GALAXY GAMING, INC. (OTCMKTS:GLXZ) Files An 8-K Results of Operations and Financial ConditionItem 2.02
Results of Operations and Financial Condition
GALAXY GAMING, INC. (OTCMKTS:GLXZ) Files An 8-K Results of Operations and Financial Condition
On April 3, 2017, Galaxy Gaming, Inc., (the “Company”) filed a Current Report on Form 8-K to provide disclosures required under Item 4.02, Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review, related to the Company’s financial statements previously issued for the fiscal year ended December 31, 2015, and for the quarters ended March 31, June 30, and September 30, 2016, due to two accounting errors noted during the preparation of the financial statements for the year ended December 31, 2016. This Amended Current Report on Form 8-K/A is filed to provide updated information about the Company’s providing restated financial information as discussed below.
On April 17, 2017, the Company filed its annual report on Form 10-K for the fiscal year ended December 31, 2016, and on May 15, 2017, the Company filed its quarterly report on Form 10-Q for the period ended March 31, 2017, in which the accounting errors were corrected in the comparative 2016 periods. The restatements to reflect the correction of both errors are referred to herein collectively as the "Restatement."
In the original Current Report on Form 8-K, the Company disclosed its intention to amend its previously filed quarterly reports on Form 10-Q for the periods ended June 30 and September 30, 2016.However, after careful consideration, the Company’s management and the Board of Directors have determined that amending the quarterly reports for the periods ended June 30 and September 30, 2016, is not necessary because the Company will provide the corrected comparative 2016 financial information in the reports to be filed for the corresponding periods in 2017.Accordingly, the Company will restate the financial statements for the three and six months ended June 30, 2016, in its quarterly report on Form 10-Q for the period ended June 30, 2017, to be filed on or before August 14, 2017. Similarly, the Company will restate the financial statements for the three and nine months ended September 30, 2016, in its quarterly report on Form 10-Q for the period ended September 30, 2017, to be filed on or before November 14, 2017.
Notwithstanding the foregoing, the tables below set forth the amounts as originally reported for the categories presented in the Company’s financial statements that were affected by the Restatement, the effect of the Restatement and the restated amounts for the periods presented.
As of and for the quarterly period ended June 30, 2016
|
Balance Sheet |
Asoriginally reported |
Impactof restatement |
Asrestated |
|||
|
Deferred tax asset – current |
$ |
– |
$ |
43,017 |
$ |
43,017 |
|
Deferred tax asset – net of current portion |
– |
393,321 |
393,321 |
|||
|
Total assets |
17,140,459 |
436,338 |
17,576,797 |
|||
|
Income taxes payable |
519,781 |
156,586 |
676,367 |
|||
|
Accrued expenses |
1,158,864 |
26,928 |
1,185,792 |
|||
|
Deferred tax liability |
75,358 |
(75,358 |
) |
– |
||
|
Total current liabilities |
7,925,536 |
108,156 |
8,033,692 |
|||
|
(Accumulated deficit) retained earnings |
(35,552 |
) |
738,646 |
703,094 |
||
|
Accumulated other comprehensive income |
410,464 |
(410,464 |
) |
– |
||
|
Total stockholders' equity |
3,428,000 |
328,182 |
3,756,182 |
|||
|
Total liabilities and stockholders' equity |
17,140,459 |
436,338 |
17,576,797 |
4852-0529-9276.v1
|
Three Months Ended June30,2016 |
Six Months Ended June30,2016 |
||||||||||||
|
Statements of Income |
As originally reported |
Impact of restatement |
As restated |
As originally reported |
Impact of restatement |
As restated |
|||||||
|
Selling, general and administrative |
$ |
1,622,105 |
$ |
10,479 |
$ |
1,632,584 |
$ |
3,274,304 |
$ |
(8,489 |
) |
$ |
3,265,815 |
|
Provision for income taxes |
(231,057 |
) |
(51,273 |
) |
(282,330 |
) |
(388,020 |
) |
(134,335 |
) |
(522,355 |
) |
|
|
Foreign currency exchange gain |
– |
247,664 |
247,664 |
– |
360,226 |
360,226 |
|||||||
|
Net income |
377,527 |
185,912 |
563,439 |
756,894 |
234,380 |
991,274 |
|
Statement of Cash Flow |
Asoriginally reported |
Impactof restatement |
Asrestated |
