty and our reputation and, if furloughed employees do not return following the crisis, or if employees seek higher-paying jobs, may limit our ability to restart operations following the crisis and to grow our food service technology business as planned;
|
● |
a possible future reduction in the value of goodwill or other intangible assets causing the carrying value of such assets to exceed their fair value, which could require us to recognize asset impairment;
|
● |
difficulty predicting our manufacturing requirements accurately due to volatile economic conditions and uncertainty as to when our customers may resume operations, which could result, in the case of an underestimate, in inadequate manufacturing capacity or inventory, interruptions in production and delayed deliveries to customers (with resulting losses in orders or customers lowering our net sales), or in the case of an overestimate, in an excess inventory of component parts or manufactured products;
|
● |
increases in prices and/or decreases in availability of component parts and raw materials needed to produce our products;
|
● |
foreign exchange rate fluctuations due to volatile global economic conditions, which could negatively affect earnings and the value of our assets held outside the United States, and if we increase prices to absorb a portion of the currency impact, could cause demand to decrease;
|
● |
volatility of, and decreases in, trading prices of our common stock; and
|
● |
the possibility that we may need to raise additional capital through an equity or debt financing to support operations but are unable to do so due to, among other things, global economic conditions, conditions in the global financing markets, trading prices of our common stock and the outlook for the industries that we serve, all of which could be negatively impacted by the COVID-19 pandemic, such that there can be no assurance that such financing would be available to us.
|
● |
technologically advanced products that satisfy the user demands;
|
● |
superior customer service;
|
● |
high levels of quality and reliability; and
|
● |
dependable and efficient distribution networks.
|
● |
loss of channel and the ability to bring new products to market;
|
● |
concentration of credit risk, including disruption in distribution should the distributors and / or resellers’ financial condition deteriorate;
|
● |
reduced visibility to end user demand and pricing issues which makes forecasting more difficult;
|
● |
distributors or resellers leveraging their buying power to change the terms of pricing, payment and product delivery schedules; and
|
● |
direct competition should a distributor or reseller decide to manufacture printers internally or source printers from a competitor.
|
● |
the imposition of additional duties, tariffs, quotas, taxes, trade barriers, capital flow restrictions and other charges on imports and exports by the United States or the governments of the countries in which we or our manufacturers and suppliers operate;
|
● |
delays in the delivery of cargo due to port security considerations, labor disputes such as dock strikes, and our reliance on a limited number of shipping and air carriers, which may experience capacity issues that adversely affect our ability to ship inventory in a timely manner or for an acceptable cost;
|
● |
fluctuations in the value of the U.S. Dollar against foreign currencies, which could restrict sales, or increase costs of purchasing, in foreign countries;
|
● |
economic or political instability in any of the countries in which we or our manufacturers or suppliers operate, which could result in a reduction in demand for our products due to political and economic instability or impair our foreign assets;
|
● |
a reduced ability or inability to sell in or purchase from certain markets as a result of export or import restrictions;
|
● |
potentially limited intellectual property protection in certain countries, such as China, may limit recourse against infringing products or cause us to refrain from selling in certain geographic territories;
|
● |
reliance on a limited number of shipping and air carriers who may experience capacity issues that adversely affect our ability to ship inventory in a timely manner or for an acceptable cost; and
|
● |
economic uncertainties and adverse economic conditions (including inflation and recession).
|
● |
merge, consolidate, form subsidiaries or dispose of assets;
|
● |
acquire assets outside the ordinary course of business;
|
● |
enter into other transactions outside the ordinary course of business;
|
● |
sell, transfer, return or dispose of collateral;
|
● |
make loans to or investments in, or enter into transactions with, affiliates;
|
● |
incur or guarantee indebtedness, incur liens;
|
● |
redeem equity interests while borrowings are outstanding under the credit facility;
|
● |
change our capital structure; or;
|
● |
dissolve, divide, change our line of business or cease or suffer a disruption to all or a material portion of our business.
|
● |
prevailing domestic and international market and economic conditions, and conditions in the industries we serve, including current market volatility and the economic impact of COVID-19 and resulting shutdowns on the casino and food service industries and on the U.S. and global economies;
|
● |
adverse business conditions faced by customers, or bankruptcies or store closures of our customers resulting from adverse economic conditions due to COVID-19 or otherwise;
|
● |
changes in our business, operations or prospects;
|
● |
developments in our relationships with our customers or strategic partners;
|
● |
announcements of new products or services by us or by our competitors;
|
● |
announcement or completion of acquisitions by us or by our competitors;
|
● |
changes in existing or adoption of additional government regulations; and
|
● |
unfavorable or reduced analyst coverage.
|
Location
|
Operations Conducted
|
Size
(Approx. Sq. Ft.)
|
Owned
or Leased
|
Lease Expiration
Date
|
|||||
Hamden, Connecticut
|
Executive offices and sales office
|
11,100
|
Leased
|
April 30, 2027
|
|||||
Ithaca, New York
|
Hardware design and development, assembly and service facility
|
73,900
|
Leased
|
May 31, 2025
|
|||||
Las Vegas, Nevada
|
Software design and development and casino and gaming sales office
|
19,600
|
Leased
|
October 31, 2022
|
|||||
Doncaster, UK
|
Sales office and service center
|
6,000
|
Leased
|
August 26, 2026
|
|||||
Macau, China
|
Sales office
|
180
|
Leased
|
June 30, 2021
|
|||||
110,780
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Food service technology
|
$
|
7,734
|
25.3
|
%
|
$
|
6,104
|
13.3
|
%
|
$
|
1,630
|
26.7
|
%
|
||||||||||||
POS automation and banking
|
3,770
|
12.3
|
%
|
5,758
|
12.6
|
%
|
(1,988
|
)
|
(34.5
|
%)
|
||||||||||||||
Casino and gaming
|
10,979
|
35.9
|
%
|
21,529
|
47.1
|
%
|
(10,550
|
)
|
(49.0
|
%)
|
||||||||||||||
Lottery
|
817
|
2.7
|
%
|
1,291
|
2.8
|
%
|
(474
|
)
|
(36.7
|
%)
|
||||||||||||||
Printrex
|
300
|
1.0
|
%
|
1,166
|
2.6
|
%
|
(866
|
)
|
(74.3
|
%)
|
||||||||||||||
TSG
|
6,995
|
22.8
|
%
|
9,900
|
21.6
|
%
|
(2,905
|
)
|
(29.3
|
%)
|
||||||||||||||
$
|
30,595
|
100.0
|
%
|
$
|
45,748
|
100.0
|
%
|
$
|
(15,153
|
)
|
(33.1
|
%)
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Food service technology
|
$
|
7,734
|
25.3
|
%
|
$
|
6,104
|
13.3
|
%
|
$
|
1,630
|
26.7
|
%
|
||||||||||||
POS automation and banking
|
3,770
|
12.3
|
%
|
5,758
|
12.6
|
%
|
(1,988
|
)
|
(34.5
|
%)
|
||||||||||||||
Casino and gaming
|
10,979
|
35.9
|
%
|
21,529
|
47.1
|
%
|
(10,550
|
)
|
(49.0
|
%)
|
||||||||||||||
Lottery
|
817
|
2.7
|
%
|
1,291
|
2.8
|
%
|
(474
|
)
|
(36.7
|
%)
|
||||||||||||||
Printrex
|
300
|
1.0
|
%
|
1,166
|
2.6
|
%
|
(866
|
)
|
(74.3
|
%)
|
||||||||||||||
TSG
|
6,995
|
22.8
|
%
|
9,900
|
21.6
|
%
|
(2,905
|
)
|
(29.3
|
%)
|
||||||||||||||
$
|
30,595
|
100.0
|
%
|
$
|
45,748
|
100.0
|
%
|
$
|
(15,153
|
)
|
(33.1
|
%)
|
||||||||||||
International*
|
$
|
5,862
|
19.2
|
%
|
$
|
10,416
|
22.8
|
%
|
$
|
(4,554
|
)
|
(43.7
|
%)
|
* |
International sales do not include sales of products made to domestic distributors or other customers who in turn ship those products to international destinations.
