Company: LTRYW
Filing Date: 2025-10-15
Form Type: 10-Q/A
Source: 0001493152-25-018121
Chunk: 28

Company: Lottery.com Inc.
Filing Date: 2025-10-15
Form: 10-Q/A
Chunk 28
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     | $ |            12,124 |   |

Depreciation expense for the three
months ended March 31, 2025 was $ 1,718
and was $2,846 for the three
months ended March 31, 2024.

| F-16 |

Note 5. Prepaid Expenses for Advertising Credits

Prepaid expenses consist of payments made on contractual obligations for services to be consumed in future periods. The Company entered into agreements with two third parties to provide advertising services and issued equity instruments as compensation for the advertising services (“Prepaid advertising credits”). The Company expenses the service as it is performed by the third parties. The value of the services provided were used to value these contracts, except for the year ended December 31, 2021 the Company reserved for potential inability to realize $ 2,000,000of prepaid advertising credits in future periods. For the period ending December 31, 2024, the Company determined that approximately an additional $ 4,745,000of prepaid advertising credits purchased during 2017 and 2018 may not be able to be fully utilized. As a result, the Company decreased prepaid expenses by $ 4,745,000and increased its reserve for loss of prepaid advertising credits by $ 4,745,000. Prepaid expenses are included in current assets on the consolidated balance sheets. The Company had total remaining prepaid expenses of $ 14,356,591for the three months ended March 31, 2025 and $ 14,449,333for the year ended December 31, 2024, respectively.

Note 6. Notes Receivable

On October 5, 2021, the Company provided
$250,000 to SP Global Holdings in exchange for a 3 year promissory note with interest at 8%. Principal and accrued interest are due in
a balloon payment at maturity. In March of 2025, the company received payment from SP Holdings for principal and accrued interest. The balance due
from SP Holdings at March 31, 2025 is $0.

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