Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 17

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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 September 30, 2025 and December 31, 2024,
respectively.

Investments

On
August 2, 2018, AutoLotto purchased 186,666 shares of Class A-1 common stock of a third-party business development partner representing
4% of the total outstanding shares of the Company. As this investment resulted in less than 20% ownership, it was accounted for using
the cost basis method.

Property
and equipment, net

Property
and equipment are stated at cost. Depreciation and amortization are generally computed using the straight-line method over estimated
useful lives ranging from 3
three to five years. Leasehold improvements are amortized over
the shorter of the lease term or the estimated useful life of the asset. Routine maintenance and repair costs are expensed as incurred.
The costs of major additions, replacements and improvements are capitalized. Gains and losses realized on the sale or disposal of property
and equipment are recognized or charged to other expense in the consolidated statement of operations.

Depreciation
of property and equipment is computed using the straight-line method over the following estimated useful lives:

Schedule of Depreciation of Property and Equipment 

    Computers and equipment 
    3 years
  
    Furniture and fixtures 
    5 years
  
    Software 
    3 years

Leases

Right-of-use
assets (“ROU assets”) represent the Company’s right to use an underlying asset for the lease term and lease liabilities
represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at
commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation
of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period
incurred. As most of the leases do not provide an implicit rate, the Company would use its incremental borrowing rate based on the information
available at commencement date in determining the present value of lease payments. Otherwise, the implicit rate would be used when readily
determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will
exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under
the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component for all classes
of underlying assets as both