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Domestic
|
$
|
6,956
|
89.9
|
%
|
$
|
5,522
|
90.5
|
%
|
$
|
1,434
|
26.0
|
%
|
||||||||||||
International
|
778
|
10.1
|
%
|
582
|
9.5
|
%
|
196
|
33.7
|
%
|
|||||||||||||||
$
|
7,734
|
100.0
|
%
|
$
|
6,104
|
100.0
|
%
|
$
|
1,630
|
26.7
|
%
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Hardware
|
$
|
3,938
|
50.9
|
%
|
$
|
4,169
|
68.3
|
%
|
$
|
(231
|
)
|
(5.5
|
%)
|
|||||||||||
Software, labels and other recurring revenue
|
3,796
|
49.1
|
%
|
1,935
|
31.7
|
%
|
1,861
|
96.2
|
%
|
|||||||||||||||
$
|
7,734
|
100.0
|
%
|
$
|
6,104
|
100.0
|
%
|
$
|
1,630
|
26.7
|
%
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Domestic
|
$
|
3,763
|
99.8
|
%
|
$
|
5,714
|
99.2
|
%
|
$
|
(1,951
|
)
|
(34.1
|
%)
|
|||||||||||
International
|
7
|
0.2
|
%
|
44
|
0.8
|
%
|
(37
|
)
|
(84.1
|
%)
|
||||||||||||||
$
|
3,770
|
100.0
|
%
|
$
|
5,758
|
100.0
|
%
|
$
|
(1,988
|
)
|
(34.5
|
%)
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Domestic
|
$
|
6,852
|
62.4
|
%
|
$
|
13,076
|
60.7
|
%
|
$
|
(6,224
|
)
|
(47.6
|
%)
|
|||||||||||
International
|
4,127
|
37.6
|
%
|
8,453
|
39.3
|
%
|
(4,326
|
)
|
(51.2
|
%)
|
||||||||||||||
$
|
10,979
|
100.0
|
%
|
$
|
21,529
|
100.0
|
%
|
$
|
(10,550
|
)
|
(49.0
|
%)
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Domestic
|
$
|
817
|
100.0
|
%
|
$
|
1,290
|
99.9
|
%
|
$
|
(473
|
)
|
(36.7
|
%)
|
|||||||||||
International
|
–
|
0.0
|
%
|
1
|
0.1
|
%
|
(1
|
)
|
(100.0
|
%)
|
||||||||||||||
$
|
817
|
100.0
|
%
|
$
|
1,291
|
100.0
|
%
|
$
|
(474
|
)
|
(36.7
|
%)
|
|
Year Ended
|
Year Ended
|
||||||||||||||||||||||
(In thousands, except percentages)
|
December 31, 2020
|
December 31, 2019
|
$ Change
|
% Change
|
||||||||||||||||||||
Domestic
|
$
|
6,262
|
89.5
|
%
|
$
|
8,769
|
88.6
|
%
|
$
|
(2,507
|
)
|
(28.6
|
%)
|
|||||||||||
International
|
733
|
10.5
|
%
|
1,131
|
11.4
|
%
|
(398
|
)
|
(35.2
|
%)
|
||||||||||||||
$
|
6,995
|
100.0
|
%
|
$
|
9,900
|
100.0
|
%
|
$
|
(2,905
|
)
|
(29.3
|
%)
|
Year Ended December 31,
|
Percent
|
Percent of
|
Percent of
|
|||||||||||||||
2020
|
2019
|
Change
|
Total Sales - 2020
|
Total Sales - 2019
|
||||||||||||||
$
|
12,929
|
$
|
21,935
|
(41.1
|
%)
|
42.3
|
%
|
47.9
|
%
|
Year Ended December 31,
|
Percent
|
Percent of
|
Percent of
|
|||||||||||||||
2020
|
2019
|
Change
|
Total Sales - 2020
|
Total Sales - 2019
|
||||||||||||||
$
|
5,703
|
$
|
4,393
|
29.8
|
%
|
18.6
|
%
|
9.6
|
%
|
Year Ended December 31,
|
Percent
|
Percent of
|
Percent of
|
|||||||||||||||
2020
|
2019
|
Change
|
Total Sales - 2020
|
Total Sales - 2019
|
||||||||||||||
$
|
6,144
|
$
|
8,033
|
(23.5
|
%)
|
20.1
|
%
|
17.6
|
%
|
Year Ended December 31,
|
Percent
|
Percent of
|
Percent of
|
|||||||||||||||
2020
|
2019
|
Change
|
Total Sales - 2020
|
Total Sales - 2019
|
||||||||||||||
$
|
9,255
|
$
|
9,166
|
1.0
|
%
|
30.3
|
%
|
20.0
|
%
|
Year Ended December 31,
|
Percent
|
Percent of
|
Percent of
|
|||||||||||||||
2020
|
2019
|
Change
|
Total Sales – 2020
|
Total Sales – 2019
|
||||||||||||||
$
|
(8,173
|
)
|
$
|
343
|
(2,482.8
|
%)
|
(26.7
|
%)
|
0.7
|
%
|
● |
We reported a net loss of $5.6 million.
|
● |
We recorded depreciation and amortization of $1.3 million and share-based compensation expense of $0.9 million.
|
● |
Accounts receivable decreased $3 million, or 47%, primarily due to lower sales volume during the fourth quarter of 2020 compared to the fourth quarter of 2019 due to the pandemic.
|
● |
Inventories decreased $0.9 million, or 7%, primarily due to the utilization of inventory on hand to fulfill sales in response to the pandemic.
|
● |
Prepaid income taxes increased $2.2 million due to an expected income tax refund related to the net operating loss reported for 2020 that will be carried back to prior years as permitted by the CARES Act.
|
● |
Other current and long-term assets increased $0.2 million, or 19%, due primarily to recording a contract asset related to a long term BOHA! sales contract which was partially offset by the recognition of royalty expense that was prepaid in 2019 to a technology partner for food service technology.
|
● |
Accounts payable decreased $1.3 million, or 43%, due to inventory purchases made towards the end of the fourth quarter of 2019 that were subsequently paid in the first quarter of 2020 and a lower level of inventory purchases during 2020 due to the pandemic.
