XNAS:PTEK PokerTek Inc Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

XNAS:PTEK (PokerTek Inc): Fair Value Estimate
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XNAS:PTEK (PokerTek Inc): Consider Buying
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XNAS:PTEK (PokerTek Inc): Consider Selling
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XNAS:PTEK (PokerTek Inc): Fair Value Uncertainty
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XNAS:PTEK (PokerTek Inc): Economic Moat
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XNAS:PTEK (PokerTek Inc): Stewardship
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 10-Q


     x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2012

OR

     o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________to______________________

Commission File Number: 000-51572
 
Logo

 
PokerTek, Inc.
 
(Exact name of registrant as specified in its charter)
 
North Carolina
 
61-1455265
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
1150 Crews Road, Suite F, Matthews, North Carolina 28105
(Address of principal executive offices) (Zip Code)
 
(704) 849-0860
(Registrant’s telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                Yes x    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).                                Yes x    No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
 
 
o
Large accelerated filer
o
Accelerated filer
 
o
Non-accelerated filer (do not check if a smaller reporting company)
x  
Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o    No x
 
As of April 27, 2012, there were 7,553,388 shares outstanding of the registrant’s common stock.
 
 
 

 
 
POKERTEK, INC.
 
TABLE OF CONTENTS

   
Page
PART I - FINANCIAL INFORMATION
     
Item 1.
1
     
Item 2.
12
     
Item 3.
17
     
Item 4.
17
     
     
PART II - OTHER INFORMATION
Item 6.
17
     
18
     
19

 
 

 
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
             
   
Three Months Ended March 31,
 
   
2012
   
2011
Restated
 
Revenue
           
   License and service fees
  $ 1,083,414     $ 1,355,959  
   Sales of systems and equipment
    594,523       608,403  
      1,677,937       1,964,362  
Cost of revenue
    385,979       571,100  
      Gross profit
    1,291,958       1,393,262  
Operating expenses:
               
   Selling, general and administrative
    892,734       1,186,168  
   Research and development
    199,784       264,760  
   Share-based compensation expense
    108,249       157,951  
   Depreciation
    4,232       20,281  
      Total operating expenses
    1,204,999       1,629,160  
Operating profit (loss)
    86,959       (235,898 )
   Interest expense, net
    20,855       26,282  
Net income (loss) from continuing operations before income taxes
    66,104       (262,180 )
   Income tax provision
    6,727       4,538  
Net income (loss) from continuing operations
    59,377       (266,718 )
   Income (loss) from discontinued operations
    10,522       (9,974 )
Net income (loss)
  $ 69,899     $ (276,692 )
                 
Net income (loss) from continuing operations per common share - basic and diluted
  $ 0.01     $ (0.04 )
Net income (loss) from discontinud operations per common share - basic and diluted
    -       -  
Net income (loss) per common share - basic and diluted
  $ 0.01     $ (0.04 )
Weighted average common shares outstanding - basic and diluted
    7,564,104       6,210,883  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
1

 
 
POKERTEK, INC.
 
CONSOLIDATED BALANCE SHEETS
 
             
   
March 31,
2012
(Unaudited)
   
December 31,
2011
 
Assets
           
Current assets:
           
   Cash and cash equivalents
  $ 969,747     $ 606,229  
   Accounts receivable, net
    690,836       726,520  
   Inventory
    1,563,053       1,762,806  
   Prepaid expenses and other assets
    162,066       147,487  
   Net assets of discontinued operations
    11,788       92,310  
Total current assets
    3,397,490       3,335,352  
                 
Long-term assets:
               
   Gaming systems, net
    1,244,300       1,104,333  
   Property and equipment, net
    34,624       38,855  
   Other assets
    210,251       223,333  
Total long-term assets
    1,489,175       1,366,521  
Total assets
  $ 4,886,665     $ 4,701,873  
                 
Liabilities and Shareholders' Equity
               
Current liabilities:
               
   Accounts payable
  $ 319,432     $ 321,955  
   Accrued liabilities
    385,114       468,958  
   Deferred revenue
    289,497       281,466  
   Founders' loan
    700,000       -  
   Long-term liability - related party, current portion
    70,342       54,952  
   Current liabilities of discontinued operations
    44,639       70,383  
Total current liabilities
    1,809,024       1,197,714  
                 
Long-term liabilities:
               
   Long-term liability - related party
    253,256       268,646  
   Long-term debt
    -       700,000  
Total long-term liabilities
    253,256       968,646  
                 
Total liabilities
    2,062,280       2,166,360  
                 
Commitments and contingencies
               
                 
Shareholders' equity
               
   Preferred stock, no par value per share;
    -       -  
   authorized 5,000,000 none issued and outstanding
               
                 
   Common stock, no par value per share;  authorized 40,000,000
    -       -  
   shares, issued and outstanding 7,553,388 and 7,490,120 shares at
               
   March 31, 2012 and December 31, 2011, respectively
               
                 
   Additional paid-in capital
    48,587,256       48,368,283  
   Accumulated deficit
    (45,762,871 )     (45,832,770 )
                 
Total shareholders' equity
    2,824,385       2,535,513  
                 
Total liabilities and shareholders' equity
  $ 4,886,665     $ 4,701,873  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
2

 
 
POKERTEK, INC.
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
 
(Unaudited)
 
                               
                               
                               
                               
   
Common Stock
               
   
Shares
   
Value
   
Additional
Paid-in Capital
    Accumulated
Deficit
    Total
Shareholders'
Equity
 
Balance, December 31, 2011
    7,490,124     $ -     $ 48,368,283     $ (45,832,770 )   $ 2,535,513  
Issuances of common stock, net
    63,264               38,724               38,724  
Share-based compensation
                    180,249               180,249  
Net income
                            69,899       69,899  
Balance, March 31, 2012
    7,553,388     $ -     $ 48,587,256     $ (45,762,871 )   $ 2,824,385  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
3

 
 
POKERTEK, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
             
   
Three Months Ended March 31,
 
   
2012
   
2011
Restated
 
Cash flows from operating activities:
           
   Net income (loss)
  $ 69,899     $ (276,692 )
   Net (income) loss from discontinued operations
    (10,522 )     9,974  
Adjustments to reconcile net loss to net cash used in operating activities:
               
   Depreciation and amortization
    196,186       368,249  
   Share-based compensation expense
    108,249       157,950  
   Provision for doubtful accounts and other receivables
    (27,926 )     15,580  
Changes in assets and liabilities:
               
   Accounts and other receivables
    63,582       (149,812 )
   Prepaid expenses and other assets
    (12,772 )     72,720  
   Inventory
    199,753       (46,100 )
   Gaming systems
    (331,921 )     (52,842 )
   Accounts payable and accrued liabilities
    (14,367 )     92,204  
   Deferred revenue
    8,413       (154,156 )
Net cash provided by operating activities from continuing operations
    248,574       37,075  
Net cash provided by (used in) operating activities from discontinued operations
    64,945       (676 )
Net cash provided by operating activities
    313,519       36,399  
                 
Net cash used in investing activities
    -       -  
                 
Cash flows from financing activities:
               
   Proceeds from issuance of common stock, net of expenses
    49,999       124,997  
   Repayments of capital lease
    -       (13,450 )
Net cash provided by financing activities
    49,999       111,547  
Net increase in cash and cash equivalents
    363,518       147,946  
Cash and cash equivalents, beginning of year
    606,229       666,179  
Cash and cash equivalents, end of period
  $ 969,747     $ 814,125  
                 
Supplemental Disclosure of Cash Flow Information
               
Cash paid for:
               
   Interest
  $ 27,382     $ 14,425  
   Income taxes
    7,686       4,031  
                 
Non-cash transactions:
               
   Amortization of commitment fee issued in common stock
  $ 11,275     $ 11,275  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
4

 
 
POKERTEK, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.   Nature of Business and Basis of Presentation
 
The Company is engaged in the development, manufacture and marketing of electronic table games and related products for casinos, cruise lines, racinos, card clubs and lotteries worldwide.

The Company previously operated an amusement business, which sold the Heads-Up Challenge product to bars and restaurants. During 2010, the Company decided to exit the amusement business to focus the Company’s resources on the higher-margin gaming business. The results of operations of the amusement business are reflected as a discontinued operation in the accompanying consolidated financial statements for all periods presented.

The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All significant intercompany transactions and accounts have been eliminated.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Certain reclassifications have been made to prior periods’ financial information to conform to the current period presentation.

As described in Note 17, Restatement of Unaudited Interim Consolidated Financial Statements, of the Company’s Annual Report on Form 10-K, the Company restated the results for the first three quarters of 2011. The restatement was necessary in order to conform to new Accounting Standards updates 2009-14 and 2009-13 issued in October 2009. There were no material changes to the Company’s significant accounting policies during the most recent fiscal quarter ended March 31, 2012.

The accompanying consolidated financial statements have been prepared without audit and are presented in accordance with Article 8-03 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for annual financial statements. In the opinion of management, these consolidated financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company’s results of operations for the periods presented. The results of operations for the three months ended March 31, 2012, are not necessarily indicative of the results to be expected for the entire year.

 
Note 2.   Operations and Liquidity Management

Historically, the Company has incurred net losses and used cash from financing activities to fund its operations. During 2010 and 2011, the Company significantly improved its operating results, renewed its credit facility with Silicon Valley Bank (“SVB”), closed several equity transactions and entered into a stock purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”) to improve liquidity and provide capital for future growth.
 
As of March 31, 2012, the Company’s cash balance was $969,747 and availability from the SVB Credit Facility (as described in Note 10 below) was $309,384. Cash provided by operations for the three months ended March 31, 2012 was $313,519. The level of additional capital needed to fund operations and the Company’s ability to conduct business for the next year is influenced primarily by the following factors:

The pace of growth in the gaming business and the related investments in inventory and spending on development and regulatory efforts;
The launch of new products, such as ProCore, which will require additional investments in inventory;
The Company’s ability to control its operating expenses as the business grows;
The Company’s ability to negotiate favorable payment terms with its customers and vendors;
The Company’s ability to access the capital markets, if necessary, and maintain availability under its credit line; Demand for the Company’s products and the ability of the Company’s customers to pay on a timely basis; and
General economic conditions as well as political events and legal and regulatory changes.
 
Regulatory changes in Mexico, in the fourth quarter of 2011, continued to adversely impact operations in the first quarter of 2012, reducing revenues and gross margins.  In response, the Company implemented new expense reduction initiatives in late 2011 to offset some of the loss in revenues.  While the Company believes the loss of business in Mexico to be temporary, its 2012 operating plans contemplates replacing that business with new product placements in other markets.  To that end, in the first quarter of 2012, the Company moved a portion of its electronic gaming tables from Mexico to the United States in order to meet anticipated demand from other markets.

