What changed in this filing

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Item 1. Financial Statements

2024-05-14 compared with 2023-11-14 · 144 added, 185 removed, 218 unchanged (60% of the section changed)

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C ONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2023

March 31, 2024

December 31, 2023

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Cash and cash equivalents

Accounts receivable, net

Employee retention credit receivable

Accounts receivable, net of allowance for expected credit losses of $ 668 and $ 768

Prepaid income taxes

Other current assets

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Fixed assets, net of accumulated depreciation of $ 18,947

and $ 17,656 , respectively

Right-of-use assets, net

Right-of-use assets

Deferred tax assets

Intangible assets, net of accumulated amortization of $ 1,480 and $ 1,364 , respectively

Intangible assets, net of accumulated amortization of $ 1,556 and $ 1,518

Liabilities and Shareholders’ Equity:

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TRANSACT TECHNOLOGIES INCORPORATED

CONDE NSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

September 30,

(In thousands, except per-share data)

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General and administrative

Operating income (loss)

Operating (loss) income

Interest and other (expense) income:

Interest, net

Income (loss) before income taxes

Income tax (expense) benefit

Net income (loss)

Net income (loss) per common share:

Shares used in per-share calculation:

(Loss) income before income taxes

Income tax (benefit) expense

Net (loss) income

Net (loss) income per common share:

Shares used in per-share calculations:

See notes to Condensed Consolidated Financial Statements.

TRANSACT TECHNOLOGIES INCORPORATED

CONDENSED CONSOLI DATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

(LOSS) INCOME

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Net income (loss)

Net (loss) income

Foreign currency translation adjustment, net of tax

Comprehensive income (loss)

Comprehensive (loss) income

See notes to Condensed Consolidated Financial Statements.

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CONDE NSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(In thousands)

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Share-based compensation expense

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Accrued liabilities and other liabilities

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

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Cash flows from financing activities:

Proceeds from bank borrowings

Withholding taxes paid on stock issuances

Payment of bank financing costs

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

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TRANSACT TECHNOLOGIES INCORPORATED

CONDENSED CONSO LIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Equity beginning balance

Common stock:

Balance, beginning of period

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Balance, beginning of period

Net income (loss)

Net (loss) income

Balance, end of period

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Balance, beginning and end of period

Accumulated other comprehensive (loss) income, net of tax

Accumulated other comprehensive loss:

Balance, beginning of period

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should be read in conjunction with the audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”).

The results of operations for the three and nine months ended September 30, 2023

are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

Impact of Global Economic Conditions, Supply Chain Disruptions and the COVID-19 Pandemic

Since early 2020 and into the first quarter of 2022, the COVID-19 pandemic caused uncertainty and disruption in the global

economy and financial markets.

Similar to other companies, TransAct has also been impacted by global supply chain issues, increased shipping costs and inflationary pressures, which have increased our costs and, in some instances, slowed our ability

to deliver products to our customers.

After experiencing significantly lower inventory and sales levels in 2021 due to supply chain disruptions, we were able to increase our inventory levels and minimize the impact to our customers in 2022 by

successfully modifying our products that were affected by supply chain disruptions, as well as by sourcing component parts from alternate suppliers.

At the same time, after a slowdown resulting from the Omicron and other variants of COVID-19 that

began to ease in the first nine months of 2022, we continued to experience demand recovery during the remainder of 2022 and into 2023.

Although we were able to increase inventory levels during 2022 and the first nine months of 2023 and expect to

continue to do so in the balance of 2023, there can be no assurance that new or continuing supply chain disruptions will not affect our products or that we will be able to make timely modifications to address any future supply chain issues that

Further, while we have offset most of our cost increases by increasing prices of our products, there can be no guarantee that we will not be impacted by the economic effects of any future cost increases that cannot be predicted, supply chain

disruptions, inflationary pressures and potential new COVID-19 variants in the markets we serve and from which we source our supplies and parts.