|
● |
Accrued liabilities and other liabilities increased $0.2 million, or 3%, due primarily to an increase in accrued inventive compensation.
|
● |
We reported a net income of $0.5 million.
|
● |
We recorded depreciation and amortization of $1.4 million and share-based compensation expense of $0.7 million.
|
● |
Accounts receivable decreased $1.6 million, or 20%, primarily due to strong collections on receivables during the fourth quarter of 2019.
|
● |
Inventories decreased $0.8 million, or 6%, primarily due to the utilization of inventory on hand to fulfill sales.
|
● |
Prepaid income taxes decreased $0.6 million, or 71%, primarily due to an income tax refund received in the fourth quarter of 2019.
|
● |
Other current and long-term assets increased $0.3 million, or 47%, due primarily to an advanced payment of royalty fees to a technology partner for food service technology.
|
● |
Accounts payable decreased $0.5 million, or 15%, primarily due to the utilization of inventory on hand to fulfill sales requiring a lower level of inventory purchases during the second half of 2019.
|
● |
Accrued liabilities and other liabilities increased $0.4 million, or 11%, due primarily to an increase in deferred revenue related to our food service technology service contracts and software subscriptions.
|
Financial Covenant
|
Requirement
|
Calculation for the period from April 1, 2020 to December 31, 2020
|
||
EBITDA
|
Minimum of $(6,631)
|
$(4,899)
|
● |
We did not design and maintain effective controls over user access within the Company’s ERP system, Oracle, to ensure appropriate segregation of duties and to adequately restrict user access to appropriate personnel. Specifically, the provisioning and user recertification controls were not designed to ensure that users maintain proper segregation of duties and, as a result, users could have had inappropriate access rights (the “Access Control Weakness”).
|
● |
We did not design and maintain effective controls over the completeness and accuracy of information included in key spreadsheets supporting our accounting records (the “Spreadsheet Control Weakness”).
|
● |
To address the Access Control Weakness, we utilized the services of an Oracle consulting firm and an accounting firm unrelated to our Independent Registered Accounting Firm, to assist us in analyzing and reviewing Oracle access for all users. During the first quarter of 2020, we completed the analysis and deployed an action plan. Based on this analysis and action plan, during the second quarter of 2020, we created new Oracle responsibilities for each employee for which a conflict was identified to remove Oracle transactional responsibilities that we believed to be conflicting and reassigned those responsibilities to a different employee to ensure proper segregation of duties. We completed the implementation of the new Oracle responsibilities for all users in July 2020. During the third quarter of 2020, we completed the enhancement and implementation provisioning and user certification controls to ensure we maintain the appropriate segregation of duties within Oracle. The Access Control Weakness was deemed to be remediated as of September 30, 2020.
|
● |
To address the Spreadsheet Control Weakness, for each key spreadsheet we plan to evaluate and determine (1) if a standard Oracle report exists containing the same information as the spreadsheet, and if so, we would utilize the standard Oracle report (without modification) instead of the spreadsheet to support our accounting records and (2) if a standard Oracle report cannot be used, we will implement a new key control whereby an employee performs a formal validation that the information from Oracle is completely and accurately transferred (automatically or manually) to a spreadsheet by verifying totals and other information on a test basis. For all key spreadsheets, we plan to design and implement a new key control to validate the completeness and accuracy of information supporting our accounting records. During 2020, we began the process of evaluating each key spreadsheet based on the above criteria, and for several key spreadsheets, we implemented a new key control to validate the completeness and accuracy of the information contained within and supporting each such spreadsheet.
|
Plan category
|
(a)
Number of
securities to be
issued upon exercise
of outstanding
options, warrants
and rights
|
(b)
Weighted-
average
exercise price
of outstanding
options, warrants
and rights
|
(c)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)
|
|||||||||
Equity compensation plans approved by security holders:
|
||||||||||||
2005 Equity Incentive Plan
|
291,000
|
$
|
9.47
|
–
|
||||||||
2014 Equity Incentive Plan
|
1,107,155
|
7.95
|
837,204
|
|||||||||
Total
|
1,398,155
|
$
|
8.27
|
837,204
|
(a)
|
The following documents are filed as part of this Form 10-K:
|
1.
|
Financial Statements.
|
Report of Independent Registered Public Accounting Firm
|
Consolidated Balance Sheets as of December 31, 2020 and 2019
|
Consolidated Statements of Operations for the years ended December 31, 2020 and 2019
|
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2020 and 2019
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2020 and 2019
|
Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019
|
Notes to Consolidated Financial Statements
|
2.
|
Schedules.
|
Certificate of Incorporation of TransAct Technologies Incorporated (conformed copy) (incorporated by reference to Exhibit 3(i) of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-21121) filed with the SEC on August 9, 2019).
|
|
Certificate of Designation, Series A Preferred Stock, filed with the Secretary of State of Delaware on December 2, 1997 (incorporated by reference to Exhibit C of the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on February 18, 1999).
|
|
Certificate of Designation, Series B Preferred Stock, filed with the Secretary of State of Delaware on April 6, 2000 (incorporated by reference to Exhibit 3.1(c) of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-21121) filed with the SEC on May 8, 2000).
|
|
Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on August 2, 2019).
|
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1/A (No. 333-06895) filed with the SEC on August 1, 1996).
|
|
Description of Securities (incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K (SEC File No.
000-21121) filed with the SEC on March 16, 2020).
|
|
10.1(x)
|
2005 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on June 1, 2005).
|
10.2(x)
|
TransAct Technologies Incorporated 2014 Equity Incentive Plan, as Amended and Restated (incorporated by reference to Exhibit A to the Definitive Proxy Statement on Schedule 14A filed with the Commission on April 23, 2020, File No. 000-21121).
|
10.3(x)
|
2014 Equity Incentive Plan Time-based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-21121) filed with the SEC on May 6, 2016).
|
10.4(x)
|
2014 Equity Incentive Plan Performance-based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-211121) filed with the SEC on August 8, 2016).
|
10.5(x)
|
Employment Agreement, dated July 31, 1996, by and between TransAct and Bart C. Shuldman (incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement on Form S-1/A (No. 333-06895) filed with the SEC on August 1, 1996).
|
10.6(x)
|
Severance Agreement by and between TransAct and Steven A. DeMartino, dated June 1, 2004 (incorporated by reference to Exhibit 10.8 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2005).
|
10.7(x)
|
Severance Agreement by and between TransAct and Tracey S. Chernay, dated July 29, 2005 (incorporated by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 14, 2008).
|
10.8(x)
|
Amendment to Employment Agreement, effective January 1, 2008, by and between TransAct and Bart C. Shuldman (incorporated by reference to Exhibit 10.10 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2009).
|
10.9(x)
|
Amendment to Severance Agreement by and between TransAct and Steven A. DeMartino, effective January 1, 2008 (incorporated by reference to Exhibit 10.12 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2009).
|
10.10(x)
|
Amendment to Severance Agreement by and between TransAct and Tracey S. Chernay, effective January 1, 2008 (incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2009).
|
Lease Agreement by and between Bomax Properties and Ithaca, dated as of March 23, 1992 (incorporated by reference to Exhibit 10.14 of the Company’s Registration Statement on Form S-1 (No. 333-06895) filed with the SEC on June 26, 1996).
