Galaxy Gaming, Inc.
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
GLXZStored price and day change unavailable
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-068307
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000950170-25-106037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 45 previous paragraphs and 57 current paragraphs.
23 unchanged; 19 reworded; 11 added; 2 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Under the terms of the Merger Agreement, if the Merger has not been consummated by July 18, 2025 (the "Initial Outside Date"), either Galaxy or Evolution may terminate the Merger Agreement; provided that such date shall be automatically extended to October 18, 2025 (the "First Extended Outside Date") if, on the Initial Outside Date, all conditions to the Merger would have been satisfied or waived if the closing had taken place on the Initial Outside Date, other than the closing conditions to the absence of certain legal constraints, or the receipt of certain gaming regulatory approvals (the "Gaming Approval Closing Condition"). As of July 18, 2025, all conditions to the Merger would have been satisfied or waived if the closing occurred on such date, other than the Gaming Approval Closing Condition. In accordance with the foregoing terms, on July 18, 2025, the Initial Outside Date was automatically extended to October 18, 2025.
Current report
Research and development expenses were down $26,317, or 9.8% for the three months ended June 30, 2025 compared to the comparable period in the prior year. The decrease was due to the decline of the total amount of outside services used for research and development in the period.
Current report
Stock-based compensation expenses decreased $41,471, or 21.3% for the three months ended June 30, 2025, as compared to the same period in the prior year. The decrease was primarily due to lower compensation for our Board of Directors in 2025, driven by the vesting of a previously granted equity award and a reduction in the number of board members, both of which contributed to lower stock-based compensation during the current period.
Current report
Provision for income taxes was $93,912 for the three months ended June 30, 2025, compared to provision for income taxes of $28,293 for the comparable prior-year period. The increase in expense is primarily driven by the increased income before provision for income taxes.
Current report
Revenue
Current report
Recurring core revenue decreased $236,835, or 2.2% for the six months ended June 30, 2025, as compared to the same period in the prior year. The decrease was primarily driven by the absence of a one-time payment of approximately $140,000 received in the prior year, the impact of recent casino closures and a decrease in revenue generated from licensed third-party intellectual property. Royalties netted against gross core revenue decreased $110,112 for the six months ended June 30, 2025, as compared to the same period in the prior year. This decrease was due to lower royalties paid to third-parties for licensed intellectual property. Perpetual license sales of our progressive gaming systems to customers of $761,541 were down 66.9% percent for the six months ended June 30, 2025, as compared to the same period in the prior year. This decline was primarily driven by a strategic decision by management to prioritize higher-margin, recurring revenue streams, as well as the timing of customer purchases. Gross digital revenues of $7,856,574 were up $872,156, or 12.5% for the six months ended June 30, 2025, as compared to the same period in the prior year. This favorable increase reflects the ongoing expansion of our digital content onto new customer sites and the continued success of offering competitive products with brand recognition. Net of royalties, digital revenues grew to $5,602,116, up 8.9% for the six months ended June 30, 2025, as compared to the same period in the prior year.
Current report
Costs and Expenses
Current report
Selling, general and administrative expenses decreased $92,310, or 1.1% for the six months ended June 30, 2025, as compared to the same period in the prior year. This decrease was primarily driven by a $223,089 reduction in costs associated with special projects, most notably legal expenses incurred related to the acquisition by Evolution. Normalized for the impact of special projects and excluding the related fees of $451,955 and $675,044 for the six months ended June 30, 2025 and June 30, 2024, respectively, selling, general, and administrative expenses increased $130,779 for the six months ended June 30, 2025, as compared to the same period in the prior year. The increase was primarily driven by higher compensation and related expenses, partially offset by reductions in legal expenses unrelated to special projects, as well as lower taxes and licensing costs.
Current report
Stock-based compensation expenses decreased $16,452, or 4.9% for the six months ended June 30, 2025, as compared to the same period in the prior year. The decrease was primarily driven by lower compensation for our Board of Directors in 2025, resulting from the full vesting of a previously granted equity award and a reduction in the number of board members. These factors led to a decline in stock-based compensation during the current period, partially offset by an increase in stock-based compensation for employees.
Current report
Interest expense decreased $2,660,347, or 58.2% for the six months ended June 30, 2025, as compared to the same period in the prior year. The decrease was due to reduced interest rates and a reduced principal balance as a result of the recent refinancing of our debt. Interest income was down $371,628, or 90.6% compared to the prior year period, primarily due to lower cash balances.
