TRANSACT TECHNOLOGIES INC Management’s Report of Financial Condition and Results of Operations (as adjusted for a change in accounting principle) (Form 10-Q)


Forward Looking Statements
Certain statements included in this Quarterly Report on Form 10-Q for the period
ended June 30, 2022 (this "Report"), including without limitation, statements in
this Management's Discussion and Analysis of Financial Condition and Results of
Operations, which are not historical facts are "forward-looking statements"
within the meaning of the U.S. federal securities laws, including the Private
Securities Litigation Reform Act of 1995. Forward-looking statements generally
can be identified by the use of forward-looking terminology, such as "may",
"will", "expect", "intend", "estimate", "anticipate", "believe", "project",
"plan" or "continue" or the negative thereof or other similar words.  The
Company cautions readers not to place undue reliance on any such forward-looking
statements, each of which involves certain risks and uncertainties, including,
but not limited to, those listed in Part 1, Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2021 (our "2021 Form 10-K"), and in our
other filings with the Securities and Exchange Commission (the "SEC").  Such
risks and uncertainties could cause actual results to differ materially from
those discussed in, or implied by, the forward-looking statements.  Any such
risks and uncertainties may also be exacerbated by the ultimate impact of the
COVID-19 pandemic and the re- emergence of virus variants, supply chain
disruptions, inflation which is unknown at this time and the Russia/Ukraine
conflict and its impact on freight costs.  In addition, statements made in this
Report about the COVID-19 pandemic and the potential effects and impacts of the
COVID-19 pandemic on the Company's business, financial condition, liquidity and
results of operations may constitute forward-looking statements due to factors
and future developments that are uncertain, unpredictable and, in many cases,
beyond our control, including the scope, duration and extent of the COVID-19
pandemic, actions taken by governmental authorities and businesses in response
to the COVID-19 pandemic and any further resurgences or variants, vaccination
rates and the direct and indirect impact of the COVID-19 pandemic on our
employees, customers and third parties with which we conduct business, including
difficulties or delays in manufacturing or delivery of inventory or other supply
chain disruptions.  Although management has taken steps to mitigate any negative
effect of such risks and uncertainties, including the impact of the COVID-19
pandemic, significant unfavorable changes could severely impact the assumptions
used.  Forward-looking statements speak only as of the date they are made, and
we do not undertake any obligation to update them to reflect the impact of
subsequent events or circumstances, except as required by law.  As used in this
Report, unless the context otherwise requires, references to "we", "us", "our",
the "Company" and "TransAct" refer to the consolidated operations of TransAct
Technologies Incorporated and its consolidated subsidiaries.

Insight

TransAct is a global leader in developing and selling software-driven technology
and printing solutions for high-growth markets including food service
technology, point of sale ("POS") automation and casino and gaming.  Our
world-class products are designed from the ground up based on market and
customer requirements and are sold under the BOHA!™, AccuDate™, Epic,
EPICENTRAL®, and Ithaca®, brand names.  During 2019, we launched a new line of
products for the food service technology market, the BOHA! branded suite of
cloud-based applications and companion hardware solutions.  The BOHA! software
and hardware products help restaurants, convenience stores and food service
operators of all sizes automate the food production in the back-of-house
operations.  Known and respected worldwide for innovative designs and real-world
service reliability, our thermal printers and terminals generate top-quality
labels, coupons and transaction records such as receipts, tickets and other
documents, as well as printed logging and plotting of data.  We sell our
technology to original equipment manufacturers ("OEMs"), value-added resellers,
and select distributors, as well as directly to end-users.  Our product
distribution spans across the Americas, Europe, the Middle East, Africa, Asia,
Australia, New Zealand, the Caribbean Islands and the South Pacific. We also
offer world-class service, support, labels, spare parts, accessories and
printing supplies to our growing worldwide base of products currently in use by
our customers. Through our TransAct Services Group ("TSG"), we provide a
complete range of supplies and consumables used in the printing activities of
customers in the restaurant and hospitality, retail, casino and gaming, and
government markets.  Through our webstore, www.transactsupplies.com, and our
direct selling team, we address the demand for these products.  We operate in
one reportable segment, the design, development, and marketing of
software-driven technology and printing solutions for high growth markets, and
provide related services, supplies and spare parts.

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Impact of the COVID-19 pandemic
In the first quarter of 2020, the COVID-19 pandemic and the resulting social
distancing measures, including closures and restricted openings of restaurants
and casinos implemented by federal, state and local authorities, negatively
impacted customer demand and disrupted portions of our supply chain, including
delayed product shipments from our two manufacturers located in Thailand and
China.  Our inventory levels decreased significantly during 2021 due to these
supply chain disruptions, and although we have been able to increase inventory
levels during the first six months of 2022, continuing delays and further
disruptions have led to an increased backlog, increased freight costs, and
impacted our ability to deliver products to our customers on time or at all.
While we began to experience a modest recovery starting in the second half of
2020 and continuing through 2021, the recovery slowed again in the first quarter
of 2022 due to a resurgence resulting from the Omicron variant and other
variants.  We again are beginning to see a resumption of the recovery in the
second quarter of 2022 which we expect to continue during the remainder of 2022,
though the exact timing and pace of recovery are unknown given uncertainty
surrounding responsive measures to the spread of virus variants or any potential
future resurgences of the virus and the significant disruption that we and our
customers have already experienced and may continue to experience.  We are
monitoring indicators of demand recovery, including our sales pipeline, customer
orders and product shipments to ascertain an estimate of the ultimate impact of
the COVID-19 pandemic on our business, but the length and ultimate severity of
the reduction in demand and supply chain disruptions due to the COVID-19
pandemic remains uncertain.

Below is a discussion of the impact we have experienced from the COVID-19 pandemic which we believe will continue to be felt for the foreseeable future in each of our markets.

