Summary of significant accounting policies (Policies) |
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| Summary of significant accounting policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Principles of consolidation |
Principles of consolidation: The accompanying Consolidated Financial Statements include
the audited Consolidated Financial Statements of TransAct and its wholly-owned subsidiaries, which require consolidation, after the elimination of intercompany accounts, transactions and unrealized profit.
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| Use of estimates |
Use of estimates: The preparation of Consolidated Financial
Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and
disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
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| Cash and cash equivalents |
Cash and cash equivalents: We consider all highly liquid
investments with a maturity date of three months or less at date of purchase to be cash equivalents.
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| Accounts receivable and credit losses |
Accounts receivable and credit losses: The Company records accounts receivable when the right to consideration becomes
unconditional. We establish an allowance for expected credit losses to ensure trade receivables are valued appropriately.
We are exposed to credit losses primarily through our net sales of products and services to our customers which are recorded as Accounts Receivable, net on the
Consolidated Balance Sheets. We evaluate each customer’s ability to pay through assessing customer creditworthiness, historical experience and current economic conditions through a reasonable forecast period. Factors considered in our evaluation of
assessing collectability and risk include: underlying value of any collateral or security interests, significant past due balances, historical losses and existing economic conditions including country and political risk. There can be no assurance
that actual results will not differ from estimates or that consideration of these factors in the future will not result in an increase or decrease to the allowance for credit losses. We may require collateral or prepayment to mitigate credit risk.
We estimate expected credit losses of financial assets with similar risk characteristics. We determine if an asset is impaired when our assessment identifies there is
a risk that we will be unable to collect amounts due according to the contractual terms of the agreement. We monitor our ongoing credit exposure through reviews of customer balances against contract terms and due dates, current economic conditions
and dispute resolution. Estimated credit losses are written off in the period in which the financial asset is no longer collectible.
The following table summarizes the activity recorded in the allowance
for expected credit losses related to accounts receivable:
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| Inventories |
Inventories: Inventories are stated at the lower
of average cost or net realizable value. We review net realizable value based on estimated selling prices in the ordinary course of business less estimated costs of completion, disposal and transportation, historical usage and estimates of future
demand. Based on these reviews, inventory write-downs are recorded, as necessary, to reflect estimated obsolescence, excess quantities and net realizable value. We purchase raw materials and component parts for use in our manufacturing process.
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| Fixed assets |
Fixed assets: Fixed assets are stated at cost. Depreciation is recorded using the
straight-line method over the estimated useful lives. The estimated useful life of tooling is five years; machinery and equipment is ten years; furniture and office equipment is five years
to ten years; and computer software and equipment is three years to seven years. Leasehold improvements are amortized over the shorter
of the term of the lease or the useful life of the asset. Costs related to repairs and maintenance are expensed as incurred. The costs of sold or retired assets are removed from the related asset and accumulated depreciation accounts and any gain or
loss is recognized. Depreciation expense was $0.7 and $0.9 million in 2025 and 2024, respectively.
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| Leases |
Leases: We account for leases in accordance with ASC 842, “Leases” (“ASC 842”), which requires lessees to
apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized
based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater
than 12 months regardless of their classification. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor does not convey risks and rewards or control, the lease is treated as operating.
We applied the practical expedient allowing for our short term leases of 12 months or less to be accounted for on the straight-line basis,
with no right-of-use asset or lease liability recorded. We have lease agreements that include lease and non-lease components, and we do not apply the practical expedients to combine these components for any of our leases.
We enter into lease agreements for the use of real estate space and certain equipment under operating leases and we have no financing or sales-type
leases. We determine if an arrangement contains a lease at inception. Our leases are included in “Right-of-use assets, net” and “Lease liabilities” in our Consolidated Balance Sheets.
Right of use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Lease right of use assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.