Current report
Primarily as a result of the factors described above, we had net loss of $1,070,925 for the six months ended June 30, 2025, as compared to net income of approximately $451,605 for the same period in the prior year.
Removed paragraphs (2)
Previous report
Our revenue consists of the following components:
Previous report
Stock-based compensation expenses increased $25,019, or 17.7% for the three months ended March 31, 2025, as compared to the same period in the prior year. The increase was due primarily to a higher stock-based compensation for officers, employees, and consultants.
Reworded paragraphs (19)
Previous wording
The following is a discussion and analysis of our financial condition, results of operations and liquidity and capital resources as of and for the three months ended March 31, 2025 and 2024. This discussion should be read together with our audited consolidated financial statements and related notes included in Item 8. Financial Statements and Supplementary Financial Information included in our 2024 Form 10-K.
Current wording
The following is a discussion and analysis of our financial condition, results of operations and liquidity and capital resources as of and for the three and six months ended June 30, 2025 and 2024. This discussion should be read together with our audited consolidated financial statements and related notes included in Item 8. Financial Statements and Supplementary Financial Information included in our 2024 Form 10-K.
Previous wording
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, as do other materials or oral statements we release to the public. Forward-looking statements are neither historical facts nor assurances of future performance, but instead are based only on our current beliefs, expectations, and assumptions regarding the future of our business, plans and strategies, projections, anticipated events and trends, the economy, and other future conditions, as of the date on which this report is filed. Forward-looking statements often, but do not always, contain words such as “may,” “will,” “should,” “could,” “might,” “expect,” “intend,” "target," “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other similar expressions. These forward-looking statements are only predictions. We have based these forward-looking statements on our current expectations, assumptions and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, the ability to complete the Merger (as defined herein) on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary gaming regulatory approvals and satisfaction of other closing conditions to consummate the proposed Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement (as defined herein); risks that the proposed Merger disrupts the Company’s current plans and operations or diverts the attention of the Company’s management or employees from ongoing business operations; the risk that certain restrictions during the pendency of the Merger may impact the Company's ability to pursue certain business opportunities or strategic transactions; the risk of potential difficulties with the Company’s ability to retain and hire key personnel and maintain relationships with customers and other third parties as a result of the proposed Merger, including during the pendency of the Merger; the risk that the proposed Merger may involve unexpected costs and/or unknown or inestimable liabilities; the risk that the Company’s business may suffer as a result of uncertainty surrounding the proposed Merger; the risk that stockholder litigation in connection with the proposed Merger may affect the timing or occurrence of the proposed Merger or result in significant costs of defense, indemnification and li…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, as do other materials or oral statements we release to the public. Forward-looking statements are neither historical facts nor assurances of future performance, but instead are based only on our current beliefs, expectations, and assumptions regarding the future of our business, plans and strategies, projections, anticipated events and trends, the economy, and other future conditions, as of the date on which this report is filed. Forward-looking statements often, but do not always, contain words such as “may,” “will,” “should,” “could,” “might,” “expect,” “intend,” "target," “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other similar expressions. These forward-looking statements are only predictions. We have based these forward-looking statements on our current expectations, assumptions and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, the ability to complete the Merger on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary gaming regulatory approvals and satisfaction of other closing conditions to consummate the proposed Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; risks that the proposed Merger disrupts the Company’s current plans and operations or diverts the attention of the Company’s management or employees from ongoing business operations; the risk that certain restrictions during the pendency of the Merger may impact the Company's ability to pursue certain business opportunities or strategic transactions; the risk of potential difficulties with the Company’s ability to retain and hire key personnel and maintain relationships with customers and other third parties as a result of the proposed Merger, including during the pendency of the Merger; the risk that the proposed Merger may involve unexpected costs and/or unknown or inestimable liabilities; the risk that the Company’s business may suffer as a result of uncertainty surrounding the proposed Merger; the risk that stockholder litigation in connection with the proposed Merger may affect the timing or occurrence of the proposed Merger or result in significant costs of defense, indemnification and liability; effects relating to the announc…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
On July 18, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Evolution Malta Holding Limited, a company registered in Malta (“Parent”), and Galaga Merger Sub, Inc., a Nevada corporation and direct wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, and subject to the terms and conditions thereof, Merger Sub would merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent.
