Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 202

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part II, Item 8
Chunk 202
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 assets or
    liabilities

    ●
    Level
    2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially
    the full term of the asset or liability

    ●
    Level
    3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable
    assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability.

Determination
of fair value and the resulting hierarchy requires the use of observable market data whenever available.

The
classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement
of fair value.

     F-12 

Fair
value of stock options and warrants

Management
uses the Black-Scholes option-pricing model to calculate the fair value of stock options and warrants. Use of this method requires management
to make assumptions and estimates about the expected life of options and warrants, anticipated forfeitures, the risk-free rate, and the
volatility of the Company’s share price. In making these assumptions and estimates, management relies on historical market data.

Recent
Accounting Pronouncements

In
January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and other (Topic 350) (“ASU 2017-04”). ASU 2017-04
simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be
the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated
to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative
impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero
or negative carrying amounts. The amendments in this ASU are effective for goodwill impairment tests in fiscal years beginning after
December 15, 2021, and early adoption is permitted. The Company is currently evaluating this new standard and management does not currently
believe it will have a material impact on its consolidated financial statements, depending on the outcome of future goodwill impairment
tests.

In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic