Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 124

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 124
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 loans without consent from the
noteholders.

During
the year ended December 31, 2021, the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors
for an aggregate amount of $38,893,733. The notes bear interest at 8% per year, are unsecured, and are due and payable on dates ranging
from December 2021 to December 2022. The Company could not prepay these loans without consent from the noteholders. As of December 31,
2021, the Series B Convertible Notes had a balance of $0.

During
the year ended December 31, 2021, the Company entered into amendments with six of the Series B promissory noteholders to increase
the principal value of the notes. The additional principal associated with the amendments totaled $3,552,114.
The amendments were accounted for as a debt extinguishment, whereby the old debt was derecognized and the new debt was recorded at
fair value. The Company recorded loss on extinguishment of $71,812
as a result of the amendment which was reported in “Other expenses” on the consolidated statements of operations and
comprehensive loss.

As
of October 29, 2021, all except $185,095 of the series B convertible notes were converted into 488,226 shares of Lottery.com common stock
after accounting for the 1:20 reverse stock split that took place on August 9, 2023.   December 31, 2021, the remaining notes comprising
the outstanding balance of $185,095 were no longer convertible and were reclassified to notes payable See Note 9. Accrued
interest on this note payable as of June 30, 2025 was $86,990.

     F-18 

Short
term loans

On
June 29, 2020, the Company entered into a Promissory Note with the U.S. Small Business Administration (“SBA”) for $150,000.
The loan has a 30thirty-year
term and bears interest at a rate of 3.75% per annum. Monthly principal and interest payments were deferred for twelve months after the
date of disbursement. The loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains
events of default and other provisions customary for a loan of this type. As of both June 30, 202