Food service technology and POS automation.  In both our food service technology
and POS automation markets, many restaurants and food service establishments
that were closed during much of the second quarter of 2020 started to reopen in
the third quarter of 2020 as state and local governments began to ease
restrictions put in place in response to the COVID-19 pandemic. Many of our
customers initially opened under restrictions that limited them to providing
drive-through, take-out or delivery service without dine-in options, as well as
limiting the volume of customers and employees on site at any one time. During
the second half of 2020 and throughout 2021 and the first six months of 2022, as
these food service customers reopened for business, we experienced sales
improvement compared to the second quarter of 2020. Notwithstanding the gradual
resumption of operations that began in the third quarter of 2020, our food
service technology customers continue to recover from the financial impact of
the COVID-19 pandemic, and we expect new capital expenditures to be a lower
priority for them in the near term, which we believe will continue to negatively
impact sales of BOHA! hardware, software and label products. However, food
service providers have been and are likely to continue to be required to develop
and implement new or enhanced policies and operating procedures regarding
cleaning, sanitizing and social distancing to ensure the safety of their
employees and customers. Additionally, our markets have experienced labor
shortages and inflation in their food and labor costs. We believe that our BOHA!
hardware, software and label products could prove to be helpful to our food
service customers in efficiently and effectively managing and complying with
these new procedures, while also helping to overcome staffing issues and
inflation, especially as many establishments are and will likely continue to be
operating with reduced staff levels due to the continuing labor shortage.

Casino and gaming.  In the casino and gaming market, most casinos and other
gaming establishments were closed worldwide during most of the second quarter of
2020. Many casinos began to reopen in late May and early June 2020, but similar
to restaurants, casino openings were slow and measured, starting with reduced
capacity and limited gameplay based on social distancing guidelines. During the
fourth quarter of 2020, some casinos re-closed due to a resurgence of the
COVID-19 pandemic. However, many casinos in the U.S. reopened during the first
quarter of 2021 with limited capacity and continued to remain open and further
expand capacity during the remainder of 2021. We anticipate that casinos
world-wide will continue to increase capacity over time, barring any new
closures or reduced capacity requirements in response to any new resurgence of
the COVID-19 pandemic, including the emergence of variants.  Though sales of our
casino and gaming products increased during 2021 and the first six months of
2022, and we expect this trend to continue for the remainder of 2022, casinos
continue to recover from the financial impact of the COVID-19 pandemic, and
therefore we expect that certain casinos' appetite for purchases of new slot
machines may be diminished, which may negatively impact sales of casino and
gaming printers purchased by slot manufacturers for use in slot machines at
casinos during the balance of 2022.

Printrex. We made the strategic decision to leave the Printrex market as soon as
December 31, 2021 and expect to have no future sales in this market beyond 2021.

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TSG.  Due to closures and reduced operating capacity of restaurants, food
service establishments, casinos and other gaming establishments resulting from
the COVID-19 pandemic, sales of spare parts, service and consumable products
have declined, and we expect full year sales to remain at reduced levels, due to
lower usage while the COVID-19 pandemic persists.

Although we have seen improvement in the second quarter of 2022, our gross
margin has been negatively impacted by the COVID-19 pandemic and we expect our
gross margin to continue to be negatively impacted while the COVID-19 pandemic
and its economic effects on the markets we serve persists.  As a result of
significantly lower sales levels, which were expected, as well as increased
material and shipping costs resulting from worldwide supply disruptions caused
by the COVID-19 pandemic, we believe our gross margin may continue to be
impacted due to fixed manufacturing overhead expenses (such as facility costs,
depreciation, etc.) that cannot be reduced or eliminated even with the lower
sales level.

We have also experienced supply chain disruptions, including delayed product
shipments from our two contract manufacturers located in China and Thailand that
conduct almost all of our printer and terminal manufacturing, due to reduced
operations and parts shortages at these facilities.  To date, these disruptions
have only minimally impacted deliveries to customers due to our high inventory
levels and reduced demand for our products.  Our inventory levels have increased
during the first half of 2022 as we have made adjustments to the COVID-19
pandemic-related supply chain problems.

In light of the uncertainty around the ultimate impact of the COVID-19 pandemic
and the resulting economic impacts, we implemented a number of cost saving
measures during 2020 to help mitigate the impact on our financial position and
operations and continued to limit discretionary spending during the first nine
months of 2021.

Since the onset of the COVID-19 pandemic, our top priority has been to ensure
the health and safety of our employees while continuing to provide our customers
with high-quality, personalized service. On March 20, 2020, we instituted
work-from-home practices for the majority of our employees to reduce the spread
of COVID-19 and to comply with government mandates.  Because most of our
employees already had laptop computers with remote access into our IT systems,
we experienced only minor reductions in productivity and minimal costs related
to the implementation of our work-from-home practices.  In 2022, we have
transitioned to a more hybrid and flexible model to accommodate both our
employees and the needs of the business.  In addition, even with the transition
to a hybrid model, our internal control structure remains operational and
unchanged.

We have evaluated the recoverability of the assets on our unaudited condensed
consolidated balance sheet as of June 30, 2022 in accordance with relevant
authoritative accounting literature. We considered the disruptions caused by the
COVID-19 pandemic, including lower than previously forecasted sales and customer
demand and macroeconomic factors potentially impacting accounts receivable,
inventory, investments, intangible assets, goodwill and other assets and
liabilities.  Where forward-looking estimates are required, we made a good-faith
estimate based on information available as of the balance sheet date. We have
continued to monitor for indicators of impairment through the date of this
Report.

Notwithstanding the foregoing, there is no assurance that the actions we have
taken in response to the COVID-19 pandemic are sufficient or adequate, and we
may be required to take additional preventive or responsive measures, as the
ultimate extent of the effects of the COVID-19 pandemic 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.  See Part I, Item 1A, Risk Factors, of Form 10-K for the year
ended December 31, 2021, and other filings we make with the SEC from time to
time, for further discussion of risks related to COVID-19.

Critical Accounting Judgments and Estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our Condensed Consolidated Financial Statements, which have been
prepared by us in accordance with accounting principles generally accepted in
the United States of America. The presentation of these 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, warranty obligations, 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. There have been no material changes in our critical accounting
judgements and estimates from the information presented in Part II, Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," in our 2021 Form 10-K

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Results of operations: Quarters ended June 30, 2022 compared to the three months ended June 30, 2021

Net Sales. Net sales, which include printer, terminal, software and label sales,
as well as sales of replacement parts, consumables and maintenance and repair
services, by market for the three and six months ended June 30, 2022 and 2021
were as follows:

                           Three Months Ended            Three Months Ended
(In thousands, except
percentages)                  June 30, 2022                 June 30, 2021            $ Change       % Change
Food service
technology ("FST")      $     3,432          27.2 %   $    3,074           33.0 %   $      358           11.6 %
POS automation                1,172           9.3 %        1,256           13.4 %          (84 )         (6.7 %)
Casino and gaming             6,525          51.7 %        3,467           37.2 %        3,058           88.2 %
Printrex                          -           0.0 %          112            1.2 %         (112 )       (100.0 %)
TSG                           1,494          11.8 %        1,416           15.2 %           78            5.5 %
                        $    12,623         100.0 %   $    9,325          100.0 %   $    3,298           35.4 %

International * $2,896 22.9% $1,371 14.7% $1,525 111.2%

* International sales do not include sales of printers and terminals

national distributors or other national customers who may, in turn, ship these

printers and terminals to international destinations.



Net sales for the second quarter of 2022 increased $3.3 million, or 35%, from
the same period in 2021.  Printer, terminal and other hardware sales unit volume
increased 27% year-over-year to approximately 25,000 units for the second
quarter of 2022 due primarily to a 69% increase in casino and gaming sales unit
volume.  The average selling price of our printers, terminals and other hardware
increased 18% in the second quarter of 2022 compared to the second quarter of
2021 due primarily to price increases instituted on most of our products in the
latter part of the first quarter of 2022.  In addition to the sales unit volume
increases, FST software, labels and other recurring revenue increased $0.1
million, or 6%, in the second quarter of 2022 compared to the second quarter of
2021 due in part to increased sales of BOHA! terminals.

International sales for the second quarter of 2022 increased $1.5 million, or
111%, from the same period in 2021, primarily due to a 152% increase in sales in
the international casino and gaming market driven largely by an increase in
sales of our thermal casino printers.

Food service technology. Our primary offering in the food service technology
market is our BOHA! ecosystem, which combines our latest generation terminal and
workstation, cloud-based software applications and related hardware into a
unique solution to automate back-of-house operations in restaurants, convenience
stores and food service operations.  The software component of BOHA! consists of
a suite of software-as-a-service ("SaaS")-based applications for both Android
and iOS operating systems, including applications for temperature monitoring of
food and equipment, timers, food safety labeling, media libraries, checklists
and task lists, and equipment service management.  These applications can be
sold separately or combined into a single platform with the associated hardware,
which includes the BOHA! terminal and workstation, handheld devices, tablets,
temperature probes and temperature sensors. The BOHA! terminal combines the
software and hardware components in a device that includes an operating system,
touchscreen and one or two thermal print mechanisms that print easy-to-read food
rotation labels, grab-and-go labels and nutritional labels for prepared foods,
and "enjoy by" date labels.  The BOHA! workstation uses an iPad or Android
tablet instead of an integrated touchscreen.  Both the BOHA! terminal and
workstation are equipped with the TransAct Enterprise Management System to
ensure that only approved applications and functions are available on the device
and allows over-the-air updates to the applications and operating system.  BOHA!
helps food service establishments and restaurants (including fine dining, casual
dining, fast casual and quick-serve restaurants, convenience stores, hospitality
establishments and contract food service providers) effectively manage food
safety and grab-and-go initiatives, as well as automate and manage back-of-house
operations.  Recurring revenue from BOHA! is generated by software sales,
including software subscriptions that are typically charged to customers
annually on a per-application basis, as well as sales of labels, extended
warranty and service contracts, and technical support services.  Sales of our
worldwide food service technology products for the three months ended June 30,
2022 and 2021 were as follows:

                           Three Months Ended            Three Months Ended
(In thousands, except
percentages)                  June 30, 2022                 June 30, 2021            $ Change       % Change
Domestic                $    3,281           95.6 %   $    2,987           97.2 %   $      294            9.8 %
International                  151            4.4 %           87            2.8 %           64           73.6 %
                        $    3,432          100.0 %   $    3,074          100.0 %   $      358           11.6 %



                           Three Months Ended            Three Months Ended
(In thousands, except
percentages)                  June 30, 2022                 June 30, 2021            $ Change       % Change
Hardware                $    1,253           36.5 %   $    1,008           32.8 %   $      245           24.3 %
Software, labels and
other recurring
revenue                      2,179           63.5 %        2,066           67.2 %          113            5.5 %
                        $    3,432          100.0 %   $    3,074          100.0 %   $      358           11.6 %



The increase of $0.4 million, or 12%, in food service technology sales for the
second quarter of 2022 compared to the second quarter of 2021 was driven by an
increase in sales of both hardware as well as software, labels and other
recurring revenue. FST hardware sales increased 24% due to higher sales of our
Accudate 9700 terminal (largely for use at McDonald's) and to a lesser extent,
higher sales of our BOHA! terminal and work station to new and existing
customers.  BOHA! software (recognized on a SaaS subscription basis), labels and
other recurring revenue increased by 5%, primarily due to increased label and
software sales due to the growth of the installed base of our BOHA! terminal and
workstation.

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POS automation. Revenue from the POS automation market includes sales of our
Ithaca 9000 thermal printer used primarily by McDonalds and other quick-serve
restaurants located either at the checkout counter or within self-service kiosks
to print receipts for consumers or print on liner-less labels.  Sales of our
worldwide POS automation products for the three months ended June 30, 2022 and
2021 were as follows:

                           Three Months Ended            Three Months Ended
(In thousands, except
percentages)                  June 30, 2022                 June 30, 2021            $ Change       % Change
Domestic                $    1,172          100.0 %   $    1,252           99.7 %   $      (80 )         (6.4 %)
International                    -            0.0 %            4            0.3 %           (4 )       (100.0 %)
                        $    1,172          100.0 %   $    1,256          100.0 %   $      (84 )         (6.7 %)



The decrease in POS automation product revenue for the second quarter of 2022
compared to the second quarter of 2021 of 7% was driven primarily by printer
production limitations caused by the worldwide supply chain slowdown.  As a
result, we could not produce enough POS automation printers to fulfill customer
orders during the second quarter of 2022.  However, we expect production to ramp
up in the second half of 2022 and sales of our POS automation printers to be
significantly higher in the second half of 2022 compared to the first half of
2022 based on the backlog of orders we have received for McDonald's.

