Company: LTRYW
Filing Date: 2025-04-09
Form Type: 10-K/A
Source: 0001641172-25-003412
Chunk: 128

Company: Lottery.com Inc.
Filing Date: 2025-04-09
Form: 10-K/A
Chunk 128
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 we may be forced to curtail or abandon our plans to recommence our operations and we may need to permanently cease our operations.”

Convertible Debt Obligations

Prior to the Closing, we funded our operations through the issuance of convertible promissory notes.

From August to October 2017, the Company entered into seven Convertible Promissory Note Agreements with unaffiliated investors for an aggregate amount of $821,500. The notes bore interest at 10% per year, were unsecured, and were due and payable on June 30, 2019. The Company and the noteholders executed amendments in February 2021 to extend the maturity date to December 21, 2021.

From November 2019 through October 28, 2021, we issued approximately $48.2 million in aggregate principal amount of Series B convertible promissory notes. The notes bore interest at 8% per year, were unsecured, and were due and payable on dates ranging from December 2020 to December 2022. For those promissory notes that would have matured on or before December 31, 2020, the parties extended the maturity date to December 21, 2021 through amendments executed in February 2021. The amendments also allowed for automatic conversion to equity as a result of the Business Combination. Nearly all of the aforementioned promissory notes automatically converted into shares of Common Stock or were terminated pursuant to their terms, as applicable, in connection with the Closing. Those that remain outstanding do not have conversion terms that were triggered by the Closing.

Immediately prior to the Closing, approximately $60.0 million of convertible debt was converted into equity of AutoLotto.

As of December 31, 2023, we had $2,570,993 of convertible debt outstanding.

See Item 1: Business: Overview and Recent Developments: “Loan Agreement with Woodford ,” “LoanAgreement with United Capital Investments London Limited,” and “Placement Agent Agreement with Univest Securities, LLC”above for additional information.

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Cash Flows

Net cash used by operating activities was $2.4 million for the year ended December 31, 2023, compared to net cash used by operating activities of $31.3 million for the year ended December 31, 2022. Factors affecting changes in operating cash flows were stock-based compensation expense along with decreased expenses for personnel costs, and sales and marketing activities in 2023 as compared to 202