Company: LTRYW
Filing Date: 2025-04-21
Form Type: 10-K
Source: 0001641172-25-005487
Chunk: 121

Company: Lottery.com Inc.
Filing Date: 2025-04-21
Form: 10-K
Item: Item 8
Chunk 121
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, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i. e. leases with terms
of 12 months or less).

  F-12  

Internal
Use Software Development

Software
development costs incurred internally to develop software programs to be used solely to meet our internal needs and applications are
capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will
be used to perform the intended function. Additionally, we capitalize qualifying costs incurred for upgrades and enhancements to existing
software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities,
maintenance and minor modifications are expensed as incurred. Internal-use software development costs are amortized on a straight-line
basis over the estimated useful life of the software.

Goodwill
and Other Intangible Assets

Goodwill
represents the excess of the cost of assets acquired over the fair value of the net assets at the date of acquisition. Intangible assets
represent the fair value of separately recognizable intangible assets acquired in connection with the Company’s business combinations.
The Company evaluates its goodwill and other intangibles for impairment on an annual basis or whenever events or circumstances indicate
that an impairment may have occurred in accordance with the provisions of ASC 350, “ Goodwill and Other Intangible Assets

Revenue
Recognition

Under
the new standard, Accounting Standards Update (“ ASU”) 2014-09, “ Revenue from Contracts with Customers (Topic 606)

Lottery
game revenue

Items
that fall under this revenue classification include:

Lottery
game sales

The
Company’s performance obligations of delivering lottery games are satisfied at the time in which the digital representation of
the lottery game is delivered to the user of the B2C Platform or the commercial partner of the B2B API, therefore, are recognized at
a point in time. The Company receives consideration for lottery game sales at the time of delivery to the customer, which may be the
user or commercial partner, as applicable. There is no variable consideration related to lottery game sales. As each individual lottery
game delivered represents a distinct performance obligation and consideration for each game sale is fixed, representing the standalone
selling price, there is no allocation of consideration necessary.

In
accordance with Accounting Standards Codification (“ ASC”) 606, the Company evaluates the presentation of revenue on a gross
versus net basis dependent on if the Company is a principal or agent. In making this evaluation,