Lease expense is recognized on a straight-line basis over the lease term. As most of our leases do not provide an implicit rate, the Company
determines its incremental borrowing rate by using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Our lease
right of use asset excludes lease incentives. Our leases have remaining lease terms of one year to five years, some of which include options to extend. The exercise of lease renewal options is at our sole discretion and our lease right of use assets and liabilities reflect only
the options we are reasonably certain that we will exercise.
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| Goodwill and Intangible assets |
Goodwill and Intangible assets: We acquire
businesses in purchase transactions that result in the recognition of goodwill and intangible assets. The determination of the value of intangible assets requires management to make estimates and assumptions. In accordance with ASC 350-20 “Goodwill,”
acquired goodwill is not amortized but is subject to impairment testing at least annually and when an event occurs or circumstances change that indicate it is more likely than not an impairment exists. We perform a fair value-based impairment test to
the carrying value of goodwill and indefinite-lived intangible assets on an annual basis and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The Company utilizes the option to first
assess qualitative factors to determine whether it is necessary to perform the Step 1 quantitative goodwill impairment test in accordance with the applicable accounting standards. Under the qualitative assessment, management considers relevant events
and circumstances including but not limited to macroeconomic conditions, industry and market considerations, Company performance and events directly affecting the Company. If the Company determines that the Step 1 quantitative impairment test is
required, management estimates the fair value of the reporting unit primarily using the income approach, which reflects management’s cash flow projections, and also evaluates the fair value using the market approach. Factors considered that may trigger
an interim period impairment review of either acquired goodwill or intangible assets are: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of acquired assets or
the strategy for the overall business; significant negative industry or economic trends; and significant decline in market capitalization relative to net book value. Finite lived intangible assets are amortized and are tested for impairment when
appropriate. Finite lived intangible assets are amortizable and tested for impairment when appropriate.
As of December 31, 2025, we have
determined that no goodwill or intangible asset impairment has occurred and the fair value of goodwill was substantially higher than our
carrying value based on our assessment as of December 31, 2025 when our annual review for impairment was performed.
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| Revenue recognition |
Revenue
recognition: We account for revenue in accordance with ASC 606: “Revenue from Contracts with Customers”. In accordance with ASC 606, a performance obligation is a promise in a
contract with a customer to transfer a distinct good or service to the customer. Some of our contracts with customers contain a single performance obligation, while other contracts contain multiple performance obligations (most commonly when
contracts include a hardware product, software and extended warranties). A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company
acts as a principal in shipping and handling activities. Consequently, amounts billed to customers for shipping and handling are included in Net Sales in the Consolidated Statements of Operations. The corresponding costs incurred for shipping and
handling are classified as Cost of Goods Sold.
The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the
customer. To the extent the transaction price includes variable consideration, such as price protection, reserves for returns and other allowances, the Company estimates the amount of variable consideration that should be included in the transaction
price utilizing either the “expected value” method or the “most likely amount” method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that
a significant future reversal of cumulative revenue under the contract will not occur.
For a majority of our revenue, which consists of printers, terminals, labels, and replacement parts, the Company recognizes revenue as of a point of
time. The transaction price is recognized upon shipment of the order when control of the goods is transferred to the customer and at the time the performance obligation is fulfilled. We also sell a software solution in our casino and gaming market,
EPICENTRAL, that enables casino operators to create promotional coupons and marketing messages and to print them in real time at the slot machine. EPICENTRAL is primarily comprised of both a software component, which is licensed to the customer, and a
hardware component. EPICENTRAL software and hardware are integrated to deliver the system’s full functionality. The transaction prices from EPICENTRAL software license and hardware are recognized upon installation and formal acceptance by the
customer when control of the license is transferred to the customer. For out-of-warranty repairs, the transaction price is recognized after the repair work is completed and the printer or terminal is returned to the customer, as control of the product
is transferred to the customer and our performance obligation is completed.
