Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 169

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 169
---
 of our business operations, re-hire employees
and pay our expenses. The most likely source of such future funding presently available to us is through additional borrowings under
loan agreements or through the issuance of equity or debt securities. If lenders do not advance us amounts as agreed under loan agreements
or we are otherwise not able to secure the necessary capital to restart our operations, hire new employees, and obtain funding sufficient
to support and restart our operations, we may be forced to permanently cease our operations, sell off our assets and operations, and/or
seek bankruptcy protection, which could cause the value of our securities to become worthless.

These
conditions, along with our current lack of material revenue producing activities, and significant debt, raise substantial doubt about
our ability to continue as a going concern for the next 12 months. For more information, see Note 2 - Significant Accounting Policies,
Going Concern to the consolidated financial statements included herein.

Prior
Convertible Debt Obligations

Prior
to the Closing, we funded our operations through the issuance of convertible promissory notes.

From
August to October 2017, the Company entered into seven Convertible Promissory Note Agreements with unaffiliated investors for an aggregate
amount of $821,500. The notes bore interest at 10% per year, were unsecured, and were due and payable on June 30, 2019. The Company and
the noteholders executed amendments in February 2021 to extend the maturity date to December 21, 2021.

From
November 2019 through October 28, 2021, we issued approximately $48.2 million in aggregate principal amount of Series B convertible promissory
notes. The notes bore interest at 8% per year, were unsecured, and were due and payable on dates ranging from December 2020 to December
2022. For those promissory notes that would have matured on or before December 31, 2020, the parties extended the maturity date to December
21, 2021 through amendments executed in February 2021. The amendments also allowed for automatic conversion to equity as a result of
the Business Combination. Nearly all of the aforementioned promissory notes automatically converted into shares of Common Stock or were
terminated pursuant to their terms, as applicable, in connection with the Closing. Those that remain outstanding do not have conversion
terms that were triggered by the Closing.

Immediately
prior to the Closing, approximately $60.0 million of