Casino and gaming. Revenue from the casino and gaming market includes sales of
thermal ticket printers used in slot machines, video lottery terminals, and
other gaming machines that print tickets or receipts instead of issuing coins at
casinos and racetracks and other gaming venues worldwide.  Revenue from this
market also includes sales of thermal roll-fed printers used in the
international off-premise gaming market in gaming machines such as Amusement
with Prizes, Skills with Prizes and Fixed Odds Betting Terminals and kiosks for
sports betting at non-casino gaming and sports betting establishments. Revenue
from this market also includes royalties related to our patented casino and
gaming technology.  In addition, casino and gaming market revenue includes sales
of the EPICENTRAL print system, our software solution (including annual software
maintenance), that enables casino operators to create promotional coupons and
marketing messages and to print them in real time at the slot machine.  Sales of
our worldwide casino and gaming products for the three months ended June 30,
2022 and 2021 were as follows:

                           Three Months Ended            Three Months Ended
(In thousands, except
percentages)                  June 30, 2022                 June 30, 2021            $ Change       % Change
Domestic                $    3,929           60.2 %   $    2,438           70.3 %   $    1,491           61.2 %
International                2,596           39.8 %        1,029           29.7 %        1,567          152.3 %
                        $    6,525          100.0 %   $    3,467          100.0 %   $    3,058           88.2 %



The increase in domestic sales of our casino and gaming products for the second
quarter of 2022 compared to the second quarter of 2021 of $1.5 million, or 61%,
was primarily due to an across-the-board increase in OEM printer sales and price
increases as we continue to experience continued recovery and believe we are
increasing our market share compared to the second quarter of 2021 when the
casino and gaming market was negatively impacted by the COVID-19 pandemic.  This
increase was somewhat tempered by a continued global chip shortage that limited
our printer production during the second quarter of 2022. We also completed an
installation of Epicentral software at a new casino during the second quarter of
2022 that contributed to the overall increase in domestic sales.

Similar to the domestic sales increase, the international sales increase of our
casino and gaming products for the second quarter of 2022 was $1.6 million
compared to the second quarter of 2021 and was primarily due to a 157% increase
in sales of our thermal casino printers.  Though sales in Asia remain weak due
to closures related to the COVID-19 pandemic, we experienced a sales recovery
primarily in Europe and Australia during the second quarter of 2022 compared to
the second quarter of 2021 when the international casino and gaming market was
negatively impacted by the COVID-19 pandemic.

We expect production to continue to ramp up in the second half of 2022 and sales
of our casino printers to be higher in the second half of 2022 compared to the
first half of 2022 based on the backlog of orders we have received.

Printrex. Printrex branded printers were sold into markets that include wide
format, desktop and rack mounted and vehicle mounted black/white thermal
printers used by customers to log and plot oil field, seismic and down hole well
drilling data in the oil and gas exploration industry.  Sales of our worldwide
Printrex printers for the three months ended June 30, 2022 and 2021 were as
follows:

                              Three Months Ended                Three Months Ended
(In thousands, except
percentages)                     June 30, 2022                     June 30, 2021             $ Change       % Change
Domestic                $         -                 0.0 %   $       25             22.3 %   $      (25 )       (100.0 %)
International                     -                 0.0 %           87             77.7 %          (87 )       (100.0 %)
                        $         -                 0.0 %   $      112            100.0 %   $     (112 )       (100.0 %)



We made a strategic decision to exit the Printrex market as of December 31, 2021
and have had no sales, and expect to have no future sales in this market beyond
2021.

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TSG. Revenue generated by TSG includes sales of consumable products (POS receipt
paper, inkjet cartridges, ribbons and other printing supplies for legacy
products), replacement parts, maintenance and repair services, refurbished
printers, and shipping and handling charges.  Sales in our worldwide TSG market
for the three months ended June 30, 2022 and 2021 were as follows:

                           Three Months Ended            Three Months Ended
(In thousands, except
percentages)                  June 30, 2022                 June 30, 2021            $ Change       % Change
Domestic                $    1,345           90.0 %   $    1,252           88.4 %   $       93            7.4 %
International                  149           10.0 %          164           11.6 %          (15 )         (9.1 %)
                        $    1,494          100.0 %   $    1,416          100.0 %   $       78            5.5 %



Domestic revenue from TSG for the second quarter of 2022 increased $0.1 million,
or 7%, compared to the second quarter of 2021.  The increase was primarily due
to increased sales of replacement parts and accessories for lottery and POS
printers.  This increase was partially offset by a reduction of legacy
consumables that are no longer a focus for the Company.

Internationally, TSG’s revenue fell $0.1 millioni.e. 9%, in the second quarter of 2022 compared to the second quarter of 2021.

Gross profit. Gross profit for the three months ended June 30, 2022 and 2021 is summarized below (in thousands, except percentages):

   Three Months Ended June 30,         Percent        Percent of       Percent of
                                                     Total Sales      Total Sales
    2022                2021            Change          - 2022           - 2021
$       5,434       $       3,432           58.3 %           43.0 %           36.8 %



Gross profit is measured as revenue less cost of sales, which includes primarily
the cost of all raw materials and component parts, direct labor, manufacturing
overhead expenses, cost of finished products purchased directly from our
contract manufacturers, expenses associated with installations and support of
our EPICENTRAL® print system and BOHA! ecosystem and royalty payments to third
parties, including to the third-party licensor of our food service technology
software products.  For the second quarter of 2022, gross profit increased $2.0
million, or 58% due largely to a sales increase of 35% for the second quarter of
2022 compared to the second quarter of 2021.  During the second quarter of 2022,
our gross margin increased 620 basis points, to 43.0%, compared to 36.8% in the
second quarter of 2021.  The increase in gross margin resulted primarily from
higher sales volume, a more favorable product mix and the effect of price
increases instituted in the latter part of the first quarter of 2022.

