Schedule I [Schedule]
 12 Months Ended
Dec. 31, 2016
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Schedule I
CONDENSED BALANCE SHEETS
(in thousands, except share data)
 
December 31,
 
2016
 
2015
Assets
Current assets
 
 
 
Cash and cash equivalents
$
10,171

 
$
25,972

Prepaid expenses
40

 
63

Total current assets
10,211

 
26,035

Deferred tax asset
—

 
3,528

Investment in subsidiaries
153,926

 
203,390

Total assets
$
164,137

 
$
232,953

 
 
 
 
Liabilities and Stockholders’ Equity
Current liabilities
 
 
 
Accounts payable and accrued liabilities
$
36

 
$
—

Intercompany payables
93

 
20

Total current liabilities
129

 
20

Long-term debt
146,284

 
131,125

Other long-term liabilities
1,296

 
1,271

Total liabilities
147,709

 
132,416

Stockholders’ equity:
 
 
 
Common stock
149

 
149

Additional paid-in capital
177,276

 
177,276

Retained earnings
(156,451
)
 
(75,077
)
Accumulated other comprehensive loss
(4,546
)
 
(1,811
)
Total stockholders’ equity
16,428

 
100,537

Total liabilities and stockholders’ equity
$
164,137

 
$
232,953

AP GAMING HOLDCO, INC.
(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
 
Year ended December 31,
 
2016
 
2015
 
2014
Operating expenses
 
 
 
 
 
Selling, general and administrative
$
231

 
$
546

 
$
1,512

Total operating expenses
231

 
546

 
1,512

Loss from operations
(231
)
 
(546
)
 
(1,512
)
Other expense (income)
 
 
 
 
 
Equity in net loss of subsidiaries
62,450

 
33,405

 
26,870

Interest expense
15,165

 
8,123

 
—

Interest income
—

 
(1
)
 
(6
)
Loss before income taxes
(77,846
)
 
(42,073
)
 
(28,376
)
Income tax benefit (expense)
(3,528
)
 
3,528

 
—

Net loss
(81,374
)
 
(38,545
)
 
(28,376
)
Foreign currency translation adjustment
(2,735
)
 
(2,099
)
 
289

Total comprehensive loss
$
(84,109
)
 
$
(40,644
)
 
$
(28,087
)
AP GAMING HOLDCO, INC.
(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS
(in thousands, except per share data)
 
Year ended December 31,
 
2016
 
2015
 
2014
Cash flows from operating activities
 
 
 
 
 
Net loss
$
(81,374
)
 
$
(38,545
)
 
$
(28,376
)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
 
 
 
 
 
Amortization of deferred loan costs and discount
340

 
143

 
—

Payment-in-kind interest capitalized
14,819

 
7,980

 
—

Equity in net loss of subsidiaries
62,450

 
33,405

 
26,870

(Benefit) provision of deferred income tax
3,528

 
(3,528
)
 
—

Changes in assets and liabilities that relate to operations:
 
 
 
 
 
Prepaid expenses
23

 
6

 
(69
)
Intercompany payable/receivable
148

 
455

 
455

Accounts payable and accrued liabilities
35

 
(24
)
 
24

Net cash (used in) provided by operating activities
(31
)
 
(108
)
 
(1,096
)
Cash flows from investing activities
 
 
 
 
 
Investment in subsidiaries
(15,720
)
 
(172,484
)
 
(11,635
)
Distributions received from subsidiaries
—

 
1,322

 
2,737

Net cash used in investing activities
(15,720
)
 
(171,162
)
 
(8,898
)
Cash flows from financing activities
 
 
 
 
 
Proceeds from issuance of debt
—

 
111,550

 
—

Proceeds from issuance of common stock
—

 
77,425

 
—

Proceeds from employees in advance of common stock issuance
—

 
579

 
1,969

Repurchase of shares issued to management
(50
)
 
(277
)
 
—

Payment of deferred loan costs
—

 
(548
)
 
—

Net cash provided by financing activities
(50
)
 
188,729

 
1,969

Increase (decrease) in cash and cash equivalents
(15,801
)
 
17,459

 
(8,025
)
Cash and cash equivalents, beginning of period
25,972

 
8,513

 
16,538

Cash and cash equivalents, end of period
$
10,171

 
$
25,972

 
$
8,513

 
 
