Company: LTRYW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001641172-25-011865
Chunk: 6

Company: Lottery.com Inc.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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 in Mexican Pesos and the base currency for S& MI Ltd. is
British Pounds. Sales, costs and expenses are translated at the average exchange rates in effect during the reporting period. Foreign
currency translation gains and losses are included as a component of accumulated other comprehensive income (loss).

Cash
and Restricted Cash

As
of March 31, 2025 and December 31, 2024, cash was comprised of cash deposits. From time-to-time cash deposits with some banks may exceed
federally insured limits with the majority of cash held in one financial institution. Management believes all financial institutions
holding its cash are of high credit quality and does not believe the Company is subject to unusual credit risk beyond the normal credit
risk associated with commercial banking relationships.

The
Company had no marketable securities as of March 31, 2025 and December 31, 2024.

  F-8  

Accounts
Receivable

The
Company through its various merchant providers pre-authorizes forms of payment prior to the sale of digital representation of lottery
games to minimize exposure to losses related to uncollected payments and does not extend credit to the user of the B2C Platform or the
commercial partner of the B2B API, which are its customers, in the normal course of business. The Company estimates its bad debt exposure
each period and records a bad debt provision for accounts receivable it believes it may not collect in full. In the fall of 2024, the
Company completed a project whereby certain older items in accounts receivable for the TinBu subsidiary were offset against the allowance
for uncollectible receivables, resulting in a reduction in the number of individual items in accounts receivable which were aged greater
than 90 days and the total amount for them. At the completion of this project, the balance in the allowance for uncollectible receivables
was $22,016. At the end of 2024 the Company increased the allowance for uncollectible receivables by $10,984. At December 31, 2024 the
allowance for uncollectible receivables was $33,000 whereas, before the project described above, it was $94,270 at December 31, 2023.
The Company did not increase in its allowance for uncollectible receivables as of March 31, 2025.

Prepaid
Expenses for Advertising Credits

Prepaid
expenses consist of payments made on contractual obligations for