Operating Expenses - Engineering, Design and Product Development.  Engineering,
design and product development expense for the three months ended June 30, 2022
and 2021 is summarized below (in thousands, except percentages):

   Three Months Ended June 30,         Percent        Percent of       Percent of
                                                     Total Sales      Total Sales
    2022                2021            Change          - 2022           - 2021
$       2,172       $       1,804           20.4 %           17.2 %           19.3 %



Engineering, design and product development expenses primarily include salary
and payroll related expenses for our hardware and software engineering staff,
depreciation and design expenses (including prototype printer expenses, outside
design, development and testing services, supplies and contract software
development expenses including those to the third-party licensor of our food
service technology software products).  Such expenses increased $0.4 million, or
20%, for the second quarter of 2022 compared to the second quarter of 2021, as
we gradually return to more normalized pre-COVID-19 spending levels and continue
development of our food service technology products which we expect to continue
during the second half of 2022.  In addition, we incurred higher design expenses
related to incorporating alternate electronic parts into our products in
response to the worldwide chip shortage in an effort minimize disruptions to our
printer and terminal production.

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Operating Expenses - Selling and Marketing. Selling and marketing expense for
the three months ended June 30, 2022 and 2021 is summarized below (in thousands,
except percentages):

   Three Months Ended June 30,         Percent        Percent of       Percent of
                                                     Total Sales      Total Sales
    2022                2021            Change          - 2022           - 2021
$       3,293       $       1,767           86.4 %           26.1 %           18.9 %



Selling and marketing expenses primarily include salaries and payroll related
expenses for our sales and marketing staff, sales commissions, travel expenses,
expenses associated with the lease of sales offices, advertising, trade show
expenses, public relations, e-commerce and other promotional marketing
expenses.  Such expenses increased $1.5 million, or 86%, for the second quarter
of 2022 compared to the second quarter of 2021, primarily due to investment
spending for our FST sales and marketing groups.  During the second quarter of
2022, we continued BOHA! market studies we began in the first quarter 2022,
increased marketing programs and hired additional sales staff to support our
BOHA! products. In addition to these investments, we incurred higher sales
commissions, travel expenses and tradeshow expense, as we returned to
pre-COVID-19 spending levels, compared to the lower level of spending during the
second quarter of 2021 resulting from the negative impacts of COVID-19.  Despite
the strategic investments we have made in our FST sales and marketing groups, we
expect overall selling and marketing expenses to be lower in the second half of
2022 compared to the first half of 2022 due to cost cutting measures we have
implemented in other areas.

Operating expenses – general and administrative. General and administrative expenses for the three months ended June 30, 2022 and 2021 is summarized below (in thousands, except percentages):

   Three Months Ended June 30,         Percent        Percent of       Percent of
                                                     Total Sales      Total Sales
    2022                2021            Change          - 2022           - 2021
$       2,923       $       2,509           16.5 %           23.2 %           26.9 %



General and administrative expenses primarily include salaries, incentive
compensation, and other payroll related expenses for our executive, finance,
human resources, business development and information technology staff,
corporate headquarters, professional and legal expenses, information technology
expenses, and other expenses related to being a publicly-traded company.
General and administrative expenses were up $0.4 million, or 17%, compared to
the second quarter of 2021 due to higher professional fees, salary increases,
and depreciation and other expenses related to the implementation of a new ERP
system that was completed in April 2022.  These increases were partially offset
by a reduction in incentive compensation expense.

Operating loss. Operating loss for the three months ended June 30, 2022 and 2021 is summarized below (in thousands, except percentages):

    Three Months Ended June 30,          Percent        Percent of        Percent of
                                                       Total Sales       Total Sales
     2022                 2021            Change          - 2022            - 2021
$       (2,954 )     $       (2,648 )         11.6 %          (23.4 %)          (28.4 %)



Our operating loss increased $0.3 million, or 12%, for the second quarter of
2022 compared to the second quarter of 2021 due to a $2.0 million, or 58%,
increase in gross profit on 35% higher sales and 620 basis point improvement in
gross margin was more than offset by a $2.3 million, or 38%, increase in
operating expenses during the second quarter of 2022 compared to the second
quarter of 2021.

Interest, net. Net interest expense remained consistent at$28 thousand for the
second quarter of 2022 compared to $29 thousand for the second quarter of 2021.
We expect interest expense to increase during the second half of 2022 compared
to the first half of 2022 due to required minimum borrowings pursuant to the
terms of the July 2022 Amendment No. 2 to the Siena Credit Facility.

Other, net. We recorded other expense of $264 thousand for the second quarter of
2022 compared to other expense of $17 thousand for the second quarter of 2021,
primarily due to higher foreign exchange losses recorded by our U.K. subsidiary
resulting largely from the weakening of the British pound against the U.S.
dollar during the second quarter of 2022.

Income Taxes. We recorded an income tax benefit for the second quarter of 2022
of $870 thousand at an effective tax rate of (26.8%), compared to an income tax
benefit for the second quarter of 2021 of $664 thousand at an effective tax rate
of (24.6%).

Net Loss. As a result of the above, we reported a net loss for the second
quarter of 2022 of $2.4 million, or ($0.24) per diluted share, compared to a net
loss of $2.0 million, or ($0.23) per diluted share for the second quarter of
2021.

                                       23
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Results of operations: Half-year ended June 30, 2022 compared to the six months ended June 30, 2021

Net sales. Net sales, which include sales of printers, terminals and software, as well as sales of spare parts, consumables and maintenance and repair services, by market for the six months ended June 30, 2022 and 2021 were as follows:

                            Six Months Ended             Six Months Ended
(In thousands, except
percentages)                 June 30, 2022                June 30, 2021            $ Change       % Change
FST                     $    5,562          24.9 %   $    5,821          33.0 %   $     (259 )         (4.4 %)
POS automation               2,472          11.1 %        2,420          13.7 %           52            2.1 %
Casino and gaming           11,287          50.6 %        6,332          35.9 %        4,955           78.3 %
Printrex                         -           0.0 %          271           1.6 %         (271 )       (100.0 %)
TSG                          3,004          13.4 %        2,782          15.8 %          222            8.0 %
                        $   22,325         100.0 %   $   17,626         100.0 %   $    4,699           26.7 %

International *         $    5,496          24.6 %   $    2,677          15.2 %   $    2,819          105.3 %


* International sales do not include sales of printers and terminals

national distributors or other national customers who may, in turn, ship these

printers and terminals to international destinations.



Net sales for the first six months of 2022 increased $4.7 million, or 27%, from
the same period in 2021. Printer, terminal and other hardware sales unit volume
increased by 26% to approximately 48,000, units for the six months of 2022
driven primarily by a 65% increase in unit in our casino and gaming market. 

