Hello, everyone, and thank you all for joining us during the Lithium Partners Spring 2025 Investor Conference. My name is Adam Lowensteiner, Vice President of Lithium Partners. Today's presentation comes from Table Trac, ticker symbol of TBTC, that is Tango, Bravo, Tango, Charlie on the OTCQX exchange. Joining us from the company today is its President and CEO, Chad Hoehne, and Randy Gilbert, CFO and COO. Today, Chad, Randy, and I will engage in a fireside chat-like style Q&A session. One final item before we jump into the discussion, I want to remind everyone that Table Trac is available for one-on-one meetings. If you have not already signed up, please send me an email at loewensteiner@lithiumpartners.com. With that said, let's now turn to today's discussion with Table Trac. Welcome, Chad and Randy. Thanks, Adam. Hey, Adam. First off, thanks so much for taking the time and participating in this conversation. It's really appreciated. Now let's expand on a few topics. To start the conversation, I always like asking, what does Table Trac do? What's its history like? Can you tell us something a little bit about yourself and your backgrounds? Adam, you know, I started Table Trac after a little over a decade working in the electronics manufacturing industry and turned my attention to the gaming space and founded the company in 1995. Since then, we've been building and providing systems and equipment for the gaming industry, primarily what we now call the brick-and-mortar side, as there are other sides of the industry emerging. We've kept our focus there now for all of these years. The product line, CasinoTrac, is our primary product. It's a casino management system, which is a combination of an information system as well as proprietary hardware that goes into each one of the slot machines or at each one of the tables to gather and report data back to the central system. It's used for revenue accounting, player tracking, player loyalty, and promotions, as well as some interactive and entertaining activities on the gaming floor for the patrons. A little bit about your background? Like I said, prior to starting CasinoTrac or Table Trac, I managed various departments within an electronic manufacturing firm here in Minneapolis. Before that, education was in finance from a state university here in Minnesota. Great. Randy, how about yourself? I graduated from a school up in northern Minnesota, moved down to the Minneapolis area here and started to work with an accounting firm called KPMG. After a few years of doing public accounting, like many of us, I decided that just was not my gig and went into the private sector and actually ran through a lot of different industries. Around 2000 or so, when Table Trac was going public, I found this company. I was actually one of the original, almost one of the original investors in the public market. My path weaved around through a lot of places until I ended up at a local accounting firm here doing Sarbanes-Oxley audits in that fun world. I was a principal there. One day, I received an email from Chad asking me if I'd seen some of the recent reviews or releases. I hadn't. I promptly went out to take a look at them. Chad and I had a meeting probably a week later. Two weeks later, I have found the best experience I've ever had in my life working here at Table Trac. Great. Can we dive into a little bit of what your offerings are? You mentioned about CasinoTrac. What specifically do they do for your customers? One of the things about a casino management system is it involves almost all of the departments underneath the roof of a casino. We serve the security and surveillance function, providing information to them, slot floor operations from the recording and payment of jackpots and tracking of the cash and money on there to providing that player card function to guests where they can earn and spend points, take free play, and put free play onto their machines. The player loyalty function starts with the player's club, but then moves out into more advanced functions like promotions, administration, and management, and delivery tools like player kiosks and mobile apps where the customers can see those offers and promotions that they're receiving from the casino and be able to act on those and also be made aware of those offers that those casinos are giving them. Why are your offerings so important to your customers? What are their differentiators? What's the value add that you offer to them? There is quite a number. I' d like to start with the fact that every gaming jurisdiction requires a casino to have a casino management online system installed at their casino. We have a regulatory environment that both requires the use of our system, but also regulates us. We are in a heavily regulated area. On top of that, though, providing features and functionality to our customers to make it easy for their employees to use the system for the benefit of the casino back at the house or the casino patron out on the floor is very important to our system. I do have to say, though, one of our biggest differentiators is our service and support department. We have U.S.