Galaxy Gaming, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

LEASES

LEASES

12 Months Ended

Dec. 31, 2024

NOTE 8. LEASES

We have operating leases for our corporate office, two satellite facilities in the state of Washington and for certain office 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, 2024, no renewal option periods were included in any estimated minimum lease terms as the options were not deemed reasonably certain to be exercised. Our leases have remaining lease terms ranging from 5 months to 27 months. Some of these leases contain options that allow us to extend or terminate the lease agreement.

Supplemental balance sheet information related to leases is as follows:


	Year Ended December 31,
	2024			2023
Operating leases:
Operating lease right-of-use lease assets	$	533,163		$	785,543

Operating lease current liabilities	$	286,019		$	268,541
Operating lease long-term liabilities		297,714			585,879
Total operating lease liabilities	$	583,733		$	854,420

Weighted-average remaining lease term in years:
Operating leases		1.98			3.12
Weighted-average discount rate:
Operating leases		4.6	%		5.4	%

The components of lease expense are as follows:


	Year Ended December 31,
	2024		2023
Operating lease cost (1)	$	290,836	$	291,045
(1) Classified as selling, general and administrative expense

Supplemental cash flow information related to leases is as follows:


	Year Ended December 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Principal and interest payments related to operating leases	$	299,595	$	290,877

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	—	$	26,302

At December 31, 2024, future maturities of our operating lease liabilities are as follows:


	Amount
Years ended December 31,
2025	$	306,055
2026		302,011
2027		2,985
Total minimum lease payments		611,051
Less: imputed interest		(27,318	)
Total operating lease liability		583,733
Less: current portion		(286,019	)
Long-term portion	$	297,714