Current wording
On July 18, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Evolution Malta Holding Limited, a company registered in Malta (“Parent” or "Evolution"), and Galaga Merger Sub, Inc., a Nevada corporation and direct wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, and subject to the terms and conditions thereof, Merger Sub would merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent.
Previous wording
Upon the closing of the Merger, each share of common stock, par value $0.001 per share of the Company issued and outstanding immediately prior to the effective time of the Merger, other than any Company common stock (i) owned by Company stockholders who are entitled to demand and have properly and validly demanded their appraisal rights under Nevada law or (ii) owned by Parent, Merger Sub, the Company or by any of their respective subsidiaries, will be converted automatically into the right to receive $3.20 per share in cash, without interest and subject to any applicable withholding taxes.
Current wording
Upon the closing of the Merger, each share of common stock, par value $0.001 per share of the Company issued and outstanding immediately prior to the effective time of the Merger, other than any Company common stock (i) owned by Company stockholders who are entitled to demand and have properly and validly demanded their appraisal rights under Nevada law or (ii) owned by Parent, Merger
Previous wording
Recurring core revenue decreased $145,467, or 2.7% for the three months ended March 31, 2025, as compared to the same period in the prior year. The decrease was primarily driven by the absence of a one-time payment of approximately $140,000 received in the prior year. Royalties netted against gross core revenue decreased $64,132 for the three months ended March 31, 2025, as compared to the same period in the prior year. This decrease was attributable to less royalties paid on our EZ Baccarat revenues. Perpetual license sales of our progressive gaming systems to customers of $505,120, were down 37.3% percent for the three months ended March 31, 2025, as compared to the same period in the prior year. Gross digital revenues of $3,835,585 were up $379,632, or 11.0% for the three months ended March 31, 2025, as compared to the same period in the prior year. This favorable increase reflects the ongoing expansion of our digital content into new markets and the continued success of offering competitive products with brand recognition, most notable
Current wording
Recurring core revenue decreased $91,368, or 1.7% for the three months ended June 30, 2025, as compared to the same period in the prior year. This decrease was driven in part by the impact of recent casino closures and to a lesser extent, a decrease in revenue generated from licensed third-party intellectual property. Royalties netted against gross core revenue decreased $45,980 for the three months ended June 30, 2025, as compared to the same period in the prior year. This decrease was attributable to lower royalties paid to third-parties for licensed intellectual property. Perpetual license sales of our progressive gaming systems to customers of $256,421 were down 82.9% percent for the three months ended June 30, 2025, as compared to the same period in the prior year. This decline was primarily driven by a strategic decision by management to prioritize higher-margin, recurring revenue streams, as well as the timing of customer purchases. Gross digital revenues of $4,020,989, were up $492,524, or 14.0% for the three months ended June 30, 2025, as compared to the same period in the prior year. This favorable increase reflects the ongoing expansion of our digital content onto new customer sites and the continued success of offering competitive products with brand recognition. Net of royalties, digital revenues grew to $2,833,416, up 11.5% for the three months ended June 30, 2025, as compared to the same period in the prior year.
Previous wording
Cost of ancillary products and assembled component expense decreased $218,378, or 53.7% for the three months ended March 31, 2025, as compared to the same period in the prior year. The activity in Cost of ancillary products and assembled components reflects the component costs associated with the perpetual license sales of our progressive gaming systems.
Current wording
Cost of ancillary products and assembled component expense decreased $410,685, or 68.6% for the three months ended June 30, 2025, as compared to the same period in the prior year. The activity in cost of ancillary products and assembled components reflects the component costs associated with the perpetual license sales of our progressive gaming systems.
Previous wording
Selling, general and administrative expenses increased $107,953, or 2.6% for the three months ended March 31, 2025, as compared to the same period in the prior year. Without the costs associated with the acquisition by Evolution and excluding the related transaction fees of $208,273, selling, general, and administrative expenses decreased $100,320, or 2.4% for three months ended March 31, 2025, as compared to the same period in the prior year.
Current wording
Selling, general and administrative expenses decreased $200,263, or 4.5% for the three months ended June 30, 2025, as compared to the same period in the prior year. This decrease was primarily driven by a $431,362 reduction in costs associated with special projects, most notably legal expenses incurred related to the acquisition by Evolution. Normalized for the impact of special projects and excluding the related fees of $243,682 and $675,044 for the three months ended June 30, 2025 and June 30, 2024, respectively, selling, general, and administrative expenses increased $231,099 for the three months ended June 30, 2025, as compared to the same period in the prior year. This increase was driven primarily by higher compensation and related expenses.
