Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 46

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 1
Chunk 46
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 and liabilities and their respective tax basis. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary
to reduce deferred tax assets to amounts expected to be realized.

Note
13. Commitments and Contingencies

Indemnification
Agreements

The
Company enters into indemnification provisions under its agreements with other entities in its ordinary course of business, typically
with business partners, customers, landlords, lenders and lessors. Under these provisions, the Company generally indemnifies and holds
harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities
or, in some cases, as a result of the indemnified party’s activities under the agreement. The maximum potential amount of future
payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material
costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated
fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of September
30, 2025 and December 31, 2024.

Digital
Securities

In
2018, the Company commenced an offering and issuance (the “LDC Offering”) of 285 million revenue participation interests
(the “Digital Securities”) of the net raffle revenue of LDC Crypto Universal Public Company Limited (“LDC”).
The Digital Securities do not have any voting rights, redemption rights, or liquidation rights, nor are they tied in any way to other
equity securities of LDC or the Company nor do they otherwise hold any rights that a holder of equity securities of LDC or the Company
may have or that a holder of traditional equity securities or capital stock may have. Rather, each of the holders of the Digital Securities
has a pro rata right to receive 7% of the net raffle revenue. If the net raffle revenue is zero for a given period, holders of the Digital
Securities are not eligible to receive any cash distributions from any raffle sweepstakes of LDC for such period. For the years ended
December 31, 2024