Company: LTRYW
Filing Date: 2025-05-07
Form Type: S-1/A
Source: 0001641172-25-009053
Chunk: 198

Company: Lottery.com Inc.
Filing Date: 2025-05-07
Form: S-1/A
Chunk 198
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ivables was $ 33,000 whereas, before the project described above, it was $ 94,270at December 31, 2023.

Prepaid Expenses for Advertising Credits

Prepaid expenses consist of payments made on contractual obligations for services to be consumed in future periods. The Company entered into an agreement with two third parties to provide advertising services and issued equity instruments as compensation for the advertising services (“Prepaid advertising credits”). The Company expenses the service as it is performed by the third parties. The value of the services provided were used to value these contracts, except for the year ended December 31, 2021 the Company reserved for potential inability to realize $ 2,000,000of prepaid advertising credits in future periods. For the period ending December 31, 2024, the Company determined that approximately an additional $ 4,745,000of prepaid advertising credits purchased during 2017 and 2018 may not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 4,745,000and increased its reserve for loss of prepaid advertising credits by $ 4,745,000. Prepaid expenses are included in current assets on the consolidated balance sheets. The Company had total remaining prepaid expenses of $ 14,449,333and $ 19,020,159for the years ended December 31, 2024 and 2023, respectively.

Investments

On August 2, 2018, AutoLotto purchased 186,666shares of Class A-1 common stock of a third-party business development partner representing 4% of the total outstanding shares of the company. As this investment resulted in less than 20% ownership, it was accounted for using the cost basis method.

Property and equipment, net

Property and equipment are stated at cost. Depreciation and amortization are generally computed using the straight-line method over estimated useful lives ranging from three 3to five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Routine maintenance and repair costs are expensed as incurred. The 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

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