Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 209

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part II, Item 8
Chunk 209
---
-house. Each of TinBu, Global Gaming, and Lottery.com is considered
a reporting unit for application of the annual review for potential impairment.

     F-16 

The
Company performed a valuation of each of the reporting units described above, using discounted cash flow methodologies and estimates
of fair market value. Given the results of the quantitative assessment, the Company determined that the goodwill for the TinBu and Global
Gaming reporting units was impaired. For the year ended December 31, 2023, the Company recognized goodwill impairment charges of $5.65
million for the TinBu reporting unit and $1.06 million for the Global Gaming reporting unit. The total impairment charges related to
goodwill were $6.71 million. In addition, it was determined that there was an impairment of certain intangible assets related to Global
Gaming. For the year ended December 31, 2023, the Company recorded impairment charges of $488 thousand to trade names and trademarks
and $312 thousand to technology acquired from Global Gaming. The total impairment charges to intangible assets were $800 thousand.

Additionally,
in connection with completion of the tax provision for 2023, a transaction which had been recorded for the year ended December 31, 2021
was reevaluated and a decision was made that it should not have been recorded and should be reversed. Specifically, at the end of 2021,
a decision was made to increase goodwill related to the acquisition of Global Gaming Enterprises, Inc. due to an incorrect conclusion
that “an adjustment should be made to goodwill for the recording of related deferred tax liabilities as the Company released $1.6
million of valuation allowance since the additional deferred tax liabilities represent a future source of taxable income”. This
approach improperly accelerated the effects of future amortization of intangible assets related to Global Gaming, resulting in inappropriately
releasing part of a valuation allowance for deferred taxes which is not in compliance with GAAP. At that time, the Company recorded an
increase to goodwill for Global Gaming and an income tax benefit each in the amount of $1,653,067. We reversed this transaction by reducing
goodwill for Global Gaming by $1,653,067 and increased accumulated deficit to remove the income tax benefit which was incorrectly recorded
for year ended December 31, 2021.

Similarly,
the Company performed an impairment analysis for the three months ended September 30, 2024 and as a result of that analysis it was determined