What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-06-15 compared with 2022-04-01 · 514 added, 1218 removed, 20 unchanged (99% of the section changed)

We were originally formed

as a Delaware corporation on March 17, 2016, for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase,

reorganization, recapitalization or other similar business combination with one or more businesses.

On October 29, 2021, we consummated

a business combination (the “Business Combination”) with AutoLotto, Inc.

and Recent Developments

were originally formed as a Delaware corporation on March 17, 2016, for the purpose of effecting a merger, share exchange, asset acquisition,

stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses.

On October 29, 2021,

we consummated a business combination (the “Business Combination”) with AutoLotto, Inc.

(“AutoLotto”).

Following the closing

of the Business Combination (the “Closing”) we changed our name from “Trident Acquisitions Corp.” to “Lottery.com

Inc.” and the business of AutoLotto became our business.

Tony DiMatteo and Matt Clemenson, the co-founders of AutoLotto, continue

to lead our Company as Chief Executive Officer and Chief Revenue Officer, respectively.

We are a leading provider

of domestic and international lottery products and services.

As an independent third-party lottery game service, we offer a platform that

we architected, developed, and operate to enable the remote purchase of legally sanctioned lottery games in the U.S.

and abroad (the

Our revenue generating activities consist of (i) offering the Platform via our Lottery.com app and our websites

to users located in the U.S.

and international jurisdictions where the sale of lottery games is legal and our services are enabled

for the remote purchase of sanctioned lottery games (our “B2C Platform”);

(ii) selling credits (“LotteryLink Credits”)

that can be exchanged for flexible promotion packages that include our marketing collateral, prepaid advertising, development services,

account management, and prepaid lottery games for use in promotions to our third-party master affiliate marketing partners for use by

them and by their sub-affiliates in undertaking affiliate marketing activities and promoting our B2C Platform (“LotteryLink”);

(iii) offering an internally developed, created, and operated business-to-business application programming interface (“API”)

of the Platform to enable our commercial partners, in permitted U.S.

the closing of the Business Combination (the “Closing”) we changed our name from “Trident Acquisitions Corp.”

to “Lottery.com Inc.” and the business of AutoLotto became our business.

Unless the context requires otherwise, references

to the “Company,” “we,” “us,” “our,” “Lottery.com” and “Lottery.com

Inc.” refer to Lottery.com Inc.

and its consolidated subsidiaries after the Closing.

July 6, 2022, the Company announced that the Audit Committee (the “Audit Committee”) of the board of directors of the Company

(the “Board”) had retained outside counsel to conduct an independent investigation that revealed instances of non-compliance

with state and federal laws concerning the states in which lottery tickets were procured as well as order fulfillment.

The investigation

also identified issues pertaining to the Company’s internal accounting controls (the “Internal Investigation”).

a report on the filings of the Internal Investigation, on June 30, 2022, the Board terminated the employment of Ryan Dickinson as the

Company’s President, Treasurer and Chief Financial Officer, effective July 1, 2022.

Subsequently, the Company initiated a review

of its cash balances and related disclosures as well as its revenue recognition processes and other internal accounting controls.

July 20, 2022, Armanino LLP (“Armanino”), the Company’s registered independent public accountant for the fiscal years

ended December 31, 2021 and 2022, advised the Company that its audited financial statements of for the year ended December 31, 2021 (the

“2021 Audit”) and the unaudited financial statements for the quarter ended March 31, 2022 (the “March 2022 Financials”),

should no longer be relied upon.

Armanino advised that it had determined, subsequent to the 2021 Audit and review of the March 2022 Financials,

that the Company had entered into a line of credit in January 2022 that was not disclosed in the footnotes to the 2021 Audit and was

not properly recorded in the March 2022 Financials (see Note 3 to the consolidated financial statements included herein for more details).

July 28, 2022, the Board determined that the Company did not have sufficient financial resources to fund its operations or pay certain

existing obligations, including its payroll and related obligations, due to a significant misstatement of our cash balances.

following day, on July 29, 2022, the Company effectively ceased operations (the “Operational Cessation”), when it furloughed

the majority of its employees and generally suspended its lottery game sales.

The Company’s remaining employees were limited to

the heads of the product, information technology and human resources teams as well as the entire legal and compliance team.

week, several additional employees were recalled from furlough.

All non-furloughed employees were retained, at the discretion of the

Company’s then Chief Operating Officer and Chief Legal Officer, to provide the minimal business functions needed to address the

Company’s legal and compliance issues and to secure necessary funding to resume the Company’s operations.

Less than half

of these non-furloughed employees remain active in the efforts to restore Company operations and as of March 31, 2023, approximately

$1.9 million in outstanding payroll obligations remain unpaid.

September 27, 2022, Armanino resigned as the independent registered public accounting firm of the Company, effective immediately.

October 7, 2022, the Audit Committee approved the engagement of Yusufali & Associates, LLC, (“Yusufali”) as the Company’s

new independent registered public accounting firm.

the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused its operations on restarting certain

of its core businesses (as described in more detail under “- Plans for Recommencement of Company Operations ” below),

completing the restatements of the Company’s 2021 Audit and March 2022 Financials and preparing and filing the Company’s

delinquent periodic reports, including Amendment No.

1 to the Company’s Annual Report on Form 10-K/A for the year ended December

31, 2021, which the Company filed on May 10, 2023, Amendment No.

1 to the Company’s Quarterly Report on Form 10-Q/A for the three

months ended March 31, 2022, which the Company filed on May 15, 2023, the Company’s Quarterly Reports on Form 10-Q for the three

months ended June 30, 2022 and September 30, 2022, which the Company filed on May 22 and 24, 2023, respectively, the Company’s

Quarterly Report on Form 10-Q for the three months ended March 31, 2023, and this Report.

March 23, 2023, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to appeal a determination

by the Listing Qualifications department (the “Staff”) of Nasdaq dated February 23, 2023, to delist the Company’s securities

At the hearing before the Panel on April 24, 2023, the Company presented its plan to complete the restatement of its financial

statements for the fiscal year ended December 31, 2021, and the subsequent quarter ended March 31, 2022, and to file the amended periodic

reports and all subsequent required filings with the SEC.

The Company requested the continued listing of its securities on Nasdaq pending

the completion of its compliance plan.

letter dated May 8, 2023, the Panel granted the Company’s request for continued listing, on an interim basis, subject to the Company

submitting financial projections for fiscal 2023 and filing the restated financial statements for the fiscal year ended December 31,

2021, and quarter ended March 31, 2022, with the SEC by May 15, 2023.

The Company satisfied these conditions and the Panel indicated

that it would review the filings, along with the updated projections, and thereafter determine whether to afford the Company additional

time to complete the compliance plan presented at the hearing.

letter dated May 24, 2023, the Panel notified the Company that it had determined to suspend trading and otherwise move to delist the

Company’s securities from Nasdaq effective with the open of the market on May 26, 2023.

The Company’s securities were suspended

from trading on that date but the securities were not delisted because the Company thereafter requested that the Panel reconsider its

determination to delist the Company’s securities from Nasdaq based upon what the Company believed to be mistakes of material fact

upon which the Panel had based its decision.

June 8, 2023, the Panel notified the Company that it had determined to reverse its prior decision and grant the Company’s request

for continued listing subject to the Company’s timely compliance with a number of conditions ultimately expiring on August 17,

2023, on which date the Company must satisfy all applicable criteria for continued listing on Nasdaq (the “June 8 th

As a result of the foregoing, the suspension from trading ceased and the Company’s securities were reinstated

for trading on Nasdaq effective with the open of the market on June 15, 2023.

See “ Risk Factors - Risks Related to Our Common

Stock and Warrants - We are not currently in compliance with the continued listing standards of Nasdaq and may not be able to regain

compliance with Nasdaq’s continued listing standards in the future ” for more information.

Agreement with Woodford

December 7, 2022, the Company entered into a loan agreement (the “Loan Agreement”) with Woodford Eurasia Assets, Ltd.

(“Woodford”),

pursuant to which Woodford agreed to provide the Company with up to $52.5 million, subject to certain conditions and requirements, of

which $300 thousand was received by December 31, 2022 and is owed pursuant to the terms of the Loan Agreement.

Amounts borrowed accrue

interest at the rate of 12% per annum (or 22% per annum upon the occurrence of an event of default) and are due within 12 months of the

date of each loan.

Amounts borrowed can be repaid at any time without penalty.

borrowed pursuant to the Loan Agreement are convertible, at Woodford’s option, into shares of the Company’s common stock,

par value $0.001 per share (the “common stock”), beginning 60 days after the first loan date at the rate of 80% of the lowest

publicly available price per share of common stock within 10 business days of the date of the Loan Agreement (which was equal to $0.28

per share), subject to a 4.99% beneficial ownership limitation and a separate limitation preventing Woodford from holding more than 19.99%

of the issued and outstanding common stock of the Company, without the Company obtaining shareholder approval for such issuance.

to the Loan Agreement included the resignation of four prior members of the Board (Lisa Borders, Steven M.

Cohen, Lawrence Anthony DiMatteo

and William Thompson, all of whom resigned from the Board in September 2022), and the appointment of two new independent directors.

loans under the Loan Agreement also require the Company to comply with all listing requirements, unless waived by Woodford.

Agreement also allows Woodford to nominate another director to the Board of Directors, in the event any independent member of the Board

of Directors resigns.

of the loans can only be used by to restart the Company’s operations and for general corporate purposes agreed to by Woodford.

Loan Agreement includes confidentiality obligations, representations, warranties, covenants, and events of default, which are customary

for a transaction of this size and nature.

Included in the Loan Agreement are covenants prohibiting us from (a) making any loan in excess

of $1 million or obtaining any loan in amount exceeding $1 million without the consent of Woodford, which consent may not be unreasonably

(b) selling more than $1 million in assets;

(d) encumbering any assets, except in the normal course of business, and not in an amount to exceed $1 million;

or restating our governing documents;

(f) declaring or paying any dividend;

(g) issuing any shares which negatively affects Woodford;

and (h) repurchasing any shares.

Company also agreed to grant warrants to purchase shares of common stock to Woodford (the “Woodford Warrants”) in an amount

equal to 15% of the Company’s 50,925,271 issued and outstanding shares of common stock.

Each Woodford Warrant has an exercise price

equal to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being

debited from the bank account of Woodford, which equates to an exercise price of $0.28 per share.

In the event the Company fails to repay

the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset

by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount (i.e., will

equal $0.21 per share).

connection with our entry into the Loan Agreement, the Company also entered into a Loan Agreement Deed, Debenture Deed and Securitization,

with Woodford (the “Security Agreement”), which provides Woodford with a first floating charge security interest over all

present and future assets of the Company in order to secure the repayment of amounts owed under the Loan Agreement.

The floating charge

may be converted into a fixed charge upon the occurrence of certain events including:

an event of default;

if Woodford reasonably believes

that any secured property may be in jeopardy or danger of being seized or sold;

or if Woodford reasonably considers that it is desirable

to protect its security interest.

The floating charge may be automatically converted into a fixed charge upon the occurrence of certain

other events.

The Security Agreement prohibits the Company from providing any other security interest over our assets, even if secondary

to Woodford, while the amounts borrowed under the Loan Agreement remain unpaid.

On June 12, 2023, the Company entered into an amendment of its Loan Agreement

with Woodford (the “Loan Agreement Amendment”).

The Loan Agreement Amendment provides that Woodford shall henceforth be able

to convert, in whole or in part, the outstanding balance of its loan into the conversion shares at a conversion price that represents

a further 25% discount to the original conversion price of 20%.

All other terms and conditions of securitization remain in full force

Prior to Operational Cessation

to the Operational Cessation, the Company was a provider of domestic and international lottery products and services.

As an independent

third-party lottery game service, we offered a platform that we developed and operated to enable the remote purchase of legally sanctioned

lottery games in the U.S.

and abroad (the “Platform”).

Our revenue generating activities included (i) offering the Platform

via our Lottery.com app and our websites to users located in the U.S.

and international jurisdictions where the sale of lottery games

was legal and our services were enabled for the remote purchase of legally sanctioned lottery games (our “B2C Platform”);

(ii) offering an internally developed, created and operated business-to-business application programming interface (“API”)

of the Platform, which enabled our commercial partners, in permitted U.S.

and international jurisdictions, to purchase certain legally

operated lottery games from us and to resell them to users located within their respective jurisdictions (“B2B API”);

(iv) delivering global lottery data, such as winning numbers and results, and subscriptions to data sets of our proprietary, anonymized

(iii) delivering global lottery data, such as winning numbers and results, and subscriptions to data sets of our proprietary, anonymized

transaction data pursuant to multi-year contracts to commercial digital subscribers (“Data Service”).

We currently derive substantially

all of our revenue from service fees paid to us by users of our B2C Platform, the sale of our LotteryLink Credits, revenue share arrangements

with commercial partners participating in our B2B API, and subscription fees from users of our Data Service.

We intend to pursue growth

through the implementation of new products and features within our B2C Platform services, expansion of our B2C Platform offering into

new domestic and international jurisdictions, expansion of our LotteryLink program and the sale of additional LotteryLink Credits, entry

into additional agreements with new commercial partners for our B2B API, execution of strategic acquisitions and other synergistic opportunities,

including gaining access to complementary and new technology through such acquisitions, and investment in and development of new technology,

and enhancement of our existing technology in each of our business lines, including distributed ledger technology.

In December 2021, we

finalized the acquisition of the domain name https://sports.com and are exploring opportunities for the intended strategic entry into

legal sports gaming verticals, which may include the distribution of sports lottery games.

We also expect to grow our brand and commitment

to social awareness through our affiliation with WinTogether, a registered 501(c)(3) charitable trust (“WinTogether”).