 
5

 
 
The Company’s operating plan for 2012 calls for balancing revenue growth with operating expense and working capital management, and carefully monitoring the impact of growth on cash needs and cash balances. The Company has demonstrated a trend of improving operating results over the past two years and it expects those improving trends to continue through 2012. However, as the Company seeks to grow its recurring revenue business and launch new products, the Company may seek to raise additional capital through new equity or debt financing or by expanding the SVB Credit Facility. If the Company is unable to raise additional capital or expand the SVB Credit Facility, its ability to conduct business and achieve its growth objectives would be impacted.


Note 3.   Discontinued Operations

In August 2010, the Company decided to exit the amusement business due to declining demand and reduced pricing power for its Heads-Up Challenge product.

The results of operations and related non-recurring costs associated with the amusement business have been presented as discontinued operations for all periods. Additionally, the assets and liabilities of the discontinued operations have been segregated in the accompanying consolidated balance sheets.  The statements of operations for the discontinued operations for the three months ended March 31, 2012 and 2011 consisted of the following:

   
Three Months Ended
 
   
March 31,
 
   
2012
   
2011
 
             
Revenue
  $ 112,582     $ 37,308  
                 
Cost of revenue
    97,089       14,165  
                 
   Gross profit
    15,493       23,143  
Operating Expenses
    4,971       33,117  
                 
Net income (loss) from discontinued operations
  $ 10,522     $ (9,974 )

 
Assets and liabilities of discontinued operations at March 31, 2012 and December 31, 2011 consisted of the following:
 
   
March 31,
2012
   
December 31,
2011
 
Assets:
           
Accounts receivable
  $ 9,350     $ 9,699  
Inventory
    2,438       82,611  
Total assets
  $ 11,788     $ 92,310  
                 
Liabilities:
               
Accounts payable
  $ 19,610     $ 2,897  
Accrued liabilities
    25,029       67,486  
Total liabilities
  $ 44,639     $ 70,383  
 
 
 
6

 
 
Note 4.   Accounts Receivable

Accounts receivable at March 31, 2012 and December 31, 2011 consisted of the following:

   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
Accounts receivable
  $ 802,384     $ 872,703  
Allowance for doubtful accounts
    (111,548 )     (146,183 )
   Accounts receivable, net
  $ 690,836     $ 726,520  
 

Note 5.   Inventory

Inventory at March 31, 2012 and December 31, 2011 consisted of the following:
 
   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
Raw materials and components
  $ 730,987     $ 698,576  
Gaming systems in process
    480,892       374,638  
Finished goods
    583,466       926,889  
Reserve
    (232,292 )     (237,297 )
   Inventory, net
  $ 1,563,053     $ 1,762,806  

 
Note 6.   Prepaid Expenses and Other Assets

Prepaid expenses and other assets at March 31, 2012 and December 31, 2011 consisted of the following:

   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
Prepaid expenses
  $ 72,169     $ 54,012  
Stock issuance commitment fee, net
    41,704       45,282  
Other
    48,193       48,193  
   Prepaid expenses and other assets
  $ 162,066     $ 147,487  
                 
Deferred licensing fees, net
  $ 160,071     $ 173,153  
Other
    50,180       50,180  
   Other assets
  $ 210,251     $ 223,333  


Note 7.   Gaming Systems

Gaming systems at March 31, 2012 and December 31, 2011 consisted of the following:
 
   
March 31,
   
December 31,
 
   
2012
   
2011
 
Gaming systems
  $ 6,472,548     $ 6,473,043  
Less: accumulated depreciation
    (5,228,248 )     (5,368,710 )
   Gaming systems, net
  $ 1,244,300     $ 1,104,333  
 

 
7

 

Note 8.   Property and Equipment

Property and equipment at March 31, 2012 and December 31, 2011 consisted of the following:
 
   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
Equipment
  $ 456,715     $ 456,715  
Leasehold improvements
    202,508       202,508  
Capitalized software
    157,067       157,067  
      816,290       816,290  
Less: accumulated depreciation
    (781,666 )     (777,435 )
   Property and equipment, net
  $ 34,624     $ 38,855  
 

Capitalized software consists of purchased software, consulting and capitalized internal costs related to the purchase and implementation of a new internal-use enterprise resource management system. Accumulated depreciation on capitalized software at March 31, 2012 was $157,067.


Note 9.    Accrued Liabilities

Accrued liabilities at March 31, 2012 and December 31, 2011 consisted of the following:
 
   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
Accrued professional fees
  $ 68,785     $ 62,736  
Other liabilities and customer deposits
    316,329       406,222  
   Accrued liabilities
  $ 385,114     $ 468,958  

Note 10.  Debt
 
The Company’s outstanding debt balances as of March 31, 2012 and December 31, 2011 consisted of the following:

   
March 31,
   
December 31,
 
   
2012
   
2011
 
             
SVB Credit Facility
  $ -     $ -  
Founders' Loan
    700,000       700,000  
   Total debt
    700,000       700,000  
Current portion of debt
    700,000       -  
Long-term portion of debt
  $ -     $ 700,000  
 

SVB Credit Facility: The Company maintains a credit facility with Silicon Valley Bank to support its working capital needs (the “SVB Credit Facility”). On February 22, 2012, the Company entered into the “Sixth Amendment to Loan and Security Agreement”, which extended the maturity date for the facility to January 16, 2013. Maximum advances are determined based on the composition of the Company’s eligible accounts receivable and inventory balances with a facility limit of $937,500. The SVB Credit Facility bears interest at an annual rate equal to the greater of 6.5% or prime plus 2.0%.

