Company: LTRYW
Filing Date: 2025-04-21
Form Type: 10-K
Source: 0001641172-25-005487
Chunk: 101

Company: Lottery.com Inc.
Filing Date: 2025-04-21
Form: 10-K
Item: Item 1A
Chunk 101
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 UCIL
under each’s loan agreement may depress the market price of our common stock and cause substantial dilution.

As of December 31, 2024,
per the Company’s books and records, we had borrowed $798,351 under the Loan Agreement to Woodford and $14,783 from UCIL [after
conversion of $682,859 from convertible debt to equity by UCIL in August of 2024]. Amounts borrowed can be repaid at any time without
penalty and accrue interest per the terms and conditions of each loan agreement. Amounts borrowed may, at each lender’s option,
be converted into shares of common stock, beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available
price per share of Company common stock.

  55  

In
addition, in connection with the loan agreements we agreed to grant warrants to each of Woodford and UCIL to purchase up to 15% of the
shares of common stock that were then issued and outstanding, each with an exercise price equal to the average of the closing price for
each of the ten days prior to the drawing of the first tranche. In the event we fail to repay the amounts borrowed when due or either
lender fails to convert the amount owed into shares of common stock, the exercise price of the warrants may be offset by amounts owed,
and in such case, the exercise price of the warrants will be subject to a further discount.

If
sequential conversions of amounts owed under either loan agreement or warrants are exercised, and sales of such resulting shares of common
stock take place, the price of our common stock may decline, and as a result, the lender will be entitled to receive an increasing number
of shares of common stock, which shares could then be sold in the market, triggering further price declines and conversions or exercises
for even larger numbers of shares, to the detriment of our investors. The shares of common stock issued may, under certain conditions,
be sold without restriction pursuant to Rule 144. As a result, the sale of these shares may adversely affect the market price, if any,
of our common stock.

Additionally,
the issuance of common stock upon conversion of the amounts owed under either loan agreement or the exercise of warrants will result
in immediate and substantial dilution to the interests of other stockholders.

On
June 12, 2023, the Company entered into an amendment of its Loan Agreement with Woodford (the “ Loan Agreement Amendment”