Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  



We evaluate subsequent events through the date of issuance of the financial statements.  There have been no subsequent events that occurred during such period that would require adjustment to or disclosure in the financial statements as of and for the quarter ended March 31, 2019, except as follows:


On April 22, 2019, we entered into the First Amendment to the Credit Agreement with Zions Bancorporation, N.A. dba Nevada State Bank to extend the Revolving Loan Maturity Date from April 24, 2019 to April 24, 2021.


On May 6, 2019, we redeemed all 23,271,667 shares of the common stock held by Triangulum, an entity controlled by Robert B. Saucier, Galaxy Gaming's founder, and, prior to the redemption, the holder of a majority of our outstanding Common Stock.  The redemption of Triangulum’s shares was given effect pursuant to our Articles of Incorporation (the “Articles”), which expressly provide that if certain events occur in relation to a stockholder that is required to undergo a gaming suitability review or similar investigative process, we have the option to purchase all or any part of such stockholder’s shares at a price per share that is equal to the average closing share price over the thirty calendar days preceding the purchase.  The average closing share price over the thirty calendar days preceding the redemption was $1.68 per share.


As consideration for the redemption, we issued a promissory note payable to Triangulum in the face amount of $39,096,401.  The promissory note matures on May 5, 2029, and bears interest at a rate of 2% per annum, with accrued interest payable annually in arrears. The promissory note is unsecured and is subordinated to our existing and future indebtedness in accordance with its terms.  We may prepay principal and any accrued interest in full or in part at any time.

Also on May 6, 2019, we entered into a Second Amendment to the Credit Agreement to (i) provide an additional $10 million of availability under the Term Loan component of the facility; and (ii) waive for a period of 180 days the breach of any covenant in the Credit Agreement that might occur as a result of the redemption.

Furthermore, we filed a lawsuit on May 6, 2019 seeking (i) a declaratory judgment that we acted lawfully and in full compliance with the Articles when we redeemed the Triangulum Shares and (ii) certain remedies for breach of fiduciary duty and breach of contract by Triangulum and its Managing Member, Mr. Saucier.  The suit alleges that the redemption and the other relief sought by us are appropriate because of, among other things, the failure of Mr. Saucier to cooperate with our gaming regulatory efforts in Nevada, California and certain other jurisdictions.  Galaxy Gaming, Inc. v. Triangulum Partners, LLC, Robert B. Saucier, et al, Clark County, Nevada district court (Case No. A-19-794293-B).