Performance obligations are satisfied over time if the customer receives the benefits as we perform work, if the customer controls the asset as it is
being produced, or if the product being produced for the customer has no alternative use and we have a contractual right to payment. For our separately priced extended warranty, BOHA! cloud-based software applications, technical support for our food
service technology terminals and maintenance agreements (including free one-year maintenance received by customers upon completion of
EPICENTRAL installation) revenue is recognized over time as the customer receives the benefit. The transaction price from the maintenance services is recognized ratably over time, using output methods, as control of the services is transferred to the
customer. Our cloud-based BOHA! software allows customers to use hosted software over the contract period on a subscription basis without taking possession of the software and the subscription price is recognized ratably over the contract period. For
extended warranties, the transaction price is recognized ratably over the warranty period, using output methods, as control of the services is transferred to the customer.
When there is more than one performance obligation in a customer arrangement, the Company typically uses the “standalone selling price” method to
determine the transaction price to allocate to each performance obligation. The Company sells the performance obligations separately and has established standalone selling prices for its products and services. In the case of an overall price discount,
the discount is applied to each performance obligation proportionately based on standalone selling price. To determine the standalone selling price for initial EPICENTRAL installations, the Company uses the adjusted market assessment approach.
For contracts with terms of less than 12 months, the Company expenses sales commissions as they are incurred, since the expected amortization period
of the cost to obtain a contract is less than 12 months.
Disaggregation of revenue
The following table disaggregates our revenue by market type, as we believe it best depicts how the nature, amount, timing and uncertainty of our
revenue and cash flows are affected by economic factors. Sales and usage-based taxes are excluded from revenues.
Contract balances
Contract assets consist of unbilled receivables. Pursuant to the over-time revenue recognition model, revenue may be recognized prior to the customer
being invoiced. An unbilled receivable is recorded to reflect revenue that is recognized when such revenue exceeds the amount invoiced to the customer. Unbilled receivables are separated into current and non-current assets and included within “Accounts
Receivable, net” and “Other Assets” on the Consolidated Balance Sheets.
Contract liabilities consist of customer prepayments and deferred revenue. Customer prepayments are reported as “Accrued Liabilities” in current
liabilities in the Consolidated Balance Sheets and represent customer payments made in advance of performance obligations in instances where credit has not been extended and is recognized as revenue when the performance obligation is complete.
Deferred revenue is reported separately in current liabilities and non-current liabilities and consists of our extended warranty contracts, technical support for our food service technology terminals, EPICENTRAL maintenance contracts and prepaid
software subscriptions for our BOHA! software applications, and is recognized as revenue as (or when) we perform under the contract. During the year ended December 31, 2025, we recognized revenue of $1.1 million related to our contract liabilities as of December 31, 2024.
Net contract liabilities consist of the following:
Remaining performance obligations
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 December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $5.9 million. The Company expects to recognize revenue on $5.5
million of its remaining performance obligations within the next 12 months following December 31, 2025, $0.3 million within the next months following December 31, 2025 and
the of these remaining performance obligations within the next months following December 31, 2025.
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| Concentration of credit risk |
Concentration of credit risk: Financial instruments that potentially expose us to concentrations
of credit risk are limited to cash and cash equivalents held by our banks with balances in excess of FDIC insured limits, and accounts receivable. The Company maintains its cash and cash equivalents with high-quality financial institutions.
Accounts receivable from customers representing 10% or more of total accounts receivable, net during the years ended December 31, 2025 and 2024 were as
follows:
Sales to customers representing 10% or more of total net sales during the years ended December 31, 2025 and 2024 were as follows:
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| Engineering, design and product development |
Engineering, design and product development: Engineering, design and product
development expenses include expenses incurred in connection with specialized engineering and design to introduce new products and to customize existing products, and are expensed as a component of operating expenses as incurred. We recorded $6.7 million and $7.0 million of research and
development expenses in 2025 and 2024,
respectively.
Costs incurred in the engineering, design and product development of a computer software product are charged to expense until technological
feasibility has been established, at which point all material software costs are capitalized within Intangible assets in our Consolidated Balance Sheet until the product is available for general release to customers. While judgment is required in
determining when technological feasibility of a product is established, we have determined that it is reached after all high-risk development issues have been documented in a formal detailed plan design. The amortization of these costs has been
included in cost of sales over the estimated life of the product.