The results of operations for the three months ended March 31, 2024 are

not necessarily indicative of the results to be expected for the full year ending December 31, 2024.

Current Business Trends

After strong demand during most of 2023 due in part to our primary competitor’s struggle to deliver products in the face of

supply chain constraints, in late 2023, we began to see indications of a temporary slowdown in demand in the casino and gaming market, as customers that had built up excess inventory due to supply chain concerns advised us that they would temporarily

reduce orders until their stock normalized.

This slowdown impacted our results in the fourth quarter of 2023 and the first quarter of 2024, and we expect this trend to continue to impact results during 2024 until these customers are able to sell

their on-hand inventory.

Further, our primary competitor in the casino and gaming market has resumed supplying product and continued to increase volume at what we believe is full capacity, which has resulted in the beginning of downward pricing

pressure in that market and could exacerbate the demand slowdown, which has negatively impacted our worldwide casino and gaming sales.

In addition, we have experienced cost increases as a result of current economic conditions, most of which we have

been able to offset by increasing prices of our products.

However, there can be no guarantee that we will be able to increase prices sufficiently to offset any future such cost increases that cannot be predicted, and we may be further impacted by

supply chain disruptions, inflationary pressures and other global economic conditions that may affect the markets we serve and from which we source our supplies and parts.

Balance Sheet, Cash Flow and Liquidity .

We have taken the following actions to increase liquidity and strengthen our financial position in an effort to mitigate the negative impacts from the COVID -19 pandemic, supply chain disruptions and inflationary pressures:

Employee Retention Credit – The Company received a refundable employee retention credit under the CARES Act in the first quarter of 2023.

The Company previously 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 Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021.

Credit Facility – On March 13, 2020, we entered into a credit facility with Siena Lending Group LLC 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 for further details regarding this facility.

Expense Reductions – During the third quarter of 2023, we began a cost reduction initiative to reduce our overall level of operating expenses that includes reducing employee

headcount, trade show, advertising and other promotional marketing expenses, certain third party engineering resources and other expenses, and to a lesser extent, certain general and administrative expenses.

When completed in the fourth

quarter of 2023, we expect these actions will result in approximately $ 3 million of annualized savings beginning in 2024

During the third quarter of 2023, we began a cost reduction initiative to reduce our overall level of operating expenses that included reducing

employee headcount, trade show, advertising and other promotional marketing expenses, certain third party engineering resources and other expenses, and to a lesser extent, certain general and administrative expenses.

We saw the full impact of these

actions in the first quarter of 2024 and expect they will result in approximately $ 3 million of annualized savings compared to the 2023

levels, partially offset by typical annual inflationary and cost of living increases in operating expenses.

Notwithstanding the foregoing, there is no assurance that the cost-cutting efforts we have taken to bring expenses in line with our revenue

and mitigate the impact of global economic conditions such as supply chain disruptions and inflation, and conditions in our markets will be sufficient or adequate, and we may be required to take additional measures, as the ultimate extent of the

effects of these risks on the Company, our financial condition, results of operations, liquidity, and cash flows are uncertain and are dependent on evolving developments which cannot be predicted at this time.

After reviewing whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations over the 12 months following the date on

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Use of Assumptions and Estimates

Management’s belief that the Company will be able to fund its planned operations over the 12 months following the date on which the Condensed Consolidated Financial

Statements were issued is based on assumptions which involve significant judgment and estimates of future revenues, inflation, rising interest rates, capital expenditures and other operating costs.

Our current assumptions are that casinos and

restaurants will remain open and consumer traffic will continue to remain strong during the remainder of 2023.

Though demand for our products at casinos increased substantially in 2022 and during the first nine months of 2023, we cannot predict the

ultimate impact of the current economic environment, including inflation, rising interest rates and supply chain disruptions on our customers, which may impact sales.

We believe that we are positioned to withstand the impact of any potential economic

downturn or slower than anticipated economic recovery.

However, should conditions warrant, we believe we will be able to take additional financial and operational actions to cut costs and/or increase liquidity.