 
8

 
 
Based on the Company’s accounts receivable and inventory levels on March 31, 2012, as of such date availability was $309,384 with no borrowings outstanding. The SVB Credit Facility includes covenants requiring the achievement of specified financial ratios and thresholds and contains other terms and conditions customary for this type of credit facility. As of March 31, 2012, the Company was in compliance with these covenants. The SVB Credit Facility is collateralized by security interests in substantially all of the assets of the Company and is senior to the Founders’ Loan.

Founders’ Loan: On March 24, 2008, the Company entered into a loan agreement for $2.0 million with members of the board of directors, Lyle A. Berman, Arthur L. Lomax and Gehrig H. White. Monthly interest payments may be made, at the election of the holder, in common stock at a 13% annual interest rate pursuant to a formula or cash at a 9% annual interest rate. The loan contains no restrictive covenants and, following the conversion described above, is collateralized by security interests in 62 PokerPro systems. Such interests have been subordinated to the SVB Credit Facility.

As of March 31, 2012, the carrying value of the Founders’ Loan was $0.7 million and its fair value was $0.7 million. The maturity date of the loan is March 21, 2013.  For the periods ended March 31, 2012 and December 31, 2011, the Company made $15,707 and $72,665, respectively, in aggregate interest payments in cash.


Note 11.  Employee Benefit Plan

The Company has established a salary deferral plan under Section 401(k) of the Internal Revenue Code covering substantially all employees. The plan allows eligible employees to defer up to 96% of their annual compensation, subject to annual limitations established by the IRS. The Company matches the contributions equal to 100% on the first 3% of the deferral and 50% on the deferral from 3% to 5%. For the three months ended March 31, 2012 and 2011, the Company’s expenses related to the plan were $12,856 and $17,851 respectively.


Note 12.  Shareholders’ Equity
 
Common Stock.  There are 40,000,000, no par value; authorized shares of the Company’s common stock of which 7,553,388 and 6,284,117 common shares were outstanding as of March 31, 2012 and 2011, respectively.

Lincoln Park Transaction
 
The Company has an agreement with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company has the right  to sell $50,000 worth (or greater amount under certain circumstances) of shares of its common stock to LPC every two business days, provided the shares have been registered for resale under the Securities Act of 1933, as amended.  In November 2010, a registration statement covering the resale of up to 1,210,458 shares of the Company’s common stock to be issued to LPC under the agreement was declared effective.  During the three months ended March 31, 2012, the Company issued 78,458 shares of common stock to LPC for aggregate proceeds of $49,999.  As of March 31, 2012, 692,137 shares remain available for purchase.  The facility expires on March 10, 2013.
 
Stock Incentive Plan

The Company’s shareholders have approved stock incentive plans, authorizing the issuance of stock option, restricted stock and other forms of equity compensation. Pursuant to the approved stock incentive plans 342,199 shares remained available for future grant as of March 31, 2012. The Company has historically issued stock options and restricted shares as compensation, although it has the authority to use other forms of equity compensation instruments in the future.
 
Principal assumptions used in determining the fair value of option awards include the following: (a) expected future volatility for the Company's stock price, which is based on the Company’s historical volatility, (b) expected dividends, (c) expected term and forfeiture rates, based on historical exercise and forfeiture activity, and (d) the risk-free rate is the rate on U.S. Treasury securities with a maturity equal to, or closest to, the expected life of the options. The assumptions used to determine the fair value of option awards for the periods ended March 31, 2012 and December 31, 2011 were as follows:
 
 
March 31,
2012
 
December 31,
2011
Expected Volatility
97%
 
96% - 98%
Expected Dividends
0
 
0
Expected Term
6 yrs
 
6 yrs
Risk-free Rate
1.02%
 
0.89% - 2.11%
 
 
 
9

 
 
A summary of Stock Option activity and changes during the three months ended March 31, 2012, is as follows:
 
         
Weighted Average
       
   
Shares
   
Exercise
Price
   
Remaining Contractual
Term
   
Aggregate
Instrinsic
Value
 
Stock Options
                       
Outstanding at December 31, 2011
    856,080     $ 4.55              
   Granted
    -       -              
   Exercised
    -       -              
   Forfeited
    -       -              
   Expired
    -       -              
Outstanding at March 31, 2012
    856,080     $ 4.55       7.1     $ (3,068,641 )
                                 
Exercisable at March 31, 2012
    507,921     $ 5.82       6.7     $ (2,465,562 )
 
 
A summary of Restricted Stock activity and changes during the three months ended March 31, 2012, is as follows:
 
       
Weighted Average
 
Restricted Stock
 
Shares
 
Remaining
Contractual
Term
 
Grant Date
Fair Value
 
Nonvested at December 31, 2011
    270,000       $ 197,271  
   Granted
    -         -  
   Vested
    (62,500 )       (35,063 )
   Forfeited
    -         -  
Nonvested at March 31, 2012
    207,500  
                     1.5
  $ 162,208  
 
 
Note 13.  Income Tax Provisions

For the three months ended March 31, 2012 and March 31, 2011, the Company recognized a tax provision of $6,727 and $4,538, respectively. These provisions are based principally on the Company’s estimated foreign income tax withholding liability, which is attributable to revenues generated outside of the United States.

The effective rates for the periods ending March 31, 2012 and 2011 differ from the U.S. federal statutory rate principally due to the tax benefit arising from the Company’s net operating losses that are fully offset by the valuation allowance established against the Company’s deferred tax assets and deferred tax liabilities.