Previous wording
Depreciation and amortization increased $93,624, or 13.6% for the three months ended March 31, 2025, as compared to the same period in the prior year. This increase was primarily driven by depreciation expense associated with incremental placements of assets deployed at client locations and to a lesser extent, an increase in amortization expense for certain intangible assets placed in service in the current quarter.
Current wording
Depreciation and amortization increased $83,918, or 12.0% for the three months ended June 30, 2025, as compared to the same period in the prior year. This increase was primarily driven by amortization expense for certain intangible assets placed in service and to a lesser extent, an increase in depreciation expense associated with incremental placements of assets deployed at client locations.
Previous wording
Interest expense was down $1,285,997, or 56.2% for the three months ended March 31, 2025, as compared to the same period in the prior year. The decrease was due to reduced interest rates as a result of the recent refinancing of our debt. Interest income was down $178,988, or 88.7% compared to the prior year period, due to lower cash balances.
Current wording
Interest expense decreased $1,374,350, or 60.3% for the three months ended June 30, 2025, as compared to the same period in the prior year. The decrease was due to reduced interest rates and a reduced principal balance as a result of the recent refinancing of our debt. Interest income was down 92.4% compared to the prior year period, primarily due to lower cash balances.
Previous wording
Primarily as a result of the factors described above and the refinancing of our debt, we had a net loss of $2,021,282 for the three months ended March 31, 2025, as compared to a net gain of approximately $208,908 for the same period in the prior year.
Current wording
Primarily as a result of the factors described above, we had net income of $950,357 for the three months ended June 30, 2025, as compared to net income of approximately $242,697 for the same period in the prior year.
Previous wording
Research and development expenses were up $110,890, or 44.0% for the three months ended March 31, 2025, as compared to the same period in the prior year. This increase was driven by higher payroll costs due to increased headcount and the ongoing development of internal software placed in service.
Current wording
Research and development expenses were up $84,573, or 16.2% for the six months ended June 30, 2025, as compared to the same period in the prior year. This increase was driven by higher payroll costs due to increased headcount and the ongoing development of internal software placed in service.
Previous wording
The Company recognized a loss on extinguishment of debt of $2,969,585 for the three months ended March 31, 2025 related to the refinancing of our debt from Fortress to BMO.
Current wording
The Company recognized a loss on extinguishment of debt of $2,969,585 for the six months ended June 30, 2025 related to the refinancing of our debt from Fortress to BMO.
Previous wording
Income tax provision increased to $36,421 for the three months ended March 31, 2025, compared to income tax provision of $26,325 for the comparable prior-year period. The increase was due to a higher adjusted pre-tax book income offset by discrete items including the loss on extinguishment of debt and stock compensation expense.
Current wording
Provision for income taxes was $130,333 for the six months ended June 30, 2025, compared to provision for income taxes of $54,618 for the comparable prior-year period. The increase was due to a higher adjusted pre-tax book income offset by discrete items, primarily the loss on extinguishment of debt.
Previous wording
As of March 31, 2025, we had total current assets of $11,686,870 and total assets of $27,816,794. As of December 31, 2024, we had total current assets of $24,171,920 and total assets of $41,010,731. The decrease in current assets as of March 31, 2025 compared to December 31, 2024 was due to the decreased cash and cash equivalents driven by cash used in the refinancing of our debt. The decrease in total assets as of March 31, 2025 compared to December 31, 2024 was primarily due to the decrease of current assets noted above.
Current wording
As of June 30, 2025, we had total current assets of $10,452,127 and total assets of $26,603,798. As of December 31, 2024, we had total current assets of $24,171,920 and total assets of $41,010,731. The decrease in current assets as of June 30, 2025 compared to December 31, 2024 was primarily due to the decreased cash and cash equivalents driven by cash used in the refinancing of our debt. The decrease in total assets as of June 30, 2025 compared to December 31, 2024 was primarily due to the decrease of current assets noted above.
Previous wording
Our total current liabilities as of March 31, 2025 compared to December 31, 2024 increased to $7,551,332 from $6,602,744. This was primarily due to the increase in the current portion of long-term debt as a result of the refinancing of our debt from Fortress to BMO.
