Note 8 - Leases |
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| Leases of Lessee and Commitments Disclosure [Text Block] |
8. LEASES
The Company determines if an arrangement is a lease or contains a lease at inception. The Company leases certain office equipment under finance leases. We also lease equipment related to our horse racing operations under operating leases. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short term leases.
As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We recognize expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements do not contain any variable lease payments, material residual value guarantees or any restrictive covenants.
Lease costs related to operating leases were $28,228 and $26,785 for the years ended December 31, 2025 and 2024, respectively. The total lease expenses for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or liability was $448,231 and $457,454 for the years ended December 31, 2025 and 2024, respectively.
Lease costs included in depreciation and amortization related to our finance leases were $36,182 and $33,332 for the years ended December 31, 2025 and 2024, respectively. Interest expense related to our finance leases was immaterial.
The following table shows the classification of the right of use assets on our Consolidated Balance Sheets at December 31, 2025 and 2024:
1 – Finance lease assets are net of accumulated amortization of $63,729 and $30,779 for the years ended December 31, 2025 and 2024, respectively.
The following table shows the lease terms and discount rates related to our leases:
The maturity of operating leases and finance leases for the year ended December 31, 2025 are as follows:
Purchase Obligations
In March 2022, the Company entered into a -year agreement with a totalizator provider. Pursuant to the agreement, the vendor provides totalizator equipment and related software which records and processes all wagers and calculates odds and payoffs. The future minimum purchase obligations under the new agreement are $166,400 per year. The amounts charged to operations for totalizator expenses for the years ended December 31, 2025 and 2024 were $203,000 and $200,000, respectively. |
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