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TBTC, chart, website, sec

These guys make automated equipment for table gambling games like blackjack. I looked at Table Trac...
2004 10-K
Q1 through Q3 2005
more stuff
Google checking
competitors
and reached this conclusion.

The real showstopper with TBTC was covered here: Recurring revenue is too small. They seem to make about $3,500 per month per casino on recurring revenue. You'd need to subtract a fair amount from this for costs of supporting the casino. Let's say the gross profit is $2,500. This means they probably need 40 casinos just to break even. At 70 cents on the ask, I just don't think it's a good investment.

So I figure I'll take another look at the company.

2005 10-K:
4 million shares on March 15, 2006. 500K options.
3 full-time employees (hey, I've looked at companies with zero employees, ok?)
A Wisconsin casino (most of their casinos are in that region) placed an order for a new system. Customer number 10. Installation due April 2006.
Unqualified auditor opinion.
Balance sheet is fairly solid, if a bit anemic... most assets are AR.
25% net margin. $303K earnings, mostly AR and not cash.

Q1 2006:
Hooray! Much of that AR was converted into cash. Balance sheet is now solid. $220K net cash (all operating expenses for the quarter were only $153K).
86% gross margins!
Sounds good so far, but...
Net loss of $15K. See? It's those low recurring revenues.
Obviously cash flow from operations was good due to AR conversion to cash.
No capex, no financing, all operations.

So this additional customer might put them into positive earnings territory, but barely. They need a lot of wins to bring in a lot of cash on a regular basis. However, let's say they got 10 more customers. They might clear $300K or more in earnings per year after the big revenues from installation died down. That's still less than 7 cents per share. And the shares are trading around 70 cents.