Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 197

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part II, Item 8
Chunk 197
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 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 a lessee and lessor. Further, management has elected a short-term lease exception policy on all
classes of underlying assets, 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-9 

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