Note 14.  Related Party Transactions

Transactions with Aristocrat

Revenue from transactions with Aristocrat was $16,025 for the three months ended March 31, 2012, compared to $38,468 for the three months ended March 31, 2011. As of March 31, 2012 and December 31, 2011, $10,800 and $10,200, respectively, were due from Aristocrat and included in accounts receivable in the accompanying Consolidated Balance Sheets.

As of both March 31, 2012 and December 31, 2011, $323,598 was payable to Aristocrat for the Company’s purchase of inventory, which is reflected in the accompanying Consolidated Balance Sheet as a related party liability.

As of both March 31, 2012 and December 31, 2011, Aristocrat owned approximately 9.6% of the Company’s common stock.

 
10

 

Office Lease

The Company leases its office and manufacturing facility under an annual operating lease from an entity owned and controlled by the Company’s President and the Company’s Vice Chairman of the Board of Directors. The lease expires in August 31, 2013. Rent expense recorded for the leased space for the three months ended March 31, 2012 and March 31, 2011, was $34,560 and $36,600, respectively.

Founders’ Loan

During the three months ended March 31, 2012 and March 31, 2011, the Company made $15,707 and $17,556, respectively, in aggregate interest payments in cash. Refer to Note 10, Debt, for a description of the terms of this loan.


Note 15.  Segment Information

The Company reports segment information based on the “management approach”. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. Following the Company’s exit from its amusement business, the Company’s operations are entirely focused on gaming products. Based on the criteria specified in ASC Topic 280, Segment Reporting, the Company has one reportable segment. The results of operations for the amusement products have been reported as discontinued operations for all periods presented.
 
Revenues by geographic area are determined based on the location of the Company’s customers. For the three months ended March 31, 2012 and 2011, revenues from customers outside the United States accounted for 17.7% and 50.4% of consolidated revenue, respectively. The following are the revenues and long-lived assets by geographic area:
 
   
March 31,
 
   
2012
   
2011
Restated
 
Revenue:
           
   United States
  $ 1,380,808     $ 974,750  
   North America (excluding U.S.)
    90,786       446,695  
   Europe
    154,678       329,736  
   Other International
    51,665       213,181  
    $ 1,677,937     $ 1,964,362  
                 
           
December 31,
 
      2012       2011  
Long-lived assets:
               
   United States
  $ 915,884     $ 1,026,157  
   North America (excluding U.S.)
    285,587       223,882  
   Europe
    211,805       62,021  
   Other International
    75,899       54,461  
    $ 1,489,175     $ 1,366,521  


Note 16.  Commitments and Contingencies

Legal Proceedings

The Company is subject to claims and assertions in the ordinary course of business. Legal matters are inherently unpredictable and the Company's assessments may change based on future unknown or unexpected events.

On August 21, 2009, a complaint was filed against the Company in the United States District Court for the District of Nevada by Marvin Roy Feldman. The plaintiff is seeking unspecified monetary damages related to the Company's distribution of PokerPro in Mexico. The Company believes that it has several meritorious defenses to these claims and intends to defend itself vigorously.


 
11

 


Forward-Looking Statements
 
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including but not limited to Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. These forward-looking statements are made under the provisions of The Private Securities Litigation Reform Act of 1995. In some cases, words such as “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or other comparable words identify forward-looking statements. Our actual results, performance or experience may differ materially from those expressed or implied by forward-looking statements as a result of many factors, including our critical accounting policies and risks and uncertainties related, but not limited to: the impact of global macroeconomic and credit conditions on our business and the business of our suppliers and customers, overall industry environment, customer acceptance of our products, delay in the introduction of new products, further approvals of regulatory authorities, adverse court rulings, production and/or quality control problems, the denial, suspension or revocation of permits or licenses by regulatory or governmental authorities, changes in laws and regulations affecting the gaming industry, termination or non-renewal of customer contracts, competitive pressures and general economic conditions and our financial condition, including our ability to maintain sufficient liquidity to operate our business. These and all other material risks and uncertainties known to us are described in more detail under the caption “Risk Factors” in Item 1A of Part I of the annual report on Form 10-K for the year ended December 31, 2011, that we filed on March 27, 2012, as amended by form 10-K/A filed on April 30, 2012, as well as other reports that we file from time to time with the Securities and Exchange Commission (“SEC”). As a result of these risks and uncertainties, the results or events indicated by these forward-looking statements may not occur. We caution you not to place undue reliance on any forward-looking statement.
 
Forward-looking statements speak only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by applicable laws, and you are urged to review and consider disclosures that we make in the reports that we file with the SEC that discuss other factors germane to our business.
 
All references to operating data for 2011 are restated.
 
All references in this Report to “PokerTek”, “we”, “us”, “our” or “the Company” include PokerTek, Inc. and its consolidated subsidiaries.
 
Company Overview and Business Strategy
 
We are engaged in the development, manufacture and marketing of electronic table games and related products for casinos, cruise lines, racinos, card clubs and lotteries worldwide. Our products are PokerPro and ProCore.
 
PokerPro is a 10-seat electronic poker table that allows operators to offer the most popular player-banked games and tournaments. The PokerPro system offers cash games, single-table tournaments, and multi-table tournaments with an extensive game library including Texas Hold’em, Omaha, Razz, and Seven Card Stud. Game rule and limits, including blinds, antes, rake structures and house rules, are completely configurable.
 
ProCore is a unique electronic table game platform that expands on the PokerPro technology and allows multiple house-banked games to be run on a single, efficient, economical platform. The versatility of the ProCore system allows operators to add new game content as it is released. Several variations of Blackjack and related side bets are deployed on this platform. Games and house rules can be customized easily to meet property and regulatory requirements, making it an ideal choice for operators looking to add an automated solution to their gaming floor.
 