|
|
Second Amendment to Lease Agreement by and between Bomax Properties and Ithaca, dated December 2, 1996 (incorporated by reference to Exhibit 10.27 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 31, 1998).
|
Agreement regarding the Continuation and Renewal of Lease by and between Bomax Properties, LLC and TransAct, dated July 18, 2001 (incorporated by reference to Exhibit 10.8 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 29, 2002).
|
|
Amendment No. 1 to Lease Agreement between Bomax Properties, LLC and TransAct (incorporated by reference to Exhibit 10.16 of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-21121) filed with the SEC on May 10, 2012).
|
|
Amendment No. 2 to Lease Agreement between Bomax Properties, LLC and TransAct, dated January 14, 2016 (incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 11, 2016).
|
|
Amendment No. 3 to Lease Agreement between Bomax Properties, LLC and TransAct, dated February 28, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on March 4, 2020).
|
|
Lease Agreement by and between Las Vegas Airport Properties LLC and TransAct dated December 2, 2004 (incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2005).
|
|
First Amendment to Lease Agreement by and between Las Vegas Airport Properties LLC and TransAct dated August 31, 2009 (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2010).
|
|
Second Amendment to Lease Agreement by and between The Realty Associates Fund IX LP and TransAct dated June 30, 2015 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-21121) filed with the SEC on August 7, 2015).
|
|
Lease Agreement by and between 2319 Hamden Center I, L.L.C. and TransAct dated November 27, 2006 (incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 15, 2007).
|
|
First Amendment to Lease by and between 2319 Hamden Center I, L.L.C. and TransAct dated January 3, 2017 (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K (SEC File No. 000-21121) filed with the SEC on March 16, 2017).
|
|
Loan and Security Agreement, dated as of March 13, 2020, among Siena Lending Group LLC, TransAct Technologies Incorporated and the other Loan Parties from time to time party thereto (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (SEC File No. 000-21121) filed with the SEC on May 22, 2020).
|
|
Note, dated May 1, 2020, by TransAct Technologies Incorporated in favor of Berkshire Bank (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on May 5, 2020).
|
|
Master License Agreement dated February 22, 2019 and amendments thereto.
|
|
Master Development and License Agreement dated July 20, 2018.
|
|
21*
|
Subsidiaries of the Company
|
23.1*
|
Consent of Marcum LLP
|
23.2*
|
Consent of PricewaterhouseCoopers LLP (predecessor auditor).
|
31.1*
|
Rule 13a-14(a) Certification of Chief Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
Rule 13a-14(a) Certification of Chief Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
|
32‡
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
(x) |
Management contract or compensatory plan or arrangement.
|
* |
These exhibits are filed herewith.
|
† |
Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item (601)(b)(10) of Regulation S-K.
|
‡ |
Furnished herewith.
|
(b)
|
Exhibits.
|
(c)
|
Financial Statement Schedules.
|
TRANSACT TECHNOLOGIES INCORPORATED
|
||
By:
|
/s/ Bart C. Shuldman
|
|
Name:
|
Bart C. Shuldman
|
|
Title:
|
Chairman of the Board and Chief Executive Officer
|
Signature
|
Title
|
Date
|
||||
/s/ Bart C. Shuldman
|
Chairman of the Board and Chief Executive Officer
|
March 12, 2021
|
||||
Bart C. Shuldman
|
(Principal Executive Officer)
|
|||||
/s/ Steven A. DeMartino
|
President, Chief Financial Officer, Treasurer and Secretary
|
March 12, 2021
|
||||
Steven A. DeMartino
|
(Principal Financial Officer)
|
|||||
/s/ David B. Peters
|
Vice President and Chief Accounting Officer
|
March 12, 2021
|
||||
David B. Peters
|
(Principal Accounting Officer)
|
|||||
/s/ John M. Dillon
|
Director
|
March 12, 2021
|
||||
John M. Dillon
|
||||||
/s/ Randall S. Friedman
|
Director
|
March 12, 2021
|
||||
Randall S. Friedman
|
||||||
/s/ Emanuel P. N. Hilario
|
Director
|
March 12, 2021
|
||||
Emanuel P. N. Hilario
|
||||||
/s/ Haydee Olinger
|
Director
|
March 12, 2021
|
||||
Haydee Olinger
|
||||||
/s/ Thomas R. Schwarz
|
Director
|
March 12, 2021
|
||||
Thomas R. Schwarz
|
Financial Statements
|
||
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated Balance Sheets as of December 31, 2020 and 2019
|
F-5
|
|
Consolidated Statements of Operations for the years ended December 31, 2020 and 2019
|
F-6
|
|
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2020 and 2019
|
F-7
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2020 and 2019
|
F-8
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019
|
F-9
|
|
Notes to Consolidated Financial Statements
|
F-10
|
|
December 31,
2020
|
December 31,
2019
|
||||||
Assets:
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,359
|
$
|
4,203
|
||||
Accounts receivable, net
|
3,377
|
6,418
|
||||||
Note receivable
|
100
|
1,017
|
||||||
Inventories
|
11,286
|
12,099
|
||||||
Prepaid income taxes
|
2,409
|
180
|
||||||
Other current assets
|
644
|
998
|
||||||
Total current assets
|
28,175
|
24,915
|
||||||
Fixed assets, net
|
1,950
|
2,244
|
||||||
Notes receivable, net of current portion
|
1,584
|
–
|
||||||
Right-of-use asset
|
3,618
|
2,855
|
||||||
Goodwill
|
2,621
|
2,621
|
||||||
Deferred tax assets
|
2,939
|
2,565
|
||||||
Intangible assets, net
|
583
|
817
|
||||||
Other assets
|
777
|
44
|
||||||
14,072
|
11,146
|
|||||||
Total assets
|
$
|
42,247
|
$
|
36,061
|
||||
Liabilities and Shareholders’ Equity:
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,691
|
$
|
2,960
|
||||
Accrued liabilities
|
3,665
|
3,041
|
||||||
Lease liability
|
837
|
945
|
||||||
Deferred revenue
|
504
|
700
|
||||||
Total current liabilities
|
6,697
|
7,646
|
||||||
Long-term debt
|
2,173
|
–
|
||||||
Deferred revenue, net of current portion
|
111
|
219
|
||||||
Lease liability, net of current portion
|
2,864
|
2,104
|
||||||
Other liabilities
|
166
|
166
|
||||||
5,314
|
2,489
|
|||||||
Total liabilities
|
12,011
|
10,135
|
||||||
Commitments and contingencies (Note 15)
|
|
|
||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $0.01 value, 4,800,000 authorized, none issued and outstanding
|
–
|
–
|
||||||
Preferred stock, Series A, $0.01 par value, 200,000 authorized, none issued and outstanding
|
–
|
–
|
||||||
Common stock, $0.01 par value, 20,000,000 authorized at December 31, 2020 and 2019; 12,976,227 and 11,515,090 shares issued; 8,931,385 and 7,470,248 shares outstanding, at December 31, 2020 and 2019, respectively
|
130
|
115
|
||||||
Additional paid-in capital
|
42,536
|
32,604
|
||||||
Retained earnings
|
19,718
|
25,348
|
||||||
Accumulated other comprehensive loss, net of tax
|
(38
|
)
|
(31
|
)
|
||||
Treasury stock, 4,044,842 shares, at cost
|
(32,110