In addition, the presentation of the accompanying unaudited financial statements requires us to make estimates and judgments that affect the reported amounts of assets,

liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities.

Our estimates include those related to revenue recognition, accounts receivable, inventory obsolescence, goodwill and intangible assets, the valuation of

deferred tax assets and liabilities, depreciable lives of equipment, share-based compensation and contingent liabilities.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the

circumstances.

Actual results could differ from those estimates used.

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.

Management’s belief that the Company will be able to fund its planned operations over the 12 months following the date on which the unaudited Condensed Consolidated

Financial Statements were issued is based on assumptions which involve significant judgment and estimates of future revenues, inflation, rising interest rates, capital expenditures and other operating costs.

Though demand for our products at casinos

has increased substantially post-pandemic, we cannot predict the ultimate impact of the current economic environment, including inflation, rising interest rates and supply chain disruptions on our customers, which may impact sales.

We believe that we

are positioned to withstand the impact of any potential future economic downturn and we would be able to take additional financial and operational actions to cut costs and/or increase liquidity.

In addition, the presentation of the accompanying unaudited Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of

contingent assets and liabilities.

Our estimates include those related to revenue recognition, accounts receivable, inventory obsolescence, goodwill and intangible assets, the valuation of deferred tax assets and liabilities, depreciable lives of

equipment, share-based compensation and contingent liabilities.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

Actual results could differ from those estimates

Significant accounting policies

For a discussion of our significant accounting policies, see Note 2, Summary of significant accounting policies within Part II, Item 8.

“Financial Statements and

Supplementary Data” in the 2022 Form 10-K.

For a discussion of our significant accounting policies, see Note 2, Summary of significant accounting policies within Part II,

“Financial Statements and Supplementary Data” in the 2023 Form 10-K.

There have been no changes to our significant accounting policies since the 2023 Form 10-K.

Recently Adopted Accounting Pronouncement

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses

Measurement of Credit Losses on Financial Instruments .

This ASU and its related amendments (collectively, the “Credit Loss Standard”) modifies the impairment model to utilize an expected loss methodology in place of the

incurred loss methodology for financial instruments, including trade receivables, contract assets and off-balance sheet credit exposures.

The Credit Loss Standard requires consideration of a broader range of information to estimate expected credit

losses, including historical information, current economic conditions and a reasonable forecast period.

This Credit Loss Standard requires that the statement of operations reflect estimates of expected credit losses for newly recognized financial

assets as well as changes in the estimate of expected credit losses that have taken place during the period, which may result in earlier recognition of certain losses.

We adopted this standard effective January 1, 2023, and this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

We are exposed to credit losses primarily through our sales of products and software to commercial customers which are recorded as Accounts receivable, net on the

Condensed Consolidated Balance Sheets.

Our method for developing our allowance for credit losses involves making informed judgments regarding whether an adjustment is necessary to our historical loss experiences to reflect our expectations around

current economic conditions and reasonable and supportable forecast periods, where applicable.

We utilize current economic market data as well as other internal and external information available to us to inform our decision making in this process.

Recently issued accounting pronouncements:

On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) .

The amendments improve reportable segment

disclosures requirements and clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment and contain other disclosure

requirements.

These amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024.

These segment disclosure requirements must be applied retrospectively to all periods

presented in the financial statements.

We are currently evaluating the impact of adopting this standard;

however, we do not expect it to have a material impact on our Consolidated Financial Statements.

On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures.

ASU requires the use of consistent categories and greater disaggregation in tax rate reconciliations and income taxes paid disclosures.

These amendments are effective for fiscal years beginning after December 15, 2024.

These income tax disclosure

requirements can be applied either prospectively or retrospectively to all periods presented in the financial statements.

We are currently evaluating the impact of adopting this standard;

however, we do not expect it to have a material impact on

our Consolidated Financial Statements.