We distribute our gaming products using our internal sales force and select distributors, generally on a recurring revenue participation model, recurring revenue fixed license fee model or as a sale of hardware combined with recurring license and support fees.
 
We use an analytical approach and segment the market for our electronic table games into three categories: those with no competition from manual table games; those with limited competition from manual table games; and those markets characterized by a high level of saturation of manual table games. We intentionally focus the majority of our sales and marketing effort on those markets that have either no or limited competition from manual table games. We also opportunistically place tables in markets with higher saturation of manual table games where we believe we have a value proposition for the operators and players. This approach allows us to narrow our focus, directing our limited resources in a targeted approach, and has significantly improved customer retention.
 
 
12

 
 
In those identified markets, we plan to increase our dominant position in electronic poker with our PokerPro system. With the recent addition of the ProCore platform, the addressable opportunities are expanded with Blackjack and other electronic house-banked games. The market for electronic Poker is a smaller niche where we enjoy a dominant market position. The market for electronic Blackjack and specialty player-banked games is larger, but also characterized by more competition. We believe our products offer significant competitive advantages over other competing systems and platforms and, as a result, we are well-positioned to increase our market share of the electronic Poker market, while increasing the market for electronic house-banked games and displacing competitor products in those markets.
 
We have identified key markets in Europe, Canada, South America and the United States that meet our market segmentation criteria and we believe those markets provide actionable opportunities to grow significantly. We are also monitoring changes in regulation at the state, federal and international level and believe that budgetary, legislative and other factors are becoming favorable for expansion of gaming and electronic table games in particular.
 
As of March 31, 2012, our installed base consisted of 2,032 gaming positions worldwide, comprised of 1,894 PokerPro and 138 ProCore gaming positions. As of March 31, 2011, 2610 gaming positions were deployed worldwide comprised of 2574 PokerPro gaming positions, and 36 ProCore gaming positions.  Excluding Mexico, gaming positions increased worldwide by 132 in the twelve month period from March 31, 2011 to 2012. The increase in gaming positions resulted from net increased placements of PokerPro and ProCore in our target markets of the United States, Europe and other international markets.
 
Results of Operations for the Three Months Ended March 31, 2012 Compared to the Three Months Ended March 31, 2011, as restated.

   
Three Months Ended March 31,
 
   
2012
   
2011
Restated
   
Change
 
Revenue
  $ 1,677,937     $ 1,964,362       -14.6 %
Gross profit
    1,291,958       1,393,262       -7.3 %
   Percentage of revenue
    77.0 %     70.9 %        
                         
Operating expenses
    1,096,750       1,471,209       -25.5 %
                         
Interest expense, net
    20,855       26,282       -20.6 %
Income tax provision
    6,727       4,538       48.2 %
                         
Net income (loss) from continuing operations
    59,377       (266,718 )     122.3 %
Net income (loss) from discontinued operations
    10,522       (9,974 )     205.5 %
Net income (loss)
    69,899       (276,692 )     125.3 %


Revenues. Revenues decreased by $0.3 million or 14.6% to $1.7 million for the three months ended March 31, 2012 as compared to $2.0 million for the three months ended March 31, 2011. This decrease was primarily due to the absence of revenues from Mexico in the current quarter as well as changes in product mix.  We ceased operations in Mexico in September 2011, due to the information bulletin issued by Mexico’s Secretaría de Gobernación (“SEGOB”), the government agency responsible for administering the country's internal affairs, notifying casino owners in Mexico that all card and roulette games, whether live or electronic, would no longer be permitted. Excluding Mexico revenues from the quarterly period ended March 31, 2011, total revenues increased 5.7%.

Revenues from license and service fees decreased $0.3 million, primarily due to the impact of reduced revenues from Mexico. Revenues from systems and equipment sales remained relatively unchanged, decreasing $14,000. Both periods included individual systems and equipment sales that significantly impacted quarterly revenues with 2012 being favorably impacted by increased sales to a domestic customer and in 2011 by an increase in sales to a European customer.

Gross Profit. Gross profit decreased by $0.1 million or 7.3% to $1.3 million for the three months ended March 31, 2012 compared to $1.4 million for the three months ended March 31, 2011. For the three months ended March 31, 2012 and 2011, gross profit margin was 77.0% and 70.9%, respectively. The increase in gross profit margin was primarily attributable to changes in revenue mix, improved asset utilization and reduced product costs and depreciation.

 
13

 
 
Operating Expenses. Operating expenses decreased $0.4 million or 25.5% to $1.1 million for the three months ended March 31, 2012, as compared to $1.5 million for the three months ended March 31, 2011. Operating expenses decreased quarter over quarter as we continue our cost reduction efforts resulting in lower spending on personnel-related costs, regulatory approvals, and professional fees. Share-based compensation expense decreased 31% to $0.1 million in the quarter ended March 31, 2012, from $0.2 million in the quarter ended March 31, 2011, as a larger proportion of old outstanding options becoming fully vested.
 
Interest Expense, net. Interest expense decreased $5,427 or 20.6% for the three months ended March 31, 2012 to $20,855 from $26,282 for the three months ended March 31, 2011, as well as lower interest expense on the lower balances of the Founders’ loans and the payoff of the capital lease obligations in 2011.

Income Tax Provision Income tax provision was $6,727 for the three months ended March 31, 2012, and $4,538 in the comparable period of 2011. The increase in income tax provision was attributable to lower withholdings in foreign jurisdictions.
 
