Annual report pursuant to section 13 and 15(d)

Statements of Cash Flows

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Statements of Cash Flows (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Cash flows from operating activities:    
Net income (loss) for the year $ 621,726 $ (473,336)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense 50,488 40,149
Amortization expense 1,564,969 435,218
Amortization of debt discount 208,632 52,158
Provision for bad debts 35,000 44,000
Write-off of inventory    15,000
Deferred income tax benefit (341,823)   
Share-based compensation 91,152 28,000
Changes in operating assets and liabilities:    
Increase in restricted cash (199,743) (17,221)
Increase in accounts receivable (218,440) (575,185)
Decrease (increase) in other current assets 70,138 (100,813)
Increase in inventory (610) (107,327)
Decrease (increase) in prepaid expenses 28,207 (32,710)
Increase in accounts payable 12,407 78,677
(Decrease) increase in accrued expenses (86,245) 203,434
Increase in deferred revenue 104,294 115,181
Increase in jackpot liabilities 200,759 21,350
Net cash provided by (used in) operating activities 2,140,911 (273,425)
Cash flows from investing activities:    
Acquisition of property and equipment (18,467) (20,948)
Payments received on note receivable 3,679 28,510
Increase in products leased or held for lease (47,416) (17,737)
Net cash used in investing activities (62,204) (10,175)
Cash flows from financing activities:    
Collection of stock subscription receivable    6,604
Principal payments on notes payable (1,402,484) (184,531)
Proceeds from issuance of common stock    200,000
Net cash (used in) provided by financing activities (1,402,484) 22,073
Effect of exchange rate changes on cash (460,706)   
Net increase (decrease) in cash and cash equivalents 215,517 (261,527)
Cash and cash equivalents - beginning of year 182,907 444,434
Cash and cash equivalents - end of year 398,424 182,907
Supplemental cash flow information:    
Cash paid for interest 673,915 115,537
Cash paid for income taxes      
Non - cash investing and financing activities:    
Intangible assets acquired through the issuance of notes payable recorded at fair values    21,150,000
Intangible assets acquired through the issuance of common stock recorded at fair values    480,000
Debt discount related to fair value of notes payable    1,530,000
Effect of exchange rate on note payable in foreign currency    64,960
Write-off of uncollectible stock subscription receivable