As a provider of lottery products

and services we are required to comply with, and our business is subject to, regulation in each jurisdiction in which we offer or market

our B2C Platform, or a commercial partner offers users access to lottery games through the B2B API.

In addition, we must also comply

with the requirements of federal and other domestic and foreign regulatory bodies and governmental authorities in jurisdictions in which

we operate or with authority over our business.

For example, currently, in the U.S., users of our B2C Platform are required to be physically

located, at the time of purchase, in the state or jurisdiction of the lottery authority offering the lottery game that they purchase on

our Platform.

We verify their location through geofencing technology integrated into our Platform.

A user physically located in one U.S.

may not purchase a lottery game sold by a lottery authority in another U.S.

jurisdiction.

Internationally, we operate our B2C Platform

in jurisdictions in which such service is lawful through commercial agreements with operators who have obtained approvals from the relevant

government regulators, if and as required, and users may only access lottery games if they are physically located in the jurisdiction

of the commercial partner at the time of purchase, as verified by geofencing technology.

Our business is additionally subject to multiple

other domestic and international laws, including those relating to the transmission of information, privacy, security, data retention,

and other consumer focused laws, and, as such, may be impacted by changes in such laws or changes in how such laws are interpreted.

more information, see “ Item 1.

Business — Regulation and Compliance ” below.

Our B2C Platform operates

independently from any lottery authority, operator, or other provider of lottery games and enables users to purchase draw lottery games

remotely from a mobile device or computer.

As of December 31, 2021, our B2C Platform was available to users in 12 U.S.

jurisdictions

and multiple international jurisdictions.

To use our B2C Platform, a

user must first create an account and respond to several compliance questions to confirm they are eligible to play.

The requirements are

designed to be a low friction experience for the user.

Once they complete the registration process, a user can begin playing the draw

lottery games offered in their jurisdiction, including choosing the number of plays, and whether to select their own numbers or to play

randomly selected draw numbers.

Following the completion of payment, the purchase is immediately confirmed, and the user receives a digital

representation of their draw lottery game in their app or web-based account, including confirmation of their draw numbers.

The confirmation

is not delayed by our subsequent acquisition of the physical lottery game from the lottery authority.

At this point, we fulfill the purchase

of the physical lottery game ticket by either employing couriers to directly acquire the draw lottery game ticket from brick-and-mortar

retailers for delivery to us, or by utilizing electronic lottery terminals licensed by us (or by our affiliates or retail partners, as

applicable) from the relevant lottery authority pursuant to official retail lottery licenses issued by such lottery authorities.

in further detail below, in either event, prior to the applicable draw, we securely hold the physical lottery game ticket on the user’s

If a user elects to play randomly

selected draw numbers, such draw numbers are immediately assigned by us and not by the lottery authority, to ensure that the user receives

immediate confirmation of their actual lottery game, without the delay that would otherwise be necessitated if the random draw numbers

were assigned by the lottery authority.

To generate these numbers, we deploy a pseudo random number generator (“pRNG”), being

an algorithm that uses mathematical formulas to produce sequences of random numbers.

We rely on the Cryptographic Module Validation Program

to validate the cryptographic modules of its pRNG.

The Cryptographic Module Validation Program is a joint effort between the National

Institute of Standards and Technology under the Department of Commerce and the Canadian Centre for Cyber Security, a branch of the Communications

Security Establishment, to promote the use of validated cryptographic modules and to validate cryptographic modules to Federal Information

Processing Standard 140-2 and 140-3, as tested by third party laboratories.

The use of the validated pRNG ensures that the randomly

selected draw numbers are truly random.

Whether selected by the user

or at random, the user’s draw lottery game numbers are securely retained in the Platform and queued for fulfillment by us with the

lottery authority via the electronic lottery terminals or deployment of couriers.

The original draw lottery game tickets are generally

considered “bearer instruments” under relevant law, meaning that the individual that holds, or “bears”, the lottery

game ticket, or “instrument”, is deemed the owner, as there is no other process to prove or designate ownership, and accordingly,

their safe keeping on behalf of the user is of the utmost importance.

We secure the original draw lottery game tickets in our physical,

restricted entry safes;

the original draw lottery game tickets do not leave the jurisdiction of original sale and are physically delivered

to a user only for the claims and redemption process.

We monitor all lottery games that our users play and automatically notify a user

by push notification and/or email if they are a winner.

For a user who wins a prize

less than $600, subject to applicable laws in each jurisdiction, we are able to instantly deposit the prize amount into the user’s

account and subsequently redeem the winning lottery game ticket on behalf of the user.

In accordance with Federal tax reporting requirements,

for a user who wins a prize of $600 or more, we provide the user with the original lottery game ticket for their direct claim and redemption.

Unless otherwise required by law, we charge a service fee on all lottery games purchased on our B2C Platform but do not take a commission

from our user’s prizes.

We currently hold a retail

lottery license issued by the Texas Lottery Commission.

For more information, see

Business — Our Services — B2C Platform .”

In the third quarter of 2021,

the Company launched its affiliate marketing program, which it has branded LotteryLink.

In general, affiliate marketing

is a cost-effective advertising model in which a B2C vendor compensates independent third-party marketers for successfully generating

new consumers to the B2C vendor’s online platforms and converting them to users.

The independent third-party marketers are referred

to as “Affiliates”;

the Affiliate with the direct relationship with the B2C vendor is referred to as the “Master Affiliate”

and any Affiliates that only have a direct relationship with the Master Affiliate, and not directly with the B2C vendor, are referred

to as “Sub-Affiliates”.

In an effort to ensure that their products reach a broad array of potential customers, B2C vendors

work directly and indirectly with Affiliates across multiple industries and marketing channels who undertake promotional and marketing

initiatives and activities to direct consumers to our B2C Platform.

The B2C vendor pays the Affiliates a commission to incentivize their

promotional activities.

Affiliates purchase promotional materials from the B2C vendor for such promotional activities and are otherwise

generally limited in the type and scope of marketing materials and collateral that they may use in their promotional activities.

As part of LotteryLink, we

pay each of our Affiliates a percentage of the revenues derived from each new customer they refer to us and, if such customer is located

in a jurisdiction in which they may lawfully use our B2C Platform, is converted to a user.

These commissions are paid for a contractually

specified duration of such user’s activity on the B2C Platform.

In support of their promotional

activities, our Master Affiliates purchase credits, referred to as a LotteryLink Credit, from the Company that can be redeemed for flexible

promotion packages, consisting of marketing collateral, prepaid advertising, development services, account management, and prepaid lottery

games that can be used in promotions.

The Company may introduce additional redemption opportunities for LotteryLink Credits in the future.

A Master Affiliate may allocate its LotteryLink Credits to its Sub-Affiliates for such Sub-Affiliate’s redemption from the Company.

The LotteryLink Credits are intended to help our Affiliates reach new customers and convert such customers to users of our B2C Platform.

Our B2B API provides a secure

distribution interface through which our authorized third-party omni-channel and multi-product commercial partners acquire access through

our Platform to certain legally operated lottery games by integrating our B2B API into their existing back-office functionality and user

facing websites and applications to enable our commercial partners to purchase such draw lottery games from us for resale to users within

their permitted jurisdictions.

Our B2B API is enabled in the U.S.

and internationally.

Each time a commercial partner,

on behalf of a user, requests a play from us via the B2B API, such commercial partner acquires the rights to the number of requested plays,

and is provided with either pre-selected numbers as requested by the commercial partner’s user, or is randomly assigned numbers

by the pRNG that is communicated via the B2B API to the commercial partner.

In either event, the commercial partner automatically receives

a digital representation of the purchased draw lottery games, including draw numbers, without delay for the subsequent acquisition of

the physical lottery game by us.

We fulfill the acquisition

of the draw lottery games by utilizing the electronic lottery terminals installed in our, or our affiliate’s or retail partner’s

locations under the authority of the applicable lottery authority pursuant to official retail licenses from such lottery authorities.

The original lottery game tickets are securely stored by us in physical, restricted entry safes located in the jurisdiction of original

The original lottery game ticket does not leave the jurisdiction of original sale and is only physically delivered to a winning

user if and when such user is required to present such original lottery game ticket for the claims and redemption process.

nor our commercial partners ever take a commission from our users’ prizes.

Our commercial partners charge a service fee and, in

international jurisdictions, a mark-up, on their purchase price of the lottery game to their users.

We receive a share of our commercial

partners’ revenue on each lottery game purchased.

For more information, see

Business — Our Services — B2B API .”

We deliver daily results of

domestic and international lottery games from more than 40 countries to over 400 digital publishers and media organizations, pulled from

real time primary source data.

In some instances, we charge a subscription fee or per-record fee to use our Data Service, and in other

instances, the Data Service is included within a bundle of other provided services, such as affiliate marketing agreements.

We additionally

rely on this information to make winning lottery numbers and results for all U.S.

in-state and multi-state games available through

our websites, apps, and APIs.

We additionally enter into commercial agreements pursuant to which in consideration of pre-paid fees we

provide data sets of our proprietary, anonymized transaction data pursuant to multi-year contracts and in accordance with the requirements

of our Terms of Service.

For more information, see

Business — Our Services — Data Service .”

The WinTogether Platform

We are affiliated with WinTogether,

which supports charitable, educational, and scientific causes.

We operate https://wintogether.org (the “WinTogether Platform”)

on behalf of WinTogether, which offers sweepstakes that support charitable causes selected by the trustees of WinTogether and incentivizes

participants to donate to those chosen causes by entering donors into sweepstakes for the chance to win cash prizes, luxury items, and

exceptional experiences.

In exchange for operating the WinTogether Platform and the sweepstakes on behalf of WinTogether, we receive a

fee from the gross donations from each sweepstakes.

While the revenue received from our services relating to the WinTogether Platform

are currently nominal, we believe that this may be a scalable source of revenue in the future, as well as a mechanism to increase our

brand reputation and recognition by sweepstake participants, which could result in the acquisition and monetization of new users to our

B2C Platform.

For more information, see

Business — Our Services — The WinTogether Platform .”

Lottery Market Size

According to the World Lottery

Association, in 2020, the global lottery game market was valued at $318 billion in worldwide gross sales in 2020, and global Gross

Gaming Revenue (“GGR”), or the difference between gross sales and the amount paid out in winnings, totaled $105 billion.

a market research company, forecasted the global lottery market to grow to more than $550 billion in worldwide gross sales in 2025.

Historically, governmental agencies have operated lotteries under a mandate to generate funds to support or fund social causes from the

net proceeds from such lotteries.

The social causes may include educational initiatives, cultural undertakings, sports and leisure, and

other social or environmental causes.

Alternatively, the net proceeds from lotteries may be directed to governmental treasuries for general

disbursement.

According to the World Lottery Association, the total amount of money that global lottery members of the World Lottery Association

paid a total of $84.3 billion to social causes and to governmental treasuries in 2020.

This amount represents 26.6 cents for every dollar

Lottery Market Segmentation

The global lottery game market

is generally divided into three main categories of products (i) draw, or terminal-based, games;

(ii) instant win, or “scratcher”

and (iii) sports lottery games.

In addition to the three main categories, the regulatory authorities that license lottery

games may also offer other forms of games of chance and casino-style games.

Draw, or terminal-based, games

are the oldest and most common forms of lottery games.

Some of the popular domestic and international draw games include Mega Millions ® ,

Powerball ® , Il Gioco del Lotto ® ,

elGordo ® , Euro Jackpot ® , and €uro-Millions ® .

In the U.S., prices for such draw games typically begin at $1 per game and additional options, including bonus plays, extra draws, and

second chance draws, are generally available for an additional cost.

When a player plays a draw

game, they acquire a set of numbers, letters, symbols, or a combination thereof;

the goal is to match those numbers, letters, and symbols

to those drawn by the lottery authority on a specified date and time.

Depending on the rules of the draw game, the numbers, letters, and

symbols may be designated by the player or selected by a random number generator.

Draw games are sold by officially licensed retailers

with valid agreements with the applicable lottery authority and transacted through electronic terminals installed by such lottery authority

for the purpose of selling the lottery game and printing the lottery game ticket, validating sold lottery game tickets, and performing

other administrative functions.

Draw games have historically

been purchased in person directly from traditional licensed brick-and-mortar retail locations, such as convenience stores, tabletop games

retailers, or gas stations.

According to Technavio, purchases from these retailers contributed over 93.7% to the overall draw game lottery

market in 2019, and 93.3% in 2020.

These retailers process the transaction via the electronic terminals and provide the player with bearer

documentation evidencing their purchase.

Alternatively, in jurisdictions in which online lottery game sales — or iLottery — is

legal, the player may alternatively complete the entire transaction remotely from their mobile device or computer (“Online Lottery”).

Online Lottery requires state legislative and regulatory approval for the account funding, acquisition, and play of lottery games to be

managed online, without the requirement to physically be in or near a brick-and-mortar retail seller of lottery games.

For more information,

see “ Item 1.

Business — Our Industry — Global Market Trends .”

According to industry forecasts

by Technavio, sales of draw lottery games comprised 54.5% of the overall global lottery market in 2020 and are anticipated to grow at

approximately 9.0% CAGR between 2020 and 2025, forecasting an increase of approximately 54% in worldwide legal gross sales, from $194 billion

in worldwide legal gross sales in 2020 to nearly $300 billion in worldwide legal gross sales in 2025.

In the U.S., draw lottery

games are offered in all 46 states and 3 territories in which lottery games are legal.

Instant Win Games

Instant win, or “scratch”

lottery games are designed to be quick and easy to play.

These games have the numbers, letters, symbols, or a combination thereof concealed

on a scratch card.

To play, the player removes or scratches off the covering to instantly reveal their winning status.