|
)
|
(32,110
|
)
|
||||
Total shareholders’ equity
|
30,236
|
25,926
|
||||||
Total liabilities and shareholders’ equity
|
$
|
42,247
|
$
|
36,061
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Net sales
|
$
|
30,595
|
$
|
45,748
|
||||
Cost of sales
|
17,666
|
23,813
|
||||||
Gross profit
|
12,929
|
21,935
|
||||||
Operating expenses:
|
||||||||
Engineering, design and product development
|
5,703
|
4,393
|
||||||
Selling and marketing
|
6,144
|
8,033
|
||||||
General and administrative
|
9,255
|
9,166
|
||||||
21,102
|
21,592
|
|||||||
Operating (loss) income
|
(8,173
|
)
|
343
|
|||||
Interest and other income (expense):
|
||||||||
Interest expense
|
(130
|
)
|
(28
|
)
|
||||
Interest income
|
78
|
17
|
||||||
Other, net
|
56
|
35
|
||||||
4
|
24
|
|||||||
(Loss) income before income taxes
|
(8,169
|
)
|
367
|
|||||
Income tax benefit
|
2,539
|
149
|
||||||
Net (loss) income
|
$
|
(5,630
|
)
|
$
|
516
|
|||
Net (loss) income per common share:
|
||||||||
Basic
|
$
|
(0.72
|
)
|
$
|
0.07
|
|||
Diluted
|
$
|
(0.72
|
)
|
$
|
0.07
|
|||
Shares used in per-share calculation:
|
||||||||
Basic
|
7,827
|
7,466
|
||||||
Diluted
|
7,827
|
7,677
|
||||||
Dividends declared and paid per common share:
|
$
|
-
|
$
|
0.36
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Net (loss) income
|
$
|
(5,630
|
)
|
$
|
516
|
|||
Foreign currency translation adjustment, net of tax
|
(7
|
)
|
51
|
|||||
Comprehensive (loss) income
|
$
|
(5,637
|
)
|
$
|
567
|
|
Common Stock
|
Additional
Paid-in
|
Retained
|
Treasury
|
Accumulated
Other
Comprehensive
|
Total
|
||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Income (Loss)
|
Equity
|
||||||||||||||||||||||
Balance, January 1, 2019
|
7,418,299
|
$
|
115
|
$
|
32,129
|
$
|
27,515
|
$
|
(32,110
|
)
|
$
|
(82
|
)
|
$
|
27,567
|
|||||||||||||
Issuance of common stock on restricted stock units
|
45,167
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||
Issuance of common stock on deferred stock units
|
28,231
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||
Relinquishment of stock awards and deferred stock units to pay withholding taxes
|
(21,449
|
)
|
–
|
(217
|
)
|
–
|
–
|
–
|
(217
|
)
|
||||||||||||||||||
Dividends declared and paid on common stock
|
–
|
–
|
–
|
(2,683
|
)
|
–
|
–
|
(2,683
|
)
|
|||||||||||||||||||
Share-based compensation expense
|
–
|
–
|
692
|
–
|
–
|
–
|
692
|
|||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
51
|
51
|
|||||||||||||||||||||
Net income
|
–
|
–
|
–
|
516
|
–
|
–
|
516
|
|||||||||||||||||||||
Balance, December 31, 2019
|
7,470,248
|
$
|
115
|
$
|
32,604
|
$
|
25,348
|
$
|
(32,110
|
)
|
$
|
(31
|
)
|
$
|
25,926
|
|||||||||||||
Issuance of shares from exercise of stock options
|
62,500
|
1
|
374
|
–
|
–
|
–
|
375
|
|||||||||||||||||||||
Issuance of common stock on restricted stock units
|
32,725
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||
Issuance of common stock, net of issuance cost
|
1,380,000
|
14
|
8,723
|
–
|
–
|
–
|
8,737
|
|||||||||||||||||||||
Relinquishment of stock awards and deferred stock units to pay withholding taxes
|
(14,088
|
)
|
–
|
(41
|
)
|
–
|
–
|
–
|
(41
|
)
|
||||||||||||||||||
Share-based compensation expense
|
–
|
–
|
876
|
–
|
–
|
–
|
876
|
|||||||||||||||||||||
Foreign currency translation adjustment, net of tax
|
–
|
–
|
–
|
–
|
–
|
(7
|
)
|
(7
|
)
|
|||||||||||||||||||
Net loss
|
–
|
–
|
–
|
(5,630
|
)
|
–
|
–
|
(5,630
|
)
|
|||||||||||||||||||
Balance, December 31, 2020
|
8,931,385
|
$
|
130
|
$
|
42,536
|
$
|
19,718
|
$
|
(32,110
|
)
|
$
|
(38
|
)
|
$
|
30,236
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Cash flows from operating activities:
|
||||||||
Net (loss) income
|
$
|
(5,630
|
)
|
$
|
516
|
|||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
||||||||
Share-based compensation expense
|
876
|
692
|
||||||
Depreciation and amortization
|
1,342
|
1,371
|
||||||
Deferred income tax benefit
|
(367
|
)
|
(294
|
)
|
||||
(Recovery of) provision for doubtful accounts
|
(1
|
)
|
16
|
|||||
Foreign currency transaction (gains) losses
|
(58
|
)
|
18
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
2,976
|
1,589
|
||||||
Inventories
|
876
|
796
|
||||||
Prepaid income taxes
|
(2,226
|
)
|
577
|
|||||
Other current and long term assets
|
(198
|
)
|
(333
|
)
|
||||
Accounts payable
|
(1,276
|
)
|
(517
|
)
|
||||
Accrued liabilities and other liabilities
|
176
|
415
|
||||||
Net cash (used in) provided by operating activities
|
(3,510
|
)
|
4,846
|
|||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(744
|
)
|
(1,062
|
)
|
||||
Additions to capitalized software
|
–
|
(304
|
)
|
|||||
Issuance of note receivable
|
(600
|
)
|
(1,000
|
)
|
||||
Net cash used in investing activities
|
(1,344
|
)
|
(2,366
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Revolving credit line borrowings
|
2,756
|
–
|
||||||
Revolving credit line payments
|
(2,756
|
)
|
–
|
|||||
Long-term debt borrowings
|
2,173
|
–
|
||||||
Proceeds from stock option exercises
|
375
|
–
|
||||||
Payment of dividends on common stock
|
–
|
(2,683
|
)
|
|||||
Proceeds from the issuance of common stock
|
9,798
|
–
|
||||||
Payment of common stock issuance costs
|
(1,061
|
)
|
–
|
|||||
Withholding taxes paid on stock issuance
|
(41
|
)
|
(214
|
)
|
||||
Payment of bank financing costs
|
(213
|
)
|
–
|
|||||
Net cash provided by (used in) financing activities
|
11,031
|
(2,897
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
(21
|
)
|
(71
|
)
|
||||
Increase (decrease) in cash and cash equivalents
|
6,156
|
(488
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
4,203
|
4,691
|
||||||
Cash and cash equivalents, end of period
|
$
|
10,359
|
$
|
4,203
|
||||
Supplemental cash flow information:
|
||||||||
Interest paid
|
$
|
64
|
$
|
30
|
||||
Income taxes paid
|
46
|
65
|
||||||
Non-cash capital expenditure items
|
25
|
17
|
● |
a reduction of our workforce starting in July 2020 by approximately 20% through a combination of employee terminations and temporary furloughs. During the fourth quarter, we brought back all furloughed employees. As of December 31, 2020 our overall headcount was reduced by approximately 16% when compared to December 31, 2019;
|
● |
a 10% reduction in the salaries of all salaried, non-commissioned employees, including executive officers, starting in March 2020. From May 1, 2020 until early July 2020, employees below the vice president level were paid their full salary as a result of the receipt of the PPP Loan proceeds (defined below). All employees’ full salaries were reinstated on January 1, 2021;
|
● |
a reduction in sales commissions for all commissioned employees starting in March 2020 through the end of 2020;
|
● |
a 10% reduction of cash retainer fees for all non-employee directors starting in March 2020 through the end of 2020; and
|
● |
the elimination of discretionary spending wherever possible starting in March 2020 and continuing into the first quarter of 2021.
