☒ | QUARTERLY 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, CT |
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 - Financial Information: |
Page |
|
Item 1 |
Financial Statements (unaudited, as adjusted) |
|
Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 |
3 |
|
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 |
4 |
|
Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2022 and 2021 |
5 |
|
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 |
6 |
|
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2022 and 2021 |
7 |
|
8 |
||
Item 2 |
17 |
|
Item 3 |
29 |
|
Item 4 |
29 |
|
PART II - Other Information: |
||
Item 1 |
30 |
|
Item 1A |
30 |
|
Item 2 |
30 |
|
Item 3 |
30 |
|
Item 4 |
30 |
|
Item 5 |
30 |
|
Item 6 |
30 |
|
31 |
Item 1. | FINANCIAL STATEMENTS |
June 30, 2022 |
December 31, 2021 |
|||||||
Assets: |
(In thousands, except share data) |
|||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
3,893 |
$ |
19,457 |
||||
Accounts receivable, net |
11,991 |
7,593 |
||||||
Employee retention credit receivable |
1,500 |
1,500 |
||||||
Inventories |
10,907 |
7,711 |
||||||
Prepaid income taxes |
188 |
137 |
||||||
Other current assets |
794 |
738 |
||||||
Total current assets |
29,273 |
37,136 |
||||||
Fixed assets, net of accumulated depreciation of $17,216 and $16,736, respectively |
2,838 |
2,684 |
||||||
Right-of-use asset |
2,937 |
2,553 |
||||||
Goodwill |
2,621 |
2,621 |
||||||
Deferred tax assets |
7,325 |
5,143 |
||||||
Intangible assets, net of accumulated amortization of $1,286 and $1,209, respectively |
319 |
397 |
||||||
Other assets |
230 |
400 |
||||||
16,270 |
13,798 |
|||||||
Total assets |
$ |
45,543 |
$ |
50,934 |
||||
Liabilities and Shareholders’ Equity: |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
5,017 |
$ |
4,308 |
||||
Accrued liabilities |
3,649 |
3,894 |
||||||
Lease liability |
789 |
789 |
||||||
Deferred revenue |
887 |
805 |
||||||
Total current liabilities |
10,342 |
9,796 |
||||||
Deferred revenue, net of current portion |
169 |
186 |
||||||
Lease liability, net of current portion |
2,170 |
1,781 |
||||||
Other liabilities |
190 |
187 |
||||||
2,529 |
2,154 |
|||||||
Total liabilities |
12,871 |
11,950 |
||||||
Shareholders’ equity: |
||||||||
Common stock, $0.01 par value, 20,000,000 shares authorized; 13,954,850 and 13,917,731 shares issued, respectively; 9,910,008 and 9,872,889 shares outstanding, respectively |
139 |
139 |
||||||
Additional paid-in capital |
55,708 |
55,246 |
||||||
Retained earnings |
8,842 |
15,566 |
||||||
Accumulated other comprehensive income, net of tax |
93 |
143 |
||||||
Treasury stock, at cost, 4,044,842 shares |
(32,110 |
) |
(32,110 |
) |
||||
Total shareholders’ equity |
32,672 |
38,984 |
||||||
Total liabilities and shareholders’ equity |
$ |
45,543 |
$ |
50,934 |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(In thousands, except per share data) |
||||||||||||||||
Net sales |
$ |
12,623 |
$ |
9,325 |
$ |
22,325 |
$ |
17,626 |
||||||||
Cost of sales |
7,189 |
5,893 |
14,325 |
10,855 |
||||||||||||
Gross profit |
5,434 |
3,432 |
8,000 |
6,771 |
||||||||||||
Operating expenses: |
||||||||||||||||
Engineering, design and product development |
2,172 |
1,804 |
4,455 |
3,607 |
||||||||||||
Selling and marketing |
3,293 |
1,767 |
5,976 |
3,210 |
||||||||||||
General and administrative |
2,923 |
2,509 |
6,127 |
5,118 |
||||||||||||
8,388 |
6,080 |
16,558 |
11,935 |
|||||||||||||
Operating loss |
(2,954 |
) |
(2,648 |
) |
(8,558 |
) |
(5,164 |
) |
||||||||
Interest and other expense: |
||||||||||||||||
Interest, net |
(28 |
) |
(29 |
) |
(92 |
) |
(42 |
) |
||||||||
Other, net |
(264 |
) |
(17 |
) |
(299 |
) |
(100 |
) |
||||||||
(292 |
) |
(46 |
) |
(391 |
) |
(142 |
) |
|||||||||
Loss before income taxes |
(3,246 |
) |
(2,694 |
) |
(8,949 |
) |
