Galaxy Gaming, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LEASES

LEASES

9 Months Ended

Sep. 30, 2024

NOTE 5. LEASES

We have operating leases for our corporate office, two satellite facilities in the state of Washington, and leases 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 September 30, 2024, no renewal option periods were included in any estimated minimum lease term as the options were not deemed reasonably certain to be exercised. Our leases have remaining lease terms ranging from 8 months to 30 months.

Supplemental balance sheet information related to leases is as follows:


	September 30, 2024			December 31, 2023
Operating leases:
Operating lease right-of-use lease assets	$	596,305		$	785,543

Operating lease current liabilities	$	281,588		$	268,541
Operating lease long-term liabilities		371,854			585,879
Total operating lease liabilities	$	653,442		$	854,420

Weighted-average remaining lease term in years:
Operating leases		2.23			3.12
Weighted-average discount rate:
Operating leases		4.4	%		5.4	%

The components of lease expense are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost (1)	$	71,515	$	72,071	$	219,322	$	216,213
(1) Classified as selling, general and administrative expense

Supplemental cash flow information related to leases is as follows:


	Nine Months Ended September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Principal and interest payments related to operating leases	$	222,862	$	216,243

As of September 30, 2024, future maturities of our operating lease liabilities are as follows:


	Amount
Years ended December 31,
2024	$	76,733
2025		306,055
2026		302,011
2027		2,985
Total minimum lease payments		687,784
Less: imputed interest		(34,342	)
Total operating lease liability		653,442
Less: current portion		(281,588	)
Long-term portion	$	371,854