|
● |
Public Offering – On October 16, 2020, the Company raised net proceeds of $8.7 million, after deducting underwriting discounts, commissions and offering expenses, through an underwritten public offering (the “Offering”) and sold an aggregate of 1,380,000 shares of common stock.
|
● |
PPP Loan – On May 1, 2020, the Company was granted a $2.2 million loan (the “PPP Loan”) under the Paycheck Protection Program (the “PPP”) administered by the Small Business Administration (“SBA”) established under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which enabled us to return our furloughed employees to full time employment and to restore certain pay cuts until the PPP Loan proceeds were exhausted.
|
● |
New Credit Facility – On March 13, 2020, we entered into a new credit facility with Siena Lending Group LLC that provides a revolving credit line of up to $10.0 million, subject to a borrowing base.
|
● |
Reduced Capital Expenditures – We limited capital expenditures during 2020.
|
Year Ended December 31,
|
||||||||
(In thousands)
|
2020
|
2019
|
||||||
Balance, beginning of period
|
$
|
221
|
$
|
205
|
||||
Additions charged to costs and expenses
|
1
|
39
|
||||||
Deductions
|
(2
|
)
|
(23
|
)
|
||||
Balance, end of period
|
$
|
220
|
$
|
221
|
|
Year Ended December 31, 2020
|
|||||||||||
(In thousands)
|
United States
|
International
|
Total
|
|||||||||
Food service technology
|
$
|
6,956
|
$
|
778
|
$
|
7,734
|
||||||
POS automation and banking
|
3,763
|
7
|
3,770
|
|||||||||
Casino and gaming
|
6,852
|
4,127
|
10,979
|
|||||||||
Lottery
|
817
|
–
|
817
|
|||||||||
Printrex
|
83
|
217
|
300
|
|||||||||
TransAct Services Group
|
6,262
|
733
|
6,995
|
|||||||||
Total net sales
|
$
|
24,733
|
$
|
5,862
|
$
|
30,595
|
|
Year Ended December 31, 2019
|
|||||||||||
(In thousands)
|
United States
|
International
|
Total
|
|||||||||
Food service technology
|
$
|
5,522
|
$
|
582
|
$
|
6,104
|
||||||
POS automation and banking
|
5,714
|
44
|
5,758
|
|||||||||
Casino and gaming
|
13,076
|
8,453
|
21,529
|
|||||||||
Lottery
|
1,290
|
1
|
1,291
|
|||||||||
Printrex
|
961
|
205
|
1,166
|
|||||||||
TransAct Services Group
|
8,769
|
1,131
|
9,900
|
|||||||||
Total net sales
|
$
|
35,332
|
$
|
10,416
|
$
|
45,748
|
December 31,
|
||||||||
(In thousands)
|
2020
|
2019
|
||||||
Unbilled receivables, current
|
$
|
290
|
$
|
–
|
||||
Unbilled receivables, non-current
|
591
|
–
|
||||||
Customer pre-payments
|
(216
|
)
|
(232
|
)
|
||||
Deferred revenue, current
|
(504
|
)
|
(700
|
)
|
||||
Deferred revenue, non-current
|
(111
|
)
|
(219
|
)
|
||||
Net contract assets (liabilities)
|
$
|
50
|
$
|
(1,151
|
)
|
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
International Gaming Technology (“IGT”)
|
11
|
%
|
15
|
%
|
||||
Scientific Games
|
–
|
10
|
%
|
December 31,
|
||||||||
|
2020
|
2019
|
||||||
IGT
|
15
|
%
|
14
|
%
|
December 31,
|
||||||||
(In thousands)
|
2020
|
2019
|
||||||
Balance, beginning of period
|
$
|
215
|
$
|
273
|
||||
Warranties issued
|
56
|
181
|
||||||
Warranty settlements
|
(131
|
)
|
(239
|
)
|
||||
Balance, end of period
|
$
|
140
|
$
|
215
|
|
December 31,
|
|||||||
(In thousands)
|
2020
|
2019
|
||||||
Raw materials and purchased component parts
|
$
|
5,467
|
$
|
7,724
|
||||
Finished goods
|
5,819
|
4,375
|
||||||
$
|
11,286
|
$
|
12,099
|
|
December 31,
|
|||||||
(In thousands)
|
2020
|
2019
|
||||||
Tooling, machinery and equipment
|
$
|
9,508
|
$
|
9,175
|
||||
Furniture and office equipment
|
1,706
|
1,694
|
||||||
Computer software and equipment
|
7,364
|
7,062
|
||||||
Leasehold improvements
|
2,873
|
2,696
|
||||||
21,451
|
20,627
|
|||||||
Less: Accumulated depreciation and amortization
|
(19,979
|
)
|
(19,010
|
)
|
||||
1,472
|
1,617
|
|||||||
Construction in-process
|
478
|
627
|
||||||
$
|
1,950
|
$
|
2,244
|
|
December 31,
|
|||||||||||||||
2020
|
2019
|
|||||||||||||||
(In thousands)
|
Gross Amount
|
Accumulated Amortization
|
Gross Amount
|
Accumulated Amortization
|
||||||||||||
Purchased technology
|
$
|
2,526
|
$
|
(1,975
|
)
|
$
|
2,526
|
$
|
(1,792
|
)
|
||||||
Customer relationships
|
1,300
|
(1,300
|
)
|
1,300
|
(1,300
|
)
|
||||||||||
Trademark
|
480
|
(450
|
)
|
480
|
(402
|
)
|
||||||||||
Covenant not to compete
|
146
|
(146
|
)
|
146
|
(146
|
)
|
||||||||||
Patents
|
56
|
(54
|
)
|
56
|
(51
|
)
|
||||||||||
Other
|
80
|
(80
|
)
|
80
|
(80
|
)
|
||||||||||
Total
|
$
|
4,588
|
$
|
(4,005
|
)
|
$
|
4,588
|
$
|
(3,771
|
)
|
|
December 31,
|
|||||||
(In thousands)
|
2020
|
2019
|
||||||
Salaries and compensation related
|
$
|
2,328
|
$
|
1,541
|
||||
Warranty
|
112
|
174
|
||||||
Professional and consulting
|
257
|
465
|
||||||
Other
|
968
|
861
|
||||||
$
|
3,665
|
$
|
3,041
|
December 31,
|
||||||||
|
2020
|
2019
|
||||||
Expected option term (in years)
|
7.0
|
6.8
|
||||||
Expected volatility
|
41.7
|
%
|
38.8
|
%
|
||||
Risk-free interest rate
|
0.9
|
%
|
2.6
|
%
|
||||
Dividend yield
|
0.0
|
%
|
3.5
|
%
|
|
Stock Options
|
Restricted Stock Units
|
||||||||||||||
Number of Shares
|
Average Price*
|
Number of Units
|
Average Price**
|
|||||||||||||
Outstanding at December 31, 2019
|
1,142,468
|
$
|
9.23
|
90,575
|
$
|
10.46
|
||||||||||
Granted
|
245,950
|
7.43
|
52,700
|
9.76
|
||||||||||||
Exercised
|
(62,500
|