We account for revenue in accordance with ASC Topic 606:

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Three Months Ended

September 30,

(In thousands)

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Total net sales

Nine Months Ended

September 30,

(In thousands)

United States

International

United States

International

Food service technology

POS automation

Casino and gaming

TransAct Services Group

Total net sales

Contract balances

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software applications, and is recognized as revenue as (or when) we perform under the contract.

For the nine months ended September 30, 2023 , we recognized revenue of $ 1.2 million related to our contract liabilities at December 31, 2022 .

Total net contract liabilities consisted of the following:

September 30, 2023

For the three

months ended March 31, 2024, we recognized revenue of $ 0.4 million related to our contract liabilities at December 31, 2023.

contract liabilities consisted of the following:

March 31, 2024

December 31, 2023

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Remaining performance obligations represent the transaction price of firm orders for which a good or service has not been delivered to our customer.

As of September 30, 2023, the aggregate amount of transaction prices allocated to remaining performance obligations was $ 12.0 million.

As of March 31, 2024, the aggregate amount of transaction prices allocated to remaining performance obligations was $ 6.8 million.

The Company expects to recognize revenue of $ 6.5

million of its remaining performance obligations within the next 12 months following September 30, 2023, $ 0.2 million within the next 24 months following September 30, 2023

and the balance of these remaining performance obligations recognized within the next 36 months following September 30, 2023.

million of its remaining performance obligations within the next 12 months following March 31, 2024, $ 0.2 million within the next 24 months following March 31, 2024 and

the balance of these remaining performance obligations recognized within the next 36 months following March 31, 2024.

The components of inventories were:

September 30, 2023

March 31, 2024

December 31, 2023

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Credit Facility

On March 13, 2020, we entered into a credit facility (the “Siena Credit Facility”) with Siena Lending Group LLC (the “Lender”).

The Siena Credit Facility provides for a

revolving credit line of up to $ 10.0 million and was originally scheduled to expire on March 13, 2023.

On March 13, 2020, we entered into the Loan and Security Agreement governing a credit facility (the “Sien a Credit Facility”) with Siena Lending Group

LLC (the “Lender”).

The Siena Credit Facility provides for a revolving credit line of up to $ 10.0 million and was originally scheduled to

expire on March 13, 2023, prior to being extended, as discussed below.

Borrowings under the Siena Credit Facility bear a floating rate of interest equal to the greatest of (i) the prime rate plus 1.75 %, (ii) the federal funds rate plus 2.25 %, and (iii) 6.50 %.

The total deferred financing costs related to expenses incurred to complete the Siena Credit Facility were $ 245 thousand which were reported as “Other current assets” in current assets and “Other assets” in non-current assets in the Condensed Consolidated

Balance Sheets.

We also pay a fee of 0.50 % on unused borrowings under the Siena Credit Facility.

Borrowings under the Siena Credit

Facility bear a floating rate of interest equal to the greatest of (i) the prime rate plus 1.75 %, (ii) the federal funds rate plus 2.25 %, and (iii) 6.50 %.

The total deferred

financing costs related to expenses incurred to complete the Siena Credit Facility was $ 245 thousand, which were reported as “Other current

assets” in current assets and “Other assets” in non-current assets in the Condensed Consolidated Balance Sheets.

We also pay a fee of 0.50 %

on unused borrowings under the Siena Credit Facility.

Borrowings under the Siena Credit Facility are secured by a lien on substantially all the assets of the Company.

The Siena Credit Facility imposes a financial covenant on the Company and borrowings are subject to a borrowing base based on 85 % of eligible accounts receivable plus the lesser of (a) $ 5.0

Facility are secured by a lien on substantially all the assets of the Company.

Borrowings under the Siena Credit Facility are subject to a borrowing base based on 85 % of eligible accounts receivable plus the lesser of (a) $ 5.0

million and (b) 50 % of eligible raw material and 60 % of finished goods inventory.

The agreement governing the Siena Credit Facility restricts, among other things, our ability to incur additional indebtedness and create other liens.