-based service and support for all of our clients 24/7, something that they really appreciate. They generally get someone who solves their problem on the first phone call instead of just being given an overseas number that they're number 37 in line to be served. Another great differentiator of our system within our space is our platform and architecture gives us some unique advantages that our competitors really do n't offer to their customers. Our platform and architecture allows our system to be able to be highly resistant to ransomware and hacking attacks. In fact, our system has never been breached. If you have about a year and a half ago, we all heard about Caesars and MGM in Las Vegas taking their entire gaming floors down for sometimes days or a week at a time. That' s happening all across the country with casinos. That' s something that we have been able to build a system for. While no one can ever claim 100% hackproof. We' ve proven in the field in situations where clients' networks were infected and knocking down other systems within their building. Our system stood tall and continued to serve that gaming floor. Their core source of revenue was able to keep running 24/7. They never had to send a letter out to all of their customers telling them that there' s been a breach of their personal data, which is a huge advantage. Wow. That's amazing. If I may add, it's one of the things that we promote in MarketNow. We believe we have the most secure, unified, and stable system in the market right now because systems is all that we do. Our focus is always on our system to make it the best experience for our customers. Your products are, to tell them correct, hardware and software-based. Is that correct? And is there a one-time sale and recurring revenues? How does that work? It depends on the products. For the most part, as a system company, primarily a system company who's expanding our product offerings, you have that upfront fee. Let's say you do decide to lease, which we do not have a lot of people that want to lease the systems. You have that one-time fee to buy the system. We do provide financing for all of our customers now to make that process even easier. We have all the recurring fees that go with it, our annual maintenance. We have a lot of other product lines that I can mention. Chad can get into if you want him to get into that. We offer different kiosk games and products. We have products called Slot Suite. There is a host of others. I don't know if we want to get into that right now, Adam, on the different product lines that we have. Those are all reoccurring fees for us. We lock them into different levels of time commitments on those. Like you said, there is a maintenance component that goes on after the initial installation of the system and the sale of the core system. Once the core is in there, we offer a group of products, some premium product enhancements. Those product enhancements generally go towards better service for the patron on the gaming floor, different access to features that they like to have or conveniences that they like to have that increases the casino's attractiveness to their patrons. We generally are moving towards more of a model where we'll license those on an ongoing basis. Getting a three or five-year commitment to that feature and then having that as a recurring revenue model that stacks on top of the core system and maintenance that's in place. Who are some of your customers? What's the duration of contracts with your customers? How sticky is this business? It sounds like once they're integrated and if they really like your product and it runs as smoothly as you expressed, I don't see any reason why they would leave. We do love the fact that we have a 90% plus retention rate. Our base is very sticky. It' s for all the reasons that Chad already went over about the quality of the product, the service. Service is one of the big reasons w e hear horror stories from some of our competitors. We do n't really like to get into talking about our customers on things like this. We have our press releases as a public company that we can get into. I will say that Table Trac goes a lot to the Native Americans. We got our start in tribal country and really brought systems to them when they were in need of it. Our expansion now has been more on the commercial side of things. We have sites that are restricted, sites that have five games. We have sites that are almost 3,000 games. Our system is unbelievably flexible. Chad loves to talk about this more. I'm going to let him talk about how flexible the system is and how much it works across all these different platforms. Yeah. Thanks, Steve. The scalability of the system is outstanding. Like Randy says, our smallest location is five slot machines in a gas station up in Reno. Our largest site is upwards of 3,000 slot machines on a single floor. Those systems are all running the same core software with just the size of the hardware that we put in place. When it comes to hardware, we're unique as well. What's happened in the industry is a lot of systems have gone to adding on more and more servers as they add more and more features. Another feature, another server. We've been careful to integrate our features into our core product and have them knit into the fabric of that product so they become part of it. With that, we are able to operate on a very small footprint of servers such that we really only need to have a pair of servers in any given environment. When you have that few, instead of having an eight-hour checklist to bring a system to life from a catastrophic power failure, you