The

average selling price of our printers, terminals and other hardware increased 5%
for the first six months of 2022 compared to the first six months of 2021 due
primarily to price increases instituted on most of our products in the latter
part of the first quarter of 2022.  FST software, labels and other recurring
revenue increased $0.5 million, or 15%, in the first six months of 2022 compared
to the first six months of 2021.

International sales in the first half of 2022 increased $2.8 millionor 105%, compared to the same period in 2021, mainly due to a 137% increase in the international casino and gaming market.

Restoration technology. Sales of our restaurant technology products worldwide for the six months ended June 30, 2022 and 2021 were as follows:

                            Six Months Ended             Six Months Ended
(In thousands, except
percentages)                 June 30, 2022                June 30, 2021            $ Change       % Change
Domestic                $    5,227          94.0 %   $    5,551          95.4 %   $     (324 )         (5.8 %)
International                  335           6.0 %          270           4.6 %           65           24.1 %
                        $    5,562         100.0 %   $    5,821         100.0 %   $     (259 )         (4.4 %)



                            Six Months Ended             Six Months Ended
(In thousands, except
percentages)                 June 30, 2022                June 30, 2021            $ Change       % Change
Hardware                $    1,816          32.7 %   $    2,550          43.8 %   $     (734 )        (28.8 %)
Software, labels and
other recurring
revenue                      3,746          67.3 %        3,271          56.2 %          475           14.5 %
                        $    5,562         100.0 %   $    5,821         100.0 %   $     (259 )         (4.4 %)



The decrease in food service technology sales of $0.3 million, or 4%, in the
first six months of 2022 compared to the first six months of 2021 was driven by
a decrease in hardware sales, partially offset by an increase in sales of BOHA!
software, labels and other recurring revenue.  Hardware sales decreased 29% in
the first half of 2022 compared to the first half of 2021 due largely to lower
sales to a national convenience store customer and an initial sale to a new
national travel center customer completed in the first quarter of 2021 that did
not reoccur in the first half of 2022.  FST software, labels and other recurring
revenue sales increased 15% in the first six months of 2022 compared to the
first six months of 2021.  This increase was primarily due to increased label
sales and, to a lesser extent, increased software sales, compared to the prior
year period due principally to the growth of the installed base of our BOHA!
terminals and workstations

                                       24
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Point of sale automation. Sales of our point-of-sale automation products worldwide for the six months ended June 30, 2022 and 2021 were as follows:

                            Six Months Ended             Six Months Ended
(In thousands, except
percentages)                 June 30, 2022                June 30, 2021            $ Change        % Change
Domestic                $    2,472         100.0 %   $    2,412          99.7 %   $        60            2.5 %
International                    -           0.0 %            8           0.3 %            (8 )       (100.0 %)
                        $    2,472         100.0 %   $    2,420         100.0 %   $        52            2.1 %


Point-of-sale automation printer sales held steady, increasing $0.1 millioni.e. 2%, for the first six months of 2022 compared to the first six months of 2021.

Casino and games. Sales of our casino and gaming products worldwide for the six months ended June 30, 2022 and 2021 were as follows:

                            Six Months Ended             Six Months Ended
(In thousands, except
percentages)                 June 30, 2022                June 30, 2021            $ Change       % Change
Domestic                $    6,717          59.5 %   $    4,402          69.5 %   $    2,315           52.6 %
International                4,570          40.5 %        1,930          30.5 %        2,640          136.8 %
                        $   11,287         100.0 %   $    6,332         100.0 %   $    4,955           78.3 %



The increase in domestic sales of our casino and gaming products of $2.3
million, or 53%, for the first six months of 2022 compared to the first six
months of 2021 was primarily due to an increase in domestic sales and price
increases in our gaming and thermal casino printers, as we have experienced a
positive recovery and believe we are increasing our market share during the
first six months of 2022 compared to the same period in 2021 which was impacted
by the COVID-19 pandemic.  This increase was somewhat tempered by a continued
global chip shortage that limited our printer production during the second
quarter of 2022.  We also completed an installation of EPICENTRAL software at a
new casino during the second quarter of 2022 that contributed to the overall
increase in domestic sales.

International sales of our casino and gaming products increased by $2.6 million,
or 137%, in the first six months of 2022 compared to the first six months of
2021.  Sales of our thermal casino printers increased 118% and sales of our
off-premise gaming printers increased 273%.  These increases are attributable to
the recovery of the international markets after significant negative impacts
from the COVID-19 pandemic during the 2021 period.

Printrex. Sales of our Printrex printers worldwide for the six months ended June 30, 2022 and 2021 were as follows:

                             Six Months Ended                Six Months 

Ended

(In thousands, except
percentages)                   June 30, 2022                  June 30, 2021             $ Change       % Change
Domestic                $        -              0.0 %   $       52            19.2 %   $      (52 )       (100.0 %)
International                    -              0.0 %          219            80.8 %         (219 )       (100.0 %)
                        $        -              0.0 %   $      271           100.0 %   $     (271 )       (100.0 %)



We made a strategic decision to exit the Printrex market as of December 31, 2021
and have had no sales, and expect to have no future sales in this market beyond
2021.

TSG. Sales in our worldwide TSG market for the six months ended June 30, 2022
and 2021 were as follows:

                            Six Months Ended             Six Months Ended
(In thousands, except
percentages)                 June 30, 2022                June 30, 2021            $ Change       % Change
Domestic                $    2,413          80.3 %   $    2,532          91.0 %   $     (119 )         (4.7 %)
International                  591          19.7 %          250           9.0 %          341          136.4 %
                        $    3,004         100.0 %   $    2,782         100.0 %   $      222            8.0 %



The decrease in domestic revenue from TSG of $0.1 million, or 5%, for the first
six months of 2022 as compared to the first six months of 2021 was primarily due
to lower service revenue and sales of consumable products.  Service revenue
declined 35%, primarily related to declining revenue from a service contract
with a legacy banking customer that is expected to expire during 2022.
Consumable sales declined by 40% due to decreased sales of consumable products
for our legacy products on which we are no longer focusing on.  These decreases
were offset by a 16% increase in sales of replacement parts and accessories.

