Company: LTRYW
Filing Date: 2025-04-21
Form Type: 10-K
Source: 0001641172-25-005487
Chunk: 154

Company: Lottery.com Inc.
Filing Date: 2025-04-21
Form: 10-K
Item: Item 9
Chunk 154
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-15(e) and 15d-15(e) under the Exchange Act) as of December
31, 2022. Based on such reevaluation, our Chief Executive Officer concluded that, as of the end of the period covered by this Report,
our disclosure controls and procedures were still not effective due to the material weaknesses in our internal control over financial
reporting with respect to our financial statement close and reporting process, as described further below. As a result of this conclusion,
we retained third-party accounting consultants who performed additional analysis as deemed necessary to ensure that our financial statements
were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Report present
fairly in all material respects our financial position, results of operations and cash flows for the periods presented. The issues which
were identified during the initial and subsequent review continued until the new management team for the company began addressing them
in the fall of 2022. Efforts to strengthen and improve internal controls over accounting and financial reporting are ongoing.

  75  

Material
Weaknesses in Internal Control Over Financial Reporting

In
connection with the audit of our condensed consolidated financial statements included in this Report, our management has identified material
weaknesses in our internal control over financial reporting as of December 31, 2024 and 2023 relating to deficiencies in the design and
operation of the procedures relating to the closing of our financial statements. These include: (i) our lack of a sufficient number of
personnel with an appropriate level of knowledge and experience in accounting for complex or non-routine transactions, (ii) the fact
that our policies and procedures with respect to the review, supervision and monitoring of our accounting and reporting functions were
either not designed and in place or not operating effectively; (iii) our inability to complete the timely closing of financial books
at the quarter and fiscal year end, and (iv) incomplete segregation of duties in certain types of transactions and processes.

Specifically,
prior management did not design and maintain sufficient procedures and controls related to revenue recognition including those related
to ensuring accuracy of revenue recognized from non-routine transactions such as the sales of LotteryLink Credits. As a result, we determined
that there was an overstatement of revenue in the consolidated statement of operations of approximately $52.1 million during the year
ended December 31, 2021, which required a restatement of the previously issued financial statements for the year ended December 31, 2021