Leases And Commitments

12 Months Ended

Dec. 31, 2015

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 will transfer to the Company at the end of the lease or when all payments have 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 are payable monthly at $58,533, with an interest rate of 4.0% and a maturity date of December 15, 2020.

The following table shows the future minimum lease payments under the capital lease by years and the present value of the minimum lease payments as of December 31, 2015:


Year ending December 31,	Amount

2016	$	702,397
2017		702,397
2018		702,397
2019		702,397
2020		702,768
Total minimum lease payments		3,512,358
Less: Amount representing interest		(334,064)
Present value of minimum lease payments		3,178,294
Less: Current portion		(585,563)
Long-term portion	$	2,592,731

As of December 31, 2015, the present value of minimum lease payments due within one year is $586,000.

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, 2015 and 2014 were $224,000 and $226,000, 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, 2015 and 2014 were $145,000 and $140,000, respectively. All such leases expire in or before February 2018.

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



	Payment due by period
	Total Amount
Obligations	Committed		2016		2017		2018		2019		2020		Thereafter

Operating leases	$	58,900	$	29,200	$	27,300	$	2,400	$	-	$	-	$	-
Purchases	$	1,152,000	$	226,000	$	228,000	$	230,000	$	233,000	$	235,000	$	-