have literally a system that brings itself back online the same way that your refrigerator comes back on when the electricity turns back on, what we call unattended restart. Nobody in the IT staff gets a phone call in the middle of the night. Our system is up and running before the first slot machine gets halfway booted. By the time those slot machines are back online, we are 100% back online. Nobody lifted a finger. That's really given a lot of, that's a lot of the reason why we've had success in some of the areas outside in Central and South America, as well as the Caribbean Islands, where we have installs and places in the U.S. that maybe don't have the most reliable power grid. Our system takes care of itself for that customer. Even in the rainforests of Costa Rica, our system is a success for them. You mentioned many countries just now. You mentioned sizes of customers. How large is the market opportunity here? How much have you penetrated? What does the competitive landscape look like? Who are you maybe going up against? I'll start with that last question first. We compete against the big boys, right, our main competitors, but they're game and system manufacturers or suppliers. There are five of us in the United States. I would say that our market primarily is right now, w e've been focused on the United States. Within the United States, we probably have somewhere north of 15% but south of 20% of that business right now. We're really focused on getting more of that. There are other regulations and things we'd have to do and language barriers we'd have to deal with if we started heading into Europe or more of Asia. We do have partnerships, and Chad can talk about that in Asia. We do have our partnerships in Australia, and we have our partnerships all through LATAM. We are finding that we are becoming the system of choice in LATAM as people are coming up for renewals on that right now. The LATAM market, as you know, or maybe you do n't know, our viewers should know, is ever-changing. Venezuela is onto gaming. They are off of gaming. Onto gaming, off of gaming. Brazil is onto gaming. We deal with that all the time as well. When they are onto gaming and they are looking for a system, they have been coming to us more and more often now because of all the reasons Chad just talked about, the stableness. Their power grids are not stable at all. This system works really well when they are moving up and down. Yeah, Randy. Another thing, Randy has done a terrific job for us of developing our representatives, our distributor partners down in those markets to make sure that they are up to speed on the product knowledge and fully supported to be able to succeed in taking over some of those sites. Yeah. Thank you, Chad. We mentioned a little bit about regulatory and that that's part of your business in the market you're in. Anytime when you're dealing with casinos, I guess there's typically certifications, licenses to operate are required. What does it entail to operate in your business? And maybe mention the markets you're already in that you're already clear to sell into. Yeah. It's a multi-stage process in each one of the jurisdictions that we are in. We, first of all, have to have the principals given a suitability certification. The company is licensed to do business. All of that occurs before the product then needs to be also certified and licensed for use in the jurisdiction after the company has been established. It's an arduous task. It takes a long time to do. It's something that we have in CasinoTrac that maybe isn't something that shows up anywhere on the books, but it's actually a considerable value. The Nevada gaming license for a distributor and a manufacturer is a coveted thing. We are both a full-fledged manufacturer distributor in the state of Nevada. We're licensed in California. We're licensed in Massachusetts, Louisiana, Mississippi, Iowa, South Dakota, and dozens and dozens of Native American reservations where there's gaming that we've gone through this process. So we've developed internally the necessary bookkeeping and processes to be able to efficiently navigate that I don't want to call it a minefield. Process. It's not that bad. It's not that bad. It requires a lot of effort. It also brings us, you can't just go and do business in these locations until you have passed those certifications and been granted those licenses by the various gaming commissions and boards. Adam, if I may add just a little bit more to that, t he company made the decision back in 2016 and 2017, to get licensed in Nevada, which is the most stringent out of all of them. And Chad's use of minefield, when I first started working here in 2018, and I had to go through that process, I was a bit appalled about the information and the way that they locked me down for that first six months as I was going through those certifications. But once you go through it once or twice, you realize they already know everything about me. And so you just open up all your records to them. But they take a hard, deep look. And I remember, I mean, they went and looked at every one of our, my mom's house, my sister's house. They locked your lockbox down. You can't go into that. They are thorough, and rightly so. When you think about where the industry started and where we are now, I don't think we're anything like we were back when Bugsy was running the