Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 107

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 107
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. Internal-use software development costs are amortized on a straight-line
basis over the estimated useful life of the software.

Goodwill
and Other Intangible Assets

Goodwill
represents the excess of the cost of assets acquired over the fair value of the net assets at the date of acquisition. Intangible assets
represent the fair value of separately recognizable intangible assets acquired in connection with the Company’s business combinations.
The Company evaluates its goodwill and other intangibles for impairment on an annual basis or whenever events or circumstances indicate
that an impairment may have occurred in accordance with the provisions of ASC 350, “Goodwill and Other Intangible Assets”.

Revenue
Recognition

Under
the new standard, Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”,
the Company recognizes revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists; (ii)
identifiable performance obligations under the contract exist; (iii) the transaction price is determinable for each performance obligation;
(iv) the transaction price is allocated to each performance obligation; and (v) when the performance obligations are satisfied. Revenues
are recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration
expected to be entitled to in exchange for those goods or services.

Lottery
game revenue

Items
that fall under this revenue classification include:

Lottery
game sales

The
Company’s performance obligations of delivering lottery games are satisfied at the time in which the digital representation of
the lottery game is delivered to the user of the B2C Platform or the commercial partner of the B2B API, and therefore are
recognized at a point in time. The Company receives consideration for lottery game sales at the time of delivery to the customer,
which may be the user or commercial partner, as applicable. There is no variable consideration related to lottery game sales. As
each individual lottery game delivered represents a distinct performance obligation and consideration for each game sale is fixed,
representing the standalone selling price, there is no allocation of consideration necessary.

In
accordance with Accounting Standards Codification (“ASC”) 606, the Company evaluates the presentation of revenue on a gross
versus net basis dependent on whether the Company is a principal or agent. In making this evaluation, some of the factors that are considered
include whether the Company has control over the specified good or services before they are transferred to the customer. The Company