Company: LTRYW
Filing Date: 2025-11-20
Form Type: 10-Q
Source: 0001493152-25-024384
Chunk: 119

Company: Lottery.com Inc.
Filing Date: 2025-11-20
Form: 10-Q
Item: Part I, Item 8
Chunk 119
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    $12,124 

Depreciation
expense for the three months ended September 30, 2025 was $830
and was $2,095 for
the three months ended September 30, 2024.

Note
5. Prepaid Expenses

Prepaid
expenses consist primarily of advertising credits from two top tier media organizations that operate in the United States. The advertising
credits were obtained in return for warrants, shares of common stock and shares of preferred stock. The agreements do not specify a time
period for utilizing these credits and there is no requirement to provide cash or other consideration in connection with utilizing them.
The balance can be utilized at any time at the mutual consent of the parties. The Company expects to begin utilizing these credits in
the second half of 2025 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 3
three-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 September 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