)
|
7.79
|
(32,725
|
)
|
9.88
|
||||||||||
Forfeited
|
(1,563
|
)
|
10.32
|
–
|
–
|
|||||||||||
Expired
|
(36,750
|
)
|
8.61
|
–
|
–
|
|||||||||||
Outstanding at December 31, 2020
|
1,287,605
|
$
|
8.98
|
110,550
|
$
|
10.30
|
* |
weighted average exercise price per share
|
** |
weighted average grant stock price per share
|
|
Equity Awards Vested and Expected to Vest
|
Equity Awards That Are Exercisable
|
||||||||||||||||||||||||||||||
Awards
|
Average Price*
|
Aggregate Intrinsic Value
|
Remaining Term**
|
Awards
|
Average Price*
|
Aggregate Intrinsic Value
|
Remaining Term**
|
|||||||||||||||||||||||||
Stock Options
|
1,287,605
|
$
|
8.98
|
$
|
366
|
5.8
|
809,512
|
$
|
8.85
|
$
|
67
|
4.2
|
||||||||||||||||||||
Restricted stock units
|
110,550
|
–
|
785
|
2.4
|
–
|
–
|
–
|
–
|
* |
weighted average exercise price per share
|
** |
weighted-average contractual remaining term in years
|
|
December 31,
|
|||||||
(In thousands)
|
2020
|
2019
|
||||||
Deferred tax assets:
|
||||||||
Foreign net operating losses
|
$
|
563
|
$
|
538
|
||||
Depreciation
|
302
|
165
|
||||||
Inventory reserves
|
719
|
916
|
||||||
Deferred revenue
|
47
|
58
|
||||||
Warranty reserve
|
31
|
47
|
||||||
Stock compensation expense
|
731
|
701
|
||||||
Other accrued compensation
|
388
|
226
|
||||||
R&D credit carryforward
|
460
|
111
|
||||||
Other liabilities and reserves
|
394
|
276
|
||||||
Gross deferred tax assets
|
3,635
|
3,038
|
||||||
Valuation allowance
|
(659
|
)
|
(444
|
)
|
||||
Net deferred tax assets
|
2,976
|
2,594
|
||||||
Deferred tax liabilities:
|
||||||||
Other
|
37
|
29
|
||||||
Net deferred tax liabilities
|
37
|
29
|
||||||
Total net deferred tax assets
|
$
|
2,939
|
$
|
2,565
|
Year Ended December 31,
|
||||||||
(In thousands)
|
2020
|
2019
|
||||||
Balance, beginning of period
|
$
|
444
|
$
|
390
|
||||
Additions charged to income tax provision
|
215
|
54
|
||||||
Balance, end of period
|
$
|
659
|
$
|
444
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Federal statutory tax rate
|
21.0
|
%
|
21.0
|
%
|
||||
U.S. corporate tax rate change
|
9.5
|
–
|
||||||
R&D credit
|
4.2
|
(83.2
|
)
|
|||||
State income taxes, net of federal income taxes
|
0.2
|
12.0
|
||||||
Business meals and entertainment
|
0.1
|
5.4
|
||||||
Miscellaneous permanent items
|
–
|
1.4
|
||||||
Uncertain tax positions
|
(0.2
|
)
|
1.0
|
|||||
Foreign-derived intangible income deduction
|
–
|
(5.4
|
)
|
|||||
Stock award excess tax benefit
|
(0.3
|
)
|
(8.4
|
)
|
||||
Stock option cancellations
|
(0.5
|
)
|
0.8
|
|||||
Valuation allowance and tax accruals
|
(2.6
|
)
|
14.8
|
|||||
Other
|
(0.3
|
)
|
–
|
|||||
Effective tax rate
|
31.1
|
%
|
(40.6
|
)%
|
|
December 31,
|
|||||||
(In thousands)
|
2020
|
2019
|
||||||
Unrecognized tax benefits as of January 1
|
$
|
107
|
$
|
104
|
||||
Tax positions taken during the current period
|
41
|
28
|
||||||
Lapse of statute of limitations
|
(27
|
)
|
(25
|
)
|
||||
Unrecognized tax benefits as of December 31
|
$
|
121
|
$
|
107
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Net (loss) income
|
$
|
(5,630
|
)
|
$
|
516
|
|||
Shares:
|
||||||||
Basic: Weighted average common shares outstanding
|
7,827
|
7,466
|
||||||
Add: Dilutive effect of outstanding equity awards as determined by the treasury stock method
|
-
|
211
|
||||||
Diluted: Weighted average common and common equivalent shares outstanding
|
7,827
|
7,677
|
||||||
Net (loss) income per common share:
|
||||||||
Basic
|
$
|
(0.72
|
)
|
$
|
0.07
|
|||
Diluted
|
(0.72
|
)
|
0.07
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Operating cash outflows from leases
|
$
|
1,040
|
$
|
1,031
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
||||||
Weighted average remaining lease term (in years)
|
4.9
|
5.0
|
||||||
Weighted average discount rate
|
4.1
|
%
|
3.7
|
%
|
|
December 31, 2020
|
|||
2021
|
$
|
971
|
||
2022
|
879
|
|||
2023
|
713
|
|||
2024
|
718
|
|||
2025
|
464
|
|||
Thereafter
|
180
|
|||
Total undiscounted lease payments
|
3,925
|
|||
Less imputed interest
|
224
|
|||
Total lease liabilities
|
$
|
3,701
|
|
Quarter Ended
|
|||||||||||||||
(In thousands, except per share amounts)
|
March 31
|
June 30
|
September 30
|
December 31
|
||||||||||||
2020:
|
||||||||||||||||
Net sales
|
$
|
10,247
|
$
|
5,285
|
$
|
7,300
|
$
|
7,763
|
||||||||
Gross profit
|
4,918
|
2,290
|
3,349
|
2,372
|
||||||||||||
Net loss
|
(992
|
)
|
(1,853
|
)
|
(867
|
)
|
(1,918
|
)
|
||||||||
Net loss per common share:
|
||||||||||||||||
Basic
|
(0.13
|
)
|
(0.25
|
)
|
(0.11
|
)
|
(0.22
|
)
|
||||||||
Diluted
|
(0.13
|
)
|
(0.25
|
)
|
(0.11
|
)
|
(0.22
|
)
|
||||||||
2019:
|
||||||||||||||||
Net sales
|
$
|
11,550
|
$
|
11,350
|
$
|
11,686
|
$
|
11,162
|
||||||||
Gross profit
|
6,086
|
5,704
|
5,546
|
4,599
|
||||||||||||
Net income (loss)
|
746
|
186
|
384
|
(800
|
)
|
|||||||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic
|
0.10
|
0.02
|
0.05
|
(0.11
|
)
|
|||||||||||
Diluted
|
0.10
|
0.02
|
0.05
|
(0.11
|
)
|
[***]
By: _/s/ [***]_______________________
Name: __[***]________________________
Title: __President & CEO______________
|
TRANSACT TECHNOLOGIES INCORPORATED
By: __/s/ Steven A. DeMartino_________
Name: __Steven A. DeMartino___________
Title: __President and CFO_____________
|
a.