Net Income (Loss) from continuing operations. Net income from continuing operations for the three months ended March 31, 2012 was $59,377, an improvement of $326,095 over the net loss of $266,718 for the three months ended March 31, 2011. The change from a net loss to a net income was attributable to improved gross margins, and lower operating expenses.

Net Income (Loss) from discontinued operations. Net income from discontinued operations for the three months ended March 31, 2012 was $10,522, an improvement of $20,496 over a net loss from discontinued operations of $9,974 for the three months ended March 31, 2011.

Net Income (Loss). Net income for the three months ended March 31, 2012 was $69,899, an improvement of $346,591 over the net loss of $276,692 for the three months ended March 31, 2011.

Liquidity and Capital Resources

Prior to the quarter ended March 31, 2012, we incurred net operating losses since the Company’s’ inception. We have typically funded our operating costs, research and development activities, working capital investments and capital expenditures associated with our growth strategy with proceeds from the issuances of our common stock and other financing arrangements.  In recent periods, our operating results improved significantly with increased gross margins and lower operating costs.  As a result, we are beginning to invest working capital with the introduction of the ProCore platform.  In order to finance operations, we have entered into several equity transactions and maintained a credit facility, which are discussed in detail below and in the notes to our financial statements included elsewhere in this report.

Discussion of Statement of Cash Flows
 
   
Three Months Ended March 31,
       
   
2012
   
2011
Restated
   
Change
 
Continuing Operations:
                 
   Net cash provided by operating activities
  $ 248,574     $ 37,075     $ 211,499  
   Net cash used in investing activities
    -       -       -  
   Net cash provided by financing activities
    49,999       111,547       (61,548 )
      Net cash provided by continuing operations
    298,573       148,622       149,951  
Net cash provided by (used in) operating activities of discontinued operations
    64,945       (676 )   $ 65,621  
Net increase in cash and cash equivalents
    363,518       147,946          
Cash and cash equivalents, beginning of year
    606,229       666,179          
Cash and cash equivalents, end of period
  $ 969,747     $ 814,125          


For the three months ended March 31, 2012, net cash provided by operating activities improved $211,499 or 570.5% to $248,574. The improvement in cash from operating activities was primarily due to improved profitability and collections, partially offset by reductions in accounts payable and accrued liabilities.

 
14

 
 
No cash was used or provided by investing activities for the three months ended March 31, 2012 or 2011.  As part of our ongoing cost reduction measures, the Company has curtailed capital expenditures.

Net cash provided by financing activities was $49,999 for the three months ended March 31, 2012 compared to net cash provided by financing activities of $111,547 for the three months ended March 31, 2011. Cash provided by financing activities is primarily due to the issuance of common stock, partially offset by payments on our capital lease obligation in the quarter ended March 31, 2012.
 
For the three months ended March 31, 2012, net cash provided by operating activities of discontinued operations was $64,945 compared to net cash used in operating activities of discontinued operations of $676 for the three months ended March 31, 2011. This increase is attributable to the sale of a majority of the remaining inventory in early 2012. 
 
We have $0.7 million of debt outstanding under our Founders’ Loan, as explained in Note 10, Debt to the financial statements, with a maturity date of March 21, 2013, which provides for monthly interest payments, at the election of the holder, in either shares of our common stock at a 13% annual interest rate pursuant to a formula or cash at a 9% annual interest rate.
 
We maintain a credit facility with Silicon Valley Bank to support our working capital needs (the “SVB Credit Facility”). On February 22, 2012, we entered into the “Sixth Amendment to Loan and Security Agreement”, which extended the maturity date for the facility to January 16, 2013. Maximum advances are determined based on the composition of our eligible accounts receivable and inventory balances with a facility limit of $937,500. The SVB Credit Facility bears interest at an annual rate equal to the greater of 6.5% or prime plus 2.0%. As of March 31, 2012, approximately $300,000 was available under the SVB Credit Facility, based on our accounts receivable and inventory levels, and there were no amounts outstanding under the facility.
 
In June 2010 we entered into an agreement with Lincoln Park Capital (“LPC”), pursuant to which we have the right to sell to LPC up to $5.0 million worth of shares of our common stock over a period that expires March 10, 2013.  Our right to sell shares to LPC is conditioned to those shares being registered for resale under the Securities Act of 1933, as amended.  In November 2010 the SEC declared effective our a registrations statement covering the resale of up to 1,210,458 shares of our common stock (after giving effect to the 2.5-for-1 reverse stock split in February 2011) to be issued to LPC under the agreement. Since June 24, 2010, we have sold an aggregate of 518,321 shares of our common stock to LPC for aggregate gross proceeds of $624,985, of which 78,458 shares were sold in 2012 resulting in gross proceeds of $49,999. As of March 31, 2012, 692,137 shares of the Company’s common stock remain available for purchase under the agreement.
 
Operations and Liquidity Management
 
Historically, we have incurred net losses and used cash from financing activities to fund our operations. Over the past two years, we refocused our business strategies, significantly improving our margins and reducing our expenses, while also expanding our growth opportunities and significantly improving our operating results and cash flow performance. During that period, we also renewed our credit facility, closed several equity transactions and entered into a stock purchase agreement with LPC to improve our liquidity and provide capital to grow our business.