Games are often

thematically linked to popular interests, such as sporting events, specific board games, or other specialized interests or activities.

Popular titles include Crossword Connect ® , Deuces Wild ® ,

and Monopoly Millionaires’ Club ® .

In the U.S., prices for scratch lottery games

typically range from $1 to as much as $50 per scratch card.

Scratch lottery games are sold by licensed retail outlets and are additionally

available for online play in jurisdictions that authorize Online Lottery.

Online scratch lottery games typically have all the elements

of a physical scratch lottery game, but in digitized form, and often with additional visual and entertainment elements.

The market for this game-type

has experienced growth attributed to the relatively low retail price of scratch lottery games and the opportunity to instantly win prizes.

Sales of scratch lottery games comprised 26.6% of the overall global lottery market in 2020;

according to industry forecasts by Technavio,

the scratch lottery games market is expected to increase approximately 58%, from $95 billion in worldwide legal gross sales in 2020

to $150 billion in worldwide legal gross sales in 2025.

In the U.S., scratch games are offered in all but two jurisdictions — North

Dakota and Wyoming — in which lottery games are legal.

According to Eilers &

Krejcik, a global gaming industry research firm, in the U.S., in 2021, instant ticket sales increased to $17.5 billion, or by 9%, as compared

to 2020, due to a unique combination of strong discretionary income growth from real wage growth and U.S.

federal and state income support,

relatively restricted competing entertainment and gaming options, and stable growth trends leading into the COVID-19 pandemic.

We are not currently engaged

in the deployment of scratch lottery games through the B2C Platform.

Sports Lotteries

Sports lotteries are a variant

of pari-mutuel betting, in which users pay a fixed price to select a sporting event’s outcome and the users with the most accurate

prediction of such outcome win prizes.

Sales of sports lottery games

comprised 18.9% of the overall global lottery market in 2020;

according to industry forecasts by Technavio, the sports lotteries market

is expected to increase approximately 51%, from $67 billion in worldwide legal gross sales in 2020 to $101 billion in worldwide

legal gross sales in 2025.

We are not currently engaged

in the deployment of sports lottery games.

In December 2021, we finalized the acquisition of https://sports.com and are exploring opportunities

for the intended strategic entry into legal sports gaming verticals, which may include the distribution of sports lottery games.

Geographic Distribution

Legalized lottery products

are operated by national, state, provincial, or municipal governmental authorities and their licensees in more than 100 countries under

separate, regulated regimes.

In North America, in-state and multi-state sanctioned lottery products are offered in 46 U.S.

jurisdictions, including the District of Columbia, Puerto Rico, and the U.S.

Virgin Islands, as well as every Canadian

province and Mexico.

Lotteries have varying degrees

of governmental and regulatory acceptance across the globe, with certain countries, states, provinces, territories or even municipalities

prohibiting lotteries, and other jurisdictions endorsing all or only certain forms of lotteries at the national or state, provincial,

territorial, or municipal level.

According to Technavio, in 2020, the Asia-Pacific region comprised 37.1% market share of all lottery

sales, Europe comprised 31.9%, the Middle East and Africa region comprised 3.4%, South America comprised 2.3%, and North America comprised

more than 25% market share of all lottery sales.

Lottery sales include all forms of lottery games, including draw, scratch, and sports

lottery games, as well as revenues from the sale, lease or license of lottery systems, terminals, or vending machines.

In the U.S., the Multi-State

Lottery Association (“MUSL”) is a non-profit association owned and operated by its U.S.

state and territory member lottery

associations that, amongst other activities, assists its members in the development and issuance of multi-jurisdictional draw and scratch

lottery games, including Powerball ® , MegaMillions ®

and Monopoly Millionaires’ Club ® .

MUSL games are multi-jurisdictional — or

“multi-state” — meaning one type of lottery game may be offered for play in multiple jurisdictions, subject

to the applicable laws and regulations of each such jurisdiction, as opposed to in-state games, which are games developed for play by

a state lottery authority within its jurisdiction.

According to Eilers &

Krejcik, in 2021, total U.S.

lottery sales increased to $106 billion, or by 17%, as compared to 2020, reflecting the largest amount on

record as a result of record sales of both instant ticket and draw-based sales.

In 2021, in the U.S., instant ticket sales increased 13%

from 2020 to $72 billion, and draw-based sales increased by 24% to $33 billion as compared to 2020.

These sales increases built on an

already impressive year for lottery sales during 2020, when spending on lottery games increased by 11% from 2019.

Whereas the 10-year

average annual growth rate on lottery game spending between 2010 and 2019 was approximately 4%, the average annual lottery spending grew

by approximately 14% between 2019 and 2021.

In addition, Eilers &

Krejcik reported that, as of February 2022, 38% of adults in the U.S.

have access to operational online sports lottery betting.

total sports betting market, excluding tribal sports betting markets but including sports lottery betting, had total gross sales of $57.7

billion in 2021, which represents an increase of 167% from 2020.

Total sports betting GGR in 2021 was $4.3 billion, or an increase of

178%, as compared to 2020.

Total sports betting gross hold percentage, or the amount of total sales that are not paid out in winnings,

was 7.5% in 2021 as compared to 7.2% in 2020.

Online sports lottery betting accounted for 87% of total sports betting gross sales and

83% of GGR in 2021, as compared to 80% and 73%, respectively, in 2020.

Global Market Trends

Many national, state, provincial,

territorial, and municipal governments rely on revenues from the sale of lottery games for a significant source of public program funding,

including recreational programs, educational programs, and environmental efforts.

When under revenue pressure due to factors that may

include increased expenses, decreased access to general revenues, and other impacts to annual budgets and tax revenues, including events

such as the impact of the COVID-19 pandemic, these entities often look to revenue from gaming, including lottery game sales, as a continued

and potentially increased revenue opportunity for governmental authorities.

Traditionally, lottery games

have only been sold by government licensees at brick-and-mortar facilities, such as convenience stores, grocery stores, and small retailers,

which restricted players’ ability to purchase lottery games to those times when they were physically within the retailer’s

licensed location, and accordingly potentially restricted a player’s opportunities to play and the governmental authority’s

lottery derived revenues.

However, as of December 31, 2021, Online Lottery had been authorized under regulations in 15 jurisdictions,

being Arizona, Connecticut, Georgia, Illinois, Kentucky, Michigan, New Hampshire, New York, North Carolina, North Dakota, Pennsylvania,

Rhode Island, South Dakota, Virginia, and the District of Columbia.

Access to in-state or multi-state draw games are available in all

of these jurisdictions.

Online versions of instant win, or “scratcher” tickets are authorized in eight of these jurisdictions.

In New York and Virginia, Online Lottery is available, but only through subscriptions in which a player must subscribe for automatic

purchase of games on a recurring basis for multiple weeks of play.

According to Eilers &

Krejcik Gaming, in 2021, Online Lottery gross sales in the U.S.

increased more than 28% year-on-year to $5.1 billion, due to

improved same-store sales growth across most U.S.

states and incremental growth from new jurisdictions that introduced Online Lotteries.

In 2021, Online Lotteries represented approximately 5% of total U.S.

lottery game sales.

In jurisdictions in the U.S.

which Online Lottery is legal, a player is required to undergo account verification requirements and to transfer funds from their payment

provider or linked bank account to their account, and then can only play the games that are available.

There is typically a minimum amount

of funds that must be transferred to the player’s account, regardless of the amount that the player wishes to play.

The player must

have an account with each lottery authority to play in that lottery authority’s jurisdiction.

Winning players may be notified by

either an email or a push notification or both and, to the extent permitted by law and in accordance with Federal reporting requirements,

receive redemption of prizes less than $600 directly to their accounts.

The States of New York and

New Jersey have introduced a licensed lottery courier program to register lottery couriers within such jurisdictions and govern the operation

of lottery couriers’ activities, regulated by the New York State Gaming Commission and the New Jersey Lottery Commission, respectively.

They are the only two jurisdictions with such privileged licensing regimes and we are not aware of any other jurisdiction introducing

a similar program.

While such licensing creates an additional financial burden as well as a potential timing delay in advancing operations

in those jurisdictions, upon receipt of licensure, it provides certainty to the ability to operate in such jurisdiction.

The Company intends

to apply for a lottery courier license in each of New York and New Jersey in 2022.

Our Platform, which deploys

distributed ledger technology to ensure data security, provides registered B2C Platform users with the ability to purchase in-state and

multi-state lottery draw games directly via a mobile device or computer, to securely maintain their acquired lottery game ticket(s), to

obtain comprehensive multi-jurisdiction lottery result information, and, to the extent allowed by applicable law, to automatically redeem

a winning lottery game of less than $600.

The mobile application is offered for mobile devices that operate under iOS and Android and

can be downloaded for free from the Apple App Store and Google Play stores, respectively, and other mobile download sites.

material updates of our mobile applications on an ongoing basis to provide new functionality and upgraded performance.

to our mobile application, we offer our https://play.lottery.com site to users located within authorized and enabled U.S.

and international

jurisdictions for the remote purchase of lottery games in permitted jurisdictions, and additionally maintain our https://lottery.com site

to support a variety of general functions and information delivery.

We offer our B2C Platform

to users located in California, Colorado, Georgia, Michigan, Minnesota, New Hampshire, Ohio, Oregon, Pennsylvania, Texas, Washington,

and the District of Columbia.

We anticipate being able to offer this service in up to five additional jurisdictions by the end of 2022,

subject to regulatory approval in certain jurisdictions in which it is required.

Additionally, our B2C Platform is available to users

in international jurisdictions.

To register on our B2C Platform

and purchase a lottery game, a user must create an account, be the greater of 18 years old or the age of majority in the jurisdiction

in which they are situated, and be physically located within such jurisdiction, as verified by internally and externally deployed geofencing

Individuals that are not physically located within one of the jurisdictions where our services are offered, as verified by

geofencing technology, are not permitted to register to purchase a lottery game.

In the U.S., a user may only purchase tickets offered

by the lottery authority of the jurisdiction in which such user is situated.

Our registration and user

interfaces are designed to be easy to use and provide for the creation of an account and purchase of a lottery game with minimum friction

and without the creation of a mobile wallet or requirement to pre-load minimum funds.

Purchases may be completed on our B2C Platform in

by use of major credit cards, linked financial institution accounts, other enabled payment providers, or credits from past

winnings, and internationally by use of certain major credit cards or credits from past winnings.

In accordance with the terms

of our Responsible Gaming Policy, users are limited to purchasing up to 50 lottery games per game.

For more information, see “ Item

Business — Regulation and Compliance — Responsible and Underage Gaming .”

Once a user of our B2C Platform

has created an account and completed several required, simple compliance requirements, they select the draw lottery game they would like

to play, whether they would select their own numbers or play randomly selected draw numbers, the number of games they would like to play,

and complete the payment processing requirements, following which the acquisition is immediately confirmed and the user receives a digital

representation of their draw lottery game, including their draw numbers, in their app or web-based account, without delay for our acquisition

of the physical lottery game.

If a user elects to play randomly selected draw numbers, such draw numbers are immediately assigned by our

The user’s random or

pre-selected lottery game numbers are retained in the Platform and queued for fulfillment by us.

We fulfill the acquisition of draw lottery

games by either employing couriers that directly acquire the draw lottery games from brick-and-mortar retailers, or by leveraging electronic

lottery terminals installed under the authority of the applicable lottery authority pursuant to a retail license received by us or a commercial

partner, which process lottery game sales in bulk, daily, for us.

The original draw lottery

game tickets are considered bearer instruments and, accordingly, their safekeeping is of the utmost importance.

We store and safeguard

original draw lottery game tickets in physical, restricted entry safes;

they do not leave the jurisdiction of their original sale and

are only physically delivered to a user, if required, for the claims and redemption process.

Unlike purchases from traditional brick-and-mortar

lottery retailers, in which lottery game tickets are susceptible to being lost, damaged, stolen or — as a bearer instrument — claimed

by a person other than the purchaser, lottery games purchased through our B2C Platform are securely maintained and linked to the user

using rigorous technical requirements.

The importance of this safekeeping cannot be understated.

In 2021, a winner of a $26 million

dollar California Lottery prize advised that they destroyed the winning draw lottery game ticket in the laundry;

according to California

Lottery officials, if someone loses a ticket, they must provide evidence of ownership, such as a photograph or digital representation

of the front and back of the ticket, otherwise their claim will fail.

Our Platform, with its secure maintenance of the original lottery

ticket, which safeguards against destruction, loss or theft, is designed to prevent events such as this.

We monitor all lottery games

that our users play and automatically notify a user by push notification and email if they are a winner.

We monitor all draws and notify

users via the app or their web-based account of winning lottery games.

In the event a user wins a prize in an amount that is less than

$600, subject to applicable laws in each jurisdiction, we are able to distribute a payout of the prize amount to the user’s account

immediately following public announcement of the draw, which funds may then be deployed by the user to purchase additional lottery games

or be transferred by the user from their account to their linked financial institution.

We then redeem the winning game from the lottery

authority on the user’s behalf.

In the event that a user wins a prize of $600 or more, we provide the user their original lottery

game ticket for their direct claim and redemption directly from the lottery authority.

Under federal U.S.

law, lottery prizes of

$600 or more are subject to certain federal and applicable tax withholdings as reported on a Form W-2G, and the residency of the

prize winner must be reported on federal and applicable state income tax returns, which is the basis for the prizes over this threshold

being collected directly from the lottery authority.

We do not take any portion

of a user’s winnings.

Our revenue is the retail value of the acquired lottery game and the service fee charged to the user, which

we impose on each lottery game purchased from our B2C Platform.

The amount of the service fee is based upon several factors, including

the retail value of the lottery game purchased by a user, the number of lottery games purchased by a user, and whether such user is located

within the U.S.

or internationally.

Currently, in the U.S., the

minimum service fee is $0.50 for the purchase of a $1 lottery game and $1 for the purchase of a $2 lottery game;

the service fee for additional

lottery games purchased in the same transaction is 6% of the face value of all lottery games purchased.

For example, the service fee for

the purchase of five $2 tickets is $1.60, being the $1 base service fee, plus 6% of the aggregate value of the face value of all lottery

games purchased.

In 2021, our domestic B2C Platform users purchased an average of 3.9 lottery games per transaction at an average service

fee of $0.37 per lottery game.

In 2021, we had an average gross profit per domestic B2C Platform user of approximately $26.64.

not incur any expenses on digital marketing in 2021.

In 2020, the average customer acquisition cost was $4.01 per new user.

customer acquisition costs per new user include digital marketing costs but exclude non-digital marketing costs and any new users who

are referred to us by an Affiliate.

Between 2020 and 2021, we had a year-over-year retention rate of domestic B2C Platform users of 72%,

excluding any users acquired from an Affiliate or the API, which resulted in an average lifetime user value of $95.14, which was calculated

as the quotient of the average gross profit per user divided by the difference of one less the retention rate.

Internationally, we impose

a mark-up on the cost imposed on the sale of each lottery game together with a service fee charged to the user.

In 2021, our international

B2C Platform users purchased an average of 2.1 lottery games per transaction at an average service fee of $2.30 per lottery game.

charge a higher service fee on lottery games in our international jurisdictions, and, as a result, in 2021, the annual gross profit on

these sales was 97% higher as compared to domestic sales.

In 2021, our average gross profit per international user of our B2C Platform

The Company did not incur any expenses on digital marketing in 2021, and accordingly the average customer acquisition cost

during 2021 remained $4.26 per new user, unchanged from 2020.

The year-over-year retention rate on the B2C Platform was slightly lower

internationally, at 69%, resulting in a user lifetime value of $102.48.

Although revenues from our international jurisdictions currently

comprise approximately 10% of our total revenues in 2021, we are focused on the growth of this business organically and through the pursuit

of strategic acquisitions and other synergistic opportunities.

In 2021, we delivered approximately

2.6 million lottery games to users of our B2C Platform worldwide, our B2C Platform hosted approximately 37,000 daily average users, including

approximately 11,000 daily average repeat users.

Our success relies, in part,

on our ability to attract new customers to our B2C Platform and convert such customers to ongoing users of the B2C Platform.

this objective, in the third quarter of 2021, we launched our global affiliate marketing program, LotteryLink.

In general, affiliate marketing

is a cost-effective advertising model in which a B2C vendor compensates independent third-party marketers for successfully generating

new consumers to the B2C vendor’s online platforms and converting them to users.

The independent third-party marketers are referred

to as “Affiliates”;

the Affiliate with the direct relationship with the B2C vendor is referred to as the “Master Affiliate”

and any Affiliates that only have a direct relationship with the Master Affiliate, and not directly with the B2C vendor, are referred

to as “Sub-Affiliates”.

In an effort to ensure that their products reach a broad array of potential customers, B2C vendors

work directly and indirectly with Affiliates across multiple industries and marketing channels who undertake promotional and marketing

initiatives and activities to direct consumers to our B2C Platform.

The B2C vendor pays the Affiliates a commission to incentivize their

promotional activities.

Affiliates purchase promotional materials from the B2C vendor for such promotional activities and are otherwise

generally limited in the type and scope of marketing materials and collateral that they may use in their promotional activities.

As part of LotteryLink, we

pay each of our Affiliates a percentage of the revenues derived from each new customer they refer to us and, if such customer is located

in a jurisdiction in which they may lawfully use our B2C Platform, is converted to a user.

These commissions are paid for a contractually

specified duration of such user’s activity on the B2C Platform.

In support of their promotional

activities, our Master Affiliates purchase credits, referred to as a LotteryLink Credit, from the Company that can be redeemed for flexible

promotion packages, consisting of marketing collateral, prepaid advertising, development services, account management, and prepaid lottery

games that can be used in promotions.

The Company may introduce additional redemption opportunities for LotteryLink Credits in the future.

A Master Affiliate may allocate its LotteryLink Credits to its Sub-Affiliates for such Sub-Affiliate’s redemption from the Company.

The LotteryLink Credits are intended to help our Affiliates reach new customers and convert such customers to users of our B2C Platform.

As of March 28, 2022, we had

an agreement with one Master Affiliate.

In 2019, we made our Platform

available to third-party commercial partners through our B2B API, which provides a secure distribution interface between us and authorized,

regulated, third-party commercial partners for the acquisition of authorized lottery games from us and resale of such lottery draw games

within their regulated and authorized jurisdictions.

Our B2B API is enabled in the U.S.

and internationally.

Through this indirect distribution

model, third-party omni-channel and multi-product regulated commercial partners sell authorized lottery games in permitted jurisdictions

by inclusion of the B2B API on their existing back-office functionality and user facing websites and applications, which enables their

acquisition from us and subsequent resale to users of authorized lottery games.

Acquisition of lottery games is fulfilled directly via

The commercial partner is responsible for purchaser verification, payment processing, and delivery of the digital representation

of the draw lottery game to the end-user, and we are responsible for lottery game ticket fulfillment, certain regulatory and compliance

functions, and the claims and redemption process.

The bearer instruments evidencing lottery games sold through the B2B API are securely

stored by us in restricted access safes and do not leave the jurisdiction of their original sale.

They are not delivered to the commercial

partner and if delivery to the user is required, such user is required to travel to the jurisdiction of issuance for possession.

Neither we nor our commercial

partners take a portion of a user’s winnings.

Together with our third-party commercial partner, we agree on the amount of the mark-up

on the cost to be imposed on the sale of each lottery game purchased through the B2B API, if any, together with a service fee to be charged

We receive up to 50% of the net revenues from such mark-up and service fee pursuant to our commercial agreement with each

commercial partner.

In the U.S., our commercial partners do not charge a mark-up;

our average gross revenue generated by a lottery game

sale by a commercial partner in 2021 was $2.59.

With respect to our international (non-U.S.) operations our average gross revenue was

We currently do not charge our commercial partners a fee for the use of the B2B API.

In 2021, we had agreements

to acquire and sell lottery games through the B2B API with three international third-party commercial partners, including a French betting

solution, and one U.S.

third-party commercial partner, which operates a proprietary mobile wallet for use at traditionally coin-operated

machines, such as arcade games, vending machines, and laundry machines, which enabled our offerings on its mobile application.

Collectively,

these agreements provided us with access to over 420,000 unique points of sale for users to acquire lottery games from via our B2B API.

In 2021, we delivered over

333,485 lottery games to end users of our B2B API, worldwide.

Data Services

In 2018, we acquired TinBu,

LLC (“TinBu”), a digital publisher and provider of lottery data results, jackpots, results, and other data, as a wholly-owned

Through TinBu, our Data Service delivers daily results of over 800 domestic and international lottery games from more than

40 countries, including the U.S., Canada, and the United Kingdom, to over 400 digital publishers and media organizations.

Our technology pulls real

time primary source data, and, in some instances, we acquire data from dedicated data feeds from the lottery authorities.

constantly monitored to ensure accuracy and timely delivery.

We are not required to obtain licenses or approvals from the lottery authorities

to pull this primary source data or to acquire the data from such dedicated feeds.

Commercial acquirers of our Data Service pay a subscription

for access to the Data Service and, for acquisition of certain large data sets, an additional per record fee.

We additionally enter into

multi-year contracts pursuant to which we sell proprietary, anonymized transaction data pursuant to multi-year agreements and in accordance

with our Terms of Service in consideration of a fee and in other instances provide the Data Service within a bundle of provided services.

The WinTogether Platform

We are affiliated with WinTogether,

a registered 501(c)(3) charitable organization formed in April 2020, to support charitable, educational, and scientific causes.

Our founders formed WinTogether and our Chief Executive Officer and President continue to act as Trustees.

We operate the WinTogether

Platform on behalf of WinTogether, which offers sweepstakes that support charitable causes selected by the trustees of WinTogether and

incentivizes participants to donate to those causes by entering those who donate into a sweepstakes for a chance to win cash prizes, luxury

items, and exceptional experiences.

When a participant donates to a campaign cause on the WinTogether Platform, they are automatically

entered to win a prize;

the number of entries a participant receives is based on the value of their donation;

provided, however, in accordance

with the sweepstakes requirements of most jurisdictions and the terms of service for each sweepstakes, no purchase or donation is required

for entry into the sweepstakes offered on the WinTogether Platform.

Unlike lottery games and other

games of chance, participation in sweepstakes is generally permissible, subject to compliance with certain regulatory requirements, in

every state within the U.S.

and many international jurisdictions.

Sweepstakes offered on the WinTogether Platform are open to participants

within the U.S.

and internationally, unless void in a jurisdiction or local law prohibits the offering or entry into a sweepstakes.

In our three campaigns that

took place during 2021, WinTogether raised gross proceeds of approximately $70,000.

We are the operator and administrator

of all sweepstakes on the WinTogether Platform.

In consideration of our operation of the WinTogether Platform and administration of the

sweepstakes, we receive a percentage of the gross donations to a campaign, from which we pay a dividend to certain holders of our Notes

(as defined below) on behalf of LDC Crypto (as further described below), and all administration costs associated with the sweepstakes,

including those of third-party service providers.

The balance of the gross donations from each campaign are donated to the named charitable

In the sweepstakes we have conducted to date, the partnering charitable organization received at least 60% of gross donations.

Prior to July 2018, we

issued a series of convertible promissory notes (the “Notes”), which had several conversion rights upon the occurrence of

certain events, one of which was an “initial coin offering” by AutoLotto or one of its wholly owned subsidiaries that resulted

in net proceeds of $20,000,000 or more (the “Notes Conversion Threshold”).

In July 2018, LDC Crypto Universal Public

Company PLC (“LDC Crypto”), an indirectly wholly-owned subsidiary of AutoLotto, by a combination of the conversion of the

outstanding Notes and new subscriptions, issued revenue participation interests (the “Digital Securities”) in an initial offering

with net proceeds in excess of the Note Conversion Threshold on an exempt private placement basis in the U.S.

in reliance of Rule 506 of Regulation D and outside the U.S.

persons in reliance of Rule 903 of Regulation S.

Digital Securities were issued pursuant to a private placement memorandum (the “PPM”), a subscription agreement and related

documents and were issued as “smart contracts” ERC20-based standard digital assets.

Under the PPM, LDC Crypto offered up to

285,000,000 Digital Securities to be sold at multiple closings.

In February 2022, LDC Crypto and LDC WinTogether, Inc., a wholly-owned

subsidiary of the Company, executed an Assignment and Assumption Agreement, whereby LDC WinTogether, Inc.

assumed the liabilities and

obligations of LDC Crypto, including the Digital Securities.

Each Digital Security entitles its holder the right to receive as a dividend

its pro rata share of 7% of the net revenues from each campaign, paid on a periodic basis by AutoLotto on behalf of LDC WinTogether, Inc.

We expect that participation

in sweepstakes offered on the WinTogether Platform will continue to grow as we and WinTogether’s Trustees continue to develop WinTogether’s

In addition to the benefit of the philanthropic opportunities generated by the WinTogether Platform, and notwithstanding that

the revenues for our services relating to WinTogether are currently immaterial, we view WinTogether’s operation as a scalable source

of revenue, as well as a mechanism to increase our brand reputation and recognition by visitors to the WinTogether Platform, as it includes

a link to our mobile app and website, which may result in the acquisition and monetization of new users to the B2C Platform.

Competitive Strengths

We believe our definitional

brand name, early entry in the growing Online Lottery industry, strength of our distribution ecosystem, and experienced management team

collectively contribute to our success as a leading provider of products and services for the domestic and international lottery industry

and strengthens our differentiation from our competitors.

Definitional Brand Name

We believe that the simplicity

and definitional nature of our “Lottery.com” domain and brand names provide us with a memorable, distinctive and easily identifiable

brand by our users.

In 2021, approximately 9.7 million unique visitors to our web-based properties, such as https://play.lottery.com ,

generated 14.4 million web sessions.

These web sessions were driven 47% from organic search compared to directly entered URL traffic of

In 2021, our iOS and Android apps were downloaded approximately 233,000 times.

Early Entrant in Growing Mobile and Online

We have offered our services

via our Platform since 2016.

We are one of the early market entrants in the mobile and online delivery of lottery games, which we believe

offers us a significant advantage over many of our competitors, including state operated Online Lottery and third-party lottery game delivery

services, and that this experience provides us with a developed understanding of consumer objectives, an existing connection to shifting

demographics, and the ability to capitalize on the growth of lottery gaming in multiple jurisdictions.

We believe that consumers

are demanding an improved and more entertaining experience from their lottery game products, which we believe our mobile delivery affords

over Online Lottery offerings, through its engaging and modern digital experience, simplicity of design, speed of access, and utility.

Additionally, as users travel from one permitted jurisdiction to another in which we offer our services, they can continue to use our

same app or online functionality, rather than having to download a new app or online functionality in each state for Online Gaming, if

offered, which would typically require them to pre-fund the mobile wallet of each app.

We also believe that the demographics

of the traditional brick-and-mortar lottery game market are aging and have developed a maturing customer base.

Online and mobile sales,

however, tap into a new demographic of typically younger users more inclined to engage through these channels because of their deep adoption

of mobile devices, which offers the opportunity to expand the total lottery game market by reaching into new and underserved markets.

This transition may have been amplified by the accelerated user traffic to online channels resulting from the COVID-19 pandemic.

we sold approximately 1.3 million unique lottery games;

in 2021, we sold approximately 2.9 million unique lottery games, representing

a 123% year-over-year increase, which we attribute to in part to the shift in consumer purchasing habits to mobile and online purchases

due to the COVID-19 pandemic.

As an early entrant in the delivery of digitized representation of lottery games with an established and

growing user base in both the U.S.

and abroad, we believe we are well positioned to capitalize on this shift in consumer preference

from in-store to digital purchases.

We rely on technology services

to closely monitor and track amendments, additions, and impositions of regulations in all jurisdictions regarding the authorization of

lottery and work to maintain effective relationships with applicable legislative and regulatory authorities in each jurisdiction in which

we operate or anticipate operating in.

We use this information in the development of our strategic expansion and growth framework and

model, but additionally, and importantly, to create strong working relationships with the regulatory authorities in the jurisdictions

in which we do business, to ensure transparent regulatory compliance and promote each jurisdiction’s objective for economic benefit

through the sale of lottery games.

Strong Distribution Ecosystem

In addition to the organic

growth of users of our B2C Platform and purchasers of lottery games from third-party commercial partners on our B2B API, we believe we

have opportunities to increase our distribution ecosystem and create non-organic growth through existing and new affiliate marketing partners,

which direct users to our B2C Platform in consideration of a percentage of the gross profits derived from users acquired as a direct result

of such affiliates’ marketing efforts over a contractually determined period.

We do not pay additional fees to such affiliates.

We have entered into affiliate

marketing agreements with prominent media organizations and digital publishers, including AccuWeather Inc., ICARO Media Group (“ICARO”),

and Coinstar, pursuant to which each organization and publisher monetizes its existing customer base and technology by marketing our business

in consideration of payment of a percentage of gross profits.

We intend to enter into similar agreements with other media organizations,

digital publishers, and online content creators through LotteryLink.

Experienced Management Team

Our management team includes

leaders and pioneers in consumer, lottery, and gaming industries.

Tony DiMatteo and Matt Clemenson,

our Co-Founders and Chief Executive Officer and Chief Revenue Officer, respectively, together have been at the forefront of developing

innovative online products and blockchain solutions and establishing strategic partnerships with market participants throughout their

careers, including developing technology solutions at Hotwire, Inc.

and LesConcierges, Inc.

Our management team additionally

includes Ryan Dickinson, Chief Financial Officer and President, and Katie Lever, Chief Legal Officer and Chief Operating Officer.

member of our leadership team draws from more than 15 years of prior experience in technology, gaming, or internet-related industries

in both consumer and business-to-business product development, including leadership roles with AccuWeather, Scientific Games Corporation,

and Bally Technologies.

We believe our team is well-positioned to continue to deliver competitive and unique technology, while executing

on a substantial expansion in domestic and international markets.

Our Growth Strategy

Our strategic objectives include

increasing penetration within our existing domestic jurisdictions, expanding our operations into new domestic jurisdictions, growing our

international footprint, pursuing strategic acquisitions and other synergistic opportunities, introducing new revenue generating products,

and enhancing our technology infrastructure.

Increase B2C Platform Penetration in Existing

Domestic Jurisdictions

As of December 31, 2021, we

offered our services in 12 jurisdictions in the U.S.

and directly or indirectly sold more than $7.2 million in lottery games

in these jurisdictions in that year.

For the year ended December 31, 2021, our domestic revenues generated from our B2C Platform and B2B

API in these jurisdictions represented less than 0.1% of total sales of lottery games in the U.S.

Even if we were not to undertake

our planned expansion of offerings in up to five additional jurisdictions by the end of 2022, continued penetration into our existing

domestic jurisdictions through a combination of organic growth and marketing activities represents a significant growth opportunity for

Expand B2C Platform Operations into New

Domestic Jurisdictions

In the U.S., only Alabama,

Hawaii, Nevada, and Utah, do not have any form of legalized lottery.

There is legalized lottery in the other states and jurisdictions

within the U.S., including the District of Columbia, Puerto Rico and the U.S.

Virgin Islands.

By the end of 2022, we plan

on completing a launch of our B2C Platform in up to five additional jurisdictions, subject to regulatory approval in those jurisdictions

in which it is required.

We have determined targeted jurisdictions based on a combination of factors including total addressable market,

regulatory environment, legality of sports betting and ease of market entry.

By the end of 2023, we intend to offer our B2C Platform in

a total of 32 jurisdictions within the U.S.

The balance of the jurisdictions may pose greater or prohibitive market entry challenges.

Once we launch our B2C Platform

in a new domestic jurisdiction, we intend to promptly expand our marketing initiatives in that jurisdiction, which we believe is one of

the most cost effective and efficient ways to increase non-organic growth.

Generally, we are prohibited from directly marketing our services

in those jurisdictions in which lottery is illegal or our services are prohibited, and in those jurisdictions in which both lottery and

our services are legal and permitted, we focus our marketing expense on those jurisdictions in which we are currently operating or immediately

intend to operate in.

Grow B2C Platform Operations in International

We believe that revenue from

international B2C Platform users will be instrumental to our continued success and growth.

Generally, sales of lottery games in international

markets are less constrained by regulation and oversight by regulatory authorities within those jurisdictions than in similar situations

within the U.S.

We currently sell certain

in-state and multi-state draw lottery games issued by the Texas State Lottery to users of our B2C Platform in various countries worldwide.

In the future, subject to certain regulatory factors, we may sell in-state lottery games issued by other U.S.

lottery authorities

to international users from our B2C Platform.

Subject to regulatory requirements, we intend to sell lottery games from other international

markets and proprietary lottery game products from our B2C Platform to international users;

accordingly, we believe that our pursuit of

strategic acquisitions and the products that we intend to develop will be particularly important to our international market.

See “ Item 1.

Business — Our

Growth Strategy — Pursue Strategic Acquisitions and Other Synergistic Opportunities ” and “ — Introducing

New Revenue Generating Products .”

Pursue Strategic Acquisitions and Other

Synergistic Opportunities

In order to reinforce our

position as a leading provider of products and services for the domestic and international lottery industry, while developing opportunities

in other synergistic growth oriented operations, we intend to selectively pursue strategic opportunities with businesses whose user bases,

content, products, and distribution channels are competitive or complementary to our existing domestic and international B2C Platform,

B2B API, Data Services and LotteryLink operations, as well as strategic opportunities with businesses that provide differentiating offerings

to these operations, which we anticipate may include sports betting and real money games of chance.

For example, in June 2021,

we acquired 100% of the equity of Global Gaming Enterprises, Inc., a Delaware corporation (“Global Gaming”), which holds 80%

of the equity of each of Medios Electronicos y de Comunicacion, S.A.P.I de C.V.

(“Aganar”) and JuegaLotto, S.A.

Lottery Game Platform Services

our B2C Platform and our B2B API provided users with the ability to purchase legally sanctioned draw lottery games via a mobile device

or computer, securely maintain their acquired lottery game, automatically redeem a winning lottery game, as applicable, and receive support,

if required, for the claims and redemption process.

Our registration and user interfaces were designed to be easy to use, provide for

the creation of an account and purchase of a lottery game with minimum friction and without the creation of a mobile wallet or requirement

to pre-load minimum funds and - importantly - to provide instant confirmation of the user’s lottery game numbers, whether selected

at random or picked by the user.

Users of our B2C Platform services paid a service fee and, in certain non-U.S.

jurisdictions, a mark-up

on the purchase price.

Prior to the Operational Cessation, we generated revenue from this service fee and mark-up.

Our B2B API Platform

resumed limited operations in April 2023.

As of the date of this Report, our B2C Platform is not currently operational.

We anticipate

that our B2C Platform will become operational by the end of 2023.

WinTogether Platform

to the Operational Cessation, we operated and administered of all sweepstakes offered by WinTogether, a registered 501(c)(3) charitable

organization (“WinTogether”), which was formed in April 2020 to support charitable, educational, and scientific causes.

consideration of our operation of the WinTogether platform and administration of the sweepstakes, we received a percentage of the gross

donations to a campaign, from which we paid certain dividends and all administration costs.

WinTogether platform continued operating after the Operational Cessation, until all sweepstakes campaigns were completed and all prizes

On March 29, 2023, the board of directors of WinTogether voted to suspend its relationship with the Company.

the Operational Cessation, certain of the Company’s wholly-owned subsidiaries have continued to operate under the direction of

the leadership teams that were in place prior to the Company’s acquisition of such companies.

While the operational activities

of these subsidiaries vary, from the Operational Cessation through the date of this Report, each of TinBu, Aganar and JuegaLotto has

decreased its expenses and has had its revenue remain consistent or decrease slightly from pre-Operational Cessation levels.

2018, we acquired TinBu, LLC (“TinBu”), a digital publisher and provider of lottery data results, jackpots, results, and

other data, as a wholly-owned subsidiary.

Through TinBu, our Data Service delivers daily results of over 800 domestic and international

lottery games from more than 40 countries, including the U.S., Canada, and the United Kingdom, to over 400 digital publishers and media

organizations.

See “ Item 1A.

Risk Factors – We are party to pending litigation and investigations in various jurisdictions

and with various plaintiffs and we may be subject to future litigation or investigations in the operation of our business.

outcome in one or more proceedings could adversely affect our business, financial condition, and results of operations ” for

more information about our relationship with Tinbu.

technology pulls real time primary source data, and, in some instances, we acquire data from dedicated data feeds from the lottery authorities.

Our data is constantly monitored to ensure accuracy and timely delivery.

We are not required to obtain licenses or approvals from the

lottery authorities to pull this primary source data or to acquire the data from such dedicated feeds.

Commercial acquirers of our Data

Service pay a subscription for access to the Data Service and, for acquisition of certain large data sets, an additional per record fee.

additionally enter into multi-year contracts pursuant to which we sell proprietary, anonymized transaction data pursuant to multi-year

agreements and in accordance with our Terms of Service in consideration of a fee and in other instances provide the Data Service within

a bundle of provided services.

and JuegaLotto

June 30, 2021, we acquired 100% of the equity of Global Gaming Enterprises, Inc., a Delaware corporation (“Global Gaming”),

which holds 80% of the equity of each of Medios Electronicos y de Comunicacion, S.A.P.I de C.V.

(“Aganar”) and JuegaLotto,

(“JuegaLotto”).

JuegaLotto is federally licensed by the Mexico regulatory authorities with jurisdiction over the ability to commercialize lottery games

in Mexico through an authorized federal gaming portal and to commercialize games of chance in other countries throughout Latin America.

Aganar has been operating in the licensed Online Lottery market in Mexico since 2007 and has certain rights to sell Mexican National Lottery

draw games, instant win tickets, and other games of chance online with access to a federally approved online casino and sportsbook gaming

license and additionally issues a proprietary scratch lottery game in Mexico under the brand name Capalli.

We believe that Mexico and

Latin America are important strategic markets for us.

As of December 31, 2020 (the date of the most recently available data), Latin America’s

estimated lottery game market was approximately $9.1 billion across 26 countries and the TAM in such countries included 664 million

We believe that the acquisition of Global Gaming and the ownership of the majority of the equity of Aganar and JuegaLotto will

position us to penetrate and capitalize on this large market, which may provide us with the opportunity to offer our B2C Platform to users

located within the borders of Mexico, offer certain Mexican lottery games to users outside of Mexico through both our B2C Platform and

our B2B API, and leverage Aganar internal expertise in the creation and distribution of private label lottery games.

We believe that the

resulting synergies will increase our daily average users, repeat users, and positively impact our gross margins and net revenues.

We believe there are additional

opportunities to acquire complementary and synergistic businesses that are less able to adequately achieve reasonable scale on their own

as a result of internal deficiencies, including technological implementation, management expertise, or funding requirements.

Many businesses

that we have identified as potential acquisition candidates operate in jurisdictions with sizable TAM, such as Eastern Europe or Africa,

and we believe they will favorably view the opportunity to execute a business combination with us due to factors that include our definitional

brand name, growing domestic and international presence, and technological offerings.

Introducing New Revenue Generating Products

We believe our ability to

retain our existing and attract new users, affiliates, partners, and data subscribers, and to expand our operations in existing and new

jurisdictions depends, in part, on our continued ability to create new revenue generating products, such as offering a fee-based subscription

service of exclusive products, providing the opportunity to acquire fractional shares of lottery games, and launching our own, proprietary

lottery game products.

For example, we anticipate

that users of our B2C Platform will support a fee-based subscription service that offers subscribers access to participate in exclusive

lottery game pools, premium lottery prediction data, and other select features and functionality for a fixed monthly price.

We have conceptualized

and are developing this product offering and anticipate launching it on Project Nexus.

See “ Item 1.

Business — Develop

Technology and Functionality.

We believe that offering users

a fractional share product will be a significant revenue generating opportunity for us in many international jurisdictions in which users

have less disposable income as compared to users within the U.S.

Unlike a lottery pool, which is generally a familiar concept and

in which multiple lottery game tickets are acquired to provide the opportunity and the winnings of all such tickets are shared by the

pool participants, fractional share participants provide for multiple participants to participate in a lottery game by purchasing a share — or

fraction — of one ticket at a proportionate fraction of the price and participating in, a proportionate fraction of any

This provides an opportunity for those who may not want to expend the full purchase price of a lottery game to participate at less

Given the lower up-front cost and lower risk of loss, we expect that this will attract additional users who may not wish to commit

the discretionary income to acquire a single lottery game.

We have conceptualized and are developing this product offering and anticipate

launching it on Project Nexus.

See “ Item 1.

Business — Develop Technology and Functionality.

We also believe that there

is a considerable opportunity to offer our own, proprietary lottery game products in non-U.S.

jurisdictions that permit non-governmental

authorities to issue lottery games and other games of chance.

We are conceptualizing this product.

Develop Technology and Functionality

We are developing a proprietary,

blockchain-enabled online gaming platform, which we have named Project Nexus.

Project Nexus, the initial phase of which is expected to

be implemented in the second quarter of 2022, is designed and developed to handle high levels of user traffic and transaction volume,

while maintaining expediency, security, and reliability in processing lottery game sales, the retail requirements of the B2C Platform,

the administrative and back-office functionality required by the B2B API, and the claims and redemption process.

Project Nexus is designed

to minimize the Company’s use of electricity and other resources to reduce the Company’s environmental and natural resources

We continually assess our technological offerings and will continue to commit our resources to the improvement of the scope and

functionality of Project Nexus, its applications, and our information technology infrastructure.

We believe that development

of our technology and functionality will allow us to more fully monitor our existing B2C Platform, Lottery Link, B2B API Platform, and

Data Services operations, analyze user preferences and purchase behavior to determine enhanced functionality requirements, and concurrently

ensure the strength and reliability of our transactional security systems, which, together, will improve our Platform’s service,

increase loyalty and experience, and facilitate sales growth and increased revenues.

We are committed to maintaining a strong security

system and providing reliable and uncompromising services and information.

We view distributed ledger

technology as an important future functionality of the lottery industry and currently deploy distributed ledger technology in our Platform

and will deploy it in Project Nexus to encode the data transfer system and ensure transactional security.

A distributed ledger can

be described as a ledger of any transaction or contract maintained in decentralized form across different locations and people, eliminating

the need for a central authority to keep a check against manipulation.

In this manner, a central authority is not needed to authorize

or validate any transactions.

All information on the ledger is securely and accurately stored using a cryptographic hash and can only

be accessed using keys and cryptographic signatures.

Once the information is stored, it becomes an immutable database, which the rules

of the network govern and cannot be altered retroactively, which means that the data entered is irreversible.

Distributed ledger technology

is, by design, inherently resistant to cyber-attack because all distributed copies must be attacked simultaneously for an attack to be

successful, and, for the same reason, these records are, by design, resistant to malicious changes by a single party.

Distributed ledger

technology is also very efficient and reduces operational inefficiencies because of the inherent speed that a transaction takes to complete.

We believe that a decentralized

application for the distribution of lottery games that is verified through the distributed ledger technology and inherently not subject

to alteration will improve the security of and enhance the transparency and trust in our Platform, Project Nexus, products, and services,

which is why we have leveraged this technology.

Our Platform currently leverages,

and Project Nexus is anticipated to leverage, distributed ledger technology by preserving a cryptographic ledger of the user identification,

draw identification, ticket identification, and game numbers into an immutable ledger.

The distributed ledger is append-only and keeps

a complete record of all changes to the provided data that cannot be deleted, modified, or overwritten.

There are no APIs or other methods

to alter any committed data in place.

Each transaction writes one or more blocks to the distributed ledger in a transaction.

block contains entry objects representing the transaction data along with certain other information, which are then sequenced and hash-chained

to guarantee data integrity.

Distributed Ledger blocks are sequenced and chained together with cryptographic hashing techniques, which

enables transactional data integrity using a cryptographic verification method.

We intend to further leverage

distributed ledger technology in our future offerings, which may include (i) deploying critical user mechanics, such as user identify,

geolocation, and administration of promotional draws on blockchain technology and (ii) increasing acceptance of alternative forms

of permitted payment methods, which will enable a broader base of users to the B2C Platform.

Notwithstanding our best efforts to continue

to evaluate distributed ledger technology and the opportunity to deploy it in our technological developments, these efforts may have limited

or no success.

User Support Operations

We value our B2C Platform

users and have a dedicated Customer Happiness Team that provides high-quality user support services, including service consulting, and

complaint processing.

We also have a service team dedicated to the claims and redemption process, which monitors the winning results of

all lottery products that we offer and initiates the prize collection process as soon as a user wins a prize.

We give users detailed instructions

and are available to answer inquiries throughout the process, which we believe is especially helpful to first-time prize winners.

functionality includes an identity verification process to ensure prizes are distributed to the correct users.

Since our inception, there

have not been any legal claims brought against us by users in connection with lottery prize distribution.

Sales, Marketing and Branding

Our sales and marketing team

conducts various traditional and online marketing programs and promotional activities, including in-game events and announcements, online

and traditional advertising, sign-up promotions, and offline promotions that capitalize on our brand name and reputation.

Additionally, through LotteryLink,

we are party to several agreements with Affiliates whereby they have agreed to direct their customers to our B2C Platform and, upon conversion

to our users, we have agreed to pay the Affiliates a percentage of the gross profit derived from such acquired users for a determined

In the third quarter of 2021, we began the sale and transfer of LotteryLink Credits to a master Affiliate for use in providing

affiliate marketing collateral to other Affiliates.

We believe that we may generate

additional revenue in the future by these Affiliates purchasing more LotteryLink Credits.

During 2021, we did not conduct

any digital marketing campaigns.

In early 2022, we launched marketing campaigns with existing major media channels and relevant sponsorships

and entered into new agreements with the intent of strengthening our brand name recognition in those jurisdictions in which our services

are permitted, which may result in an increase of our historical domestic average customer acquisition cost of $4.01 per new user since

In our view, our competitive

advantage is our prominent brand name and URL, our proprietary technology, and the synergies we gain from our collective operations of

our B2C Platform, LotteryLink, B2B API, and Data Services.

Additionally, because of the significant TAM and low penetration of companies

optimizing the digitized delivery of lottery games, all industry competitors have significant room for growth without driving significant

increases in the market’s user acquisition costs.

It is our belief that for at least the near future, competition for new users

will remain low between us and our direct competitors, including those jurisdictions that now or in the future offer Online Lottery, because

of the significant potential growth in this segment, potential shift in opportunity from existing players, and new players’ change

in purchasing habits from purchasing lottery games in brick-and-mortar outlets to mobile and online delivery functionality.

We believe that the main competitors

to our B2C Platform are JackPocket, Inc., Lotto Direct Limited doing business as TheLotter, Shoutz, Inc.

operating as LotteryHUB, Lotto.com

Inc., and MidoLotto operated by Lottery Now Inc.

These online lottery platforms allow users to buy lottery games at their convenience

and with a proscribed geographic reach, which we believe is further driving demand for the service.

Increased marketing efforts

by us and our competitors is driving the growing overall popularity of lottery games purchased online or through a mobile device, contributing

to the overall growth of the market.

We, and our competitors, are using social media platforms such as Facebook, Instagram, and Twitter

to connect with users to market, create awareness, and increase penetration.

We do not believe that LotteryLink

currently has direct competitors in the lottery affiliate marketing space.

We believe that the primary

competitor to our B2B API is NeoGames S.A.’s neoplay ® , which offers an open API of interactive instant games from

any game provider.

Data Services

We believe that our main competitors

in our Data Services operations are Gaming Solutions International and Numadata.

The WinTogether Platform

The primary competitors to

WinTogether are Omaze, Inc.

and Prizeo US, LLC.

We believe that because our B2C Platform offerings generate significant user traffic

to our mobile application and website, we are able to capitalize on this traffic and capture new participants who would not otherwise

have knowledge of WinTogether and its objectives but for their use of our B2C Platform.

Regulation and Compliance

We are subject to a variety

of laws in the U.S.

and abroad that affect our business, including state, territorial, and federal laws regarding lotteries, gaming,

sweepstakes, consumer protection, electronic marketing, data protection and privacy, competition, taxation, intellectual property, export,

and national security, all of which are continuously evolving.

The scope and interpretation of the laws that are or may be applicable

to us are often evolving or new and uncertain and may conflict with each other, particularly those governing our international operations.

Lottery and gaming laws are

generally based upon declarations of public policy designed to protect consumers from fraud and other misdeeds and the viability and integrity

of the games, while raising revenues for the particular country, state, or other authorizing jurisdiction.

To accomplish these goals,

stringent laws and regulations may be established to ensure that participants in the industry meet certain standards of character and

responsibility, which may require participants to:

JuegaLotto is federally licensed by the Mexican regulatory authorities with jurisdiction over

the ability to commercialize lottery games in Mexico through an authorized federal gaming portal and to commercialize games of chance

in other countries throughout Latin America.

Aganar has been operating in the licensed Online Lottery market in Mexico since 2007 and

has certain rights to sell Mexican National Lottery draw games, instant win tickets, and other games of chance online with access to

a federally approved online casino and sportsbook gaming license and additionally issues a proprietary scratch lottery game in Mexico

under the brand name Capalli.

See “ Item 1A.

Risk Factors – We need additional capital to, among other things, support and restart

our operations, re-hire employees and pay our expenses.

Such capital may not be available on commercially acceptable terms, if at all.

If we do not receive the additional capital, we may be forced to curtail or abandon our plans to recommence our operations and we may

need to permanently cease our operations” for additional information.

December 2021, we finalized the acquisition of the domain name https://sports.com and on November 15, 2022, we formed a wholly-owned

subsidiary called Sports.com, Inc., a Texas corporation (“Sports.com”).

Subsequently, Sports.com announced a partnership

with the Saudi Motorsports Company, which enabled the Company to roll out the Sports.com brand at the IFA World Cup decider at the end

of November 2022.

In December 2022, Sports.com signed an agreement with Data Sports Group, GmbH (“ DSG ”), which provides

Sports.com the exclusive North American distribution rights for sports data products offered and maintained by DSG (the “DSG Data”).

The DSG Data is being sold through the same sales resources and sales channels as the lottery data offered by TinBu.

for Recommencement of Company Operations

noted above, since the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused its operations

on restarting certain of its core businesses.

The Company has developed a three phase plan to recommence its operations, which plan is

outlined below.

1 - Relaunch B2B API Platform .

During the Operational Cessation, the Company maintained positive relationships with its ticket-printing

and courier partners, as well as several distribution partners that have been found to be in compliance with local, state, and federal

rules related to ticket procurement and distribution.

These partners have implemented the Lottery.com API and have advised the Company

that they expect to be ready to offer lottery games to their customers through their sales channels when the Company resumes operations.

As such, the Company believes that it has sufficient demand to resume operation of its B2B API platform operations, assuming it is able

to maintain the core employee team to manage the lottery ticket fulfillment process and access sufficient capital to relaunch Project

Nexus, which was designed to, among other things, handle high levels of user traffic and transaction volume, while maintaining expediency,

security, and reliability in the administrative and back-office functionality required by the B2B API.

Our B2B API Platform resumed limited

operations in April 2023.

2 - Resume B2C Platform Operations.

The Company believes that it will be in a position to relaunch its B2C Platform by the end of

As of the date of this Report, the Company expects that it will initially relaunch its B2C Platform to customers in Texas for a

period of time before rolling it out to other jurisdictions.

If the Texas Bill (as defined below) is enacted into law as drafted, the

Company may elect to accelerate the relaunch of its Platform to customers in another state.

The Company plans to limit the rollout in

order to give it additional time to properly vet and confirm compliance with local, state and federal rules related to ticket procurement

and distribution.

For more information, see “ Item 1A.

Risk Factors - Regulatory and Compliance Risks - A jurisdiction may enact,

amend, or reinterpret laws and regulations governing our operations in ways that impair our revenues, cause us to incur additional legal

and compliance costs and other operating expenses, or are otherwise not favorable to our existing operations or planned growth, all of

which may have a material adverse effect on us or our results of operations, cash flow, or financial condition .” The Company

has also maintained various pre-paid media credits that it expects to use to launch and maintain promotional campaigns geared towards

encouraging prior customers to return to the Platform and to acquire new customers.

3 - Restore Other Business Lines and Projects.

Assuming the success of Phase 1 and Phase 2, the Company expects to restore other

products it previously offered, such as supplying lottery tickets to consumers in approved domestic jurisdictions, partnering with licensed

providers in international jurisdictions to supply legitimate domestic lottery games, and reviving other products and services that were

under development when the Operational Cessation occurred.

of the date of this Report, the current estimated cash balance of the Company and subsidiaries is approximately $102,766.

believes that this cash on hand, along with future borrowings, will be sufficient for the Company to pay its service providers in connection

with the filings of its deficient periodic reports, including this Report and the Company’s Quarterly Report on Form 10-Q for the

three months ended March 31, 2023.

of the date of this Report, our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the

ticker symbols “LTRY” and “LTRYW,” respectively.

As of the date of this Report, we are not in compliance with

Nasdaq’s continued listing requirements (the “Listing Rules”), as discussed in greater detail below under “ Risk

Factors - Risks Related to Our Common Stock and Warrants - We are not currently in compliance with the continued listing standards of

Nasdaq and may not be able to regain compliance with Nasdaq’s continued listing standards in the future ,” and have been

granted a limited exception from Nasdaq to continue the listing of our securities.

Additionally, under its new management, the Company

continues to work to improve its disclosure and reporting controls, and plans to overhaul its systems of internal control over financial

reporting and invest in additional legal, accounting, and financial resources.

if the Company’s three phase plan to recommence its operations is successful, there can be no assurance that the Company will be

able to regain compliance with the applicable Listing Rules, or that the hearings panel will continue to stay the delisting of the Company’s

securities from Nasdaq.

If the Company’s securities are delisted from Nasdaq, it could be more difficult to buy or sell the Company’s

common stock and warrants or to obtain accurate quotations, and the price of the Company’s common stock and warrants could suffer

a material decline.

Delisting could also impair the Company’s ability to raise additional capital needed to funds its operations

and/or trigger defaults and penalties under outstanding agreements or securities of the Company.

can be no assurance that we will have sufficient capital to support our operations and pay expenses, repay our debt, or that additional

funds will be available on favorable terms, if at all.

We may not be able to restart our operations and/or generate sufficient funding

to support such operations in the future.

The Company’s ability to continue its current operations, prepare and refile deficient

and restated reports, and restart its prior operations, is dependent upon obtaining new financing.

Future financing options available

to the Company include equity financings, debt financings or other capital sources, including collaborations with other companies or

other strategic transactions.

Equity financings may include sales of common stock.

Such financing may not be available on terms favorable

to the Company or at all.

The terms of any financing may adversely affect the holdings or rights of the Company’s stockholders

and may cause significant dilution to existing stockholders.

There can be no assurance that the Company will be successful in obtaining

sufficient funding on terms acceptable to the Company, if at all, which would have a material adverse effect on its business, financial

condition and results of operations, and it could ultimately be forced to discontinue its operations and liquidate.

These matters, when

considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable

period of time, which is defined as within one year after the date that the financial statements are issued.

The accompanying financial

statements do not contain any adjustments to reflect the possible future effects on the classification of assets or the amounts and classification

of liabilities that might result from the outcome of this uncertainty.

For more information, see the risk factors in Item 1A of this

Report under the heading “ Risks Relating to the Internal Investigation, Restatement of our Consolidated Financial Statements,

Our Ability to Continue as a Going Concern, Our Internal Controls and Related Matters.”

and Compliance

are subject to a variety of laws in the U.S.

and abroad that affect our business, including state, territorial, and federal laws regarding

lotteries, gaming, sweepstakes, consumer protection, electronic marketing, data protection and privacy, competition, taxation, intellectual

property, export, and national security, all of which are continuously evolving.

The scope and interpretation of the laws that are or

may be applicable to us are often evolving or new and uncertain and may conflict with each other, particularly those governing our international

and gaming laws are generally based upon declarations of public policy designed to protect consumers from fraud and other misdeeds and

the viability and integrity of the games, while raising revenues for the particular country, state, or other authorizing jurisdiction.

To accomplish these goals, stringent laws and regulations may be established to ensure that participants in the industry meet certain

standards of character and responsibility, which may require participants to:

ensure that games are conducted fairly and honestly;

● establish procedures designed to prevent cheating and fraudulent practices;

● establish and maintain anti-money laundering practices and procedures;

● establish and maintain responsible accounting practices and procedures;

● ensure that lottery games are sold only at the price established by the applicable lottery regulator;

● report prizes awarded and withhold certain amounts for taxes and other specified liabilities;

establish procedures designed to prevent cheating and

fraudulent practices;

establish and maintain anti-money laundering practices

and procedures;

establish and maintain responsible accounting practices

and procedures;

ensure that lottery games are sold only at the price

established by the applicable lottery regulator;

report prizes awarded and withhold certain amounts

for taxes and other specified liabilities;

file periodic reports with regulators;

● establish programs to promote responsible gaming and comply with other social responsibility practices;

establish programs to promote responsible gaming and

comply with other social responsibility practices;

enforce minimum age requirements.

State and federal laws in

and federal laws in the U.S.

govern and, in some cases, limit our business practices.

For example, the Interstate Wagering Amendment to 18 U.S.C.

1301 limits our ability to purchase lottery games for a user located in one state from a lottery authority located in another state, except

under certain limited circumstances, such as where the lottery authorities in the respective states allow the sales.

Therefore, for our

users located within the U.S., we only purchase lottery games for users geolocated to be physically situated within the U.S.

or jurisdiction where the lottery game they are purchasing is being conducted, unless an exception were to be authorized by the applicable

lottery authorities.

For more information, see “ Item 1A.

Risk Factors — Regulatory and Compliance Risks — If

the Interstate Wagering Amendment is interpreted or applied to prohibit transmissions to foreign countries, it could have a negative impact

on our business, financial condition, and results of operations.

In addition, the Wire Act

provides that anyone engaged in the business of betting or wagering that knowingly uses a wire communication facility for the transmission

in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or

contest, or for the transmission of a wire communication that entitles the recipient to receive money or credit as a result of bets or

wagers, or for information assisting in the placing of bets or wagers, may be fined or imprisoned, or both.

The Wire Act provides, however,

that it shall not be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting

of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event

or contest from a state or foreign country where betting on that sporting event or contest is legal into a state or foreign country in

which such betting is legal.

For example, the Interstate Wagering Amendment

§ 1301 limits our ability to purchase lottery games for a user located in one state from a lottery authority located

in another state, except under certain limited circumstances, such as where the lottery authorities in the respective states allow the

Therefore, when such offerings are operational, for our users located within the U.S., we only purchase lottery games for users

geolocated to be physically situated at the time within the U.S.

state or jurisdiction where the lottery game they are purchasing is

being conducted, unless an exception were to be authorized by the applicable lottery authorities.

For more information, see “ Item

Risk Factors - Regulatory and Compliance Risks - If the Interstate Wagering Amendment is interpreted or applied to prohibit transmissions

to foreign countries, it could have a negative impact on our business, financial condition, and results of operations.

addition, the Wire Act provides that anyone engaged in the business of betting or wagering that knowingly uses a wire communication facility

for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on

any sporting event or contest, or for the transmission of a wire communication that entitles the recipient to receive money or credit

as a result of bets or wagers, or for information assisting in the placing of bets or wagers, may be fined or imprisoned, or both.

Wire Act provides, however, that it shall not be construed to prevent the transmission in interstate or foreign commerce of information

for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or

wagers on a sporting event or contest from a state or foreign country where betting on that sporting event or contest is legal into a

state or foreign country in which such betting is legal.

In late 2011, the Office of Legal Counsel (the “OLC”) in the U.S.

Department of

Justice (the “DOJ”) issued an opinion that concluded the conduct prohibited by the Wire Act was limited to sports gambling;

however, in January 2019, the OLC issued a new opinion (the “2019 Opinion”) that concluded that the restrictions in the

Wire Act on the transmission in interstate or foreign commerce of bets and wagers was not limited to sports gambling but applied to all

bets and wagers, including those involving state lotteries.

Reinterpretation of the federal Wire Act by the OLC threatened certain online

lottery sales, leading to litigation in which the First Circuit Court of Appeals (the “First Circuit”) determined that the

Wire Act applies only to interstate wire communications related to sporting events or contests and not lottery games.

Finding that the

declaratory judgment was an adequate remedy at law, however, the First Circuit declined to set aside the 2019 Opinion under the Administrative

Procedure Act.

Department of Justice (the “DOJ”) issued an opinion that concluded the conduct prohibited by the Wire Act was limited to

sports gambling;

however, in January 2019, the OLC issued a new opinion (the “2019 Opinion”) that concluded that the restrictions

in the Wire Act on the transmission in interstate or foreign commerce of bets and wagers was not limited to sports gambling but applied

to all bets and wagers, including those involving state lotteries.

Reinterpretation of the federal Wire Act by the OLC threatened certain

online lottery sales, leading to litigation in which the First Circuit Court of Appeals (the “First Circuit”) determined

that the Wire Act applies only to interstate wire communications related to sporting events or contests and not lottery games.

that the declaratory judgment was an adequate remedy at law, however, the First Circuit declined to set aside the 2019 Opinion under

the Administrative Procedure Act.

In addition to the First Circuit’s decision, the U.S.

Circuit Court of Appeals for the Fifth Circuit (the “Fifth

Circuit”) has previously held the Wire Act prohibitions apply only to sports gambling.

Because many of the Company’s operations

occur outside the jurisdictions of the First Circuit and Fifth Circuit, and because the First Circuit did not set aside the 2019 Opinion,

we are still monitoring the potential impact of the 2019 Opinion on our business.

For more information, see “ Item 1A.

Risk Factors — Regulatory

and Compliance Risks — If there is a final determination on

the applicability of the Wire Act to our operations and it is determined or codified that the Wire Act extends to transmission of lottery

games in interstate or foreign commerce, certain of our operations that are not currently restricted by statute or practice to a state’s

territorial boundaries may be negatively impacted or eliminated, which may have a material adverse effect on our business, financial conditions,

Circuit Court of Appeals for the Fifth

Circuit (the “Fifth Circuit”) has previously held the Wire Act prohibitions apply only to sports gambling.

Because many of

the Company’s operations occur outside the jurisdictions of the First Circuit and Fifth Circuit, and because the First Circuit

did not set aside the 2019 Opinion, we are still monitoring the potential impact of the 2019 Opinion on our business.

For more information,

see “ Item 1A.

Risk Factors - Regulatory and Compliance Risks - If there is a final determination on the applicability of the

Wire Act to our operations and it is determined or codified that the Wire Act extends to transmission of lottery games in interstate

or foreign commerce, certain of our operations that are not currently restricted by statute or practice to a state’s territorial

boundaries may be negatively impacted or eliminated, which may have a material adverse effect on our business, financial conditions,

and results of operations .”

In Minnesota, the sale of

scratch Online Lottery tickets is prohibited.

In Virginia, lottery courier services are prohibited by law.

Some states limit the charges

that we can impose and collect.

We only purchase lottery games on behalf of our users and customers where our services are permitted and

in accordance with applicable laws.

The scope and interpretation of the laws that are or may be applicable to our services and the fees

we charge are subject to interpretation and may change.

Our compliance with local,

territorial and federal laws is based on our interpretation of existing state and federal laws regarding lottery services such as ours.

states prohibit the use of courier services and the sale of online lottery tickets, while others limit the charges that we can impose

When such offerings are operational, we only purchase lottery games on behalf of our users and customers where our services

are permitted and in accordance with applicable laws.

The scope and interpretation of the laws that are or may be applicable to our services

and the fees we charge are subject to interpretation and may change.

For example, in April 2023, the Texas State Senate passed Senate

Bill 1820 (the “Texas Bill”), which would, among other things, prohibit online lottery gaming and the use of courier services

in Texas, if enacted.

As of the date of this Report, the Texas Bill is under review of the Texas State House of Representatives.

Texas Bill is enacted into law as drafted, the new rules would be implemented by January 1, 2024.

compliance with local, territorial and federal laws is based on our interpretation of existing state and federal laws regarding lottery

services such as ours.

We have obtained legal advice and notified certain lottery authorities in U.S.

jurisdictions where we do business of the services

that we offer, but in most cases, we have not received definitive determinations of the laws applicable to our services.

There is a risk

that existing or future laws in the states and jurisdictions in which we operate may be interpreted in a manner that is not consistent

with our business model.

Future laws that permit certain lottery services may be accompanied by restrictions or taxes that make it impractical

or less feasible to operate in certain jurisdictions.

Other laws and regulations

may be adopted or construed to apply to us that could restrict our business model, including privacy, taxation, marketing, anti-money

laundering, anti-corruption, copyright, currency exchange, export, and antitrust laws, as well as laws governing public companies.

The growth of electronic commerce

may prompt calls for stronger consumer protection laws that may impose additional burdens on companies such as ours conducting business

through the Internet and mobile devices.

It is likely that scrutiny and regulation of our industry may increase, and we will be required

to devote additional resources to compliance with applicable regulations.

While we believe that we are currently in compliance in all

material respects with all applicable laws and regulatory requirements, we cannot assure that our activities or our users’ activities

will not become the subject of any regulatory or law enforcement investigation, proceeding, or other governmental action or that any such

investigation, proceeding, or action, as the case may be, would not have a materially adverse impact on us or our business, financial

condition or results of operations.

For more information, see

Risk Factors — Regulatory and Compliance Risks — Our

business model and the conduct of our operations may have to vary in each U.S.

jurisdiction where we do business to address the unique

features of applicable law to ensure we remain in compliance with that jurisdiction’s laws.

Our failure to adequately do so may

have an adverse impact on our business, financial condition, and results of operations .”

We currently hold a license

issued by the Texas Lottery Commission to conduct the retail sale of lottery tickets in the State of Texas.

We may determine or be required

to secure additional licenses from other regulatory authorities with jurisdiction over our operations in new markets in which we contemplate

expansion including, without limitation, the States of New York and New Jersey.

Such licensure may impose additional obligations

on us and our operations, which may include continuous disclosure to and investigation by the applicable regulatory authority into the

financial stability, integrity, and business experience of our company, its affiliates, and their respective significant stockholders,

directors, officers, and key employees.

In markets in which we have not previously operated or in newly regulated markets, licensing regimes

may impose licensing requirements or conditions with which we have not previously been required to comply, which may include locating

technical infrastructure within the relevant territory, establishing real-time data interfaces with the regulatory authority, implementing

consumer protection and privacy measures, or additional approvals or certifications of our technology, all of which may present operational

challenges and material costs.

jurisdictions where we do business

of the services that we offer, but in most cases, we have not received definitive determinations of the laws applicable to our services.

There is a risk that existing or future laws in the states and jurisdictions in which we operate may be interpreted in a manner that

is not consistent with our business model.

Future laws that permit certain lottery services may be accompanied by restrictions or taxes

that make it impractical or less feasible to operate in certain jurisdictions.

For more information, see “ Item 1A.

- Regulatory and Compliance Risks - A jurisdiction may enact, amend, or reinterpret laws and regulations governing our operations in

ways that impair our revenues, cause us to incur additional legal and compliance costs and other operating expenses, or are otherwise

not favorable to our existing operations or planned growth, all of which may have a material adverse effect on us or our results of operations,

cash flow, or financial condition.

laws and regulations may be adopted or construed to apply to us that could restrict our business model, including privacy, taxation,

marketing, anti-money laundering, anti-corruption, copyright, currency exchange, export, and antitrust laws, as well as laws governing

public companies.

growth of electronic commerce may prompt calls for stronger consumer protection laws that may impose additional burdens on companies

such as ours conducting business through the Internet and mobile devices.

It is likely that scrutiny and regulation of our industry may

increase, and we will be required to devote additional resources to compliance with applicable regulations.

While we believe that we

are currently in compliance in all material respects with all applicable laws and regulatory requirements, we cannot assure that our

activities or our users’ activities will not become the subject of any regulatory or law enforcement investigation, proceeding,

or other governmental action or that any such investigation, proceeding, or action, as the case may be, would not have a materially adverse

impact on us or our business, financial condition or results of operations.

more information, see “ Item 1A.

Risk Factors - Regulatory and Compliance Risks - Our business model and the conduct of our operations

may have to vary in each U.S.

jurisdiction where we do business to address the unique features of applicable law to ensure we remain

in compliance with that jurisdiction’s laws.

Our failure to adequately do so may have an adverse impact on our business, financial

condition, and results of operations .”

currently hold a license issued by the Texas Lottery Commission to conduct the retail sale of lottery tickets in the State of Texas.

We may determine or be required to secure additional licenses from other regulatory authorities with jurisdiction over our operations

in new markets in which we contemplate expansion.

Such licensure may impose additional obligations on us and our operations, which may

include continuous disclosure to and investigation by the applicable regulatory authority into the financial stability, integrity, and

business experience of our company, its affiliates, and their respective significant stockholders, directors, officers, and key employees.

In markets in which we have not previously operated or in newly regulated markets, licensing regimes may impose licensing requirements

or conditions with which we have not previously been required to comply, which may include locating technical infrastructure within the

relevant territory, establishing real-time data interfaces with the regulatory authority, implementing consumer protection and privacy

measures, or additional approvals or certifications of our technology, all of which may present operational challenges and material costs.

Certain stockholders may be required to be licensed.

To the extent that any stockholder,

director, officer, or key employee is required to submit to required background checks and provide disclosure, and such individual fails

to do so or they or we do not successfully do so, this may jeopardize the grant of a license, provide grounds for termination of an existing

license, or result in the imposition of penalties.

Generally, any person or entity who fails or refuses to apply for a governmental license,

finding of suitability, registration, permit, or approvals within the prescribed period after being advised by a competent authority that

they are required to do so may be denied or found unsuitable, as applicable, which may result in our determining or being required to

sever our relationship with such person or entity.

Further, we may be subject to disciplinary action or suffer revocation of licensure

if, following notification that a person or entity is disqualified or unsuitable, we (a) pay them any dividend or interest upon our

(b) allow them to exercise, directly or indirectly, any voting right conferred through the shares they hold;

them remuneration in any form for services rendered or otherwise;

or (d) if required, fail to pursue all lawful efforts to require

them to relinquish their shares.

Furthermore, our Charter provides

that any of our securities held by a person or entity that is disqualified or unsuitable, as such terms are defined in our Charter, are

subject to redemption by us as and to the extent required by a regulatory authority or deemed necessary or advisable by our Board in its

sole and absolute discretion.

If a gaming authority requires the Company, or our Board deems it necessary or advisable, to cause any such

securities be subject to redemption, we will deliver a redemption notice (as described in the Charter) to such person or entity or its

affiliate(s) (as applicable) and we will purchase the number and type of securities specified in the redemption notice for the redemption

price determined in accordance with the Charter and set forth in the redemption notice.

Data Protection and Privacy

Because we handle, collect,

store, receive, transmit, and otherwise process certain personal information of our users, customers, and employees, we are also subject

to federal, state, and international laws related to the privacy and protection of such data.

Regulations such as the General Data Protection

Regulation of the European Union and the California Consumer Privacy Act could affect our business, and the potential impact is still

being determined.

the extent that any stockholder, director, officer, or key employee is required to submit to required background checks and provide disclosure,

and such individual fails to do so or they or we do not successfully do so, this may jeopardize the grant of a license, provide grounds

for termination of an existing license, or result in the imposition of penalties.

Generally, any person or entity who fails or refuses

to apply for a governmental license, finding of suitability, registration, permit, or approvals within the prescribed period after being

advised by a competent authority that they are required to do so may be denied or found unsuitable, as applicable, which may result in

our determining or being required to sever our relationship with such person or entity.

Further, we may be subject to disciplinary action

or suffer revocation of licensure if, following notification that a person or entity is disqualified or unsuitable, we (a) pay them any

dividend or interest upon our shares;

(b) allow them to exercise, directly or indirectly, any voting right conferred through the shares

or (d) if required, fail to pursue all lawful efforts

to require them to relinquish their shares.

our Charter provides that any of our securities held by a person or entity that is disqualified or unsuitable, as such terms are defined

in our Charter, are subject to redemption by us as and to the extent required by a regulatory authority or deemed necessary or advisable

by our Board in its sole and absolute discretion.

If a gaming authority requires the Company, or our Board deems it necessary or advisable,

to cause any such securities be subject to redemption, we will deliver a redemption notice (as described in the Charter) to such person

or entity or its affiliate(s) (as applicable) and we will purchase the number and type of securities specified in the redemption notice

for the redemption price determined in accordance with the Charter and set forth in the redemption notice.

Protection and Privacy

we handle, collect, store, receive, transmit, and otherwise process certain personal information of our users, customers, and employees,

we are also subject to federal, state, and international laws related to the privacy and protection of such data.

Regulations such as

the General Data Protection Regulation of the European Union and the California Consumer Privacy Act could affect our business, and the

potential impact is still being determined.

Other states are considering similar laws, which could impact our business.

Responsible and Underage Gaming

We are committed to compliance

with the underage and responsible gambling requirements set forth in the domestic and international statutes and regulations governing

our operations.

We take our corporate responsibility to our users and the regulators with authority over our business very seriously,

and we are focused on maintaining a safe and responsible gaming environment.

We support and are members of the National Council on Problem

Gaming, whose mission is to lead state and national stakeholders in the development of comprehensive policy and programs for all those

affected by problem gaming.

We continue to evaluate and develop our technology to meet the statutory requirements regarding responsible

gaming and self-exclusion, as well as our own self-imposed objectives regarding corporate social responsibility.

All of the U.S.

jurisdictions

and most of the international jurisdictions in which we operate prohibit sales of lottery tickets to persons under 18 years of age.

We have instituted know-your-customer requirements to aid our efforts in identifying minors and preventing them from using our services.

Many jurisdictions, especially

international jurisdictions, are imposing more stringent rules with regard to underage and responsible gambling.

This trend could continue

to spread, and both U.S.

and Underage Gaming

are committed to compliance with the underage and responsible gambling requirements set forth in the domestic and international statutes

and regulations governing our operations.

We take our corporate responsibility to our users and the regulators with authority over our

business very seriously, and we are focused on maintaining a safe and responsible gaming environment.

We support and are members of the

National Council on Problem Gaming, whose mission is to lead state and national stakeholders in the development of comprehensive policy

and programs for all those affected by problem gaming.

We continue to evaluate and develop our technology to meet the statutory requirements

regarding responsible gaming and self-exclusion, as well as our own self-imposed objectives regarding corporate social responsibility.

jurisdictions and most of the international jurisdictions in which we operate prohibit sales of lottery tickets to persons

under 18 years of age.

We have instituted know-your-customer requirements to aid our efforts in identifying minors and preventing them

from using our services.

jurisdictions, especially international jurisdictions, are imposing more stringent rules with regard to underage and responsible gambling.

This trend could continue to spread, and both U.S.

and international jurisdictions may strengthen underage and responsible gambling requirements.

We are in the process of developing

a comprehensive internal compliance program, which will ensure compliance with legal requirements imposed in connection with our activities

and with legal requirements generally applicable to all publicly traded companies.

We have recently hired a Vice President of Compliance

specifically in furtherance of this objective.

While we are firmly committed to full compliance with all applicable laws, we cannot ensure

that our compliance program will prevent the violation of one or more laws or regulations, or that a violation by us, an employee, a customer

or other third-party will not result in enforcement action, the imposition of a monetary fine or suspension or revocation of one or more

of our licenses, which could have a material adverse effect on us or on our results of operations, cash flow, or financial condition.

Because we do business in

international jurisdictions, our operations are subject to anti-corruption laws and regulations, such as the U.S.

Foreign Corrupt

Practices Act of 1977, the U.K.

intend to continue to develop a comprehensive internal compliance program, which will ensure compliance with legal requirements imposed

in connection with our activities and with legal requirements generally applicable to all publicly traded companies.

While we are firmly

committed to full compliance with all applicable laws, we cannot ensure that our compliance program will prevent the violation of one

or more laws or regulations, or that a violation by us, an employee, a customer or other third-party will not result in enforcement action,

the imposition of a monetary fine or suspension or revocation of one or more of our licenses, which could have a material adverse effect

on us or on our results of operations, cash flow, or financial condition.

we do business in international jurisdictions, our operations are subject to anti-corruption laws and regulations, such as the U.S.

Corrupt Practices Act of 1977, the U.K.

Bribery Act of 2010 and other anti-corruption laws that may apply where we operate.

As we continue to expand globally, we are likely to be subject to additional laws and restrictions, which increases the risk that we will

inadvertently violate one of those laws or restrictions.

We had a total of 43 and 20

full time and 7 and 5 part time employees as of December 31, 2021, and 2020, respectively.

In 2021, 40 of our employees were located

within the U.S.

and 10 were located within Mexico and in 2020, all of our employees were located within the U.S.

We do not have any

labor contracts.

Our ability to maintain a

trained management team and other employees is critical to the success of our business.

We are committed to attracting, developing, and

retaining a diverse team of employees, whose varied backgrounds and experience will further our innovative and creative environment.

value an internal culture of philanthropy, diversity, and innovation, which we believe creates a strong and committed team that furthers

our strategic objectives.

As we continue our organizational

growth, we are in the process of developing learning functionality to ensure our employees’ skills, abilities and attributes continue

to develop with our business’ requirements and human resources and compliance best practices.

Intellectual Property

We rely on a combination of

trademark, copyright, and trade secret protection laws in the U.S.

and other jurisdictions, as well as confidentiality procedures

and contractual provisions, to protect our intellectual property and our brand.

We have been using the LOTTERY.COM

trademark since 2017;

in February 2021, the LOTTERY.COM logo was registered on the Supplemental Register of the U.S.

Patent and Trademark

The registration of our LOTTERY.COM, AUTOLOTTO, LOTTERYLINK, WINTOGETHER and SPORTS.COM word marks and SPORTS.COM logo are pending

with the U.S.

As we continue

to expand globally, we are likely to be subject to additional laws and restrictions, which increases the risk that we will inadvertently

violate one of those laws or restrictions.

members of the Board and all principal executive officers who served in such positions as of the end of the prior year and at the time

of the Operational Cessation, have resigned from such positions.

of the date of this Report, the Company has 10 non-furloughed employees who remain active in the efforts to restore Company operations.

rely on a combination of trademark, copyright, and trade secret protection laws in the U.S.

and other jurisdictions, as well as confidentiality

procedures and contractual provisions, to protect our intellectual property and our brand.

have been using the LOTTERY.COM trademark since 2017;

in February 2021, the LOTTERY.COM logo was registered on the Supplemental Register

Patent and Trademark Office.

We are also using and/or have common-law trademark rights in the trademarks AUTOLOTTO,

LOTTERY.LINK, WINTOGETHER, SPORTS.COM, and TAP TICKET.

We will continue to evaluate the filing of trademark applications in the U.S.

As of December 31, 2022, the registration of our LOTTERY.COM, AUTOLOTTO and SPORTS.COM word

marks and SPORTS.COM logo were pending with the U.S.

Patent and Trademark Office.

In March 2023, the U.S.

Patent and Trademark Office denied the registration

of the SPORTS.COM word mark and the appeal period has expired.

The registration of the SPORTS.COM logo has also been denied and the Company

is currently considering whether to appeal such denial.

We are also using and/or have common-law trademark

rights in the trademarks AUTOLOTTO, SPORTS.COM, and “TAP, TAP, TICKET.” We will continue to evaluate the filing of trademark applications in

and internationally, as appropriate.

While we currently do not

own any patent applications or issued patents, we will continue to evaluate our technology to determine whether it is appropriate to file

patent applications in the U.S.

we did not own any patent applications or issued patents as of December 31, 2022, we will continue to evaluate our technology to determine

whether it is appropriate to file patent applications in the U.S.

or internationally.

We seek to protect our intellectual

property rights by implementing policies that require our employees and independent contractors involved in development of intellectual

property to enter into agreements acknowledging that all intellectual property generated or conceived by them on our behalf are our property

and assigning to us any rights that they may claim or otherwise have in those works or property, to the extent allowable under applicable

Notwithstanding our best efforts

to protect our technology and proprietary rights through registrations, licenses, and contracts, unauthorized parties may still seek to

use our intellectual property and technology without rights thereto.

We may also face allegations that we have infringed the intellectual

property rights of third parties, including our competitors and non-practicing entities.

Available Information

Our Internet address is www.lottery.com.

Our website and the information contained therein or linked thereto are not part of this Annual Report on Form 10-K.

seek to protect our intellectual property rights by implementing policies that require our employees and independent contractors involved

in development of intellectual property to enter into agreements acknowledging that all intellectual property generated or conceived

by them on our behalf are our property and assigning to us any rights that they may claim or otherwise have in those works or property,

to the extent allowable under applicable law.

Notwithstanding

our best efforts to protect our technology and proprietary rights through registrations, licenses, and contracts, unauthorized parties

may still seek to use our intellectual property and technology without rights thereto.

We may also face allegations that we have infringed

the intellectual property rights of third parties, including our competitors and non-practicing entities.

Internet address is www.lottery.com.

Our website and the information contained therein or linked thereto are not part of this Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business