Company: LTRYW
Filing Date: 2025-04-11
Form Type: S-1
Source: 0001641172-25-003901
Chunk: 137

Company: Lottery.com Inc.
Filing Date: 2025-04-11
Form: S-1
Chunk 137
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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, 2023 and 2022 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, 2021, which required a restatement of the previously issued financial statements for the year ended December 31, 2021 contained in
the Amended 2021 Annual Report.

We have begun implementing
remediation steps to improve our internal control over financial reporting and to remediate the identified material weaknesses, including
(i) adding personnel with sufficient accounting knowledge; (ii) adopting a more rigorous period-end review process for financial reporting;
(iii) adopting improved period close processes and accounting processes, and (iv) clearly defining and documenting the segregation of
duties for certain transactions and processes. Management has expanded and will continue to enhance our system of identifying transactions
and evaluating and