(5,306 |
) |
||||||||
Income tax benefit |
870 |
664 |
2,225 |
1,187 |
||||||||||||
Net loss |
$ |
(2,376 |
) |
$ |
(2,030 |
) |
$ |
(6,724 |
) |
$ |
(4,119 |
) |
||||
Net loss per common share: |
||||||||||||||||
Basic |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
(0.68 |
) |
$ |
(0.46 |
) |
||||
Diluted |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
(0.68 |
) |
$ |
(0.46 |
) |
||||
Shares used in per-share calculation: |
||||||||||||||||
Basic |
9,910 |
8,976 |
9,898 |
8,962 |
||||||||||||
Diluted |
9,910 |
8,976 |
9,898 |
8,962 |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(In thousands) |
||||||||||||||||
Net loss |
$ |
(2,376 |
) |
$ |
(2,030 |
) |
$ |
(6,724 |
) |
$ |
(4,119 |
) |
||||
Foreign currency translation adjustment, net of tax |
(8 |
) |
32 |
(50 |
) |
85 |
||||||||||
Comprehensive loss |
$ |
(2,384 |
) |
$ |
(1,998 |
) |
$ |
(6,774 |
) |
$ |
(4,034 |
) |
Six Months Ended |
||||||||
June 30, |
||||||||
2022 |
2021 |
|||||||
(In thousands) |
||||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ |
(6,724 |
) |
$ |
(4,119 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Share-based compensation expense |
581 |
695 |
||||||
Depreciation and amortization |
625 |
486 |
||||||
Deferred income taxes |
(2,227 |
) |
(1,153 |
) |
||||
Gain on the sale of fixed assets |
– |
(8 |
) |
|||||
Foreign currency transaction losses |
298 |
107 |
||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(4,547 |
) |
(2,350 |
) |
||||
Inventories |
(3,250 |
) |
2,334 |
|||||
Prepaid income taxes |
(51 |
) |
(90 |
) |
||||
Other current and long-term assets |
77 |
29 |
||||||
Accounts payable |
789 |
1,012 |
||||||
Accrued liabilities and other liabilities |
(159 |
) |
(862 |
) |
||||
Net cash used in operating activities |
(14,588 |
) |
(3,919 |
) |
||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(744 |
) |
(159 |
) |
||||
Proceeds from the sale of fixed assets |
– |
8 |
||||||
Collection of note receivable |
– |
1,598 |
||||||
Net cash (used in) provided by investing activities |
(744 |
) |
1,447 |
|||||
Cash flows from financing activities: |
||||||||
Proceeds from stock option exercises |
– |
277 |
||||||
Withholding taxes paid on stock issuances |
(119 |
) |
(100 |
) |
||||
Payment of bank financing costs |
(10 |
) |
(31 |
) |
||||
Net cash (used in) provided by financing activities |
(129 |
) |
146 |
|||||
Effect of exchange rate changes on cash and cash equivalents |
(103 |
) |
(73 |
) |
||||
Decrease in cash and cash equivalents |
(15,564 |
) |
(2,399 |
) |
||||
Cash and cash equivalents, beginning of period |
19,457 |
10,359 |
||||||
Cash and cash equivalents, end of period |
$ |
3,893 |
$ |
7,960 |
||||
Supplemental schedule of non-cash investing activities: |
||||||||
Capital expenditures included in accounts payable |
$ |
7 |
$ |
100 |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(In thousands) |
||||||||||||||||
Equity beginning balance |
$ |
34,771 |
$ |
28,369 |
$ |
38,984 |
$ |
30,125 |
||||||||
Common stock |
||||||||||||||||
Balance, beginning and end of period |
139 |
130 |
139 |
130 |
||||||||||||
Additional paid-in capital |
||||||||||||||||
Balance, beginning of period |
55,423 |
42,816 |
55,246 |
42,536 |
||||||||||||
Share-based compensation expense |
285 |
431 |
581 |
695 |
||||||||||||
Issuance of shares from exercise of stock options |
– |
186 |
– |
277 |
||||||||||||
Relinquishment of stock awards and restricted stock units to pay for withholding taxes |
– |
(25 |
) |
(119 |
) |
(100 |
) |
|||||||||
Balance, end of period |
55,708 |
43,408 |
55,708 |
43,408 |
||||||||||||
Retained earnings |
||||||||||||||||
Balance, beginning of period |
11,218 |
17,518 |
15,566 |
19,607 |
||||||||||||
Net loss |
(2,376 |
) |
(2,030 |
) |
(6,724 |
) |
(4,119 |
) |
||||||||
Balance, end of period |
8,842 |