On July 21, 2021, the Company

entered into an amendment (“Siena Credit Facility Amendment No.

1”) to the Loan and Security Agreement governing the Siena Credit Facility.

The Siena Credit Facility imposes a financial covenant on the Company and restricts, among other things, our ability to incur additional indebtedness and create other

On July 21, 2021, the Company entered into an amendment (“Siena Credit Facility Amendment No.

1”) to the Siena Credit Facility.

Siena Credit Facility Amendment No.

1 changed the financial covenant under the Siena Credit Facility from a

minimum EBITDA covenant to an excess availability covenant requiring that the Company maintain excess availability of at least $ 750 thousand

under the Siena Credit Facility, tested as of the end of each calendar month, beginning with the calendar month ended July 31, 2021.

From July 31, 2021 through September 30, 2023, we remained in compliance with our excess availability covenant.

As of September 30, 2023,

we had $ 2.3 million of outstanding borrowings under the Siena Credit Facility and $ 6.8 million of net borrowing capacity available under the Siena Credit Facility.

1 changed the financial covenant under the Siena Credit Facility from a minimum

EBITDA covenant to an excess availability covenant requiring that the Company maintain excess availability of at least $ 750 thousand under

the Siena Credit Facility, tested as of the end of each calendar month, beginning with the calendar month ended July 31, 2021.

From July 31, 2021 through March 31, 2024, we remained in compliance with our excess availability covenant.

As of March 31, 2024, we had $ 2.3 million of outstanding borrowings under the Siena Credit Facility and $ 3.0 million of net borrowing capacity available under the Siena Credit Facility.

On July 19, 2022, the Company and the Lender entered into Amendment No.

2 (“Siena Credit Facility Amendment No.

2”) to the Loan and Security Agreement governing the Siena

Credit Facility, as amended by Siena Credit Facility Amendment No.

2”) to the Siena Credit Facility as amended by Siena

Credit Facility Amendment No.

Also on July 19, 2022, the Company and the Lender entered into an Amended and Restated Fee Letter (the “Amended Fee Letter”) in connection with Siena Credit Facility Amendment No.

Siena Credit Facility Amendment No.

Siena Credit Facility Amendment

2 did not modify the aggregate amount of the revolving commitment or the interest rate applicable to the loans .

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2 include, among other things, the following:

(i) The extension of the maturity date from March 13, 2023 to March 13, 2025;

(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 (as amended) and unrestricted cash is less than $ 5 million for 3 consecutive business days or (b) an event of default

occurs and is continuing.

The extension of the maturity date from March 13, 2023 to March 13, 2025;

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 as amended and unrestricted cash is less than $ 5 million for 3 consecutive

business days or (b) an event of default occurs and is continuing.

In addition, the Amended Fee Letter requires the Company, while it retains the ability to direct the use of funds in the deposit account, to maintain outstanding

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On May 1, 2023, the Company and the Lender agreed to a letter amendment to the Loan and Security Agreement governing the Siena Credit Facility.

Section 7.1(m) of the

Loan and Security Agreement governing the Siena Credit Facility required that any successor to the Company’s former Chief Executive Officer be reasonably acceptable to the Lender, and this amendment confirmed that John Dillon, the Company’s current

Prior to such amendment, Section 7.1(m) of the Loan

and Security Agreement governing the Siena Credit Facility required that any successor to the Company’s former Chief Executive Officer be reasonably acceptable to the Lender.

This amendment confirmed that Mr.

John Dillon, the Company’s current

Chief Executive Officer, is an acceptable successor, and applied the same requirement to any future successor to Mr.

Dillon as Chief Executive Officer .

Earnings per share

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Three Months Ended

Nine Months Ended

September 30,

(In thousands, except per-share data)

Net income (loss)

Net (loss) income

Weighted average common shares outstanding

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Weighted average common and common equivalent shares outstanding

Net income (loss) per common share:

The computation of diluted earnings per share excludes the effect of the potential exercise of stock

awards, including stock options and restricted stock units, when the average market price of the common stock is lower than the exercise price of the related stock award during the period, as the inclusion of these stock awards in the computation

of diluted earnings would be anti-dilutive.

