Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 108

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 8
Chunk 108
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 price. For all of the Company’s transactions, management concluded that gross presentation is
appropriate, as the Company is primarily responsible for providing the performance obligation directly to the customers and assumes fulfillment
risk of all lottery game sales as it retains physical possession of lottery game sales tickets from time of sale until the point of redemption.
The Company also retains inventory risk on all lottery game sales tickets as they would be responsible for any potential winnings related
to lost or unredeemable tickets at the time of redemption. Finally, while states have the authority to establish lottery game sales prices,
the Company can add service fees to ticket prices evidencing its ability to establish the ultimate price of the lottery tickets being
sold.

     F-10 

Other
associated revenue

The
Company’s performance obligations in agreements with certain customers are to provide a license of intellectual property related
to the use of the Company’s tradename for marketing purposes by partners of the Company. Partners pay a license fee up front.
The transaction price is deemed to be the license issue fee stated in the contract. The license offered by the Company represents a symbolic
license which provides the customer with the right to use the Company’s intellectual property on an ongoing basis with continued
support throughout the term of the contract in the form of ongoing maintenance of the underlying intellectual property. There is no variable
consideration related to these performance obligations.

Arrangements
with multiple performance obligations

The
Company’s contracts with customers may include multiple performance obligations. For such arrangements, management allocates revenue
to each performance obligation based on its relative standalone selling price. Management generally determines standalone selling prices
based on the prices charged to customers.

Deferred
Revenue

The
Company records deferred revenue when cash payments are received or due in advance of any performance, including amounts which are refundable.

Payment
terms vary by the type and location of the customer and the products or services offered. The period between invoicing and when payment
is due is not significant. For certain products or services and customer types, management requires payment before the products or services
are delivered to the customer.

Contract
Assets

Given
the nature of the Company’s services and contracts, it has no contract assets.

Taxes

Taxes
assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions, that are collected
by us from a customer, are excluded from revenue.

Cost
of Revenue

Lottery
Specific Operations. Cost of revenue consists primarily of variable costs, comprising (i)