Galaxy Gaming, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

LEASES

Year Ended December 31, 2022

Classification

Operating lease cost

Selling, general and administrative expense

LEASES

12 Months Ended

Dec. 31, 2022

NOTE 8. LEASES

We have operating leases for our corporate office, two satellite facilities in the state of Washington and for certain equipment. We account for lease components (such as rent payments) separately from the non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). The discount rate represents the interest rate implicit in each lease or our incremental borrowing rate at lease commencement date.

As of December 31, 2022, our leases have remaining lease terms ranging from 12 months to 51 months. Some of these leases contain options that allow us to extend or terminate the lease agreement.

As of December 31, 2022, no renewal option periods were included in any estimated minimum lease terms as the options were not deemed reasonably certain to be exercised.

Supplemental balance sheet information related to leases is as follows:


	As of December 31, 2022
	Amount			Classification
Operating leases:
Operating lease right-of-use lease assets	$	1,002,749

Operating lease current liabilities	$	248,317		Current portion of operating lease liabilities

Operating lease long-term liabilities		830,289		Long-term operating lease liabilities

Total operating lease liabilities	$	1,078,606

Weighted-average remaining lease term:
Operating leases		3.94

Weighted-average discount rate:
Operating leases		4.4	%

The components of lease expense are as follows:

Supplemental cash flow information related to leases is as follows:


	Year Ended December 31, 2022
	Amount		Classification
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	281,303	Net income

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	71,901	Supplemental cash flow information

As of December 31, 2022, future maturities of our operating lease liabilities are as follows:


	Amount
2023	$	290,877
2024		288,892
2025		294,507
2026		302,011
2027		2,985
Total minimum lease payments		1,179,272
Less: imputed interest		(100,666	)
Total operating lease liability		1,078,606
Less: current portion		(248,317	)
Long-term portion	$	830,289