Internationally, TSG revenue increased $0.3 million, or 136%, for the first six
months of 2022 compared to the first six months of 2021, primarily due to a 205%
increase in sales of replacement parts and accessories to international casino
and gaming customers.

                                       25
--------------------------------------------------------------------------------

Gross profit. Gross profit for the six months ended June 30, 2022 and 2021 is summarized below (in thousands, except percentages):

   Six Months Ended June 30,         Percent           Percent of               Percent of
    2022               2021          Change        Total Sales - 2022       Total Sales - 2021
$      8,000       $      6,771          18.2 %                   35.8 %                   38.4 %



For the first six months of 2022, gross profit increased $1.2 million, or 18%,
due largely to a sales increase of 27% in the first six months of 2022 compared
to the first six months of 2021.  The decrease in gross margin percentage
resulted primarily from higher freight and product costs incurred due to the
worldwide supply chain disruption and chip shortage during the first six months
of 2022.

Operating Expenses - Engineering, Design and Product Development.  Engineering,
design and product development expense for the six months ended June 30, 2022
and 2021 is summarized below (in thousands, except percentages):

   Six Months Ended June 30,         Percent           Percent of               Percent of
    2022               2021          Change        Total Sales - 2022       Total Sales - 2021
$      4,455       $      3,607          23.5 %                   20.0 %                   20.5 %



Engineering, design and product development expenses increased $0.8 million, or
24%, during the first six months of 2022 compared to first six months of 2021,
as we gradually return to more normalized pre-COVID-19 spending levels, as well
as the impact from the hiring of additional engineering staff in late 2021 and
the first quarter of 2022 for continued development for our food service
technology products.

Operating Expenses - Selling and Marketing. Selling and marketing expense for
the six months ended June 30, 2022 and 2021 is summarized below (in thousands,
except percentages):

   Six Months Ended June 30,         Percent           Percent of           

Percentage of

    2022               2021          Change        Total Sales - 2022      
Total Sales - 2021
$      5,976       $      3,210          86.2 %                   26.8 %                   18.2 %



Selling and marketing expenses increased $2.8 million, or 86%, for the first six
months of 2022 compared to the first six months of 2021 primarily due to
investment spending for our FST sales and marketing groups.  During the first
half of 2022, we initiated BOHA! market studies, increased marketing programs
and hired additional sales staff to support our BOHA! products.  In addition to
these investments, we incurred higher sales commissions, travel expenses and
tradeshow expense, as we returned to pre-COVID-19 spending levels, compared to
the lower level of spending during the first half of 2021 resulting from the
negative impacts of the COVID-19 pandemic.

Operating expenses – general and administrative. General and administrative expenses for the six months ended June 30, 2022 and 2021 is summarized below (in thousands, except percentages):

   Six Months Ended June 30,         Percent           Percent of               Percent of
    2022               2021          Change        Total Sales - 2022       Total Sales - 2021
$      6,127       $      5,118          19.7 %                   27.4 %                   29.0 %



General and administrative expenses increased $1.0 million, or 20%, for the
first six months of 2022 compared to first six months of 2021 due to higher
professional fees (including legal fees related to a shareholder matter that was
resolved in March 2022 when we entered into a Cooperation Agreement with two
shareholders), salary increases and depreciation and other expenses related to
the implementation of a new ERP system that was completed in April 2022.  These
increases were partially offset by a reduction in incentive compensation expense
during the first half of 2022.

Operating loss. Operating loss for the six months ended June 30, 2022 and 2021 is summarized below (in thousands, except percentages):

    Six Months Ended June 30,          Percent        Percent of        Percent of
                                                     Total Sales       Total Sales
    2022                2021            Change          - 2022            - 2021
$      (8,558 )     $      (5,164 )         65.7 %          (38.3 %)          (29.3 %)



Our operating loss increased $3.4 million, or 66%, for the first six months of
2022 compared to the first six months of 2021 as a $1.2 million, or 18%,
increase in gross profit on 27% higher sales was more than offset by a $4.6
million, or 39%, increase in operating expenses during the first half of 2022
compared to the first half of 2021.

                                       26
--------------------------------------------------------------------------------

Interest, net. We recorded net interest expense of $92 thousand for the first
six months of 2022 compared to net interest expense of $42 thousand for the
first six months of 2021.  The increase in net interest expense was primarily
due to lower interest income earned from the note receivable to a third-party
software developer that was collected in March 2021.  We expect interest expense
to increase during the second half of 2022 due to required minimum borrowings
pursuant to the terms of the July 2022 Credit Facility Amendment No. 2.

Other, net. We recorded other expense of $299 thousand for the first six months
of 2022 compared to other expense of $100 thousand for the first six months of
2021 primarily due to increased foreign exchange losses recorded by our U.K.
subsidiary largely due to a weakening of the British pound against the U.S.
dollar in the second quarter of 2022.

Income Taxes. We recorded an income tax benefit for the first six months of 2022
of $2.2 million at an effective tax rate of 24.9%, compared to an income tax
benefit for the first six months of 2021 of $1.2 million at an effective tax
rate of 22.4%.

Net Loss. As a result of the above, we reported a net loss for the first six
months of 2022 of $6.7 million, or $0.68 per diluted share, compared to a net
loss of $4.1 million, or $0.46 per diluted share for the first six months of
2021.

Cash and capital resources

Cash Flow
For the first six months of 2022, our cash and cash equivalents balance
decreased by $15.6 million to $3.9 million as of June 30, 2022 due primarily to
higher accounts receivable associated with higher sales volumes, increased
inventory related to strategic inventory purchases in response to the global
supply chain crisis and a reported net loss for the period.

Operating activities: The following significant factors affected our cash used
in operating activities of $14.6 million for the first six months of 2022 as
compared to cash used in operating activities of $3.9 million for the first six
months of 2021:

In the first six months of 2022:

? We recorded a net loss of $6.7 million.

? We recorded depreciation and amortization of $0.6 million and based on sharing

compensation charge of $0.6 million.

? Accounts receivable increased $4.5 million due to higher sales volumes in the

first half of 2022.

? Deferred taxes increased $2.2 million due to continuous losses.

? Inventories increased $3.3 million largely thanks to the strategic purchases of

electronic parts in volume to minimize production interruptions

with our subcontractors.