 
 
 
 
Non-cash investing and financing activities:
 
 
 
 
 
Subsidiary payment for share repurchase on Company’s behalf
$
—

 
$
1,000

 
$
—

Intercompany payable settled as distribution
$
—

 
$
890

 
$
—

Incurrence of Amaya Seller Note
$
—

 
$
12,000

 
$
—

AP GAMING HOLDCO, INC.
(PARENT COMPANY ONLY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The parent company financial statements of AP Gaming Holdco, Inc. (the “ Parent Company”) should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes thereto. For purposes of these condensed financial statements, the Parent Company’s wholly owned and majority owned subsidiaries are recorded based upon its proportionate share of the subsidiaries’ net assets (similar to presenting them on the equity method).

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted since this information is included in the Company’s consolidated financial statements included elsewhere in this Form 10-K.

NOTE 2 - COMMITMENTS AND CONTINGENCIES

The Parent Company is a holding company and, as a result, its ability to pay dividends is dependent on its subsidiaries’ ability to obtain funds and its subsidiaries' ability to provide funds to it. Restrictions are imposed by its subsidiaries' debt instruments, which significantly restrict certain key subsidiaries holding a majority of its assets from making dividends or distributions to the Parent Company. These restrictions are subject to certain exceptions for affiliated overhead expenses as defined in the agreements governing the debt instruments, unless certain financial and non-financial criteria have been satisfied.

Long-term debt of the Parent Company consists of the senior secured PIK notes and the Amaya Seller Note as described below.

Senior Secured PIK Notes

On May 29, 2015, the Company entered into a note purchase agreement with AP Gaming Holdings, LLC, as subsidiary guarantor (the “Subsidiary Guarantor”), Deutsche Bank AG, London Branch, as purchaser (the “Purchaser”), and Deutsche Bank Trust Company Americas, as collateral agent.  Pursuant to the agreement, the Company issued $115.0 million of its 11.25% senior secured PIK notes due 2021 (the “Notes”) at an issue price of 97% of the principal amount thereof to the Purchaser in a private placement exempt from registration under the Securities Act of 1933, as amended.  The Notes are secured by the Company’s equity in its subsidiary AP Gaming, Inc., subject to certain limitations including those imposed by gaming laws, and are unconditionally guaranteed by the Subsidiary Guarantor.

Interest on the Notes will accrue at a rate of 11.25% per annum. The Company may elect to pay interest due on the Notes in cash, by increasing the principal of the outstanding Notes or by issuing new Notes (“PIK interest”) for the entire amount of the interest payment or by paying interest partially in cash and partially in PIK interest. Interest on the Notes will accrue from the date of issuance and will be payable on the dates described in more detail in the agreement.  The Notes will mature on May 28, 2021.  The net proceeds of the Notes were used primarily to finance the Cadillac Jack acquisition.

The Notes contain limitations on additional indebtedness, guarantees, incurrence of liens, investments and distributions, as defined. The Notes also contains customary events of default included in similar transactions, including, among others, failure to make payments when due, acceleration of other material indebtedness, breach of covenants, breach of representations and warranties, involuntary or voluntary bankruptcy, and material judgments. At December 31, 2016, the Notes totaled $133.3 million, which includes capitalized interest of $21.8 million.

Seller Note

On May 29, 2015, the Company issued a promissory note to Amaya Inc. (the “Amaya Seller Note”) with an initial principal amount of $12.0 million to satisfy the conditions set forth in the stock purchase agreement for Cadillac Jack. The Amaya Seller Note accrues interest on the unpaid principal amount at 5.0% per annum and is payable semi-annually on June 30 and December 31 (and on May 29, 2023, the maturity date of the note), commencing on June 30, 2015. All interest accrued and payable on any interest payment date will be paid by capitalizing such interest and adding it to (and thereby increasing) the outstanding principal amount of the Amaya Seller Note. All principal under the note is due and payable on May 29, 2023.  The Amaya Seller Note is required to be prepaid under certain circumstances described in more detail in the note agreement. The Company may prepay from time to time all or any portion of the outstanding principal balance due under the Amaya Seller Note.  The Amaya Seller Note includes certain covenants and events of default that are customary for instruments of this type. At December 31, 2016, the Amaya Seller Note totaled $13.0 million, which includes capitalized interest of $1.0 million.