15,488 |
8,842 |
15,488 |
||||||||||||
Treasury stock |
||||||||||||||||
Balance, beginning and end of period |
(32,110 |
) |
(32,110 |
) |
(32,110 |
) |
(32,110 |
) |
||||||||
Accumulated other comprehensive income (loss), net of tax |
||||||||||||||||
Balance, beginning of period |
101 |
15 |
143 |
(38 |
) |
|||||||||||
Foreign currency translation adjustment, net of tax |
(8 |
) |
32 |
(50 |
) |
85 |
||||||||||
Balance, end of period |
93 |
47 |
93 |
47 |
||||||||||||
Equity ending balance |
$ |
32,672 |
$ |
26,963 |
$ |
32,672 |
$ |
26,963 |
||||||||
Supplemental share information |
||||||||||||||||
Issuance of shares from stock awards |
– |
27 |
63 |
92 |
||||||||||||
Relinquishment of stock awards to pay withholding taxes |
– |
1 |
26 |
32 |
● | Public Offering – On October 16, 2020 and August 16, 2021, the Company raised net proceeds of $8.7 million and $11.2 million (including the exercise of the underwriters overallotment options on October 16, 2020 and August 20, 2021), respectively, after deducting underwriting discounts, commissions and offering expenses, through underwritten public offerings in which we sold an aggregate of 1,380,000 and 842,375 shares of common stock, respectively. |
● | 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. On July 8, 2021, we received notice that the PPP Loan had been forgiven as of July 1, 2021. See Note 5 for further details regarding the PPP Loan. |
● | Employee Retention Credit – Under the provisions of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. In connection with the CARES Act, the Company recognized the employee retention credit during the fourth quarter of 2021 as a $1.5 million “Gain from employee retention credit” in the Consolidated Statement of Operations for the year ended December 31, 2021 and recorded a $1.5 million “Employee retention credit receivable” in the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021. We expect to receive these funds during 2022. |
● | Credit Facility – On March 13, 2020, we entered into a new credit facility with Siena Lending Group LLC (the “Lender”) that provides a revolving credit line of up to $10.0 million, subject to a borrowing base, and on July 19, 2022, we entered into an amendment to extend the maturity of the facility to March 13, 2025. See Note 5 and Note 10 for further details regarding this facility. |
● | Reduced Capital Expenditures – We limited capital expenditures during 2020 and 2021, and are gradually increasing expenditures during 2022 as sales improve. |
Three Months Ended |
||||||||||||||||||||||||
June 30, |
||||||||||||||||||||||||
2022 |
2021 |
|||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||
United States |
International |
Total |
United States |
International |
Total |
|||||||||||||||||||
Food service technology |
$ |
3,281 |
$ |
151 |
$ |
3,432 |
$ |
2,987 |
$ |
87 |
$ |
3,074 |
||||||||||||
POS automation |
1,172 |
– |
1,172 |
1,252 |
4 |
1,256 |
||||||||||||||||||
Casino and gaming |
3,929 |
2,596 |
6,525 |
2,438 |
1,029 |
3,467 |
||||||||||||||||||
Printrex |
– |
– |
– |
25 |
87 |
112 |
||||||||||||||||||
TransAct Services Group |
1,345 |
149 |
1,494 |
1,252 |
164 |
1,416 |
||||||||||||||||||
Total net sales |
$ |
9,727 |
$ |
2,896 |
$ |
12,623 |
$ |
7,954 |
$ |
1,371 |
$ |
9,325 |
Six Months Ended |
||||||||||||||||||||||||
June 30, |
||||||||||||||||||||||||
2022 |
2021 |
|||||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||
United States |
International |
Total |
United States |
International |
Total |
|||||||||||||||||||
Food service technology |
$ |
5,227 |
$ |
335 |
$ |
5,562 |
$ |
5,551 |
$ |
270 |
$ |
5,821 |
||||||||||||
POS automation |
2,472 |
– |
2,472 |
2,412 |
8 |
2,420 |
||||||||||||||||||
Casino and gaming |
6,717 |
4,570 |
11,287 |
4,402 |
1,930 |
6,332 |
||||||||||||||||||
