Company: LTRYW
Filing Date: 2025-04-22
Form Type: 10-K/A
Source: 0001641172-25-005663
Chunk: 151

Company: Lottery.com Inc.
Filing Date: 2025-04-22
Form: 10-K/A
Chunk 151
---
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

| Computers     
 and equipment |     | 3     
 years |
| Furniture     
 and fixtures  |     | 5     
 years |
| Software      |     | 3     
 years |

Leases

Right-of-use assets (“ROU assets”) represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and