Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 113

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 8
Chunk 113
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 event for the Series B convertible notes, of which $63.8 million was converted into 164,426 shares of
AutoLotto that were then converted into 488,225 shares of Lottery.com common stock using the Exchange Ratio.

At
the Closing, each option to purchase AutoLotto’s common stock, whether vested or unvested, was assumed and converted into an option
to purchase a number of shares of Lottery.com common stock in the manner set forth in the Merger Agreement.

The
Company accounted for the Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer
and TDAC as the accounting acquiree. Refer to Note 2, Summary of Significant Accounting Policies, for further details. Accordingly,
the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization.
The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded.

The
accompanying consolidated financial statements and related notes reflect the historical results of AutoLotto prior to the merger and
do not include the historical results of TDAC prior to the consummation of Business Combination.

Upon
the closing of the transaction, AutoLotto received total gross proceeds of approximately $42,794,000, from TDAC’s trust and operating
accounts. Total transaction costs were approximately $9,460,000, which principally consisted of advisory, legal and other professional
fees and were recorded in additional paid in capital. Cumulative debt repayments of approximately $11,068,000, inclusive of accrued but
unpaid interest, were paid in conjunction with the close, which included approximately $5,475,000 repayment of notes payable to related
parties, and approximately $5,593,000 payment of accrued underwriter fees.

Pursuant
to the terms of the Business Combination Agreement, the holders of issued and outstanding shares of AutoLotto immediately prior to the
Closing (the “Sellers”) were entitled to receive up to 300,000 additional shares of Common Stock (the “Seller Earnout
Shares”) and Vadim Komissarov, Ilya Ponomarev and Marat Rosenberg (collectively the “TDAC Founders”) were also entitled
to receive up to 200,000 additional shares of Common Stock (the “TDAC Founder Earnout Shares” together with the Seller Earnout
Shares, the “Earnout Shares”). One