|
AccuDate XL2e (Android)
|
i.
|
203 dpi printing
|
ii.
|
Android Lollipop (v5.x)
|
iii.
|
XGA, 1024 x 768 and has a 4:3 aspect ratio
|
iv.
|
56 mm print head (= 448 dots/raster line)
|
v.
|
Maximum label width = 59mm
|
b.
|
AccuDate TXL / Project Nome (Android)
|
i.
|
300 dpi printing
|
ii.
|
Android 8
|
iii.
|
WXGA, 1280 x 800 with a 16:10 aspect ratio.
|
iv.
|
73.15 mm print head (= 864 dots/raster line)
|
v.
|
Maximum label width = 80mm
|
(i)
|
[***] commits to a monthly uptime of 97.75% (or 120 minutes of permitted downtime)
|
(ii)
|
In case of special large contracts (between TransAct and its customers), [***] will work with Transact to address any special
SLA requirements the TransAct customer has.
|
(i)
|
[***] shall notify Transact at least 5 days in advance of all scheduled outages,
|
(ii)
|
No such scheduled outage shall last longer than one hour or occur more frequently than once a week, and
|
(iii)
|
The are scheduled between the hours of 11:00 p.m. and 7:00 am (US EST).
|
(i)
|
Transact, its customers or any of their respective employees, agents, or affiliates, or
|
(ii)
|
Internet or other network traffic problems which are completely outside of the control of [***] and cannot be mitigated by
[***]. An example of network traffic problems completely outside of the control of [***] is the Transact Identity that will be provided by Transact.
|
(a)
|
Section
2.2 of the Existing Agreement is hereby amended by inserting immediately following the words "[***] shall offer such product support 24 hours per day, seven days per week, as described in Section 2.6." the words "The Parties may provide, in any amendment to or
modification of Schedule A,
for specific mutually agreed remedies in the event of a breach of Schedule A."
|
(b)
|
Schedule
A of the Existing Agreement is hereby amended by adding the following provision at the end of the portion of such Schedule A called “UPTIME” under “Service
Levels”:
|
(a)
|
This Amendment shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Connecticut without regard to conflict of laws principles.
|
(b)
|
This Amendment shall inure to the benefit of and be binding upon each of the
Parties and each of their respective permitted successors and permitted assigns.
|
(c)
|
The headings in this Amendment are for reference only and do not affect the
interpretation of this Amendment.
|
(d)
|
This Amendment may be executed in counterparts, each of which is deemed an
original, but all of which constitute one and the same agreement. Delivery of an executed counterpart of this Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Amendment.
|
(e)
|
This Amendment constitutes the sole and entire agreement between the Parties
with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter.
|
[***]
By: _/s/ [***]_______________________
Name: _[***]_________________________
Title: _President & CEO________________
|
TRANSACT TECHNOLOGIES INCORPORATED
By: _/s/ Steven A. DeMartino__________
Name: _Steven A. DeMartino____________
Title: _President and CFO______________
|
(a)
|
This Amendment shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Connecticut without regard to conflict of laws principles.
|
(b)
|
This Amendment shall inure to the benefit of and be binding upon each of the
Parties and each of their respective permitted successors and permitted assigns.
|
(c)
|
The headings in this Amendment are for reference only and do not affect the
interpretation of this Amendment.
|
(d)
|
This Amendment may be executed in counterparts, each of which is deemed an
original, but all of which constitute one and the same agreement. Delivery of an executed counterpart of this Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Amendment.
|
(e)
|
Except as provided in the Loan Agreement, this Amendment constitutes the sole
and entire agreement between the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to
such subject matter.
|
[***]
By: _/s/ [***]_______________________
Name: _[***]_________________________
Title: _President & CEO_______________
|
TRANSACT TECHNOLOGIES INCORPORATED
By: _/s/ Steven A. DeMartino__________
Name: _Steven A. DeMartino____________
Title: _President and CFO______________
|
1.
|
Exhibit B of the Original Agreement is hereby deleted in its entirety and replaced with the following:
|
2. |
All other terms and provisions of the Original Agreement are hereby ratified, adopted and reaffirmed and shall remain in full force and legal effect, except only those
which are explicitly changed by this Third Amendment. To the extent that there is a conflict between the terms and provisions of the Original Agreement and this Third Amendment, the terms and provisions of this Third Amendment shall govern
for purposes of the subject matter of this Third Amendment only.
|
3. |
This Third Amendment and the Original Agreement constitute the entire understanding and agreement, and supersede any and all prior or contemporaneous representations,
understandings, and agreements, whether oral or written, between [***] and TransAct relating to the subject matter of this Third Amendment and the Original Agreement. This Third Amendment may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the same document.
|
[***]
|
TransAct Technologies Incorporated
|
/s/ [***]
Authorized Signatory
[***]
Name
President and CEO
Title
|
/s/ Steven A. DeMartino
Authorized Signatory
Steven A. DeMartino
Name
President and CFO
Title
|
[***]
By: _/s/ [***]________________________
Name: _[***]__________________________
Title: _President & CEO________________
|
TRANSACT TECHNOLOGIES INCORPORATED
By: _/s/ Steven A. DeMartino___________
Name: _Steven A. DeMartino_____________
Title: _President and CFO_______________
|
1. |
I have reviewed this Annual Report on Form 10-K of TransAct Technologies Incorporated;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
|
|
|
/s/ Bart C. Shuldman
|
|
Bart C. Shuldman
|
|
Chairman and Chief Executive Officer
|
|
1. |
I have reviewed this Annual Report on Form 10-K of TransAct Technologies Incorporated;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
|
|
|
/s/ Steven A. DeMartino
|
|
Steven A. DeMartino
President, Chief Financial Officer, Treasurer and Secretary
|
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/s/ Bart C. Shuldman
|
|
Bart C. Shuldman
Chairman and Chief Executive Officer
|
|
|
|
/s/ Steven A. DeMartino
|
|
Steven A. DeMartino
President, Chief Financial Officer, Treasurer and Secretary
|
|