places down on the Strip. They want to make certain that it stays as professional as possible. To Chad's point, now that we have all these things in place, everyone follows either Nevada or one of the larger tribal entities. We just know how to run through these things pretty quick. Occasionally, I have to update the newest financials for them, our financials. It' s pretty straightforward. Right. Of course, as a public company, we always have fresh, fully SEC-audited financials at our fingertips. It's one of the things that helps us navigate that area of regulatory space. Gaming can be sensitive to the economy sometimes, I guess. How sensitive is the Table Trac story to the economy? How should investors view that? Also, how should investors view online gambling versus in-person casino gambling? How does that affect your business? Maybe if you could paint a picture for investors to understand these industry dynamics, that'd be great. I would like to start with the gaming is pretty resistant to fluctuations in the general economy. In fact, just coming out of COVID, a lot of our casinos had their best months ever when things were looking rough. Gambling seems to be something that is relatively immune to the ups and downs of the marketplace. I just saw in, I was just reading that, for instance, the Colorado market is up 4% year-over-year right now. They were just commenting on this very same topic of, "Are we getting hit by the economy?" They are saying it does n't look that way. In years past, when we have gone through ups and downs, I would say that has been true too. We kind of braced for it. It just never really affected us. Further on that, Adam, which is interesting, I mean, it's an industry that the economy doesn't affect the player side of it. When an economy starts to turn down, we tend to get more people looking to us because our competitors are so insanely expensive with their system that when their upgrades come up, our calls tend to rise at that point in time. We see an uptick in interest in the Table Trac, CasinoTrac system, which helps us a lot. The other thing, and Chad kind of touched on this a little bit, and you did on your question, the whole uprise of iGaming, we believe, is going to create even more opportunity for us because some of these brick- and- mortars are going to have to have a system that can do more, or they do not want to spend as much on the brick and mortar system. We are the best value in the market right now for the system. Besides the stability and everything else, we make the terminology and use the terminology with our potential customers that we get you out of the quicksand. Once you get onto CasinoTrac, you are a partner with us. You' re not going to have these insanely charges every five or six years. You' re part of the family. You' re going to pay your maintenance. There'll be an occasional upcharge for certain things. You're not going to have to rebuy your system every six years from us. How do you go about selling your products? Is there a sales team? What's the sales cycle like? Do you have a pipeline of business giving you some improved visibility? Absolutely. All of those things. We do have salespeople out in the field reporting to our sales manager in Las Vegas. We have using modern CRM techniques and building the pipeline and stages in the pipeline. We have a pipeline that, in our last meeting, I heard it overflowed the number of line entries that would be allowed in the data table. We had to make a little adjustment there. It continues to grow. The sales cycle is long and arduous because in order for someone to make the decision to switch systems, we really need to have the buy-in from these number of different departments. The player club, player loyalty group needs to have buy-in on the switch. The slot floor manager and slot floor operations, cage, and vault need to be involved in it. We need rev audit because if rev audit isn't happy with their system, ain't nobody happy with their system. That's one of our calling cards because when we go into places, that's one of the things that we show them how we can do a better job and solve some of those problems for that rev audit department. Of course, upper management then has to agree as well. This process, we just recently did an analysis and said that the mean on that is about 16 months from the time we first do introductions and shake hands to the time that we get to the signing of a contract. After the signing of a contract, the organization and ramping up to do the installation can be anywhere from 45 days to three months of preparation before we switch that gaming floor from one system to ours. To add just a little bit more color to that too and to probably fill in the rest of your question, we're not selling shampoo. We have to get out there and really inform people what we're doing. This type of thing is like anything else. People don't like to change their tax accountant. People don't like to change their system, right, for just a lot of reasons. You know what's going on. You know how to use the system. You're just afraid of things that you might lose. We have to get past that hurdle. That's why it's 16 months. You have to convince them quite a bit. We market by going to trade shows. We're in the major trade shows. The tribal has their annual show. We have G2E out in Vegas that we go to and a few other small