For the nine months ended September 30, 2022, there were 1.6 million of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share.

in periods when a net loss is reported, such as the nine months September 30, 2022, basic and diluted net loss per common share are calculated using the same method.

Net (loss) income per common share:

The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options and restricted stock units, when the

average market price of the common stock is lower than the exercise price of the related stock award during the period, as the inclusion of these stock awards in the computation of diluted earnings would be anti-dilutive.

For the three months ended March 31, 2024, there were 89 thousand

of potentially dilutive shares consisting of stock awards that were excluded from the calculation of earnings per diluted share.

Furthermore, in periods when a net loss is reported, such as the three months ended March 31, 2024, basic and diluted

net loss per common share are calculated using the same method.

We account for leases in accordance with ASC Topic 842:

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Lease expense is recognized on a straight-line basis over the lease term.

Operating lease expense for the nine months ended September 30, 2023

Operating lease expense for the three months ended March 31, 2024

and 2023 was $ 282

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The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):

Nine Months Ended

September 30,

Three Months Ended

Operating cash outflows from leases

The following summarizes additional information related to our leases as of September 30, 2023 and December 31, 2022:

September 30, 2023

The following summarizes additional information related to our leases as of March 31, 2024 and December 31, 2023:

March 31, 2024

December 31, 2023

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Weighted average discount rate

The maturity of the Company’s operating lease liabilities as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

September 30, 2023

The maturity of the Company’s operating lease liabilities as of March 31, 2024 and December 31, 2023 were as follows (in thousands):

March 31, 2024

December 31, 2023

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Total lease liabilities

We recorde d income tax expense in the third

quarter of 2023 of $ 169

thousand at an effective tax rate of 15.7 % compared to an income tax benefit in the third quarter of 2022 of $ 62 thousand at an effective tax rate of ( 13.3 %).

For the nine months ended September 30, 2023, we recorded income tax expense of $ 1.2 million at an effective tax rate of 19.8 % , compared to an income tax benefit for the nine months ended September 30, 2022 of $ 2.3 million at an effective tax rate of ( 27.0 %) .

We recorded an income tax benefit in the first quarter of 2024 of $ 277 thousand at an

effective tax rate of ( 21.1 %) compared to an income tax expense in the first quarter of 2023 of $ 629 thousand at an effective tax rate of 16.7 %.

We are subject to U.S.

federal income tax, as well as income

tax in certain U.S.

state and foreign jurisdictions.

federal income tax, as well as income tax in certain U.S.

state and foreign

jurisdictions.

We have substantially concluded all U.S.

federal, state and local income tax, and foreign tax regulatory examination matters through 2019.

However, our federal tax returns for the years 2020

through 2022 remain open to examination.

state and foreign tax jurisdiction tax years remain open to examination as well, but we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial

The Company maintains a valuation allowance against certain deferred tax assets where realization is not certain.

However, our federal tax returns for the years 2020 through 2023 remain open to examination.

state and foreign tax jurisdiction tax years remain open to examination as well, but we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial Statements.

The Company maintains a valuation

allowance against certain deferred tax assets where realization is not certain.

Subsequent events

In the fourth quarter of 2023, we completed an asset sale of our Printrex product line (essentially inventory on-hand) and plan to record a resulting

non-operating gain of approximately $ 0.4 million in the fourth quarter of 2023.

Prior to this sale, the last TransAct sales of Printrex

products occurred in 2021.

The Company has evaluated all other events or transactions that occurred up to the date the Condensed Consolidated Financial Statements were available

to be issued.

Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the Condensed Consolidated Financial Statements.

The Company has evaluated all events or transactions that occurred up to the date the Condensed Consolidated Financial Statements were available to be issued.

upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the Condensed Consolidated Financial Statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements