Company: LTRYW
Filing Date: 2025-04-21
Form Type: 10-K
Source: 0001641172-25-005487
Chunk: 120

Company: Lottery.com Inc.
Filing Date: 2025-04-21
Form: 10-K
Item: Item 8
Chunk 120
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2017 and 2018 may not be able to be fully utilized. As a result,
the Company decreased prepaid expenses by $4,745,000 and 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 $14,449,333
and $19,020,159

Investments

On
August 2, 2018, AutoLotto purchased 186,666 shares of Class A-1 common stock of a third-party business development partner representing
4% of the total outstanding shares of the company. As this investment resulted in less than 20% ownership, it was accounted for using
the cost basis method.

Property
and equipment, net

Property
and equipment are stated at cost. Depreciation and amortization are generally computed using the straight-line method over estimated
useful lives ranging from three 3

Depreciation
of property and equipment is computed using the straight-line method over the following estimated useful lives:

Schedule
of Depreciation of Property and Equipment

  Computers          3      
  Furniture          5      
  Software           3      

Leases

Right-of-use
assets (“ ROU assets”) represent the Company’s right to use an underlying asset for the lease term and lease liabilities
represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at
commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation
of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period
incurred. As most of the leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information
available at commencement date in determining the present value of lease payments. Otherwise, the implicit rate was used when readily
determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will
exercise 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 elected a short-term lease exception policy on all classes of underlying
assets