Company: LTRYW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001641172-25-011865
Chunk: 17

Company: Lottery.com Inc.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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2024, the Company
determined that approximately an additional $4,745,000 of prepaid advertising credits purchased during 2017 and 2018 may not be able
to be fully utilized. As a result, the Company decreased prepaid expenses by $4,745,000 and increased its reserve for loss of prepaid
advertising credits by $4,745,000. Prepaid expenses are included in current assets on the consolidated balance sheets. The Company had
total remaining prepaid expenses of $14,356,591 for the three months ended March 31, 2025 and $14,449,333 for the year ended December
31, 2024, respectively.

Note 6. Notes
Receivable

On
October 5, 2021, the Company provided $250,000 to SP Global Holdings in exchange for a 3 year promissory note with interest at 8%. Principal
and accrued interest are due in a balloon payment at maturity. In March of 2025, the company received payment from SP Holdings for principal
and accrued interest. The balance due from SP Holdings at March 31, 2025 is $0.

On
March 22, 2022, the Company entered into athree-year secured promissory note agreement with a
principal amount of $2,000,000. The note bears simple interest at the rate of approximately 3.1% annually, due upon maturity of the note.
The note is secured by all assets, accounts, and tangible and intangible property of the borrower and can be prepaid any time prior to
its maturity date. As of September 30, 2023, the entire $2,000,000 in principle was outstanding.

This
note was received in consideration for a portion of the development work that the Company performed for the borrower who had intended
to use the Company’s technology to launch its own online game in a jurisdiction outside the U. S., where the Company is unlikely
to operate.

Note 7. Write-Off
of Goodwill and Intangibles

As
required by ASC 350 Intangibles - Goodwill and Other Impairment and ASC 360 - Impairment Testing: Long-Lived Assets, in connection
with preparing the consolidated financial statements for the period ended December 31, 2023, management conducted a review as to whether
there were conditions or circumstances that may indicate the impairment of its long-lived assets, goodwill and other indefinite-lived
intangible