Company: LTRYW
Filing Date: 2025-05-07
Form Type: S-1/A
Source: 0001641172-25-009053
Chunk: 132

Company: Lottery.com Inc.
Filing Date: 2025-05-07
Form: S-1/A
Chunk 132
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1, our disclosure controls and procedures were not effective due to material weaknesses in our
internal control over financial reporting with respect to our financial statement close and reporting process.

In connection with the filing
of Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2021 (the “Amended 2021
Annual Report”), our new management, with the participation of our Chief Executive Officer, reevaluated the effectiveness of our
disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31,
2021 and determined they were not effective due to the material weaknesses in our internal control over financial reporting with respect
to our financial statement close and reporting process. Our disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management,
including our Chief Executive Officer, to allow timely decisions regarding required disclosures.

Material Weakness in Internal Control Over Financial Reporting

In connection with the audit
of our condensed consolidated financial statements included in this Report, our management identified material weaknesses in our internal
control over financial reporting as of December 31, 2024 and 2023 relating to deficiencies in the design and operation
of the procedures relating to the closing of our financial statements. These include: (i) our lack of a sufficient number of personnel
with an appropriate level of knowledge and experience in accounting for complex or non-routine transactions, (ii) the fact that our policies
and procedures with respect to the review, supervision and monitoring of our accounting and reporting functions were either not designed
and in place or not operating effectively; (iii) our inability to complete the timely closing of financial books at the quarter and fiscal
year end, and (iv) incomplete segregation of duties in certain types of transactions and processes.

Specifically, management
did not design and maintain sufficient procedures and controls related to revenue recognition including those related to ensuring accuracy
of revenue recognized from non-routine transactions such as the sales of LotteryLink Credits. As a result, we determined that there was
an overstatement of revenue in the consolidated statement of operations of approximately $52.1 million during the year ended December
31, 202