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

Annual report pursuant to Section 13 and 15(d)

LEASES

LEASES

12 Months Ended

Dec. 31, 2023

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, 2023, our leases have remaining lease terms ranging from 16 months to 39 months. Some of these leases contain options that allow us to extend or terminate the lease agreement.

As of December 31, 2023, 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:


		Year ended December 31,
	Classification	2023			2022
Operating leases:
Operating lease right-of-use lease assets		$	785,543		$	1,002,749

Operating lease current liabilities	Current portion of operating lease liabilities	$	268,541		$	248,317

Operating lease long-term liabilities	Long-term operating lease liabilities		585,879		$	830,289

Total operating lease liabilities		$	854,420		$	1,078,606

Weighted-average remaining lease term:
Operating leases			3.12			3.94

Weighted-average discount rate:
Operating leases			5.4	%		4.4	%

The components of lease expense are as follows:



		Year Ended December 31,
	Classification	2023		2022
Operating lease cost	Selling, general and administrative expense	$	291,045	$	286,296

Supplemental cash flow information related to leases is as follows:


		Year Ended December 31,
	Classification	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Net income	$	290,877	$	281,303

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	Supplemental cash flow information	$	26,302	$	71,901

At December 31, 2023, future maturities of our operating lease liabilities are as follows:


	Amount
Years ending December 31,
2024	$	301,492
2025		307,107
2026		302,011
2027		2,985
Total minimum lease payments		913,595
Less: imputed interest		(59,175	)
Total operating lease liability		854,420
Less: current portion		(268,541	)
Long-term portion	$	585,879