Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 24

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 guidance
is effective for the public companies with fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning
after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of this standard.

Note
3. Business Combination and Acquisitions

TDAC
Combination

On
October 29, 2021, the Company and AutoLotto consummated the transactions contemplated by the Merger Agreement. At the Closing, each share
of common stock and preferred stock of AutoLotto that was issued and outstanding immediately prior to the effective time of the Merger
(other than excluded shares as contemplated by the Merger Agreement) was cancelled and converted into the right to receive approximately
3.0058 shares (the “Exchange Ratio”) of Lottery.com. common stock.

     F-13 

The
Merger closing was a triggering event for the Series B convertible notes, of which $63.8 million was converted into 164,426 shares of
AutoLotto that were then converted into 488,225 shares of Lottery.com common stock using the Exchange Ratio.

At
the Closing, each option to purchase AutoLotto’s common stock, whether vested or unvested, was assumed and converted into an option
to purchase a number of shares of Lottery.com common stock in the manner set forth in the Merger Agreement.

The
Company accounted for the Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer
and TDAC as the accounting acquiree. Refer to Note 2, Summary of Significant Accounting Policies, for further details. Accordingly,
the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization.
The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded.

The
accompanying consolidated financial statements and related notes reflect the historical results of AutoLotto prior to the merger and
do not include the historical results of TDAC prior to the consummation of Business Combination.

Upon
the closing of the transaction, AutoLotto received total gross proceeds of approximately $42,794,000, from TDAC’s trust and operating
accounts. Total transaction costs were approximately $9,460,000, which principally consisted of advisory, legal and other professional
fees and were recorded in additional paid in capital. Cumulative debt repayments of approximately $11