ones. We are in a lot of the publications. We' re marketing all the time in that. Just good old-fashioned door knocking. This is sales pitch 101. We have a finite number of casinos. We start learning more and more about them all the time. They become your friends, and they become or your friends. They become acquaintances. I do not know if any of them really become our friends until they become our partners. We start learning about them and finding out what their pains are and doing exactly what Chad said, showing them how we can make that pain subside a little bit. Eventually, they come our way. As we discussed, I think this question's important just to any investors out there that want to kind of learn about Table Trac and understand how things fluctuate quarter- to- quarter. The company sells systems and software-based products, which can make revenues and margins shift from one quarter to the next, depending upon when deals are closed and installations are completed. Since there are those shifts, can you possibly explain to investors how that works, meaning cost of installation and thereafter, is there recurring revenue? Maybe share some of those nuances as new offerings are installed and what happens to the P&L, how that flows through the P&L. Yeah. That's a great question. We're affected even more by this as a public company. I'll throw the phrase out there, and it'll mean nothing except for a few people. We are guided by ASC 606, revenue recognition. Every system we put in, I have to tear it down and break it down and take a look and see what can we recognize now, what has to be recognized over time. We're really getting more in tune to that so that we craft our contracts in such a way so we can recognize as much, make a good balance there between how much we can recognize upfront versus what we're going to do on recurring. Obviously, items like the system and things that you're putting in and the customer accepts, we can take right upfront. Those items that they gather benefit over the years, the maintenance. Some of the products we talked about, like the Slot Suite and the kiosk -related, and there's a host of others. Those are month- to- month where they pay monthly and get the benefit monthly. Those become our monthly recurring charges. Those are generally under multi-year contracts. Although the revenue is being recognized on a month-to-month basis, we do n't install it unless we have a commitment for 36 or 60 months of usage of those features. Right. One of the things that we have learned, and we kind of touched about this earlier, while we have that 15%-20% of the market, we know that we're never going to get 100% of the market. We' re trying to create more models that create better recurring revenue for us because the system sales are choppy. You see that. Anybody that's looked at us, you can see that one quarter, we have $1 million to the bottom line. The next time, we barely have $10,000 because timing is everything in this. We can't control that timing. The more recurring revenue we can get, and we've done a really good job of this building that recurring revenue up, we are pretty much at a break-even at any given time if we didn't sell a system. We're trying to grow that even more so that it's not just break-even, but always having revenue. We strive to create more of those products. We've been successful at creating more of those products. This leads into my next question. Due to successful sales, the company has accumulated a strong balance sheet, approximately $7 million in cash and equivalents, and no debt. How much cash is required to have on hand to operate the business? What are maybe some of the plans for excess cash on hand? That's always the million-dollar question. We hear that a lot now. I say this just as a matter of history for people who are n't as familiar with us as we are. This is new ground for us. You do n't have to look too many years back where Table Trac was under six figures, sometimes under five figures in the bank account. We ha ve done a really good job with our product line and managing and changing business. We started a dividend program, as I hope everyone is aware of, that we are committed to keeping. The board talks about it all the time about what should we be doing with this. We are always looking for ways to expand our product lines if that is the easiest way. We are certainly not going to overpay for any product. That is a conversation that we talk about all the time. I think Chad has something to probably add to that as well. Yeah. Again, our core operations have grown to the point where the actual cash is not in demand. It is the other way around. We are accumulating cash and on a path to continue with that, which just, of course, raises our value. It gives us the opportunity and luxury of being able to scour the landscape for products and services that we might think would be complementary to our business. At this point in time, we are paying dividends and then continuing to grow the business. I think that last point is key. A lot of people would probably like us to distribute that money back to them. We're finally at a point in time that we can, and I don't want to say take risks, but we can look at other products and really venture into them and talk about, "Let's study this a little bit more." Where 15 years ago, that was not always a luxury for Table Trac. We're