Leases And Commitments

12 Months Ended

Dec. 31, 2016

8.LEASES AND COMMITMENTS

Capital Lease Obligations

On December 14, 2015, the Company entered into a five-year lease agreement (the “Agreement”) for approximately 32 acres of land adjacent to the Racetrack for a total purchase price (net present value of minimum lease payments) of $4.9 million. See Note 14. Land Sales and Purchase, for additional information on the land purchase. Title to the land was to transfer to the Company at the end of the lease or when all payments had been made, if earlier. As part of the agreement, the Company paid the seller $1.7 million upon execution of the Agreement, including $1.4 million of proceeds from a prior land sale which was being held by an unrelated third party. The lease payments were payable monthly at $58,533, with an interest rate of 4.0% and a maturity date of December 15, 2020. During May 2016, the Company paid the capital lease obligation in-full. As of December 31, 2016 there is no outstanding capital lease obligation for the purchase of the land.

Purchase Obligations

In March 2014, the Company entered into a seven-year agreement with a new 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 amounts charged to operations for totalizator expenses for the years ended December 31, 2016 and 2015 were $226,000 and $224,000, respectively.

Operating Lease Obligations

The Company has entered into operating leases for rental of office equipment and for track equipment to maintain the Racetrack. Amounts charged to operations under these agreements for the years ended December 31, 2016 and 2015 were $104,000 and $145,000, respectively. All such leases expire on or before February 2018.

Future minimum operating lease payments and purchase obligations are as follows:



	Payment due by period
	Total Amount
Obligations	Committed		2017		2018		2019		2020		2021		Thereafter

Operating leases	$	115,000	$	69,000	$	46,000	$	-	$	-	$	-	$	-
Purchases	$	926,000	$	228,000	$	230,000	$	233,000	$	235,000	$	-	$	-

- Definition

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

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