Printrex |
– |
– |
– |
52 |
219 |
271 |
||||||||||||||||||
TransAct Services Group |
2,413 |
591 |
3,004 |
2,532 |
250 |
2,782 |
||||||||||||||||||
Total net sales |
$ |
16,829 |
$ |
5,496 |
$ |
22,325 |
$ |
14,949 |
$ |
2,677 |
$ |
17,626 |
June 30, 2022 |
December 31, 2021 |
|||||||
(In thousands) |
||||||||
Unbilled receivables, current |
$ |
342 |
$ |
314 |
||||
Unbilled receivables, non-current |
185 |
308 |
||||||
Customer pre-payments |
(320 |
) |
(99 |
) |
||||
Deferred revenue, current |
(887 |
) |
(805 |
) |
||||
Deferred revenue, non-current |
(169 |
) |
(186 |
) |
||||
Total net contract liabilities |
$ |
(849 |
) |
$ |
(468 |
) |
June 30, 2022 |
December 31, 2021 |
|||||||
(In thousands) |
||||||||
Raw materials and purchased component parts |
$ |
9,242 |
$ |
6,470 |
||||
Work-in-process |
– |
11 |
||||||
Finished goods |
1,665 |
1,230 |
||||||
$ |
10,907 |
$ |
7,711 |
Six Months Ended |
||||||||
June 30, |
||||||||
2022 |
2021 |
|||||||
(In thousands) |
||||||||
Balance, beginning of period |
$ |
101 |
$ |
140 |
||||
Warranties issued |
12 |
19 |
||||||
Warranty settlements |
(33 |
) |
(45 |
) |
||||
Balance, end of period |
$ |
80 |
$ |
114 |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(In thousands, except per share data) |
||||||||||||||||
Net loss |
$ |
(2,376 |
) |
$ |
(2,030 |
) |
$ |
(6,724 |
) |
$ |
(4,119 |
) |
||||
Shares: |
||||||||||||||||
Basic: Weighted average common shares outstanding |
9,910 |
8,976 |
9,898 |
8,962 |
||||||||||||
Add: Dilutive effect of outstanding options and restricted stock units as determined by the treasury stock method |
– |
– |
– |
– |
||||||||||||
Diluted: Weighted average common and common equivalent shares outstanding |
9,910 |
8,976 |
9,898 |
8,962 |
||||||||||||
Net loss per common share: |
||||||||||||||||
Basic |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
(0.68 |
) |
$ |
(0.46 |
) |
||||
Diluted |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
(0.68 |
) |
$ |
(0.46 |
) |
Six Months Ended |
||||||||
June 30, |
||||||||
2022 |
2021 |
|||||||
Operating cash outflows from leases |
$ |
456 |
$ |
522 |
June 30, 2022 |
December 31, 2021 |
|||||||
Weighted average remaining lease term (in years) |
3.2 |
3.5 |
||||||
Weighted average discount rate |
4.5 |
% |
4.4 |
% |
June 30, 2022 |
December 31, 2021 |
|||||||
2022 |
$ |
461 |
$ |
886 |
||||
2023 |
972 |
721 |
||||||
2024 |
1,023 |
721 |
||||||
2025 |
711 |
426 |
||||||
2026 |
21 |
23 |
||||||
Total undiscounted lease payments |
3,188 |
2,777 |
||||||
Less imputed interest |
229 |
207 |
||||||
Total lease liabilities |
$ |
2,959 |
$ |
2,570 |
December 31, 2021 |
||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
||||||||||
Inventories |
$ |
7,720 |
$ |
7,711 |
$ |
(9 |
) |
|||||
Deferred tax assets |
5,141 |
5,143 |
2 |
|||||||||
Retained earnings |
15,573 |
15,566 |
(7 |
) |
Three months ended March 31, 2022 |
Three months ended June 30, 2021 |
|||||||||||||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
Under FIFO Cost |
Under Average Cost |
Effect of Change |
|||||||||||||||||||
Cost of sales |
$ |
6,708 |
$ |
7,136 |
$ |
428 |
$ |
6,000 |
$ |
5,893 |
$ |
(107 |
) |
|||||||||||
Gross profit |
2,994 |
2,566 |
(428 |
) |
3,325 |
3,432 |
107 |
|||||||||||||||||
Operating loss |
(5,176 |
) |
(5,604 |
) |
(428 |
) |
(2,755 |
) |
(2,648 |
) |
107 |
|||||||||||||
Loss before income taxes |
(5,275 |
) |
(5,703 |
) |
(428 |
) |
(2,801 |
) |
(2,694 |
) |
107 |
|||||||||||||
Income tax benefit |
1,262 |
1,355 |
93 |
687 |
664 |
(23 |
) |
|||||||||||||||||
Net loss |
(4,013 |
) |
(4,348 |
) |
(335 |
) |
(2,114 |
) |
(2,030 |
) |
84 |
|||||||||||||
Net loss per common share: |
||||||||||||||||||||||||
Basic |
$ |
(0.41 |
) |
$ |
(0.44 |
) |
$ |
(0.03 |
) |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
0.01 |
|||||||