During the first six months of 2021:

? We recorded a net loss of $4.1 million.

? We recorded depreciation and amortization of $0.5 million and based on sharing

compensation charge of $0.7 million.

? Accounts receivable increased $2.4 million mainly due to increased sales

volume during the second quarter of 2021.

? Inventories have fallen $2.3 million due to the use of available stocks

to make sales.

? Accounts payable increased $1.0 million mainly due to timing of payments

during the second quarter of 2021.

? Accrued expenses and other liabilities decreased $0.9 millioni.e. 11%, due

mainly to the payment of the 2020 annual bonuses in March 2021.



Investing activities:  Our capital expenditures were $0.7 million for the first
six months of 2022 compared to $0.2 million for the first six months of 2021.
Expenditures in 2022 were primarily related to the implementation of a new ERP
system.  Expenditures in 2021 were primarily related to computer and networking
equipment and new product tooling equipment.  During the first six months of
2021, we limited our capital expenditures to help preserve liquidity amidst the
height of the COVID-19 pandemic.  Investing activities also provided $1.6
million in the first six months of 2021 for the collection of the remaining $1.6
million note receivable balance from an unaffiliated third party.

Financing activities:  Financing activities used $0.1 million of cash in the
first six months of 2022.  During the first six months of 2021, financing
activities provided $0.1 million of cash primarily from the exercise of stock
options, net of withholding taxes paid.

                                       27
--------------------------------------------------------------------------------

Credit Facility and Borrowings
On March 13, 2020, we entered into the Siena Credit Facility with Siena Lending
Group LLC (the "Lender") and terminated our credit facility with TD Bank N.A.
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.  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.  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.  Borrowings under the Siena Credit Facility are subject
to a borrowing base based on (i) 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 Siena Credit Facility imposes a financial covenant on the Company and
restricts, among other things, our ability to incur additional indebtedness and
the creation of other liens.  The three-month period from April 1, 2020 to June
30, 2020 was the first period we were subject to the financial covenant, which
required the Company to maintain a minimum EBITDA and continued through the
12-month period from April 1, 2020 to March 31, 2021.  On July 21, 2021, the
Company entered into an amendment (the "Credit Facility Amendment") to the Siena
Credit Facility.  The Credit Facility Amendment 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 ending July 31, 2021.
From July 31, 2021 to June 30, 2022, we have been in compliance with our excess
availability covenant. As of June 30, 2022, we had no outstanding borrowings
under the Siena Credit Facility and $4.5 million of available borrowing capacity
under the Siena Credit Facility, excluding the excess availability covenant.

On July 19, 2022, the Company and the Lender entered into Amendment No. 2 (the
"Credit Facility Amendment No. 2") to the Loan and Security Agreement, dated as
of March 13, 2020, between the Lender and the Company, as amended by Amendment
No. 1, dated as of July 21, 2021, between the Lender and the Company.  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 the Credit Facility
Amendment No. 2. The Credit Facility Amendment No. 2 did not modify the
aggregate amount of the revolving commitment or the interest rate applicable to
the loans.

Amendments to Amendment No. 2 of the Siena Credit Facility include, among others, the following:

(i) The extension of the due date of March 13, 2023 at March 13, 2025; and

(ii) Termination of the existing Escrow Account Control Agreement and entry into

in a new “spring-loaded” deposit account control agreement, allowing the

Company to direct the use of funds in its deposit account until

(a) the sum of excess availability under the Siena Credit Facility and

unallocated cash is less than $5 million for 3 consecutive working days or

(b) an Event of Default occurs and continues.



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 borrowings of at least $2,250,000 in principal amount. If the
Company does not have the ability to direct the use of funds in the deposit
account, then the Amended Fee Letter requires the Company to pay interest on at
least $2,250,000 principal amount of loans, whether or not such amount of loans
is actually outstanding.

On May 1, 2020 (the "Loan Date"), the Company was granted the PPP Loan from
Berkshire Bank in the aggregate amount of $2.2 million, pursuant to the PPP
which is administered by the SBA and was established under Division A, Title I
of the CARES Act, enacted March 27, 2020.  Under the terms of the PPP, the PPP
Loan would be forgiven to the extent that funds from the PPP Loan were used for
payroll costs and costs to continue group health care benefits, as well as for
interest on mortgage obligations incurred before February 15, 2020, rent
payments under lease agreements in effect before February 15, 2020, utilities
for which service began before February 15, 2020 and interest on debt
obligations incurred before February 15, 2020, subject to conditions and
limitations provided in the CARES Act.  At least 60% (under the PPP terms, as
amended) of the proceeds of the PPP Loan needed to have been used for eligible
payroll costs for the PPP Loan to be forgiven.

On July 8, 2021, the Company received notifications from Berkshire Bank and the
SBA that its PPP loan (including all interest accrued thereon) of $2.2 million
had been fully forgiven by the SBA and that the forgiveness payment date was
July 1, 2021.  The forgiveness of the PPP Loan was reported as "Gain on
forgiveness on long-term debt" in the Consolidated Statement of Operations
during the year ended December 31, 2021.

                                       28

————————————————– ——————————

Resource Sufficiency
Given the unprecedented uncertainty related to the impact of the COVID-19
pandemic on the food service and casino industries, the Company is closely
monitoring its cash generation, usage and preservation including the management
of working capital to generate cash. The Company does not currently anticipate
requiring any additional credit facilities within the next twelve months beyond
our Siena Credit Facility which is discussed above.

We believe that our cash and cash equivalents on hand, our expected cash flows
generated from operating activities and borrowings available under our Siena
Credit Facility will provide sufficient resources to meet our working capital
needs, finance our capital expenditures and meet our liquidity requirements
through at least the next twelve months.  Notwithstanding this belief, the
duration and extent of the COVID-19 pandemic remain uncertain, and its ultimate
impact is unknown.  Further, the availability under the Siena Credit Facility
depends in part on inventory levels, which have been impacted, and will continue
to be impacted, by supply chain disruptions due to the COVID-19 pandemic.  As a
result, we continue to evaluate several different strategies to enhance our
liquidity position as a result of the significant financial and operational
impacts due to the COVID-19 pandemic.  These strategies may include, but are not
limited to, seeking to raise additional capital through an equity or debt
financing.

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