Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 22

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 four-year statute of limitations.

Fair
Value of Financial Instruments

The
Company determines the fair value of its financial instruments in accordance with the provisions of ASC 820, Fair Value Measurements
and Disclosures (“ASC 820”), which establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels
of the fair value hierarchy under ASC 820 are described below:

    ●
    Level
    1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or
    liabilities

    ●
    Level
    2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially
    the full term of the asset or liability

    ●
    Level
    3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable
    assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability.

Determination
of fair value and the resulting hierarchy requires the use of observable market data whenever available.

The
classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement
of fair value.

     F-12 

Fair
value of stock options and warrants

Management
uses the Black-Scholes option-pricing model to calculate the fair value of stock options and warrants. Use of this method requires management
to make assumptions and estimates about the expected life of options and warrants, anticipated forfeitures, the risk-free rate, and the
volatility of the Company’s share price. In making these assumptions and estimates, management relies on historical market data.

Recent
Accounting Pronouncements

In
January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and other (Topic 350) (“ASU 2017-04”). ASU 2017-04
simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be
the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated
to that reporting unit