Diluted |
$ |
(0.41 |
) |
$ |
(0.44 |
) |
$ |
(0.03 |
) |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
0.01 |
|||||||
Shares used in per-share calculation: |
||||||||||||||||||||||||
Basic |
9,886 |
9,886 |
8,976 |
8,976 |
||||||||||||||||||||
Diluted |
9,886 |
9,886 |
8,976 |
8,976 |
Six months ended June 30, 2021 |
||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
||||||||||
Cost of sales |
$ |
11,112 |
$ |
10,855 |
$ |
(257 |
) |
|||||
Gross profit |
6,514 |
6,771 |
257 |
|||||||||
Operating loss |
(5,421 |
) |
(5,164 |
) |
257 |
|||||||
Loss before income taxes |
(5,563 |
) |
(5,306 |
) |
257 |
|||||||
Income tax benefit |
1,243 |
1,187 |
(56 |
) |
||||||||
Net loss |
(4,320 |
) |
(4,119 |
) |
201 |
|||||||
Net loss per common share: |
||||||||||||
Basic |
$ |
(0.48 |
) |
$ |
(0.46 |
) |
$ |
0.02 |
||||
Diluted |
$ |
(0.48 |
) |
$ |
(0.46 |
) |
$ |
0.02 |
||||
Shares used in per-share calculation: |
||||||||||||
Basic |
8,962 |
8,962 |
||||||||||
Diluted |
8,962 |
8,962 |
Three months ended March 31, 2022 |
Three months ended June 30, 2021 |
|||||||||||||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
Under FIFO Cost |
Under Average Cost |
Effect of Change |
|||||||||||||||||||
Net loss |
$ |
(4,013 |
) |
$ |
(4,348 |
) |
$ |
(335 |
) |
$ |
(2,114 |
) |
$ |
(2,030 |
) |
$ |
84 |
|||||||
Comprehensive loss |
(4,055 |
) |
(4,390 |
) |
(335 |
) |
(2,082 |
) |
(1,998 |
) |
84 |
Six months ended June 30, 2021 |
||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
||||||||||
Net loss |
$ |
(4,320 |
) |
$ |
(4,119 |
) |
$ |
201 |
||||
Comprehensive loss |
(4,235 |
) |
(4,034 |
) |
201 |
Three months ended March 31, 2022 |
Six months ended June 30, 2021 |
|||||||||||||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
Under FIFO Cost |
Under Average Cost |
Effect of Change |
|||||||||||||||||||
Net loss |
$ |
(4,013 |
) |
$ |
(4,348 |
) |
$ |
(335 |
) |
$ |
(4,320 |
) |
$ |
(4,119 |
) |
$ |
201 |
|||||||
Deferred income taxes |
(1,262 |
) |
(1,355 |
) |
(93 |
) |
(1,209 |
) |
(1,153 |
) |
56 |
|||||||||||||
Inventories |
(1,344 |
) |
(916 |
) |
428 |
2,591 |
2,334 |
(257 |
) |
Three months ended March 31, 2022 |
Three months ended June 30, 2021 |
|||||||||||||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
Under FIFO Cost |
Under Average Cost |
Effect of Change |
|||||||||||||||||||
Equity beginning balance |
$ |
38,991 |
$ |
38,984 |
$ |
(7 |
) |
$ |
28,363 |
$ |
28,369 |
$ |
6 |
|||||||||||
Retained earnings -- beginning of period |
15,573 |
15,566 |
(7 |
) |
17,512 |
17,518 |
6 |
|||||||||||||||||
Net loss |
(4,013 |
) |
(4,348 |
) |
(335 |
) |
(2,114 |
) |
(2,030 |
) |
84 |
|||||||||||||
Retained earnings -- end of period |
11,560 |
11,218 |
(342 |
) |
15,398 |
15,488 |
90 |
|||||||||||||||||
Equity ending balance |
35,113 |
34,771 |
(342 |
) |
26,873 |
26,963 |
90 |
Six months ended June 30, 2021 |
||||||||||||
Under FIFO Cost |
Under Average Cost |
Effect of Change |
||||||||||
Equity beginning balance |
$ |
30,236 |
$ |
30,125 |
$ |
(111 |
) |
|||||
Retained earnings -- beginning of period |
19,718 |
19,607 |
(111 |
) |
||||||||
Net loss |
(4,320 |
) |
(4,119 |
) |
201 |
|||||||
Retained earnings -- end of period |
15,398 |
15,488 |
90 |
|||||||||
Equity ending balance |
26,873 |
26,963 |
90 |
(i) | The extension of the maturity date from March 13, 2023 to March 13, 2025; and |
(ii) | The termination of the existing blocked account control agreement and entry into a new “springing” deposit account control agreement, permitting the Company to direct the use of funds in its deposit account until such time as (a) the sum of excess availability under Siena Credit Facility (as amended by the Credit Facility Amendment) and unrestricted cash is less than $5 million for 3 consecutive business days or (b) an event of default occurs and is continuing. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (as adjusted for a change in accounting principle) |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Food service technology (“FST”) |