Current wording
Our total current liabilities as of June 30, 2025 compared to December 31, 2024 increased to $7,527,390 from $6,602,744. This increase was primarily due to an increase in the current portion of our long term debt as a result of the refinancing of our debt from Fortress to BMO.
Previous wording
Our operating activities provided cash of $1,168,692 for the three months ended March 31, 2025, compared to $1,366,629 provided for the comparable prior year period. This change is mainly attributable to the net loss in the current quarter and a variance of $826,550 in use of assets and liabilities that relate to operations. Additionally, the Company recognized a loss on extinguishment of debt of 2,969,585 due to the refinancing of the Fortress loan to BMO, depreciation and amortization increased $93,624 primarily driven by amortization related to intangible assets placed in service and to a lesser extent, depreciation related to assets deployed at client locations, stock-based compensation increased $25,019 from the vesting of stock options and bad debt increased $75,703.
Current wording
Our operating activities provided cash of $4,345,791 for the six months ended June 30, 2025, compared to $3,873,347 provided for the comparable prior year period. This change is mainly attributable to the net loss in the current period and a variance of $632,929 in use of assets and liabilities that relate to operations. Additionally, the Company recognized a loss on extinguishment of debt of $2,969,585 due to the refinancing of the Fortress loan to BMO, depreciation and amortization increased $177,542 primarily driven by amortization related to intangible assets placed in service and to a lesser extent, depreciation related to assets deployed at client locations, $16,452 decline in stock-based compensation and an increase in bad debt of $89,019.
Previous wording
Investing activities used cash of $283,330 for the three months ended March 31, 2025, compared to cash used of $351,334 for the three months ended March 31, 2024. This decrease in cash used was primarily due to the decrease in the transfer of title of assets deployed at client locations to perpetual license customers and decrease of cash used for the acquisition of assets deployed at client locations offset by an increase in acquisition of property and equipment.
Current wording
Investing activities used cash of $1,161,744 for the six months ended June 30, 2025, compared to cash used of $676,315 for the six months ended June 30, 2024. This increase in cash used was primarily due to the decrease in the transfer of title of assets deployed at client locations to perpetual license customers and an increase in investment in internally developed software and acquisition of property and equipment.
Previous wording
Cash used in financing activities during the three months ended March 31, 2025, was $13,849,213. This compares to $219,761 cash used by financing activities for the three months ended March 31, 2024. The increase in cash used was due to the refinancing of our debt from Fortress to BMO.
Current wording
Cash used in financing activities during the six months ended June 30, 2025, was $16,493,898. This compares to $465,317 cash used by financing activities for the six months ended June 30, 2024. The increase in cash used was due to the refinancing of our debt from Fortress to BMO and additional principal payments made on the debt in the current year.
Previous wording
Credit Facility. On January 6, 2025, we entered into a new credit agreement with BMO that provides for a $2,000,000 senior secured revolving credit facility and a $45,000,000 senior secured term loan. On January 6, 2025, we borrowed $45,000,000 under the new term loan and used this amount plus cash on hand to repay all amounts outstanding under the Fortress senior secured term loan agreement, which was terminated.
Current wording
Credit Facility. On January 6, 2025, we entered into a new credit agreement with BMO that provides for a $2,000,000 senior secured revolving credit facility and a $45,000,000 senior secured term loan. On January 6, 2025, we borrowed $45,000,000 under the new term loan and used this amount plus cash on hand to repay all amounts outstanding under the Fortress Credit Agreement, which was terminated.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Sub, the Company or by any of their respective subsidiaries, will be converted automatically into the right to receive $3.20 per share in cash, without interest and subject to any applicable withholding taxes.
Current report — wording carried from elsewhere
Results of operations for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
Cost of ancillary products and assembled component expense decreased $629,063, or 62.6% for the six months ended June 30, 2025, as compared to the same period in the prior year. The activity in Cost of ancillary products and assembled components reflects the component costs associated with the perpetual license sales of our progressive gaming systems.
Current report — wording carried from elsewhere
Depreciation and amortization increased $177,542, or 12.8% for the six months ended June 30, 2025, as compared to the same period in the prior year. This increase was primarily driven by amortization expense for certain intangible assets placed in service and to a lesser extent, depreciation expense associated with incremental placements of assets deployed at client locations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
21+3. Net of royalties, digital revenues grew to $2,768,700, up 6.3% for the three months ended March 31, 2025, as compared to the same period in the prior year.