Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 27

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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5 and anticipates fully utilizing all of them by the end of 2026. Accordingly, they are presented as current assets.

Note
6. Notes Receivable

On
March 22, 2022, the Company entered into a 3three-year secured promissory note agreement with a principal amount of $2,000,000. The note
bears simple interest at the rate of approximately 3.1% annually, due upon maturity of the note. The note is secured by all assets, accounts,
and tangible and intangible property of the borrower and can be prepaid any time prior to its maturity date. As of June 30, 2025, the
entire $2,000,000 in principle was outstanding.

This
note was received in consideration for a portion of the development work that the Company performed for the borrower who had intended
to use the Company’s technology to launch its own online game in a jurisdiction outside the U.S., where the Company is unlikely
to operate.

Note
7. Write-Off of Goodwill and Intangibles

As
required by ASC 350 Intangibles – Goodwill and Other Impairment and ASC 360 – Impairment Testing: Long-Lived Assets, in connection
with preparing the consolidated financial statements for the period ended December 31, 2024, management conducted a review as to whether
there are conditions or circumstances that may indicate the impairment of its long-lived assets, goodwill and other indefinite-lived
intangible assets.

The
Company reviewed the goodwill and intangibles acquired in the acquisitions of TinBu, LLC and Global Gaming Enterprises, Inc., the domain
names and software purchased from third parties, and software developed in-house. Each of TinBu, Global Gaming, and Lottery.com is considered
a reporting unit for application of the annual review for potential impairment.

The
Company performed a valuation of each of the reporting units described above, using discounted cash flow methodologies and estimates
of fair market value. Given the results of the quantitative assessment, the Company determined that the goodwill for the TinBu and Global
Gaming reporting units was impaired. For the year ended December 31, 2023, the Company recognized goodwill impairment charges of $5.65
million for the TinBu reporting unit and $1.06 million for the Global Gaming reporting unit. The total impairment charges related to
goodwill were $6.71 million. In addition, it was determined that there was an impairment of certain intangible assets