$ |
3,432 |
27.2 |
% |
$ |
3,074 |
33.0 |
% |
$ |
358 |
11.6 |
% |
||||||||||||
POS automation |
1,172 |
9.3 |
% |
1,256 |
13.4 |
% |
(84 |
) |
(6.7 |
%) |
||||||||||||||
Casino and gaming |
6,525 |
51.7 |
% |
3,467 |
37.2 |
% |
3,058 |
88.2 |
% |
|||||||||||||||
Printrex |
– |
0.0 |
% |
112 |
1.2 |
% |
(112 |
) |
(100.0 |
%) |
||||||||||||||
TSG |
1,494 |
11.8 |
% |
1,416 |
15.2 |
% |
78 |
5.5 |
% |
|||||||||||||||
$ |
12,623 |
100.0 |
% |
$ |
9,325 |
100.0 |
% |
$ |
3,298 |
35.4 |
% |
|||||||||||||
International * |
$ |
2,896 |
22.9 |
% |
$ |
1,371 |
14.7 |
% |
$ |
1,525 |
111.2 |
% |
* | International sales do not include sales of printers and terminals made to domestic distributors or other domestic customers that may, in turn, ship those printers and terminals to international destinations. |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
3,281 |
95.6 |
% |
$ |
2,987 |
97.2 |
% |
$ |
294 |
9.8 |
% |
||||||||||||
International |
151 |
4.4 |
% |
87 |
2.8 |
% |
64 |
73.6 |
% |
|||||||||||||||
$ |
3,432 |
100.0 |
% |
$ |
3,074 |
100.0 |
% |
$ |
358 |
11.6 |
% |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Hardware |
$ |
1,253 |
36.5 |
% |
$ |
1,008 |
32.8 |
% |
$ |
245 |
24.3 |
% |
||||||||||||
Software, labels and other recurring revenue |
2,179 |
63.5 |
% |
2,066 |
67.2 |
% |
113 |
5.5 |
% |
|||||||||||||||
$ |
3,432 |
100.0 |
% |
$ |
3,074 |
100.0 |
% |
$ |
358 |
11.6 |
% |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
1,172 |
100.0 |
% |
$ |
1,252 |
99.7 |
% |
$ |
(80 |
) |
(6.4 |
%) |
|||||||||||
International |
– |
0.0 |
% |
4 |
0.3 |
% |
(4 |
) |
(100.0 |
%) |
||||||||||||||
$ |
1,172 |
100.0 |
% |
$ |
1,256 |
100.0 |
% |
$ |
(84 |
) |
(6.7 |
%) |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
3,929 |
60.2 |
% |
$ |
2,438 |
70.3 |
% |
$ |
1,491 |
61.2 |
% |
||||||||||||
International |
2,596 |
39.8 |
% |
1,029 |
29.7 |
% |
1,567 |
152.3 |
% |
|||||||||||||||
$ |
6,525 |
100.0 |
% |
$ |
3,467 |
100.0 |
% |
$ |
3,058 |
88.2 |
% |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
– |
0.0 |
% |
$ |
25 |
22.3 |
% |
$ |
(25 |
) |
(100.0 |
%) |
|||||||||||
International |
– |
0.0 |
% |
87 |
77.7 |
% |
(87 |
) |
(100.0 |
%) |
||||||||||||||
$ |
– |
0.0 |
% |
$ |
112 |
100.0 |
% |
$ |
(112 |
) |
(100.0 |
%) |
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
1,345 |
90.0 |
% |
$ |
1,252 |
88.4 |
% |
$ |
93 |
7.4 |
% |
||||||||||||
International |
149 |
10.0 |
% |
164 |
11.6 |
% |
(15 |
) |
(9.1 |
%) |
||||||||||||||
$ |
1,494 |
100.0 |
% |
$ |
1,416 |
100.0 |
% |
$ |
78 |
5.5 |
% |
Three Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
5,434 |
$ |
3,432 |
58.3 |
% |
43.0 |
% |
36.8 |
% |
Three Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
2,172 |
$ |
1,804 |
20.4 |
% |
17.2 |
% |
19.3 |
% |
Three Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
3,293 |
$ |
1,767 |
86.4 |
% |
26.1 |
% |
18.9 |
% |
Three Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
2,923 |
$ |
2,509 |
16.5 |
% |
23.2 |
% |
26.9 |
% |
Three Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
(2,954 |
) |
$ |
(2,648 |
) |
11.6 |
% |
(23.4 |
%) |
(28.4 |
%) |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
FST |
$ |
5,562 |
24.9 |
% |
$ |
5,821 |
33.0 |
% |
$ |
(259 |
) |
(4.4 |
%) |
|||||||||||
POS automation |
2,472 |
11.1 |
% |
2,420 |
13.7 |
% |
52 |
2.1 |
% |
|||||||||||||||
Casino and gaming |
11,287 |
50.6 |
% |
6,332 |
35.9 |
% |
4,955 |
78.3 |
% |
|||||||||||||||
Printrex |
– |
0.0 |
% |
271 |
1.6 |
% |
(271 |
) |
(100.0 |
%) |
||||||||||||||
TSG |
3,004 |
13.4 |
% |
2,782 |
15.8 |
% |
222 |
8.0 |
% |
