Company: LTRYW
Filing Date: 2025-04-09
Form Type: 10-K/A
Source: 0001641172-25-003412
Chunk: 136

Company: Lottery.com Inc.
Filing Date: 2025-04-09
Form: 10-K/A
Chunk 136
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. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the
current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
(1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective,
or complex judgments. Communication of critical audit matters does not alter in any way our opinion on the financial statements taken
as a whole and we are not, by communicating the critical audit matters, providing separate opinions on the critical audit matter or on
the accounts or disclosures to which they relate.

Impairment Analysis

As discussed in Note 8 to the financial statements,
management performed their annual impairment analysis during the year ended December 31, 2023. As disclosed by management, the determination
of fair value using the income approach requires the use of significant estimates and assumptions, including forecasted revenue growth
rates and discount rates.

As a result of the annual impairment assessment, the
Company concluded that there was impairment to the intangible assets and goodwill of Autolotto and Tinbu, LLC in the aggregate $7,509,800.

The principal considerations for our determination
that performing procedures relating to the impairment analyses is a critical audit matter are the significant judgment by management when
developing the fair value measurements of the reporting unit, which in turn led to a high degree of auditor judgment, subjectivity and
effort in performing procedures and evaluating audit evidence related to management’s significant assumptions related to forecasted
revenue growth rates, discount rates, as applicable.

The primary procedures we performed to address this critical audit matter included:

| ● | We evaluated and recomputed the methodology used in connection with the Company’s impairment analysis, including review of the appropriate accounting literature, valuation model, significant assumptions used, and the completeness and accuracy of the underlying data used; |
| ● | We assessed the significant assumptions used by management relating to forecasted revenue growth rates, discount rates, and revenue multiples as applicable.                                                                                                                    |
| ● | We evaluated the reasonableness of the Company’s projections of future cash flows by comparing the assumptions used in the projections to actual results and other information deemed necessary as well as tested the mathematical accuracy of the calculations;                |
| ● | We evaluated the adequacy of the Company’s disclosures in the financial statements related to the impairment.                                                                                                                                                                   |

| F-2 |

Revenue Recognition

As discussed in Note 2 to the financial statements,