Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 15

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 that option. Lease expense for lease payments is
recognized on a straight-line basis over the lease term.

Under
the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component for all
classes of underlying assets as both a lessee and lessor. Further, management has elected a short-term lease exception policy on all
classes of underlying assets, permitting the Company to not apply the recognition requirements of this standard to short-term leases
(i.e. leases with terms of 12 months or less).

     F-9 

Internal
Use Software Development

Software
development costs incurred internally to develop software programs to be used solely to meet our internal needs and applications are
capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will
be used to perform the intended function. Additionally, we capitalize qualifying costs incurred for upgrades and enhancements to existing
software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities,
maintenance and minor modifications are expensed as incurred. Internal-use software development costs are amortized on a straight-line
basis over the estimated useful life of the software.

Goodwill
and Other Intangible Assets

Goodwill
represents the excess of the cost of assets acquired over the fair value of the net assets at the date of acquisition. Intangible assets
represent the fair value of separately recognizable intangible assets acquired in connection with the Company’s business combinations.
The Company evaluates its goodwill and other intangibles for impairment on an annual basis or whenever events or circumstances indicate
that an impairment may have occurred in accordance with the provisions of ASC 350, “Goodwill and Other Intangible Assets”.

Revenue
Recognition

Under
the new standard, Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”,
the Company recognizes revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists; (ii)
identifiable performance obligations under the contract exist; (iii) the transaction price is determinable for each performance obligation;
(iv) the transaction price is allocated to each performance obligation; and (v) when the performance obligations are satisfied. Revenues
are recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration
expected to be entitled to in exchange for those goods or services.

Lottery
game revenue

Items
that fall under this