|||||||||||||||
$ |
22,325 |
100.0 |
% |
$ |
17,626 |
100.0 |
% |
$ |
4,699 |
26.7 |
% |
|||||||||||||
International * |
$ |
5,496 |
24.6 |
% |
$ |
2,677 |
15.2 |
% |
$ |
2,819 |
105.3 |
% |
* | International sales do not include sales of printers and terminals made to domestic distributors or other domestic customers that may, in turn, ship those printers and terminals to international destinations. |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
5,227 |
94.0 |
% |
$ |
5,551 |
95.4 |
% |
$ |
(324 |
) |
(5.8 |
%) |
|||||||||||
International |
335 |
6.0 |
% |
270 |
4.6 |
% |
65 |
24.1 |
% |
|||||||||||||||
$ |
5,562 |
100.0 |
% |
$ |
5,821 |
100.0 |
% |
$ |
(259 |
) |
(4.4 |
%) |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Hardware |
$ |
1,816 |
32.7 |
% |
$ |
2,550 |
43.8 |
% |
$ |
(734 |
) |
(28.8 |
%) |
|||||||||||
Software, labels and other recurring revenue |
3,746 |
67.3 |
% |
3,271 |
56.2 |
% |
475 |
14.5 |
% |
|||||||||||||||
$ |
5,562 |
100.0 |
% |
$ |
5,821 |
100.0 |
% |
$ |
(259 |
) |
(4.4 |
%) |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
2,472 |
100.0 |
% |
$ |
2,412 |
99.7 |
% |
$ |
60 |
2.5 |
% |
||||||||||||
International |
– |
0.0 |
% |
8 |
0.3 |
% |
(8 |
) |
(100.0 |
%) |
||||||||||||||
$ |
2,472 |
100.0 |
% |
$ |
2,420 |
100.0 |
% |
$ |
52 |
2.1 |
% |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
6,717 |
59.5 |
% |
$ |
4,402 |
69.5 |
% |
$ |
2,315 |
52.6 |
% |
||||||||||||
International |
4,570 |
40.5 |
% |
1,930 |
30.5 |
% |
2,640 |
136.8 |
% |
|||||||||||||||
$ |
11,287 |
100.0 |
% |
$ |
6,332 |
100.0 |
% |
$ |
4,955 |
78.3 |
% |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
– |
0.0 |
% |
$ |
52 |
19.2 |
% |
$ |
(52 |
) |
(100.0 |
%) |
|||||||||||
International |
– |
0.0 |
% |
219 |
80.8 |
% |
(219 |
) |
(100.0 |
%) |
||||||||||||||
$ |
– |
0.0 |
% |
$ |
271 |
100.0 |
% |
$ |
(271 |
) |
(100.0 |
%) |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||
(In thousands, except percentages) |
June 30, 2022 |
June 30, 2021 |
$ Change |
% Change |
||||||||||||||||||||
Domestic |
$ |
2,413 |
80.3 |
% |
$ |
2,532 |
91.0 |
% |
$ |
(119 |
) |
(4.7 |
%) |
|||||||||||
International |
591 |
19.7 |
% |
250 |
9.0 |
% |
341 |
136.4 |
% |
|||||||||||||||
$ |
3,004 |
100.0 |
% |
$ |
2,782 |
100.0 |
% |
$ |
222 |
8.0 |
% |
Six Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
8,000 |
$ |
6,771 |
18.2 |
% |
35.8 |
% |
38.4 |
% |
Six Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
4,455 |
$ |
3,607 |
23.5 |
% |
20.0 |
% |
20.5 |
% |
Six Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
5,976 |
$ |
3,210 |
86.2 |
% |
26.8 |
% |
18.2 |
% |
Six Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
6,127 |
$ |
5,118 |
19.7 |
% |
27.4 |
% |
29.0 |
% |
Six Months Ended June 30, |
Percent |
Percent of |
Percent of |
|||||||||||||||
2022 |
2021 |
Change |
Total Sales - 2022 |
Total Sales - 2021 |
||||||||||||||
$ |
(8,558 |
) |
$ |
(5,164 |
) |
65.7 |
% |
(38.3 |
%) |
(29.3 |
%) |
● | We reported a net loss of $6.7 million. |
● | We recorded depreciation and amortization of $0.6 million and share-based compensation expense of $0.6 million. |
● | Accounts receivable increased $4.5 million due to higher sales volumes in the first half of 2022. |
● | Deferred income taxes increased $2.2 million due to continued losses. |
● | Inventories increased $3.3 million due largely to strategic purchases of electronic parts in volume in an effort to minimize disruptions of production at our contract manufacturers. |
● | We reported a net loss of $4.1 million. |
● | We recorded depreciation and amortization of $0.5 million and share-based compensation expense of $0.7 million. |
● | Accounts receivable increased $2.4 million primarily due to increased sales volume during the second quarter of 2021. |