As of March 31, 2012, our cash balance was approximately $1.0 million and we have the ability to borrow approximately $300,000 under the SVB Credit Facility. Cash provided by operations for the three months ended March 31, 2012 was $313,519, an improvement of $277,120 from the first three months of 2011. The level of additional capital needed to fund operations and our ability to conduct business for the next year is influenced primarily by the following factors:

The pace of growth in the gaming business and the related investments in inventory and spending on development and regulatory efforts.
The launch of new products, such as ProCore, which will require additional investments in inventory as we seek to expand that line of business;
Our ability to control our operating expenses as the business grows;
Our ability to negotiate favorable payment terms with our customers and vendors;
Our ability to access the capital markets and maintain availability under our credit line;
Demand for our products the ability of our customers to pay us on a timely basis; and
General economic conditions as well as political events and legal and regulatory changes.

Our operating plan for 2012 calls for balancing revenue growth with operating expense and working capital management, and carefully monitoring the impact of growth on our cash needs and cash balances. We have demonstrated a trend of improving operating results over the past two years and we expect those improving trends to continue through 2012.

Our operations were recently impacted by regulatory changes in Mexico that significantly reduced revenue and gross margins in the fourth quarter of 2011. In response, we implemented new expense reduction initiatives in late 2011 to partially offset the impact of Mexico. While we believe the loss of business in Mexico to be temporary, we are building our operating plans based on replacing that business with new placements planned in other jurisdictions in 2012. We moved a portion of our electronic gaming tables from Mexico back to the United States in early 2012 to meet anticipated demand from those other markets.

 
15

 
 
We believe the capital resources available to us from our cash balances, the SVB Credit Facility and our equity line of credit with LPC will be sufficient to fund our ongoing operations and to support our operating plans for at least the next 12 months. However, we may seek to raise additional capital or expand our existing credit facilities to fund growth. We cannot assure you that, in the event we need additional working capital, adequate additional working capital will be available or, if available, will be on terms acceptable to us. If we are unable to raise additional capital or expand our credit facilities, our ability to conduct business and achieve our growth objectives would be negatively impacted.

Contractual Obligations

The table below sets forth our known contractual obligations as of March 31, 2012:
 
   
Total
   
Less than
1 year
   
1 - 3 years
   
3 - 5 years
   
More than
5 years
 
                               
Debt obligations (1)
  $ 700,000     $ 700,000     $ -     $ -     $ -  
Operating lease obligations (2)
    233,088       139,584       93,504       -       -  
Purchase obligations (3)
    950,407       950,407               -       -  
Other long-term liabilities (4)
    323,598       70,342       253,256       -       -  
            Total
  $ 2,207,093     $ 1,860,333     $ 346,760     $ -     $ -  
 
(1)   
Represents the outstanding principal amount and interest on our Founders’ Loan.
(2)   
Represents operating lease agreements for office and storage facilities and office equipment.
(3)   
Represents open purchase orders with our vendors. Includes $929,800 open purchase orders with ICP Electronics, Inc.
(4)   
Represents purchase of gaming inventory from Aristocrat.

Customer Dependence

As of March 31, 2012, five of our customers made up approximately 74.5% of our total revenues, with one accounting for 32.6%, a second accounting for 29.3%, a third accounting for 5.0%, a fourth accounting for 4.2%, and a fifth accounting for 3.4%. As of March 31, 2011, five of our customers made up approximately 51.6% of our total revenues, with one accounting for 30.2%, a second accounting for 6.8%, a third accounting for 5.4%, a fourth accounting for 4.9%, and a fifth accounting for 4.3%. The loss of any of these customers or changes in our relationship with them could have a material adverse effect on our business.

Critical Accounting Policies
 
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
 
We believe that of our significant accounting policies, which are described in Note 1 – “Nature of Business and Significant Accounting Policies” to our consolidated financial statements appearing elsewhere in this report, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
 
These consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Certain reclassifications have been made to prior periods’ financial information to conform to the current period presentation.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.
 
 
16

 


Reference is made to “Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. There have not been significant changes in our exposure to market risk since December 31, 2011.


 
(a) Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(c) and 15-d-15 (e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 
PART II – OTHER INFORMATION
 
 
Exhibit No.
 
Description
31.1
 
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
 
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
 
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*
 
XBRL Instance Document
101.SCH*
 
XBRL Taxonomy Extension Schema
101.CAL*
 
XBRL Taxonomy Calculation Linkbase
101.DEF*
 
XBRL Taxonomy Extension Definition Linkbase
101.LAB*
 
XBRL Taxonomy Extension label Linkbase
101.PRE*
 
XBRL Taxonomy Extension Presentation Linkbase
 
* Furnished with this report. In accordance with rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
 
 
17

 


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
POKERTEK, INC.
   
Date: May 11, 2012
 
 
/s/ Mark D. Roberson
 
Mark D. Roberson
 
Chief Executive Officer and Chief Financial Officer
 
(Principal Executive Officer and Principal Financial Officer)
 

 
18

 

EXHIBIT INDEX


Exhibit No.
 
Description
31.1
 
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
 
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
 
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*
 
XBRL Instance Document
101.SCH*
 
XBRL Taxonomy Extension Schema
101.CAL*
 
XBRL Taxonomy Calculation Linkbase
101.DEF*
 
XBRL Taxonomy Extension Definition Linkbase
101.LAB*
 
XBRL Taxonomy Extension label Linkbase
101.PRE*
 
XBRL Taxonomy Extension Presentation Linkbase
 
* Furnished with this report. In accordance with rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
 
 
19

XNAS:PTEK PokerTek Inc Quarterly Report 10-Q Filling

PokerTek Inc XNAS:PTEK Stock - Get Quarterly Report SEC Filing of PokerTek Inc XNAS:PTEK stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

XNAS:PTEK PokerTek Inc Quarterly Report 10-Q Filing - 3/31/2012
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