there now. We want to continue to grow as well as take care of our investors, right? That's why the dividend program was started and increased this year. We went from $0.01- $0.02 last quarter anyway. I can't say and won't say that that's going to continue forward. It is our plan to keep that dividend program. We'd ideally like to find or develop, if that means that we have to bring more resources and develop more products that drive more recurring and one-time revenue for us so that maybe that dividend grows from $0.02 to $0.10. That is a forward-looking. Do not think that is coming. That would be a great plan for everybody if we could get to that. Another use with that strong balance sheet, of course, having recognition of the industry of us as a company as well as our products is something that we have to invest in. We are investing more in the marketing function in the company to gain more exposure and make sure that we're well-known in the marketplace. We feel that that's succeeding. The comments that we get now at the show are, "Oh, we saw you in the news," or, "We heard about you," or, "Yeah, everyone's talking about you." Those are fun things to be receiving at the gaming shows now. That's because we are purposely investing more in that side of growing the business. In your opinion, what are some key catalysts that investors should be focused on for the future? How should they or how do you view your success? I say you because, Chad, you founded the company, and you still retain ownership, I think, in excess of 25% of the company. Many investors look for owner-operator situations when they're considering their investments. I have said for the last three years, and I stand by that there are still a lot of the clients out there who are looking for us, and they just do not know it yet. Operating this business to get it out into more and more locations is, and then with all the benefits that come with it, not just that initial system sale hit, but the ongoing revenue from maintenance and then the feature sets that we are adding on and the mobile app, all of those things are an exciting opportunity for us to continue to grow and build this business into a larger and larger entity. We are still going to stay focused on the systems side of the business, where some of our competitors have more of a focus in building different new slot machines. Their system side of their business is more of a secondary thought to them. It is primary for us. Our customers recognize that and appreciate that, that they are buying from someone. Their system is coming from a systems-focused company. We have a lot of opportunity ahead of us. If I may add to that, Adam, we were just chatting a little bit about this at dinner last night. Because we have built such a stable and secure balance sheet now, we were just saying how the fun is just going to begin now because we have the resources to really promote everything that we wish we could have promoted 15 years ago. We just did not have the resources. We are using that. We are trying to get smarter with that and really get out there and let everybody know. We think the best days are still ahead for Table Trac. Before I conclude, is there anything else you want to add before we finish this discussion? Anything I missed? I think you hit the crux of everything. I think we've added some color along the way. We don't know clearly what tomorrow brings except that everything that we've been doing now is going to be there. The other thing that I would say, and I'll let Chad finish with the final word here, when I came on board, one of the things I really wanted to push for is that the shareholders matter to us. While we don't have millions and millions of shareholders, we want to make certain that we're doing what's right first and foremost for our customers and the company. We haven't forgotten about the shareholders. We want to make certain that for those people that have been here for the long haul, like myself and Chad and our officers, so that sounds selfish. We have been here for quite some time. We have had a lot of people that, Adam, you probably know, that are just coming in this year or maybe will come in from this conference. We want to let you know that we understand that we need to be building shareholder value. That is something that we have our eye on all the time. Quarterly, with the board, we talk about that. Yeah, absolutely. I'll just add that it's always been one of my core things that we're doing the right things for our customers, our employees, our vendors, and our shareholders. All of those groups are being recognized and identified by us here. We're taking care of that in a way that is building a good, positive business that can't help but continue to succeed. My thought is that while we've been around a while, we're really getting our sea legs at this point in time. We're excited for the next five years. Thank you, Chad and Randy, for your time today. We greatly appreciate it. To anyone out there that has not already signed up for a one-on-one, again, please send me an email at loewensteiner@lithiumpartners.com. If you'd like to learn more about Lithium Partners, you can visit our website at lithiumpartners.com or follow us on LinkedIn to stay connected about future events. We hope you all enjoy the rest of the conference. Have a great day. Thank you, Adam. Thanks, Adam.