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| Advertising |
Advertising: Advertising costs are expensed as incurred. Advertising expenses, which are included in selling
and marketing expense on the accompanying Consolidated Statements of Operations for 2025 and 2024 totaled $1.2 million and $1.2 million, respectively. These expenses include items such as consulting, professional services, tradeshows, and print advertising.
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| Income taxes |
Income taxes: The income tax amounts reflected in the accompanying Consolidated Financial Statements are
accounted for under the liability method in accordance with ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize some portion of the deferred tax assets through future
operations. In accordance with ASC 740, we identified, evaluated and measured the amount of benefits to be recognized for our tax return positions. See Note 11 – Income taxes.
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| Foreign currency translation |
Foreign currency translation: The financial position and results of operations of our
foreign subsidiary in the UK are measured using local currency as the functional currency. Assets and liabilities of such subsidiary have been translated into U.S. dollars at the year-end exchange rate, related sales and expenses have been translated
at the weighted average rate for the period, and shareholders’ equity has been translated at historical exchange rates. The resulting translation gains or losses, net of tax, are recorded in shareholders’ equity as a cumulative translation adjustment,
which is a component of accumulated other comprehensive income and loss. Foreign currency transaction gains and losses, including those related to intercompany balances, are recognized in Other, net on the Consolidated Statements of Operations.
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| Share-based payments |
Share-based payments: At December 31, 2025, we have share-based employee compensation plans, which are described more fully in Note 10 – Stock incentive
plans. We account for those plans under the recognition and measurement principles of ASC 718, “Compensation – Stock Compensation.” Share-based compensation expense is measured at the grant date, based on the estimated fair value of the
award, and is recognized as expense over the employee’s requisite service period.
We use the Black-Scholes option-pricing model to calculate the fair value of share-based awards. The key assumptions for this valuation method include
the expected term of the option, our stock price volatility, risk-free interest rate, dividend yield, market price of our underlying stock and exercise price. Many of these assumptions require judgment and are highly sensitive in the determination of
compensation expense. Forfeitures are recognized as they occur.
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| Net income (loss) per share |
Net income (loss) per share: We report net income or loss per share in accordance with ASC 260, “Earnings per Share (EPS).” Under this guidance, basic EPS, which excludes dilution, is computed by
dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock. Diluted EPS includes in-the-money stock options using the treasury stock method. During a loss period, the assumed exercise of in-the-money stock options has an anti-dilutive effect, and therefore, these
instruments are excluded from the computation of diluted EPS. See Note 12 – Earnings per share.
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| Recently issued accounting pronouncements |
Recently issued accounting pronouncements:
On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740).
This 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 have evaluated the impact of adopting this standard and it did not have a material impact on our
Consolidated Financial Statements. We have adopted this standard in our fiscal year 2025 annual financial statements and have applied this standard retrospectively
for all prior periods presented in the financial statements. See Note 11 – Income taxes.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation
of Income Statement Expenses. The amendments in this update require footnote disclosures on disaggregated information about specific categories underlying certain income statement expense line items that are considered relevant. This includes
items such as the purchase of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted.
Adoption of this ASU will result in additional disclosure, but will not impact our consolidated financial position, results of operations, or cash flows.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326). This amendment provides certain entities with an additional practical
expedient election for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions under Accounting Standards Codification (“ASC”) Topic 606; Revenue from Contracts with
Customers (“ASC Topic 606”). This includes assets acquired in business combinations or through consolidation of VIEs that are not a business if those assets arose from transactions that the acquiree or variable interest entity accounted for
under ASC Topic 606. 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.
Other new accounting pronouncements issued, but not effective until after December 31, 2025, did not have, and are not expected to have, a material impact on our
financial position, results of operations or liquidity.
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