● | Inventories decreased $2.3 million due to the utilization of inventory on hand to fulfill sales. |
● | Accounts payable increased $1.0 million due primarily to the timing of payments during the second quarter of 2021. |
● | Accrued liabilities and other liabilities decreased $0.9 million, or 11%, due primarily to the payment of 2020 annual bonuses in March 2021. |
(i) | The extension of the maturity date from March 13, 2023 to March 13, 2025; and |
(ii) | The termination of the existing blocked account control agreement and entry into a new “springing” deposit account control agreement, permitting the Company to direct the use of funds in its deposit account until such time as (a) the sum of excess availability under the Siena Credit Facility and unrestricted cash is less than $5 million for 3 consecutive business days or (b) an event of default occurs and is continuing. |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Item 3. | DEFAULTS UPON SENIOR SECURITIES |
Item 4. | MINE SAFETY DISCLOSURES |
Item 5. | OTHER INFORMATION |
Item 6. | EXHIBITS |
Certificate of Amendment to Certificate of Incorporation of TransAct Technologies Incorporated (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on June 2, 2022). |
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3.2* |
Certificate of Incorporation of TransAct Technologies Incorporated, as amended (conformed copy). |
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Amended and Restated Bylaws of TransAct Technologies Incorporated (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (SEC File No. 000-21121) filed with the SEC on June 2, 2022). |
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Third Amendment to Lease Agreement by and between Columbia Nevada Paradise Industrial, LLC and TransAct dated April 26, 2022. |
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Audit Preference Letter. |
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31.1 * |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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31.2 * |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1 ** |
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. |
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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). |
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101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
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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). |
* | Filed herewith. |
** | Furnished herewith. |
TRANSACT TECHNOLOGIES INCORPORATED |
|
(Registrant) |
|
By: /s/ Steven A. DeMartino |
|
Dated: August 18, 2022 |
Steven A. DeMartino |
President, Chief Financial Officer, Treasurer and Secretary |
|
(Principal Financial Officer) |
|
By: /s/ William J. DeFrances |
|
Dated: August 18, 2022 |
William J. DeFrances |
Vice President and Chief Accounting Officer |
|
(Principal Accounting Officer) |
Attest:
/s/ Richard L. Cote
|
TRANSACT TECHNOLOGIES INCORPORATED
By /s/ Bart C. Shuldman
|
Attest:
/s/ Richard L. Cote
|
TRANSACT TECHNOLOGIES INCORPORATED
By /s/ Bart C. Shuldman
|
Period
|
Monthly Base Rent
|
|
November 1, 2022 – November 30, 2022
|
$0.00*
|
|
December 1, 2022 – October 31, 2023
|
$24,468.75
|
|
November 1, 2023 – October 31, 2024
|
$25,325.16
|
|
November 1, 2024 – October 31, 2025
|
$26,211.54
|
|
November 1, 2025 – November 30, 2025
|
$27,128.94
|
1. | I have reviewed this quarterly report on Form 10-Q 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 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 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 quarterly report on Form 10-Q 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 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 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 |