|||
|
Net income |
$ |
756,894 |
$ |
234,380 |
$ |
991,274 |
|
Deferred income tax provision |
388,020 |
(388,020 |
) |
– |
||
|
Decrease in accounts receivable |
71,287 |
2,784 |
74,071 |
|||
|
Decrease in accounts payable |
(241,190 |
) |
(240,634 |
) |
||
|
Increase in income taxes payable |
349,450 |
166,807 |
516,257 |
|||
|
Increase in accrued expenses |
327,090 |
7,811 |
334,901 |
|||
|
Net cash provided by operating activities |
2,654,343 |
24,318 |
2,678,661 |
|||
|
Principal payments on notes payable |
(2,488,778 |
) |
(24,318 |
) |
(2,513,096 |
) |
|
Net cash used in financing activities |
(2,524,011 |
) |
(24,318 |
) |
(2,548,329 |
) |
As of and for the quarterly period ended September 30, 2016
|
Balance Sheet |
Asoriginally reported |
Impactof restatement |
Asrestated |
|||
|
Deferred tax asset – current |
$ |
– |
$ |
43,017 |
$ |
43,017 |
|
Deferred tax asset – net of current portion |
– |
393,321 |
393,321 |
|||
|
Total assets |
18,418,176 |
436,338 |
18,854,514 |
|||
|
Income taxes payable |
1,106,600 |
(94,623 |
) |
1,011,977 |
||
|
Accrued expenses |
976,834 |
26,928 |
1,003,762 |
|||
|
Deferred tax liabilities |
75,358 |
(75,358 |
) |
– |
||
|
Total current liabilities |
4,606,229 |
(143,053 |
) |
4,463,176 |
||
|
Retained earnings |
785,421 |
579,391 |
1,364,812 |
|||
|
Total stockholders' equity |
3,879,584 |
579,391 |
4,458,975 |
|||
|
Total liabilities and stockholders' equity |
18,418,176 |
436,338 |
18,854,514 |
4852-0529-9276.v1
|
Three Months Ended September30,2016 |
Nine Months Ended September30,2016 |
|||||||||||||
|
Statements of Income |
As originally reported |
Impact of restatement |
As restated |
As originally reported |
Impactof restatement |
As restated |
||||||||
|
Selling, general and administrative |
$ |
1,576,480 |
$ |
(22,924 |
) |
$ |
1,553,556 |
$ |
4,850,785 |
$ |
(31,412 |
) |
$ |
4,819,373 |
|
Provision for income taxes |
(602,619 |
) |
251,207 |
(351,412 |
) |
(990,639 |
) |
116,871 |
(873,768 |
) |
||||
|
Foreign currency exchange (loss) gain |
– |
(5,926 |
) |
(5,926 |
) |
– |
354,301 |
354,301 |
||||||
|
Loss on extinguishment of debt |
(87,578 |
) |
(427,459 |
) |
(515,037 |
) |
(87,578 |
) |
(427,459 |
) |
(515,037 |
) |
||
|
Net income |
820,972 |
(159,254 |
) |
661,718 |
1,577,867 |
75,125 |
1,652,992 |
|
Statement of Cash Flow |
Asoriginally reported |
Impactof restatement |
Asrestated |
|||
|
Net income |
$ |
1,577,867 |
$ |
75,125 |
$ |
1,652,992 |
|
Loss on extinguishment of debt |
87,578 |
427,459 |
515,037 |
|||
|
Deferred income tax provision |
54,370 |
(54,370 |
) |
– |
||
|
Increase in accounts receivable |
(107,969 |
) |
(705 |
) |
(108,674 |
) |
|
Decrease in other current assets |
43,017 |
(43,017 |
) |
– |
||
|
Decrease in prepaid expenses and other current assets |
6,608 |
2,314 |
8,922 |
|||
|
Decrease in accounts payable |
(858,954 |
) |
(858,404 |
) |
||
|
Increase in income taxes payable |
936,269 |
(81,901 |
) |
854,368 |
||
|
Increase in accrued expenses |
141,841 |
11,030 |
152,871 |
|||
|
Net cash provided by operating activities |
3,321,274 |
336,485 |
3,657,759 |
|||
|
Principal payments on long-term debt |
(2,873,437 |
) |
(336,485 |
) |
(3,209,922 |
) |
|
Net cash used in financing activities |
(1,993,009 |
) |
(336,485 |
) |
(2,329,494 |
) |
About GALAXY GAMING, INC. (OTCMKTS:GLXZ)
Galaxy Gaming, Inc. is engaged in the business of designing, developing, manufacturing and/or acquiring casino table games and associated technology, platforms and systems for the global gaming industry. The Company markets its products to land-based, riverboat and cruise ship gaming establishments and to Internet gaming companies. It groups its products into four product categories: Proprietary Table Games, Enhanced Table Systems, e-Tables and Ancillary Equipment. The Company has an installed base of its products on over 5,000 gaming tables located in over 600 casinos. The Company owns over 20 different table games, including 21+3, Two-way Hold’em and Three Card Poker, which are played in over 250 casinos. The Company’s Proprietary Table Games are grouped into two product types: Side Bets and Premium Games. Enhanced Table Systems are electronic enhancements used on casino table games to add to player appeal and to enhance game security.
